Imágenes de páginas

Mr. Hill. We would be glad to have your statement. We want to get information here. I did not mean to curtail you in your presentation of your case.

Mr. O'NEILL. The depression for the coal industry began in 1921. We have grown progressively worse since that time until May 1933. During the boom year of 1928, the industry, as shown by the Bureau of Internal Revenue reports, showed a net deficit of all corporations of 24 million dollars; in 1929, 12 million dollars; in 1930, 42 million dollars. The 1931, 1932, and 1933 figures I do not have, but they were progressively worse.

During the conferences when the code of fair competition was under consideration by the N. R. A., it was estimated that the losses throughout the Nation that were being sustained on the average over all of the companies were 30 cents a ton, or a loss of over $100,000,000 a year.

General Johnson advised me that he had a report that at that time the industry was within 12 months of total bankruptcy.

Mr. Vinson. What was the price that was used to develop that 30-cents-per-ton loss?

Mr. O'NEILL. The average realization in Division No. 1 at that time, and as disclosed by N. R. A. figures which have been furnished to me since I have been in the city, was $1.03 a ton, and for the total tonnage the losses were about 30 cents on that basis.

Mr. Vinson. In other words, you mean in relation to that $1.03 a ton that it was selling for 73 cents a ton?

Mr. O'NEILL. No; it was selling for $1.03 a ton, but the cost was about $1.33 a ton. In other words, the loss was about 30 cents a ton.

Mr. COOPER. You mean that it cost you $1.33 a ton to produce it?
Mr. O'NEILL. That is right.
Mr. COOPER. And you were losing about 30 cents a ton?
Mr. O'NEILL. Thirty cents in May 1933.

Division No. 1 is the mines in Pennsylvania, Ohio, West Virginia, Virginia, Maryland, Kentucky, and Northern Tennessee, which produces about 72 percent of the total production of the United States.

Mr. COOPER. Was that $1.33 per ton the cost of production under the provisions of the coal code under the N. R. A.?

Mr. O'NEILL. No, that was prior to N. R. A.

The Natural Resources Board issued a statement which I would ike to quote in the record:

Stabilization of the coal industry is needed to protect capital. In 1929, according to the Treasury statistics of income, there were 1,437 bituminous coal companies producing approximately 46 percent of the total output, that operated at a loss, and their deficits exceeded the income of the companies making a profit, so that the industry as a whole reported a net loss even during that year of boom. Virtually no other business covered by the Treasury's record showed such widespread money losses as the mining of bituminous coal.

When we had reach that point, that Judge Warrum touched upon a report here yesterday that the preventable waste in the industry had been estimated at 150,000,000 tons per year. During the period of 1930 to 1933, I would say that millions of tons of coal were lost permanently by the flooding of mines, the withdrawal of all equipment and tracks, and such mines being allowed to fall in, and the pillar coal that could have been taken out of those properties was lost forever so far as we here are concerned. That waste of a natural resource will recur if conditions are allowed to go back to unrestricted competition. The industry had unrestricted competition from 1921 to 1933, and that was the result.

In 1933, in division no. 1, the wages paid to mine workers were a maximum of about $3, and less than $1.50 per day. The wages cost per ton in May 1933, was 61.4 cents a ton, and the hours of labor were a minimum of 8 and a maximum of 13.

In division no. 1, which I have described to you, the average wages per day received by miners were slightly in excess of $2 per day. Bankruptcy and tax sales and abject poverty were the rule throughout the entire region.

With the adoption of the code, collective bargaining was restored in the industry substantially in all those fields that had formerly been unionized and had departed from the union, and was established in many sections of the country which hitherto had been nonunion.

On October 2, 1933, the wage scale was placed on a basis of 94 cents a ton wages cost or an increase of 53.1 percent in pay to the mine workers. An 8-hour day was established and a 5-day week. That continued through until April 1, 1934, when the 7-hour day was established and the 5-day week, and the wage cost per ton increased to $1.15; or an increase to the mine workers of about 88 percent over Mav 1933.

Converting that into dollars, the miners, 300,000 of them in division no. 1, received in wages in 1934, above those that were being paid in 1933, $121,000,000, or about $400 a year increase for each worker in that area, and on a per-day basis representing an increase in wages of about $2.70 per day.

Those rates now are $5 per day, the base rate, for 7 hours, north of the Ohio River, and $4.60 a day for 7 hours south of the Ohio River in the area I have just described.

The results in division no. 3, which is Alabama, southern Tennessee, and Georgia, were about the same. Its labor cost in May 1933, was 74 cents, and under the code from April 1, 1934, to December of 1934, $1.39, or a gain of 65 cents a ton to the worker, or abour $330 a year. These gains were made in a year of depression and through regulation.

In addition to these gains made by labor, I think it might be well to say that the 30 cents a ton loss that the industry was sustaining in May 1933, was entirely wiped out, and for the first year when it was on its own resources without the aid of strikes in foreign countries or the anthracite mines, or coal-car shortages on railroads, the industry had a margin of about 2 cents under these circumstances.

Mr. VINSON. What about division no. 2? Mr. O'NEILL. Division no. 2 showed substantial gains, Indiana and Illinois, but they were on a higher wage scale than divisions 1 and 3, and there was not the marked change as to labor in division no. 2 that there was in divisions 1 and 3.

Mr. Vinson. What division or divisions did that $121,000,000 to which you refer cover?

Mr. O'NEILL. The $121,000,000 increase was in division no. 1, the miners in Pennsylvania, Ohio, Maryland, West Virginia, Virginia, Kentucky, and northern Tennessee. In division no. 3, Alabama, southern Tennessee, and Georgia, the increase was about $6,000,000. Those two divisions represent about 75 percent of the total production of the country.

Mr. VINSON. When you take your profit in the operating, are you using the same division?

Mr. O'NEILL. Division no. 1 was about 2 cents. I can furnish the figures as to divisions 2 and 3. They are extant and compiled by the N. R. A., and can be easily obtained for the record if desired.

Mr. VINSON. What are they?
Mr. O'NEILL. I cannot recall them, but I can get them for you.

Mr. Vinson. If you please; I would like to have you insert them in the record.

Mr. O'NEILL. All right, I will do that.

About November 1934, this code began to break down. There had been no enforcement of the code, so far as price cutting was concerned. On December 11, the United Mine Workers wrote a letter to the National Recovery Administration, calling their attention to the fact that the price structure was breaking down, which would endanger the possibility of the renewal of a wage agreement.

Certain amendments were made to the code of fair competition in January 1935 in the hope that this price cutting could be stopped and stability restored to the basis that had brought about the very favorable returns I have referred to. It was obvious by January 15, however, that the code structure was crumbling very rapidly, and in March of this year, when the Massachusetts State bids were opened, the prices there disclosed, in the public bid, were from 30 to 50 cents a ton below the established code prices.

Mr. Vinson. Did the fact that April 1 was coming along have anything to do with it?

Mr. O'Neill. I think the fact that June 16 was coming along had something to do with it.

Mr. Vinson. Did not the fact April 1 was coming along have something to do with it?

Mr. O'NEILL. I do not think April 1 had much to do with the break-down of the code. That was the end of the wage agreement.

Mr. Vinson. Was it not understood that there would be difficulty in executing a similar wage agreement on April 1?

Mr. O'NEILL. Undoubtedly so.
Mr. Vinson. Do you not think that had some effect on it?
Mr. O'NEILL. On the prices?
Mr. VINSON. Yes; on the part of the operators.

Mr. O'NEILL. I think the prices had the effect on the break-down of the possibility of a wage agreement. That is, the cutting of the code prices made it impossible for anyone to contemplate the successful negotiation of a wage agreement under these circumstances.

I would say, Congressman, that the New York State bids were opened on June 4, and to show you the destructive price-cutting that was taking place, there were 43 bids for one piece of business at Islip, Long Island, and there were 6 of those bids at code price, and 37 below code price, which ranged below code price from 13 to 68 cents a ton.

It is my judgment, as one who sells coal, that the current prices today in the market show a greater loss between cost of production and the current price than they did in May 1933, when they were 30 cents a ton less than cost.

Mr. Vinson. For what period did that contract to which you have referred apply?

Mr. O'NEILL. This one here?

Mr. Vinson. For what period did the contract which you mentioned as having price cutting

Mr. O'NEILL. The New York State contract?
Mr. VINSON. Yes; when did it begin?
Mr. O'NEILL. It will begin on July 1, and extend to June 30, 1936.
Mr. Vinson. July 1 this year?
Mr. O'NEILL. This year, until June 30 next year.

The bids on New York State business indicate that there is some destructive price cutting for all of their plants. They buy about 450,000 tons of coal a year. It is my judgment that they will save over $275,000 in the price that they will pay for their coal this year as compared with what the State paid for it last year under the same

wage scale.

It is my opinion that with this serious situation as to price cutting there is no possibility whatever of the negotiation of a wage agreement, because persons who bid—and here is one company which bid $1.29 on a piece of business, when I happen to know that their cost is $2 a ton under the present wage scale, of course, it is intended that when people take business at that price they must be depending upon wage cutting in order to break even.

The industry so far as present prices is concerned, as I have said before, is worse off on today's basis than it was in May 1933. And when the consideration of the making of this wage scale is considered-and I happen to be one of the committee that is trying to negotiate that wage scale, and was at one time hopeful that we could by the amendments to the code and the hope that it would be extended upon a basis that would make it more enforceable, conclude that agreement. I can say here today that I have absolutely no hope of concluding a wage agreement on the present level of wages unless there is something done to stabilize prices in this industry. I hope, and the conference that I represent here hopes that Congress will give us a law, if they can, that will stabilize prices so that wages may be decently maintained.

Mr. Hill. Do you think this proposed legislation will do that?

Mr. O'Neill. I have every belief that it will do that, Congressman. I believe that it is an enforceable bill. I believe that its marketing provisions are practicable and are written in a way that is sound from a public policy standpoint; that it will maintain decent and fair competition upon which proper wage standards can rest. Without that, in our industry, with no competitive controls whatever except the burden of over-productive capacity, no wage standards can be maintained.

Mr. Hill. I understand that the marketing provisions in this title I largely, at least, reflected the desires and attitudes of the operators.

Mr. O'NEILL. That is right.
Mr. Hill. Do you care to discuss that?
Mr. O'NEILL. I am perfectly satisfied to discuss it.

Mr. VINSON. What part did you have in the formulation of part II, the provision of H. R. 8479 that deals with marketing?

Mr. O'Neill. I think that the committee of which I am chairman, for which I am here speaking, with our attorneys, practically wrote this entire provision, except the sections dealing with marketing agencies. Mr. VINSON. What section is that? Mr. O'NEILL. Page 8, section 4. It is not in part II.

Mr. Vinson. In addition to part II, that which is headed “Marketing”, what other portions of the bill did your committee write?

Mr. O'NEILL. They collaborated in the writing of the code and in all parts of the bill, although the labor relations provisions were largely those prepared by the United Mine Workers of America.

Mr. VINSON. Who composed this committee?
Mr. O'NEILL. This committee of 18, the special committee?

Mr. Vinson. The committee on which you served, and which is responsible for the marketing sections of this bill.

If you do not have it at your finger tips, you can put in the names of those gentlemen, and with what operating concern they are connected. That will give us a general picture of them.

Mr. O'NEILL. I think I could repeat most of them, if you want them now.

Mr. Vinson. No; do not take up that time now.
Mr. O'NEILL. All right.

Mr. Vinson. I am interested to know the changes in respect of marketing throughout the history of the Guffey-Snyder bill up to and including the language which we have under consideration in H. R. 8479.

Mr. O'NEILL. The principal change in the marketing provisions is in section (a) of part II, where the standard for establishing the minimum price is contained, beginning on line 21. I think the original Guffey bill provided for a minimum price of 90 percent of the lowest cost mines excluding the 10 percent highest cost mines, and excluding from cost certain items, I think depreciation, depletion, and selling expense.

Mr. Vinson. Would it be asking too much for you at this point in the record to clip from the original Guffey bill the language that sets forth the manner and method in that bill of reaching the minimum price, and insert it in your remarks? I am interested in following this thing through and seeing the different philosophies surrounding the minimum price feature, because as I view it, that is a basic, vital point in this legislation. You will agree with me on that, I take it.

Mr. O'NEILL. That is right; I do believe that.

Mr. Vinson. There have been a number of changes. Operators have had conferences, and they have agreed with operators to make changes, so I have been told.

Mr. O'NEILL. That is right.

Mr. Vinson. Then other operators would come along and they would agree upon other changes. Those agreements and conferences were made, naturally, behind closed doors. Then, as I understand it, your group met with the Mine Workers, and they agreed finally with the language which we have here.

Mr. O'NEILL. That is right.

Mr. Vinson. And in addition to that, probably in some of the other bills, other people may have agreed upon what a minimum price was. That is correct; is it not?

« AnteriorContinuar »