Stabilization of the Bituminous Coal Mining Industry

of the industry is considered. All of these taxes and expenses placed on captive mines coal production of steel companies, must obviously be absorbed eventually in the cost of steel products, as the industry is in no position to assume such additional burdens, and will thereby affect all of the users of steel products in the United States, to whom they will be passed, and will, therefore, have the most far-reaching effect.

Under title II of the bill, 40 percent of the proceeds of the tax are to be dedicated to a sinking fund to pay interest and retire bonds, which are to be issued under the bill for the purpose of purchasing coal lands as a national bituminous coal reserve alleged to be for the conservation of the national bituminous-coal resources and their assured utilization in the public interest; and the remaining 60 percent are to be used "for the rehabilitation of miners who have been displaced from employment by reason of the withdrawal of coal lands from mining operations." At the 1930 rate of production, this tax could amount to $47,000,000 per year, of which the 60 percent allotted to the rehabilitation of unemployed miners would be $28,200,000. This amounts to $50 a year for every miner then employed. This amount is unreasonable and far in excess of any expectant needs.

Section 1 of title II in creating the so-called "National Bituminous Coal Reserve" states that it is "for the purpose of conserving the Nation's bituminous coal resources, promoting the economic production of coal, checking the evil of excessive and wasteful production, and assuring future supply in time of peace and war As previously pointed out, none of these purposes are served by captive mines whose production is always, in times of peace as well as war, measured by the industrial demands for steel products.

III. BITUMINOUS COAL CODE

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The provisions respecting the bituminous coal code proposed by the bill to be prescribed for all owners and operators of bituminous coal properties are divided into three major subjects: (1) Production; (2) marketing; and (3) labor relations.

(1) Production.-The attempt to divide the bituminous coal area into appropriate districts, to determine the standard maximum tonnage to be allotted to the various districts, and to allocate to each district a periodic maximum output marketable for the district and to establish periodic quotas thereof to each mine would seem to have absolutely no utility to or application to captive mines. These provisions are all dedicated to the conservation of the natural coal resources of the Nation by restricting the coal production of coal mines to national requirements; but we have shown that in respect of our captive mines the production is naturally restricted to the actual requirements of our steel business.

Furthermore, the method proposed by paragraph (d) of part 1 of section 4 of the bill is "to base quotas on the average annual output of the mine since the year 1929 in its relation to the standard maximum allotted such district," and paragraph (b) of said section provides that "standard maximum tonnage" allotted to each district shall be based upon the "average annual output since 1917 and its current service as shown by its output for 1934." This formula is purely arbitrary and fictitious and would not be equitable under any circum

stances to our captive mines because their annual output is always necessarily controlled solely by the requirements of the steel business and not by the demands for bituminous coal in the open markets. This is just another illustration of the impossibility of prescribing the same standards of control in respect of captive mines as in the case of commercially operated mines. To impose any requirements which would prevent the production of a captive-mined coal being adjusted from time to time over short periods of time to conform to the needs of its related business would destroy all of the advantages and business efficiency resulting from operating the mines and conducting the manufacturing business as a single unit.

Furthermore, extraordinary and peculiar variations in output have occurred during these abnormal years, which include the aftermath of the World War, the so-called "New Economic Era," and the depression, and surely these years cannot be used as any adequate or proper standard of measurement for normal or probable requirements. Why take such a period of distortion, flux, and economic dislocation as a standard of normality for a basic industry?

If the Commission must maintain the relative proportions fixed by these standard allocations in fixing the quotas to meet periodic maximum estimates required by the market, as seems to be prescribed by paragraph (c) of part 1 of section 4, the present geographical bituminous-coal areas will be rigidly and unchangeably "frozen" without regard to changing economic conditions, shifting demands, and possibly future discoveries of new supplies. To leave all future development and departures from these fixed allocations to the discretion of a Federal agency is to deprive the States of their sovereign rights to the benefits of the resources within their boundaries and to submit to a control which might be inimical to their interests.

(2) Marketing.-There is absolutely no occasion for any regulation of marketing in respect of captive mines; as has been repeatedly said, captive-mined coal is not marketed in the sense commercially understood and in the sense employed in the bill. Furthermore, the standards of price-fixing stipulated by the bill are absolutely inapplicable, as some of the stipulated elements in the fixing thereof are not present as a matter of fact, and to artificially impose or interject them would be establishing an entirely artificial price unrelated to fact. Here again we see that the captive mines have characteristics fundamentally different from commercially operated mines and that the two cannot be thrown into the same legislative category.

Most certainly captive-mined coal is in no way involved in the complex work of commercial price making and enforcement and therefore should not be taxed under any form of regulation for service not rendered and with which it is not involved. Prices respecting captive-mined coal are not a matter of public import and are adjusted solely as a matter of intercompany policy.

It is further submitted that any proper and adequate measure of price fixing or production allocation is impracticable, due to the wide variations in yearly demands, varying business conditions, multitudinous grades of coal, and widely separated markets therefor. Furthermore, to prescribe any standard equitably applicable to captive mines would require that such standards be predicated on the conditions and demands of the steel industry, not on the bituminous-coal industry, so that two different standards would have to

be made if any consideration is to be given to different and uncomparable business conditions. As the bill is made applicable to all captive mines, similar differentiation would have to be made respecting captive mines owned by the railroads, public utilities, chemical and other industrial enterprises. In other words, you would have a complicated set of standards which would probably so impinge upon each other as to make all such standards impracticable to effectuate their intended objective.

(3) Labor relations.-The wages, working hours, and labor conditions of the employees of the captive mines are presently the same as at the commercially operated mines. Captive-mine owners are not subject to the Bituminous Coal Code but have entered into a separate agreement with the President of the United States governing hours, wages, and working conditions. Never in the history of the operation of our captive mines have our captive-mine employees been paid less, and most of the time have been paid even more than the prevailing rate in the bituminous-coal industry in the district in which they operate, so that no instance can be shown of labor chiseling in the operation of our captive mines, and therefore no legislation has been or is necessary to assure the payment of prevailing rates of wages in respect of our captive mines.

The principles of collective bargaining to be prescribed for the bituminous coal industry should be the same as prescribed for all industries. No logical reason can be advanced to support different standards or principles for collective bargaining in different industries. Unless the principles of collective bargaining are unified in all industry, industrial labor conditions will be thrown into chaos and justice to employees and the public defeated.

The provision in paragraph (g) of part III of section 4, that wage agreements negotiated by collective bargaining in any district, between representatives of purchasers of the majority of its annual tonnage production and representatives of the majority of mine workers therein belonging to a recognized national association of mine workers, shall be accepted as the minimum wages in such district is, if constitutional, a deprivation of all rights of a great body of employers and employees to negotiate respecting terms of employment through representatives of their own choosing. It denies to a minority of employers, in point of view of their annual total production, the right to negotiate and imposes upon them the will of the majority of employers in tonnage production. It denies to every employee not belonging "to a recognized national association of mine workers" the right to have any voice whatsoever in the determination of their conditions and terms of employment. No employee has any right to bargain individually or collectively except through "a national association of mine workers"; and he is bound, irrespective of his own rights or desires, by any agreement concluded by a majority of those employees "belonging to a recognized national association of mine workers", even though such association should only have a minority of employees in the industry. Under this provision no employee can have the right to individually or collectively bargain or protect his own interests in any subject relating to his employment unless he joins "a national association of mine workers." This is clearly designed to compel all employees to join such a national association.

It prevents the practical use of employee representation plans, or any other method of collective bargaining chosen by the employees themselves regardless as to whether or not such chosen method is an effective means of collective bargaining. If one "national association of mine workers" represents a majority of employees, the bill then excludes any other labor organization, national or otherwise, having less than a majority of the employees as its members, any right to represent employees who have preferred membership therein. In view of the actual situation presently existing in the industry, known to all, the purpose is obvious to force all employees in the industry by legislative fiat into one well-known labor organization, regardless of and in spite of the wishes of the employees themselves, and to legislatively superimpose that organization as the sole and exclusive bargaining agency.

The proposal far transcends the efforts to prescribe by legislation or ruling the rule that representatives chosen by a majority of employees shall be the exclusive bargaining agency for all regardless of the constitutionality or legality thereof. To impose union representation-in fact, to even prescribe the organization or the particular kind of organization which must be chosen-is the very denial of any semblance of the right of collective bargaining through representatives of the employees' own choosing. To require negotiation of the terms and conditions of employment through any representation or agency not voluntarily chosen by the employee himself is a denial of freedom of contract.

IV. GENERAL

If it should be found that conditions have developed in the commercial bituminous-coal industry which make some Federal regulation necessary, it is wholly unnecessary to adopt this or any further legislation, and it is particularly unnecessary and inadvisable to adopt the rigid prescriptions embodied in this bill. If such regulation is desirable, there is no reason why regulation cannot be effectively accomplished through the National Industrial Recovery Act and the the extension thereof, together with the codes and boards established under that act. The National Industrial Recovery Act establishes a means through which the commercial industry can be regulated to the full extent desirable. Furthermore, such regulation under the provisions of the National Industrial Recovery Act would be flexible and would permit change and adjustment from time to time to meet varying and unforeseen conditions which necessarily will arise in said industry, will permit a sound regulation to develop as a matter of experience, and will allow said industry itself to cooperate in meeting its own needs and requirements. Legislation, however, such as this bill, is not only unnecessary, but impracticable and undesirable in respect of captive-mines, for the reasons herein stated; and, in respect of the commercial bituminous industry, would be equally impracticable because of the rigid detailed requirements of the bill based on abnormal conditions which would bind the commercial industry to inflexible legislative principles which experience might prove absolutely impractical and even detrimental and which would forbid adaptability to changing conditions and experience.

V. CONSTITUTIONALITY AND LEGALITY

The Supreme Court of the United States has repeatedly held that mining and manufacture is not "commerce" within the meaning of the interstate-commerce clause in the Constitution and therefore not within the jurisdiction of the Federal Government. Even if the products of mines or manufacture ultimately find themselves in the channels of interstate commerce as an instance to their distribution or sale, their productive operations are not subject to Federal jurisdiction. Their actual instrumentalities of transportation, if interstate, may be subject to Federal control, but this does not change the rule as to their operations. However, in this connection, an important fact is that approximately 65 percent of our total production of captive-mine coal is used and consumed within the State of its production.

It is, therefore, submitted that the ownership and operation of captive-coal mines, viewed either as mining or as an integrated part of manufacture, are not subjects of Federal jurisdiction and that, therefore, this bill is unconstitutional.

These summarized conclusions of law can be easily substantiated by a multitude of Supreme Court and other decisions, if desired, but no attempt will be here made to argue the constitutional aspects of the bill. Our effort has been to demonstrate the impracticability and injustices of the bill and its failure to even serve its intended and declared purpose in respect to captive mines, but we would be remiss in our duty if we did not call attention to its clear unconstitutionality. (Information referred to is as follows:)

SCHEDULE A.-Schedule of United States Steel Corporation and Subsidiaries Captive Coal Mine production in each district provided in S. 1417 compared to total district production, 1929 to 1933, inclusive

DISTRICT 1. H. C. FRICK COKE CO., PENNSYLVANIA; LORAIN STEEL CO., PENNSYLVANIA