studied this and found they could not get anywhere and why? It is because under our scheme of government, where your Federal Government has enumerated powers and everything else is reserved in the States, you have not got any room to regulate a privately owned industry. You can not fix the price. We might be glad to have you fix the price which we must charge if you will fix the price which the customers have got to pay. That is the point. And as we read the law you have not got that power under the present system of government. Now, I am quite with you as to the enormous importance of these deposits. I am quite with you on the conservation end of this story. And that is what I believe the only pathway out. I do not feel competent to express with my limited knowledge of the industry an opinion here on that subject. But, as a lawyer, that is the road you have got to travel.

Senator COUZENS. Do I understand that you oppose this bill?
Mr. BELDEN. Absolutely.

Senator COUZENS. Have you offered any substitute?

Mr. BELDEN. No, Mr. Chairman. And as I am saying, in the view which we take of the nature of the industry and the constitutional limitations which are imposed upon Congress, there is not any chance to offer a substitute or regulation which will do any good. It will just be a further interference with private ownership and control. I think there are two alternatives here: They are private management and control on the one hand or Government ownership and control on the other, and that there is not any room for the intermedi

ate course.

Senator COUZENS. You will remember that some of the witnesses when we held hearings before said that the coal industry ought to have more latitude in the way of powers to consolidate.

Mr. BELDEN. Yes.

Senator COUZENS. Do you agree with that?

Mr. BELDEN. I do not think it is necessary for you to do a thing to enable us to consolidate except just leave the industry alone. The reason why there have not been consolidations in the coal business as there have been in the automobile business is that economic and business conditions have not been such as to call for consolidations and mergers. Business goes along the lines which the industry require. When the force of conditions requires your automobile companies to consolidate they are going to consolidate.

Senator COUZENS. Oh, well, they do not consolidate unless they are profitable. You do not see the unprofitable ones consolidating very much. There is not much demand for an unprofitable concern. Mr. BELDEN. That is it, that is it.

Senator COUZENS. It is the overdevelopment of the coal industry itself that makes no demand for consolidation?

Mr. BELDEN. Yes.

Senator COUZENS. Nobody wants to consolidate with a weakling! Mr. BELDEN. That is it exactly. And no bank wants to take bonds or securities put out by a coal company.

Senator CoUZENS. Yes. But I am coming back to the question of witnesses who appeared here and said that the coal industry ought to have more power, or less restrictions, perhaps, under the Sherman Law than they now have, and that in itself would be an aid to the solution of the difficulties of the industry.

Mr. BELDEN. I know.

Senator COUZENS. You do not agree with that?

Mr. BELDEN. No. Most of the men that said that were not lawyers. Senator COUZENS. Oh, well, do you have to be a lawyer to understand consolidation in business?

Mr. BELDEN. It has to be a lawyer to discuss the question of the limits. Now lawyers as a rule are not good business men and they are not good judges of when a consolidation ought to be made, but you can not make a consolidation without a lawyer.

Senator CoUZENS. That is unfortunate.

Senator Fess. Mr. Belden, I did not quite understand that statement that you do not need any legislation.

Mr. BELDEN. I do not know whether you were here, Senator. I was calling attention to the fact that under the rule of reason established by our courts in the Standard Oil and American Tobacco and later cases they had sustained consolidations like the Steel Corporation up to companies having a production of 50 per cent of the total steel of the country. And I commented on the fact that our industry, the coal industry, is so widely held that there is hardly a company in it that has got 2 per cent. Like the Pittsburgh Coal. That if we took all our mines in Ohio and put them together it would only make about 6 per cent of the annual production, and we could do that to-day if business conditions warranted. The chairman has put his finger on the trouble

Senator FESS. You mean then that we could seek consolidation, notwithstanding the Clayton law and the Sherman law, without any modification?

Mr. BELDEN. Absolutely. That only prevents an unreasonable rẻstraint on business. And we have our rules laid down by the Supreme Court. So that in your State steel companies get together, like the Central Steel Co. and United Alloy. Consolidations in this business and that business all the time going forward, and with the approval of the Department of Justice. We usually submit a plan for consolidation to the Department of Justice, and often go and talk to the Federal Trade Commission in advance.

Senator FESS. We had this in mind. There has been no regulation with reference to production and the amount of consumption demanded. Therefore you could not reduce the production in order that we might maintain prices, because that would be in restraint of trade. Any consolidation that would lead to the limitation of production might be regarded in restrain of trade to maintain prices. And consolidations therefore could not take place unless we had remedial legislation.

Senator WHEELER. Well, they are doing that in a great many of the industries right now notwithstanding we have the Sherman antitrust law, and they are doing it, as you stated, with the approval of the Department of Justice and the Federal Trade Commission. Mr. BELDEN. Absolutely. The way it works out, Senator, is this. Let us apply it to the coal industry. We will stick to that. Let us say that two companies, each having four mines down in eastern Ohio, went together and then they had eight, and they only had business to run five. They close down three and operate the five and reduce their cost and keep within their market conditions. And

then when the demand increases they open those other mines one by one. That would be a good way out. But Senator Couzens has hit it right. To make consolidations and mergers you have got to have a market for securities. It usually takes additional capital to bring about such a merger. Somebody has got to take some bonds or some preferred stock or something. And you could not go into Cleveland or Cincinnati or Chicago and sell a coal bond for anything. It is the sickest industry, so far as securities are concerned. that there is. A Cleveland trust company would laugh at you if you came in and offered an issue of bonds on coal.

Senator FESS. Then it is your idea that if we wanted to consolidate in order to restrict the output so as to maintain some relationship between production and consumption that the way is open to do it without legislation?

Mr. BELDEN. Absolutely. Just forget this bill. The way is open right now under the present law.

Senator GLENN. Your recommendation then summed up, as I understand it, is to let bad enough alone?

Mr. BELDEN. No, sir; I say that you can sum it up in a sentence or two. Either you have got to leave the management-I am not talking about transportation-either you have got to leave the management of our mines with the companies that own them, or else you have got to take them over and own them yourselves and manage them.

Senator GLENN. Of course you know there is no possibility of doing that now?

Mr. BELDEN. No; I do not know that at all. I expect to live to see this country recognize the value of its natural resources and have an amendment in its Constitution that will enable this Government and enable this Nation to save its oil and its coal for the future generations.

Senator GLENN. You do not not think there is any reasonable possibility of Government ownership of coal mines or the railroads of the country within the next decade, do you?

Mr. BELDEN. Now you are speaking of years?

Senator GLENN. Yes.

Mr. BELDEN. I want a time limit on it. I can not answer any more than I would have said that in 1919 that within two or three years the liquor business would have been prohibited by amendment. I had not supposed it would be possible that that would go through. But this much I say, that public sentiment develops rapidly when necessity compels and some one points the way. The oil and the coal of this country are being wasted. Every man who comes on the stand tells you that that is so. What are you going to do about it? You will not remedy the situation by a bill which introduces divided responsibility into this question. You have either got to have the private management and ownership or you have got to take the whole responsibility yourself.

Senator WAGNER. I was out when perhaps that thought was developed that Senator Fess asked you about. Is it possible to have mergers of this great industry now?

Mr. BELDEN. Absolutely.

Senator WAGNER. Why, if you create a monopoly as the result of that merger you are in conflict with the antitrust law.

Mr. BELDEN. Now, this time I agree with you. But the question is: How can anybody create a monopoly in the coal industry? Just in a word. You are familiar with the rules laid down by the Supreme Court for mergers. They sustained the Steel Corporation up to 50 per cent of the production. These consolidations that are going on through the country as a rule represent 10 per cent, 15 per cent, 20 per cent of the total production of an industry. And lesser amounts. And they are approved. They are within the principle of the laws. They are approved by governmental boards.

Senator WAGNER. The rule of reason, do you mean?

Mr. BELDEN. Yes.

Senator WAGNER. But suppose that in this particular section the consolidation resulted, because of impossibility of competition with them, in controlling the price in that particular section, that would be in violation of the antitrust laws?

Mr. BELDEN. It absolutely would. And I am going to say to you that there are not enough coal men in the country to control the price of coal. If you take all the big coal companies and put them into one organization and they raise the price, all the little coal mines around through the country-and there are some 10,000 of them would immediately start up and beat it down. There is not any such thing as controlling through private industry the price of coal because of the enormous quantity of it and its wide diffusion throughout the country. It can not be done. There is not anybody in the world that is wild enough to believe that a monopoly could be created in coal that would enable them to fix the price. The most that anybody can ever hope is that if the number of producers is reduced, the number of operating mines is diminished, then perhaps we can get a fair return on capital that is invested. There is not anybody to-day going to invest a dollar in coal mines. It is just the poor fellows that have got their money in it.

Senator WHEELER. Let me ask you this. Is it not the purpose of this bill, for instance, to stop the very thing that you are speaking of? I fully agree with you that it would be very difficult to create a monopoly in coal because of the fact that not only are there a great many mines that are owned at the present time by private individuals that are not opened up, but there are vast deposits of coal upon the public domain yet which have been untouched, and, of course, if coal got up too high they could go in and take it up as they do other mines and develop them. But is it not the purpose of this bill to give the Government agency the right to say that there shall not be a mine opened up here and there shall not be any mine opened up

there?

Mr. BELDEN. I think, Senator, that that is precisely the purpose of the bill. And because you propose to vest in a commission the right to say that one company may operate and another may not, that one mine shall be closed down and another may run, I say that under your present constitutional limitations you are just as plainly invading the realm of private right as anything that was ever put through the Congress.

Senator WHEELER. Let me ask you this. Do you not think it would be in the public interest if the Government could do that?

Mr. BELDEN. If it owned the mines. I would hate to have an investment in mines and have that sort of supervision with reference to a private interest.

Senator WHEELER. Well, of course that same argument was made with reference to the railroads.

Mr. BELDEN. But not with such force.

Senator WHEELER. I think the railroads argued it with just as much force as the coal operators did.

Mr. BELDEN. Do you think so, Senator? A railroad is a common carrier, and from the earliest days has been subject to control and regulation.

Senator WHEELER. Yes; but they objected to this control, and they have constantly insisted that the Interstate Commerce Commission was just going in and invading their inalienable rights under the Constitution, telling them how they should run their business, which was entirely the province of the board of directors of the company. Mr. BELDEN. Now, Senator, let me ask you a question and then I am through. I have taken too much time already. What would you say to a commission dealing with agriculture now? You are going

to have a real tussle with that question here next spring.

Senator WHEELER. We are not going to have any tussle with agriculture because we have elected a President that is going to settle that whole thing.

Mr. BELDEN. And I think he will.

Senator WHEELER. Well, I hope he does. But I doubt it.

Mr. BELDEN. What would you say to a commission that had the power-never mind the disposition, but the power to say that your great big wheat ranch up in Montana should be shut down but the one in Dakota could run?

Your wheat re

Senator WHEELER. Well, I think that is not a parallel case. Mr. BELDEN. Oh, but it is a natural resource. produces itself. It is a stronger case.

Senator WHEELER. I do not agree with you that it is a stronger case or think it is a parallel case at all.

Mr. BELDEN. But it just illustrates what I am saying. There has been a confusion of thought here. You have been thinking of the production of coal as being impressed with a public interest. I ask you now as a lawyer: Where in the books has any court ever said that the coal business was impressed with a public interest yet?

Senator WHEELER. I do not think they have, but I think they should have.

Mr. BELDEN. Well, that may be. I sat in the Supreme Court the other day

Senator WHEELER. I think the time will come when they probably will.

Mr. BELDEN. Well, perhaps. Gentlemen, I thank you.

Senator WHEELER. Let me ask you one more question that I had in mind, and that is this: You spoke of how you were running along smoothly out in Ohio during the past year since you have had this contract.

Mr. BELDEN. Yes.

Senator WHEELER. Which has been called here the "yellow-dog" contract, or something of that sort. I am not speaking

Mr. BELDEN. That is all right, Senator. I drew it, and I take responsibility for it.