A Mine Owned by the Miners.
ARTHUR COOK IN TECHNICAL WORLD
In Saginaw, Michigan, there is a coal mine which is owned by the workmen who dig out the coal It is apparently a refutation of the statement that there is no chance for the little iudependent mine to make headway against the combination of operators.
IT is not so very long ago that Mr. Russell, the English economist, declared, after careful investigation and consideration, that co-operative institutions must inevitably prove unsuccessful in this country. One of his principal arguments was the impossibility of obtaining supplies, as the influence of the trusts was so great that the dealers were afraid to sell to the independent organizations. Others have reported similarly; and it is, accordingly, not surprising that foreign labor, whose only knowledge of conditions here comes from these men, should acquiesce in this stricture on our democracy.
But situated within the limits of the city of Saginaw, Michigan, is a little coal mine that is a complete refutation of this attack upon the democracy of the country. It is not only co-operative but in many respects it occupies a unique position in the mining world, and represents a freedom, from the labor standpoint, that the most independent of the Old-World companies have been unable to attain. It is co-operative not only in the disposition of the coal, but in the actual production of it. It is essentially a mine of the miners, a “Workingman’s Mine,” as it styles itself. Moreover, at no time has the company encountered any serious difficulty in obtaining supplies. At the outset, one of the big hardware firms refused to recognize it or have any dealings with it; but this is the only instance in which obstacles of this kind have been encountered.
The company, at the same time, is
to-day one of the finest examples of a successful co-operative institution that could be encountered; and the history of its inception, organization, and operation is novel and instructive.
Socialism has many followers among the workingmen in Saginaw, and socialism cries out against the employers with some bitterness. Only a short time ago, a leading socialist explained his position to me with some fervor.
“The man who pays me my wages is my master,” he said; “I am1 dependent on him for my bread and butter, and I am just as much his slave as if he had an actual title* to me ; and so is my wife, and so are my children. Oh! There isn’t anything so low I wouldn’t stoop to, to rid myself of the employers. I’d do anything—I hate them.” His whole face was flushed and convulsed as he stood with clenched hands and chokingly repeated over and over again, “I hate them, I hate them, I hate them.”
There were some among the socialists, however, who looked around for something more practical than verbal expressions of hatred; and among these the general plan of the Caledonia Company was formed.
It was planned to make this essentially a workingman’s mine, the company to be composed of practical mine-workers. The idea of working for the benefit of another was to be largely obviated, for each member of the company was to have an equal share of the stock, and was, accordingly, to be equally interested in the
output. Thus, every man was, in a sense, working for himself, and whatever his ability and industry gained was of direct value to himself. The company was to consist of 100 men, with a total capitalization of $50,000. (Recently it was voted to increase this to 500 men and a capitalization of $250,000.)
In government, the plan of the company was democratic. The mine itself was to be under the direct control of the superintendent, who was accountable to a board of managers; and the decision of this body was to be at all times liable to review by the general assembly of the miners. The general business of the company was to be in the hands of the board of managers, always subject to review.
To a socialistic mind, the plan had no small charm, and many were attracted to the company. The individual contributions were not large. Some were to pay in labor. If it was worth anything, it was worth the trial. Accordingly the formation of the company was soon under way.
There lacked only the coal land, and this was a serious defect. Although there was more or less coal available, it was imperative to have a favorable location; and the other companies had secured control of the best, economically located land. It was chance that the mine was not developed at Corunna, instead of Saginaw; but fortune favored the new company.
Although they have since consolidated, there were at that time two main companies, or combinations of companies, in the vicinity of Saginaw. Lying in the midst of the land controlled by one of these, was a little tract of forty acres, on which advance royalties were being paid. To save these royalties, believing that the land could be picked up again with-
out difficulty when required, the company allowed the lease to lapse. Almost immediately the members of the Caledonia Company became apprized of the fact; the land was secured, and the preliminary work begun. The greatest secrecy attended this; and it was only when the work of sinking the shaft had actually begun, that the formation of the company became known. The shaft was put down with extraordinary rapidity; and on September 1, 1905, coal was sold from the new mine, which lay at a depth of 165 feet.
There still remained the work of clearing away the wTaste and rock, of securing proper entries, etc.; and it was well along in the fall before the company was prepared really to enter the market.
So far the operators had been, on the surface, at least, passive. Nevertheless, their influence had been felt when the mine attempted to secure a spur from the railroad a short distance away. This was to be 1,000 feet in length, the miners themselves to furnish the grading and ties. For the 1,000 feet of rails the company demanded $3,000, and the mine is still unsupplied with track.
Meanwhile, the operators had advanced coal to the regular winter “trust” price of $4.50 per ton. Coal could be sold at outside points for less; but at Saginaw, where it was mined, this was the required price. The Caledonia began to sell at $4.25.
The operators were now stung to action, and endeavored to bring the little group of miners to a full realization of what it was up against. A conference was held at which they explained their painful duty.
“We have got to protect the retailer,” they said.
“We have got to protect the public,” was the reply. “And, besides,
if you are so solicitous for the retailer, why have you got your own retail wagons out running around the city in competition with him?”
But the operator were firm. “You know the price of life,” they said.
The Caledonia’s reply was instant and unmistakable. The price of coal was dropped to $4, then to $3.50, where the retail price has remained ever since. The action of the operators was equally positive. Coal was rushed to the south end of the city, and sold from the car, at a point directly in front of the Caledonia mine, at the startling price of $1.75. The entire action was kept as secret as possible, and it was aimed to keep knowledge of the matter from the city at large. This was for two main reasons. The greater part of the sales of the Caledonia mine were made in the vicinity of the mine, and it was hoped to cut off the customers of that company without affecting the general public. Thus the operators would lose little, and the socialist mine everything. At the same time, the move was expected to have immediate effect on the little mine; and it was thought that the latter would come to a full realization of the fact that $4.50 was, after all, a fair and reasonable price.
The effect was lacking, however; and in a short time it became evident that the move was a losing one for the operators. The supply of $1.75 coal lasted but two days. It was then withdrawn, and the general retail price for the city was fixed at $3, delivered, fifty cents under the Caledonia price.
Immediately the retailers complained that they were being maltreated.
“The operators are using us as a blind against ourselves,” one of the retailers remarked, privately. “They
claim to be making the fight for our benefit, and we can say nothing. At the same time, they have fixed the retail price below that at which it is possible for us to sell. We have asked them to fix it so we may sell at cost, but they have refused. Now the alternative faces us, of either selling at the price set by their retail office and actually losing money on every ton of coal sold, or of losing our old customers, who would otherwise go over to the retail office of the operators.”
Some of the retailers advertised coal at $4, some at $3.50; but beside the operators’ big advertisement at $3, this looked ridiculous, and one by one they dropped to the operators’ price The Caledonia, however, clung to its price of $3.50 with all the stubbornness of a mine mule.
But the little socialist mine, with its ridiculous little forty acres of coal, had already gained many friends, and these continued to stand by it. After all this mine is the key to the whole situation. It is only because of its presence that the operators conceded the low price; and if, at any time, through lack of support or for any other reason, the Caledonia had succumbed, the retail price would immediately have jumped again to the old figure. There have been enough people, who have realized this fact, and enough friends of the Caledonia mine, to keep it well supplied with orders; and it has thrived and flourished largely because of the difficulties which have beset it.
At one stage of the proceedings, the operators argued: “Your miners are working for themselves. Consequently they take greater pains, and there is less dirt in your coal.” This is probably true, and must be accepted as one strong reason why the Caledonia Company has won many
excellent customers, manufacturéis, etc., away from the great coal companies.
“We work especially for the retail trade,” said the general manager of the so-called socialist mine. “We give the retail trade precedence over evrything else. At the same time we are able to and shall take care of all manufacturing concerns with whom we have contracts.”
One of the leading hotels signed a contract with the company. Afterward the operators’ representative called on the owner of the hotel.
“Here,” he said, “You have a contract with us that holds until October. How do you come to be getting in Caledonia coal?” The answer was brusque and to the point: “We can’t make money so fast we can afford to burn up any more of it than we have to.”
Many of the large consumers are now using Caledonia coal. The company was an experiment, but it has proven a successful one. The operators have all along predicted its fall, however. One of the leading operators said, early last winter:
“The Caledonia people are making a big mistake. Their price would be a leasonable one if every season was a busy one. They are making no provision for the dull summer! months, during which there will be no demand for their product.”
However true his statement may have been, the Caledonia Company has been saved the dull season, for, on account of the expiration of the agreement between the miners and operators of the State, this has been an abnormal season. However disastrous the great bituminous tie-up may be for the miners as a whole, for the particular group controlling the socalled socialist mine, it has proven most fortunate.
About the first of March, it became evident that there was little chance of an agreement between miners and oprators. Fearful of being tied up through lack of fuel, every big consumer began to lay in an advance supply; and every mine in the valley was worked to its capacity to meet, as far as possible, the demand. The Caledonia, of course, shared in this prosperity; but this was not all. Shortly before the expiration of the old agreement between miners and operators, it was announced that the little mine would run right through, regardless of the stiike; as the owners of the mine worked it themselves, they had no labor troubles, and were unaffected by labor disturbances. The result was a general rush for cover. The operators’ commissioner bitterly assailed the position of the mine; but with prospects of a long, hard strike, and but one possibility of assistance during this, the consumers hastened to make overtures.
True to its promise, the Caledonia mine has run regularly and has more than given satisfaction to its customers. It is, of course, piled far ahead with orders; and to all appearance possesses more than enough regular large consumers to assure it a market for its product winter and summer from now on. At the same time, it has stood all along as the workingman’s mine, a mine for the people; and positive assurance is given that the retail trade will receive the first consideration. The company has secured an additional 500 acres of land, part of it lying just outside the city, and is sinking a shaft there. If this is not in operation in time for the increased demand next fall, a double shift will be put on in the present mine, for the double shift can be worked more
easily in mining, perhaps, than in any other industry. Although the only mine operating in the State, the Caledonia has not raised the price of its product, The retail price remains $3.50. The company now has practically the only coal for sale in the State.
If the Caledonia mine was an experiment, so far it has proven a most successful one. The freedom and independence of the miners from a social standpoint have been very grateful; but, aside from all this, looked at as a purely financial proposition, the members of the company are faring much better than those employed by the operators of the valley.
The wage scale of the company is based directly on the Michigan scale; but there are some differences of scale and application that actually malke it considerably above that paid by the other operators. The. scale is applied to the coal “mine run,” a concession which united labor has ‘been unable to obtain from the Michigan operators, by whom it is applied only to the screened coal. In addition, the scale is applied to a 36-inch vein of coal, although in other mines it is based on a 30-inch vein, which is much more difficult to work. Day mien are paid ten cents per diem above the price fixed by the Michigan scale.
At present the Caledonia wages, are based on the 1903 scale, which is 5.55 per cent, higher than the 1904-5 scale. The operators of the State were loath to grant this raise, and the inability of miners and operators of the Michigan' district to come to an agreement resulted in a tie-up of at least several months’ duration. The 1903 scale, however, was put into effect by the Caledonia mine early in April, when the United Mine Workers first decided to stand out for this. At
present the average wage paid in the mine is $2.75 per day.
So far, no dividends have been paid. Starting last fall with very little actual capital, it has been necessary for the mine to pay for itself as it went along; and consequently all the profits, above the operating expenses, have been put into the development of the mine. It is promised, however, that the company will soon be in a position to declare dividends, and no doubt the coming year will see these paid.
It would seem that there is every reason for the success of the mine in the future. It has won considerable reputation in the valley—it has even had a brand of cigars named after it. It has the friendship and respect of its customers. The coal itself is of as high quality as any in the State, and considerably above the average. The management is in the hands of strong, capable men. The mine has no labor difficulties; every man is personally interested in the company and eager to do his utmost for its success. Of course the present mine, with only forty acres of coal, will not long suffice; but by the time this is exhausted the other 500 acres will have been brought into use, and at least two mines will be in operation upon them. The supply of coal is for the present quite sufficient.
At least two other mining organizations have been formed in the valley along similar lines. One of these has been founded entirely by practical miners, and has been doing considerable prospecting. One of the Caledonia men was secured to organize it. The other is partially cooperative without any socialistic principles—what principles it has are rather doubtful, but they are not socialistic.
But the point is this. The Caledonia Company has already exerted a strong influence on the mining world. No sane man believes a cjompjlete socialism possible; but this mine has pointed out a peaceable way to the
partial realization of some of the highest socialistic ideals. Others have already begun to follow, and there is no reason why the plan should not be extended still farther in this and other branches of labor.