coal trade bulletin - Clpdigital.org

32 THE COAL TRADE BULLETIN.
us are tatight to swim, but unless we know how to
swim we shall surely drown if we fall overboard
even if we are not 20 feet from shore.
Some of the principles for efficient direction are:
Definite ideals, definite authority and responsibility,
constantly available and used competent
counsel, strict discipline, fair dealing, high and
immediate efficiency reward.
The main principles for efficient supervision is
that every part of material, of equipment, ot
personal work shall be designed, specified, selected,
tested, conserved and inspected with continuous
intelligent care.
The main principles of successful management
are that there shall be balance between the three
great human incentives: Action, appetite, Inspiration.
The main principles of successful operation are:
(1) standardized conditions; (2) standardized
operations: (3) advance planning; (4) standards
and schedules; (5) despatching of all work; (6)
standard practice instructions; (71 records, reliable,
immediate, available, classified and adequate.
A few years ago I was one of a committee which
made the following report on a coal mine in a
receiver's hands:
"If the coal properties are shut down, the annual
loss will be $420,000.
"If they are operated at the standardized cost
per ton of $0,857 and for an output of 3,000,000
tons and the coal is sold at
THE PliJCE REALIZED
last year for coal, $0.S097, the loss will be $141,000.
"The standard cost includes a charge for interest
of $0,067 and for depreciation of $0,058, a total
of $0,123 per ton.
"The standard costs are 14.8 per cent, lower
than 1909-10 corresponding costs, 17.4 per cent.
lower than July and August, 1910, corresponding
costs."
This short report was amplified into the following
findings:
1. The coal lands have been injudiciously acquired.
2. Money has been injudiciously spent in equipping
the plants.
3. Overhead charges for interest, maintenance
and depreciation are therefore high.
4. The present market selling price for coal is
so low as to make profitable coal mining very difficult,
if not impossible, even if the coal lands had
been secured without price, and had been equipped
with rigid reference to economical operation.
5. The present situation would be most effectively
bettered if the market price of coal increased.
6. To shut down the mines and wait for better
prices would entail an annual expense for power,
maintenance, supervision, depreciation and inter­
est of $420,000. This does not include an annual
charge of $104,494 on book value of coal lands not
immediately identified with the plants to be operated.
7. The cost of niining coal if operations are
standardized, will be $0,857 per ton for a daily
output of 12,000 tons, a monthly output of 250,000
tons and a yearly output of 3,000.000 tons.
8. Tbe loss from continued operation will depend
on
PRICE OBTAINED FOR COAL
sold: At $0.66 loss will amount to $561,000; at
$0.70 loss will amount to $420,000; at $0.70 loss
from operations and loss from suspension of operations
will lie equal; at $0.75 loss will amount to
$200,000; at $0.8097, price netted by coal sales in
1909-10, loss from operation will be $141,900; at
$0,857 there is neither loss nor profit from operation;
at $0,921, profit above operation, $192,000;
this is sufficient to pay interest on obligation.
Coal should therefore continue to be mined: At
$0,948, profit from operation $272,000; this pays
lor operation for moneys owed and for present administration
charges.
9. While waiting, hoping and working for better
coal prices, costs of operations are to be standardized:
(a) by revaluing all the lands and equipment,
thus reducing future operating overhead
charges; (b) by putting the management of inside
and outside operations in the hands of a competent
and experienced man of reliable character;
(c) by giving him all the assistance possible from
modern business organization and methods adapted
from other bituminous coal mine operations and
industrial enterprises; (d) by concentrating operation
at that plant, or these plants, where coal can
lie mined most cheaply; (e) by investigating the
advantages, if any. to be derived from coking the
product of these mines: (f) by investigating the
advantages, if any, of establishing a washery at
the mines.
In making its investigations your committee
attempted to determine a standard cost per ton of
mined coal for a standard output, which we assumed
at 3,000,000 tons each year.
The standards adopted for immediate use are:
(1) The present
STANDARD MINING SCALE
for mining labor $0,485; (2) current rates of
wages for a minimum amount of other efficient
working labor $0,175; (3) moneys for supervision.
supplies and other bills, taxes, insurance, etc., an
efficient minimum $0.07; (4) depreciation charges
based on revaluations, on experience, and on the
present ascertained coal reserve tributary to
operating plants $0.06; (51 interest at six per cent.
per annum on reappraised values of coal reserves,
niining buildings, equipment, etc., actually used
for mining operations $0,067.