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sociation of mine workers, shall pted as the minimum wages for perating in such district or group is this: There is no logical reason rk, which are entirely appropriate in, shall be made to apply to remote dis

where they may be entirely inappro? agreed to by a majority or any other Nation. The matter of maximum daily Hermined upon its merits in each district the established demand for coal and the big time to meet such demand. des, I am in agreement that a substantial rict, based upon aggregate tonnage, should

wage scale which would become binding listrict. However, in my opinion, it is not the action of a simple majority, and I have "rence of three-fourths in tonnage of the provirpose of the provision as drafted is not clear Tould be made clear that minimum wages so

action of the majority are limited to wages it would not include wages paid on a piecework - Portions in piecework rates of pay might occur, silk and the consequent opportunity for earnings umployees of the majority and the employees of

filed with the Labor Board and shall be accepted rin such district or group of districts as the minions of labor paid upon an hourly or daily wage ior amendment to follow.)

emen, in spite of the diversity of the conad fears which you have made a matter of

es of the long hearing which we have just ... the chairman of the subcommittee that the mity be confidently deduced from the evidence.

period of abnormal prosperity which was born . coal industry was not only poverty stricken, -- for at least a quarter of a century before the ional recovery law. The operators habitually estructive competitive war against one another. ument of the recovery law and the adoption of ;vas frequently bitter strife between the operators ļihe miners on the other. is before the enactment of the recovery law the

maselves to be totally incapable of cooperating .: the matter of promoting the prosperity of their it from ruin. of the enactment of the recovery law, about

coal operators of the country were insolvent. sands of miners were without employment; many pors' wives and children were utterly destitute. son of the National Recovery Act and the govern

which it provided, the industry became more it had been for many years before the passage of Jctive competition among the operators was abancices of coal and the wages of the miners were stabi

intially increased. The nonunion miners have been ized by the United Mine Workers of America; the

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1934 (p. 8): "Advantage continues to be taken of the provisions in every district scheme that owners of coal mines may freely arrange transfers of quota. In a number of districts considerable tonnage was involved in transfers during the course of the year.'

Page 10: Change paragraph (i) to read:

“(i) Every second year after the passage of this act the Commission shall, in accordance with the provisions hereof, make and establish new standard district tonnage quotas and new standard mine tonnage quotas; in the revision of such standard tonnage quotas the court shall give due consideration to the output of the respective districts and of each mine during the preceding period of operation under the act. In its annual report to the Secretary of the Interior for transmission to Congress the Commission shall report fully upon the system of allocation herein set up with such recommendations concerning the same as it may deem appropriate.”

Page 11, part II, marketing: Omit all reference to minimum prices.
Change paragraphs (a) and (b) to read:

66

'(a) The Commission shall ascertain the cost of production free on board the mines, including the cost of labor, supplies, power, workmen's compensation, taxes, insurance, administration, and all other direct expenses of production, in each of the producing districts as defined herein. The average cost free on board the mines thus ascertained for the period for each district taken to the next highest even cent per ton, shall be announced by the Commission not later than March 1 of each year. The determination of cost for each year beginning April 1 shall be based on the actual costs for the preceding calendar year, adjusted, if necessary, to compensate for any changes in wage rates, hours, or other basic cost factors.”

(b) Within thirty days after their election, the district boards shall respectively submit for the approval of the Commission a list of maximum prices, free on board the mines, for coal and grades of coal produced within the district. Upon failure of a district board, on demand of the Commission to submit such lists and the information upon which the prices are predicated, or upon the refusal of the district board to modify any such maximum price or prices, the Commission is authorized from time to time to fix maximum prices for any grade or size of coal. Such maximum prices shall be established at a figure or figures which will yield a just and reasonable profit above the actual average cost of production within the district, including the cost of selling and the amortization of capital investment. Twenty days' notice in writing shall be given to any code member to be affected by the order of the Commission, and at such hearing anyone in interest may be heard. Upon approval of prices submitted or order fixing the same, notice thereof shall be mailed to each code member in the district, and no coal shall be sold free on board the mine by any code member within the district at more than the maximum price so fixed: Provided, That where maximum prices are established by the Commission they shall be determined for periods of six months ending the last day of March and the last day of September of each year.”

If it should be decided to keep in the bill a provision for minimum prices, an amendment should be added at page 11, substantially as follows:

“Upon the complaint of any district board that the minimum price established for any size or grade of coal produced within the district substantially restricts the sale of such coal in competition with other fuel or with other forms of energy the Commission shall, following hearing upon the matter, authorize such reduction in the minimum price of such coal as may be found necessary to meet said competition.

Page 15. I believe paragraph (c) would be improved if it were revised to read:

“(c) A bituminous Coal Labor Board, consisting of three members, shall be appointed by the President of the United States, to be assigned to the Department of Labor. The members of the Board shall be impartial persons, with no financial interest in the industry or connection with any organization of employees. The Board shall appoint a secretary and necessary clerical and other assistants. The members shall serve for a period of five years and until their successors are named and shall each receive compensation at the rate of $12,000 per annum and expenses. Decisions of the Board may be by a majority thereof."

Page 17, change paragraph (g) to read:

"The wage agreement or agreements, including maximum daily and weekly hours of labor, negotiated by collective bargaining in any district or group of two or more districts between representatives of producers of three-fourths of its annual tonnage production and representatives of the majority of the mine work

ers therein belonging to a recognized national association of mine workers, shall be filed with the Labor Board and shall be accepted as the minimum wages for all such classes of labor by the code members operating in such district or group of districts."

My view with respect to this amendment is this: There is no logical reason why maximum daily and weekly hours of work, which are entirely appropriate in, say, the eastern part of the United States, shall be made to apply to remote districts in the western part of the country (where they may be entirely inappropriate) for the reason that they have been agreed to by a majority or any other proportion of the coal producers of the Nation. The matter of maximum daily and weekly hours of work should be determined upon its merits in each district or group of districts, depending upon the established demand for coal and the actual need for longer or shorter working time to meet such demand.

With respect to minimum wage scales, I am in agreement that a substantial majority of the producers in each district, based upon aggregate tonnage, should have the power to negotiate a basic wage scale which would become binding upon all code members within the district. However, in my opinion, it is not logical that this would result from the action of a simple majority, and I have suggested that it require the concurrence of three-fourths in tonnage of the producers within the district. If the purpose of the provision as drafted is not clear with respect to the following, it should be made clear that minimum wages so imposed upon the minority by the action of the majority are limited to wages paid by the hour or by the day and would not include wages paid on a piecework basis. Otherwise very serious distortions in piecework rates of pay might occur, since the conditions under piecework and the consequent opportunity for earnings might vary greatly between the employees of the majority and the employees of the minority producers.

Page 18, line 1, insert "shall be filed with the Labor Board and shall be accepted by the code members operating in such district or group of districts as the minimum wages for all classifications of labor paid upon an hourly or daily wage basis."

(Further recommendations for amendment to follow.)

Senator NEELY. Gentlemen, in spite of the diversity of the conflicting opinions, hopes, and fears which you have made a matter of record during the progress of the long hearing which we have just concluded, it appears to the chairman of the subcommittee that the following conclusions may be confidently deduced from the evidence.

1. Expecting a brief period of abnormal prosperity which was born of the World War, the coal industry was not only poverty stricken, but in a state of chaos for at least a quarter of a century before the enactment of the national recovery law. The operators habitually waged relentless and destructive competitive war against one another.

2. Before the enactment of the recovery law and the adoption of the Coal Codes there was frequently bitter strife between the operators on the one hand and the miners on the other.

3. For many years before the enactment of the recovery law the operators proved themselves to be totally incapable of cooperating with one another in the matter of promoting the prosperity of their industry, or saving it from ruin.

4. At the time of the enactment of the recovery law, about 90 percent of the coal operators of the country were insolvent. Hundreds of thousands of miners were without employment; many thousands of miners' wives and children were utterly destitute. Under the operation of the National Recovery Act and the governmental regulation which it provided, the industry became more prosperous_than it had been for many years before the passage of the law. Destructive competition among the operators was abandoned. The prices of coal and the wages of the miners were stabilized and substantially increased. The nonunion miners have been generally organized by the United Mine Workers of America; the

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Coal produced is, therefore, approximately 61 percent of the amount consumed.. The Youngstown Sheet & Tube Co. for long time purchased all of its coal, but it soon became evident that, in order to be sure of the necessary quality of metallurgical coal and a steady and regular supply, backed by proper reserves, it was imperative that a large proportion of its requirement should be owned and the operation of its mines governed by its needs for fuel in accordance with its sale of manufactured steel products. The company, therefore, acquired a large coal acreage which, in due time, was opened up and fully equipped. In addition, it established a large washing plant so that there would be, as far as possible, full control as to quality. All of this was done at heavy expense to the company.

The consumption of coal at its different works varies greatly with the public demand for steel products. It is a physical impossibility, at all times, to keep the different units of its works in exact harmony, and it is often necessary, for economical operations and proper consideration of costs, to produce more coke than the active blast furnaces would at the same time consume.

The company has from time to time sold a portion of this coke, but these sales have been made with due regard to proper market conditions and have not militated against the so-called “commercial mines.” A study of the consumption as shown herewith very clearly shows that it has purchased from outside sources coal largely in excess of that which entered into the production of the coke so sold.

A high standard of wages has been maintained. Living conditions have been of the highest, as shown by a report of the United States Coal Commission in 1923. Safety has ever been uppermost with the management. That conservation has been considered carefully is shown by a recovery of coal of well over 90 percent.

For the reasons stated in the summary presented by Mr. Thomas Moses we believe it is impracticable, unfair, and unnecessary to include captive mines in. the proposed legislation.

THE YOUNGSTOWN SHEET & TUBE Co., By C. G. ROBINSON, Vice-President.

AND

STATEMENT OF CRUCIBLE STEEL Co. OF AMERICA AND SUBSIDIARIES

AFFILIATES AS OWNERS OF CAPTIVE MINES IN OPPOSITION TO THE PROPOSED

“BITUMINOUS COAL CONSERVATION ACT OF 1935”, INTRODUCED AS S. 1417 To the subcommittee of the Committee on Interstate Commerce of the United States

Senate: The Crucible Steel Co. of America and its subsidiaries and affiliates appear in opposition to S. 1417, cited as Bituminous Coal Conservation Act of 1935", introduced by Senator Joseph F. Guffey of Pennsylvania, January 21 (calendar day, January 24), 1935, and respectfully submit the following facts and arguments in opposition to said bill as the same affects them as owners of "captive mines.”

In the 5 years from 1929 to 1933, inclusive, the captive mines owned by us, our subsidiaries, and affiliates, produced and we consumed the following aggregate amounts of coal:

Production in tons

Year

Cruci

ble mines

Consumption in tons

Cornell
mines

Total

1929.
1930
1931.
1932
1933.

954, 805
755, 035
531, 922
369, 413
372, 152

179, 544
134, 705
59, 128

1, 134, 349 1,089, 061

889, 740 817,351 591, 050 569, 647 369, 413 412, 634 372, 152 552, 589

The above table shows the close relationship between the coal produced in our captive mines and the amount consumed in our business. During the first of the 3 years covered by the above table the fluctuations are almost identical and it is to be noted that in the last 2 years, the Cornell mines were not in operation. During those last 2 years, and also to a certain extent in earlier years, we and our subsidiaries have been obliged to purchase bituminous coal in the open market, particularly when conditions require certain qualities or grades of coal or when certain deliveries and demands make the purchase of such coal necessary

or more advantageous than that which our captive mines can readily supply, A small amount-approximately less than 10 percent-of the coal produced at our captive mines has been sold by us, but that practice is being discontinued and the problems of our captive mines can therefore be considered on the basis of their entire production now being used in our steel business. Our vital interest in any legislation affecting our mines is therefore obvious.

The captive mines owned or leased by us and our subsidiaries and affiliates and the coal produced therefrom, coked or processed, are to be used exclusively and solely in our business and the coal is not to be sold by us to others in the commercial markets in competition with commercial bituminous coal. This conclusively establishes that these captive mines are being operated only as a part of our steel business and that coal is to be taken from such mines only when and to the extent actually required by our business needs. They constitute an integrated part of our steel business, and to impose rigid regulations upon them as though they were a separate and distinct commercial coal business will only destroy their use as a part of a steel business and prevent the economy and business efficiency which can be obtained by operating them as a part of our steel business.

In other words it is clear

1. That the operation of our captive mines is limited to the interests and requirements of our steel business as such and is an essential and integrated and inseparable part thereof; and

2. That our captive mines are not operated competitively with the general commercial operation of bituminous coal mines.

We, therefore, wish to refer to the analysis made by the United States Steel Corporation and its subsidiaries of the various provisions of the bill; and particularly to refer to their analysis of and objections to (a) the declared objects of the bill insofar as they relate to captive mines; (b) the tax on bituminous coal; (c) the proposed Bituminous Coal Code and its provisions regarding the production, marketing, and labor relations. We also wish to particularly refer to the general observations in said statement of United States Steel Corporation and its subsidiaries made respecting the advisability of adopting the proposed bill and its constitutionality and legality. Such analysis of the aforesaid problems presented by the bill point out many major defects and demonstrate its impracticability and injustice, which are equally applicable to our captive mines as they are to the captive mines of the United States Steel Corporation and its subsidiaries. In order to avoid duplication, we are not again analyzing the bill in detail, but respectfully request that you consider the objections to the bill set, forth in the statement made to you by the United States Steel Corporation and its subsidiaries as being equally applicable and burdensome upon the operation of our captive mines as fully as though we had specifically made the same objections herein.

Dated, New York, March 1, 1935.

Respectfully submitted on behalf of Crucible Steel Co. of America and its. subsidiaries and affiliates.

By F. B. HUFNAGEL, President Crucible Steel Co. of America.

PHILADELPHIA, PA., March 8, 1935. FRANK K. BOAL,

Secretary to Senator James J. Davis: Regarding your telegram of yesterday I give you here in abbreviated summary in lieu of brief requested. If such direction and discipline of bituminous coal industry is deemed necessary by Congress, then I recommend that it should be; One, temporary and limited definitely as to time; two, directed entirely by financially disinterested American citizens with control and responsibility vested in one man; three, that it should include production control of individual mines based upon past production and present physical productive capacity, as well as control over new mines; four, that it shall regulate all wages and that wages should be based on approximate commercial value of coal f. o. b. mines which have been fairly well-determined by code authorities; five, that there shall be a comprehensive national effort instituted at once to regulate the forces, the disintegration of which makes such legislation essential. I feel that any regulation should be based upon the ideal of equal opportunity for all. I do not think this. can be accomplished with code authorities consisting of men interested financially in almost every decision.

A. K. ALTHOUSE.

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