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That the Olsen case was close to the line seems intimated in the concurring opinion of Mr. Justice Cardozo, who said: “What is near and what is distant may at time be uncertain. (Cf. Board of Trade v. Olsen, 262 U. S. 1.) There is no penumbra of uncertainty obscuring judgment here."

B. The bill is in violation of the due process clause of the fifth amendment Section I of the bill declared "that the mining of bituminous coal and its distribution by producers

are affected with a national public interest" and upon this declaration the entire industry is placed under a rigorous license system and the “National Bituminous Coal Commission” is authorized in part II of section 4 to fix both the minimum and maximum prices for coal.

The proposition that such matters as the prices, the income of a business, and the right of persons to engage therein without a governmental license, cannot be regulated either by the Federal or State Governments unless such business is affected with a public interest in the technical legal sense, is not open to question. (See Adkins v. Children's Hospital, 261 U. S. 525; Williams v. Standard Oil Co. 278 U. S. 235; New State Ice Co. v. Liebmann, 285 U. S. 262; Chas. Wolf Packing Co. v. Court of Industrial Relations, 262 U. S. 522.) Unless it be found that the production and distribution of coal are affected by a public interest the charges may not be controlled by the Federal Government.

It has already been pointed out in the consideration of the question of jurisdietion that the mere declaration in the bill that this industry is affected with s public interest is not determinative. The question remaining therefore is whether or not the production and distribution of coal are affected with such a public interest as will warrant regulation as to price-fixing, licensing, etc.

The business of coal mining has never been declared "affected with a public interest.” On the contrary, the Supreme Court in Wolf Packing Co. v. Court of Industrial Relations (262 Ű. S. 522), said:

"It has never been supposed, since the adoption of the Constitution, that the business of the butcher, or the baker, the tailor, woodchopper, the mining operator or the miner, was clothed with such public interest that the price of his product or his wages could be fixed by said regulation."

As above indicated, courts have not considered mining a business affected with a public interest and the fact that Congress declares such coal mining to be affected with the public interest has little or no bearing on the legal status of the coal industry. In the Wolff Packing Co. case, the Kansas Legislature also declared that the preparation of food is affected by a public interest, but the Supreme Court refused to be influenced by such a declaration.

"It is manifest from an examination of the cases cited in the third heading that the mere declaration by a legislature that the business is affected with a public interest is not conclusive of the question whether its attempted regulation on that ground is justified. The circumstances of this alleged change from the status of a private business and its freedom from regulation into one in which the public have come to have an interest are always a subject of judicial inquiry.”

It has already been pointed out that the bill collides with the fifth amendment in other respects. It establishes a system of price-fixing by which the property of producers in proximity to consuming market areas will be taken from them for the benefit of distant producers. It sets up a procedure for fixing prices in which the consumer and the small producer have no voice, and their rights are determined ex parte by the large producers. The features of the bill on which these conclusions are based are set forth in part I of this statement. In view of the other points raised, it seems unnecessary to enter into a detailed examination of the many analogous cases which have arisen under the due-process clause.

C. The bill contains unconstitutional delegations of legislative power During the hearings, proponents of the bill have asserted that, after the decision of the Supreme Court in the Schechter case, the bill was revised so as to meet the test laid down by the Court as to valid delegations of legislative power. With what success has this been done?

1. THE LACK OF DEFINITE STANDARD

This matter has been dealt with in part I of this statement. A great deal of phraseology has been inserted in the bill ostensibly for the guidance of district boards and the Commission, but the standard which they are to follow remains as nebulous as before. This is true with respect to the fixing of minimum prices and price variations as to mines and consuming areas, the classification of coals, the establishment of rules and regulations, and the coordination of prices. Virtually the only positive injunction in the bill is that the total return for a district shall not be less than its share of the total weighted average cost, and that, as between two districts serving a common consuming market area, transportation costs shall be one of the items taken into consideration. Nothing that can properly be called a standard is provided for determining what shall be the minimum price for any particular mine or producing field.

This situation does not meet the test provided by the Supreme Court when it said, in the Schechter case, the following:

“To summarize and conclude upon this point: Sec. 3 of the recovery act is without precedent. It supplies no standards for any trade, industry, or activity. It does not undertake to prescribe rules of conduct to be applied to particular states of fact determined by appropriate administrative procedure.”

It is impracticable to quote extensive other portions of the opinion which are also in point.

See also Panama Refining Co. v. Ryan (293 U. S. 388).

2. THE INVALID DELEGATION TO PRIVATE INDIVIDUALS

The far-reaching legislative functions which, under the bill, devolve upon the district boards, have been described in part Í of this statement. The district boards are composed of producers, are elected by producers, are paid by producers, and are not in any sense government officials. Can they be empowered to make the law of the United States?

This delegation of legislative authority falls within the prohibition in the Schechter case, supra, and is unconstitutional. The court in that case said:

“But would it be seriously contended that Congress could delegate its legislative authority to trade or industrial associations or groups so as to empower them to enact the laws they deem to be wise and beneficent for the rehabilitation and expansion of their trade or industries?

Could trade or industrial associations or groups be constituted legislative bodies for that purpose because such associations or groups are familiar with the problems of their enterprises?

“And could an effort of that sort be made valid by such a preface of generalities as to permissible aims as we find in section 1 of title 1? The answer is obvious. Such a delegation of legislative power is unknown to our law and is utterly inconsistent with the constitutional prerogatives and duties of Congress.” .D. The bill reposes judicial power in the proposed Commission in violation of the

Constitution The Guffey-Snyder bill authorizes the proposed National Bituminous Coal Commission to entertain complaints againt producers of "code" violations, to give notice and hold hearings to determine the guilt or innocence of the accused, and, in case of guilt, to deprive the accused of his right to engage in the coalmining business or, in the alternative, to paying a heavy tax. Whatever may be its formal disguise, this is an exercise of judicial power. As has already been pointed out, the same Commission that sits as judge is also, in part at least, both legislator and prosecutor. There is virtually no recourse to the courts, and, 'in any event, there is no trial of issues of fact by an independent and disinterested judge, whether under the judicial branch of our Government or not.

Article III, section 1, of the Constitution vests the judicial power of the United States in the Supreme Court and such inferior courts as the Congress may from time to time ordain and establish. The Guffey-Snyder bill vests judicial power in a commission which also has executive and legislative functions and which is not, in any sense, an inferior court.

In the recent case of Rathbun v. United States, - U. S. decided on the same day as the Schechter case, involving the President's power to remove a member of the Federal Trade Commission, the Supreme Court said

“The fundamental necessity of maintaining each of the three general departments of government entirely free from the control or coercive influence direct or indirect, of either of the others, has often been stressed and is hardly open to serious question. So much is implied in the very fact of the separation of the powers of these departments by the Constitution, and in the rule which recognizes their essential coequality. The sound application of a principle that makes ‘one master in his own house precludes him from imposing his control in the house

of another who is master there. James Wilson, one of the framers of the Constitution, and a former justice of this court, said that the independence of each department required that its proceedings shall be free from the remotest influence direct or indirect, of either of the other two powers' (Andrews, the works of James Wilson (1896) vol. 1, p. 367). And Mr. Justice Story, in the first volume of his work on the Constitution, fourth edition, 30, citing no. 48 of the Federalist, said that neither of the departments in reference to each other ‘ought to possess, directly or indirectly, an overruling influence in the administration of their respective powers.' And see O'Donoghue v. United States, supra (289 U. S. 530, 531, 67 L. ed. 1361, 1362, 53 S. Ct. 740).”

In the Federal Papers, James Madison said

"The accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, selfappointed, or elective, may justly be pronounced the very definition of tyranny."

In his Spirit of the Laws, Montesquieu said,

"Again, there is no liberty, if the power of judging be not separated from the legislative and executive powers. Were it joined with the legislative, the life and liberty of the subject would be exposed to arbitrary control; for the judge would be then the legislator. Were it joined to the executive power, the judge might behave with all the violence of an oppressor." Respectfully submitted.

Louis G. CALDWELL. Joseph B. FLEMING, Of Kirkland, Fleming, Green & Martin,

Attorneys for Northern Illinois Coal Corporation.

APPENDIX

PROPOSED AMENDMENTS TO H. R. 8479 (A BILL TO STABILIZE THE BITUMINOUS COAL

MINING INDUSTRY, ETC.) The basis for the foll ving proposed amendments to H. R. 8479, introduced by Mr. Snyder on June 13, 1935.

FIRST SET OF PROPOSED AMENDMENTS

1. Strike out that portion of section 4 beginning with and including line 21 on page 10 and extending to and including line 8 on page 17, and insert in lieu thereof the following:

“Subject to the provisions of subsection (h) of part II, no coal shall be sold at a price below the cost thereof to the code member, such cost to include, but without limitation, the cost of production, the cost of selling, and the cost of administration. The sale of coal at a price below cost shall constitute a violation of the code."

2. On page 17, lines 10 to 12, strike out the words "below the minimum or above the maximum therefor approved or established by the Commission” and insert in lieu thereof the following: "below cost”.

3. On page 17, strike out lines 15 to 19, both inclusive.

4. On page 17, lines 22 to 24, strike out the words “below the minimum or above the maximum therefor approved or established by the Commission and in effect” and insert in lieu thereof the following: "below cost".

5. On page 18, lines 1-2, strike out the words “The minimum prices established in accordance with the provisions of this section” and insert in lieu thereof the following: “The prohibition against sale below cost contained in this section".

6. On page 18, lines 8 to 11, strike out the following “Maximum prices established in accordance with the provisions of this section shall not apply to coal sold by a code member and shipped outside the continental United States."

7. On page 19, lines 4 to 6, strike out the words “below the minimum price at the time of delivery upon such contract, established as in this act provided” and insert in lieu thereof the following: "below cost”.

8. On page 19, lines 21-22, strike out the words "the code prices" and insert in lieu thereof the following: “the prohibition against sale below cost."

9. On page 20, lines 1 to 3, strike out the words “the maintenance of such persons, in the resale of coal, of the minimum price established under this act”, and insert in lieu thereof the following; "the observance by such persons, in the resale of coal, of the prohibition against sale below cost herein provided for."

SECOND ALTERNATIVE

1. Strike out all of paragraph (b) of part II of section 4, beginning with and including line 21, on page 14, to and including line 24, on page 15.

2. On page 10, lines 24-25, insert after the word "produced” and before the words “in said district” the following: “in each producing field.”

3. On page 11, lines 1-2, strike out the words "and price variations as to mines and consuming market areas."

4. On page 11, lines 3 to 14, strike out the sentence beginning with the words “In order to sustain the" and ending with the words “the cost of administration”, and insert in lieu thereof the following:

“In order to sustain the stabilization of wages, working conditions, and maximum hours of labor, said prices shall be established so as to yield a return for each producing field equal as nearly as mathematically possible to, and not less then, the weighted average of the total costs, determined as hereinafter provided, of the tonnage of such producing field, including, but without limitation, the total cost of production, the cost of selling, and the cost of administration. No minimum prices shall be established by a district board for any producing field unless such district board shall have among its members persons from and fairly representing such producing field and unless such persons, or a majority thereof, approve such minimum prices. When it appears that a producing field is not fairly representad in a district board, the Commission may require the reorganization of such district board so as to provide for such representation."

5. Strike out all of that portion of paragraph (a) of part II of section 4, beginning with and including line 15, on page 11, to and including line 8, on page 12.

6. On page 12, line 12, strike out the word "district” and insert in lieu thereof the words "producing field.".

7. On page 12, line 13, after the words “the consuming public”, insert the following: No attempt shall be made, in or by the prices thus established, to deprive any consumer or any consuming market area of the benefit of natural advantages resulting from geographical location and proximity to one or more producing fields, or to counteract differences in transportation costs resulting from such location and proximity. In establishing such prices, the necessity for meeting competition from the producers of competing fuels, such as oil and gas, may be taken into account."

8. On page 12, line 24, to page 13, line 2, strike out the words beginning with the word “district”, to and including the words “subsection (b)”, and insert in lieu thereof the following: “respective producing fields.".

9. On page 13, line 5, strike out the word “district" and inset in lieu thereof the following:

same producing field.” 10. On page 13, line 10, after the word "produced” and before the words "in the district" insert the following: in each producing field.”

11. On page 13, lines 18–19, strike out the words in the respective minimumprice area.

12. On page 13, lines 21 and 23, and on page 14, lines 4-5, strike out the words minimum-price area” and insert in lieu thereof the following: "producing field.”

13. On page 16, line 7, at the beginning thereof, insert the following: “the respective producing fields in."

14. On page 16, line 9, after the words “total cost” and before the words "of the district”, insert the following: “of the respective producing fields."

15. On page 16, strike out lines 12 to 15 and insert in lieu thereof the following: “If any code member of district board or member thereof shall be dissatisfied with the minimum prices thus established or any of the rules and regulations of either the Commission or any district board, or by a failure to establish such minimum prices or to adopt any rule or regulation by either the Commission or any district board, or by the maximum prices.”

THIRD ALTERNATIVE

1. On page 11, lines 3, after the words "necessary and proper”, insert: "but shall not, by any such classification or by any such price variation, deprive or attempt to deprive any consumer, any group of consumers, or any consuming market area, in whole or in part, of the benefit of any natural advantage resulting from geographical location or proximity to producing fields, or counteract or attempt to counteract, in whole or in part, differences in transportation costs.”

144204-35-38

2. On page 12, line 12, after the words within the district”, insert: "shall take into account the necessity of meeting competition with competing fuels, such as oil and gas, and shall not place the producers of any producing field or of any district at any disadvantage in such competition.”

3. On page 12, line 13, after the words "the consuming public", insert: "including the rights of consumers and of consuming market areas to any natural advantage including, but without limitation, those resulting from geographical location, proximity to producing fields, and lower transportation costs."

4. On page 15, line 3, strike out the words "and transportation charges upon coal" and insert in lieu thereof: “but shall not deprive or attempt to deprive any consumer, any group of consumers, or any consuming market area, in whole or in part, of the benefit of any natural advantage resulting from geographical location or proximity to producing fields, or counteract or attempt to counteract, in whole or in part, differences in transportation costs. Such coordination shall take into account the necessity of meeting competition with competing fuels, such as oil and gas, and shall not place the producers of any producing field or of any district at any disadvantage in such competition."

FOURTH ALTERNATIVE

1. Strike out all of paragraph (b) of part II of section 4, beginning with and including line 21, on page 14, to and including line 24, on page 15.

2. On page 11, lines 3 to 14, strike out the sentence beginning with the words "in order to sustain the" and ending with the words "the cost of administration", and insert in lieu thereof the following: “In order to sustain the stabilization of wages, working conditions, and maximum hours of labor, said prices shall be established so as to yield a return for each district equal as nearly as mathematically possible to, and not less than, the weighted average of the total costs, determined as hereinafter provided, of the tonnage of such district, including, but without limitation, the total cost of production, the cost of selling, and the cost of administration. No minimum prices shall be established by a district board for any producing field unless such district board shall have among its members persons from and fairly representing such producing field and unless such persons, or a majority thereof, approve such minimum prices. When it appears that a producing field is not fairly represented in a district board, the Commission may require the reorganization of such district board so as to provide for such representation.”

3. Strike out all of that portion of paragraph (a) of part II of section 4, beginning with and including line 15, on page 11, to and including line 8, on page 12.

4. On page 12, line 13, after the words “the consuming public", insert the following:

“No attempt shall be made, in or by the prices thus established, to deprive any consumer or any consuming market area of the benefit of natural advantages resulting from geographical location and proximity to one or more producing fields, or to counteract differences in transportation costs resulting from such location and proximity. In establishing such prices, the necessity for meeting competition from the producers of competing fuels, such as oil and gas, may be taken into account."

5. On page 12, line 25, to page 13, line 2, strike out the words "subject to such modification therein as may result from the coordination provided for in the succeeding subsection (b)”.

6. On page 13, lines 18-i9, strike out the words “in the respective minimumprice area

7. On page 13, lines 21 and 23, and on page 14, lines 4–5, strike out the words "minimum-price area" and insert in lieu thereof the following: “district".

8. On page 16, lines 14 and 15, strike out the words "coordination of " and insert in lieu thereof the following: "minimum".

Mr. Hill. The next witness we will hear is Mr. Findlay. Will you state your full name, your residence, and whom you represent?

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