One of the Local Committee's most important duties is the establishment of retail gross margins, and it is thought advisable to offer some practical suggestions on this subject.

The United States Fuel Administration's Publication No. 7, of October 1, 1917, was issued chiefly as an emergency measure. At that time there was an urgent need for some method by which retail prices could be regulated until the state Fuel Administrators were appointed. The United States Fuel Administration realized that as soon as local committees were organized they would be in a position to establish gross margins by a more exact method than the one outlined in Publication No. 7. Local Committees are, therefore, advised that if the retail margins established in their district are based on the rules and regulations set forth in Publication No. 7, they should immediately make a careful investigation to ascertain whether this plan is causing evident and definite injustice. If it is found that the gross margins established by Publication No. 7 are not equitable and just to both the consumer and retailer, the Local Committee should them make a careful investigation of the facts and recommend to the State Fuel Administrator, for his approval, revised retail gross margins which the retailers in their district may add to the cost of the coal or coke to them in order to determine the maximum retail selling price.

If the retail gross margins, heretofore established, were based on abnormal conditions, Local Committees should also now carefully investigate with a view to establishing retail gross margins based on the retailer's cost of conducting his business at least for the period of April 1, 1917, to April 1, 1918.

"Gross Margin", as used in these instructions, is the sum which, added to the average cost of a retailer's coal or coke supply alongside his wharf, pocket or water yard, when such coal or coke is received by him by water, or to the average cost of coal or coke to such retailer at wholesalers' pockets, trestles, railroad sidings, mines, tipples, dumps, docks, yards or wharves, determines the maximum price at which the coal may be sold. The items which enter into the cost of the coal to the retailer

are:

1. The price at the mine.

2. Transportation charges.

3. War tax.

4. Commission allowed a purchasing agent if it is a bona fide transaction. The retail gross margin includes:

1. The retailer's expense of unloading and yard expense.

2. Delivery expense.

3. General expense.

4. Degradation.

5. Net profit.

In general, it is advisable that every Local Committee should establish, subject to the approval of the State Fuel Administrator, two gross margins, one for coal sold at the retailer's yard or hin and one for sidewalk or chute delivery direct from the wagon or truck. Extra charges that the retailer may be permitted to add to the sidewalk or chute delivery price to the consumer should be also established for deliveries in less than one-ton lots or for extra delivery services, such as wheeling or carrying coal to cellar or carrying coal upstairs. In many districts it will probably be necessary to make other allowances than those referred to above, but this is a matter which should be decided by the Local Committees according to conditions in their districts, subject to the approval of the State Fuel Administrator.

The retail coal business varies so greatly from one city to another that, generally speaking, it is not good practice to apply the same margin to more than one community without additional investigation. There are instances, of course, where conditions throughout a given district will be such that the same margin is applicable for all dealers within the district, or where two cities with the same population require the

same gross margins. In general, however, margins for each city should be based on data representing the conditions in that particular city.

Before equitable gross margins can be established it is essential that you obtain the most accurate data available from the retailers representing the costs of the retail coal business in your district. Gross margins should not be based on the costs of the inefficient retailer nor should they be based on the costs of the most efficient dealer, but they should be based on the costs of the majority of the reasonably efficient retailers. This may appear unjust to the retailer with the high costs, but it must be remembered that even in normal periods certain retailers are unable to make a reasonable net profit on their coal business. The Local Committees are responsible, not only to the retailers but to the general public, and should not assist in maintaining an uneconomical business by the establishment of prices which are unjust to the public.

(5) The retail coal dealer's costs can be divided into:

1. Yard expense, defined as follows: Cost of unloading coal, salaries and wages of yard force, and miscellaneous yard expense.

2. Delivery expens?, defined as follows: Salary and wages of delivery forces, cost of maintaining teams, wagons and trucks used exclusively for coal delivery purposes.

3. General expense, defined as follows: Salary of officers or proprietor and other office force, lights, insurance, taxes, advertisements and miscellaneous office expense.

4. Degradation and shrinkage, defined as follows: Loss on account of increased percentage of slack in prepared sizes, and also loss in weights, due to shipping and handling.

Where other business is handled in connection with the retail coal business the Local Committees should be careful to note that only the actual cost of handling coal is submitted.

The Local Committees should carefully scrutinize the salaries of officers and see if the service rendered and the tonnage handled merit such a charge. Item No. 3, General Expense, might be called the secondary expense of a retail coal dealer. Whenever a concern reports a General Expense charge that amounts to more than one-third of the charges for unloading, yardage and delivery, a careful investigation should be made to ascertain if such a claim is just.

When considering the loss occasioned to a concern because of degradation, the Local Committee should take into consideration that the percentage of coal which degrades is not a total loss, but that the loss occasioned to the retailer by degradation is only the difference between the cost of that kind of coal which he bought and the cost of that kind at the retailer's yard, which corresponds to his degraded size.

If the retailers in any district satisfy the Local Committee that it is impossible for them, without the aid of accountants, to submit their expenses, tonnage and income in conformity to Form # 2, heretofore sent you, the Local Committee may be able to secure the information needed by having typewritten or printed a list of questions, asking, along with any other information they desire, for such detailed information in regard to the costs of retailing coal, the amount of tonnage handled, and the amount of the retailers investment, as they may deem necessary. These questions should be sent to each dealer to be answered by him under oath and returned within a specified time. Forking of coal should be discouraged when the quality of prepared sizes and run of mine are such that it can be economically burned without forking.

Reports as to the cost of coal, gross margins and selling prices should be obtained monthly from all retailers, and the retailers should be compelled to post up and maintain in their places of business, accessible to their customers, the Government price as fixed at the mine or oven for each grade and kind of coal or coke handled, transportation charges, the maximum gross margins established, and the retail selling prices.

As soon as the Local Committee's recommendations relative to the gross margins to be established have been approved by the State Fuel Administrator, it is your duty to see that (1) the retailers are immediately notified of the retail gross margins which have been established, (2) that these margins are strictly adhered to, and (3) to report any violations thereof to the State Fuel Administrator.

By W. E. HOPE.

UNITED STATES FUEL ADMINISTRATION,
States Organization Division.

Section 2.-District Representatives.

Statement of United States Fuel Administrator Dated December 21, 1917, as to Duties and Powers of Deputy Distributors, Afterwards Called District Representatives. The appointment of Mr. D. R. Lawson as a Deputy Distributor of the United States Fuel Administrator in the Fairmont District of Virginia marks a further step in the plan of decentralization of the Fuel Administration and promises more effective co-operation between the Fuel Administration, the coal producers, and the railroads. Mr. Lawson's appointment was made after assurances had been received from Mr. C. H. Jenkins, President of the West Virginia Coal Operator's Association, that the appointment would be satisfactory to the Association and to all the operators concerned. It is the policy of the United States Fuel Administrator to appoint as Deputy Distributors only men familiar with the coal industry and acceptable to the coal producers of the district in which each is appointed.

The Deputy Distributors are not to be confused with the Fuel Administrators, whose duties and responsibilities remain as heretofore. The duty of the Deputy Distributor is to facilitate the shipment of coal to meet emergencies on requests and orders from the United States Fuel Administrator and from the State Fuel Administrators, to make equitable allotment of such orders among operators, and to keep the Fuel Administration at Washington informed of conditions in each producing district. Authority is not given to the Deputy Distributors to determine priority of needs, nor to prefer one consignee over another. This authority is reserved to the United States Fuel Administrator and, when so authorized, to the State Fuel Administrators. It is to be noted that the agency is intended primarily to meet emergency needs. Under normal conditions, the purchaser will be left as free as the war emergency permits to deal directly with the operators producing the coal.

A Deputy Distributor will eventually be appointed in each producing district. The plan contemplates also the designation of a representative of the railroads to advise with the Deputy Distributor in each producing district, and the Executive Committee of the American Railway Association has been asked through its chairman, Mr. Fairfax Harrison, to cooperate by appointing such representatives.

H. A. GARFIELD.

Form of Letter of Appointment of District Representatives.

DEAR SIR: To facilitate the apportionment and distribution of bituminous coal and to assure prompt and equitable allotment of emergency orders among shippers, you are hereby appointed District Representative of the U. S. Fuel Administrator for the purpose named below.

in

You are directed to establish the necessary organization to properly conduct the activities of this office.

(1) On receipt of requests for fuel from State Fuel Administrators and on receipt of requests and orders for fuel from the U. S. Fuel Administrator, to allot such requests and orders to the individual shippers and mines in the above named area as equitably as possible, and with a view to securing prompt compliance with such orders without undue hardship to individual shippers.

(2) To report to the U. S. Fuel Administrator in detail on each request received
from State Administrators and describe the action taken, including the
name of the shippers or mine to which the request or order was allotted.
(3) To arrange with each individual shipper and mine in your district for
notice to you of production, working time, free coal, and shipments.
(4) To compile reports of production, working time, car supply, shipments,
and free coal and to report such figures to Washington in totals at the close
of each week, beginning at once. Forms for reporting this information
will be forwarded to you as soon as prepared.

(5) To comply with all instructions issued by the U. S. Fuel Administrator
governing the conduct of your office and to recommend to the U. S.

Fuel Administrator, from time to time, any changes in practice which might result in more efficient administration.

Your appointment as above is to continue at the pleasure of the U. S. Fuel Administrator and may be terminated by him at any time, as the exigencies of the business may require or as his judgment may deem proper.

All reports and communications regarding the operation of your office should be addressed to Mr. .... U. S. Fuel Administration, Washington, D. C.1

At least until other arrangements are established, it is understood that the expense of conducting your agency will be borne by the individual shippers and mines in your district under a co-operative arrangement to be established and agreed upon by them.2

Please confirm at once by wire your acceptance of this appointment.
Yours very truly,

Form of Notice to Shippers of Appointment of District Representatives.

To all shippers of bituminous coal in

at

GENTLEMEN: Enclosed you will find copy of a letter appointing Mr.

fields of

District Representative of the U. S. Fuel Administration for the coal to serve as representative of all individual shippers and mines in that area. He will receive requests from State Fuel Administrators, and orders and requests from the U. S. Fuel Administration for the shipment of bituminous coal for emergency use, and will allot such requests and orders among the mines, shippers, and operators in his producing district in a manner which in his judgment will prove most equitable.

Until further notice you are instructed to refer any requests or orders for fuel received from any other members of the U. S. Fuel Administration to Mr. action.

for

The proper discharge of Mr. .'s duties will require a hearty co-operation on your part and prompt compliance with his requests. It will be necessary for you to furnish him with certain statistical data, which he will treat confidentially.

This appointment has been made to facilitate the operation of your business, and therefore to aid in meeting a national emergency. It is done with the full belief that the appointment of one man to represent all individual shippers and mines in your district, who by reason of his proximity and familiarity with the business will

1 Until January 24, 1918, the name appearing in this paragraph was that of Mr. L. A. Snead. On that date the name of Mr. J. D. A. Morrow was substituted. On and after March 20, 1918, the name of Mr. A. W. Calloway was substituted for Mr. Morrow's name.

2 This paragraph was omitted in letters of appointment issued after March 28, 1918.

will very

be in a position to allot the Administration's orders to the best advantage, greatly facilitate our efforts to meet the urgent requirements of the consumers. Yours very truly,

H. A. GARFIELD,
U. S. Fuel Administrator.

List of District Representatives and Assistant District Representatives with Dates of Appointment and Definition of Territory Covered by the Particular District.

District No. 1. Central Pennsylvania.-Comprises three sections of the coal fields of central Pennsylvania.

Section A. Huntingdon and Bedford Counties operations in Somerset County served by the Pennsylvania Railroad and operations on the Pennsylvania Railroad between Cresson and Blairsville as well as the South Fork Division and the Indiana Branch. Section B. Center County-Cambria County (except that part listed above) Eastern part of Indiana County and all operations in Clearfield County tributary to the New York Central and Pennsylvania Railroads.

Section C. Operations on the Buffalo, Rochester & Pittsburgh Railroad in the western half of Indiana County. Operation in Armstrong County on and tributary to the Buffalo, Rochester & Pittsburgh Railroad and the Buffalo and Susquehanna Railroad. Operations in Clearfield County tributary to the Buffalo, Rochester & Pittsburgh Railroad, also Jefferson, Elk, McKean, Cameron and Clinton Counties. Dist. Rep. J. P. Cameron, Altoona, Pa., Jan. 30, 1918.

Asst. Dist. Rep. Sec. A, John Lloyd, Jr., Altoona, Pa., Jan. 30, 1918.

Asst. Dist. Rep. Sec. B, Harry B. Scott, Philipsburg, Pa., Jan. 30, 1918. Asst. Dist. Rep. Sec. C, Samuel A. Rinn, Punxsutawney, Pa., Jan. 30, 1918. District No. 2. Western Pennsylvania north of Pittsburgh.-Comprises the coal fields of Pennsylvania in Armstrong, Butler, Clarion and Mercer Counties and the northeastern section of Lawrence County and the extreme southwestern corner of Indiana County along the Pennsylvania Railroad.

Dist. Rep. F. B. Reimann, Butler, Pa., Jan. 28, 1918.

District No. 3. Pittsburgh and Panhandle District.—Comprises the coal fields of Pennsylvania in Allegheny, Greene and Washington Counties, Westmoreland County west of and along the Youghiogheny River, and the extreme northwestern corner of Fayette County. On February 19, the four Panhandle Counties of West Virginia— Brooke, Hancock, Ohio, and Marshall-were transferred from District No. 6, and became a part of District No. 3.

Dist. Rep. R. W. Gardiner, Pittsburgh, Pa., Jan. 28, 1918.

District No. 3A. Westmoreland; Irwin Gas Coal, Ligonier, Latrobe, Greensburg.— Comprises Westmoreland County, Pennsylvania, on the Pennsylvania Railroad, main line and branches, north of Ruffsdale, excepting Sewickley branch connecting at Youngwood, between Pitcairn and Blairsville intersection. This does not include mines on the Pittsburgh Division of the Baltimore & Ohio, or river mines on the Youghiogheny River.

Dist. Rep. Julian B. Huff, Greensburg, Pa., March 29, 1918 (resigned).
Dist. Rep. George H. Francis, Greensburg, Pa., October 28, 1918.

District No. 3B. Connellsville Region.-Comprises Fayette County, Pennsylvania, south and west of a line from Banning Station through Whitsett Junction to Brownsville, except operations on the Baltimore & Ohio at and east of and connecting at Indian Creek; also operations in Westmoreland County, Pennsylvania, on the Pennsylvania Railroad at and south of Ruffsdale, and operations on the Sewickley branch connecting at Youngwood; also operations on the Baltimore & Ohio in Westmoreland County on the Mount Pleasant branch, connecting at Broadford, but not including operations on the Baltimore & Ohio along the Youghiogheny River or river mines on the Youghiogheny River.