charged through the operation of said pool or marketing association. Such maximum prices may be changed from time to time, upon hearing, by the commission. Any member of such pool or association may withdraw at any time upon notice to the commission: Provided, That if such withdrawing member be a corporation, it shall remain subject to other provisions of this act.

SEC. 3. No merger, combination, or consolidation of two or more corporations engaged in the production and shipment of bituminous coal in interstate commerce shall be lawful without a license therefor granted by said commission; and such license shall be granted only upon the applicants' acceptance of the provisions of this act and compliance with the rules and regulations of said commission promulgated for the purpose of carrying the provisions of said act into effect. The provisions of the Sherman and Clayton Acts shall not apply to mergers, combinations, and consolidations created and licensed under the provisions of this act.

SEC. 4. The commission shall have jurisdiction of and general control over such marketing pools, cooperative-selling associations, mergers, combinations, and consolidations. In considering the request for such licenses said commission shall have authority to inquire into all matters relative to the mining and shipping of coal by said applicants, including the quality of coal to be marketed, the 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. The commission shall further inquire as to the preparation of applicants for maintaining and their ability to maintain direct selling agencies in their principal consuming markets, and shall provide reasonable regulations requiring the maintenance of such agencies of direct sale to the consumer.

SEC. 5. The commission shall have authority to fix the maximum prices which may be agreed upon or charged by the members of said marketing pools or cooperative selling associations, or by said mergers, combinations, and consolidations, engaged in interstate commerce and licensed under the provisions of this act. Said maximum prices shall be fixed with due regard to fair wages paid for the production of coal and a fair return on the capital invested. Such maximum prices may be changed from time to time, upon hearing, by the commission. At any hearing to fix or change maximum prices the members of such marketing pools and selling associations, or such merger, consolidation, or combination, shall be heard through counsel or representatives of their own choosing, and the mine workers shall likewise be heard through their counsel or chosen representatives. The scale of maximum prices fixed by the commission in any case shall be made with reference to the different grades, kinds, and quality of coals marketed in interstate commerce by said licensee, and should any licensee feel that any such maximum price is unreasonable or confiscatory, it may apply to the district court of the United States in the district in which its mines or a part thereof are located, asserting by its bill of complaint the unreasonable and confiscatory nature of such maximum price. A copy of the proceedings had before said commission shall be filed with said court, and thirty days' notice of said proceedings shall be given the commission, and such district court of the United States shall have jurisdiction to review the finding and order of the commission with respect to such maximum price or prices complained of, and, if they are found to be unreasonable or confiscatory, to adjudge and require the commission to set aside its findings, and make further and additional orders with respect to such maximum price or prices. SEC. 6. No corporation not engaged in mining and shipping or in shipping bituminous coal in interstate or foreign commerce at the date this act goes into effect, shall thereafter be permitted to engage in interstate or foreign commerce in bituminous coal until it has applied for and secured a license from the commission permitting it so to do; and said license shall be granted only upon applicant's acceptance of the provisions of this act and its compliance with the rules and regulations promulgated by said commission for the purpose of carrying this act into effect. And any corporation now engaged in mining and shipping or in shipping coal in interstate or foreign commerce may apply for and receive such license upon accepting the provisions of this act: Provided, That no corporation now engaged in mining and shipping or in shipping bituminous coal in interstate or foreign commerce may claim or exercise the right and privilege granted hereunder of becoming a member of a marketing pool or cooperative-selling association, or of consolidating, merging, or combining with other corporations as above provided, unless it file with the com

mission its application for license and its acceptance of the provisions of this act within three months after the act goes into effect.

SEC. 7. The mining and interstate and foreign commerce of such licensees shall be supervised, encouraged, and promoted by said commission, which shall make suitable regulations for inspecting, analyzing, and grading the coals marketed by said licensees in interstate and foreign commerce, coal so graded to be known as Government-graded coal, and the commission shall furnish information of the character and service ability of such graded coals to domestic and foreign purchasers and consular agents of the United States.

Said commission may inspect the mines of said licensees and shall have authority to recommend methods, inventions, and devices for increasing the safety of the miners and developing economies in mining operations. The commission shall have authority to recommend to departments and agencies of the Federal Government coals of such licensees in accordance with the requirements and fuel qualifications required by such Federal departments and agencies.

Said commission shall study and encourage the economical distribution of markets between said licensees and the development of joint or cooperative selling agencies, yards, and docks which said licensees may desire to use.

The commission shall study the problem of exporting coal and the bunkering of ships and shall make such reasonable rules and regulations as will promote the export and bunkering trade of said licensees. Said commission shall investigate and report to Congress concerning the importation of coals into the United States.

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 ten 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.

It shall be the duty of such licensees and their employees to exert every reasonable effort to make and maintain agreements concerning wages and working conditions and to settle disputes in connection therewith; and in the making of such agreements the licensees may negotiate through an operators' association, and the employees shall be entitled to deal collectively by representatives of their own choosing without interference, influence, or coercion exercised by their employers. No such licensee shall make it a condition of employment that the employee shall not join a labor union, but the right of the mine workers employed by such corporations to organize and maintain their union shall not be denied or abridged.

SEC. 8. Any license granted under the preceding section may be revoked by the commission upon a hearing, with thirty days' notice to the licensee, upon proof that such licensee has failed or refused to comply with the provisions of this act and the rules and regulations of the commission promulgated to carry the act into effect, and it shall be thereafter illegal for the party whose license was revoked to ship bituminous coal in interstate commerce.

SEC. 9. Any shipment of bituminous coal in violation of the provisions of the preceding sections of this act is hereby declared to be illegal, and for each day's shipment of bituminous coal in violation of the foregoing provisions the offender shall be fined in a sum not less than $1,000 nor more than $5,000. SEC. 10. Every corporation engaged in mining and shipping or shipping bituminous coal in interstate or foreign commerce, at the date this act goes into effect, and declining to accept the provisions hereof and to comply with the rules and regulations of said commission, shall apply for and secure a secondary license from the commission permitting it to continue in such interstate or foreign commerce, the granting of which license shall be conditioned upon the said corporation agreeing to and accepting the following conditions: If any such corporation desires to employ only nonunion mine workers, its employees shall be free to terminate their employment and join a labor union at will, and no contract of employment which is intended to impair this right shall be lawful; said employees shall have the right of assemblage for the purpose of peaceably discussing and hearing discussed principles of organized labor and collective bargaining; the employees of such corporation shall be paid

in lawful money of the United States and be free to purchase their necessities of life where they choose; said employees shall be entitled to select a checkweighman to inspect the weighing of their coal and the weights and scales used by said corporation for the purpose of determining the wages of its employees shall be open to inspection by the agents of the Bureau of Standard Weights and Measures of the United States or of this commission; and said corporation shall make annual report in the manner to be prescribed by said commission. No such corporation after the date above fixed for securing a secondary license shall be permitted without such license to engage in the shipment of bituminous coal in interstate or foreign commerce, and any shipment made by such corporation without the license herein provided for shall be illegal and upon conviction thereof such corporation shall be fined for each day's illegal shipment a sum not less than $100 nor more than $1,000.

After the granting of such license the commission may revoke the same at a hearing, with thirty days' notice, to the offending corporation, upon proof that such a corporation has refused to comply with one or more of the conditions upon which such license was granted.

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.

SEC. 12. Should any part of this act be held unconstitutional it is the purpose and intention of Congress that the remainder thereof shall continue in full force and effect.

SEC. 13. There is hereby authorized to be appropriated the sum of $ or so much thereof as may be necessary prior to the passage of the next general appropriation act, for the purpose of carrying out the provisions of this act.

The CHAIRMAN. At the suggestion of some members of the committee I asked Mr. Secretary Davis of the Department of Labor to appear before us at the opening of the hearings, to give us the benefit of his judgment on the entire bituminous coal situation.

Of course, Mr. Secretary, we realize that you are an administrative official of the Government, and that you may not desire to go into the entire subject covered by the bill, S. 4490, but it will be very helpful to the committee, and I think to the country, if you will give us a statement on the general bituminous coal situation as you have observed it during the now nearly eight years that you have had to deal with the various phases of the situation as they have come before you from time to time as Secretary of Labor. With that understanding you may proceed.

STATEMENT OF HON. JAMES J. DAVIS, SECRETARY OF LABOR

Secretary DAVIS. Mr. Chairman and gentlemen of the committee, there are two industries that are out of tune with American industrial life, and the loudest of these discordant tones comes from bituminous coal. I want it understood that I am confining my remarks strictly and solely to the bituminous coal industry. Industrially speaking, America's poorest relation is coal. Most of our other great industries have come under scientific management and operation. The outstanding exception is coal. Other great industries have had to face practically the same conditions now surrounding coal. They moved ahead. Coal remains where the others were 50 years ago. I remember that one time when I served on a wage committee of steel workers Andrew Carnegie made the statement that "steel was either prince or pauper," and I think that applies to coal. In other words, when there is a tremendous amount of

business, coal is prince; when there is but little business, coal is pauper.

This fact is known to the entire country. It is known to the producers of coal. The full facts in regard to the mining and marketing of bituminous coal have been reported to Congress by half a dozen commissions, the last one the fact finding commission headed by Mr. John Hays Hammond. Its report covers every ill known to the industry. It offers suggestions to set it in order. The facts this commission found were widely published and commented upon, yet but little has been done either within or without the industry to bring it in line with the other major industries.

We must admit, however, that the producers of coal are confronted with serious difficulties both in and outside the industry. However, the fact remains that with proper management the mining and marketing of coal should be what is known as a "cinch." Every other industry in the country requires coal or the power derived from coal. The market is there, the industry has the coal, yet between this vast demand and this rich supply chaos prevails. In some sections men dependent on the mining of coal for their livelihood and their families are hungry and the operators are bankrupt.

I am reliably informed by well-known operators that the principal ill of the industry is lack of leadership. All the other ills would yield to that, yet so far the industry has not been able to find this leadership within itself, and the situation is serious because as a whole the country can not prosper to the limit while one of its most important industries lags so far in the rear.

The principal technical ill of coal is overdevelopment. It was overdeveloped before the war, but the war enormously stimulated this overdevelopment. We remember that the cry of those days was to "produce, produce, produce." Every sort of a mine that was able to produce a pound of coal was driven to capacity. Mines, equipment, and miners were increased to produce twice the amount of coal we used to consume in peace times. With the end of the war demand dropped even lower than it used to be in peace. Modern invention enabled users of coal to get more power from a smaller amount of fuel. Oil and gas are used as substitutes. The former market for coal has been cut almost in half, while productive capacity itself has doubled. The result is that producers of coal are in fierce competition. To capture the market they have cut prices. In cutting prices they have lowered wages. They have also reduced the days of operation. Too many miners employed receive but part-time work, and in most instances with low wages. Wages in some sections are as low as around $3 a day, ranging from that in other localities to $4 and $6 a day.

In general neither the operators nor the miners are getting anything out of coal, and the country gets little or nothing from them. In almost every mining locality business is poor. Where there are low wages or none at all the purchasing power is paralyzed. No one is able to buy the products of other industries, and the business of the country suffers by this loss of demand. If the purchasing power of all American industries were the same as in most of the bituminous coal fields, I really believe it would cut the market for coal onethird, or possibly one-half, because when people are out of work or only on part time or receiving low wages, their demands are next to nothing.

CONDITIONS IN DETAIL

It must be said that while the industry can be brought to order, the task of doing so may be hard. While the operator has the simple purpose of mining and marketing coal, this must be done under very varied conditions. Each mining locality has its own peculiar production problems. It has another separate problem in getting its coal to market. These differences in mining and marketing give rise to differences of experience and view on the part of the operators. Their interests are naturally combative and hard to reconcile. Yet close studies of all these differences make it clear that unity of view and effort can be achieved. Until they are, the industry will never be free of strife. The operators will be fighting each other and fighting labor, and the country will continue to pay the cost. All the parties at issue in coal should come together with the firm determination to wipe out every difference and draw a common gain from a

common aim.

WASTEFUL METHODS

Under present conditions one glaring evil of the industry is wasteful mining methods. Coal is one of our precious patrimonies. Yet I am informed by those in position to know that fully 40 per cent of the coal is left in the ground as a permanent waste. Two years ago it was found that in producing a little more than 500,000,000 tons for the calendar year, approximately 400,000,000 tons had been left in the mines as pillars, stumps, or thin and not immediately profitable layers of coal. It will never afterwards be profitable to go into the mines to recover these leavings.

WASTEFUL MARKETING

The same waste appears in the marketing of coal. Some grades are sold at cost or below, while the operator relies for profit on the domestic or spot coal markets.

In selling coal at cost or below the operators raise the excuse that this is forced upon them by buyers of coal in the large. Certain concerns, such as transportation and public-utility companies, take advantage of the competitive state of the mining industry to offer the lowest possible price in the certainty that some operator in need of business will accept the offer. The price offered may be below the cost of production, but at times the operator accepts it merely to keep his mines going and his working force intact. Yet the acceptance of this low price in one locality has a tendency to make such price general. The companies offering this minimum price are only taking a natural business advantage of the disorganization in coal. It seems to me the coal producers have only themselves to blame for their want of organization.

UNITED ACTION THE NEED

It would seem that the very magnitude of the ills within the coal industry and the power of the forces beating upon it from without would compel its leaders and elements to united action. These ills