The plaintiff received a judgment for $3,000, covering the years 1921, 1922, 1923, and a portion of 1924, based upon these facts: That they deducted for the weight of the car 2,500 pounds. The coal was loaded by the car. The sealer of weights and measures measured and estimated the capacity of the cars, 26 in number, and he stated in the record that the weights of the cars ran from 2,040 pounds to as high as 2,450 pounds. And yet all during this time 2,500 pounds had been reduced from the weight of each car of coal on account of the car, and the miner sued for the difference and secured a judgment for $3,000, which was affirmed by the Supreme Court of Appeals of the State of West Virginia. That record is here if anybody would like to see it.

Those are the things that lead us to ask that these limitations and conditions be imposed upon the secondary licensee. They are all constitutional. None of them impinge upon the real constitutional rights of these parties. If they had, we would have hesitated, on account of the legal effect, to have put them in here.

We feel that, on the contrary, they are not only justified by the practices that obtain in this industry, but every one of them has, in its last analysis, the purpose of maintaining a constitutional right, not destroying one.

STATEMENT OF T. C. TOWNSEND, ESQ., OF COUNSEL FOR THE UNITED MINE WORKERS OF AMERICA

Senator COUZENS (presiding). Mr. Townsend, are you ready to proceed? The committee will be glad to hear you.

Mr. TOWNSEND. Mr. Chairman and members of the committee, I had prepared a written argument to submit to the committee but the time is so limited that I feel that it would be unduly trespassing upon the time of the committee if I undertook to go through with this argument.

(Copies of the mimeographed statement prepared by Mr. Townsend were distributed to the members of the committee.)

Mr. TOWNSEND. After this written argument was prepared, Mr. Loos and Mr. Emery, appearing respectively for the National Coal Association and the National Association of Manufacturers, delivered orally to the committee and filed with the committee written briefs raising some additional legal objections to the bill which are not covered in this paper which I submit. I am going to confine my remarks this morning to the observations on the legal aspect of the bill that were made by Mr. Loos and Mr. Emery, and file this written argument with the committee without undertaking to go through it.

REPLY TO LEGAL OBJECTIONS OF OPPONENTS TO BILL NO. 4490

This is not in that written argument. I only prepared it last night after listening to the argument of Mr. Loos and reading the brief of Mr. Emery:

The legal objections of opponents to this bill may be summarized and answered as follows, generally:

Ojection: The reach and consequence of the doctrines pronounced by the bill are almost beyond comprehension. If the principles asserted by the bill are correct, it is strange indeed that they have not been discovered many years ago. That objection was urged before this committee by at least two gentlemen who addressed themselves to the committee.

Answer: If the power exists in Congress to regulate corporations engaged in mining, producing, and shipping coal in interstate commerce, the fact that Congress has not exercised such power is no denial of its existence. This same argument was urged against the constitutionality of the corporation tax law, passed August 5, 1909, and involved in the case of Flint v. Stone Tracy Co. (220 U. S. 108). At page 169 of the opinion the court said:

The argument, at last, comes to this: That because of possible results a power lawfully exercised may work disastrously, therefore the courts must interfere to prevent its exercise, because of the consequences feared. No such authority has ever been invested in any court. The remedy for such wrong, if such in fact exist, is in the ability of the people to choose their own representatives and not in the exertion of unwarranted powers by courts of justice. The Supreme Court has answered the first argument.

Objection: The mining of coal is not interstate commerce. It is not commerce at all. It is purely local intrastate business. Because the bill attempts to regulate and supervise the mining of coal, we submit that it is unconstitutional.

Answer: Proponents of this bill do not contend that the mining of coal as such is interstate commerce. The bill does not affect or undertake to regulate interstate commerce, except in so far as it is conducted by corporations hereafter created and engaged in the mining and shipping of coal in interstate commerce.

In Flint v. Stone Tracy Co., supra, it was contended that the tax law there involved was in conflict with the Constitution because it undertook to levy taxes upon corporations organized under State laws and conducting exclusively intrastate business, a subject over which Congress had no power or control. The court in this opinion said, in referring to the case of Osborn v. The Bank (9 Wheat. 739):

Chief Justice Marshall, in delivering the opinion of the court, conceded that if the corporation had been originated for the management of an individual concern, with private trade and profit for its great end and principal object, it might be taxed by the State.

In the case of Pennsylvania v. West Virginia (262 U. S. 601), Justice Holmes said:

I know of no relevant distinction between taxing and regulating in other ways.

If the power to regulate under the commerce clause is as broad and comprehensive as is the taxing power of the Government (the taxing power and the commerce clause being found in the same article of the Constitution), and the State can tax a corporation organized by Congress to engage in a private business, then Congress can regulate a corporation organized under the laws of a State and engaging in interstate commerce; because the power to regulate, as declared by the Supreme Court of the United States, is as broad and as comprehensive as the power to tax.

Objection: The proposed bill is unconstitutional in that it attempts to regulate the relation between employers and employees engaged in a business which is not interstate commerce. It undertakes to limit the right of private contract.

That involves to some extent

Senator WHEELER. Let me ask you this question. I think you have stated it, but I want to see if I understand it correctly:

Your theory is that this bill is not an attempt to regulate interstate commerce, but that the Congress has a right to regulate it because of the fact that they are artificial persons or corporations under the Constitution? Is that it?

Mr. TOWNSEND. Yes, sir; they have a right to reach the corpo

ration.

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Senator WHEELER. That is what I wanted to get clearly in mind. Mr. TOWNSEND. Answer: This objection relates to that feature of the bill which undertakes to restrict the "yellow dog" contract. That refers to the question discussed a moment ago. The courts of the State of New York refuse to recognize the "yellow dog contract, and assert that it is against public policy. A subcommittee of the Judiciary Committee of the United States Senate composed of Senators Norris, Walsh, and Blaine, all eminent lawyers, has framed a bill declaring the "yellow dog" contract as against the public policy of the United States, and further declares that any such contract shall not be enforceable or afford any basis for the granting of any legal or equitable relief by any court of the United States.

If this bill did no more than restore to the individual miner his constitutional rights of which he has been deprived by the use of the "yellow dog" contract, it would be worth the consideration of the Senate.

Objection: Congress may not do by indirection what it can not do directly that is, Congress can not regulate the mining of coal, a purely local business, under the guise of a system of licensing corporations which engage in mining and shipping coal in interstate commerce.

Answer: Such is not the design, purpose, or terms of the bill. We repeat that the bill deals only with corporations undertaking to exercise power over which the Congress of the United States has exclusive control. It has been repeatedly stated here that a State can pass no law that affects interstate commerce. I do not think this is altogether a correct statement of the rule. Correctly stated, the rule is, no State can pass a law which interferes with or burdens interstate commerce.

As said by the Supreme Court of the United States in Oliver Mining Co. v. Lord (262 U. S. 179), in considering a tax law of the State of Minnesota.

The tax may indirectly and incidentally affect such commerce, just as any taxation of railroads and telegraph lines does, but this is not a forbidden burden or interference.

Thus the courts recognize that a State, in dealing with the subject of taxation over which it has exclusive control, may affect incidentally and indirectly the commerce clause of the Constitution, and yet such tax laws are a valid exercise of such a power. The tax laws of a State levying taxes upon railroads do, as a matter of course, incidentally and indirectly affect interstate commerce, yet they are valid. The same argument may be applied with equal force to a subject over which Congress has exclusive control. Such a subject is the power to regulate interstate commerce. In the exercise of this exclusive power it may reach so far as to indirectly and incidentally

affect local State subjects. Laws would not be invalid for such a reason. If the bill here is a valid exercise of a power over which Congress has exclusive control-and we submit that it is—then, if it incidentally and indirectly affects the mining of coal by providing for the proper weight thereof, or that the wage of the miner should be paid in standard currency of the United States, or that a commission has authority to recommend methods of conservation and make suggestions relating to marketing the product, all of such matters would be incidental to the main subject. To adopt any other rule or to take any other position would result in the loss of this vast power vested in Congress in every case where it incidentally and indirectly affected a subject over which the State has control. Any such position would be allowing the "tail to wag the dog."

This distinction is clearly made in the case of Flint v. Stone Tracy Co., supra, at page 163, where the court uses the following language [reading]:

There is nothing in these cases contrary, as we shall have occasion to see, to the former rulings of this court which hold that where a tax is lawfully imposed upon the exercise of privileges within the taxing power of the State or Nation, the measure of such tax may be the income from the property of the corporation, although a part of such income is derived from property in itself nontaxable. The distinction lies between the attempt to tax the property as such and to measure a legislative tax upon the privileges involved in the use of such property.

The distinction in this bill lies in the fact that it affects only corporations engaged in interstate commerce, a subject over which Congress has exclusive control and does not affect the commerce itself. If the distinction drawn in one case as to taxes is good, it is good as to the question of regulation of interstate commerce.

Objection: The bill is unconstitutional because it attempts to fix the price of coal. The business of mining coal is not impressed with a public interest.

Answer: It can not be pointed out wherein the bill, in any of its provisions or in any reasonable inference that may be drawn from the language used, undertakes to fix the price of coal beyond the fixing of a maximum price. There is express authority for this in Stafford v. Wallce (258 U. S. 495), and the later decision of the Federal court in sustaining the right of the Secretary of Agriculture under the stockyards act to fix maximum commissions. The only place in this bill where the commission fixes a maximum price is by the way of a condition imposed on the primary licensees, who are given the right to form marketing pools.

Objection: The bill is unconstitutional because no standard is prescribed for the conduct of the commission or the industry.

Answer: This objection goes only to the administrative features of the bill and does not affect the principle involved. Any such objections, if constructive, may be readily corrected. This same answer likewise applies to the objections made to the bill that it is vague and indefinite, and proposes to punish criminal offenders under the bill without sufficiently specifying the crime.

Senator WHEELER. That is frequently done.

Mr. TOWNSEND. Why, certainly.

Senator WHEELER. It is done in practically every one of the Interior Department bills that are passed; and they have held that the

Department of the Interior can pass regulations, and they shall be deemed criminal, while there is nothing in the act itself setting out what they shall be.

Mr. TOWNSEND. I should like to make one additional observation: Senator Sackett from time to time in connection with these hearings has propounded the inquiry as to whether or not Congress, under the general-welfare clause of the Constitution of the United States connected with the power of Congress over interstate commerce, could conserve the coal industry under a bill providing for conservation or the extending of the power of Congress to conserve the coal industry.

I think the Supreme Court of the United States has answered that question. I want to give to the committee and to Senator Sackett, if he were here, the benefit of the discussion of it.

In 1919 West Virginia passed an act providing that before any natural gas that was produced in the State could be piped beyond the boundaries of the State, it was the duty of the producers first to supply the consumers-industrial and domestic-living and residing in the State.

One of the arguments advanced in favor of the bill, and one of the arguments advanced before the Supreme Court of the United States when the bill was attacked upon the theory that it was unconstitutional as an unwarranted interference with and a burden upon interstate commerce, was that it was a measure of conservation.

In that connection the Supreme Court of the United States used this language, which is found at page 599 of the opinion. The opinion is reported in 262 U. S. 599.

Senator BLACK. Which opinion is that that you are reading from? There are two opinions in that case, as I recall.

Mr. TOWNSEND. Yes. This is Pennsylvania v. West Virginia.
Senator BLACK. I mean, which judge's opinion is it?

Mr. TOWNSEND. This is from the majority opinion of the court, written by Justice Van Devanter [reading]:

And yet we have said that in matters of foreign and interstate commerce there are no State lines. In such commerce instead of the States a new power appears, and a new welfare, a welfare which transcends that of any State. But, rather, let us say it is constituted of the welfare of all of the States, and that each State is made the greater by a division of its resources natural and created with every other State, and those of every other State with it. This was the purpose as it is the result of the interstate-commerce clause of the Constitution of the United States.

We submit that there is clear authority under that decision for the position inquired about by Senator Sackett, and which appears from time to time to have been in his mind in connection with the proper regulation of this subject.

Senator HAWES. Mr. Townsend, may I ask you a question which does not relate to this argument?

Mr. TOWNSEND. Yes, sir.

Senator HAWES. The judge several times spoke of the issuance of scrip in the matter of payment of wages. I think in my State that is prohibited. Is it not prohibited in most of the States by State statute?

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