Hot Coal

The U.S. coal industry--contrary to popular opinion--is not about to burn out. Soft coal's outlook, in fact, has brightened so much that the U.S. Bureau of Mines says production will be up to 671 million tons by 1975 (v. 406 million last year). The big coal-mining companies are turning such solid profits that many sharp-eyed Wall Street investors have pegged them as growth companies and have begun to push their stock prices up.

In large measure. Old King Coal's resurgence is the direct result of a unique phenomenon: the slimming down of a major industry by its own labor union.

Behind this curious process is a man once dreaded by U.S. business as a wild-eyed radical--thundering John L. Lewis, who at 82 still bosses the United Mine Workers union despite his innocuous-sounding title of president emeritus. For all his deep compassion for his miners, Lewis long ago grasped the harsh realities of the coal industry, i.e., that only the big and efficient mines can do business at a profit.

"We decided." said Lewis, "that it was better to have half a million men working in the industry at good wages and high standards of living than to have a million working in poverty and degradation." Squeeze the Underfed. In line with this businesslike philosophy. John L. has enthusiastically pushed the mechanization of U.S. coal mines, opposed featherbedding, and kept the coal industry free of major strikes since 1952. He has also put the squeeze on small, uneconomic mines to such an extent that a year ago the U.M.W. was found guilty of violating --of all things -- the Sherman Antitrust Act.

The U.M.W., a federal district court de cided, had used its power to discriminate against a small company (Tennessee's de funct Phillips Brothers Coal Co.) in favor of the big West Kentucky Coal Co., con trol of which had been acquired by Cleve land Industrialist Cyrus Eaton with mon ey lent him by the U.M.W. welfare fund.

During the trial. Lewis coldly testified: "I cannot sorrow for those pallid, under fed, ill-nourished operators of small mines who can't procession." keep up with the economic One predictable result of Lewis' policy: the number of coal miners at work in the U.S. has been more than halved (to 142,400) in the past ten years. And as displaced miners grow more and more desperate for jobs, they are increasingly willing to take work wherever they can find it -- including nonunion mines. Last year one-third of the coal mined in the U.S. "captive" (excluding 80 millions tons from the "captive" mines owned by steel compa nies) was nonunion, the highest percent age since the 19305. when the U.M.W.

was organizing. Price cutting by the low-paying nonunion mines has become so acute that last week, in the heart of East Kentucky's depressed coal fields, a bitter battle was raging between the U.M.W.

and tough Henry LaViers, 62, the owner of three small unionized coal mines.

LaViers demands that the U.M.W. excuse him from making the standard 40-c--per-ton payment into the union's welfare fund so he can compete with the nonunion mines all around him. The U.M.W., fearing that such a concession to LaViers' South-East Coal Co. could start a nationwide cave-in of its whole hard-won welfare program, has responded by pulling all 145 miners out of his mines.

22 Tons. On the positive side, the tough Lewis line has forced coal productivity up so fast that a miner who could dig only 6.3 tons of coal a day in 1946 can now take out 14 tons a day, and in the best strip mines a man may produce as much as 22 tons. This makes the U.S.

miner far and away the most productive in the world, and enabled the U.S. to ship 33 million tons of coal abroad last year.

This productivity record and the resultant low cost of coal are the major factors in coal's healthy long-term outlook. Also working to coal's advantage is the fact that the worst effects of the railroads' switch from coal-burning locomotives to diesels and of the U.S. homeowner's shift into gas or oil heat are over. Electric-power companies have long superseded railroads as coal's best customer. Last year the power companies took 44% of U.S. coal production, and because of coal's low price, its sales are expected to grow along with the power-generating industry--despite whatever far-off threat atomic fuel poses.

To overcome one of coal's most serious remaining disadvantages--its high transportation costs--President Kennedy fortnight ago asked Congress to grant the right of eminent domain to set up a coal pipeline* from the depressed West Virginia coal fields to the Eastern seaboard.

Should this go through, coal would be in a position to broaden its sales even further by competing effectively with the residual fuel oil now brought in by tankers to the Eastern utilities.

* Which carries a slurry of water and coal from mine to customer (TIME, Nov. 17, 1961 ).

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