May I call the attention of the Senators, just reverting for the moment, to the fact that at the time the railroad companies in northern West Virginia were paying 52 cents a ton for West Virginia coal, the railroads were charging from $3.09 to $3.38 a ton for hauling coal from the Kanawha district in West Virginia to Washington? I ask the Senators to compare that fact with the attitude of the coal companies. It is true that the railroad companies as a whole havé exacted more tribute from the public in levying unfair and confiscatory freight tariffs against the coal industry than the coal industry ever dreamed of doing in connection with increasing prices.

Senator NEELY. According to your statement, Mr. Lewis, the railroad companies charged more than six times as much for transporting a ton of coal from West Virginia to the Washington market as the operator received for supplying it. In spite of the fact that in the operator's cost was involved the value of the raw material, the overhead expense, interest on investment, and the wages of his miners.

Mr. LEWIS. That is true, Senator, astonishing as the statement may sound. That is precisely what it means. It is only one of the absurdities of the situation. May I call attention to the fact that the miner who is getting 221⁄2 cents a ton for producing that coal was buying his own powder and furnishing his own explosive, which might cost him 5 cents a ton, or, in some instances, 10 cents a ton; and he would get the residue for his labor. If you can imagine a more miserable situation than that which existed prior to the enactment of the N. R. A., I am free to confess I cannot do so myself.

Mr. Francis' objection to the proposed form of allocation falls within the category of my previous comment on that proposition. The Mine Workers are willing to adjust themselves to anything that may seem logical and proper with regard to the formula.

Mr. Francis made some very interesting statements on the question of differentials in the wages, and some statements which will be of great value to the United Mine Workers of America in the ensuing wage negotiations which are to take place in Washington beginning again next week. He says that the differentials in wages are traced to freight-rate differentials. That may be true, but the Mine Workers have never conceded that a man should accept a low wage because a member of the Interstate Commerce Commission made an error in computing a freight tariff. The man in the mine is not responsible for the maladjustment of the freight-rate structure in the industry, and the Mine Workers have never conceded that it should be so held. On the other hand, Mr. Francis says that he doubts whether the present disparity is as much as it appears between the miners of the South as against those of the North. Of course, there is a difference of 40 cents a day in the day wage, but by and large, he thinks the rates of tonnage workers in the South substantially exceed those in the North. If that is true, it makes the whole question of wages and differentials easily adjusted, because if the figures can be substantiated all that is necessary to do is to learrange the wages so as to completely eliminate any differential. Those are matters, however, for a wage conference, and not for this committee to concern itself with in any substantial way.

Mr. Francis says no district ought to have a wage imposed upon it by a competing district, and I assume to that degree he took exception

to the labor provisions of the Guffey bill. Mr. Suender also made the same observations. As a matter of fact, both Mr. Suender and Mr. Francis know it is impossible to make any settlement of wages or conditions of employment by any one district independently of other competing districts. There has to be some form of general knowledge as to the wage structure and some form of general understanding. Mr. Francis would be the last man to permit the Logan coal field to make a wage settlement with the United Mine Workers of America in advance of knowing what kind of a settlement the competitors of the Logan field were going to make in reference to a wage schedule. The same is true of the other competing districts, which furnishes a basis for a more or less national relationship, and a national negotiation of the wage structure of the industry. Assuredly, any one district could not permit itself to be frozen on the peak of a wage scale higher than its adjacent competitors in another field which entered the same natural market. So there must be concurrent negotiations on these wage scales and concurrent settlement of this problem, in order to safeguard the interests of all. I really doubt that either one of these gentlemen meant just what he said.

Mr. Francis says that a bill of this kind should apply just as rigidly to the captive mines as to the commercial mines. I concur with him fully, and on that point I want to say just a word with respect to other tonnage. I refer to the 40 million tons, more or less, of so-called "irregular production" produced by the bituminous-coal industry by so-called "trucks, wagons, and snowbird"" mines. That is an important phase of the problem in stabilizing the coal industry. The Senators will understand that if prosperity should come to the coal industry in a substantial form at any time, that very prosperity carries with it the seeds of its own destriction, in this manner: The creation of a condition that will bring a price for coal that returns the investor anything and pays a living wage will bring into the industry the reopening of a vast number of new mines, both small mines and large ones, which will spring up by the thousand, as they have since the N. R. A. has come into existence. That has brought into production a large number of idle class A mines of responsible concerns or responsible coal companies, so that the creation of conditions which bring prosperity to the industry in turn invoke influences that again strike it down, inevitably strike it down.

Since the promulgation of the bituminous coal code there have come into existence literally thousands and thousands of small mines. Some of them are very small, working only a man or two, or the so-called "family mines". Others are larger, employing over 100 men, and in some instances as many as 250 men. They are served by trucks running over hard roads with no investment, with low expenditures and low costs. They are marketing at the present time approximately 40 million tons of coal which will displace other coal from the best markets of the industry, because that is largely a domestic product. They are depriving the legitimate coal industry of the advantage of marketing that much coal of the more profitable grades.

There must be a complete regulation of all phases of the bituminouscoal industry, if this bill is passed. The renewing of those mines under the guise of helping the small man will be detrimental to the industry and will break down the enforcement of the provisions of this act as it has been drawn under the coal code.

In Western Pennsylvania, West Virginia, Ohio, Indiana, Illinois, Missouri, and all of these States where there are communities to be served, we have found the small mines have developed the market rapidly in the last year and a half, and developed it so fast that it is impossible to keep any statistical record of them. There can be no accounting in any substantial way of their production or influence on the market.

I was rather amazed to listen to the testimony here of Mr. Jonas Waffle, representing the Indiana Coal Operators' Association and Code Authority, who testified that the truck business in Indiana and these unregulated mines were in his estimation of no particular importance. Well, I suppose it is true that Mr. Waffle is not really an authority on the coal industry. He is neither an operator, nor a miner, nor an engineer, nor a salesman. He is a statistical representative who for some years ran a coal bureau and freight-rate office in Indiana, and who recently has become the representative of the Indiana coal operators because it was impossible for those operators to agree on anybody else.

But in December 1934 the Indiana Coal Operators appealed to the United Mine Workers of America for help in restraining untrammeled competition of truck mines in Indiana, and a state-wide meeting was called under the auspices of the Indiana Coal Operators, to which they invited representatives of the United Mine Workers of America, the independent coal operators, the code authorities, representatives of the railroads, representatives of the railroad brotherhoods, representatives of the Indiana State Federation of Labor, and a representative of our International Union was assigned there by my office, one of our most substantial men, Maj. Percy Tutlow. That meeting resolved to take the question up with the Governor and ask the cooperation of the State of Indiana in curbing these men and the breaking down of the code prices by these truck mines operating without restraint, and Mr. Jonas Waffle made the presentation to the Governor and asked the Governor to exercise all the power of the Commonwealth in curbing what he said was a most menacing and sinister influence.

I am sorry Senator Minton is not here when I am talking about Indiana, because I would have liked to have him here. Mr. Waffle must have been suffering from amnesia, to come before this committee and say the truck element had no effect on code prices or the breaking down of code prices.

You know, in Indiana the coal industry is chopped up into about four elements. One of them is the hand-loading mines, where they try to operate without the use of machinery, and it is blasted from the soil and they load it by hand. That is one section of the industry. Another section is the mechanized mines, where they have tried to use modern machinery, undercutting machinery, loading machinery of the conveyor type or pick-up type, where the machine picks the coal up and loads it on mine cars. Their cost is greatly below the cost of production of that hand-loading mine type. They have a distinct advantage, and the hand-loading mines cannot compete with the mechanized mines in the market.

Then we have another section, practically 25 percent of the production, which includes the strip mines or open-surface mines. Their cost of production is substantially less than the cost of production of the mechanized mines.

Then we have the truck mines, to which I referred a short time ago, making up the four sections.

So that we have the operators of that State divided into four sections. or groups, each fiercely competing with the others, each trying to grain an advantage over the other, each hating all the others with all the venom that is possible, and each being unable to agree with any of the others on any subject, except to oppose everything. They are always in agreement on opposing everything. They opposed the enactment of the National Industrial Recovery Act. They opposed the promulgation of the coal code. They had a little code of their own that had certain provisions in it that were designed to assist Indiana.

But as a result of that confusion in the Indiana industry that State has been suffering in a most intense form from internal competition. It has had the external competition from across the river in western Kentucky, where the North American Co. operates in an unrestrained fashion and dumps its coal where it desires. It has had the most devilish internal competition between the handloading mines and the mechanized mines and the strip mines, plus the competition of the unrestrained truck mines that operate in any way they want to and sell their coal at any price, that do not obey the mining laws, the code prices, or the contract wages.

I don't know of any section in the coal industry that in the last 10 years has emitted a greater volume of wails and tears and lamentations than the bituminous-coal industry in Indiana. I know all hose operators personally, individually, that is, the substantial operators. From year to year they have called upon high heaven to witness that they are being sacrificed by the United Mine Workers of America in being compelled to pay reasonable wages while western Kentucky was free and other sections were free. And now, as usual when there is proposed a measure designed to stabilize this industry and to stabilize the competition they have among themselves, we find them adopting a dog-in-the-manger attitude and sending Mr. Jonas Waffle here to oppose the enactment of the Guffey bill.

For 5 years Mr. John Templeton, one of the leading coal operators of Terre Haute, Ind., never walked from his home to his office down the main street of that city without stopping and telling groups of coal miners that John Lewis owned stock in nonunion coal mines. and for that reason was trying to sacrifice Indiana in order that his coal companies might mine the coal at a profit. And yet Mr. Templeton and the other operators there are now sanding the wheels of progress, as usual, and demanding the right to continue to fry and suffer in their own misery.

Most of the coal companies in that State have been in receivership. or threatened with being driven out of business, outside of the two favored sections, the strip mines and the mechanized mines, and yet they send Mr. Jonas Waffle here, who inherently knows nothing of the problems of the coal industry, but is a very nice gentleman whom I like individually, to mumble his opposition to the only constructive suggestion that has ever been offered the coal industry.

We might ask, if they don't want the Guffey bill, what they do want. And they would glibly say, "We want the extension of the coal code in its present form." But the coal code, as has been demonstrated by the secret records of the industry from which I have read and quoted.

is practically destroyed. It is destroyed to such a degree that it affects the negotiation of a new wage scale for the industry. And it is destroyed, Senators, to the degree that, without the enactment by Congress of the Guffey bill, I seriously doubt whether a wage scale can be negotiated between now and the first of April, and I seriously doubt that the country can escape the economic and industrial struggle that threatens the coal industry. I base that upon the official paper presented to the Mine Workers in the joint conference at the Shoreham Hotel 2 weeks ago, when they said the realization of the industry had fallen so low that it was extremely doubtful that the industry could continue to pay the present wage scale. I base upon what I know to be the intention of the members of the United Mine Workers of America to secure in the next wage scale negotiated in this industry a shortening of hours and an increase in wages.

We are assured by the Secretary of Agriculture and by the Bureau of Statistics of the Department of Labor, as well as by the Planning and Research Division of the N. R. A., that the cost of meat is going to advance by leaps and bounds, and that the cost of living is going to sharply advance. I am advising the Senators that under those circumstances the mine workers of this country in the bituminous coal industry are expecting some considerstion from the coal operators on the question of increased pay. Four dollars and sixty cents a day in a coal mine, where they work approximately 3 days a week, is not & living wage for an American. And when that American is threatened with a great increase in the cost of living, then it is time that someone in this industry should wake up to the responsibilities of the situation and give some attention to a reasonable method of securing a price for this product that will take care of the equities from the human standpoint of the industries.

Senators, that cannot be done by coming here and opposing the enactment by Congress of the only rational formula ever presented to the Congress for the stabilization of this much oppressed industry. It cannot be done by coming here and asking for the retention of a busted coal code, busted by the operators themselves, because it was the operators who have sold their coal below the code prices. It was the coal operators who signed the code; it was the coal operators who gave their commitment to the Government that they would adhere to the provisions of the code; it was the coal operators who have violated the code; it was the coal operators who are chiseling under the code; it was the coal operators who in this secret record from which I have read who said the code is broken; and it is the coal operators that the United Mine Workers of America will expect either to place their house in order or come to the Federal Congress and admit they cannot place it in order, and ask the Federal Congress and our Government to lend a helping hand.

I am speaking with some degree of earnestness on this proposition, because the potentialities of this matter are tremendous. They are larger than the interests of the coal industry. They are larger than the interest of the men who work in the coal industry. It affects the public welfare; it affects the public security; it affects the well-being of the "new deal"; it affects the possibility of this Government of ours helping industry and finance out of the industrial morass in which they have been floundering for so long. If the coal industry now breaks down and lays down in this situation, the effect upon the