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Former Senator STANLEY. Mr. Chairman, may I ask the gentleman a few questions?
Senator NEELY. Certainly.
Former Senator STANLEY. Assuming that there were no interstate commerce clause in the Constitution, would there be any basis whatever for this legislation?
Mr. WINGER. None whatever. I don't think there is any basis for this act.
Former Senator STANLEY. I understand that is a moot question, but assuming for the sake of argument that the proponents of this bill are correct in their theory that a thing that affects interstate commerce, or tends to affect it, is interstate commerce. I do not want to be committed to that.
Mr. Winger. I could not be.
Former Senator STANLEY. Assuming that is correct and that they are within the interstate commerce clause, is there any other provision of the Constitution to authorize this legislation?
Mr. WINGER. I could not find any. The argument has been made that the general welfare provision would cover it, but I do not think there is any general welfare provision in the Constitution.
Former Senator STANLEY. If this bill rests solely upon the fact that the producers and the miners of coal are engaged in interstate commerce, what difference does it make, as far as Federal authority is concerned, if it is not interstate commerce, whether you call it a utility or not? Can that strengthen the Federal Government's jurisdiction?
Mr. WINGER. I do not think so. I do not see how it can.
Former Senator STANLEY. If the interstate commerce clause is sufficiently broad and sufficiently elastic--and on one occasion Justice Brewer said it was a rubber band--to reach it, is there any necessity for calling it a utility in order to give the Congress jurisdiction?
Mr. Winger. I do not think so. If the interstate commerce clause is broad enough to cover it, there is no necessity to call it a public utility; but I do not think it is broad enough to cover this industry.
Former Senator STANLEY. Assuming that it is correct that the interstate commerce clause does not authorize the regulation of anything except those things that are actually in the channels of interstate commerce, or necessarily incidental thereto, does calling this a public utility in any way strengthen the Federal power?
Mr. WINGER. I do not see that it does. I do not think it does. That is all, Mr. Chairman.
Senator NEELY. Thank you very much. STATEMENT OF J. G. PUTER BAUGH, McALESTER, OKLA., REPRE
SENTING COAL OPERATORS OF ARKANSAS AND OKLAHOMA
Mr. PUTERBAUGH. Mr. Chairman, my name is J. G. Puterbaugh. I am president of the McAlester Fuel Co. of McAlester, Okla., and I am here as spokesman for the operators of coal mines located within the States of Arkansas and Oklahoma.
In these two States there are about 187 coal mines, which employ about 7,000 men.
Senator NEELY. Are the mines that you represent organized or unorganized?
Mr. PUTERBAUGH. They are all organized.
Senator NEELY. Have you experienced any difficulty with the United Mine Workers of America since your properties became organized?
Mr. PUTERBAUGH. Not the last time. The mines in Oklahoma and Arkansas went open shop in 1924 and 1925, because we could not prevail upon the miners' organization to recede from the Jacksonville scale which became effective in 1920. Our business was rapidly going to natural gas and fuel oil, and we brought those facts to the attention of the miners' organization, but they took the position that, while they recognized that we were suffering and entitled to consideration, because of their contractual relations east of the Mississippi River in Illinois, Indiana, and Ohio, they could not grant us concessions west of the Mississippi without upsetting the relations they had east of the Mississippi, which they felt were more important States from their standpoint.
At the present time all of the mines in these two States, except two or three stripping operations in northern Oklahoma, are working under wage contracts with the United Mine Workers of America, which expire on March 31, 1935.
It is the unanimous judgment of the coal operators whom I represent that it would be unwise for the Congress to enact into law the Guffey bill or any similar bill at this session. In order to comply with your request that both the proponents and the opponents of this bill avoid unnecessary repetition I shall not undertake to review the numerous provisions of the bill nor undertake to recite any considerable number of the many reasons why we think it should not be enacted into law.
We believe that it would fall far short of bringing benefit to the country and to the highly complex industry of coal mining. We believe that it would be entirely against and contrary to good public policy.
Its primary effect would be to make it compulsory that every coal miner in the United States become and remain a member of and obey the mandates of the United Mine Workers of America. It would destroy, insofar as the bituminous coal mining industry is concerned, the idea of "collective bargaining," as the mine owners of the country would have no alternative but to accept the ultimatum of the miners' organizations. We do not believe that we would be discharging our trust to the public and to the consumers of the States of which we are citizens if we would urge this Congress to pass such a law, even though in return for the liberty we would surrender we might hope to derive substantial financial benefit. Practically all mines in Arkansas and Oklahoma operated under union contracts from 1903 to 1923, inclusive. During that period the day wages of underground mine labor were increased from $2.85 to $7.50 per day.
As a result of this high wage the cost of producing and the selling price of coal were advanced to such high figures that practically every railroad west of the Mississippi River and east of the Rocky Mountains and south of Nebraska and Missouri abandoned the use of coal and entered upon the use of fuel oil; approximately two-thirds of the industrial plants and domestic consumers entered upon the use of natural gas, which is abundantly produced in Kansas, Texas, Arkansas, Oklahoma, and Louisiana.
This wholesale abandonment of coal and resultant tremendous increase in the demand for natural gas and fuel oil and petroleum coke, which is a byproduct of oil refineries, tremendously stimulated the building of pipe lines, until at the present time practically every town and hamlet within the States of Kansas, western Missouri, Oklahoma, Arkansas, Texas, and Louisiana, which States are the natural markets for Arkansas and Oklahoma coal, is now supplied with natural gas, and the business we are still holding is in constant jeopardy and can be held only by the continuance of competitive prices on coal.
We recognize the desirability of standardizing wages by districts. We concede that apparently the only practical way to accomplish this standardization is by means of wage contracts with organizations of mine workers. The difficulty is that there is a wide and irreconcilable difference between the leaders of the miners' organization and the coal operators of the country and the principal consumers of coal, large and small, as to what constitutes a fair wage for men employed in coal mines and as to what the length of a reasonable work day should be.
In our part of the country the principal consumers of fuel that are not using gas or oil are the farmers. As every one knows, the farmers of this country are hard pressed to make a living. Their farms are mortgaged; their future is most uncertain. Prosperity cannot return to this country until their problem is reasonably solved. The coal miners in the Southwest are, even in these distressing times, far better paid for the work they perform than the farmers who buy their product and pay the hard-earned money that meets their pay rolls.
I might add that a majority of the employees of our mines have come at last to recognize these facts. They are not individually demanding increased wages per hour and per day or shorter working time, but are saying to our managements, “Try and increase your market demand and give us a greater number of working days per year.” These men, many of whom have grown to manhood and spent all of their lives working for their present employers, have manifested a far clearer understanding of the difficult conditions under which the coal-mining industry of the Southwest is struggling to survive than have their leaders, who, of necessity, spend their time here in Washington and in the large producing States of the East.
Under the plan of collective bargaining that has prevailed during the past 20 years, the outlying districts of the country, and particularly mines in the Southwest, have had practically no voice in determining the wages they are to pay. The wage scales they have been required to subscribe to and pay have been dictated by the large and powerful coal-mining corporations operating mines in Pennsylvania and Illinois. As a result, our feet have time and again been held to the fire, and we have been compelled to hold in effect wage schedules that were entirely illogical for our part of the country and that have resulted in the loss of business, as stated, to gas, oil, petroleum coke, and to more favored mining districts east of the Mississippi, as a result of which the prosperity of our industry in the Southwest has been destroyed and thousands of worthy mine workers who were entitled to live and prosper have been thrown out of employment at the mines.
Practically every 2 years between 1903 and 1924 our biennial wage contracts expired before we could even obtain conferences with the miners' union in respect to their renewal. Our mines have, year after year, remained in idleness from 2 to 6 months pending the settlement of wage controversies in the central competitive field, which included the coal mines of Illinois, Pennsylvania, Ohio, and Índiana. When at last agreements were reached in the East we were given an ultimatum which it was useless to resist.
We do not feel that this procedure has been in keeping with the spirit of true or proper collective bargaining, and we are not prepared to subscribe to the enactment into law of a plan to add to the strength of the miners' union the strong right arm of the Federal Government in continuing such procedure. We could not do this and keep faith with the consumers who still depend upon us for coal and who have made it possible for us to continue in business. We could not do this and keep faith with the coal miners who look to us for employment upon which they must depend for daily bread for themselves and families. Even for the benefits that are held out to encourage us to accept this proposal, we cannot delegate such absolute power and control to an organization that does not take into consideration the rights of the producers, the miners, and the consumers of each State according to the conditions that exist in those States and according to the earnings of those who buy as compared with those who produce coal.
On the last day of March of the year 1922 the United Mine Workers, which at that time dominated the labor in practically all bituminous mines in this country, ordered the miners in all bituminous mines in the United States to lay down their tools and quit work until such time as the coal operators should agree to continue to pay them the high war wages, ranging from $7.50 to $12 per day, as set out in the Jacksonville agreement. During those 6 months thousands and thousands of domestic and industrial consumers in the Middle West, after weeks and months of waiting, tired of uncertainty and fearful of a coal famine, accepted the proposals of distributors of natural gas and fuel oil and permanently abandoned the use of coal. Since that catastrophe the volume of demand for domestic coal throughout the Middle West has been reduced by one-half. There has been wide distress among coal miners as a result of unemployment, and mining company after mining company has gone into bankruptcy.
This bill has been constructed on the theory that the coal mines throughout the country are producing a commodity that the public must buy, and that we have only to establish the machinery to raise wages, prices, and profits and that the consuming public will of necessity pay the bill. Our experience has demonstrated to us in the Southwest the fallacy of this belief. In 1924 and 1925, to save the industry in the Southwest from complete destruction and to hold the third of the farmer business that was still on coal, and having desperately endeavored to persuade the officials of the miners' union of the necessity of reduction in war wages that were still in effect, practically all of the coal operators of Arkansas and Oklahoma discontinued contractual relations with the miners' organization, reduced the day wage from $7.50 to $5 per day, and later to $3.75 per day, and continued until the fall of 1932 open shop.
By the summer of 1932, after the arrival of the depression and a further reduction in market demand as a result of diminished buying power on the part of the consuming public, selling prices had become badly demoralized and a number of producers in those States, in their effort to continue solvent, reduced wages below what was considered the standard prevailing wage of $3.75 per 8-hour day. This created discontent on the part of both those employers who were attempting to standardize wages at that minimum and on the part of the miners who were receiving the standard wage and whose wages were menaced by the acceptance of reduced wages in neighboring and competitive mines.
The officials of the United Mine Workers, taking advantage of this situation, prevailed upon a majority of our miners to renew membership in their organization, and with comparatively little difficulty prevailed upon the producers of those States to renew contractual relations with them on a basic day wage of $3.75 per day; and such operators as did not rerecognize the union and sign contracts with it in the latter half of 1932, did sign up upon the organization of the N. R. A. in the summer of 1933, upon the assurance from the miners that the contracts entered into and which established the $3.75 day wage until March 31, 1935, would continue in effect until the date of the expiration specified therein.
Notwithstanding these agreements, by and with the authority of the Recovery Administration, the wages specified in these contracts were arbitrarily set aside on March 31, 1934, and the basic day wage was advanced from $3.75 per 8-hour day to $4.60 per 7-hour day. After protests and investigations extending over a period of several months, in June 1934, the Recovery Administration, over the strong protest of the mine workers' organization, ordered a reduction in the basic wage for Arkansas, Oklahoma, Missouri, and Kansas from $4.60 to $4 for a 7-hour day, in recognition of the fact that a mistake had been made and that the advance previously ordered would be harmful alike to the miners and the producers of those States.
I have made this recital, gentlemen, in order to bring to you a realization of the fact that this is a wide country. The procedure which is obviously logical and proper in one part of the country at a given time will be entirely illogical and disastrous to another part of the country. There is no strait-jacket nor no one wage schedule that will fit all parts of the country at one time, and there is no labor organization, however intelligently it may be managed, but that will in time become too powerful and too unwieldy and to enmeshed in internal and external politics to be safely trusted with a mandate to control American industry.
We accepted the Recovery Act and the proposal of N. R. A. with respect to codes with many fears and misgivings and largely because the country was in the midst of a depression that had brought tremendous dislocations and much unemployment and distress. The country was looking to the President for leadership. It was the President's plan and wish and this industry laid aside its traditions and allowed itself to be regimented. After days, weeks, and months of confusion and conferences, in which the best operating and legal brains of the industry participated, a fairly workable code was evolved and accepted.
Labor was placated by the wide-spread recognition of the union and of the principle of collective bargaining, and by the granting of very large increases in wages. National and district code authorities were set up and labor relations boards appointed throughout the