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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 this commission; and said corporation shall make annual report in the manner to be prescribed by said commission."
None of these conditions impinge upon any constitutional or moral right, or destroy any just economic advantage to which an existing corporation can lay claim. The first condition deals with individual service or
yellow dog" contracts, somewhat different from the condition imposed upon the primary licensee. The secondary licensee is permitted to employ only nonunion workmen, but such contracts shall be at will, its employees being at liberty to terminate such relationship and join a labor union. The case of Hitchman Coal Co. v. Mitchell (245 U, S. 229) has been cited by opponents. In that case it was pointed out by the dissenting opinion of Brandies, J., in which Holmes and Clark, J. J., concurred, at p. 272:
“The contract created an employment at will ; and the employee was free to leave at any time. The contract did not bind the employee not to join the union; and he was free to join it at any time. The contract simply bound him to withdraw from plaintiff's employ if he joined the union."
This was, indeed, admitted in the majority opinion, which held, however, that the plaintiff was nevertheless entitled to his injunction. Page 251 :
“ That the employment was at will, and terminable by either party at any time, is of no consequence."
If it be admitted that a corporation employer has a constitutional right to employ only nonunion men, his contract with them can not give him a property right in their status as nonunion men, This freedom of contract could be as well asserted in employing only Democrats or Baptists; but no contract of that character could be other than at will, or be construed as depriving the employee of the right to change this status at will upon leaving the employment. The provision, instead of violating a constitutional right of a corporation, guarantees a constitutional right of the miner, and it leaves the corporation with all the legal rights it now has.
And yet the right is asserted by these soft-coal corporations of imposing covenants in their individual service contracts which effectually insulates their labor from unionization. In the Red Jacket case, 18 Fed. (20) 839, 316 coal companies of West Virginia invoked the jurisdiction of the Federal court for the southern district of that State on Federal grounds and secured an injunction against representatives of the miners' union restraining them from persuading employees to quit their employment and join the union. The Supreme Court refused to review this decision on certiorari, and it has been adopted in Ohio and Pennsylvania in injunction cases that were brought before the committee.
The power to impose this legislative condition rests not only on the right to regulate the corporation; it can be found in the relation that the subject bears to interstate commerce. Consider the origin of the packers and stockyards act. The Government brought an injunrtion suit under the Sherman Act to l'estrain certain practices at the Chicago stockyards (Swift & Co. v. United States (196 U. S. 375)). Among other specifications was the charge that the defendants agreed “ to refrain from bidding against each other." It was conceded that the transportation of the stock had been consummated with delivery at the yards. But the court restrained the defendants on the ground that their acts were intended to interfere with interstate commerce, which the court said " is not a technical legal conception but a practical one, drawn from the course of business." Thereafter Congress passed the act to regulate the business of such stockyards, and the act came b: fore the Supreme Court in Stafford v. Wallace (258 U. S. 497). The court said :
" It is manifest that Congress framed the packers and stockyards act in keeping with the principles announced and applied in the opinion in the Swift
The recital in section 2, paragraph b, of title 1 of the act (sec. 183 of this title quoted in the margin leaves no doubt of this). The act deals with the same current of business and the same practical conception of interstate
“Of course, what we are considering here is not a bill of equity or an indictment charging conspiracy but a law. The language of the law shows that what Congress had in mind primarily was to prevent such conspiracies by supervision of the agencies which would be likely to be employed in it. If Congress could provide for punishment or restraint of such conspiracies after their formation through the antitrust law, as in the Swift case, certainly it may provide regulation to prevent their formation. The reasonable fear by Congress that such acts, usually lawful, and affecting only intrastate commerce when considered alone, will probably and more or less constantly be used in conspiracies against interstate commerce or constitute a direct and undue burden on it, expressed in this remedial legislation, serve the same purpose as the intent charges in the Swift indictment to bring acts of a similar character into the current of interstate commerce for Federal restraint. Whatever amounts to more or less constant practice and threatens to obstruct or unduly to burden the freedom of interstate commerce is within the regulatory power of Congress under the commerce clause, and it is primarily for Congress to consider and decide the fact of the danger and meet it. This court will certainly not substitute its judgment for that of Congress in such a matter unless the relation of the subject to interstate commerce and its effect upon it are clearly nonexistant."
In United Mine Workers v. Coronado Coal Co. (259 U. S. 349) the court said with reference to a local strike of miners in which threefold damages were sought by the coal company under the Sherman Act:
It is clear from these cases that if Congress deem certain recurring practices, though not really a part of interstate commerce, likely to obstruct, restrain, or burden it, it has the power to subject them to national supervision and restraint."
And in the Red Jacket case (18 Fed. (20) 839) the circuit court of appeals held that the United Mine Workers were guilty of conspiracy in restraint of interstate commerce by attempting to persuade the employees of 316 companies suing, to quit work and join the union. In that case there was no claim that the shipment of coal was being molested or that there was any attempt to interfere with the sale of coal in other States. The offense was one that related to the mining of coal which, it was charged, was intended to restrain interstate commerce; and it grew directly out of the efforts of the union to persuade employees under " yellow dog" contracts to quit their service and join the organization. Paraphrazing the language of the Supreme Court in the Stafford case quoted above, we say:
“ If Congress could provide for punishment or restraint of such conspiracies after their foundation through the antitrust law, as in the Red Jacket case, certainly it may provide regulation to prevent their formation. The reasonable fear by Congress that such acts, usually lawful, and affecting only intrastate commerce when considered alone, will probably and more or less constantly be used in conspiracy against interstate commerce, or constitute a direct and undue burden on it, expressed in this remedial legislation, serves the same purpose as the intent charged in the Red Jacket case to bring acts of a similar character into the current of interstate commerce for Federal restraint.
This court will certainly not substitute its judgment for that of Congress in such a matter unless the relation of the subject to interstate commerce and its effect upon it are clearly nonexistent."
In other words, the courts hold that Congress already has, through the Sherman Act, regulated the activities of a labor union in persuading employees under "yellow dog" contracts from leaving their employ and joining the union. If so, Congress can return to this subject and enact further legislation in the premises.
It may be hurriedly retorted that all Congress can do is to legislate definite restraints or regulations upon the miners, since the court holds that their persuasion of employees under " yellow dog ” contracts is the obstruction of interstate commerce. This would be a melancholy reflection on the power and discretion of Congress in relation to the subject matter. If it may legislate with reference to a situation thus created, it must have power to deal with the subject fully in order to deal with it fairly and justly. It must have power to deal with the unfair conditions that breed such conflict-with the causes that lie back of such activities.
No objections have been offered to the remaining conditions of the secondary license. It has been suggested that the provision that the employees shall be paid in lawful money should be modified so as to permit the payment in checks
upon banks or trust companies, as certain hazards attend the transmission of currency pay rolls.
None of these conditions impair constitutional rights. On the contrary, they guarantee legal rights. If it be said they amount to regulations of relationship between employer and employee, and are thus beyond the power of Congress, the answer is twofold: First, they are not regulations of commerce, but conditions imposed upon corporations seeking to exercise franchises within the national sovereignty. Second, they do, in fact, bear a relationship to interstate commerce. The suppression of public meetings, the use of scrip and token money, the “pluck-me stores," and the robbery of miners in their weights, are the occasion for the efforts of the union to organize the men, to call them on strike, to persuade them to repudiate their "yellow dog ” contracts; and these efforts on the part of the miners' organization are, through Federal injunctions based upon the Sherman Act, made subject to a code of Federal judicial restraints that operate through wide areas of the bituminous fields. If through the Sherman Act, Congress has conferred on the Federal judiciary authority to regulate union activities occasioned by such evils, we submit that Congress may return to the subject and in a new act regulate these abusive practices.
(9) Sec. 11. Relating to railroads.-Section 11 provides that there can be no new switches or railroad lines cut for sidings to bituminous coal operations without permission of the Interstate Commerce Commission, which, in turn, shall depend upon a certificate of approval by the coal commission. There is also a provision in section 7 which empowers the commission to make reasonable rules governing railroad fuel service and to prevent discrimination between coal mines and coal fields, and providing that in determining relative cost of railroad fuel coal, the commission may consider the commercial traffic rate on such coal over the distance it may be transmitted from any mine to the fueling point of the railroad. Obviously the railroads are under such regulatory control, and the only legal objection urged to these provisions, is that the authority is not vested in the Interstate Commerce Commission. The reason for reposing the power to act in the coal commission is that it is, as the committee knows, a matter bound up in the stability of the bituminous industry and is wholly beyond the ability of any other commission to investigate and properly regulate.
The representative of the railroads made no objection to the provision as to the new sidings, but did object to the fuel regulation on the ground that the fuel service of railroads was a technical problem involving special factors of coal requirements. Manifestly this matter can be presented to the commission, and there is nothing in the bill to prevent a satisfactory solution to the technical problem. The need for the control appeared throughout the investigation. Railroads were not only purchasing their coal universally below production cost, but were discriminating against coal fields that had supplied them for years. Some of them had closed down their own mines to go to distant fields where they could buy coal cheaper in a disorganized industry whose capital was being decimated and whose labor was impoverished. In these cases it was shown that they would be actually paying more if the additional hauling was estimated at commercial rates. Whether this course of conduct was a conspiracy to destroy the union, to establish nonunion mine labor, or deflate the miners' wages is immaterial. These results have followed; and along with them, the pauperizing of many communities whose coal had fueled the railroads for years.
The provision that no new sidings shall be cut by railroads for bituminous coal operators without the approval of the commission is a regulation within the power of Congress. The Interstate Commerce Commission may even direct the abandonment of a line, even though it affects intrastate traffic, if its order “ protects interstate commerce from undue burden or discrimination." (State of Colorado v. United States, 271 U. S. 153.) It may do this despite existing shippers' connections—depriving communities of transportation facilities and even against the power of the State.
The committee has been impressed with two fundamental facts: The multitude of unnecessary operating units, each with its colonized labor force and part-time employment; and the waste of coal reserves in the struggle for existence. Relief in these matters would certainly be desirable, and the processes of relief can never be worked out without this check on shipping facilities, Moreover, such regulations bear not only on ultimate economies in soft-coal commerce but directly serve to prevent wasteful and improvident traffic operations. There is nothing in our transportation so utterly wasteful as the shipping of coal. This commodity is not only hauled hundreds of miles unnecessarily for
purposes of competition, but, more important, there is the reckless consignment of coal. The larger markets are filled with demurrage coal. Secretary of Labor Dayis in his statement says:
* The secretary of the National Coal Association in a circular the other day sent out to its membership pointed out that they had 800,000,000 tons of unbilled coal on railroad sidings at mines. Do you wonder, then, Senators, why it is that we have this everlasting beating down of the price of coal? Anything that affects the treasury of the coal company affects the pay envelope of the worker."
He then refers to one State, Illinois, and showed that it had 338 coal mines with railroad tipples, aside from 694 local wagon mines; that the 338 shipping mines worked 139 days in the year; that if the largest 84 of these 384 mines had operated for 300 days during the year they could have produced more than all the mines did produce.
Now, if it is for Congress and not the courts to say that this absurd traffic does burden the national transportation facilities, as surely as the foolish operation of a railroad track which it may order discontinued, then we submit that Congress may provide suitable legislation to moderate and regulate itcertainly when the direct objective of such regulation is the railroad. And it remains that in proper cases a shipper would have his resort to the courts when his application for a switch has been unreasonably denied.
BRIEF OF FACTS
Relation of soft coal to industry and transportation. The United States Coal Commission, at pages 259 to 262 of their report to Congress in 1925, said:
" Food and water alone outrank coal among the necessaries of life. Of the 43 articles of food, from meat to fruit, the only ones into the production of which coal does not directly enter are . strictly fresh' eggs and fresh milk, and even those reach the market behind the steam-driven locomotives. Yet the 40,000 tons or more of bituminous coal that invisibly reaches our tables every day is of little moment compared with the coal that makes up the staff of life of our industries. The distribution of the year's output of the bituminous mines tells the story; out of an annual production of 500,000,000 tons, 28 per cent goes to the railroads, 25 per cent to the boiler houses of factories and mills of all kinds, 15 per cent to the coke ovens and gas plants, 10 per cent to the homes, 7 per cent to the steel plants, 7 per cent to power plants and street railways, 4 per cent is exported to Canada or overseas, 2 per cent is used at the coal mines for necessary power, and the remaining 2 per cent goes to the seaboard for steamship fuel. In those proportions bituminous coal is the driving force of modern industrial and commercial activity. Every one of the 45 major coal-producing districts in the United States, except the Michigan and Texas districts, ship coal outside the State in which it is mined. Three hundred miles of cars loaded high with coal is the measure of the daily output of the bituminous mines of the United States, and with that volume of traffic it is obvious that the uninterrupted flow of coal from mine to boiler room is a prime requisite to the general welfare.
Therefore the mining of coal in 29 States, its interstate transportation, and its country-wide distribution together make up a service indispensable to the general public.
A failure of the gas and electric plants of a great city to function would result in a public catastrophe of almost inconceivable extent. This is one of the reasons why these utilities have been put under public control, and the practical logic that half a century ago clothed with a public interest the steam locomotive and in later years the electric-power station must recognize a large element of public service in the coal mine that furnishes the necessary energy to both locomotive and power plant.
" It is this indispensable service which the coal mine performs that gives the largest social value both to the property and to its product, and in turn this social value in effect grants to the public an interest in that use and creates a compelling reason for public control."
Overdevelopment.--An enormous coal acreage has loaned itself to reckless exploitation. Il!-advised local financing, encouragement by railroads seeking additional tonnage, and the stimulus of war prices to new mining ventures have contributed to this result.
The United States Coal Commission stated that in 1923 the consumptive lemand was * less than 500,000,000 tons of bituminous coal a year, while the capacity of the mines is over 700,000,000 tons." (R. 368.)
The condition is rapidly growing worse. In 1926 there were 7,177 mines reported to the geographical survey. Of these there were 5,253 in the seven States of Illinois, Indiana, Ohio, Pennsylvania, Kentucky, Virginia, and West Virginia, which produced 85.7 per cent of the total production of 573,366.985 tons of all of the States in 1926. Between 1916 and 1921 there were 5,282 mines opened and 1,538 closed—the excess being 3,744 (R. 374). It was frequently stated during the hearing that the productive capacity is now almost double the consumption, and that there are at least one-third more men engaged in mine labor than the condition of the market demands. In 1919 there were 621,988 men employed in bituminous mines. In 1926 there were 593,647 (R. 383). The average number of days' work per each miner will not exceed 150 days (R. 382). This labor is largely colonized at the mines in company houses, a policy encouraged by the operating units so that their labor forces may be ready at the various times per week or per month, or season, when the mine is ready to operate.
At the time the Jacksonville wage agreement was made in 1924 the mine labor of Illinois, Indiana, Ohio, and western Pennsylvania was organized; and in parts of southern and northern West Virginia, central Pennsylvania, and Kentucky the miners belonged to the union.
The union scale in relation to wages, working conditions, and to a stabilized industry.—The labor cost of soft-coal production is 60 or 70 per cent of its total cost. With a standard or uniform scale (of course, with fixed differentials for various fields), 65 per cent of the production cost is wholly stabilized and beyond competitive cutting. Under nonunion conditions, and particularly under the individual service or " yellow-dog” contracts prevailing in the nonunion fields, the factor of labor cost vitally enters into competition. Wages are cut to furni: h margins for bidding, and the result is a succession of wage reductions in the struggle for markets. (Lewis R. 407; Operator Peale R. 583; Operator Woodford R. 933.)
The Jacksonville scale.-In 1917 a wage scale was negotiated under the mediation of Fuel Commissioner Garfield. This scale, with 14 per cent added, was the basis of the scale of 1920, when President Wilson's coal commission handed down its award, which award was a mediation plus an executive direction to operators and miners to make their contract in conformance with it. The letter of the President is as follows (R. 446) :
“ THE WHITE HOUSE,
Washington, March 19, 1920. “ GENTLEMEN: I am transmitting to you herewith a copy of the report and award of the bituminous coal commission appointed to adjust matters in controversy between the bituminous coal miners and operators of the country.
In accordance with instructions in my letters of appointment to the commission and memoranda attached thereto and the agreements by mine workers and operators to abide by the report and award of the commission, this report and award is the basis upon which the wage-schedule agreements between the mine workers and the operators shall be made.
“ Operators and miners should, therefore, make arrangements for convening the necessary joint conference as soon as possible to make such changes in the terms, provisions and conditions, mining rates, and wage schedules as are set forth in this report and award."
This scale of 1920 was accepted by the operators in the central competitive field and major outlying districts. The scale of 1920 expired April 1, 1922, by the failure of the operators and miners to renew it. The strike was settled August, 1922, without any changes in the previous scale, and was effective until April 1, 1924. Shortly preceding its expiration the operators and representatives of the union met at Jacksonville, Fla., and negotiated a new scale. (R. 1071-1072; R. 379-380.)
A majority of the operators of the Kanawha district of southern West Virginia and western Kentucky refused to accept the Jacksonville agreement. Union men in these operations were called on strike. These strike activities were restrained, even in the matter of persuasion, by Federal injunctions. Shortly after the Jacksonville agreement went into effect a succession of repudiations of their agreement by operators began in West Virginia and extended into Pennsylvania. Injunctions were resorted to by the defaulting operators in suppressing strike activities when the mines were reopened in violation of the Jacksonville scale at lower wages. Upon the termination of the Jacksonville scale the operators generally in the seven States declined to renew the wage scale and a general strike was ordered by the union officials.