EXCHANGE Report of Proceedings ottttr Congress Sixteen fh Annus ! Session ' pl^ PA* October 20-24, J9! 3 Published by tlie AMERICAH MIKING CONGRESS At ttic bffice of the Colorado 1914 CARL SCHOLZ PRESIDENT OF THE AMERICAN MINING CONGRESS Report of Proceedings OF THE American Mining i C_J Congress Sixteenth Annual Session Philadelphia, Pa. October 20-24 1913 Published by the American Mining Congress At the Office of the Secretary Denver, Colorado 1914 PREVIOUS SESSIONS OF CONGRESS. DATE. CITY. PRESIDENT. ADDRESS. 1st July, 1897 1 Denver, Colo. Hon. Alva Adams, Pueblo, Colo. 1st July, 1897 Denver, Colo. Hon. L. Brandford Prince, Santa Fe, N. M. 2d July, 1898 Salt Lake City, Utah. Hon. L. Brandford Prince, Santa Fe, N. M. 3d July, 1899* Milwaukee, Wis. Col. B. F. Montgomery, Cripple Creek, Colo. 3d June, 1900 Milwaukee, Wis. Col. B. F. Montgomery, Cripple Creek, Colo. 4th July, 1901 Boise, Idaho. Hon. L. Brandford Prince, Santa Fe, N. M. Sth Sept., 1902 Butte, Mont. E. L. Shafner, Cleveland, Ohio. 6th Sept., 1903 Deadwood and Lead, S. D. Hon. J. H. Richards, Boise, Idaho. 7th Aug., 1904 Portland, Ore. Hon. J. H. Richards, Boise, Idaho. Sth Nov., 1905 El Paso, Texas. Hon. J. H. Richards, Boise, Idaho. 9th Oct., 1906 Denver, Colo. Hon. J. H. Richards, Boise, Idaho. 10th Nov., 1907 Joplin, Mo. Hon. J. H. Richards, Boise, Idaho. llth Dec., 1908 Pittsburgh, Pa. Hon. J. H. Richards, Boise, Idaho. 12th Oct., 1909 Goldfield, Nev. Hon. J. H. Richards, Boise, Idaho. 13th Oct., 1910 Los Angeles, Cal. Dr. E. R. Buckley, Rolla, Mo. 14th Oct., 1911 Chicago, 111. John Dern, Salt Lake City, Utah 15th Nov., 1912 Spokane, Wash. Samuel A. Taylor, Pittsburgh, Pa. 16th Oct., 1913 Philadelphia, Pa. David W. Brunton, Denver, Colo. 1 Temporary. a Passed to June, 1900. INDEX Alaskan Question, Report on. . . 43 Amendments to By-Laws, Appointment of Committee on 90 Auditing Committee, Report of 108 Coal Mining Legislation, Report of Committee on 68 Credentials, Committee on 26 Financial Statement of Secretary 108 Interstate Trade Commission, Draft of a Bill 69 Members, Adjourned Meeting of 110 Members, Annual Meeting of 108 Mining Investments, Report of Committee on 52 Nominations, Report of Committee on 110 Resolutions, Committee on 40 Report of 91, 93, 97, 98 Revision of Mineral Land Laws, Report of Committee on 45 Standardization of Electrical Equipment in Coal Mines, Report of Committee on 77 Ways and Means, Report of Committee on 77 SPEAKERS. Bartlett, C. O Debate on Mine Accounting 41, 42 Debate on Committee on Ways and Means 57 Boland, W. P Committee on Ways and Means, Report of ..78-84 Broman, Isadore J The State of Texas and Its Resources 21 Brunton, D. W Committee on Amendments to By-Laws, Appointment of.. 90 Response to Address of Welcome 16 President's Annual Address Ill Burton, John R The Greatest Mine in the World 19 Debate on Resolution No. 15 106 Debate on Resolution No. n 98, 99 Debate on Resolution No. 12 99-104 Callbreath, J. F., Tr Reads Paper on Mine Taxation, by Hon. D. L. Webb.. 28 Announcements. 26, 27, 28, 34, 35, 40, 55, 56, 72, 76 Debate on Committee on Ways and Means 57-60 Debate on Resolution No. 12 99-104 Debate on Resolution No. n 98, 99 Announces Officers and Directors for Ensuing Year 96 Reads Report on Alaskan Question 43 Debate on Resolution No. 7 92-97 Carey, Hon. Joseph M The Mining Convention and Its Influence for Good 24 Cattell, Edward James Address of Welcome on behalf of Mayor of Philadelphia. 10-16 Chance, Dr. H. M Amendment to By-laws, Ap-pointment of Committees on. . 84 Mine Taxation 32, 339 Debate on Committee on Ways and Means Report of ..78-84 Debate on Resolution No. 15 106 Crane, Dr. W. R The Coal Resources of Alaska 39, 192 Fluker, W. H Response to Address of Welcome 17 Gold Mining in Georgia 72, 216 Foster, Dr. Martin D The Federal Government and the Mining Industry 72, 370 Debate on Federal Government and Mining Industry 73-76 Foster, Ruf us J Debate on Federal Government and Mining Industry . . . 73-76 Griffith, William Report of Committee on Ways and Means 77 Debate on Resolution No. 12 99-104 Debate on Taxation of Mining Property.... 29-33 Debate on Committee on Ways and Means Report of . .78-84 Debate on Resolution No. 15 106 Hoffecker, B. F What is the Matter With the Coal Mining Industry (by John W, Boileau) 60, 375 Hornberger, J. B. L Mine Accounting 41, 363 Jennings, Hennen Calls Meeting to Order 53 Debate on Resolution No. 12 99-104 Debate on Mine Accounting 41, 42 Debate on Resolution No. II 98, 99 Debate on Committee on Ways and Means Report of ..78-84 Lamb, Walter C Something About Nevada 20 Lawrie, H. N Development of the State of Oregon 20 Malcomson, James W ..Debate on Taxation of Mining Property 29-33 Maloney, William A Few Facts About Alaska.-. 16 Maurer, Charles E Response to Address of Welcome 19 Debate on Mine Accounting 41, 42 Debate on Arbitration in the Mining Industry 85-90 Moderwell, C. M Coal Mine Legislation 68 Debate on Mine Accounting ..41, 42 Debate on Relation of Big Business to Industrial Pros- perity 54, 55 278415 4 INDEX Moorshead, A. J Debate on The Coal Mining Industry 61-66 Norris, R. V Taxation of Mining Property 28, 331 Norman, Sidney Debate on Resolution No. 12 99-104 Norwood, C. I Resources of Kentucky 18 Debate on Federal Government and Mining Industry 73-76 Parker, Dr. E. W The Cost of Coal Mining 60, 384 Debate on Relation of Big Business to Industrial Pros- perity 54, 55 Parsons, Dr. C. W The Radium Situation 76, 223 Paul, J. W Mine Rescue and First Aid Operations 36, 281 Quealy, P. J Wyoming, Its Citizenship and the Nation 25 Reed, Thomas T Debate on Federal Government and Mining Industry .. .73-76 Rice, George S Mine Recovery Work 36 Debate on Mine Accounting 41, 42 Robinson, Neil West Virginia and the Mining Congress 23 Ross, David On the Alaskan Question 43 Debate on Resolution No. 14 105 Rushmore, David D The Industrial Corporation and Scientific Research 44, 265 Ryan, Debate on Resolution No. 7 92-97 Sargent, E. C Use of Concrete in Mining Operations 39, 249 Scholz, Carl Accepts Gavel and Assumes the Office of President 91 Debate on The Coal Mining Industry 61-66 Debate on Resolution No. n 98, 99 Shafroth, Senator John F... Federal Administration of Public Land Laws 48, 165 Debate on Federal Administration of Land Laws 48-52 Smith, George Otis Plain Talks 47, 154 Debate on Federal Administration of Land Laws 48-52 Smyth, Dr. H. L Debate on Taxation of Mining Property 29-33 Storrs, Arthur H Debate on Arbitration in the Mining Industry 85-90 Taylor, S. A Committee on Ways and Means, Motion for Appoint- ment of 57 Debate on Resolution No. n 98, 99 Calls Meeting to Order 27 Uniform Reports 34, 303 Debate on Resolution No. 14 105 Debate on Relation of Big Business to Industrial Pros- perity 54, 55 Debate on Resolution No. 12 99-104 Debate on Committee on Ways and Means 57-60 Valatt, Debate on Taxation of Mining Property 29-33 Van Barneveld, Charles E. . . On Dr. Webb's Statement Regarding Mine Taxation 28 The Mineral Division of the Panama-Pacific Exposi- tion 56, 213 Van Hise, Dr. Charles R The Relation of Big Business to Industrial Prosperity.. 54, 391 Wigton, F. H Opening of Convention. 9 Willard, H. E Debate on Arbitration in the Mining Industry 85-90 Wilson, H. M General Mining Co-operation 35 Mine Recovery Work 37 Wilson, William B Arbitration as a Factor in the Mining Industry 85, 274 Debate on Arbitration in the Mining Industry 85-90 INDEX ADDRESSES. Annual Address of President David W. Brunton, Denver, Colo. Ill Industrial Progress of the United States Dr. James Douglas, New York 121 Plain Talk , George Otis Smith, Washington, D. C. 154 Conservation from the Western Standpoint, Hon. John F. Shafroth, Senator from Colorado 165 Needed Changes in Our Mineral Land Laws, Hon. Thomas J. Walsh, Senator from Montana 175 Public Land Laws, The Hon. A. A. Jones, Washington, D. C. 185 Administration of Our Public Land Laws Clay Tollman, Washington, D. C. 188 Coal Resources of Alaska, The W. R. Crane, State College, Pa. 192 Alaskan Situation, The Falcon Joslin, Fairbanks, Alaska 206 Pan-Pacific International Exposition. .Charles E. Van Barneveld, San Francisco, Cal. 213 Gold Mining in Georgia W. H. Fluker, Thomson, Ga. 216 Our Radium Resources Charles L. Parsons, Washington, D. C. 223 Workmen's Compensation vs. Employers' Liability, Samuel A. Taylor, Pittsburgh, Pa. 235 Compensation Laws and Accident Prevention Work David Ross, Springfield, III. 239 Use of Concrete in Mine Operation E. C. Sargent, Chicago, III. 249 A Defense of the Flame Safety Mine Lamp E. A. Hailwood, England 258 Industrial Corporation and Scientific Research, The, David B. Rushmore, Schenectady, N. Y. 265 Arbitration as a Factor in the Mining Industry, William B. Wilson, Washington, D, C. 274 Mine Rescue and First Aid Operations J. W. Paul, Pittsburgh, Pa. 281 Storage and Handling of Explosives in Mines, Charles E. Munroe, Washington, D. C. 288 Use and Abuse of Explosives, The Robert W. Gunnell, Pottsville, Pa. 298 Uniform Reports S. A. Taylor, Pittsburgh, Pa. 303 Taxation of Coal Lands, The R. V. N orris, Wilkes-Barre, Pa. 331 - Mine Taxation H. M. Chance, Philadelphia, Pa. 339 Taxation of Mining Property, The D. L. Webb, Denver, Colo. 345 Mining Investments W. R. Allen, Butte, Mont. 356 - Mining Costs J. B. L. Hornberger, Pittsburgh, Pa. 363 - Federal Government and the Mining Industry, The, Hon. M. D. Foster, Washington, D. C. 370 What is the Matter With the Mining Industry? John W. Boileau, Pittsburgh, Pa. 375 Lessons of the Year in Our Mining Industry, Dr. Joseph A. Holmes, Washington, D. C. 380 Cost of Coal Mining, The Edward W. Parker, Washington, D. C. 384 Relation of Big Business to Industrial Prosperity, With Special Reference to Mining, Dr. Charles A. Fan Rise, Madison, Wis. 391 RESOLUTIONS No. SUBJECT. INTRODUCED BY PAGE. DISPOSITION. PAGE. 1 Dishonest Operations Sidney Norman 45 Adopted 47 2 Mineral Mine Laws David W. Brunton 53 Adopted 91 3 Valuation of Mining Property.. Charles E. Maurer 54 Adopted 91 4 Mine Reports Samuel A. Taylor 56 Adopted 91 5 Federal Aid to Mining Schools. H. M. Lawrie 76 Adopted 91 6 Anti-Trust Laws Charles E. Maurer 76 Ad'pt'd as Amended 92 7 Alaska Land Laws William Maloney 92 Ad'pt'd as Amended 92 8 Corporation Income Tax Law.. John E. Patton 97 Adopted 97 9 Loss of Life in Dawson Mine.. R. Dawson Hall 97 Adopted 97 10 Thanks Com. on Resolutions . . 97 Adopted 97 11 Fraud John R. Burton 99 Tabled 99 12 Securities John R. Burton 99 Lost 102 13 Mines and Mining David W. Brunton 104 Adopted 104 14 Industrial Injuries David Ross 105 Ad'pt'd as Amended 106 15 Fraud Sidney Norman 99 Tabled 107 OFFICIAL ROSTER, 1914 OFFICERS. CARL SCHOLZ, President. M. S. KEMMERER, Second Vice-Pres. HENNEN JENNINGS, Firse Vice-President. HARRY L. DAY, Third Vice-President. J. F. CALLBREATH, Secretary, Denver, Colo. DIRECTORS. SAMUEL A. TAYLOR, Pittsburgh, Pa. W. J. RICHARDS, Pottsville, Pa. D. W. BRUNTON, Denver, Colo. CARL SCHOLZ, Chicago, 111. HENNEN JENNINGS, Washington, D. C. HARRY N. TAYLOR, Chicago, 111. E. A. MONTGOMERY, Los Angeles, Cal. JOHN MAYER, Kansas City, Mo. M, S. KEMMERER, New York. *W. G. CONRAD, Helena, Mont. JAMES DOUGLAS, New York City. GEORGE H. DERN, Salt Lake City, Utah. HARRY L. DAY, Wallace, Idaho. EXECUTIVE COMMITTEE. CARL SCHOLZ, Chicago, 111. D. W. BRUNTON, Denver, Colo. HARRY N. TAYLOR, Chicago, 111. Deceased. OFFICIAL ROSTER, 1913 OFFICERS, 1913. President DAVID W. BRUNTON, Denver, Colo. First Vice-President HENNEN JENNINGS, Washington, D. C. Second Vice-President E. A. MONTGOMERY, Los Angeles, Cal. Third Vice-President CARL SCHOLZ, Chicago, 111. Secretary J. F. CALLBREATH, Denver, Colo. DIRECTORS. SAMUEL A. TAYLOR, Pittsburgh, Pa. CARL SCHOLZ, Chicago, 111. D. W. BRUNTON, Denver, Colo. HARRY N. TAYLOR, Chicago, 111. HENNEN JENNINGS, First Vice-President. JOHN MAYER, Kansas City, Mo. E. A. MONTGOMERY, Los Angeles. W. G. CONRAD, Helena, Mont. CHARLES A. BARLOW, Bakersfield. GEORGE H. DERN, Salt Lake City. JAMES DOUGLAS, New York City. HARRY L. DAY, Wallace Idaho. W. B. SHACKELFORD, Joplin, Mo. STATE VICE-PRESIDENTS. Alabama L. B. MUSGROVE, Birmingham. Oklahoma DR. C. N. GOULD, Norman. Alaska COL. B. F. MILLARD, Valdez. Oregon JUDGE T. C. BURKE, Baker City. Arizona JUDGE R. E. SLOAN, Phoenix. South Carolina H. L. SCAIFE, Clinton. Arkansas A. W. ESTES, Little Rock. South Dakota T. J. GRIER. California H. F. BAIN. San Francisco. Tennessee CHARLES H. SMITH, Canada H. H. LANG, Cobalt, Ont. Chattanooga. Colorado A. L. WILFLEY, Denver. Utah D. MACVICHIE, Salt Lake City. Georgia E. L. MARTIN, Macon. Virginia VAN NESS HEERMANCE, Idaho H. F. SAMUELS, Wallace. Rocky Mount. Illinois E. T. BENT, Chicago. Washington G. B. DENNIS, Spokane. Kansas DR. ERASMUS HAWORTH, West Virginia DR. I. C. WHITE, Lawrence. Morgantown. Montana EDWARD HORSKY, Helena. Wisconsin GEORGE L. JARRETT, Missouri COL. H. H. GREGG, Joplin. Platteville. New Mexico C. T. BROWN, Socorro. Wyoming JUDGE M. N. GRANT, Laramie. New York J. R. BURTON, New York. COMMITTEES, 1913. EXECUTIVE. D. W. BRUNTON, H. N. TAYLOR, CARL SCHOLZ. GENERAL REVISION OF MINERAL LAND LAWS. Alaska L. V. RAY. Nevada D. C. McDONALD. Arizona WILL L. CLARK. New Mexico J. J. MURRAY. California J. ROSS CLARK. Oregon THOMAS C. BURKE. Colorado BULKELEY WELLS. Oklahoma DR. C, N. GOULD. Idaho E. M. HEIGHO. South Dakota I. A. WEBB. Montana CORNELIUS KELLY. Utah F. J. HAGENBARTH. Missouri E. B. KIRBY. Washington MATT BAUMGARTNER. Minnesota HORACE V. WINCHELL. FEDERAL LEGISLATION. Metal Mining Affairs. JESSE KNIGHT, Prove, Utah, Chairman. C. E. LOOSE, Provo, Utah. L. K. ARMSTRONG, Spokane, Wash. COL. J. A. EDE, La Salle, 111. JOHN GILLE, Butte, Mont. Alaskan Affairs. FALCON JOSLIN, Fairbanks, Alaska, Chairman. J. L. STEELE, Landlock, Alaska. D. M. STEWART, Seward, Alaska. T. P. McDONALD, Seattle, Wash. H. R. HARRIMAN, Seattle, Wash. Coal Mining Affairs. WALTER M. BOGLE, Fisher Bldg., CHARLES M. MODERWELL, Chicago, 111., Chicago, 111., Chairman. Treasurer. E. R. SWEENEY, Kansas City, Mo. THOMAS W. DAVIS, Saginaw, Mich. 8 OFFICERS AND COMMITTEES, 1913 Prevention of Mine Accidents. W. R. INGALLS, New York, N. Y., Chairman. DR. JAMES DOUGLAS, New York. J. R. FINLAY, New York. J. P. CHANNING, New York. JOHN HAYS HAMMOND, New York. Workmen's Compensation. JOHN H. JONES, Pittsburgh, Pa., Chairman. DAVID ROSS, Springfield, 111. W. R. WOODFORD, Cleveland, Ohio. J. W. DAWSON, Charleston, W. Va. THOMAS L. LEWIS, Bridgeport, Ohio. STANDARDIZATION OF ELECTRICAL EQUIPMENT. In Coal Mines. GEORGE R. WOOD, Philadelphia, Pa., Chairman. SAMUEL A. TAYLOR, Pittsburgh, Pa. H. M. WARREN, Scranton, Pa. J. R. BENT, Oglesby, 111. G. A. SCHREIER, Diveraon, 111. G. T. WATSON, Fairmount, W. Va. W. A. THOMAS, Pittsburgh, Pa. Metal Mines. H. S. SANDS, Denver, Colo., Chairman. FRANK E. SHEPARD, Denver, Colo. C. A. CHASE, Denver, Colo. Mineral Statistics. GEORGE W. RITER, Salt Lake City, Utah, Chairman. OTTO RUHL, Joplin, Mo. FREDERICK BURBIDGE, Spokane, Wash. Forestry Relations. HENRY I. SEEMAN, Denver, Colo., Chairman. E. A. COLBURN, Denver, Colo. ROBERT L. MARTIN, Denver, Colo. Bureau of Mines. SEELEY W. MUDD, Los Angeles, Cal. HAROLD N. LAWRIE, Portland, Ore. M. J. FALKENBURG, Seattle, Wash. A. H. HARRISON, Silverton, Colo. E. P. SPAULDING, Spokane, Wash. U. S. Geological Survey. DR. H. FOSTER BAIN, San Francisco, Cal., Chairman. DR. R. D. GEORGE, Boulder, Colo. J. W. MALCOLMSON, Kansas City, Mo. TL C. GEMMELL, Salt Lake City, Utah. Ore Treatment Charges. E. M. DE LA VERGNE, Colorado Springs, Colo., Chairman. BULKELEY WELLS, Telluride, Colo. W. MONT FERRY, Salt Lake City, Utah. S. E. BRETHERTON, San Francisco, Cal. HENRY P. LOWE, Central City, Colo. Transportation. HARRY JOSEPH, Salt Lake City, Utah, Chairman. IMER PETT, Salt Lake City, Utah. Mining Investments. W. R, ALLEN, Butte, Mont., Chairman. WM. SCALLON, Helena, Mont. LYMAN A. SISLEY, Chicago, HI. R, F. COLLINS, Spokane, Wash. EDWIN O. HOLTER, New York City. Organization Committee. Alaska J. L. STEELE. Oregon H. N. LAWRIE. Arizona GEORGE U. YOUNG. Ontario R. W. BROCK. British Columbia H. B. BROWN. New Mexico T. H. O'BRIEN. California GRANT H. TOD. New York D. M. RIORDAN. Colorado ALLAN BURRIS. Nevada JULES LABARTHE Idaho H. F. SAMUELS. Oklahoma J. P. McNAUGHTON Illinois DAVID ROSS. Oregon H. M. PARKS. Kentucky HYWEL DAVIES. South Dakota R. L. DAUGHERTY. Mexico L. R. BUDROW. Texas S. J. BROMAN. Michigan JAMES B. COOPER. Utah JOSEPH F. MERRILL. Minnesota W. J. OLCOTT. Virginia E. A. SCHUBERT, 'Roanoke. Missouri JOHN M. MALANG. Washington MAURICE D. LEEHEY Montana W. R. ALLEN. Wisconsin GEORGE L. JARRETT Ohio-C. S. JOHNSON. REPORT OF THE PROCEEDINGS OF THE Sixteenth Annual Session of the American Mining Congress. Believue-Stratford Hotel, Philadelphia, Pa. October 20-24, 1913. MONDAY, OCTOBER 20, 1913. Opening Session 2.00 O'Clock P. M. The Congress was called to order by Mr. F. H. Wigton, chairman, Local Executive Committee. CHAIRMAN WIGTON: Gentlemen of the American Mining Con- gress: It is a well-known adage that the best is reserved until the last. In this case it is not violated, as you are not receiving the best at the opening. As chairman of the Executive Committee in Philadelphia we welcome you members of this American Mining Congress to this city. You have come from all over this wide land to consider questions which are of vital import to the industries of the United States. Oftentimes mining is rather slurred upon, because in the public prints there nre so many other things which appear openly to the people, whereas mining is conducted underground, and little is known comparatively of the dangers, the difficulties and the haz- ards which surround that industry. The industries which you represent are the underlying foundation of the civilization, and all the industries of this coun- try and of the civilized world. You represent gold and silver, the tokens which pass current as the evidence of accumulated wealth, which is in reality stored labor. You repre- sent iron, tin and lead, all of \yhich are essential in the upbuilding and prog- ress of civilization, but it is fitting, in "this city of Philadelphia, which probably is the greatest centre of the coal mining industry of the United States, to speak a word upon that which you also represent. That is possibly the keynote of all the industries, for without fuel you cannot produce gold, silver, iron, copper nor tin. Without fuel you cannot run railroads, carry on manufacturing plants, light your houses, warm yourselves, and of all the mining industries, probably coal is most slurred upon. You gentlemen who produce, or are the representatives of the pro- ducers of gold and silver have before the people those glittering products which promptly attract attention. In tin and copper, you see them in the household utensils. You see them all about you. In iron, your railroads, your buildings everything that is necessary to life almost is so represented, but coal, that dark, dirty, unpleasant substance to handle, is rather apt t 10 be overlooked. It is put in the cellar, out of sight and is only brought forth when it is absolutely needed. It is not stored in quantities for future use beyond a very small amount. People do not want it until they are forced to have it to drive the trains across the country, to warm the houses, and to run manufacturing plants. Without intending to slur the gentlemen of the newspapers, who are apt to represent to the public what they think the public will want, they have been inclined to lead the public to think in the production of coal, if it sells for $2.00, that about a dollar and seventy-five cents of that is profit to the coal operator. There probably has been no better opportunity than will arise through this Congress to enlighten the people, not only of this city, but throughout the United States, of the hazards and difficulties that surround the coal trade, and also to let them know something of the truth, because the truth is best for all, and is what we want the people to know, and in that way they may arrive at a more just understanding of the difficulties in the mining of coal, as well in the mining of all other minerals. These meetings will be filled with discussions upon technical subjects, but it is always well to give expression of views as to the value which thes^ substances possess to the community at large, and all the difficulties sur- rounding the industries themselves. In other words, the effort is to lead the people to know something about mining as an industry and to readilv appreciate it. Gentlemen, on behalf of Philadelphia and the Executive Committee, I bid you welcome, and we trust after your deliberations have been con- cluded, and when the time comes for your departure, which we will all regret, you will leave with a pleasant feeling and delightful associations, urging you for an early return to this city of Brotherly Love. Gentlemen, I bid you welcome. (APPLAUSE). Gentlemen, I desire to introduce the representative of the Mayor of Philadelphia, Mr. Edward James Cattell, City Statistician, -who will address you in his Honor's behalf. MR. CATTELL: Mr. Chairman and gentlemen of the American Mining Congress : His Honor, Mayor Blankenbuig, being ill and out of the city, at his request I appear as his substitute on the program to bid you welcome to the city of Philadelphia, and to say that from his heart, and from the hearts of more than a million six hnndref the furs from one country; another arm goes North to Scotland for more I 4 OFFICIAL PROCEEDINGS furs; to Russia for more furs; out to far India to gel the shellac; out to Japan to get silk, and this great mass of raw material, gathered from ail round the globe, is centred here in Philadelphia. What next? Why, nearly six thousand willing workers, who are nearly all stockholders in the concern, begin work on this raw material. The fur is corn apart; the felt is madej the hats are fashioned, finished, boxed ready for export all over the ^yorld. And if you divide the number of hats produced by the number of hours worked, you will find that that raw material is transferred into the finished hat at the rate of a finished hat every 2V 2 se-.onds. Does not this stand for a miracle to our modern eyes? Can there be written a more fascinating fairy tale? Come to another centre of industry, on the banks of the Delaware. Here, in 45 separate buildings of the Disston Saw and File Works, they take each year a total of 2500 tons of grind-stone and put it up against 7500 tons of steel, with the result that thirteen million files, saws and knives are called into existence each tool to go out into the world with power to multiply the power of man. and through that multiplied power, multiply the comforts of mankind. Think what this means : In this one establishment, dividing again output by hours worked, a new tool to be of service to mau kind is called into existence with every tick of rhe clock or every second of time. You see a thousand children released from school. They cannot travel far in ninety seconds, and yet in ninety seconds our stocking mills will make a pair of stockings for each one of the thousand children. One of these children will go home to a seven-rcom house. Our car- pet mills will carpet that house in 28 seconds. We build the largest locomo- tive in 2M> hours, and the largest trolley car in one hour. These are just a few illustrations of the picturesque side of our activities and yet I think they carry a lesson and a meaning for all. One thought more and I will leave you to your deliberations. I am a chronic optimist and therefore a hater of pessimists and pessimism. You know what a pessimist is ; he is the man who, when given the choice of two evils, takes them both and asks for repeat orders. Now the optimist according to my point of view, is represented pretty well by my dear old friend Casey. He called the other day to say good-bye. "I am going out to the Sandwich Islands," he informed me. ''Man alive, you cannot stand it there; it is 185 degrees in the shade." Back came his answer: "But I needn't stay in the shade all the time." Men like Casey don't meet trouble half way and they always expect to find, and generally do find, some way of escaping the trouble which many of us see in tomorrow and so few of Us meet today. It has been my fortune to travel all over the world, and I speak with a due sense of responsibility when I go on record here, that I believe this country is today facing the greatest era of prosperity ever faced by any country, in any age, on any continent. I hold this faith because I believe that not merely our usual purchasing power will have its normal return of increase during the next decade, but because I see in the wonderful creative work, born of a greater intelligence and more exact science, ;t remarkable multiplication of our purchasing power from outside sources, in 1869, or 44 years ago, I crossed the continent on the first railroad ever linking East and West, traveling on that trip over five days over what every geography in the world called the "Great American Dessert." Today, thanks to science, we are raising four crops a year on that dessert. Prior to that trip I traveled through the South, where frequently were to be seen signs threatening a fine on those who left cotton seed as waste in the streets. Today that despised waste adds 108 million dollars to the export values of the United States. There is at the present moment running wild ii; the rivers of the United States, three times the pulling power of all the horses in the world a power which in the near future will be harnessed for the uses of com- AMERICAN MINING CONGRESS 15 mercial and manufacturing life. In every direction that we look economies are being inaugurated, new methods developed whereby millions wasted in times past are to be returned .into the general fund of wealth for the benefit of mankind. In every direction that the eye can range is obtained evidence of this new spirit and this new power. Take as one broad example our great area of agricultural land, on which today we average a production of only about fourteen bushels to the acre; where ir. Europe, on land tilled a thousand years, they average 40 bushels to the acre. So, gentlemen, the message I would bring you is not only welcome to Philadelphia, but a message of hope for the future : a hopeful message which is thoroughly in keeping with the traditions of Philadelphia a city always endeavoring to inspire hope and a new love of liberty in the peoples of this Republic. In closing let me leave this thought. This is a time in which many large issues are being handled, most of them in a large way, but no matter how well treated, there must develop a certain amount of doubt and hesita- tion in commercial affairs. There is certain 10 be a feeling in certain quarters that injustice is done. The period, therefore, is pre-eminently one, in which each should exercise a large and cool allowance; where we should try to remember the responsibility that comes with our title "Sovereign by Divine Right." It is a time for each to endeavor to put aside all littleness and to work with heart and soul for the common good of our common land. It is because I have this condition in mind, perhaps, that I have also very clearly before me as I speak today the picture of my first and last meeting with General Grant. I was a guest at the White House at the first inaugural, in 1869. I saw General Grant receiving applause and compliments from a large portion of a great nation. I saw him later received with peculiar honor and distinction all round the world; and then it was my painful duty to wit- ness the actions of this same man when he seemed the prey of all the furies, and ill-luck seemed to dog every footstep ; first his little fortune swept away through the treachery of a partner, followed by the surrender of his swords and medals that he might do all in his power to discharge a personal obligation incurred in an effort to avert this ;a.ilure; then came the fall on an icy pavement which made him a cripple, and later the verdict of the doctors which put a very short limit on his life and decreed that these days remaining on earth should be days of intense, suffering from cancer I saw him withdraw practically from active life, ;ind from the scenes and associations to which he was deeply attached, ar.'d take up his residence in the lonely little cottage on Mt. McGregor, in New York State, where even- ounce of remaining strength was put in service that he might complete that great book which was to pay his last debt and leave his wife provided against want in the future. My last interview found him almost on the edge of the valley of the Great Shadow. His voice had left him; he could only communicate by the written pad, and yet he was still at work on his task that task which was to pay a debt of honor and provide, as an honest man should desire, for the welfare of v r ife and children after his death. At the close of that interview he wrote on his pad: "My great comfort in these dark days is the fact that from all over the South, from my old opponents in arms, come messages of good-will and kindly sympathy, and I seem to see an early realization of my heart's desire, expressed in these old words : 'Let us have peace/ " 1 can do no better, in closing this welcome on behalf of the Mayor of Philadelphia to this great Congress, than call attention to this admonition and this message from the dead soldier, and emphasize here from living lips the thought, the plea, the prayer : "Let us have peace." And coming from tjie wider range of national good to the narrower but more deeply regarded limits of my own dear city, I trust that before you leave you will be able to join with me in the piayer which falls from my lips every day of my life, the prayer uttered first by William Penn, our Founder, more thar two and a quarter centuries ago: 16 OFFICIAL PROCEEDINGS "And thou, Philadelphia, child of my neart, named before thou wert born; my soul lifts to God for thee, that thou mayest stand in the day of trial, and that thy children may tc blessed." (Ap- plause). CHAIRMAN WIGTON: Gentlemen of the Congress, the Governor of this Commonwealth, expected to be present and address you in the opening exercises, but he has been unavoidably detained. You have been enthralled 6y the eloquence of the Mayor's representative and put in a responsive frame of mind to proceed with your deliberations, and we now hand the Congress over to your able president,' Dr. D. W. Brunton, of Colorado. PRESIDENT BRUNTON: (Applause). Chaiiman of the Executive Committee and members : In the first place, allow me in the name of the American Mining Congress to thank the Executive Committee, and the Mayor of this city, through his able representative, for the hearty reception tendered us. I could not help thinking as I listened to the eloquent and flowery address of Mr. Cattell at the strange contrast between the Cattell of today and the Cattell I knew thirty-seven years ago. It is almost as different as the town of Caribou, in Colorado, thousands of feet above the sea level and your own city of Philadelphia. One of the last things I remember about Mr. Cattell before his leaving it was a very severe winter and he was unfortunate enough to contract a very severe cold. The doctor insisted that he should not only take a rest, but a tonic, a mixture of whisky and quinine. Mr. Cattell said he objected to quinine. (Laughter). There are a great many representatives from the different States H> Speak this afternoon, and the hour is more than late, so I think we will commence by calling on the representative from Alaska, Mr. William Ma- loney, of Nome. MR. MALONEY : Mr. President and gentlemen of the American Mining Congress: I did not expect to be called upon to speak so soon after my arrival, but I can tell you a few facts about Alaska. I have listened in tently to the opening address of the chairman as he talked to you on the subject of coal. We of Alaska have been trying in vain for a number of years to get our coal lands opened up, and for that reason I would ask the members of this Congress, at this time, to aid us as much as they can for the benefit of Alaska. Some of you probably are not aware of the size and greatness of the productions of Alaska. We have a population of about thirty thousand white people. Our production is about eighty millions a year, of which about twenty-five millions in gold, silver and copper. Alaska is not alto- gether an icicle as some people think. We have beautiful agricultural gar- dens, flower gardens and vegetables of all kinds. In fact, we raise consid- erable agricultural produce. They are shipping it, however, at the present time to Alaska, although transportation is high and the country is suffering from the want of railroads and means of transportation, and we do hope, a.nd the majority of Alaskans think that the present administration, at least, will do something toward opening up Alaska in the way of building railroads and opening up the coal fields so that we can have cheaper transportation and cheaper fuel. We have extensive mines in the interior of Alaska, which we cannot operate for the want of transportation. Of course, the mines upon the coast we are able to operate to a great extent, as they are closer to th? transportation facilities. We have some of the largest mining companies, I believe, in the world today. They have many mines and produce a great ^eal. It would be interesting to a great many of you gentlemen to see those mines. The great drawback of Alaska has been, and is at the present time, AMERICAN MINING CONGRESS 17 the want of transportation and the opening up of the coal fields, so that the people of Alaska will be able to get cheaper fuel and be able to open up. their mines and work them at a profit. We have more coal than there is in the State of Pennsylvania, and we cannot get one ton. This summer, the second of August, I left Nome, Alaska, with Dr. Holmes of the Bureau of Mines, and traveled with him to Fairbanks, and into the Indian coal fields. There are immense coal fields in that district. We were there on the 26th of August. Had we been half a day later we would not have seen anything. That afternoon we saw fourteen veins of coal, ranging from four to thirty feet in thickness, openly exposed. They did not need any shafts. The coal was wide open, thirty feet wide, laying there. The people of Alaska cannot use it, the government won't allow them. That evening we went into a cabin for the night, and along came a snowstorm and the snow was fourteen inches deep. We went back through this snow to Fairbanks and met Dr. Holmes. He expected to be here to attend this Congress. I thank you, gentlemen. (Applause). The President: We will next listen to a response from Mr. W. H. Fluker Thompson, Georgia. MR. FLUKER: Mr. President and gentlemen: Michael Angelo and many other sculptors have carved beautiful and lifelike images from cold marble, but no one has succeeded in giving life and warmth to the creatiou of his hands. Many an eloquent speech has been cut out of the cold English language that bore no more resemblance to life than do these figures in marble; but it seems to me that this gentleman, Mr. Cattell, has wrought the miracle of breathing warm life and friendliness into his address of welcome. And I have been made to feel, as never before, the tightening of the ties which bind this whole land together in bonds of unity. It is good that such hospitality, such friendship and brotherly love should exist, and in this day and time, when men seem to seek to convert their time and talents only into the almighty dollar, it is no small thing that this great city with its wonderful business interests, its honored memories and cherished legends should pause, even for a moment, in its stride to even greater achievements, to give the glad hand, in friendly welcome, to a bunch of ordinary Americans. I have no words to express my appreciation of such a reception, but I can fall back on the old Southern custom and invite you, all of you. and your families, to come to see us down in Georgia. We will do our best to measure up to this Philadelphia standard. We have no great shipyards. no business enterprises of such magnitude as has been described to us, but we have plenty of room to build others, we have the material, and the de- mand for them, and we have the men ready to help build them. I only wish that I were a public speaker and able to present the won- derful opportunities 1 of that great State. While Georgia is developing rap- idly, her best resources are still practically untouched and I earnestly invite you to come and see for yourselves what opportunities this State abounds in. There comes to my mind the story of an old negro moonshiner. Pos- sibly you do not know what a "moonshiner" is. Well, he is a distinct species of the human race, who inhabits the mountains of North Georgia and East Tennessee. He cares nothing for books or store clothes and is rarely seen in the cities unless there is a circus in town or he is carried there by the revenue officer. He operates a small still, from which the government de- rives no revenue, and exchanges his product with his neighboring customers for corn and rye, which are the raw materials from which the "mountain dew" is produced. This old negro, whose name is Joshua Harris, made whisky in the hills of Wilkes county before the laws forbidding it were made. After these laws were enacted, Joshua continued his business as if nothing had happened. i8 OFFICIAL PROCEEDINGS For many years he evaded the revenue officers, but they finally got him and took him to Augusta for trial. The trial of a "moonshiner" is a very simple matter. He usually comes before the court, pleads guilty, a small fine, which is promptly paid by some friend, is imposed; then he hurries happily homeward to resume operations. The old negro was brought before the judge to be sentenced, and the judge, in his impressive and dignified way, said to him: "So, you have been making whisky?" The old negro very humbly said "Yessah, dats what dey tells on me j edge." The judge then asked : "What is your name?" The old negro replied, "Joshua Harris, sah." "Joshua," said the judge, "then you are the man who made the sun stand still." The old negro was a little deaf, so leaning forward he answered: "Sah?" "You are the man, I suppose, who made the sun stand still?'' "No, sah, boss, dat warn't me; dat was jes a little moon-shine-still, I made." The old negro's fine was paid by one of his white friends, and he was soon on his way to his hills. A short while afterward his friend called upon him at his still. Joshua set out a bottle of his best whisky, saying: "Dar it is, boss, hit ain't much, but what is dar, is jes' as free as de Savannah Ribber, as long as dar's a drap in de bottle." So, we present the resources of Georgia; we believe they are large and afford great opportunities for all of you and in the spirit of the old negro, who offered his best liquor, freely, to his best friend, we offer them to you. (APPLAUSE). The President: The State of Kentucky will be represented by Mr. C. J. Norwood, State Geologist, of Lexington. MR. NORWOOD: Mr. President, ladies and gentlemen: Kentucky desires to express its warm appreciation of the welcome that has been accorded to this Congress. Her delegates feel at home in Pennsylvania. They feel at home in Philadelphia and on Philadelphia streets. Many of the early families of Kentucky were founded by Pennsylvanians. That great pioneer of Kentucky, Daniel Boone, was a Pennsylvanian. Many of our most useful citizens of today are Pennsylvanians. Much Pennsylvania money is now at work developing our mine resources. Kentucky feels that it is now as rich in resources as any of the mining States. Kentucky has a reputation for the loveliest women, the speediest horses, the finest grass lands, the most fragrant mint and the quaint Kentucky 'Colonel' makes a most delightful picture. The State today has become one of the most ambitious of the States industrially. Indeed, within recent years a new Kentucky has been formed. All that made the gcod old commonwealth attractive as a homestead is still there the loveliest women, the fastest horses, the fragrant mint, the beautiful meadows are still there, and the birds in their flight from North to South and back again still call there to sing their songs of praise and thanks- giving to the Giver of all good things, for his graciousness in creating a Kentucky. But now the quaint Kentucky 'Colonel' lives only in Washington, and the quaint Kentucky 'Colonel' as we know him is busy opening coal mines, putting down oil wells, blasting out stone quarries, digging phosphate rocks, quarrying asphalt rocks, making about the best coke in the country, or de- veloping some other of these several varieties of mineral products that we have in the State. For, gentlemen, Kentucky is one of the richest mineral bearing States in the Union. Our greatest progress, naturally, has been made in coal mining, although we were slow to get to that. We did not reach the five million ton mark until about 1905, but last year we more than trebled the output, and with an output of nearly sixteen and a half million tons of coal last year, ran into fifth place of the coal mining States AMERICAN MINING CONGRESS 19 of the Union; Pennsylvania, West Virginia, Illinois and Ohio being the States ahead of us, and within a very few years we will take fourth place. Now, modesty, as well as the command of the secretary, forbids me from going into details concerning other than our mineral resources. Surely Kentucky has reached a position of importance in mining affairs, and her delegates are mainly interested in the efforts thai the American Mining Congress is making in behalf of the mining interests of the country, in the line of which, from whatever point of view you might regard it, is the effort to obtain Federal aid for the mining schools under control of the State. Gentlemen, I thank you. (APPLAUSE). The President. We will now listen to response on behalf of the State of New York by Mr. John R. Burton. MR. BURTON: Mr. President and gentlemen of the Congress: I am not on the program to give a talk and I would rather listen to the discussions of the other delegates, but as long as I have been placed in this position I will say that I believe we have the greatest mine in the world in New York. The mine is situated below what Inspector Burns called at one time, the 'dead line.' It is a place where they have been mining out of your pockets and putting it back in the 1 ground. We have been financing the mines of the country and while a great deal of that finance has gone into the pockets of the 'Get-Rich-Quick' operator, I believe the operations in New York and throughout the country have reached that stage where the 'Get-Rich-Quick' operator has been eliminated. Most of the financing has been done on the New York curb, of which I am a member and represents the leading mine markets of the world. I hope to have something more to say in the deliberations of the Congress, and in the meantime, am glad to be with you. (APPLAUSE). The President. I take pleasure in introducing Mr. Charles E. Maurer. of Ohio, who will respond on behalf of that State. MR. MAURER : Mr. Chairman and gentlemen of the convention : As delegates from Ohio we are glad to be here. There is every reason why Ohio should be welcomed to a convention in Pennsylvania or any of the adjoining States. Ohio is the gateway of all coke and of the great quantity of your iron ore that comes through the northwest lo the Great Lakes, and 1 may say, like the bird of passage, a great deal of the coal comes from your States and we welcome you and welcome your coal, because the coal mining industry as an industry must be bound together. There must be some organization of the operators in this industry in this country. There is no industrial advantage where there are so many individuals engaged as there are in the coal mining industry of this country. No other industry has so many small operators. You take your iron ore industries, your steel industries, your lumber industries all the large industries are controlled by very large corporations, and the coal mining industry alone is controlled by individuals and small corporations. The result to the coal mining industry has been to its disadvantage. We are bound and surrounded by the Sherman 'Anti-Trust' Law, by this law and the other law, by some kind of a law in this State and by some kind of a law in another State, that absolutely prevents two business men engaged in this industry from talking on the street about that industry without becoming criminals. That is the reason that the coal mining industry .today as somebody says has so little in it for us, because of the tremendous competition and because of the tremendous waste. You realize that in the coal mining of this country, forty per cent, of the product is being left in the mines, that will never be produced it is absolutely wasted. And why? Because of the inability, on account of the keen competition to develop and bring this coal out to the surface. 20 OFFICIAL PROCEEDINGS I tell you it is a question for mining institutions of this country to study. It is a question for the legislators of the States to study. It is a question for the Congress to study. This great natural resource is being destroyed and wasted. The timber lands were destroyed and the time will come when we realize how much has been wasted and I hope that this meet- ing will take up the question of the conservation of this great natural resource of this country. Gentlemen, I am glad to be here, and I know the other members of the State of Ohio are also glad to be here. (APPLAUSE). The President. I take pleasure in presenting Mr. Walter C. Lamb, of Tonopah, Nevada, one of the delegates appointed by the President of the United States. MR. LAMB. Mr. Chairman and members of the Congress : My ap- pointment as a representative of the Federal Government is something that came very recently, and perhaps it might be more proper if I came as from the State of Nevada. However, I would rather say something about the State of Nevada than I would about the general government. Perhaps I might acknowledge the very cordial welcome that the Philadelphians and Pennsylvanians have given the members of the Congress. I remember about eleven years ago, when mining in the West, and particularly in the State of Nevada had fallen to a very low ebb, that new life was given by the city of Philadelphia, through the agency of the gentle- men who started the development in Southern Nevada. They produced about seventy million dollars, and as a direct result of that caused the discovery of gold in the gold fields. The mines in that country are now in a most excep- tional condition of prosperity. I realize from my experience in the West that there are a great many problems that such a body as this Congress might very well consider. It is quite surprising the more one pays attention to the general industry of mining, that there are so many problems to be solved, so many conditions that should be corrected by both State and National Legislation, and I hope, although myself have very serious misgivings as to my ability to contribute a great deal, I hope to be able to render some assistance in the future de- liberations of this Congress in shedding light on the questions that should be considered for the correction of those problems that face us in the West through Federal legislation. I should be better pleased to listen to some of the other delegates. < APPLAUSE). President Brunton introduces the representative from Oregon, Mr. H. N. Lawrie, of Portland. MR. LAWRIE: President, ladies and gentlemen of the American Mining Congress : It gives me great pleasure to be here today to tell you a little more about the recent development of the State of Oregon. It might be said that mining in Oregon has been at a very low ebb in the past four or five years, but more recently there have been some innovations which have assisted greatly in stimulating a large development. The 1913 Legislative Session of Oregon voted a substantial appropriation for the support of a Bureau of Mines and Geology. The work has been carried on this past summer by six field parties, and in the spring of 1914 we hope tp publish a number of very important bulletins concerning mining conditions of the State with distribution of a relief map which will give more of an idea of the metals of the State and the conditions of the placer mining industry which has contributed, and continues to do so, to the quota of wealth of the State of Oregon. This year the estimates show that the State of Oregon will have in- creased its gold production approximately 300 per cent, over what it produced last year, or any year of the past decade. This will indicate the large amount of development that is going on at the present time. AMERICAN MINING CONGRESS 21 Outside investors have come to the State with a full realization of the possibilities of development and we hope to direct that capital into channels of greater safety of investment. The Pan-American Exposition, to take place in 1915, in San Francisco, is a matter which is very dear to our heaerts. Preparations are now under way to compile a series of volumes on various problems of mining industry by the most capable authorities in the world. These contributions will be of great advantage, educationally, to the mining industry, and will become the basis and guide for future legislation. There is, however, in our opinion, only one channel through which this legislation may properly take form. The American Mining Congress fills that particular place in the United States, and we, of Oregon, hope that the deliberations of ihis convention will have vital influence in changing such laws as may be necessary to assist mining development. Of this we are certain ,that the present administration of the Department of Interior and tlie Department of Agriculture are extremely interested in the problems of Western development. It is true that for the past four or five years the development of the natural resource of the West has been retarded. It has been largely due to the fact that it became necessary to withdraw large areas of land to tem- porarily protect them from the speculative element not those who would seriously intend development. True, the West had to suffer because of this withdrawal, but now, gentlemen, is the time for us to formulate our ideas into a set of principles concerning resource development with an idea as to its conservation. I mean conservation in the real sense, rather than in the form it has been given to us. Principles which because of their lasting nature, will actually be a foundation for satisfactory legislation. The reason why our laws at the present time are inefficient is largely because the American Mining Congress was not born years before. As I said before, we, of Oregon, are vitally interested with California in the outcome of the Pan-American Exposition, and on behalf of the State of Oregon. I would like to invite each one of you who attend the exposition to visit the Oregon Building, where you will be received hospitably and shown the resources of that State, and I trust that after you have seen this that you will be inclined to visit the State of Oregon to see its actual operations. Outside of the mining industry there are so many other resources in an undeveloped country that it is hardly possible to consider the conservation of mining resources without taking into consideration the hydro-electro possibilities that of the timber re- sources, which is perhaps more transitory than the others, and its agricultural resources. I trust that the deliberations of this Congress will take into consider- ation the principles of conservation, not only of one resource, but consid- ering all the resources in the one group. I thank you very much for your attention. (APPLAUSE). The President. I now present the State Mining Inspector, who will respond on behalf of the great State of Texas. MR. ISADORE J. BROMAN : Mr. Chairman, members of the American Mining Congress and fellow delegates : In behalf of the Lone Star State, the Empire of the Southwest, I wish to express my appreciation of the hospitable words of welcome addressed to us by the representatives of the city of Philadelphia. It is always a great pleasure to attend the American Mining Congress especially so in the city of Brotherly Love, a city so famous in our political history as being the birthplace of American Independence and more recently famous as having gained an important victory in the most popular of Amer- ican sports. (Laughter and Applause). 22 OFFICIAL PROCEEDINGS Speaking of Philadelphia as being the birthplace of American Inde- pendence calls to my mind the fact that Texas enjoys the unique position of possessing the right to celebrate two independence days. We did not belong to the thirteen original colonies, as you know, but came into the Union after having gained our own independence. We have memories as cherish- ed as those of this great Cpmmonwealth of Pennsylvania. We have our Al- amo and San Jacinto, cherished memories in the hearts of all Texans and as important in shaping the future destiny of the Great Southwest as were Thermopylae and Marathon to the Ancient Greeks. We gained our inde pendence and came into the Union, hence we can celebrate one independence gained by the force of our own arms and one which was bequeathed to us, in common with all the States, the day we entered the Union. In spite, however, of the differences in our political history we feel one with you in promoting the industrial welfare of our common country. As chief mine inspector of the State of Texas I am principally inter- ested in the safety of mining. I have, with the possible exception of the gentleman from Alaska, the largest territory to cover of any mine inspector of the country. We have 50,000 square miles of coal area and I am compelled to travel from Texarcana to Eagle Pass, from Thurber to Houston, and anyone familiar with the State of Texas can appreciate the amount of traveling involved. In fact I cover about eight thousand miles in Texas every year, making two inspection tours during the year. In spite of the fact that we have an enormous area of workable coal this resource is very much undeveloped as we have but 50 mines with an annual output of some over 3,000,000 tons of bituminous coal and lignite. As far as safety is concerned we have been fortunate in having possibly the lowest mortality rate of any State in the Union, being about one and two-tenths per thousand. In the promotion of the safety of coal mining I have found, from my experience as mine inspector, that this problem is of a two -fold nature. The average mine operator will not take unnecessary risks. It is a business proposition with him to keep his mines in the safest possible condition, but, on the other hand, the greatest trouble is often experienced with the mine em ployes. Mining being a hazardous business the miner often becomes indiffer- ent toward the dangers surrounding him, and careless in the preservation of his own safety and that of his fellow workmen. As an illustration of this. the fact may be cited, that it is generally the old experienced miner who takes hazardous risks and as a consequence endangers not only his own life but |is well of those working in his vicinity. One of the principal problems there- fore confronting us mine inspectors is how best io secure the co-operation of the individual miner. As a geologist, I am also interested in the development of our natural resources, especially in the development of our mineral resources in which our State is wonderfully rich. Almost every mineral catalogued is to be found in Texas, though not all of them in commercial quantities. We have rich deposits of iron, zinabar, zinc, some silver, formations rich in oil, salt and valuable clay deposits. It is only during the present year, however,' that our State mineral lands have been open to development. These land's are now open to prospecting and development on a royalty basis and I think this act of legislation will to a great extent lend stimulous to mineral develop- ment. Our great need in To as at the present time is more capital and more people. We could, I believe, with our wonderful agricultural resources, easily support from fifty feet below the lowest developed level, if the deposit shows no evidence of diminishing in size. As regards the annual tonnage Mr. Finlay assumed that if a mine were equipped and opened up for a larger production than it had been making, it ought to produce this larger tonnage. This of course increased annual profits and the assessed valuation. He apparently did not take into acciunt the possibility of marketing this additional tonnage. The result was that the sum of the annual tonnages which he assumed for all the iron mines of Michigan was much in excess of the tonnage that these mines had ever been able to sell in any preceeding year. The Tax Commission has also corrected this assumption. The main criticism of the Finlay valuation has been directed against his assumption that a reasonable return on a mining invest- ment is five per cent. It is hardly necessary to say that this figure is absurd, whether judged by the usual practice of engineers in recom- mending such investments to their clients, or by their inherent disad- vantages suck as the concentration of physical hazards, lack of liquidity, fluctuation of income, etc. The Tax Commission has taken some ac- count of these criticisms by raising the interest rate to six per cent. this year, but this factor will continue to cause great dissatisfaction until it is given its proper value of not less than ten per cent. An ex- perience of three years has, I think, convinced the operators of Mich- igan that with due care in the determination of the factors, the Finlay method is well adopted to determining the value of iron mining prop- erty, and that it will give more equitable results, not only as between the mines themselves, but as between them and other forms of property than any other. Its great merit, from their point of view, is that it afford a satisfactory method of keeping the mines under the General Property Tax Law. The alternative is the tonnage tax, and to that they are unalterably opposed. A DELEGATE: Is that basis of valuation used for local taxes in the counties and towns as well? MR. SMYTH: It is used for local taxation as well. A DELEGATE: What was Mr. Finley's method of arriving at taxes on undeveloped or only partially developed properties? PROFESSOR SMYTH: In developing mines he assumed that these properties would be developed in a certain time, ten or fifteen years, and he assumed an average cost for development, spread that over the life of the mine as part of the operating cost and treated it as a deferred payment. MR. GRIFFITH: While listening to Professor Smyth's report I have been thinking how it would work in our anthracite regions in this State. It. would be particularly pleasing, I think, to some of our AMERICAN MINING CONGRESS 31 large operatives to have this method of taxing their properties on their net income, because there would not be any net income and conse- quently no tax. Many of our 'mines are operated at a loss of ten or fifteen cents per ton on every ton they take out. The owners have railroads to haul this coal to market, and they make up the mining loss in the freight charges on the tonnage. Some of the largest collieries we have in the region are thus operating at a loss, so that in these particular instances it seems to me that the net profit would hardly answer as a basis for taxation. Of course, that is a condition we have there, and while it is one that is attracting a great deal of public at- tention at the present time on the part of the National Government, and one which many of our Legislators think is to be deplored, still, I am going to say, from my view-point, it is the greatest God-send the anthracite regions ever had, because a great many collieries there would otherwise be shut down and thousands of men would be out of employment; therefore from that view-point this condition is an excel- lent one for us. In regard to the general matter of taxation of coal lands, it has long been my idea that we need a general revision of laws for that purpose. I think in most of the States, and in Pennsylvania, the laws were made seventy odd years ago, and when they were framed there was no thought of taxing mineral lands under these laws. They were formed for the purpose of taxing surface land value which could be judged by anybody. Now that we require more revenue, we are beginning to tax the minerals, and we have no laws under which the 'minerals can be taxed. Therefore, we are obliged to take these old laws, and apply them to the mineral in the ground, which cannot be seen and cannot be estimated accurately, and the result is very to the time when a mine was ready to produce a daily tonnage re- gardless of what it does actually produce at that time. I guess most engineers have had to do with development and have been in quite a quandary to know about that charge. Several times I have been put in a predicament by the fact that in Pittsburgh or in the West where the geological conditions and formations made it difficult to bring the mines up to the tonnage that was desired in the beginning, the mine still so operates at a loss for a considerable period. I was very much interested to know from Mr. Hornberger just when they changed from capital account to operating account. MR. HORNBERGER: Well, I hardly know how to answer that except by repeating what I have said, but I might add that in districts in which conditions are uncertain, and where the projected capacity cannot be definitely approximated or realized within the time of the construction of the plant, prudence would suggest that in such a place the installation should be made to fit those conditions. Speaking for coal mines, if you open a mine intended to produce five thousand tons per day, it would not be wise to put in all of your equipment, and everything necessary for that production, if you are going to stop short of five thousand tons per day of capacity in any phase of development at construction, and only be able to produce, say,. twenty-five hundred tons a day. In such a case your construction ac- count would be closed when you reach your twenty-five hundred tons per day and reopened as I indicated in my paper when you are going; to increase the capacity. If you will keep in mind that word "ca- pacity" in what I said before, that is the point on which my argument turns; that what you capitalize is the CAPACITY of the mine, and when you reach that capacity, regardless of what the mine is producing,, the construction account should be closed, and the operating account should take up and absorb all charges. I know that this question between the construction account and the operating account is a very difficult one; it worries a good many construction men, and operating 1 men, some sharp, arbitrary line has to be drawn of necessity. The proposed plan is that when the construction of the mine has reached a point where it is able to produce approximately the output for which it is intended, then the construction account is to be closed, and kept 42 OFFICIAL PROCEEDINGS closed until, by the installation of new plants or new units, you get to the point where you see the mine has been increased in capacity. You have a certain amount of electrical energy which produces twenty-five, hundred tons a day, and you propose by installing some more power to increase your capacity to thirty-five hundred tons per day. The ex- penditure for this additional equipment is certainly a proper charge to capital account, but, ( .. -otherwise, all the expenditure should be charged to operating account. I do not know if I have made myself clear; it is rather a compli- cated, troublesome question. MR. CHARLES M. MODERWELL, Chicago. Mr. Chairman, I would like to ask a personal question as to how he arrived at a six per cent, basis. Is it based on experience, does it have relation to the supposed life of the plant or equipment, or was it largely arbitrary? MR. HORNBERGER: It is largely arbitrary, though based more or less on experience. I think that five per cent, in our case would be sufficient for the reason that all that needs to be done is to return the original cost. It does not have to make replacements and renewals. These are made a charge to operations. If, as I stated in the paper you want to include renewals and replacements in your charges to the fund, then your fund must grow much more rapidly; then ten per cent, would probably not be an outside amount. MR. JENNINGS: I would like to ask a question on the subject of this depreciation. It seems to be immensely complicated by some of our taxes. It seems to me to be a very hard matter to find out what the real earnings of a mining corporation are. For instance, if your mine has only a life of five years, and you are making one hundred thousand dollars a year, is it right to pay income tax on one hundred thousand dollars a year, or is it right to depreciate your property and your lands in accordance with the life of it at 'the time^yoti expect to work the property? I fully agree with you that the depreciation in mining is one of the most difficult things to properly adjust in ordinary circumstances, and it seems to me it has been immensely complicated by the new income tax law. What is the ordinary method in coal mining, for instance, of estimating the depreciation, in order to pay the right in- come tax on a mine that has short life? MR. HORNBERGER: I do not think that the income tax law really complicates this question very much. The Government is going to get that tax, and it is a question whether it is going to get it this year or later. It accepts your book values, to start with. It allows you to deduct from your earnings that which you say is necessary to replace your investment; it does not tax that. I understand that certain cor- porations whose lands were carried on their books at low cost values were allowed to revalue their lands after a proper showing that the lands were really worth more, so that their royalty or depletion charge would be increased. The companies who did that are saving in taxes. I do not know where the Government would draw the line, but I assume it would be drawn at a revaluation in excess of a fair com- mercial value for the property; that, up to that point, companies that are charging off five cents depreciation, or three cents depreciation, or two cents depreciation, where they oueht to be charging off ten cents depreciation, are simply giving something to the Government that they n J?*J? eed to pay; the Government, in the last analysis, does not tax CAPITAL, it taxes EARNINGS, and so earnings should be con- strued with a proper regard for the amount which should be reserved to restore capital. AMERICAN MINING CONGRESS 43 MR. CHARLES E. MAURER: I want to ask Mr. Hornberger this question. Doesn't it depend, to a greater extent, on the life of your plant? If you had a plant that would last ten years, should not the hole in the ground be depreciated at the rate of ten per cent, a year? THE PRESIDENT: I am sorry we have to terminate this inter- esting discussion, but we have a good deal more this morning. The next thing is the report from the Committee on Alaskan Affairs, by Mr. Falcon Joslin, of Fairbanks, Alaska. SECRETARY CALLBREATH: A wire from Mr. Joslin, from Fairbanks, Alaska, about ten days ago, states that he had mailed his report. (Mr. Joslin's address will be found at page 206 of this report.) It has not yet reached us and consequently we cannot present it at this time. With your permission, Mr. President, as a member of that Co>m- mittee, I would like to incorporate the report as a part of the proceed- ings and to present one or two very terse statements concerning Alaska with the hope that the assistance of the delegates may be secured in Alaska's behalf. Most of you have heard of the great Alaskan question. Pioneers who have gone into that country and suffered privations and hardships with a view of developing her resources are today digging the roots out of the ground for fuel with great mountains of coal in their neigh- borhood, the use of which is absolutely prohibited by the Government. Instead of conservation, we have reservation. All coal lands have been withdrawn from entry by Presidential order, and those who had claims before the withdrawal order have been refused patents. Every possible technical objection has been made to invalidate the claims of the pio- neers, and today the w*hole of Alaska is bottled up, waiting for t'he time when Congress will pass new laws which will permit that country to be developed. MR. DAVID ROSS, Springfield, 1.11.: Just a word with regard to the report submitted by Secretary Callbreath. It is quite within the province, at least, of the imagination to believe that the Government, if given time enough, will not only discover, but acknowledge the mistake of its policy or want of policy in regard to the Alaska mining situation. While our form of government survives, strengthened, as many be- lieve, by the initiative, referendum and recall, there is still hope for the Alaskans, but hope repeatedly deferred, as Solomon observed, maketh the heart sick, and the present condition of our Alaskan friends testi- fies most tragically to its poverty producing effects when taken as a regular diet, and it may not be out of place here to suggest that the supersensitive type of parlor socialism that has succeeded only in de- ceiving itself into believing that there is more virtue and utility in making provision for the imaginary needs of the future than in taking care of the actual wants of the present, has not entirely emancipated itself from the sphere of educative influences or is wholly exempt from Time's impressive teachings. Life would not be the interesting thing it is were it not for the reasons it constantly supplies either in confirming our prejudices or in provoking or justifying a change in our beliefs, and my faith in this philosophy has found much comfort in a report just issued from the Federal Department of Agriculture to the effect that contrary to all previous notions the crow is the farmer's best friend. (Laughter.) It should be understood that this discovery was not made by the farmers, who, up to this time, were supposed to be the victims of this omnivorous bird, but by a specially trained corps of experts, similar, I assume, in type and temperament to that other class who have mistaken Alaska for a laboratory in which to prosecute their ex- periments. (Laughter.) 44 OFFICIAL PROCEEDINGS The authors of this report in substance declare that while the crow's fondness for young birds and bird-eggs robs him of the glory of posing as a Simon pure conservationist (laughter), his capacity for consuming grasshoppers, white grubs, cut worms and other injurious insects more than off-sets his destructive tendencies in other directions. (Laughter.) It's a trifling admission on an insignificant subject, but may mean much; the straw indicates the tornado's course, and the poet tells us that a pebble in the brooklet cast has changed the course of many a river. May we not hope that this discovery may pave the way for the creation of a sentiment in the United States that will insist that the Alaskan be allowed at least the crow's license for life (laughter), excusing it, if necessary, on the grounds that if the drainage from his diggings muddies the waters of the Bay, or the mine drifts or other openings in the Earth interfere here and there with the natural beauty of the landscape, it would be more than atoned for in the added op- portunities for honest toil and legitimate investments. I regret that I cannot speak of Alaska like those who are personally familiar with it, as it has never been my fortune to see any part of it even with the aid of a telescope or an excursion boat, but I would rather accept the plan of the people who live and work there, or who would if given a chance, who are familiar by actual contact with the real situation, many of them having lost their savings and risked their lives in pur- suit of its possibilities, and who have the patience and energy, if per- mitted, to develop its wonderful sources of wealth I would, I repeat, rather approve the theories of those people as to the means of develop- ing that great Empire, than become the foolish victim of an expert's dream. (Applause.) THE PRESIDENT: We will next have the pleasure of hearing from Mr. D. D. Rushmore, of Schenectady, on "The Industrial Cor- poration and Scientific Research." MR. RUSHMORE: Mr. President and Members of the American Mining Congress: At the invitation of the President and Secretary of the American Mining Congress, I hastily outlined on the impor- tant subject of the fields of activity of the large industrial corporations a little paper which has been headed, "The Industrial Corporation and Scientific Research," which possibly is one of the least known of its fields of activity. Mr. Rushmore's paper will be found on page 265 of this report. A DELEGATE: I would like to ask Mr. Rushmore a question. Has your company gone into the matter of the storage battery loco- motives to any extent, and if so, what success have they had in securing one that would be effective in underground work? MR. RUSHMORE: We have gone into that to some considerable extent, and have already manufactured quite a number of such locomo- Ihere are probably more in use in industrial plants than have yet been used underground. The storage battery mining locomotive s not yet an entirely finished product, although I think we are quite prepared to furnish them under certain conditions and for certain classes ot service. MR. GEORGE S. RICE: I would like to ask if you are familiar with the storage battery locomotives used in Westphalia, Germany, and what the shortcomings may be of that system. I found they were used in gaseous mines, where other kinds of locomotives are not per- mitted, and they seem to be giving fair results, but I have merely a superficial knowledge of this. MR. RUSHMORE: I am not familiar with those particular loco- Ordmanly the storage battery locomotive is handicapped AMERICAN MINING CONGRESS 45 somewhat by the first cost, which makes it practically necessary to create a power station on the locomotive. The battery containing the energy with which the machine is operated is somewhat limited, and it necessarily limits the amount of work you can do without either replacing the batteries or recharging them. I think, as far as operations in gaseous mines are concerned, they ought to be comparatively safe. The only problem would be the sparking of the commutator, and a direct motor can be made prac- tically safe for gaseous mines and is being done today in Germany and this country. While they are not absolutely safe, I think there is a very high degree of safety, and the question is merely an economic one. THE PRESIDENT: If there is no more discussion on this paper, we will adjourn until 2 o'clock this afternoon. WEDNESDAY, OCTOBER 22, 1913. Afternoon Session. Meeting opened by the President. Resolution No. 1, Introduced by Sidney Norman, Spokane, Wash. Realizing that dishonest operations of the financially powerful are of greater menace to the mining industry than are similar opera- tions oi the small promoter, who has already been checked by state statutes for which this organization has always stood sponsor and which, in many instances, it has had placed upon the statute books, the American Mining Congress, in Sixteenth Annual Convention as- sembled, goes on record as emphatically favoring the institution of universal state laws that will provide protection to minority stock- holders by making directors more definitely- responsible for their wel- fare and constituting infraction of such laws a felony, punishable by imprisonment. It pledges itself to support legislation necessary to put such laws into effect and respectfully suggests that the Department of Justice investigate scandals recently disclosed regarding securities listed on the New York Stock Exchange to the end that responsibility may be properly placed and the offenders brought to justice. Copies of this resolution shall be forwarded to the President of the United States, the Attorney General of the United States and the New York Stock Exchange. THE PRESIDENT: We will refer that to the Committee on Resolutions. We will now hear the report of the Committee on General Re- vision of Mineral Land Laws, by Mr. E. B. Kirby, of St. Louis, Mo. Report of the Committee on Revision of the Mineral Land Laws to the American Mining Congress, October 22, 1913. The American Mining Congress is engaged in the work of in- ducing the Congress of the United States to undertake a general re- vision of the Mineral Land Laws relating to the location and develop- ment of the mineral deposits on the public domain in the United States and Alaska and known as the Mining Code. (To this end the American Mining Congress is urging the appoint- ment of a Commission, whose members shall be selected for their recognized knowledge and experience in the mining industry. This 46 OFFICIAL PROCEEDINGS Commission shall consider the mining laws 9f this and other coun- tries, and shall hold public hearings in the principal mining communi- ties of the West and Alaska, giving full opportunity for the expres- sion of public opinion concerning the problems before it. Its recom- mendations shall be presented to Congress in a form of a fully drafted Mining Code. It is not attempted to have this include deposits of coal, oil, phosphate or salines, because these are generally regarded as the subjects of other and special legislation. The American Mining Congress is therefore not attempting at present to formulate and recommend specific changes in the Mining. Code. It is concentrating its efforts upon the creation of machinery which will do this detail work of revision, and will do it in a way calculated to inspire the confidence of the mining communities and appeal to the common sense of all men. While the efforts made at Washington with the last Congress and Administration were not successful, they showed clearly that success will be only a matter of persistent work, and meanwhile the active interest created by the movement of the American Mining Congress in this matter is rapidly extending. The American Institute of Mining Engineers, whose 4600 mem- bers include most of the men in charge of the more important mining and metallurgical enterprises of the country, has just appointed a com- mittee of prominent members to take up the work of securing a re- vision of the mining laws and intends to press the matter with all its power. The Mining and Metallurgical Society of America has recently announced itself as strongly desirous of a general revision, and it has devoted a large part of its attention this year to a general discussion of the details of such a revision. The Society has clearly presented the existing situation in the following language: "As to the need for mining law revision there seems to be no- doubt whatever. Congress has been memorialized by our greatest statesmen and economists, by Presidents, Cabinet Officers and Di- rectors of the Land Department and of the Geological Survey. As- sociations of Commercial and Mining men in all parts of the land have voiced the necessity, and committee after committee has formu- lated its suggestions and presented them to a heedless Congress. "Mining journals have teemed with articles upon the subject, promi- nent attorneys and jurists have discussed it. The expensive and some- times disastrous apex litigation in almost every mining district, where- the mine proprietors have not prudently by mutual agreement nulli- fied the extralateral right provision of the statutes under which their title was acquired, has attracted widespread attention to some of the worst defects in our present law, until scarcely anyone attempts to defend it, and yet nothing is done." The United States and Alaska are suffering from mining laws- which were framed forty years ago, and have since become inter- woven with a mass of supplementary state legislation differing in- every state. The resulting body of laws is at variance with the geo- logical realities of ore deposit structure and with the practical opera- ions of mining. It has furthermore been so construed, amended and revised by judicial interpretation that in various ways it has become- Imost impossible for the courts themselves to decide what it really means. Moreover the various parts of the Code are so interdependent that it is practically impossible to correct one fault without revising it as a whole. . Tne . t act . 1S > tnat while other mining countries have been keeping- reir mining laws up to the requirements of modern industry, and the- AMERICAN MINING CONGRESS 47 standards of modern ideas, the United States has for forty years been standing still. Through all those parts of the mining world which are affected by the mineral land laws, there is substantial agreement as to the evils of the present Mining Code arid the fact that a revision is .necessary. With respect to the details of the changes required there are naturally differences of opinion, and it is necessary to compose such differences by bringing them all to a focus before some authoritative body which has the power of decision. This body, or Commission, .must necessarily have a personnel which will inspire confidence. There are, moreover, a number of difficult problems^ in such a revision, for which all the experience and knowledge which the mining commu- nities can furnish is needed. By the system of public hearings pro- posed for the Commission these problems may be so threshed out as to bring the mining public and the Commission to substantially the same conclusions as to the best solutions for them. The work done by this Committee has made it clear that the Ameri- can Mining Congress has adopted a plan of action which appeals to the judgment of the great majority of men, and reduces to a mini- mum the number of objectors. In fact, it is believed to be the only practicable plan for securing the end desired. The work to be done now lies at Washington, and the difficulty to be overcome is the fact that very few? of the legislators there know anything about mining or mining laws. They are naturally slow to move in a matter which they do not understand, and in which they .are not yet interested, and to overcome this indifference requires steady, persistent work by someone who can stay at Washington. At present there seems to be no way of accomplishing this work until the Secretary of the American Mining Congress is given the means with which to do it, and the Committee strongly urges this course to supplement such efforts as it can make through correspondence and the occasional visits of its members. That the plan of the American Mining Congress will be adopted -.soiner or later is certain. The regular session of Congress this winter will afford the first opportunity of presenting that matter to the new Congress and Administration, and now that all the important organizations of the mining men are actively working to the same end, there is every reason to expect success at an early date. EDMUND B. KIRBY, Chairman. MR. SIDNEY NORMAN: Mr. President, I take pleasure in movr ing the adoption of that report, and extending the thanks of the Con- vention to this Committee, and also add to that motion that the Com- mittee be continued. Seconded; motion carried. THE PRESIDENT: We will now have the pleasure of hearing from the Director of the United States Geological Survey, Mr. George Otis Smith on "Plain Talk." MR. SMITH: Mr. President and Gentlemen: My contribution this afternoon to the discussion of Federal Mining Laws, both in its form ;and substance, is actuated by a desire to get down to the facts. In trakirg ny appeal -for "Plain Talks," however, I have no intention of being offensively personal in any reference to my fellow orators. In fact, I might cite as an illustration of the kind of language that I criti- -cise and condemn in the paper which has been printed and distributed, as an illustration of that, a case in which I myself was the offender. 48 OFFICIAL PROCEEDINGS Some years ago, before a Congressional Committee, I was asked to define Conservation. I was, of course, influenced by my environ- ment and I expressed myself to the effect that my conception of con- servation was utilization with a maximum of efficiency and a minimum of waste. That sounded so well that I was perfectly safe; there was no further inquiry, the long words did the work. In fact, I used only one good Anglo-Saxon word and that was "Waste." If I were to give a definition of the same word if I would define conservation today, I rather think that instead of using that language I would say that conservation means simply using as much and wasting as little as we can. The things which I wish to emphasize in the paper which you have before you are the importance, first, of considering the basic principles in these matters of public policy, and, second, of having prac- tical, every-day men of the engineer type, like you men whom I see before me, work out these principles into practice. The man who knows must take a larger part in these matters of practical statesmanship; in working out the underlying principles we must think for ourselves and try to study the trend of events rather than to guess the route of somebody's band wagon. Some of the principles I have set down, not as novel, but as true, are principles that must be taken into consideration in any discussion of new laws for the disposition of mineral lands be- longing to the United States. Dr. Smith's paper will be found at page 154 of this report. THE PRESIDENT: The subjects of the principal addresses this afternoon are so interlaced that perhaps we had better postpone the discussion of Dr. Smith's paper until after we hear the succeeding ones, and all can be discussed together, with greater advantage. We are fortunate enough in having with us this afternoon Senator John F. Shafroth, of Colorado, who will address us on the Federal Administration of Public Lands as it affects the mining industry. Senator Shafroth's address will be found at page 165 of the report. ' THE PRESIDENT: We are exceedingly fortunate in having with us this afternoon the Chairman of the Senate Committee on Mines and Mining, Senator Thomas J. Walsh, of Montana. We would be pleased to have him lead the discussion on the subject we are considering. Senator Walsh's address will be found at page 175 of this report. THE PRESIDENT:- Another member of our Governmental family who is favoring us with his presence this afternoon is Mr. A. A. Jones, Assistant Secretary of the Interior. Mr. Jones' address will be found at page 185 of this report. DIRECTOR SMITH: I am not only interested, but quite sympa- thetic with the Senator from Colorado in his expression of the need of bringing Western experience to bear upon these questions. I think, however, if a census were taken in Washington, it would show not only that the West is ably represented in Congress, but also that the Departmental Service is shot through and through with men from the West, who are in a position to take up this difficult proposition. I suppose the one man in the Geological Survey who has done the most work on the valuation of coal lands is one who was born and educated in Colorado and is a citizen of Colorado, and if there is anything 'the matter with that policy, I am going to insist that Colorado take its tun share of the blame, because I rely upon the advice of that member of the Survey to whom I have alluded. ' SH AFROTH: I want to say I have never criticized * rP aSt T 0r the P resent administration with respect to carrying out What I am opposed to is the policy of leasing. While there nave been many criticisms made against Mr. Pinchot and against the AMERICAN MINING CONGRESS 49 individual, I know you cannot put forth a policy and carry it out with- out many violations of what is right in individual conduct, and for that reason I have never attempted in my speeches to criticize individuals. MR. SMITH: I think the Senator and I do not misunderstand each other. I referred to this case and can refer to other cases where the men who are having most to do with influencing me, for instance, on these matters of the proper public land policy are men who are either residents of the West, or men who have put their best work and secured their best experience in the West, which simply shows that we are already looking to the West for light, and I think the policies that are being adopted, under those circumstances, are policies that are fully sympathetic with the West. That is not a question that the Senator and I can quarrel over. Nor will we on the question of statistics of acreage. The fact is, the Senator and I cannot keep right up to date on how many acres have been withdrawn. I think possibly five mil- lion acres is closer to the actual fact than nine million acres, but I will not insist on exact figures since we are reducing the withdrawn area so fast I cannot keep up with the figures myself. Within six months we have restored two and a half million acres right in Colorado alone. SENATOR SHAFROTH: We want to thank you very much for doing that. (Laughter. MR. SMITH: Out in Denver they had a similar experience; -they thought they had more land tied up than was actually tied up. Only yesterday I recommended nearly a half million acres of restorations, and I suppose Colorado had her share. I remember that Montana had a large amount. The bulk of the withdrawal talks which we hear so much is to the effect that two hundred and fifty million acres are with- drawn. This figure shrinks a good deal when we examine the facts. I am speaking roughly, because I cannot keep up to date on these figures, but there were less than sixty million acres of coal lands with- drawn on July 1st. SENATOR SHAFROTH: I understood a hundred and ninety-five million. , MR. SMITH: We never had that much land withdrawn. I think sixty or seventy million is the present figure, somewhere around there. The bulk of it is coal land withdrawn simply for the purpose of classi- fication into non-coal lands, or coal lands, and the latter even are re- stored to agricultural entry for the surface, and to coal entry for the coal in the lands. That kind of classification and restoration has gone on right along. Every month we whittled away a pretty good amount, say one million acres. If we had more money we could whittle faster. (Laughter.) The fact is we are reducing these withdrawals constantly and ma- terially. We have outside of the coal withdrawals about ten million acres, four million acres of oil, which may be chiefly public land or it may not be. The Supreme Court is passing on that. These with- drawals look big on paper, but the area is not quite as large if we should cut out some. We have about three million acres of phosphate lands and possibly two million acres in the water power sites. The water power sites and the oil lands and the phosphate lands we are holding, pending legislation, in the hope that we are soon to get some laws that will provide for the proper kind of disposition. If Congress says "Sell," these lands will be opened for sale. If Congress says "Lease," they will be opened for leasing. If it was not for the purpose of this present argument with the Senator from Colorado, I would say that the bulk of these restorations in progress at the present time is in Montana, but I can say that this question of acreages is a very lively one, and we cannot speak by the as regards exact statistics. t OFFICIAL PROCEEDINGS Now, with regard to the sales of coal lands: Since we adopted the- present policy the sales have been approximately the same as they were for the same period before. In Colorado tke fuel companies, railroads and private individuals, and the State of Colorado together own a good deal of coal land. The General Land Office sold last year about the same tonnage of coal in public lands in Colorado as the coalcompanies were mining from priaate lands in that State. We are meeting the market demands even at these prices. Of course we haven't sold any coal lands in Colorado at $400^ but we went across into Wyoming and did it. We sold a section of land for $400, wfaich is saving for public- use the money that formerly went into the hands of the speculator. But the question of taxation, although I did not touch upon it in, my paper, I realize, is a very important phase of this question, and I would take exception to some things said by the Senator. In the first place, this holding the land at coal land prices is not keeping the people off the land, it is not preventing the disposition of the surface of that land. The land is going into the hands of the men on the ground, the- surface entrymen, and they are paying their taxes to the State of Colorado. It is true the coal under that land is being reserved, and is not ready for taxation, but when it is sold it at once becomes taxable^ and can be taxed by the State. In regard to taxation an argument can be made in favor of the policy of putting a price on the land. The Federal Government has been helping out the Western States in this matter of taxation, because in the Western States I cannot say Colorado, though I know it is true in Montana and New Mexico the States are beginning to put a tax valu- ation on coal lands that expresses the coal value, and they are copying our figures that express that coal value. The Northern Pacific Railroad in Montana is paying taxes on its coal lands, as coal lands. So the Federal Government is in this indirect way really helping the States. I had on my desk the other day a request from one of the Western States to give the totals- of all valuations for the use of the County Board of Appraisers. Now as to what we think of this matter of leasing the coal lands. I think my proposition is simply that the United States should prepare to follow the excellent example of policy and practice which is afforded by the States of Colorado and Wyoming, who do not sell their own. coal lands, but lease them. If we went a trifle further West we would find one State that is not as wise as these States we mention, but actually sold for a pittance coal lands which were adjacent to public lands which contains an undeveloped resource. Why should we not- quarter and two dollars and a half. There are the two extremes one State selling the land for a pittance and the other holding their lands in the name of the State and leasing them at a fair figure. We prefer to follow the example of Colorado. In this matter of taxation I believe the subject has been dis- cussed at another session I think we should look forward rathter- than backward. Why should we continue in the idea of taxing the lands valued at fifty dollars t$Q State sold out for one dollar and a in the Southwestern part of the United States, as well as the North- eastern part of the United States, turn our faces in the other direction? We talk about taxing the output of timber land in the Eastern States. Why isnt it a good policy for coal lands in the Western States? So- I think the policy to advocate is to tax the product of the land. I am not a lawyer, so I cannot speak with the assurance of a lawyer about the right of the State to tax a mining right or lease. I know a lawyer who thinks the State has such power, but I do not think:: there is any question about the State taxing the product of the mine. AMERICAN MINING CONGRESS 51 Suppose we follow the example of Colorado and charge ten cents ,per ton on the coal. The simplest thing is to divide that royalty be- tween the Government land owner and the State. Permit me to indulge in some very simple arithmetic. Take that land in Wyoming which sold for $400 per acre, a sale amounting to over a quarter of .a million dollars. At the present time that sale could be added to the property which could be taxed by the state of Wyoming. I do not know the tax rate up there, but under the sale policy that land is taxable just as the Senator believes it should be. There is also a plant which must be erected on that land which will probably cost more .than the land. The land was sold pretty cheap, you see. If now we should consider that the plant has an output of one-half million dollars a year and we would consider that this land, instead of being sold, was leased by the State of Wyoming or the United States, there would be a royalty of some fiffty thousand dollars paid annually to the Federal Government. Now wouldn't it be fair to divide that royalty and give Colorado or Wyoming a return that would exceed .any reasonable tax that would be put on the land? So I think we do not need feel that the State has no possible way to getting re- turns in money in case there should be Federal leases as well as a state lease, or a system of Federal lease instead of a Federal policy of sale. I was interested when the Senator from Montana brought up the particular case where the coal company had exhausted its land. Now it wants to buy or lease adjacent public land. Why? The reason is that they can make better terms with the Federal Government than they can with the property owners whose lands surround the coal company's mine. They would rather pay five cents to the Gov- ernment than twelve cents to the corporate owner. The same way with oil, the Federal lease promises to be more beneficial, more satis- factory than dealings with middlemen. SENATOR SHAFROTH: The gentleman referred to Colorado, .and the policy which had been pursued by Colorado. I wish to show that he has not stated a parallel case. In the first place, I want to explain how the sales have been made by the Government in the policy he has assumed. It was decreed in the early days when coal lands were taken up that twenty dollars an acre should be paid for land within a given -distance of a railroad, and ten dollars an acre beyond that distance. Under that policy these lands were disposed of at ten dollars and twenty dollars an acre, and we have today in Colorado nine million acres of coal lands that have not been taken up at all under that ten dollar provision. It showed it was a wise policy in developing the -country. Now the Government for th,e past ten or twelve years has been withholding those lands by reason of that, although the march of civilization has gone on. These lands have become more valuable. By reason of that the department officials have not acted as they should, in my opinion. Nevertheless, I am not here protesting that these lands be sold at the low price. I am not here to say if this land is worth four hundred dollars an acre, it should be sold for less. I want to say in this very instance that Mr. Smith cites of land being sold for four hundred dollars an acre. I want to know why Wyoming should have been for years deprived of the tax on that land. It is the pfevention of the right of the State to tax that I am pro- testing against. In relation to the coal lands acquired by the State, the State has taken these lands for the purpose of development. The 52 OFFICIAL PROCEEDINGS very object and purpose of the Government giving those lands is for the State to make those lands as valuable as they can and get as much revenue as they can to help the National Government itself, and in the case of State lands, all the money comes into the State Treasury, and it realizes just as much in the payment of dues to the State as if it had a tax collector upon the land, and consequently it is in the same condition as where the National Government takes something within State jurisdiction, the proceeds of which goes to its own treasury. There is the difference. The State government can lease or sell the land at as high price as it pleases, because the land goes to the payment of the taxes and expenses of the State. That is perfectly proper. But when you come to the National Government, who takes that money and puts it into the Treasury, money that should be taxed by the State, it is an entirely different proposition. Remove the question of taxation and then you will win the case. The Government cannot hold and should not hold these lands just as it did in Wyoming, up here, worth four hundred dollars an acre, and yet the burden of maintaining the State, county and schools falls upon the people. It is wrong in the fundamental principle. THE PRESIDENT: To complete our official view of the situation we would like very much to hear from Mr. Clay Tallman, Commissioner of the General Land Office. Mr. Tallman's address will be found at page 188 of this report. SENATOR SHAFROTH: I want to say with relation to the check that the distinguished visitor from the land office has mentioned that it must be borne in mind that every dollar which is expended by the Government has got to be assessed against the very land owner who gets the benefit from the improvement and is paid to the Government to reimburse it for its expense; then the Government is through with it; iris only a loan, until the owner of it pays it back. It is merely for the purpose of erecting these irrigation works and then letting the owners of the land benefited by that work pay the cost back into the Government Treasury. THE PRESIDENT: Gentlemen, the hour for closing our after- noon session has already arrived, and we have one more paper, which I think will have to be read by title and appear in the transaction-the observations of Dr. Erasmus Haworth, Lawrence, Kan. on "Federal rVcords" ^ Sch0 ls ' Which wil1 be read bv title and appear in the - of , the . Committee on Mining Investments is in order at t I? the f absen ^ of th e chairman.. Mr. W. R. Allen, of Butte, , the Secretary will present his report. Report of the Committee on Mining Investments. the ^e'c? U J ^ mmi f tt Ki n fining Investments, to whom was referred as follows: y legislation, do report and recommend f " b J U f sky 'L law le ^ islation h ^ shown that the tr, f ,,^ PaSSed u have the earma rks of politics; this we de & the s^verl'l^t^'"'' 18 St Cks are found to be for sale in a great many of AMERICAN MINING CONGRESS 53 presented to it. That copies of the bill and resolution of indorsement be printed and placed with the Secretary and Executive Commitee and officers of the Congress, with instructions to mail the same with letter of transmittal to the Governor and both branches of the Legislature of each State when the Legislatures are in session. 3. That the bill drafted and receiving the indorsement of this Con- gress be aimed at honest State regulated publicity of facts sufficient to advise a prospective investor as to the assets of the company, its re- sources and indebtedness, and such other facts as are legitimately public property in any industrial or commercial company, and that such pub- licity be under State supervision and become a permanent State record' with the proper officer, and that no arbitrary power, with reference to the sale, disposition or marketing of mining stocks, be placed in the hands of a single individual or of any State or political boards, and that such bill see to it that mining companies be protected from unjust dis- crimination as to their stocks and their publicity as compared with any other stock industrial, mercantile or others. 4. We recommend that each member of the Congress keep in touch with this legislation in his State, and through the Secretary and Execu- tive officers of the Congress, furnish the influential members of their several Legislatures with copies of the bill and its indorsement from this Congress. And also use every honorable effort to see that the only "blue sky" law passed be the one having the indorsement of this Con- gress. 5. That this Congress take steps to have a uniformity of laws upon this subject and that we endeavor to obtain reasonable national legisla- tion upon this subject. Respectfully submitted, W. R. ALLEN, Chairman. THE PRESIDENT: We hope all will be present to-night promptly at 8 o'clock to listen to the address of Dr. Van Hise. Adjourned until 8 P. M. WEDNESDAY, OCTOBER 22, 1913. Evening Session. Meeting called to order by the First Vice-President, Mr. Hennen Jennings. CHAIRMAN JENNINGS: The meeting will please come to order. The Secretary has some announcements to make and some resolutions to read. THE SECRETARY: Mr. Chairman, I desire first to announce that the paper which appears on the program for this evening session, following the address of Dr. Van Hise, was mistakenly placed at that place on the program. It should have appeared as the first thing ora Thursday morning. RESOLUTION NO. 2 (Introduced by David W. Brunton.) RESOLVED: That the Mineral Land Law Revision Com- mittee of the American Mining Congress be requested to confer with and, if possible, enlist the support of the American Institute of Mining Engineers, The Mining and Metallurgical Society and all other kindred organizations in an effort to bring about such amendments to the mineral land tews of the United States as will inure to the benefit of the Mining Industry. S4 OFFICIAL PROCEEDINGS ;r RESOLUTION NO. 3 (Introduced by Charles E. Maurer, of Ohio.) WHEREAS, There are at present a great many different schemes and systems of valuation of mining properties lor the purpose of taxation, and WHEREAS, There is a tendency in many of the States to place an undue share of the burden of taxation upon the mining industry, and WHEREAS, There should be some uniform system of valuation of mining properties for the purpose of taxation, there- fore, be it RESOLVED, That a special committee of the American Mining Congress be appointed to investigate and recommend a fair, uniform and equitable basis of valuation upon which taxes shall be assessed. CHAIRMAN: Referred to the Resolutions Committee. THE CHAIRMAN; Ladies and Gentlemen, we have the privilege tonight of hearing an address by Dr. Charles R. Van Hise, President of the Wisconsin University, Madison, Wis., on "The Relation of Big Business to Industrial Prosperity, with Special Reference to Mining." I have the honor and privilege of introducing to you Dr. Van Hise. (Applause.) Dr. Van Hise's paper will be found at page 391 of the report. DR. E. W. PARKER, Washington, D. C.: May I ask one question, Professor? Do you include the labor question? DR. VAN HISE: I do include the labor question. As a parallel to the proposed commissions, we should think of the Interstate Commerce Commission. Gradually, step by step, its power has developed; at first moderate, and now extensive. Labor is entitled to a reasonable wage; labor is entitled to reasonable living conditions. Both of these would be securable under the system advocated, because the commission could take them into account and impose such conditions as would result in reasonable wages, sanitation and safety. The question of whether or not the commission should have authority to fix wages, or to have the regulation of wages, of course, would be one of the last to be taken up. How far the regulations should >go finally, I would not pretend to say. In the case of the railroads, it so happens that I was a member of the board of arbitration which spent several months on the labor problems submitted to it. The board took the position that if the public compels the operation-of the railroads and the commissions control the prices which may be charged by them, labor should surrender its right to strike and submit to regulation. A great railroad strike might tie up the railroads for a section of the country as large as France and with a population as great. This would result in much loss of life and immeas- urable suffering. No man or group of men, either laborers or operators, or the two combined, should ever have such a right. He who goes into the railroad service should surrender the privilege of strike in the public interest, but if he does so, he should have the protection of a public commission. I am not so absurd as to expect that all the things advocated will be accomplished at once. In America we move conservatively. We take at first a short step and see how that will work, what it will accom- plish; and with the experience of that step we take the next. DR. RUFUS J. FOSTER: In Dr. Van Hise's address he quoted a statement in regard to Dr. Holmes, which I would like to correct, from actual knowledge and experience. AMERICAN MINING CONGRESS 55 i3r. Holmes, as quoted by Dr. Van Hise, says that in the early days of mining, no more than thirty per cent, or forty per cent, of anthracite coal would be brought to the surface, which is correct; but the state- ment that today only fifty per cent, is brought to the surface is absolutely wrong. In many instances, as high as ninety per cent, is being brought to the surface, and it is safe to say that, taking the region as a whole, seventy-five to eighty per cent, is being brought to the surface; and, further than that, much of the coal that was abandoned in the early days by the individual operators, working under the conditions of those days, is being utilized now by the companies working the same. As an instance, I would just cite the Centralia Colliery, of the Lehigh Valley Coal Company, which is located in very close proximity to my boyhood home, and very close to where I first started in work in my profession as a Mining Engineer. That colliery today, and for several years past, has been mining virgin coal. It has been mining; its coal from the abandoned workings of the abandoned Lawter Runt, Colliery, abandoned over thirty years ago. The Centralia Colliery itsefl 1 thirty years ago, was considered practically worked out, and the same can be said of the coal that was taken from the old workings of the Continental Colliery. That is just one instance of numerous instances through the anthracite veins. It has come about by greater skill employed by the companies, by better facilities in every way, better machinery, better methods and the expenditure of large sums of money that the individuals could not afford to spend, and that colliery is mining and shipping today almost as much coal per month as the whole four collieries did thirty years ago together. That is only one instance, an<$ Dr. Holmes' statement that but fifty per cent, of the coal is taken out is. absolutely untrue. I have objected to it in the past, and I stand again to object to it, and it will be borne out by the gentlemen connected with, these collieries. DR. VAN HISE: I am very glad to have the correction. It does not interfere, however, with my argument indeed, it strengthens it, because the increased efficiency described has come in connection with concentration in the anthracite industry. A DELEGATE: I think it strengthens your argument. MR. TAYLOR: In connection with the statement made with reference to your Commission in Wisconsin that they have raised the rates in a number of cases in public utilities, I have forgotten what the percentage was in comparison with those that were advanced. DR. VAN HISE: They have done more in lowering than increasing: the rates. One thing ^ of great importance is inequality. Those inequalities have been eliminated. But some telephone companies were- too optimistic; they did not realize how quickly their equipment de- teriorates, and they were charging such a low rate that they were losing money if depreciation were taken into account. In this class of cases, rates have been advanced by the commission, but I am unable to give you the percentage of advance in the different instances. MR. CHARLES M. MODERWELL, Chicago, 111.: If the Com- mission would be given the same authority as the Interstate Commerce Commission has in regard to the regulation of rates, that would mean they would fix maximum prices; our question would be what to do with minimum prices. DR. VAN HISE: I am in favor of both maximum and minimum,, so far as I am concerned. THE SECRETARY: The Nominating Committee is requested to meet m the red room at 9 o'clock, the Resolutions Committee at 9.15 tomorrow morning. 5 6 OFFICIAL PROCEEDINGS We have received invitations from the Hirsh Electric Company to visit their plant, also from the Curtis Publishing Company and John Wanamaker. There will be a smoker tomorrow evening. The delegates are requested on behalf of the Entertainment Committee to attend the smoker. Admission will be by ticket only, and each delegate will receive but one ticket. Additional tickets can be secured for $2.00 each. It is expected that the tickets will be on hand prior to the closing of this session. Ladies visiting Philadelphia in connection with the Convention are cordially invited to occupy the upper boxes and enjoy the evening's entertainment. After the adjournment the manage- ment of the Mining Show has consented to have the picture show of mining operations begin at 10 o'clock and demonstrations of mine safety and first-aid work in the mine at 10.15. CHAIRMAN: Before proposing the motion of adjournment, I think I am voicing the sentiment of this Congress and whole meeting in extending our appreciative thanks to Dr. Van Hise for presenting .great public questions in a big, grave way. (Applause). Meeting Adjourned. THURSDAY, OCTOBER 23, 1913. Morning Session. THE PRESIDENT: The Secretary will make some announce- ments. THE SECRETARY: I want to call attention first to the smoker this evening. Tickets are ready at the Registration desk for those who are entitled to places in the Convention. If you present your appli- cation at the Registration desk you will be supplied with tickets. Those who are not entitled can buy tickets for their friends at $2.00 each. After the adjournment of the morning session, all of you will appear on the street in front of the hotel, for the purpose of having a photograph taken of the Convention. I want, also, to call attention to another matter. One of the officers of the Congress this morning asked me whether there was to be another demonstration of the Mine Safety Work at Horticultural Hall. If you will read the program carefully you will see it provides for six demonstrations daily, which will continue until Saturday, and the moving-picture show of mining operations at regular times. THE PRESIDENT: We will first have the pleasure this morn- ing of listening to Mr. Charles E. Van Barneveld, of San Francisco, Cal., on "The Mineral Division of the Panama-Pacific Exposition." Mr. Van Barneveld's paper will be found at page 213 of this report. THE SECRETARY: I beg to present Resolution No. 4, by Mr. S. A. Taylor, of Pittsburgh, Pa. RESOLUTION No. 4 (Introduced by Samuel A. Taylor, of Pittsburgh.) WHEREAS, It is very desirable from all standpoints to have a more uniform system of Mine Reports, both as to time of making the same and to the subject matter, therefore, be it ESOLVED: That the Director of the Geological Survey and the Director of the Bureau of Mines of the Federal Government be requested to co-operate with the heads of the Department of Mines or the proper officers of the various States, together with a committee of the American Mining Congress, in order to secure uniformity as to form and time of tnaking mining statistical reports. AMERICAN MINING CONGRESS 57 THE PRESIDENT: Referred to the Committee on Resolutions. MR. S. A. TAYLOR: Mr. Chairman, I would like to make a motion. I will make the motion first and the explanation afterward. I move you that a Committee on Ways and Means, consisting of five members, shall be appointed to act with the President and the Secretary of the Association, as members ex-officio, to take up the question of financing this Association. I do not know whether it is generally known to the members of the Association or not, but the fees from the membership are not sufficient to carry on the work of the Congress. The work of the Congress for the past number of years has been carried on at a great expense by the Secretary, and it has reached a point where he has spent not only the money of the Congress, but a great deal of his own personal money in carrying on the work of the Congress, and it seems to me this is unfair, and if the work of the Congress is to be effective and to amount to anything, those interested in it must surely finance it. Therefore, I make the motion that is now made. Seconded. MR. C. O. BARTLETT: I want to say a few words along the line of Mr. Taylor's talk. I think it was ten or twelve years ago when we had the Congress in Deadwood. I do not know the exact number of years, but it was before Mr. Callbreath's time. As I remember, at that time I had a .paper, and I urged upon the Congress the importance of bringing in other branches of mining. For instance, they were telling us at Deadwood that the production of that great mine there was worth seven million dollars a year. Now, that sounds pretty good, and it seemed nice to go through the mill where they took the ore, crushed it, worked down over the plates and on to the rolls, and I was thinking, and I said: "While you are producing seven million dollars' worth of gold here, in Vermont they are producing more dollars in granite, and they take that granite out of the ground and supply all of the United States. In doing it they employ ten men where you do one." Therefore, I thought it was necessary to bring other mining industries into this Congress. This has been done to a great extent, but not largely enough yet. For instance, two years ago, at the Convention held at Chicago, the bituminous coal operators began to realize the importance of having an Association of this kind. This year it is down here among the hard coal the anthracite men and I am glad to see such men as Mr. Richards, of the Philadelphia & Reading, and other hard coal miners. In fact, they have awakened to the importance of the fact that much of goo.d can be accomplished through such a movement. So far, so good. It is very important that we begin to realize the magnitude of the mining business. We have not even touched iron ore. I represent the lit- tle city of Cleveland, a little city on Lake Erie, of about five or six hundred thousand people, and I looked up the statistics and found the amount of ore shipped to Cleveland last year was twenty-nine million five hundred thousand tons. Now, that ore in that city and other cities is made into other things, and it takes an immense amount of work. We shipped into that city last year ten million tons of coal. We are able to produce a ton of iron a little cheaper than it can be produced anywhere else tn the United States, so that we produce more than a million dollars' worth of stuff a day, largely connected with mining. In the city of Cleveland, nineteen hundred and forty feet below the ground we have developed salt mines, taking out six hundred and fifty tons of salt a day. Mining is a mighty big word, Mr. Secretary; it means a whole lot. Again, the city of Cleveland produces ten million dollars' worth of paint a year. Paint is largely composed of minerals. We have to have 5 8 OFFICIAL PROCEEDINGS graphite, lead, zinc and other things, and those things are important,, very important, indeed, and now when you have taken in first the precious- metals, then the soft coal, then the hard coal, let us go on to the iron;, that is the thing that uses the coal. We have so many foundries, all over the State of Ohio, and many manufacturers using two hundred tons a day under their boilers. In a little manufacturing place, one company is using fifty tons of coal a day. Those are the factories that use the coal. This is a mighty important question. There is no better place to solve it than through the American Mining Congress, and it ought to have the support, not only of the gold and silver, but of iron, lead and other industries. Jt is necessary to protect ourselves. We have been doing a little something at these meetings every year; trying to struggle along to get money to pay our Secretary, who is not paid half enough. He has been working hard, while you and I have been putting in a few days to help him. He has been doing considerable work in Washington, I understand, and now I am going to request the- Secretary that he give this Congress something of an idea of the work he has done, and what is required to do future work. I would like to- have you do that now, if you please, Mr. Secretary. THE PRESIDENT (to the Secretary): It is up to you. SECRETARY CALLBREATH: Mr. Chairman and gentlemen of the Convention: The President says it is up to me. It would be very difficult for me to tell you all of the things I have tried to do in Washington and I Jiardly know how to approach the subject. It is easy for on.e to say because a certain thing has been done that the causes he has put in motion, or has helped to put in motion, were responsible for that result, but we must not lose sight of the fact that this is a great country; that the men who represent it from the various- Congressional and Senatorial districts of this country each have their own ideas, each have their own interests, representing their own people. Therefore, when a cause is a good one and no cause can succeed at Washington unless it is a good one there are many influences which come together in the great stream which unite in bringing about Congressional action. I think it is fair to say that the- American Mining Congress led the effort which culminated in the creation of the Bureau of Mines,. because it desired the greatest co-operation between the Federal Government and the Mining Industry, but for me to assume any special credit in connection with it would be very unfair. It is because we have been able to bring together enough of other influences and be- cause we have been able to show the justice of *vhat we asked that suc- cess was attained. I would much prefer that what little I shall say shall be addressed to the future rather than to the past. I feel that those who have worked together in this movement have demonstrated that they can accomplish something. There is so much more yet to be accomplished that it will be necessary for us who have- worked together to enlist others in pressing such legislative action as the Mining Industry needs. The Mining Industry is of vital importance to the Nation. First, the safety of the workmen; second, efficiency irr operation, and third, the conservation of our natural resources, are ab- solutely essential to the best development of our industrial life. When we contemplate all of the things which ought to be done for the benefit directly of the Mining Industry and, indirectly, for the benefit of every other industry, the work seems appalling. One staggers at the thought, until he realizes that the forces through which we must work are just as anxious to do the right thing as we are to have them do it. The impression often prevails that members of Congress go down?' to Washington, answer the roll call, draw their pay, play golf and don'f do much else. The impression is in the minds of many people that AMERICAN MINING CONGRESS 59 -members of the National Congress are more or less venal, and that they .are not influenced except by sinister motives. I am sorry there is such .an opinion as this, as I think I know it to be absolutely unjust. The members of Congress are the same kind of men you would be if your ambition had led you in that direction, if you had successfully asked the .support of the people in your Congressional district to send you to rep- resent them at Washington. When you reached Washington you found the one thing you regarded as the important thing, mighty insignificant when compared with all the other important questions which were -crowded upon you for consideration. When I was first sent to Washington, I soon found that Congress- men were like the rest of us; convince them that a thing was right and they would give it support. An early experience was a call upon a prominent Congressman in his office. His desk was full of letters, and he was dictating to his stenographer. I gave him my name and asked for a date when I could have an opportunity to talk with him a very few minutes, noting the fact that he was busy. He wheeled in his chair and, in effect, said, "I always will be busy. When I first came to Congress, I thought I ought to know everything; after I had been here awhile, I found if I knew two or three things well it was all I could do. Now I .am satisfied to know one thing well. Tell me your story and tell it quick." I told him my story in about three minutes, and left him a typewritten brief explaining why the Federal Government should co- operate with the mining industry, which I asked him to read. I said to him: "My name and telephone address are at the bottom of this brief, and if you want further information, I will be delighted to talk to you about it." I did not expect to hear from him again. Within a few hours a telephone message from him asked me to call the next morning. He listened to my whole story patiently, and when I had finished he said: "You are right; whenever you want my help, let me know." Many times that member has been in his seat ready to help us in some legisla- tion in which we were interested. Our first appropriation was for $150,000, "for conducting such in- vestigations as would lead to greater safety and efficiency in mining op- erations." When the bill carrying the appropriation was under consid- eration, and this item was read, it carried the words, "In the territories and the District of Alaska." The chairman of the committee who had it in charge did not realize that this amendment meant that this money could only be spent in a few localities in New Mexico. It happened that at three o'clock, when this clause was reached, a special matter had been set for consideration, and the action on this item went over. This gave opportunity for a fight, through which the objectionable words in this bill were eliminated. That was the beginning of the work which led to the creation of the Bureau of Mines; that was the first efficient movement in the agitation which has led to a decrease of approximately thirty pel cent of the loss of life in coal mining operations. We did not do it, bul we aroused public sentiment all over the country. The purposes of the Mining Congress cannot well be described ex cept in the general terms the bettering of the conditions of the Alining Industry and the work varies with the force of the efforts of others who seek undue benefits at the expense of the industry. The great industry of Mining should be represented by a Depart- ment of Mines, with a dozen bureaus, each striving for the benefit of some particular branch of the Mining Industry. This will come if we stand together as we ought. We need to get rid of the bickerings and jealousies that exist between one section and another. Let us not attempt to work out the things which neighborhoods cannot agree upon, but let us fight only for those things upon which all can agree. There are enough important questions concerning which all agree to keep us pretty busy from this on. When we have decided what we want, let 6o OFFICIAL PROCEEDINGS us go to the members of Congress with a plain business statement, not with the expectation of unduly influencing them, but simply pointing out to them the justice and importance of our plan. When enough members of Congress are ready to give their support to a movement, the presiding officer and steering committees will have hard work to fence out the legislation. What we need to do is to be in position to present our case to the members of Congress in such a way that they wiU understand what we want and why we want it. Convince them that it is right and there will be little trouble about legislation after that. It seems to me that in the future we ought simply to do what we have tried to do in a small way, in a much larger way. I must confess to you my utter inability to keep in touch with all the mining problems and look after the regular work of the organization. The people who organize best get the best results. Each special interest is working for itself. Let us stand to- gether, not asking for unfair things, but for those things which are for our benefit, and alike for the benefit of every other industry of these United States. Each special interest is working for itself. Let us stand together, not asking for unfair things, but for those things which are for our benefit, and alike for the benefit of every other industry of these United States. Let us first seek safety in mining operations and proper care for those who are the necessary victims of industrial accidents. Let us seek the highest efficiency in mining opera- tions to the end that the consumer may have the product at the lowest possible price consistent with satisfactory conditions and wages for the miner and a fair profit to the producer. Let us stand for those things, and stand for them together. I thank you. (Applause.) THE PRESIDENT: I would like very much to say something on this subject myself, but we have an extended program. We will now have the pleasure of hearing an address by Dr. W. W. Parker, of the U. S. Geological Survey, on "The Cost of Coal Mining." DR. PARKER: Mr. Chairman and Gentlemen of the Congress: Speaking of Congressmen, Mr. Callbreath a few moments ago recalled to my mind an incident that occurred in Washington. I happened to have luncheon with one yesterday, and I might say that it was at the New Willard, and I might also say that it was at neither his expense nor my own. This Congressman was leaving the Capitol for the pur- pose of meeting us at luncheon. As he was walking to the street car he saw an auto truck passing near by, on which a part of the freight was a cow, and he remarked that that is the way it was in Washington- cows rode in automobiles and the Congressman had either to take a street car or walk. (Laughter.) Mr. Parker's address will be found at page 384 of this report. THE PRESIDENT: The subject of Mr. Parker's address is so closely related to the succeeding address that we will postpone its discussion until we have heard from Mr. John W. Boileau, of Pitts- burgh on What is the Matter With the Coal Mining Industry?" Then we will discuss both papers together. MR B. F. HOFFECKER: I will have to make a little correction to the President for presenting Mr. Boileau. This is not Mr. Boileau, but one of his employes. I feel like a little Daniel in a very large den ? iVi? nS ' u ^ as forced to make tha t comparison by the remark of Mr. Callbreath He found Mr. Boileau would not be here this morning, and when I told him I was to read Mr. Boileau's address he asked me 1 was ready to beard the lion in his den. I do not think I will be badly torn I hope not. Mr. Boileau's paper will be found at page 375 of this report. THE PRESIDENT: Gentlemen: The subject of both papers is now open for discussion. AMERICAN MINING CONGRESS 61 MR. A. J. MOORSHEAD, of St. Louis: I believe that I am expected to open the discussion on the subject matter before this as- sociation. I feel myself totally incompetent and unable to be of any benefit whatever to the industry, although I have been connected with and taken part in the affairs of the operators and their organizations and also the United Mine Workers since we became a part of that associa- tion. (Laughter.) And nothing but confusion and dissatisfaction has prevailed. The last speaker, it seems to me, should have been the first on the list, with the subject, "What is the Matter With the Coal Industry?" Lack of organization, lack of co-operation, and lack of common inter- est that is the trouble with it. You gentlemen who came here and were present at the first session must have been distressfully impressed with the number here when the committee representing the city of Philadelphia made their opening remarks and welcomed us less than a hundred. They tell me there were twenty-five hundred on Monday night at a prize fight, and we scarcely had fifty men at this meeting on the opening day. A more discouraging situation to the President and Secretary I never saw in my life, and I want to say to you that it is that condition of affairs that brings us into absolute contempt with the public, and we deserve the ill fare that we get, just because we do not pay attention to matters that are of vital importance to us. (Applause.) But what are we going to do about it? What is it that is the cause of it? I have had to admit, and I still have to feel, that selfishness is very largely the cause, and it is not only ruining those who, by mis- fortune, are put up against matters that they cannot control, but it is going to ruin the selfish men that promote or force such a condition, and ultimately they will have to pay the same penalty. You cannot, through inactivity or any other means, allow another man to fall or bring about a business condition that will cause him to fall, without at the same time falling into the pit yourself, and covering yourself with the mire that is created by it. I am sorry to feel the necessity of rebuking a class of business men engaged in the most important industry in this country in the manner in which I am now doing it and have had to do, but it is about time that somebody said plainly what a great many people have been thinking for a good many years. (Laughter.) You must have been convinced, when you heard the Senators talk- ing yesterday, that one thing that troubles as much as any other is the constant conflict that is going on between the federal and state govern- ments, and we are being ground between those two millstones and I say that because I know it. It has been my fortune I say fortune be- cause I have gotten considerable education out of it to represent some of the operators before the Legislature of Illinois for a great many years, and I know some of the working methods of that body or rather, those two bodies and how their work is accomplished and how the Federation of Labor manage their affairs. How have they been doing it? They have bodies of skilled men constantly present during legislative sessions, and they are on the job all the time from early morn until late at night in fact, as long as it may be necessary to accomplish what they want. Where are the operators? They generally leave one or two men to do the whole work for them, with the final result that when the reports come in and they find some additional legislation saddled upon them that is going to prove ruinous, as they believe, they blame the one man who stayed faithfully on the job and tried to do the best he could. ^2 OFFICIAL PROCEEDINGS And this fairly illustrates the difference between the interest shown .by those representing labor and the methods of those who are in charge of important business affairs and undertakings. Now in regard to legislation; let us see what it does. And I am going to tell you that I am not a friend of state rights. The State of Illinois furnishes perhaps one of the best examples that I know of, of striving to regulate an industry in a single state, and it largely results from what is called advanced unionism and advanced legislation. For instance, there has been passed by the Legislature of the State of Illinois a Workmen's Compensation Act a good measure if it were a .national one, but when it is saddled upon one State and not upon the .neighboring states, all engaged in the same industry (say, coal mining), where the product all goes to the same common market, is of the same grade, and has the same mining and freight rates, there is a burden that one State must carry which the others do not have to suffer at all. Furthermore, we have in our State another good law if it were a national one, and that is that all mine buildings shall be of fireproof construction stone, brick, rock, etc. and that the shafts shall be con- creted. There is not a man engaged in >mining but would admit that he would rest a great deal easier on his pillow at night if by the proper kind of legislation all operators were compelled to so construct their properties and were so regulated in all States alike that in the operation of the mines they would be as safe as it would be possible for mortal -man to make them. We only object when such things are saddled on one State alone and not another. There is the trouble. And we have the lesson again of the lack of co-operation; one State does not, in the matter of legis- lation, care a continental about the others. It seems to be a question of satisfying the interest that brings the votes to them and how aggres- sive those people may be in demanding legislation. Some of the Legis- lators even boast of the fact that they have had a thousand bills to con- sider and that they only passed three hundred. And that condition of affairs goes on every two years regularly until the special laws special enactments are so great in number that no lawyer in the State can be expected to know what there is on the books, except in a gen- eral way, and no lawyer in one State pretends to know anything at all about the laws in the other States, except the common law; and there is your confusion right there. So far as I know, no attempt has been made by the Legislators of the various States to get together and pass common laws for the samo industries for the general good of all. No, they don't think of it. At the last session of the Legislature of Illinois, a most important measure came up, and it became necessary for me to show how it would afreet the coal mining industry. It was known as the full crew bill a railroad measure intended to regulate the size of trains. The bill pro- vided for a crew of six men engineer, fireman, conductor and three brakemen. This was considered a full crew, and a crew of that size could take out more than fifty cars, empty or loaded; but if perchance, through payday fever or some other cause, a brake-man did not show up for duty, a train of seventy-five cars that were to go to take care of two mines would .have to be cut down from seventy-five to fifty, and the miners who went to work in the morning on the statement that there would be plenty of cars at the mine would be disappointed. One mine could not work, simply because one brakeman did not report for duty. 1 said to the committee that we were more interested in that bill than the industries put together in the State of Illinois, and further hem that we moved in railroad cars in the last fiscal year fifty-three million tons of coal we mined more than that, but that is what we put into the cars. I stated to them that it required thirty-seven thousand trains to handle the product, fifteen thousand trains of which AMERICAN MINING CONGRESS 6$ were necessary to move the empties and twenty-two thousand to move the loads that we did our business by the train load not like 'other shippers, the general run of whom handle a car or two at a time that with us the cars had to come in sufficient quantities for a full day's work; otherwise, under the resolutions of most of the local union bodies in Illinois that if a certain number of empties are not on the tracks ins the morning the mine could not operate, we would lose that day's work. I furthermore stated to them that they undoubtedly did not know, and perhaps had never taken the pains to find out, what the industry- meant to the State, and what a wonderful asset it is to the State; that the cars required to handle our output would, if coupled together, reach more than one-third of the way around the earth; in other words, when coupled together, would stretch eighty-five thousand miles,, but to better describe it, they would stretch from New York to San Francisco and back again, and there would still be enough left over to- make a train of cars that would reach from Omaha, Nebraska, to Chi- cago, and from there to New Orleans; that, as wonderfully great as our industry is and as necessary as it is for the welfare of the State, I was. not making an exaggerated statement when I said that coal mining as a whole in Illinois is insolvent bankrupt. It is true that there are a few companies here and there that are enjoying some local conditions or special grades of coal that are doing very well, but as a whole it is bankrupt, and I told them they could easily verify what I s?id by going to the banks in the city of Chicago or in Springfield or down through the coal fields, and that at all those places they would find thf banks loaded up with the worthless securities of coal mining companies Of course, they wanted to know what the causes were, and they are largely political. If you will take our industry, you will find that no- move can be made by an operator seeking to organize or form a com- bination or trust without his being assailed by press and public alike and naturally, too, for the reason that it is the foundation for the wel- fare of all commerce. Without it there would be none. It has made this great country. The business men naturally watch it jealously; and it requires just as many heat units to keep life in the bodies of the poor as in those of the rich. All must use it in some manner, and con- sequently the whole public is so interested that they are continually talking and writing about it, and they watch it with a jealous eye. What about other industries? They have seemingly fattened under the Sherman Act grown up like mushrooms; but with the coal com- panies it makes no difference whether it is in the purchase of raw material or manufactured articles, we must pay combination prices for the more important things at least. On the other hand, labor is a trust, and in our State it is recognized as a lawful one, and the statutes specially protect labor from prosecu- tion under the anti-trust laws. We would have no objection to all these things if we were per- mitted to do as others are allowed to do, but we are ground between the combinations of industry on the one side and the combination of labor on the other, with our own interests denied the same privilege of combining to benefit themselves. There is the trouble with your state rights. What we do need is a common law to govern us all alike. If we could have that, we would be better off, in my opinion. The Federal Government, if it could have- charge of the entire mining industry, with laws for all alike, governing the construction and the operation of mines on lines of safety, going even to a greater extreme than Illinois, would solve the problem that apparently cannot be solved in any other way. It would do away with the under-capitalized companies with incompetent organizations, %ho construct and equip too cheaply for safety, and operate without a view to conservation in any sense. There are many such low tonnage prop- 64 OFFICIAL PROCEEDINGS erties in Illinois, and they set the pace and make the prices; too often at ruinous figures. My idea of Federal Government control is that all should be com- pelled to construct and operate properly and safely. It would dignify the industry, and the small operator could then, if he desired to go into the coal business, invest his money in the securities of good, sub- stantial properties, and it would give him a better guarantee than he now has, and, what is more, when that state of affairs came about, we would find ourselves working with a more skillhri and intelligent class of people; and such interests would find a way to co-operate together. As it is, co-operation seems impossible. In our strike troubles of 1910, while we were facing the United Mine Workers at the front door, many of the small companies, so to speak, were running out at the back door. That is our trouble exactly. I do not know how we are going to remedy it and do not know how we are g9ing to bring about federal control, except through an organiza- tion like this. It seems to me that if the right spirit prevailed if we were really in earnest and got together with the avowed intention of doing something, we could at least help ourselves more than we have been doing in the past. We could perhaps find a way to bring about a commission that would help the States enact more uniform laws, especially when affect- ing such an industry as mining. All bills presented by the United Mine Workers should be submitted for enactment to all legislative bodies at the same time, and it would be better if the bills were jointly agreed to by employe and employer before being presented for enactment. This, I believe, under properly organized methods, could be easily brought about; but the way we are going on now, some States have little or no legislation to govern them in mining, while others are saddled so heavily that they are brought to insolvency, which, as I said before, is the case in Illinois. We find the same lack of co-operatio*n and organization in the United Mine Workers' ranks. Their aggressive organization in our State has loaded the mining companies to death with mining rates and conditions that the operators of that State would not complain of if they were borne by all alike. And so that organization, like ours, drifts on to the point of least resistance, and we all seem to drift on, each one independent of and indifferent to the conditions existing in other dis- tricts and States, so long as they are less favorable than our own. Until such time as we can learn to give as well as take and be willing to work on lines of reasonable equality, we must expect to drift on from bad to worse, and that is why the industry and its organizations are so completely demoralized. I do not know whether the statement is true or not, but have been told that the Secretary of this Congress has had to advance this or- ganization $3,500.00 of his own money to discharge its obligations. Is that right, Mr. Callbreath? SECRETARY CALLBREATH: You refer to the probable deficit on account of the mining show. I hope it won't be quite so bad as that. MR. A J. MOORSHEAD: Well, do you have to advance any money at all? MR. CALLBREATH: With reference to the $3.500.00 referred to, t is a question as to the outcome of the Mining Show. At present it looks like a loss to us. MR. MOORSHEAD: In other words, he has to run a side-show here to keep this organization alive. What do you think of that? (Applause.) What can we expect to gain what can we expect to secure when we show so little interest? But few of the operators seem to take it seriously; and I say that in a comparative sense Do you AMERICAN MINING CONGRESS 65 suppose that the gentlemen representing the Mayor, and others who came to bid us welcome took us seriously? And could they be expected to do so when there were not more than about a hundred members present? I told Mr. Callbreath that if I had been the Secretary or the unfortunate President of this body, I would have told them a story that I believe would have been apropos and sunk into their hearts pretty well, but I cannot give it to you now. A DELEGATE: Give it to us anyhow. CHORUS OF VOICES: Story! MR. MOORSHEAD: It is probably an unusual thing for me to come here and bring out points of this kind during the discussions of technical matters which have been read before this body, and such as Mr. Parker, the Statistician, has given to us. We know that in our accounting system there is no regularity or fixed way of doing things^ and so it goes down all along the line of our work, and even to this Congress here; we drift and we do not do things as we should. We come here and we talk about them. We are like a certain party who went to confession; he told the same old story every time until the good father said to him, "My dear man, you have been coming here relating this story so long that I should think you would get tired of it. Didn't you do penance when you committed the crime?" He said he did. "Well, what are you bringing it up for here again"; and the man answered, "I just like to talk about it." (Laughter.) That is it exactly we just like to talk about it and I have begun to think that a great many have come here for that purpose only. It is about time we changed our habits, and I have concluded, myself, that until we can have a better and more enthusiastic organization, we are largely in the position of a farmer who went to market a calf. He got up at sunrise, giving himself plenty of time to go to the little station from which he was going to ship the calf, and which was only about three miles from his farm, but when he got to the brow of the hill where he could see the depot, he had traveled ten. He looked at the calf and wondered whether the calf felt as tired as he did. As the train was nearly due and he wanted to land the calf on the platform in good shape, he concluded to grasp it by the tail, and as soon as he did, the calf jumped into the air and then went down the hill at full gallop. The old farmer was taking strides twenty feet long, and those at the road- side who saw them coming cried out to the farmer, "Let go, you old fool; you can't stop that calf." The old farmer, still clutching the calf's tail witrj a death grip, cried out, "No; I know I can't, but if I can hang on, maybe I can steer him a little." (Laughter.) I have got to the point now, where all I am able to do is to try to steer you a little. (Laughter.) And this talk of mine (perhaps not quite to your liking), is given with the thought in mind of trying to steer ourselves in the direction of a better and more enthusiastic organization, with ample working fund and strong membership, that will do sub- stantial things for the benefit of the whole mining industry of the country. What we do want are results, and to permit nothing to inter- fere with us in carrying them out. When it comes to co-operation, the principles we apply at home in our own business affairs we do not seem to bring and apply here. I said in Chicago, at one meeting of the Mining Congress, that I knew of no better means by which the industry could lift itself up out of the mire to the dignified standing it deserves than through the American Mining Congress something that would bring us together from all parts of the country to a place where we could concentrate our thoughts and efforts, and accomplish, through legislation and other means that might be necessary, some good for all. I thank you, gentle- men. (Applause.) 456 OFFICIAL PROCEEDINGS THE PRESIDENT: Before the discussion becomes too general, we would like to hear from Mr. Carl Scholz, of Chicago. MR. SCHOLZ: Mr. President and gentlemen: I scarcely think it is fair to have me succeed Mr. Moorshead in this discussion, not only because he is an able orator, but he comes from my State, and has practically told my story. There is very little which I can add. The coal mining industry reminds me pf a fable which I heard when quite a young boy, about a father and his seven sons. He called them while on his deathbed and presented them with a bundle of seven ,sticks, and asked each to try and break the bundle, in which none suc- ceeded; thereupon he cut the string and handed each son one stick, who broke it very readily. This same moral applies to the mining industry. Individually, we are not very strong, and only by combined efforts can we hope to resist the force of attacks made on us from every side. While each mine owner must do his share for any improvement in our industrial situation, his influence can only be felt when the results are iitilized by a large organization. Perhaps one of the most impressive lessons which I now recall was my first attendance at a wage meeting -at Indianapolis some ten years ago. The largest meeting hall in town was packed from the stage to the gallery, and with chairs in the aisles; on one side were the miners, and the other side their employers. There were miners from every coal mining district in the United States, whether or not their contracts had expired, or even where they had no -organization. iThey were there to learn how they could benefit their -cause, and by their presence lend strength to the body asking for a new wage contract. The operators from the affected districts were there in full force, with a large number of officials and advisers. When I look over the small attendance at the session of this Mining Congress, I am, indeed, disappointed, and feel sorry for the officers who have made -such strenous efforts to have a full representation. The only excuse for this small attendance must be due to lack of knowledge of the work which can be accomplished through the American Mining Congress, because the work is certainly of as much importance as wage confer- ences, ^and we should have men here who have no contracts with the .miners' organization; therefore, our attendance should be much larger than that of the wage conferences, which usually extend over several weeks. There are many other meetings throughout the year which are regularly and well attended, and it seems to me it is just as vital that we should give time and attention to the matters which pertain to our revenue, as it is to guard against increase in expenses. Mr. Moorshead has dwelt at length on the subject of co-operation and the necessity to look after legislative matters in States in which we operate. I have found that when the miners gain a point in one State, either in a wage agreement, employment conditions, or by legis- lative ^measures, the same question is soon raised in all other States who haven t that particular advantage. This is due to their central organiza- tion through which this information is distributed, and where notes are compared as to the relative advantages which one State has over the TS. With the operators this condition does not exist, unless where, perhaps, one manager is in charge of property in various States, but even then the work is not thorough, and depends more upon the indi- viduality of the operator involved. There is no system or concerted efforts. While State legislation is of importance in operating matters, Na- tional legislation has much bearing upon the commercial side of the industry, and in this respect we are entirely lacking. What we need -and must have is a competent regular attendant in Washington to look after all the measures affecting our industry as they come up In this respect the miners are again better situated than we are because they AMERICAN MINING CONGRESS 67- have a full representation who carefully looks after their interest, and obnoxious measures which may come up at times are soon killed on. the floor or in the committee rooms. Through the Federation of Labor the miners' organization is able to enlist other labor organizations in. the support of any measures which they do not care to have passed. From my conversation with coal operators I judge that not every one is well posted on the purposes of the Mining Congress, and for my part I well recall the disappointment which 1 felt at the session of 1909, in Pittsburgh, when Mr. John Mitchell, who .was then at the- zenith of his power, made an address which was very popular with the newspapers and received wide publication. 'The real work of the Congress was mentioned very briefly, and the whole meeting, according to the press, had more the aspect of a labor conference than anything else. I well realize that some of our subjects, may not be popular with the press, judging from the rather limited amount of notices which has been given this present session, but I feel, that if our aims were better understood, publicity and support would be coming forward more readily. Nearly every Coal Company contributes a considerable sum annually for the negotiation of wage contracts and State legislative matters. The amount required from each operator for the support of a legislative- representative in Washington would be very much smaller than the money now paid for State representation. Within the last few years mine run bills were passed in Arkansas and Oklahoma which have nearly ruined the industry, and efforts to have these bills repealed met absolute defeat, because the public did not know the import of the subject. Our only friend at court has been Mr. E. W. Parker, of Wash- ington, who has called attention to the injury done the industry in his- annual reports, but since these reports are only read by coal operators, it has not helped the cause very much thus far. Similar bills are now pending in other States, and the precedent established by Oklahoma and Arkansas will help to have the legislation passed in other States. Earlier in the session today reference was made to the lack of knowledge as to the cost of production of certain sizes of anthracite- coal; the same condition exists in the bituminous industry. Newspapers are clamoring about the high cost of lump coal, little realizing that slack coal is sold for less than the mining rate, and that the other expenses for day labor, material, etc., must be borne by the small amount of lump coal obtained. In one case where I invited a newspaper representative to visit the mining district and look over our books, with the view of ascertaining the fact, the investigator interviewed a few miners as they were coming from work, and made his conclusions upon their statements. All of this leads me to believe that the compilation of" authentic and indisputable data is one of the essential matters which this Congress must undertake before it can expect much benefit for the mining industry. The address which Mr. Parker delivered this morning is the first information as to the status of the bituminous coal industry yet pre- sented. While many of us have read the publications of the Census. Bureau, reference to the mining industry is only a very small part compared with a vast number of subjects treated more fully, and is r therefore, entirely lost sight of. I am of the opinion, notwithstanding all statements to the contrary, that the accounting methods established' by the Interstate Commerce Commission for our railways have been of great benefit to the honest railway owners and operators, because by these methods the true conditions of the property are shown, and' charges are made where they properly belong. I believe a similar method applied to the mining industry would necessarily be followed by goocE results. 68 OFFICIAL PROCEEDINGS In the bargaining for our wage contracts in the organized States we are a fairly consolidated body, confronting an even stronger and better organized force. In the sale of our product we go out singly and alone, trying to get business at any price, irrespective of cost, always hoping for the "survival of the fittest," with ourselves in the front row. This is not a healthy condition, and our success as operators should not depend upon the failure or misfortune of our neighbors. Car short- ages, blizzards, strikes, disasters, or similar misfortunes, should not be the cause for undue advances in the selling price of the coal. Regular operation, even with reduced forces, is more economical than spurts, as we now experience. Under the laws, as now existing, the simple exchange of correspond- ence pertaining to coal prices can bring the writer within the hands of the law; at the same time, other producers avail themselves of every means to obtain the best prices for their products. In this respect we have much to learn from the farmers, who by means of the telephone and newspaper quotations have been able to increase the price of their product to a profitable basis; yet we hear much about the oppressed farmers and the rich coal barons, when, as a matter of fact, the situation is quite the reverse. I would very much dislike to leave this Congress without feeling that at least a few delegates have become converted to our cause, and that they, in turn, upon reporting to their home bodies will be able to enlist the interest of others who have not been able to attend this session. I would ask that each delegate here will aim to secure new members whose support, both moral and financial, is greatly needed, and I am sure the investment will prove of mutual advantage. I thank you. THE PRESIDENT: Gentlemen, I dislike very much to curtail this most important and interesting discussion, but it is now half-past twelve, and we still have to hear from Mr. C. M. Moderwell, of Chicago, of the Committee on Coal Mining Legislation. MR. MODERWELL: The Committee on Coal Mining Legisla- tion has a very brief report to make. The effort of the committee has been along the line of the discussion this morning. Believing, as the past two speakers have indicated, that one method of relief from the evils, as indicated by these two speakers, would be the permission to do what other people do without permission. We have bent our efforts to the framing of a bill for an Interstate Trade Commission, and which, in effect, is a modification of the Sherman Anti-Trust Law. That bill speaks for itself, and will be attached to our report. I can only say briefly that it provides for a trade commission, which in some respects is similar to the Interstate Commerce Commission, and which would permit of co-operation under government regulation. The bill itself is in print and will, upon request, be sent to you by the Secretary of the Congress. I speak for it your earnest study and your co-operation I would like to say in this connection that some of us have felt, and 'ex- pression has been given to that feeling on this floor, that the gentlemen who are in Congress, generally called "politicians" by those who are not in Congress, are more or less responsible for this state of affairs I want to say that is not a fact, but that the gentlemen who sit on this floor and those we represent are the men who are responsible. Public opinion is the only court from which politicians take their orders, and it is up to this body and the people in this industry to create the public opinion which will command the necessary legislative support. (Ap- A great industry like ours must have publicity, and when the public fully understands the real condition of the coal mining industry, the gen- tlemen who are sitting in the state legislatures and the gentlemen in AMERICAN MINING CONGRESS 69 Washington will obey the orders of the court of public opinion. (Ap- plause.) Report of the Committee on Coal Mining Legislation The work of the committee during the past year has been directed toward influencing public opinion and securing legislation by Congress which will permit some modification of the "Anti-Trust" law. This has resulted in the preparation of a bill for the creation of an interstate trade commission. Copy of this bill is herewith attached and consti- tutes the report of the committee, which is submitted for the considera- tion of the American Mining Congress. Respectfully submitted, C. M. MODERWELL, For the Committee. Draft of a Bill for the Creation of an Interstate Trade Commission A. BILL. Be it enacted ~by the Senate and House of Representatives of the United States of America in Congress assembled, That a commission be, and is hereby, created and established to be known as the Interstate Trade Commission, which shall be composed of five commissioners, who shall be appointed by the President, by and with the advice and consent of the Senate: Provided, That not more than three commissioners shall be appointed from the same political party. SEC. 2. That the commissioners first appointed under this Act shall continue in office for four, five, six, seven, and eight years, respectively, from the day of , nineteen hundred and twelve, the term of each to be des- ignated by the President, and on the expiration of the term of each his suc- cessor shall be appointed for the term of six years. SEC. 3. That any commissioner shall be removed by the President for in- efficiency, neglect of duty, or malfeasance in office, and shall be removed for acting in any matter in which he is personally or financially interested. But no vacancy in the commission shall impair the right of the remaining com- missioners, if not less than three in number, to exercise the powers of the commission. SEC. 4. That each commissioner shall receive an annual salary of ten thousand dollars, payable in the same manner as the salaries of the judges of the courts of the United States are paid. The commission shall appoint a secretary or clerk, who shall receive an annual salary of three thousand six hundred dollars, payable in like manner, and the commission shall have authority to employ and fix by order of record the compensation of such other employees as it may find necessary to the proper performance of its duties. The expenses of the commission, including all necessary expenses for transportation and travel incurred by the commissioners, or by their employees under their orders, in making any investiga- tion in any other place than in the city of Washington, shall be allowed and paid upon the presentation of itemized vouchers therefor, approved by the chairman of the commission or. in his absence, upon the approval of any one of the com- missioners. SEC. 5. That the commission hereby created may conduct its proceedings in such manner as will conduce to the proper dispatch of business and to the ends of justice. A majority of the commission shall constitute a quorum for the transaction of business, but no commissioner shall participate in any hearing or proceeding in which he has any pecuniary interest. The commission may, from time to time, make or amend such general rules or orders as may be requisite for the order and regulation of proceedings before it, including forms of notices and the services thereof, which shall conform as nearly as practicable to those in use in the courts of the United States. The chairman of the commission shall be selected by the members thereof, and shall hold such office for the period of one year from the date of such selection: Provided. That no commissioner shall be eligible for designation as chairman in consecutive years. Each commissioner during the time he shall serve as chairman of the commission shall receive an additional annual compensation of five hundred dollars, which shall be payable in like manner as the salaries hereinbefore provided for. SEC. 6. That the commission shall sit as a body on the first Tuesday of every month, and shall continue in session for at least one day, and otherwise may convene and adjourn at the call of the chairman or presiding commissioner or on the written request of at least three commissioners: Provided, That the com- mission shall not be legally required to meet on the first Tuesday of the months of July, August, and September, but may meet at any time as otherwise herein pro- vided. 70 OFFICIAL PROCEEDINGS SEC. 7. That the commission may sit as a court and its hearings may be had in the nature of court proceedings, in which parties and applicants may be heard by counsel or in person, and it shall be governed by the rules of such proceedings generally; it shall cause records of its proceedings to be properly kept; and it shall have power to issue summons under seal compelling the at- tendance of the parties, and may subpoena witnesses and compel their attendance,. and all such witnesses shall be paid their per diem and mileage as witnesses- in attendance on the courts of the United States. The commission may require witnesses to testify under oath, and may require the submission of statements- and reports under oath relating to transactions or matters coming before it. Each commissioner and the secretary or clerk of the commission shall have the- power to administer oaths with reference to all transactions or ratters coming before the commission or in relation to its business. Provided^ That the com- mission may, in its discretion, where the necessities of thr case or the public good require it, hold informal or executive meetings, ajaG upon the application* or request of any person, party or corporation, and in Qch case may so order its^- record, or make or issue its certificate or approval fn such manner as will not make public any information voluntarily confided of submitted to the commission. SEC. 8. That the commission shall have a teal under which its writs shall: be issued and of which judicial notice shaUr be taken, a description of which shall be duly entered of record at the organization of the commission. SEC. 9. That the principal office of fne commission shall be in the city of Washington, where its general session^ and sittings shall be held, but whenever the convenience of the public or o4 the parties or of the witnesses may be promoted, or delay or expense p/evented thereby, the commission may hold special sessions in any part of fne United States, but its findings and deter- minations shall be entered of record, if the same are to be recorded, at its principal office in the city of Washington. The commission may by order delegate one or more of the commissioners to prosecute any inquiry necessary to or in connection with its duties in any part df the United States into any matter or question of fact pertaining to the busin*8s of any corporation or person, or number of corpora- tions or persons, subject to the provisions of this Act, and shall, by order, direct the duties of any commissioner so delegated. And to carry out and give effect to the provisions of this Act, tiW commission is hereby authorized to employ special agents or examiners who shall have power to administer oaths, examine witnesses and receive evidence. SEC. 10. That It shall be the duty and jurisdiction of the commission to inquire Into and investigate any and all agreements, contracts, alliances, undertakings, tr*de arrangements, combinations, and operating practices in,, through, under Or by which, either directly or indirectly, any corporation or corporation*, or any individual or individuals, or any collection or asso- ciation of individuals, riot subject to the provisions of the interstate com- Sierce Act, tttlt engaged in interstate commerce as a business, or making: Interstate shipments for itself or another as an incident to or part of its: business, ttftve contracted, agreed, arranged, combined, or made any trade Arrangement with any corporation or corporations, individual or individuals, r any collection or association of individuals, relating to production, manu- facture, Shipping, transportation, or to manufacturing and shipping or pro- ducing And shipping or otherwise transporting, or the obtaining for manu- lactur*, production, change in form, or combination in construction, of any article or articles, commodity or commidities, product or thing of whatsoever kind, or any goods, wares, or merchandise whatsoever, and to determine whether any such agreement, contract, alliance, undertaking, trade arrange- ment, combination or operating practice, or any act or thing done thereunder, or pursuant thereto, or in carrying out thereof, is in violation of an Act: approved July second, eighteen hundred and ninety, entitled "An Act to pro- t*t trade and commerce against unlawful restraints and monopolies," and Ifty amendments thereof, and whether any such contract, agreement, alliance,, undertaking, trade arrangement, combination, or operating practice, or any Jhl, o F ? lng d01 i e t , hereunder or P ursu ant thereto or in the carrying out thereof, is an unlawful restraint or monopoly. SEC. 11. That any corporation or corporations, individual or individuals, or association or collection of individuals, not subject to the provisions of the interstate commerce Act, now engaged or desiring to engage in any business enterprise, agreement contract, alliance, undertaking, trade arrange- Combination, or operating practice with any corporation or corpora- ir lth / ny individual or individuals, or association or collection of nder and by t vir t ue of any contract, agreement, arrangement, eX vR res . s or implied, or trade combination, for the purpose of 'r^ PPm f' V ansportins ' or of manufacturing and transporting- n t f Producing or obtaining, either for manufacture or ship- iSs or ^ P n r ta l l n ' ft n . y art j cle or articles, or any commodity or com- ercandS *?2J thlng f wh atsoever kind, or any goods, wares, or f the ?omSnVnHr * r i m "7 / ubmit * th * Commission, or to one or mora- lise ae^mpn? /nr,t 6le f at ^?- to hear and determine the same, such enter- bfnation n? on^ot- Ct> alliance . undertaking, trade arrangement, com- unation, or operating practice, or the acts or things done thereunder or AMERICAN MINING CONGRESS 71 pursuant thereto, or in the carrying out thereof, for approval by such coin- mission, or by the commissioner or commissioners delegated to hear and determine the same; and if approved the same may be adopted and acted upon, or the actions or things done thereunder or pursuant thereto or in the carrying out thereof continued, and if pursued, followed, and prosecuted .according to the permission or direction of the commission, or of the com- missioner or commissioners delegated to hear and determine the same, such determination shall be final and conclusive as to ajl questions of fact, nd conclusive that such business enterprise, agreement, contract, alliance, undertaking, trade arrangement, combination or operating practice Is not in violation of the act approved July second, eighteen hundred and ninety, entitled "An act to protect trade and commerce against unlawful restraints and monopolies," or of any amendments thereof, and is not an unlawful restraint of trade: Provided, That no statement, document, or evidence made, submitted, or given in any hearing under this Act by ary corporation or cor- porations, individual or individuals, or association or collection of individuals, voluntarily submitting to the jurisdiction of the commission and abiding by .and obeying the determination and mandate of the commission, or of any commissioner or commissioners delegated to hear and determine the same, shall be used as evidence against any such corporation, individual, association, or collection of individuals in any proceedings or action in any court or other tribunal against any such corporation, individual, association, or collection of individuals. SEC. 12. That upon the finding by the commission, or by any commissioner >or commissioners, that any agreement, contract, alliance undertaking, trade arrangement, combination, or operating practice, or any act or thing done under or pursuant thereto, or in the carrying out thereof, is unlawful, and is in violation of the Act approved July second, eighteen hundred and ninety, entitled, "An Act to protect trade and commerce against unlawful restraints ,;and monopolies," or upon the disapproval by the commission or by any com- missioner or commissioners delegated to hear and determine the same, of any ..such agreement, contract, alliance, undertaking, trade arrangement, combina- tion, or operating practice, the commission shall serve notice on such cor- poration, individual or association or collection of individuals, that such Agreement, contract, alliance, undertaking, trade arrangement, combination, or operating practice, or such proposed agreement, contract, alliance, under- taking, trade arrangement, combination, or operating practice is unlawful and that all or any acts or things being done or proposed to be done under or pursuant thereto, or in the carrying out thereof, shall cease and terminate, and -on failure within a reasonable time to cancel and annul such agreement, con- tract, alliance, undertaking, trade arrangement, combination, or operating practice, or to change, amend or correct the same in compliance with the order or mandate of the commission or of any commissioner or commissioners delegated to hear and determine the same, or to cease all acts and things toeing done thereunder and pursuant theret9> and in carrying out the same, except as ordered or directed by the commissioner, or by any commissioner or commissioners delegated to hear and determine the same, the com- mission shall certify its findings and orders, or the finding and orders of :&ny commissioner or commissioners delegated to hear -and determine the same, to the Attorney General of the United States, and such finding shall in any suit, prosecution, or proceeding brought and prosecuted on account of the matters involved or growing out of such findings, be prima facie proof of the facts involved therein. SEC. 13. That any State or Federal Prosecuting Attorney, upon proper showing under oath of five or more persons, citizens of the United States whose interests are affected may complain that any corporation or cor porations, individual, association, or collection of individuals, within th( meaning and provisions of this Act, either alone or in connection with anj other corporation or individual or association or collection of individuals, is violating the provisions of the Act approved July second, eighteen hun- dred and ninety, entitled, "An Act to protect trade and commerce against unlawful restraints and monopolies," stating the facts of such alleged viola- tion fully and with particularity. Thereupon the commission or the com- missioner or commissioners that it may delegate to hear and determine the complaint shall cause summons to issue to all such corporations or indi- viduals to appear at a place named within the jurisdiction of a Federal dis- trict court of the principal place of business or residence of any one of such parties so complained of on a day named, being not less than twenty days from the date of service, to show cause why the commission should not de- clare such agreement, contract, alliance, undertaking, trade arrangement, combination, or operating practice unlawful and in violation of the Act approved July second, eighteen hundred and ninety, entitled, "An Act to protect trade and commerce against unlawful restraints and monopolies." "The commission, or any one or more commissioners to whom the matter has teen referred, may by the proper process compel the attendance of the parties and the attendance of witnesses and the production of papers and ^documents, and may hear and determine the charges, and may make the iproper finding and orders warranted by the evidence, as provided in other cases under the provisions of this Act. 72 OFFICIAL PROCEEDINGS SBC. 14. That any commissioner or officer or employee of such commission who shall give out, repeat, divulge, or in any manner make public any matter, act, doing, or decision of such commission, or the contents or substance or effect of any agreement, contract, alliance, undertaking, trade arrangement, combination, understanding, transaction, or practice designated by the commission not to be made public may be fined in any sum not exceeding one thousand dollars, and shall be summarily removed or discharged. SEC. 15. That as to all matters of procedure relating to the enforcement and to the method and manner of carrying out the provisions of this Act not herein particularly specified, the commission and courts and public officers shall be governed and controlled by the provisions relating to procedure of the Act approved February fourth, eighteen hundred and eighty-seven, entitled "An Act to regulate commerce." and the commission or any commissioner or commissioners to whom a matter has been referred for hearing and deter- mination is hereby authorized to use the proper writs and processes of the proper district court, and to direct the acts of the officers of the proper district court, for all purposes in carrying out or enforcing the provisions of this Act. SEC. 16. No prosecution suit, action or other proceeding shall be in- stituted under the provisions of an act approved July two, eighteen hun- dred and ninety entitled, "An Act to protect trade and commerce against unlawful restraints and monopolies," or any amendments thereof until after investigation and decision by the Interstate Trade Commission as in this act provided. SEC. 17. That the sum of one hundred thousand dollars, or so much thereof as may be necessary, is hereby appropriated for the purpose of carrying out all the provisions of this act until such time as regular annual appropriations are made. SECRETARY CALLBREATH: I assume, Mr. President, that it is not intended that this Congress shall go on record as approving this specific bill. The report of the committee is not intended to ask for the indorsement of the bill by the Congress, but simply to submit it so that it will appear in the proceedings of the Congress as a matter for further consideration. .THE PRESIDENT: The Secretary has some announcements to make, after which we will adjourn until 2 o'clock. THE SECRETARY: Mr. Harry Taylor was selected by the Pro- gram Committee to take charge of the meeting of the coal operators. This afternoon, in his absence, the President suggests that Mr. Carl Scholz shall act as the Temporary Chairman of that meeting. Adjourned. THURSDAY, OCTOBER 23, 1913. Afternoon Session THE PRESIDENT: The meeting will please come to order. Mr. W. H. Fluker, of Thompson, Georgia, will present his paper on "Gold Mining in Georgia." MR. FLUKER: Mr. President and Gentlemen: I realize that this is not a gold mining meeting, and that most of us here are little interested in gold mining. I am from Georgia, however, and I am naturally more interested in that subject than any other. Mr. Fluker's paper will be found at page 216 of this report. THE PRESIDENT: Next we will have the pleasure of listening to j - ar - tm D ' Foster > Chairman of the House Committee on Mines and Mining, on the subject of "The Federal Government and the Mining Industry." ,.. . DR - FOSTER: Mr. President and members of the American Mining Congress: I am glad of the honor of attending your meeting. I do not know that I can offer anything new on this subject, which may he interesting to you, as it has been discussed so often and so much in the past If I may take the liberty of reading to you a few remarks that I shal make on this subject, I shall be very glad to do so It has been my pleasure, since I have been a member of Congress, during the AMERICAN MINING CONGRESS 73 agitation of this subject to induce the National Legislatures to do something for the mining interests of the United States. Dr. Foster's address will be found at page 370 of this report. DR. FOSTER: I remember when we first started in to do some- thing for the coal mining industry, and it required some time to convince Congress of the necessity of establishing another Bureau in the Federal Government. You all know, who -have had any expertence in inducing Legislatures and Congress to do something new that they immediately look, and naturally so, at the expense that may be incurred by increasing the Governmental activity; and so the great catastrophes convinced Congress that the time had come when something should be done to prevent the great loss of life that was occurring year after year in the mining industry of the country. The headlines of the newspapers do not contain accounts of the loss of one life in one particular place, but today we read of the great catastrophe down in New Mexico. I do not believe, gentlemen, that any reasonable request made to Congress for an expenditure of money to assist your industry in saving life will be refused. I desire to say that in the Sixty-second Congress, when every appropriation was being held down to the very lowest amount, the Bureau of Mines received the only increase that was given during that session, and the only one which was increased about fifty thousand dollars. I do not believe you expect a very rapid increase of appropria- tions. I do not believe it could be profitably used should a great amount of money be appropriated at one particular session of Congress, or for one year, but gradually this work grows, and the appropriation grows, as it is necessary to develop this great industry in which you are engaged. I came over here to talk to you for just a little while today and to let you know that, so far as I am concerned, I am pleased to help you in this work, that the mining industry may develop; that it may be more profitable; that we may discover finally some means whereby the loss of life in the mining industry may be reduced to the lowest per cent, possible. If we -can accomplish that in time, we have done a great work, and the money expended will _ have been well used. I want all of .you to feel, so far as your organization is concerned, that, while I could not promise what will be done, because I do not know I am only one of four hundred and thirty-five members in the National House of Representatives yet I feel confident that Congress is willing to appro- priate a reasonable amount, as has been done for agriculture and other departments of the Government in helping you along in the great work in which you are engaged. I thank you. (Applause.) THE PRESIDENT: I certainly want to voice my appreciation of the eloquent, comprehensive and scholarly address of Dr. Foster, and would like very much if some of the members here would take up the subject in a general discussion. MR. C. J. NORWOOD, Lexington, Ky.: I have no intention of undertaking to discuss Dr. Foster's paper, but I do wish to say that I am very much pleased with his reference to Federal aid to mining schools under State control. I feel great interest in the subject on more than one account. I happen to be at the head of a State mining school, and this may cause some of you to discount what I may say in behalf of the proposition, but I hope not. My notion is that the greatest benefit that a State school can be to the mining interests is not simply or chiefly in the education of mining engineers, and such is not the chief ambition of the Kentucky College of Mines and Metallurgy. I believe that the State schools can do their greatest work in educating the miners, and it is in that direction that we hope to be able to accomplish much good. But to properly 74 OFFICIAL PROCEEDINGS broaden their work so that the working miner can be reached in an adequate way, the State schools must have greater facilities for extend- ing their instruction into the mming regions than most of them now do have, for such instruction must be of a special sort and carried on apart from that which is laid out for training engineers. I also happen to be Chief Inspector of Mines for our State, and I have reached the same conclusion that, I suppose, most men connected with coal mining have reached, and that is that the greatest agency for reducing accidents in our coal mines is education. Not only must we have trained managers and trained engineers, but the minor officers and miners and common laborers must be better educated. I remember the time when the foreman was made responsible for about everything that was done about the mine. He was expected to determine, in a fashion, many things that really belong to the work of an engineer, and results have not been creditable to our management of mines and percentage of extraction of coal from the bed. I think that the foreman's duties will now, through the demands of modern mining, become specialized and more restricted, and that, at the same time, the foreman will be required to have a more thorough knowledge of the technical features of the work ttiat does come under his control than has been accepted heretofore; and this is equally true of the other minor officials in the mines. All down the line the demand is for greater efficiency, for more intimate knowledge of principles and for a wider range_ of information generally. The expert miner and the common laborer must alike have a better education in matters pertaining to mining. This will enable him to understand the necessity for discipline a difficult thing for an unedu- cated man. It has been said time and time again that the best safeguard against accidents is discipline that we can limit them by means of a set of rules. No doubt that is true; but the difficulty is to get men to accept discipline. We have Rules and "Don'ts" in such number that no one can remember them. The natural tendency of a man seems to go against a rule, unless he can see the reason behind it. Those who have their natural intelligence broadened by educational training can see the reason behind the rule, and ordinarily when a man does see the reason for it he will follow the rule. I have been in touch with mines for quite a number of years, and I think I can speak with confidence on this question. Now, I think the State mining schools, if provided with means to adequately carry on what is known as "extension work" among the mines, can do a work of immense value to the mining interests, not only in educating men for positions of authority in the mines, but in educating the miner so that he will the more readily act in accordance with established rules (which is discipline) and thus co-operate in limiting the number of mine accidents. Further, if the Federal Government would give to the State mining schools money that would enable them to carry on some research work in the mining regions and for present purposes I will emphasize the coal mining regions the schools could do much that would be of direct, practical service to the industry in their respective States. For instance in our State, when opening a coal mine, we leave pillars of a width that is settled entirely by tradition, and which originally was determined solely by what may be called "rule of thumb." In one field pillars are about the same width, no matter what particular seam of coal is being work,ed, and that width was determined by somebody or bodies who came from England, or, it may be, Scotland, many years ago, the widtl then adopted being that which served for a coal of the same thKrkness in the old country." We do not know the compressive strength of a single seam of coal in Kentucky, therefore cannot tell what weight a given pillar of this or that coal can really carry Of AMERICAN MINING CONGRESS 75 course, the various beds have different strengths, and not only that, but the same seam is stronger in some parts of a field than in others. Becoming convinced that the usual width of pillar left in working one of the coals in our Western field is too small that with wider pillars certain evils that are now coincident with the working of that coal would probably be obviated I recently suggested to one of our opera- tors, who contemplates opening a new mine, that he provide for thicker pillars; but when he asked what the increase should be I was unable to give a really definite answer, because of lack of knowledge as to the crushing strength of the coal. If our school had the money necessary to enable us to carry on investigations of the crushing strengths of the different seams of coal in the State ^nd this would not be duplication of work that the Federal Bureau of Mines might "be expected to carry on the result would be worth a great deal to our mining industry, since it would make possible the obtention of more coal from an acre, would reduce costs incident to squeezes and unquestionably would greatly reduce the number of accidents that occur in the mines. If we could have enough money to carry our instructional work right to the mines in every locality in other words, if we had the means to employ a sufficient number of instructors in our "extension work," and provide them with proper illustrative appliances it would be a wonderful help to the mining industry. This is a matter in which I am very much interested, not simply as the head of a mining school, but as a mine inspector engaged in efforts to reduce the loss of life and limb at mines. What I have said in general, of course, applies to all State mining schools. I have only used the Kentucky school as an illustration. I feel sure that the mining industry as a whole will be very glad if Dr. Foster and his associates succeed in obtaining from Congress aid for the State mining schools comparable in at least some degree with that it has given to schools of agriculture and mechanic arts. MR. THOS. T. REED, of California: I would like to offer a vote of thanks to the Honorable Dr. Foster for coming here to speak to us today, and express our thanks for the deep interest he feels in our behalf. Carried. The President conveys the thanks of the -meeting. DR. FOSTER: I came here because I thought it was my duty to come here. I felt what little I could help along this work I would very gladly do. I realize that the state of Illinois is largely interested in coal mining. There is not a great deal of other mining in com- parison with our coal. I want to state this: that in Illinois, so far as the mining laws are concerned, I think we have taken some advanced steps. We have established our own rescue stations, purchased our own equipment, trained our men, and in the last State fair held in Spring- field, we went there and competed with others for a prize offered by the State Fair Association. I feel somewhat proud, if I may be permitted to express it, of my own State in taking this interest in mining work, and I hope they will go ahead and do more than ever. It has been my pleasure to get those mine rescue cars in the district that I represent. As expressed by the gentleman a moment ago, what we need is education. You can establish discipline, and yet if men are not trained to the importance of this work they become careless because they see no accidents, so it is necessary they should be trained. A man may escape it ninety-nine times, and the next time there may be an accident in which he not only loses his bwn life, but the lives of many more will be lost. 76 OFFICIAL PROCEEDINGS A DELEGATE: Would you mind telling us what the appropria- tion of the last Congress to the Bureau of Mines is? DR. FOSTER: Six hundred and sixty-two thousand dollars, if I remember rightly. That included one hundred thousand dollars for western mining. A DELEGATE: You say one hundred thousand dollars was set aside for western metal mining? DR. FOSTER: I want to say this: After we established the Bureau of Mines, I attempted to get an appropriation of fifty thousand dollars for the western mining work, and I found a point of order was made qn the amendment, and it was decided that the original law did not authorize the appropriation, and then we passed another law which enlarges the scope of the Mining Bureau, and the appropriation of one hundred thousand dollars was made under that law. THE PRESIDENT: I think probably our next paper will give us some idea of what the appropriation of that one hundred thousand dollars, appropriated for western metal mining, is, and what it is being expended for. We 'now have a paper on that most interesting subject, "The Radium Situation," by Dr. C. W. Parsons, of Washington, D. C. DR. PARSONS: Mr. President and Gentlemen of the American Mining Congress: I doubt if it is worth while for me to read this paper, which will take some twenty or twenty-five minutes, but I will try to give you in a shorter time a little summary of what it contains. Dr. Parsons' paper will be found at page 223 of this report. THE PRESIDENT: I am certain that if any of you desire to ask any questions of Dr. Parsons that he will be very glad to answer. (No questions asked). THE PRESIDENT: Has any gentleman present any resolutions to offer. There are two on the table, and in the absence of the Secretary I will read them and after that refer them to the Committee on Resolutions. RESOLUTION No. 5 (Introduced by H. M. Lawrie, of Oregon.) WHEREAS, This Congress has previously endorsed the principle of Federal Aid to State Mining Schools, therefore, be it RESOLVED: That the American Mining Congress, again urge immediate passage by Congress of legislation providing for Federal assistance to the various State Mining Schools. RESOLUTION NO. 6 (Introduced by Charles E. Maurer, of Ohio.) WHEREAS, The reports of the Geographical Survey show the deplorable condition of the great coal industry of the United States and the small returns for the investment, and WHEREAS, Federal and State laws encouraging com- petition and preventing reasonable co-operation among those engaged in the production of this great natural resource, result not only in preventing a fair return for the investment of capital and the risks involved, but in most cases allow only the recovery of from fifty to eighty per cent, of our buried heat, light and power, the balance of which is irretrievably lost, and WHEREAS, These laws prevent the surrounding of the mployees engaged in the extremely dangerous occupatton of mining with all possible safeguards; therefore, be it AMERICAN MINING CONGRESS 77 RESOLVED: That we urge upon the Congress of the United States and the State Legislatures the necessity of the modification of the so-called "Anti-Trust" laws as applied to our natural resources in order that they may be conserved and proper safeguards thrown around the employees, be it further RESOLVED: That copies of this resolution and the ad dress of Edward W. Parker to this Congress be sent to the President of the United States, to the members of Congress and to the Governors of the respective coal producing States of the Union. I will make the announcement that a meeting of the new Board of Directors will be held at 5 P. M. in the room immediately to the rear of the stage, where the Committee on Resolutions is now holding its session. There will be no evening session, owing to the fact that the Reception Committee is giving a smoker in this room at 9 o'clock. Be sure and get your tickets as you go through the passage. All delegates are entitled to tickets. We have an invitation from the Grand Master of the Masonic Lodge to visit the Masonic Temple. You know this city has one of the oldest and most elaborate Masonic Temples in the country. Meeting adjourned until 10 o'clock tomorrow morning. FRIDAY, OCTOBER 24, 1913 Morning Session Meeting called to order by the President. THE PRESIDENT: We will first hear the report of the Com- mittee on "Standardization of Electrical Equipment in Coal Mines," by Mr. George R. Wood, Philadelphia, Pa. Report of Committee- on Standardization of Electrical Equipment in Coal Mines: To the American Mining Congress: Gentlemen: Your committee, begs to report that it has observed the operation of the Pennsylvania State Code, covering electrical practice in mines, which, as previously reported, is practically identical with the code drafted by your committee. Mr. James E. Roderick, Chief of the Department of mines for Pennsylvania, advises that he has no changes to suggest, and states that the code has given satisfaction. Since this law has been in practical operation for two years, and has proven to be a satisfactory working code, your committee recom- mends that this code be offered by the Congress to the Mining Depart- ments of the bituminous coal mining States as a basis for uniform rules or laws covering the installation of electrical equipment in mines. GEORGE R. WOOD, Chairman. THE PRESIDENT: Any remarks or discussion on this report? If not, will some one kindly move that it be adopted. SECRETARY CALLBREATH: I move that the Report of the Committee be adopted. Seconded; carried. THE PRESIDENT: We will now hear the report of the Special Committee on Ways and Means. MR. GRIFFITH, Chairman of the Committee: Gentlemen of the American Mining Congress, your Committee on Ways and Means have been considering the matter of the finances of this Congress 7 8 OFFICIAL PROCEEDINGS yesterday afternoon and this morning, and we have thought it wise to place this matter before you in a -detailed way. This Congress is a voluntary organization, which is composed of, first, members who pay their dues, $10.00 a year, and, second, delegates who pay no dues at all, but have the right to come to these meetings and vote on all questions, do everything that members do, except hold office. The total membership of the Organization has been about fifteen hundred. That is the number that are expected to pay ten dollars each, but the Secretary has been able to collect from only about five hundred of those fifteen hundred people. Consequently, the finances of this or- fanization have been in a sad state ever since it started, and ,the ecretary has been compelled year after year to finance the different matters and help the organization out. Your Committee on Ways and Means have considered this entirely wrong, and that we ought to arrange some method of maintaining the finances of this organization permanently and liberally, because it may be made an organization of the utmost usefulness to the mining industry in this country. In the first place it is necessary to in some manner induce more permanent members to join the organization and pay their dues regu- larly, and to that end it is urged by this Committee that every member here resolve himself into a Committee of one to secure new members for this organization, and every member of this Convention as a delegate in making his report to the party who appointed him shall urge upon that institution the necessity of using every influence toward interesting others in the Congress. Now, in order to make this membership and activities of the Con- gress more desirable we render the following report and trust it will meet with your approval. Report of Committee on Ways and Means. The Committee on Ways and Means recommend that an additional class of members, to be known as subscribing mem- bers, be created in this Congress, which shall consist of cor- porations only and who shall have no right to vote; that the portion of funds to be raised from any State may be appor- tioned by the Ways and Means Committee for that State among all the mining corporation in the State in approximately such proportion as tih value of the mining products of any cor- poration bears to the value of the total mining products of the State; that these subscribing members, in consideration of their subscription to the Congress, shall have the right to receive all of the publications, papers and other printed data of this Congress and shall also have the right to request, from time to time, such information of a legislative and statistical nature, referring to mining questions, as the Secretary may be able to supply from the records of the Congress, and it is further recommended that the Secretary shall employ the necessary assistance to compile such data and to publish a bi-monthly bulletin which shall contain abstracts of pending legislation, opinions and other information of interest to the mining Congress, and this work be considered one of the important functions of the Congress; that the Ways and Means Committee for each State as above mentioned shall consist of three mem- bers to be appointed yearly by the Executive Committee of the American Mining Congress, and that the assessment for each State to be raised by these State Committees shall, in the dis- cretion of the Board of Directors be approximately such a pro- portion of the total budget as the value of the mining products of AMERICAN MINING CONGRESS 79 each State bears to the value of the total mining products of the United States. The smallness of the general apportionment and the light- ness of the burden to any State or corporation under this scheme can be immediately seen by the study of the output tables prepared by the Government in which the total valuation of all products of the mines of this country are for the year 1911 in excess of two billion dollars, and the total amount to be raised, we should suggest as a start, should be fifty thousand dollars, which is a small amount to provide for the proposed increased activities of the Congress, and this would show that for each million dollar output we are only asking twenty- five dollars. Our Secretary in his work in Washington has discovered that the association of corporations who had the right to vote and control tha activities of the Congress are a great detriment to him. Therefore these subscribing members should consist of members who have no right to vote. What he most desires is more members. He can bQ very much more efficient do much more efficient work, very much more valuable to the mining interests of the country, if he represents five or ten thousand men who contribute ten dollars each than if he represents five or six hundred who contribute fifty dollars each. What he needs is the backing of a great many people interested in the mining industry. There are several subjects which came up during the consideration of this question, but the committee divided them into two or three questions of importance to this Congress. I have been talking a little about the necessity for increasing our memb.ership, and Mr. Jennings, one of the members of the committee, will talk to you briefly on another matter. MR. JENNINGS: This is the first Congress I have had the pleasure of attending. Having been out of the country for many years, it is a ereat privilege to me to have come in contact with mining men in the way I have at this Congress. I have been much impressed by the speakers and the high class of the addresses, papers and discussions. They all show what good, necessary and useful work this Congress can do. Abroad one heard comments of capitalists against investments in mining enterprises in this country in connection with the uncertainty of the titles and the great amount of litigation prevailing in mining affairs. The Congress Committee on Mining Laws has ably and clearly shown how necessary and vital is reform in this connection, and which the Committee on Alaskan Affairs and the speakers on this subject have emphasized. This meeting has brought forward very clearly the neces- sity of harmonizing State and Federal viewpoints, as well as those of labor and capital in the mining world, and, in fact, our sphere of work and usefulness is quite unending. On the other hand, there seems to be no proper provision made to give force to the ideas and work attempted. Our Secretary has done wonders with the money and aid at his command, but he is overburdened not only in a technical and political way, but also in griving so much of 'his time and attention in the past to the raising of the inadequate funds obtained. The work accomplished and the methods pursued by our Secretary in Washington have been explained by himse 1 f, and any one who has heard him must be satisfied that what we are endeavoring to do in bringing to the attention of Congress the varied mining wants and problems of the country has been done in right, proper and entirely above-board way. He has indicated also the necessity of obtaining our funds in a broad way from all classes of persons interested in mining, as in this way the money will be far more 8o OFFICIAL PROCEEDINGS valuable in that it will allay any suspicion that this Congress and its Secretary are run by any small group of persons or corporations for selfish purposes, and it is to combat this idea and bring all interested in mining legislation affairs into line on a perfectly fair and impersonal plane that the recommendations of the Ways and Means Committee have been framed, as so ably outlined by our Chairman. If this Congress is to disseminate the varied and useful information recommended by previous speakers and be in a position to be listened to with respect and confidence by the Representatives of the different States in Washington before they have acti-i on bills that may prove harmful or disastrous to certain mining sections of the country, it is imperative that sufficient means should be provided to give the repre- sentatives of the Congress facilities to do their office work in a thorough, systematic, accurate and open way, and if such funds cannot be raised in a big impersonal way as outlined, or some other equally broad manner, then it would seem that there is no reason for the continuance of the existence of the Congress. MR. BARTLETT: Mr. President and members of the American Mining Congress: It requires time and thought to provide ways and means to raise the necessary funds to do the work that can be done by the American Mining Congress. Your committee has thought of making a lot of resolutions, but concluded that resolutions never answer the purpose, as was the case with Senator Wade, of Ohio, back in the sixties. The Senator was a rough-spoken fellow, and after the war he brougiht home a colored strvant. Hi|s town had never had any colored people and rebelled. They called a meeting and made resolutions that Mr. Wade send the darkey back. A committee was appointed to wait upon the Senator and present the resolution, which they very properly did. He said to them: "Gentlemen, you can resolute until hell freezes, over, but the first man that touches that darkey will get hurt," and the darkey died a natural death. Therefore, instead of drawing up a lot of resolutions, we cut the matter as short as possible, and as our worthy Chairman, Mr. Griffith, has already stated, we decided that each one of the committee would state to the members of the Congress the needs of the Congress and the absolute need of funds to success- fully carry on the work, and for my part I will say a few words about the necessity of organization: Now, gentlemen, during the last few days of this session we have listened to very able papers, such as I have never listened to before, papers of able men, in which it was stated that the largest interests in the United States were absolutely making less than 3 per cent, on their millions of actual investment, and to make this matter still morq emphatic, the statements made in the different papers read are abso- lutely proven by one of the officials of the United States, Mr. Parker, who is probably better able to judge the coal business than any other man in the United States. It certainly makes me think of a minister who was out on the lake. It was pretty rough, and the minister was badly scared. He went to the captain and said: "Captain, what do you think? It is pretty rough, isn't it?" It still continued to blow, and once more the minister went to the captain with the same query, and said: "Captain, you know that I am a young man in the clergy. I have much to live for and many opportunities to do g.ood and do not want to die. Please tell me what you think of the situation." The captain replied: "Pretty rough, young man, pretty rough." Again in a short time the minister repeated the question and the captain said: "Now, young man, come with me. Open that hatch d9or and listen. What do you hear?" The, minister said: "Why, captain, they are swearin^ like sin." "Well," replied the captain, "as long as they keep on swearing you are all right, but when they quit swearing and go to praying, then look out." AMERICAN MINING CONGRESS 81 It still continued to get rougher and rougher. Again the minister interrupted the captain as to his opinion. The captain ignored it, and finally he went again to the hatch door and said: "Thank the Lord, they are still swearing." Well, I am rather thankful that the coal and other mine owners are still in the swearing line. Now, gentlemen, if we are ever going to mend these conditions it must necessarily be by organization or united effort. It never can be done by fighting it alone. In Illinois, Indiana, West Virginia, Ohio, Kentucky and other States, it is absolutely neces j sary that something be done. There was never more need for it than at the present time. Now, for one moment, please consider that the mine operators in these States depend very largely indeed upon the banks of the nation for capital. Many of the operators are clear up to their necks in debt. You know it, and I know it. How long can we expect the banks to loan money when they once know that the profits on the business is less than one-half of what the operators are paying for the loan of the money,? Again, how long are we going to get men to put capital into the mining business after they once know that it is utterly impossible to make a fair return, to say nothing of the risks that it is necessary to run in their investments, especially when they can put their capital in school and other bonds which are absolutely safe investments, with 4, 5 and even 6 per cent, interest? Gentlemen, it is high time that the coal miners, as well as all kinds of miners, should organize and try to better their conditions. The American Mining Congress has now been in existence for sixteen years. Each year it has grown stronger and stronger. It commenced with the precious metals, and then took up other lines, such as lead and zinc, then the bituminous coal, and now are in the anthracite region, trying in every possible way to interest those interested in the mining business. Now, whatever is done to the betterment of our condition must necessarily be done through organization and legislation, and it can be truly stated that our present secretary, Mr. Callbreath, has done a great work, especially during the last year. He could have done very much more had he had the proper support financially; in fact, the time is here when much can be done in the way of organization and legislation through the American Mining Congress if enough support can be had to do it; and, therefore, as a member of the American Mining Congress, I appeal to you and urge that each of us take hold of this matter and see that enough support is given. It can be done. It is up to us to do it, and do it now. THE PRESIDENT: What is your pleasure? A DELEGATE: I move the report be adopted. Seconded. W. P. BOLAND, Scranton, Pa.: I do not believe we should tax without representation. I believe that the operator or the corporation should be let in here and have a vote and power as well as the active member. I do not think there ought to be any suspicion or any doubt about the membership of an organization of this kind, and you have got good men in corporations that would be valuable assets to this move- ment, and I believe that this committee ought to allow every member ought to have the active members feel they were not the allies of some concealed combination who supported this organization. I believe that the members here ought to ask every man to give his best thought and debar no corporation from a vote in this organization. MR. GRIFFITH: I might, in answer to that remark, say the present regulations are ample to cover that point. There is nothing to prevent any corporation from supporting personal memberships. A DELEGATE: Then let us remove that suspicion. 82 OFFICIAL PROCEEDINGS MR. GRIFFITH: The object is to guard the organization from the necessity of receiving gifts from corporations. We want to place this in such a manner that it will be to the advantage 01 corporations to subscribe, in consideration of the information and the advantages they would secure from the Bureau of Statistics we propose to organize. MR. BOLAND: That is my very idea, if you please, to remove suspicion. Great corporations are charged today with being the creators of corrupt politicians. Now, in starting this movement, let every man be recognized and every man have the equal power of the others to vote. He cannot commit any wrong, unless the majority of this organization is wrong, and let this body eliminate the discrimination against the corporations. They have enough to fight now, without their own organization, or an organization which wants to uplift it, putting a cloud over" it. That is my idea. I want to see a square deal for the fellows who are the backbone of this organization. We realize now more than ever the necessity of good thinking men getting together and trying to change the conditions. That is my idea. DR. CHANCE: Mr. President, I think if we adopt the suggestion of the gentleman who has just spoken we would simply convert this Cong'ress into an organization of corporations. If the corporations desire to have an organization which shall be representative of corpora- tions, they are entirely free to organize such an institution. This Congress is intended to represent, not corporations, not the technical nd of the business, not the mine managers, nor the public, but all. Now, the chief beneficiary of the activities of this Congress should be the corporations and larger owners of mineral properties. This organi- zation does not appeal to the Mining Engineer. We have our tech- nical societies; we have local technical societies, and we have national technical societies, metallurgical and chemical and electro-chemical, and we do not come here to be benefited, and, therefore, this American Mining Congress has a very small percentage among its members of Mining Engineers, Metallurgists, Electro-Chemists and men engaged technically in the various industries that the American Mining Con- gress represents in the aggregate. Now, if the corporations are the chief beneficiaries of the work which this Congress is to do in the future, then the corporations should contribute their fair quota of the cost of doing the work. The plan which is suggested by the Committee, as I understand it, is one whereby the necessity of asking for donations or voluntary (Con- tributions from corporations and operators shall be removed. That ne- cessity in the past has led to suspicions that perhaps the American Mining Congress might be under the control of those who contributed largely for its support. That suspicion s'hould be removed. I do not mean to imply that it has ever injured the American Mining Congress, or decreased its sphere of influence, but a practical way should be found whereby the corporations should contribute their fair share of the ex- pense of this work, and at the same time not be asked to do it as a gratuity or as a charity. To accomplish this, the Committee proposes that the Congress shall resume, but in an entirely different form, the publication of its Bulletin; that this Bulletin shall be issued bi-monthly; that the Bulletin shall contain a complete synopsis of all pending legislation in every State in the Union. That it shall contain abstracts of the decisions handed down by the Courts in the several States in all cases affecting the min- ing industry, so that you or I and representatives of large interests may have in our libraries something to which we can refer and upon which we can rely for information as to pending legislation, not only in the State in which we do business, but in every other state. That service will be valuable to the mine manager, to the presidents and officials AMERICAN MINING CONGRESS 83 of mining corporations and also to the smaller operator. It will not only keep him posted as to what rs going on in his own State, but will keep him in touch with the trend of legislation all over the country, and when legislation of an objectionable nature is proposed, it will warn htm in advance to take action, so that we may move quickly and get together for concerted action. If we were to undertake to make corporations voting members of this organization, we would immediately lose with the public that in- fluence which, as a voluntary and independent association of mining men, we now have, but which we cannot retain if the operations and the activities of this Congress are not wisely administered. For these reasons, I think, it seems utterly impossible for this organization to consider any proposition to make corporations voting members of this organization. But there are other objections. If you make a corporation a voting member, who is authorized to cast the vote? The President? Perhaps by resolution of the board of directors, perhaps by a vote of the stock- holders, a President or Director may be so empowered, but if some one comes here to cast .such a vote we have no means of knowing whether he is authorized under the charter of that corporation to cast the vote or not. The publication of this Bulletin will involve no more expense than the organization has been put to before, and it will furnish something of value. If you go to any one and ask for money, you must tender a return which is commensurate with the proposition that you ask them to accept. Heretofore solicitations for voluntary donations were sent broad- cast to those who might feel disposed to donate. This has been the main source of revenue which has made possible the holding of the annual meetings or Conventions. The Committee believes that this system ought to be changed. This Congress ought to stand on its own feet and, unaided by outsiders, do the work which will justify its continued life and existence. If it cannot do this, it had better dis- solve. The basis of the Congress should be made financially sound. The Committee has made this recommendation after mature discussion and consideration, extending back^ in fact, through many years. In adopting this plan we are not entirely alone. There are other or- ganizations which have adopted a similar plan whereby corporations are admitted to subscribing membership. The proposition is not really to ask a membership subscription; it is rather one to gain subscriptions to defray the costs of publication and other work of the Congress. The corporation official who is interested in this work will individually be- come a member and have a vote. If the President of any corporation is interested sufficiently, he can become a member and will then have a vote. Mining engineers might become members, but I do not think this organization appeals to the mining engineer sufficiently to enroll a num- ber of engineers. MR. BO LAND: I should like to say one word in reply to this gentleman. As an argument it does not appeal to me as consistent, for the reason that he asks a corporation to contribute to this organization and yet denies the corporation the right to exercise the great power back of this organization. I want to say from my own personal experience that I would much rather have a man like Mr. Richards a member of this organization than any subordinate he might substitute. I would rather have a man like Mr. Ross, of the Delaware & Hudson. Every member who has a part in the existence of this organization ought to have a voice in this or- ganization, and when you put a cloud over the corporation you im- mediately create a suspicion that there is something wrong in the cor- 84 OFFICIAL PROCEEDINGS poration. That you ought to remove, gentlemen. You want to invite the corporations into a different atmosphere from the one which they are traveling and let them get the views of the little fellow as well as the big fellow and rind out what the situation is today. They are the men who can change the situation, and they ought not to transfer it to subordinates or corrupt politicians and have men pass it and know nothing about the conditions, and allow themselves to stand to one side and see their rights taken away from them. I believe today that sixty per cent of the corporations are all right if you give them an opportunity to be heard, but let us invite them in and not debar them. Do not ask them to contribute money and then deprive them of a vote. This is a land of taxation, not taxation without representation. Right here, across the road, at the old Liberty Hall, they opposed taxation without representation, and I say to this body of intelligent men that they ought to substitute another measure or an- other resolution or a paragraph that would eliminate that taxation with- out representation. DR. CHANCE: I would like to ask the gentleman if he knows of any organization that admits members of this class. MR. BOLAND: I will answer you in this way that today con- ditions are different from what they have been in fifty years. We are doing things today that they had not done fifty years ago. If we have been making mistakes for fifty years, we ought to correct them. I be- lieve the corporations coming in here to represent them would send their very best men. They are picking out today men of character and brains, and they have the confidence of the people. All good men that I know are connected with the corporations. Let us talk heart to heart. Do not be afraid. There is nothing to fear. A DELEGATE: I would like to say that Mr. Richards is a member of this association, and he is also a Director, and any Director or President of any corporation has that same power. MR. BOLAND: I will say Mr. Richards is debarred in one meas- ure and admitted in another. I want to eliminate that if I can. THE PRESIDENT: Are you ready for the question? Motion put and carried. DR. CHANCE: I have a motion to make in the form of a resolu- tion that a committee of three be appointed by the President to draft an amendment to the by-laws of the American Mining Congress to provide for subscribing memberships in accord with the report of the Committee on Ways and Means and that such an amendment be submitted to the members for adoption. Seconded. Motion carried. THE PRESIDENT: I would like a little time to think over who to appoint, and will make the announcement before the close of the meeting. We will now hear the report of the Committee on Resolutions. THE SECRETARY: Mr. Chairman and Gentlemen, the Resolu- tions Committee's report will take quite a little time, probably all the morning session. Secretary of Labor Wilson is here ready to address us on the subject of "Arbitration" and is going to stay over until to- morrow, so he can deliver his address just as well this afternoon as in the morning if we prefer that. We ought to have a suggestion as to when we will hear Mr. Wilson. THE PRESIDENT: What is your pleasure, gentlemen? Moved that Secretary Wilson be heard at the present time if he is ready. Seconded. Carried. AMERICAN MINING CONGRESS 85 THE PRESIDENT: I take great pleasure in presenting to you Secretary William B. Wilson, of the Department of Labor in Wash- ington, who will deliver an address to us on " Arbitration as a Factor in the Mining Industry." Secretary Wilson's address will be found on page 274 of this report. MR. C. E. MAURER, Cleveland, Ohio: I am glad to say I have made the same argument that Mr. Wilson has made this morning a great many times in these trade meetings. That is, the relationship between organized labor and employes must be treated as a partner- ship. Now the question I want to ask is what should be the basis of agreements so entered into. SECRETARY WILSON: The basis to begin with is to mutually meet and mutually discuss in order that each may mutually understand the other's differences. Each individual case under such discussion will have to be treated as the particular incidents in the case may require. There are no two situations that are exactly alike. The basis of it all is get together. Find out each other's difficulties, and then out of the knowl- edge of each other's difficulties work out the problem on the basis that is equitable to all concerned. MR. MAURER: That is not the point. The point I am getting at is this: What should be the basis of the wage agreement? SECRETARY WILSON: From that you mean the amount? MR. MAURER: Here is a partnership, on one side labor the employe; on the other side the employer. Now when they attempt to arrive at the basis of the agreement, wage agreement, upon what basis would the wage be determined in this partnership. SECRETARY WILSON: That is problematical. The first basis should be as near as possible to a living wage for the workmen. The standard of living is as I have stated a flexible proposition, an indeter- minate thing, but it should be as far as possible a living wage for the workman according to American standards. It may not even be that to begin with, because of this. You find in one part of the country a condition where the wages have been forced down, and consequently the cost of production is lower than elsewhere. In collective bargaining both sides have to take into consideration the competitive relationship between the employers. In the other field where they are producing coal under low wages those wages may be such as not to enable the workmen to secure a sufficient amount to attain what I recognize as the American standard of living. That would have an effect on the fields where collective bargaining is engaged in. There is a point beyond whicTT in the negotiations the workmen cannot force the employers to go with- out injury to themselves. If they insist on too much they would drive their employers out of business and themselves out of work. The selfish part comes in there. If they force wages and conditions beyond a certain point, with the employers they are negotiating with, the other employers would secure the business. So those matters are matters which have to be threshed out in each individual case as it comes up for consideration. MR. MAURER: I think you understand my question. Should not the wages be based on the commodity they produce its competitive value. SECRETARY WILSON: Only partly so. MR. MAURER: Then it is not a partnership? SECRETARY WILSON: Yes, it is a partnership, but like all partnerships all the elements in the partnership have to be taken into consideration. You cannot consider the proposition solely from one phase of the partnership and arrive at a correct basis, you must take into consideration all the phases in the partnership in order to arrive at a correct basis. Whatever the product brings in the market is the amount divisible by the partners. Now that you have found your sum 86 OFFICIAL PROCEEDINGS total the question is what portion of it should go to the employers and what portion to the employes. But behind that is another problem. The workman while a partner in the business is not the selling partner, he is the producing partner, the other partner is the selling partner. The producing partner, who has to share this amount that is to be jointly divided between them has a right to know if there is any possible means by which that sum total can be increased, so that he, who is a producing partner may have a larger amount as his share for production. That element also comes into consideration, so that there is not only the competitive relationship, but all of the other relationships in the partnership that have to be taken into consideration. MR. MAURER: Does not competition fix the value of the com- modity. You must take this into consideration. The employer has to meet the competitive prices in all other fields; by the laws of this country and the several States he is prevented from combining or co-operating to protect himself, and yet he is dealing with an aggregation that is combined, and therefore in the end, in case he cannot protect himself, you can see the propriety of the quotation you made a few moments ago, "He who has power takes." It is the combined power that takes. Look at the history of coal production in the competitive States. Since 1908, when our wage agreement went into effect, the miners' wages have been increased practically one hundred per cent., and yet the result in the competitive States shows there has been an absolute loss, absolutely no return for capital invested, so that combined power, combined labor, got one hundred per cent, increase, but capital, prevented by legislation, from even co-operation, has got the worst end of the bargain and has suffered a loss. Now isn't that true? SECRETARY WILSON: I would not admit the latter part of it has suffered a loss. As far as my information goes the profits in the bituminous coal fields, in the central competitive fields, are as great or greater now than they were before collective bargaining begun. The development has been greater. Reinvestments have been immense in the bituminous coal fields, so that I would not admit that the profits have declined in the bituminous coal fields, but here is a proposition that undoubtedly would have to be considered in any such conference. I have stated that the producers in any industry are living, moving sentient beings. They must have shelter, clothing and food. Those are elemen- tary needs. The cost of all of those things has very materially increased. Now that is true also to a limited extent of capital. There are some things in capital where the cost has not increased materially, there are some things in which the cost has increased materially. Those are things which have to be taken into consideration. MR. H. E. WILLARD, Cleveland, Ohio: Don't you think that the employer who employs this labor that is the organized labor ought under the laws to be entitled to the same rights and the same protection as the laborer; that we ought to have the right, within reasonable bounds, to co-operate and protect ourselves. SECRETARY WILSON: There must be bounds. Labor is a part of man; capital is that which has been produced before and which has not yet been consumed. They are two entirely different proposi- tions. There might very properly be a combination of men for their own protection, where there might not properly be a combination of capital. An employer is a man who utilizes capital in his business, and by the utilization of that capital in his business he is able to employ others to assist him in the conducting of his business. Now what he is dealing with is, first, capital, and, second, men. He is dealing with two different elements. Capital which is a product of man, and men which is the product of a Higher Power. Those who are themselves a product of that Higher Power may very properly unite, but to unite that which AMERICAN MINING CONGRESS 87 is a product of man for the purpose of controlling the situation, the commercial situation, would be an entirely different problem. MR. WILLARD: Do not lose sight of the fact that the purpose of control is conservation, and competition in our natural resources does not conserve them, does it? I am referring to the coal industry. You cannot conserve without co-operation. SECRETARY WILSON: That is true in a very great many instances. You must have co-operation in order to conserve. There are many conditions which arise as a result of competition in the coal mining industry by which a vast amount of values are lost to the public forever. For instance, a man has a coal operation where some of his coal is difficult of access, difficult to mine, costly to get out. Another portion of his coal may be easier of access, cheaper to get out. He has to meet competitive conditions. He has to take that which he can mine and meet the competitive conditions, and leave that which he cannot mine and meet the competitive conditions. That is a condition which is more or less peculiar to such industries as the mining industries. MR. WILLARD: Isn't it a fact, Mr. Wilson, that there are four elements that enter into the production and selling of coal; first, capital, then labor, then transportation, and the man who pays the bill is the public consumer. Now, I have listened to your able argument about two subjects, capital and labor, embracing the important part of how much of the selling price the operator gets to divide with the wage-earner. How in the name of common sense can the wage-earner ask the operator to contribute that which he does not get? You people have lost sight of the invisible power which takes all of the profit and leaves nothing for the operator to divide with the wage-earner. And you hold the operator. You get a rope around his neck, the labor union at one end and the railroad men at the other end, and there is nothing left for the operator but destruction. Now, I believe these two great bodies working together for the betterment of these conditions ought to look around and find the other cause of all this trouble. You have a CommissiotPnow in Washington. God bless them! They are the only salvation that this country has got to-day in my estimation, and they are trying to find out the true facts and allow the men that deserve a reasonable profit to get that profit out of the railroad, but not destroy the operator and change the white man into the black man, making a slave of him by taking all there is in the business away from him. SECRETARY WILSON: That is one of the elements that clearly demonstrates the necessity of employer and employes threshing out those problems the amount that an employer has to pay in trans- portation to get his product to the market, as compared to what another employer has to pay to get his to the market. That should be dealt with in mutual conference. As to whether that rate in every case is unjust or not unjust is a matter that can be very properly dealt with by our Federal Government. I would not like to undertake to say that a rate is unjust, that a rate is selfish, that the railroad is securing without first going into an examination of all the factors that go to make up its cost, and all the factors that have gone to make up its investments. Having a knowledge of what the factors were that made up its investments, its cost sheets and then what its earn- ings were, I would then be in a position to say whether or not the rates asked were excessive, but in the meantime while that information is being made available there is no reason in my judgment why the employe and employer should not get together and work their problems, out on the basis of the information they have. 88 OFFICIAL PROCEEDINGS MR. WILLARD: I would like to ask Mr. Wilson, when the employer and employe have met, consulted and agreed, and a contract has been entered into by both parties and signed, I would like to ask you, Mr. Wilson, in the light of your experience what would you suggest as a remedy for the enforcement of that contract, for the protection of the employer whose limit of margin when he went into the contract, known to the entire community and country, is so small that the slightest interference or deviation from the execution of that contract would wipe it out? What could you suggest to us, as employers, to remedy a violation of that contract by either party while it is in existence? What is the reason? There must be a good reason why organized labor objects to the control by the Government, either State or national, of its contracts. On what grounds does organized labor ask for immunity from prosecution. There are many of us in the country that hear of these things at Washington. We read them in the newspapers. We don't get the information at close hand. SECRETARY WILSON: While it is not pertinent, I have no hesitancy in discussing this question. To begin with, in reply to your first question, I know of no remedy, except the moral influence that may be brought to bear upon the situation. Unfortunately, it has been true that both employers and employes have, after having entered into time contracts, violated those contracts. Employers sometimes violate contracts on the grounds that market conditions have changed since the contracts were entered into, and that they are no longer in position 1 to pay the rates. Workmen violate the contracts for a number of reasons. Fortunately, those instances are not numerous, but they exist in the very nature of a wage contract. The employer may be a corporation or an individual, and yet a wage contract is not legally binding upon that individual or corporation. There is nothing in any wage contract that can be made or put into the contract that will say to the employer that you must give three hundred days' work per year, or a hundred and fifty days' work a year to your employes. It simply provides a given rate if the services are needed. When an employer decides to end the contract all he has to do is to close down the works until the necessities of the employes compel them to accept a new con- tract upon a new basis. There is no power that can be placed in the contract that will compel the individual workman to work against his will, so the wage contract entered into between employer and employe is a contract made by both in a spirit of honor that makes it binding upon each. My experience has been that very generally that spirit of honor has been lived up to by both employer and employes. After the con- tracts were made as a rule they are honorably lived up to. I know of no manner in which you can get away from that situation. I cannot conceive of a method by which it can be made legally binding upon either side. The other phase which is not pertinent to the discussion we have here is suggested in a statement I made a few minutes ago, that labor power is a part of man. It cannot be controlled by any outside man or force without controlling the man himself. The moment the labor power leaves the individual, it is no longer labor power, it is a product of labor, and when you pass laws that are meant to prevent combines in restraint of trade it is the products of labor and not labor itself that is meant to be covered. MR. WILLARD: One more question. Can the man who is an employe by reason of the fact that he labors commit no wrong against the community? SECRETARY WILSON: Oh, no, it simply presupposes this. That which is not considered a wrong for one person to do is not to be considered a wrong for a number of persons to do in dealing with AMERICAN MINING CONGRESS 89 the disposal of their own labor power. The only exemption that has been asked is that in these associations they shall not be prosecuted for that which does not otherwise constitute a crime when done by an individual. In other words, it is not a crime to associate for the accomplishment of a proper purpose in a proper way, or a legal purpose in a legal way. (Applause.) MR. ARTHUR H. STORRS, Scranton, Pa.: I would like to make a few observations as to the effects of what I believe has been the greatest arbitration problem that the country has ever had in the coal fields. At least, that of the anthracite coal fields, and I would preface my remarks by saying that I have absolutely no interest in any anthracite operation. I think the anthracite industry has been benefited, both as to the em- ployer and the employe, but I think carrying out Secretary Wilson's idea of a partnership has failed to result in a smooth working partnership, and that possibly because of the fact that the partnership, instead of being a straight partnership is one in which there is, you might say, a sub-partnership on the one side composed of many elements. No man, as has been stated, would be compelled to work if he does not like the conditions. The award of the Commission, as it has been subsequently worked out has been with the employer, who is compelled to observe the award of the Commission, and the subsequent award of the Board of Conciliation, or go out of business. On the other hand, any employe who is not satisfied with the award of the Board of Conciliation or the Board of Arbitration may move and secure employment elsewhere. The prevailing scarcity of labor makes it an easy matter, in an extreme case, to take ninety per cent, of the men at any colliery who become dissatisfied with the decision of the Board of Conciliation, and they are at liberty to move on and find other employ- ment. The operator cannot move on, he cannot secure men from any other field. The union men will not come to take their places. An instance of this has been brought to my attention where the refusal of one man to pay his union dues tied up the colliery for over a week, a matter over which the operator had absolutely no control. Now the employer must suffer for that one thing, and it is absolutely unfair, it seems to me. I know of no way, as the gentlemen has just said, by which this can be controlled, but that seems to be the weak element of the partnership. , I would like to ask Mr. Wilson what is the objection to the incor- poration of the labor union, where the action of the local or district as it may be results in absolute loss or damage to the employer? SECRETARY WILSON: The objection to the incorporation of a trade union is because of the physical condition under which wage contracts are made, which, if the trade unions were incorporated, would make trade unions subject to damages for failure to live up to the contract, while, as I have stated, the individual employer or the corporation would not be subject to damage if they fail to live up to the contract. When a corporation feels that it can no longer live up to the contract because of market conditions, or for any other reason, there can be nothing in the contract that would compel it to operate. I know of no way in which you could put any clause in a contract that would compel an employer to operate when he did not want to operate. The contract simply provides that he agrees to give certain terms when he does operate so that notwithstanding the fact that a concern is incorporated and consequently can be sued for violations of the ordinary contract it cannot be sued for damages for shutting down its plant. It cannot be sued for damages for the violation of the contract, because the contract itself creates a basis which prevents such conditions from arising. 90 OFFICIAL PROCEEDINGS Now, if trade unions are incorporated and they enter into contracts by which they work at a given rate they would be subject to suits for damages. In other words if they are incorporated they are subjected to suits for damages whenever the contract is violated. In order to avoid those conditions trade unions have refused to incorporate, although some of our courts have held they may be sued without being incor- porated. This is particularly the case in the Danbury Hatters' case, where the hatters' union, together with the officers, were sued, and the court held that voluntary associations of that kind are subject to suits for damages. That is the fundamental reason why trade unions do not care to incorporate. MR. STORRS: Mr. Wilson has also stated a mutual necessity of both parties to this partnership employer and employes. They are best met in the largest possible protection for a given amount of labor, and yet I think there is no question in the anthracite field but what every effort of the union to limit the possible output which labor should give to the possible protection of every form of contract, which in the past prevailed. A man of unusual ability was able to buy that ability to secure a large return in the form of wages. This has been discounte- nanced; in fact, forbidden in the form of a contract. THE PRESIDENT: Owing to the lateness of the hour, I am reluctantly obliged to terminate this discussion. The Committee to draft amendments to our by-laws will be Dr. H. M. Chance, Eli T. Connor, J Blair Kennerly. Moved that a vote of thanks be extended to Secretary Wilson for his attendance and address to this meeting. Seconded. Carried. Secretary reads letter from Dr. Holmes, dated San Francisco, October 19th. (Secretary has this letter.) THE PRESIDENT: We hope to have the pleasure of hearing that address read this afternoon. We will now adjourn the meeting. The report of the Resolutions Committee will be in special order this afternoon. FRIDAY, OCTOBER 24, 1913. Afternoon Session. Meeting called to order by the President. THE PRESIDENT: I think before we proceed any further with the business of the convention I ought to make an announcement. At the meeting of your Directors last night officers were elected for the ensuing year, and it now becomes my duty and privilege to transfer the reins over to my successor. The past year has been one of pleasant associations, and while we have not succeeded in doing all that we undertook to do, it is some satisfaction to know that in the work the Congress has never halted, and its condition, both in the States from which we hail and Washington was never better than it is to-day. This is, however, entirely due, almost entirely, to the strenuous, able and unselfish efforts of our able Secretary (applause), and to him must be given the credit for everything that this organization has been able to accomplish. We would be able perhaps to accomplish more if it were not for the fact that we are all very apt to do what is very clearly described in the slang expression, "Let George do it." Instead of doing things our- selves, we hope somebody else will go ahead and do them. That is entirely wrong. I can illustrate that best perhaps by a little incident that occurred in Scotland last summer. A tourist asked a Scotch boy the direction to a certain place, and the boy replied: "You go down AMERICAN MINING CONGRESS 91 the street a quarter of a mile and turn to your left, then you go an eighth of a mile and you come to a minister, a signboard, and it will point the way you should go." "Why do you call the signboard a minister?" asked the tourist, to which the boy made reply, "Because the point the way we dinna wan' to go oursel's." (Laughter.) I would like to see every member of the Congress lead in the direction he would like to have others follow. It is now my privilege to introduce to you your new President, Mr. Carl Scholz, of Chicago. (Applause.) I will ask Mr. Scholz to take the chair, and I hand him the gavel. PRESIDENT CARL SCHOLZ: Mr. President and Gentlemen: In accepting the gavel which you have just handed me I want to express my deep appreciation to the Directors in selecting me for this important position, and at the same time acknowledge my weakness in carrying out the work you have asked me to assume. I, myself, know best how totally unfit I am to step into the shoes of such an able man as has just vacated the chair, but I bespeak your hearty co-operation, and hope that with the help given me my own inefficiency will become less noticeable. Much has been said during this session of the efforts and the ability of our Secretary, and I wish to say now that I believe he and the other officers are entitled to more support in the future than they have been given in the past. While moral influence is beneficial, financial assistance is absolutely important to conduct and enlarge this work. After my selection as President was made known to me last night I felt that it might be necessary for me to prepare an inaugural address, but since there are so many matters to be discussed I will not take up the time to say anything now but bespeak your hearty co-operation in the work of this Congress. Again I thank you for the honor conferred on me, and hope that when my year of office ends we will have accom- plished something we will not be ashamed of. The Committee on Resolutions will now make its report. MR. TAYLOR, Chairman: Gentlemen, we have still before us for consideration several resolutions which we have not been able to agree upon. It may be possible that we may have to bring them out on the floor of the convention a little later, but I am bringing to you the resolutions which we have already agreed upon, and we will make an additional report a little later on. Resolution No. 2, introduced by Mr. D. W. Brunton. Your Committee recommends the passage of this resolution, and I therefore move its adoption. Seconded. Motion carried. Resolution No. 3, introduced by Charles K Maurer, of Cleveland. Your Committee recommends the passage of the resolution as introduced, and I move its adoption. Seconded. Motion carried. Resolution No. 4, introduced by S. A. Taylor. Your Committee recommends the passage of this resolution, and I move the adoption thereof Seconded. Motion carried. Resolution No. 5, introduced by H. N. Lowrie, of Portland. Your Committee recommends the passage of this resolution, and I move the adoption thereof. Seconded. Motion carried. Resolution No. 6, introduced by Mr. C. K. Maurer, of Cleveland. This has been amended, and I will read the amended resolution. 92 OFFICIAL PROCEEDINGS Resolution No. 6, Introduced by C. E. Maurer, of Ohio. Whereas, The Federal reports show the deplorable condition of the great coal industry of the United States and the small return for the investment, as indicated by a paper read to this Congress by Edward W. Parker, Statistician of the United States Geographical Survey; and Whereas, Federal and State laws encouraging competition and pre- venting reasonable co-operation among those engaged in the production of this great natural resource result not only in preventing a fair return for the investment of capital and the risk involved, but in most cases allow only the recovery of from fifty to eighty per cent, of our buried heat, light and power, the balance of which is irretrievably lost; and Whereas, These laws limit the surrounding of the employes engaged in the extremely dangerous occupation of mining with all possible safe- guards; therefore be it Resolved, That we urge upon the Congress of the United States and the State Legislatures the necessity of the modification of the so- called "Anti-Trust" laws as applied to our natural resources in order that they may be conserved and proper safeguards thrown around the employes; be it further Resolved, That copies of this resolution and the address of Edward W. Parker to this Congress be sent to the President of the United States, to the members of Congress and to the Governors of the respective coal producing States of the Union. Your Committee recommends the passage of this resolution as amended, and I move its adoption. Seconded. Motion carried. Resolution No. 7, introduced by William Maloney, of Alaska, has been amended as follows: Resolution No. 7, Introduced by William Maloney, Nome, Alaska. Whereas, The pioneers of Alaska have, for many years, been appealing to the Government for a more liberal administration of the public lands or for some new legislation which would permit the develop- ment of Alaska's resources; Whereas, The Congress of the United States has given consideration to these appeals, has conducted hearings before various committees, but thus far no legislation has been given and the administration of the resources of Alaska by the Federal Government has brought about a stagnation of business, discouraging to the pioneers, in that far-off territory and prohibitive of its best development; and Whereas, Bills have been introduced in Congress which, in effect, recognize the fact that the construction of railroads into barren and undeveloped country cannot be expected except by the utilization of the enhancement of values of its natural resources, as a part compensa- tion for the years of unprofitable operation, which necessarily accrue in the operation of a railroad in an undeveloped country; therefore be it Resolved, By the American Mining Congress in Sixteenth Annual Session assembled that we urge upon the administration of the Federal Government the best redress possible under the present laws or that such laws be speedily enacted, that private capital may be induced to interest itself in the development of the great natural resources of this territory. Your Committee recommends the adoption of this resolution as amended, and I move its adoption. Seconded. MR. RYAN, ALASKA: In seconding the adoption of the reso- lution proposed by Mr. Maloney, of Alaska, I would like to make a AMERICAN MINING CONGRESS 93 few remarks, but if you, Mr. Chairman, think they would be out of order at this time I shall postpone them until later on. I will not: take over ten minutes. The resolution which has been reported by the Committee and just read is far from representing my views and the views of many others on the subject matter contained therein. It, however, has the virtue of being non-controversial. The American Mining Congress has seen fit in the past to advocate measures which have not had the unanimous support of Alaskans by any means, namely, a leasing system policy for its public lands and the government ownership and operation of its transportation system, both of which I consider socialistic in the highest degree. Any suspicion in this resolution that might or could be con- strued to favor such policies I should protest against to the fullest extent of my power. The foundation principles of socialism is govern- ment ownership of natural resources and public utilities and government operation of all industries. This is the policy subscribed to and en- dorsed by Messrs. Fisher, late Secretary of the Interior Department; Gifford Pinchot, and some of the department heads in Washington, but not yet, thank God, by the National Congress. A word concerning Alaska's conditions. Dr. Brooks gives the minimum estimate of its coal resources at one hundred and fifty billion tons, with only one-fifth of Alaska geologically surveyed and known. This exceeds the original supply of Pennsylvania, and as yet we have to burn foreign coal and California oil. Senator Shafroth, of Colorado, when speaking yesterday, resented in the strongest terms the crime committed against his State in the name of law by the Forest Service in Washington, i. e., the withdrawal of public lands. He told you gentlemen that fifteen million acres of the public lands of Colorado were withdrawn from entry and so from State taxation. I did not wish to interrupt the Senator or I would have reminded him of the fact that one reserve alone in Alaska contains fifteen million acres of land, namely, the Tongas Reservation, while another, in which I have the misfortune to reside, contains over eleven million acres, namely, the Chugach Reservation, seven millions of which is bare of timber. Mr. George E. Baldwin, of Valdez, speaking before your Con- gress a couple of years ago described it vividly. The Department itself acknowledged that seven million acres of this latter reserve contains no timber, and these are only two of the many reserves in that much abused territory. I agree with the Senator, and with many of the gentlemen who have spoken here of the unnecessary interferences from many of the Bureaus in Washington, and I believe, like a great editor in New York expressed himself, that if a few desks were thrown into the streets of Washington and the young gentlemen who sit at them were sent out to the fields over which an unwise Congress has given them jurisdiction, conservation might once more command the respect of men who have seen it at work. My conviction is that Alaska contains the ore and coal and other resources to warrant the building of railroads, and if our Government will take the lid off, so that capital can invest with reasonable hope of returns, railroad building will follow as a natural result. I believe in the greatest men for the greatest things; the greatest opportunities for all men. the greatest liberty for the greatest achieve- ment for any and every useful enterprise with no obstructive laws. We are legislating for little things. The laws of nature and the gifts of God call for legislation that shall approach the magnitude of the things to be done by men great enough to do them. I have nothing but contempt, derision and oblivion for all yellow liars and muckrakers, if they are worth the expenditure of so much consideration. 94 OFFICIAL PROCEEDINGS Compared with private enterprise, no service rendered by the Gov- ernment pays. None is conducted so economically, nor is this due by any means to difference in wages. It is hardly possible to expect to secure the personal interest in Government service, the careful curtail- ment of expense and the unfailing watchfulness, which are the well recognized essentials of success in private business. Those who desire to adhere to the socialistic platform have every right to contend for its establishment. Those who believe in the individualistic source of life have the right also to contend for its preservation. The United States has grown and prospered beyond every nation on earth. It will continue to grow and prosper if its people will continue to stand firm for individualism. I represent on the floor of this Congress, directly or indirectly, over twenty millions of money, excluding the Copper River and North- western Railway, now invested in transportation enterprises in Alaska. The passage of any legislation, providing for government ownership and operation, means the confiscation of tha,t money. In my own interests in the territory I have invested thousands of dollars, and stand prepared to invest millions to complete the necessary transpor- tation lines as set forth by me before the Congressional Committees, and therefore feel that I am justified in protesting against the endorse- ment by this body of a policy such as ; I have described and which to me means confiscation pure and simple and the driving out of private capital, not only for the development of her transportation lines but her mining interests as well. Government ownership and operation of our railroads and telegraph lines is a guaranty of bad service and costly management, but perhaps as serious a menace as either lies in the political phase of it. It is not stepping outside the limits of conservatism to estimate the railroad and telegraph employes of the country to-day at two millions. (See I. S. C. Reports, 1911.) Would the politician be a politician if he did not court and fawn upon such a source of political control? Would not the politicians who are in power and anxious to stay in, as well as those who are out and anxious to get in, bargain with it, agreeing to favor legislation to further its private interests in exchange for its support? Then, too, what political patronage would there be in the control of a government payroll twice as large as the present government expenditure. Government ownership may seem to some the solution of a few of the problems that confront us, but it is a dream that would end in a rude awakening. Nothing could be more destructive to the rule of the people than the creation of a class which, by itself, is able to dictate political control and shape legislation not for the general good, but to serve its own selfish ends. We have an example of this in the advocates of the present bills before the Committees in Washington. The bills have not as yet been passed upon by the United States Congress. One of these bills, reported out of Committee, provides for Government ownership and operation of our transportation. The other, not as yet considered, provides for the operation of our utilities. Therefore, regret to see the slightest favor by this Congress towards a policy which has not been discussed and passed upon by it, and which I do not believe if considered on this floor would receive the endorsement of the members of the American Mining Congress of America. I thank you. (Applause.) SECRETARY CALLBREATH: May T say just one word simply to indicate what I think might be a false impression to be gained from the remarks just made that the American Mining Congress once advo- cated a Federal leasing policy for the control of the coal lands for Alaska. I admit the truth of the statement, but I want to say that that AMERICAN MINING CONGRESS 95 policy was temporarily approved, because at that time it was believed to have the approval of a great majority of Alaskans. It was thought expedient to sacrifice the fundamental principle of our Government, and the theories upon which its prosperity has been established in order that the resources of Alaska might be temporarily opened and thus bring immediate prosperity to that territory. It was believed that if that policy should be adopted it could be reversed when the nation had become awake to the fact that the policy was wrong. I trust every man in this audience will use his best endeavor not that the best thing shall be done for Alaska, but that something shall be done for Alaska. (Applause.) MR. RYAN: What the Secretary says is perfectly true, but he must not forget that the Alaskans have to be considered in the matter, and perhaps the Alaskans might prefer to remain tied up for a few years longer until they are able to manufacture, with your help, gentle- men, a sentiment of right and nothing but right, than to accept a cure such as is proposed by the leasing system. Alaska should not be treated differently from any other part of the United States. The railroad men who represent the present investments in Alaska went to Washington and appeared before the Senate and House Com- mittees, and showed conclusively that they were prepared to extend their railroad lines and share in the development of the country. When the country was released from the bondage, that Mr. Pinchot and others have put upon it, under the name of conservation, and I think the Secre- tary will agree with me, that this "bottled up" situation was created for the sole purpose of forcing on us some such tyrannical proposition as the leasing law, and government ownership and operation of our utilities and industry. They want to try these new theories of theirs on "the dog," but we men who went into Alaska and put our money there in good faith demand a square deal. We are to-day like some of you coal people in the East, paying "Irish" dividends owing to the lack of action or rather inaction at Washington. Any man who is helping and advocating the theories of Mr. Pinchot in what he calls conserva- tion, and is ready to turn the country over to their socialistic doctrines pure and simple, is no friend of good government. There is no excuse for these raiV ad hills at this time. They are bound to meet with the very same objection on the floor of Congress as private enterprise has had to meet in the bottling up of coal, etc. First release the territory's resources and take the lid off, and see if private capital will not continue the development of the territory. As an example of the present con- servation policy are you aware it is impossible to acquire more than one hundred and sixty acres in a compact body in Alaska for any commercial enterprise to-day, such as smelters, terminal grounds, etc.? You are limited to that acreage, and around that one hundred and sixty acres there is a Government reserve equal to four hundred and eighty acres. This is the construction of the law by the Department in Washington, and Alaska is up against it. Then they say to the men who have already invested their money in transportation: "Why don't you fellows go ahead and build railroads as you say you can?" Their answer is: "Restore her resources to development and watch the result." We now have to face an attempt at Government ownership of our rail- roads, but if you gentlemen of this Congress, representing the great mining industries, will show to the National Government your distrust in any such a policy as proposed it will be of inestimable value to us in Alaska in getting sane and safe legislation for our territory. Resolution No. 7 adopted. MR. RYAN: I rise to a question of information, Mr. Chairman, to ask why the Alaskan Committee is not represented by Alaskans. There is only one Alaskan on the so-called Alaskan Committee, an4 I want to say in all kindness to the gentlemen who compose the 96 OFFICIAL PROCEEDINGS American Mining Congress that Alaska should not be represented in such a "carpet bag" way. The interests of Alaska are close to you, just as close as they are to the Alaskans, and I am sure that it is your wish and the wish of the Directors of the American Mining Congress to have the Territory of Alaska honestly and fully represented in the deliberations of the Congress. The present representation has caused a great deal of resentment, which does not redound to the popularity or to the standing of the membership of this body as it ought. We have suffered from "carpet bagism" in the past in Alaska, and I am sure the body of men who compose this Congress do not want to impose it any further on Alaska. I do not know how the present Com- mittees are made up. MR. TAYLOR: I would suggest that the paper that Dr. Holmes has prepared be read. It is not very long, and there have been several requests that it be read. THE PRESIDENT: Before calling for Dr. Holmes' paper we will have the Secretary read the names of the officers elected yesterday. SECRETARY CALLBREATH: May I first say one word in regard to the Alaskan situation, The Congress has a rule which provides its members comprise the Committees. I think the Directors have tried to select for their Alaskan Committee the men near Alaska as far as it is possible to select from our membership. It was useless to select men in Nome to do the work who expected to remain in Nome. The Chairman of the Committee on Legislation has been a member of that Committee during the last year, and other members of the Committee have a strong interest in Alaska or a residence there, and were as nearly representative of Alaska as the Directors could select such a Committee. The desire is to make the Committee as thoroughly representative of Alaskan interests as it is possible to do, but I am inclined to think it is impossible to get any Committee that would possibly agree upon any policy of that description. MR. RYAN: I do not wish this Congress to misinterpret my meaning. There have been selfish interests represented on the Alaskan Committee, and this should not be tolerated by the American Mining Congress. Gentlemen should not represent as a Committee of the Mining Congress anything to the detriment of our country at Wash- ington. That has been done in the past, and necessarily has caused all of the trouble that has arisen. SECRETARY CALLBREATH: I do not want to discuss this question, but I want to deny the statement that selfish interests have controlled the Alaskan Committee. If there is in all this world a man who is entitled to the absolute respect of every fellow citizen, if there is a man in all this world in whom I have absolute respect as to his unselfish desires to serve Alaska that man is Mr. Joslin, and he has been the dominating spirit of the Committee during the past two or three years. I do not want to discuss that question, but it is not fair to say that Mr. Joslin has been using the Mining Congress for selfish purposes. MR. RYAN: I am not saying anything of the kind in regard to Mr. Joslyn. There are others on that committee. 'SECRETARY CALLBREATH: I appreciate that fact. I am asked to announce to the convention the officers of the Congress and Directors for the ensuing year: President, CARL SCHOLZ. First Vice-President, HENNEN JENNINGS. Second Vice-President, M. S. KEMMERER. Third Vice-President, HARRY L. DAY. AMERICAN MINING CONGRESS 97 Directors. D. W. BRUNTON, Colorado; GEO. H. BERN, Utah; W. G. CONRAD, Montana; JOHN MAYER, Missouri; HARRY N. TAYLOR, Illinois; HENNE'N JENNINGS, Washington, D. C; W. J. RICHARDS, Pottsville, Pa.; E. A. MONTGOMERY, California; M. S. KE'MMERER, New York. S. A. TAYLOR, Pittsburgh, Pa.; DR. JAMES DOUGLAS, New York; HARRY L. DAY, Idaho; CARL SCHOLZ, Illinois. MR. TAYLOR: Your Committee on Resolutions recommend the passage of resolution No. 8, and I move its adoption. Resolution No. 8, Introduced by John E. Patton, Tennessee. Whereas, The U. S. Internal Revenue Collectors of the various col- lection districts have placed different constructions upon the Corporation Income Tax Law as regards the right of mining companies owning their lands in fee to charge, as a part of the expense of production, a royalty or depletion charge; therefore, be it Resolved: By the American Mining Congress that the Treasury Department be petitioned to issue uniform directions to its Collectors in this regard, providing that a definite royalty or depletion charge be allowed as an item of the cost of production in arriving at the net income of mining companies for the purpose of taxation. Motion seconded and carried. MR. TAYLOR: Your committee recommends the passage of Reso- lution No. 9, and I move its adoption. Resolution No. 9, Introduced by R. Dawson Hall, of New York. Resolved: That we express our sympathy with the relatives and friends of those who have lost their lives in the terrible explosion in the Dawson mine, and that we join with the officials and owners of the Stag Canon Coal Company in regretting that all their efforts and forethought have, in some unfortunate and inexplicable manner, been rendered of no avail, and that the Secretary communicate the matter of this resolution to the proper persons. Motion carried. MR. TAYLOR: Resolution No. 10, introduced by the Resolution* Committee. Resolution No. 10, Introduced by the Resolutions Committee. Whereas, The Sixteenth Annual Session of the American Mining Congress, held at Philadelphia, October 20 to 25, 1913, has resulted from the excellent arrangement made for the sessions and from the hospitality extended to the members of the Congress by the citizens of Philadelphia; now, therefore, be it Resolved: That the Congress hereby expressed its deep apprecia- tion of the help and entertainment extended to it and its hearty thanks to all concerned, including especially the local committees at Philadel- phia, the Press and the citizens generally, with special praise to Messrs. E. T. Connor and Daniel Whitney, and to the management of the Bellevue-Stratford Hotel. The Congress also regrets that on account of the illness of Mr. E. T. Connor he was unable to participate in the proceedings, the success of which is largely due to his personal efforts. Motion to adopt seconded and carried. o8 OFFICIAL PROCEEDINGS MR. TAYLOR: Here is the Resolution, gentlemen, No. 11, intro- duced by Mr. John R. Burton, New York City, that we desire, while it is part of a Committee, that you listen to its reading: "Whereas discredit has been brought upon the mining profession in the past by dishonest promoters and others in the quotation of worthless mining securities," etc, MR. TAYLOR: Of course, in my position, I move the adoption of the resolution. Seconded: Question. MR. BRUNTON: Before adopting this resolution I would like to know its exact purport. MR. BURTON: There is no exact purport, except to throw every safeguard around investments, and it has been my forte, for the past four years, to watch mining investments and promoters. Through my position I have been successful in throwing a number of them in jail, but for some reason they come back after serving a jail sentence and go in business under another name. I believe the leopard cannot change his spots, and I want to keep them out of it. I believe the mining busi- ness is in a better position to-day than it was five years ago. I want to keep these people out of the mining business. I, myself, am not interested in mining. My profession is newspaper work. I thought this resolution would keep them out. I know newspaper men would be very glad to do everything in their power to commence a prosecution, which it is necessary for either the newspapers or the Congress to do. By that I mean present the facts to the Federal Government. They will take care of the prosecutions themselves. THE PRESIDENT: Any further remarks. SECRETARY CALLBREATH: I do not want to appear as op- posed to the tenor of the resolution, but I fear its latter part, which is intended to be its effective part, is a limitation upon a certain right, rather than an extension of it. It is now within the power of any mem- ber of the Mining Congress to prefer charges against any other member of the Mining Congress before the Board of Directors, and if they shall find that he has been guilty of any act which is calculated to bring dis- credit on the Mining Congress, and shall establish that fact, the Board of Directors has power to expel him from membership. This would seem to indicate that no one would have the right to prefer such charges except he be a member of the Committee of Mining, and, therefore, the tenure is to restrict this right to the members of the Committee on Mining Investments. THE PRESIDENT: I offer an amendment to that resolution, providing that any member of the Congress may make the charge, and refer it to the Resolutions Committee. SECRETARY CALLBREATH: That is all right; is now provided for by our By-Laws. MR. BURTON: I have been trying to see these By-Laws, but have not been able to see them. THE PRESIDENT: The By-Laws already contain that provision. MR. BURTON: I would like to have it read. A DELEGATE: I do not think the By-Laws covers that point. MR. JENNINGS: As I understand it, the passage of this resolu- tion would virtually be a restriction. I make the point that no resolution can be passed which has the effect of interfering with the By-Laws of the Congress an amendment to the By-Laws must take another course. MR. TAYLOR: A Chairman of that Committee I could not agree with my fellow-members, but I believe that you are placing an undue I do not know what to call it but after a man has been indicted and served a term in jail, you are going to put a ban on him from ever be- coming an honest man again. You know men have been indicted and AMERICAN MINING CONGRESS 99 convicted of certain things where there was no moral intention of doing wrong. I am not in favor of it. THE PRESIDENT: The Secretary has gone for the By-Laws now, and they will be ready in a moment. I do not believe the point of order has been well taken. I will suspend this until after the By-Laws have been gone over upon the Secretarys return. We will proceed with other resolutions, and in the meantime hold this on the table to save time. MR. TAYLOR: Resolution No. 11 and No. 15 are very much of the same import, and as we have passed over No. 11 and laid it on the table, it has since been introduced by Sidney Norman, of Spokane, Wash., as follows: Resolution No. 15, Introduced by Sidney Norman, Spokane, Wash. It is the sense of this meeting that the Board of Directors of the American Mining Congress should take such steps as will express in unmistakable terms its opposition to the employment by any of the mem- bers of this association, directly or indirectly, of any man who has been found guilty of fraud in connection with the handling of securities. This resolution has been approved by the committee, and I move its adoption. Seconded; carried. MR. TAYLOR: Resolution No. 12, introduced by Mr. John R. Burton, of New York. Resolution No 12, Introduced by John R. Burton, of New York. Whereas, Legislation affecting the issuance of securities has been passed by the various State legislatures during the past year; and Whereas, A number of brokers who have been selling fictitious mining stocks to the public have been indicted, convicted and sentenced to jail: and Whereas, Such individuals have brought the promotion of mining stocks into disrepute in the past by their dishonest methods and prac- tices; be it Resolved: That a committee on mining investments be appointed by the American Mining Congress, whose duty it shall be to watch mining promoters in general and see that investors are correctly informed of the men and mines behind a scheme that looks dishonest or appears to be fraudulent, and if, upon investigation, the committee finds that fraud is being perpetrated on the public, thereby bringing discredit on the mining profession, the chairman of this committee be empowered to take such legal steps as he deems necessary for the protection of the public and bring the guilty promoter to justice. MR. TAYLOR: This resolution has been passed by the com- mittee, and I will have to move its adoption. Seconded. MR. TAYLOR: If this resolution is passed at the present time it necessitates a great deal of money to carry out its provisions. It pro- vides, among other things, that a committee on Mining investments shall be formed, whose duty it shall be to watch mining promoters in general. Now, that may be a very easy matter, and as the author of this resolution stated that there were a number of journals that would give this information, yet, if the Mining Congress were charged with this duty, it must first ascertain if the information given by these jour- nals is correct. What does that mean? It means somebody must spend a great deal of time on investigations; that we shall employ some one at a salary which we, at the present time, are not in a position to pay. Further than that, if they find there are certain fraudulent schemes, it makes it the duty of the committee to prosecute. We are on record as loo OFFICIAL PROCEEDINGS being opposed to anything of this kind. Not only that, but we are in favor of and have advocated the passage of such laws. The question resolves itself into this: that we have never been in a position to take the initiative, insofar as the prosecution is concerned, for the reason we have not the money to do that. It will entail upon this Congress the employment of lawyers and engineers to ascertain if the facts are true or not true, all of which takes considerable time, and this Congress has not had in the past such money as will be necessary, nor do we see any future possibilities of having any. MR. GRIFFITH: This subject came up in a discussion of the Ways and Means Committee on this question, and it was their idea that this matter might be covered without any resolution here at all by sim- ply working out of the plan adopted by the Ways and Means Committee, providing the Assistant Secretary could gather statistics and all sorts of information in mining, and give corporations and others the opportunity to get such information as could be gathered, not only from public reports, but private reports, and in that way they can be very useful in bringing an end to the system of fraudulent mine promoters. MR. BURTON: I would like to disabuse the minds of the mem- bers of the Congress about there being any expense attached to this whatsoever. The resolution reads: "Take such legal steps," etc, turn- it over to the post office authorities. The Government acts as the prosecutor; the American Mining Congress should not appear as the prosecutor in any case, yet the facts of a fraudulent scheme should be presented to the Federal authorities. MR. JENNINGS: I am not in perfect accord with all this busi- ness. We have a right to protect the public, but it strikes me we are going beyond our province. We are infringing on the common law, and as gentlemen and earnest workers we assume we want to abide by the common law of this country, and when a person is convicted under the common law of this country, I do not see any reason why we should go outside of our province. MR. BRTJNTON: I have come to the conclusion that the most effective way in which we can aid in the passage of laws in each indi- vidual State is by the blue-sky laws of Kansas. Some modification of this will be needed. There is no doubt that laws can be passed by the different States which will absolutely prevent fraudulent mining promo- tions by simply making promoters responsible for statements in their circulars. SECRETARY CALLBREATH: Mr. President and Gentlemen: I would like to give briefly a history of the efforts of this organization in this direction. This is not a new subject for discussion, and for the past four or five years we have had ample discussion. The first commit- tee on this subject reported at the Denver convention in 1906. They recommended what was known as the "Pardee Law." Ex-Governor Pardee, of California, was the chairman of our committee. The "Pardee Law" was a modification of the California law, which provided that any person who makes a misrepresentation concerning the facts relating to a mine shall be guilty of a misdemeanor. The difference between that and the existing law is this: False pretense is everywhere punishable under the common law, but to convict it is necessary to have four con- ditions prevail: first, that there must be a misrepresentation; second, that the misrepresentation must be known to the party making it; third, the party to whom it is conveyed must believe the misstatements, and fourth, acting upon that belief, he must do some act to his loss or dis- advantage. Now it is very difficult to get all four of those conditions at the same time, and, in consequence, it has been very difficult to convict. In most instances, the man who accepts a statement concerning a matter AMERICAN MINING CONGRESS 101 of which he knows absolutely nothing, is so ashamed of his loss that he will pocket his loss and say nothing about it. He will not prosecute. The "Pardee Law" makes the man who publishes the misstatement guilty. This law has been enacted in a number of States under our special direction and work, and we have hoped to have it passed in all States; hoped to create the legal agency to go into the various States with a view of assisting the local prosecuting attorney in procuring con- victions under that law, but in some way, like many other good things which the Congress has undertaken to-day we have not been able to do it. Another point which ought to be referred to is the fact that the Secretary was instructed by the Board of Directors to make inquiries concerning the value of mines or of mining stocks, and to get such information as would give investors an idea as to whether the investment was wise or not. We spent considerable time in gathering data con- cerning various mines, and had a report on more than five thousand mines, from British Columbia to Mexico; and when an inquiry was made starting with the information at hand made every possible effort to discover what were the actual conditions. This work is one of great importance and delicacy, because there is many a mining proposition which, on its face, looks perfectly fair, and yet which is extremely fraudu- lent, and again, there are many propositions which, on their face, may look unfair, and yet when you get to the real conditions the operator is simply mistaken. A great many mining enterprises fail not because of the dishonesty of the promoter, but because of the fact that he is not able to secure enough money to prosecute his enterprise to its com- pletion. If it is necessary to drift a tunnel one thousand feet to encounter a certain vein, and the party has money enough to drift it nine hundred feet only, it is a failure, even though the other one hundred feet would have opened a valuable ore body. Many of these enterprises fail to get sufficient money to complete their work. The mining business requires higher and more varied scientific knowledge than any other. In my judgment, the general enactment and enforcement of the so-called "Pardee Law," and the creation of an agency by which the best possible information can be given about the party and the property itself, would do most toward bringing about proper conditions. What we need is such publicity that will put all the conditions under which mining profits are possible before the public. If you are foolish enough to invest where you understand all the conditions, that is your fault. What we need is publicity. What we need is to let the world know what the conditions are. If you are willing to invest in a mine when you know all the conditions, when you know the man who is asking for your money has been taking the money of others for many years and has never made a dollar for them, that is your fault, and you cannot expect protection, but you have a right to expect pub- licity. MR. NORMAN: Both the former President and Secretary Call- breath have, in recent discussion, made reference to the efficacy of the Pardee law of California and the "Blue-Sky" laws of various other States. I should like to ask Mr. Callbreath if he knows of a single conviction in the State of California under the Pardee law. SECRETARY CALLBREATH: I do riot know of one. MR. NORMAN: And I do not believe one has been secured. I was a resident of California for six years, engaged most of that time in mining journalism, and had the pleasure of bringing into court three of the worst fakirs then infesting Los Angeles. Each was accused under the Pardee law, which makes such offense a misdemeanor. In one par- ticular case promoters had been guilty of putting over a very bad propo- sition, printed statements, containing the alleged misrepresentations, 102 . OFFICIAL PROCEEDINGS having been sent out from time to time to stockholders of the company. These printed circulars were offered in evidence, after the information they contained had been proven false, but were rejected by the court for the reason that the name of the man who made the statements was printed. In other words, it was held that it was impossible to secure conviction unless the original statement were placed in evidence with the original signature of the party making such untrue statements. You will thus see how almost impossible it is to secure conviction of the dis- honest promoter under the Pardee law as interpreted in this case. So far as the "Blue-Sky" laws are concerned, you all know, of course, that the original law of Kansas is so framed that the State Bank Commissioner has absolute say as to any security offered to investors in that State. The bank examiner is presumed to know something about the banking business, and is doubtless appointed to his position partially through the efforts of bankers. We all know that bankers are basically antagonistic to the mining business, and yet mining propositions are judge by the bankers' own representive, and he is constitnted the court of last appeal. If he determines that a proposition is not up to his particular standard, though he presumably knows nothing of mining, you cannot seek capital in the State of Kansas. In my opinion both the Pardee law and the "Blue-Sky" laws have dismally failed in their original intention of drawing the fangs of fakirs. I was the originator of a motion that you have just adopted which pledges the support of this Congress in a campaign for uniform State laws that will curb the activities of the dishonest financier and more definitely define the duties of directors toward minority stockholders. If the American Mining Congress intends to live up to the high ideals set for it by its best friends, I think the time has come when we should do something to stop the enormous depradations of the dishonest rich. The small promoter has already been attended to by various laws and, in greater degree, by awakening the public to his methods, but nothing tangible has been done to protect the public against his fellow who operates in a big way. The small promoter steals the dollar and a big shout goes up from the public and press, but the financier steals by the million and, through control of the banks and the press, is able to escape with his booty without the slightest trouble. Some of you have doubtless noticed that within the past few months a certain great mining interest in New York, which has been operating away off somewhere toward the South Pole, placed on the market a new corporation with a capital of $115,000,000. The actual outlay 'is said to have been in the neighborhood of $1,500,000, and yet $20,000,000 worth of convertible bonds were offered to the public, and the promoters kept for themselves no less than $95,000,000 worth of stock. I want to tell you something. If you or I had offered such a proposition as this, you or I would now be in jail. Just so long as there is no criminal law to touch the "dummy" directors placed in office to do his master's ^bidding will the minority stockholder suffer great loss and the mining industry be brought into disrepute. I want to see crimi- nal laws placed upon our statute books that will make the practice of using dummy" directors a dangerous one. When that time comes the financier will be more careful, because he will be unable to find dummies who will take a chance of going to jail. It is the big man who is the real menace to the mining industry, and I want to see the American Mining Congress fire the first gun in a nation-wide campaign that will place his operations under the ban of criminality, where they belong and from which they have so far escaped. MR. TAYLOR: My objection to this resolution is, that instead ot going after the man to put him in jail, it simply expels him from membership in the American Mining Congress, which is a penalty en- tirely inadequate. Motion to adopt Resolution No. 12 was put and declared lost. AMERICAN MINING CONGRESS 103 MR. BURTON calls for rule covered in the By-Laws in regard of delegates to vote. THE SECRETARY: Mr. President, the right of delegates to vote on all matters coming before any convention of the American Mining Congress has never been questioned, and whether the By-Laws spe- cifically provide for it or not, it has been the accepted custom. The' delegates introduce resolutions, which are referred to a resolu- tions committee selected by the delegates, and come back again to the delegates for final disposition. Secretary reads part of Article No. IV, of the By-Laws, as follows: "and each delegate attending, properly accredited, shall be entitled to participate in the deliberations of the Congress." THE PRESIDENT: We will now reconsider Resolution No. 11, the By-Laws having been found containing the clause called for. Secretary again reads Section 4 of Article III, as follows: Sec. 4. Any member of the American Mining Congress who shall be guilty of any act which may bring discredit to this organization may be expelled by the Board of Directors or the Executive Committee, after due notice of the time and place at which action will be taken upon the charges against such member, which charges must be made in writing by another member in good standing, and such accused member shall, upon demand, be entitled to receive a copy of and have a full hearing upoii the charges so made, before final action is taken, such demand to be made within twenty days after notice of such charges has been mailed by the Secretary to his last given post-office address. MR. BURTON: My resolution covers employment by the people of the Association. When such cases exist they could be looked into, and it is not for me to present the case here, but to the proper authori- ties. This, I think, will govern the employment of men by the association. THE PRESIDENT: The Chair believes that it would be best handled by an amendment to the By-Laws instead of a resolution on the floor. We will ask the Secretary to read Resolution No. 11 again before we vote on it. Secretary le-reads Resolution No. 11. DR. CHANCE: I rise to a point of order. I move that the reso- lution be laid on the table. MR. BURTON: What is the procedure in changing the By-Laws? SECRETARY CALLBREATH: A two-thirds vote of the mem- bers after thirty days' notice, in writing, has been given. Motion seconded and carried. A DELEGATE: As a delegate is not a member, I suggest that a vote be taken on the resolution by the members, if that is what he desires. SECRETARY CALLBREATH: May I suggest the difficulty of the proposition lies in the fact that while those personally present might favor the proposition, those holding proxies would not feel authorized to vote either for or against the resolution, not being authorized to do so. THE PRESIDENT: The Burton resolution is tabled. MR. BURTON: Is there any method by which I can offer an- other? THE PRESIDENT: It would have to come through the regular channel of the Resolutions Committee. A DELEGATE: There is a motion before the house. I second the motion to have a vote of the members. ANOTHER DELEGATE: Mr. President, I understand that mo- tion has been lost. Isn't that final? 104 OFFICIAL PROCEEDINGS MR. BURTON: I rise to a point of order. According to the reading of the By-Laws, as given to the Secretary, it is impossible to separate the votes of members from the votes of the delegates, so I think the gentleman is out of order. THE PRESIDENT: Sustained. Motion out of order. MR. BURTON: The By-Laws say that delegates may participate in the deliberations of the Congress. Secretary reads again from the By-Laws. MR. BURTON: I suggest it be left up to the delegates to give an expression of what they are willing to do. It is easy to vote my motion down if they don't want to express themselves. THE PRESIDENT: In order to carry out this proposition it would be necessary to call a meeting of members instead of having the open Congress instead of the meeting we are now having. SECRETARY CALLBREATH: And it would be necessary to have a quorum of the members- THE PRESIDENT: Either in person or by proxy. MR. BURTON: I offer a new resolution: "That it is the sense of this meeting that the Board of Directors of the American Mining Congress should take such steps as will express to its members its opposition to the employment by any of its members, directly or indi- rectly, of any man who has been found guilty of fraud in connection with the mining industry. Seconded. Question. THE PRESIDENT: The Chair believes this is not the proper place to introduce a resolution of this kind, that it is to be made to the Resolutions Committee when in session, and the matter has been closed. MR. BURTON: The unanimous consent of the Resolutions Com- mittee would carry that resolution. THE PRESIDENT: Resolution No. 11 has been lost, and the Chair does not believe it can be opened at this time. MR. LAWRIE: It is a new resolution as I understand. THE SECRETARY: The resolution, of course, can be reintro- duced. THE PRESIDENT: The Chair suggests the Resolutions Com- mittee withdraw and see if they cannot agree upon the resolution that has been just lost. MR. TAYLOR: Resolution No. 13, introduced by D. W. Brunton, of Colorado Resolution No. 13, Introduced by David W. Brunton, of Colorado. .Whereas, The original purpose of the American Mining Congress was to bring about such co-operation between the Federal Government and the mining industry as would lead to its highest development; and Whereas, The creation of a Federal Bureau of Mines has resulted in such great good to the mining industry as to justify a demand for an extension of the work in this behalf, and for larger activity by the Fed- eral Government; therefore, be it Resolved, By the American Mining Congress in sixteenth annual session assembled that we urge upon the President and the Congress of the United States the enactment of legislation providing for a Depart- ment of Mines and Mining, with its head a member of the President's cabinet, in order that the highest needs of the great productive industry, mining, may receive that attention from the Federal Government to which, by reason of its importance, it is entitled. Seconded. Motion carried. AMERICAN MINING CONGRESS 105 MR. TAYLOR: Resolution No. 14 introduced by Mr. David Ross, of Illinois. Resolution No. 14, Introduced by David Ross, of Springfield, 111. Whereas, In the operation of unlimited liability laws as applying to proceedings relating to the recovery of damages for work accidents has been accompanied by great delay, immense cost and frequent mis- carriages of justice; therefore, be it Resolved, That the members of this Congress favor and approve the enactment of laws by the States and the nation prescribing specific compensation for industrial injuries arising out of and in the course of employment; that such laws should apply to employers and employees engaged in all kinds of productive industries, and that in the drafting and administration of the same every agency having for its purpose the prevention of industrial accidents should be encouraged, as that is the primary object and should be the legitimate result of such legislation. THE PRESIDENT: Any discussion on Resolution No. 14? What is your pleasure, gentlemen? MR. BARTLETT: There is no one, I do not care who he is or where he may come from, who is not in favor of this law. The only real question is, who shall pay the bill? In Germany the manufacturer pays one-third; in Ohio he pays three-thirds; in New York he does not pay anything, and that is the trouble. There are many things about this matter. It is an important question. We might ask, who pays the fiddler? MR. ROSS: At the request of the Secretary of this Congress I prepared a few remarks on the subject of Workmen's Compensation Laws and Accident Prevention Work, and I regret that some of the gentlemen who had participated in that discussion are not present now. From my point of view this is one of the most important questions affecting every phase of our modern industry that can come before this convention, and I think it is necessary to come before this convention. I appreciate it is somewhat of a disappointment. I am not going to go into the question raised by our fellow-member as to whether or not the burden of this liability should be divided between the employer and the employe. Suf- fice it to say that the great body of laws already passed by the different States in the Union is concerned, that liability is put entirely upon the employer. I do not recall any of the States that have passed laws or have in contemplation, the enactment of laws where the burden has been imposed upon the employe, except the law in the State of Ohio. So that what we have to say on this subject will relate to the principles of this legislation. It might not be out of order to say that Congress has already gone on record as approving the Workmen's Compensation Law. Mr. Ross's paper will be found at page 239 of this report. A DELEGATE: Mr. Chairman, I hope and trust that the Six- teenth Annual Session of the American Mining Congress will adopt the resolution in . the particular phrase and in the manner in which it has been presented. The best method of meeting this trouble of liability and of accident prevention can be reached, and can be reached only by enactment of legislation of that kind. The industrial worker who has met with an accident in the mine in the course of his employment sub- mits, under these laws, to a reduction of 50 per cent, of his wages. Un- der the common law he would be entitled to recover at least 100 per cent, and in addition to that damages, and the purpose of the law which imposes 50 per cent, on his employer strikes me as being eminently fair, and that that will commend itself to the lawmakers of the land. Out of forty-eifcht States forty-five of them represent the great industrial States of the Union, and no matter who should bear the burden of this liability, it should not prevent this Congress from taking action now on io6 OFFICIAL PROCEEDINGS this resolution and sustaining its former declaration with respect to such legislation. I move, Mr. Chairman, the adoption of this resolution. THE PRESIDENT: You have heard Mr. Ross's discussion of the resolution. What is your pleasure? MR. TAYLOR: Mr. President, I would like to amend the reso- lution. I do not know what the remainder of the committee discussed in connection with it, but I have prepared a paper along the same lines as Mr. Ross has, which the Secretary has, but on account of the lack of time I will not be able to read it; but if this were amended in some such manner as the following, I think it would be just the same and would probably be just as efficient: Resolution No. 14, Introduced by David Ross, as Amended. Whereas, In the operation of unlimited liability laws as to the recov- ery of damages for industrial accidents has been accompanied by great delay, immense cost and frequent miscarriages of justice; therefore, be it Resolved: That the members of this Congress favor and approve the enactment of laws by the States and the nation prescribing specific workmen's compensation in lieu of employers' liability for industrial injuries arising out of and in the course of employment; that such laws should apply to employers and employes engaged in all kinds of pro- ductive industries. MR. ROSS accepts the amendment made by Mr. Taylor. A dele- gate calls for a re-reading of the amendment. Secretary reads the amended resolution. THE PRESIDENT: The resolution as amended has been read. Motion to adopt put and carried. MR. TAYLOR: Resolution No. 15, introduced by Mr. Sidney Nor 7 man, of Spokane, Wash. The committee recommends the resolution as offered. "It is the sense of this meeting that the Board of Directors of the American Mining Congress to in unmistakable terms," etc. I recommend its adoption. MR. BURTON: In suppprting that motion I wish to rise to a point of personal privilege. It has been suggested in a friendly way because, of course, I know the members of the American Mining Con- gress are all friends of mine that this resolution has been introduced from a personal motive. Both resolutions are general in their terms, and you might see the necessity of some law that will place the respon- sibility on the "dummy" directors. I believe in upholding the mining industry in the best form, and the American Mining Congress should go behind this movement in an unmistakable manner. MR. GRIFFITH: One feature about the resolution which I object to is, that it lasts forever. A man who has been a criminal ought to have a chance of employment, and for the American Mining Congress to deny the man a chance of employment, it seems to me, is an exceed- ingly cruel thing to do. The very worst criminal you could think of should have the opportunity to reform and make an honest living. Why should we deny him the chance to become a worthy and useful citizen? MR. BURTON: Is it better to give a man who has been im- prisoned and taking money from investors all of his life in every scheme imaginable, finally entering into the mining game, convicted, sentenced and serving a term in jail, and allow him to come back and work the same thing over again. The leopard cannot change his spots, neither can that man. I think the American Mining Congress should do everything in its power to keep him out. MR. NORMAN: There may be cases, Mr. President, where that resolution might work a hardship, but the specific cases which I refer AMERICAN MINING CONGRESS 107 to are cases where every man who has mining operations in New York knows this exists there all the time. He is arrested on some charge of fraud; he changes the name of his firm and continues in business. I know this to be a fact, although my own experience has been short. DR. H. M. CHANCE: I call for a reading of the resolution again. Secretary reads resolution. DR. CHANCE: I think we would make a mistake in passing a resolution of this kind. In the first place, the objection offered by Mr. Griffith that virtually it is an attempt of the American Mining Congress to blacklist every man who has been convicted of fraud, seems to be a proposition that is an absolute bar from the man ever becoming a good citizen. It seems to me, besides, that it is beneath the dignity of the American Mining Congress to pass a resolution of this kind; that reso- lution implies it is the practice of the members of the American Mining Congress to employ criminals. I do not believe it is necessary to curb the desire of the members of the American Mining Congress to con- tinue to employ criminals. Some of them have in the past unwittingly taken such men into their employ. For that reason I oppose the adoption of the resolution. MR. NORMAN: It is not the intention of this resolution to imply that the members of the Congress employ criminals. Nevertheless, it is a fact that the Mining Congress, through one of its former presidents, has been severely criticised, and I believe the Secretary can enlighten us, as he understands the situation thoroughly. I would like to hear from the Secretary in regard to this matter. A DELEGATE: It seems ridiculous that the American Mining Congress should be made a police body, and I move that this last reso- lution presented be tabled. Seconded. MR. NORMAN: I rise to a point of order, and I ask a vote of the members of the American Mining Congress. THE PRESIDENT: Point of order not sustained. A motion to table a resolution is always in order. Motion to lie on the table was put and carried. THE PRESIDENT: Any further business to come before this Congress? If there is no further business to come before this Congress a motion to adjourn is in order. THE PRESIDENT: We will now listen to Mr. George S. Rice, who will read a paper by Dr. Joseph A. Holmes, Director of the Bureau of Mines. Dr. Holmes' paper will be found at page 380 of this report. THE PRESIDENT: If there is no further business before the house, a motion for adjournment will be in order. MR. GRIFFITH: I move that we adjourn. Convention adjourned sine die at 5.15 o'clock. MEETING OF MEMBERS TUESDAY, OCTOBER 21, 1913. Meeting called to order by President Brunton at 8.15 P. M. The Secretary announced that in addition to the members present there were one hundred and thirty-four members represented by per- sonal proxies and ninety memberships maintained by the Illinois Coal Operators' Association, being more than a legal quorum of the member- ship. THE PRESIDENT: We will first listen to the financial report of the Secretary. The financial report of the Secretary for the eleven months ending October 1, 1913, the report of the Auditing Committee and the Special Auditor's report were then read as follows: AMERICAN MINING CONGRESS. Financial Statement, November 1, 1912, to October 1, 1913. RECEIPTS. Cash on hand, per annual report for year ending Oct. 31, 1912. $279.76 Membership dues 4,763.41 Membership fees 405.00 Special contribution, account of work at Washington 117.87 Spokane Convention Fund 2,033.64 Advertising, 1912 Convention 685.00 Miscellaneous receipts 342.17 $8,626.85 DISBURSEMENTS. Secretary's salary $2,400.00 Expense of Washington office 1,442.20 Printing 1,307.83 Secretary's expense 796.80 Closing expense Spokane Convention 1,029.10 Salary and expenses of Assistant Secretary 924.40 Rent of Denver office 225.00 Postage , 186.00 Organizers 45.00 Office supplies 24.95 Bank Exchange 18.90 Telegraph and telephone 38.36 Miscellaneous expenses 58.25 8,496.79 Balance September 10, 1913 $130.06 Cash in bank $60.06 Cash in hand 70.00 $130.06 Philadelphia, Pa., October 19, 1913. I hereby certify that the foregoing is a correct statement of the receipts and disbursements of the American Mining Congress for the period from November 1, 1912, to September 30, 1913. J. F. CALLBREATH, Secretary. Philadelphia, Pa., October 20, 1913. We, the undersigned members of the Auditing Committee of the AMERICAN MINING CONGRESS 109 American Mining Congress, having examined the vouchers and accounts of the Secretary, covering transactions for the period from November 1, 1912, to October 1, 1913, hereby certify that we find the same to be correct, and that the statement hereto attached is a correct statement of the financial transactions of the American Mining Congress during said period. JAS. W. MALCOLMSON, VAN NESS HEERMANCE, Members Auditing Committee. Statement of Cash Receipts and Disbursements American Mining Con- gress, November 1, 1912, to September 30, 1913. RECEIPTS. Cash on hand, per report for year ending October 31, 1912. . .. $279.76 Receipts from membership dues $4,763.41 Membership fees 405.00 Special contribution, account of work at Washington 117.87 Spokane Convention Fund 2,033.64 Advertising, 1912 Convention 685.00 Miscellaneous receipts 342.17 Total receipts 8,347.09 Total cash to be accounted for $8,626.85 DISBURSEMENTS. Secretary's salary $2,400.00 Secretary's expenses . . 796.80 Salary and expenses of Assistant Secretary 924.40 Organizers 45.00 Expense of Washington office 1,442.20 Rent of Denver office rr-. 225.00 Printing 1,307.83 Postage 186.00 Office supplies 24.95 Bank Exchange 18.90 Telegraph and Telephone 38.36 Closing expense Spokane Convention 1,029.10 Miscellaneous expenses 58.25 Total disbursements . 8.496.79 Balance on hand, September 30 ; 1913 $130.06 We hereby certify that we have audited the accounts of the Secre- tary of the above Association for the eleven months ending September 30, 1913, and that the foregoing statement sets forth fully and correctly the cash transactions of the period and the correct balance on hand as of September 30th. JOHN P. HERR, Certified Public Accountant. THE SECRETARY: In connection with this report we have the vouchers showing all these accounts to have been paid by check, with the exception of two or three small transactions, which were paid out in cash. These vouchers are numbered consecutively and carry with them the cancelled checks, showing disbursements made, and with the bank's statement in corroboration of the report. MR. TAYLOR: Mr. Chairman, I move the report of the Secretary as read be received and filed. Motion carried. THE PRESIDENT: The next business before the Members' Meet- no OFFICIAL PROCEEDINGS ing is the appointment of the Committee on Nominations. Nomina- tions for that Committee are now in order. MR. BROMAN, of Texas: I make the following nominations: S. A. Taylor, Pittsburgh; J. W. M'alcplmson, Kansas City; William Griffith, Scranton; Van Ness Heermance, Virginia; Daniel Whitney, Philadelphia. Moved that nominations be closed. Seconded. Carried. PRESIDENT: I think it would be well for someone to move that the Secretary cast the unanimous vote for the Convention for the names mentioned; A DELEGATE: Mr. Chairman, in order to expedite matters, I move the Secretary be empowered to cast the unanimous ballot. Seconded. Carried. SECRETARY: By direction of the Convention I hereby cast the unanimous ballot of the Convention for S. A. Taylor, J. W. Malcolmson, William Griffith, Van Ness Heermance and Daniel Whitney, to act as a Committee on Nominations. THE PRESIDENT: I hereby declare the election of the Nominat- ing Committee and will request the first named to arrange with the other members for a meeting, and to prepare the Committee's recom- mendations to be presented at a later meeting. Meeting adjourned until 10 A. M. f Thursday, October 23. 1913. ADJOURNED MEETING OF MEMBERS. THURSDAY, OCTOBER 23, 1913. 10:00 A. M. THE PRESIDENT: The meeting will please come to order. We will first hear the report of the Committee on Nominations, by the Chairman. M'R. S. A. TAYLOR, Chairman of Nominations Committee, reads report of this Committee: To the Members of the American -Mining Congress. Your Committee on Nominations beg to place in nomination for directors of the American Mining Congress Hennen Jennings, Wash- ington. D. C; W. J. Richards, Pottsville, Pa., E. A. Montgomery, Los Angeles, Cal.; M. S. Kemmerer, New York, to serve for a period of three years, and until their successors are elected. Respectfully submitted, S. A. TAYLOR, JAS. W. MALCOLMSON. WM. GRIFFITH, VAN NESS HERRMANCE, DANIEL WHITNEY. THE PRESIDENT. Gentlemen, what is your pleasure in regard to this report? MR. TAYLOR: In order to bring it before the Association, I move that these four named gentlemen be elected as Directors of the American Mining Congress, and that the Secretary be authorized to cast the unanimous ballot of the members. Seconded. Carried. THE SECRETARY: In accordance with your instructions I cast the unanimous ballot of the members personally present and represented by proxy for the election of Messrs. Hennen Jennings, W. J. Richards, E. A. Montgomery and M. S. Kemmerer. to serve as Directors for a period of three years, and until their successors are elected. THE PRESIDENT. In accordance with your ballot I declare the gentlemen named elected as Directors. Adjourned. The President's Annual Address. D. W. BRUNTON, DENVER, COLO. Everywhere about us we notice things which, judged in the light of the present, have little or no right to an existence. They are simply survivals of past necessities or customs, which are perfectly useless in the world of today. To this class certainly belongs the customary address of the retiring President of the American Mining Congress. Modesty prohibits him from mentioning the work which has been carried out during his administration and good taste prevents him from offering advice or making suggestions to his successor. In fact, as far as I can see, the only thing that is left for him to do is to give his audience some idea of the aims and objects of the Mining Congress and the assistance it hopes to give to the industry which has called it into existence. The difficulties under which coal mining operations are carried on and the restrictions by which that industry is hampered will be so graphically described during the discussions at our meet- ing here that it would be a waste of time for me to anticipate them. Adverse as these conditions may seem, they are no worse than those under which precious and semiprecious metal mining is carried on in the west. In order that those of you who are not personally familiar with precious metal mining may understand the difficulties under which we operate, allow me to sketch briefly the discovery and history of a typical western mine. As soon as a prospector who has been tramping over the hills, perhaps for many weary years, discovers the outcrop of an ore body he makes a location as prescribed by law and by the time he receives the first assay returns on the ore he has exposed, not only the ground adjacent to his location, but his claim itself, will be covered two or three layers deep by conflicting locations, running in every possible direction. He then proceeds to perform the $500 worth of development work required by the government before United States patent can be obtained. When the work is completed, patent surveys made, and U2 PROCEEDINGS AMERICAN MINING CONGRESS the advertising period ended, he finds himself face to face with a number of adverse claims, the fierceness with which these conflicting claims are fought being dependent, not so much upon the supposed rights of the people who are opposing him, as on the value of the mineral in his claim. The mine is not yet producing, he has no money to fight these adverse suits, and he must either compromise by conveying a portion of his discovery to the men who are attempt- ing to rob him or give up an interest in his claim to some one with ready money who will finance his legal battles. When this fight is over, if the surface openings still continue to carry ore in depth, he begins shipping and before he has time to reap the reward of his labors, or accumulate a respectable surplus he finds himself confronted with one or more "apex" law suits. It is a most unusual thing for a mine to find its way into the pro- ducing stage without having to fight one or more "apex" law suits, all because our legislators in 1872 gave us the most archaic law that was ever placed on the statute books. No other nation possesses such an antiquated, absurd and irrational mining law, which, no matter what it was intended to do, has only resulted in a continued expense and annoyance to mine owners and big fees to lawyers and experts. If the possibilities of litigation ended with the first few years of exploration, the case would not be so serious, but some of the most bitterly fought and expensive law suits have arisen between claims which have been in operation for many years. At the present time two of the greatest mines in Cripple Creek, which have worked togther in peace and harmony for over fourteen years, are fighting a two and one-half million dollar battle, all because of the discovery in one of the workings of a spur or branch of the main ore body. One of the most disastrous effects of this continuous litigation is to frighten capitalists away from mining investments, because observing eastern investors have learned that the discovery of a new mine carrying rich ore is almost certain to be the beginning of the most expensive and interminable litigation. Some years ago the United States government appointed a committee to examine and report on the advisability of revising our present mining laws. Some of the ablest men in the industry were placed upon this board and, while their report was pigeon-holed and never made public, I understand it was unequivocally in favor of a complete revision. The Mining and Metallurgical Society, PRESIDENT'S ANNUAL ADDRESS 113 the American Institute of Mining Engineers, and the American Mining Congress each have had committees composed of represen- tative mining men from all portions of the United States investi- gating the desirability of a change in our mining laws and the re- ports of the committees appointed by all of these societies have been unanimously in favor of an entirely new code, as piece-meal re- vision seems not only undesirable, but, under present conditions, almost out of the question. The American Mining Congress is joining hands with the American Institute of Mining Engineers and the Mining and Metallurgical Society, and together we hope to arouse public opinion to the necessity of making a complete revision of our present mining law. The different organizations interesting in this work have for years been collecting data on the subject of mining law. American mining engineers, in the pursuit of their profession, travel all over the world and the mining laws of each nation and their effects on the industry as carried on to-day have been thoroughly studied and the data thus obtained is in the hands of the committee of the American Institute of Mining Engi- neers, The Mining & Metallurgical Society, and of the Mining Con- gress, and these committees are now working together in complete harmony and will soon be able to present a carefully worked out mining code which, if it becomes a law, should do much for the future of the industry and the nation. Neither revision nor repeal will, however, be an easy task, as the apex side-line features of our mining law have proved a veritable mint for lawyers and experts. Let us follow our typical mine a little further. If the com- position of its ores is such that they can be treated by themselves at or near the mine the owner may congratulate himself, but, unfortunately, the' great majority ol our precious or semiprecious metal mines carry ores which contain several metals, usually associated with sulphur in such a form that they can be most successfully treated by smelting. This is an operation which experience has shown requires a wide mixture of ore to avoid the necessity of using dead fluxes ; consequently, the ores have to be shipped and sold to a smelting company, located, usually, at some convenient railroad center. Years ago there was ample competi- tion among the numerous smelting companies, and the miner could be sure of obtaining all that his ore was worth under exist- ing conditions. Today most of the plants have passed into the ii 4 PROCEEDINGS AMERICAN MINING CONGRESS hands of a few great corporations, which practically amount to a gigantic monopoly, which not only tells the miner flat-footed what they will pay for his ores, but in some instances, just how much they will permit him to ship. It would seem that all these things are about as great a burden as an industry could bear, but our typical miner has still more troubles. The Forest Service is doing splendid work in the preserva- tion of our forests, but the organization is still young and some- what imperfect; many of the superintendents and rangers are not only untrained but are over-zealous and officious and as a conse- quence rules and restrictions, made with the best intentions in the world, are often misinterpreted and the mine owner some times finds it difficult to obtain timber for mine supports and fuel, per- mission to build roads, or to lay pipe lines, without carrying on an interminable correspondence and waiting until reels of red tape have been unwound. In addition to this the Government has now stepped in and withdrawn coal lands and water power sites from entry. The operations of hoisting, pumping, air compressing, and ven- tilating all require large amounts of power. Picture to yourself the feelings of a mine owner with an undeveloped coal field or an unused water power near his property and yet, to all intents and purposes, as far away as if located in the mountains of the moon. The drawbacks already enumerated, which seem to be suf- ficient to discourage any industry, are bad enough, but the end is not yet. The soil in the valleys of our western mountains is extremely rich, the mines furnish a near at hand and high priced market for all the products of the range, field and garden, consequently tillable land anywhere near the mines is rapidly taken up by settlers, and, so generally successful are their operations, in a few years the agricultural population is sure to outnumber the miners, a condition which already obtains in nearly every mining state in the west. Just as soon as a farming community gains numerical strength sufficient to make itself felt in legislative halls, its first act is to place the principal burden of taxation on to the mines. There is scarcely an excep- tion to this anywhere in the west. For instance: . In Colorado the mines are now assessed at their entire cash value plus one-half of the annual gross output, plus the total PRESIDENT'S ANNUAL ADDRESS 115 net output, while the agricultural and fruit lands of the state are, in many cases, only assessed at from one-third to one-fifth of their actual market value. In Arizona a law has recently been passed under which the mines are assessed at their full cash value plus one-eighth of their annual gross output, plus four times their net output. Nothing could be more ruinous or unfair to the mining industry, yet, it is difficult to see how it is possible for the mine operators to prevent or repeal such iniquitous legislation with a minority vote. Nor are they content with this. In many places the farmers have not only attempted but succeeded in throttling the very industry which called them into existence and made them pros- perous. In Montana, Utah, and California the agriculturists have actually succeeded, by means of legal injunctions, in closing up or obtaining unheard-of damages from the smelters on ac- count of alleged damages to crops, which any impartial observer knows are often entirely mythical. In fact "smoke farming" has become a recognized business, and lands in many localities near a smelter are now worth much more than they could have been sold for before "smoke suits" were instituted. The Amal- gamated Copper Company has already paid out more money for damages, alleged and real, to the lands of farmers around Ana- conda than the entire valley could be sold for if the smelter were not in existence. This, in spite of the fact that the Company maintains near the smelter an experimental farm which raises the largest crops and the finest cattle in the state. In California the farmers have made placer mining difficult, and in many places impossible. These things may seem in- credible, but they are absolute facts, as every one conversant with present conditions in the west is fully aware. It is difficult to understand why the farmer should attempt to destroy the industry which makes his occupation both pleasant and profitable, as, without the metals, he would be obliged to till his ground with a sharp stick and carry his scanty crops to market either on his own back or on the backs of domestic animals. Inland transportation without metals would be reduced to the trail and canoe and, without intercommunication and exchange of products and ideas, we would all revert to a state of savagery. The necessary risks and difficulties attendant upon mining n6 PROCEEDINGS AMERICAN MINING CONGRESS operations are a sufficient load for any industry to carry, but there are many things other than those already mentioned which the Mining Congress hopes to be able to change. For instance, an experienced miner, for the love of change or from being dis- satisfied with his condition in one state, moves to another where a different code of signals is employed. He is, of course, careful to study the new code, but some day before the use of the new signals has become entirely mechanical he absent-mindedly gives a wrong signal and the unlooked-for result is often disastrous. Most mining states have their own code of mining signals which are compulsory within their boundaries, but, with the migratory nature of our miners, it is necessary that we should have a uniform code of mining signals throughout the United States. Again, a miner who has been working in a mine with an electrical equipment for power and lighting of 220 volts, changes to another property, perhaps in the same district. Two hundred and twenty volts, as we all know, is comparatively harmless, but in the new mine where our miner goes to work, the potential on the underground line is 440, or perhaps even 2200, and, with- out realizing the difference, he is as careless in handling or working about the high potential line as he formerly was with the low, and the results are unexpected and perhaps fatal. This illustrates emphatically the necessity for a uniform system of electrical equipment throughout the entire country and committees from the Mining Congress and Engineering societies have already drafted rules and regulations for uniform and safe underground equipment which should become a law in every mining state. In any mine, no matter how stringent rules may be adopted lor the protection of th.e miners and the prevention of accidents, careless workmen will sometimes drill into missed shots, post- pone timbering weak ground, ride on loaded cars, walk into open winzes or shafts, etc. Accidents from these sources occur with altogether too much frequency and, while they are something which the operator has taken every precaution to avoid, they are and must remain a burden on the industry. At the present time in most states when an accident of this kind occurs the contingent fee attorney is immediately on hand and a prolonged period of bitter litigation ensues, and when a verdict is finally reached the crippled workman or his family gets practically PRESIDENT'S ANNUAL ADDRESS 117 nothing; court costs and lawyers' fees having absorbed nearly, if not all, of the award. To obviate this, a number of states have recently passed what are known as "Workmen's Compensa- tion" laws, and, so far as I am able to learn, in every State in which laws have been passed the results have been extremely gratifying. The cost to the employer has been no greater than before, while the sufferers get from two to ten times as much as they did under the antiquated laws in force in most States, and, what is even of more importance, they obtain the compensation im- mediately, instead of at the end of an exhaustive and embittered struggle. For this reason the American Mining Congress urges the passage of laws of this kind in every mining State, because it is certain the result will be a direct benefit to both employers and workmen, besides tending to bring about a much better feeling be- tween these two representative classes. When our typical mine finally reaches a stage where deep explorations are necessary, water is generally encountered, some- times in sufficient quantities to make pumping a most serious item of expense. So long as pumps only drain the property in which they are located all goes well, but it often happens that, owing to the presence of numerous cracks and fissures, or the permeability of the rock itself, that it is impossible to drain one mine without lowering the water level in the mines immediately adjacent. This throws a most unjust burden on the pioneer company, for which at present it has no recourse, and it has either to stand the expense of draining all the surrounding ter- ritory or cut down its rate of development to the average of the mines about it. We need a Drainage District Law which will compel every one operating mines within a given district to bear their proper share of the expense of pumping. As soon as the earliest developed mines in a new district begin shipping any considerable amount of valuable ore a para- sitic population descends like a cloud on the camp. Prominent among this class is the mine promoter, the better class among whom carry on a perfectly legitimate and useful work, as they raise capital with which to develop new mines or promising prospects, but obtaining a bond or purchasing a promising new mine or prospect costs real money, consequently the impecunious and irresponsible brokers usually pick up worthless claims which n8 PROCEEDINGS AMERICAN MINING CONGRESS can be had for little or nothing and then proceed to boom them by means of flamboyant prospectuses and magazine and news- paper advertising all over the United States. In the district it is easy to distinguish the difference between a valuable property and a worthless one, but a thousand or two miles away it is exceedingly difficult to discern the difference between their prospectuses. In fact, as a general rule, the wildcat promotion is groomed until it presents a more attractive appearance on paper than the genuine article, and as a consequence the country is annually flooded with millions of dollars' worth of absolutely worthless mining stock, the effect of which is to discredit mining operations of all kinds in the minds of the unfortunate purchasers. The men who lose the money in wildcat mining ventures never stop to consider that there are two widely different kinds of mining which are carried on by two very dissimilar classes ; the real wealth producing operators who mine in the bowels of the earth, and the fake mining men and promoters who mine only in the pockets of the public. The Mining Congress has for years urged the passage of laws which would make wildcat promotions impossible, legis- lation which should be of the greatest benefit both to eastern investors and to the mining industry. The greatest service the Mining Congress has so far been able to perform for the benefit of the mining industry has been the assistance it was able to give in the creation of the Bureau of Mines, which we hope and confidently expect will do as much, for the mining industry as the Department of Argiculture has been able to do for the farmer. It took years of patient endeavor on the part of the Mining Congress to arouse sufficient interest in the matter and to build up public opinion to a point where our National Congress appreciated the necessity of giving such an aid to mining, and, although the Bureau of Mines was not organized until 1910, the magnificent results which it has already accomplished have more than convinced every one of its value. The experiments and work which it has carried on at the Pitts- burgh testing station on explosives and explosions have marked a new epoch in scientific investigations on the causes of explosions and the properties of explosives, the practical results of which have been a steady annual decrease in the number of mining acci- dents. Even here, however, there is still much to be accomplished, PRESIDENT'S ANNUAL ADDRESS 119 as there is no reason why mining accidents, both serious and fatal, should be two and a half times as great in the United States as in Great Britain. Until this year the work of the Bureau of Mines has been almost entirely confined to coal mining in the East, but the last Congress gave an appropriation of $100,000 for Western metal .mining. This appropriation only sufficed for the opening of chemical and microscopical laboratories, which have been estab- lished in Denver and are already carrying on a most valuable and useful work in the investigation of the properties of the rarer metals and in petrographic and microscopic studies of our low-grade complex ores. Investigations are also being carried on at the present time on concentration methods and the adap- tability of the various methods now in use to the different ores found throughout the Rocky Mountain region. The Mining Congress hopes soon to see a large testing station, something on the lines of the one now in use at Pitts- burgh, established somewhere in the West, where experimental work on a larger scale than is possible in a laboratory can be carried on. The able and enterprising Director of the Bureau of Mines is extremely anxious to make this installation, and the Mining Congress expects that every one connected with the in- dustry will do what he can to assist the Bureau in obtaining a sufficient appropriation for this work. The total appropriation this year for the Bureau of Mines was only $662,000, a very considerable part of which was spent in testing coal purchased for the navy, the Panama Canal, and other necessary Government work. Compared with the appro- priations made for the Department of Agriculture, this sum is hardly worth considering, and, when we stop to realize that the products of the mines are equally as essential to the wealth and welfare of the Nation as those of the farms, it is evident that larger appropriations for the support of the Bureau of Mines are not only desirable but absolutely necessary. A power plant, no matter how perfect its design or excellent its workmanship, is absolutely useless without an adequate supply of fuel, and, unless the Bureau of Mines is given ample funds for the work ahead of it, the results attained will fall far short of our expec- tations and necessities. The speeches and debates that you have already listened to 120 PROCEEDINGS AMERICAN MINING CONGRESS give some idea of the requirements of the coal mining industry, while the examples I have just cited in the history of a typical precious metal mine give some, although not all, of the defects in out present system, for which a legal remedy is required. We all know that mines can neither be called into existence nor made profitable by legislation, but we do expect that laws will be framed and passed which will afford equal opportunity to all and just protection to every one who risks either life or capital in the industry. The motto of the Mining Congress is safety and efficiency, by which we mean, not only security to the investors and owners, but health and safety to our employees as well. The desirability of the various legislative changes and improve- ments outlined are so obvious that it is evident they can meet with but little opposition, but we are certain to encounter inertia, some- thing which is far more difficult to overcome than the warmest opposition. The American Mining Congress is the only organization covering the entire United States whose sole business it is to look after the legal and commercial interests of the coal and metal mining industries, and the work which it entails necessi- tates a continually increasing expenditure of time and energy. There is nothing so effective in carrying out legislative reforms as a thoroughly aroused and insistent public opinion, a condi- tion which in this case can only be reached by a continuous and well-directed educational campaign. To conduct this effectively we require more funds and a greatly increased membership, and we hope that every person directly or indirectly interested in min- ing will see that it is to his best interest to become a member of the American Mining Congress. This would give us immediately a vast increase in both numbers and influence, an irresistible com- bination which would soon bring about every necessary reform. Industrial Progress of the United States as Influenced by Our Land Laws. DR. JAMES DOUGLAS, NEW YORK. The acute industrial progress of this country dates from the termination of the Civil War. However baneful the passions which war excites, and deplorable the suffering and loss which it involves, it seems always to precede and probably is efficient in producing ac- celeration of great national activity, by which the rapid advances in the arts of peace obligate the ravages of strife, and smooth the rancorous feelings it excites. The terrible Civil War, which prostrated the South and strained the resources of the North from 1861 to 1865, certainly had that effect. It not only by force welded the nation into one, but it aroused a spirit of industrial energy, spurred on by generous motives. Until, and even after, the Civil War was fought out, California and Oregon were isolated, by thousands of miles of almost uninhab- ited country, from the seat of government and the older States. But a railroad, the Union and Central Pacific, incorporated unfortunately under two charters, but really one road, was surveyed while Mr. Jefferson Davis was United States Secretary of War. The project was recognized, when hostilities broke out, as an essential war measure, and building was commenced, therefore, while the war was raging, and finished in 1872, or seven years after the war closed. It brought the East and the West into intimate touch, and gave the people some faint conception of the incalculable value of the inter- vening stretches of prairie and mountain and plateau lying between the Missouri River and the Pacific. Laws were therefore framed with the view of utilizing as rapidly as possible these boundless resources. When the vastness of the space to be peopled, and the wealth to be garnered from the soil and from the rocks of half a continent, untouched by the hand of man, came to be even dimly realized by the united people, an invitation was given to the whole \ 122 PROCEEDINGS AMERICAN MINING CONGRESS world, including even the Chinese, bidding all to enter and to help in harvesting the treasures which seemed so boundless. It was the policy instigated not solely by motives of gain but by a spirit of generosity and fraternity ; for these altruistic impulses are stronger in the early stage of a people's life than after industrial success and selfishness and class prejudice have chilled the enthu- siasm, which is generally warmer in a newborn than in the maturer nationality. Though the most, liberal land and corporation laws would not have succeeded in creating a great industrial nation within half a century, had the resources to work upon not been present, it is equally true that without the laws and the democratic consti- tution, the country's resources would have been more slowly developed. In the opening of the west beyond the Mississippi by railroads and steamboats an impulse was given to expansion greater even than that which originated in the settlement of the Ohio valley, for the new land laws permitted the whole world to enter and take part in the feast of good things. Emigration from Europe eagerly accepted the hearty invitation to people the West. But the revela- tion of what the West had to offer to the miner, as well as the farmer, diverted the current of the American population inland to- wards the development of its own resources. Thus American energy was transferred, in a great measure, from the sea and from foreign commerce, to the opening of this more attractive field. This influ- ence was probably more effectual, though less conspicuously recog- nized in its effect on American commerce, than even the destruction of the old mercantile fleet of superannuated ships by the Alabama. The restless human element on the Atlantic coast had previously gone to sea, but after the discovery of gold in California, the amaz- ing mineral wealth of the whole Rocky Mountain chain and the fertility of the prairies west of the Missouri, offered a more attrac- tive outlet than the sailor's life ; while the West coupled the promise of gain with abundance of danger and adventure. Thus, when a sailor became a pioneer, he gratified his impulse to break loose from the rigid conventions of human life, the narrow circle of his neigh- borhood, and the restrictions political and social which he resented in his own home. New England, therefore, the nursery of the American mercantile marine, was deserted by her children. They scattered West, and not East. Of course with the increase of wealth has sprung up for solu- INDUSTRIAL PROGRESS OF THE UNITED STATES 123 tion a crop of social and economical problems; some of them of a very weedy description, not easily stored and difficult of digestion, and the consciousness of natural power has almost compelled the nation to break away from the restrictive domestic policy of the "fathers" and to absorb foreign territory and take their place among the great powers of the world. With age new responsibilities are forced on nations as well as on individuals, and laws as well as the rules of living, have to be modified to meet these new conditions. This applies urgently to our land and mineral law, which succeeded admirably in attaining the objects aimed at half a century ago, but now undoubtedly require revision. The fundamental motive of our land laws in individual owner- ship is inherited from colonial days. Both of the two first groups of colonists who left England in the seventeenth century, those who went to Virginia and those who went to New England, were fellow- partners in companies with English shareholders, one of whose assets was the land they acquired on the American continent. A modified species of communism therefore existed, but only for a very short time. The desire for the private ownership of the land, which the settlers cultivated, was irresistible to men who had freed themselves from the manorial and leasehold systems of Great Britain; and this preference has coincided so accurately with the growth of national prosperity on this side of the Atlantic, that almost all land legislation has favored actual ownership and small holdings. For a time after the Declaration of independence the lands of the Western domain were disposed of in large blocks to defray the war debt; but since then legislation has avowedly aimed at frustrating land monopoly and vesting its ownership in the actual cultivator. It has not always succeeded. The same tendency has controlled the legislation for the sale of the mill and forest land, but in every case the spirit of unbounded liberality in disposing of the public domain, which characterized the laws, has, to a certain degree, frustrated the original intention. The liberal land laws created new forces which could be utilized only by the expenditure of consolidated capital, controlled either by private corporations or by the State. The first alternative was adopted, and it inevitably followed that to meet the requirements of the national growth these combinations of capital had to corre- spondingly increase their size and influence, until they have come 124 PROCEEDINGS AMERICAN MINING CONGRESS to assume a menacing importance in public estimation. But, in fact, the recent Federal land laws have not controlled the disposal of the materials out of which were created the great Trusts, that of late have attracted so much attention and comment. The iron ores of the Steel Trust in Michigan and Tennessee followed the land, and sugar and tobacco are not primarily Western products. What, however, must be borne in mind, in explanation of the remarkable growth of the country, is that the laws enacted since the war came into operation when the railroad system of the country was being rapidly built up ; when the steam engine was being improved ; when the means of generating and controlling the electric current were being studied, and when inventors were already conceiving the many industrial uses to which it has since been turned. The country, therefore, sprang into existence, industrially, at the very time these new forces were being brought into the service of man. And no people on the face of the earth were as eager and able to use them as the Americans. From colonial days labor has been scarce and costly: and, therefore, to devise machinery which will replace mus- cular exertion has become almost a natural and a national faculty. THE DISPOSAL OF THE: WESTERN DOMAIN. At the time of the Declaration of Independence only six of the thirteen States had definite boundaries. They were New Hamp- shire, Rhode Island, New Jersey, Pennsylvania. Delaware, and Massachusetts. Each of the others laid claim to ill-defined areas of the vast unexplored region west of the Appalachian Mountains. The ownership of these western lands by certain States was opposed by those States which did not share in their possession, mainly on the ground that "the resources of that general government, to which all contributed, should not be taxed for the protection and develop- ment of this region, while its advantages would inure to the benefit of the favored few."* In 1779, before the war was actually fin- ished, Congress recommended Virginia and the other States to for- bear settling or selling their unappropriated lands. All were turned over to the Federal Government except the Connecticut Reservation on Lake Erie, the ownership of which was disposed of by the State of Connecticut, before the jurisdiction over the same was relin- quished to the Federal Government in 1800. *"A Century of Population," p. IQ. INDUSTRIAL PROGRESS OF THE UNITED STATES 125 The Northwest Territory a still larger domain, some 900 miles by 700 miles was constituted in 1787 as a single district and subsequently subdivided into five States, designated by number. Even so far-sighted a man as Thomas Jefferson, though under the inspiration of world-building, predicted that "the Western country was so vast and the facilities for transportation and communication so meagre, that it would be a thousand years before the country as far west as the Mississippi would be thickly settled." Facts have contradicted Jefferson's calculations, for the people have succeeded, by liberal legislation, in reducing from ten to one the number of centuries which have expired in filling, though not overcrowding, this vast expense with an industrious population. LANDS OWNED BY THE; FEDERAL GOVERNMENT. On the creation of the Republic the colonies which became the Thirteen Federated States retained possession of their public lands within their recognized boundaries. But the United States the Federal Government retained control of most of its public lands under the constitutions granted by Congress to the States since created by it, and the Federal Government now owns virtually all the public land in the district of Alaska.* The present total area of the United States, exclusive of Alaska, is now 1,937,144,900 acres; that of Alaska is 378,165,700 acres, and of the Islands and Panama Canal Zone, 80,405,120 acres, making a total of 2,395,715,840 acres, or 3,743,306 square miles, but the public lands which passed into the Federal Government originally, and have been since obtained, were 1,441,436,160 acres. The unceded lands in 1904 were 473,836,402 acres ; since that date about 20,000,000 acres have been disposed of. Of this the largest quantity is in the arid region, not over 10 per cent, of which can probably be irrigated ; but a very much larger proportion is applicable to grazing. Public lands have been disposed of under the following Acts of Congress passed since the Civil War, and in the following quan- tities, up to June 3Oth, 1904. (Report of the Commissioner of the General Land Office) : *The country's gross area in 1790 was 820,377 square miles; the settled portion 239,935 square miles, or about 29 per cent. ("A Century of Popula- tion," a Census Document, p. 17). 126 PROCEEDINGS AMERICAN MINING CONGRESS SUMMARY OF THE DISPOSITION OF THE PUBLIC DOMAIN, EXCLUSIVE OF ALASKA, 1904.* Title. Acres. Confirmed private land claims 33,440,482 Wagon- road construction land grants : Primary Limits 2,429,956 Indemnity Limits 437,517 Canal Construction Land Grants : Primary Limits 4,560,044 Indemnity Limits 38,653 River Improvement Land Grants 2,246,251 Railroad Construction Land Grants: Certified or Patented, Primary Limits 76,614,654 Certified or Patented, Indemnity Limits 2 7>935>638 Odd Sections, Not Certified (Estimated) 13,000,000 Swamp Lands: Approved 65,015,414 Indemnity, Patented 723,850 Grants of Land to States and Territories : School Grants 69,058,443 Total Other Grants 20,587,863 Scrip : Private Land Claims 1,164,345 Sioux Half-breeds 310,240 Chippewa Half-breeds 1 10,480 Agricultural College 7,672,800 Allotment to Individual Indians I 3>987,359 Land Ceded by Indians and Sold Through Office of Indian Affairs 1,1 16,038 Mineral Lands 1,731,275 Final Homestead Entries 96,495,030 Final Timber-Culture Entries 9>745>433 Lands Sold Under the Timber and Stone Acts 7,596,078 Reservoir Rights of Way 329,109 Forest Reserves: Entire Area 57,9O9>934 Lieu Land Selections 2,193,502 *The Report of the Public Land Commissioner (p. xiii.), after giving the figure of 473,836,402 acres unsold in 1904, adds : "The latter figure of nearly a half a billion acres, while but a third of the original area, is still enormous/' INDUSTRIAL PROGRESS OF THE UNITED STATES 127 Area Withdrawn 54,399,092 State Reclamation Land Grants 978,074 Land Withdrawn for National Reclamation Purposes. . 2,488,665 Land Disposed of for Cash Under Various Acts: To June 30, 1880 196,755,215 July I, 1880, to June 30, 1904 79,803,003 Entries Pending (Estimated) 39,525,840 National Parks in the Public Land States 3,654,454 Military and Similar Reserves: Military Wood and Timber 66,857 Other Similar Reserves 500,000 Indian Lands: Reservations 70,448,126 Ceded, but Not Open to Settlement 2,597,735 Unappropriated Public Land of the United States 841,872,377 Total Land Surface in Public Domain, including Alaska 1,809,539,840 A brief summary of some of these laws will explain in part the ease with which wealth has been accumulated, and the rapid strides which industrial progress has made in the United States. LAND LEGISLATION PRIOR TO THE HOMESTEAD ACT OF 1862. The first Homestead Act was passed in 1862, but previous to that date land legislation had occupied much of the attention of Congress. Perhaps the most important measure was the Ordinance of 1787, which guaranteed the absolute ownership of land. But the transfer of its vast domain by the Federal Government to the absolute owners has undergone many changes in both principle and practice. The United States promised what they did not actually own when, in I776,f they offered lands in "the western settlements" to deserters from the British ranks, and as a bounty to induce men to enlist in the continental army. But the Federal Government ulti- mately became owners of these tracts of land west of the Allegha- f "Land Question in the United States," p. 121, Shosuke Sato, Johns Hop- :ins University Studies. 128 PROCEEDINGS AMERICAN MINING CONGRESS nies, of which certain of the States had become possessors after the expulsion of the French and before the Revolution, and of the still larger northwestern domain ; with which, according to the Hon. John Jay,* "it may always be remembered to England's credit in the peace negotiations, Shelburne, declining all temptation to a con- trary course, endowed the Republic." Mr. Jay describes this as its "gigantic boundaries at the south, west and north, which determined its coming power and influence." When in possession, the Federal Government fulfilled its pledge by rewarding its soldiers by grants of land. It also devoted a liberal portion to education, and sold the balance at $i an acre in large lots to land companies and indi- viduals, the minimum being an entire section of 640 acres. Land companies were formed to buy tracts by the millions of acres; for the sale of these apparently boundless spaces was regarded as, and really was, the readiest way of relieving the financial stringencies of the Government. Hamilton, as a financier, favored giving, to the purchaser of one whole township of ten miles square or more, two years' credit, but he also saw the advantage of selling to settlers in small lots. The price of land soon rose to $2 an acre. And early in the nineteenth century opposition to the disposal of the public domain in large blocks became so strong that the sections that might be sold to a single entryman became smaller and smaller, till in 1820 the present minimum of forty acres (a quarter-quarter section) was reached, and the payment might be made in four instalments. Meanwhile the General Land Office was organized on very much the lines it still possesses. The land debates alternated with settlers' relief debates during the early years of the last century, and stability of legislation was not reached till the Pre-emption Act of 1841 was passed. This was, however, only one of several statutes. The pre- emptor paid the established price, but he bought his acres at private sale, and the Government forfeited the advantage of putting the public domain up in large parcels at public auction. The present pre-emption law permits any authorized purchaser, who does not already own 320 acres, to buy 160 acres, on which he must reside, and for which he must pay by certain deferred payments. It was the forerunner of the still more liberal system of homesteading, or the free grant of land to actual settlers, which was advocated as early as 1833, and was the object of the "Free Soilers" agitation. (Sato, p. 164.) * Windsor's "Critical History of America," Vol. V. p. 580. INDUSTRIAL PROGRESS OF THE UNITED STATES 129 THE HOMESTEAD ACT. The following summary of the homestead law and the method of acquiring land under it is given by Judge Lindley :* "The homestead laws secure to the head of a family, of lawful age, who is a citizen of the United States, or who has declared his intention to become such, the right to settle upon, enter, and acquire title to not exceeding one hundred and sixty acres of unappropriated non-mineral public lands, by establishing and maintaining residence thereon and improving and cultivating the land for a continuous period of five years. "To obtain an inceptive right to a homestead, the applicant files with the register of the local land office an application, stating his qualifications, and describing the land he desires to enter. If it appears from the tract-books that the land is of the character sub- ject to entry under the law, and is clear that is, unappropriated the applicant is permitted to make entry of the land; the receiver of the land office issues a receipt for the fees paid for filing the application, a record is made in the local office, and the fact reported to the general land office. If the lands are returned as mineral, and borne on the tract-books as such, the homestead claimant will not be permitted to initiate his right until a hearing is had for the pur- pose of determining the character of the landr To use the common expression, the mineral must be 'proved off/ before any right to the land can be inaugurated under the agricultural land laws. What- ever may be the effect of the Surveyor General's return, as evidence in litigated cases involving the character of the land, the land officers in administering the land laws accept such return as controlling their action in the first instance. "It would seem that the estate acquired by a homestead claimant who has filed his application and received his preliminary receipt from the receiver of the land office, is of greater dignity than that acquired by filing a declaratory statement under the pre-emption laws. By the pre-emption laws the United States did not enter into any contract with the settler, or incur any obligation that the land occupied by him should ever be offered for sale. They simply de- clared that, in case their lands were thrown open for sale, the privi- lege to purchase should be first given to parties who had settled upon and improved them. *"A Treatise on the American Laws Relating to Mines and Mineral Lands," Vol. I. pp. 204, 205. i 3 o PROCEEDINGS AMERICAN MINING CONGRESS "Public land covered by a pre-emption filing as to which there has been no payment made or final certificate issued, may be appro- priated by Congress to public purposes, or otherwise disposed of without infringing any legal right held by the pre-emptioner. "In an opinion of Attorney General McVeagh, given at the request of the Secretary of War, it was stated, that upon the 'entry' by the homestead claimant at the local land office, a right in his f avoi would seem to attach to the land, which is liable to be defeated only by failure on his part to comply with the requirements of the home- stead law in regard to settlement and cultivation; that this right amounts to an equitable interest in the land, subject to the future performance by the settler of certain conditions, and, until forfeited by failure to perform the conditions, it must prevail, not only against individuals, but against the Government; that, in contemplation of the homestead law, the settler acquires an immediate interest in the land, which, for the time being at least, becomes severed from the public domain. "The land department has invariably acted upon this theory; and the Supreme Court of the United States has given its sanction to the rule that such an entry, so long as it remains subsisting, is such an appropriation of the tract as segregates it from the public domain. Innumerable filings under the pre-emption laws have been accepted for the same tract by the land office ; but from the moment a homestead entry is accepted and the preliminary receipt issued, no further applications or filings for the tract are permitted, so long as the entry remains uncancelled. "Although the land may be, in fact, mineral in character, and a mining claim be located thereon, no application to patent such min- ing claim will be received by the land officers until a hearing is had to determine the character of the land. "If the land be found at such hearing to be mineral in character, a cancellation pro tanto of the homestead entry will be ordered, and the mineral lands will be segregated, whereupon the mineral appli- cant may proceed to patent." Under the Homestead Act there have been made from the pas- sage of the Act till June 30, 1912, 924,215 entries of quarter sections of 160 acres, covering 127,846424 acres. The size of the entries was therefore about 10 per cent, less than the law allowed. The object of the Act was to settle the land with actual agriculturists, and to discourage its acquisition in large blocks by individuals or INDUSTRIAL PROGRESS OF THE UNITED STATES 131 corporations. A man, once the patent is issued, can do what he will with his own and dispose of it to corporation promoters, but the patent is only issued to citizens who have nominally lived on the land for five years, or aliens who have declared their intention of becoming citizens. And the same citizen can make only one entry on any class of the public lands. Instead of a residence of five years on the land an Act was passed (Sec. 2301 of Revised Statutes, July ist, 1881), by which, on payment of $2.50 per acre, a patent is issued to the applicant after only fourteen months' residence. Over twenty millions of acres have been purchased under these conditions ; but as the Act has been used to facilitate the concentration of land into large holdings, the Commission of 1904 recommended the repeal for the following reason : "The object of the homestead law was primarily to give to each citizen, the head of a family, an amount of land up to 160 acres, agricultural in character, so that homes would be created in the wilderness. The commutation clause, added at a later date, was undoubtedly intended to assist the honest settler, but, like many other well-intended acts, its original intent has been gradually per- verted, until now it is apparent that a great part of commuted home- steads remain uninhabited. In other words, under the commutation clause the number of patents furnished no index to the number of new homes." Despite the manifest intention, therefore, of the laws to create small holdings, and the precautions taken to prevent their perversion, the tendency to create large estates has not been altogether pre- vented. But the result of the policy has, on the whole, attracted to the land small, industrious farmers, who have paid off their debts, become independent, and constitute one of the most stable elements of the population. Nevertheless the Commission of 1904 concludes its report with the following sinister reflection:* "Detailed study of the practical operation of the present land laws, particularly of the Desert Land Act and the commutation clause of the Homestead Act, shows that their tendency far too often is to bring about land monopoly rather than to multiply small holdings by actual settlers. The land laws, decisions, and practices, have become so complicated that the settler is at a marked disad- vantage in comparison with the shrewd business man who aims to * Report of the Public Lands Commission, 1904. 1.32 PROCEEDINGS AMERICAN MINING CONGRESS acquire large properties. Not infrequently their effect is to put a premium on perjury and dishonest methods in the acquisition of land. It is apparent, in consequence, that in very many localities, and perhaps in general, a larger proportion of the public land is passing into the hands of speculators and corporations than into those of actual settlers who are making homes. This is not due to the character of the land. In all parts of the United States known to your Commission, where such large holdings are being acquired, the genuine homesteader is prospering alongside of them under precisely the same conditions. Wherever the laws have been so enforced as to give the settler a reasonable chance he has settled, prospered, built up the country, and brought about more complete development and larger prosperity than where land monopoly flourishes. Nearly everywhere the large land-owner has succeeded in monopolizing the best tracts, whether of timber or agricultural land. There has been some outcry against this con- dition. Yet the lack of greater protest is significant. It is to be explained by the energy, shrewdness, and influence of the men to whom the continuation of the present condition is desirable. "Your Commission has had inquiries made as to how a number of estates, selected haphazard, have been acquired. Almost without exception collusion or evasion of the letter and spirit of the land laws was involved. It is not necessarily to be inferred that the pres- ent owners of these estates were dishonest, but the fact remains that their holdings were acquired or consolidated by practices which can- not be defended. "The disastrous effect of this system upon the well-being of the nation as a whole requires little comment. Under the present conditions, speaking broadly, the large estate usually remains in a low condition of cultivation, whereas under actual settlement by individual home-makers the same land would have supported many families in comfort and would have yielded far greater returns. Agriculture is a pursuit of which it may be asserted absolutely that it rarely reaches its best development under any concentrated form of ownership. "There exists, and is spreading in the West, a tenant or hired labor system which not only represents a relatively low industrial development, but whose further extension carries with it a most serious threat. Politically, socially, and economically this system is indefensible. Had the land laws been effective and effectually en- forced its growth would have been impossible. INDUSTRIAL PROGRESS OF THE UNITED STATES 133 "It is often asserted in defense of large holdings that, through the operation of enlightened selfishness, the land so held will event- ually be put to its best use. Whatever theoretical considerations may support this statement, in practice it is almost universally untrue. Hired labor on the farm cannot compete with the man who owns and works his land, and if it could the owners of large tracts rarely have the capital to develop them effectively. "Although there is a tendency to subdivide large holdings in the long run, yet the desire for such holdings is so strong, and the belief in their rapid increase in value so controlling and so widespread, that the speculative motive governs, and men go to extremes before they will subdivide lands which they themselves are not able to utilize. "The fundamental fact that characterizes the present situation is this : That the number of patents issued is increasing out of all pro- portion to the number of new homes." The most recent modification of the Homestead Law is "The Three- Year Homestead Bill," approved by the President on June 6, 1912. Under it "the period of residence necessary to be shown in order to entitle a person to patent under the homestead laws is re- duced from five to three years, and the period within which a home- stead entry may be completed is reduced from seven to five years. The three-year period of residence, however, is fixed, not from the date of the entry, but 'from the time of establishing actual permanent residence upon the land.' 5: RAILROAD LAND GRANTS. More land was in the past given as a bonus to encourage rail- road building than has been transferred to homesteaders. The earliest grants were made in 1850, and those prior to 1862 were made to States as trustees and agents of transfer for the railroads. Only three grants were made after 1870, and about 75 per cent, of the whole was in the encouragement of trans-continental roads. The lands ceded to encourage railroad building were in the territories adjacent to the assisted roads. The largest grants were of land contiguous to the early trans-continental roads the Union and Kansas Pacific, the Central Pacific, the Northern Pacific, the South- ern Pacific, and the Santa Fe. In all, seventy-nine land grants were made, covering nearly 200,000,000 acres, but, "by reason of forfeiture by Congress because of the failure of the grantees to construct the roads as required by the granting Act, this amount 134 PROCEEDINGS AMERICAN MINING CONGRESS was reduced to such an extent that the acreage at this time is esti- mated at 155,000,000 acres."* Since then further forfeitures have been made. Most of the land, especially the lumber land, was unsaleable at the time, and was therefore merely a prospectively valuable asset. It, however, assisted the roads in raising funds, and it is charged that the roads, owing to the rising value of both agricultural and lumber lands, are not over-zealous in trying to dispose of their ex- tensive unsold holdings. Mineral lands were not intentionally granted, or intentionally claimed. And where such minerals, includ- ing oil, have been found, the right of the concessionaire to enjoy this advantage is being questioned by the administration. Though the Government no longer makes grants of land to encourage the building of the large railroads, it still cedes the use of the right of way and a certain acreage for station grounds to any railroad traversing the public domain. To encourage the building of the first transcontinental roads, Congress lent large sums to the companies, which have been re- turned. But the need of transportation was so urgently felt by the population of thinly settled districts, that exemption of taxes for limited periods, bonuses by municipalities and counties of station grounds and rights of way, and even grants of money, were made. But of late such encouragement has been seldom extended to railroad builders. GRANTS OF PUBLIC LANDS TO TERRITORIES AND STATES. The Federal Government generally confers on newly-created Territories and States large tracts of land for specific purposes, retaining, however, the greater portion, including coal and mineral lands. The grants to States and Territories up to November, 1904, were : , Acres. For common schools 69,058,443 For charitable, educational, penal, and reformatory insti- tutions 8,539,464 For internal improvements 10,631,482 For public buildings 1,162,731 For salt springs and contiguous tracts 606,045 89,998,165 * Report of the Public Lands Commission, 1904. INDUSTRIAL PROGRESS OF THE UNITED STATES 135 When the thinly settled sections of the West enjoyed limited self-government as Territories, the land within these Territories was retained by the National Government, with the exception of such grants as may have been entrusted to the Territorial Govern- ment to be sold for special purposes. On the creation of States, Congress has not followed a uniform rule in its grants of public lands to the new self-governing communities, but has always en- dowed them most liberally with land for educational purposes. As early as 1785 an Ordinance was passed assigning 680 acres of land, or one thirty-sixth of the entire public domain, to every township "for the maintenance of public schools within said town- ship." And every new State since the admission of, and includ- ing, Oregon, has received an additional grant of the thirty-sixth section. Land grants to new States for the maintenance of univer- sities and agricultural colleges have been the rule. In all cases the Federal Government has aimed at excluding known mineral lands from the control of new States ; but they have otherwise been amply provided with the means if wisely disposed of for educating their children in even more advanced studies than the elements. Texas has been an exception ; for, being an independent republic when incorporated into the Union, one of the conditions of Texan annexation was that she should "retain all the^the vacant and unap- propriated lands lying within her limits, to be applied to paying the debts and liabilities of Texas, and the remainder of said lands, after discharging such debts and liabilities, to be disposed of as said State may direct; but in no event are such debts and liabilities to become a charge upon the Government of the United States." But Texas is liberal in the support of education. The Constitution of 1876 assures to the School Fund of Texas half the proceeds of the sale of public lands. (Report of the Public Lands Commission, p. 33.) INDIAN AND MILITARY RESERVATIONS. For Indian reservations, 14,574,688 acres were appropriated between June 3Oth, 1911, and June 3Oth, 1912, but not alienated, for the area can be cut down by Act of Congress or executive order. The treatment of the Indians by the United States have been a sub- ject of acute controversy, both at home and abroad. As the white population invaded the Western prairies, the Indians, who could not be expected to adopt civilized habits and methods, had to be removed, and this could not always be done without inflicting some I 3 6 PROCEEDINGS AMERICAN MINING CONGRESS injustice, for the only remedy for the anomaly seemed to be the transfer of the Indian to less desirable lands. As to the military reservations, most of them have been restored to the public domain, owing to the altered system of army con- centration. NATIONAL PARKS. Of late years large areas of the public domain which are re- markable for the possession of great natural beauty, like the Yel- lowstone Park, in Montana, or the Yosemite in California, have been secured from desecration, or from private ownership, by con- version into national parks; and, to rescue prehistoric and historic monuments, the land on which they stand, if not owned by the Government, may be acquired by purchase, and set apart under the National Monument Act. These appropriations are evidences of a certain aesthetic and historical sense in the popular character, with which it is not generally credited, DESERT LAND ACT. Under the Desert Land Act, nearly 13,000,000 acres have been ceded to entrymen in blocks of a sauare mile, on condition that a certain portion of each entry be adequately irrigated. In applying this, and the provisions of all other statutes, curious anomalies inevitably occur. Land to be Irrigated under Reclamation Service. Of the mil- lions of acres still within the public domain a considerable portion is within the Arctic circle, rich, doubtless, in mineral, but of little value for forestry or agriculture. Of the balance, by far the larger quan- tity is comprised within the Rocky Mountains, and therefore within not only the barren but the arid zone. Some of the projects aim at storing flood waters by damming mountain torrents ; others attain the same object by raising the level of lakes, and still others will draw water, loaded with fertilizing material from such comparatively large and sluggish rivers as the Colorado and the Rio Grande. This work is being done at the expense of the Federal Government, and by the Reclamation Service, under the direction of the United States Geological Survey. ''The total sum set aside for all classes of projects is $34,270,000, and the amount of land to be irrigated is 1,909,000 acres. The aver- INDUSTRIAL PROGRESS OF THE UNITED STATES 137 age value of irrigated land in the United States is $47 per acre. This acreage will, therefore, add $89,723,000 to the taxable property of the United States in land values alone. According to the census report of 1900, the average annual income from irrigated land is $15 per acre. On this basis an income of $28,735,000 per annum will be added to the nation's wealth." The figures are, of course, departmental calculations. Though the policy of the Government is to withdraw from corporate control in the future the forests and the waters of the public domain, whether available for power generation or irrigation, small holdings in the arid region will be irrigated by pumping, when underground flow is near the surface, and by catching the rainfall in artificial reservoirs. Such irrigation projects are carried out by corporations, associations of ranchers, or by individuals, and will undoubtedly render fertile a large acreage of desert land in small separate areas. TIMBER AND STONK ACTS. Three and a half million acres of timber land have been sold in California, Oregon, Nevada and Washington, at $2.50 per acre, under the Timber and Stone Act (Public Timber Laws, p. 98). The entrymen can take up only 160 acres; but this provision has not prevented the forest lands passing into the possession of large pro- prietors, either through purchase from entrymen or by the use of lieu land scrip that is, scrip which has been issued as a reward for military and other service, and as a bonus to the railroads. Some such scrips are or have been transferrable, and good, therefore, for the purchase from Government of certain classes of land. To avoid the destruction of the forests through wasteful methods of lumber- ing, forest fires, and other preventable causes, the President has used the authority conferred on him by the Act of March 3d, 1891, to withdraw from the public domain and create as forest reserves "public lands wholly or in part covered with timber or undergrowth." Lumbering may. however, be conducted under license on these reser- vations, and agricultural lands upon the same may be disposed of. The acreage now included in the 150 national forests is 187,406,376 acres. (Report of the Commissioner of General Land Office for 1912.) I 3 8 PROCEEDINGS AMERICAN MINING CONGRESS MINERAL LAND LAWS. While the homestead laws continue to meet with popular ap- proval, it is very generally recognized that the laws under which desert land, and those under which coal, mineral, timber and stone lands can be secured, should be radically amended. These laws were all passed with the object of stimulating mining, quarrying, and of encouraging the reclamation of the country's desert districts. Some of the measures erred in the direction of over-liberality, while others were framed to put, as it was hoped, the minerals as well as the land into the possession of the poor man, and prevent their being monopolized by wealthy corporations. But in every case the policy was to develop the natural resources as speedily as possible and induce population to enter. The policy has succeeded so far beyond anticipation that if the legislators of a generation ago had been able to foresee the rapidity with which wealth would grow, and the national resources be proportionately used up, they might have hesi- tated to frame measures so generous, for they have attracted to the country the most enterprising spirits of all Europe, and they have afforded to men of magnificent powers of imagination and organ- ization, aided by great wealth, the material for creating huge enter- prises, which it is now found more difficult to control than it was to create. In the colonies before the Revolution the title to the common minerals passed, under the common law rule, to the owner of the soil, and the colonies, when they entered the Federation, retained control of these lands. But the mineral lands owned by the United States after the Revolution were disposed of under three statutes. 1. An Ordinance (May, 1785), entitled "An Ordinance for ascertaining the mode of disposing of lands in the Western Terri- tory," which was of the vaguest character. 2. The Lode Law of 1866. 3. The General Mining Law of 1872, known as the Law of the Apex. There was substantially no mining done in the United States till the purchase of Louisiana and the acquisition of the lead mines of Missouri, which had been one of the most alluring baits of Law's Mississippi scheme. As a result of the Louisiana purchase, a law was passed in 1807 to the effect that "the President of the United States shall be and is hereby authorized to lease any lead mine which INDUSTRIAL PROGRESS OF THE UNITED STATES 139 has been or may hereafter be discovered in the Indian Territory for a period not exceeding five years." The leasing of mineral lands was entrusted to the War Department, but it did not impose on it a heavy burden till 1845, when, after the extinction of the Michigan Indian titles in 1843, active mining commenced in the native copper deposits of Lake Superior. For two years only, subsequently to 1845, tne system of leasing was carried out. It was the system inherited from the mother country, but badly practiced when applied on the large scale of inexperienced officials. The Hon. Abraham S. Hewitt, in his interesting address to the American Institute of Mining Engineers on "A Century of Mining," tells of the process by which the leasing system was supplanted by the out-and-out purchase system:* "For a few years the rents were paid with tolerable regularity, but after 1834, in consequence of the immense number of illegal entries of mineral land at the Wisconsin land office, the smelters and miners refused to make any further payments, and the Government was entirely unable to collect them. After much trouble and ex- pense, it was, in 1847, finally concluded that the only way was to sell the mineral land, and do away with all reserves of lead or any other metal, since they had only been a source of embarrassment to the department. "Meanwhile, by a forced construction (afterwards declared invalid) of the same Act, hundreds of leases were granted to specu- lators in the Lake Superior copper region, which was from 1843 to 1846 the scene of wild and baseless excitement. The bubble burst during the latter year ; the issue of permits and leases was suspended as illegal, and the Act of 1847, authorizing the sale of the mineral lands and a geological survey of the district, laid the foundation of a more substantial property." It may be doubted whether reform of the working of the leasing system, instead of its abolition, would not have been a wiser course ; but the radical step of alienating absolutely the mineral lands was recommended by President Polk on December 2d, 1845, and enacted into law, and the copper lands of Michigan were offered for sale at $5 an acre, the price at which mineral lands have ever since been disposed of. * Transactions of the American Institute of Mining Engineers, Vol. V. p. 181. I 4 o PROCEEDINGS AMERICAN MINING CONGRESS The principal argument adduced by President Polk for the change of policy is the unprofitableness of leasing. He says: "According to the official records, the amount of rents received by the Government for the years 1841, 1842, 1843, an d 1844, was $6,354.74, while the expenses of the system during the same period, including salaries of the superintendents, agents, clerks and incidental expenses, were $26.111.11, the income being less than one- fourth of the expense. To this pecuniary loss may be added the injury sustained by the public in consequence of the destruction of timber, and the careless and wasteful manner of working the mines." But President Fillmore, in his annual message to Congress on December 2d, 1849, referring to the application of the land laws to the newly-acquired territory of California, gives as the most logical reason for the out-and-out sale of the public lands that "the relation of debtor and creditor between the citizens and the Government would be attended with many mischievous consequences." The public feeling in favor of actual ownership of land has always been strong. The first mining excitement followed J:he first successful effort to mine the metallic copper of Lake Superior, and, as we have seen, the result was the adoption of the sale in preference to the lease system. The next modification of importance followed the rush for gold in California, then a remote section, newly acquired by con- quest and subsequent treaty. To meet local exigencies, a mining code was framed by the miners, through methods curiously illus- trative of the working of popular institutions. When California was occupied by the United States the Mexi- can mining laws were in force, and till 1849 tne conquered province remained under military rule. Colonel Mason, the Governor, while still ignorant that the treaty of Guadaloupe Hidalgo had been signed on February 2d, issued the following proclamation from Monterey on February I2th, 1848: "From and after this date the Mexican laws and customs now prevailing in California relative to the denouncement of mines are hereby abolished. "The legality of the denouncements which have taken place, and the possession obtained under them since, till the occupation of the country by the United States forces, are questions which will INDUSTRIAL PROGRESS OF THE UNITED STATES 141 be disposed of by the American Government after a definite treaty of peace shall have been established between the two Republics." Without questioning the right of Colonel Mason to revoke arbi- trarily the existing mining law, the miners obeyed, and framed rules and regulations, not only for regulating the conduct of mining, but for the mode of acquiring the mines themselves, although all of them were virtually trespassers on the public domain. Hence arose the custom, afterwards embodied in the United States statute, of allowing neighboring miners to create a mining district and constitute themselves into a legislative body, whose rules and regulations, if not contrary to either Federal or State or Terri- torial laws, have a binding obligation. These self-constituted legis- lators in California followed the Mexican code so far as it applied to discovery and development, but they introduced into their mining code a principle which had no place in any modern mining statute. To them the ownership of the surface was subsidiary to that of the lode or quartz vein, which might happen to crop out at any given spot. Therefore they conceded to the owner of the outcrop the right to follow his discovery to any depth, and under the "dip, spur and angle clause" of their amateur regulation, created extra-lateral rights and introduced the law of the Apex, which came to be the distinguishing feature of the statutes passed in 1866 and 1872, and which has remained unaltered till to-day. This anomalous law of the Apex was apparently copied from an old custom confined to the High Peak district of Derbyshire, and probably incorporated in the California mining code at the suggestion of some English miners. Judge Field, who was ultimately elevated to the Supreme Court of the United States, but who had been one of the pioneers of Cali- fornia an alcalde before the admission of the State a legislator in the first Assembly, and a State judge, thus graphically describes the process by which these mining regulations were framed by these early intelligent miners : "The discovery of gold in California was followed, as is well known, by an immense immigration into the State, which increased its population within three or four years from a few thousand to several hundred thousand. The lands in which the precious metals were found belonged to the United States, and were unsurveyed and not open by law to occupation and settlement. Little was known of them further than that they were situated in the Sierra Nevada Mountains. Into these mountains the emigrants in vast 142 PROCEEDINGS AMERICAN MINING CONGRESS numbers penetrated, occupying the ravines, gulches and canyons, and probing the earth in all directions for the precious metals. Wherever they went they carried with them that love of order and system and of fair dealing which are the prominent characteristics of our people. In every district which they occupied they framed certain rules for their government, by which the extent of ground they could severally hold for mining was designated, their possessory right to such ground secured and enforced, and contests between them either avoided or determined. These rules bore a marked similarity, varying in several districts only according to the extent and character of the mines; distinct provision being made for dif- ferent kinds of mining, such as placer mining, quartz mining, and mining in drifts and tunnels. They all recognized discovery, fol- lowed by appropriation, as the foundation of the possessor's title, and development by working as the condition of its retention. And they were so framed as to secure to all comers within practicable limits absolute equality of right and privilege in working the mines. Nothing but such equality would have been tolerated by the miners, who were emphatically the law-makers, as respects mining upon the public lands in the State. The first appropriator was everywhere held to have, within certain well-defined limits, a better right than others to the claims taken up; and in all controversies, except as against the Government, he was regarded as the original owner, from whom title was to traced . . . These regulations and customs were appealed to in controversies in the State courts, and received their sanction; and properties to the value of many millions rested upon them. For eighteen years, from 1848 to 1866, the regu- lations and customs of miners, as enforced and moulded by the courts and sanctioned by the legislation of the State, constituted the law governing property in mines and in water on the public mineral lands/' The Argonauts not only carried to the west coast the habits of self-government which were the heritage of the race, but carried them into practice with the same independence and originality as characterize most of the legislation of the colonists of Australia. The rapid development of the Comstock Lode, after its discov- ery in 1859, rendered the framing of a Federal mining law a matter of necessity, and therefore in 1866 Congress enacted the first law under which a Federal title could be obtained to Federal mining land. The provisions of the Act are as vague as its title "An Act granting INDUSTRIAL PROGRESS OF THE UNITED STATES 143 the right of way to ditch and canal owners through the public lands, and for other purposes." Lindley says (I. p. 53) : "The title gives no clue to the scope of the Act. As a matter of fact, the title belonged to another Act which had passed the House, and for which the Mining Act was substituted in the Senate, without any attempt to change the title, and in this form passed both houses." The Act provided: "i. That all the mineral lands of the public domain should be free and open to exploration and occupation. "2. The rights which had been acquired in these lands under a system of local rules, with the apparent acquiescence and sanction of the Government, should be recognized and confirmed. "3. That titles to at least certain classes of mineral deposits or lands containing them might be ultimately obtained." The Act, however, which is still in force, is that passed in 1872 as "An Act to Promote the Development of the Mining Resources of the United States." The Act expresses decisively the liberality with which the country has disposed of its mineral lands, and the result has certainly justified its title and intent. The Preamble states : "Be it enacted by the Senate and House of Representatives of the United States of America, in Congress assembled, i. That all valuable mineral deposits in land belonging to the United States, both surveyed and unsurveyed, are hereby declared to be free and open to exploration and purchase, and the lands in which they are found to occupation and purchase, by citizens of the United States, and those who have declared their intention to become such, under regulations prescribed by law, and according to the local customs or rules of miners, in the several mining districts so far as the same are applicable and not inconsistent with the laws of the United States." The extent of the mining claim is prescribed as follows: "A mining claim located after the passage of this Act, whether located by one or more persons, may equal, but shall not exceed, one thousand five hundred feet in length along the vein or lode ; but no location of a mining claim shall be made until the discovery of the vein or lode within the limits of the claim located. No claim shall extend more than three hundred feet on each side of the middle of the vein at the surface, nor .shall any claim be limited, by any mining 144 PROCEEDINGS AMERICAN MINING CONGRESS regulation, to less than twenty-five feet on each side of the middle of the vein at the surface, except where adverse rights existing at the passage of this Act shall render such limitation necessary. The end lines of each claim shall be parallel to each other." The extralateral rights of the early California regulation are secured to the locator under the Federal law, under the third clause of the Act: "That the locators of all mining locations heretofore made. . . . shall have the exclusive right of possession and enjoyment of all the surface included within the lines of their locations and of all veins, lodes or ledges, throughout their entire depth, the top or apex of which lies inside of such surface lines extended downward vertically, although such veins, lodes or ledges may so far depart from a per- pendicular in their course downward as to extend outside the vertical side lines of the said surface locations ; provided that their right of possession to such outside parts of said veins or ledges shall be confined to such portions thereof as lie between vertical planes drawn downward as aforesaid, through the end lines of their loca- tions, so continued in their own direction that such planes will inter- sect such exterior parts of said veins or ledges. And provided fur- ther, that nothing in this section shall authorize the locator or pos- sessor of a vein or lode which extends, in its downward course, beyond the vertical lines of his claim, to enter upon the surface of a claim owned or possessed by another." Whether granting these extralateral rights has advanced the progress of mining is a disputed question, but they have been the source of most protracted and costly litigation. The Act prescribes the manner in which a mining claim must be monumented and recorded, and the amount of work which must be actually done upon it, either above or below ground per annum ($100) in order to secure possessory rights. No rent or royalty is exacted by the Federal Government, but after $500 have been expended on the claim, the possessory title may be converted into an absolute patented title by the payment of $5 per acre. The Act is admittedly defective in many of its provisions, but in criticising it, one must remember and appreciate that motive which actuated the people, through their legislators, in throwing open all their lands, agricultural and mineral, not only to occupation, but to actual owner- ship by citizens or by any one who has "declared his intention to INDUSTRIAL PROGRESS OF THE UNITED STATES 145 become such." Under the Homestead Act the agricultural land is given freely; under the mining law no charge is made for the possessory title, and for a patent to a mining claim the trifling price of five dollars per acre, hardly enough to meet the administration cost of the land department. Considering the incalculable hidden mineral wealth of the western half of the continent, it is not sur- prising that the active spirits of the world accepted the cordial invitation to share it on such liberal terms, and that it has been uncovered, developed and marketed with extraordinary speed, at extravagant profits, and that it has created spasms of speculative mania, which have perhaps not had a healthy effect on public morals. Mining companies are permitted the liberal allowance of 500x3 acres, but if a company reaches its limit, the same shareholders simply organize another. Metal mining, therefore, on a large scale can be carried on without evasion of any law. Most of the coal and iron is mined east of the Missouri, and their possession passed to the owners of the land. But the gold and silver, and most of the copper, are produced in the Rocky Mountains States under the liberal Federal laws which we have described. The sum total in value for 1911, as given by the United States Geological Survey, is as follows : Non-metallic products $1,235,896,653 Metallic 672,179,600 Unclassified 250,000 $1,908,326,253 Assuming the most modest estimate of actual profits on this large sum. we begin to appreciate the wealth that is accumulating in the country. Nor does this all fall to the lot of the shareholders of the large mining companies. If we take, for instance, the 2,000,000 acres of mineral lands which have been sold by the Federal Government, by far the largest proportion has been first located by prospectors and sold at often high figures. The poor man has been given the prospects, gratis, by the Federal Government, while the corporation has paid him the higher value of a merely promising, though perhaps undeveloped holding, which in most cases never develops into a mine. Comparatively little actual mining is done by the poor man. He avoids exposing more ore than will give pre- sumptive value to his claim, and even if it proves to be a claim I 4 6 PROCEEDINGS AMERICAN MINING CONGRESS which may develop into a mine, he obtains for it a high speculative value. COAL LAND LAWS. The Coal Land Laws, regulating the sale of coal lands, date from July ist, 1864, and March I3th, 1865, but the Act under which most of the coal lands have been sold came into effect in 1873. The coal land laws offer an interesting study of good intentions misapplied. The lawmakers applied to coal lands the rules which were quite applicable to agricultural lands. They did not offer the coal for nothing, but they put a very small value on the land which covers it, and parted with land and coal together. But the law limits the amount of coal land which can be taken under a single entry to 160 acres the agricultural quarter section and forbids more than two contiguous entries to be consolidated into a working organization. After the formalities have been ful- filled and the land paid for, as in the case of agricultural land, the entryman can do what he likes with his own property, but if he has made a contract, implied or expressed, to sell his coal, before he actually obtains his patent, he is subject to criminal action and the forfeiture of his property.* The coal land laws, under which all coal lands under control of the Federal Government have until recently been disposed of, provides that "Every person above the age of twenty-one years, who is a citi- zen of the United States, or who has declared his intention to become such, or any association of persons severally qualified as above, shall, upon application to the register of the proper land office, have the right to enter, by legal subdivisions, any quantity of vacant coal lands of the United States not otherwise appropriated or reserved by competent authority, not exceeding one hundred and sixty acres to such individual person, or three hundred and twenty acres to such association, upon payment to the receiver of not less than ten dollars per acre for such lands, where the same shall be situated more than fifteen miles from any completed railroad, and not less than twenty dollars per acre for such lands as shall be within fifteen miles of such road." *The coal land entries, from the passage of the Act, March 3rd, 1873 : to June 30th, 1912, were 3982, covering 576,280 acres. (Report of the Public Land Commission, 1912.) INDUSTRIAL PROGRESS OF THE UNITED STATES 147 The declaration which the entryman made was as follows : "I, , hereby apply, under the provisions of 'the Revised Statutes of the United States, relating to the sale of coal lands of the Township of , of range , in the dis- trict of lands- subject to sale at the land office at , and containing acres; and I solemnly swear that no portion of said tract is in the possession of any other party; that I am twenty-one years of age, a citizen of the United States (or have declared my intention to become a citizen of the United States), and have never held nor purchased lands under said Act, either as an individual or as member of an association ; and I do further swear that I am well acquainted with the character of said described land, and with each and every legal subdivision thereof, having frequently passed over the same; that my knowledge of said land is such as to enable me to testify understandingly with regard thereto, that said land contains large deposits of coal, and is chiefly valuable therefor; that there is not, to my knowledge, within the limits thereof any vein or lode of quartz or other rock in place bearing gold, silver or copper, and that there is not within the limits of said land, to my knowledge, any valuable deposit of gold, silver or copper. So help me God." The affidavit is so worded that it renders liable to prosecution for perjury every entryman who has even a remote intention of sell- ing his claim, and not working it himself. But the law was admin- istered with reasonable latitude. Still it is manifestly inapplicable to the present industrial conditons. President Roosevelt, in his message to Congress on December 1 7th, said: "1" am gravely concerned at the extremely unsatisfactory con- dition of the public land laws, and at the prevalence of fraud under their present provisions. For much of this fraud the present laws are chiefly responsible. There is but one way by which the fraud- ulent acquisition of these lands can be definitely stopped, and there- fore I have directed the Secretary of the Interior to allow no patent to be issued to public lands under any law until by an examination on the ground actual compliance with that law has been found to exist. For this purpose an increase of special agents in the General Land Office is urgently required ; unless it is given, bona fide would- be settlers will be put to grave inconvenience, or else the fraud will in large part go on. 148 PROCEEDINGS AMERICAN MINING CONGRESS "Further, the Secretary of the Interior should be enabled to employ enough mining experts to examine the validity of all mineral land claims, and to undertake the supervision and control of the use of the mineral fuels still belonging to the United States. The pres- ent coal law limiting the individual entry to 160 acres puts a pre- mium on fraud by making it impossible to develop certain types of coal fields and yet comply with the law. It is a scandal to main- tain laws which sound well, but which make fraud the key without which great natural resources must remain closed. The law should give individuals and corporations, under proper Government regu- lation and control (the details of which I shall not at present dis- cuss), the right to work bodies of coal land large enough for profit- able development. My own belief is that there should be provision for leasing coal, oil and gas rights under proper restrictions. If the additional force of special agents and mining experts I recommend is provided and well used, the result will be not only to stop the land frauds, but to prevent delays in patenting valid land claims, and to conserve the indispensable fuel resources of the nation." The President's recommendation to amend the laws in the direc- tion of leasing instead of selling did not meet with the approval of Congress, which adheres to the traditional national preference for private ownership. President Taft favored leasing. The Commissioner of the General Land Office in his report for 1909 to his superior, the Secretary of the Interior, says, under the heading, "Coal Land Legislation": "Attention is called to this because of the demand for the con- servation of the natural resources, and because of the entire inade- quacy of present legislation either for the conservation or for the proper development of either coal or "oil lands. In his Message to Congress at the beginning of the first session of the Sixtieth Con- gress, President Roosevelt endorsed your recommendation in the following words: f< 'In my judgment the Government should have the right to keep the fee of the coal, oil and gas fields in its own possession, and to lease the rights to develop them under proper regulations ; or else, if the Congress will not adopt this method, the coal deposits should be sold under limitations, to conserve them as public utilities, the right to mine coal being separated from the title to the soil.' "After this endorsement of your recommendation, President INDUSTRIAL PROGRESS OF THE UNITED STATES 149 Roosevelt, recognizing the absurdity of present limitation in regard to area, added : " The regulations should permit coal lands to be worked in sufficient quantity by the several corporations. The present limita- tions have been absurd, excessive, and serve no useful purpose, and often render it necessary that there should be either fraud or else abandonment of the work of getting out the coal/ "The conditions which existed then exist to-day, and the situa- tion which is thus created, and which was recognized by President Roosevelt, is as intolerable now as it was then. "Any legislation in regard to the disposal of coal lands by lease or otherwise, should contain a strong anti-trust clause, and a pro- vision which would prevent any agreement to abstain from mining the coal. If it should be determined to lease on a royalty, then unless such a clause be inserted, so that open competition may be maintained, the charge of the royalty will mean nothing more than that the public will pay the additional price. This would not in any way relieve the situation/' The result of the agitation so far has been that, as the admin- istration could not get a law through Congress which met with gen- eral approval, President Roosevelt used his executive authority to withdraw all coal lands from entry, pending contemplated legislation and revised regulation. No new laws have been passed, but the Interior Department, through the Geological Survey, has been revaluing all the unceded coal lands in the public domain, assigning a specific value to each coal area, based upon the quality of the fuel, ease of extraction, facility for transportation, etc. The task is a difficult one, especially when applied to Alaska, where there are un- doubtedly very large coal resources, but where little or no work has been done to determine the extent to which faulting has disturbed the beds or modified the character of the coal. The agitation about the disposal of coal lands applies only to the quantity still under control of the Federal Government, viz., that of the Rocky Mountains and Pacific Coast section. Elsewhere in all the older States, except Louisiana,* the lands and the minerals beneath them, have become private property under the English common law rule. The area of the coal lands of the United States is estimated by the United States Geological Survey at 496,776 square miles, of * "Land Question," Sato, p. 13. /SO PROCEEDINGS AMERICAN MINING CONGRESS which 480 square miles consist of the anthracite coal lands of Penn- sylvania, 148,609 square miles of lignite, leaving 250,051 miles of bituminous coal.f The same authorities estimate the quantity of coal of all grades contained under that area as follows : ORIGINAL COAL SUPPLY. Anthracite & bituminous 250.531 1.176,72Easily Amt. Accessible Easily Accessible Sq. Miles. Shoressible. with Difficulty. Available. Ace t Tons. Short Tons. Short Tons. Area. Amt. 7,000,000 505,730,000,000 1,176,727,000,000 Total 496,776 1,922,977,000,000 293,450,000,000 Sub-bituminous . 97,636 356,705,000,000 354,045,000,000 216,252,000,000 Lignite 148,609 389,549,000,000 1,153,225,000,000 1,392,979,000,000 No large section of the country, except the New England States and California, is deprived of the blessing of its own fuel supply. New York and New Jersey are dependent on their neighbors for coal, but this dependence is really geographical, not economical. This wide and almost uniform diffusion of the essential element of industrial development has contributed largely to rendering pos- sible the material progress of the country; while at the same time it has been politically a unifying force by diffusing manufactures and reducing the dangerous sectionalism, which at one time grew out of the prevalence of localized agricultural and manufacturing interests and prejudices. The large area of the coal fields, as well as the favorable structure and deposition of the bituminous coal- beds (the bituminous beds being generally horizontal), has enabled coal and coke to be almost everywhere sold at lower figures than prevail in the metallurgical centres of Europe. Coal from many of the districts in the East, South and Middle West, is sold on the cars at 80 cents to $i per ton of 2000 pounds, and $1.25 has been a high price in the West. The conservation of the national resources of the country has recently become a prominent political issue, and has passed out of the domain of scientific inquiry and calm discussion into that of bitter partisan strife. That the laws are too liberal and too loosely administered is becoming the general opinion; but they have, from the point of view of national growth, been so eminently and con- spicuously successful, that even those who are most keenly sensible of their defects, hesitate to call a halt of the national progress by trying legislative experiments with them. t Transactions of the American Institute of Mining Engineers, Vol. XL P. 254. INDUSTRIAL PROGRESS OF THE UNITED STATES 151 Mr. Ballinger's report as Secretary of the Interior for 1909, however, reflects the popular opinion when he makes strictures on the operation of the old land laws and recommendations for the future. He says: "The proper use and disposition of the public lands have been questions involving no little legislative as well as administrative difficult from the beginning of their history. They were, during the earliest administrations, treated as a national asset for the liquidation of the public debt and as a source of reward for our sol- diers and sailors. Not until the discovery of gold on the Pacific slope did the policy change for one of exploitation, by which our citizens were encouraged to develop the mineral and agricultural resources of the public domain on condition of receiving limited areas at a nominal cost. For similar reasons, railway and wagon road grants were liberally donated by Congress in order to add facilities for the opening up of these almost inaccessible regions. "The railwav grants generally were limited to non-mineral lands, except such as contained coal and iron, which latter minerals were taken to be essential for railway construction and operation. New States were, when admitted, liberally endowed with public lands for school and other purposes ; so that, out of a public domain in 1860 of 1,055,911,288 acres (Alaska then not belonging to the United States), we now have only about 731.354,081 acres, confined largely to the mountain ranges and the arid and semi-arid plains, except lands within some of the Indian reservations and the 368,035,975 acres of undisposed-of land in Alaska. "All of the principal land statutes were enacted over twenty- five years ago; the Homestead Act, the Pre-emption and Timber Culture Acts, the Coal Land, and the Mining Acts for the aid of the industrious prospector, were among the earlier Acts of this nature. "The liberal and rapid disposition of the public lands under these statutes, and the lax methods of administration which for a long time prevailed, naturally provoked the feeling that the public domain was legitimate prey for the unscrupulous, and that it was no crime to violate or circumvent the land laws. It is to be regret- ed that we, as a nation, were so tardy to realize the importance of preventing so large a measure of our natural resources passing into the hands of land pirates and speculators, with no view to develop- ment looking to the national welfare. It may be safely said that I 52 PROCEEDINGS AMERICAN MINING CONGRESS millions of acres of timber and other lands have been unlawfully obtained, and it is also true that actions to recover such lands have in most instances long since been barred by the Statute of Limita- tions. The principal awakening to our wasteful course came under your predecessor's administration. The bold and vigorous prosecu- tions of land frauds, through Secretaries Hitchcock and Garfield, have restored a salutary respect for the law, and the public mind has rapidly grasped the importance of safeguarding the further dis- position of our natural resources in the public lands in the interest of the public goods as against private greed. Notwithstanding this, it is necessary to continue with utmost vigor, through all available sources, the securing of information of violations of the public land laws, and to follow such violations with rigid prosecutions. "In this present policy of conserving the natural resources of the public domain, while development is the keynote, the best thought of the day is not that development shall be by national agen- cies, but that wise utilization shall be secured through private enter- prise under national supervision and control. Therefore, if material progress is to be made in securing the best use of our remaining public lands, Congress must be called upon to enact remedial legis- lation/' These strictures are hardly fair, and are perhaps too sweeping. The old laws were framed to encourage the development of the country. As is the case the world over, certain men of exceptional foresight and ability used them to secure from the public domain, at a trifling price but not necessarily or generally by fraud large areas, especially of coal, oil and mineral lands, which when devel- oped have proved, especially under the protection of the tariff, of enormous value. Their value was not appreciated when the laws were made, and these laws did not prevent any citizen who came into possession of land as a gift from the State or as entryman of a homestead, or as the purchaser of a quarter section of coal lands, from selling it to a corporation, once he had acquired a patent. While some coal lands were probably acquired under the Homestead Act, and then disposed of as coal lands, the Government thus being defrauded out of $15 an acre, most coal and mineral lands have been legally acquired with the land or from the original locators, or under old Mexican grants in Colorado and New Mexico, by the only holders who could work them safely and economically, by modern mechanical methods. The lawmakers of the first statutes, and the INDUSTRIAL PROGRESS OF THE UNITED STATES 153 many legislators who have, since conditions have altered, recognized the defects of the old laws, and yet have not possessed the courage to amend them, were more at fault than the men, whose accumula- tion of wealth under these laws has alarmed the public. If they had not developed the country's resources, there would not have been over 90,000,000 of people to upbraid them. Mere technical evasion of the laws, admittedly defective, should not be laid as willful infraction to the charge of the men who have built up the great national industries. That in the rush for wealth and the pro- duction of quantity there has been waste is beyond question; but economy of necessity follows experiences of waste and of knowledge how to avoid it, and none are more anxious to save than the big financial industrial corporations. Both in America and elsewhere domestic waste far exceeds industrial waste. That these laws should have remained so long unamended, while such radical changes have taken place in the industrial condition of the country, was attributed by the Public Land Commission to the public "dread of the introduction of unfamiliar requirements, and the fear that new enactments may recognize physical conditions even less than present ones, and may be even less suited to the needs of the country. By the use of practice, sanctioned by custom, the people have heretofore been able to get along fairly well ; any change in their mind is associated with more difficult requirements, and they dread innovations which may hinder rather than help home-making." Plain Talk. GEORGE OTIS SMITH, DIRECTOR U. S. GEOLOGICAL SURVEY, WASHINGTON, D. C. Whatever the forum selected, public discussion in America tends to evoke more language than ideas. Most of us err in this way, and we all feel the influence when we think aloud before our assembled fellows, with the result that we sometimes strive less for common sense than for uncommon sound. Plain ideas are dressed up in borrowed or imported finery with all the tender care that a fond mother lavishes upon her little girl going to a first party, so that too often the practical man who knows the work-a-day world at first hand delivers an address conspicuous for the elegant words which completely envelop and conceal plain facts and solid opinions that deserve more appropriate treatment. Plain talk is more becoming than oratory to a time like the present, when the signs point to large changes in the world of business and industry. Vital issues, that are real and not fancied, bring us together, and our concern in these issues arises from our interest in our country and ourselves. The exact distribu- tion of this interest varies somewhat with the individual, but all of us are very much alive to whatever affects the welfare of ourselves and of our fellows. We need, then, only to face these issues squarely and discuss them in plain language. The mem- bers of the American Mining Congress are men connected in one way or another with the business of taking out of the ground things that are useful. With rare exceptions, we are everyday citizens blessed with more practical experience than theory. Our purpose in life, in a business way, is simply to put into use the mineral wealth that is now locked up in the rock vaults. This wealth includes the coal and oil that our fellow-citizens need for heating and lighting their homes and running their trains and autos, the iron and copper and lead and other metallic and non-metallic materials that are so necessary to the structures PLAIN TALK 155 of this Twentieth Century, and the mineral fertilizers without which our farmers will soon find themselves unable to feed us. Mining is a productive industry of the first rank, and it is plain that our mines are fairly essential to human welfare. Here, then, if anywhere, do the problems of common interest to both the public and the mining industry deserve to be discussed in plain language that the everyday man uses and understands. He was a dreamer who complained that "the times are sadly out of joint," but even practical men must admit that we are facing days of great changes in the relations of government to business. It is a changing order, and this is no time to shut our eyes to what is immediately before us. Precedents are regarded as out of date, behind the times, and the good old days of unrestricted competition have passed, apparently never to return. In the language of the street, it is now up to the prac- tical man to help to steer the new social movement, for to try to stop it is simply to court disaster, nor will the quick applica- tion of brakes stop the skidding. In the world of business an evolution has begun which can and should be responsive to all the conditions of industry and the principles of economics, but if, on the other hand, there is much dogged resistance to this evolution by those who might be termed the second lieutenants of industry, such action will simply tend to force the public approval and adoption of a more revolutionary policy. This approaching readjustment of the old and new appears to me a dangerous subject for experiments by office-seekers, politicians, and amateur reformers; it will prove a real task for men ac- customed to measure costs, balance opposing factors, and, above all, patiently and impartially test out opinions with facts. Inasmuch as our Twentieth Century civilization is in a very large degree due to the work of that class of highly trained yet thoroughly practical men to whom we give the collective name engineers, Professor Swain performed a needed public service last June when in his presidential address he urged his fellow-members of the American Society of Civil Engineers to throw themselves into the work of solving the social problems of today. The times are indeed ripe for the citizen with an engineer's training and experience, and especially with his scientific breadth of view, and, above all, his appreciation of the 156 PROCEEDINGS AMERICAN MINING CONGRESS controlling value of hard facts, to enter upon a larger share of the duties of citizenship. In a talk before the Philadelphia Engineers' Club last winter I stated the same idea more pointedly when I suggested that "a lobby at Washington of engineers with high ideals of profession and citizenship would be a power for good." Mr. Brook Adams just recently has similarly given applied science credit for the present status of civilization and social movement, and I understand Mr. Adams' view to be that to the employment and generous support of applied science has been largely due the former almost impregnable position of the capi- talist class. Does not the remedy for present-day evils seem to be for the scientist, the engineer, to enter the service of the people, simply by taking a larger interest in civic questions and exercising a larger influence in public matters ? To consider now perhaps the most important matter in which this body is particularly interested, namely, the Federal legislation needed to promote mining on the public lands, we will find it imperative to recognize certain ideas that have won large popular support, if not adoption, by the majority, especially as these ideas have never been written into our archaic mining laws. Stated plainly, some of these ideas sound commonplace, but it is on commonplaces that we must build, if we are to have laws fitted for everyday use. I will mention certain of these almost axiomatic truths for two good reasons: In the first place, they are probably not accepted by all who are connected with the mining industry, and secondly, as I have just hinted, these commonplaces of today have little or no expression in the statutes under which the miner in the West must operate. Here are some principles to which no group of individuals can assert a claim based on prior discovery or continuous pos- session; they belong in fee simple to that large body of Ameri- cans who have come to realize that unregulated private mo- nopoly and good citizenship are antagonistic terms. The public possesses greater rights than any individual or corporation. Private enterprise must be subordinated to the public good. Big business is not necessarily either vicious or unfriendly to public interest, but big business more than small business is in need of a strong control by the people. The day of big business, in PLAIN TALK 157 the sense of unnatural and unrestrained monopoly and special privilege, is passing. Effective inspection and intelligent regu- lation of industry by the people's representatives will increase. The bright light of publicity should and will shine on the inner workings of all private business which either touches or controls the production and distribution of the necessaries of life, and publicity is logically the first step in regulation by the people. All these propositions must, I believe, be accepted as prem- ises in the formation of any new mining statutes whose purpose is to provide at all adequately for the present and the future. Nor are these all ; other principles applying more particularly to this legislative problem are hardly less fundamental. Mining has become a business rather than a gamble. The Federal Government, no less than the State Governments, is concerned, not with restriction or reservation, but with promotion and en- couragement of new mines and increased mineral output to the fullest extent necessary to meet current market demands for each product. Every generation has its own right to use natural resources, but no generation has the right to abuse or waste whatever mineral wealth it inherits. Not only advances in public opinion, but also changes in economic conditions place demands upon legislation, and the mineral land laws of twenty, forty or fifty years ago can not meet the requirements of today. To illustrate: The coal mined west of the Mississippi river in 1873 amounted to less than two million tons, and last year to over fifty-eight million tons. The oil production in the public land states in 1897 was two million barrels and last year 141 million barrels, yet 1873 and 1897 are the dates of the latest Federal enactments providing for the acquisition of coal and oil lands, respectively. Here are some infant industries that have grown up and deserve laws to fit. In order to serve the American people, a term which includes capitalist as well as mine worker, and consumer as well as mine operator, the new laws recognize every factor in the complex task of taking something out of the ground and making it useful. Every man who has a part in this undertaking, from prospector to ultimate consumer, has his rights, and these rights must be recognized, measured and protected. All these men are in reality partners in the enterprise. Any undue advantage allowed to any one partner is pretty sure to involve unfair treatment of one or more of the I S 8 PROCEEDINGS AMERICAN MINING CONGRESS others. The prices of mine products can not be regulated, as some radicals advocate, nor can either the industry or the prices even be subjected to beneficial influence, except as full consideration is given to costs. Increase in mine safety, decrease in waste and im- provement of working conditions, in part at least, will involve in- crease in operating expenses and may therefore raise prices. Open books and standardized accounting will soon come to be the rule in all large productive operations. The people will demand full oppor- tunity to know all the elements of cost in the coal they burn whether or not the land owner and the operator are making a profit or a loss, whether the mine worker gets a living wage and what are his working conditions, whether the transportation company and the middleman are receiving their share or more than their share. The public doesn't want to stop or obstruct private business, but it does demand that fair play be the rule of the game. To come now to the question of what is needed in mineral land legislation, a plain statement of facts will help. Legislative pro- grams too often resemble the hotel bill of fare which the average citizen has to ask the waiter to translate. In my opinion, we want these laws for the coal and oil and phosphate lands first of all for the sake of the citizens who wish to use the mineral product from these lands. Not that other citizens are not to be served by the new legislation, but as new consumers we are all concerned with prices, and, to benefit the many as well as the few, legislation must favor low costs. I should therefore put down as the first essential of mineral land legislation that no provision in the law should place any unnecessary charge, burden or operating cost upon the operator. Accordingly, no royalty should be imposed with the primary purpose of revenue. The consumer will surely pay the tax, if the charge paid to the Government landlord is imposed for other than purposes of administration and of control in the interest of the consumer. The most recently issued waterpower permits provide that the Fed- eral Government shall receive a royalty which varies directly with the square of the average price paid by the public for the electric current. The less the consumer pays, the less the Government land- lord receives. A large burden which the mining industry now has to bear and which should be lightened is that made up of the various risks and uncertainties that attend it. In mining there is guess work enough of Nature's own making to give the industry all the speculative PLAIN TALK 159 flavor it needs. As I have pointed out in a paper published this month by the American Institute of Mining Engineers, any invest- ment risk increases both cost and selling price, and whatever the origin of that risk, the ultimate consumer will find that he pays the carrying charge. For this reason, in order to lower the cost of coal, I favor a leasing law, rather than the present method of selling Government coal lands at an appraised valuation. Any scheme of selling an undeveloped resource involves uncertainties in valuation, and the risk thus created is liberally discounted by the operator necessarily and properly, I may add, for his own protection, but the public pays the bill. Even more important is the feature that under lease the operator is relieved from all the burden of land investment. Other illustrations of uncertainties that can and should be cut out will occur to those of you who are more familiar with mining than I am. I may mention, however, the unnecessary risk that has been forced on the oil prospector in the possiblity of having his claim jumped by a more resourceful driller. Absolute protection during a proper period of exploration should be made a feature of every mining law. Another unnecessary and very costly risk has been mentioned by H. V. Winchell the extra-lateral right em- bodied in our lode law. Mere mention of the "apex" brings to mind litigation that has wasted the substance of western mine owners like a plague, many a long-continued suit being almost as disastrous to the successful litigant as to his opponent. Even where lawsuits have been avoided, fear of them has constituted an element of risk that surely found its place in the financing and operating of a mine on a lode claim. Second in importance only to this matter of protecting the mineral producer from unnecessary operating costs is the need of offering to the developer of an unused resource an inducement com- mensurate with the hazardous or speculative character of his under- taking. This cuts both ways. To promote development, mining laws should attract the men having the knowledge and capital neces- sary to engage in the business of mining, but it does not follow that mining on the public domain should be set up like a public lottery, with the same big prizes for all comers, whatever the risk taken. Too often in the past the practice has been for the majority of locators to sit by and watch a few real miners test out the ground, when, if a strike was made, these hangers-on at once had valuable claims to sell. The "wildcatter," who in his compliance with both 160 PROCEEDINGS AMERICAN MINING CONGRESS spirit and letter of the law has risked his last cent in discovering oil, has received no more land from the Government than the school teachers, drygoods clerks and barkeepers whose names have dec- orated the paper locations for miles about. The present system has passed out too many large premiums to those who didn't even take a chance at least their stake was only a picayune compared with the bonanza prize. This means unearned increment in large amounts, and in the end the consumer pays for it. To continue this kind of mineral land lottery is bad economics. On the other hand, however, any law for the disposition of mineral land, whether by lease or not, should provide large rewards for the real prospector and the wildcatter, who so often stake their all against an uncertain and secretive Nature ; when they lose out they have no redress, and when they win, their discoveries usually add more to the nation's wealth than to their own pockets. They deserve to be in the pre- ferred class ; but why offer the same rewards to the taggers-on, who simply rush in to grab a share in a sure thing? A third side of this proposition is the question of the inalien- able right of each citizen to his share of the nation's mineral wealth. This vague right has possibly come to appear more definite and substantial in recent years because of magazine statistics setting forth our per capita share in the wondrous wealth represented by Alaskan coal, but even writers with much more information and sense also speak of the unconditional free grant of valuable minerals as the something-for-nothing that goes with American citizenship. There is more reason in figuring the citizen's right and interest in any undeveloped minerals as a double one: First, that measured by the possibility of the mineral being mined and thus made useful at a cost to him that shall not be unnecessarily high, and second, his right to an equal chance to undertake mining within the limits of his own ability. He has absolutely no right to a speculative profit from public mineral lands, and his profit as a producer should be measured by his own productive contribution. It follows that it is absurd to talk about free or unconditional grants of mineral land as a perquisite of American citizenship. The privilege should pass only on condition of productive labor. The real intent and, in fact, the stated purpose of our mining statutes is development which means use, and some attempt has been made in each law to make that the condition of occupancy of mineral land. This principle seems ab- solutely right, and new legislation needs only to enforce the idea best PLAIN TALK 161 set forth by Mr. Kirby at the Tonopah meeting of the Mining Con- gress "Dig or get off the claim." As I remember his plain talk on the facts, we do not need to blame either Congress or the Land Department for the paralysis of mining districts, but only look around the camp and see the idle claims whose owners are waiting for something to turn up and somebody else to turn it up. The law needs to offer opportunity only to the mineral entryman who uses that opportunity. Equal opportunity is more theoretical than prac- tical with men who are unequal in capacity and purpose. The use the citizen is to make of the land should be the measure of his right and privilege. In the matter of acreages, the various mineral land laws present some curious features. The lawmaker appears to have harked back to the homestead idea, but it takes little experience to show that 160 acres, which will provide a home on the land, counts for little, for instance, in the opening of a coal mine that will have a half-million ton annual output and involve a half- million dollar investment. These legal obstacles naturally re- sulted in the creation of a class of dummy entrymen and specu- lative middlemen, who grabbed Government land for the purpose of selling it to the bona-fide coal operators. Experience shows that it is a purposeless and bad enonomic policy for the Govern- ment to dispose of such mineral lands in small parcels, simply to give everyone his chance. Let the particular use to which the land is to be put determine the appropriate acreage, and give the man who is to put the land to that use the chance to deal directly with the Federal owner, and not force him to pay an idle middle- man's profit. With these purposes in mind, and with due regard for changed conditions, both in the mining industry and in public opinion, how can Federal legislation meet the nation's need? As a summary I can do no better than express my conception of the main essentials of a new mining code, following in general the analysis of the whole problem recently outlined by the special committee of the Mining and Metallurgical Society of America : First : Land-classification is the duty of the landlord, private or Federal, as a preliminary to the disposition of any or all of the natural resources the land contains. Separation of surface and mineral rights follows as the logical result of classification, 162 PROCEEDINGS AMERICAN MINING CONGRESS wherever there is any reason to consider that there may be more than one estate in the land. Second : While the title to the surface of lands suitable for agricultural use should be granted in fee, thus continuing the wise policy of encouraging home-making, public interest and the need of protecting the consumer against private monopoly are believed to justify the retention in the Government of such sur- face resources as timber and water-power, because their cheapest and fullest use is best secured by operation in large units. Even more important is the reservation by the Government, at the time that the surface patent is granted, of all mineral wealth beneath the surface for separate disposition, under mineral-land laws. In private transfers of land the reservation of mineral rights is be- coming more and more the common practice. Third: The possessory title to the mineral should be retained in the Government, not for the purpose of asserting any theory of "sovereign patrimony" or "regalian right," but simply as a practical method of assuring development under the best condi- tions. Let us regard the Federal Government as a trustee rather than as a sovereign landlord, and the idea and purpose of pro- prietorship by the people become more easily understood. The application of the lease idea to the mining of precious metals, while logical in certain respects, is not at all of com- parable importance with its application to what have been termed "public utility" mineral resources, such as coal, petro- leum, phosphate and potash. The utilization of this class of resources is of prime importance, and questions relating to their disposition have a practical rather than an academic interest. Leasehold has the advantage over permanent alienation in that it allows the Government to exercise continued control in the public interest. Such control is essential in order to promote use and discourage speculative non-use, to prevent control of large land holdings by powerful corporations for such monopoli- zation as works to the detriment of the consumer, and also to permit and even to promote consolidation of holdings and cen- tralization of operation where large units are favorable to the public interest. To work out control of this type, the mining law should provide for prospecting permits that will give exclusive occu- PLAIN TALK 163 pancy during short periods long enough, however, for full exploration under terms and conditions whose sole purpose should be to insure that only bona-fide prospectors will enter the land and that they will do purposeful work. The annual assessment farce has had a long enough run. The prospecting permit will ripen into a lease whenever the results of explora- tion justify the operation of the property on a producing basis. Where the proof of coal or oil or other mineral substance in minable quantity is a discovery of the type termed "wild-cat" in the case of oil, the prospector rendering such service to the industry and to the public should receive his lease upon purely nominal terms. No bonus or rent should be exacted from the lessee, except possible rent during any period of temporary cessation of pro- duction, and that simply as a means of discouraging non-use. The royalty on the product, whether figured on quantity or value of output or on net returns, should be no higher than is necessitated by royalties or other charges prevailing for similar products under private leases in the same locality. Wherever the price to the consumer could be directly affected by the royalty to the people's trustee, the royalty should be lowered to a nominal figure. The essential features of the lease should be conditions enforcing full and continuous use, economy and safety of operation, and control of occupancy. Transfers should not be prohibited, but simply made subject to approval by the people's representative. If in any region large units of production are seen to favor lower costs and a longer lived industry, all for the public good, consolidation of holdings should be encouraged and transfers of leases permitted; but if the purpose of large holdings is monopolization in order to curtail production and raise prices, transfers to that end should be denied the executive approval necessary to make them effective. As I look ahead, and not so far ahead, either, I believe I see the following propositions stand out plainly in the future status of mining on the public lands: The mining men, like the rest of the people, will see that this big productive business belongs in the public-service class. 164 PROCEEDINGS AMERICAN MINING CONGRESS Because its products are so largely necessaries of life, the mining industry will be regulated by the people. The control of public mineral lands will be exercised largely through a leasing system, simply because in this way the public owner and private operator can best co-operate, and the purpose of this sympathetic co-operation will be to lower costs of pro- duction in order to permit reasonable prices to the consumer, and at the same time provide fair wages to the mine worker and adequate profits to the capitalist and operator. That will be public control, but not Socialism. Conservation from the Western Standpoint. JOHN F. SHAFROTH, SENATOR FROM COLORADO. Mr. President and Gentlemen of the American Mining Congress: I feel very much gratified to come here. I did not understand my subject to be as the Chairman announced, but still it is kindred to that. I expected to talk on conservation from the Western standpoint, but inasmuch as this is similar to the subject announced I will proceed somewhat in the line of the skeleton notes I have written. Gentlemen, everybody believes in conservation, if we mean by that elimination of waste. No one, I care not whether he is a Western man or an Eastern man, believes in the waste of our re- sources. If the people in the United States would confine them- selves to the execution of their doctrine from that standpoint, no one would have any objection whatever, but there has been growing up a sentiment giving a different meaning to the word conservation than that which I have stated. It has partaken of the nature of a propaganda in favor of leasing the various lands of the United States, grazing lands, mineral lands, coal lands, asphalt lands and all others that are supposed to contain valuable products, and this policy makes a burden upon the West which we do not think is fair, and which we do think the Eastern people, if they understood the question, would countenance. When we started out on that policy of conservation it contem- plated the setting aside of various timber lands at the head waters of our mountain streams solely for a local purpose, namely, to con- serve the snow in the mountains from melting until midsummer, when the waters in the valleys below would be most needed. You know in all that western country we have irrigation, and it is neces- sary for us to have a flow of water in summer. That was the reason the first enactments of Congress were made, not to conserve the timber, but for the purpose of preserving the snows and thereby making more abundant water with which to irrigate our lands. 166 PROCEEDINGS AMERICAN MINING CONGRESS The Representatives and Senators from the West believed firmly in the proposition to set aside reserves for that purpose, but in the giving of that power to the President they did not limit it. Soon there began to be created large reservations, which not only took in the head waters of the streams, but embraced almost all the large sections of our contiguous public lands. In my State there has been fifteen million acres of land set aside as timber reserves. Now, that is an area equal to Massa- chusetts, Connecticut, Rhode Island and Vermont combined. You would think that in one western State, that was a pretty large plot of land to set aside for any purpose, but we find further that this land which was designated for forests was unsuited for that pur- pose. You know we have in the Rocky Mountain region what is called the timber line, which means that Nature has decreed that no timber can grow above that line, and yet forty per cent, of these preserves in my State are above timber line. It is in these sections that the most valuable mines of our State are located. There is another zone between the timber line and good timber, where there grows scrub timber which is not good for forest pur- poses. Yet 30 per cent, of those areas that are set aside in the State of Colorado contain this scrub timber. Thus we find that only 30 per cent, of the areas that are set aside as forest reserves can have any relation whatever to forestry. If they talk about re- claiming these forests you will find that it will be an absolute im- possibility, even in the lower lands. We have the authority of the Agricultural Department of the United States to the effect that it takes 200 years to grow a tree 19 6/10 inches in diameter in my State at an altitude of 7,500 feet above sea level. Now these are the conditions that exist in my State and I have no doubt they exist in every other State in the Rocky Moun- tain region. We simply say: "We would like you to take your hands off so far as attempting to make our forest preserves your concern." I have no objection to the Government selling these lands and selling them for what they can get. If these lands are worth money let the officials dispose of them, but it cannot be that they can lock up our resources and prevent that development which occurred in the western States previous to the adoption of this policy. CONSERVATION FROM WESTERN STANDPOINT. 167 I cannot agree with the gentlemen who has just taken his seat as to the wisdom of the Government in leasing any lands, and there is one thing that he does not refer to and which he overlooks entirely. I happened to have been Governor of my State at one time and did not know why the State revenues were so small until I began to look into this very question of the conservation policy of the Government. I found we were not getting much revenue and I began to inquire closely, and I found in one county nine-tenths of the area was in reservation. When the Government of the United States creates a State it passes an Enabling Act, in which it is specified that no land of the United States is subject to taxation. I simply saw in this county that nine-tenths of the land was public domain and could not be subjected to taxation, which made one-tenth of the property of the county bear the burden that should have been paid by all. I want to show you a map of the State of Colorado. The dark blots that are upon it, are the Government reservations con- taining 15,000,000 acres, from which we cannot get one dollar of revenue for State, county or school taxes. We find that this Government has set aside 9,425,000 acres of coal land in the State of Colorado, and we find the officials have placed enormous values upon it, in some instances as high as $400 an acre, and that hardly any land whatever is being taken up. Nine million, four hundred and twenty-five thousand acres of coal land, valued at between a half billion and a billion dollars, are conse- quently not subject to taxation. What do you think of a little State, such as ours, with prop- erty valued at a half to a billion dollars, exempt from taxation? Suppose an individual had such an exemption there would be a revolution. Yet, my friends, that is exactly the condition that -exists out there by reason of these reservations. Now it seems to me when people understand this subject they will have a different view of the question of conservation conser- vation not from the standpoint of locking up our resources, but from the standpoint of benefit, both to the United States and the States. You must remember that all of this land was obtained by the Government not for the purpose of making money out of it. It never i68 PROCEEDINGS AMERICAN MINING CONGRESS has been the policy to do that. It has been the policy of the Govern- ment to so arrange its land laws as to produce settlement and de- velopment, and thereby to build up a citizenship which would be the bulwarks of the nation in times of war, and the revenue producers in times of peace. We saw this land had been here for six thousand years, and it was not worth anything until the pioneers developed the same. Do you remember what Daniel Webster said about this western country? I will just read you an extract from a speech made by him relative to these lands. He said : ''What do we want of that vast and worthless area, that region of savages and wild beasts, of deserts, shifting sands, whirling winds, cactus and prairie dogs? To what use could we ever hope tc put those great deserts and mountain ranges covered from their very bases with eternal snows ? What could we ever do with 3,000 miles of rock-bound, treeless, uninviting lands of the United States which have cost the Government four and seven-tenths cents per acre in its acquisition?" There never was a policy suggested of making money out of these lands until this so-called conservation policy was advocated. Even if you live in Philadelphia, you have a right to send any- body out to Colorado to-morrow with instructions to locate a min- ing claim for you locate a claim containing gold, silver, lead or iron, and you need not go near it, and thus you have a right to an interest in that property. The requirement of the law is that you shall do a certain amount of work upon each mining claim, and I agree with Mr. Smith in his statement that there ought to be work performed upon these properties. The law requires that you shall do one hundred dollars' worth of work on each claim per year. Other statutes require residence upon other locations. Homestead laws require residence. Others require the locator to remain a cer- tain length of time upon the land, but every citizen of the United States has an interest in this land to the extent that it is given to him to take advantage of, if desired. Now these States were taken into the Union after a set policy was fixed by the United States Government. This was not new. The great middle West had been developed, Ohio, Indiana, Illinois, Missouri and Kansas had become great and powerful States, adding millions of dollars each year to the revenues of the Government. CONSERVATION FROM WESTERN STANDPOINT 169 Under this policy the Government could not attempt to prevent the development of the resources of those States ; on the contrary, the citizens thereof had the entire benefit of the natural resources of those middle west States. That was the policy. Why, even you people along the Atlantic coast got lands for nothing. You will find in New England there wasn't a penny given, and when the settlers came to Ohio and Indiana the Homestead rights prevailed, and if a man lived on the land for five years, he obtained title to it. There were some laws which governed a certain minimum rate of a dollar and a quarter for the taking up of lands under the pre-emption claim. That was the policy under which this whole western country between the Alle- ghenies and the Rocky Mountains was developed. And then came in this vast territory in the Rocky Mountain regions, which is now the subject of restriction upon the part of the Government. We find that that policy apparently was settled. You cannot find in the old laws anything with relation to perpetual ownership on the part of the Government. Nobody had suggested perpetual ownership. It was to be free from taxation until disposed of. Disposition of the public land was recognized, and the Government was holding it in trust for the people, so that when the people did take it and commence development, there should be passage of title by the United States for those lands. We find under these Enabling Acts, which Congress passed, it has used the identical language in every instance with relation to the rights of the State. It was never intended that one State should have a greater right than another. This language, contained in every Enabling Act, is that when the State is formed "it shall be admitted into the Union upon an equal footing with the original States in all respects whatsoever." Tell me, is it right to give to the people of the East, the people of Ohio, Indiana, Illinois, Missouri and Kansas, the full rights of their own public natural resources, and yet, when it comes to the most favored section of this country, the section which is called the Great American Desert, the "rock-bound, treeless, snow-clad" por- tion, as Daniel Webster has defined it, the United States will say, "No, we do not propose to let you have the natural resources of your States, although we have given them to the more favored States?" Now, we find that if the United States wants to assume juris- diction of the reserved lands; if it wants to put itself on a level 170 PROCEEDINGS AMERICAN MINING CONGRESS with the citizens that have given value to this billion or half billion dollars' worth of coal mines and pay cost of maintenance of local government within the reserved areas, then that will be only a fair arrangement, but we insist by reason of the clause, which is con- tained in the contract with the State when the rights of the State were fully determined at the time those contracts were made, it is unfair for the Federal Government to say: "Now, we will exempt all this land from taxation, compelling you to maintain a republican form of government and an educational system over the same and at the same time, we will not contribute." That is not fair, it is not right, and any person who understands it ought to recognize it. There are some other phases of this question with relation to our State of Colorado to which I want to call your attention. We are situated in the interior, about 1,800 miles from the Atlantic seaboard. Half of the State is mountainous. We are about 1,000 or 1,200 miles from the Pacific coast. No matter what trouble might come, if we were to get into a war with all the nations of the earth, not a single soldier of all those forces could ever set foot on the soil of Colorado. Far into the interior the invading armies could not march or conquer the people, so you can readily see our interest in maintaining a navy is not a selfish interest. We need no protection of the United States Government against the armies of all Europe, or of all the world, and yet our Legislators and our Senators, for years and years, have been advo- cating continually large appropriations for the navy. We have no harbors, not even a single river in our State that could float even a flat bottom boat, and yet we have contributed every year through our Representatives in Congress toward the development of the harbors in this country. The Sixty-first Con- gress appropriated $88,000,000 for that purpose. Yet you have heard no objection on that account from the Colorado people. We know there rests upon us a certain obligation to be ren- dered the Government which we should discharge by the levying of taxes. Colorado contributes every year to the national treasury $5,000,000 in import and internal revenue duties. This obligation we cheerfully discharge, but in the face of all the facts we find that to the Rocky Mountain region alone of all the States of the Union the Federal Government attempts to say: "You shall not have the resources which we have given to all of the people in the other States," and bear in mind, we are less favored than any of those CONSERVATION FROM WESTERN STANDPOINT 171 older States. Under such a policy the Government is going to hold these lands in perpetuity, something never before attempted, be- cause these lands were acquired in trust for the people. It is proposed that the Federal Government shall collect from the State of Colorado a lease rental or royalty of 10 cents per ton upon all coal mined from the reserved areas. Let us see what that would mean. The Geological Survey has estimated the coal measures in Colorado to aggregate 371 billions of tons. The world's consump- tion of coal to-day is one billion two hundred and fifty millions of tons pe: year, so that Colorado has enough coal within its borders to supply the world for more than three hundred years. Out of these 371 billions of tons, more than 325 billions is in the hands of the Government. If we are to pay 10 cents per ton it means the State of Colorado will ultimately contribute to the national treas* ury $32,500,000,000. More than ten times the total debt of the Government at the close of the greatest war that ever occurred in our history. That is what Colorado would have to contribute if this little 10 cents per ton was imposed on the people of that State. That is not the worst feature of it, for whenever a tax is imposed upon a natural resource, it means the people have to pay for it. It means it will not be in the exact amount of royalty imposed, but it will prob- ably be three, four, five or six times as great, because when these mines are developed by corporations, they are not going to be sat- isfied by getting back the amounts they pay to the Government, they must have their profits, and ultimately the people of the State will have to pay a larger amount than the royalty. Let us now consider the water power problem. Out there water falls from such heights that a wonderful amount of power can be generated. We can take the Grand River, our largest stream, and for every five miles we can develop power. We have one plant at Shoshone, Colorado, upon which a company has spent six or eight million dollars in generating some 20,000 horsepower. After they had constructed their plant and had it in operation, the Govern- ment served notice upon them that they must get off. That was a nice proposition for the Government to serve upon men who had spent six or eight million dollars to develop a natural resource that had been going to waste since time began. The bureau has been trying to force the execution of a contract to compel payment of I 7 2 PROCEEDINGS AMERICAN MINING CONGRESS royalties of one dollar per horsepower, graded by small amounts at first, and going up in ten years to a dollar per horsepower. The laws of the United States at that time permitted any corporation to file a plat of their line on the public domain. The mere filing of it should constitute the rights of the parties to that right of way. The Government gave that right in order to have the country developed, but when Mr. Pinchot came into power he got the Secretary of the Interior, then Mr. Garfield, to revoke the grants to forty of these power plants, some of which were developed, others in partial con- struction, and others just beginning. That very plant upon which notice was served, at Glenwood Springs, or Shoshone, was the plant that was already in operation to furnish power to the city of Denver, a distance of over two hundred and fifty miles. The matter has been in court ever since, but there has been no final determina- tion of it. Now the assumption of the conservationists was that the United States owns the waters, but when they appeared before the committees in the House and Senate they were shown a Supreme Court decision to the effect that the States owned the waters. That checked their plans for a time, but they declared their con- servation policy must go on and a way must be found by which con- trol of the water and the horsepower that is generated therefrom held in their hands, so they began to scheme and finally advanced the proposition that the Federal Government owns the land where the power plant is to be located. Now they try to make a company, before it can use any plant on the public domain, deed or convey the Government a right to a certain amount of the horsepower it generates. That is doing indirectly what could not be done directly. These waters belong to the State and the State has the right to use them. To permit a hold-up of the State under a provision of that kind is to deny the very indicta of sovereignty of the State. The State should have the same right as the nation to condemn anything in order to have a public work. The State should have the same right as the nation to condemn any piece of property owned by the United States that is not used for Governmental purposes. We find that this horsepower, generated entirely from water fall, is just waiting for development. The Colorado State Engineer told me that if we had the right to develop that water power under the laws that existed fifteen years ago, there would be investments CONSERVATION FROM WESTERN STANDPOINT 173 in that line of more than one hundred million dollars in the State of Colorado in the next three years. But the gentlemen at Wash- ington say that they can do for the West better than the West can do for itself. How is Congress so sure it can handle the problem so much better than the States themselves? We have had some experience with Congress in this regard. You will remember that Congress gave away forty-three land grants to railroads, to the extent of 155,000,000 acres, an area equal to the whole of Maine, New Hamp- shire, Vermont, Massachusetts, Connecticut, Rhode Island, New Jersey, Pennsylvania, Delaware, Maryland and Ohio combined. That is what Congress did, and yet it is thought a wise thing to put all the development of this Western country into the hands of the Government in order that a State should not encourage monopoly. Every corporation that files upon a water power plant there, becomes a public carrier and is subject to the legislation of the State just the same as the railroads. If the rate is too high the State can come in and say : "This is unreasonable and we will fix a less charge for it." Here are water powers that have been going to waste for cen- turies, lying there now undeveloped. There is not a single water power plant being constructed in the State of Colorado at this time, because the Government policy has been to charge a royalty. There can be no question but what the people of a State are much more careful of the rights of the State and the rights of the people of the State than the National Government. Legislators sometimes are corrupt, sometimes controlled by corporations, but not any more than the big bodies in Washington have been in the past, and we cannot assume that they are going to be more subject to the influence of corporations than Congress would be. Not only that, but in our State, under the initiative and referendum, if the Legislature does not pass the correct law, the people have the right to pass it and to review all acts of their rep- resentatives. While corporations may have influence over a Legis- lature, they will not have influence over the entire mass of the peo- ple, and so these Western States that have these laws have a better opportunity to curb the monopolistic tendencies of corporations than has the National Government. I 74 PROCEEDINGS AMERICAN MINING CONGRESS Now, then, I feel that Washington has got no right to control Colorado. They do not know our conditions. They do not know our needs, they do not know our necessities, and, consequently, we naturally feel that when there is something to be done in Washing- ton, eighteen hundred miles away, they are not informed as to the situation as we understand it, and you are going to find, gentlemen, that this same tendency to control land, to control water powers, to control gold mines, to control silver mines, to control copper mines, to control zinc mines, and to control lead mines, is objectionable. We propose to have a say in the Congress of the United States as to whether this iniquitous policy shall be fastened upon us. My friends, a great justice of the United States once delivered a speech and I want to read to you what he said as to the relation between the State and the people. These are the words of Justice John M. Harlan, one of the great men of his time: "National government for national affairs and State govern- ment for State affairs is the foundation rock upon which our insti : tutions rest. Any serious departure from that principle would bring disaster upon the American system of free government." Needed Changes in Our Mineral Land Laws. THOMAS J. WALSH, SENATOR FROM MONTANA. Mr. President and Gentlemen of the American Mining Congress: It was my purpose to attend this Congress to discuss with you needed changes in our general land laws, but the duties of the cur- rent session bore so heavily upon me I found it impossible to make the preparation for the presentation of the subject in a way that would enlighten those who attend meetings of this kind. Our code of mineral laws was framed more than a generation ago. It would have required an acquaintance with the subject with which they dealt, a more profound and far-seeing statesmanship than its authors confessedly had, to have devised a system which would not be found wanting in some respects after a lapse of so many years. It is a high tribute to the sagacity and ability of the great men who devised that code that it has worked as well as it has, and that the basic principles upon which it was built are still recog- nized as being essentially sound. With respect to the lands containing coal the system admittedly has broken down, and with reference to oil, gas, phosphates and other natural resources of a similar character, it is no discredit to the great men who devised the prevailing system that it has proved a failure, as they scarcely contemplated the necessity of legislation touching lands containing such minerals. In the essential features the provisions of the law in relation to lands containing metalliferous ores have fully justified them- selves. Although the wisdom of them is an open question, the sys- tem will work out all right. It remains a powerful inducement to the exploration and development of the public lands containing gold, silver, copper and other metals, in exactly the same way as it always has been. i 7 6 PROCEEDINGS AMERICAN MINING CONGRESS The chief criticism made in respect to this branch of the law is that it breeds litigation. It becomes frequently an exceedingly troublesome, oftentimes perplexing, difficulty to determine to which claim particular ore bodies belong and such an uncertainty, as a matter of course, tends to retard the development of the land. This evil is not a crying one, however much may be said in support of the extra-lateral right. As the present system has operated very suc- cessfully for a great many years, there is no immediate necessity for revision in that branch of the mining code. The law has, however, unquestionably entirely broken down so far as the coal lands are concerned. It is not possible, practically speaking, to appropriate coal land under the present law. It allows an appropriation of only 320 acres by an association, and through- out the West, where there are any coal lands, an area of that extent is too small to induce development. In order to compete in the markets, even in the West, an investment of $200,000 or $300,000 is requisite for opening the mine and in the construction of proper works for handling the coal, and transporting it. An investment of that amount of money is scarcely justifiable in connection with coal land no greater in area than 320 acres, unless it be unusually rich. This condition prompted the making of entries really for the benefit of a corporation intending to operate a considerable tract of land when the title to same should be acquired, a practice for years tacitly approved or acquiesced in. It was always, I imagine, recognized by lawyers to be contrary to the law and is now held to be criminal. It becomes necessary, accordingly, to revise the coal land laws, and that should be done, and done without any delay whatever. Public attention has been directed for a great many years to the condition of affairs in Alaska, and it is not at all unjust or unfair to say that that condition constitutes a reproach to the United States and to the Congress of the United States. It was disclosed in a recent investigation, by a senatorial com- mittee, that the Navy requires for the use of the fleet in our West- ern waters about 300,000 tons of coal annually. This it transports from Newport News around Cape Horn at a cost of about $5.00 or NEEDED CHANGES IN MINERAL LAND LAWS 177 $5.50 per ton, costing the Government on the Pacific Coast about $8.00 a ton, when an abundance of coal can be obtained within twenty-five miles of the coast of Alaska and can be laid down at the seaboard at a cost not to exceed $2.50. In other words, by reason of the fact that the coal deposits of Alaska are locked up, the Gov- ernment of the United States is paying something like $1,500,000 annually for freight on coal which is carried around to the fleet. With the $1,500,000, the amount the United States is so paying each year, a railroad can be built into the coal fields and the coal can be laid down at tidewater for less than it costs at the Atlantic seaboard. Yet it seems impossible to make any headway towards securing new legislation or to develop any of the rich coal deposits in these lands under the existing laws. Practically every acre known to contain coal is reserved from appropriation and no patents are being issued upon the appropriations which have been made. I would not like to have anybody understand that I am offering any criticism whatever of the initial reservation of this land, of the interruption of the process of appropriation of the same by private individuals. In fact, I am profoundly convinced that the original reservation was a wise, just and commendable effort on the part of those charged with the administration of the public lands; but not to have made some provision since that time, reasonably adapted to the development of those lands and the utilization of their great deposits of coal, at least by the Navy and particularly in case we should unfortunately become involved in a war on the Pacific, is something that approaches in gravity a crime. All agree on the necessity for some legislation. Of what na- ture? That presents a most serious question for consideration. The learned Director of the Geological Survey, to whom we have listened this afternoon, has presented very strongly the sentiment prevailing in this section of the country in behalf of a leasing system. Senator Shafroth you have heard advance in a most forcible way many of the considerations of weight against it. That it will be an enormous tax upon the people of the West no one can doubt, even though the liberal policy suggested by the Director as to the royalty to be paid is pursued. For instance, you would consider, perhaps, that 10 cents per ton on coal would be a very low royalty. It would I 7 8 PROCEEDINGS AMERICAN MINING CONGRESS seem so, yet the Chicago, Milwaukee and St. Paul railway operates coal mines at the town of Roundup, in my State, the products of which are utilized by that road only for operation of its trains. It produced last year 600,000 tons of coal, and if it had become neces- sary to pay a royalty of 10 cents per ton that road would have paid $60,000 last year in tribute to the Government. Of course, it must add just that much to the amount which it otherwise would charge the people of our State for freights transported into the State or out of the State, in order to recoup itself. Thus whatever amount is paid becomes a tax upon our people. But there is another consideration. It is as a matter of course desirable that these lands should be appropriated with reasonable rapidity. Take the Alaska coal lands, for instance. It is disclosed that industries of that section, despairing of the opening of the coal lands, have made other arrangements for fuel, and more partic- ularly many of the markets which would have absorbed the coal mined there are now being supplied very largely by oil from the State of California. Great dredging enterprises are conducted in Alaska to-day, the fuel for which is transported from the State of California. The Treadwell mine uses a large quantity of oil for fuel; it has installed boilers that burn oil. It does not care, as it once did, for coal from Alaska which it would have been glad to get some eight or ten years ago. In the course of time what is known as white coal is unquestionably going to take the place of the black coal to a very great extent. Our State, for instance, has water power resources that are tremendous in the aggregate. The Missouri River is fairly well dammed now. Four great power dams are now in operation on that river, with a fifth, on the Madison, one of its tributaries, and another, the greatest of all, is now being installed. One of the most remarkable power sites in the world, perhaps, is that of the Pend d'Oreille. The Kootena furnishes an endless amount of power. Clark's Fork is a series of cascades in our State. It is only a question of time when coal will no longer be our chief reliance as a source of power, as it is now, and as it has been in the past. In the future unquestionably other sources of power- will be developed and we are all apprehensive that under a leasing NEEDED CHANGES IN MINERAL LAND LAWS 179 system, such as has been suggested, the coal lands of our State will lie idle for a generation, at least. Of course, it is different here. The State of West Virginia and the State of Pennsylvania are in the midst of conditions essen- tially different. The great markets for coal are close at hand. The region is an old one, that is, it has long been known. It has been extensively explored. The risk attendant upon operating is no- where near so great, and the demand is unfailing. The market is to the North and the South and the East and the West. The great commercial cities and the great industrial centers are here for the consumption of that coal. The output of our mines must be transported two or three hundred miles to a market that is limited at the best. Therefore, you cannot reason that because the leasing system is a wise system here and in this locality it ought to be in our section. Moreover, we ought to learn something from experience along these lines. In a discussion of this matter one of my colleagues said to me some time ago: "It seems to me the right thing to do is to provide for the payment of a royalty, not upon the gross output but upon the net proceeds of the operation of the mine." He readily perceived that 10 cents per ton might be an oppressive burden. He said: "I think the royalties ought to be paid upon the net profits of the operation rather than on the gross output." Now, really, that strikes one as an exceedingly sensible sugges- tion, and the plan proposed an exceedingly reasonable kind of a solution of this problem, but, when tried out, as it has been tried out all over the West, it has been discarded as an impossible thing. We have had no little experience in regard to that matter. Senator Shafroth and myself have been for twenty years practic- ing law in the mining region and we can point you to practical diffi- culties in the way of the successful operation of what seems a very perfect system. We have tried it. A man locates a mining claim, develops it enough to show that it is a good prospect and then usually leases it. The lessees are not any longer paying a royalty on the net profits of the mine. That system was discarded long ago. The trouble began because there was nobody who could tell i8o PROCEEDINGS AMERICAN MINING CONGRESS what the profits were. There was always a controversy as to whether any amount spent for development work was to be de- ducted from the gross returns and, if so, how much. Of course, if the lessee was to be permitted to go on and conduct such develop- ment work as he saw fit, the result would be that there never would be any profits at all until he got ready to distribute net profits. Then there arose the question of account, and almost invariably that kind of a contract led to a lawsuit. But that is not so bad, because the lessor had an opportunity to go into court and have the thing finally determined and adjudicated. He would represent to the Court that although the books showed no net profits, a large amount of money was being uselessly spent in what was claimed to be the develop- ment of the mine, that the operator was paying large and unneces- sary salaries to his superintendents and an unnecessary amount to his men, and that there was more expense incurred because of timbers used in the work than was actually necessary. After a long trial he would eventually get an adjudication as to whether there was a net profit. It was expensive, but he had some redress. He could sue the other man. But you cannot sue the United States, and so if you lease from the Government you have absolutely no redress at all. You say: "Mr. Director, I mean to do such and such develop- ment work, and I desire to get credit for the cost of it in the ac- counting for any ores which may be extracted from the mine." Mr. Director will say : "If you do that I will not allow you to take credit for it on any returns which you get." What can the lessee do ? He has to follow the dictum of the Government officers, or he has to quite his lease. Under these conditions how can it be believed that any one will put $250,000 or $300,000 into a property for the de- velopment of a coal mine? The system of paying a royalty upon the net profits will not work with the Government as a landlord, if for no other reason that because there are no means of adjusting any differences which may arise between the lessee and the lessor, except permission is given to sue the Government. So if you adopt the leasing system at all you will be obliged to exact a royalty upon every ton of coal that comes out of the mine. That conclusion follows, as well, as the result of our experience in NEEDED CHANGES IN MINERAL LAND LAWS 181 the West. Leases containing a provision for the payment of a pre- centage of the net outcome have been abandoned entirely. Prac- tically all require the payment of a royalty upon the net output so much a ton, or such a percentage of the smelter returns. In the disposition of the Government coal land the royalty will have to be calculated, as I think, upon the gross output, should a leasing system be adopted. Then arises the difficulty of fixing what it should be. Anybody can see who thinks about the matter at all that such a system imposes a tremendous burden upon the people who have settled in those regions which Nature has blessed with these natural resources that in reality the royalty paid becomes a tax upon them. We are not at all insensible to the fact that frequently when the fee is granted properties of very great value get into the hands of private owners for a very small amount, but that is the case with gold, silver and other mines as well. And it is this very chance of the possibility of great returns that spurs endeavor, that prompts the discovery and exploitation of such. I want to say one thing in this connection, and that is that the people of the West are obviously more immediately and vitally concerned in the preservation of these great natural resources and in making them contribute to the de- volopment of their States respectively than people living two or three thousand miles away can possibly be. They are as much con- cerned as anybody in the East can possibly be, that none of these great resources shall fall into the hands of plundering interests, and particularly that they shall not be gathered up and appropriated by monopolizing organizations which seek to utilize them for the pur- pose of exacting a tribute from a patient and long suffering people. Some provisions must be made, likewise, which will permit of the appropriation of lands containing oil and gas under a plan that is more appropriate to the necessities of the case than a placer mining location. I am disposed to be much more tolerant of the idea of leasing in the case of oil and gas than I am in the case of coal, and cer- tainly in the case of lands containing metalliferous ores. The leas- ing system works tolerably well in the West with respect to gas and cil. In the State of Wyoming there are a great many oil and gas properties that have been developed under a leasing system, and I 182 PROCEEDINGS AMERICAN MINING CONGRESS see no reason for doubting that explorers will be as glad to obtain privileges upon the public lands as on those held in private owner- ship, the terms being the same. I believe in the case of lands containing oil or gas an oppor- tunity should be given to carry on the explorations with a pre- emption right. It is rather unfortunate that the one upon whom the burden of original exploration falls, . the pioneer should not have an oppor- tunity to secure at least the place upon which he is conducting his operations. Yet, under the existing laws, he has no right, prior to actual discovery, even of occupancy except to the space upon which his machinery is erected and upon which he is conducting his opera- tions. The West has been represented in the United States Senate in the past by many very able and profound students of the national questions in which it is more directly interested. They were, how- ever, to a very great extent pioneers, not brought into direct con- tact with the questions that now most concern us until late in life. It is perhaps fortunate for the country at this time that there are in the Senate, and in the House as well, a great many men who have been impelled by reason of business and professional interests to give the closest study to the solution of them. I can assure the people of the country, so far as they may be represented at this Congress, that there is a deep and earnest desire among all the Representatives of the West to solve these questions in that spirit. I cannot for one single moment conceive that there is any con- siderable sentiment in this section of the country which looks to the ownership of these great natural resources out in the West as a means of enriching the national treasury the proceeds to be ex- pended for national purposes. When the public lands were first secured by grants from the States it was expected, indeed in some quarters it was feared, that from their sale there would eventually be realized a tremendous sum to go towards discharging the expenses of the National Govern- ment. It soon was disclosed, however, that that was not a sound view, and that the policy of selling for the best price obtainable was not a wise one ; that the wisest policy for the Government to pursue NEEDED CHANGES IN MINERAL LAND LAWS 183 was to offer these lands at a very low price, and particularly to en- courage their rapid settlement. It was demonstrated over and over again that the Government of the United States speedily got from the new communities more revenue from internal taxes and customs duties paid by them than could ever be secured by holding the lands and selling them at a profit. I think we may safely feel that there is no sentiment abroad in this section of the country, although an effort has been made in some quarters to cultivate it, in favor of a policy somewhat different from this. Reference has been made in a magazine article exploiting our wealth of natural resources. I read one a short time ago telling of the Forestry Bureau, and what it had achieved. Let me say now that a great deal of the opposition and the antagonism toward the Forestry Service and the idea of forest preservation which pre- vailed at one time in some sections of the country, at least, has quite passed away. We are very much more hospitably inclined towards the forestry policy than we were some years ago. The magazine article to which I allude, figured up just exactly what the total value of all the forests of this country belonging to the United States is. The aggregate was divided by one hundred million and the result exhibited as the share of every man, woman and child in the forest lands of the nation. The purpose was to impress the reader with the idea of personal wealth, and to imbue him with the idea that no policy ought to be pursued which would deprive him of the heritage thus accruing to him. By a similar course of reflection a man may indulge the belief that he is com- fortably rich though he did not have five cents to buy a loaf of bread. He might calculate what is his part of the money invested in public buildings of the country, the harbors, river improvements, and other public property, not to mention specifically all other pub- lic lands besides those that are forested. I do not think that that kind of argument impresses the people of this section of the country very deeply. I am of the opinion that they feel these great natural resources belong to the people of the nation who hold them for those who go out on the frontier and de- velop them, in just the same way as the resources of the older sec- 184 PROCEEDINGS AMERICAN MINING CONGRESS tions of our common country were utilized for the immediate benefit of the people who first subdued them. We have a common interest in devising a system that will contribute most rapidly to the develop- ment of these resources, and at the same time, confer the most last- ing benefit upon the nation. The Public Land Laws. HON. A. A. JONES, FIRST ASSISTANT SECRETARY INTERIOR, WASHINGTON, D. C. Mr. Chairman and Gentlemen: I did not expect to be called upon to address this assembly. It is the duty, in part, of the Interior Department to interpret the laws which you have been discussing, to administer them, and also upon request of members oi Congress, to make suggestions looking to new legislation, and the purpose of my visit to this city, and to this Congress, was to obtain such in- formation as would aid me in the better performance of official duty. But as a citizen of the West I have a kindred feeling with those who are assembled here. The mining laws of the country are largely applicable in all that great section of which I am a citizen. Having lived in my adopted State for more than a quarter of a century, I have breathed the Western air, and as a citizen of that section I have watched the administration of the laws of the country. I have seen wherein development has been retarded, and in the very nature of things I have been impressed with the fact that changes are necessary. In regard to the land bearing metallic ores, certain changes in the laws would aid in the development of that country. There is no doubt changes should be made in the laws relative to the develop- ment and the mining of coal properties. The existing laws were not framed with reference to existing conditions, but forty years ago they were framed for conditions of that time when the use of coal was limited. It was provided that no citizen could take up more than 160 acres of coal land, and that an association of citizens could acquire but a limited area much, less than is necessary at the present time and under present conditions to develop a coal mine. As has been so aptly stated by the Senator from Montana, it is recognized that the people of the whole United States have an interest in the resources of that country, but as Western citizens, we look forward to the time when each citizen of the country shall 186 PROCEEDINGS AMERICAN MINING CONGRESS undertake to obtain his interest in those resources. If you of Penn- sylvania, or you of Utah, feel that you have an interest in the coal lands of Colorado or New Mexico it is your privilege to go to those States and there make those resources productive and do something to develop that section of the country. How this may be done is the great problem. I appreciate the objection to a lease law as stated by the Senators from Montana and Colorado, but there are also objections to be made to the dis- posal in fee of coal land. I apprehend that the great dissatisfaction which prevails in regard to a leasing system arises from the fact that the present method of disposal of the mines is decidedly unwise and tends to retard the development of the country. But I do not believe that the West desires to return to the old system under which land con- taining coal was disposed of. The law of course was violated and in many cases it was deemed necessary that it be violated. The laws were not fitted for the development of the industry, and, consequently, through use of dummy entrymen the operators managed to get into one ownership a sufficient quantity of land to enable the coal to be produced and put on the market. If you are to simply take off the limit of the quantity of land which may be acquired you still have a condition which I do not believe impresses the ordinary mind as being a wise one. But something must be done. If the lands are sold at the prices suggested by the Senator from Colorado, then it seems to me an unnecessary burden is put upon the consumer of that product. The investment of $400 an acre in coal land would mean a continu- ing burden upon the consumer a tax upon the kitchen and the fireside. If the consumer in the West may be relieved from the neces- sity of such an investment then to that extent you aid in the develop- ment of that section of the country. If, as stated by Director Smith in his paper, the royalty is for the purpose only of control and not for the purpose of revenue, then is it not possible in that way to relieve the consumer of a considerable burden? I do not under- take to say what should be the exact form of legislation. But that legislation is necessary there can be no doubt, and as to the basic principle of legislation, I believe the people of the country are almost unanimous that these Western lands and resources shall THE PUBLIC LAND LAWS 187 not be exploited for the purpose of raising revenues to run the general Government. (Applause.) The West is unalterably opposed to that idea, and except for the population which exists in the West, and which we hope may be increased in the near future except for the existence of that pop- ulation the resources of the West would have no value whatever; and if you want to give to those resources value you must so use them as to build up that section of the country, to build up homes there, to build up industries there which may consume and use the resources. We are all agreed in the West that we do not want monopoly in coal lands. In my State, New Mexico, one concern to-day con- trols more than a half million acres of coal land. We do not want that. The West does not want it. We feel that these monopolies should not exist ; we feel that we want the highest form of develop- ment, that we want the mines run in such a way as not to waste the resources of the country. We want sufficient wages paid to those who are engaged in bringing into use the natural resources. We want all the safety appliances that are necessary, and the consuming public is willing to pay the bill. These are the conditions desired in that section of the country, and I believe when they are fairly presented to the people of the nation they will realize that what we are all seeking is the upbuild- ing and the development of that section of the country as well as the proper utilization of these resources the banishing of monopoly and waste, and the bringing about of prosperous and happy homes. (Applause.) Administration of Our Public Land Laws. CLAY TALLMAN, COMMISSIONER GENERAL LAND OFFICE, WASHINGTON, D. C. Mr. President and Gentlemen : I came over here to attend this meeting for the purpose of listening to the remarks of others, and not for the purpose of attempting to make remarks or to state my views on the subjects di'scussed. I came here to endeavor, as far as possible, to get the benefit of the viewpoint, opinion and judg- ment of those men who are actively engaged in actual mining operations and in the development of the mining interests through- out the country. * As you are all well aware, the position I hold with the Gov- ernment is administrative and semi- judicial in its character; except in a very minor way, it is not within my province to lay down any policy. Policies of the Department are properly determined by the head of the Department. I have listened with great interest to the discussions here of the operation of the various public land laws, particularly those respecting mining. Practically all of these laws it is the duty of my office to administer in the first instance. With respect to the inadequacy and inconsistency of many of the public land laws, I think probably no one more fully realizes the short-comings of these laws and the difficulties inherent in them and in their subject matter, than the men engaged in the administra- tion of those laws in the Department of the Interior. You will find that many of these Government officials will agree with you as respects many of the alleged defects of our public land laws, and no one more than they is more anxious for a complete, comprehen- sive, scientific and workable revision of the public land laws, partic- ularly the mining laws. If you will, for the moment, place yourselves in our position, you will readily appreciate that we are between two fires. On the one hand, there are the laws laid down by Congress, and we feel and believe it our duty to administer and enforce those laws and to carry out fully the intent of Congress as best we can. On the other hand, we feel compelled not infrequently to take due cog- ADMINISTRATION OF PUBLIC LAND LAWS 189 nizance of conditions and resulting injustice which would follow a strict interpretation and application of the law. These questions, as they arise in every conceivable way, require serious thought and consideration. As a result we are not infrequently charged, on the one hand, of failing to observe the plain mandates of the law, while again we are doubtless more frequently charged with being bureau- cratic. In considering these various acts of Congress that have been discussed here to-day, however, I argee with the Senator from Montana, that we should not lose sight, for a single moment, of the highly desirable basic principles of some of the laws of Congress as they now exist. The wisdom and foresight of the framers of our mineral land laws and of the homestead laws, for instance, can- not be discounted. Under these laws, the great agricultural and mining industries, almost from the Ohio River westward to the Pacific Coast, have been developed. These laws have encouraged active discovery and development of the mineral resources in the mining regions, and have enabled millions of people to secure their own self-supporting homes in the agricultural regions. It behooves us then to give careful thought to any change in the basic princi- ples of some of these laws, under which we have witnessed the great western development of the last fifty years. Notwithstanding the commendable features of many of these acts of Congress, we have, nevertheless, come to a day in the admin- istration of many of these laws where there is no question as to their inadequacy ; we have also come to a time when there has arisen a distinct difference of opinion on broad questions of policy as respects the management and handling of our remaining public resources in the Western States. These different view-points are in some respects fairly illustrated by the respective positions taken by Director Smith of the Geological Survey and by Senator Shaf- roth of Colorado. It is not for me, as a ministerial officer, to attempt, or to pre- sume for a minute to lay down broad general principles of policy, either in my Department or for Congress. If I may be permitted to express a personal opinion, in connection with the matters re- ferred to by the speakers who have just preceded me, to my mind and as a result of my experience, it seems to me that these questions are more largely questions of facts and figures pertaining to each igo PROCEEDINGS AMERICAN MINING CONGRESS of these great public resources than they are questions of abstract legal rights as to jurisdiction. In my view, I am not disposed to spend so much time or to attach so much importance to any abstract questions of State rights involved in this discussion; I am more disposed to figure out the best possible way to administer and dis- pose of these natural resources in the West for the best and greatest upbuilding of the West and the nation as a whole, and I am not so particular, on any question of principle, whether the administration of these resources is under the direction of the States or the Federal Government. I believe that if investigation and study of any re- source indicates that the State can handle same better than the Federal Government, then let us give that right to the State. If it should appear, however, viewed from all standpoints, that such resources can be handled better by a Bureau Department of the Federal Government, then let us lodge the duty there. I am frank to say that as I see things now, I concur with Sena- tor Shafroth on this point, namely, that the net income arising from these resources, whatever form it may take, whether royalty or land tax, or tax on output, or otherwise, or in whatever way it is paid, should go to the upbuilding and benefit of the respective States in which these resources are situated. Now, that does not argue that the leasing system is necessarily improper or impossible ; it results simply in this : that the royalties, fees or whatever income is derived from the coal leases, for in- stance, over and above the actual cost of administration, shall go into the State treasury for the upbuilding of State institutions. If Colorado has so many hundreds of billions of tons of coal as has been stated here this afternoon, it is apparent that a very low rental, so low as to be scarcely felt by the consumer, would result in bring- ing into the coffers of the State a tremendous sum of money; I do not think the people are so particular as to who happens to be the lessor or the lessee of these resources, so long as the benefit derived therefrom goes to the people or community entitled thereto. One point I would not have you overlook, however, with re- spect to the present method of administering the coal land laws ; as you are all well aware, coal lands have been classified by the Geo- logical Survey and prices fixed at which they may be purchased under existing laws. Last week there came into my office a single check for $86,400 in payment for 320 acres of coal land in the State of Utah. You all realize that this is an extraordinary sale of Gov- ADMINISTRATION OF PUBLIC LAND LAWS 191 ernment lands. What becomes of this money as well as all the other proceeds arising from the sale of public lands ? It does not remain in the East for the building of shore defenses, but practically all of it is turned back into the reclamation fund and is again used in the West for the further development of the agricultural resources of that section of the country. Hence we see that we can not view this question of public land laws, price and income without taking a comprehensive view of the entire scheme. My inclination is to say too much on these lines when once started. I think all of these subjects are exceedingly important and far-reaching in their effect. They all deserve the most serious and careful consideration of the mining men of the country as well as members of Congress and Department officials. On the whole, I have the highest hopes that between and among able and conscien- tious men in Congress and Departmental officials, ready and willing at all times to give the best of their knowledge and experience of these subjects from the administrative end, backed by a sound, sane and conservative, but just and progressive public opinion, we will be able to work out these big problems in a way more to the satis- faction of the people of the West than we are doing at the present time. The Coal Resources of Alaska. W. R. CRANE. STATE COLLEGE, PA. An apparently well-informed individual on reading an article in a technical journal on the Matanuska coal field wrote to the editor inquiring in what part of the world the Matanuska field is situated; and accurate information regarding the coal fields is even more vague than the knowledge of their location. Such expressions as "literally mountains of coal" have been used rather indiscriminately by certain writers concerning the Alaska coal fileds. As a rule, however, the residents of that terri- tory are more conservative in their attitude and statements. The most exaggerated view that the writer heard expressed during a stay of a year in Alaska was in answer to a query where the best occurrence of coal could be found in the Bering River field. "Dig anywhere and you will find coal." The extent of the coal fields is largely an unknown quantity, although extensive areas of coal-bearing formations have been definitely located and are constantly being added to by new dis- coveries. There are fully 1500 square miles of coal-bearing for- mations and probably six times that area of coal-bearing forma- tions not known to contain workable coal. The best known fields are the Bering River, the Matanuska, Cook Inlet, Chignik Bay, large areas in the interior along the Tanana and Yukon Rivers, and certain areas in the extreme north- ern part of Alaska, particularly along the Arctic Ocean. The coals are largely of recent origin belonging chiefly to the Cretaceous and Tertiary periods, although limited areas occur in the Carboniferous and Jurassaic periods. The more recent coals are lignitic in character and comprise the larger part of the coal- bearing areas. Roughly it may be said that the fossil fields of the interior of Alaska are lignites, while those occurring along the coast or adjacent to areas of volcanic rooks and disturbed areas are true coals. The comparatively recent deposits of organic COAL RESOURCES OF ALASKA 193 matter have thus been matured by earth movements and through proximity to highly heated masses of igneous rocks and are now coal, although of a wide range of values. Considerable development work has been done in the Bering River, the Matanuska, Cook Inlet and Chignik Bay regions, but so far it has been very inadequate, even from the standpoint of proving the extent and value of the fields. That there are exten- sive deposits of coal in each of these fields is well known, but until thoroughly prospected their continuity and value will be largely problematic. In those regions where coal beds occur horizontally or at slight inclination and extend over large areas with uniformity of thickness and character, their development and working is a simple matter, but where the nature of their occurrence is extreme with respect to position and condition of the beds, where each foot of development work may reveal new and unexpected conditions, then before extensive operations can be hoped for, there must be imperative need of the coal and wide experience in the develop- ment and mining of difficult deposits. This may be considered a broad statement regarding the occurrence of the coal, but lit- erally true, for in every region visited the same conditions were found to exist, in some instances better, in others worse. There are portions of each field where the coal beds approach normal conditions, but they constitute the minor part and will probably be of sufficient extent to exert a predominating influence on the work of development and mining. In the Bering River field there are 49 square miles known to contain coal and 21.6 square miles of coal-bearing formations, in which no coal of importance has been found. The coals of this field are semibituminous, semianthracite and anthracite, and are of fair grade. From the standpoint of fuel value these coals are excellent, but their physical condition, so far as can be ascer- tained, is poor. The coal beds have been folded, faulted and trav- ersed by igneous intrusions, which, while resulting in aging of the deposits, have also seriously broken the coal and in many places rendered large areas worthless by burning to coke. The coals of many portions of the field are practically inac- cessible, owing to their location on steep mountain slopes and rugged ridges ; however, it is possible that the larger part of the 194 PROCEEDINGS AMERICAN MINING CONGRESS coal can be worked from the stream levels. Owing to the ex- cessive rainfall, the precipitation often exceeding 150 inches per year, the conditions are particularly favorable for vegetable growth, with the result that the mountains are covered with a mantle of moss as well as thickets of willow and alder, which seriously interfere with the work of prospecting, development and transportation. All of the lanre streams have as their source extensive fields of glacial ice practically enclosing the field, which, with the excessive rainfall, keeps them in an almost continuous state of flooding. The production of coal from the Bering River field has been very limited, probably not exceeding 1800 tons. Somewhat over 800 tons were mined by the Bureau of Mines for the Navy, to be used for testing purposes. A limited amount has been used locally and probably a still smaller amount has been shipped out of the country. The United States Geological Survey has made extensive tests, both chemically and physically, on the coals of this field. The results of some of these tests are given in tabulated form on page 205. The coals of the Matanuska Valley are semibituminous, bitu- minous and anthracite, and occur in a known area of 70 square miles. While the coal-bearing area in the Matanuska Valley ex- ceeds that in the Bering River field, being 300 square miles, yet there are probably more large coal beds and consequently more coal in the latter field. The principal occurrence of coal along the Matanuska River are found in the valleys of Boulder, Chicka- loon, Coal, Carbon, Kings, Eska and Moose Creeks. The anthra- cite regions lies to the eastward of Chickaloon Creek and on the slopes of the mountains east of Boulder Creek. The bituminous coals occur on Chickaloon, Kings, Carbon and Coal Creeks, while the semibituminous coals are found on Eska and Moose Creeks. As in the Bering River field the anthracite coal lies in the extreme eastern portion of the coal-bearing area or near the seat of greatest earth movement and igneous intrusions. The beds have been extensively folded and otherwise disturbed, and yet the coal is in fair condition physically. The bituminous coals have also been disturbed, and, even to a greater extent than the anthra- cite, they are consequently badly broken. The semibituminous coals, while standing at various angles and frequently highly COAL RESOURCES OF ALASKA 195 inclined, show less disturbance and are in good physical condi- tion, as is evidenced by their ability to resist wear when exposed to the force of swift mountain streams. While lying at a greater distance inland, the coals of the Mat- anuska Valley are in large part more accessible than those of the Bering River field, and being probably less friable, will undoubt- edly be the first to receive attention when the coal lands are opened for development. Aside from local consumption, which probably has not ex- ceeded 200 tons, the coal taken out of the Matanuska field is a negligible quantity. However, the Bureau of Mines is now engaged in mining from 500 to 800 tons for naval tests. The chemical composition and fuel value of the Matanuska coals are shown in the following table: (1) ANALYSIS OF MATANUSKA COALS Total Vola- Mois- tile Fixed Sul- Calo- Fuel Districts. ture.Matter. Carbon Ash phur. ries. B.T.U.Ratio. Chickaloon Creek. . 1.98 17.20 66.08 14.56 0.67 8260 14,868 3.77 Carbon & Coal Cr'k 4.20 19.72 65.26 10.82 0.42 6649 11,968 3.32 Kings Creek 1.45 22.77 66.40 9.38 0.67 7419 13,354 2.91 Youngs Creek 2.50 28.32 58.82 10.36 0.58 2.08 Eska Creek 6.08 35.41 49.78 8.23 0.42 6299 11,338 1.41 Moose Creek 7.04 35.45 49.10 8.41 0.32 1.39 Generally speaking, the coal deposits bordering on Cook Inlet are extensions of the Matanuska field, but of a more recent period. While lignitic in character, there are certain small areas that border closely upon semibituminous coal. This is particularly true of the coal found at Port Graham, which owes its more mature character to the close proximity of intruded masses of diabase and other igneous materials. Of the 304 square miles of known coal-bearing formations contiguous to Cook Inlet, by far the larger part is on the plateau of Kenai Peninsula, particularly on its southern and southwest- ern portions. Probably the best showing occurs on the north shore of Kachemak Bay and along the east shore of the Inlet. Extensive deposits are to be found on the Shuitna and Beluga flats and extend into the highlands and mountains to the west- ward, which area is known as the Tyonek field. (1) U. S. G. S., Bull. No. 500, pp. 89-91. 196 PROCEEDINGS AMERICAN MINING CONGRESS The deposits of this region show all of the gradations from unaltered wood, through brown coal and peat, to a fair grade of lignite. The ash-content ranges from 6 to 35 per cent, and con- stitutes the chief objection to their use as fuel, and particularly as steam producers. The lignite beds of the Cook Inlet field have suffered but little through earth movements, seldom having an inclination exceeding 15 degrees. Numerous local disturbances, as minor folds, occur and while faulting is not infrequently observed, yet the displacement is slight and rarely exceeds 10 to 12 feet. Practically the only coal produced in Alaska, aside from that mined for the navy, during the past summer, was mined at Port Graham on the Whorf property, which property has the added distinction of being the first coal claims allowed to go to patent in Alaska. Probably the field next in importance from standpoint of work done is the region lying along the shore of Chignik Bay and the lagoon of Chignik River. This field is in certain places 5 to 6 miles wide and at other points does not exceed one-half mile in width. Rising from the ocean level along the west shore of the bay, the coal-bearing formations increase in inclination until the en- closing mountains are reached, where they have been folded, faulted and crushed by the upheaval of igneous rock-masses. It is evident, then, that the condition of the coal must be similar to that in the other fields previously mentioned, and is in many respects much worse. The coal is bituminous and lignitic in character, and while of fair grade, has considerable ash. It be- longs to the upper Cretaceous period. Probably several thousand tons of coal have been mined at various points in the field, particularly at Whalers and McKinsie Creeks, and on Chignik River. The coal has been used to a limited extent for domestic purposes, but chiefly in the produc- tion of steam in salmon canneries and on tugs and ocean-going steamers. Coal has also been mined at various points on Bristol Bay. on the Bering Sea and along the Arctic coast. Rather exten- sive development work has been done at Unga Island, near the lower end of the Alaskan Peninsula, and at Herendeen Bay, also COAL RESOURCES OF ALASKA 197 on the peninsula, but without success. The coal proved to be both unsatisfactory in quality and uncertain in quantity. Opera- tions at both points have long since been abandoned. Whalers have for many years obtained coal at Corwin mines, Cape Lisburne, on the Arctic coast, although no systematic de- velopment work has ever been attempted. The coal beds of this region belong to the lower Carboniferous period. It is reported that a new coal field has been discovered at Yakataga, several hundred miles southeast of Controller Bay, and that the coal is similar in grade to that of the Bering River field. Further, the beds have probably not been seriously affected by earth movements, as they stand at moderate inclinations. While the possibilities of mining coal in this region are prob- ably much better than in a number of the other fields, and there are good harbor facilities, yet owing to the position of the coast at this point it is exposed to the fury of storm off the Pacific Ocean. Further, the close proximity of vast fields of glacial ice ensures an excessive amount of moisture, both rain and snow, with attendant disadvantages. There are numerous exposures of coal and lignite, principally the latter, on all of the large streams in the interior of Alaska. Coal is found throughout the greater part. of the course of the Yukon, also on the Colville, Koyukuk, Tanana and Copper River basins. The coals of the lower Yukon, and to a large extent its tributaries, belong to the Cretaceous period, and are probably largely bituminous in character, while the upper Yukon, Tanana and Copper River basins contain lignite coals and are largely Tertiary. Analyses of coal from practically all of the fields of Alaska are given in the following table : (1) ANALYSES OF ALASKA COAL. Mois- Volatile Fixed Fuel District & Kind of Coal. ture. Matter. Carbon. Ash. Sulphur. Ratio. ANTHRACITE. 1. Bering River, aver- age of 7 analyses. . 7.88 6.15 78.23 7.74 1.30 12.86 2. Matanuska River, 1 sample 2.55 7.08 84.32 6.05 .57 11.90 SEMIBITUMINOUS. 3. Bering River, coking, average age of 11 analyses 4.76 13.27 74.84 7.12 1.5l 5.68 ig8 PROCEEDINGS AMERICAN MINING CONGRESS 4. Cape Lisburne, average of 3 analyses 3 66 17 47 75 95 2 92 96 4 46 5. Matanuska River, coking average of 16 analyses .... 2.71 BITUMINOUS. 6. Lower Yukon, average ll analyses . 4 68 20.23 31 14 65.39 56 62 11.60 7 56 .57 48 3.23 1 90 SUB-BITUMINOUS. 7. Matanuska River, average of 4 analyses 6 56 35 43 49 44 8 57 37 1 40 8. Koyukuk River, 1 sample . 4 47 34 32 48 26 12 95 1 40 9. Nation River, 1 sample 139 40 02 55 55 3 04 2 98 1 39 10. Alaska P e n i n- sula, average of 5 analyses .... 2.34 ll. Cape Lisburne, average of 1 1 analyses 935 38.68 38 01 49.75 47 19 9.22 5 45 1.07 35 1.30 1 24 12. Anaktuvuk River, 1 sample 685 36 39 43 33 13 38 54 1 20 LIGNITE. 13. Port Graham, 1 sample ... 16 87 37 48 39 12 6 53 39 1 04 14. South eastern Alaska, average of 5 samples. . . 1.97 15. Wainwright Inlet, 1 l sample . ... 10 65 37.84 42 99 35.18 42 94 24.23 3 42 .57 62 1.02 1 OO 16. Colville River, l sample 1 1.50 30 33 30 27 27 90 50 1 00 17. Upper Yukon, Canadian, aver- age of 13 analyses 13.08 18. Upper Yukon, Circle Province, average of 3 analyses 10 45 39.88 41 81 39.28 40 49 7.72 7 27 1.26 1 30 .99 97 19. Upper Yukon, Rampart Prov- ince, average of 6 analyses 1 1 42 41 15 36 95 10 48 33 91 20. Seward P e n i n- sula, 1 sample.. 24.92 21. Chitistone River, 1 sample .... 1 65 38.15 51 50 33.58 40 75 3.35 6 10 .68 .88 79 22. Kachemak Bay, average of 6 analyses . ... 19 85 40 48 30 99 8 68 35 77 23. Cantwell River, l samole . . 13.02 48.81 32.40 5.77 16 fifi COAL RESOURCES OF ALASKA 199 24. Kodi ak Island, 1 sample 12.31 51.48 33.80 2.41 .17 .66 25. U n g a Island, average of 2 analyses 10.92 53.36 28.25 7.47 1.36 .62 26. Tyonek, average of 4 analyses ... 8.35 54.20 30.92 6.53 .38 .58 27. C h i s t o china River, 1 sample.. 15.91 60.35 19.46 4.28 .32 (1) U. S. G. S., Bull. No. 314, p. 45. It is undoubtedly true that only a very small part of the workable coal beds have been discovered. There is hardly a prospector who penetrates some remote and unfrequented region but what brings back word of having seen evidences of the occurrence of coal. It is evident that much of the high-grade coal in Alaska has resulted from local conditions, such as earth movements, intru- sions of igneous materials and proximity to masses of highly heated rocks, rather than to the slower acting geologic phenomena more generally responsible for the production of coal under normal conditions. It is but natural then that this intensive production of coal should result disastrously in its physical condition, thus materially reducing its value in that the amount of small coal is greatly increased. The development and mining of the coal has also been rendered much more difficult by the folding and faulting of the beds. Much of the bituminous coals, particularly in the Bering River and Matanuska fields, is suitable for coking and may thus increase the value of such coals by extending their use. Should the condition of the coal not change materially in depth, which is unlikely, it would seem that to increase its value and con- sequent utilization, coking and briquetting will have to be resorted to. The production of coal in Alaska has amounted to probably 22,727 short tons to date. A large part of this coal has been con- sumed locally, although probably over 2,500 tons have been ship- ped out of the country for testing purposes. The development of the coalfields in various parts of Alaska will depend largely upon local needs, but their proximity to min- ing districts will make possible the local treatment of the ores, thus reducing the cost of handling and shipment. The large de- 200 PROCEEDINGS AMERICAN MINING CONGRESS posits of low-grade copper and iron ores, known to exist at points not easily served by railroads connecting with the coast, might be worked to advantage with fuels near at hand. Those fields lying near the coast or easily accessible to tide water could readily find a foreign market provided the coal is of such grade and in such condition as to permit of competition with other available fuels. Alaska is popularly known as "the last frontier of the United States," and in spite of the large amount of publicity it has received during the past few years, it will probably remain a territory largely unknown by the people of the States and poorly provided for by the Government. The welfare of her people, now numbering nearly 65,000, has apparently been hardly considered, with the result that the growth in permanent population has remained practically stationary for several years. In the ad- ministration of the internal affairs of this territory the Govern- ment has not exercised a liberal and progressive policy, but rather an obstruction policy. The coal lands have been with- drawn from entry, the forests are being conserved by the imposi- tion of well-nigh impossible regulations, while the laws govern- ing mining claims (placer and lode) are inadequately known and administered. It is a country little known and so far removed from the seat of Government that accurate information regard- ing and interest in its pressing needs are largely wanting. Un- fortunately for Alaska, the development that was well under way was begun in an extremely inopportune time, being checked and throttled by the radical conservative policy of a few years ago. Alaska stands in urgent need of an application of the "square- deal" idea, which is now being strenuously advocated by her fair- minded people and by the friends of good government. The home-rule form of government recently inaugurated puts the Alaskan Legislature in the position of an advisory board with powers of recommendation only. The establishment of a commission with administrative powers similar to those of the Panama Canal Commission has been advocated. Alaska is, however, a large territory, over twice the size of Texas, of rugged surface and exceedingly irregular outline, which renders the administration of law difficult and unsatisfactory, owing to lack of means of communication and transportation. Further, Alaska is a new country, not only with respect to the development of COAL RESOURCES OF ALASKA 201 her resources, but new geologically, as is evidenced by the vast areas of mountainous country and rock-strewn plains, covered in turn with moss and sparse growths of spruce, willow and alder. The problems that confront those responsible for her develop- ment are largely for the engineer to solve ; as, providing means of transportation by land and water, developing the mines, main- taining the fisheries, building dock and coaling stations, etc. The success of various engineering commissions has probably been largely responsible for the suggestion of a similar commission to take charge of the development of Alaska. Following the development of the mineral and fuel resources will come the inevitable demand for agricultural development. While the areas suitable for agricultural purposes are limited, due to excessive rainfall in certain localities and a universally pro- tracted winter season, preventing the proper curing and matur- ing of certain cereals, yet there are large areas where such con- ditions exist only in part. There is, however, much land suitable for grazing, which may ultimately solve some problems now vex- ing the people of the United States, such, for instance, as that of meat supply. Transportation by water and rail is the crying need of Alaska. Roads, both wagon and rail, are of infrequent occur- rence and very inadequate, and even the small beginnings made have been obtained largely through the subterfuge that they were to be used for military purposes. As practically no coal has been shipped from Alaska, and there is no immediate prospect of the opening of the fields and the production of an output in ex- cess of local consumption, no well-defined and organized action has been taken looking toward the handling and marketing of the coals when operations actively begin. The marketing of Alaskan coal, owing to conditions peculiar to the location of the fields, will prove a difficult task in many respects. Many of the harbors are icebound for several months each year. The Bering River often discharges large quantities of ice into Controller Bay, particularly during severe winters. The effect of ice-floes upon long lines of track made necessary by ex- tensive shoaling, which are supported by piling and connect the shore with the docks, would be severe. On Cook Inlet, practi- cally all harbors above 60 degrees north latitude are blocked with 202 PROCEEDINGS AMERICAN MINING CONGRESS ice for two or three months during the middle of winter. Of the many excellent harbors on the Pacific coastline few are suitable for the trans-shipment of coal, owing to the fact that they are inaccessible from the interior, as well as not desirable for dock construction by reason of high tides, ice and extended shoaling. At present the coal lands of Alaska lie untouched ; un- limited supplies of fuel needed for the development of the resources of the country and withheld from its proper and legitimate use, all because of an obstructive policy rather than a constructive policy, that is forced upon this far distant territory. British Columbia and Australia coals are being sold in Alaska for as much as $20 per ton in the more remote parts, which includes the duty levied upon it by the Government, besides an additional Territorial tax of lOc per ton. Verily this is "carrying coals to Newcastle," and it is safe to say that it is not appreciated by those who are striving to develop the country. Too great hopes and expectations must not, however, be placed on the advantage of being able to use the coal for home consumption, for unless there is some means of regulating the price it is doubtful if any material relief will be experienced. When the coal becomes available, even for the home market, it will have to be sold in competition with foreign coals. It is claimed that under stress of competition British Columbia coal could be sold in Alaska as low as $5.00 per ton, which is un- doubtedly as cheap as the Alaskan coals could be placed on the market. This could, however, only be possible when the de- mand has reached such proportions that it could be purchased by the cargo of 4000 tons. Norwegian and Scandinavian bot- toms could be secured to handle the coal by the cargo at a cost of $1.50 per ton. The contention is not that this will be done, but that it could be done. There are advocates for and against Government owned and operated railroads and the leasing of coal lands. Of the former it may be said that it is doubtful whether private capital will be overanxious to go to any great expense to provide trans- portation for the development of the coalfields and the handling of the coal under the present conditions of the world's market. With the extensive and constantly growing use of oil for fuel COAL RESOURCES OF ALASKA 203 purposes the market for Alaskan coal outside that territory is uncertain and problematic. There are at present but two railroads in Alaska and they do not connect with the coalfields, although it was the original intention that they should, and that they will ultimately is not doubted. The Copper River and Northwestern Railway, con- necting Cordova with Chitina and Kennicott, is 199 miles in length, while the proposed extension from Chitina to Fairbanks is 240 miles. This railway could readily connect with the Bering River coalfields by a branch line to Katalla, thence into the coal- fields, or by a more direct line up the Copper and Martin rivers. The former connection would have a length of about 65 miles, while the latter would be 50 miles, with a maximum grade of 0.3 per cent. Should Katalla, or some point on Controller Bay, be finally chosen as the termini, the haul would not exceed 25 miles from the coalfield to the seaboard. The Alaska Northern, formerly the Alaska Central Rail- way, extends from Seward on Resurrection Bay to Kern Creek on Turnagain Arm, a distance of 71 miles. In this distance, two summits were traversed: the first, encountered 12 miles north of Seward, has an elevation of 600 feet ; the second, 33 miles further on, has an elevation of 1060 feet. The grade from tide water to and over the two summits is 2 per cent. The proposed extension of this line to the coalfields on the Matanuska River, a distance of about 100 miles, would have a grade of 2.2 per cent. The railways mentioned above have as their coastal terminals most excellent harbors, not only having deep water and ample room, but could readily be fortified and mined. Both lines are standard-gauge and have been built under adverse conditions; such as forming a road-bed along the walls of precipitous canons requiring a vast amount of difficult excavation, the crossing of divides, traversing extensive gravel flats through which swift glacial streams are constantly cutting new channels, protection against earth and snow slides, and the necessity of considerable tunneling, which have made permanent railroad building both difficult and expensive. The leasing system is not altogether popular in Alaska, but could be made more popular by the elimination of some of the objectionable features. The principal objection to the leasing 204 PROCEEDINGS AMERICAN MINING CONGRESS system, and one that will always conflict with the conservation policy, is that of the limited acreage of the leasehold. Small operations are both inefficient and uneconomical. Large opera- tions require large sums for equipment and consequently large holdings to guarantee adequate returns and insure permanency of investment. It is safe to say that an allotment of 320 acres could not be considered if the coal lands are to be operated com- petitively. If a leasing system is adopted, it should by all means be so framed as to encourage large corporations entering the field, thus ensuring efficiency in operation and reduction of waste. Government ownership of mines and their operation by a com- mission would undoubtedly mean efficient work and would con- form to the broadest ideas of the conservation policy, but for many it savors too much of socialism. Regardless of the method finally adopted for the disposition of the coal laws of Alaska, it is generally conceded that the working of the coal should be carried on under the direct super- vision of the Federal Government, which, if further extended to the transportation of the coal to tide water, would eliminate many of the evils now existing in various mining regions of the United States. It will probably be some time before the coals mined in Alaska can compete in the world's market with the product of other fields, which are more advantageously situated, although when the solution of the problem of their proper utilization has been accomplished a market will undoubtedly be open for them. However, if a constant supply of fuel can be assured at reason- able rates to the home market, the development of the vast resources of Alaska will be both sure and rapid, which will attract people and capital and will thus build up a permanent population and give permanency to investment. COAL RESOURCES OF ALASKA 205 0) n i -i S I Oj eo < 1 i B 02 : 3^' tf 1 f S : S j : 7 . I a Is ft o t/5 LO oc 02 | o | i 1 5 tt jlatile and )mbustible Matter W s 5 02 ^^ T- J -* If? 02 >0 w t- ,_, o M s .. ., Total ^salarjos^caiLd^ not include as wages a*irder and ) 7. MIXE PRODUCTS. 1912, in net tons: a. Mined and used for operating b. Mined and sold to local trade c. Mined and shipped to market d. Mined and used in coke making Total net tuns and value t^~ FIU, ALSO THE BLANKS OX THE OTHER SIDE. 312 PROCEEDINGS AMERICAN MINING CONGRESS EXHIBIT No. 2 Continued. COKE PRODUCTS.- Number of ovena sed, .Number cf days operated, Number of coke workers, . Aggregate wages paid them, i Tons of coke: made, Value, . BY COUNTIES: If you operate in more than one county pl?ase indicate number and product in eaoh county: County) . Net Tons, County, _ .___. Net Tons, _ Connty, County, ~^ri7 ^^y- Net Tons, SPECIAL LABOR DATA, 1912. PLEASE FIlAj -THESE BLANKS FULLY The data may prove most important to tjie State in case of industrial unrest or business disturbance.--' Americans, i: NATIONALITY and number of employes,. 2, REGULAR workfcig fours per weok, _ J Negroes. _ _ 'fatt^S-J 'Foreigner*, "?;. 3. STRIKE and LOCKOUTS, a. What nature, . _^. b. When begun, c. Time lost, __ d. Men affected, e. Boys affected, f. Estimated" money loss, . Give tlie number of days the mine or quarry, or any part of the mine or quarry, was in operation during: tin year. Days when slnit down for repairs, or for other causes, ami there was neither drcflopmeiil icoric nor production, should not be included. Do not include Sundays and holidays, unless, plant was in actual operation. f>- i as- NUMBER OF HOHRS NORMALLY WORKED BY WAGE-EARNERS: (a) PER SHIFT (b) PER WEEK f2...... Give the prevailing practice followed during the'year. without attnrnptir.g to indicate rariatiops from this practice". Ail that it is desired to Jtaow is the practice generally prevailing in respect to the hours of labor of employees. * 3. Capital invested and area of mineral and other lands: AMOUNT OF CAPITAL, BOTH OWNED AND BORROWED, INVESTED BY OPERATOR .. %..u2- The answer should show the total amount of capital, owned and bin-owed, invested by the operator in the enterprise on the last day of tha business year reported, as shown by his boots. .Do not Include securities and loans representing investments in other enterprises. MlNEKAL AND OTHER LANDS: NUMBER OF ACHES OWNED OR LEASED BY OPERATOR. Include or.ly lands actually pertainine to the mining property covered by this report; not undeveloped lands elsewhere owned by the sains operator. j O'EI> BV OPEKAT08. HELD CMIEB LEASE OPERATOR. " 1 * I- j _ MINERAL or. COAL LAND (ACRES) . ' C? v G,*J 0' 7" t7s^n^>J\ TIMBER LAND NOT INCLUDED ABOVE (ACRES) ' # /r /Ut^* 1)STL4 ^:: ..;:; OTHER LAND (ACRES) j *...-'.!- : ', i TOTAL (ACRES; - -. QxO < *^O ^..J.:. 7 -TZxTTZ^L-J / ! , 4. Salaried employees: Number, December 15, 19O9, as per pay roll, if data are not obtain- able for that day or month, give the data for nearest representative or normal day. and state day and month here .ii^J^tff^f^t^^r^^.^.t5. ~. ./...^.^...y . Men. Women. ^" ' ^ CLERKS, STENOGRAPHERS, AND OTHER SALARIED EMPLOYEES.. -^ TOT\L 6 '///*n^ 5. Wage-earners, including employees paid by ton, car, yard, or other unit: Number, December 1 5, ' 1 9 O 9 , a per pay roil. If data are not bbtahSaWe for that day or month, tfhre ata for same day as for Inquiry 4. Answers should include all persons working in connection rtth mine or quarry, wr-ether employed directly by owner or working for lessee, contractor, or other. Include overseers and foremen receiving waces and performing work similar to men over whom they have charge ; those whose duties are wbolly superriiory stouM be reported under second item of Inquiry 4. EMPLOYED DIRECTLY BY OPERATOR: ENGINEERS, FIREMEN, MACHINISTS, CARPENTERS, AND OTHER MECHANIC liIlNRRS, QCARRYMEN, AND STONECUTTERS . A BOVL cpovNo. DEI.OW noriiD. 3 .. ^ ??S*U^ Tlw- / 2 & MINERS' HELPERS (16 YEARS OR OVER) ?3.T.^ Aug./. ./../.. \ Sept. Oct.. Nov. . 4L. Dec. KllPLOYED OTHERWISE,. AS-*Y CONTRACTOR, ETC. Jan. Feb. ... Mar Apr. .. y - June July Aug. ... , MONTH. NPKBEB. Sept . Oct.. Nov. '. Dec... 7. Salary and wage payments: Total amounts paid in salaries and wages during the year Covered by this report. Wages should be ru-t wages, after deducting charges for supplies furnished by the company to miners or quarrymen and stonecutters, such as explosives, lamp o'l, UacUsmithing. etc.. as well as sharRea for power, hoisting, superintendence, etc. Do not include amount paid for contract work, if not done by the regular em pi. .yees, as the amount paid for such work should be reported under lua'uiry 9. See note to laauiry 5d supplies of.every descriptiott and fuel used during the year covered by the report for any purpose in connection with the development or ope ration of the-fltibe or quarry. If freight paid on materials is kept in a separate account, enter ia the; proper line below: otherwise include the cost in answers to the first tvvo items. Inctnde in the' first item the cost of the following materials: Lumt>er and timber used: for repairs, mice sup- ports, track ties, and all other purposefl: iron and sPSel for blacksmithlng. rails, fross.sleeiiers, etc., for tracks and repairs: renewals and repairs of tools: explosives and oil u'seii directly or sold to employees; water for boilera and other pur- . poses; machinery supplies, etc. TOTAL COST OF ALL MATERIAL^ (OTHER THAN FUEL) AND SUPPLIES FSED DURFNO THE YEAR... $..... ..<.&>.j2. COST OF FUEL AND RENT OF POWER ________ , r ------------- . --------- * --- --- --------- - ------- $.^.t^.JU.^^...'.. AMOUNT PAID, IF ANY, FOB FREIGHT ON ArovE WHICH HAS NOT ALREADY BEEN INCLUDED ---- $. ..... ,^J TOTAL COST OF MATERIALS, SUPPLIES, AND FU-JL, AND FREIGHT ON SAME. PROCEEDINGS AMERICAN MINING CONGRESS EXHIBIT No. 3 Continued. d. Miscellaneous expenses: Amount paid during the year for the following items. This RENT AND ROYALTIES S .iou. Include avnounts p.-iid for rei.t of min*> or ouarry. and plant and buildings thereon, royalty Ou product, and for tuunel. water, transportation, and urainage privileges ' , ~ TAXES _ ' * & S- ? 3 7 CONTRACT WORK NOT INCLUDED IN ANSWER TO INQUIRY 7 / / luolude tunneling, sha't sinking, boring test holes, etc., during the year, if not done by employees hired directly by this operator. RENT OF OFFICES AND BUILDINGS, OTHER THAN AT MINE OR QUABRY, VSE or PATENTS, ,,,,,.^, ^ / /,-7>t-< TOTAL . . S j# ?-/' 9? 1 0. Development work ... $ ^7>r^^__ employees or by contract, which coct should be included in a, .Mvers to Inuuirii s7.:.aud'J. 1 1. Power: Mechanical power employed in or about the mine or quarry. Give all mechanical power employed, either owned rtr rent-d. including ihe nunherand horsepower of all tnglnes, motors, water wheels. etc.. used for hoisting, ventilating, pumping, or other puri>o&es. CLASS. NUMBER. TOTAL HORSEPOWER. a. POWER OWNBD Engines' Steam y?m^ / ?7/>Le_ >j . .'J 1 L n 'J . n Other power (specify kind) < j ^ 7A - ?a ^ 'TJsru^ ^ry^L^ b. POWER RENTED FROM OTHER ESTABLISHMENT^ Electric motors (include motors owned by the establishment but operated ~^Ej. / ?7 Other power (specify kind) W^t^- 'jtySTl.L c. NAME AMD ADDRESS OF-ESTABLISHMBNT SUPPLYING RENTED POWER : ...Ji-/./-^/~tt. / ^-^L-^l/C^- /? \/* , ,, ^^.-Q^^fty '/ ' d. NAME OF STREAM OR LAEK FROM WHICH WATER POWER is OBTAINED TO GENERATE POWER, WHETHER DIRECT OB ELECTRIC. Give answer regardless of question whether power is owned or rented from others. 12. Remarks: CERTIFICATE: THIS is TO CERTIFY that the information contained in this schedule and in the supplemental schedule is complete and correct, to the best of my knowledge and belief. ^~. /7 CSigniiture cf peraon^uroislung the iofonnation.) (Signature of S|x>cial Agcut or Eoumrator.^*r ! , (Till. Mrf add**..) UNIFORM REPORTS 319 EXHIBIT No. 4. Exhibit No. 4. Department of Interior, Bureau of Census Sup- plemental Report, U. S. Geological Survey. [See pages 320-321.] This report is not necessary, if some scheme of centralizing reports would be carried out, as practically all of this information could be secured from other reports made. 320 PROCEEDINGS AMERICAN MINING CONGRESS EXHIBIT No. 4.' Sryarlmrnt of (Ctimmmr anJi Cabor BUREAU OF THE CENSUS [LL2-356] Srjiartmf rtt nf ttyr .Untrrtur UNITED STATES GEOLOGICAL SURVEY BITUMINOUS COAL, 1909 SUPPLEMENTAL SCHEDULE A report must also toe made on the General Census should cover the same period. nle for Mines .and Quarries. Both reports WASHINGTON, D. C., Januarys, 19$. To avoid duplicate inquiries, the Geological Snrvey.'which collects annual statistics of production of minerals, and the Bureau of the Census are cooperating with respect to securing data for the year 1909. This schedule has been prepared by the United States Geological Survey and calls for information desired by the Survey, but such information will also be used by the Bureau of the Census in connection with the census statistics of 1909. The schedules will be presented in most cases by special agents of the Bureau of the Census. All answers will be held absolutely confidential. The Geological Survey will not publish them in such a way as to permit of the identification of the operations of individual establishments, or disclose them to any other individual or to any bureau or depart- ment of the Government other than the Census Bureau. The Census Bureau will also treat any information thus secured as subject to the provisions of law regarding confidential treatment contained in the act of Congress of July 2, 1909, for taking the Thirteenth and subsequent decennial censuses, as more fully set forth in the general census schedule of mines and quarries. Director of the Census. V. 5. Geological Survey. 1. Character of coal produced: Bituminous, semibituminous, semianthracite, splint, block, cannel, subbituminous, or lignite ............. 2. Products: Quantity and value of coal mined in 1909. (Include all marketable sizes of coal. Exclude only slack coal wasted.) QUANTITY. (Ton., 2,000 lb.) Loaded at mines for shipment Sold to local trade or used by employees . Used at mines for steam and heat Made into coke at mines by this establishment (report details on supplemental schedule for. coke) [OVK] UNIFORM REPORTS EXHIBIT No. 4 Continued. 321 3. Coal washed or otherwise cleaned Coal washed or cleaned (tons, 2,000 Ibe.) for market In 19O9: Washed coal obtained therefrom (tons, 2.0C Kind of washer in use .... K) Ibs.) ^l^T^lc^s^" Number of jigs or washers in the plant 'pZsr-XUL- 4. Character of openings to the works: DEPTH OR LENGTH. (Feet.) Shaft *?lsi-xuL Slope ^T^iryi^. Drift or level 'JQ/^cZf- s& ^ L ~ Open cutting or stripping . _ .. 22f~n^ ~jr ' /^XUL- 5. Machinery: KIND. NUMBER. FOB UNDERCUTTING: Pick or puncher machines. SfosTTU^ ^^st^r^---~ ]m^- FOB SHEARING: Pick machines . . (frnQ*^. Chain machines 3lsT7?^ , Quantity of coal mined by machines in 1909 (tons, 2,000 Ibs.) // J^ ^^/ / / 6. Railroads or waterways over which product was shipped : NAME OF RAILROAD OR WATERWAY. ( TS T L) j^^^Tt^^^^^*/- Jj/;.^^^^ ^^xl/^^^1^^^^ ^^^a^^Ss^'^*^^^ ~^*z^-^ .TBz^^s^-*--*^ | 7. Miscellaneous: If the mine was idle because of strikes in 1909, state number of men affected and days they were idle. >p- ff Number of men on strike w.Af^f. 6 - < - 7?A^t^_^ Date of strike: From 'x^V^ 8 Remarks: 322 PROCEEDINGS AMERICAN MINING CONGRESS EXHIBIT No. 5. Exhibit No. 5. Department of Interior, U. S. Geological Survey, Production of Coal, etc. [See pages 323-324.] This report could also be done away with so far as the operator is concerned, if only one authoritative report was made, as above outlined. UNIFORM REPORTS 323 EXHIBIT No. 5. CONFIDENTIAL DEPARTMENT OF THE INTERIOR UNITED STATES GEOLOGICAL SURVEY PRODUCTION OF COAL IN 1912 Please fill out replies to the following queries and return as promptly as possible In the inclosed envelope, which requires no postage. All replies are held confidential, only State and county totals being published. Name of mine State County Character of coal produced.. Name or number of bed worked . Disposition of product : Tons. [Include all marketable size% of coal. ' Ex- clude only slack coal wasterf.] //Q* OU a. Loaded at mines for shipment ........ - ..rTJff. .^rjfrf-tV b. Sold to local trade or used by employees ......... 3. . Products manufactured Dressers, Tables. (Please show kinds, amounts, etc.* of wood used on back of card) 2. What attempts have been made to utilize waste material for purposes other than fuel? ^'':^^. a P.L e .. arid red gum waste is made into toy croquet balls and tncillets. Date of this report Title (OVER) UNIFORM REPORTS 329 [Mi S! FUTURE, PAYMENT AT DIFFERENT PERIODS AHO PRESENT VALUE OF TAXES OK SAME AT 20 MILLS FOR. SAME, PERIODS. Calculated *r 6 Ftercerff. 333 the necessary greater development, more extensive haulage and ventilation, longer transportation, additional pumping, and greater cost of preparation; but certainly does indicate the irrationality of an assessment based on coal contents alone irrespective of condi- tions. The actual assessments per foot acre, which under various subterfuges are still persisted in despite the law as interpreted by the Supreme Court of the State have gradually increased from about $50.00 to the 1913 assessment in Luzerne County, in the Wyoming field, where the assessed valuation was actually fixed at an equivalent present rate of $250 per foot acre, about 20 cents per ton for all coal of all sizes estimated to be ultimately recover- able from the lands. Assuming that the average date of mining for all coal will be but fifty years hence, and that taxes must be paid on this valuation at the rate of but 20 mills, the present value per ton available in the ground on the basis of this monstrous assessment would be about $2.37, a figure many times greater than any possible value for mining purposes. Third : Valuations based on royalty values : This method which has been advocated by many engineers, appears at first sight eminently logical and proper; it has been objected to by the Penn- sylvania Supreme Court and hence cannot be legally used for as- 334 PROCEEDINGS AMERICAN MINING CONGRESS sessment avluation. (Penn'a Supreme Court Report No. 299, page 470) which says referring to royalty basis of valuation : "Its market value is its fair selling value for cash, not payable as roy- alty strung out through a long series of years, but payable at the time or as soon thereafter as the value could be determined. Such a method does not make allowance in undeveloped territory for the length of time coal may lie in the ground unmined, undeveloped and unprofitable. It is impossible to reduce to a scientific basis and to mathematical precision the elements of value entering into the present selling price of a tract of coal land. The question is not what earning power coal lands may develop in the future, but what they are actually worth in the market at present." Further, this method presents inherent difficulties and objec- tions, which remembering that under the Pennsylvania Law as- sessment on similar properties must be equal, appears to be in- superable. On a royalty basis of valuation the time of mining is the con- trolling factor in calculating values. As an example assume five exactly similar properties, each containing 2,000,000 tons of coal, to be worked out seriatim at an average of 100,000 tons per year, and each paying thirty cents per ton royalty, an annual royalty paid during the mining of each tract of $30,000.00; on the basis of Luzerne County, Pennsylvania, 1913 assessment, these would each be valued at $400,000, and would pay approximately $8,000.00 an- nual taxes up to the average time of exhaustion. Their present values, on a royalty basis, calculated at 6 per cent, would be as follows : Tracts Start Complete Mining Mining First 20 years Second 20 years 40 years Third 40 years 60 years Present Less Present Net Value Value Present Royalties Taxes Value $344,100.00 $58,880.00 $285,220.00 107,360.00 110,120.00 -12,760.00 3355000 126100.00 -92,550.00 Fourth 60 years 80 years Fifth . 80 years 100 years 10,430.00 131,080.00 -120,650.00 3 250 00 132 550 00 -129,300.00 Thus even without any taxes the coal held for future necessities is shown to have but small present value, and including the taxes to be paid, except the first assumed tracts, to be mined out within twenty years, is worse than valueless and would be held by the owners at a loss. This condition may be well illustrated by the following dia- THE TAXATION OF COAL LANDS 335 gram showing the present values, and present value of tax charge on $100.00 to be paid at a future date, as on lands held for reserve. Hence, the Supreme Court is unquestionably justified in reject- ing a royalty basis for assessment valuations and taking the five example tracts above, it is apparent that, depending only on the element of time, the valuations on this basis vary from a value of $285,000.00 to a loss of $129,300.00, and it is greatly to the finan- cial interest of the owners to have the properties exhausted in the shortest possible time, practically regardless of the ultimate yield, and they are financially fully justified in taking only the most avail- able and most easily and quickly mined coal, even at the cost of the utter destruction of thinner beds which may be interstratified with the thicker ones, and which would be irretrievably ruined by the removal of larger beds below them. Further, as a commentary on the justice and equality of an as- sessment based in royalty values, it is evident that a mere change of ownership, transferring a tract of coal land from a reserve for fifty years or more in the future under one ownership, to coal im- mediately available to another would radically change its assessed value. Also a valuation on present royalty rates may result in absolute tax confiscation of lands leased at the going rates of many years ago, in many of whch leases the taxes were covenanted to be paid by the Owners, as many anthracite leases made in the 60' s and 70's of the last century pay from 8 to 25 cents per ton on the larger sizes only, while present royalties vary from 35 to 60 cents per ton for prepared sizes, with about half these prices for pea and one-quarter for buckwheat coal. Fourth: Valuation upon capitalized estimated profits: This method of valuation has been proposed, but as far as is known, has never been applied to the assessment of coal land in Pennsylvania ; it has all the objections applying to royalty valuations, with the further very serious objection that the profits of mining enterprises are under similar conditions, largely dependent upon the manage- ment that such a basis for assessment would result in most un- justly penalizing good management which essentially involves good and economical mining with resulting lower losses and the recovery of larger percentages of the mineral in the ground. 336 PROCEEDINGS AMERICAN MINING CONGRESS j. 1 1 m lit * Conclusions: That it appears that none of the suggested or attempted methods of assessment has resulted or can result, in an equitable valuation fair and just to both the public and the owners of coal land, that even moderate taxation of the coal in the ground is opposed to all principles of conservation, as its effect is to put a tremendous premium on rapid mining, almost regardless of ulti- mate recovery, to encourage the destruction of poorer and thinner beds interstratified with the better ones, on account of the enor- THE TAXATION OF COAL LANDS 337 mous penalty entailed in slower mining, and to discourage by pro- hibitive penalties the holding of lands in reserve for the future necessities of the people. For these reasons it appears that the taxation of mineral in the ground is logically and economically wrong, leading to the rapid and uneconomical exhaustion of the mineral wealth of the country, and putting a premium on premature and wasteful exploitation, and that the proper method of taxation for all minerals would be a tax based on the value at the mine of each year's product a? the local rate of taxation assessed for that particular year, including an assessment on surface lands, outside improvements and machin- ery, the value of which are readily ascertainable, but not includ- ing any valuation of mine openings or inside improvements which are incidental to the mining process and which after the exhaustion of the mineral are of no value. Thus, a colliery producing 1,000,000 ton of anthracite in 1912, with a value at the mine of say $2,500,000.00, and with surface and improvements valued at $1,500,000.00 should pay taxes for the year 1913, on $4,000,000.00 valuation, regardless of the area of coal land tributary to such a colliery, and if for any cause the produc- tion in some later year should fall to $1,000,000.00 in value and the value of the surface and improvements decrease to $1,000,000.00 valuation, the taxes for the next year should be assessed on but $2,000,000.00 valuation. This suggested method of assessment and taxation of coal lands is of course clearly illegal under the present laws of the State of Pennsylvania, and would require special legislation to put it in force, and while not absolutely just, in that it assesses coal from thin and impure beds, costly to mine, at the same rate as that from the more cheaply mined thick and pure beds, would, if legalized, possess the inestimable advantage of doing away with all uncer- tainty and litigation as to assessed valuations, result in the payment of taxes in greatest amount at the times of greatest production and consequently greatest population and public need for money ; and by concentrating taxation on the land most actively worked and reliev- ing reserve land from its present crushing burdens, would tend to 338 PROCEEDINGS AMERICAN MINING CONGRESS the conservation instead of the dissipation of the irreplaceable coal resources of the country, by encouraging the complete mining of lands once opened, including all workable beds large and small, rather than the opening of the best beds on all lands to obtain im- mediate returns and avoid the burdens of accumulating taxation, even at the cost of the destruction of smaller and less valuable beds lying above the larger ones. Mine Taxation. H. M. CHANCE. PHILADELPHIA, PA. The formulation of an equitable system of mine taxation is per- haps one of the most difficult problems with which leglislative bodies are attempting to cope. It may be assumed without question that any equitable system of mine taxation would be satisfactory to all concerned, provided that it is one reasonably free from perplexing complication and un- certainties, is clearly constitutional and is one that can easily and uniformly be enforced. Such system must not conflict with the Federal Constitution, or with the Constitution of the State in which it is adopted, or with laws applying to other property. The possibility of devising a law which may be adopted by all of the States and Territories of the United States seems as yet to be quite remote, but the adoption of a practically uniform system for the whole country would be of such enormous" value to mine owners, operators and the general public that all mining organizations should co-operate to this end. The title "Mine Taxation" is intended to include the levying of taxes, the methods of fixing the levy, the methods of assessing values for taxation, taxation on the personal property, on the real estate, on mineral in the ground, on the output, on the gross value of output, on profits, on dividends and on indebtedness of mine operators and cor- porations. The Federal Government has at times been urged to levy taxes on production, on products transported from one state to another, on products exported from the country, on net earnings, on the capital stock of mining corporations, on the bond issues of corporations, etc. In the several states similar taxes have been imposed and others proposed, such as a tax on production (tonnage tax), or on products exported from the State, or on the gross or net value of output, or on profits or dividends, or on bond issues or other evidences of debt or on capital stock, or on personal property, or on real estate im- provements (buildings, etc.), or on the surface, or on mineral in the 340 PROCEEDINGS AMERICAN MINING CONGRESS ground, or on the value of mining rights, or on developed mineral, or a license tax to do business, or a tax on interest paid on debts, or on corporation franchises, etc. In addition to some or any of these, the mine operator or cor- poration always has certain special taxes levied or assessed in many different ways for local purposes, the most common of which are a road tax, school tax, poor tax, county tax, town or city tax, tax on animals, and special taxes levied for county or township bond in- terest, sinking fund, etc. Our form of Government requires the raising of revenue for the maintenance of the Federal organization and the performance of its functions, for the maintenance of the individual State governments, of the County government and of the governments of townships, boroughs and cities. The firm ingrafting into our laws of the Constitutional principle that taxation shall be equal, has generally protected the owners of mineral property, and the operators of mines, from forms of taxation that are confiscatory, but has not entirely prevented the collection of unjust and inequitable tax levies. We cannot, of course, hope to simplify the methods by which governmental revenues, federal, state and local are raised. No one class of taxpayers can hope to change or simplify the systems in use for these purposes in different parts of the country, and it is not proposed to discuss the inconvenience and inefficiency of the systems by which the actual levying and collection of taxes is effected. The present object is to invite discussion of those basic prin- ciples and facts upon which assessments for mine taxation are made and also to consider questions that are raised by the levying of specific and special taxes upon mining (and manufacturing) in- dustries. Generally speaking, all such specific or special levies are made by the federal or state governments. Local governments, those of counties, townships, boroughs and cities have rarely had the power to levy special or specific taxes, their power to tax usually being limited to a determination of the amount of the levy or levies to be made for the current year, and the amount or percentage so deter- mined is levied upon the assessed value of all property subject to taxation within the boundaries over which the local government has jurisdiction. MINE TAXATION 341 It is, therefore, apparent that so far as local taxation is con- cerned the owners of mineral land, or mines, and mine operators, are interested only in the way in which such properties are assessed, and the methods used by assessors in assessing the value of such property. A consideration of state and federal taxation, however, opens up a much wider field for discussion, involving the principles upon which taxation is based. Broadly speaking, the levying of special and specific taxes upon commercial, manufacturing and mining activities appears to be brought about by the desire to make those most capable of paying bear a larger share of the burden of taxation than that levied on the real and tangible personal property of such concerns. Such taxes are in effect similar to an income tax. The capital of the corpora- tion, or large individual manufacturer, includes not only tangible property, but also the good will of the business, the value of trade marks, patents, etc., which often largely exceed in value that of the real and tangible personal property. Taxes levied on profits, on output, on capital stock, on bonded indebtedness, etc., seem to be merely an expression of the determina- tion on the part of the public to collect taxes on these more or less in- tangible assets. To combat the application to mining industries of the reasoning by which such taxes are justified, it seems only necessary to insist upon the fact that mining is not manufacturing; that the miner, even when handing his product to the consumer prepared for use, is merely disposing of a portion of the assets upon which the business is based; that his supply of raw materials once exhausted cannot be renewed and that his business is one of limited life. Rarely indeed can a mining operation be said to have a "good will" of any considerable value, or one upon which there is any justification for the levying of a tax. Taxes levied upon output, or upon operative profits, may similarly be objected to on the ground that the apparent profit is not in reality a profit, but constitutes a portion of the value of the prin- cipal which is being taken out of the ground and distributed to the owners. All of the property of a corporate or individual miner is cer- tainly bearing its full share of the burden of taxation when it is equitably assessed by the system used in assessing other property, and is paying taxes at the same rate. 342 PROCEEDINGS AMERICAN MINING CONGRESS If the object of taxation be to raise revenue for governmental requirements, then the taxation of mining properties should be limited strictly to that imposed on other property. If, on the other hand, the power to tax is to be used indirectly to conserve the resources of a state or country for the use of the citizens of the particular state or country, then a tax on products exported from the state or country may be justified. If the intent be to force the payment of a large part of the required revenue by the mineral resources of a region, then taxes on production, or on exportation, may be justified. It is, however, difficult to see upon what basis the Owner of mineral property can equitably be called upon to pay a higher rate of taxation than the owner of non-mineral property, and such taxes must always appear unjust and inequitable. Similarly, any scheme by which the power to tax is used to discriminate in favor of those who happen to reside in the vicinity of mineral deposits may be most unjust to the majority of consumers who reside at a greater distance therefrom. The levying of taxes on the indebtedness of corporations appears to be merely a device to tax the income of the creditor holding such obligations at its source. It is an indirect and therefore an objec- tionable method of collecting an income tax. Taxes imposed on the franchises of mining corporations, and upon bond issues, upon production, upon "profits," upon franchise, upon dividends, etc., may consistently be opposed. Those interested in the development of our mineral resources may stand upon firm ground in opposing any form of taxation that tends to discourage or retard the opening and working of such deposits. Upon this ground all forms of taxation upon capital stock, license taxes to do business, may be classed with other plans for raising revenue from corporations in order to lighten the burden of taxation upon the individual. Such taxes are generally popular, but undoubtedly are discriminatory and unjust. Taxation for revenue only, without the incidental purpose of restraint or regulation, would certainly seem to be the only form of taxation that is just and equitable to the interests affected; if this be true, then all other forms of tax levy should be opposed as detri- mental to the community, as discriminatory and unjust to owner and operator, and indirectly as a burden upon those industries that use the products of our mines as raw materials. To tax the producer MINE TAXATION 343 of raw .materials is indirectly to tax the industries depending upon them and thus to raise the price to the consumer of the finished product. Increase in the price of such finished products lessens con- sumption, restricts the market and thus reduces the output of the mines. As reduced output invariably increases the mining cost per ton, the levying of suph tax reacts commercially to raise the cost to the consumer by an increase in price much greater than the amount of the tax. Assessments for Taxation. The limits of this paper do not permit an extended discussion of the methods used in different parts of the United States for assess- ing mineral property for taxation. In the eastern states it is generally the practice of township and county assessors, county commissioners, boards of tax revision and other officials whom the law designates for the purpose of fixing assessments of value for taxation, to assess mineral property, mining rights, etc., at a sum bearing some relation to the sales value at volun- tary sale. This practice is, however, by no means universal, the methods used differing widely in different districts and generally be- ing adjusted by the assessors to meet the views or wishes of a majority of the residents of the district. When in any district the property owners are anxious to sell or lease the mineral or mining rights, we usually find assessments for taxation take little or no account of the value of mineral deposits, but on the other hand, in districts where most of the known mineral deposits have been sold or leased to operators, the assessments are made at figures approximating the actual sales value, or at a definite fraction of such value. In some of the western states (as, for instance, in Nevada) an assessment of a fixed sum is by law placed upon each patented claim, irrespective of the value of the claim. In other localities, the improvements made by operators (owners or lessees) only are assessed for taxation, no assessment being made of the value of the mineral. It is obviously impossible to attempt any general assessment of values for taxation in most of our metal mining districts similar to that made in 1910 by Mr. J. R. Finlay for the State Tax Commis- sioners of the State of Michigan, not only because the cost of mak- ing the necessary investigation in many cases would be prohibitive, 344 PROCEEDINGS AMERICAN MINING CONGRESS but because in few districts is development work carried far enough in advance of the stopping of ore to demonstrate the presence of any considerable quantity of valuable (profitable) ore, and because valua- tion for taxation must necessarily be based upon known resources, not upon surmise nor upon the hopes or expectations of owners or operators. In the case of coal deposits it is relatively a simple matter to determine values that bear some relation to the quantity and quality of available or workable coal, yet in our coal mining districts throughout the United States we find an almost entire lack of sys- tem, or of the adoption or adherence to any well defined plan, for fixing such values. An investigation recently made for the purpose of compiling data covering the principal coal fields of the United States disclosed a most remarkable lack of agreement upon any plan for assessing coal values for taxation. Not only is there practically no uniformity in practice between any two states, but we find entirely different methods used in adjoining counties of the same state, and even in adjoining townships of the same county. The principle that seems most generally recognized by the local assessors is one which re- quires assessments to be so made as to be "satisfactory" to the tax- payers of each district. Paraphrasing a celebrated comment concern- ing the tariff, one is tempted to conclude that the assessment ol mineral lands for taxation "is a local issue." The writer regrets that time does not permit him to describe in detail the methods used for assessing the value of coal lands in the principal coal mining districts in the United States, as disclosed by this investigation, but hopes, at an early date, to present a complete summary of the information so obtained. The Taxation of Mining Property. D. L. WEBB, DENVER, COLO. There is a trite old saying that there is nothing sure but death and taxes ; nevertheless taxation has been a complicated, litigated and unsettled matter since "time whereof the memory of man run- neth not to the contrary." Perhaps no subject directly affecting the mining industry has received so little attention from mining men as that of taxation ; nor is there much, if anything, to be found on mine taxation in the books devoted to the subject of taxation, and less in the law reports. It would appear that after having "cussed and discussed" taxation from every possible angle, except mining, the world has determined that the taxation of mines did not square with any theory, and the valuation of mines for taxing purposes was so hopelessly complicated that the only solution was to adopt an arbitrary statute, without right, rhyme or reason, saying that mines shall pay taxes thus and so, and if the miner does not like it he may go to Court and show where the statute is wrong. The miner is in the minority; the majority is against him; the layman thinks that all that glitters is gold hence the mine should be heavily taxed, and so it is. In recent years some intelligent effort has been made to devise a fair system of mine taxation in at least one state, i. e., Minnesota. They mine iron in that state and, of course, did not face as knotty a question as if they had been dealing with the taxation of precious metal mines. However, they have devised a scheme which seems worthy of quotation here for the purpose of suggesting some ideas for the taxation of metalliferous mines. I quote from Report of the Minnesota Tax Commission, 1912, pages 84, 85, 86: "The difference existing between mines in geological con- ditions, character of the ore, and expense of mining made it impossible to consider all mineral properties as belonging to the same group or class. These different factors made it neces- sary to group mines having the same general characteristics 346 PROCEEDINGS AMERICAN MINING CONGRESS into a class, and to apply a different rate of valuation to each class in order to determine their fair taxable value. "Under this system mining properties are divided into three groups operating mines, reserves, and sub-reserves. These groups are sub-divided into six classes of operating mines, six classes of reserves, and two classes of sub-reserves, and a different rate of valuation applied to each class. "For the purpose of determining the valuation of operating mines, they are classed under six groups, as follows : "Class 1. Properties where mining is comparatively inex- pensive and the ore high grade. "Class 2. Properties where mining is comparatively in- expensive and the ore of lower grade. "Class 3. Properties where mining is somewhat more difficult and mining cost greater than in the case of Classes 1 and 2, and the ore of mixed grade. "Class 4. Underground properties where the expense of mining is comparatively low for that kind of mining and the ore of high grade. "Class 5. Underground or milling pit properties of dis- tinctly second grade, determined by a higher cost of mining and lower grade of ore than in the case of Class 4. "Class 6. Mines of inferior character where expenses of operation are high. "There is a corresponding reserve class for each operating class. Reserves may be briefly described as mineral properties that have been drilled and tested, and upon which measurable tonnages of merchantable ore are known to exist but have not been developed because of remoteness from or lack of trans- portation facilities, market conditions, or other causes that would render their present operation unprofitable. "Sub-reserves are a secondary class of reserves and are valued at a lower rate than either of the other classes. "In addition to reserves and sub-reserves, there is a class of unexplored lands that from surrounding deposits and other circumstances justify the belief that they may contain mer- chantable ore. In such cases the assessed value is usually placed THE TAXATION OF MINING PROPERTY 347 at a much higher figure than adjoining lands that are known to be outside of the mineral belt, or on lands that have been drilled and no merchantable ore found on them. "While the same rate is usually applied to the tonnages of each class, it is occasionally necessary to make some variation in the class rate in order to meet conditions sometimes peculiar to a single mine, the purpose being to make the assessment of each individual property as nearly equal as possible." Of course, Minnesota is assessing its mines upon the ad valorem system of taxation, as distinguished from some other state where the output theory of taxation is in vogue ; and while the ad valorem system may be feasible where iron and coal deposits are to be taxed, it is the opinion of the writer that taxation of the output is the only practical method for precious metal mines. However, the quotation seems to offer some suggestion which could be applied with profit where the law requires an ad valorem basis of taxation of precious metal mines. Under the early common law of England all gold and silver mines (called Royal mines) belonged to the King, by reason of his right of coinage; so in the United States all mines belong to the sovereign power the people. There are three ways for the sovereign power to gain revenue from its mineral deposits : 1. Public ownership and operation. 2. Lease and royalty. 3. Private ownership, with a division of the proceeds between the private owner and the sovereign power ; usually in the form of taxes. We are not interested in the two first mentioned methods. The question that interests us, in the third method, is how to make an equitable and fair division of those proceeds in view of the fact that ''mining is a lottery in which the prizes rarely reach the price of the tickets," and where there seems to be no good reason why the prize winners should not contribute liberally, and in the pro- portion to their winnings, to the support of the government. In these days the government finds no difficulty in passing a law to assess incomes and inheritances in proportion to their size. This legislation has been brought about, at least partly, by the 348 PROCEEDINGS AMERICAN MINING CONGRESS changed conditions existing in the United States to-day as com- pared to forty or fifty years ago. Professions, special privileges and what not are taxed to-day upon a theory peculiarly applicable to the object to be taxed. Why not a tax upon precious metal mines upon a basis adapted to the nature of the industry, the hazard of the business and the size of the income? A few salient facts cannot be disputed : The government derives no revenue, taxes or otherwise, from its mineral ground until sold to private individuals. Therefore it behooves the government, both national and state, to throw no obstacle in the way of speedy sale of its mineral ground, but rather to encourage its purchase with the hope of adding to the nation's wealth both from its sale and development. The value of that mineral ground to the government is estab- lished at $5 per acre (lode claims). Therefore, there seems to be no fundamental reason why the mere delivery of a patent from the government to the purchaser should automatically increase the value of the land from $5 to a great sum for taxing purposes. The ground may or may not contain precious metal of com- mercial value. Therefore, nothing but a nominal, or say $5, value should be placed upon the ground until the existence of precious metals of . commercial value is established. Location, or proximity to producing mines, is no adequate criterion of the value of supposed mineral ground. Therefore no zone or locality system of valuation of property has any merit in a mining territory. Mineral ground may be valueless to-day and invaluable to- morrow ; it may be invaluable to-day and valueless to-morrow. Therefore no system of taxation applicable to the usual classes of property subject to taxation can be fairly and equitably applied to mines. As was said by J. J. Thomas, Secretary of the State Board of Equalization of Utah, in a paper read before the Inter- national Tax Commission : "As the population in the West increased to that point where organization into government for the comfort and safety THE TAXATION OF MINING PROPERTY 349 of the people and the protection of property was necessary, naturally one of the first questions that arose was that of revenue, and in framing revenue laws the committee in charge looked to the older States, often the ones they had emigrated from, for their guidance. As a result, the laws upon revenue in force in those States, old-fashioned and otherwise, were with some minor changes incorporated into the laws of the territory just coming into existence. These revenue laws answered fairly well, until with the development of rich mines problems arose in taxing them which did not affect other classes of property. "The value of real estate could be ascertained with reason- able accuracy, according to its location, desirability and earning power. The value of improvements is, generally speaking, always in evidence, as also that of personal property when it can be found ; but to determine the value of mineral-bearing land, with its ores buried in the earth, was something beyond human power. There were so many chances for uncertainties about a vein or deposit of ore, in mountainous countries espe- cially, that the only way to determine its value was to dig it out, sell it and figure up what you had left; until that was done, no man could tell what a mine was worth. "Veins or deposits of ore have been found which upon the surface yielded fabulous returns, but which when sunk a few feet gave out entirely or changed to so low a grade that it would not pay to operate them. On the other hand, some of the richest and greatest producing mines in the West are mines which are of such low grade that they practically went begging for some one to purchase and develop them." Let us see how the problem has been approached in some countries and states : GREAT BRITAIN : The general custom levying taxes on the basis of receipts earned by a property is extended to mines, and the tax laid on the royalties received from operating the mines. Frank L. McVey, of Minnesota Tax Commission, citing Blunden, "Taxa- tion and Finance," chapter V. MEXICO: Under Mexican law no ownership of fees by indi- viduals is permitted. All mining land is owned by the government. The government sells the right to use the ground, for which a pay- 350 PROCEEDINGS AMERICAN MINING CONGRESS ment is made. A tax is laid upon the output and in case it is not paid the claim reverts to the government. United States Industrial Commission Report, Vol. XII, page 37. BRITISH COLUMBIA : The law is that every person owning, managing, leasing or working a mine has to pay 2 per cent, on the assessed value of all ore or mineral bearing substances raised, gotten or gained from any lands in the provinces which have been sold or removed from the premises, less the actual cost of trans- portation to mill or smelter and the cost of smelting or milling; so that practically 2 per cent, is charged on the net smelter returns of the value of the ore. All unworked crown-granted mineral claims have to pay a tax of twenty-five cents per acre annually. A full-sized claim of 1,500 feet contains 52 acres, so that the tax per claim is $13.50. Provision is made to permit the grouping of claims, not exceeding eight claims, upon which mining development to the extent of $200 worth of work per claim may be done annually in lieu of the taxes. J. B. McKilligan, Tax Collector of British Columbia. ONTARIO: The basis of taxation as laid down in the law of 1907 is net profits: "All mines which yield an annual profit above the ex- empted amount of $10,000, pay a flat rate of 3 per cent, on such excess. "The tax in any year is based upon the profits of the preceding year." In addition an acreage tax of two cents per acre is imposed on all mining claims in unorganized portions of the province, above ten acres in extent, including mining rights held separately from surface rights. Prof. O. D. Skelton, Queen's University, Ontario. KLONDIKE : At the present time a tax of 2 l / 2 per cent, is levied on all gold shipped out of the territory. Prof. O. D. Skelton. SOUTH CAROLINA: "General Assembly shall provide by law for uniform and equal taxation of all property ; Except mines and mining claims, the products of which alone shall be taxed." Constitution, Article X, Section 1. VIRGINIA: The Legislature may provide for the special and separate assessments of all coal and other mineral land. Consti- tution, Article XIII, Section 172. THE TAXATION OF MINING PROPERTY 351 WYOMING: All mines and mining claims from which gold, etc., may be produced shall be taxed in addition to surface im- provements ... on the gross product thereof as may be pre- scribed by law. Constitution, Article XV, Section 3. NEVADA : "Section 1. The Legislature shall provide by law for a uniform and equal rate of assessment and taxation, and shall prescribe such regulations as shall secure a just valuation for taxation of all property, real, personal and possessory, except mines and mining claims, when not patented, the proceeds alone of which shall be assessed and taxed, and, when patented, each patented mine shall be assessed at not less than five hundred dollars ($500), except when one hundred dollars ($100) in labor has been actually performed on such patented mine during the year, in addition to the tax upon the net pro- ceeds ; and also excepting such property as may be exempted by law for municipal, educational, literary, scientific or other charitable purposes." Constitution, Article X, Section 1. UTAH : A constitutional amendment was submitted at the election held November 5, 1912, and I believe carried, which reads as follows: "All mines and mining claims, both placer and rock in place, containing or bearing gold, silver, copper, lead or other valuable precious metals, after purchase thereof from the United States, shall be taxed at a value not greater than the price paid the United States therefor, unless the surface ground, or some part thereof, of such mine or claim is used for other than mining purposes, and has a separate and independent value for such other purpose ; in which case said surface ground, or any part thereof, so used for other than mining purposes, shall be taxed at its value for such other purposes as provided by law ; and all the machinery used in mining, and all property and surface improvements upon or appurtenant to mines and mining claims, which have a value separate and independent of such mines or mining claims, and the net annual proceeds of all such precious metal mines and mining claims shall be taxed as provided by law." MONTANA : "All mines and mining claims, both placer and rock in 352 PROCEEDINGS AMERICAN MINING CONGRESS place, containing or bearing gold, silver, copper, lead, coal or other valuable mineral deposits, after purchase thereof from the United States, shall be taxed at the price paid the United States therefor, unless the surface ground, or some part thereof, of such mine or claim, is used for other than mining purposes, and has a separate and independent value for such other pur- poses, in which case said surface ground, or any part thereof, so used for other than mining purposes, shall be taxed at its value for such other purposes, as provided by law; and all machinery used in mining, and all property and surface im- provements upon or appurtenant to mines or mining claims, and the annual net proceeds of all mines and mining claims shall be taxed as provided by law." Constitution, Article XII, Section 3. OHIO: "Laws may be passed providing for excise and franchise taxes and for the imposition of taxes upon the production of coal, oil, gas and other minerals." Constitution, Article XII, Section 10. LOUISIANA : "Until otherwise provided by the General Assembly by a vote of two-thirds of the members elected to each house, all operating mines of sulphur, salt or other minerals, all oil or gas wells, all stone quarries, sand, gravel and shell pits shall be taxed upon a percentage of gross value of the product at the mouth of the mine, well, quarry or pit." Constitution, Article VI, Section 9. It will thus be seen that in at least some jurisdictions it has been deemed feasible to tax mines upon a basis adapted to the nature of the industry, the hazard of the business and the size of the output. This method must, .of course, be subject to the same qualifications as in other "lines that the tax shall not be so excessive as to amount to confiscation or deter investment, nor the mode of collection vexatiously hampering. "The positive reason," says Professor Skelton, "for preferring the tax on the output in its greater certainty. Any estimate of the value of the minerals in the ground must, it is felt, contain a large element of guesswork diligent and scientific guesswork it may be, but guesswork still." THE TAXATION OF MINING PROPERTY 353 In speaking of Utah's method of taxing on the output, C. S. Patterson, of the State Revenue Board, said to the National Tax Association, September 3, 1912: "One of the most difficult subjects of taxation is the mining industry. It is, of course, axiomatic that the mines of the state should pay their fair proportion of the cost of gov- ernment, and at the same time should not be called upon to pay more. "This state seems firmly committed to the principle of taxing the net proceeds of mines, and we are not prepared to say that any better system has been, or in the nature of things, can be devised." The state of Texas considered, and, I think, adopted within the past year, a new mineral law, designed to encourage the industry and taxing the gross output at 5 per cent. In commenting upon the proposed legislation the El Paso Herald says, inter alia: "In framing the mining bill, the best experience and practice of the United States, the separate states, Mexico and Australia have been followed. "Compensation to the State is provided by royalty upon the output sold or disposed of; this is the ideal method, and supersedes all forms of fee ownership, patent, or tax." It seems that an output tax must be upon the "net" rather than the "gross" output, for it is only in assessing upon the "net" that the various elements such as expense of mining, cost of trans- portation, value of ore, etc., can be considered and an individual mine given the benefit of unfavorable circumstances as compared with other mines ; in short, it seems that assessment upon the "net" would be absolutely necessary for classification purposes, as evi- denced by quotation from the laws of Minnesota appearing in the forepart of this paper. Of course, tax collectors always complain that any law, assessing upon the basis of a net income, net return or net profit, encourages dishonesty upon the part of the person assessed, and renders the collection of the full tax due the government a difficult if not impossible task. The answer to this, however, is, that all the late laws levying taxes on net income, net returns, etc., are defining exactly what the term "net" shall mean, and prescribing what may and what may not be deducted from the "gross." 354 PROCEEDINGS AMERICAN MINING CONGRESS There seems to be no good reason why the tax upon net re- turns should not be graduated so that the mine with a large annual net return would pay its taxes upon a higher percentage basis than the mine with a small annual net return. It rather appeals to human nature that those most able to bear the expenses of govern- ment should be required to do so, and those less able should con- tribute in proportion to their ability, and this feeling has crystallized into positive statutory enactment within the past few years in inheritance tax and income tax laws. In the case of non-producing mineral ground the valuation for taxation should in no case be left to the discretion of the local assessor, for, human like, the assessor will invariably raise the value to the point where the rate of assessment will produce suffi- cient money to support the governmental institutions, however extravagant their respective officers may be. The law must put a limitation upon the value of non-producing ground beyond which point no assessing officer or body may go. And if that limitation should not be $5 per acre", i. e., the purchase and sale price, then what is the proper criterion? It is argued by some that a low valuation placed upon non- producing mineral ground has a tendency to encourage the monopoly of large territory without development thereof. On the other hand, it is argued, from an entirely different standpoint, that a high valuation placed upon mining property for taxation purposes is extremely discouraging to the industry. Let the merits of the respective arguments be what they may, it is the opinion of the writer that the amount of taxes which would be paid upon non- producing mineral ground, at either high or low valuation, would neither encourage nor discourage the development of the ground. For instance, in Colorado in the year 1910, the average valuation upon non-producing claims was $49.73 per acre, or $487.30 for a claim of ten acres. The average tax rate for the same year was approximately 4 per cent., or an average tax of $20 per claim. It is not thought that this tax of $20 (although in the opinion of the writer entirely too high) would influence the owner of an unde- veloped claim, one way or the other, in the development thereof ; for in the event that he determines to develop his claim, he faces, at once, an expenditure so many times $20 that that sum of money would have no bearing upon the question of his development. Until and unless some better method is devised for the taxation THE TAXATION OF MINING PROPERTY 356 of mining claims, it is my opinion that non-producing mineral ground should be assessed at a valuation not to exceed $5 per acre ; and that producing mines should be assessed upon their net output only, and then upon a graduated scale in accordance with the extent of the net output, and in no case to exceed probably 5 per cent. Mining Science of March 9, 1911, says: "Those hazards which distinguish the business of searching for mineral wealth and of locating property in the hope of discovering payable ore bodies afford one explanation of the difficulties which lie in the path of law makers and of admin- istrative officers to justly value mining property for the pur- pose of taxation. To value that whose value is often so elusive and to maintain a proper uniformity in the distribution of the burdens of taxpaying is one of the peculiar problems of the Commonwealth in which mines are among the main scources of wealth." That statement is quite true and should be continually borne in mind, when we criticize 'the taxing officers or complain of the apparent or real injustice in the valuation of mining property for taxation ; nevertheless a fair, reasonable basis for the taxation of mining property must be possible, it has not yet been worked out, and it behooves us to present our case to the officers of the Com- monwealth; to urge them to hear, consider and act upon our complaint, and in the end solve a problem which will do much to ease the troubles of the mining man. I am glad to have had this opportunity to jot down a few lines on this subject; it is one upon which it is almost impossible to secure data; but if what I have said will serve to start others to thinking along the same line, followed by discussions and de- bates, then a beginning will have been made and time will tell the result. Cordially, D. L. WEBB. Mining Investments. W. R. ALLEN, BUTTE, MONTANA. At the fifteenth annual session of the American Mining Con- gress, held at Spokane, Washington, November 25th to the 29th, 1912, a resolution was adopted authorizing the president of the Congress to appoint a committee to inquire into, and gather data upon, the subject of safeguarding the prospector, mine owner, legitimate promoter and investor from the operations of unfair and illegitimate promotions, and to ascertain the laws upon the statute books in the various states in the Union ; to submit a report to the next session of the Congress for appropriate action, recom- mending a law covering the subject or amendments to existing laws ; to assist the secretary and work in conjunction with him in furthering the interests of the mining industry along legislative lines. The president appointed the following-named gentlemen as members of the committee: W. R. Allen, Butte, Montana; William Scallon, Helena, Montana ; R. L. Collins, Spokane, Washington ; Lyman A. Sisley, Chicago, and Edwin A. Holter, New York City. Owing to the great distance between the various members it has been impossible to hold a meeting of the committee prior to the meeting in Philadelphia. The members of the committee, however, have exchanged ideas and submitted data by correspond- ence. We find a unanimity of opinion among mine owners, pros- pectors and investors for such laws and regulations as will tend to drive from the field that class of promotions that are not founded upon merit, fair dealing, or justice. We fully realize that no other occupation offers more oppor- tunities for success and large profits. Ever since the creation of man has the search for metal been carried on ; ancient history from the time of Tubalcain, the first great worker of metals, records MINING INVESTMENTS 357 human activities in the search for and the manufacture of minerals and metals that have been so useful and necessary to mankind. There are two great fundamental industries on which civiliza- tion is based and our very existence depends mining and agri- culture. These two industries must necessarily be carried on hand in hand, each working with and through the other. One cannot exist or be of value without the other. These two make up all the essentials, comforts, conveniences and necessities of life. The science of agriculture can, and indeed has, become a purely mathematical problem; its hazards are so limited as to admit of the smallest possible profits, with a reasonable degree of certainty; all that pertains to agriculture can be seen and com- prehended. It is far different with the mining industry. In dealing with this branch of our existence no well-defined law of nature can be followed; no satisfactory rule of man can be depended upon. It is true that the study of mineralogy, geology and chemistry has, and will enable the human eye, to a degree, to see further than the surface of the earth, but at best, all deductions made are more or less speculative. To formulate any set rule for the discovery of ore, or estimating the value of minerals not seen or uncovered, is impossible ; therefore, as the uncertainties increase so should the profits. The mining industry is not only important to the welfare of mankind, but absolutely necessary. Before the farmer can plough his field, or reap his grain ; before the manufacturer can weave the fabric or bolt the grist ; or the home-builder construct his place of abode; or the housewife prepare the meals or stitch the clothing; before cities can grow or be connected by the great systems of highways, steam or electric ; before we set sail upon the seas for foreign lands, the product of the mines and miners must be used; iron, steel, copper, lead, zinc, tin, and thousands of other metals used in manufacture and the arts, as well as the precious metals, such as our money standards or medium of exchange. To this array must be added the coal and the oil that are used for fuel, heat and light; the electric currents of the air that are harnessed through the agency of metals. The mining industry requires the genius of man, the brains of the world; perseverance, unlimited hope, and a great amount of capital. As a rule, mineral is not found in places of easy access ; it is found where volcanic action has so disturbed the earth's 358 PROCEEDINGS AMERICAN MINING CONGRESS surface as to make it, in many instances, almost impregnable by man. The millionaire, or man of moderate means, is content to leave the unexplored fields to that intrepid, dauntless, fearless and courageous body of men known as prospectors, buoyed by hope, with unbounded enthusiasm, and encouraged in the belief that they will discover mineral. This army of Argonauts is found wherever traces of mineral exist, toiling without certainty of reward, suffer- ing hardships and enduring privations ; but few realizing their dreams. Throughout all mining regions rest the dust in unmarked graves of the prospectors who have passed from life without re- ward. As we enjoy the implements of modern civilization, little do we realize the blasted hopes, the disappointed lives, the unpaid labor of the prospectors that have been imprinted upon the tablets of progress and time before the results of their labor could be put to commercial use. Not only every miner and mine owner, but civilization itself should encourage and assist the prospectors ; to that end laws should be framed for their protection, as well as the protection of the investor. Our endeavor should be to put the investor in touch with the prospector, and the prospector in reach of capital. One is as necessary in the development of the industry as the other; one is the pioneer, the other the builder. Thousands of prospectors, who will never be able to accomplish anything in their lifetime, could develop properties of great worth and value if they only had the necassary funds. Millions of acres, particularly in the western states and Alaska, contain hidden treasure that cannot be reached by the prospector's pick, yet by surface indications he knows full well of the mineral existence. While great is the known mineral wealth of this country, but a small portion has as yet been discovered. Large cities will yet be built; billions of wealth will be poured into the world's treasury from undiscovered and undeveloped mines. We should not, by laws, harass, but rather assist and en- courage in the development of the mineral resources ; lend en- couragement to the prospector, protect and assist him in the development of the mining industry. There are three necessary factors : the prospector, the promoter and the investor. The legiti- mate, honest promoter who, after careful investigation, finds a prospect worthy of development and enlists the necessary capital, is entitled to his reward : he is entitled to some of the credit that MINING INVESTMENTS 359 is due those whose endeavors go to make this industry great. The investor is entitled to more than ordinary returns upon his invest- ment ; he has no absolute assurance ; he may lose all or he may receive enormous returns; he is entitled to every safeguard that can be reasonably thrown around him. There are many who invest in mining propositions who do not know the difference between a mining prospect and a developed mine. A developed mine is a commercial proposition, operating upon a commercial basis and returning certain annual premiums. In mines of this class the element of speculation is past, also the element of chance for large returns. The investor, in the developed or developing mine is in the class that may hope for large returns, but there must always be associated an element of chance. If, after proper investment of the funds, careful and competent management, the project fails to develop, there should be no complaint on the part of the investors, for they would have willingly and gladly accepted any returns, no matter how large. The great problem that confronts us to-day is how to bring our mineral resources, and their necessary development, to the attention of the investors, and present them in such manner that they may thoroughly understand all conditions under which they make their investment, and then abide by the results with the satisfaction of knowing that the money was actually expended in the development or benefit of the property. While I have not the figures at hand, and I doubt if they are obtainable, if the money lost from mercantile business failures, as reported by the commercial agencies, could be compared with the money lost through legitimate mine development, and this com- parison be compared with the profits on each line pro rated with the investment, I am of the opinion that the balance would be on the mining side. I am of the opinion that the percentage of failures would be smaller in the mineral column. The great question before us is how to prevent unscrupulous and conscienceless promoters from entering the field and fleecing the public, thereby doing the mining industry and legitimate mine promoter and prospector irre- parable injury. Any field of endeavor that promises large returns will always attract the criminal and dangerous class of promoters that prey upon the unsophisticated and gullible public. I hail from a mining state, have been associated with mining men, and have been connected with the mining industry all my life. In that state we have seen the discovery and development of 3<5o PROCEEDINGS AMERICAN MINING CONGRESS the greatest mines the world has ever known. With the large number of men, both practical and theoretical in that state, it would be impossible to select a board, or commission, or delegate the powers to one man that could intelligently and fairly pass upon the merits of any proposition in its promotive stage to the extent of guaranteeing to the investors that they would receive a stipulated return upon their investment; all that could possibly be hoped for would be opinion that the plan of promotion seemed fair and reasonable. Even mining engineers, the greatest known, have reported unfavorably upon many of the greatest producers we have. For the last thirty years predictions have been made that the Butte Mining Camp would play out; that the ore bodies would not extend downward ; that the values would not remain ; but to-day Butte, contrary to the many predictions of many eminent geologists and mining engineers, has larger veins and richer values than ever known before in the history of the district. When men schooled and trained in the science of mining and geology make such mistakes and miss the mark so far in their estimates and calculations, can we safely delegate the power and authority to a board or commission of three, five, seven or a dozen men? Worse still, to the judgment of one man, who, perhaps has had no experience or training whatever in the mining industry? Yet to-day, in many states in the Union, has almost arbitrary power been vested in such hands that it is well-nigh impossible to enter some states with any kind of a mining proposition wherein the sale of stock is involved. It is my desire, and it is the desire of every delegate in this Congress, every legitimate mining man in this nation, to eliminate the wildcatter and the promoter of worth- less mining propositions, but the industry is too great, the products too necessary to retard the growth and development by enacting such laws as will make it prohibitive for the small mine owner and prospector, through his honest, legitimate promoter, to reach the investing public. After a careful study of the laws now upon the statute books in a number of states; after watching their operations, I am of the opinion that the law that will best serve the interests of the prospector, mine owner and legitimate promoter, and at the same time fully protect the investor, will place no arbitrary powers in boards or state officials. I am of the opinion that a law should be enacted by every state in the Union, governing the sale of mining promotion stocks that will give to the mining investor accu- MINING INVESTMENTS 361 rate information of the plan of organization, amount of capital stock or bonds, amount to be paid for the property, either in stock or cash, condition of titles, whether held by lease and bond, owned outright, patented or unpatented, amount of development, names and references of officers and directors, salaries paid to officers and managers, and all other information concerning the company, leaving it to the investor to decide for himself, as he must do in any other investment or business venture, as to the honesty or capability * of the management, the possibilities and probabilities of success ; this procedure will force mine owners and promoters to produce engineers' reports and any other information bearing upon their property. Most all states have laws dealing with misrepresentation and fraud, and any one who files with the state department, for the purpose of securing a license to sell stock, information concerning the property that is erroneous, may be prosecuted under the laws covering fraud and deception. The laws governing the sale of stock or bonds may be divided into two heads : publicity and super- vision. Publicity is essential and it may be profitably used to the benefit of all ; it can be made a fountain head in each state whereby the investor can gain all the information that he may desire, con- cerning any security offered, but I seriously doubt if it would be advisable to place the power with the state officer or board to pass upon the question as to whether or not the securities offered are a good investment. Again, a man, board, or commission in Illinois, Pennsylvania, New York or New Jersey, could not intelligently say that a mining proposition located in Montana, Colorado or Cali- fornia is not meritorious. I believe that state departments should require and have on file at all times, information that tends to enlighten the investor and give the facts, such information to be presented in affidavits by the officers of the corporation desiring to sell stock. Thirty-six states in the Union have under consideration laws governing the sale of stocks, bonds and securities. Kansas adopted the first "blue sky" law, known as the Dolley law; the law is administered under the state bank examiner or commission. Other states left the question to the Secretary of State, secretaries, com- missions and others. In Montana the administration of the law is left to the state auditor or commissioner of insurance. Arizona has a law adopted in 1912 following very closely the Kansas law. Arkansas has provided a "blue sky" law, which went into effect in 362 PROCEEDINGS AMERICAN MINING CONGRESS March, 1913; the Colorado Legislature passed a "blue sky" law the day before adjournment, but it was vetoed by the Governor. Idaho, Montana, North Dakota, Vermont and West Virginia have enacted laws similar to the Kansas law. Iowa has a law that is more comprehensive than almost any of the laws that have been adopted. Maine has passed a law to go into effect January 1, 1914. Michigan, Missouri and Ohio has adopted laws that are now in effect. Oregon has passed a law which becomes effective next March. South Dakota has adopted a law which contains restric- tion of the Kansas law of 1911. Laws have been under considera- tion by the Legislatures of North Dakota, Illinois, Massachusetts, New Jersey, Pennsylvania, Rhode Island and Wisconsin ; the Legis- latures of Delaware, New Hampshire, New Mexico, North Caro- lina, Utah and Wyoming adjourned without enacting laws upon the subject; Indiana passed a law, but it was vetoed by the Gov- ernor, who appointed a commission to study the subject. The Minnesota Legislature adjourned without getting to any agreement upon the "blue sky" laws; the New Jersey Legislature adjourned without enacting any legislation, notwithstanding the recommen- dations of President Wilson when he was Governor of the state. Mining Costs. J. B. L. HORNBERGER, COMPTROLLER PITTSBURGH COAL COMPANY, It is with some misgivings that I undertake, at the request of the officers of this Convention, to lead in the presentation of the subject "Mining Costs"; not that the subject is one unworthy of your time and attention, nor that my study of it has been meagre or superficial, although doubtless a more experienced and capable leader might easily have been chosen for the service, but because the matter of the proper construction of mining cost accounts and the use of the same by those vitally interested does not usually re- ceive the attention and consideration which it deserves. Perhaps this fact influenced your officers in introducing a paper on the sub- ject and inviting your attention to its consideration and discussion. However this may be, I believe that the subject is one of great im- portance and I therefore have consented to discuss it, more in the hope of emphasizing some things which we all know more or less, but sometimes forget, than of presenting any new or startling views upon it. First. Who are interested in mining costs? The Foremen, Superintendents, General Managers, executive officers, Boards of Directors and stockholders the viewpoints of these respective classes are different, but all are, or should be, greatly concerned to secure the truth, the whole truth and nothing but the truth. Care- lessness and indifference as to statements made are, in the last analy- sis, of the same texture as wilfullness-and misrepresentation and frequently lead to the same disastrous results. Second. How may these statements be made to most accurately and clearly set forth the information concerning actual conditions, which is so necessary to those whose capital and repu- tations are at stake? The limit of time you will fix for the consideration of this sub- ject, among the many other important matters which are to engage your attention, makes it necessary for me to avoid details as much as possible to outline rather than elaborate. 364 PROCEEDINGS AMERICAN MINING CONGRESS Interest Interest on capital invested in lands, mining rights, plants and equipments, and discount on bonds issued against such investments, should hot be charged to mining cost. Interest on bonds sold for the purpose of constructing specific plants is commonly charged to such construction cost up to the time when the plants are ready for operation, but this practice easily runs into an abuse and a mis- representation to bondholders, stockholders and the public. An operating company will not err but rather commend itself to all con- cerned by holding to an absolute rule not to capitalize interest under any circumstances. Many companies in the past, which sold bonds for less than face value, charged such discount to Property or Construction Account, but this practice is now less common and will doubtless gradually disappear in companies which wish to be credited with conservative management and frankness in reports to stockholders and the public. Taxes Taxes in an operating company should be charged to Opera- tions, never to Property. The amount of tax chargeable to the operation of a given mine ought to be, as nearly as may be, the tax upon the land which will ultimately be operated through that mine, and the tax for a given year should be apportioned in equal amounts over the divisions of the year for which cost statements are made. Royalty or Property Depletion The value of coal or mineral rights, at cost, should be extin- guished at a charge to Operations in a fixed amount per ton or per acre as the property is exhausted. Some companies have revalued lands on their books and so created a surplus. This, in probably almost every case, was not a wise thing to do. Assuming that the transaction was thoroughly honest in intent, properly shown on the books of the company as a surplus not derived from operations, and properly followed up by increased charges to future operations for exhaustion, it will appear in the last analysis to be simply reach- ing into the future. I would say, therefore, that while such re- valuation in some cases may seem to be justified, in most cases it is a thing which ought not to be done. If the lands are really worth more from year to year than their first cost, the fact will be reflected in increased selling value of the product, which, in so far forth, will increase earnings. The difference of value, believed or MINING COSTS 365 hoped to exist, ought not to be put into Surplus Account in advance of actual sales of product, thereby increasing, in a fictitious way in corresponding amount, the mining cost of the future in other words, it may be said to be always wiser and more conservative to book earnings as they are actually realized, not as anticipated or hoped for. Depreciation of Plant and Equipment There is, perhaps, no single phase of accounting, whether of mining or manufacturing companies, more complex or trouble- some, than this matter of Plant and Equipment Depreciation ; hence nothing in which there are more differences of opinion and method of procedure among operating companies; I might add nothing in which managements and accountants may more easily, and with the best intentions, deceive themselves and each other. The views, plans and methods herein set forth are, therefore, not necessarily standard they are more or less the result of my personal study and experience. Up to the time when a mine is placed on an operating basis, that is when it is ready to produce the daily tonnage for which its development, plant and equipment were planned- (regardless of what it actually does produce at that time, determined perhaps by the law of supply and demand, labor or weather conditions or car supply) all expenditures for development, plant and equipment should be charged to Construction Account with credit to that Account for product sold in the full sum realized for the same. After the projected development has been completed and the mine placed on an operating basis, all expenditures made during the whole course of its life, whether for development, air shafts, road extensions, mine cars, mining machines, motors, power houses, power equipment or lines, or anything that may be installed, should be charged to Operations, unless such expenditures result in posi- tive increase of capacity, in which case they may be charged to Capital Investment with a proper regard to the question of the length of time that such additions may reasonably be expected to serve. Further charges should be made to Mining Cost monthly in fixed uniform amounts, with credit to a Fund Account generally known as Plant and Equipment Depreciation Fund, for the replace- ment of capital originally invested in such Development, Plant and Equipment, or for the replacement of units which wear out or be- 366 PROCEEDINGS AMERICAN MINING CONGRESS come obsolete. The extent to which this fund may be used for replacements or renewal in kind must be determined by the rate at which the fund is accumulated. If the rate is low and a long period, perhaps the entire life of the mine, is consumed in charg- ing Operations with the full amount of the original investment (less salvage), obviously no replacements or renewals should be charged against or paid out of the fund all must be charged to Operations. If the rate be made high enough so that a much shorter period is consumed in getting into the fund the full value of the original investment through charges to Operations, certain replacements, renewals, or improvements may be charged against the fund. The company with which I am connected now follows the uniform rule of charging Operations with depreciation of plant and equipment at the rate of 6 per cent, per annum on net (or reducing) values, with credit to Depreciation Fund. This will cover into the fund about 70 per cent, of the original value in twenty years; it is contemplated that salvage values, that is, the values of all equipment scrapped, or removed for use at other points during that period, together with the remainder value, credited to the fund will make up the 30 per cent, or balance of original value not charged to Operations in the fixed monthly charges. We, therefore, do not charge any renewals or replacements against our Depreciation Fund accumulation, but charge them all to Operations ; when the charges are so large as to seriously impair monthly comparisons of cost they are spread over the operations of a few months. Labor In the Pittsburgh Coal Mining District labor costs fall into two general divisions, first, that which is paid on a unit basis of work performed, such as the scale rate for pick mining, machine mining subdivided into cutting and loading, and dead work, such as yard- age, room turning, break throughs, clay veins, etc., and, second, that which is paid on a per diem basis, such as motormen, drivers, general inside labor, tipple labor, general outside labor, elec- tricians, etc. It would hardly be profitable to follow the subdivisions of labor in this paper they differer, of course, with changing con- ditions and according to the viewpoint of the respective operators. MINING COSTS 367 Supplies All expenditures for Live Stock and Supplies, after the initial installation at a new mine, should be charged to Operations as made, although, for purposes of checking, and accuracy in monthly comparisons of cost, inventories should be taken at the close of each month and entries made debiting Inventory Account, with credit to Operations, for unused supplies at cost and for Live Stock in the service at a fair valuation, taking to account wear and tear. Fuel The mining cost statement at a mine depending upon its own power plant, which does not include a charge for coal consumed in the same is incomplete and apt to be misleading in comparisons with mines purchasing power from central stations. For this reason it is proper to charge the fuel at a representative value to Opera- tions, with credit to Coal Sales Account, notwithstanding that Operations have already been charged with all the items entering into the cost of the product so consumed. This treatment of the individual power plant fuel of course, must not be lost sight of in the general summary of business done. Insurance Fire, tornado, boiler and employer's liability insurance premiums are increasingly important as items to be taken to account in mining costs whether these hazards are covered by insurance companies or assumed by the operator. In the latter case a fund or funds should be created and maintained at a charge to Opera- tions in sufficient amount to pay all losses, and, conservatism sug- gests, to accumulate a reasonable surplus. General Office Expenses and Other General Expense General Office Expense and Other General Expense should be incorporated in mining cost statements in order to get a total outside amount of cost upon which to base selling values; they should, however, be shown separately under appropriate headings, not being included in any of the subdivisions of "Cost at Mine." In a company conducted exclusively as a mining company it is, perhaps, better not to differentiate nicely between that portion of General Office Expense which is chargeable direct to mining, such as the Operating and Engineering Departments, and the expenses of Departments of Sales, Transportation, Finance, Accounts, etc. In a broad sense, the base of all the company's business is the 368 PROCEEDINGS AMERICAN MINING CONGRESS production of its mines, hence all of its General Office Expense may properly be included as a part of its total mining cost. Form of Cost Statement of a Typical Bituminous Mine Pittsburgh District Operating Days Production in Tons of Run of Mine Tons \Y 4 " Lump % Small Sizes % Total Pick Mined Machine Mined Total Cost per Ton Pick Mining Machine Mining Yardage Room Turning Break Through Clay Veins, Spars, etc. Drainage and Ventilation Animal Haulage Mechanical Haulage General Inside Labor Tipple Labor General Outside Labor Supt., Clerks, Pit and Fire Bosses Mining Machine Repairs Mining Machine Expense Pit Car Repairs Pit Rails and Ties Pit Posts and Caps "T" Iron and Spikes Power Plant Expense Stable Expense General Expense at Mine MINING COSTS General Repairs Total Direct Charges Labor Supplies Fuel 369 Royalty Depreciation Taxes, Insurance and other General Expense General Office Expense Total The Federal Government and the Mining Industry. HON. M. D. FOSTER WASHINGTON, D. C. Mr. President and Members of the American Mining Congress, I greet you: The subject of "The Federal Government and the Mining Industry" is one that has been discussed so much and so often that I doubt if there is much left to be said on the subject that is new or interesting to you. It has been my pleasure to be a Member of Congress during the agitation of this subject in an effort to induce the National Legislature to do something for the mining industry of the United States. Believing that there should be more interest manifested in mining by the national government than was being given, it has been my pleasure to help along, as best I could, in this important work. Congress has been pretty liberal in appropriating money for most worthy objects in the past. Yet it must be realized that too often individuals and organi- zations go to the Federal Government for things that should be done by State, and the tendency to fasten upon the National treasury for all time to come many expenses that should be borne by the States seems to be popular in the country now. Many seem to think that the National treasury is filled by some means whereby nobody pays the tax. It is true that many activities, such as mining and agriculture, are better promoted by National aid in connection with the States and the whole expense is not intended to be borne by the National treasury. The agitation for a Depart- ment of Mines and Mining was started some years ago, principally by the metal mining interests of the West, which finally resulted in the establishment of the present Bureau of Mines in 1910. The determining factor at the time being the awful explosions and con- sequent loss of life in the coal mines. The Western mining interests, it is true, did not receive very much benefit from the first work of the Bureau, and has not been given the attention it deserves. In the Sixty-second Congress there was appropriated $50,000 to begin the work in the metal mining sections of the country. FEDERAL GOVERNMENT AND MINING INDUSTRY 371 This is but a beginning of the work in this great industry, and it is to be hoped that it will be the means of starting this work which will finally result in carrying it forward to greater results. In the ores of Colorado is practically all the radium of the world, and we have been permitting European countries to export this ore and extract the metal and bring it back to us for sale. This results because we have neglected this important branch of the mining industry. We should be extracting that metal from the ore of our own country and selling it to the world. The low-grade ores of the West have not been properly worked for the reason that the individual has been unable to do so profitably. If the National Government could assist these people to find some way of extract- ing the metal from these low-grade ores, it would be the means of adding millions to the wealth of the country. We help in agriculture, and why not in the mining industry which stands next in importance? Is it worth while? I think so, and your long experience teaches you there is no doubt of it. There has been objection in some quarters that the entering on the work in mining experimental stations in the West that some operators will be benefited; that is true in a general way, but the work done by the Government will be general in character, so that all interested will have the benefit, and the work will jnot be done for the purpose of exploiting the value of any particular mine. We all now recognize the importance of the experimental farm for the benefit of agriculture. Who knows the great possibility yet undeveloped in our Western country and the opportunity of adding millions of wealth to the treasury of our people if some systematic work can be done to advance the mining industry of that section. It is a recognized problem in the metal mining States that the treatment of what are known as the refractory or complex ores is one of difficult solution. The help the Government can lend to the solving of these problems or treating this class of ores we think would certainly be of great benefit. The knowledge gained by the work of the Government would be available for all. The burden is too big for the individual, and must be undertaken by the State or nation if we are to succeed. We believe in conserving the natural resources of our country, and yet no individual can be expected to do this work alone. Those engaged in the mining industry are confronted with the problem of how to treat the 372 PROCEEDINGS AMERICAN MINING CONGRESS complex ores so as to save the smaller quantity of metal, as you so well know by experience that the zinc smelter cannot treat the zinc ore so as to be able to save the lead, or the lead smelter the zinc, and the sulphur, arsenic, iron and manganese or similar substances are also lost. To help solve these difficult problems should be the aim of some Federal agency. Is it not worth an effort and the expenditure of a reasonable amount by the Federal Government to save this amount to our people and thus add so much to the wealth of our land? The importance of study in the conservation of our mineral resources is well known in the great loss in the low-grade ores. The large amount of coal left in the ground in mining is an example of this waste, and this coal is forever lost to mankind, and there is no way in the future to secure it. The economical use of fuel is a study of the Bureau of Mines, and certainly an important one. This is an age of economy in manufacture and if it can be demonstrated that the fuel of one factory is worth twenty-five per cent, more than in another on account of its economical use, then it is that one has the advantage over the other in the unit of cost of production. The 1 record shows that the value of the manufacturers of the country have increased from more than four billion dollars in value in 1870 to more than twenty billion of dollars in 1910, and the increase of the crude products of the mines have increased from three hundred and sixty-four millions in value in 1880 to more than two billion in 1910, showing that mining increased in a proportionate rate with manufacturing. In 1870 the per capita consumption of coal was ninety-six hundredths tons, and in 1910 it had increased to five and five-tenths. As a basis of transportation the mines of the country constitute sixty per cent, of the tonnage by weight. Stop the working of mines even temporarily and we see a condition that existed in Great Britain lately when the wheels of industry and the facilities of transportation standing still and the whole nation in idleness. The Bureau of Mines has lately taken up the problem of the conservation in natural gas. In the search for oil the natural gas is not considered of much value, and has been allowed to escape into the air or been burned in the field where it was of no value. It is believed that the oil can be taken out of the ground and the gas so walled in as to leave it for future use when wanted. If the problem of saving this valuable fuel can be solved it will be the means of adding millions to our wealth. Let us hope that FEDERAL GOVERNMENT AND MINING INDUSTRY 373 with the research instituted by the Federal Government through the Bureau of Mines may be the means of saving to the people a large per cent, of two hundred and fifty million tons of coal now lost each year. That the twenty to fifty per cent, in loss in metal mining may be saved. That the gases lost in manufacturing coke may be saved for a useful purpose. When we stop to contemplate the great loss going on from year to year is it not enough to awaken us to the importance of expending a reasonable amount of money in an effort to stop this waste? The Bureau of Mines was established in 1910 because of the great loss of life occurring in the mines in the coal mining industry. When great disasters occur we are appalled at the great loss of life. Yet day by day the loss goes on, one life after another going out and we do not think so much of it. In the metal mining industry the record shows that almost as many people lose their lives as in coal mining. The Bureau, through its establishment of mine rescue station first-aid instructions, has taught the miner and operator the importance of care in preventing accidents. They have done much and there is still a great deal to be learned. The Government has done a great deal for agriculture and has spent millions to promote this great work, and why should not the Government do its part for the mining industry? I have only enumerated a few reasons why the Federal Government should lend its aid to this great industry, and I hope in the future more may be done looking to the conservation of human life and the conservation and economical use of the products of the mine. Let us remember the progress of the race to higher planes of civilization is brought about by studying the record of victory and failure that has been made by different investigators by avoiding these failure and taking advantage of those successes. Vast sums have been spent in the investigations of mining conditions, but others have not had the record of those investigations, and so have gone over the same road to meet the same failure in the end. I am for enlarging the field of this great work. Let the nation help by investigation in the metal mining, by looking to the conservation of our mineral resources. By care- ful study as to the safety of those engaged in mining so as to prevent the great loss of life that has existed in the past. The Federal Government can, in my judgment, well afford to do its part in this great work. It certainly is the duty of the Federal Government to lead the way in the great work of solving the problems that confront 374 PROCEEDINGS AMERICAN MINING CONGRESS the mining industry of the country, and I would be glad to see the appropriation increased by Congress for the experimental work in the Western field which now so much needs it. I would even go farther and extend aid to the mining schools under State control that they might be better atile to carry forward their great work of education in this important industry of our country as is now done for the agricultural colleges in each State. It is not my purpose to advocate large expenditures, but I am in favor of a reasonable appropriation and such as the National treasury can afford for carrying on this important work. Let us do something for the eduction of those who are now in the mining schools that more interest may be awakened to the importance of this great industry. Gentlemen of the Convention, I am with you to help promote the interest of the industry in which you are so deeply interested and so much desire to see advanced. It will be my pleasure to do whatever is reasonable to help along in the great work of bringing out of the mountains their treasures of wealth that can not now be gotten by any known process, that human life may be made safe, that the loss of thousands of lives of those who work in the mines may cease and that this great industry may receive the attention it deserves by the National Government. What is the Matter With the Mining Industry? JOHN W. BOILEAU. PITTSBURGH, PA. The real trouble with the Mining Industry is, in the main, the neglect and inattention on the part of not only the persons engaged in such industry, but particularly that of the members of the various committees at Washington who have to do with mining affairs. They have long neglected it Just last month a Congressman from Kansas resigned from the Mines and Mining Committee and three other committees ki order to become a member of a committee where he expects to get more publicity and greater prestige. The Mining Industry is the second industry in importance in the United States. It has a yearly production of more than two billion dollars as against nine billion claimed for agriculture. This comparison does not give justice to the mining industry, as in the nine billion output claimed by agriculture there are duplications which may reach as high as three or four billion dollars. The Department of Agriculture figures the value of the corn crop and then figures the value of the farm animals after the corn has been fed to them. The figures upon which the out- put of the mining industry is based, as a rule, show the value of the raw product at the mines. While the mining industry is the second in importance in this country, it is not generally understood as such. The development of the mines came after agriculture, and as a result agriculture made its claims upon the Federal Government and the various State Governments for aid many years before the mining industry. Agriculture as an industry is, therefore, better understood, better entrenched and better taken care of. The Federal Government altogether has appropriated nearly $24,- 000,000 a year for agriculture and the States approximately $11,000,000 more. The Federal Government is giving to the mining industry about $1,000,000 per year, and the States much less than this. 376 PROCEEDINGS AMERICAN MINING CONGRESS In Congress, there is always a number of members who are ready at all times to champion the cause of agriculture. In Congress, there are very few men who understand any- thing about the mining industry. In Congress, membership on the Agriculture Committee is considered one of the honors. In Congress, the Committee on Mines and Mining goes begging for a chairman or for membership on the committee. This is because of the first remark made in this talk. The attitude of Congress generally toward the mining in- dustry is in sharp contrast to the industry's importance in Great Britain. Membership on the Mines and Mining Committee in Parliament there is one of the highest honors that a member can receive. The best men are selected for this place, and a debate on the mining industry serves to bring forth the entire membership, and it becomes almost a national issue. Agriculture, with its strong organization and its general recognition throughout the country, has grown so rapidly in public favor and in the aid given by the Federal Government, that today it is the greatest subsidized industry on the face of the earth. For every $375 worth of product taken from the ground, the farmer received $1 of Federal aid. Add the State aid of $11,000,000 per year to this and you will readily see that no industry at any time has ever been subsidized to such extent. Agriculture is one of the industries of least hazard. The men work out in the open air, under the bright sunlight, and under the most healthful conditions. The mining industry is one of the most hazardous known. In 1912, 3,602 men were killed in the mines and quarries in the United States. The men work in the dark underground pass- ages, away from the light of day, and are continually surrounded by unknown terrors. They have the deadly gases of the mines to contend with, and the even more dangerous coal dust. There is always the danger of fall of roof crushing the lives out of the men. The miners in the metal mines, in some instances, suffer and languish and die from inhaling stone-dust. There is danger in every phase of the industry. The mining industry obtains from Congress l-24th the amount of money given to agriculture. According to the figures given out by the Department of Agriculture, that industry is THE TROUBLE WITH THE MINING INDUSTRY 377 only a little more than four times as large as the mining industry. Mining is not sufficiently recognized because there is a woe- ful lack of co-operation throughout the country. As a general rule, the mining man of the West does not know the coal mining operator of the East, and the reverse, of course, is true. This lack of co-operation extends to many of the technical and trade papers, I am sorry to say. An illustration in point the techni- cal papers, with one or two possible exceptions, when sent the prospectus of the meeting of the American Mining Congress and Mining Show, have failed to exhibit any enthusiasm which would lead toward a good meeting. I understand that Mr. Call- breath, the Secretary, wrote personal letters to these papers, asking editorial comment on both events, and, outside of two or at least three papers, these requests were ignored. Take almost any other industry, and its national convention for the year is the greatest event of the year. The papers are filled with advance notices and there is a hurrah and enthusiasm which compels a great attendance. The papers take the move- ment as their own and make it appear that every prominent man in the industry is coming, and this is generally the result. This spirit of "don't care" seems to pervade the entire indus- try, even in the regulation, operation and the marketing of the output, especially in the marketing end of it, as some operators are operating in the interests of other than the stockholders and bragging about giving their coal away at the same price as the cost of a load of dirt. Any co-operative scheme that is started will take the most difficult work before it can be a success. Several of these harmful conditions can be brought about by wakening up of the real owners of the property to the alarming situation that will result if such policies are continued. There never seems to be any difficulty in getting the repre- sentative farmers together. It is but a short time ago that the Farmers' Union held its national convention at Saline, Kan- sas. The first day of the convention resolutions were passed demanding more liberal agricultural appropriations and the establishment of a Bureau of Marketing in the Department of Agriculture, credit extension, stricter immigration laws, etc. These resolutions, as drawn up, were sent to every member of Congress, and every one took an interest in them. Agriculture has gotten to a point where it does not ask it demands. The 378 PROCEEDINGS AMERICAN MINING CONGRESS mining industry begs and in a pitiful way, and when the beggars ask to have representative mining men co-operate with them, it is generally a few of them. Congress soon sees that the appeal does not come from a united industry, and it loses interest. The Remedy. A greater, more compact and more repre- sentative organization than the American Mining Congress, the Mining Congress to be the nucleus of this organization. Head- quarters offices in Washington, with a staff capable of taking care of the interests of the industry before Congress. A closer co-operative spirit among the prominent men engaged in the industry. A more ready response to the call for help when legis- lation adverse to the industry is introduced. An advisory com- mittee that will meet at least twice a year and take up the prob- lems of the industry and in a positive way suggest them to the convention and the headquarters offices in Washington, where equal positive influence shall be brought in legislation that will be favorable. No other industry of any importance whatever is so badly represented in Washington as the mining industry. I am not casting reflections on Mr. Callbreath, the Secretary of our Mining Congress, in this. He has been endeavoring to maintain an office in Washington, but I do mean that there have been no adequate funds to carry along any fight for the industry. There are industries that are insignificant in proportion to the mining industry that have headquarters in Washington, with an expense account of $25,000 or more per year, and this expenditure is considered an economy. An illustration of how badly the mining industry is equip- ped along this line: A year or more ago, some legislation was introduced which threatened the interests of the oil men in California. This obnoxious legislation passed the House before the oil men were aware that there had been any such legislation on. Two special trains were engaged, at great expense, by the California operators. The oil men were rushed to Washington, and after ten days' strenuous endeavor and the expenditure of considerable money for necessary expenses, these men were victorious. A permanent headquarters office for the mining industry could have taken care of a similar matter before it had reached the dangerous point, and with a fraction of the expense incurred by the California oil men. THE TROUBLE WITH THE MINING INDUSTRY 379 The mining men themselves do not seem to realize the magnitude of their own industry. The industry employs more than a million miners ; 750,000 are coal miners and more than 300,000 metal miners. Directly and indirectly connected with this work are 2,500,000 men. The products of the mines constitute 65 per cent, of the freight traffic of the country. Of the 550,000,000 tons of coal mined in 1912, it would make a solid train of regular coal cars that would reach around the world without any room for the locomotives to haul them. In coming to our home State of Pennsylvania, of the entire production of coal in the United States in 1912, Pennsylvania produced practically 45 per cent, of the total. Of the entire production of coal in the United States during the past life of the coal mining industry, more than 50 per cent, of the total tonnage has been mined in the State of Pennsylvania. The total production of coal during 1912 in Pennsylvania equals one-twentieth (l-20th) of all the coal ever produced in the United States. Inasmuch as coal as fuel is the very basis of all industrial activity, why not have the manufacturing interests and the coal interests themselves, each interest, whether it is operating in brick, iron or steel, or any interest using fuel, all give their influ- ence and financial aid toward establishing a Bureau, with head- quarters at Washington, that will co-operate not only with the Bureau of Mines, but with any member of Congress to represent any industrial interest among its constituents. No member of Congress in that position can afford to forsake the mining inter- ests of the largest districts in the country. With the making of a great and industrial center like Pittsburgh, the coal industry has gone on with less attention from the press or individual up- liftment than any other industrial business that I know of. Lessons of the Year in Our Mining Industry. DR. JOSEPH A. HOLMES, DIRECTOR BUREAU OF MINES, WASHINGTON, D. C. 1. Our mining industry, already larger, is also growing more rapidly than that of any other great country. During the past century the value of our mineral products for each ten years has almost doubled that of the preceding decade. And while this rate of increase will probably continue to be a diminishing one, the steadiness and continuity of this growth is but one of the evidences that for many years to come the industry will continue to grow in magnitude and national importance. 2. During the year there has come to be a more general recognition of mining as one of the two agriculture being the other of the two great foundation industries of the nation. All products of the mine become at once articles of interstate commerce, which no state can reserve unto itself, but which must serve a higher or a larger purpose, namely, the welfare of all the states ; and under the recent decisions of the highest courts of the land, mining is thus recognized as a great national industry. 3. But notwithstanding these facts, and the fact that this most hazardous of our great industries, including with it metal- lurgical operations, gives employment to more than 2,000,000 men; contributes to our national wealth yearly products valued at more than $4,000,000,000, which furnish more than two-thirds of our total freight tonnage, out of which we build and operate our rail- ways and steamship lines, our telephone and telegraph lines, our buildings and our highways, develop heat and light, and operate our factories, and which in a thousand ways contribute to the welfare and the very life of the nation this great national industry of such vital importance to all the people is receiving but tardy and inadequate recognition and aid from the legislative and administra- tive branches of the general government. 4. The speculative and dishonest features of mining are di- minishing. We are getting further away from Mark Twain's defini- tion of a mine. Great ore deposits like those now being developed at Junea, Alaska, extensive areas of gold-bearing gravel, or the coal fields are, preliminary to mining operations or the sale of LESSONS IN OUR MINING INDUSTRY 381 stock, being prospected to-day with such care and thoroughness that mining operations may be entered upon with as much certainty of results as would be true of an investment in a building, a manufacturing plant, or farming. Only the investor need see to it that he is dealing with honest and experienced men. The enforce- ment of post office regulations, and various state laws, enacted at the request of the American Mining Congress, is doing much to check the dishonest mine promoter; and with these agencies the Bureau of Mines is co-operating as far as it can do so. The opening up of large low-grade ore bodies, heretofore generally and necessarily ignored in our great mining states, is another phase of mining development which will yield more certain returns on the capital invested, and will, therefore, give greater safety to the small as well as to the large investor in mines, and this development will also give greater stability to labor conditions. 5. The discovery and development of these large low-grade ore bodies, like that of iron and coal, bring about conditions which are not such as to interest or encourage the ordinary prospector. But with the needed discovery of more efficient methods for working these low-grade ores, the interest in them will increase; new pros- pecting methods will be developed; new prospectors will traverse the hills; and in many regions a new life for mining, more stable and more permanent, will result. In the placer regions of Alaska the old-time prospector still has his fields of activity. Every year he enjoys a new stampede. Now and then he makes a stake, and usually reinvests all, or a large part of his savings, in another strike. It is the poor man's field, with a future as well as a past. In recent stampedes, how- ever, there has developed a practice which threatens to seriously interfere with, if it does not destroy, prospecting of the old type; that is the practice, which I believe, to be both undesirable and contrary to the spirit of the law, under which wealthy individuals and large corporations rush their well-equipped hired men to a new discovery to stake claims, each in his own name, and then imme- diately transfer such claims to their employers. 6. It is as to mine-safety that the year's experience teaches the most important lessons. The decided progress in reducing the loss of life in coal mining during the past few years gives encourage- ment as to what may be further accomplished along this line. Mine owners, miners, and mine inspectors all deserve commendation for their good work during the year in behalf of mine safety, mine 382 PROCEEDINGS AMERICAN MINING CONGRESS rescue and first-aid work. But we should all realize that we have but begun the good work. The recent awful disasters in Wales and in Germany, and several smaller disasters in this country, indicate the need of new and greater efforts to prevent the occurrence of similar disasters during the new year upon which we are now entering. Let no man think that his mine is safe. Most of the disasters have occurred in our best mines. We must take no chances. We must give safety the benefit of every doubt. Every mine owner, and every miner in his employ, should co-operate in a determined effort to prevent even the smallest of accidents ; for it is often the small accidents that inaugurate large disasters. Let no man be careless where the lives of men are at stake. Both operators and miners should and will welcome the most rigid inspection and enforcement of law by the state's inspec- tors. With all efforts for greater safety the Bureau of Mines will co-operate to the fullest possible extent. 7. There has been progress in the movement for the prevention of waste in mining and metallurgical operations. The Bureau has been endeavoring to collect reliable data as to the nature and extent of such waste, and possible methods of lessening or preventing the same. That this waste is large all admit ; but few, however, appeared to realize what now appears to be the case, that the aggregate value to the nation of the sum total of all the waste of mineral products may be said to approximate a million dollars per day. The special efforts of the Bureau will be along the lines of finding out what part of this waste is preventable under existing conditions, and how this waste prevention may be brought about to a larger extent each year as new and more favorable conditions develop. Already some progress has been made, the most notable example being the saving during this first year of natural gas and oil having an aggregate value equal to many times the total cost of the Bureau from its inauguration to the present time. The re- sults of pending inquiries and investigations indicate the possibility of much larger future yearly waste prevention in connection with both mining and metallurgical operations. 8. Since the last meeting of the Mining Congress a new organic act for the Bureau of Mines has been enacted by Congress. The duties and purposes of the new Bureau have been enlarged to the full scope asked for by its friends ; and at last metal mining has been recognized in Federal legislation as an important branch of the mining industry. Meanwhile, also, Congress has appropriated LESSONS IN OUR MINING INDUSTRY 383 $100,000 for investigations and inquiries relative to safety and waste in the mining and treatment of ores and other mineral sub- stances. These inquiries and investigations, relating to all mineral resources other than coal, are now in progress in a considerable number of states where mining, quarrying and metallurgical opera- tions are under way. The other special appropriations for the work of the Bureau are $135,000 for testing the coal and oil used by the general government; and about $360,000 for investigations of mine explosions and other accidents in coal mines. 9. I am aware of many criticisms of the Bureau in different parts of the country because of its failure to do numerous things of which there is serious need, and which if done would aid greatly in better safeguarding the health and lives of miners, and would be generally helpful in the prevention of waste, as well as in the general development of the mining industry. I know, however, that while agreeing with our critics that these things ought to be done, and come within the scope prescribed by Congress for the Bureau, members of the Mining Congress all realize the inadequacy of our appropriations for doing even the many things needed and that have to do directly with the saving of life. It is more unfortunate, however, that our inability to do many of these things at the opportune time tends to discredit all our work and even the movement for greater safety among the miners, who appreciate less fully the cost of such investigations, and whose good will, confidence, and co-operation is essential to the success of all our efforts. But while the situation is at times profoundly discouraging, there is nevertheless good evidence of progress. The movement for safety as appreciably reduced the loss of life in coal mines during the four years since our investigations were begun. The co-operation of both mine owners and miners with the Bureau in this work is now more effective than ever before. In the work for the prevention of waste the saving during the first year has exceeded in money value many times the total cost of the Bureau. Congress at its last session authorized an appropriation of $300,000 for new laboratories for the work of the Bureau at Pittsburgh. And it is hoped that in the near future this recognition and aid for the mining industry from the Federal government, so much needed and so long demanded by the American Mining Congress, may be more nearly commensurate with the sacrifices and the national importance of the industry. The Cost of Coal Mining. EDWARD W. PARKER, UNITED STATES GEOLOGICAL SURVEY. In order to do justice to the subject and to the occasion, ; paper on the cost of coal mining prepared for presentation befor the American Congress should be based upon an intensive stud; of the records, not too many, of typical operations in a sufficien number of states to get results capable of analytical comparisoi and deduction. Unfortunately, when I was asked by the Secre tary of the Congress to prepare this paper there was not time t< collect data from which such a study could be made, and I hav been compelled to adopt as the basis of this discussion the lates official statistics available, those of the Thirteenth Census of th United States, which covers the calendar year 1909. Since tha time wages have been advanced in both the anthracite and bitu minous districts, and prices for the product have been raise( to compensate for (and in some cases, possibly more than offset' the increased cost of production. If at the outset I may be permitted to make a suggestion as to one thing needed in the coal-mining industry (looking at i from the standpoint of the statistician and economist) it is ; standardization in the methods of accounting. It is difficult- one might say impossible to compile accurate statistical dat; regarding cost and value of product when operators themselve; can not tell what their product costs nor what they actually re ceive for it, and when their only means of judging whether the] are making or losing money is by their bank accounts. Withii the present year the Geological Survey was requested by on< corporation, whose value of production is measured by the ten: of millions, to furnish statements of its output some ten or fifteer years ago, which it was unable to ascertain from its own records The only reason that the Survey could not comply with the re quest was that the schedules and tabulations are kept for two years only, for purposes of comparison, and are then destroyed as there is no place where they can be safely stored and the besi method of maintaining their confidential character is to burr them. In the anthracite region particularly is it difficult to secure THE COST OF COAL MINING 385 accurate information, not only in regard to mining cost, but also the value at first hand of the output. A large proportion of the anthracite is sold at so much a ton delivered at Buffalo, or Chi- cago, or Milwaukee, or wherever it may be, and the sale price of the coal at the mines includes the freight to the point of de- livery and is so entered on the books. Until the recent action of the United States Supreme Court abolishing the contracts be- tween the anthracite companies and the transportation interests, all the anthracite shipped to New York harbor ports for a number of years has been sold on a percentage basis of the tidewater price, the railroads taking 35 per cent, for the freight and return- ing 65 per cent, to the operators. The magnitude of the task of determining what the actual value of the product is, was rather forcibly brought home to me last spring, when I called at the New York office of one of the big anthracite companies for the purpose of urging the expediting of that company's report. It had furnished complete reports of production, by sizes, for its numerous mines, but had omitted any statement of values. I had written a letter urgently requesting as accurate a statement of the value as I had received of the production, and had been promised the additional information. The auditor brought for my observation sheet upon sheet of closely written figures, upon which the calculations necessary to get the data had been made. It had taken the entire time of one clerk more than two weeks to do the work. What goes into mining cost is in many cases as difficult to ascertain. As many here well know, the old type of wooden or corrugated iron breakers in the anthracite region of Pennsyl- vania are giving way rapidly to modern structures or reinforced concrete or other fireproof construction. I have been reliably informed that the investment in most of these cases is charged, not to capital account, but to mining expenses! It must, of course, eventually go into the cost of mining, but it seems to me that it is an investment, not an expense, and when charged into the cost of mining should be in the form of depreciation, and ot interest on the investment. These are cited merely as examples of the complexities which confront the economist when he under- takes to analyze such statistics as he finds available. There is a somewhat general impression that the mining of coal, both anthracite and bituminous, is a highly lucrative avocation, and that the principal occupation of the so-called coal barons is to 386 PROCEEDINGS AMERICAN MINING CONGRESS look pleasant as the golden stream flows into their coffers. I venture to state, taking the industry as a whole, that there are few lines of industrial endeavor where, during the last ten years, there have been smaller returns for the capital invested and for the energy, mental and manual, that has been put into it, than in the business of coal mining. As has been already observed, the only recent official statistics of relative cost and value available are those presented in a recent bulletin published by the Bureau of the Census and which cover the calendar year 1909. This report shows that the value of the Pennsylvania anthracite produced in that year was $148,957,894. The total gross ex- penses amounted to $139,110,444, from which should be deducted $4,864,844 made up from charges to miners for explosives, oil, and blacksmithing, making the net expenses $134,245,600. The gross expenses are itemized as follows: Services: Salaries $ 4,572,489 Wages 92,169,906 $ 96,742,395 Supplies : Fuel and power 3,189,279 Other supplies 23.472,809 26,662,088 Royalties 7,969,785 Miscellaneous 7,736,176 Total gross expenses $139,110,444 Deductions 4,864,844 Net expenses $134,245,600 The total production in 1909 amounted to 72,215,273 long tons, so that the average value per ton for the output in that year was $2.06; the average cost per ton was $1.86; and the net returns on the operations for the year were $14,712,294, or an average of 20 cents per ton. This at first glance looks like a fair return, but attention must be called to the fact that the Census figures of cost make no allowance for interest on capital invested or borrowed, and no offsetting charge's for amortization or depre- ciation. According to the returns to the Bureau of the Census, the entire capital invested in anthracite mining in 1909 was $246,- 700,000, which may appear rathe** inadequate when one con- siders the magnitude of the industry, and an annual production of $150,000,000 (in 1911 the output was valued at $175,189,392 and COST OF COAL MINING 3$7 in 1912 it was $177,622,626), but I am taking the figures reported by the Census Bureau. If on this .capitalization an allowance of 4 per cent, be made for interest, the net returns for the year amounted in round numbers to $4,844,000. If, as I suggested at the outset, new breakers and other equipment are charged into operating expenses, no allowance need be made for depreciation, but surely the exhaustion of from 75,000,000 to 80,000,000 tons from the reserves every year should have some amortization charged against it and if 5 cents a ton be allowed the margin of $4,800,000 is practically wiped out. At least it may be said that from the operators' standpoint there may have been some reason for the recent advances in the price of anthracite, the effect of which the author of this paper has felt as keenly as any other consumer of anthracite. The figures covering the cost and value of bituminous coal show even more striking comparisons. (I may remark here that there are some slight differences in the statistics of production between the Census figures and those published by the United States Geological Survey for the reason that the Census investi- gations excluded mines having a production of less than 1000 tons, whereas the Survey rakes the country with a fine-tooth comb and includes every small country bank, from which it can secure a report. For 1909 the Survey showed a bituminous coal production of 379,744,257 short tons valued at $405,486,777, and the Census Bureau showed a production of 376,865,510 tons valued at $401,577,477, the difference being about 3,000,000 tons in quantity and $4,000,000 in value less than 1 per cent, in either case. As the Census figures for cost of mining are the basis of this discussion, the Census figures of production are also used). The total value of the bituminous production, as already stated, was $401,577,477, and the mining expense of producing this value, including salaries of officers, was $378,159,282. As in the case of anthracite, the expenses of production do not include any charges for depreciation, amortization, or interest on capital in- vested or borrowed. The expenses are divided as follows : Salaries . . $ 20,417,392 Wages 282,378,886 Supplies 45,345,932 Royalties 12,035,900 Miscellaneous 17,961,172 Total . $378,159,282 388 PROCEEDINGS AMERICAN MINING CONGRESS From this it appears that 75 per cent, of the total cost and 70 per cent, of the total value was spent in wages. Salaried offi- cials got less than 5.5 per cent. Now, let us see what capital got. The total capital invested in the bituminous coal mines of the United States in 1909 was, according to the Census bulletin, in round numbers $960,000,000 ($960,289,465), and I do not think that looks as if there were very much over-valuation, whatever the capitalization may be as represented by stock issue. The difference between the value of the product and the expense of producing it was $23,440,000 (I shall talk the rest of this in round numbers), or a fraction over 2.5 per cent, on the capital. The average value per ton of all the bituminous coal produced in the United States was $1.07, the costs averaged a fraction of a cent over $1.00, so that the' margin of profit to cover interest, depreciation, and amortization was a little less than 7 cents a ton. In some states the expenses ex- ceeded the returns. Take Arkansas, for instance, where the expenses totaled $3,630,526 and the value of the product was $3,508,590. Other instances were: Value of Product. Expenses. Iowa $12,682,106 $12,816,076 Kentucky 9,940,485 10,127,987 Tennessee 6,548,515 6,691,482 Oklahoma 6,185,078 6,536,441 Virginia 4,336,185 4,392,440 Pennsylvania, by long odds the most important producer, with an output of 137,300,000 tons, showed a total of expenses of $117,440,000 and of value of $129,550,000, a balance on the profit side of a little over $12,000,000, or about 3 1-3 per cent, on the capital invested, $358,600,000. The four competitive states, West Virginia, Illinois, Ohio and Indiana, which rank second, third, fourth and fifth, respectively, in producing importance, all show such narrow margins between income and outlay that profits are visible only with a miscroscope. The figures follow : Value of Product. Expenses. Difference. West Virginia.. $ 44,344,067 $43,024,716 $1,319,351 Illinois 53,030,545 51,697,504 1,333,041 Ohio 27,353,663 27,153,497 200,166 Indiana . 15,018,123 14,906,831 111,292 $139746,398 $136,782,548 $2,963,850 THE COST OF COAL MINING 389 These four states with an aggregate production of a little more than the bituminous output of Pennsylvania, showed a total of less than $3,000,000 as the excess of receipts over expenses. The capital invested in the coal-mining industry in these states was something over $310,000,000, so that the returns on the capital were less than 1 per cent. I do not wish to tax the patience of this audience to the breaking point, but there is one other fact to which I desire to call attention, and that is to the conditions in the public land states, which are also coal producers. They are California, Col- orado, Idaho, Montana, New Mexico, North Dakota, Utah, Washington and Wyoming. All of them showed favorable com- parisons with other states. They produced in round numbers 25,000,000 short tons of coal in 1909. The value of the product was $37,000,000, ( J ), tne expenses,, $32,400,000, the difference being say, $4,600,000. The capital reported was approximately $70,- 000,000, so that the average earnings on the capital invested in these states was between 6 and 7 per cent., as compared with less than 1 per cent, in West Virginia, Illinois, Ohio and Indiana, and of ;;bout 2.5 percent, for all the bituminous coal mined in the United States in 1909. I am present, not as 1 an advocate of the coal-mine operators of the United States nor have I prepared this paper in their interest. I must, in fact, confess that when I began, less than three weeks ago, -a study of the Census bulletin, I was somewhat surprised at the facts presented therein, though I was somewhat familiar with the general situation. If there is any other branch of the min- ing industry conducted on such narrow, not to say dangerous margins, I should be glad, yet sorry, to know it, and when these figures are considered one must feel that if there is any mulcting of the people in the coal that goes into their heating furnaces and kitchen ranges, the coal-mine operators are not the robber barons. And when the dividing line between profit and loss is so faint, all the more credit is due to the men in authority who are throughout all of the coal-mining regions spending thousands C 1 ) These figures include a small production, about 200,000 tons, valued at $300,000, from Georgia, with the expenses and capital incident thereto. All of the sttaes mentioned except Colorado, North Dakota and Wyoming were grouped by the Census Bureau as "Other States." 390 PROCEEDINGS AMERICAN MINING CONGRESS of dollars to reduce the hazard and improve the conditions under which the men work for the coal we burn. Mr. Hennen Jennings : I would like to ask Mr. Parker if he has 1 made any study of the fact, for instance, that in Washington they have to pay seven dollars and a half for anthracite coal, and also how the cost is determined between the mines 1 and the distri- buting point. Mr. Parker : Most of the domestic consumers do not realize that a profit on anthracite coal has to be made out of aihout sixty per cent, of the output. All of the prepared or profitable sizes; such as furnace, egg, range and nut (pea coal is now ? I suppose, included among the profitable sizes) make up about sixty per cent. of the total output, possibly a little more. The rest, the smaller sizes which are used for steaming purposes, comes 1 into competi- tion with bituminous coal, and in all cases is 1 sold at less than the actual cost of production. Some figures in regard to that con- dition were published in my annual report this year. The average price for the prepared sizes at the mines will range somewhere be- tween three dollars and four dollars and fifty cents per ton, the freight to Washington is two dollars 1 , so that the cost price to the dealers there is between five and six and a half dollars. The dealers, I suppose, think they are entitled to some profit for hand- ling the coal. The price recently has gone up from seven and a quarter to seven fifty, and now we are paying seven fifty or I think something of that kind. The cost of mining has 1 been in- creased since 1909, by the addition of ten per cent in the wages paid to the miner, and I suppose also the operators feel they are entitled to make some profit on their mining operations. A Delegate: Isn't it a fact from those figures that the cost of (Distribution to the consumer for the coal that goes to the city is as 1 much as the average at the mines ? Mr. Parker: I think that is the chief trouble. Of course, that is a matter which has a very important bearing on the cost of coal to the consumer. It is a detail into which we cannot go, for the reason that we have not the money to carry on an investigation of that kr'rid. The question of transportation cost may be the milk in the cocoanut. The Relation of Big Business to Industrial Prosperity, with Special Reference to Mining. DR. CHARLES R. VAN HISE, PRESIDENT WISCONSIN UNIVERSITY, MADISON, WIS. The subject assigned to me is: Big Business in its Relation to Industrial Prosperity, with Particular Reference to Mining. It is de'sired, I understand, that I discuss the trust problem in its broader relations and particularly in relation to mining. Statement of the Problem It is a very curious fact that the larger part of the discussions of the magazines and newspapers regarding trusts during the past two years, including the presidential campaign clustered about a phrase invented by Mr. Louis Brandeis. He said : "The question before the people is, the regulation of competition vs. the regulation of monopoly." The phrase was indeed a stroke of genius, in that it struck popular fancy, and was accepted as a correct statement of the trust problem. The alternative pre- sented naturally led the people to turn toward regulated com- petition. However, I hold that no such necessary alternative is before us at the present time. There 1 are many other solutions of the question of the trusts than regulated competition or regu- lated monopoly. The scientific mind demands not simply that two of the various possible solutions be' considered, but that all be taken into account, and the best one among them selected. Also in the discussions of the trust problem magnitude and monopoly in industry have been treated as synonymous terms. They are not synonymous terms. Monopoly has a well-defined meaning in law, and it is that meaning which should be as- signed to this term in a discussion before a mining congress. There may be great magnitude in a business, and not monopoly. Indeed it is believed, that by far the greater number of large organizations fall short of monopoly ; but it has been tacitly as- sumed in most public discussions that all are monopolies. That is a thing to be proved, with regard to any one of them of which 392 PROCEEDINGS AMERICAN MINING CONGRESS it is asserted. Only if we assume that all of the great concen- trations of industry are monopolies, does the statement of the question as regulated competition versus regulated monopoly correspond with the problem. Concentration the Result of Progress It is generally agreed, that concentration of industry up to a certain point is necessary in order to give efficiency. It would not be held by anyone, I imagine, that we should return to the situation of fifty or sixty years ago, in which industry was minutely subdivided, in which there were few organizations of large size, but many minor organizations scattered all over the country. Do you believe, do any of you believe that we shall ever return from the great flour mill to the cross-roads grist mill? It is impossible. This illustration and many others which could be mentioned show that some degree of concentration is allowable. The practical question is: what degree of concentra- tion is permissible and advantageous, not only for economy in production, but for the advantage of the people at large? It is therefore clear that it does not meet the question which con- fronts us in regard to the so-called trusts to assume that all of the concentrations of industry are monopolies. If we can make that assumption and place it as the foundation stone of our argument, it is easy to win approval of the idea of regulated competition. The Laws Relating to Big Business Monopoly has never been recognized in this country by common law, nor by statute law ; neither has it ever been so recognized in England. Co-operation in industry both by com- bination and by contracts has been recognized by the laws of both countries. The distinction is fundamental. In England in the middle ages both common and statute laws were very stringent against combinations and contracts in restraint of trade. But Parliament more than sixty years ago wiped out all the statutes against such combinations and contracts, provided they were not monopolies, contrary to public policy, or immoral. Also, in this country, in colonial days, the laws were very strict against combinations and contracts in restraint of trade. But here, also, there was a gradual amelioration of the laws until co-operation was permitted, along many lines, including division of territory, limitation of output, and even fixing of prices ; pro- BIG BUSINESS 393 vided, always, that as a result of the co-operation the combina- tions or contracts did not result in monopoly or were not gen- eral, were not immoral, and were not contrary to public policy. Thus we see that the laws in regard to combinations and contracts in restraint of trade went thru a similar evolution both in this country and in England, and that the laws finally became very liberal. In other countries than England and America, the laws in regard to co-operation are also liberal. By gradual development the principle has been reached for most civilized nations that freedom in trade means freedom to combine as well as freedom to compete. This was the situation in this country also when in 1890 the Sherman law was enacted, and immediately the wheels, so far as co-operation was concerned, were turned back to the conditions of the middle ages. All combinations and contracts in restraint of trade were prohibited, and this applied to the latter even if limited in extent or confined in time. This national legislation led to an influenza of similar legislation in the states and, within a few years, more than thirty states had passed statutes against combinations and contracts in restraint of trade, many of them even more drastic than the Sherman law. The question now arises: what were the results of these statutes? The Sherman act contained two separate provisions, one of which prohibits every contract and combination in the form of trust or otherwise in restraint of trade as illegal ; another section provides that monopoly or attempt to monopolize is also illegal. By the public it was supposed that every contract and combination in restraint of trade meant what the words said, and that congress in using these words meant to pass a new and drastic law replacing the common law; indeed the earlier de- cisions of the supreme court took this point of view and held that the reasonableness or unreasonableness of a contract or combination was immaterial. However, in the Standard Oil and Tobacco cases the court took an entirely new attitude and stated that only restraint of trade which was undue was meant to be covered by the law (altho the word "undue" is nowhere in the act), that the restraint meant was that which was not permitted under the common law ; and, therefore, that only con- tracts or combinations were prohibited by the law which were unreasonably in restraint of trade. 394 PROCEEDINGS AMERICAN MINING CONGRESS Why was this change in front made? Well, of course, I do not know ; but it is a fair conclusion that the investigations of the supreme court led them to the view that if the Sherman act were enforced in accordance with its terms prohibiting all con- tracts and combinations in restraint of trade, this would create an impossible situation. Therefore, they inserted the words "undue" or "unreasonable" into the law, so as to make it as nearly as possible in accordance with common law; and thus started a second cycle of development by judicial decision in order to make it approach, as nearly as possible, to the common law which existed before the act was passed. One cycle of evolu- tion in regard to this matter had been sufficient in Germany, sufficient in England and other countries. America is the only civilized nation which must go thru this development twice. While these recent decisions of the court do not go far enough, they clearly point the way to a ground intermediate between "regulation of monopoly or regulation of competition," and this is: Freedom of competition, prohibition of monopoly, permis- sion to co-operate, and regulation of co-operation. As already noticed, if it can be assumed that the above phrase contains all of the possible alternatives, it is easy to reach a conclusion. We must not have monopoly and therefore we are driven to the other conclusion, regulation of competition ; but since the .assumption is fallacious, the conclusion has no foundation. The Existing Situation What is the situation with which we are confronted. The Sherman law and the state anti-trust laws are upon the statute "books. We have gone through one stage of development, have made the first step in the second stage. It is now proposed to neutralize the decisions of the court by defining "reasonable" so that it shall mean prohibition of all contracts and combinations in restraint of trade, and thus succeed in getting statute law back to where Senator Sherman and the people thought they had gotten it twenty years ago through the enactment by Congress of the Sherman act. This would compel the beginning of an- other third cycle of development. This solution of the problem of combination makes me think of the philosopher, Harold Udgardin, by name, an Esqui- mau who lives up on Hudson Bay. "Harold has one trap now set in the same place where it has been for twenty years ; he has BIG BUSINESS 395 not yet caught a fox in it, but he will not consider changing its location, as it is a good place, he reasons, and ought to catch a fox. "It preys on his mind if he doesn't visit and trim this fox trap regularly, and he has been known to get up and go out in the night to bait it when he was especially negligent." Notwithstanding that the trap of the Sherman act has never caught a fox for twenty years, and only smells in one or two places of a tail or a leg, it is proposed to strengthen its "springs" and sharpen its "teeth" with the expectation that it will then catch a sufficient number of foxes to become the solution of the great, fundamental problem of concentration of industry. In regard to the Sherman act, it has been assumed that its only violators are the great combinations. This assumption is made in practically all discussion of the question. The Steel Trust, the Tobacco Trust, and a few other large combinations are mentioned; and it is supposed that the small business men and the small producers are not acting in violation of the law. But the principle of co-operation which the Sherman act tries to suppress extends from the great industrial centers, like Phila- delphia to the country cross-roads. Does it make any difference here in Philadelphia, the home of anthracite, whether one buys anthracite of one retail dealer or another? It doesn't make any difference in the country cross-roads either. The price is just the same from all the dealers in the same locality. The same is true of ice, the antithesis of anthracite, and is also true of all standard articles. The principle of co-operation has extended from the great manufacturers and the great dealers of the large cities to the small manufacturers and small dealers of the small cities and even villages. All are co-operating in exactly the same way; the principle is the same for the large and small men, one is violating the law just as certainly as is the other. I am willing to stand for enforcement of law when the law is enforced alike for all; but when somebody is picked out because he is in the front seat, or because it is good politics to attack him and ninety-nine or nine hundred and ninety-nine are allowed to escape I say that it is a profoundly immoral situation. And that is exactly the existing situation in this country. The politician who says "Break up these trusts; destroy them," says with the very same breath, "We must have co-operation among the farmers." 396 PROCEEDINGS AMERICAN MINING CONGRESS Why, gentlemen, the cranberry growers of Cape Cod, New Jersey, and Wisconsin, sell about 90 per cent of their products through an agency down in Hudson Street, New York. Similarly, many products of the farmers, illustrated by cotton, citrous fruits, etc., are marketed thru co-operative selling agencies. Have we heard of the Attorney-General prosecuting these farmers? Con- gress understands the situation and at their two recent sessions they attached to the sundry civil bill a clause containing an appropriation of $300,000 for the enforcement of the antitrust laws, which included the provision that none of this money should be spent in prosecuting combinations or agreements of labor, nor spent "for the prosecution of producers of farm pro- ducts and associations of farmers who co-operate and organize in an effort to and for the purpose to obtain and maintain a fair and reasonable price for their products." The purpose of this provision is clearly to make the Sherman law class legisla- tion by indirection and, in effect, to prevent equality before the law of the manufacturer as compared with the farmer. Also, some of the smarter state legislatures have seen the situation, and in order to prevent the farmers from being hit by their antitrust bills exempted the products of the lands so long as in the hands of the producers. This was true for Texas, Louisiana, Illinois and South Dakota. You see the state legislature, like congress, saw that the farmers have so many votes that they have to be dealt with gently when they form a trust. But some of the state laws got into the United States courts, and these courts promptly declared these exemptions unconstitu- tional as being special legislation, and not giving equal protec- tion under the laws. I venture to predict that it will not be so popular a political game to shout, "Bust the trusts" when the farmers understand that their trusts are also to be "busted." No more pernicious or immoral legislation was ever passed by Congress or by the 1 states. Fortunately Ex-President Taft and President Wilson have both protested against the pernicious action of Congress. The principles of justice in regard to trusts and combinations are alike for the manufacturers, the farmers, and the laborers. In this country we have not a special situation which con- cerns a few men, but a general, irresistible impulse. It is all very well to ask, "Has the time come when a few rich men shall defy BIG BUSINESS 397 the law?" but Edmund Burke said more than a century ago, "I do not know the method of drawing- up an indictment against a whole people." And that is the situation which we have in this nation as regards combination. There is just as close-riveted an arrangement between the three icemen in the country town as there is in steel ; and any solution of the problem of combina- tion, if it be a just solution, must be applied not only to steel, tobacco, etc., but to the small tradesmen and the farmer. Just as certainly as the great combinations are violating the Sherman act, as I have no doubt many of them are, so are the small aggre- gations of wealth violating state antitrust statutes. This general violation of the trust laws, national and state, is the problem that we have before us. The Breakdown of Competition The late Attorney General of the United States, Mr. Wicker- sham, said, if we can only break up each of the great combina- tions into six, or eight, or ten parts, these different parts will com- pete ; that the tendency to competition under such circumstances is irresistible. But I tell you, gentlemen, the tendency for co- operation in this Twentieth Century is so much stronger than the tendency for competition, that you will never restore the latter in the old sense. There will be competition between differ- ent classes of goods ; there will be competition between the great mail order house and the village grocer ; there will be compe- tition in service; and I am just as anxious as anyone to have trade regulated by competition as far as possible; but, as a matter of fact, competition has broken down hopelessly in this country to adequately control prices ; to adequately control quality; and we all know it. Why, gentlemen, it is the theory regarding competition that it will regulate prices, and quality; that it will give us reasonable prices and superior quality. That is a beautiful theory ; but if this theory has ever corresponded to the facts in the past (and this I doubt) we may be sure that in the future it will never again do so. We have recognized the failure of competition to secure quality, by the establishment of the pure food laws. Why should we have pure food laws if competition will give us good quality? If articles were fraudulently sold, so important to the general welfare as foods, there was a remedy in the courts. If I were sold a thing as pure strained honey, that was wholly innocent of 398 PROCEEDINGS AMERICAN MINING CONGRESS having any relation whatever with a, bee, I had a remedy in law; I had been fraudulently dealt with. Why didn't I take my case to the courts? You know why. The loss was so small that it was impracticable for the individual to thus obtain redress. Finally, recognizing the fact that competition was wholly inadequate to secure pure food, national and state pure food laws were enacted and special officers were designated upon whom was imposed the duty of protecting the public. When we confessed that competi- tion did not regulate quality, and imposed the duty of protecting the public upon administrative officers, we succeeded in getting pure food, or a reasonable proportion of pure food, at least, and never until then. The situation is further illustrated by clothing. Shoddy is frequently sold as woolen. Why? To do so is fraud, and the aggrieved party may get redress in court under the theory of the law; but uf course he never does for the loss is too small for the individual to go to the trouble and expense of redress which would be far greater than the loss. But if we had admin- istrative officers whose duty it is to protect the public at public expense for textiles, shoddy would not be sold as woolen because the risk would be too great. Magnitude and Efficiency Now, why is it that competition to regulate prices has broken down? Because of the simply enormous advantages which come with co-operation. One of these has been mentioned, the economic gains of magnitude. In this matter there are na differences of opinion up to a certain magnitude. We all agree that the nation will not return to the country grist mill ; but this does not settle the question regarding the magnitude that is per- missible. Those who are attacking the combinations assert that a great many of the large industrial organizations have exceeded the magnitude which gives the highest efficiency. I may assert upon the other hand that very few of them have gone beyond the stage which gives increased efficiency. Neither side can prove his case because of lack of facts. I have looked through the books, and I have had experts examine the literature of concentration, to find if investigations had been made which would give facts upon which to base a judgment regarding the relation of efficiency and magnitude. The only such investigation of which I find record is that of BIG BUSINESS 399 Herbert Knox Smith in regard to the steel industry. The late Commission of Corporations, as the result of an elaborate inquiry, reached the conclusion that the large concentrations in the manu- facture of steel are very much more efficient than the small ones, and for certain products he gave the amount per ton. He stated that the five great combinations United States Steel, Lacka- wanna, Cambria, Jones-Laughlin, Republic have an advantage for pig iron and steel billets from $2.50 to over $5.00 per ton as compared with the smaller organizations. Thus, for iron and steel it has been proved that a hundred- million-dollar combination is economically more efficient than a ten-million-dollar combination. It has not been proved that a thousand-million-dollar combination is more efficient than a hundred-million-dollar combination ; no investigation has been made to determine this point. It may be asserted that the United States Steel Corporation is not more efficient than its four strong competitors, and I may assert the contrary ; and we are exactly where we were before, because' we don't know the facts. The question is one for scientific investigation, and it is to be hoped that the National Bureau of Corporations will do the work. Similar investigations should be made for other lines of industry than steel, so that we may have a scientific foundation upon which to decide how far we shall permit magnitude. One of the specific points which have been raised in regard to the efficiency of the large steel corporations is the more fre- quent failure of rails in this country. It has been argued that this is due to their poorer quality because of the inefficiency of the large corporations, and especially the United States Steel Corporation. In this connection, it should be remembered that there is no other country in the world in which the speed of the traffic, the weight of the train and engine, in freight and pas- senger service, approach those in this country. Also it should be remembered that the very rails manufactured in Germany and England, which are alleged to be so excellent, are produced by great trusts in the sense in which the term has been used here tonight. The German steel combine has control of a larger per- centage of the iron product of Germany than the United States Steel Corporation has for the United States. However, it may be said that the German steel combine gives greater freedom to the individual plant that it is a federation rather than a con- 4 oo PROCEEDINGS AMERICAN MINING CONGRESS solidation. The same thing would have been true' in this country had it not been for the Sherman Act. Men who build up a busi- ness dislike to surrender its management to someone else. Affili- ation of the different companies in the same business was de- veloping in this country in the same way as in England and Germany, on the principle of co-operation. Then the trust was declared to be unlawful, and so arose the holding corporation ; and now, again driven by law, the holding corporation is passing to complete merger. The Forces Which Produced Combination This brings us to the next point of the discussion, the forces which have led to combination in this country. One of these is directly related to what has just been said. Each step from the loose association to complete merger was taken to escape the last decision of the court because' of the irresistible tendency for co-operation. Germany and England are vastly more fortunate than we are in this respect, in that, permitting reasonable co-operation, they have allowed firms to co-operate without driving them to consolidation. The units of the various cartels and combinations in these countries have therefore sur- rendered their autonomy to a less extent than the elements of the combinations in this country. Other forces which have led to combination are the desire to eliminate or at least restrict competition, the desire to limit output and divide territory, and in connection with these the maintenance of prices. These forces may be legitimate or illegiti- mate, depending upon the extent to which they are carried. An- other force strongly influential in producing concentration has been the profit of promoters. Regarding the legitimacy of this force there may be great doubt in many cases. Limited time, while permitting the enumeration of these forces, prohibits their adequate discussion ; therefore I shall pass on to the advantage's which result from co-operation, arid especially with relation to the natural resources. The Relations of Co-operation and Conservation There can be no question that the competitive system, when unrestrained, is positively opposed to the policy of conservation. This is true alike for minerals and timber, but tonight I can only consider the first aspect of the subject. BIG BUSINESS 401 The minerals of the earth, and here are included not only the metallic minerals but the carbon compounds, required the building of the earth for their making. Mineral deposits are doubtless in the process of manufacture at the present time ; but even if so, this is at so slow a rate as to be negligible. From the point of view of mankind, the stores of minerals in the earth are deposits of definite magnitude upon which we may draw but once and which by no possibility can be increased. To illustrate, with regard to the banks of coal, the situation in regard to this subsurface produce of first importance for the human race is similar to that of a man who has a deposit in a bank upon which he may draw, but can not by any possibility increase by a single dollar. He is obliged to make his existing bank account last thruout his life. Similarly the mineral resources of the earth must last thruout the life of humanity. In this connection it should be recognized that modern civilization would not be possible without the mineral resources of the earth, no iron ships, no metal agricultural implements, no tools except those of stone, no fuel but wood. Without the subsurface products of the earth we would at once return to the material conditions of the stone age. It is therefore incontrovertible that, from the point of view of the human race, economic systems or laws which result in unnecessarily rapid use of the mineral stores of the earth aff indefensible; but such are the economic theories and laws now dominant in the United States. The wastefulness of the com- petitive system may be proved with regard to every product which is taken from the earth. In a single address this cannot be done, but I shall mention two or three substances which illustrate the truth of the above positions. Lead and Zinc Lead and zinc in Wisconsin and Missouri are mined on a small scale under an extreme competitive system. The losses of these metals in their mining and metallurgy are nothing short of appalling. In southeastern Missouri, according to the late Dr. Buckley, former geologist of the state, not less than fifteen per cent of the metal is left underground; the losses in concen- tration approach fifteen per cent; the loss in smelting and con- centration frequently amounts to fifteen or twenty per cent, thus making a total loss of from forty-five to fifty per cent; in other 402 PROCEEDINGS AMERICAN MINING CONGRESS words, only a little more than one-half of the lead of the deposits reaches the market. In southeastern Wisconsin, State Geologist Hotchkiss reports that the total loss of the original zinc in the mines amounts to forty-eight per cent. Again we have a re- covery of a little more than fifty per cent. These great losses are due to the system of very numerous small holdings combined with the competitive system. High royalties on the part of the small feeholder are demanded of the operator. The operators desire to get large returns at the earliest practicable moment upon this small investment. In consequence ore is left in the ground that should be mined ; unnecessary losses take place in concentration, also unnecessary losses occur in smelting. Iron The lead and zinc of Missouri and Wisconsin illustrate the situation for metals, where there is great subdivision in owner- ship and operation, and thus the extreme of the competitive system. In contrast with this situation, may fee mentioned the Lake Superior iron mines. In the early days of iron ore mining in this region the holdings were relatively small. Under these circumstances, according to Professor C. K. Leith, the losses of mining were commonly from 35 to 40 per cent of the ore. These losses were due to mining the higher grades in order to get the largest immediate profit, and also in part to faulty mining. In recent years there has been a steady tendency to concentration of ownership of the iron ores, and at the present time the greater part of the ores are owned by large corporations able to hold them until such time as they can be economically used. A num- ber of these larger corporations own smelting plants and are holding their, ore reserves for the use of their own plants. They, therefore, have every motive for efficiency in mining and economy in handling. Under present conditions, Dr. Leith says- the losses in mining iron ore in the Lake Superior region are usually under twenty per cent, and ten per cent is perhaps a fair average. With relative concentration of ownership of iron ore in the Lake Superior region, as contrasted with subdivision of owner- ship in the years gone by, there has been great gains in conserva- tion. BIG BUSINESS 403 Coal But the most disastrous losses in the mining industry, so far as the future of the human race is concerned, are in connection with coal. Holmes * presents the facts in regard to the ruinous wastes of coail in the past, due to the unrestrained competitive system. He states that in the early days of mining, when there was much subdivision of ownership not more than thirty or forty per cent, of the anthracite coal of the veins mined was brought to the surface, leaving from sixty to seventy per cent, in the ground. The Colliery Engineer says that with the concentration of owner- ship of recent years these losses have been greatly reduced. Ac- cording to this Journal, thru the use of large capital for develop- ment work, and in providing machinery, the operators "are con- serving the valuable anthracite deposits by extracting from the ground and making available for use, from fifty to one hundred per cent, more of the coal in a given area than was extracted forty or even thirty years ago." Seams are being mined "that even twenty years ago were considered too small to be profitably work- ed." The situation for bituminous coal is somewhat similar to that for anthracite. Until recently the losses for such coal were sub- stantially hailf. While these los'ses have been somewhat reduc- ed, it is still true that in some fields not more than from fifty to sixty per cent, of the coal of the mines is being taken from the ground. In the bituminous industry the situation is that of the extreme competitive system; and so long as this situation prevails it cannot be expected that efficient and economic mining will be secured. Holmes estimates that since the beginning of mining in the United States, "twoi billion tons of anthracite and three bil'lions tons of bituminous coal have been left under ground in such condition as to make its future recovery doubtful or im- possible." The principles which from the point of view of con- servation should apply to mining of coal are well known. So far as practicable the manes should be so worked as to make onfe superimposed vein after the other available. Coal) slack should be reduced in amount and should be utilized. No considerable Conservation of Natural Resources in the United States, Van Rise, pp. 80-82. Report of the Wisconsin State Conservation Commission, pp. 32-38. *"Carbon Wastes," J. A. Holmes, "Mineral Wastes Symposium," The Journal of Industrial and Engineering Chemistry, March, 1912. PROCEEDINGS AMERICAN MINING CONGRESS 404 percentage of coal should be left in the ground as pillars. If these reforms were introduced, the losses could be reduced to half the present amounts and possibly to one-fourth. But to ask that any such proposals should be put into opera- tion under the restrained competitive system is purely chimerical. Under the Sherman law there is no opportunity to limit output, divide territory, or regulate prices. Five thousand bituminous coal operators could produce two hundred million tons of coal per annum beyond present demands. If the operators could agree upon limitation of output, and division of market so as to reduce freights, and could arrange for reasonable prices which would give them no more than their present profits, they would then be able to follow these principles in mining their coal; for they themselves would be gainers in prolonging the life of their mines, and, far more important, many future generations would be the immeasurable gainers in that they would have adequate coal supply. It is doubtless true that the plan proposed would result in somewhat higher prices for bituminous coal ; but, even so, coal would be cheaper in this country than in others. This slight additional increment, however, would be but a small social burden for this generation to bear in order to leave an adequate heritage to future generations. Under the competitive system, we are recklessly skimming the cream of the natural resources of a virgin continent with no regard for the rights of our chil- dren or our children's children. They will have a heavy score against us if we continue to ignore the future and to apply the unrestrained competitive system in total disregard of their rights. Corrective Measures In the time that remains to me I shall proceed to the con- structive side of the question before us and make positive pro- posals in regard to the things which should be done in order that we may obtain the advantages of concentration of business and at the same time protect the public. My proposal, gentlemen, is neither regulated competition, nor regulated monopoly, but re- tention of competition, prohibition of monopoly, permission for co-operation, and regulation of the latter. It has been proposed that combinations should be so divided that no one corporation shall have more than fifty per cent of any business. That is Mr. Bryan's suggestion. In the case of the BIG BUSINESS 405 Stanley bill the presumption of the violation of the Sherman law is against a corporation having more than thirty per cent. Now, it makes no difference, gentlemen, whether you break the great combinations up so that no one combination has more than fifty per cent or thirty per cent of a line of business, or so that there are ten with ten per cent, or twenty with five per cent. The demonstration of this lies in the fact already mentioned that thousands of farmers may and do co-operate in marketing their products just as perfectly as do the five great manufacturers .of steel. This they do in various parts of the United States for numerous products. At the present time there are state and national movements to still farther extend the advantages oi co-operation to the farmers. Since it is unquestionable that the sense of justice of the citizens of the United States will support the courts in prohibiting class legislation, we shall, therefore, I believe, ultimately permit co-operation in all lines of business alike. If we, however, retain freedom of competition, permit con- centration sufficient to give efficiency, allow reasonable co-oper- ation, and prevent monopoly, this will require regulation just as it has been necessary to regulate the railroads. This done, the Sherman law will be forgotten. Has there been any prosecution of the railroads for violations of the Sherman law because of collusion in fixing rates? And yet, everyone of us here knows that they are just as flagrant violators of the Sherman Act as any other class of corporations in the United States. Are the freight rates the same for different roads between any two points ? Are the passenger rates between Philadelphia and Chicago identical on all roads? Can you do better in price by travelling over the Pennsylvania than over any other road? The rate is the same, providing the speed is the same. How does it happen that the roads all got together? Just by Providence, I suppose. It was doubtless by a Providential act that these rates were fixed identi- cally upon all the roads, under the same conditions, all over the country. Why is it that nobody proposes to indict the railroads for collusion? Simply for the reason that the rates which they can charge are controlled by commissions, national and state. No- body any longer wishes to make them further trouble, because the public is protected by its commissions. That is the sum of the whole matter. The railroads are just as much amenable to 4 o6 PROCEEDINGS AMERICAN MINING CONGRESS attack under the Sherman Act as any other combination in the United States; but when the railroads are giving reasonable rates, and are competing in giving reasonable service, even if the law is on the statute book and is the hallowed thing that has been described, the sense of official justice is such that they are not attacked in the courts. Will the Attorney-General of the United States or the Attorney-General of this or any other state bring suit against the railroads for conspiracy in fixing rates when the public is properly protected? -I have not heard the proposal made anywhere. However, it is a wrong condition when we have on the statute books a law of a kind which requires the officials of justice to close one eye whenever they pass by the men in con- trol of one great group of industries, and at the same moment see other men not one whit more guilty. We ought to remedy this condition so that honorable business men shall not be in the position, the unfortunate position, of being technically violators of statutes which it is not advantageous from the public point of view to enforce. Trade Commissions Should Be Created I have not time to more than touch upon necessary modi- fications of the law; but the substance of my remedied proposal is that there be an interstate trade commission and state trade commissions, which shall have substantially the same powers to regulate co-operation in industry that the Interstate Commerce Commission and the State Commerce Commissions have in regard to the public utilities. It seems to me that the Interstate and State Commerce Commissions and the administrative bodies for the pure food laws point the way for the next constructive step in the development of the laws. It would perhaps be chimerical, with public opinion as at present, to propose the repeal of the Sherman Act; but the situation may be met by amendments to this law. The Sherman Act can be left to apply, as defined by the supreme court, to monopoly. Unreasonable restraint of trade may be defined as monopolistic restraint of trade, and it is rather generally agreed that monopoly should be prohibited. To make the matter perfectly clear another amendment should allow rea- *For a full discussion of remedial measures, see "Concentration and Con- trol; a Solution of the Trust Problem in the United States," by Charles R. Van Hise, pp. 225-278. BIG BUSINESS 407 sonable co-operation, but such co-operation should be under the watchful eyes of administrative commissions in order to protect the public. Powers of Commissions The coal operators at a conference held in Chicago in May, 1912, agreed upon a bill for the establishment of an interstate trade commission. The important power proposed for such commission was the authority to decide whether any proposed arrangement is in opposition to the Sherman Act as it now exists under the interpretation of the courts. If any arrangement is approved by the commission as in accordance with law, then the organization which enters into such an arrangement is to be free from prosecution under the Sherman Act. Also the com- mission is empowered to require the discontinuance of any exist- ing trade arrangement, practice, or combination, which is found to be in violation of the national trust law. From the foregoing discussion it is apparent that while the above proposal is a move in the right direction and is an improvement upon the present situation, it is not adequate. The frightful wastes of unrestrained competition as applied to mineral products, and especially as applied to coal, can only cease when operators are permitted to co-operate in limiting and dividing the market. However, if they are permitted thus to co-operate, there is danger that the public may be required to pay unreason- able prices ; and therefore any such co-operation should be under the watchful eyes of commissions that should have power to require the discontinuance of any trade arrangement found inimical to the public welfare. Ultimately also it will probably be found necessary to give the commissions the same authority in regulating prices that the State and Interstate Commerce Commissions have in regulat- ing rates for the public utilities. The burden of fixing prices should rest with the operators ; but whenever any man feels that a price is unreasonable, he should have the right to have his case brought before a commission for adjudication. If, after investiga- tion, any price is found to be unreasonable, the commission should have authority to issue an order that it be made reasonable. I am aware that the above suggestion regarding price regulation has been vigorously attacked ; but it should be under- 408 PROCEEDINGS AMERICAN MINING CONGRESS stood that the proposal does not involve the initiative in fixing prices. Wherever a business is not so large as to be affected by a public interest, the principles of trade which are now in force would hold in regard to prices; and this statement means that the great majority of prices would be controlled by the present system, as imperfect as it is. However, wherever co-operation and combination are permitted in such a manner as to lead to a situation where the market is controlled, it is clear that the pub- lic cannot be protected under these conditions unless represented by some authority having power to protect it, even to the extent of regulating prices. The proposed trade commissions should have a number of other powers which I have not time fully to discuss. It is clear that all unfair practices should be prohibited ; and by unfair prac- tices is meant to include everything covered by the term immoral practices under the common law. If I were to define unfair practices, it would be that they should include all those practices of every kind which are inimical to the welfare of the people. Another, and perhaps the most vital, point of the law creat- ing the state and interstate trade commissions should be that when an individual is wronged through unreasonable rates, or rebates or other discrimination, it should be the duty of a pub- lic commission to handle his case. The aggrieved individual should not be obliged to carry his case through the machinery of the courts ; he should make complaint to an administrative commission, representing the public, and him as a part of the public, to secure redress. This, while the greatest, is but one of the many advantages which may be gained through the estab- lishment of trade commissions, national and state. The powers of the commissions should be granted as broad, simple rules of law; and detailed regulations for the administration of these rules should be formulated by the commissions. If the views which are here presented are sound, it is clear that it is not sufficient simply to create trade commissions who shall act as interpreters of the Sherman Act, but that important amendments to the Sherman Act are, necessary in order to per- mit the magnitude necessary for efficiency, in order to allow the co-operation imperative for conservation, in order to protect the public. BIG BUSINESS 409 Powers to Be Given Gradually I do not suppose that at the outset the commissions created will receive all the powers which they will finally possess. In- deed, while I hold to the above principles, at first I should be conservative in giving powers to these commissions. The powers would be based upon the same principles that have been applied in the pure food laws, and in the control of the public utilities. The American people always move slowly in these matters, and step by step; and I should not expect that these trade commis- sions, if created, would at once be granted all the powers which they would finally exercise. In this matter I should expect the same slow development to take place that has occurred regard- ing the commissions which control the public utilities. More than forty years have elapsed since the creation of the Interstate Commerce Commission. These early commissions had the powers of recommendation, of requiring publicity, etc. Finally the com- missions of Illinois and Iowa were given the power to control rates, but comparatively little came of this authority. It was not until 1905 that in Wisconsin a comprehensive law was en- acted to control the railroads. The passage of the law was strongly resisted by the companies, because of the fear that the proposed commission would treat them unfairly, but the act was passed despite their opposition. Under the law, there were ap- pointed in that state by Senator R. M. La Follette, then Gover- nor, a scientific commission composed of three men, one a well- known lawyer, the other a keen statistician, and the third an eminent professor of transportation. I have heard from many of the railroad men, including a railroad president and some of the ablest railroad lawyers, that the Wisconsin commission has been fair and reasonable both to the railroads and to the public. Neither side would go back to the previous situation upon one side hold-up bills to be defeated by questionable methods at each session of the legislative ; upon the other side numerous re- bates and discriminations. Before we had a railroad commission in Wisconsin there was continuous war between the people and the railroads. Since that commission has been created, and especially since its authority has been extended over all the pub- lic utilities of the state, including to adjust rates, we have had peace. Similarly, the Interstate Commerce Commission had small 4 io PROCEEDINGS AMERICAN MINING CONGRESS powers at first, merely powers of recommendation; and it was only six years ago that this commission finally gained the power to fix maximum rates; and at the present time the commission have not the power to initiate rates. The initiative rests with the railroads. It is only two ye'ars ago that the Interstate Commerce Commission gained the power to suspend advances of rates pending investigations regarding their reasonableness. Thus, stage by stage, conservatively, the development of the control of public utilities by administrative commission was worked out. Substantially the same history applies to the pure food laws. Doubtless the extension of laws of this class will go on until fabrics are included; until fraud will be practically eliminated through the use of false names for any commodity. I would have the proposed trade commissions pass through a similar history. Thus, precisely as with the Commerce Com- missions, by slow development, industry where co-operation has so extended as to become affected with a public interest would be controlled by trade commissions under the same lawful methods that have been applied to the public utilities. Concen- tration, co-operation, and control are presented as the keyboard to the solution of our great industrial problems. 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