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hazards”, should be delegated to the United States Bureau of Mines, such not being a proper function of a coal-regulatory commission.

The "rehabilitation of mine workers displaced from employment and the relief of mine workers partially employed” (sec. 13) is not the responsibility of the coal industry. If the task of rehabilitating mine workers partially employed, or out of employment, is to be undertaken by the Government, it should be at the expense of State or Federal Government. The methods employed should differ in no way from those attached to like handling of other classes of citizens. There is no justifiable reason for placing either a railway employee, coal mine worker, or steel worker, or even an agriculturist, in a class by himself, when the element of relief enters.

In conclusion, we submit that the bill is impossible of successful fulfillment. It discriminates against an important basic industry by reason of singling out that industry for drastic and most expensive regulation without attempting to attach similar regulation and expense to the bituminous coal industry's direct competitors. The measure of taxation provided for in the bill would crush the industry, further add to unemployment, and bring about additional financial disaster. To attempt to bring simple marketing conditions that surround captive mines, under the varied and complex conditions that affect commercial sales, is wholly unjustifiable and would be productive of detrimental results. If coal legislation is to be continued, then let the Government extend the National Industrial Recovery Act, and the Bituminous Coal Code, strengthening and clarifying the code wherever necessary, holding to the advantages gained by some 20 months of most arduous and expensive experimentation.

I want to say, Mr. Chairman, a word with reference to the purchasing of coal lands. The Union Pacific Coal Co. has thrown overboard in the last 3 years property which, with accrued taxes and without any charge for interest, cost $3,000,000. It never occurred to us that it was our privilege to dump those properties on the coal industry or the United States Government.

We recently abandoned 26,000 acres in the great State of Illinois. We have abandoned lands in the States of Utah and Colorado, and we have abandoned 26,000 acres of coking coal in British Columbia, the seams having a total thickness of 80 feet.

Senator MINTON. Did you own that property outright?

Mr. MCAULIFFE. We owned the land outright in the United States and had Crown grant rights in the Province of British Columbia.

Senator MINTON. To whom did you abandon it?
Mr. MCAULIFFE. We abandoned it rather than pay taxes.
Senator MINTON. You mean you let it go for taxes?

Mr. MCAULIFFE. We let it go for taxes. We abandoned it and charged off the loss, looking on this property as an ill-advised investment.

Senator NEELY. What is the name of the subsidiary which operates the captive mines of the Union Pacific Railroad--the Union Pacific Coal Co.?

Mr. MCAULIFFE. The Union Pacific Coal Co.

Senator NEELY. Are you the president of the Union Pacific Coal Co.?

Mr. McAULIFFE. Yes, sir.
Senator NEELY. Who is the chairman of the board of directors?

year to certain commercial operators, that being the mercial mine producing that grade of coal in any quanti district.

Senator Neely. Does your company comply fully with Mr. McAULIFFE. It does, and has from the beginning. the first company to subscribe in the Rocky Mountain reg code.

Senator NEELY. Are there any other witnesses present w be heard this evening? If not, the committee will adj 10:30 o'clock tomorrow morning.

(Thereupon, at 9:45 p. m., the committee adjourned 10:30 a. m., Friday, Mar. 1, 1935.)

Mr. MCAULIFFE. Mr. H. W. Clark, of New York City.

Senator NEELY. What official connection, other than being the president of this coal company, have you with the Union Pacific?

Mr. McAULIFFE. I am special representative of the executive vice president in charge of railroad-owned coal lands.

Senator NEELY. How many mines does the subsidiary own? Mr. MCAULIFFE. We are now operating eight in the State of Wyoming, and we have a small mine owned by another subsidiary, the Washington Coal Co., in the State of Washington, which formerly produced one-quarter of a million tons per year. The locomotives using that coal turned to oil burners about a year ago.

Senator NEELY. How many miners have you?
Mr. MCAULIFFE. We have about 1,875 mine workers.
Senator NEELY. Are they organized or unorganized?
Mr. MCAULIFFE. They are wholly organized.
Senator NEELY. By the United Mine Workers?

Mr. McAULIFFE. Yes, sir. Incidentally, the State of Wyoming is 100 percent organized, and has been organized for some 24 years.

Senator Minton. The H. W. Clark to whom you referred is Harley Clark?

Mr. McAULLIFFE. I think his name is Henry W. Clark. He is counsel for the Union Pacific System.

Senator MINTON. He is not the utility operator, then?
Mr. MCAULIFFE. No, sir.

Senator MINTON. You said that under this bill coal would be increased in price to the consumer 30 cents per ton. Is that right?

Mr. MCAULIFFE. That is my opinion.
Senator MINTON. How do you arrive at that figure?

Mr. MCAULIFFE. It is very difficult to arrive at I made some computations a year ago on the shorter work day. I was fortunate to get within one-half cent of my computation. You must arrive at those things in an arbitrary way. I am assuming first 10 cents taxes. I am assuming then 3 or 4 cents tax for administration purposes, and almost unlimited interference with the conduct of the business.

I have this thought, that our property would have its tonnage reduced by any process of allocation perhaps 40 percent, which would immediately increase our unit cost per ton. This is for the reason that the coal is hauled on deadhead billing, without revenue freight charged, in accordance with the rule of the Interstate Commerce Commission, a substantial distance. It is more than probable that any process of allocation would interfere with that arrangement.

Senator NEELY. Does the Union Pacific Railroad consume all the coal that is mined by the Union Pacific Coal Co?.

Mr. McAULIFFE. With the exception of perhaps about 60,000 tons, which is turned over to commercial operators, plus coal used by our employees in our boiler plants. The railroad, however, purchases about 70,000 tons from commercial operators.

Senator NEELY. Does your company compete in any manner whatsoever with the noncaptive mines?

Mr. MCAULIFFE. In no manner whatsoever. Our relations with our commercial mines are harmonious and very happy. We do not compete with them. We are not in the commercial business. We do at Hanna, Wyo., turn over about 35,000 tons of lump coal per


year to certain commercial operators, that being the only commercial mine producing that grade of coal in any quantity in that district.

Senator NEELY. Does your company comply fully with the code?

Mr. MCAULIFFE. It does, and has from the beginning. We were the first company to subscribe in the Rocky Mountain region to the code.

Senator NEELY. Are there any other witnesses present who wish to be heard this evening? If not, the committee will adjourn until 10:30 o'clock tomorrow morning.

(Thereupon, at 9:45 p. m., the committee adjourned to meet at 10:30 a. m., Friday, Mar. 1, 1935.)



MARCH 1, 1935


Washington, D. C. The subcommittee met, pursuant to adjournment, in the caucus room, 318 Senate Office Building, at 10:30 a. m., Senator M. M. Neely (chairman) presiding.

STATEMENT OF JAMES D. FRANCIS, HUNTINGTON, W. VA. Senator NEELY. Mr. Francis, you may proceed.

Mr. FRANCIS. Mr. Chairman, I am James D. Francis, of Huntington, W. Va., president of the Island Creek Coal Co. and Mallory Coal Co., with mines in Logan County, W. Va., and Pond Creek Pocahontas Co., with mines in McDowell County, W. Va.

The Island Creek Coal Co. has a capacity of approximately 772 million tons per annum.

It produced in 1927, 7,400,000 tons; in 1928, 5,600,000 tons; in 1934, 3,475,000 tons. The Mallory Coal Co. produced in 1934, 675,000 tons. It has a capacity of approximately 850,000 tons. The Pond Creek Pocahontas Co. has a capacity of 2% million tons; it produced in 1932, 1,480,000 tons; 1933, 1,430,000 tons; 1934, 1,560,000 tons.

I am speaking for the companies which I represent. I am appearing here in opposition to the Guffey bill because it is my opinion it would be detrimental to the interests of the producers, the miners and the public. I am in favor of reasonable and proper legislation in the interest of the coal industry. I believe that if the proposed legislation is enacted it will put the indsutry in a strait-jacket and will result in a decrease in the consumption of coal, working time of employees, increase in cost, and higher selling prices to the public. The bill, as drawn, will, in my opinion, be injurious to the industry as a whole and especially to the industry in the South.

I am going to divide my suggestions into two parts: First, suggestions for simpler legislation; second, comments to the committee in connection with the Guffey bill.

I believe that legislation improving and extending the N. R. A. or temporary legislation for the natural resources industries is desirable. I believe if legislation is passed it ought to be in the very simplest possible form to be effective. It should be clearly within constitutional limits and should not attempt to regulate the industry in too great detail. We can, in my opinion, obtain all the benefits the industry and those engaged in iť desire and are reasonably entitled to and better protect our future as an industry by less rigid legislation.

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