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Mr. O'NEILL. You take the Clearfield district in Pennsylvania. I am most familiar with it. We have what they call the base rate, or the low rate, to the Middle Atlantic and the New England States.
Mr. VINSON. Let us take the Lakes. I am more familiar with that.
Mr. O'NEILL. The Pittsburgh district and Ohio have the base rate to the Lakes for transshipment by vessel over the Lakes, and the other districts are differentially higher. Now, of course, the lake prices have to be coordinated, Pittsburgh and Ohio, so that the high-volatile fields of southern West Virginia and Kentucky and the low-volatile fields of southern West Virginia, who are all lake shippers, can maintain their business on the relative market value of their coals as compared with Pittsburgh and Ohio.
Mr. Vinson. When you say “coordinated” do you mean that the price that they will receive for it will be suc as to care for the differential in transportation?
Mr. O'NEILL. Substantially so.
Mr. VINSON. When you say “substantially”, what side are you on? I mean, are you on the plus or minus side?
Mr. O'NEILL. In some markets we are on the minus side; in some we are on the plus side-depending on where we are shipping.
Mr. Vinson. Let us just take your Pittsburgh-Ohio field to the Lakes, and take the southern fields, Kentucky and West Virginia, to the Lakes. When you say those prices should be coordinated, do you mean that this differential—what is it, 35 cents, now?
Mr. O'NEILL. Thirty-five.
Mr. Vinson. Thirty-five cents—that 35 cents a ton added charge in freight from the Kentucky and West Virginia fields to the Lakes should be included so that the Kentucky and West Vriginia operator will get that added transportation charge and will not have absorbed
any of it?
Mr. O'NEILL. He may have to absorb some of it, but the 35 cents must be considered in relation to the market value of the coals. Now, the southern coals that go the Lakes as a rule bring a higher price at the mine than the Ohio coals, for instance.
Mr. Vinson. How much higher price, compared to this differential? I am interested in this question, now, because I do not want to sit here and see something put over on the Kentucky-West Virginia fields, because that not only would destroy the fields, but it would put out of business the mine worker whom it is also desired to help.
Mr. O'NEILL. Under the code of fair competition we coordinated prices with the Pittsburgh district.
Mr. Vinson. And we shipped to the Lakes in competition with Pittsburgh and Ohio, did we not?
Mr. O'NEILL. That is right. The freight-rate differential over Clearfield is 22 cents a ton, we will say, to Albany, N. Y. The difference in the value of our coal was sufficient that we established a price that made a difference at Albany-f. o. b. mine, I am talking of-of 30 cents in favor of the Pittsburgh mines. In other words, we gave them the differential in freight and 8 cents additional for what they considered to be the superior quality of our coal, in order to make them competitive with us at Albany. Coordination agreements of that kind were effected in practically all marketing areas.
Mr. Vinson. Is there any language in this bill that would prevent the same sort of coordination, whatever that is, that we had under N. R. A?
Mr. O'NEILL. I think that the price provision in paragraph (a), where you come in with a schedule of prices coordinated between the various coals in each of these districts on one base price, it is going to eliminate many of the difficulties that were encountered under the code of fair competition, where it was left to the individual judgment, or, rather, to the judgment of each of the code authorities, as to how they established their prices.
Mr. VINSON. I hope there are a lot of advantages here, Mr. O'Neill, over the N. R. A, set-up.
My question to you was whether or not there was anything in this marketing agreement in this bill that would prohibit or prevent the coordination that prevailed during the N. R. A. regime, that permitted Kentucky and West Virginia coal move to the Lakes in competition with Pittsburgh and Ohio.
Mr. O'NEILL. No; I do not think so.
Mr. O'NEILL. I think it will permit and require that kind of coordination.
Mr. Vinson. There is nothing, so far as you know, in here that will be of detriment to the Kentucky-West Virginia field in Lake competition over that which was in the N. R. A. set-up.
Mr. O'NEILL. Not a thing, and, as I say, I think it is on a fair basis, and I think that the Commission set up here with the powers granted the National Bituminous Coal Commission in this bill, and the responsibilities, plus the history under the code, is such that I cannot conceive of any tribunal of that kind going and changing under a law of this character things that were voluntarily done by the operators themselves under the code of fair competition.
Mr. Vinson. Wherein are there advantages in the present coal legislation over the N. R. A. history? Mr. O'NEILL. The whole bill, you mean? Mr. Vinson. You say there are some advantagesMr. O'NEILL. I think that this bill is enforceable. Mr. VINSON. In this bill that we did not have in N. R. A.?
Mr. O'NEILL. I think that the bill by reason of its provisions and penalties for enforcement is going to be much superior to what we had under the National Industrial Recovery Act, granting that we made great progress under the National Industrial Recovery Act until this year. I think the enforceability of this bill is one of the things that appeals
I think its structure is a little better, more practical, and I think that is largely based on the experience that we had under the code, and improves the code. So far as the establishment of labor relations is concerned, I cannot conceive of how fair competition can be maintained in this industry without proper relationship of wages and proper standards of wages.
Mr. TREADWAY. Mr. O'Neill, I believe you were one of the so-called "Shoreham conferees"?
Mr. O'NEILL. That is right, Congressman. Mr. TREADWAY. You had considerable to do with the preparation of this bill, did you not?
Mr. O'NEILL. I was on the committee. I am chairman of the committee.
Mr. TREADWAY. You, of course, are very familiar with page 5, the tax on bituminous coal, and the bituminous coal code on page 6, are
Mr. O'NEILL. I am familiar with its provisions; yes.
Mr. TREADWAY. To what extent will the drawback of 99 percent of the tax of 25 percent influence coal operators like yourself toward adopting the code in section 4 and becoming a part of this organization?
Mr. O'NEILL. I think instead of being 99 percent it will be 100 percent; that 100 percent will join the code.
Mr. TREADWAY. You feel it is a voluntary joining, or do you think that there is sufficient inducement under the drawback for everyone to want to cover themselves into it?
Mr. O'NEILL. I think there is sufficient inducement for everybody to want to come into it.
Mr. TREADWAY. In other words, you do not feel it would be voluntary in some instances?
Mr. O'NEILL. It would be in my own case.
Mr. TREADWAY. In other words, you would make such an agreement with your competitors without the compulsion? You need not have the tax, from your viewpoint?
Mr. O'NEILL. If they were all like me, but
Mr. TREADWAY. Certainly; that is what I said. But not being like you and willing to join in this group, you feel that those that are willing to stand for that sort of tax, with the rebate, ought to force their competitors to cooperate with them?
Mr. O'NEILL. No; I do not believe that.
Mr. O'NEILL. I believe this, that if we are going to have order in this industry, we have to have a bill that will compel compliance with a decent set of standards, and that must be done by the Congress, not by me.
Mr. TREADWAY. Of course, this is undoubtedly drawn with the view, in the judgment of those who drafted it, of avoiding the Supreme Court decision against price fixing, codes, and so forth, is it not?
Mr. O'NEILL. Avoiding it?
Mr. TREADWAY. The Supreme Court decision of 3 weeks ago practically nullified the code system, did it not?
Mr. O'NEILL. The Schechter case? That is my understanding. I am not a lawyer.
Mr. TREADWAY. There is no use designating the name; we all know what it is.
Mr. O'NEILL. It did destroy the codes.
Mr. TREADWAY. It did destroy the codes. Now you are setting up a similar code as effective in your industry, and using compulsion to force your associates into it, are you not?
Mr. O'NEILL. I do not know whether this is an agreement or whether it is compulsion.
Mr. TREADWAY. A rose by any other name is just as sweet; call it what you have a mind to. It is the result that I am referring to.
Mr. O'NEILL. If it requires compulsion, I would say it is needed and necessary. If Congress believes with me, they will give it sufficient compulsion to make everybody obey the law.
Mr. TREADWAY. Irrespective of Supreme Court decisions and otherwise?
Mr. O'NEILL. I cannot argue the law. I will have to consult my lawyer. I am not a lawyer, I am a coal operator.
Mr. VINSON. The Schechter case destroyed the codes that could be set up under the National Industrial Recovery Act. That opinion did not say that under other acts of Congress a code could not be set up that would be valid.
Mr. TREADWAY, I hope, Mr. O'Neill, that when this code is argued again before the Supreme Court, for subtlety of expression you will employ my good friend Vinson here to get out the language for you. I know he will be a great help to you; but, of course, it would be unfortunate if he were still in Congress at that time.
Mr. O'NEILL. Yes; it would.
Mr. TREADWAY. You see what I am aiming at, Mr. O'NEILL, is to see to what extent you and other operators like yourself feel that you should compel people to agree to something that is repulsive to them.
Mr. O'NEILL. I do not know what is repulsive to anyone, but here is my opinion: Unless we have a law that will support decent standards as to prices, there can be no order in this industry, and if this industry is not subject to regulation by Congress there is going to be no peace in this industry, and there will be chaos in it. I think Congress will have to do it. There is no possibility of making a wage agreement at this time.
I am not going to discuss interstate commerce or intrastate commerce, but I will say this frankly, that the smokeless operators of West Virginia, where you people buy much of your coal in New England, will not make a wage agreement unless they know what the smokeless operators in central Pennsylvania, where New England buys a great deal of its coal, are going to pay, and vice versa.
Mr. TREADWAY. Just one other thought, if I may. I see your embarrassment in making direct answers to the line of thought that I am endeavoring to lead you into. I do not blame you for wanting to keep away from it. But now let me ask you this, and I think this is quite pertinent:
What effect, if any, would the adoption of this tax and the conditions provided for in this bill have upon the price of bituminous coal to consumers?
Mr. O'NEILL. My idea about the price provision is that it will in general lower the level of prices that will be established under this code below those in effect under the code of fair competition on May 27, when the Supreme Court struck down the codes.
In other words, the buyer of coal in New England, as I view this price fixing provision, is going to get the benefit of the average cost bearing on the minimum price schedules of the lower priced high volatile districts of southern West Virginia and Kentucky, Illinois, and Indiana, as against the higher cost in the mines in the east, New River, Pocahontas, and central Pennsylvania, where you buy your coal. And as it operates, as I see it, that constant bearing down upon cost by elimination of inefficient mines for a period of time, if the bill is successful and operates, will have a tendency for the average cost of all these minimum price areas to lower until only enough people are left in business to supply the consumption demands of the country.
Mr. TREADWAY. Then as compared to the price-fixing that was set up under the code, your judgment is that this arrangement would be beneficial to consumers?
Mr. O'NEILL. I think beneficial to the consumers.
Mr. TREADWAY. Then why have not any consumers shown an interest in this measure?
Mr. O'NEILL. I do not think the consumers understand the measure.
Mr. TREADWAY. We understand that 65 percent of your people and 99 percent of labor are for it. What about your customers ?
Mr. O'NEILL. I might say this, Congressman:
So far as our group is concerned, we have not attempted to interest the customers or consumers in this bill. The people who are opposing the bill have made many efforts to do so. It is my judgment that if the consumers want peace in this industry, want coal at a fair price based upon sound economy, this bill will give them just that thing.
Mr. CROWTHER. Is it not the general supposition that the Members of Congress are supposed to represent the consumers?
Mr. TREADWAY. Is that addressed to me?
Mr. TREADWAY. I have been here some time, and I would say to my colleague that that has been my object over a long period of years, so far as my district is concerned.
Mr. CROWTHER. I know the gentleman is most statesmanlike in that.
Mr. TREADWAY. It is selfish. Every other Congressman wants to work for his district.
Mr. O'NEILL. This is the committee: "Charles O'Neill”-
Mr. O'Neill. The special legislative committee of the National Conference of Bituminous Coal Producers, the “Shoreham conference" that Mr. Vinson wanted in the record; the committee which cooperated in the preparation of this bill.
Mr. Hill. It may go in the record.
I have not had the opportunity to give this bill such study as it requires. I have hit only the high spots. Would you mind giving us your impression of section 13 on page 37? Just what does that mean? I will read it:
Every corporation engaged in mining bituminous coal which ships its coal in interstate commerce either directly or through a subsidiary or an agent, or which uses the mails or other means of communication in interstate commerce to dispose of such coal, shall be subject to, and, as a prerequisite to its right as a corporation to engage in interstate transactions shall file with the Commission its acceptance of the provisions of title I of this Act.