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, S. 129, 137, 66 L. Ed. 166, 42 Sup. Ct. Rep. 42.) And “it makes no difference that the facts may be disputed or their effect opposed by argument and opinion of serious strength. It is not within the competency of the courts to arbitrate in such contrariety." ((Rast v. Van Deman & L. Co., 240 U. S. 342, 237, 60 L. Ed. 679, 687, L. R. A. 1917A, 421, 36 Sup. Ct. Rep. 370, and cases there cited.) And, further, the purposes of the legislation may not be the correction of some definite evil, but may be only to remove obstacles to a greater public welfare.''
They sustained the law and sustained the classification. And here, to repeat what I said a moment ago, has the Congress ever been confronted with a greater reason for classification The Government has the right to make a classification, indeed, is compelled to do so by the necessities of the case. Has Congress or your committee of the Senate ever been confronted with an industry whose condition is so dark? Even by the admission of these gentlemen on the other side, for Mr. Belcher draws a dismal picture of the situation and winds up by saying, “ There is no hope; no hope at all."
Here, as I say, the capital structure of the industry is being decimated.' The industry itself is oppressed, we know, by the highly organized purchasing interests of this country. The industry is oing through a process of deflating wages until, according to the statement of Secretary Davis, $3 is being paid for bringing coal from the bowels of the earth for the enjoyment of the human race, for the progress of this complex industrial machine that we boast of. We know from the testimony here that the retail coal dealers who came before this committee and opposed this legislation are charging more to take the coal out of a wagon and put it into the cellar than the miner is getting for taking it out of the bowels of the earth. We know that communities are pauperized. We know that there are violent labor disputes. We know all these things, and other things that might be enumerated; they all hover over this industry. It has been made the subject of special reference by the platform planks of the two great parties. It has been mentioned by the President elect in his speeches, coupled with the textile industry and the farm industry, as being one of the three remaining blots upon the beautiful escutcheon of our prosperity.
And then say that it can not be singled out? Why, it was singled out from the anthracite-coal industry there in the Collieries case for the mere purpose of levying a tax, and the court found nothing wrong with it. All through the decisions there is a classification of corporations. There are classifications by zoning ordinances in a case that I think came from Detroit, although I am not sure about that, but there are classifications in almost all legislation, it might be said.
I have not heard it argued here, although I might have missed the proposition, that it is class legislation because it deals with corporations and not individuals. That may be in the mind of some member, so let me suggest an answer to it.
In Hammond Packing Company v. Arkansas, 212 U. S. 322, the act was attacked because it affected foreign corporations without affecting individuals:
Although it be conceded that the provisions of the statute can not, consistently with constitutional limitations, be applied to individuals-
That is what we say heresuch concession would not cause the act to amount to a denial of the equal protection of the laws. The difference between the extent of the power which the State may exert over the doing of business within the State by an individual and that which it can exercise as to corporations furnishes a distinction authorizing a classification between the two. It is apparent that the court below
That is, the Supreme Court of Arkansasboth in the Hartford case and in this, by a construction which is here binding, treated the statute, in so far as its prohibitions were addressed to individuals, as separable from its requirements as to corporations, and, therefore, even though there was a want of constitutional power to include individuals within the prohibitions of the act, that fact does not affect the validity of the law as to corporations.
Now, let us take up this bill: The first section provides for a commission. It has been attacked here because it creates a cominission of politicians and of fellows who will not know anything about the coai business. Of course that argument has been leveled against the creation of every commission that is now in existence under State or Federal laws. Take the public service commissions, which the public service corporations would not now yield, and they were attacked in the beginning on the ground that they would place politicians in the control of their business.
Senator WHEELER. Maybe that is the reason they would want them.
Senator COUZENS. I do not think that argument impressed the members of the committee very much.
Mr. WARRUM. Very well. I would suggest that the other side should have come in with a constructive suggestion. For instance, that there be an operator but on the commission. And if they do make that suggestion, then we would like to suggest that some one be put on the commission representing labor. We do not feel that the bill that we offer to the committee, and with our fight against the united opposition of these other gentlemen, should entirely ignore us.
Now, as to the second section, and if they do not want so many commissioners they can make it less, or more if desired. The commission is to provide for the employment of competent engineers, assistants, and so forth. That is merely an administrative feature; that has to do with the mechanics of the thing.
Now, as to the second section, let us read it or before reading it let me make this statement: In general terms this bill provides for the control of corporations engaged in shipping coal in interstate commerce, shipping it or mining and shipping. It divides them into two classes for the purpose of license and regulation. It provides that those that want to exercise some special privilege, such as mergers, combinations, or marketing pools, shall secure a primary license, and leave the others that do not want to do business under a primary license to apply for a secondary license, and exacts from the latter four conditions, none unconstitutional, but all of them constitutional. It also leaves in there a clause that evidently the honorable chairman has had in mind from time to time, and that is the clause that if they want to disband their corporations and ship coal as individuals they can do that and escape from the provisions of this bill.
Senator COUZENS. They do not even have to disband their corporations.
Mr. WARRUM. Well, they can maneuver around and sell coal to somebody else. We wanted to give the committee something that
the Congress has control over. I want to disabuse the mind of the chairman of the proposition that they are going to seek some northwest passage. Mr. Greever let the cat out of the bag, and they know it, and if you will stop a minute and think about it you will know it. The trouble with this bill from their point of view is that they all want to come under the primary license, because they all want to enjoy the peculiar privileges that come under it. They are not all going to start out alone, like Henry Hudson, and seek' a northwest passage; they are going to try to strike it down in the courts or get a primary license. Mr. Greever said:
It is intended that any real freedom of action shall be made impossible by making the privilege of fixing prices so valuable as to make the surrender of independent control of business imperative. The whole act hinges upon this proposition.
Why, that is true. We admit, gentlemen of the committee, that the secondary license has been made so attractive that they will all want it.
Senator GLENN. The secondary license?
Here is the reference to persons, the only timefirms, and corporations engaged in the production and interstate or foreign commerce of bituminous coal to form marketing pools and cooperative selling associations for the purpose of agreeing on the market prices of their coals: Provided, That such persons, firms, or corporations first apply to said commission for and secure from it a l cense therefor; such license to be granted only upon the applicant's acceptance of the provisions of this act, and their compliance with the rules and regulations promulgated by said commission for the purpose of carrying the act into effect.
The only reason the word “persons ” was inserted there, from my point of view, although I may be wholly wrong, and I have tried to be just as careful in preserving this bill from legitimate attack on the ground of unconstitutionality as possible, but I can say that it may be said if these artificial creatures were given the right to exercise their franchise under national control and regulation by the Congress, and were given the right to form marketing pools, and the individual who is engaged as a natural person could not join such a marketing pool, that he might complain the act was unconstitutional as to him. So the hand is not laid upon him. Congress does not lay its heavy hand upon him but opens the door to him. He can stay out or come in. If he comes in he comes in to enjoy privileges for which he must accept the conditions. The door is not closed to him. That is the only reason for that provision.
Now, he just comes in and enjoys the privilege if he wants to, or he stays out, but he is not shut out. In every other section this bill deals with corporations engaged in shipping coal in interstate and foreign commerce.
The commission shall have authority to inquire into all matters touching the mining and shipment of bituminous coal by said pool or association and the members thereof.
Why shouldn't they? If these gentlemen are to gather round the mahogany table and decide what price shall be charged and on mar
keting problems, and they are to be given these extraordinary privileges, then there must be some governmental control. Mr. GEEVER. Did you intend to say Mr. WARRUM (continuing). I would rather not be interrupted.
Mr. GEEVER. This is for your own benefit; but if you do not want a suggestion it is all right with me.
Mr. WARRUM. You have had a week in which to present your argument, and I have all of your suggestions here—a bundle of them.
The commission shall have authority to inquire into all matters touching the mining and shipment of bituminous coal by said pool or association and the members thereof, and to fix the maximum prices which may be agreed upon or 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.
Here is the proposition as it appears further down:
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.
If the Sherman and Clayton Acts are withdrawn, that is, if the corrective hand of Congress as now laid upon pools is withdrawn, so that they can get together and agree upon prices, ought that to be done in the absence of the commission? Ought it to be done without any provision for a commission at least inquiring as to productive costs, railroad rates, and other things that may fairly be expected to determine what a reasonable price should be? And without the right to fix a maximum price
Now they charge that this bill fixes prices. I say it fixes a standard above which they can not go, unless they go to the Federal court under its provisions and have that standard stricken down. They have to do as the public utilities-go before the public-service commission and establish another standard.
I want to call attention to the fact that on December 19, I believe it was, a Federal court in Omaha held that the packer and stock. yards act gave Secretary Jardine the constitutional right, or that the power was given by a valid act of Congress to fix the maximum price of commissions that should be charged there.
Senator SACKETT. If we do that as to coal, would not we have to do it as to all other industries?
Mr. WARRUM. Why so? It gets back to the proposition, is this class legislation?
Senator SACKETT. I mean, if you relieve coal of the control of the Sherman Act would not other products come in and ask to be relieved ?
Mr. WARRUM. I think not. There has been argument here that they are now entitled to enjoy the right to some mergers that would not be found in restraint of trade. And there has been some argument that if one concern is to be relieved another must be. I want to call the committee's attention to this: When the Sherman Act was first passed the decisions of the United States Supreme Court, until the Standard Oil decision, were uniform—that any contract or act or agreement that tended to restrain trade was violative of the Sherman Act. That prevailed for almost 20 years, because the Sherman Act was passed in 1890.
But in the Standard Oil case the Supreme Court adopted what is known as the rule of reason as interpretive of the Sherman Act and held that the former decisions that if contracts or agreements tended to restrain trade would be overruled and that the rule would be adopted in construing the act so that conduct to be reprehensible under the Sherman Act had to constitute unreasonable restraint of trade. In the subsequent Steel Co. case, although it was stated in the opinion of the court that the Government showed the Steel Co. controlled 40 per cent of the finished steel business of this country, they held that was not unreasonable restraint of trade and that the Steel Co, was not reprobated by the Sherman Act.
The point I make is that the Congress is not bound by the Sherman Act nor by the Clayton Act. The Congress can pass other laws if it wants to
Now, let us see if it can pass a law with reference to a special situation: The Standard Oil decision had long become the law. That is, it was the interpretation of the Sherman Act that it had to be unreasonable 'restraint of trade and, as applied to the Steel case, that 40 per cent control of the finished steel products did not constitute unreasonable restraint of trade. And yet Congress, in 1921, passed the packers and stockyards act, in which it is provided that it was unlawful for the packers to
Sell or otherwise transfer to or for any other packer, or buy or otherwise receive from or for any other packer, any article for the purpose or with the effect of apportioning the supply in commerce between any such packers, if such apportionment has the tendency or effect of restraining commerce or of creating a monopoly in commerce-or engage in any course of business or do any act for the purpose or with the effect of manipulating or controlling prices in commerce,
The stockyards act as applied to the packers is a much stricter rule. If they turn over a ham, they may be subject to indictment, and certainly if one packer gave to another a carload of hams, an indictment might be successfully maintained under this law.
Now, it is all a question of whether it is class legislation or not. That gets back to the question that I discussed a moment ago, what legislation is or is not consistent with the class-legislation provision of the equal protection of the law.
Now, we feel that this investigation would not have proceeded far last spring if there was not in the subject matter of the bituminouscoal industry a situation such as was repeatedly characterized by Senator Watson as he sat in the chair, prevailing through this industry for years known as a buyers' market and not a sellers' market, of the operators being the prey of the highly organized purchasing interests of this country, of the business being in such shape that, as Secretary Davis said in his statement, there was, as he was informed by the National Coal Association two days before his statement was made, then on the sidings 800,000 tons of indefinitely consigned coal.
Now, in any event, that would have to be my answer to-day to Senator Sackett, that here is an industry that there is an attempt to stabilize that occupies an anomalous position in the industries of our country, and, according to lawyers on the other side, according to politicians according to statesmen, I will say, not politiciansaccording to our President, and according to the two great political