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that are disinclined to exert their very great influence in what might be termed a humanitarian capacity.

With reference to the proposal by Mr. Hosford that anthracite be included in the Guffey bill, I have this to say:

Anthracite being primarily a domestic fuel should not for this reason be included in the bituminous bill. Its conditions as to mining and distribution are also different from bituminous coal.

There are also other reasons why anthracite should be considered separately due to the concentration of its production and markets and the community of interests which obtain in the industry. Also, unlike bituminous coal, anthracite legislation, if enacted, in separate form should cover marketing provisions down to the ultimate consumer because, through the control of these conditions the anthracite industry could compete effectively with oil and gas. Bituminous being mostly used for industrial and public-utility purposes should not include in its regulation wholesale and retail marketing.

The anthracite industry constitutes a standing problem of its own. It is suffering very greatly now from the fact that it has not subscribed to a code of fair competition, under which it might have enjoyed a greater marketing and commercial advantage after the enactment of the National Industrial Recovery Act. The anthracite industry is suffering from a low sales realization, due to the fact that the prices in the old-line and independent companies are not recognized, except in their breach. No company adheres to them. So the result is that the anthracite industry, while marketing a large volume of tonnage, is doing it, generally speaking, under greater losses than have been the case for some time past, due to the fact that the operators have been unable to agree on the marketing features of a code. : Mr. Suender testified that it was because they had not been able to agree with the representatives of labor on the labor provisions. That is not so, because the United Mine Workers of America has a contract with the anthracite operators, and the United Mine Workers of America will adhere to that contract until its expiration on April 1, 1936, if it has to. Our position with the anthracite operators was that they should make a voluntary contribution to the unemployment situation in the industry by voluntarily reducing the hours of labor from 8 to 7; the 8 hours covered in the contract to the 7 hours that have been established in the bituminous industry. The Mine Workers made it plain that if the anthracite operators would not voluntarily reduce their hours from 8 to 7 the United Mine Workers of America, true to its traditions and past record, would adhere punctiliously to the 8-hour provisions of the existing contract until April 1, 1936. So when Mr. Suender says the reason for the absence of a code in the anthracite industry is due to their inability to agree with the United Mine Workers of America, it is entirely inaccurate and cannot be substantiated by the facts. The point in the discussion at the moment is that in our judgment the anthracite industry should be entirely separate and apart from the bituminous industry and should not be included in any Federal enactment designed primarily for the regulation of the bituminous industry.

Now, Senators, I appreciate the patience with which you have listened to my remarks here. I regret that indeed it has taken so much time. I have a lot of material here which I had intended to put in if time permitted, which I will now dispense with.

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Senator NEELY. Do you wish to insert that additional material in the record?

Mr. LEWIS. Yes; I have some things I should like to insert.

Senator NEELY. Please give them to the reporter, and they will be printed in the record.

Mr. LEWIS. Thank you, sir.

Before I do that, I want to make a moment's reference to the testimony of Mr. J. G. Puterbaugh, representing the coal operators of Arkansas and Oklahoma. · Mr. Puterbaugh comes from an area in the coal industry that is utterly unable to compete with the oil and gas industries. It is an area where those substitute fuels are produced, and there is no cost of delivery. The coal industry cannot be given a wage scale that will enable it to compete with oil and gas, where oil and gas really desire to come into the picture. In 1932 the Rock Island Railroad made a contract for the delivery of fuel oil for 10 cents a barrel. On the basis of 344 barrels of fuel oil to a ton of coal, they would have to sell coal for 40 cents a ton in the area represented by Mr. Puterbaugh in order to compete with fuel oil. At the current price of oil the situation has been somewhat improved, and the Southwest operators have enjoyed under the code a distinct advantage over the previous condition, by reason of the operation of the coal code.

However, Mr. Puterbaugh is not a reliable character, because he has a notorious record of being a chiseler, both before and after the bituminous coal code. He has violated his agreements with the United Mine Workers of America. He has paid starvation wages. He has hunted and pursued the men in that area in every conceivable Way, has organized the operators to raid the mine workers, and in every way is reprehensible from any standpoint. I confidentially advise the committee in this public way that I would not believe him jon a Bible under oath.

In operating his mines, when the code scale is $4 a day, he is paying $2.50 and $3, and at Malakoff, Tex., he is operating 8 hours, although the code says 7 hours. I just mention those things to show the kind of man Mr. Puterbaugh is. In the Golden Goose mine at Spadra, Ark., he has the 8-hour day. It is cooperative, and their statement shows that when miners work 10 days they receive 8 days at union rates. That is Mr. Puterbaugh's mine.

I simply mention these things to show that the operators of the Southwest, in sending, a representative here to oppose this bill, selected the greatest chiseler, I think, to be found in the coal industry of this country. I don't say this personally about Mr. Puterbaugh, but just as a matter of ordinary commercial business, because there is no secret about it at all.

Now, Senators, apropos of the marketing provisions of the Guffey bill, I want to say again that the mine workers will acquiesce in practically any readjustment of the marketing provisions that is necessary, in the judgment of the committee and the Congress. We would have liked to have the operators write a marketing provision, but, of course, as usual, they cannot agree on a marketing provision. The marketing feature is naturally more or less arbitrary in its provisions. The mine workers have no objection, if the committee thinks desirable, to having a subminimum provision, as has been suggested, I think, by Mr. Mahan or some other operator, so that slack or subnormal qualities of coal might be disposed of as a residue rather than to become

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unsalable. We are glad to assist the chairman and the committee in any reasonable readjustment of the marketing provisions.

Just in order to give the committee a slight understanding of the very difficult problem there is in arranging prices for the marketing of the bituminous product, and the great difficulty in enforcing adherence to those marketing provisions in the coal industry with a voluntary form of code of fair practices, I submit for the inspection of the committee this compilation of minimum fair market prices for bituminous coal, as shown on January 1, 1935, prices listed in all subdivisions of division no. 1, except western Kentucky. That includes the eastern Pennsylvania subdivision, the northern Panhandle of West Virginia subdivision, the northern West Virginia subdivision, the Ohio subdivision, the western Pennsylvania subdivision, southern no. 1 subdivision, and southern no. 2 subdivision, compiled by the subcommittee on the marketing reports and checked by individual subdivisions.

This compilation contains for that year 27,000 prices f. o. b. and destination points. It is a most highly technical and voluminous document, and will indicate to the committee some of the inherent difficulties in maintaining a price structure for the bituminous coal industry under the voluntary code participation plan of the bituminous coal code of fair practices. It is an amazing document, and will give the committee some idea of the technical difficulties and an understanding as to why prices in the bituminous coal industry under the code plan have broken down.

Mr. Chairman, I think that completes the presentation of my exhibits.

I want to express to the committee my personal appreciation and the appreciation of the interests that I represent, and the proponents of the bill, for the very great diligence with which the committee has pursued the task of conducting these hearings and listening to what must have been a rather tedious recital of the ailments and the difficulties of this great basic industry. In extenuation of our conduct I can only plead for my own people that we bring it to the attention of the Congress and you gentlemen because we have no other place to take our troubles or to take this problem. We are most anxious to make a contribution in every proper and honorable way as citizens to a solution of the problems and a rationalization of the processes of the coal industry.

Our first consideration, of course, is the human problem and the human interest, as represented by the membership of our organization, by literally hundreds of thousands of their dependents, and in behalf of the communities at the mines of this country which affect millions of our population. We are hopeful that the course we have suggested here and the facts that have been presented will bring to you gentlemen a recognition of the soundness of our position with

respect to what we think is the most intelligent of all the suggestions that have been made affecting the coal industry, and the only formula which we have ever known that is designed to bring about the economic rehabilitation of the bituminous coal industry.

There are plenty of people who sit back and say, "No; no; I will not do this, and I will not endorse the Guffey bill.” They admit themselves the inherent problems of the industry, the maladjustment of the industry, the starvation wages paid in the industry, and offer nothing themselves as a solution therefor. We prefer to occupy a more constructive attitude. We prefer to make concrete suggestions. If we have erred in our judgment and in our suggestions at times, we have erred in trying to move progressively toward a desired objective. We think the importance of this industry in the economic scheme of things in our country at this time warrants the action of the Federal Congress, despite the fact that here and there throughout the industry and here and there in high places in the Republic there are voices that rise and say, "No," to the suggestion. We think the well-being of the mining population, the well-being of the investors in the coal industry, and the well-being of the people of the country and the Republic are of sufficient consequence to warrant your favorable consideration of the principles embodied in this bill.

I thank you for your most kind consideration.

Senator NEELY. The committee is very much obliged to you for your cooperation.

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STATEMENT OF JOHN C. GALL, ASSOCIATE COUNSEL, NATIONAL

ASSOCIATION OF MANUFACTURERS

Mr. GALL. On behalf of the National Association of Manufacturers, composed of many thousands of manufacturers throughout the United States, most of whom are large consumers of bituminous coal, we beg leave to call to the attention of your subcommittee certain legal aspects of the pending bill, S. 1417, known as the "Guffey coal

bill."

Our views with respect to the economic effects of this legislation, if enacted, have already been presented to your subcommittee and will not be repeated here. We feel, however, that we should point out what we believe to be insuperable objectives of a legal character to the regulation proposed in the pending measure.

Briefly stated, an examination of the bill before you indicates an intention on the part of its author to declare the production, distribution and use of bituminous coal to be affected with a national public interest and to initiate a far-reaching control over the bituminous coal industry through employment of the taxing power of the United States Government.

The method proposed is somewhat analogous to that suggested in the pending social-security bills where a tax would be levied upon employers but such tax remitted to the extent that the taxpayer complied with legislation to be hereafter enacted by the various State governments. In the pending coal bill the remissions of taxes, or "drawback”, as it is called, would not depend upon the enactment of State legislation but would depend upon other conditions laid down in the bill. The fundamental principle, however, is the same: To secure a course of conduct on the part of the citizen by the indirect use of the taxing power of the Federal Government, such taxes to be collected unless the regulation proposed by the bill becomes effective. The tax, therefore, is clearly not a levy for the support of Government but a levy intended to secure an objective which obviously the author would achieve by direct regulatory legislation if not presented with clear constitutional difficulties.

LEGAL DEFECTS OF PENDING PROPOSAL

We respectfully assert the following legal propositions:

I. That the production, distribution, and use of bituminous coal are not affected with a national public interest” in a legal sense;

II. That even if such were the case, while it might justify regulation by the respective State governments, it does not confer upon Congress the power of regulation. Coal mining is an act of production and may not be directly regulated by the Congress of the United States but is within the exclusive province of State regulation to the extent that it may be regulated by government.

III. That if Congress may not directly regulate the production of bituminous coal, it may not do so by an alleged use of the taxing power where it is obvious by the character of the regulation that the measure is not intenedd primarily to produce revenue but is intended primarily to establish an intimate and far-reaching control over the business of producing coal.

IV. That insofar as the measure proposes a regulation of employment relations in the coal industry, as it does by part III, it is clearly invalid. Such regulation would not be valid even though the industry were declared and held to constitute a public utility as that term is understood in law.

It is not our purpose to present an extended legal argument on the foregoing propositions but merely to invite the attention of the committee to them so that the record may show clearly that they have been raised for the consideration of the committee.

I. The production, distribution, and use of bituminous coal are not “affected with a national public interest” in a legal sense:

In the case of Charles Wolf Packing Co. v. Kansas Court of Industrial Relations, 262 U. S. 522, the court expressly held that the mining of coal is not affected with a public interest in a legal sense. It is to be noted also, that in that case the court was confronted with an exercise of State power--not Federal- and that every presumption of an appropriate exercise of State police power was accorded by the court. Nevertheless, the decision rested upon the fundamental proposition that the mining of coal was private in the same sense as the trades of the butcher, the baker, and the candlestick maker, and could not, therefore, be regulated as a public utility. In this case the Supreme Court said:

It has never been supposed, since the adoption of the Constitution, that the business of the butcher, or the baker, the tailor, the woodchopper, the mining operator, or the miner was clothed with such a public interest that the price of his product or his wages could be fixed by State regulation. It is true that in. the days of the early common law an omnipotent Parliament did regulate prices and wages as it chose, and occasionally a colonial legislature sought to exercise the same power; but nowadays one does not devote one's property or business to he public use of clothe rith a public interest merely because one makes commodities for, and sells to, the public in the common callings of which those above mentioned are instances.

Whatever may be the effect of later decisions on the authority of the several States to regulate businesses heretofore considered private in nature, there is nothing in later decisions which would authorize the Federal Government to exercise jurisdiction.

In a later case the Supreme Court of the United States, without dissent, upheld a combination of 137 producers of bituminous coal in

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