Page images
PDF
EPUB

Sections 8 and 9 contain only provisions for enforcement and provide penalties for failure to comply with the terms of the act. (R. 188.)

Section 10 compels every corporation to operate under the act whether it files acceptance or not, as it requires a secondary license simply to continue existing business. Such license will be granted only on condition that no contract of employment is sacred if such corporation desires to employ only nonunion men. Such a contract of employment is made terminable at will, regardless of its provisions. The purpose is to fasten the union upon all corporate employers. This condition they must accept or cease to do business. (R. 188.)

Section 11 confiscates property in that it prevents any owner of coal from opening a mine except upon the approval of the coal commission. (R. 188.)

The whole scheme is this: That operators are permitted to combine and conspire to fix prices based upon cost of production and a reasonable return on invested capital under certain conditions fixed by the commission, but leaves to the labor union alone the fixing of the labor cost, which, as the largest single item of production cost, would be the controlling factor in fixing selling prices. The interest of the public is deliberately denied. (R. 188, 189.)

Notwithstanding the assurances that the bill will stabilize the industry and is intended to benefit the coal producer, nowhere is there a provision that minimum prices for coal would or could be fixed, which means that while the bill will restrict profits, it does not provide that there shall be any profits. (R. 189.)

The taking over of a problem by the Government does not assure its solution. The Government can operate only through individuals who are subject to all the frailties of men, and where they are vested with discretionary power, the wisdom of their actions is limited by their knowledge, their experience, their natural ability, and their motives. It can not be assumed that the members of the proposed commission would be better fitted to run the coal industry than are the able, experienced men who have given their lives to it, and whose personal interests and fortunes are bound up in it. (R. 189.)

All previous efforts at coal legislation have been alleged to be in the interest of the public; but that theory is abandoned in the present bill, which is based on the theory that it would help the industry. (R. 189.)

This bill was introduced at the request of the miners' union, and it appeals to force through the medium of Federal regulation to gain the domination of the bituminous coal mining industry. (R. 190.)

The bituminous-coal industry concurs in the expressed opinions of the President and President elect of the United States, and of the Department of Justice and the Federal Trade Commission on self-government in industry. It has joined in the trade-practice movement which has already accomplished beneficial results in other industries. By continued efforts to better marketing conditions, by coordinating several association committees under the name of the Market Research Institute of the National Coal Association, by giving attention to trade practices, trade relations, cost accounting, conservation, commercial research, technical research, and publicity, progress is being made within the industry. (R. 190.)

This movement for self-government in business is going steadily forward in more than a hundred lines of trade and industry, and from over 60 lines the Federal Trade Commission now has applications for trade-practice conferences. So it is evident that the bituminous industry which has made such remarkable progress in the realm of production, has set itself to the task of eliminating unfair trade practices and doing away with such wasteful and uneconomic practices as may exist. (R. 191.)

Association of Railway Executives, Washington, D. C., by C. S. Duncan, economist :

The provisions of sections 7 and 11 of the bill would seriously handicap the carriers in their efforts to carry out the requirements for the efficient economical inanagement of the railroads, contained in section 15 (a) of the interstate commerce act, and will, by impairing the high standard of transportation service of the carriers, adversely affect the public interest. (R. 112.)

That the carriers present their opposition on two grounds: It would interfere with the supply of railroad fuel. Any legislative action affecting coal supply or unnecessarily restricting the freedom of railroad management to use its best judgment based upon extended and careful investigation, tests, and analyses, in selecting its coal is of vital interest to the railroads. The main source of the carriers' power at the present time is bituminous coal. The use of electricity is relatively insignificant. Fuel oil, though substantial, is not comparable to coal. Coal is an essential requirement for the railroads in every district. They use 27 or 28 per cent of the entire soft-coal production. The decrease in consumption of coal is due to economies in operation. (R. 113, 114.)

It would increase railroad-operating costs. The selection of railroad coal is a technical, engineering problem, and the railroads must have the right kind of coal and an adequate and continuous supply for every service at every point. (R. 114.) A reduction of as little as 5 per cent of the heat content of coal used in locomotives would require the additional consumption of 6,250,000 tons of coal per year by Class I railroads. A difference of only 1 per cent in ash content in locomotive fuel requires 25,000 50-ton cars per year to haul the coal to locomotive-coaling stations, with the consequent effect on combustion efficiency and the disposal of the additional burden of refuse still to be considered. (R. 116-117.)

The public interest is involved. The railroads object to the bill in the light of the facts stated, because no need now exists for the provisions of the bill. Its enactment would be detrimental, not only to the interests of the carriers in impairing adequate standards of transportation, but would likewise be adverse to the general interests of the country. (R. 117.)

The National Retail Coal Merchants' Association, by Milton E. Robinson, jr., of Chicago, Ill., president:

The retail coal dealers of the United States distribute 125,000,000 to 150,000,000 tons of coal annually, mainly for household use, to 10,000,000 homes. The retailers constitute the contact of the industry with the public at home, from whom complaints come rather than from industrialists. (R. 56.)

The national organization is composed of local, State, and regional associations and of individuals located in 27 States and the District of Columbia; it is the only national association of retail merchants and the largest single body of retail coal dealers in the United States. (R. 56.)

A study of this bill has been made by a committee of the association, headed by Mr. Stephens, whose statement will express the position of the entire association. (R. 56.)

The National Retail Coal Merchants' Association, by Roderick Stephens, of New York City, chairman governmental relations committee:

Section 1 proposes a bituminous-coal commission; why not an anthracite commission, an oil commission, or numerous other commodity commissions? Is Congress going to establish a commission to regulate business in every commodity where the supply is in excess of demand or where a surplus of labor exists? Such legislation is paternalistic, unsound, uneconomic, and will substitute a Federal bureaucracy for individual initiative. It is unwarranted class legislation, preferential and unfair. (R. 57.)

Section 2 waives the Sherman and Clayton Acts in favor of producers of one commodity, a part of the general fuel industry. The licensing feature is a dangerous policy. It is an attempt to remedy conditions arising out of wartime stimulation of demand, by legislation, but it is more apt to perpetuate the very evil that it is attempting to correct. This section amounts to an agreement between the Federal Government and the United Mine Workers that the Government will make itself a party to a program of higher prices to be paid by the public for supporting a surplus of mines and a surplus of labor working part time for full profits and full wages. (R. 57.)

Section 3 is an unwarranted limitation on the right of business to merge under existing laws and attempts to force acceptance of Federal regulation by denial of existing rights. (R. 57.)

Section 4 would induce the formation of trusts, under Federal jurisdiction, and would bring the retailer now doing business in intrastate commerce in competition with direct-selling agencies under governmental patronage. It would create two groups of retailers, one affiliated with the marketing organization or selling pool, with prices fixed by the Federal Government, distributing the product of primary licensees at fixed prices, while the other would buy from secondary licensees with no fixation of prices. (R. 58.)

Section 5 authorizes governmental control of selling prices, with specific provision for equal representation of the United Mine Workers with the producers, in conjunction with the commission, and no provision for equal representation of the public. The determination of wages and allowable profits

would become a political matter, encouraging bargaining and trading between the three groups-producers, union labor, and political appointees. (R. 58.)

It does not appear whether the fair wages contemplated mean a fair day's wage or a fair annual wage. If the former, it is a sham, for a fair day's wage is valueless without continuous employment. Unless the maximum prices yielding a fair return on capital become minimum prices also, that provision is likewise a sham. To guarantee capital a fair return and labor a fair wage, pot on a daily basis but throughout the life of the act, without limitation on the productive capacity or the number of wage earners, can only lead to disaster for the soft-coal industry. (R. 58, 59.)

Section 6 represents a dangerously radical theory of government. The Federal Government is not empowered to say who shall engage in interstate commerce and what commodity they may produce or distribute. Why a 90-day period within which to accept the provisions of the act? (R. 59.)

Section 7 gives the commission blanket authority to enter into every phase of coal production. If that is helpful, why not help other industries; if detrimental, why select the already "sick” bituminous industry? (R. 59.)

Sections 8 and 9, providing for the revocation of licenses for failure to comply with the act or any regulation of the commission, penalizing illegal shipments of bituminous coal, is Government regulation running wild. (R. 59.)

Section 10 abrogates the right to employ nonunion labor. It is equivalent to a "union labor law” in the bituminous-coal industry, and invites such legislation for every industry. (R. 59, 60.)

There is no shortage of supply of bituminous coal. On the contrary, supply is in excess of demand. The public welfare is not threatened by excessive prices. (R. 60.)

The difference in prices of coal paid by the railroads and by householders is due to shipment first to a retail plant, unloading into that plant, handling in trucks, trucking over the streets and dumping, and then labor furnished to move it to its final destination. (R. 60.)

Wholesale commissions to-day seldom exceed 20 cents a ton, and some as low as 10 cents a ton. (R. 61.)

Some railroads and public utilities may buy coal at less than cost; householders do not. (R. 62.)

No profiteering in soft coal exists now. While supply remains in excess of demand there can be no profiteering unless the Government makes itself a party to a joint effort in conjunction with union labor and the soft-coal industry to bring about such a situation. (R. 62.)

The earnings of labor in the soft-coal industry may be increased in two waysby raising daily wages or by increasing the time worked by each employee at existing or lowered wages. If daily wages are increased, prices will increase; the competitive fuels will profit and soft-coal consumption will decrease, which will lead to a disaster such as the producers and miners in England are now facing. To increase annual earnings of miners without raising wage rates the mines must operate more days or the number of men employed must be reduced. Increased operation with increased tonnage would make existing conditions worse. (R. 62, 63.)

This legislation will help no one unless it elevates the price of soft coal. The Federal Government will be underwriting profits of the soft-coal industry and wages of employees engaged in the industry, and the public will foot the bill. Its effect will be to increase the price of soft coal to the public, as well as to involve the Federal Government in an unjustified interference and participation in business. It would be detrimental to the very industry and class of labor it is designed to assist. (R. 63.)

(He then deals with the question of retail prices of coal, bituminous and anthracite, costs, and profits. (R. 66–71.))

The New England Coal Dealers' Association, Boston, Mass., by William A. Clark, president (Mr. Clark is also vice president and a member of the governmental relations committee of the National Retail Coal Merchants' Association) :

Represents a group of retail coal merchants who sell about 80 per cent of the domestic coal used in New England. (R. 71.)

Government control means higher prices and increased cost to customers. New England industries will look for substitutes with the signing of this bill

28181-29-PT 219

During the war and following the strike in 1922 the users of a large tonnage of bituminous coal went to oil, the question of price being the deciding influence, Only a few cents per ton decide the question of the fuel to be used by large consumers. In many instances oil is a cheaper fuel in New England than coal. (R. 72.)

This bill opens still further the way for competing fuels. The increased price of bituminous coal will also increase the prices of steam sizes of anthracite. (R. 74.)

(He then goes into the question of prices of various coals. (R. 74–75.))

The Chamber of Commerce of the United States, by Felix McWhirter, member of the board of directors, and president of the People's State Bank of Indianapolis, Ind. :

Appears under instructions from the chamber to oppose the principles underlying Senate bill 4490 and does not appear as a representative of the coal industry. The bill raises a question of vital importance to all American business whether or not the individual citizen will be free to work out his problem under the American system under the safeguards of constitutional government. (R. 120.)

The bill sets a new precedent. Business men view it with disfavor, believing that Federal control of the bituminous coal industry might logically be followed in other industries. The Chamber of Commerce of the United States stands for the principle of self-government in industry and business and for individual initiative. (R. 120, 121.)

It does not object to reasonable legislation affecting industry where the public interest requires it within constitutional limitat ons, but does object in principle to legislation which gives to the Government such control as amounts to Government operation of industry. (R. 121.)

This bill goes beyond Government regulation and substitutes Government operation. It is designed to cover the entire bituminous coal-producing industry. (R. 121.)

The right to produce coal is transformed into a privilege, subject to regulation of the commission pervising mining operations, distribution, allocation of markets, sales, and prices. (R. 121.)

The commission will also regulate nearly one-third of the consumption of coal, being that consumed by the railroads. (R. 121-122.)

The commission must also function as a promotion and advertising agency and may require its licensees to maintain direct selling agencies whether they desire to do so or not or have any experience, and thereby compete with 40,000 merchants already engaged in retailing coal. (R. 122.)

The commission becomes the general manager of the industry, dictating the details of production, distribution, sales, and prices, and this without acquiring any stake in the business and without assuming any obligation for its successful conduct. A more complete usurpation of the function of business and industry can hardly be imagined than here proposed. (R. 122.)

The bill assumes that coal is a public utility, contrary to the decisions of the Supreme Court. (R. 122.)

Notwithstanding the admitted problems of the coal industry, such control would add to confusion rather than correct it. The coal industry, as well as all other industries of the country, possesses competent business leadership. The industry's ills can be corrected much better by the industry itself than through Government control, quoting from President Coolidge. (R. 122, 123.)

The Chamber of Commerce of the United States, by Charles F. Conn, member of the natural resources department committee and president Giant Portland Cement Co., Philadelphia :

During recent years continuously adequate supplies of coal of satisfactory quality at reasonable prices have been available. There is no danger of a shortage of supply, as coal resources are enormous, and the railroads have demonstrated their ability to meet emergency demands. (R. 126.)

During recent suspension in certain fields, with many mines shut down, the public was cared for; therefore, the needs of the public are not now a factor of concern. (R. 126.)

The coal industry can and will perform its obligations to the public; the industry should be given entire freedom in handling its internal problems. The proposed legislation, from the consumers' viewpoint, is unnecessary. (R. 126.)

The bill would certainly create a considerable drain on the public treasury. (R. 126.)

The industries producing the basic raw materials are conscious of their duty and obligation to the Nation and may be relied upon to do everything in the general interesi more effectively than possible through Government control. (R. 127.)

The Chamber of Commerce of the United States, by Charles H. MacDowell, member of natural resources department committee, and president Armour Fertilizer Works, Chicago, Ill. :

Large consumers of coal during the recent 18 months' coal strike in some sections of the country were able at all times to obtain adequate supplies of coal at reasonable prices and of satisfactory quantity. From their experience as consumers there is no acute coal problem. (R. 129.)

The American business community believes that Government should refrain from undertaking those things which can be successfully performed in the public interest by private enterprise. The bill is contrary to that principle. (R. 130.)

The chamber's greatest interest is offering constructive suggestions. Definite progress has been made in setting up in various industries standards of business practices. For such purposes trade associations were formed. The majority of successful business men have adopted such principles in good faith; and the national chamber has actively advocated the practical operation of these principles. (R. 131.)

This bill defeats the purpose definitely avowed by intelligent business leadership better to serve all interests of the community by self-government and the fair solution of business problems by business experience rather than the hazardous resort to Government agencies. (R. 132.)

The American Wholesale Coal Association, a brief by Ira C. Cochran, commissioner:

The association of wholesale dealers has membership in 22 States and Canada. (R. 229.)

The bill creates three separate and distinct classes of producers: (1) Corporations in marketing pools and selling associations, (2) corporations operating under the secondary license, and (3) individuals and partnerships not required to obtain licenses; all are in active competition with each other, two operating under different degrees of regulation and one under none. Either the prices of the pools or associations will become the established price of the industry or the other classes of producers will dictate a price scale which the pools and mergers must meet. Assuming that the industry conforms to the prices of the pools and mergers, the tendency would be to fix prices higher than the present market. Such method of price determination violates the rights of the public. (R. 229.)

Section 5 makes no provision for any consumer to be heard in the determination of maximum prices to be charged. No provision is made for the consumer or any other party to challenge the reasonableness of prices fixed, and consumers are without any guaranty of honesty, economy, and efficiency in the operation of coal properties. (R. 230.)

The bill deprives the consuming public of the advantages of competition, but does not impose any obligation to produce coal or to sell coal at uniform prices, and so there is no assurance of supply, as in the case of public-service corporations. (R. 230.)

Section 7 allocates territory. The consumer is bound by the price fixed, however unreasonable; his only alternative is to use substitute fuel. (R. 230.)

The dangers to the public exceed the purported benefits to the industry. (R. 230.)

II. CONSTITUTIONAL AND LEGAL

The National Coal Association, by Karl D. Loos, attorney, of the firsu of Butler, Lamb, Foster & Pope, of Chicago, Ill., and Washington, D. C.:

The power claimed rests upon the proposition stated by Mr. Warrum, as follows:

" Congress may require a State corporation desiring to engage in interstate commerce to conduct its entire business on such terms as it sees fit to impose.” (R. 202.)

« PreviousContinue »