be made if any consideration is to be given to different and uncomparable business conditions. As the bill is made applicable to all captive mines, similar differentiation would have to be made respecting captive mines owned by the railroads, public utilities, chemical and other industrial enterprises. In other words, you would have a complicated set of standards which would probably so impinge upon each other as to make all such standards impracticable to effectuate their intended objective.

(3) Labor relations.-The wages, working hours, and labor conditions of the employees of the captive mines are presently the same as at the commercially operated mines. Captive-mine owners are not subject to the Bituminous Coal Code but have entered into a separate agreement with the President of the United States governing hours, wages, and working conditions. Never in the history of the operation of our captive mines have our captive-mine employees been paid less, and most of the time have been paid even more than the prevailing rate in the bituminous-coal industry in the district in which they operate, so that no instance can be shown of labor chiseling in the operation of our captive mines, and therefore no legislation has been or is necessary to assure the payment of prevailing rates of wages in respect of our captive mines.

The principles of collective bargaining to be prescribed for the bituminous coal industry should be the same as prescribed for all industries. No logical reason can be advanced to support different standards or principles for collective bargaining in different industries. Unless the principles of collective bargaining are unified in all industry, industrial labor conditions will be thrown into chaos and justice to employees and the public defeated.

The provision in paragraph (g) of part III of section 4, that wage agreements negotiated by collective bargaining in any district, between representatives of purchasers of the majority of its annual tonnage production and representatives of the majority of mine workers therein belonging to a recognized national association of mine workers, shall be accepted as the minimum wages in such district is, if constitutional, a deprivation of all rights of a great body of employers and employees to negotiate respecting terms of employment through representatives of their own choosing. It denies to a minority of employers, in point of view of their annual total production, the right to negotiate and imposes upon them the will of the majority of employers in tonnage production. It denies to every employee not belonging "to a recognized national association of mine workers" the right to have any voice whatsoever in the determination of their conditions and terms of employment. No employee has any right to bargain individually or collectively except through "a national association of mine workers"; and he is bound, irrespective of his own. rights or desires, by any agreement concluded by a majority of those employees "belonging to a recognized national association of mine workers", even though such association should only have a minority of employees in the industry. Under this provision no employee can have the right to individually or collectively bargain or protect his own interests in any subject relating to his employment unless he joins "a national association of mine workers." This is clearly designed to compel all employees to join such a national association.

It prevents the practical use of employee representation plans, or any other method of collective bargaining chosen by the employees themselves regardless as to whether or not such chosen method is an effective means of collective bargaining. If one "national association of mine workers" represents a majority of employees, the bill then excludes any other labor organization, national or otherwise, having less than a majority of the employees as its members, any right to represent employees who have preferred membership therein. In view of the actual situation presently existing in the industry, known to all, the purpose is obvious to force all employees in the industry by legislative fiat into one well-known labor organization, regardless of and in spite of the wishes of the employees themselves, and to legislatively superimpose that organization as the sole and exclusive bargaining agency.

The proposal far transcends the efforts to prescribe by legislation or ruling the rule that representatives chosen by a majority of employees shall be the exclusive bargaining agency for all regardless of the constitutionality or legality thereof. To impose union representation-in fact, to even prescribe the organization or the particular kind of organization which must be chosen-is the very denial of any semblance of the right of collective bargaining through representatives of the employees' own choosing. To require negotiation of the terms and conditions of employment through any representation or agency not voluntarily chosen by the employee himself is a denial of freedom of contract.

IV. GENERAL

If it should be found that conditions have developed in the commercial bituminous-coal industry which make some Federal regulation necessary, it is wholly unnecessary to adopt this or any further legislation, and it is particularly unnecessary and inadvisable to adopt the rigid prescriptions embodied in this bill. If such regulation is desirable, there is no reason why regulation cannot be effectively accomplished through the National Industrial Recovery Act and the the extension thereof, together with the codes and boards established under that act. The National Industrial Recovery Act establishes a means through which the commercial industry can be regulated to the full extent desirable. Furthermore, such regulation under the provisions of the National Industrial Recovery Act would be flexible and would permit change and adjustment from time to time to meet varying and unforeseen conditions which necessarily will arise in said industry, will permit a sound regulation to develop as a matter of experience, and will allow said industry itself to cooperate in meeting its own needs and requirements. Legislation, however, such as this bill, is not only unnecessary, but impracticable and undesirable in respect of captive-mines, for the reasons herein stated; and, in respect of the commercial bituminous industry, would be equally impracticable because of the rigid detailed requirements of the bill based on abnormal conditions which would bind the commercial industry to inflexible legislative principles which experience might prove absolutely impractical and even detrimental and which would forbid adaptability to changing conditions and experience.

V. CONSTITUTIONALITY AND LEGALITY

The Supreme Court of the United States has repeatedly held that mining and manufacture is not "commerce" within the meaning of the interstate-commerce clause in the Constitution and therefore not within the jurisdiction of the Federal Government. Even if the products of mines or manufacture ultimately find themselves in the channels of interstate commerce as an instance to their distribution or sale, their productive operations are not subject to Federal jurisdiction. Their actual instrumentalities of transportation, if interstate, may be subject to Federal control, but this does not change the rule as to their operations. However, in this connection, an important fact is that approximately 65 percent of our total production of captive-mine coal is used and consumed within the State of its production.

It is, therefore, submitted that the ownership and operation of captive-coal mines, viewed either as mining or as an integrated part of manufacture, are not subjects of Federal jurisdiction and that, therefore, this bill is unconstitutional.

These summarized conclusions of law can be easily substantiated by a multitude of Supreme Court and other decisions, if desired, but no attempt will be here made to argue the constitutional aspects of the bill. Our effort has been to demonstrate the impracticability and injustices of the bill and its failure to even serve its intended and declared purpose in respect to captive mines, but we would be remiss in our duty if we did not call attention to its clear unconstitutionality. (Information referred to is as follows:)

SCHEDULE A.-Schedule of United States Steel Corporation and Subsidiaries Captive Coal Mine production in each district provided in S. 1417 compared to total district production, 1929 to 1933, inclusive

DISTRICT 1. H. C. FRICK COKE CO., PENNSYLVANIA; LORAIN STEEL CO., PENNSYLVANIA

DISTRICT 2. NATIONAL MINING CO., PENNSYLVANIA; SHARON COAL & LIMESTONE

CO., PENNSYLVANIA

1929

1930.

1931.

1932.

1933.

Year:

1929

1930

1931.

DISTRICT 3. AMERICAN SHEET & TIN PLATE CO., OHIO

SCHEDULE A.-Schedule of United States Steel Corporation and Subsidiaries Captive Coal Mine production in each district provided in S. 1417 compared to total district production, 1929 to 1933, incluiive-Continued

DISTRICT 6. UNITED STATES COAL & COKE CO., WEST VIRGINIA

1929. 1930.

1931.

1932.

1933.

1929.

1930.

1931.

1932.

1933.

1929. 1930. 1931. 1932. 1933

DISTRICT 7. UNITED STATES COAL & COKE CO., KENTUCKY

DISTRICT 9. TENNESSEE COAL, IRON & RAILROAD CO., ALABAMA

Senator NEELY. The subcommittee will adjourn until 2:30. (Whereupon, at 12:40 p. m., a recess was taken until 2:30 p. m.)

AFTERNOON SESSION

The subcommittee reconvened at the expiration of the recess, 2:30 p. m.

Senator NEELY. Mr. Gallagher is recognized.

STATEMENT OF M. F. GALLAGHER, CHICAGO, REPRESENTING THE INDIANA COAL TRADE BUREAU

Mr. GALLAGHER. Mr. Chairman, my name is M. F. Gallagher and my address is 231 South La Salle Street, Chicago. I am a lawyer and am appearing in behalf of the Indiana Coal Trade Bureau. The Indiana Coal Trade Bureau requested that I make a study of the constitutional questions involved in the pending measure and present a statement briefly discussing the ground of what we consider unconstitutionality.

The first question which naturally arises in connection with this or the other measure is the constitutional power of the Congress to enact the law.

The power of the Congress to enact this law must be derived, if it is derived at all, from the commerce clause. The commerce clause of the Federal Constitution has been considered by the Supreme Court in a number of important decisions in connection with the coal industry; and that Court has repeatedly held that the production of coal is a local and intrastate operation, and its regulation belongs exclusively to the States.

In the case of Heisler v. Thomas Colliery Co., 260 U. S., 245, the Court considered this question in view of an argument strenuously made that 80 percent of the coal which was being produced was being shipped outside the State of Pennsylvania, and it was argued that the production of the coal in Pennsylvania was necessarily a part of interstate commerce, because there could be no interstate commerce in that coal unless it was produced. But the Supreme Court rejected that contention, and held that the production of coal within a State, even though that coal is intended for interstate shipment, is a local and intrastate operation.

Now, the language of the Supreme Court in that case seemed to me to apply directly to the measure which you have under consideration. The Court said:

Its possibility, or, indeed, the certainty, of exportation of a product or article from a State, determines it to be interstate commerce before the commencement of its movement from the State, it would seem to follow that it is in such commerce from the instant of its growth or production; and in the case of coals, as they lie in the ground.

Senator MINTON. That has been in the record, Mr. Gallagher, for your information, and it will not be necessary for you to quote it further. You may argue from it anything you like.

Mr. GALLAGHER. In two other districts, one where a labor union was indicted for impeding the production of coal, the indictment was quashed because the production of coal, under a decision of the Supreme Court, was not interstate commerce.

Coal mining is not interstate commerce, says the Supreme Court, and the power of Congress does not extend to its regulation as such.

Now, there are several other cases to that effect, but here we have an attempt to bring the coal operators under this law through the imposition of a tax with a drawback in the event they accept the Federal code.

That same question arose before the Supreme Court in one of the child-labor cases, where a 10-percent tax was levied on the products of factories in which children were employed; and the Supreme Court