Supreme Court, and the United States Supreme Court judge stated that the licensee, or whatever it is called, must have his day in

court.

Senator GLENN. Certainly.

Mr. LIVERIGHT. Well, there is no provision in this bill for that.

Senator GLENN. I am not familiar with the exact wording of the section, but if properly safeguarded a provision of that kind would be constitutional and would be analogous to the provisions of the character I have stated.

Mr. LIVERIGHT. It would remove one of the objections I have urged in my discourse here, but I am discussing the bill as is. Senator COUZENS (presiding). Have you any other witness to present?

Mr. GREEVER. Mr. Chairman, I understand that the railroads have a representative here.

Senator COUZENS (presiding). Mr. Thom.

Mr. ALFRED P. THOM. Mr. Chairman, I should like to inrtoduce Doctor Duncan, economist of the Association of Railway Executives, whom we ask to be permitted to present a statement on behalf of our association.

Senator COUZENS (presiding). We will hear Mr. Duncan.

STATEMENT OF C. S. DUNCAN, ECONOMIST, ASSOCIATION OF RAILWAY EXECUTIVES, WASHINGTON, D. C.

Mr. DUNCAN. I am an economist in the employ of the Association of Railway Executives, attached to the general counsel's office here in the city of Washington. The opponents of this bill have very kindly granted us permission to be heard at this time, and I will take but very few minutes.

I appear in behalf of the Association of Railway Executives, which is composed of the Class I railroads of the country, with respect to Senate bill 4490, which proposes, among other things, to create a bituminous coal commission with certain authority and

powers.

In section 7 of this bill there is a provision, appearing at the top of page 8 of the printed copy, which reads as follows:

The commission shall investigate the fuel service of railroads engaged in interstate commerce, including the qualities required, the tonnage consumed, and the prices paid for such railroad fuel, and shall make reasonable rules and regulations governing such fuel service as will prevent discrimination between coal mines or coal fields, and for such purpose said commission may consider the fuel service of railroads during the past 10 years, together with the price paid therefor, and may further determine relative costs of railroad fuel coal by consideration of the commercial traffic rates on such coal over the distance it must be transmitted from any mine or mines to the fueling point on such railroads.

Section 11 of the bill reads as follows:

SEC. 11. After the taking effect of this act no railroad or carrier subject to the provisions of the interstate commerce act shall build any siding or switch, or cut its lines for any siding or switch to any bituminous coal mine or tipple, until after it has received permission from the Interstate Commerce Commission so to do, and such permission shall only be granted upon approval of the bituminous coal commission.

Both of these provisions, if enacted into law, will seriously handicap the carriers in their efforts to carry out the requirements for

efficient management and economical operation of the railroads in section 15a of the interstate commerce act and will, by impairing the high standards of transportation service of the carriers, adversely affect the public interest. Independent of other objections, the carriers present their opposition on these two grounds.

(I) Coal is the principal railroad fuel: It is obvious that any legislative action affecting the sources of coal supply or the continuity of an adequate supply of coal for the carriers, or any action that will unnecessarily restrict the freedom of railroad management to use its best judgment, based upon extended and careful investigation, tests, and analyses, in selecting its coal, is of vital interest to the railroads.

Apart from the limited use of electricty and gasoline for motive power, the railroads must depend upon steam. For the production of steam the carriers rely upon coal, supplemented, particularly in the western district, by oil. Much of the electricity used by the railroads is also generated from coal.

The use by the railroads of automotive engines or motor power is very small and is not significant. For example, the motor-car mileage of Class I railways for the years 1923 to 1927 is shown in the following table:

It appears from this table that the increase in motor-car mileage has been from 59,233,000 miles in 1923 to about 112,500,000 miles in 1927. Compared with the total car mileage of more than 29,253,000,000 in 1923 and of over 32,269,000,000 in 1927, these figures are immaterial.

In 1920 Class I carriers had 1,449.5 miles of roads electrified; in 1923 they had 1,534.7 miles of road electrified; and in 1927 they had 1,853.5 miles of road electrified. In addition, there were secondary tracks, yard tracks, and sidings electrified of about an equal mileage. Compared to the total mileage of 237,000 miles of road and over 400,000 miles of all tracks, these figures are not significant.

The consumption of fuel oil by Class I roads is of greater importance. In 1920 Class I railroads consumed 1,929,666,195 gallons of fuel oil, equivalent to 11,989,511 tons of coal. In 1923 they consumed 2,334,064,109 gallons of fuel oil, equivalent to 14,644,149 tons of coal. In 1927 they consumed 2,429,935,486 gallons of fuel oil, equivalent to 15,352,180 tons of coal. These calculations are based upon 158 gallons of fuel oil as equivalent to 1 ton of coal.

The use of fuel oil is very largely confined to the western district. For example, in 1920 out of a total fuel-oil consumption of 1,929,666,195 gallons, the western district accounted for all but about 50,000,000 gallons. In 1923 districts outside of the western district accounted for a little over 60,500,000 gallons, and in 1927 districts other than the western district accounted for a little over 61,000,000 gallons of fuel oil.

Class I railroads, however, in the western district, consumed over 46,500,000 tons of bituminous coal in 1920, over 41,000,000 in 1923 and a little over 34,200,000 tons of bituminous coal in 1927.

The railroads of the country can not operate without coal in any district. It is obviously an essential requirement for them. The carriers as a whole use 27 or 28 per cent of the entire amount of soft coal produced.

Senator COUZENS. I see from reading these tables that there is a constant decrease in consumption of coal, or practically so, is not that right?

Mr. DUNCAN. Yes, sir.

Senator COUZENS. What is that caused by, the use of more efficient locomotives?

Mr. DUNCAN. That is caused by economies in operation very largely.

Senator COUZENS. But the most of it is by reason of increased efficiency of locomotives, is it not?

Mr. DUNCAN. Greater efficiency in locomotives, but not alone that. There are other means of producing these economies.

Senator COUZENS. All right. You may go ahead.

Mr. DUNCAN. The consumption of bituminous coal by the Class I railroads from 1920 to 1927, inclusive, is as follows:

From the facts stated in the foregoing paragraphs it is manifest that the main source of the carriers' power at the present time is bituminous coal. While the increasing use of fuel oil and electric power, together with the coal economies which have been effected by the carriers, have prevented the natural increase in coal purchases which were to be expected from increasing railroad traffic, the fact remains that to-day the main source of filling the carriers' enormous fuel requirements in every district is bituminous coal.

(II) The selection of railroad coal is a technical engineering problem: While the Class I carriers of the country represent a large and important demand for bituminous coal, this demand is not an indiscriminating one. While the carriers must have coal to operate, for efficient operation they must have the right kind of coal and they must be assured of an adequate and continuous supply of the right kind of coal for every service and at every point along their lines.

A carrier will need to purchase coal for a large number of different uses, as for heating stations and office buildings, the operation of small stationary boilers and in terminal shops, for the generation of power for local use, low volatile coal for use on locomotives operating in terminals where the volume of smoke is restricted by city ordinance, smithing coal for shop purposes, specially sized coal for use on passenger, freight, and yard locomotives equipped with stokers, special coal for use on passenger, freight, and yard locomotive not equipped with stokers, and for use in electric power houses for generating power for train operation in electrified zones.

Senator COUZENS (presiding). You have stated it takes about 158 gallons of fuel oil as the equivalent to 1 ton of coal. Is that an average that you have struck?

Mr. DUNCAN. Yes. And that average was determined by the experience of the carriers.

Senator COUZENS. What is the difference in the grades of coal? I do not mean for you to give it to me in detail, but give me the minimum and the maximum, as I am only asking for general information

Mr. DUNCAN. I do not believe I can give you the maximum. ximui Senator COUZENS. All right. You may go ahead. Mr. DUNCAN. Even the ruling gradient of an operating division may exclude certain kinds of coal that would be serviceable on operating divisions with other gradients.

It is clear, therefore, that for economy of operation and efficiency in management, railroad fuel requirements demand coal of definite character, obtainable in certain regions only, owing to the peculiar qualities of the coal. Broadly speaking, gas coals are used for heavy duty, high-speed passenger service; low volatile coals for blacksmithing and power purposes in territories where excessive smoke is to be avoided; and medium and high volatile coals for freight service, branch-line passenger service and bunkers of marine equipment. Furthermore, the locomotive equipment of the railroads is designed for and adapted to certain character of coals that necessity and experience have proved best suited for economical and efficient service and operation. Each railroad has its own peculiar problem as to types of locomotives, character of train service, operating conditions, and location. There is no such thing as a common quality of coal for the use of the carriers. Each railroad has a different fuel requirement and within each railroad different qualities of coal are demanded for specific purposes.

The buying of coal, therefore, for a railroad becomes a technical problem. The selection of locomotive coal, for example, is distinctly an engineering problem and its correct solution for each railroad can only be determined by qualified fuel engineers familiar with the local conditions peculiar to the individual railroad.

(III) As to the duties and responsibilities of the railroad fuel purchasing departments: With the great variations in the character of coal, with the varied uses for coal on the railroads, and with the continuity and adequacy of a complete supply so essential, there must be a well-organized purchasing department, equipped by a personnel of highly trained experts. These men must know coal. They must know mines, coal seams, the chemical and physical qualities of coal. They must know coal performance. They must know coal markets and prices. They must have a detailed and intimate knowledge of the coal needs and requirements of the individual carrier. There is no more important element in the efficient operation of a railroad than the proper selection of coal.

The difficulty and complexity of the problem of selecting coal for railroad operation may be illustrated by example. Take the case of a large eastern road. It is known as a coal road. There are 268 coal mines located on its lines which are in condition for operation. These mines are owned by nearly 200 separate companies. The road consumes something like 3,200,000 tons of coal per year. Of this amount it produces from its own four coal tipples about 1,400,000 tons, leaving a balance of about 1,700,000 tons to be purchased.

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If the purchases of this road were divided equally among the 200 owning companies, the average annual tonnage per company would be only about 8,000 tons, or about one-half a carload per calendar day.

But the coal produced at these mines comes from 27 distinct coal seams having different composition and characteristics. About 65 per cent of the tonnage is from seams rated as low volatile coalthat is, coal containing volatile matter ranging from 15 to 22 per cent. The remainder is from seams rated as high volatile coal in which the volatile matter ranges from 28 to 35 per cent. Experience on this road has shown definitely that coal of different characteristics, especially coals with a considerable variation in the per cent of volatile matter, can not be satisfactorily used as a mixture.

Of the coal used on this road less than 25 per cent is in run-of-mine form. The other 75 per cent or more is fired with stokers. The stoker equipment, grates, and so forth, are designed to handle economically a mixture of slack and the smaller sizes of coal. A grade such as this must be obtained from mines that are equipped to screen coal to the desired size and that are willing to do so by reason of having a market for their resulting grades of coal.

Experience on this road has developed that although 65 per cent of the production of the mines on its lines is low volatile in character, the high volatile coal is the most economical and desirable for over 80 per cent of the total requirements when measured in

tons.

From this illustration may be seen some of the complexity and difficulty that faces the personnel which must secure the right kind of coal in an adequate supply for the efficient operation of a railroad. It is not a simple matter. It is a technical engineering problem that varies not only from road to road but from season to season and from service to service.

So vital is coal to the operation of a railroad that, despite all difficulties, complexities, and obstacles in the way, a carrier must be assured of a continuous supply. This paramount responsibility faces the fuel purchasing department of each and every railroad.

In distributing the purchases, the coal purchasing agent for a carrier must, among other things, give consideration to

(a) The ability of mines to produce the character and size of coal required.

(b) The ability of mines to make delivery when and as needed, adequate both as to quantity and quality.

(c) Cost, convenience, and reliability of deliveries.

(d) The past experience with a mine as to its willingness to accept a fuel contract and ability to undertake the performance called for thereunder.

(e) The suitability of the coal for the purpose required, when properly prepared.

(f) The equipment of the mine for proper removal of impurities and the good faith of the mine in doing so as determined, in the course of past relations.

It has been calculated that a reduction of as little as 5 per cent in the heat content of coal used in locomotives would require the additional consumption of 6,250,000 tons of coal or one hundred and twenty-five thousand 50-ton cars per year by Class I railroads.