« PreviousContinue »
the quality of coal to be marketed, wages paid miners, general production and distribution costs, capital invested, and the reasonableness of the prices which may be fixed at any time by such pool, association, merger, combination, or consolidation.” This provision must be construed as giving to the commission unrestricted power to refuse any application for license, because (a) the commission does not approve the methods of mining or of shipping coal employed by the applicant; because (b) the quality of the coal is not what the commission thinks it should be; because (c) the wages paid do not meet the approval of the commission; because (d) production and distribution costs are higher or lower than the commission thinks they ought to be; because (e) the commission is not satisfied as to the amount of capital invested; for otherwise these things would not be * considered on a mere“ application ” for license. Also, in “considering the request for such licenses,” the commission may require " the applicant to provide “ direct-selling agencies” for direct sale to the consumer. În other words, no license can be obtained when the commission sees fit to refuse it. Thus all“ dominion” over coal properties and over their operation would pass to the commission.
Section 5: This section simply amplifies the powers of the commission in fixing maximum prices at which coal may be sold by marketing pools and others having licenses.
Section 6: This section prohibits any corporation not already engaged in interstate and foreign commerce in bituminous coal to engage in that business without a license obtained under the act. It also contains further conditions imposed upon those already engaged in the business.
One of these conditions is that no corporation may obtain the primary license provided for in section 2 unless it file with the commission its application for license and its acceptance of the provisions of this act within three months after the act goes into effect.”
Mr. John L. Lewis, in his analysis of the bill before this committee,
This time limit is fixed for existing corporations to avail themselves of the privilege of a primary license in order that no such cor ration can engage in litigation over the act, with the understanding that they are free at any time to apply for the primary license.
This is plain intimidation. It is based on the assumption that fear of losing the special favor of being allowed to agree on prices will deter coal-producing corporations from testing the constitutionality of the act in the courts. Not satisfied with taking away from owners the control and management of their property and business, an attempt is made also to take away their right to their “day in court.” Legislative tyranny could go no farther.
Section 7: This section places both “ the mining and interstate and foreign commerce of such licensees " under the supervision of the commission, even to the extent of recommending methods, inventions, and devices for increasing the safety of the miners and developing economies in mining operations. Nothing seems to be left to the owner.
It proposes, under the euphonious phrase, “ study and encourage economical distribution of markets between said licensees," to zone the country and allot markets to definite coal producers.
It proposes that the commission shall govern the furnishing of fuel to the railroads, so as to "prevent discrimination between coal mines and coal fields," which can only be taken to mean that the railroads shall no longer be permitted to purchase coal where they please, and that coal producers may not sell to the railroads except by express permission of the commission. Freedom of contract between them is wiped out.
This section finally, by plain intendment, gives a monopoly of mine labor to the miners' union, and, in order to do so, goes to the unheard-of length of abrogating and making illegal all individual contracts of service, containing a provision that the employee shall not join a union. In other words, in this bill which itself provides for an “unholy” and, it is believed, illegal bargain between the Government and coal operators, there is embodied a prohibition against the freedom of contract for services which has always existed, has been regarded as a priceless possession of the working man, and has been repeatedly stamped with approval by the Supreme Court of the United States. The operator and miner could no longer fix working conditions by contract.
Sections 8 and 9: These sections contain only provisions for enforcement and provide penalties for failure to comply with the terms of the act. This question has been fully discussed by a former speaker.
Section 10: This section provides that every corporation declining to accept the provisions of the act shall, nevertheless, be compelled to operate under it, for it requires them to “ apply for and secure a secondary license from the commission permitting it to continue in such interstate commerce.” (Under sec. 6 it will be remembered, no corporation not already engaged in interstate and foreign commerce will be permitted to do so without accepting the act in toto.) Even this secondary license, simply to continue their lawful, existing business, will not be granted except upon one condition, namely, that no contract of employment is sacred if such corporation desires to employ only nonunion men, for it is provided that a nonunion employer's “employees shall be free to terminate their employment and join a union at will, and no contract of employment which is intended to impair this right shall be lawful.” That is to say, the bill proposes to create a right to break a contract, something never before known, by declaring that a contract of employment, freely entered into by both parties thereto for a definite period, shall, nevertheless, be nothing more than a contract terminable at will. This section is intended to fasten the union upon all corporate employers which have failed or refused to "accept” the full provisions of the act. This they must accept or cease to do business.
Section 11: This section proposes to prevent any owner of coal from opening a mine, by controlling the building of sidings or switches through the Interstate Commerce Commission, subject to the approval of the coal commission. This amounts to confiscation of property. The existing power of the Interstate Commerce Commission in such matters is based upon an entirely different princeple, the soundness of which we do not here question.
The scheme is this: The operators are permitted to combine and conspire to fix prices, based upon cost of production and a reasonable
return on invested capital, subject only to the authority of the commission to prevent such prices from being too high-that is, to fix maximum prices—meaning that the operators should not receive excessive profits. Labor is the largest single item of cost of production. The act leaves to the labor union alone the fixing of that item of cost, for there is no provision authorizing the commission to fix a maximum wage. It follows that the arbitrary and definite labor item of cost would be the controlling factor in the fixing of the sale price of coal, and to it would be added all other cost items and a reasonable return on capital. The right of the public to buy its coal at the best prices obtainable in a competitive market is not only ignored but deliberately denied.
Notwithstanding the assertions made by the proponents of the bill that it will “stabilize the industry,” prevent the “wasting of capital assets," and that it is intended to benefit the coal producer, nowhere is there a provision, or even a hint, that minimum prices for coal would, or could, be fixed. Profits are to be carefully restricted, but there is an equally careful avoidance of any assurance that there will be any profits.
There seems to be an idea abroad that the Government is an allgood, omniscient, omnipotent entity, and that when any problem is taken over by it, a happy solution is assured. This conception is directly contrary to the facts. The Government can operate only through individuals, who are subject to all the frailties of other men, where they are vested with discretionary power, the wisdom of their actions is limited by their knowledge, their experience, their natural ability, and their motives.
The proposed regulation would not even by "by Congress," as the phrase goes. The proposed licenses would not be issued by Congress, but by a bureau. The whole scheme of regulation, if any merit could be claimed for it, must be based on the assumption that the men who would find places in this bureau are better fitted to run the coal industry than are the able, experienced men who have given their lives to it, and whose personal interests and fortunes are bound up in it. This statement must be true, because the bill gives to this bureau the broadest possible discretion, both in making regulations and in administering them. In other words, the present management by experienced and able men, whose personal interests are involved, would be supplanted by a management by job-seeking bureaucrats, without experience and with no interest beyond holding their jobs.
To turn the bituminous coal industry over to such individuals, under these conditions, would be a calamity.
This effort for coal' legislation is not a new undertaking. The bituminous industry has been faced with many Federal legislative proposals before and since the World War. Until within the last year or so these proposals have been alleged by their proponents to be designed for the protection of the public. Before some sessions of the Congress there have been scores of bills seeking in one way or another to regulate or fetter the bituminous coal industry so as to reduce the selling price of coal. Now a change of base is taken on the theory that it would help the industry.
S. 4490, the bill before this committee, was introduced at the request of the miners' union. There is no disguising, and there has been no attempt to disguise, what the union seeks through this legislation. It appeals to force through the medium of Federal legislation to gain the domination of the bituminous coal mining industry.
The bituminous industry concurs in the expressed opinions of the President and the President-elect of the United States and of the Department of Justice and the Federal Trade Commission on selfgovernment in industry and has taken the first steps along that pathway. One of the developments of the past few years is the trade practice movement. The last 18 months have witnessed remarkable progress in that line. Considerably more than a year ago the National Coal Association, the Nation-wide organization of bituminous coal mine operators, began a study of the efforts of other lines of trade and industry in this regard and the applicableness of the principles involved to the bituminous coal industry. As a result of that study the president of the association, accompanied by the treasurer, the chairmen of two of the association's committees having to do with the question, and two other representative operators last September conferred with the assistant to the Attorney General, with a member of the Federal Trade Commission, and with the chief of trade-practice section of the commission regarding plans to secure the adoption of trade-practice resolutions in the bituminous industry, At the annual meeting of the National Coal Association, which was held in Cleveland in November, one of the general sessions was devoted to a diccussion of the trade-practice movement.
That this trade-practice movement has taken firm root in the bituminous industry is evidenced by the fact that codes are now in process of being formed in the eastern Ohio district, in Illinois, and in Indiana. Committees have been appointed and the subject is being studied in the New River, Kanawha, Harlan, southern Appalachian, western Kentucky, central Pennsylvania and several other districts. The dock operators in the Northwest have taken steps to bring about à frank agreement as to what are fair and what are unfair trade practices.
One of the major recommendations at the annual meeting of the National Coal Association was that continued effort be made to better conditions on the marketing side of the industry's business. The executive committee of the association, at its meeting early in December, authorized the coordination of a number of the committees of the association, under the name of the Market Research Institute of the National Coal Association. This has been done. Trade practices, trade relations, cost accounting, conservation, commercial research, technical research, and publicity are some of the subjects for which sections of the market research institute are being organized. All of these subjects have been previously treated, but it is believed the new set-up makes for a more concentrated and effective effort. And I stop and inject the statement there that no one not connected with these various coal associations, especially the National Coal Association, knows or can tell how much work of that sort has been done. It has been pressed and is being pressed, all for the purpose of bettering the general conditions in the coal industry.
The chairmen of the various sections of the Market Research Institute of the National Coal Association had their first meeting with the institute chairman in this city yesterday. So that work, Mr. Chairman, is going on even while these hearings are in progress. I fully understand that some pessimists may deprecate the possibilities of this movement for self-government in business. However, the effort is going steadily forward in more than 100 lines of trade and industry. The producers of oil, one of the fuels competing with bituminous coal, through the American Petroleum Institute, will meet with the Federal Trade Commission on February 11 relative to the trade practices of the oil industry. In the fertilizer, plate glass, mill work, and many other industries trade-practice resolutions have already been agreed to. The Federal Trade Commission now has applications from more than 60 lines of trade and industry for trade-practice conferences. That commission was created for the elimination of unfair trade practices.
Thus it is evident that the bituminous industry, which has made such remarkable progress in the realm of production, has set itself to the task, so far as possible, of eliminating unfair trade practices and doing away with such wasteful and uneconomic practices as may exist. It realizes the size of the task and it also knows that, as the assistant to the Attorney General said to the representatives of the National Coal Association, there is no short cut.
The basic principles, legal and economic, involved in this bill have received careful consideration by many of the most prominent and best informed men in this country. Perhaps I could close in no better way than by quoting something of what two of them have had to say on the subject.
President Coolidge, when Governor of Massachusetts, said:
The alternative to private ownership and control is public ownership and and control. Broadly extended, this is communism. The Government and its agents are not in possession of any resources, ability, wisdom, or altruism except that which they secure from private life.
Where the people are the Government, they do not get rid of their burdens by attempting to unload them on the Government.
Again President Coolidge, in speaking before the Union League Club of Philadelphia, in November, 1927, said:
It would be entirely wrong to assume that our present position has been secured as a result of accident. It has come from a carefully thought-out policy, which has been for the most part consistently followed. 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 would 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 eniers a business it must occupy the field alone. No one can compete with it. The result is a paralyzing monopoly.”
President-elect Hoover, during his campaign, referred to the subject in various speeches.
I do not think, Mr. Chairman, that it is necessary for me to read these quotations. They are all very pertinent, and you have copies of this paper, and I think they bear out the position of the National Coal Association with reference to this bill.