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HARRISBURG, Pa., March 5, 1935. SENATOR M. M. NEELY, Chairman Subcommittee of Committee on Interstate and Foreign Commerce,

Senate Office Building: Realizing the importance of S. 1417, introduced by Senator Joseph F. Guffey of Pennsylvania, I endeavored to arrange my affairs to personally appear before the Subcommittee of the Committee on Interstate and Foreign Commerce in support of this bill which I consider one of the most important and constructive pieces of legislation before the present Congress.' Affairs of state involving and requiring emergency legislation, however, prevent my appearing personally befor your committee. I take advantage of this opportunity to say to your Committee that as Governor of Pennsylvania, the largest bituminous-coal-producing State, I strongly urge passage of the Guffey bill

, because I believe that real stability can only come to the bituminous-coal industry through the enactment of such meritorious and timely legislation. The public-utility features of the bill, the marketing provisions, the labor and code provisions, as well as the provisions for the protection of natural resources, the creation of the commission, the establishment of a real labor board, and the taxing methods proposed appeal to me strongly, and the passage of this bill by the Federal Congress would be a great accomplishment and will undoubtedly bring to the basic bituminous-coal industry of this country real stability, peace, and justice to all concerned.

GEORGE H. EARLE, Governor of Pennsylania.

STABILIZATION OF BITUMINOUS COAL MINING

INDUSTRY

THURSDAY, MARCH 7, 1935

UNITED STATES SENATE, SUBCOMMITTEE OF THE COMMITTEE ON INTERSTATE COMMERCE,

Washington, D. C. The subcommittee met, pursuant to adjournment, at 10:45 a. m., in the committee room, 412 Senate Office Building, Senator M. M. Neely (chairman) presiding.

Present: Senators Neely (chairman) and Minton.

Present also: Hon. Joseph F. Guffey, a Senator from the State of Pennsylvania.

There were also present the following-named representatives of the United Mine Workers of America: Mr. John L. Lewis, president; Mr. Philip Murray and Mr. Van A. Bittner, vice presidents; Mr. Henry Warrum and Mr. Earl E. Houck, counsel.

The following operators were also present: Mr. T. G. Essington, of Illinois; Jr. Richard Emery, Jr., of Ohio; Mr. Robinson, of Ohio; Mr. Liveright, of eastern Pennsylvania; Mr. Charles O'Neill, of eastern Pennsylvania; Mr. Edward Mahan, Mr. Charles F. Hosford, Jr.; former Senator C. W. Watson, Mr. C. E. Smith and Mr. C. c. Dickinson of West Virginia, and many others.

Senator NEELY. Gentlemen, have the friends and foes of the Guffey bill during the progress of the hearing harmonized their differences of opinion?

Mr. WARRUM. We had one meeting, not with the opponents of the measure, but with a group of operators that have favored the passage of this bill. There have been some amendments that have been agreed upon which relate almost exclusively to textual corrections. I imagine I should not bu4den the committee with those.

Senator NEELY. No; that will not be necessary. Has there been any agreement on any of the fundamentals that were in dispute?

Mr. WARRUM. In relation to these fundamentals of allocation, marketing provisions, minimum price provisions, correlation of prices there has been no agreement so far as to allocation. While I cannot even speak for all of the operators who have appeared as proponents. of the bill, the general drift of opinion seems to be that the suggestion of Mr. O'Neill is perhaps the most practicable. The formula from 1923 to 1934 plus the 1934 formula would seem to result in a shift of tonnage, and he suggested that in each district there might be an allocation of quotas not less than the 1934 output. That seems to have the most adherents.

Senator NEELY. Have you reached any, agreement with any considerable number of operators as to the basis for district allocation? One prominent operator suggested to me last night that the

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allocation ought to be based on the highest output of any 2 years during the last decade, including 1934, with permission to the operator to select the 2 years which he considers most favorable to himself.

Mr. WARRUM. Do you mean the allocation to the mines or to the districts?

Senator NEELY. I am speaking of the mines in a particular district.
Mr. WARRUM. The quotas to those mines?
Senator NEELY. Yes; mine quotas.

Mr. WARRUM. There has been no general agreement. The plan that seems to me to meet with the most favor—and there may be operators here who are for the bill who may object to that, and if so they can say so—is that in any event there should be a provision that no mine should be allotted less than its 1934 production.

Senator NEELY. Judge Warrum, an objection was made to that, and I am not passing upon it, but submitting it for the consideration of those present. The objector said;

I have been scrupulously observing the code provisions. I have been living up to the National Recovery Act. Some of my competitors have been taking orders that result in violation of the provisions of the code, and they have also been scandalously cutting prices. My production has decreased because I have obeyed the law.

He showed me figures to prove that in 1 year before the National Recovery Act went into effect the output of one of his mines was over 600,000. But last year the output of that mine was only 230,000 tons. This reduction of tonnage was caused almost exclusively by the cutthroat competition of those who were not living up to the code or the law.

The objector further said:

Unless you let me go back to the time prior to the operation of the recovery act and the code you will be penalizing me for having maintained the proper wage scale, for having lived up to the law that my competitors have violated. You should not permit the law-abiding operator to be penalized to the advantage of his cut-throat competitor, who will probably use 1933 and 1934 as a basis of allocation.

Have you given any consideration to such a suggestion as that?

Mr. WARRUM. That is satisfactory to us, and may prove to be satisfactory to a good many operators, with the idea in view that 1929 might represent the output of certain producers based on their chiseling operations, under the formula set up in the measure, and perhaps it should be an average from 1929 down to 1934. That had the same purpose in view, to bring about the same result. So the suggestion that was made and that you are passing on, as you say, in relation to quotas to mines, to let them select an average for 3 years or 2 years, or anything of that kind, is satisfactory to the mine workers and may be satisfactory to most of these operators. I see nothing wrong with it. The trouble is the difficulty of getting them to agree at all.

Senator NEELY. Does anyone else present object to that suggestion? If there are no objections to it, the chairman will consider that you favor it.

Mr. EMERY. Mr. Chairman, off-hand I think Ohio would object to that. I think I will have to reserve the right to object. The main reason for taking the annual average, if you will look at Ohio's statement you will find the tonnage has steadily decreased for 5 or 10 years. You will also find a lengthy strike in 1932 caused an upset figure,

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and also in 1927 and 1926. As far as Ohio is concerned, I think we will have to reserve the right to object to this proposed amendment.

Senator NEELY. Gentlemen, in order that something concrete may result from this meeting, may I suggest that I read the bill section by section, with the invitation to all of you to offer suggestions or amendments. Section 1 is as follows:

It is hereby recognized and declared that the production and distribution of bituminous coal in and throughout the United States are affected with a national public interest, and that the right of the public to constant and ample supplies of coal at reasonable prices, the conservation of all remaining bituminouscoal deposits in the United States by scientific and economical mining and marketing of bituminous coal, the maintenance of just and rational relations between the public, owners, producers, and employees, the right of owners and producers, to fair returns upon their investments and of employees to just wages and working conditions, and the general welfare of the Nation require that the bituminous-coal industry be regulated as a public utility. It is further recognized and declared that all production and distribution of bituminous coal directly bear upon and affect its interstate commerce and national public service; and that the elimination of unfair trade practices which have tended to destroy the bituminous-coal industry and its interstate commerce is dependent upon the elimination of unfair practices in relation to hours of labor, wages, and conditions of employment.

Has any one any suggestion to offer regarding this section? Mr. WARRUM. We would like to have that strengthened and somewhat elaborated upon.

As the proponents of the bill, we would be willing to have the congressional declaration made stronger. I can read the redraft I have made, if you wish.

Senator NEELY. I wish you would.

Mr. WARRUM. The change is in two ways. Out of deference to the fears that have been expressed by some of the operators who have advocated the passage of the bill, we struck out the public-utility feature and retained that portion which stated that the production and distribution of bituminous coal are affected with a national public interest.

Senator NEELY. In what line?
Mr. WARRUM. That would be line 12, page 2. We made one or

2 two other slight changes. I will read the redraft:

SECTION 1. It is hereby recognized and declared that the mining of bituminous coal and its distribution by the producers thereof in and throughout the United States are affected with a national public interest; that the service of bituminous coal in relation to the industrial activities, the transportation facilities, the health and comfort of the people of the United States; the conservation of bituminous coal deposits in the United States by scientific and economical mining and marketing; the maintenance of just and rational relations between the public, owners, producers, and employees; the right of the public to constant and ample supplies of coal at reasonable prices; and the general welfare of the Nation require that the bituminous coal industry be regulated as herein provided.

It is further recognized and declared that all production of bituminous coal and distribution by the producers thereof, bear upon and affect its interstate commerce and render regulation of all such production and distribution imperative for the protection of such commerce and the national public service of bituminous coal; that the excessive facilities for the production of bituminous coal have led to practices and methods of production and distribution that waste the coal resources of the Nation and burden and obstruct its interstate commerce to the end that control of such production and regulation of the prices realized by the producers thereof are necessary to promote its interstate commerce, remove burdens and obstructions therefrom and protect the national public interest therein; and that the right of mine workers to organize and collectively bargain for wages, hours of labor, and conditions of employment should be guaranteed in order to prevent constant wage cutting and the establishment of disparate labor costs detrimental to fair competition in the interstate marketing of bituminous coal, and in order to avoid those obstructions to its interstate commerce that recur in the industrial disputes over unfair labor relations at the mines.

Senator NEELY. Senator Guffey, is the amendment proposed by Judge Warrum satisfactory to you?

Senator GUFFEY. Perfectly, as far as I am concerned.

Senator NEELY. Has any operator any objection to the language just read by Judge Warrum?

Mr. MAHAN. Mr. Chairman, this is the first time I have heard it. It sounded all right, but I wouldn't want to be considered as absolutely committed in favor of it.

Senator NEELY. Gentlemen, after you have had time for reflection, if you decide that any of the suggestions made this morning are unwise and that you wish to change them, will you not kindly send the chairman of the subcommittee an expression of your views in order that they may be considered before we undertake to report this bill to the full committee next Wednesday?

Section 2 is as follows:

There is hereby established in the Department of the Interior a National Bituminous Coal Commission (herein referred to as “Commission”) which shall be composed of five members appointed by the President, by an with the advice and consent of the Senate. The Commission shall annually designate its chairman, and shall have a seal which shall be judicially recognized. The first members shall be appointed for terms of 2, 3, 4, and 5 years, respectively, the term of each to be designated by the President; but their successors shall be appointed for terms of 5 years, except that any person appointed to fill the vacancy shall be appointed only for the unexpired term of his predecessor in office. The Commission shall have an office in the city of Washington, D. W., and shall convene at such times and places as the majority of the Commission shall determine. Three members shall have no financial interest in the mining, transportation, or sale of coal, oil, or gas; one member shall be a representative of the producers; and one member shall be a representative of the employees. The Commission shall, without regard to the provisions of the civil-service laws appoint a secretary and necessary clerical and other assistants. The members shall each receive compensation at the rate of $12,000 per year and expenses. Such Commission shall have the power to make and promulgate all reasonable rules and regulations for carrying out the provisions of this act, and shall annually make full report of its activities to the Secretary of the Interior for transmission to Congress. Upon all matters within its jurisdiction coming before it for determination, it shall have the power and duty of hearing evidence and finding facts upon which its orders and action may be predicated, and its findings of facts supported by any proper evidence shall be conclusive upon reveiw thereof by any court of the United States.

In my opinion you would eliminate a great deal of the objection to this bill if you would enlarge this Commission. I am also of the opinion that you might eliminate some of the objection that may arise by providing that there shall be equal representation as between the North and South, so far as the operators are concerned. Some urge that the Commissioners should be like the members of the Supreme Court--without particular interest in the subject matter of their decisions.

Mr. LEWIS. Mr. Chairman, the Mine Workers have already agreed to any enlargement of the Commission that is thought necessary. We concur in your suggestion and think that it would inspire confidence in the measure if equal representation were given as between the North and the South. It would be an evidence of good faith and would promote confidence. We are willing to make it 7 or 9. We don't care anything about the number. The industry is going to support it, and the expense will be so small that it cannot be computed in mills per ton.

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