Did Coal Miners “Owe Their Souls to the Company Store”? Theory and Evidence from the Early 1900s

Author:

Fishback Price V.

Abstract

Although coal companies may have tried to exploit a local-store monopoly, company-store prices in nonunion areas were appreciably limited by competition from other stores and mines in the same labor market. Company stores persisted in part by lowering transactions costs. Prices at company stores were generally similar to those at nearby independent stores, and higher wages may have compensated for higher store prices at isolated mines. Conditions varied, however, with labor-market tightness. Miners were generally not in debt to the store, nor paid entirely in scrip. Scrip was an advance on payday, when miners received cash.

Publisher

Cambridge University Press (CUP)

Subject

Economics, Econometrics and Finance (miscellaneous),Economics and Econometrics,History

Reference54 articles.

1. U.S. Immigration Commission, Immigrants in Mining, vol. 2, p. 202.

2. Morris, Plight of Bituminous Miner, pp. 169–72; U.S. Coal Commission, “Bituminous Workers, and Homes,” pp. 1454–58.

3. U.S. Coal Commission, “Bituminous Workers and Homes,” pp. 1454, 1456, 1534.

4. Since scrip prices were the same as cash prices, the miner had little incentive to buy goods with cash if he could draw scrip. Between 85 and 97 percent of the Stonega stores' business was paid for with coupons or on a charge account. The Stonega data overestimate deductions for store purchases by 3 to 15 percent in Tables 2 and 3, because the data were calculated as total store sales as a percentage of the payroll. Comparative Statements of Store Department, Box 253, Stonega Records.

5. The items in the budget considered as purchasable at the company store were food, clothing and dry goods, house furnishings, drugs and toiletries, hardware and mine supplies, and other miscellaneous items. U.S. Coal Commission, “Bituminous Workers and Homes,” p. 1456. Examination of the payrolls summarized in Tables 2 through 4 suggests similar breakdowns of expenditures in the early 1900s.

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