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In its present aspect, the threatened stop in the operation of the mines is unique in its industrial relationship. Some of the southern operators accuse the United Mine Workers and the northern operators of being willing to bring on cessation of work simply to force congressional action on the Guffey bill.
If the conclusions expressed in these articles are true, they illustrate again the value of a free press that dares to publish to the Nation the existence of a situation which is repugnant to the principles of a free people. If it should come to pass that the Congress of the United States can be coerced or intimidated by any organized minority in the Nation to enact laws at the bidding of that organized minority, perhaps under threat of punitive action by that group, then the law-maker power of the country will have been taken from Congress and will have passed to the group wielding such power of dictation.
When the representative and responsible press of the Nation publishes articles containing statements such as I have just read there is usually “fire behind the smoke", and the manipulations and jockeyings incidental to any such proposed legislation may properly be examined into as well as the actual draft of the proposed bill itself.
The coal monopoly bill, as introduced in the Senate by Senator Guffey originally as S. 1417, was from the beginning declared to be the bill of the United Mine Workers of America. I understand counsel for the United Mine Workers of America has stated that he, with some aid from certain operators or their counsel, prepared the bill.
At the time of the public hearings before the Senate subcommittee last February the bill was supported by various spokesmen of the United Mine Workers of America, by certain coal operators in Pennsylvania and Ohio, and by a scattering of operators from other parts of the country. On the other hand, as the record shows, the bill was opposed by substantially all the operators in the States west of the Mississippi and by an overwhelming majority of the operators in Alabama, Georgia, West Virginia, Kentucky, and Indiana.
I should like to file at this time, as an exhibit to my testimony, a inap showing the attitude of the coal operators of the country as indicated by their appearance at the public hearing before the Senate subcommittee to which I have referred.
Mr. HILL. You may file it for the convenience of the committee. We cannot very well put it in the record.
Mr. CARTER. May I hand it to you at this time?
Mr. CARTER. Since the time of that hearing the opposition to the coal monopoly bill, despite its various changes of form, on the part of the coal operators of the Nation has grown steadily. This growing opposition has been particularly marked since the United States Supreme Court's decision in the Schechter case, and is directed to any legislation of such doubtful legality as the proposed Snyder coal monopoly bill, now before you for consideration.
The enactment of laws which substantial groups believe to be not only economically unsound but unconstitutional as well can only precipitate confusion and strife in the industry.
Examination of the coal monopoly bill as originally introduced by Senator Guffey disclosed that apparently one of the primary purposes of its sponsors was to bring about substantial shifts in the tonnages of coal produced in this country. The beneficiaries of these shifts would be the mines in Pennsylvania and Illinois. The additional tonnages to be transferred by the bill to the Pennsylvania and Illinois operators were to be taken largely from the mines in West Virginia, Virginia, and Kentucky. The scheme to confiscate the business of the southern operators and the livelihood of the miners engaged in those mines was so vigorously opposed that, after its exposure at the public hearings before the Senate subcommittee,' announcements were made by the proponents of the measure and those sympathetic to it that some adjustment of the allocation provisions would be made.
Since that time the proponents of this scheme of legislation have revised substantially several times the plan by which they proposed to divide among the members of the proposed monopoly the business and profits of the monopoly.
Eventually, however, in view of the difficulties involved in determining what any particular person's share of the business and profits of the proposed monopoly should be, the proponents of this bill announced that provisions for allocation of business and profits had been stricken from the bill, and there was considerable publicity to the effect that with the elimination of this very controversial feature of the bill no further objections could be advanced by those who had theretofore opposed it on this account.
I deny the truth of the claims that the provisions for allocating the business and the profits of the proposed monopoly have been stricken from the bill. On the contrary, both the bill now being considered by you and its companion measure in the Senate continue to provide, although I admit indirectly, for allocation of business and profits. The principle of allocation, as a matter of fact, exists in a far more dangerous form, if possible, than the form in which set out in the earlier drafts of the legislation.
Allocation of the business and profits of the monopoly would be brought about by the bureaucratic machinery set up for the classification of coals.
To those of you who have not been closely identified with the Coal Code under the N. I. R. A., I should like to explain that under any form of price control the power to classify coals, or to change them from one classification to another is really the power of life and death over any particular mine or mining district, since the minimum prices are different in the case of each particular size and class of coal. It is obvious, therefore, that the power “to make such classification of coals and price variations as to mines and consuming market areas as it”, the district board, “may deem necessary and proper" is the power to very effectively allocate, through price and classification manipulation, any particular piece of business to any desired mine or mines. The similar power given to the Commission to ultimately pass upon the prices set by the district boards, and the provision for coordination of prices as between districts, carry the same possibilities as to allocation of business to favored districts.
It is a demonstrable fact that even though there was no actual provision for allocation in the code under the N. R. A., attempts were made thereunder to allocate or shift business by the device of arbitrary changes in classifications. What has been tried before will be tried again if this bill is enacted.
There has been inserted in the revised bill, now before you, in section 12 of title I, a provision to further accomplish the allocation of production through the device of stripping the Interstate Commerce Commission of power to authorize any extension of railroad facilities to commercial coal mines except upon the approval of the National Bituminous Coal Commission. This, of course, is an additional means of controlling production and is undoubtedly intended for such a purpose.
I shall now make a few comments on the present draft of the bill, and its various sections, with special attention to some of its more objectionable provisions. I shall touch upon them only briefly because I know that you do not wish to unduly prolong this hearing.
Title I, section 1: I am opposed to any regulation of the coal industry by the Federal Government of the character proposed by the Snyder coal-monopoly bill.
Mr. Vinson. What was your attitude toward the original GuffeySnyder bill?
Mr. CARTER. I opposed it as vigorously as I could.
Mr. Vinson. What was your attitude toward the 2-year extension of N. R. A.!
Mr. CARTER. I took no part actively in the N. R. A. legislation. I was in sympathy, in common with a great many other operators, with an extension of the N. R. A. Act.
Mr. Vinson. Did it benefit you?
Mr. CARTER. In the so-called “Smokeless field” of West Virginia, in McDowell County.
Mr. COOPER. You have presented here to the committee a number of copies of the same map of the United States. Let us see if I understand it correctly. The key to the map says, “ Black definitely opposed.” That means the States colored in black are opposed to this bill?
Mr. CARTER. That means that the operators in the States colored black are opposed to the bill.
Mr. COOPER. And those black checks are divided in opinion—the operators—is that right?
Mr. CARTER. That was as of their appearance before the Neely subcommittee in the Senate. Mr. COOPER. As of what date was this map prepared ?
Mr. CARTER. It was prepared shortly after the hearings before the Neely subcommittee were concluded.
Mr. COOPER. I mean, as of what calendar date does this map purport to present the picture?
Mr. CARTER. That purports to present the picture as of the time of the hearings before the Neely subcommittee.
Mr. Cooper. That does not mean anything to me. Do you know what day of the month or the year it was?
Mr. CARTER. I do not recall the date of the conclusion of those hearings; but I have a copy of the hearings here, and I will undertake to ascertain the date for
you. Mr. COOPER. About when was it?
Mr. CARTER. It was in February of this year.
Mr. COOPER. Then it says here," black lines, no appearance except as noted.” That means the States with the black lines had no appearance by operators before the committee?
Mr. CARTER. No appearance by operators before the Neely subcommittee.
Mr. COOPER. The red,“ in favor of except as noted”-that is this territory here?
Mr. CARTER. Pennsylvania and Ohio.
Mr. COOPER. Operators from the States colored red appeared before that committee of which you speak in favor of it?
Mr. CARTER. That is correct.
Mr. CARTER. All of the operators in West Virginia, with the exception of one or two, who appeared in support of the original Guffey bill, and with the exception of the Kanawha district, sent representatives to appear before the Neely subcommittee to oppose the Guffey bill.
Mr. VINSON. Any other exceptions!
Mr. Vinson. Of course, this in no sense tends to convey the idea to the committee that that is the sentiment of the operators in the United States. What you have attempted to do, if I understand it, is that
you have attempted to take the map and set out to some extent the attitude of those operators who appeared before the Neely subcommittee.
Mr. CARTER. That is correct. Since that time the opposition to this scheme of legislation has grown, and many operators who were not represented before the Neely subcommittee are represented here in opposition to the bill in the form in which it is now before you.
Mr. Vinson. Would you not be fair enough to say that many operators who opposed the original Guffey-Snyder bill now favor this legislation. Mr. CARTER. Mr. Vinson, I know of no such operator. Mr. VINSON. You do not know of any? Mr. CARTER. I do not, at the moment. Mr. Vinson. Did you hear Mr. Mahan here yesterday?
Mr. CARTER. Mr. Mahan appeared before the Neely subcommittee in support of the bill.
Mr. COOPER. He was against the N. R. A. when it originally passed but later became converted to it. He said he was for this legislation.
Mr. Vinson. I will say to this gentleman I have had many gentlemen representing operating companies who have communicated to me that they were opposed to the original bill but favored this legislation.
Mr. CARTER. Of course, I have no knowledge of that. I was only replying to your question to the best of my own knowledge.
Mr. VINSON. Yes.
Mr. CARTER. I am opposed to any such declarations as are contained in section 1 of title I of the bill with respect to the conditions existing in the industry and the necessity for its regulation. This section is obviously intended to make easier the defense of the bill in the courts, through the device of having Congress record supposed findings of fact upon which the congressional regulation of the coal industry may be justified. It seems to me that such an obvious subterfuge as this is beneath the dignity of such a body as the Congress of the United States.
Mr. Vinson. I did not catch that. What was the item that you are criticizing?
Mr. CARTER. Title I, section 1.
Mr. Hill. You mean you are not in agreement with the alleged facts set out in that, or simply opposed to the necessity for regulation by Congress?
Mr. CARTER. I am not in agreement with all of the allegations set out there as facts. I am also opposed to the Federal regulation of the coal industry by the Congress.
Mr. VINSON. Could we fix up a bill to suit you at all unless we bought your coal and paid your cost of production with plenty of profit?
Mr. CARTER. Having just stated that I was not in sympathy with the idea of Federal regulation of the coal industry, of course, it automatically follows that I would not approve of any Federal regulation of the coal industry.
Mr. Vinson. You would approve the formation and continuation of the Appalachian Coal?
Mr. CARTER. I believe that the formation of cooperative selling agencies of the character of Appalachian Coal offers the coal industry an opportunity to achieve a very substantial degree of possible stabilization.
Another item of interest in the title and in the introductory section, and similarly in title II of the bill, is a continuation of the conservation bugaboo. I believe that in the hearings on the Guffey bill before the Senate subcommittee, it was convincingly asserted that there is no conservation problem with respect to bituminous coal in the United States. I do not believe that repetition of the facts upon which such assertions were based is necessary, except to point out the bases upon which the conclusion that there is no conservation problem was reached. Statistics of, for instance, the Federal Trade Commission indicate that at the present rate of consumption it will take several thousand years to exhaust the known coal reserves in the United States. Further, statistics compiled by Federal and other agencies indicate that the amount of coal being presently consumed is constantly decreasing, not only because of competitive fuels but also because of increased efficiency in the use of coal itself, enabling consumers to obtain many more units of heat and energy from much less coal.
Title I, sections 2 and 4: I am opposed to the setting up of an enormous hybrid bureaucracy such as is contemplated in sections 2 and 4 of title I. The vast bureaucratic machine which is proposed for the administration of this legislation, composed of commissioners and boards with supporting staffs of clerks, stenographers, and other employees, would in itself impose a great financial burden upon the industry. Furthermore, as a practical matter, the mechanics of operation under such an organization necessarily would become slow and cumbersome because of the multiplicity of the units concerned. In addition the setting up of such a bureaucracy offers a fruitful field for jockeying and undercover trading, and would inevitably result