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Senator WHEELER. In section 4 it is provided—I do not know that that reaches it, though, under that section.
Senator BLACK. I doubt it.
Senator GLENN. I thought the whole theory of the bill was based on the idea that the matter of licensing would be so handled that it would do away with this overproduction and the production of coal or sale of coal below cost. If coal production is stopped, then it would not be a buyer's market.
Senator WHEELER. That is the theory.
Senator GLENN. That is the whole theory of the bill, as I understand.
Senator WHEELER. That is the theory.
Senator BLACK. But without a continuing power the theory would not be carried into actual effect.
Senator WHEELER. But they are given power to revoke the license provided at any time the licensees do not comply with the provisions of the act and the rules of the commission.
Senator BLACK. They might comply with them, and still the conditions might have changed so that the maximum price would no longer be the right one.
Senator WHEELER. When they change; the bill provides in section õ that they may appear before the commission and apply for a change.
Senator Black. Suppose they do not appear, but suppose the commission wanted to have them appear. You have fixed a maximum rate. How long will that continue?
Senator WHEELER. The bill says (reading]: 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.
That of itself gives them the authority to fix the maximum prices at any time.
Senator BLACK. That, however, is right after the authority to license them.
Senator WHEELER. Yes. Mr. WARRUM. I am not sure that it covers the matter, but there is this provision (reading):
Such maximum prices may be changed from time to time, upon hearing, by the commission.
Senator Black. What page is that? Mr. WARRUM. The bottom of page 4. [Reading:] 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.
Senator WHEELER. I think that gives the power to change. Mr. WARRUM. It is pretty hard, in creating a commission, to write everything into the law. Usually it is provided that the commission shall itself determine the necessary rules of conduct for the commission. Take the Interstate Commerce Commission. I suppose they have rules that are a foot high. Certainly the act could not embrace all of them. Now, whether or not this bill is comprehensive enough to confer on the commission particular rights that they could exercise only by virtue of a statute, I do not know. I thought it did.
You see, here is another thing: If you work on a thing of this kind, sometimes you infer that a thing is there because it is in your mind. It is like solving a problem; if you ever get it wrong once, you had better turn it over to somebody else, because you miss that factor
every time you go over it. In drafting this bill it was our purpose to enable the commission to exercise jurisdiction over these marketing pools with reference to their maximum prices, and to allow them to change them from time to time; to require them, for instance, to establish in their principal consuming centers, not everywhere, retail selling agencies in order to get away from this spread of profits which is becoming the reproach of the coal industry.
One of the significant features of this hearing is that, as I remember, every member of this committee who has appeared here has asked the question, with some astonishment, “Why is it that the price at the pit mouth is so small, and the price at the basement of the consumer is so large?
The explanation lies in the fact that there is a spread of profits that the operator does not enjoy at all; at least, he does not enjoy it directly. He may have interests in these wholesale associations that appeared yesterday, and these retail associations that appeared the other day, and denounced this bill because it requires direct selling agencies for the purpose of saving some of this spread of profits for the operator in order to enable him to reorganize his business and pay his labor a living wage; and yet they are introduced in opposition to this bill by the representative of the operators, oppressed as they are, selling their coal as the retail man said they were at less than cost.
You remember, Senator Wheeler, that the statement of the retail man was that the public is buying coal at less than cost. You challenged that statement as to whether the public was doing it and suggested that it was the utilities. Do you remember? But the statement was made by him that the public is buying coal at less than cost to the operator. He is making money as a middleman, and yet he is introduced by the representative of the operators here to oppose this bill—one of the parasites that is preying upon this industry; one of those that are responsible for this spread of profits. Yet they come here and join hands, and they say, with reference to that provision, that it is intended to create a vertical trust in the coal business!
Mr. BELCHER. I want to say at this time that the operators did not introduce those people. They came here of their own accord. The operators had nothing to do with it.
Mr. WARRUM. Why, Mr. Greever has been representing them. He spoke at the banquet of the retail coal dealers association, assailing this bill.
Mr. BELCHER. Certainly he did.
Mr. WARRUM. Then why try to create confusion on a proposition that is as plain as that?
A vertical trust means this: There is a horizontal trust that embraces a lot of things. A vertical trust is simply the integrating of a business from the producer to the consumer. That is the tendency in this country; and we have asked that the business of the coal
operator, if he applies for a primary license, be integrated to this extent—that he have his direct selling agencies in the principal consuming centers, so that there can be some relation between the cost to the man who puts the coal in his basement and the production cost of the coal.
Senator BLACK. Do you believe that under this bill the commission would have the power to enact a rule which would prevent the pool from selling to some utility company, for instance, below cost while exacting a higher rate from others ?
Mr. WARRUM. I do not know whether they would or not.
Senator COUZENS (presiding). There is nothing in this bill to prevent that. That is the point I raised. You only fix the maximum.
Mr. WARRUM. No; there is not.
Senator COUZENS (presiding). May I recall that the railroad brotherhoods and the railroads came here and asked for a bill creating by law a division for collective bargaining. Is it beyond the hope of this committee that you may get together with the operators and agree upon a bill?
Mr. WARRUM. You can answer that question, Mr. Chairman. You have seen the performance here for six months. You have seen the attitude they have taken for six months. They not only assail the bill, but they assail the framers of the bill. Why, Mr. Liveright was introduced to represent the operators from Pennsylvania and denounced this bill as conceived by a master mind and drawn by a satellite; and yet he sits here like a dyspeptic witch doctor beside the perishing body of his client, snarling at aïl suggestions that we make of relief.
Referring to these illustrations, there is no evidence that comes before court or a commission that is more potent, more argumentative, than exhibits.
Senator WHEELER. Let me call your attention, however, to the fact that the railroads did the same thing with the railroad labor bill until it passed this body and went into the Senate with a view of passing the Senate; and then at the next session they immediately got busy with the railroad brotherhoods and agreed upon a bill. That is exactly what took place in that case.
Mr. WARRUM. Yes. I think that would be the experience here if this bill were reported. If they can kill and smother this bill, all right; but if this bill is reported to the Senate, it may be then that constructive suggestions will be made from the other side, modifying this or changing that.
Senator Hawes. Judge, have you the slightest hope of this bill even being considered in the Senate at this session?
Mr. WARRUM. You know, for me to answer that question would be rather vain, because I do not know enough about the machinery of the Senate. I should assume, from what I hear about it, that that would not be possible, for it to be considered; but we do think it ought to be reported.
Senator Hawes. There is not once chance in a thousand of this bill being discussed in the Senate at this session.
Mr. WARRUM. I think that is true, but I imagine
Senator Hawes. I just wanted to get your view of it, because in suggesting yesterday this digest the element of time seemed to enter into the minds of some people.
As I understand, this special session, if possible, is going to be confined to two subjects—the tariff and farm relief-and a highly controversial bill like this will hardly come up for passage even at the special session.
Senator WHEELER. They can not confine legislation at the special session.
Senator Hawes. An attempt will be made to do it. At least, that is the public statement, that they will try to do it.
Mr. WARRUM. The only way I can answer you, Senator, is that I have to assume from what I hear that you are right, that there is not one chance out of a thousand of the bill being considered; but I can not conceive that there is any reason why the bill should not be reported. I do not know enough about the machinery of legislative progress
Senator Hawes. But, Judge, since yesterday you have suggested yourself, I think, three amendments to the bill, and you are going to adopt a suggestion of the chairman of another amendment to the bill; and probably within 12 hours there have been five suggestions of amendments already. Now, if this bill is going in, ought it not to go in in perfect form? I mean, it ought to go right or not at all.
I understand that you state that the operators have not assisted you by helpful criticism of this bill in any way.
Mr. WARRUM. That is true.
Senator HAWES, Your statement is that this is the mine workers own bill, without cooperation or assistance from anybody.
Mr. WARRUM. That is a fact, of course.
Senator HAWES. The bill providing for a labor board or board of mediation that Senator Wheeler speaks of was a bill that was presented on the Senate side and the House side by the operators and the unions.
Senator WHEELER. Not at first; let me correct you there.
Senator Hawes. They did not do that in the Barkley-Howell bill; but after they had been defeated, then both sides came in with a bill that they had jointly prepared, and the bill apparently is working. It does seem to me, Judge, that you do not want a bill to go to the Senate with defects in it, or to have it lie on the table subject to discussion and have some points in it picked out that are not workable or that are unconstitutional. It will not help your cause any. So if the bill is simply to lie on the calendar of the Senate I do not believe that you are going to lose very much by getting it into the Senate in as nearly perfect form as possible. Therefore I think that the digest of evidence that has been referred to would be very helpful here, some opinions, and so forth.
By the way, has the Secretary of Labor filed his report on the question that you asked him?
Senator WHEELER. I do not know whether he has or not.
Senator Hawes. There were a number of questions that we asked him that he said he would file statements about. I do not know whether he has done it or not.
Senator WHEELER. I do not know myself.
Senator Hawes. It does seem to me, Judge, that you want this bill to go to the Senate in the most perfect form in which you can get it there.
Mr. WARRUM. If I knew some formula of conduct on my part or on the part of the people I represent that would bring about this perfect form I should welcome it. I should have welcomed it long ago. I realize, Senator, that after it has gotten into what we think is a perfect form there can be suggestions still made, and the hope that we have still deferred. I have felt that the committee was not without its own interest in the matter, and that in the committee suggestions would be made, amendments drawn by members of the committee, or a subcommittee appointed, language clarified, and that the bill would be recommended by the committee not because we introduced it, not because I, an obscure lawyer, drew it or defended it here, and not because Mr. Lewis or the miners' union are the proponents of it, but because out of the investigations that the Senate committee have made they feel that there can be a proper exercise of congressional authority in the manner indicated by the bill, and that with some suggestions that will occur from time to time to the different members, the machinery and administrative features are all right or can be corrected.
Now, you pass that duty back to me; and I come here again at a stipulated time to go through the same operation. I can not alone attain the ideal, Seantor Hawes, that the Senate or any member of the committee have in mind. That can only be attained by the committee itself.
We do feel that this matter has been pending a long time; that if we could get it recommended back (I suppose that is the proper word; it has been, I assume, introduced)-if we could get it recommended back by the committee, it would become a living thing on the calendar of the Senate. It would attract attention. It might be re-referred to the committee, but it would not be smothered in the committee at least, and it would be in such a shape that it would call for any cooperation that the other side may see fit in the last, the eleventh hour, to yield to us.
In addition to that, Senator Hawes, let me suggest that there is an advantage in having the bill upon the calendar at the next session. True, it is said broadly that farm relief and tariff will be the subjects to be considered, but farm relief and tariff have never been mentioned during the past campaign-that is, farm relief, at least, and a tariff protective of the textile industry, without coupling it with the bituminous-coal industry.
Senator Hawes. Judge, you of course understand that all these bills die on the 4th of March, and they will be reintroduced and rereferred to this committee again after that time, when we come back here again. I wanted to direct your mind to that subject, because it has been suggested that these digests of evidence and studies of the constitutional questions be made. As you are well aware, I do not think there have been an average of 5 members out of 18 who have heard what has been said here.
Mr. WARRUM. We had no way of enforcing a larger attendance, of course.
Senator Hawes. You have made a very gallant fight, and have done it very ably.
Mr. WARRUM. Thank you, sir.
Senator Hawes. But it occurs to me that this bill, in order to have any possibility of consideration either by the public or by the