SOME * FACTORS BEARING ON THE WAGE QUESTION IN THE CLIFTON-MORENCI-METCALF = DISTRICT = BY Norman Carmichael Clifton, Arizona July 1917 THE WAGE QUESTION IN THE CLIFTON-MORENCI-METCALF DISTRICT To Employees of the Arizona Copper Company, Ltd., and the Public: During times of stress such as this district is passing through at the present time, many misstate- ments, some of them made wilfully for the purpose of creating erroneous impressions on the public mind and others made unwittingly as a result of misinfor- mation, find a ready circulation and prevent a prop- er conception of true conditions in relation to ques- tions at issue. This is written for the purpose of clearing up some of the misunderstanding which I believe exists, and I wish to put a few facts before you in order that those who desire to form a well-balanced opinion in their own minds regarding the present controversy may have a correct basis to start from. There appears to be a deeply grounded opinion on the part of a certain section of the mine workers that a uniform scale of wages should obtain in all mining camps of this state and our employees have demanded a scale which is in effect in the Miami district. It is, I think, safe to say that in no industry today does a uniform scale of wages exist, for a very good reason that conditions vary so much in different places what would be fair in the case of one concern or locality would be totally unfair in the case of another. Page Two I would like to point out a few reasons why the application of what is known as the Miami scale would not be fair to the operators in this district, and would not be of permanent benefit to the community. Operations in the Miami district are of very re- cent inception. The Miami Copper Company com- menced production in 1911, while the Inspiration Company began producing only last year. The prop- erties of these two companies adjoin and may be con- sidered as one immense ore deposit. Both properties were fully developed before stoping operations were commenced, and the owners had accurate knowledge of the size, shape and copper contents of this miner- alized area, with which information they were en- abled to lay their plans for mining the ore in the most economical manner. The science of mining large ore bodies has ad- vanced very rapidly within the past few years and these companies had the opportunity of taking ad- vantage of the very latest methods and of applying them to an unbroken area, while the highest talent has been freely used in solving the various problems connected with the mining and treatment of the ores, involving years of preparation and the expenditure of vast sums of money in order that operating labor might be saved and other expenses reduced to a min- imum. A comparison between the conditions found in the Miami district with those obtaining in the Clif- ton-Morenci-Metcalf district is opportune and should be taken into consideration when discussing the wage question as affecting these respective districts. The mines at Morenci and Metcalf have been worked as long as any in the state, having been open- ed in the early seventies or nearly fifty years ago ; in fact, it might truthfully be said that copper mining in Arizona had its beginning in this district. These mines w r ere first worked for their high grade oxid- dized ores which were smelted direct; later larger bodies of porphyry ores containing enriched veins of sulphide ore were discovered and the mining out of Page Three these higher grade ores was commenced, using the most approved method of those days, viz : the square set system, but involving the use of enormous quan- tities of timber. The more recently developed meth- ods of mining have been introduced and have re- placed the older method as far as they could be ap- plied, but their application has been restricted on account of the fact that the older workings interfered with any broad application such as is possible in the case of ore bodies laid out in the new before mining operations are commenced. The remaining ore in the case of our older mines lies in comparatively small and detached masses, scattered irregularly throughout a considerable area, honeycombed with old stopes, involving an intricate system of mine workings to reach them and for transporting the ore, and the use of a large amount of labor split up into many small units. Similarly it can be readily shown that the devel- opment of these scattered ore bodies involves vastly greater expense than is required in the case of one ore body which is self-contained. In the case of Miami, two mining companies pro- duce an aggregate of about 24,000 tons of ore per day, while in tnis district the three companies pro- duce but 7000 tons per day. The mines in the Miami district are served with a standard gauge railroad delivering supplies to all their plants ; in this district the mines are situated in wilder and more inaccessi- ble locations and the three companies have each a system of narrow gauge railroads aggregating 35 miles in length, operating over heavy grades, involv- ing the transfer from standard to narrow gauge and in every case a further transfer from nar- row gauge to baby gauge, with perhaps a haul over inclines in order to get their supplies to their mines and works. Comparing the smaller of the mining companies in the Miami district with the larger of the three com- panies operating in this district, both of which pro- Page Four duce about the same amount of ore and make about the same amount of copper per month, it may be apt- ly pointed out that in the case of the Miami Company there is but one mining organization under one staff, superintendent, foreman, and shift bosses, Their mining operations, while carried on on a comprehen- sive scale, are confined within a very limited area, the ore drops by gravity from the stopes to the haul- age levels and by a comparatively short haul by elec- tric motors is delivered to a central shaft through which it is hoisted direct to the concentrator. In our case we work twelve separate mines scat- tered over a district four miles long by two miles wide, each with its own organization and connected together by an extensive system of transportation levels and tunnels many miles in length, partly oper- ated by electric motor, partly by steam and partly by mule power, requiring the use of four shafts, four in- clines and two aerial tramways with all the necessary hoisting engines and involving a heavy cost for main- tenance, as also for operation. In addition to all this we have a system of sur- face workings, operated by from 200 to 300 leasers, scattered over the hills, producing ore in small quan- tities at numerous points from which it has to be got- ten and packed by burros to points on our transporta- tion system, all of which cost must be absorbed in the "General Mine Expense." In the former case, their ore is treated by one concentrator and in our case by two, each with its attendant staffs and tailings disposal plants. In the case of Miami, two sampling plants suf- fice ; in our case the same work requires five ; they have one assay office, we have five, not including the one in our smelting department. Similarly, where one machine shop can take care of the work of the mine and concentrator, we require three ; and similar disparity will be found to hold good in the case of mine offices, time keeping staffs, supply warehouses, blacksmith shops, air compressor plants, mine Page Five change houses and sundry other indispensable plants. It is true that in limited- areas of the larger mines in this district costs approximating those ob- tained in the Miami mines can be attained, but these areas are very limited and can in no way be taken as a criterion of the general cost of mining in this dis- trict, and what is true of the Arizona Copper Com- pany is equally true, and to an even greater extent, in the case of the two other companies operating here. These conditions are reflected in the tonnage output per man in each of the two districts, thus in the month of May, 1917, there were mined by the In- spiration and the Miami Companies a total of 777,220 tons of ore, or 25,071 tons per day. The total num- ber of men employed in their mining departments by these two companies was 1875, or a yield of 13.4 tons per man per day. In the Clifton-Morenci-Metcalf district, the Ar- izona, Phelps-Dodge and Shannon Companies to- gether mine 6,710 tons per day, and employ in their mining operations 3730 men, equivalent to a yield of 1.8 tons of ore per man per day. Making further comparison on the basis of cop- per produced, the Inspiration and Miami Copper Companies employed a total of 3748 men in all their mining, concentrating and smelting operations (In- ternational Smelter) for the month of May, and pro- duced a total of 17,187,592 Ibs. of copper, or a yield per man per day of 147 Ibs. The three companies operating in the Clifton- Morenci-Metcalf district in their total mining, con- centrating and smelting operations employ 5,197 men and produce 7,952,000 Ibs. of copper per month, equivalent to a yield of 51 Ibs. of copper per man per day. While it is true that the above difference in the yield per man is essentially due to the different con- ditions obtaining in the two districts another factor comes into play, for it is also a fact that mining labor Page Six in this district is not equal in efficiency to the labor in other districts, nor are our miners as efficient as they were a few years ago. An extract from the records of one of the oper- ating companies may be given as illustrative of this unfortunate circumstance. In the mine in question some 600 men are em- ployed and while no change has been made in mining methods used which would account for any diminu- tion of the output per man, the following figures show the facts : Tons Per Man Average Wage Per Shift Per Shift 1914 2.52 $2.30 1915 2.60 2.34 1916 2.22 3.72 1917 2.18 4.12 Thus while wages have steadily and rapidly ad- vanced during the past four years, the average output per man has steadily declined. During 1915 many of our best miners left the district and the companies here are handicapped by the necessity of using a large number of men some of whom are not physically able and others who are not mentally disposed to turn out an average day's work, and while there are many employees in our mines to whom the above remark does not apply, inquiry amongst the various foremen and shift bosses in charge of the operations in the mines will corrobor- ate this statement. The attitude of a certain important section of the mine employees towards their superior officers has also been anything but satisfactory for some time past, the deliberate opposition shown to any method introduced for the purpose of increasing efficiency, the spirit of insubordination and indifference so fre- quently shown, and the lack of cooperation and loy- alty, are factors not conducive to the harmony and good feeling which should exist and unless the com- Page Seven panies can be assured of better esprit de corps and a heartier cooperation with them amongst the employ- ees there is little inducement to reopen the mines. I would like to call particular attention to the to- tal number of men employed by the two large com- panies operating in the Miami district, viz: 3748, while the total number employed by the three com- panies operating in this district is 5197, although the Clifton-Morenci Companies produce less than one- half the quantity of copper produced by the Miami companies. The result of forcing a wage scale higher than the one now in effect upon this district would neces- sarily be followed by a large reduction in the number of men employed, the curtailment of operations, and the working of such properties only as could stand the greatly increased expense. The small mines of the large companies would be closed down, except during periods when copper sells at a figure higher than its average price, while the small operator could not exist, a condition which would not bring prosper- ity to this community. Only so lately as March, 1916, the employers and employees in this district entered into an agree- ment with respect to wages that should be paid in this district, with copper selling at different prices. The wages agreed upon involved substantial increas- es over rates previously in effect. Had this agree- ment provided a fixed rate of wages for different classes of work, irrespective of the price at which copper sold, there might be justification for the em- ployers wishing to reopen the question at the present time, and unforeseen circumstances could very apt- ly be used as an argument in their favor, but the case is quite different; the scale agreed upon was a mov- able one and just as binding upon the companies and employees at 30c copper as at 13c copper, and while the lower range of wages has not been experienced since the agreement was entered into, and notwith- standing the fact that our employees are enjoying a Page Eight higher rate of wages than received at any previous period in the history of this camp, they have deemed it an opportune time to repudiate their agreement in an endeavor to force upon the companies a still high- er scale and one which the companies maintain would be unfair to them. The present high cost of living is given as a rea- son for the demand for this superwage. It cannot be argued that a wage scale which slides with the price of the product contemplates a stationary cost of liv- ing, that the increased wages will be all profit, for it is a well known fact that when one important and widely produced commodity such as copper goes to abnormally high prices, the cause for such a condi- tion usually affects other commodities in a similar manner and the result is a general increase in the cost of living, hence this very condition is taken care of by the sliding scale. I have gone into this question quite carefully with a serious desire to obtain a correct idea as to what this increased cost of living amounts to, as af- fecting the people generally. It is true that owing to the war the cost of the necessities of life has gone up and that certain luxu- ries are unobtainable, but just to what extent this has affected the cost of living very few have a well de- fined idea. It is a fact that the price of flour has ad- vanced 75 per cent since the beginning of last year, but people do not live on flour alone and to an ordi- nary family of four or five persons this great increase in cost will probably not mean more than $2 or $3 per month. Many other staple commodities have ad- vanced but slightly and in order to know what the average increase has been one must take into account the various items which go to make up the monthly household bills. The following bill of goods has been made up with the object of showing what change in prices has occurred during the past two years in the case of staple articles commonly used in any ordinary house- hold. Page Nine The total amount of the bill, which for the year 1917 sums $100.00 is a purely arbitrary figure, chos- en for the purpose of making easy comparison, and in no sense is to be taken as representing a month's requirements for an ordinary family. The prices are taken from actual charge slips and in every case can be verified. BILL OF GOODS July Feb. June 1 PfKTQ. 915 1916 1917 iviJCjij : 00 Lbs. Flour 4.25 4.25 7.50 25 Lbs. Sugar 2.00 2.00 2.50 50 Lbs. Potatoes 1.75 1.80 2.75 3 Lbs. Coffee G. G. G. G. MJB 1.20 1.20 1.20 3 Lbs. Arbuckies .75f .75f 2 Lbs. Tea 1.50 1.50 1.30 15 Lbs. Lard 2.40 2.30 4.40 5 Lbs. Fancy Bacon 1.75 2.00 2.25 6 Lbs. Butter 2.40 2.70 2.85 2 Lbs. Cheese .60 .60 .70 y 2 -Lb. Chocolate .25 .25 .25 10 Doz. Eggs 3.50 4.50 5.00 8 Pkgs. Breakfast Cereals 1.00 1.00 1.00 1 Lb. Golden Gate Baking Powder .35 .40 .50 4 Pkgs. Macaroni .50 .50 .60 8 Pkgs. Crackers .80 .80 1.00 8 Bars Laundry Soap .40 .40 .50 1 Pkg. Laundry Powder .25 .25 .25 1 Bottle Blue .15 .15 .25 % Gal. L. C. Syrup .90 .90 1.00 1 Ham, 12 Lbs. 2.85 3.00 3.95 6 Cans Table Fruit 1.50 1.50 1.25 1 Case Assorted Canned Vegetables (24 cans) 2.90 2.90 4.40 3 Cans Pork & Beans 3 Ib. .70 .70 1.00 2 Cans Pink Salmon V z Ib. .40 .40 .40 5 Lbs. Rice .50 .50 .50 2 Doz. Milk 2.20 2.50 3.00 1 Can Cocoa .30 .30 .30 2 Sacks Salt .10 .15 It) % Lb. Pepper .10 .10 .20 1 Sack Corn Meal 10 Ibs. .40 .40 .65 1 Bottle Extract .35 .35 .50 2 Lbs. Prunes .25 .25 .40 1 Lb. Evap. Apricots .20 .20 .30 2 Jars Jam .70 .70 1.00 1 Bottle Catsup, Qt. .35 .35 .65 1 Jar Pickles .50 .50 .40 1 Jar Mustard .20 .20 .20 2 Pkgs. Starch .20 .20 .20 3 Bars Toilet Soap .25 .25 .25 3 Pkgs. D. Matches .30 .30 .25 1 Qt. Vinegar .40 .40 .25 1 Bottle Salad Dressing .40 .40 .35 7 Lbs. Pink Beans .60 .70 1.00 42.60 44.75 57.35 Page Ten Increase over 1915 Increase over 1916 f Not included in total. FRESH VEGETABLES: 12 Heads Lettuce 3 Bunches Turnips 3 Bunches Beets 2 Lbs. Peas 2 Lbs, String Beans 6 Lbs. Tomatoes 3 Bunches Green Onions Increase over 1915 Increase over 1916 FRESH FRUIT: 1 Doz. Oranges \ 2 Lbs. Apricots J or 2 do 8 Lbs. Peaches ) Bananas Per Cent Per Cent 5.05 34.62 28.15 MEAT: Increase over 1915 Increase over 1916 10 Lbs. Pot Roast 5 Lbs. Veal 5 Lbs. Mutton 5 Lbs. Pork 3 Lbs. Sausage Increase over 1915 Decrease under 1916 DRY GOODS: 1 Pr. Levi Strauss Overalls 1 Blue Chambray Work Shirt 1 Heavy Chambray Shirt 2 Pr. Work Sox (Cotton) 2 Pr. Cooper Sox 1 Pr. Canvas Gloves (Progress Mfg. Co.) 1 Suit Heavy Ribbed Cotton Underwear 5 Yds. Gingham 5 Yds. Bleached Muslin 3 Turkish Bath Towels 6 Yds. Dark Calico 3 Prs. Ladies' Hose 2 Yds. Cotton Poplin 6 Yds. Unbleached Muslin Increase over 1915 Increase over 1916 July Feb. June 1915 1916 1917 1.00 1.00 1.00 .25 .25 .30 .25 .25 .30 .25 .25 25 .10 .10 .25 .90 .90 .75 .15 .15 .15 2.90 2.90 3.00 Per Cent Per Cent 0.00 3.49 3.49 .40 .40 .40 z.__.30 .30 .25 .30 .30 .35 1.00 1.00 1.00 Per Cent Per Cent 0.00 0.00 0.00 2.50 2.50 2.50 1.25 1.75 1.50 1.25 1.50 1.25 1.25 1.50 1.50 .60 .70 .75 6.85 7.95 7.50 16.06 9.49 6 5.66 1.00 1.25 1.50 .50 .50 .50 1.00 1.00 1.25 .25 .25 .25 .50 .50 .50 sSS .25 .25 .35 1.00 1.00 1.50 .75 .85 1.00 .50 .65 .75 .75 .90 1.00 .50 .50 .75 1.05 1.05 1.35 .70 .70 .80 .50 .60 .75 9.25 10.00 12.25 Per Cent Per Cent 8.11 32.43 22.50 Page Eleven BOOTS & SHOES: 1 Pr. United Workmen Shoes 4.50 5.00 5.50 Per Cent Per Cent Increase over 1915 11.11 22.22 Increase over 1916 10.00 HARDWARE: 1 Stewpan (enamel ware) .60 .60 .75 1 Coffee Pot .75 .75 .75 1 Dish Pan .60 .60 .75 1 Wash Basin .40 .40 ,50 1 Drip Pan .20 .20 .25 % Lb. Sole Leather .65 .65 .75 Vz Doz. Cups & Saucers .75 .75 1.20 3.95 3.95 4.95 Per Cent Per Cent Increase over 1915 0.00 25.32 Increase over 1916 25.32 DRUGS: 1 Jar (4 oz.) Cold Cream .25 .25 .20 1 Bot. (1% oz.) La Sanadora .25 .25 .25 1 Bot. (3 oz.) Volcanic Oil .25 .25 .25 1 Bot. (9 oz.) Scott's Emulsion .50 .50 .60 1 Box Melba Face Powder .50 .50 .50 1 Tablet Writing Paper .15 .15 .15 1.90 1.90 1.95 Per Cent Per Cent Increase over 1915 0.00 2.63 Increase over 1916 2.63 FUEL: % Ton Coal 6.50 6.50 6.50 Per Cent Per Cent Increase over 1915 0.00 0.00 Increase over 1916 0.00 TOTAL $79.45 $83.95 $100.00 Per Cent Per Cent INCREASE OVER 1915 5.66 25.87 INCREASE OVER 1916 19.12 Page Twelve It will be seen from the above that groceries have advanced 34.62 per cent since 1915; fresh veg- etables 3.49 per cent; meat, 9.49 per cent; dry goods, and clothing, 32.43 per cent; boots and shoes, 22.22 per cent; hardware, 25.32 per cent; toilet articles, 2.63 per cent; while a few articles such as fresh fruit and coal have not advanced at all. Taken together the cost of this bill of goods in July 1915 would have been $79.45, and in June 1917, $100.00 even, a total increase of 25.87 per cent. Different articles may be substituted for those in the above list, but when such items under any one heading are added together it will be found that the total percentage of advance is approximately as shown. While the above bill of goods shows an increas- ed cost of a little better than 25 per cent, it is not to be assumed that this figure reflects the average increas- ed cost of living, there are many other items which should be taken into consideration. It is not out of the way to assume that 50 per cent of the cost of maintaining a family will fall un- der the headings shown in the above bill, leaving 50 per cent for other requirements, such as house rent, water, ice, lights, taxes, books, papers, tobacco, entertainments, traveling expenses, etc., while a pro- portion is, or should be, set aside for savings. It is a matter of common knowledge that few, if any, of the items in the supplementary list have in- creased in cost during the past two years; automo- biles, gasoline and tires have advanced, no doubt, but I am not considering these. Fresh milk has re- cently advanced 121/2 per cent. House rents in cer- tain cases which were reduced when things slumped at the time war was declared in Europe, have been restored to their former level; in other places no changes have been made, a few have been raised while on the other hand a large number of employees own their own homes, consequently that cost to them has not increased. To be safe, however, we will as- Page Thirteen sume an average advance of 10 per cent on the sup- plementary list. If then we take a 25 per cent increase, as affect- ing 50 per cent of the wages received, and 10 per cent increase with respect to the other half, the total in- crease in the cost of living works out at 17.5 per cent. Coming now to the question of wages and the ability to meet this increased cost of living, I will call your attention to the fact that in 1915 the average wage paid in this district was $2.72 per day, while the average wage paid during the first six months of the present year was $4.27 per day. Thus while the in- creased cost of living to married employees in this district may be taken at less than 20 per cent, wages have increased 57 per cent. If a similar comparison be made between the wages and the cost of living this year as compared with the same conditions last year, it will be found that the increase in wages has slightly less than off- set the increase in the cost of living, thus : Average Wage March 1916 $3.86 Average Wage January to June 1917 4.27 Increase 10.6 per cent Increased cost of living: Fifty per cent at 19.12 per cent Fifty per cent at 10.0 per cent Average 11.4 per cent This difference is equal to eighty cents upon every one hundred dollars earned in wages in the case of the man with family. In the case of unmarried employees whose pro- portionate expenditure on the necessities of life is much smaller than in the case of married employees, the increased cost of living is not so seriously felt, and their increase in wages is consequently greater in proportion. That the average employee is finding it possible to save a fair proportion of his earnings is reflected in the increased amount of deposits in the local banks The following statement shows the average total Page Fourteen deposits in all banks in this district for the past three years: Year 1915 $1,501,675 Year 1916 1,809,533 Year 1917 2,406,276 These figures show an increase of $300,000, or 20.50 per cent in 1916 over 1915 ; and an increase of $600,000 or 32.98 per cent in 1917 over 1916. No figures can be more persuasive in testifying to the prosperity of this community and employees generally, and would certainly indicate that present wages provide a considerable margin even after the present high cost of living is met. The State Auditor reports the amount of depos- its in all banks in the state for the past two years to be: Year 1916 $46,137,360 Year 1917 60,308,715 Increase 14,171,355 This increase of 14,000,000 odd dollars is equal to 30.7 per cent over the previous year, which com- pares with an increase of practically 33 per cent for pur own district, showing that pur people are enjoy- ing relatively greater prosperity than their fellow citizens in the state. That this company has not "hogged it all" and has at least returned to its employees a fair share of its earnings can best be shown by a statement of the amount paid to its shareholders in dividends, in terms of cents per pound of copper produced during Page Fifteen the past ten years, for which purpose the following statement is submitted : Year Ave. Price Received Production per Ib. cu. Dividends Pd. Lbs. Copper Cents Cts. per Ib. cu. 1907 27,404,000 19.92 5.48 1908 33,942,000 12.60 3.07 1909 31,962,000 12.58 3.26 1910 32,210,000 12,32 3.23 1911 34,584,000 11.95 3.01 1912 38,132,000 15.06 3.45 1913 34,226,000 15.35 3.31 1914 38,756,000 13.51 1.97 1915 37,330,000 15.40 2.49 1916 34,100,000 25.90 4.59 Average 34,264,400 15.37 3.32 From this table it will be seen that during the past ten years The Arizona Copper Company has re- ceived on an average 15.37 cents per Ib. for the cop- per it produced, out of which its shareholders have received only 3.32 cents per Ib. in returns. The figures for the Detroit Copper Company are not available, but it is known that the costs of that company are higher than those of the Arizona Cop- per Company. In the case of the Shannon Copper Company the figures are still more convincing and clearly show how unfair to that company the present wage de- mand is, the results of their operations are given below : Pag-e Sixteen Year Ave. Price Received Production per Ib. cu. Dividends Pd. Lbs. Copper Cents 1904 11,059,909 L2.516 1905 11,295,586 L4.2476 1906 10,970,333 17.4929 1907 13,418,126 22.3171 $450,000 1908 16,385,290 13.7275 1909 17,553,213 13.2652 1910 17,924,198 12.9498 1911 15,630,090 12.355 1912 16,406,336 14.8758 150,000 1913 18,793,724 15,8696 150,000 1914 9,003,169 13.6263 1915 6,017,642 17.7994 1916 9,364,968 27.24 41 150,000 Total 173,822,584 Ibs. cu. 15.538 $900,000 16 mo. period. From this statement it will be seen that for the thirteen years during which operations have been carried on, the Shannon Copper Company have pro- duced a total of 173,822,584 Ibs. of copper, receiving on an average 15.538 cents per Ib. for the product, out of which its shareholders have received only six tenths of one cent per Ib. in returns. When it is considered that the shareholders of the Arizona and Shannon Companies together num- ber nearly 10,000 or about twice the number of em- ployees in the entire district, many of whom are wage earners like themselves, having invested their sav- ings against the "rainy day", and when it is realized that the amounts paid in dividends have to be divid- ed among so large a number, it should be readily con- ceded that the individual share holder has received very meager, in fact totally inadequate, returns Norman Carmichael. General Manager. Clifton, Arizona. July, 1917.