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public interest to pass legislation, which is a very serious question, it would not be required to classify this industry as a public utility.

I hate to close without saying something about section 2 of this act very briefly.

I was a member of the committee of the National Coal Association that worked on that matter for months. I think the Hosford suggestion would improve it greatly. I think great care should be taken and it should be given very serious consideration. I helped make up the estimate of what it cost. That estimate was based upon not buying any land more than 3 miles from the railroad, on the theory that if any legislation is passed there will be no necessity for buying those back lands. There are millions of acres of coal lands for sale. The Government would be flooded with propositions of all kinds of cat-and-dog lands belonging to estates and banks and other people that have carried them a long time and are tired of paying taxes on them. I think if there are any expenditures made by the Federal Government there should be an effort to reduce capacity and not to buy lands. You might have to buy lands incidentally to reduce capacity, but if you do not immediately reduce capacity you will accomplish very little. I would personally be willing to recommend to our companies that we pay some additional tax to retire marginal mines and pay interest and sinking funds thereon. I would like to see it guarded very jealously, and I would like to see that money expended with the greatest care and the greatest economy. You can buy 10,000,000 acres of coal land, and it would not help the situation in the coal business in the next 10 years one iota.

We must consider that depressions have always come and gone. We always hope that another will never come, but there is always danger that it may.

I hope that this committee will give this matter very serious attention and consideration, and not enact any legislation that is going to be injurious to the coal industry.

I thank you very much.
Senator NEELY. We are very much obliged to you.

STATEMENT OF T. E. MILLSOP, REPRESENTING THE WEIRTON

STEEL CO.

Mr. Millsop. Mr. Chairman and gentlemen of the Committee, Weirton Steel Co., on behalf of its subsidiary, Weirton Coal Co., desires to enter its protest against the Bituminous Coal Conservation Act, S. 1417, now before your committee for hearing

The Weirton Coal Co., owned by the Weirton Steel Co., has a mine located at Isabella, Pa., which produces coal used by the Weirton Steel Co. in its plant at Weirton, W. Va. The production from this mine, during the time it has been owned by the Weirton Steel Co., is as follows:

Tons 1929, August to December.-- 269, 642 1932

600, 672 1930. 647, 026 1933.

469, 369 1931

1934, January to May. 180, 457 All of this coal was utilized by the Weirton Steel Co. in the manufacture of steel, except a very small part of it which was sold to the workers at the mine.

698, 686

Tons

In addition to that, the Weirton Steel Co. purchases a considerable quantity of coal. The coal produced from this mine does not compete in any way with coal on the market and its transfer to the Weirton Steel Co. has no effect whatsoever upon the price of coal.

The wages paid by the Weirton Coal Co. have always been equal to or higher than those prevailing in the district where the mine is located.

We have read the protest filed by the United States Steel Corporation on behalf of its coal-mining subsidiaries and concur with the reasoning presented in that protest. There is no reason why mines, such as that owned by the Weirton Steel Co., called "captive mines" should be subject to any regulation such as is contained in the proposed bill.

We respectfully submit that the proposed legislation, if enacted, should be modified to exclude from its provisions the captive mines, as they are a facility in the manufacture of steel and not in the competitive field at aïl as far as commercial operators are concerned.

STATEMENT OF CHARLES R. HOLTON, VICE PRESIDENT, BETH.

LEHEM MINES CORPORATION

Mr. Holton. Mr. Chairman, my name is Charles R. Holton; I reside at Bethlehem, Pa. I am vice president of Bethlehem Mines Corporation, which is the subsidiary of Bethlehem Steel Corporation that operates the coal mines owned by Bethlehem and from which the supply of coal for the steel mills of Bethlehem Steel Co. is secured. I am here as a representative of Bethlehem Steel Corporation to register our opposition to the bill now under consideration, S. 1417, insofar as that bill affects us as owners and operators of our coal mines.

Bethlehem Mines Corporation owns or leases and operates bituminous-coal mines in Washington County, Pa., and Marion County, W. Va., which produce high-volatile coal, and other coal mines in Indiana and Cambria Counties, Pa. and Preston County, W. Va., which produce medium-volatile and low-volatile coal. We also have other high volatile coal lands, chiefly in Kanawha County, W. Va., which have never been developed. We do not produce any coal for sale and we do not sell any coal except a very small quantity to our employees at or near our mines for domestic use by them. With that minor exception the coal produced by Bethlehem Mines Corporation is used by other Bethlehem subsidiaries. The output of our mines during the 5 years, 1930–34 was as follows:

Nelions 1930. 6, 775, 234 | 1933.

2, 959, 653 1931 3, 979, 336 1934.

2, 834, 219 1932.

1, 958, 093 Our average output for such 5 years was 3,701,307 net tons. In 1929 we produced from our mines 9,673,036 net tons.

I have been very much impressed by the statement just made by Mr. Moses on behalf of United States Steel Corporation in opposition to the bill which you are now considering, and we most heartily concur in the position which he has taken that the bill should not be made to apply to the so-called “captive coal mines" of the steel industry; that is, the coal mines owned or leased by the members of the industry and from which they secure their supply of this important raw material

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for their own uses. I, therefore, shall not take up the time of your committee in attempting to cover the same ground as that covered by Mr. Moses. I believe, however, that it may be helpful if I emphasize some of the points made by him and bring out a few facts which were not touched upon by him.

The purposes of the bill as expressed therein are: to stabilize the bituminous coal m.ning industry *; to provide for cooperative marketing *; to declare the production, distribution, and use of bituminous coal to be affected with a national public interest; to conserve the bituminous-coal resources of the United Statesand so forth. For the reasons which Mr. Moses has well pointed out, those purposes do not have any application to us. As I have stated, our coal is mined for our own use in the manufacture of iron and steel. The operations of our mines are not a part of the bituminous-coalmining industry, but rather an integral part of our iron and steel busi

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ness.

As the members of this committee know, the raw materials that enter into the production of pig iron-which in turn is made into steelare iron ore, coal when it is converted into coke, and limestone. Bethlehem Steel Corporation owns indirectly through subsidiary or affiliated companies its iron-ore mines and the limestone quarries from which its subsidiaries secure their supplies of those two raw materials, as well as the coal that is used by them, as I have stated. Our purpose in acquiring those mines and quarries was, of course, that we might have a sufficient supply of those raw materials of the proper quality and as advantageously located as possible for use in our business. When one stops to consider the purposes for which such mines were acquired by us-and in that respect we do not believe that we in any way differ from other members of the steel industry-it becomes apparent that the purposes of the bill, as expressed therein and to which I have referred, cannot in any way be served by making the captive coal mine of the steel industry subject thereto, any more than the purposes of a similar bill relating to iron ores or limestone would be served by making subject to such similar bill the mines and quarries of the steel industry from which its members secure their supply of those products.

We mine only the coal which we need, just as we mine only the iron ores and quarry only the limestone that we need. As I see it, it would be little short of absurd for one to claim that legislation of any kind is necessary in order to conserve our supplies of iron ore and limestone. The demands of the markets for iron and steel in turn, of course, result in a demand upon our mines and quarries for iron ore, coal, and limestone. The quantities of raw materials mined or quarried therefrom depend only upon such demand.

During the years 1917 to 1920, inclusive, when the demand for steel was very heavy, we, as well as other manufacturers of pig iron and steel, found it quite difficult to procure sufficient coal of satisfactory quality to meet our needs and we decided that it was inexpedient and unsafe, with our huge investments in blast furnaces, steel plants, and rolling mills, to depend upon the bituminous-coal-mining industry for our supply of high-grade coals. Accordingly thereafter, as opportunities presented themselves, we made substantial investments in coal properties to provide not only for our then present requirements, but also for our requirements for a considerable period of time. We have followed the same policy with regard to iron ore and limestone which, with bituminous coal- the latter converted into coke

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are, as I have said, the principal raw materials that enter into the manufacture of pig iron and steel.

Because of the fact that the quality of coal that is used in the manufacture of pig iron and steel must be better than that which may be used in the generation of steam and for other fuel purposes, it was necessary carefully to select our coal properties and the same must be true of the coal properties owned by other members of the steel industry—to the end that the coal produced therefrom might have the most advantageous properties from the point of view of our industry. Most of the coals which go to the steel plants are used in the making of coke for the blast furnaces. In addition to having an ash content as low as possible, they must be reasonably free from sulphur and phosphorus. Besides, different coals produce different qualities of coke and the efficient operation of our steel plants requires that we give most careful attention to the securing of definite fixed mixtures of coals in proper proportions adapted to the specific use.

Moreover, in our case at least, it has been necessary for us in selecting our supply of coal to secure it from mines which are so located with reference to the location of our steel plants that the coal produced therefrom shall be useable from the point of view of the cost of transportation of the coal from such mines to our plants. That was necessary because our coal supply for our steel plants is transported to them chiefly by rail. Coal being a bulky, heavy material, the freight charges, when compared with the value of the coal itself, are very large; in some cases the transportation cost per ton exceeds the market value of the coal at the mouth of the mine.

Furthermore, having a very large investment in coal properties, the coke ovens at our steel plants have been designed and built with a view to producing therein from the coals from our own properties a satisfactory quality of coke for use in our blast furnaces. It is a recognized fact that in the making of coke certain kinds of coal will expand and other kinds contract more or less according to the character of the coal; hence, in the designing and building of our coke ovens the kind and character of the coal that is used therein had to be kept in mind and the ovens made accordingly. In addition, our coke plants represent a very large investment; they cannot readily be altered to take care of changing coal mixtures; and they cannot be rebuilt without prohibitive cost.

In conclusion, I should like to leave with you the two thoughts that I have tried to emphasize, first, that the express purpose of the bill which you now have under consideration cannot in any way be served by making it apply to the captive coal mines of the steel industry; and, second, that such mines, which constitute important investments of the members of the industry, have been carefully selected with respect to their use in the industry and that the use for which they were selected should not be interfered with by any legislation, at least when no useful purpose can be served thereby.

STATEMENT OF PARKER F. WILSON, REPRESENTING THE WHEEL

ING STEEL CORPORATION

Mr. Wilson. Mr. Chairman, the Wheeling Steel Corporation, on behalf of its subsidiary, the Consumers Mining Co., desires to enter its protest against the Bituminous Coal Conservation Act (S. 1417) now before your committee for hearing.

The Consumers Mining Co., owned by the Wheeling Steel Corporation, has three mines, from which it is able to produce when needed approximately a million and a half tons of coal per year. During the last few years the production taken from these mines has averaged slightly less than a million tons a year. This coal is all used by the Wheeling Steel Corporation in its various plants. It does not come upon the market and does not affect the price of coal in any way.

We have given consideration to the protest filed by the United States Steel Corporation on behalf of its coal-mining subsidiaries and concur with the reasoning presented in that protest. In addition to that, we desire to point out that it is frequently advisable for us to accumulate coal during certain seasons of the year in order to insure continued operation of our plants and it would not only be a handicap to us to have our production restricted or to put us under the necessity of making application for any such special allowances.

We have always paid wage rates equal to or higher than the rates prevailing in the districts and are perfectly willing to continue to do

We cannot see how the production of our coal and its use by us affects in any way the general situation with respect to commercial mines and think an exception should be made in the act, eliminating the so-called "captive mines” from the operation of the act.

We would be perfectly willing to have it stipulated, in defining captive mines, that they would be exempt from the act only if they paid the prevailing wage rate in the district and we can see no objection to a definition which would require that at least 95 percent of its product be used by the owners of the mines in manufcaturing operations. There ought to be some little latitude, such as the suggested 5 percent, to take care of other incidental users of the coal mined.

SO,

STATEMENT OF S. E. HACKETT, JONES & LAUGHLIN STEEL

CORPORATION

Mr. HACKETT. Mr. Chairman, the Jones & Laughlin Steel Corporation, on its own behalf and on behalf of its wholly owned subsidiaries, the Vesta Coal Mining Co. and Shannopin Coal Co., owners and operators of captive coal mines, respectfully submits the following facts and arguments in opposition to Senate bill 1417:

1. The Vesta Coal Co. is a corporation of the State of Pennsylvania and is the owner of a contiguous tract of approximately 23,000 acres of bituminous coal situate in the County of Washington, in the State of Pennsylvania, and owns no other coal or coal lands.

2. Shannopin Coal Co. likewise is a corporation of the State of Pennsylvania and is the owner of a contiguous tract of approximately 13,000 acres of bituminous coal situate in the County of Greene, State of Pennsylvania, and owns no other coal or coal lands.

3. The Jones & Laughlin Steel Corporation, likewise a corporation of the State of Pennsylvania, is the fourth largest producer of steel and steel products in the United States and has steel plants located on the Monongahela River in the city of Pittsburgh, Pa., and at Aliquippa on the Ohio River in the County of Beaver, Pa., and in the conduct of its manufacturing business in normal times, employs approximately 20,000 men. The said Jones & Laughlin Steel Corporation is the owner of the entire capital stock of the Vesta Coal Co.

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