of West Virginia where there is practically no employment except in the mines he has added the burden he has laid down to the burden of the responsible operator, that of caring for the people. This burden is a heavy one and adds to the losses suffered by the responsible operators. The burden is so carried until the law of supply and demand increases the sale price of coal to a profitable basis, whereupon the irresponsible operators, and frequently in large numbers, immediately reopen their mines and gobble the profits of the industry to such extent that the responsible operators are frequently prevented from recouping their losses suffered under depressed times and another depressed time is very soon brought upon the industry by overproduction caused by "fair-weather producers. This is manifestly untair and, if corrected, I feel sure will result

in a saving to the industry of several cents per ton.

(2) I have repeatedly heard that the purchase of marginal properties would increase the price of coal. In this I cannot concur, for if the provisions of the Guffey bill are properly carried out it will result in a purchaser getting just the value he pays for. If this is so, it will necessarily follow that business in the future will be dictated and directed by service, and the sales cost will be materially lessened, as in most cases a customer once gotten will remain a customer so long as he gets service. In my opinion this will result in a sales cost saving of several cents per ton, and I also feel that this favorable reaction to the industry will be further augmented by coal encroaching upon oil, gas, etc., largely by reason of the better preparation and service the operators will have to maintain. It is hard to estimate this indefinite value to the coal industry but it may be very material indeed.

(3) I further contend that the irresponsible operator is responsible for the heavy and frequent fluctuations in the production of coal, thus largely increasing the cost of coal to an extent I am confident will amount to several cents per ton. (4) I have heard that such marginal properties would be bought by the Government at unreasonably high prices. In this connection, one gentleman on our committee told me that in his district many coal properties are in the hands of the banks as frozen assets and his opinion is the banks would hasten to make such assets liquid, and at a price much below the actual value of the properties, thus setting a low-cost yardstick for such purchases.

(5) The leasing at the proper time of such properties would result in huge profits to the Government.

In conclusion, I beg to say that I regard the purchase of marginal properties much in the light of any army burying its dead, which is of course proper, but I feel the districts directly benefited should stand such part of this expense as would be in proper proportion to the benefits accruing to them.

Respectfully yours,

C. H. MEAD.

GENERAL SUGGESTIONS FOR THE IMPROVEMENT OF H. R. 8479

1. I suggest that section 2, page 3, be changed in such manner that the National Bituminous Coal Commission be comprised of 1 coal operator from either the North or the South, 1 miner from the opposite direction, 1 representative of the buyer's of industrial coal, 1 representative of the distributors of coal, and 5 disinterested persons.

2. I am much opposed to marketing agencies as I feel they will eventually result in monopolies.

3. On page 19, line 22, the act provides for the Commission to prescribe a reasonable price allowance to distributors. I suggest that the Commission give due consideration to the testimony of two representatives of distributors made this the 26th day of June 1935, that a part of the service rendered the coal industry was furnishing the producers money to finance pay rolls.

4. On page 6, line 23, Part I, Organization and Production, I suggest that all district boards be composed of as few members as may be absolutely necessary, this to prevent impartial boards.

Respectfully submitted.

C. H. MEAD.

BAD UNDER PART III-LABOR RELATIONS

On page 26, line 9, we find the following:

"The wage agreement or agreements negotiated by collective bargaining in any district or group of two or more districts, between representatives of pro

ducers of more than two-thirds of the annual tonnage production of such district or each of such districts in a contracting group during the preceding calendar year, and representatives of the majority of the mine workers therein belonging to a recognized national association of mine workers, shall be filed with the Labor Board and shall be accepted as the minimum wages for the various classifications of labor by the code members operating in such district or group of districts."

Under this provision two union miners could impose their will upon a thousand or more miners who did not desire to work as union miners. This is so manifestly unfair and unreasonable that surely the United States Government would not impose upon a free people such an injustice.

In this connection, beg to say that I have always thought that part of the country should be union and part nonunion, each acting as a balance wheel upon the other. If the operators became arbitrary with their miners the union encroached; if on the other hand the union became arbitrary as was the case of the Jacksonville wage agreement and the famous or infamous slogan of "no backward step in wages", then the nonunion fields encroached upon the union, as it should be. In carefully going over part III, Labor Relations, I visualize a large and expensive tent built and held by many stays and paid for out of taxpayer's money, that the United Mine Workers of America may be protected and be made to grow. I see also Miss Perkins skipping around the "great tent" with a tear gas gun that she may protect the great and mighty from being contaminated by the presence of some poor fellow who desires to be a free American citizen.

I say if they cannot stand up on their own merit, let them fall.

I feel it only fair to state that we have serving the smokeless fields of West Virginia, not only fair and reasonable administrators of the United Mine Workers of America, but I have learned to personally like them. I even like their lawyer.

So, but for the policy committee of the United Mine Workers of America which I fear might sacrifice us to the North, in spite of our local friends in the United Mine Workers of America, I predict we will willingly remain union; but should the policy committee try further favoring the North it will soon find its hold on the South is weak indeed.

Respectfully submitted.

C. H. MEAD.

Mr. HILL. The committee will now adjourn until 10 o'clock tomorrow morning.

(Thereupon, at 4 p. m., the committee adjourned until 10 a. m., tomorrow, Friday, June 28, 1935.)

STABILIZATION OF BITUMINOUS COAL MINING INDUSTRY

FRIDAY, JUNE 28, 1935

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE OF THE COMMITTEE ON WAYS AND MEANS,

Washington, D. C.

The subcommittee met at 10 a. m., Hon. Samuel B. Hill (chairman) presiding.

Mr. HILL. The committee will come to order. The first witness we will hear this morning is Mr. V. S. Gauthier.

Will you give your full name and address, and state the capacity in which you appear?

STATEMENT OF VICTOR S. GAUTHIER, GRAND LODGE REPRESENTATIVE OF THE INTERNATIONAL ASSOCIATION OF MACHINISTS

Mr. GAUTHIER. Mr. Chairman, my name is Victor S. Gauthier; I am the grand lodge representative of the International Association of Machinists.

Mr. Chairman and gentlemen, my appearance before the committee this morning is for the purpose of proposing several amendments to the labor provisions of H. R. 8479.

The International Association of Machinists proposes the amendment of H. R. 8479 to guarantee the opportunity of self determination for any craft or class of workers, employed by the operators of bituminous-coal mines, for the purpose of self organization, and collective bargaining.

Unlike the National Labor Relations Board bill, which recently passed the House, and the Railway Labor Act, which has been established law for many years, H. R. 8479 does not now provide that the majority of the members of any craft or class of employees shall have the right to determine who shall be the representative for the class or craft for the purposes of collective bargaining.

The failure to enumerate such guaranty may very well lead to the denial of the right of self-organization and collective bargaining to crafts or classes of employees not part of that group of employees who constitute the majority of workers employed by bituminous-coal operators.

I wish to file with the committee a list of amendments which will assure that the majority of each class or craft of employees employed by the operators of bituminous coal mines shall have the opportunity to select representatives of their own choice and to bargain collectively through such representatives.

I desire to make very clear that the amendments I am proposing do not provide for collective bargaining with minorities or deny to representatives of majorities the right to become the exclusive collective bargaining agency of the class of workers they represent. What it does is to guarantee to the majority of any craft or class, the opportunity of self determination; the chance to select representatives responsive to the interest of the class or craft, and the right to bargain collectively through such representatives.

Mr. HILL. How voluminous are the amendments you are proposing?

Mr. GAUTHIER. There are not very many; they take up only two typewritten pages.

Mr. HILL. You may file those for the record.

(Mr. Gauthier submitted the following statement:)

AMENDMENTS TO H. R. 8479

Page 3, lines 5 and 6, strike out the words "mine workers" and insert in place thereof the word "employees".

Page 7, line 22, insert the word "labor" following the word “national” and add the letter "s" to the word "organization".

Page 7, line 23, strike out the words "preponderant number of".

Page 23, line 19, insert the following after the semicolon following the word "protection": "The majority of the members of any craft of employees shall have the right to determine who shall be the representatives of the craft for the purpose of collective bargaining: Provided, however, That two or more crafts may, with the consent of a majority of the members of each, unite as a class of employees for the purpose of collective bargaining, in which case the majority of the members of the class shall have the right to determine who shall be the representative of such class."

Page 24, line 22, strike out the word "may" and insert in place thereof the word "shall". Insert the word "by" following the word "be".

Page 25, line 14, insert after the word "of" the words "any craft or class of", and strike out the word "the" which precedes the word "employees".

Page 25, line 15, insert after the word "election" the following: "among the members of any craft or class".

Page 25, line 16, insert the following sentence after the word "purpose": "In such an election the majority of the votes cast shall determine the choice of the members of such craft or class in the matter of representatives."

Page 25, line 20, insert after the word "employees" the following: "or any craft or class thereof".

Page 26, line 4, insert after the word "labor" the following: "for the members of any craft or class of employees".

Page 26, lines 7 and 8, strike out the words "representatives of more than one-half the mine workers employed" and substitute in place thereof: "duly selected representatives of such craft or class".

Page 26, lines 9 and 10, strike out the words "the wage agreement or agreements" and insert in place thereof the following: "any agreement or agreements as to the wages of the members of any craft or class of employees".

Page 26, lines 15, 16 and 17, strike out the words "the majority of the mine workers therein belonging to a recognized national association of mine workers" and insert in place thereof the following: "majority of employees who are members of the craft or class affected and who are also members of a standard national labor organization".

Mr. GAUTHIER. I want to say in conclusion, Mr. Chairman, that aside from the proposed amendments, the association which I represent is in favor of the passage of this bill.

Mr. HILL. With the amendments you suggest?

Mr. GAUTHIER. Yes, sir.

Mr. HILL. The next witness is Mr. David Kaplan.

STATEMENT OF DAVID KAPLAN, WASHINGTON, D. C., REPRESENTING INTERNATIONAL MACHINISTS' ASSOCIATION

Mr. KAPLAN. Mr. Chairman, Mr. Gauthier is the spokesman for the International Association of Machinists, and I have nothing further to add to his statement.

Mr. HILL. The next witness is Mr. Louis G. Caldwell.

Will you state your full name, your address, and the capacity in which you appear?

STATEMENT OF LOUIS G. CALDWELL, WASHINGTON, D. C., REPRESENTING NORTHERN ILLINOIS COAL CORPORATION

Mr. CALDWELL. Mr. Chairman, my name is Louis G. Caldwell. I appear for the Northern Illinois Coal Corporation, with mines principally at Wilmington, Ill., a point about 50 miles from Chicago. Those mines have a production of approximately 1,000,000 tons. They are part of what are sometimes generally described as the northern Illinois coal fields, with a total annual production of about 2,100,000 tons out of a total of about 40,000,000 tons in Illinois.

The situation I want to present to you principally has to do with the pecuilar situation arising out of proximity to the consuming centers. There is one thing which I think is typical to a greater or less extent of a large part of the United States, but the facts in this this case permit it to be brought out, I think, in very understandable form.

The client I represent is not opposing the labor provisions of this bill. I may say we think the whole bill is unconstitutional, but we would not be here except for the price-fixing provisions, and I shall address myself entirely to those.

I would like to file a brief I have prepared.

Mr. HILL. You may have that permission.

(The brief referred to appears at the close of Mr. Caldwell's statement.)

Mr. CALDWELL. Mr. Chairman, the situation can be best described in the terms of the map that you now have before you. This is a map showing the State of Illinois and the surrounding territory, and on the yellow sheet there are shown the freight rate groups in the State.

The mines of my client are at Wilmington, 50 miles from Chicago, and the freight rate there is $1.25. The furthest point in Illinois carries a freight rate of $2.10, or 85 cents more.

If we wanted to carry the matter further we might mention western Pennsylvania, for purposes of comparison, with a freight rate of $3.24 to Chicago.

The feature that I want to point out, in connection with this bill, is that it is attempting to counteract the difference in freight rates by imposing a higher price on the mines closer to the consuming centers. In other words, the price at our mines will counteract whatever advantage there is in proximity to the consuming centers, or the price at which the more distant mines can sell on the same market.

Ninety percent of our coal is sold in Chicago, and, if necessary, all of it could be. It is almost entirely an intrastate proposition.