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Senator MINTON. What has been his experience in the coal business?

Mr. LEASURE. He has none whatever. This merely goes to express the opinions of the members of the Chamber of Commerce of the United States on issues involved in legislation similar to this in previous Congresses.

Senator MINTON. Is that a statement of his views or a statement of somebody else's views given to him!

Mr. LEASURE. It is a statement of the views of the general principles of this legislation as they have been declared by our members in previous years when similar legislation was before Congress.

Senator Minton. Then they are not Mr. Harriman's views personally?

Mr. LEASURE. Not at all.

Senator MINTON. Are the members of your association that express those views operators?

Mr. LEASURE. They are all sorts of business men, operators, and consumers of coal. We hold no brief for the coal operators as such.

Senator MINTON. Does the statement show in itself the source of the information that Mr. Harriman incorporates in the statement !

Mr. LEASURE. Yes, sir.
(Mr. Harriman's statement is as follows:)

STATEMENT OF HENRY I. HARRIMAN, PRESIDENT OF CHAMBER OF COMMERCE OF THE

UNITED STATES

Mr. HARRIMAN. The question, how to bring about statisfactory conditions in the bituminous coal industry which, because of its magnitude and the nature of its product, is one of the Nation's basic industries, is not a new one with the Chamber of Commerce of the United States. Conditions of instability existed in this industry long before the present depression. We are aware of the difsicult problem of developing policies that will protect the large investments in the industry, the welfare of the large number of employees, and assure the public ample supply of coal at reasonable prices. Thus, we are not unsympathetic toward those seeking a solution.

The bituminous coal mining business has physical factors that make the problem particularly difficult-extensive coal areas, and widely dispersed ownership of mining lands, large numbers of operating units, great diversity in location and accessibility of mines, breadth and thickness of seams, and quality of product. Wide seasonal fluctuations in demand for coal require peak production in winter, which imposes an excess of productive capacity upon the industry and for the same reason causes wide fluctuations in employment. In addition there is always present the pressure upon owners of coal lands, exerted through taxes and carrying charges, to bring coal lands into production when market conditions are favorable. These are only a few of the factors which raise a question as to the wisdom of sweeping under strict Federal regulation an industry of such magnitude and complexity.

Notwithstanding the important position the coal industry occupies in the industrial life of the Nation, it cannot be assumed that it is invulnerable to unwise Government policies. It is assailed on many fronts by keenly comDietitive commodities such as oil, natural gas, and hydroelectric power. If it is to maintain its position and make its full contribution to national welfare, it must be afforded free opportunity to develop the highest efficiency in all its operations from the production to the greatest distribution and the utilization of its product.

The hampering and retarding effect of Government control and regulation we recognize. On a previous occasion the Chamber expressed its position with respect to control of the bituminous coal industry in a resolution, which says

Regulation and control of the coal industry are proposed in divers ways by bills which are pending before Congress. We, therefore, consider it appropriate to reiterate the position of the Chamber of Commerce of the United

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States in opposition to proposals which have for their object control of industries by governmental agencies."

Previously the Chamber had dealt with this question of maintaining opportunity for exercise of initiative essential to progress in industry, as follows:

“ This Chamber believes that the relation of Government toward industry and commerce is primarily that of preserving equality of opportunity for alland equal chance to every citizen to win his position in accordance with his character, ability, and efforts. Individual initiative, strengthened by education, safeguarded by publicity, stimulated by active and free competition, is the guarantee of sound national progress. Laws and administrative acts should touch business enterprises with great care and only to preserve a fair field to all."

The legislation proposed in the Guffey bill, S. 1417, in some respects goes beyond previous proposals for Government regulation; it would declare the bituminous coal industry a “public utility ", and as such subject it to regulation by the Government. It would accomplish this by levying a heavy tax which would be refunded to those wbo complied with the rules of a “national code", ostensibly entered into by the industry, but in effect subject to Federal determination, reaching even to the fixing of prices and the allotting of production.

We believe that it is not through regulation by Government, with its lack of flexibility and lack of opportunity for progressive adjustment to economic conditions, that the answer will be found, but by cooperation between industry and Government. The Chamber membership advocates that the units of industry be given the fullest opportunity to take concerted action economically to control production. Our membership has recently expressed itself in full accord with legislation which would leave to industry, upon a voluntary basis, the opportunity to develop rules of fair competition, which should include questions of hours and wages, and which may in the discretion of the industry, include such factors as production control and the establishment of minimum prices. Such codes, however, in the judgment of the Chamber's membership, should not be imposed upon industry, but should be assumed voluntarily and be terminable at the option of the industry. Any measure of Government supervision that might be required in public interest because of any such voluntary agreements affecting interstate commerce contrary to the antitrust laws, should not grant mandatory authority, and should only go to the extent of terminating agreements found not to be in public interest.

The bituminous coal industry is engaged at the present moment in a wide experiment with its code under the National Industrial Recovery Act. This has contributed a wealth of experience as to the practicability of measures dealing with production, prices, and trade practices in general. The conclu. sion of a legislative committee, widely erpresentative of the industry, is that any future legislation should leave to this industry the largest measure of voluntary action in dealing with such questions.

Disregarding, therefore, legal questions that might be raised as to the constitutionality of invoking taxing power to coerce operators into compliance with the provisions of a national code, as suggested in the pending bill, or the right to declare a business of such a nature as mining and selling coal a public utility, or of imposing regulations upon enterprises engaged solely in intrastate business, and disregarding further the practical question of securing compliance with the provisions of such a law within an industry of the magnitude and complexity of the coal industry, the Chamber wishes to emphasize its objection to legislation which would place an industry. So essential to national progress as bituminous coal mining under the permanent control of Government agencies.

STATEMENT OF JAMES WALTER CARTER, PRESIDENT CARTER

COAL CO., STEVENSON, MD. Mr. CARTER. Mr. Chairman and members of the committee, my name is James Walter Carter. I am president of the Carter Coal Co., and a member of Southern Subdivisional Code Authority No. 1 of Division No. 1, and one of a committee appointed by the Smokeless Coal Operators' Association to oppose the Guffey bill, S. 1417.

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suggests that *

of the report that the total amount of coal produced in the U States up to 1922, namely, about 2112 billion tons,“ represents little more than six-tenths of 1 percent of the original supply

* the ultimate exhaustion of this nat asset is remote."

I should like to file with you, as exhibit I, a tabulation bas the Federal Trade Commission report to which I have ref showing by statistics how extremely remote is the possibility exhaustion of our known coal reserves.

Referring again to the Federal Trade Commission report shown on page 84 thereof that the United States Geological S in 1922 compiled data placing the total known coal reserves world at some 812 trillion net tons, and that the five principa owning and producing countries of the world at that time he following percentages of this total supply: United States..

Senator NEELY. Mr. Carter, where do you live?
Mr. CARTER. My residence is in Stevenson, Md.
Senator NEELY. What is your occupation?
Mr. CARTER. I am a coal operator.

Senator NEELY. Are your operations situated in the State of Maryland ?

Mr. CARTER. No; I am here as one of a committee representing the Smokeless Operators' Association of Virginia and West Virginia.

Senator NEELY. Do you operate in the Smokeless fields of Virginia and West Virginia ?

Mr. CARTER. I do.

Senator NEELY. Where are the operations with which you are personally connected ?

Mr. CARTER. In McDowell County, W. Va.
Senator NEELY. With what company?
Mr. CARTER. The Carter Coal Co.
Senator MINTON. You are speaking for the Carter Coal Co. alone?

Mr. CARTER. No; I am speaking for the Carter Coal Co., and I am also speaking as one of a committee of which Mr. Hawthorne, the witness who preceded me a few moments ago, is another.

Senator MINTON. That is a committee of operators or of code authorities?

Mr. CARTER. All of those men are operators. It happens that I am a member of the so-called “ Smokeless Code Authority.”

I have here some exhibits to which I shall refer in the course of my testimony. I should like to give each of the members of the committee a copy of these charts or exhibits to which they could refer. I believe it will simplify the proceeding. I should like to give them to you at this time.

Senator NEELY. We shall be glad to receive them.
(The charts referred to are marked “ Carter Exhibit No. 1",

and will be found in the files of the committee.)

Mr. CARTER. With the permission of the committee, I will deal first with the conservation problem in the coal industry as it is touched upon by the Guffey bill.

Senator NEELY. Proceed in your own way.
Mr. CARTER. The last section of the Guffey bill (S. 1417) reads:

SEC. 12. This act may be cited as the Bituminous Coal Conservation Act of 1935.

There has been considerable discussion carried on over a number of years as to the need for conservation of the natural resources of the Nation. Insofar as I can recall, every person with whom I have discussed this matter has been in sympathy with the idea of preventing waste in the utilization of our resources. I have, however, encountered considerable confusion of thought and lack of knowledge on the part of many people as to just what is our national conservation problem, especially as applied to coal.

In the case of bituminous coal, there is no real conservation problem currently existent in the United States. Reference to the 1926 report of the Federal Trade Commission on National Wealth and Income should disperse all fears of any dearth of coal in this country for many years to come. This report indicates that at the present rate of consumption it will take more than 7,000 years to exhaust the known coal resources in the United States. It is stated on page 82

Canada
China..
Germany
Great Britain and Ireland.

Thus it will be seen that in the size and self-sufficiency of i
reserves the United States easily leads the world.

& Of course, our wealth of coal is no warrant for its waste thoughtful persons concerned with either the production o sumption of coal are, I believe, anxious to obviate any such as may exist. Considerable progress has already been made direction. In the mining of coal great improvements hav, made in recent years with respect to the methods of extractic consequently, a greater percentage of recovery of coal ha achieved than was possible some years ago. Perfection, of has not been achieved and cannot be had but as our technical edge and experience increases further improvements in methods can be expected.

It may be of interest to note that the Guffey bill, despite i porting to be a conservation act, does not include any provision respect to preventing waste in the mining of coal other direction to the Commission proposed therein to investigat economic operations of mines with the view to the conservation national coal reserves." (Sec. 13.) As a matter of fact I tirely in sympathy with the omission from the Guffey bill such provisions. I am simply trying to point out the inconsis between its purported purposes and its actual mechanics. The

that variations in conditions in different regions, and even
mines

, are so great that no blanket laws or rules with res methods of mining are possible of general application. An rules or laws which might be needed or warranted could, of be enacted by the State legislatures and by them far more pe than by the Congress, since, in the first place, the mining of c generally been held by the courts to be an intrastate activity, the second place, the State legislatures are more familiar w local mining conditions.

In the consumption of coal even greater improvements hav made in eliminating wasteful methods than have been made i ing. The improvements that have been made in the burning

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*

Percent

51.9 16.8 13. 3 5.7

of the report that the total amount of coal produced in the United States up to 1922, namely, about 2112 billion tons," represents only little more than six-tenths of 1 percent of the original supply and suggests that *

the ultimate exhaustion of this national asset is remote.”

I should like to file with you, as exhibit I, a tabulation based on the Federal Trade Commission report to which I have referred, showing by statistics how extremely remote is the possibility of the exhaustion of our known coal reserves.

Referring again to the Federal Trade Commission report, it is shown on page 84 thereof that the United States Geological Survey in 1922 compiled data placing the total known coal reserves of the world at some 81/2 trillion net tons, and that the five principal coal owning and producing countries of the world at that time held the following percentages of this total supply: United States.. Canada ChinaGermanyGreat Britain and Ireland

2.6 Thus it will be seen that in the size and self-sufficiency of its coal reserves the United States easily leads the world.

Of course, our wealth of coal is no warrant for its waste and all thoughtful persons concerned with either the production or consumption of coal are, I believe, anxious to obviate any such waste as may exist. Considerable progress has already been made in this direction. In the mining of coal great improvements have been made in recent years with respect to the methods of extraction and, consequently, a greater percentage of recovery of coal has been achieved than was possible some years ago. Perfection, of course, has not been achieved and cannot be had but as our technical knowledge and experience increases further improvements in mining methods can be expected.

It may be of interest to note that the Guffey bill, despite its purporting to be a conservation act, does not include any provisions with respect to preventing waste in the mining of coal other than a direction to the Commission proposed therein to investigate the economic operations of mines with the view to the conservation of the national coal reserves.” (Sec. 13.) As a matter of fact I am entirely in sympathy with the omission from the Guffey bill of any such provisions. I am simply trying to point out the inconsistencies between its purported purposes and its actual mechanics. The fact is that variations in conditions in different regions, and even within mines, are so great that no blanket laws or rules with respect to methods of mining are possible of general application. Any such rules or laws which might be needed or warranted could, of course, be enacted by the State legislatures and by them far more properly than by the Congress, since, in the first place, the mining of coal has generally been held by the courts to be an intrastate activity, and, in the second place, the State legislatures are more familiar with the local mining conditions.

In the consumption of coal even greater improvements have been made in eliminating wasteful methods than have been made in mining. The improvements that have been made in the burning of coal

have been, in fact, so great as to have materially reduced the amounts of coal consumed. These improvements, largely due to technical and scientific development, are likely to continue. The conservation of coal as a natural resource has been very much furthered by this increase in the efficiency of producing heat and power by the use of coal. To illustrate this I am filing as exhibits II, III, and IV, charts

. showing graphically this decline in the consumption of coal and demonstrating the degree to which conservation of coal as a natural resource is being brought about by increased efficiencies in the consumption of coal. These charts have been taken, respectively, from C. V. Beck's Modern Combustion Coal Economics and Fuel Fallacies and the Statistical Abstract of the United States, 1933. (U. S. Geological Survey material) and show that:

(a) In 1899, 10 pounds of coal were required to produce 1 horsepower-hour, while in 1929, only 144 pounds of coal were required to produce 1 horsepowerhour;

(6) The pounds of coal used by railroads per thousand gross ton-miles has been decreased from about 175 pounds in 1919 to less than 125 pounds in 1929; and

(c) Since 1919, the pounds of coal used by public utilities to generate 1 kilowatt-hour has decreased over 50 percent.

Conservation of coal in the Nation, or the elimination of its waste, is also occurring at a very rapid rate through the displacement of coal by competitive forms of fuel and power. I should like to file as exhibit V, to graphically illustrate this fact, a reproduction of page 378 Minerals Year Book, 1932–33, Statistical Appendix. As may be seen from this exhibit V, coal accounted for more than 75 percent and competitive fuels for less than 25 percent of the total supply of energy prior to 1921, while in 1932 the figure for coal was about 53 percent and for other fuels about 47 percent. Between 1913 and 1932, the percentage of fuel energy supplied by competitive fuels has trebled from about 16 percent in 1913 to about 47 percent in 1932, whereas the percentage of energy derived from coal has decreased from 84 percent to about 53 percent. As is shown in this exhibit V, the production of water power electricity increased from 14,606,000,000 kilowatt-hours in 1919 to 34,629,000,000 kilowatthours in 1929, an increase of approximately 140 percent. The amount of coal displaced by water-power production in 1929, and thus conserved as a part of the Nation's coal reserves is 29,261,000 tons, based on the consumption of 1.69 pounds of coal to generate 1 kilowatthour in 1929.

Further development of water power on a huge scale such as is under way in the Tennessee River Valley by the Federal Government will result in the displacement of additional millions of tons of coal and their conservation as a part of the Nation's coal reserves. I hould like to file as ibit VI a statement derived from Minerals Year Book, 1932–33, showing the production of water-power electricity in millions of kilowatt-hours in each of the years 1919-29, both inclusive.

The conservation of coal which is thus being brought about by consumers has been so effective that there has been formed a corporation under the control of the National Coal Association to devise ways, through technical and scientific research, to increase the use of bituminous coal. This corporation is known as “ Bitumi- . nous Coal Research, Inc."

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