carrying and mining has a virtual monopoly of the ontput, the transportation, and the price.

It was by getting possession, almost without regard to cost, of nearly all the routes of transportation by water or rail from the mines to market and then freezing out the private mine operators, either by putting down the price of coal at the mines or by limiting the supply of cars or by charging high freights, that the Philadelphia and Reading Railroad Company has been enabled within, say, the last eighteen years to obtain practical control of the Schuylkill Canal and Navigation Company, also of the Susquehanna Canal and of about 1,700 miles of railroad, as well as of about one-third of the whole anthracite coal fields of Pennsylvania, and at the same time to put up the average price of coal at least 50 per cent. to the consumer. In fact, seven coal-carrying railroads, which are at the same time coal miners, may be said to own or control all the anthracite of the United States.

It is true a few private coal operators still doggedly cling to their property and their business, but the testimony taken by your committee abundantly shows that the Reading devil-fish," as Congressman Bramm calls it, has been steadily brauching out throughout the whole region, absorbing both coal mines and railroads. Other carrying Companies in Pennsylvania are doing the same thing, and your committee believes it has good cause for saying that more than one, if not all, of the anthracite monopolies run several of their mines in the name of private operators to quiet the general clamor against carrying companies having a monopoly of mining also.

In order to rob the public by controlling the price of coal through limiting its output and charging an exorbitant freight for its transportation, the Reading has both purchased and leased many of its coal lands at "speculative" values on credit, giving bonds of the railroad for security as well as a mortgage on the coal lands, having no sufficient amount of cash to pay down so as to let the coal land be its own security. In this way the bonded debt of the Reading Railroad has been increased to one hundred and sixty million dollars, although the cap. ital stock of the company is only about forty million. The company has twice been in the hands of receivers, and after recently collecting an assessment of about twelve millions upon the stock it is even now by consent of the stockholders in the custody of trustees for the benefit of its bond-holders. It has not paid any dividend for twelve years, although its average annual dividend for a long while immediately preceding the time it commenced to mine coal was over 10 per cent., frequently 15, sometimes 20 per cent. Many sagacious railroad experts think it never will pay another dividend to the present stockholders, so that the railroad company itself has been a great sufferer financially as well as the public by the unity of the two inconsistent pursuits of coal carrying and coal mining, which, while tempting to speculation, stock gambling, and affording monopoly an opportunity to advance the price of coal by charging an extortionate royalty for mining and an unjust freight for transportation, yet in the end punishes itself.

This experiment has entailed upon the stockholders a loss of $60,000,000, according to one expert witness, John Norris. (Testimony, p. 294.) From the day that the Reading Railroad Company first fairly entered upon the joint business of mining and carrying coal in 1871 down to the present hour, it has been rapidly sinking more hopelessly into bankruptcy. Judging from the evidence taken, and especially from the tergiversations, evasions, and general conduct of the present controlling officials of the road while testifying before your committee, there is

hardly a doubt but that most of those officials have long been much more intent upon paying themselves princely salaries and manipulating the stock of the company than they have been in reducing its debts or realizing dividends for its stockholders.

In this connection the following testimony from the last president of the Reading Railroad before it commenced mining (Charles E. Smith, pages 219, 220, and 221) sheds a flood of light upon how, at least, $15,000,000 of the $160,000,000 of the existing bond and first-mortgage debt of the company was contracted.

Q. Were you president of the Philadelphia and Reading Railroad Company?—A. I was.

Q. During what years?-A. 1861 to 1869; during the whole period.

Q. When did you cease to be a share-holder of that company?-A. About two weeks ago.

Q. Have you had any official connection with that company since your presidency ceased?-A. I was a director. I gave up the presidency some time in the summer of 1869 and went to Europe. I was gone a year, and when I came back I was elected a director. I was a director until Christmas, 1876, when I resigned, and I have had no connection with the company since.

Q. Why did you cease to be president of the company?-A. My health broke down and the doctor told me I should either resign or be in the grave within six months. Q. Why did you resign your directorship?-A. I did not resign. Yes, I did; I resigned. I made an investigation as director of that report which was made to the board about the 20th of November or December, I have forgotten which the 20th of December, I think it was, and the annual meeting took place the second Monday in January, and I resigned between the date of the report and the annual meeting; I think just about Christmas, 1876.

Q. What was it you were investigating ?-A. The crookedness of the company's accounts in these reports.

Q. Was your resignation the result of that investigation?-A. Yes.

Q. In what way -A. The amount of that business was that the reports which were to be put in the hands of the annual meeting, which was to take place in a week or two, sought to suppress certain facts, and I thought it would be dishonest, and I therefore resigned.

Q. In what particular dishonest?-A. Suppression of the truth. If the report of the directors means anything it means to tell the truth.

Q. I do not mean the dishonesty in the suppression of the truth, but in what way were those accounts dishonest ?-A. The value of the debt had been suppressed and a dividend had been declared and the money had not been earned and was borrowed to pay it, and the accounts were made up so as to represent the money had been earned; that is, if you did not read between the lines.

Q. What was the purpose of borrowing money to pay a false dividend?-A. Mr. Gowen's object was, no doubt, to make a fine showing, and some of the directors who had a hand in it were gambling heavily in stock, and their object was plunder.

By Mr. CHIPMAN:

Q. You say the money was borrowed to pay the dividends?—A. I do; amounting to about $15,000,000.

Q. How did they secure these $15,000,000?-A. Borrowed them.

Q. Well, did the company borrow the money?—A. Yes.

Q. How did the company secure it ?-A. They gave bonds.

Q. Mortgages?-A. Yes.

Q. You say that fact was suppressed in the report ?-A. If you will give me a report I will show you how it was suppressed.

Q. For what year?-A. Between 1871 and 1872 and 1876. The loans to the coal and iron company were represented to be earnings of the railroad company, because the railroad company has paid the loans of the coal and iron company, and this money for the payment of those advances was represented as money earned and received.

Q. You were a director of the railroad?-A. I was.

Q. Could you say of your recollection that the loans of the coal and iron company were represented as profits of the railroad company -A. I will show you how it was worded. This is the report for 1874, dated January, 1875. On page 9, transportation and income account. These are the receipts of the company. One large item at the bottom to make it come out right is $1,280,000. There you have half a dozen items to be added together or subtracted to make that one item. This is the amount put in the accounts, and that is cooked.

By Mr. STONE:

Q. In point of fact, was it right or wrong?-A. It was wrong, both morally and as a matter of book-keeping.

Q. Who suffered by it -A. The stockholders.

Q. Who profited by it ?-A. I do not know anybody profited by it except those who were gambling in the stock.

Q. In what way did they profit?-A. They profited very much, because they could get the money to purchase the stock and they could get it carried at 6 per cent. interest, and they got a 10 per cent. dividend, and so they cleared 4 per cent. by doing nothing and without advancing a dollar.

Q. That report is calculated to advance the market value of the stock?-A. Yes, and keep it up. They were paying dividends of 10 per cent. and in reality there was no money earned.

Q. Were you managing the coal and iron company at the same time?—A. Do you speak of me personally or the company?

Q. The company?-A. The company was managing both at the same time.

Q. When did the railroad company acquire control of the stock of the mining company?-A. At its creation.

Q. Was the mining company created at the instance, or was it the creation of the railroad company?-A. Yes; under Mr. Gowen's presidency the iron company was started in May, 1871.

Mr. CHIPMAN. That was the Laurel Run Improvement Company?

The WITNESS. Yes; the name was changed. The application was made shortly after the organization to change its name from the Laurel Run Improvement Company to the Philadelphia and Reading Coal and Iron Company. It is in that record there.

Nor do the evil effects of blending the carrying and mining of anthracite stop with robbing the public and involving the railroad company itself inextricably in debt. The laborers in the mines likewise share in the general abuses and pecuniary losses of the vicious system. The avaricious grasping at a monopoly of both carrying and mining by such a gigantic concern as the Reading Railroad and Coal Mining Company causes it to treat the miners and their help with gross injustice in many

The business of anthracite mining is overdone, because the few huge carrying companies engaged in it can not find a market for their output at the monopoly price they want for it. The capacity of the Reading to extract double the quantity of coal it now actually mines is conceded on all sides, and the capacity of the public to consume largely more than the present output of anthracite if it could be had at a competitive price, as it was formerly, is also conceded; yet the company. rather than let the output, the transportation, and the price regulate themselves by fair competition, prefers to buy or lease mines at fabulous rates and then either shut them up or work them on short time, if necessary, to limit the output and at the same time to charge both exorbitant royalty and freight to swell the price.

Then, again, as nó coal mine can be successfully worked except fullbanded-that is, with a full complement of experts and laborers-the railroads which both carry and mine anthracite always retain an abundant supply of help on hand, which help they purposely keep in ignorance as to when operations will be suspended, and for how long. If the knowledge of when they shall be required to work short time or no time were not deliberately withheld from the miners and laborers till the last moment they would doubtless seek employment elsewhere, but as it is they not only lose wages for short time or no time, but they have to pay rent also, as nearly all the houses at nearly all the mines belong to the mine operators and not to the laborers, which latter are mere tenants at will, and have to sign a written lease to that effect before they are permitted to occupy a house, especially in the Lehigh region. Rent goes on all the while against the employés, but wages are paid only in proportion to work actually done in short time, and of course no wages are paid during a Tockout or strike, while rent of the miners' houses never

VI

LABOR TROUBLES IN PENNSYLVANIA.

ceases, which, together with his other charges, must be paid when work shall be resumed before he can draw any wages. This, together with other expenses next to be mentioned, serve largely to keep the miners in debt slavery, as so many Mexican peons. Mr. Ario Pardee, of Hazel millionaire

ton, a private operator, as well as a reput and stockholder

in railroads engaged in mining and carrying anthracite, with grim humor admitted to your committee that both the railroads and private operators prefer to let the miners occupy their houses so that rent can accumulate against them during a strike, lock-out, or shutdown. Said he (testimony, p. 569)—

We can not undertake any general eviction. We expect a great many to go to work, and we are a good deal in the position of the old Quaker with his ox Golden. He got out of patience and said, "Go to hell, Golden;" but he said, "Come back again, for we can not do without thee." If we did that we would be in the position of the old Quaker.

Besides this, at most of the mines, especially in the Lehigh region, each miner or mine laborer who has a house for his family is charged and has the charge deducted from his wages for one ton of coal per month during the whole year, whether he uses the coal or not, for cooking and warming. It was proven that but very few families use that much coal any month in the year, and never in summer.

Another abuse existing at most of the mines is the practice of compelling miners to fill underground cars with coal of larger capacity than the size agreed upon. The excuse for this by the mine operator is to make up for wastage at the coal breaker, as well as for loss on account of slate rock which is always more or less mixed with the coal; but a still more abominable practice, to make sure of deducting enough for slate, dirt, and light loading is to dock every car so much. The man who determines the amount of this dockage represents the coal operator alone, the worker in the mine having no voice in it. One of the bitterest complaints of the miners is that they have no representative or means to guard against excessive dockage, and that the coal operators habitually and largely dock too much.

The testimony likewise shows that the coal operator (proprietor of the mine) invariably compels his miners to get their working outfit from him at an enormous profit to the operator, especially blasting powder. Wherever your committee went, in either the Schuykill or Lehigh regions, the grumbling was both loud and long against the overcharge for powder. It was alleged, and believed to be true, that the operators, who buy their powder cheaply at wholesale, as a rule charge the miner 100 per cent. or more advance.

However, perhaps the greatest outrage inflicted upon the workmen in and about the mines is the "pluck-me store" system of paying wages which is universal in the Lehigh region with but one or two honorable exceptions that came to the notice of your committee. Usually every Lehigh coal operator keeps a general assortment store of whatever goods a laborer or miner wants, and by not letting him have any cash to trade elsewhere, practically compels him to buy at the operators' store upon the operators' own terms. It was likewise proven that at some of the Lehigh mines only particular peddlers of poultry and the like were allowed access to the miners' houses to trade. Several of the witnesses swore that from these and other causes when pay day arrives some of the men get no money at all, because in addition to extortion for necessaries the credit system at the store has tempted the miner to extravagance and by the time his store account, his house rent, his dockage, his powder bill, his fuel bill, his taxes (which must be retained by the employer ac

cording to law), his doctor's bill, and other charges have been deducted, no wages remain due. Two ex-members of the State legislature (Senafor Coxe, testimony, 597, and Representative Evans, 479), testified that within their personal knowledge several hard-working, sober miners had toiled for years, or even a lifetime without having been able to draw a single dollar or but a few dollars in actual cash; a statement which seems borne out by a number of pay-day balance-sheets in the Lehigh region submitted to your committee and published in the testimony.

Two other causes aggravate the matter; one of which is that as a rule no miner knows what wages he is getting until pay-day comes, as wages in the anthracite regions are not regulated in any certain, simple, honest, straightforward manner, as elsewhere, but upon some hocuspocus varying principle said to depend on the price of coal at the mines. or at tide-water, either of which prices is made by the railroad to suit itself.

The other aggravating circumstance is, that many thousands of surplus laborers are always kept on hand to underbid each other for employment, and thereby force the men to submit to whatever treatment the company may impose.

These and other abuses detailed in the testimony precipitated the great anthracite strike of 1887-'88. It began in September, 1887, in the Lehigh region, where the miners complained that life was unbearable. For months previous they had been perfecting their labor organization for redress of grievances, and after mature deliberation among themselves, and consultation with the national organization of the Knights of Labor, presided over by Mr. Powderly, they resolved first to seek a correction of evils by arbitration, if possible, with the mine operators, and failing in that, to strike.

The operators of the Lehigh Valley scorned even to recognize or communicate with the delegates sent by the Knights of Labor to discuss a compromise. Hence these delegates, as the accredited organ of the miners, submitted an ultimatum, and as the operators could not or would not accept it, the strike began and continued for seven or eight months, when most of the men gave up the unequal struggle and returned to work upon the old terms. While this Lehigh strike was going on another strike occurred in the month of January, 1888, in the Schuyl kill region, whose mines are owned or controlled, as before stated, almost entirely by the mammoth Reading Railroad Company. The miners of that company struck because the authorities of the company would not continue to pay the advance in wages of 8 per cent., or about 12 cents per ton, which it had been paying since the preceding September, and the railway employés of the carrying department of the Reading, Railroad also struck in December, 1857, either from sympathy with the striking miners or probably because the officials of the Reading road purposely provoked the strike, partly to have an exense to put up the price of coal generally, and particularly in Philadelphia, partly to get rid of supporting surplus laborers for a time both in the mines and on the railway, and partly to crush labor organizations among their employés.

As already indicated, there are many suspicious facts, in truth almost satisfactory internal evidence, that the authorities of the Reading road deliberately brought about the strikes both among its miners and among its railway employés only after the Reading had mined all and trausported most of its full quota of coal as agreed upon by the anthra cite pool or board of trade. That such an agreement or allotment of production of coal existed in 1887 and 1888, and exists to-day, no one