Mr. THOMAS. That rate is graduated downward according to the type of consumption, which is a great factor in the use of fuel in that area. The same thing applies to gas.

Senator MINTON. If you start out at 8 cents per kilowatt-hour, unless it breaks off awfully fast, it is not going to hurt.

Mr. THOMAS. It does break, and it breaks the same way in the industrial contracts which are in existence in that area. I have an industrial contract with the Alabama Power Co. which provides for 3 cents per kilowatt-hour for the first thousand. That is graduated downward and when you get to the consuming point of 300,000 kilowatt hours in any one month, it gets as low as 5 mills.

Senator MINTON. Is there a service charge?

Mr. THOMAS. There is, of $1.25 for the first hundred and $1 for the additional, on a kilowatt-hour basis.

The bill does not attempt to regulate the small truck or wagon mines, and they are even now a serious menace to the stabilization of the industry. At the present time these small mines take an exceedingly large tonnage from the established producers; and in the enjoyment of the immunity from regulation which will be theirs, they will be able to take over an even much larger tonnage from these established and regulated producers. The effects of this expansion of "gopher hole" mines are not difficult to visualize..

We greatly fear that the three supposedly impartial members of the National Bituminous Coal Commission may not be in fact impartial, or may not remain so, possessed with the vast powers conferred upon them by this bill. Our fear is largely predicated upon the situation portrayed by the previous witness.

It is not unreasonable to fear that the privilege of establishing an organization of such size and character as the Commission may desire, will be abused to the extent of its becoming a means of paying political debts at the cost of the industry and at the expense of the consumers of coal.

The bill provides that the findings of fact by the Commission shall be binding upon the courts. We do not believe that mind is ready at this time-certainly we are not-to accept the decision of such a commission as binding on the courts to the extent as the bill permits of preventing the courts from correcting a manifest injustice in matters-it may be-which affect the very business life of large enterprises a confiscation of property without due process of law.

The very high tax levied upon operators will of course force them, as is the purpose of such a tax, to accept the provisions of the code however unreasonable and unfair they may be. And the Commission is given the power to conduct a hearing not in conformity with the safeguards provided in the ordinary procedure of law, and to decide that an operator shall no longer be a member of the code and thus exclude him from the privilege of a drawback of the tax imposed, which will result in his being unable to continue in the operation of his business.

The provision for the involuntary imposition of a code upon the industry is premature. There have been great and fundamental lessons learned through the operation of codes; but the situation in the bituminous coal industry has not, in our judgment, sufficiently crystalized to justify the writing of an inflexible code in the stern language of a statute. The stabilization of the industry has undoubt

edly progressed to some extent but it is still in the formative state, and has not yet come into sufficient definite shape to be crystallized by a permanent statute. Even if that were not so, there is no justification, in our opinion, for a proposal to impose such a code and such regulations upon the bituminous coal industry while its competitors and related industries remain free from such restrictions.

But I desire to speak not so much upon the general operation of the bill as upon the effect it would have upon the industry in Alabama. The Alabama coal field, as of course you know, is far removed from the large consuming areas; and at the same time it is a fact, which I wish to emphasize, that our coal meets serious competition in hydroelectricity, fuel oil, and natural gas.

As a result of that geographical position we are less competitive to the large producing and consuming area east of the Mississippi River. More than 50 percent of our tonnage is consumed within the State, and our entire tonnage is less than 3 percent of the total for the Nation. Prior to the fall of 1930, and before the effects of the economic depression became acute, the fuel oil and hydroelectricity had taken many millions of tons annually from our Alabama mines. Following this came the invasion of natural gas into the normal and natural market of Alabama coal, and its ruthless and destructive competition has shifted additional business to the extent of approximately 2,000,000 tons per year. A greater tonnage than this would have been lost had not reductions in prices of coal been made in the attempt to check the loss of additional tonnage. This serious competitive condition continues to exist. Fuel oil and hydroelectricity have shifted an estimated annual tonnage of 7,000,000 tons.

We hand you herewith table I as an exhibit showing coal and oil supplied to vessels serving the ports of New Orleans and Mobile, and the ports of Florida. I wish to call your particular attention to the tremendous decline of the use of coal at these ports and the increased use of other fuels.

TABLE 1.-Coal and oil supplied to vessels engaged in foreign trade

TABLE 1.-Coal and oil supplied to vessels engaged in foreign trade-Continued

In connection with this statement it is shown here that at the port of New Orleans, as late as 1930, coal supplied 15 percent of the fuel for those vessels, and oil 89 percent. In 1934, coal supplies 5 percent, and oil 94 percent. At Mobile, where we had an even break in the supply of fuel, that declined in 1934 to a favorable position of oil of 71 percent, and of coal of 29 percent. The same experience holds true in the Florida ports.

We submit table 2 as an exhibit showing total coal production of Alabama as compared with other States which are recognized as competitive to Alabama, and for the years 1917 to 1934, inclusive.

TABLE 2.-Coal production, Alabama and competitive States, showing increase or decrease since 1917

TABLE 2.-Coal production, Alabama and competitive States, showing increase or decrease since 1917-Continued

NOTE.-Alabama has to wash more than 70 percent of the coal mined, which represents approximately 30 percent of the total coal washed in all States.

Our purpose in giving this tabulation is to show that from 1917 to and including 1934 the Alabama territory had only two years of increased production, those years being 1923 and 1926. Hydroelectric power was fully developed in the year 1914 by the Alabama Power Co. That is when began the tremendous shifting in tonnage that progressed rapidly for the following 10 years.

While we show a decline in position of production almost continuously, and certainly continuously since 1927, it is not chargeable alone to hydroelectric, but to other competitive fuels. At the same time. coal from other districts located nearby the Alabama field, due to their more favorable physical condition, are now able to produce coal at a materially lower cost of production and can ship that coal into what might be called our normal Alabama market at a price materially lower than ours.

Senator NEELY. Are the miners in the Birmingham district organized or unorganized?

Mr. THOMAS. They are organized.

Senator NEELY. By the United Mine Workers of America?

Mr. THOMAS. Yes.

Senator MINTON. How long have they been organized?

Mr. THOMAS. Contracts were made in March 1934 and expire March 31 of this year.

We direct the attention of the committee to the tremendous decline of Alabama's production. During this same period the competitive States show an increase. The major tonnage loss in Alabama production is due largely to development of hydroelectric power and the increased use of oil and gas. We maintain that any allocation of tonnage or production control will not correct this situation, particularly if such a program resulted in the increased cost of production; for contrary to this, it will cause further heavy losses of coal tonnage.

This situation has already materially reduced the employees of the coal mines of our State, and this is illustrated by the fact that in 1928 there were employed in the coal-mining industry of our State 25,500 men in 211 mines. On July 20, 1934, this figure was 16,706 men in 76 mines. Some of these employees have obtained employment in other classes of work, but a large majority of them are today on relief.

The problems of the coal industry in Alabama are, first, to prevent a recurrence of the exploitation of labor; second, the reduction of production costs to meet the competition of other coals and forms of energy and heat production; and third, increasing the demand for or consumption of coal.

The first problem is one which definitely can be, and which is being, solved by the present conditions under which the coal industry is operating today.

The second problem is one for solution by the management of industry and certainly is not a problem with which Congress should concern itself.

The third problem deals entirely, insofar as the coal industry in Alabama is concerned, with the vanishing market, due principally to the competition of fuel oil, natural gas, and hydroelectricity.

As I have said, due to the increased partings of foreign materials in our seams, Alabama is compelled to wash mechanically a greater percent of this total tonnage than any other coal-producing area in the country. That is evidenced by the fact that we wash better than 70 percent of our total State production, which, according to the Bureau of Mines' figures, is approximately 30 percent of the total washed coal produced in the country. That is so serious a situation that we maintain that an allocation of tonnage or production control will not correct it, particularly if such a provision results in an increased cost of production which will cause further heavy losses in coal tonnage.

Since the bill S. 1417 makes mandatory the application of a uniform limitation of hours, and the sponsors of this bill have demanded the 6-hour day, this feature will be considered in discussion of the production problems of Alabama. The application of a national law regulating the coal industry of the United States, and especially a uniform limitation of hours, would have a disastrous effect upon the coal industry of Alabama on account of its peculiar natural handicaps of production. I might say the common mine seam is of such thickness in our State that I don't believe the producers in any other State would even look at them.

The many coal seams of Alabama vary greatly in thickness, the thinner seams of clean coal ranging from 26 to 36 inches, and coal seams of greater thickness being interspersed with many partings of foreign material, with a thickness totaling 24 inches or more in some of the seams. Variations in dip occur from 0° to 60°. In many of