National Economics of Coal

Mr. President and Gentlemen,--I appreciate very much the opportunity of addressing the Empire Club, but I deeply regret the necessity for the change of speakers. The loss of men like Lord Shaughnessey and Sir William Mackenzie is very serious to Canada.

First, may I say that Canada has no fuel problem, though we see a great deal in the newspapers about the fuel problem of Canada. This country has a problem of transportation and distribution of the coals of Canada from their place of production to the point of consumption, That is a real problem, but it is the only problem.

Canada has enormous resources, in coal. In my own little province we have 141/2 % of all the world's coal; we have 21% of all the coal of North America;

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Mr. Howard Stuchbury, Trade Commissioner for Alberta, was in Toronto promoting the introduction of Alberta coal in Ontario. The unexpected death of Baron Shaughnessy prevented Mr. Beatty, President of the Canadian Pacific Railway Company, keeping his appointment to address the Empire Club on December 11th, and Mr. Stuchbury on a few hours' notice consented to speak.

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we have 72% of all the coal of the British Empire, and 89% of that of Canada; so you will realize that there is no fuel problem in Canada. If we supplied all the coal that Canada needs, all that this country at present uses, we could do so without interfering very seriously with our resources for eighteen centuries. So there is still no fuel problem.

When I came down to Ontario a few months ago for the first time on this matter, I discovered a great many things about Alberta coal that I did not know before. I discovered that if Ontario used Alberta coal the insurance people would cancel all your insurance because of the possibility of fire; that the life insurance people would not insure your lives because you would be asphyxiated with the gas from Alberta coal; also quite a number of other things that I had not discovered in the twenty-two years that I have been burning it. We sometimes have cold weather in Alberta; I don't know whether you all are aware how cold we get it, but I have seen it 52 degrees below zero, and we still keep warm with Alberta coal.

We heard, too, that the coal would fall to pieces as soon as it got on the car, or as soon as you took it off. I saw coal in St. Mary's a short time ago that had been lying outside for about seven months, and it looked quite as nice as it did when it came from the mines. Now, we do not recommend that; we do not think it is wise to have our coal lie outside; it has some characteristics that are quite different from anthracite, and that is one of them--it does not stand outside storage, but in your basement or in your coal sheds it will last indefinitely. I have coal in my basement that has been there for eight years. I test it each year just to see what its heat losses are, and I have not discovered the heat losses yet. I put my coal in every year in April so as not to interfere with my garden, and I find I get the same results as if it were freshly mined.

I heard also, when I came down, that if Ontario burned Alberta coal you would have to scrap all your furnaces; I heard that in Montreal some years ago, and I heard it in Winnipeg when we went in there. But in Alberta we have no furnace or stove factory, or anything of that kind; we get from Ontario all our equipment for burning Alberta coal, and the furnace manufacturers make no change at all. I have a furnace that was built in Preston, I think; I have been using it for seventeen years; it is a mighty good furnace. I have not had to make any repairs to it in seventeen years, burning Alberta coal.

I will tell you one thing we have not got in Alberta, and that is a chimney sweep. We had a heavy wind storm seven years ago that blew down two or three bricks in my chimney, and I had to find some way of getting them out. As I am not a good climber I tried to find a chimney sweep, but could not get one anywhere, so I finally got a bricklayer to come and dig the bricks out, and I decided to have the chimney cleaned. It has not been cleaned since, and it had not been cleaned before. Our domestic coals are smokeless, and practically ashless.

I met a gentleman here the other day who told me something about Alberta, coal. He said he had burned two tons of it, and wanted to find out all about it, so he weighed out the ash after he was through, having carefully conserved the ash, and from the two tons he got 90 pounds-not very much ash.

I think the best evidence as to the value of Alberta coal and its popularity is the experience of the city of Winnipeg. When we opened up there in 1920 and tried to induce them to buy Alberta, coal, between 85% and 90% of all the domestic coal going into Winnipeg and into the Province of Manitoba came from the United States. At the end of 1922 they shipped Anthracite coal out of the city of Winnipeg, because there was no sale for it. We supply 95% of the requirements of the city of Winnipeg in domestic coal, and of the Province of Manitoba as well. (Applause) You have not heard of any serious suffering in the city of Winnipeg, or in the Province of Manitoba, as a result. There are no more people freezing to death, no more people asphyxiated than there were before. There is only one thing they had to do in Winnipeg when they started burning Alberta coal; that is, they had to scrap their ash-sifters.

I sent out a series of letters a short time ago, as I wanted to find out how good Alberta, coal was, and wanted to get all the information I could. I received some very interesting letters. I got one from a chap who was an advertising man for a clothing store, and he wrote me a very amusing and clever letter. By the same token, he mentioned the particular type of coal he was using, and I sent it down to the operator and suggested that he ought to send him two or three tons of coal for that letter--which he did. In his letter he said that he was a confirmed American hard-coal user, but that American hardcoal combined with bone and slate made him do some thinking, and so he bought some Alberta coal. He said that one of the difficulties with the American coal--I am not putting it in his own words; I wish I could remember them, for they are better than mine--was that American Anthracite coal was very temperamental; sometimes you had heat and sometimes you hadn't. Usually you could get heat if you waited long enough and had sufficient patience; but he said, "I burn Alberta coal now, and I get heat when I want it, as I want it, without fuss and without prayer." He added, "What was more important to me than anything else was that I have been able to regain my self-respect." He said, "You know, a man can sift ashes, but he cannot sift ashes and retain his self-respect." (Great laughter)

I want to tell you what already has been done in Ontario. Through the kindness of Sir Henry Thornton, about 16,000 tons of Alberta coal have come into Ontario. That has been very widely distributed, and the results are coming in from all over Ontario, and are very, very gratifying. I got the list of questions that have been sent out by the Chamber of Commerce of Hamilton, and the answers are very gratifying indeed. I might go on reading these, but then all my time would be gone, so I will not do so. The Ontario Government has been very enthusiastic in its support of Alberta coal, and in discussing the matter with the Prime Minister the other day he said, "We are going to get a rate on Alberta coal before we get through," and I think he is right. (Applause)

The fact of this coal coming into Ontario has resulted in a number of things. It has made Alberta coal popular--so popular that I have a letter here which shows just how popular it is. It is a letter from an American Coal Company in Cleveland

"We are pleased to offer you a limited tonnage of Burton Alberta coal. This coal is mined from Miller's Creek in Elkhorn seams in Kentucky . . " (Great laughter) Now, I know Elkhorn coal, as most of you do. You have known it as Elkhorn coal for many years, and you have known it as Miller's Creek coal, but I never heard it called Alberta coal before. I am proud of that; I am proud that Alberta coal has become so popular that large American operators find it necessary to re-name their coal in honour of us. But that is not the whole of this letter. This is the part of the letter that is important to me, and I think to you

"You will see at once that we are offering you a coal that will make you considerable profit as well as satisfy your customers who wish Alberta coal. If you have not received any Alberta coal this year you will probably want to have at least one car. If you have received Alberta coal you will surely require more."

Is not that a wonderful advertisement for Alberta coal? (Laughter) Now, that letter has gone to every dealer in the Province of Ontario.

I had a gentleman in my room the other night, on whom a traveller for this concern called, to know how many cars of Alberta coal he wanted from Kentucky. He said, "If I have got to resort to that kind of thing I am going out of the coal business." (Applause) There are a very large number of coal dealers in this province who feel exactly as that gentleman did.

But there are others. I had an experience at Woodstock a little over a week ago with three gentlemen there--I say that advisedly--who are in the coal business and are selling Alberta coal. A man who had lived in the West for some years and knew Alberta coal came back to his own town of Woodstock to retire, and wanted to buy some coal for winter. He bought his winter supply and had it put in--a sized American soft coal--and then he heard of coal coming down to the Ontario Government and thought he would like to have some of the coal he was so used to. He called the dealer up and asked him if he had any Alberta coal, and the dealer replied, "I have two cars." The customer said he had room for two tons, and arranged to have it sent up at the price asked, $14. He had paid $10 for the American soft coal that he got. What was the customer's surprise on going down to his basement to find, in bins right alongside of each other, exactly the same coal. The only difference was that he had paid $10 for one and $14 for the other. So you see that Alberta coal is worth $4 more for the name. (Laughter)

We had three factors that in our judgment made it seem reasonable to ask for special consideration in the movement of coal from Alberta to Ontario. The first of these was the Ontario factor. You know the difficulty you have had for the past two years in getting an adequate amount of coal of a reasonable quality at a reasonable price when you wanted it. That was one factor. We felt that Ontario would be willing to buy its coal in the summer if it could be assured of the quality and the price, and be assured that their bins would be filled.

The second is the railway factor. West of the Great Lakes for at least three months of the year there are a tremendous number of idle grain-cars--and all Alberta coal is moved in grain-cars; they are the only ones we can get. But in addition to graincars being idle, the equipment to haul those cars is idle, and the operatives to look after those cars and equipment are also idle.

Then the third factor is that of the Alberta mines. Here is our position in Alberta. We have a total present market of about 7,000,000 tons; this year it will run a little more, but we practically have all that the country can absorb in our present market, though we have a mining capacity of 14,000,000 tons. Now, you gentlemen who are manufacturers, or in any productive line, know exactly what that means. That is idle time, and idle time costs money. And it costs more money in mining than in any other industry, particularly in coal-mining, because every operation in coal-mining must be carried on, except the actual digging of coal, for 12 months in the year. Our domestic mines are closed about the 15th of February, and they remain practically closed till about the 15th of August. Now, that means high wages for the time the men are working, but not high wages for the aggregate of the year.

It means inefficiency of labour. By that I do not mean that the miners are inefficient; but you know that when you get back from a fishing trip, you have not for three or four weeks, the same facility in the office or shop or anywhere else that you have when you get down to hard-pan again. I had an experience of that. I was talking to one of our operators who had closed down for about six months, and he told me that he had to buy twenty more mules, because although he had the same number of mules that he had six months previously, they had been out to grass and had not been doing anything, and they had lost that facility, that mechanical movement, so that he took twenty additional mules in their place. (Laughter) Now, that applies to all labour; they lose that facility, and we do not get the production we ought to get at the price.

These are the three special factors; but there is another factor-and I am coming really to the title of my talk-the factor of National Economics. I do not know whether you know that Ontario spends over $100,000,000 a year for American coal and freight over American railways. Now, that is a huge sum going out of the country every year. I am not a banker; I am not an economist; I do not even know how to take care of my own money-it goes as soon as I get it; but bankers tell me that the clear turn-over is three times in excess every year. If that is so, and I assume it is, we are spending not $100,000,000 but $300,000,000. That is, we are giving to our friends across the line, potentially, $300,000,000 a year, or the total debt of Canada for eight years. Now, that is a big price to pay.

Let us look at it in another way. Presume for the sake of argument that Anthracite costs only $10 a ton at the border, though I am told it costs more than that. The replacement of 6,000,000 tons of Anthracite by our Canadian coal would mean a $1,500 a year job for 6,666 more men. Now, you are getting approximately 3,000,000 tons in Ontario; that is 20,000 jobs at $1,500 a year. Apply the same three times turn-over and you have got 60,000 jobs at $1,500 a year.

Now, they tell me that that is sound economics. Applying the normal family of four, it means that you are building a city in the United States, of 240,000 people every year.

Now, we are talking about immigration; we are saying that we must have population. That is perfectly true; but do we study emigration in that? We must not forget that we are training men in our factories and shops and stores. They go over to the United States because they are well trained. We are losing the men that we are training in our public universities and schools. They go over there because they are well trained; but who is paying the bill? We are not only losing the men, but we are paying the bill. Our coal bill is making it possible for the United States to absorb the best we have; and then we talk about replacing them from Central Europe. Now, is that sound? Is that not a high price to pay for coal, when Canada has so much?

Let us look at it in another way. There is no money spent that has so wide and even a spread as money spent for coal, because it means not only coal but transportation. Our coal coming from Alberta into Ontario covers approximately sixteen divisions of the railway. Your freight charges are very largely made up of labour. Labour gets its money at fifteen different points in Canada, from Alberta to Ontario, and it is thus very wide-spread.

The costs of mining are now between 75% and 80% labour. That money goes into circulation, and turns a good many times more than three times. Now, what does that mean to Ontario? The West is not able to pay its debts to Ontario--all of you gentlemen know that. We deprecate it as well as you do. But we have the wherewithal to pay our debts if you would buy it. The West is not able to buy the amount of goods it wants to buy from Ontario, but we have the wherewithal to get the money to buy the goods that you want to sell us.

I wonder sometimes whether we as Canadians, as citizens of the Empire, when we go to shops to buy anything, ask the question--"Where was this produced?" I do not buy a tie, I do not buy a collar, I do not buy a pair of shoes, or anything else, until I know where it comes from. (Hear, hear, and applause) If I cannot get something that is produced in Canada, at least I can get something that is produced in the Empire; (hear, hear) and unless we look at things in that way, gentlemen, we have no chance in God's world of ever attaining national economic independence. (Loud applause)

MR. JOHN D. SPENCE expressed the thanks of the Club to the speaker for his suggestive address, which had called attention to a new basis of hope for the West-of increasing interdependence of East and West, and lessening dependence of Ontario and Canada on the outside world.