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ing the fuel service of the railroads and to investigate such matters as quality, tonnage, price, and traffic rates.
The commission is also required to function as a promotion and advertising agency. It is instructed to trade-mark certain coals which meet its approval and to furnish information concerning them to domestic and foreign purchasers and consular agents of the United States. Senator WHEELER. With reference to that last statement
made with reference to coal, that the Government of the United States is to be an advertising agency, did you say?
Mr. McWHIRTER. Yes, sir; to advertise and promote the sale of coal.
Senator WHEELER. Of course, the Government is doing that very thing now with reference to many things. That it, it is advising the general public of the country as to what are the best lines or what are the best things to use in many lines of industry; is not that so?
Mr. McWHIRTER. I am informed as to their advising of the components or the consistency of various products.
Senator WHEELER. Has your Chamber of Commerce of the United States ever given any serious thought to the coal question with a view to bringing out something that would solve the problem?
Mr. McWHIRTER. Well, I should think certainly those engaged in our national resources department committee must have in their various connections with other organizations with whom they are identified, given serious thought to that matter. But the national chamber's commitment is only as I have read it to you.
Senator WHEELER. Is the Chamber of Commerce of the United States just appearing here in opposition to this bill or has it some constructive suggestion to offer with reference to how to handle the bituminous-coal situation?
Mr. McWHIRTER. The chamber of commerce, sir, is here in opposition to this bill without a suggestion as to a constructive solution of the bituminous-coal problem.
Senator WHEELER. Very well, then; that is all. You may go ahead.
Mr. McWHIRTER. The commission is instructed to provide regulations requiring its licensees to maintain direct selling agencies in their principal consuming markets. Apparently producers are to be forced to set up retailing divisions without regard to their inclination or experience in that line and in direct competition with the nearly 40,000 merchants already engaged in retailing coal.
Briefly, the proposed legislation provides that the Government through its commission shall assume the position of general manager of the bituminous-coal industry and proceed to dictate concerning the details of production, distribution, sales, and prices. This is done without acquiring any direct stake in the business and without assuming any obligation for the successful conduct of the dictatorship.
A more complete usurpation of the function of business and industry can hardly be imagined than is proposed in this measure.
There are a number of other principles in the bill to which exception quite properly could be taken. It is built on the theory that coal can be considered a public utility and as such is subject to Federal regulation in interstate commerce. It is my impression that the Supreme Court has ruled' against this theory as regards coal and
also recently as regards gasoline. In the course of these hearings you have been fully advised on this subject.
The right of coal producers to have access to the common carriers through the installation of sidings, switches, and the inauguration of railroad service which is limited in this bill, the question of the advisability of setting up a commission, which in the very nature of things can not escape a strong tincture of political character, to govern this widespread industry, the certainty of a considerable annual expenditure to maintain this commission, and similar items I shall not attempt to elaborate.
It is well known, of course, that the coal industry has been demoralized. It has gone through years of distress. Numerous investigations by Congress, the Government, and others have been made. It is useless to deny that real problems have existed and still exist. It is our view, however, that no sound permanent solution of these problems can be had through the type of governmental control contemplated in this bill. Such control would add to the confusion rather than correct it.
Our attitude is that the coal industry, as well as all other industries of the country, possesses competent business leadership to bring about a correction of the ills that beset the industry and that this result can be accomplished much better by the industry itself than through the type of governmental control which this bill would provide.
In conclusion, I should like to quote to you from a recent address by President Coolidge: ,
We have always held very strongly to the theory that in our country, at least, more could be accomplished for human welfare through the encouragement of private initiative than through Government action. We have sought to establish a system under which the people could control the Government, and not the Government control the people. If economic freedom vanishes, political freedom becomes nothing but a shadow. It has therefore been our wish that the people of the country should own and conduct all gainful occupations not directly connected with Government service. When the Government once enters a business it must occupy the field alone. No one can compete with it. The result is a paralyzing monopoly. .
I thank the committee for its courtesy.
Mr. LEWIS. You make the very interesting observation that, in the opinion of the United States Chamber of Commerce, the bituminouscoal industry has, on its management side and on its financial side, competent leadership to solve the coal problems. Would you mind telling the committee just what evil or fundamental ill the management you refer to has attacked, or what reform has been put in effect, or what evil has been removed from the industry?
Mr. McWHIRTER, How is that?
Mr. LEWIS. What constructive reform has been instituted in the bituminous-coal industry by its accomplished management that you have suggested, during the last 70 years, which was expected to save it from its present demoralization ?
Mr. McWHIRTER. I think, Mr. Chairman, in answer to Mr. Lewis's question, I should say that quite properly that question is one for the bituminous-coal industry itself. And while I would not pose as an
expert in diagnosis or in giving a prescription, yet I would say that the evolution of the business life and the industrial life of the bituminous-coal industry, and in respect particularly to conserving the natural resources and usefulness of coal, have been such in recent years that any comparison of 70 years ago would not be an unfair one. · Mr. WARRUM. Take the last 15 years.
Mr. MoWHIRTER. Things of this kind are sometimes necessarily of long and painful effort.
Mr. LEWIS. Take within 15 years, then, within the memory of yourself and myself, and what has been given to the bituminous coal industry in respect of the leadership and management side of that industry?
Mr. McWHIRTER. Again I would say that that question should properly be propounded to the industry.
Mr. LEWIS. Well, you are speaking for the United States Chamber of Commerce, and you have been eulogizing what I understood you to term the constructive leadership on the part of the operators. I therefore ask you the question: Do you know of any reform that has been instituted, any evidence of constructive leadership, along the line sought to be accomplished ?
Mr. McWHIRTER. I should like to answer you by saying that my remarks were directed to the broad principle of the cooperative study and effort in the bituminous coal industry and other industries, and that my statement as to business leadership is that of a cross-section or the average view, if you choose, of business and industry generally. I would not feel that the leadership in the bituminous coal industry could be segregated and set apart from leadership in any other industry. By and large, there must obtain in the bituminous coal industry about the same level of genius and enterprise and good morals as obtain in any other industry. So my remarks were to apply generally as to business and industry.
Mr. LEWIS. As a banker you sell securities to the public. They are sold on the basis of past performance as to what may be expected in the future of such securities, are they not? Mr. McWHIRTER. At times that is included in their record.
Mr. LEWIS. There must be something to show that they will be secure and will be able to pay dividends.
Mr. McWHIRTER. That is the future.
Mr. LEWIS. Applying the same rule to constructive management in the bituminous coal industry, you would not have an opportunity to sell securities on their future as based on their past, would you?
Mr. McWHIRTER. I have never sold securities based on the bituminous coal industry.
Mr. LEWIS. I am speaking somewhat theoretically of the proposition, but by analogy. At any rate, don't you think 70 years is a long time to wait for any reform in the bituminous coal industry? You are aware of the fact that since the very beginning of the bituminous coal industry, or at least since it became a substantial factor, the same ills have beset it that now exist, namely: Unemployment, seasonal occupation, selling coal below cost, no returns on investment, a long line of bankruptcies, fierce competition, destructive competition between competing units. These have all existed during that period. Is there any hope that they are going to be eliminated by this con
structive leadership that you have referred to, say, in the next 10 years or even 20 years?
Mr. McWHIRTER. I think so if they are going to be helped at all. I am only speaking personally, but I would say that is a matter entirely within the bituminous-coal industry, because long since has the public ceased to become alarmed or even much interested in so far as getting coal to cook with, or to bake with, or for power, as regards the altercations that happen to come in among the various elements of the bituminous-coal industry. So that as a national problem as I view it personally it is not before us.
Mr. Lewis. My object in interrogating you was simply to ascertain the basis upon which the United States Chamber of Commerce undertakes to describe the management of the bituminous-coal industry as either being competent or constructive in the light of its. past record.
Mr. McWHIRTER. My undertaking to describe them could only be construed by you or anyone else in so far as we include them in the denomination of business.
Senator WHEELER. Let me ask you this question: Have you personally made any study whatsoever of the bituminous-coal situation in the United States?
Mr. McWHIRTER. No, sir.
Senator WHEELER. Has the United States Chamber of Commerce ever made any real study of the bituminous-coal situation!
Mr. McWHIRTER. Yes, I think that study has been real and has been constant.
Senator WHEELER. By whom?
Mr. MoWHIRTER. By the natural resources department committee of the United States Chamber of Commerce.
Senator WHEELER. What does that consist of the coal operators themselves?
Mr. McWHIRTER. No, sir; it consists of the entire Chamber of Commerce, as one department. It is simply a department of effort; one of nine departments.
Senator WHEELER. Who is the head of that department? Mr. McWHIRTER. Mr. Brookings. Senator WHEELER. Of the Brookings School? Mr. McWHIRTER. No, sir; but he is a brother of that Brookings. He is devoting his entire time to the Chamber of Commerce work.
Senator COUZENS (presiding). All right. Is Mr. Conn present ! Mr. Conn. Yes, sir.
Senator COUZENS (presiding). You may proceed. STATEMENT OF CHARLES F. CONN, PRESIDENT GIANT PORTLAND
CEMENT CO., PHILADELPHIA, MEMBER OF THE NATURAL RESOURCES DEPARTMENT COMMITTEE OF THE CHAMBER OF COMMERCE OF THE UNITED STATES
Mr. Conn. I appear before you as a representative of the Chamber of Commerce of the United States. As a consumer I have a lively interest in the future supply of coal, although I have no authority to speak for the cement industry as a whole.
As you know, the cement industry requires large quantities of coal in the operation of its kilns, and our annual consumption amounts to many million tons. Another company with which I am associated—I refer to the Concrete Products Corporation-places me in a somewhat unique position as a really ultimate consumer of the product of the coal mines. We have developed a process of combining good grades of cinder-the final product of coal-with cement and molding the mixture into building blocks. The demand for these structural units is increasing steadily, and we feel that we are contributing toward the more complete utilization of coal and thus broadening its field of usefulness.
As consumers of coal we had no trouble during recent years in obtaining continuously adequate supplies of satisfactory quality at · reasonable prices. In viewing the future, I can see no cause for alarm. There seems to be no danger of shortage of supply. The reserves of coal are enormous. The excess capacity of the commercial bituminous coal mines in this country amounts to approximately 50 per cent of the present annual production. The railroads have demonstrated their ability to meet emergency demands for the movement of large tonnages of coal to market. Conditions will eventually become stabilized in accordance with the law of supply and demand.
During the recent suspension of production in certain of the bituminous coal fields, when many hundred mines were shut down and many thousand miners ceased work, matters were so handled that there was scarcely a ripple in the daily lives of those of us not directly connected with the industry. The public was cared for and thus eliminated as a factor in the situation. Experience has shown that the coal industry, if let alone, can and will perform all of its obligations to the public and consequently the public feel that the industry should be given entire freedom in the handling of its internal problems. From the consumers' viewpoint the proposed legislation is unnecessary.
There is the certainty of setting up a considerable annual drain on the Public Treasury. In the draft of the bill which we have before us the amount of the appropriation to enable the commission to function is discreetly left blank. But should such a commission be created its staff of economists, engineers, accountants, administrators, and inspectors would be very large. In a few years it would rival the Interstate Commerce Commission, which, I am informed, expends nearly $8,000,000 annually..
If Congress wishes to aid the coal industry, I suggest that it increase the inadequate appropriations for mine safety and coal research. There is a definite need for additional mine-rescue cars, for research in the production, conversion, and utilization of coal and its products. Private agencies are carrying on much of this work. Additional governmental cooperation would be appreciated.
Senator WHEELER. Why do you ask for additional mine-rescue cars?
Mr. Conn. It is my understanding that equipment of that class that is available is inadequate.
Senator WHEELER. From your standpoint ?
Mr. Conn. From the standpoint of properly caring for that particular branch of production of coal.