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Guestwords: Fuel Lessons From History

Wed, 11/02/2022 - 11:33

Europe faces a difficult winter because of the war in Ukraine. The Group of 7 has decided to cap the price it will pay for Russian oil. The challenge of monitoring the fuel markets, enforcing a price cap, and allocating fuel has been headlining the news.

There may be some lessons to help with this challenge in how the United States responded to fuel shortages during World War I, especially in 1917, and the “coal wars” that peaked in 1922. And there are some East Hampton connections.

In February 1917, the German kaiser started allowing U-boats to pursue Allied merchant vessels, which interrupted the supply of hard (anthracite) coal for fuel and created an acute U.S. shortage during the winter of 1916-17. Anthracite coal was one-tenth the supply, but it was important for industrial uses.

The federal Food and Fuel Control Act of 1917 was passed to avert fuel price increases by allocating coal nationally. It also introduced daylight saving time as a wartime measure. The U.S. Fuel Administration was led by Harry A. Garfield, who formed committees in each state to allocate fuel down to the county level. The plan was widely viewed as successful for two years, when the shortages were alleviated and some business leaders argued that fuel allocation was socialist and no longer necessary.

Garfield resigned and his successor presided over a phasing out of federal oversight, in part because of the Teapot Dome scandal that marred President Harding’s administration.

Fuel distribution problems and price pressures persisted, however, because of the ongoing wars between mine owners and mine workers, which peaked on June 21, 1922. That day, union strikers at Herrin, Ill., were enraged by a mine’s owner going back on his word and employing strikebreakers. They fired some shots at strikebreakers, and guards returned fire, killing three union miners. The next day, union miners killed the mine superintendent and 18 of the 50 strikebreakers and guards. Later, a 20th victim, from the mine owner’s side, brought the carnage to 23 deaths.

New York and other states saw these ongoing battles at the mines creating shortages and price increases. Republican Gov. Nathan Miller of New York reinstated the federal fuel committees, this time under state rather than federal control. Because of his reputation for fairness, William Woodin, a corporate C.E.O., was selected by the governor as the state’s fuel commissioner. He became a statewide “czar” to set prices and allocate coal among different users. Woodin lived on Manhattan’s East Side and summered on Lily Pond Lane in East Hampton.

Woodin threw himself into the effort. He hired Col. William Donovan of Buffalo to serve as his counsel. At the well-attended New York State Coal Merchants Association convention of Sept. 7 to 9, 1922, Colonel Donovan said Woodin was “a real human being, with an abundant fund of common sense” and asked that “the selling and distribution of coal be conducted on the level, and that no one should try and take advantage of a public necessity for personal profit.” He described Woodin as offering the coal industry a chance to demonstrate that “businesses can be trusted to do the right thing by the public in the case of an emergency.”

That month, Woodin joined with John F. Hylan, the Democratic mayor of New York City, to allocate coal and enforce rules against profiteering. Woodin said he wanted to look out for “the little guy,” a theme he would return to later as secretary of the Treasury. He said he would “see that the people of humble means are enabled to get coal.” He rejected a request from dealers for a $4-a-ton hike in the anthracite coal price, capping the price at the $14-per-ton level of the previous winter. The following month, Woodin and Hylan enjoined any landlords from using coal shortages as an excuse for not providing heat to any tenants.

As questions are raised about the possibility of capping prices and allocating fuel this winter, the experience of the United States and New York City a century ago might provide some useful lessons. For example, heating for hospitals and homeowners was a priority, and industrial and commercial users were represented on the allocating committees.

Federal and state fuel allocation in Washington, D.C., and in New York State was enforced, as violators were prosecuted and pilloried. It was viewed as a successful program, which makes it a potentially useful precedent for the State Department (headed by another seasonal East Hampton resident, Antony Blinken) to invoke.

The G7 and the European Union need every resource to counter Russian profiteering from Europe’s fuel shortages.

John Tepper Marlin, Ph.D., a 40-year resident of Springs, has written the first-ever full-length biography of William H. Woodin, who served as president of the railcar giant American Car & Foundry for 18 years before being appointed as F.D.R.’s first Treasury secretary.

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