They enjoyed more privilege than not relative to most of their neighbors and to other workaday Americans and Canadians. (I should point out that I am studying the "established" coal dealers and not the more marginal coal peddlers, whom the established dealers derided as "snowbirds" but who probably provided a service to many a consumer.) Some, of course, like Elias Rogers and his son, Alfred Rogers, in Canada and Francis Peabody in the U.S., enjoyed vast wealth (and even owned their own mines) and undoubtedly own their share of the blame for the sometimes violent labor disputes in the mines they owned and profited from.* Others, like the less famous small coal retailers, were more like the modern day convenience store owners who find themselves competing with grocery store chains and Walmarts, while still others fell somewhere in between.
A recurring theme in what I am studying are the ways in which these coal dealers engage in practices to limit competition and the ways in which the state exercises "competition policy"--with a focus on antitrust (U.S.) or anti-combines (Canada) policy, although I am also looking at licensing regimes and older policies such as laws against "forestalling the market"--to punish them for these attempts or to regulate the way in which they make these attempts. Here are the types of practices most of these coal dealers engage in:
- Monopolizing local markets by cornering the market on coal within a very few hands under the command of a single firm. (Here I use "monopolize" to mean "gain control of all or most of the commodity in a given market," and not "to secure an exclusive right from the state to trade in the monopoly.")
- Collusion with wholesalers to limit bulk sales only to "legitimate" retailers, legitimate being defined as "membership in local coal associations predicated on abstaining from 'price cutting' and from other 'trade abuses.'"
- Setting prices, either outright through price-setting conferences (more common in the 1880s and 1890s), or through some form of what by the 1910s became known as "open prices associations," where information on prices and costs was pooled in some central publication that factors in the industry could then use to determine how to set their costs.
- Labor-management agreements that regulated coal prices indirectly by standardizing labor costs. These agreements ranged from industry-wide (or almost industry-wide....West Virginia was a major exception until the 1930s) contracts ("joint agreements") between operators and the United Mine Workers, to local-market specific contracts between coal dealers and the local teamster's union(s). These local contracts usually involved some sort of exclusivity: dealers pledged to use only union labor while the workers pledged to work only for "fair" coal dealers.
For the other two practices, which, as the antitrust laws evolved, became increasingly "per se" violations--actions that by definition were violations of the antitrust laws and not subject to what became known as the "rule of reason" jurisprudence--antitrust laws were used much more aggressively and much more "successfully," if success is measured by conviction rates, having those convictions upheld in higher courts, and preventing at least the most flagrant violations.
The fourth practice--labor agreements--were sometimes subject to antitrust and other actions, and sometimes not, but they were more durable and enjoyed, sometimes, more state support.
(The New Deal is an interesting exception to all these points. The National Industrial Recovery Act not only legalized many cartel agreements, but made them legally enforceable. And even after the Supreme Court declared the NIRA unconstitutional (and the Judicial Committee of the Privy Council in England, which had jurisdiction over Canadian laws, declared a similar program, proposed by Prime Minister Robert Bennett, "ultra vires," or beyond the lawmaking powers of the Canadian government), new laws in the U.S., like the first and second Guffey Acts, as well as labor laws, like the Wagner Act and Ontario's Industrial Standards Act, had the effect, sometimes, of tolerating, if not imposing, cartel-like behavior.)
Now, back to my original point. The dealers involved are not especially sympathetic people. The workers--the coal handlers/teamsters who delivered the coal and the miners who extracted it--traditionally evoke more sympathy, probably because their circumstances were presumably more marginal and because their livelihood depended on a boss and on the vicissitudes of a labor market. (Some of this has been challenged. Fishback's Soft Coal, Hard Choices explores some of the options of geographic mobility that at least some workers enjoyed. My point is that traditionally, the workers have evokee more sympathy.)
One of the many criticisms of antitrust laws, at least the criticisms that rely on sympathy for the targets of the laws, focuses on the apparent unfairness of how these laws affect the most marginal peoples. In the case of the coal industry, this would be the miners and the drivers, and their unions' subjection to the laws. One thinks of the incarceration of labor leader Eugene Debs in part under authority of the Sherman Act** and of the Danbury Hatters' Case, in which the Supreme Court held each individual member of the hatters' union individually liable for all the damages caused by the union boycott, held to have been an action "in restraint of interstate commerce." Sometimes, small business owners and farmers are also viewed sympathetically as hapless--and presumably unintended--"victims" of the laws. But outside of the coal trade journals, hardly anyone seems to have had much sympathy for the coal dealers and coal operators, even though some of at least the smaller retail coal dealers were the sorts of proprietary capitalists people sometimes have in mind when they talk about "small business owners."
Now, I'm not trying to uplift the coal dealers from the coal dust bin of history and say yes, they, too, need sympathy. But I am bothered by the apparent arbitrariness of antitrust policy. It's not just that the policy outlaws things not normally considered crimes, at least not if we take a step back and think about them for a while.*** It's that many business transactions people might consider legitimate could be a violation of antitrust policy, and violators are often prosecuted only when they do something that offends people's moral sensibilities.
These "moral sensibilities" are offended usually in one of the following circumstances: when people believe the price of coal is too high; when people believe the supply of coal is inexplicably low; when people believe the employees of the coal operators and coal dealers are getting a raw deal and need to be paid more (but not so much more as to raise prices too much). Added to the "moral sensibility" was the fact that coal was such a necessity, especially in colder climes. It seems to me, albeit only on impressionistic evidence (because I have not studied it systematically), that only eggs, bread, and especially milk--their prices, supply, and quality--evoked more emotion than coal. Newspapers recounted sufferings of especially poorer people during times of coal shortages of high prices, and these accounts, while probably sensationalized, were also probably true.
But here's my question, something I'm trying to wrap my head around: is it "just" to have a law predicated on the notion that someone could be prosecuted at any time for its violation without any showing of intent or mens rea? This question is, of course, a question-begging question (what my college logic teacher might have called a "complex question"). It assumes that my characterization of the law (that it outlaws what people out of necessity are always going to do anyway and therefore is enforced only when people's sensibilities are implicated and an "example" is to be made of someone) is accurate. My also assumes that my characterization is exceptionally accurate [see update below]: all human-made laws, to some degree, have a certain amount of vagueness and arbitrariness to them: if lines are to be drawn, they have to be drawn somewhere; if offenses have to be defined there are always going to be cases that don't clearly fit within the definitions; if laws have to be enforced, limited resources dictate that they will be enforced with at least some degree of selectivity: is the case of antitrust laws just a problem inherent in all human-made laws, or are these laws exceptionally bad, even taking into account the weakness of our fallen nature?
I hope to write, in another post, on the justness of such a law, assuming, of course, that my characterization of it is accurate. In particular, I will want to write, if/when I have the time, on what circumstances would be necessary to prevail in order for such a law to be just.
Update 4-29-11: Ugh! I wrote that the question was partially whether my "characterization" of the law was "exceptionally accurate," when I meant and should've wrote something more like: if the law is as I describe it, to what extent are its faults unique to it, or to laws in general? Of course, if any characterization I make is indeed accurate, such an accuracy would, with my convoluted writing, be indeed exceptional.
*I am not trying to deny the culpability of miners who killed or injured strikebreakers in such depressing debacles as the "Herrin massacre," but I am saying that the mine operators share some non-trivial responsibility for putting people (strikers and strikebreakers) in such desperate circumstances.
**The appeals court upheld Debs's incarceration partly on the ground of violating the Sherman Law. The Supreme Court, in upholding the appeals court decision, declined to opine (nice rhyme, mine and not thine!) on the Sherman Act, preferring to rest its decision on Debs's purported interference with interstate commerce and the federal mails.
*** Price-setting seems pernicious, with a whiff of conspiracy and backroom deals among portly, cigar-smoking, mustachioed men in suits about to down some brandy to celebrate foreclosing on an orphanage. But if one accepts that a business owner may set his or her own prices, then it is at least a bit challenging to decide why, in principle, two or more people may not agree to set the same price. I'm not saying such behavior necessarily ought to be legal, but only that the case for the oughtness of its illegality is not necessarily so clear cut as it might seem at first.