producing 19,413 tons, would lose 16,292 tons, or approximately 85 percent. Another company producing 365,595 tons would lose 100,144 tons, or approximately 35 percent. Another company producing 156,631 tons, would lose 67,907 tons, or approximately 45 percent. Another company producing 14,427 tons would lose 11,276 tons, or about 78 percent. Another company producing 44,609 tons, would lose 30,753 tons, or about 70 percent. Another company producing 17,582 tons would lose 12,380 tons, or about 75 percent. Another company producing 91,223 tons would lose 40,620 tons, or approximately 45 percent. Another company producing 2,909,158 tons would lose 588,963 tons, or approximately 20 percent.

Senator NEELY. Of course, the losses of which you speak are utterly impossible, in view of the fact that the author of the bill and the attorney for the proponents of the measure have unconditionally agreed to an amendment which will eliminate the very objection to which you refer. I keep repeating this in the record, because there seems to be a disposition to misrepresent this matter and prejudice the people of West Virginia against the enactment of this or any other similar bill.

If this law would do what you have indicated, nobody in or from West Virginia would favor it.

I would not favor, and no intelligent person could favor, legislation that would be followed by the appalling consequences which you have indicated in the hypothetical statement you have just made.

Mr. CRICHTON. I would hardly say it was hypothetical, in view of the fact that the bill did provide that.

Senator NEELY. Do you think there is a mine in West Virginia that would lose 70 percent of its output, and that 70 percent of the miners employed there would lose their jobs, if this bill should be enacted into law as it is now written?

Mr. CRICHTON. I could not place any other interpretation on it. Senator NEELY. Will you tell me where the mine is which you think would suffer such disastrous consequences?

Mr. CRICHTON. Oh, yes. It is in the smokeless field.

Senator NEELY. Do you mean the whole smokeless field will lose 70 percent of its tonnage?

Mr. CRICHTON. No, sir; I do not. The bill does not provide in that

manner.

Senator NEELY. You read one illustration in which you said there would be a 70 percent loss in tonnage.

Mr. CRICHTON. That is right.

Senator NEELY. Where is such mine situated?

Mr. CRICHTON. It is in the smokeless field.

Senator NEELY. That takes in a great deal of territory. In what county is it located? What is the post office address of the company that will lose 70 percent of its tonnage, and in what place will 70 percent of the miners lose their jobs? I do not believe that you can name such place. If you are wrong I hope that you will admit it. Mr. CRICHTON. I will admit it if I am wrong. With your permission, I will furnish you with the mines and the loss of tonnage they will sustain under the bill as originally written.

Senator NEELY. I do not ask you to go to that trouble. You say that you know of such mines. Can you not now name one, say in

Fayette County or McDowell County, and give the name of the operator?

Mr. CRICHTON. Will you excuse me one moment?

Senator NEELY. Then you do not know?

Mr. CRICHTON. Yes; I do. I have it right here. I know it very well.

Senator NEELY. Very well.

Mr. CRICHTON. If I may, I would like to read these last figures quoting the names of the companies. The first one I read produced 2,122,000 tons, and would lose 758,000 under this plan, which is the Carter Coal Co.

Senator NEELY. The one about which I particularly inquired was the one that you stated would suffer a loss of 70 percent.

Mr. CRICHTON. If you will give me a moment I will find it.
Senator NEELY. We will give you all the time you want.

Mr. CRICHTON. The Malcolm Smokeless Coal Co.

Senator NEELY. Where is it located?

Mr. CRICHTON. Raleigh County.

Senator NEELY. How many miners does that company employ at the present time?

Mr. CRICHTON. I would judge 50 or 60.

Senator NEELY. And you think all but 15 would lose their jobs? Mr. CRICHTON. Of course, the mine would close down.

Senator NEELY. What was the tonnage of that mine?

Mr. CRICHTON. For last year it was 44,609 tons. That is one of the newer mines.

Senator NEELY. And you think its tonnage would drop to 16,000 tons?

Mr. CRICHTON. It would under this original plan of allotment. Senator MINTON. There was one that was worse than that, was there not? I think you said something about 85 percent.

Mr. CRICHTON. We had one that produced 116,000 tons that would suffer a loss of 96,000 tons.

Senator MINTON. Where is that? What company is that?
Mr. CRICHTON. The Pulaski Iron Co.

Senator NEELY. Is that a captive mine?

Mr. CRICHTON. No, sir. I think probably the Bureau of Mines records would show it is a captive mine, but that was many years

ago.

Senator NEELY. How many miners does that operation employ? Mr. CRICHTON. I would judge probably 125 to 150.

Senator NEELY. According to your construction or interpretation of this bill, all but 20 or 25 of those miners would lose their jobs? Mr. CRICHTON. No; I think the mine would close down. Senator NEELY. Very well. You may proceed.

The re

Mr. CRICHTON. Coal is a commodity which is only mined as sold. It is unlike oil or gas which can be stored for future use. striction of free distribution is just as unreasonable as it would be to say that we should not bring California oranges to the Eastern States, because by reason of geographical location these markets should use nothing but Florida oranges.

The bill further provides that no coal shall be sold at less than the average direct expense of production excluding depreciation and depletion, which immediately destroys competition of coals based on

a fuel value. This would mean that in addition to the loss suffered in the smokeless field by reason of quotas that 40 percent of the production of the field based on their costs of May 1934, at which time the field produced 3,475,267 tons, would not be able to sell their coal on account of the proposed minimum price to be fixed.

A further analysis of the cost of production figures, which have included depreciation, depletion, and selling expense, which shows that the average cost of the smokeless area for this period was $1.896 that in applying the proposed method of minimum price fixing that some sections of the smokeless fields of West Virginia would be practically entirely wiped out. To make this point more clear, in 1 field of 38 mines only 5 could remain in business.

Study and investigation to increase the use of bituminous coal are now carried on through various agencies, colleges, and State institutions. Any further agencies would only mean a duplication.

West Virginia alone, with its reserve of 160,000,000,000 of tons, could supply the entire needs of this country for over 300 years after making due allowance for mining waste, without taking into account the increasing use of other power sources. It would seem most unwarranted at this time to embark upon a scheme of buying coal lands, especially with the large reservoirs on public lands.

After the passage of the National Recovery Act discussions of a code were started in the various mining areas of the country with the thought of individual codes. However, after months of consideration we finally found ourselves with one code national in scope, adopted September 18, 1933, just a little over 17 months ago. In this short period of time it can be said that the coal industry, with an uncharted course, has traveled a long way in the stabilization which was necessary. It can further be said that the coal industry has made a sincere effort to place its house in order, and has been successful in bringing about a better condition for labor, producer, and consumer by the establishment of maximum hours of labor, with minimum day rates of pay, additional employment, fair trade practices, and the establishment of prices that are fair and reasonable to the consumer, and which latter can never be otherwise on account of the competition with other forms of fuel.

Senator MINTON. May I ask you what your experience has been with violations of the code? Do you know whether or not the code has broken down?

Mr. CRICHTON. I do not think the code has broken down.

Senator MINTON. Have you observed any instances of its violation? Mr. CRICHTON. Speaking of the group that I represent, we have had very few violations. Our violations in 1934 were less than 1 percent.

Senator MINTON. Are the prices that have been set up in the code being observed by your members?

Mr. CRICHTON. Yes, sir.

Senator MINTON. As far as your observation goes, there has not been any break-down of the code authority?

Mr. CRICHTON. No, sir.

Senator MINTON. Did you hear the testimony the other day to the effect that the code authority had practically broken down? Mr. CRICHTON. I did not. I was not here until today.

Senator MINTON. If that was the testimony, would that be in accord with your observation and the knowledge that you have?

Mr. CRICHTON. It would be quite contrary to my knowledge and observation. I would like to add that I have heard a lot of stories running around, but I find that in these areas where the code is supposed to have been broken down so badly they have not established a statistical bureau by which to gather facts. Therefore, a good deal of it has to be hearsay.

Senator MINTON. Are you an operator?

Mr. CRICHTON. I was. I am not an operator now.

Senator MINTON. You are devoting your time entirely to this code authority?

Mr. CRICHTON. That is right.

Senator MINTON. As a representative of the operators?
Mr. CRICHTON. That is right.

Senator MINTON. Very well.

Mr. CRITCHON. Mr. John L. Lewis, president of the United Mine Workers of America, during a recent meeting with coal producers, commented on the fact that the Bituminous Coal Code has been a boon to a suffering industry by shortening the working hours and by reason of the increase in wages to employees; and that the same had been a tremendous contribution to all concerned, and that the action of the bituminous-coal industry in its efforts for stabilization had been an object lesson for the Nation and, as such, had received public commendation from officials of the Government.

For the coal industry to have made such outstanding progress in the short period of 17 months is clearly indicative of the fact that the Bituminous Coal Code permitted the accomplishment of some of the purposes for which it was created. Never in the history of the country has any industry confronted with the apparently unsurmountable problems that faced the coal industry in the summer of 1933 made such constructive strides toward self-stabilization. These accomplishments were all made possible through the Bituminous Coal Code, and it is today the belief of a very large number of the coal producers that additional time, with strengthened enforcement provisions is all that is needed to accomplish stabilization under the industry by means of the present vehicle, the Bituminous Coal Code. As committee chairman of the code authority have jurisdiction over the West Virginia smokeless coal mines, which in the year 1934 had an annual production of over 44,000,000 tons of coal, I feel qualified to speak on the advantages to be secured by continued operation under a code of fair competition. First, however, I should like to review the experience of our code authority in administering the Bituminous Coal Code. Our producers are no different from the producers in any other coal producing area.

They are all possessed of an equal amount of selfishness, yet when the Bituminous Coal Code became a fact and they were assured that the code was to be maintained and administered in all fairness to all persons, personal prejudices and selfish desires were cast aside in favor of cooperation with the new program. When I use the word cooperation", it never described any situation more clearly than the manner in which the smokeless producers joined in a concerted effort to make the code of fair competition a complete success; and

it is our contention that the code is, and has been, successful, not only in the smokeless area but in other producing areas as well. It has been read into the minutes of these hearings on several different occasions by proponents of the Guffey legislation, that the Bituminous Coal Code needed only stricter enforcement provisions to make it a complete success.

The Smokeless Coal Code Authority consists of 15 members. Its code authority bylaws provide that a vote of 8 is necessary to pass any proposed motion. A study shows that 8 code authority members control but 19 percent of the total smokeless production, which proves conclusively that the small operator, as well as the large one, has been given equal voice and consideration. This fact alone did much toward securing the confidence of the producers under our subdivision. It is my thought, however, that any opposition to the Bituminous Coal Code because of lack of compliance can be traced to this reasoning.

The Bituminous Coal Code has been recognized by the smokeless producers as being the vehicle which possesses capabilities for stabilization.

Investigation shows that many of the so-called "violations" are, in reality, the propaganda of unscrupulous individuals or corporations who were hoping thereby to gain an unfair advantage in either their sales or purchases.

Many of the stories we hear about the breaking down of the code can oftentimes be traced to the purchaser himself.

Senator MINTON. Has your experience with the code authorities been confined to the smokeless area?

Mr. CRICHTON. Entirely so, Senator.

We cannot agree that the Bituminous Coal Code lost its usefulness because of lack of compliance. Compliance like success, is something which must be obtained by hard work. We believe further that the code authorities claiming that it is impossible for them to obtain compliance in their subdivisions are negligent in their duty.

Senator MINTON. Do you have some means of enforcing the code in your area?

Mr. CRICHTON. No, sir. I think it comes about for two reasons. One I have just cited: That the small producer has equal representation with the large producer on the code authority. We established a procedure of that kind, and it has operated satisfactorily. I gave up my business entirely to take over the work I am now doing, so I might do the best possible job I could. It was necessary to give up my own business. I have tried to administer alike to the big and the little. The confidence that has been instilled into the producers by such a method of carrying on is but one of the reasons for our success. The same can be done with others.

Senator MINTON. You seem to have done a good job in your particlar field. Have you never had any difficulty in enforcement?

Mr. CRICHTON. I said awhile ago that one of the things that has been lacking is that some of these code authorities have not established a statistical bureau to gather all the necessary information. And, of course, they can say by hearsay what might be done by producers, so far as violation is concerned, but they do not have the actual facts. You can get a lot of things from hearsay.