Soft Coal, Hard Choices: The Economic Welfare of Bituminous Coal Miners, 1890-1930

By Price V. Fishback | Go to book overview

8
Did Coal Miners "Owe Their Souls to the Company Store"?

The company store is one of the most reviled and misunderstood of economic institutions. In song, folktale, and union rhetoric the company store was often cast as a villain, a collector of souls through perpetual debt peonage. Nicknames, like the "pluck me" and more obscene versions that cannot appear in a family newspaper, seem to point to exploitation. The attitudes carry over into the scholarly literature, which emphasizes that the company store was a monopoly. 1 David Corbin summarizes the common view of the company store in his study of southern West Virginia coal miners.

If a coal miner survived a month of work in the mines, he was paid not in U.S. currency but in metals and paper (called coal scrip), which was printed by the coal company. Because only the company that printed the coal scrip honored it, or would redeem it, the coal miner had to purchase all his goods--his food, clothing, and tools--from the company store. Hence, the miner paid monopolistic prices for his goods. Journalists and U.S. senatorial investigating committees repeatedly revealed that the region's coal company store prices were substantially higher, sometimes three times higher, than the local trade stores. . . . To the miners, it meant, as they later sang, that they "owed their souls to the company store." For some miners, it meant being held in peonage. 2

Corbin and others suggest that company stores had a local monopoly because the company only issued scrip or kept miners in debt. Economic theory and evidence from government reports and archival sources are used here to investigate these claims. The company store's monopoly power in nonunion districts was limited because store prices were part of an employment package offered to geographically mobile miners in a labor market with hundreds of mines. Alternative reasons for company ownership of stores exist, and those based on transactions- costs theories of the firm are offered. Claims of high store prices based on scattered evidence are compared with the conclusions of the U.S. Coal Commission in 1922 and the Immigration Commission in 1909. Finally, the use of scrip and the extent of

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Soft Coal, Hard Choices: The Economic Welfare of Bituminous Coal Miners, 1890-1930
Table of contents

Table of contents

  • Title Page iii
  • Preface v
  • Contents ix
  • 1 - The Miners' Choices: Voice or Exit 3
  • Notes 10
  • 2 - The Analytical Framework 11
  • Notes 17
  • 3 - The Coal Labor Market, 1890-1930 19
  • Notes 36
  • 4 - Working in a Coal Mine 42
  • Notes 57
  • 5 - Methods of Wage Payment 60
  • Notes 74
  • 6 - Dig Sixteen Tons and What Did You Get? Earnings 79
  • Notes 98
  • 7 - Death's Taken a Mighty Toll for Coal, Coal, Coal 102
  • Notes 126
  • 8 - Did Coal Miners Owe Their Souls to the Company Store"?" 133
  • Notes 147
  • 9 - The Company Town 152
  • Notes 166
  • 10 - Coal Mines as Melting Pots 171
  • Notes 192
  • 11 - What Did Miners Gain from Strikes? 198
  • Notes 216
  • 12 - Conclusions 221
  • Appendix a Calculating Earnings for Workers in Coal Mining and Manufacturing 225
  • Notes 229
  • Appendix B Sources of Data for Panel of Twenty-Three Coal States from 1901 to 1930 234
  • Appendix C Estimating the Relationship Between Wages and Accident Rates 242
  • Notes 247
  • Appendix D a Theoretical Model of Accident Prevention by Miners and Employers 250
  • Notes 254
  • Appendix E Measuring Segregation in Job Hierarchies 256
  • Notes 260
  • Appendix F an Empirical Test of the Influence of Coal Companies on Equalizing Black and White Schools in West Virginia 262
  • Notes 264
  • Appendix G Piece Rate Regressions for West Virginia Counties 266
  • Index 271
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