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living standards of the toilers in the industry have been greatly improved; the relationship between the miners and the operators, which was formerly, and too frequently, one of bitterness and strife, has become harmonious and happy.
5. But in recent months many operators have reverted to the disastrous competition which, to their own ruin and the distress of their miners, they practiced for many years before the enactment of the national recovery law. It seems to be the general impression of those who are engaged in the industry that the price structure which has been established cannot be maintained, because of the fact that adequate penalties cannot be inflicted upon those who violate the law or refuse to comply with the provisions of the codes.
6. As a result of the so-called "chiseling" practices of the outlaws of the industry, the ethical operators are confronted with the dilemma of either losing their business or following the price-cutting examples set by those who disobey the law. The first choice would mean that the law-abiding operators would be compelled to shut down their mines and thus deprive their miners of their jobs. The second choice would eventually mean the reduction of the wages of the miners, notwithstanding the fact that it appears that their average pay is now less than $56 a month. Any decrease in the miners' meager wages or any lowering of their present unsatisfactory standards of living might result in disaster.
Gentlemen, it appears to the chairman that the chaos in which your industry was almost annihilated before the enactment of the National Recovery Law is once more marching against you from every point of the compass--not like a thief in the dead of night, but as conspicuously and as notoriously as if it were an army with banners. and trumpets and drums.
In the circumstances, by opposing enforceable governmental regulation of the coal industry such as the Guffey bill proposes, you are emulating the action of the Indian who “threw a pearl away-richer than all his tribe”; you are inviting disaster; you are mobilizing for chaos.
The coal industry of the United States is worth saving. Inseparably connected with its prosperity are the investments of untold millions of dollars; the employment of hundreds of thousands of miners; the comfort, the happiness, and hope of an innumerable throng of men and women and children. The subcommittee fervently desires to help to stabilize the coal industry; increase the safety of and the return upon every honest dollar invested in it and promote the general welfare of its hundreds of thousands of employees and all those who are dependent upon them.
May we not implore all the operators who are present, Senator Guffey, the author of the bill, and Mr. Lewis and his associates who represent the United Mine Workers of America earnestly to endeavor to agree upon such amendments to the bill as the evidence before us proves or clearly indicates to be necessary in behalf of even-handed justice to every coal-producing region, to the miners, the operators, and the consuming public.
Gentlemen, please give the subcommittee the benefit of your unstinted cooperation in this very important matter, and thereby render a great service not only to yourselves, and the committee, and the Congress, but to your country, whose prosperity or adversity will, in
all probability, to the end of our days, go hand in hand with that of the great industry to the success of which you have deliberately dedicated your fortunes and your lives.
The hearings on the bill are concluded. The subcommittee now adjourns to convene in executive session next Thursday at 10:30 o'clock for the purpose of receiving and considering such amendments As your collective wisdom may impel you to propose.
(Whereupon it was ordered that the following exhibits be printed in the record, and the subcommittee adjourned until Thursday, Mar. 7, 1935, at 10:30 a. m.)
To the Subcommittee of the Committee on Interstate Commerce of the United States
Senate: My name is R. J. Wysor. I am vice president of Republic Steel Corporation and make this protest on its behalf.
Republic Steel Corporation is the third largest steel corporation in the United States.
For the purpose of supplying part of its coal requirements it owns and operates several bituminous coal mines.
These mines are not sufficient to supply all of the corporation's requirements. In fact, the corporation purchases approximately 50 percent of its coal requirements.
The corporation is opposed to Senate bill 1417 both as a consumer of coal and as an owner and operator of so-called “captive mines."
Obviously and admittedly the result of the bill will be to increase prices of coal arbitrarily. This increase will be borne by the ultimate consumer with the result that less commodities will be purchased and the volume of business will be decreased.
Mr. Moses has pointed out reasons why our mines which are operated as a part of our business should not be subjected to any such regulations as are proposed in this bill and I will not burden the record by repeating them.
Dated March 1, 1935.
REPUBLIC STEEL CORPORATION AND SUBSIDIARIES,
To the Subcommittee of the Committee on Interstate Commerce of the United States:
The Yougnstown Sheet & Tube Co. and its subsidiaries appear in opposition to S. 1417, cited as the Bituminous Coal Conservation Act of 1935, introduced by Hon. Joseph F. Guffey, of Pennsylvania, January 21 (calendar day, Jan. 24), 1935, and respectfully submit.
They are in complete accord with the facts and arguments in opposition to said bill, as presented by the United States Steel Corporation and subsidiaries, as the same affects them as owners and lessees of “captive mines.” Because of this statement it is deemed unnecessary to attempt a separate analysis of the bill.
The following schedule shows the operations at the captive mines of the Youngstown Sheet & Tube Co. This schedule presents the approximate tonage produced at these captive mines in the aggregate over the past 5 years. Approximate tons in 1929.
2, 958, 000 Approximate tons 1930.
2, 500, 000 Approximate tons in 1931.
1, 374, 000 Approximate tons in 1932.
649, 000 Approximate tons in 1933.
705, 000 The consumption of coal is much larger than the productive capacity and is shown for the same years to be as follows: Approximate tons in 1929.
4, 972, 000 Approximate tops in 1930.
3, 645, 000 Approximate tous in 1931
2, 175, 1900 Approximate tons in 1932,
1, 212, 000 * Approximate tons in 1933.
1, 438, 000
Coal produced is, therefore, approximately 61 percent of the amount consumed. The Youngstown Sheet & Tube Co. for a long time purchased all of its coal, but it soon became evident that, in order to be sure of the necessary quality of metallurgical coal and a steady and regular supply, backed by proper reserves, it was imperative that a large proportion of its requirement should be owned and the operation of its mines governed by its needs for fuel in accordance with its sale of manufactured steel products. The company, therefore, acquired a large coal acreage which, in due time, was opened up and fully equipped. In addition, it established a large washing plant so that there would be, as far as possible, full control as to quality. All of this was done at heavy expense to the company.
The consumption of coal at its different works varies greatly with the public demand for steel products. It is a physical impossibility, at all times, to keep the different units of its works in exact harmony, and it is often necessary, for economical operations and proper consideration of costs, to produce more coke than the active blast furnaces would at the same time consume.
The company has from time to time sold a portion of this coke, but these sales have been made with due regard to proper market conditions and have not militated against the so-called commercial mines." A study of the consumption as shown herewith very clearly shows that it has purchased from outside sources coal largely in excess of that which entered into the production of the coke so sold.
A high standard of wages has been maintained. Living conditions have been of the highest, as shown by a report of the United States Coal Commission in 1923. Safety has ever been uppermost with the management. That conservation has been considered carefully is shown by a recovery of coal of well over 90 percent.
For the reasons stated in the summary presented by Mr. Thomas Moses we believe it is impracticable, unfair, and unnecessary to include captive mines in the proposed legislation.
THE YOUNGSTOWN SHEET & TUBE Co., By C. G. Robinson, Vice-President.
STATEMENT OF CRUCIBLE STEEL Co. OF AMERICA AND SUBSIDIARIES AND
AFFILIATES As (WNERS OF CAPTIVE MINES IN OPPOSITION TO THE PROPOSED
“ BITUMINOUS COAL CONSERVATION ACT OF 1935”, INTRODUCED AS S. 1417 To the subcommittee of the Committee on Interstate Commerce of the United States
Senate: The Crucible Steel Co. of America and its subsidiaries and affiliates appear in opposition to S. 1417, cited as “ Bituminous Coal Conservation Act of 1935", introduced by Senator Joseph F. Guffey of Pennsylvania, January 21 (calendar day, January 24), 1935, and respectfully submit the following facts and arguments in opposition to said bill as the same affects them as owners of “captive mines.
In the 5 years from 1929 to 1933, inclusive, the captive mines owned by us, our subsidiaries, and affi tes, produced and we consumed the following aggregate amounts of coal:
The above table shows the close relationship between the coal produced in our captive mines and the amount consumed in our business. During the first of the 3 years covered by the above table the fluctuations are almost identical and it is to be noted that in the last 2 years, the Cornell mines were not in operation. During those last 2 years, and also to a certain extent in earlier years, we and our subsidiaries have been obliged to purchase bituminous coal in the open market, particularly when conditions require certain qualities or grades of coal or when certain deliveries and demands make the purchase of such coal necessary or more advantageous than that which our captive mines can readily supply. A small amount-approximately less than 10 percent--of the coal produced at our captive mines has been sold by us, but that practice is being discontinued and the problems of our captive mines can therefore be considered on the basis of their entire production now being used in our steel business. Our vital interest, in any legislation affecting our mines is therefore obvious.
The captive mines owned or leased by us and our subsidiaries and affiliates and the coal produced therefrom, coked or processed, are to be used exclusively and solely in our business and the coal is not to be sold by us to others in the commercial markets in competition with commercial bituminous coal. This conclusively establishes that these captive mines are being operated only as a part of our steel business and that coal is to be taken from such mines only when and to the extent actually required by our business needs. They constitute an integrated part of our steel business, and to impose rigid regulations upon them as though they were a separate and distinct commercial coal business will only destroy their use as a part of a steel business and prevent the economy and business efficiency which can be obtained by operating them as a part of our steel business.
In other words it is clear
1. That the operation of our captive mines is limited to the interests and requirements of our steel business as such and is an essential and integrated and inseparable part thereof; and
2. That our captive mines are not operated competitively with the general commercial operation of bituminous coal mines.
We, therefore, wish to refer to the analysis made by the United States Steel Corporation and its subsidiaries of the various provisions of the bill; and particularly to refer to their analysis of and objections to (a) the declared objects of the bill insofar as they relate to captive mines; (b) the tax on bituminous coal; (c) the proposed Bituminous Coal Code and its provisions regarding the production, marketing, and labor relations. We also wish to particularly refer to the general observations in said statement of United States Steel Corporation and its subsidiaries made respecting the advisability of adopting the proposed bill and its constitutionality and legality. Such analysis of the aforesaid problems presented by the bill point out many major defects and demonstrate its impracticability and injustice, which are equally applicable to our captive mines as they are to the captive mines of the United States Steel Corporation and its subsidiaries. In order to avoid duplication, we are not again analyzing the bill in detail, but respectfully request that you consider the objections to the bill set forth in the statement made to you by the United States Steel Corporation and its subsidiaries as being equally applicable and burdensome upon the operation of our captive mines as fully as though we had specifically made the same objections herein.
Dated, New York, March 1, 1935.
Respectfully submitted on behalf of Crucible Steel Co. of America and its subsidiaries and affiliates.
By F. B. HUFNAGEL, President Crucible Steel Co. of America.
PHILADELPHIA, Pa., March 8, 1935. FRANK K. BOAL,
Secretary to Senator James J. Davis: Regarding your telegram of yesterday I give you here in abbreviated summary in lieu of brief requested. If such direction and discipline of bituminous coal industry is deemed necessary by Congress, then I recommend that it should be; One, temporary and limited definitely as to time; two, directed entirely by financially disinterested American citizens with control and responsibility vested in one man; three, that it should include production control of individual mines based upon past production and present physical productive capacity, as well as control over new mines; four, that it shall regulate all wages and that wages should be based on approximate commercial value of coal f. o. b. mines which have been fairly well-determined by code authorities; five, that there shall be a comprehensive national effort instituted at once to regulate the forces, the disintegration of which makes such legislation essential. I feel that any regulation should be based upon the ideal of equal opportunity for all. I do not think this can be accomplished with code authorities consisting of men interested financially in almost every decision.
A. K. ALTHOUSE.
HARRISBURG, Pa., March 5, 1935. SENATOR M. M. NEELY, Chairman Subcommittee of Committee on Interstate and Foreign Commerce,
Senate Office Building: Realizing the importance of S. 1417, introduced by Senator Joseph F. Guffey of Pennsylvania, I endeavored to arrange my affairs to personally appear before the Subcommittee of the Committee on Interstate and Foreign Commerce in support of this bill which I consider one of the most important and constructive pieces of legislation before the present Congress. Affairs of state involving and requiring emergency legislation, however, prevent my appearing personally befor your committee. I take advantage of this opportunity to say to your Committee that as Governor of Pennsylvania, the largest bituminous-coal-producing State, I strongly urge passage of the Guffey bill, because I believe that real stability can only come to the bituminous-coal industry through the enactment of such meritorious and timely legislation. The public-utility features of the bill, the marketing provisions, the labor and code provisions, as well as the provisions for the protection of natural resources, the creation of the commission, the establishment of a real labor board, and the taxing methods proposed appeal to me strongly, and the passage of this bill by the Federal Congress would be a great accomplishment and will undoubtedly bring to the basic bituminous-coal industry of this country real stability, peace, and justice to all concerned.
GEORGE H. EARLE, Governor of Pennsylania.