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and fully complies with the code. Section 5 provides that membership in the code and the right to the drawback may be revoked by the Commission“ upon proof that such member has failed or refused to comply with any duty or requirement imposed upon him by reason of his membership”, and that such membership and the right to drawback shall be restored only upon payment in full of the tax for the month or months in which the violation occurred.

The penalty thus imposed is most severe and the bill is objectionable because it fails to discriminate between a defiant refusal or willful failure to observe, on the one hand, and a minor, unintentional violation on the other.

We believe that the penalty for refusal or willful failure to obey the code should be severe and that there should be provided penalties in keeping with the magnitude of the offense for unintentional and minor violations.

We are in accord with the principles underlying subsection (g) of part III of section 4, that the maximum hours of labor and the minimum wages shall be fixed by a preponderance of the producers and employees of the industry and within the districts respectively, but are of the opinion that this should not be done by a bare majority, as provided in the bill. Certainly a bare majority of the industry should not fix maximum hours for the entire industry unless the requirements of small and perhaps remote districts can be taken care of specially upon appeal to the Commission.

Furthermore, it might be well affirmative to state in this same subsection that meetings of code members and/or mine workers, respectively, shall be arranged for the purpose of preliminary negotiations toward wage agreements between the producers and the mine workers; and that in such meetings the producers or their representatives, and the mine workers or their representatives, respectively, shall have full opportunity to express their views in respect of proposed or prospective wage agreements. No doubt such is the purpose of proponents of the bill, but it would be just as well to have no doubt on the subject.

In subsection (e) of part III of section 4, page 17, appears this sentence:

The Labor Board may order a code member to meet the representatives of its employees for the purpose of collective bargaining.

In place of it, I suggest:

The Labor Board shall use every reasonable and proper effort to bring about meetings between code members and the representatives of their employees for the purpose of collective bargaining.

In connection with the bill, my attention is drawn to several of its provisions which make findings of fact by the Commission, supported by any evidence, conclusive. My thought is that an aggrieved code member should have the right of appeal to the court, if promptly exercised. An example is a finding which would revoke code membership and practically put a producer out of business. I do not here refer to any findings to be made under part III of section 4 Labor Relations—as to which I do not favor the right ordinarily to go into court.

In the same connection, I fail to discover appropriate enforcement procedure in the bill to bring about obedience to routine orders of the Commission. Plainly, forfeiture of all rights under the code would be too severe for many ordinary infractions. But there is lack of suitable machinery to put Commission mandates into effect.

To meet these two criticisms, I would better present section 2 as “2 (a)”, and have it end with the word “facts” in line 1, page 4.

Then I would add new subsections to be lettered “(b)", "(c)”, and “(d).” I have caused such to be prepared. They read:

(b) Any person directly affected by a definitive order of the Commission, whether such order be in the affirmative or in the negative, except an order in respect of part III of section 4 hereof, may obtain a review of the order by an appeal to a district court of the United States that sits within the board district in which the aggrieved person is a resident, as such board districts are outlined in the “ Schedule of Districts" hereto annexed, or as they hereafter may be changed. Such appeal shall be taken within 30 days of service of the order upon the person affected thereby, in default of which the order shall be final and conclusive. Appeal shall be by written petition to such district court, and the procedure thereafter shall be the same as that followed in a suit in equity, the petition taking the place of a bill in equity. Such proceedings in the district courts shall be given precedence over other cases pending therein and shall be in every way expedited.

(c) The respective district courts of the United States are hereby invested with jurisdiction to enforce the orders of the Commission, and to restrain violations thereof; and it shall be the duty of the several district attorneys of the United States, under the direction of the Attorney General, to institute proceedings in equity to enforce such orders and to restrain violations thereof. Such proceedings may be by way of petition setting forth the case, or by bill in equity, and thereafter shall take the same course as a suit in equity. Pending such petition or bill and before final decree the court may at any time make such temporary mandatory or restraining order as it shall deem just in the premises. Such proceedings in the district courts shall be given precedence over other cases pending therein, and shall be in every way expedited.

(a) The jurisdiction of the district courts of the United States to enforce, set aside, modify, or restrain violation of, the orders of the Commission shall be exclusive. On the trial of an appeal under subsection (b) hereof or of a *petition or bill in equity under subsection (c) hereof the findings and order of the Commission shall be prima-facie evidence of the facts therein stated, and the burden of proof shall rest upon the person asserting the contrary thereof. The judgment and decree of the district court shall be final as to all matters of fact.

Those changes and additions may require corresponding textual changes elsewhere in the bill, which will suggest themselves to the committee without my going into them in detail.

The make-up of the proposed national coal producers' board will result in a membership of perhaps 35. Such a body is unwieldy, and will not be constituted to bring about prompt and expeditious action or results. To overcome the unwieldy nature of the board, I propose an executive, or managing or governing committee, whichever term might be the more suitable. This could be accomplished by denoting present subsection (c) of part I of section 4 by the figure “1”, and adding a new paragraph 2 to the subsection. This I have had prepared. It reads as follows, the number of members being left blank as it still calls for determination: 1. 2. The national coal producers' boards may, by resolution or resolutions passed by two-thirds vote in number of the whole board, designate an executive committee consisting of members, constituted as hereinafter stated and not otherwise, which to the extent provided in said resolution or resolutions shall have and may exercise the powers of the whole board in the management and conduct of the affairs of the board and in the performance of the duties of the board. Said executive committee shall consist of - members,

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apportioned as follows: thereof shall be selected from the area defined as “division no. I", members thereof from the area defined as division no. II ”, and members thereof from the areas defined as division nos. * III', .IV', and 'V'", as the respective areas are described in the Code of Fair Competition for the Bituminous Coal Industry approved by the President September 18, 1933, and any amendments thereto or supplements thereof.

Subsection (f) of part III of section 4, one of the marketing provisions, concerns establishment of marketing agencies. As drawn, I believe it is to be somewhat too terse. It might well be expanded to provide for the creation of such agencies within a particular district, or by code members within more than one district, where such districts serve a common market. In other words, joint-marketing agencies should be made permissible under suitable limitations.

Further considering marketing, attention is invited to subsection (d) of part II, section 4, page 13. Its purposes is laudable, but the text would appear not to be sufficiently comprehensive. Let me suggest the following in its place:

(d) The price provisions of this act shall not be evaded or violated by or through the use of subsidiaries, affiliated sales companies or other instrumentalities of any kind whatsoever, or by or through absorption, directly or indi. rectly, of any transportation or incidental or accessorial charge of any kind, or any part thereof. The Commission is hereby authorized, after investigation and after hearing following notice to the interested parties, to adopt and promulgate rules and regulations for the enforcement of this subsection.

The bill as prepared lacks any reference to or definition of unfair trade practices. This I regard as a serious omission. Producers can resort to such practices to defy established prices, and perhaps to disregard quotas. A comprehensive statement of the outlawed practices is desirable. Reference to the Code of Fair Competition for the Bituminous Coal Industry and to the regulations of the code authorities will give the committee easy access to lists of practices to be banned. If that is not sufficient, the committee might draw upon the experience of the Federal Trade Commission.

In conjunction with this recommendation, and as corollary thereto, I suggest that the National Bituminous Coal Commission be empowered to hear and determine complaints alleging perpetration of proscribed practices.

Still on the subject of marketing, the subsection (b) at the foot of page 11, you will find introductory words reading “ with the adoption of the code." But nowhere do I find any test by which to determine what constitutes the adoption of the code. This may be deliberate or it may be oversight. In the alternative, it might even be better to have the phrase eliminated than to lay down such a test; that is, merely to provide for acceptance of membership as is covered in section 5, on page 18.

In regard to title II of this bill our association has been unable to reach a conclusion on what may be called this unexplored territory. It has to do with retirement of coal lands and protection or retirement of employees or rehabilitation of such employees. We are not quite sure what we should say about that, and are not quite sure it is not now covered in subsection of section 13 of title I. If not, it could be easily further added there for further investigation by the Commission. In any event, we are of the opinion that the industry is not in position to bear the imposition of a 10 cents per ton

tax on the cost of production at this time. As a substitute for that, we think subsection 5 of section 13 of the act ought to be made to cover the investigation and report to the next Congress on title II. I should say in addition to subsection 5 of section 13.

Senator Davis. Have you finished, Mr. O'Neill?
Mr. O'NEILL. Yes, sir.
Senator NEELY. Thank you very much.

STATEMENT OF HON. JOSEPH F. GUFFEY, A SENATOR FROM THE

STATE OF PENNSYLVANIA Resumed

Senator NEELY. Senator Guffey, a newspaper article was read into the record this morning, in which the chairman of this subcommittee was censured for his apparently friendly attitude toward your bill. This article states, in effect, that you are personally interested in Pennsylvania coal lands, and that you would benefit by the enactment of this bill at the expense of West Virginia. Will you please state what, if any, personal interest you now have or in the past have had in Pennsylvania coal lands or operations?

Senator GUFFEY. I have had no interest in any bituminous-coal operations since about 1905. At the present time I own no stocks, common or preferred, notes, debentures, or bonds of any coal companies, nor am I in any way interested in any commercial operations or corporate operations that produce, transport, or market bituminous coal.

About 1905 I was interested in a tract in east Belmont County, Ohio, when I joined with some of my friends in western Pennsylvania development there. I was in that a short time, and left for the following reasons: When it came to buying the equipment for the tipple, the practical man who was writing the specifications stated that it was impossible to make any money in the bituminouscoal business at that time unless you should short-change or shortweigh the miners. I sold my stock after that and quit that development, and have not been in it since.

Senator MINTON. Apparently they have not reformed any until very recently.

Senator NEELY. Senator Guffey, the evidence that has been submitted to this subcommittee today indicates that your bill specifies an allocation of tonnage that may be unjust to the smokeless field of West Virginia. Will you agree to an amendment which will protect not only West Virginia but also every other coal-producing State against prejudicial operation?

Senator GUFFEY. I certainly will not only agree to it but I will advocate it.

Senator NEELY. Later the chairman of the subcommittee will endeavor to reach an understanding with you and others who are friendly to the bill, to the end that an amendment may be made that will properly protect West Virginia ; Indiana, in which Senator Minton is very much interested; and all the various other States that produce coal.

Senator GUFFEY. I shall be very glad to do so.

STATEMENT OF WILLIAM EMERY, JR., CLEVELAND, OHIO, VICE

PRESIDENT OF THE OHIO COAL CONTROL ASSOCIATION

Senator NEELY. Mr. Emery, you may proceed in your own way.

Mr. Emery. My name is William Emery, Jr. I am vice president of the Ohio Coal Control Association an association truly representative of the Ohio industry,

and so recognized by the N. R. A. in setting up the code authority. This association in 1934 represented about 17 million tons out of 21 million tons of production. I have been actively engaged in the coal-mining business, in an operating, executive, and sales capacity, since 1915.

Senator Minton. Where is your home?

Mr. EMERY. Cleveland. I am president of the Cambridge Collieries Co.

On February 21, 1935, Mr. E. H. Davis appeared before your committee in behalf of the Ohio Control Association, as a proponent of the principles set forth in Senate bill 1417, covering Federal regulation of the bituminous coal industry. At that time M Davis asked and received your permission to offer for your consideration, constructive suggestions for amendments to the proposed bill. At this appearance it is our desire to take advantage of the privilege which you extended to us and to present to you suggestions which may be drawn up as amendments at a later date if they meet with your approval.

TITLE I. THE BITUMINOUS COAL INDUSTRY

Section 1: We believe that the purposes of the bill as set forth can be carried out without the necessity of placing the bituminous-coal industry in the category of a public utility.

In respect to that, we are not qualified to cover the legal side of the question but are merely talking from a management standpoint.

In our opinion, the regulation of the mining, distribution, and sale of a commodity such as coal is not comparable to the regulation of the service rendered by our modern public utilities such as the telephone, railroads, and power plants, where in the former case the actual mining or manufacturing, distribution, and sale of a commodity is involved, whereas in the latter a service must be rendered upon demand. We therefore object to the classification of the bituminous-coal industry as a public utility and suggest that this feature be removed from the bill.

SECTION 2. NATIONAL BITUMINOUS COAL COMMISSION

Section 2 deals with the setting up of a national bituminous coal commission in the Department of the Interior of the United States, and, as written, provides for the selection of 5 members by the President of the United States and confirmation of his selection by the Senate. The President is restricted in his selection of these members in that 3 shall be disinterested, 1 shall be a representative of the employees, and 1 a representative of the producers. We have two points of disagreement with this section of the bill:

A. We believe that the Commission should consist entirely of disinterested appointees, and that no provision should be made for representatives of any branch of the industry.

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