act and rulings are presumptively clear in their meaning; that if a situation arises which seems not to be covered by any of these rulings, or if they work a hardship, an immediate recommendation will be made that a further ruling be issued to meet the new situation.

It is not the duty of State Fuel Administrators to construe either the Lever Act or the rulings of the United States Fuel Administrator. This burden must be borne by the attorneys of the parties interested, bearing in mind, always, that it is the earnest wish of the United States Fuel Administrator to clear up, whenever possible, any uncertainty, not by advice in particular instances, but by using any instance showing hardship as a foundation for a ruling to cover all similar cases. This must be the policy of the State Fuel Administrators as well.

SOURCES OF AUTHORITY.

Lever Act.—The Fuel Administration finds its powers and is based in law upon the Act of Congress entitled "An Act to provide further for the national security and defense by encouraging the production, conserving the supply, and controlling the distribution of food products and fuel" approved August 10, 1917, a copy of which is transmitted herewith.

Publication No. 1.-On August 23, 1917, an executive order was issued by the President, appointing Harry A. Garfield as United States Fuel Administrator, to hold office during the pleasure of the President. The State Fuel Administrators are appointed by the United States Fuel Administrator by virtue of the powers conferred upon him by this executive order. (Publication No. 1.) State Fuel Administrators will hold office during the pleasure of the United States Fuel Administrator. Publications No. 2 and No. 4.-On August 21, 1917, the President of the United States, by an executive order, fixed the prices of bituminous coal at the mine. (Publication No. 2.) In some exceptional cases these prices have been provisionally modified by the United States Fuel Administrator, and a statement of these modifications is attached hereto. (Publication No. 4.)

Publications No. 3 and No. 4.-On August 23, 1917, the President of the United States issued a second order defining jobbers and jobbers' margins and naming a price for anthracite coal. This order is now in effect as promulgated by the President, except for the price of pea coal, which has recently been reduced by order of the United States Fuel Administrator. (Publications No. 3 and No. 4.)

Publication No. 9.-From time to time, since his appointment the United States Fuel Administrator has issued rulings or regulations construing and explaining the Lever Act and the Proclamations of the President. A copy of these rulings is sent to you herewith. (Publication No. 9.) Other such rulings may be issued in the future. These, also, will be sent to you and should receive your most careful attention.

H. A. GARFIEld,
Fuel Administrator.

Statement issued by United States Fuel Administration further defining powers and duties of Federal Fuel Administrators, dated November 12, 1917.

NOVEMBER 12, 1917.

POWERS OF STATE FUEL ADMINISTRATORS.

The most important duty of the State Fuel Administrator is to see that the supply of fuel in his State is equitably distributed at fair prices. It is the intention of the U. S. Fuel Administrator to see that the State Administrator is provided with the necessary authority to accomplish this result.

No attempt is here made to list these powers in detail. A distinction is to be made, however, between a power which may require legal action for its enforcement and one which may be made effective through the consent or acquiescence of the parties affected. The State Administrator is empowered to make all such reasonable regulations or arrangements of the latter type as he in his discretion may deem necessary, so long as they are not inconsistent with the general orders or rulings of the United States Fuel Administrator. But where action is desired which may require legal enforcement, or which may involve the Fuel Administrator or the Government in legal liability, authority should be obtained by telegraph, or otherwise, from the United States Fuel Administrator.

For example, the State Administrator has authority to promulgate reasonable regulations regarding local distribution. He may require dealers to deliver only a limited supply to any one customer. He may require consumers to state their supply on hand and their requirements. He may take measures to prevent hoarding. The State Administrator is authorized to proceed with measures of this character and should have no difficulty in making them effective by force of public opinion.

The second class of powers includes those which in the event of opposition, might require enforcement by legal authority. These powers may be exercised only on express authority from the United States Fuel Administrator on recommendation of the State Fuel Administrator. The State Administrator will naturally recommend the exercise of these powers with extreme caution and only in case of emergency. An example of this kind of authority is the right to divert coal from one community or consumer who is well supplied to another which is in need; also the right to take coal from one owner for the benefit of another in need.

It is believed that in the great majority of instances the State Administrator will be able by the use of his influence and with the support of public opinion to obtain action with the consent of the parties and without resort to legal action. If this is not possible, and he considers the matter imperative, he should telegraph at once to the United States Fuel Administrator the action he recommends and request the necessary authority.

For example, if he desires to divert certain coal from a consignee already well supplied to one in need, he will first seek permission from the consignee, but if this fails, he should then telegraph Washington for authority. In connection with any. such diversion, he should make provision, for the question of payment, and it will greatly simplify matters if the party receiving the coal is compelled to pay cash, thereby eliminating questions of credit.

The State Administrator should also use his influence to have the diverted coal replaced at the earliest possible moment.

In all cases of emergency needs, the State Fuel Administrator is authorized to use his influence with the party furnishing the previous supply to obtain a further amount. Should these efforts prove futile, the State Administrator should call upon this office as heretofore (Department of Emergency Needs).

The State Administrator will realize that his position is one of great responsibility in these matters, and while no wrong will be permitted to be done through lack of authority, more effective and quicker results can often be obtained through cooperation than by legal action. It is believed that in the present state of public opinion, you will have no difficulty with the exercise of tact and good judgment in obtaining support and performance of any reasonable regulation you may determine upon. FUEL ADMINISTRATION.

Letter to Federal Fuel Administrators, dated May 10, 1918, and memorandum referred to therein relating to duties of Local Committees.

To all State Fuel Administrators:

MAY 10, 1918.

Under separate cover we are forwarding you copies of a memorandum outlining the principal duties of Local Committees.

Suggestions and instructions relative to the establishment of equitable and just maximum retail gross margins are also contained in this memorandum and we believe they will greatly aid those Committees who have not carefully investigated, since April 1, 1918, and recommended to you what maximum retail gross margins should be established for their district.

In those States or districts where equitable and just maximum retail gross margins have been established since April 1st, the information and instructions, of course, will not be of any assistance until a revision of the margins now established becomes necessary.

Will you please forward a copy of this memorandum to each Local Committee? Yours very truly,

By WALTER E. HOPE.

UNITED STATES FUEL ADMINISTRATION,

States Organization Division.

MEMORANDUM REGARDING DUTIES OF LOCAL COMMITTEES.

(Whenever the words "Local Committees" are used they shall be taken to mean either Local Committees or Local Administrators, as the case may be.)

The task of local fuel committees, generally speaking is to see that there is an adequate supply of fuel in their districts, that such supply is equitably distributed, and that the prices charged are fair to both the consumers and the retail coal dealers. With these purposes in view the duties of the local committees may be summarized as follows:

(1) Supply of fuel.

(a) To gather information regarding the supply of fuel in their several communities, and to ascertain the fuel requirements of their communities with special regard to the points of immediate needs.

(b) To report to the State Fuel Administrator any shortage or threatened shortage, in order that it may be relieved as early as possible.

(2) Regulations of the U. S. and State Fuel Administrators.

(a) To see that the regulations of the United States Fuel Administrator and of
the State Fuel Administrator are carried out in their districts.
(b) To investigate and report to the State Fuel Administrator all violations of
the regulations.

(3) Miscellaneous.

(a) To cooperate with the State Fuel Administrator in an effort to see that cars of coal are unloaded with the least possible delay, and to report any undue delays in unloading.

(b) To conduct a campaign for the purpose of securing the utmost economy in the use of fuel for both domestic and industrial purposes.

(c) To inform the public, through the newspapers, respecting all matters and regulations of the United States Fuel Administration which might assist them in solving their fuel problems.

(d) To make recommendations or suggestions from time to time to the State Fuel Administrator as to general practices, methods and policies with special reference to local conditions.

(4) Retail gross margins.

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, pccket 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 bin 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 expens?, defined as follows: Cost of unloading coal, salaries and wages of yard force, and miscellaneous yard expense.

2. Delivery expense, 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 cach 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 comp led 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.