The Nonpartisan Leader Newspaper, February 23, 1920, Page 3

M In the interest ~ of a square deal for the farmers Nonparfigan Teader ., A magazine that dares to print the truth Qfligial Magazine of the National Nonpartisan League - VOL. 10,°NO. 8 MINNEAPOLIS, MINNESOTA, FEBRUARY 23, 1920 State Mine Operation a Big Success WHOLE NUMBER 231 " Public, Miners and Operators All Benefit in North Dakota and Plans for - Immense Future Savings Are a Result : Bismarck Bureau, ? Nonpartisan Leader. S A result of the success of state oper- ation of coal mines in North Dakota during the recent nation-wide coal miners’ strike, steps probably will be taken, at the next session of the legis- lature, to provide for opening and ‘permanent operation of one or .more state-owned mines. Readers of the Leader will remember that coal " miners of the nation went on strike November 1 and remained out until December 10, 1919. Gov- ernor Frazier of North Dakota appealed to the miners of that state to meet the mine operators in a final effort at compromise before striking. As ‘a result of this appeal the strike order was tempo- rarily suspended, so far as it applied to North Da- kota. Representatives of the miners met with op- erators in Governor Frazier’s office at Bismarck for more than a week in an effort to arrange a compromise.. Operators finally rejected the miners’ terms, the order temporarily suspending the strgke in North Dakota was recalled and every union mine in the state became idle. Just at this time one of the worst blizzards of recent years swept the states Coal stocks were low. Thousands of people were threatened with suffering or death. GOVERNOR TAKES OVER MINES ° TO PREVENT SUFFERING 5 At the start of proceedings Governor Frazier had served notice upon miners and operators that if they could not reach an agreement he would take over the mines and operate them. It was no empty threat. On November 12 the governor iss.m_ad. a proclamation declaring martial law in the vicinity of all idle.mines and took them over under state operation. Miners were guaranteed ?;he same wages they had been receiving apd any increases that might be granted later; mine operators were guar- anteed that they would be paid a royalty of not ‘less than 10 cents and not more than 256 cents a ton, The public was guaranteed that coal would be furnished at normal prices. Readers of the Leader are familiar.with the legal fight made against Governor Frazier by Minnesota corporations owning mines in North Dakota and with the victory for the governor in the decision of Federal District Judge Amidon of Fargo. - The purpose of this article is to give the facts about the operation of mines, as shown by the official report submitted by J. W. Deemy, appointed - by Governor Frazier as director of mines during state operation. Mr. Deemy is one of the North Dakota oper- ators. He is a practical coal man with years of experience in the Illi- nois fields. He is neither a politician, an “agita- tor” or anything but a plain, common sense business man. He has nothing to gain by tell- ing anything but facts. Mr. Deemy, in his re- port, says state opera- tion of coal mines dur- ing the strike did these things: 1, Prevented suffering and resultant deaths, Lignite coal mines at Beulah, typ 2. Saved miners $100,000 in wages that otherwise would have been lost. ; ; 8. Saved operators thousands of dollars in roy- alties and in maintenance work that would have been necessary had the mines laid idle. 4. Prevented profiteering in retail coal sales. In addition to carrying out the promises of the governor of paying normal miners’ wages, state operation allowed the mine owners the maximum royalty promised, of 25 cents a ton, and besides left a net surplus of $5,318.75 for the state. But the most important result of state operation, in all probability, was the discovery of the wasteful methods being applied in the private operation of coal mines and the chance for successful operation of one or more state-owned mines. Mr. Deemy’s financial report states: ; . “The operating statement shows total operating expenses to be $64,336.73, not including royalties, or $2.34 per ton, items of cost comprising this amount being as follows: =3 . 3 Per ton Average cost of mining .................... $1.068 Average cost of day labor ................ .54 Total labor cost per ton |2 Cost of material, supplies and repairs Total production eXpense ...........cocooecoeeecd $1.851 Superintendence and management.. .14 J Miscellaneous and general expenses .349. Total “overhead” eXpense .................... $ .489 Total average operating cost, not includ- ing royalty, per ton .........ccccoieiiinnnaes 2.34 “The statement of income indicates revenues as follows: Received from coal sales $74,543.00 Other inComMe ......ccooeiieeieciinecaaceaeacaneae 1,954.01 Total revenue ......cocococceccoieinceceacend $76,497.01 Deduct operating cost .........ccoieeeneeens 64,336.73 Net income _............ e $12,160.28 From this amount royalties were allowed ..... SRR N 6,841.53 . Leaving net surplus of ...... plsanan $ 5,318.756 “Operating costs as indicated above are out of all proportion as compared with tonnage -produced. The figures submitted herein and which are abso- lutely correct, indicate a production cost of $1.85 per ton for laber and material. Seventy-five per the recent nation-wide coal strike, PAGE THREE ) ical of the small mines operated by the state of North Dakota during cent of the mines that were under stafe control are | not properly equipped to produce coal. If they were this cost would have been at least 40 cents per ton less, or approximately $1.45 per ton. The overhead cost as shown is 49 cents per ton, not in- cluding royalty. With properly equipped mines and operated efficiently the same tonnage could have been produced at a cost for overhead expenses of not to exceed 15 cents per ton, and add to this de- pletion and depreciation charges of 10 cents per ton, would make the total cost of operating an un- derground mine, properly equipped and at rates of wages in force during period of state operation, $1.70 per ton. x “Thus if mines were properly financed and could as a result be equipped as they should be, it would mean a clear saving of operating costs, on the present basis of 64 cents per ton. “The net surplus as shown represents the differ- ence between actual operating gxpenses and income of the mines and does not take into consideration expenses of the state, militia members or militia employes. “The tonnage produced was normal at each mine with a few exceptions. Litigation proceedings in some cases hirdered very materially the output of coal and increased expenses to the state. STATE-OWNED MINE WOULD PROVIDE NEEDED SUPPLIES - “As director of mines under state control I was - charged only with the specific duty of operating same ‘and reporting results of such operations. I feel it my duty at this time, however, to make some additional observations on the mining situation in the state. : “North Dakota has more tons of coal available than any other state. The state has created an in- dustrial commission and has under way plans for state-owned industries. = The . state educational, charitable and penal institutions now consume ap- proximately 60,000 tons of lignite coal per year. The industries now under way will use approxi- mately 40,000 tons more, making a total of 100,000 tons consumed by the state institutions each year. The average price of coal purchased by the state now is $2.50 per ton at the mines, and the supply of each particular preparation of coal is frequently uncertain. : ¥ “We can prove that a properly equipped under- ground mine can produce coal at the present time at. a cost not to exceed $1.70 per ton. Numerous au- thorities contend that a strip mine, equipped with the latest type of machinery, can put coal on cars for less than $1 per ton. There is an abundance of stripping coal avail- able in North Dakota. “On this basis the state could open a mine and make a flat saving on its own fuel require- ments of $80,000 to $150,000 per year, and could in addition make a good profit on hun- ‘dreds of thousands of tons of coal it could mine and sell in addi- 4ion to its own con- sumption, and get coal to the consumer cheap- er than it is now fur- : (Continued on page 14) =