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What is to be accomplished by that?

Mr. O'NEILL. I suppose it is to provide a means whereby corporations wishing to engage in interstate commerce will agree to go along with this law, the code.

Mr. TREADWAY. In other words, it would be a punishable offense if a person engaged in the coal business used the mails in the transaction of its business in an effort to dispose of its product, unless it. would agree to this code?

Mr. O'Neill. Unless it agreed to comply with this code and law.

Mr. COOPER. As a comment on the answer given by Mr. O'Neill, you said that it meant the corporation would agree; but as a matter of fact it is provided by law they will do it. There is no agreement on their part.

Mr. TREADWAY. Yes; it is provided by law they must come in.
Mr. COOPER. It is provided by law they will do it.
Mr. O'NEILL. Yes; it is required by law.

Mr. TREADWAY. That is a much stronger, more forceful effort to require compliance than under the tax provision. Here coal producers cannot even write a letter without joining the code.

Mr. O'NEILL. If Congress passes a law, it wants them to comply with it.

Mr. TREADWAY. We have passed a whole lot of them within the past 2 years of the Democratic administration. If it is going that far, Lord help Congress and the people.

Mr. Vinson. The trouble was we did not pass any in the Hoover administration, but just went to pot.

Mr. TREADWAY. Thank the Lord we did not pass any of them. We never will.

Mr. Vinson. Mr. O'Neill, in regard to the names of the gentlemen constituting the Shoreham committee, you have there the surname and the State. I would like to have their names, addresses, and the companies with which they are associated. That does not paint the picture that I want to get.

Mr. Hill. That will be supplied for the record. When you revise your remarks, put it in as Mr. Vinson has requested.

Mr. O'Neill. All right; I will do that. Thank you.
(Mr. O'Neill subsequently submitted the following list:)

LEGISLATIVE COMMITTEE OF THE NATIONAL CONFERENCE OF BITUMINOUS COAL

PRODUCERS

Charles O'Neill (chairman), vice president, Peale, Peacock & Kerr, Inc., New York City (mines in Pennsylvania).

Heath S. Clark, president, Rochester & Pittsburgh Coal Co., Indiana, Pa. (mines in Pennsylvania).

H. L. Findlay, vice president, Youghiogheny & Ohio Coal Co., Cleveland, Ohio (mines in Ohio, Pennsylvania, and West Virginia).

E. H. Davis, chairman, New York Coal Co., Columbus, Ohio (mines in Ohio and West Virginia).

William Emery, Jr., president, Cambridge Collieries Co., Cleveland, Ohio (mines in Ohio).

C. H. Mead, president, C. H. Mead Coal Co., Beckley, W. Va. (mines in West Virginia).

John L. Steinbugler, president, Wm. C. Atwater & Co., New York City (mines in West Virginia).

Clarence W. Watson, receiver, Elk Horn Coal Corporation, Cincinnati, Ohio (mines in Kentucky).

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Irvin Davis, president, Hatfield-Campbell Creek Coal Co., Cincinnati, Ohio (mines in Kentucky and West Virginia).

Ralph E. Taggart, vice president, Stonega Coke & Coal Co., Philadelphia, Pa. (mines in Virginia and Pennsylvania).

E. C. Mahan, president, Southern Coal & Coke Co., Knoxville, Tenn. (mines in Kentucky and Tennessee).

D. W. Buchanan, president, Old Ben Coal Corporation, Chicago, Ill. (mines in Illinois, West Virginia, and Arkansas).

George W. Reed, vice president, Peabody Coal Co., Chicago, Ill. (mines in Illinois, Indiana, Kentucky, West Virginia, and Oklahoma).

Hubert Howard, president, Binkley Coal Co., Chicago, Ill. (mines in Illinois, Indiana, Iowa, and Arkansas).

William Taylor, vice president, Valley Camp Coal Co., Cleveland, Ohio (mines in Pennsylvania and West Virginia).

Scott Stewart, president, W. J. Rainey, Inc., New York City (mines in Pennsylvania).

Joseph Pursglove, president, Pursglove Coal Mining Co., Cleveland, Ohio (mines in West Virginia).

John B. Brunot, president, Irwin Gas Coal Co., Greensburg, Pa, (mines in Pennsylvania).

Fred S. McConnell, vice president, Enos Coal Mining Co., Cleveland, Ohio (mines in Indiana).

Mr. JENKINS. Mr. O'Neill, what are your ideas as one of the leading coal producers of the United States with reference to this title II, “The Bituminous Coal Reserve"? How are you going to accomplish that reserve of minerals?

Mr. O'NEILL. I take it that it will have to be done under the direction of the Commission, of course. In the original set-up of title II, which was proposed by the operators so far as I know, we assembled engineers who made the original estimates as to what lands ought to be acquired, and placed a value that they thought they could be secured for, as if they were buying them for their own use.

Mr. JENKINS. You use the word “reserves." Literally it means to reserve these lands for future use, but that is not the purpose in this bill. The purpose in this bill is to get them out of production, is it not?

Mr. O'Neill. It is to get them out of production, and reserve them for future use. I think that is a reserve, yes, also for future use.

Mr. JENKINS. There are two ways to cut down production. One is to cut down the percentage of production of everybody.

Mr. O'NEILL. That is right.

Mr. JENKINS. To fix some sort of a plan that will cut down production unless they comply with the codes, or something of that sort. Here is a plan which looks to me as if it is employed to cut down production by taking certain people out of production. When you come to take these people out, do you not think you are going to have lots of trouble in determining whom to take out? For instance, suppose they come and want to take your plant out?

Mr. O'NEILL. They can do that only by condemnation proceedings. We have some we will sell them without much trouble.

Mr. JENKINS. If they would pay you anything like what you would like to have for them you would be glad to go out?

Mr. O'NEILL. That is right.

Mr. JENKINS. But if you take them out on the basis of production in the coal business, if you are trying to legislate for the benefit of all the people in the country, if you think the people of the country have an interest in the coal business, then you ought to take out of production coal lands with some regard to the best interests of the people generally, ought you not?

Mr. O'NEILL. That is right, and I think that the reserves that would be acquired today would become valuable as time went on, when the better and richer seams were worked out.

Mr. JENKINS. That will never be in your day or my day.

Mr. O'NEILL. Yes; it will. I would say that the high grade coal, smokeless coals of central Pennsylvania, New River, and Pocahontas, will be pretty scarce in the next 30 years. We may not be here that long; I hope we are. But that is not a very long time.

Mr. JENKINS. That is all.
Mr. Hill. Thank you, Mr. O'Neill.
Mr. T. G. Essington.

Mr. ESSINGTON. May I ask that Mr. Steinbugler be heard next? He is a substantial operator as well as a lawyer.

Mr. Hill. Yes. Mr. Steinbugler.

Mr. Essington. He will explain the marketing provisions. STATEMENT OF JOHN L. STEINBUGLER, REPRESENTING THE

NATIONAL CONFERENCE OF BITUMINOUS COAL PRODUCERS Mr. Hill. Please state your name, address, and the capacity in which you appear, Mr. Steinbugler.

Mr. STEINBUGLER. My name is John L. Steinbugler. I am a lawyer, and president and general counsel of William C. Atwater & Co., of New York City. William C. Atwater & Co. is the managing agent and controlling owner of the American Coal Co., of Alleghany County, and the Mill Creek Coal & Coke Co., both operating coal mines in the Pocahontas field in West Virginia. I am also counsel and an officer of tbe operating companies.

Mr. JENKINS. How much production do you represent?

Mr. STEINBUGLER. About 1,500,000 tons a year. I appear as a member of the general committee of the National Conference of Bituminous Coal Producers, of which Mr. O'Neill is chairman.

Mr. Hill. Referred to as the “Shoreham conference''?
Mr. STEINBUGLER Yes, sir; the "Shoreham conference."

I also appear here as a member of the committee of lawyers who assisted the operators' committee in drafting the marketing provisions and in assisting in the revision of the other provisions of H. R. 8479.

Mr. Vinson. What character of coal do your companies produce?

Mr. STEINBUGLER. Pocahontas coal; semibituminous coal. I wish at this point, while I still have it in mind, to make clear some things that I think were not entirely clear in the discussion before your committee yesterday, and that has to do with the consuming market areas that are set up in the pending bill.

The market areas are not defined in the bill. Their territorial limits are not prescribed. The bill contemplates various geographical divisions. There is the statutory producing district set out in the appendix in the bill. There is within each of such statutory districts a division for producing fields, so called, which will be defined by the local district boards. There is a minimum price area, which is set out in the bill, and which consists in most cases of a group of the statutory districts. But finally, there is the consuming market area,

in which market area prices are to be coordinated, in the language of the bill, and such common or consuming market areas will be established by the Commission presumably to follow the same system as under the N. R. A. code. That is the intention of the draftsmen of the bill.

The bill as it lies before your committee I think follows very closely indeed the entire scheme of regulation under the N. R. A. coal code. So far as I have had anything to do with it I have tried to make it conform as closely as possible to the N. R. A. regulation. We have attempted, and I think we have measurably succeeded, in writing into the bill what was not in the code under N. R. A.-two things, perhaps more, but two outstanding things:

The basis of price fixing about which Mr. Vinson asked Mr. O'Neill a little while ago was not at all defined under the N. R. A. code. There was a general statement in the code that the prices were to be fixed so as to maintain the wage scales which were described under the code, to give employment, and to carry out the purposes of the law, of the N. R. A. Act. But as to its standards sufficiently definite to stand up under attack as not constituting too great a latitude, too great a discretion in the N. R. A. itself, if that had been the only question involved I have always had the feeling that the statute was deficient in that respect.

In the bill before us we have tried to set up something very much more precise, a philosophy of min mum price fixing which lends itself to a very accurate determination in advance of the method of approach to the price fixing and of the prices that are to come out as the result of the act of the Commission in fixing minimum prices under the code.

In other words, that arrangement was intended from the standpoint of the law so as to have something to which the law might definitely tie in the event there was a question and a challenge as to whether there was here a provision for the establishment of prices that left a latitude to the Commission for discretion which could only be exercised by the Congress.

As to the method of price fixing, Mr. O'Neill said, and I wish to confirm it, that there is no substantial difference intended in H. R. 8479 as against what was done under the code except that the bill establishes the general level of prices, whereas the general level of prices was not established under the N. R. A. code.

The provision for coordination, under subsection (b) of the marketing provisions, is intended and I think has the effect of carrying forward exactly what was done under the coal code. It charges the district boards in the first instance with the responsibility of attempting that coordination themselves; in other words, relating their prices as between the various districts so as to achieve fair competitive opportunity in what is referred to as the "consuming market" or the "common market” areas.

Failing of agreement between these district boards, or even following agreement between the district boards, on complaint of some producer or some other district board that the result achieved is not fair to him or to it, there is provision for appeal to the Commission, and the Commission finally is charged with the duty of making the coordination of prices contemplated by subsection (b) of part II

namely, a relationship of prices which will give fair competitive opportunity to all the coal in these various competitive minimum-price areas.

The bill goes no further in that respect than to provide that there shall be fair opportunity for competition, that prices so arranged as between district and district in these common consuming markets shall be fair and equitable, as to all districts and all producers, and shall not be unduly preferential or prejudicial as to any of them. But the purpose of the law, in my opinion, is clear enough. It is to maintain something that is historically defensible as representing fair competition and fair participation by the various districts in common markets.

There is an express reference in the bill to the relative market values of the coal as constituting the criterion for the fixing of the various prices as between mine and mine. In other words the bill contemplates that prices shall be fixed mine by mine, so that as to all of them there will be in each district a fair opportunity for participation and competition in the markets into which their district ships its coal.

As to the price level:

The weighted average cost of the coal of the minimum price area is the standard set up in the bill toward which all of the minimum price fixing is directed. The Commission is authorized in order to bring about the proper relationship in coordination so as to maintain fair opportunity for competition between districts to go below, though not substantially below that average cost figure as to the coal from certain districts, and as to other districts it is authorized to go above that average cost figure, in order to establish between the two districts in question a proper price differential which will maintain their competitive position in a common consuming market-but all with the purpose of coming as close as is possible in achieving a proper coordination of prices to a realization for all the coal equal to the actual total cost of producing it all.

That, briefly, is the philosophy of the minimum price fixing in the bill.

As to maximum price fixing, the Commission is authorized when it decides in the public interest that maximum prices should be fixed to do so, and to fix those maximum prices at a uniform advance above the minimum prices which are in effect at the time, and to advance the prices no further than is necessary to yield a reasonable profit above the minimum prices fixed for the minimum price area in which the price is applied.

Mr. VINSON. When and under what circumstances would maximum prices be fixed ?

Mr. STEINBUGLER. The language of the bill, as I recall, is "when in the judgment of the Commission the public interest requires it," which means to me when prices begin to rise substantially above the minimum prices fixed under the bill.

Mr. Vinson. Speaking about the index price of all commodities rising?

Mr. STEINBUGLER. No. The minimum prices fixed under the pending bill will be the actual prices for coal, just as they were under N. R. A. They were minimum prices, but they were the actual prices for coal. There were practically no others.

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