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in abuses. The business of producing and selling coal is a practical matter and in my opinion much of the procedure and machinery proposed for administering the pending coal monopoly legislation is impractical. The confusion and litigation, petty and otherwise, which I believe would be set in motion by the enactment of this bill would be sufficient ground upon which to urge its rejection.
Title I, section 4, part II–Marketing: In order that the time of the committee may be conserved, I have been requested by those associated with me in opposing the Snyder coal-monopoly bill to pass over the marketing provisions of the proposed code thereinthat is, part II of section 4 of title I, paragraphs (a) to (i), both inclusive. Other opponents of the Snyder coal-monopoly bill will, with your permission, discuss that portion of the proposed bill. Silence on my part with respect to this section of the bill must not, however, be considered as indicating my approval. It is my opinion that these provisions are intended not for the elimination of unfair competition, but for the elimination of any and all competition, and I am opposed to any such result.
Monopolistic combinations of this sort have in the past, generally speaking, proven uneconomic. In an industry facing problems such as the bituminous-coal industry is facing today the false economic principles behind the monopoly theory are even more glaring than they would be in some other industries. As I see it, the essential problems of the industry are two: First, a somewhat excessive productive capacity, with many of the producers in the industry in possession of submarginal and inefficient plants and properties; and. second, increased pressure toward lower selling prices because of constantly encroaching competitive products. The first problem, that of excess capacity, cannot be cured by the monopolistic device proposed for the reason that it attempts to keep alive all of the units in the monopoly group whereas, as a matter of economics, those which are submarginal should be allowed to die a natural death. The second point, the increased competition offered by other fuels, obviously cannot be answered by a monopoly, the essential purpose of which is to raise or to maintain selling prices.
Title I, section 4, part III, paragraph (g), would change, as I understand it, the principles of collective bargaining that have heretofore been recognized in this country. I am opposed to this paragraph of the bill.
I believe that if a majority of the employees in the bituminouscoal industry should be guaranteed by statute the right to impose upon all other employees in the industry, no matter where located or where situated, such maximum limitation of hours of labor as may have been agreed upon by such majority of employees and employers representing more than two-thirds of the annual national tonnage, this would cease to be collective bargaining and would become for the minority of employees, a minority that might be as great as 49 percent, a curtailment of freedom of contract.
This paragraph of the proposed Snyder monopoly bill, however, goes much further with respect to wages. It proposes that in any district a majority of the mine workers therein belonging to a recognized national association of mine workers may impose upon all the other employees in the district wage scales agreed upon with producers of two-thirds of the annual tonnage produced in that district.
So far as the wage district in which I personally am interested is concerned, it may be argued that this provision would effect very little change in the situation now existing, since a large majority of the mine workers in the district, to the best of my knowledge and belief, belong to a recognized national association of mine workers.
This plan might, however, operate unfairly in other districts. To illustrate, let us suppose the existence of a district in which only 10 percent of the workers therein belong to a recognized national association of mine workers. A majority of that 10 percent—that is, only 6 percent of all the workers in the district-could agree with the producers of two-thirds of the tonnage in that district with respect to wages and could compel the remaining workers in the district, that is, the remaining 94 percent—to accept and be bound by such agreement. So far as the workers not belonging to the national association of mine workers would be concerned, such a statutory provision would mean a denial of the right of collective bargaining and would in effect subject them to a minority dictatorship.
The implications of those provisions-namely, that their purpose is to perpetuate the control of the United Mine Workers in those districts in which such control now exists, and to establish such control in those districts in which it does not now exist—are obvious. I question whether, even apart from the merits of the question of United Mine Workers control, the Congress should by legislation guarantee control of the labor in any industry to any one particular private organization. It seems to me that the function of the Congress is to legislate with respect to public matters rather than to enact special legislation for the benefit of a private organization, which may at any particular time possess great political power.
Without attempting to specifically refer to each and every one of the other objectionable features of this bill, I shall briefly refer to three or four such provisions. - Section 10 of title I of the proposed Snyder coal monopoly bill, the provisions of which would require producers to maintain uniform systems of accounting of costs, wages, operations, profits, losses, and such other matters as might be required in the administration of the act, seems to me in its implications to amount to a considerable encroachment upon the rights of privacy of producers. The next step, which it seems to me is probably already incorporated in section 10 in the power given to the Commission to require reports from producers, without defining what sort of reports these may be, would be the requirement that producers file with the Commission statements of their accounts. Otherwise, why should uniform systems of accounting be required?
It may be answered that they are required in order to make it possible to determine the costs of producers as the basis of minimum price fixing as provided in the marketing provisions of the code. It will be noted, however, that the uniform systems of accounting mentioned in section 10 will cover not only costs but also wages, operations, sales, profits, losses, and such other matters as may be required in the administration" of the act.
Sections 13 and 14 of title I of the proposed Snyder coal-monopoly bill are obvious attempts to accomplish in backhanded fashion that which cannot be done directly pursuant to constitutional grants of power. The attempt to require “ voluntary” compliance with the
code set out in the bill by refusing to nonassenting producers the right to trade with the Government or any of its contractors seems to me to be a decidedly petty device.
The threat in section 13 to withdraw from noncode producers the use of the mails and the right to engage in interstate commerce are in about the same category, but are perhaps even more shocking as abuses, not uses, of recognized congressional powers. The same can be said of the attempt to force acceptance of the code by the imposition of heavy taxes upon nonassenting producers.
If Congress cannot regulate the coal industry directly because it has no power to do so under its congressional grants of authority, then it seems to me that all those devices for backhanded and indirect regulation are decidedly questionable and distasteful methods, and are certainly not in accord with democratic principles of government. The nature of those subterfuges is obvious, even to laymen, and I, for one, fail to see how anything good will be accomplished by the attempt to employ them in this bill.
It will be noted that this bill provides for the regulation of bituminous coal only, leaving entirely untouched the anthracite-coal industry. Why the bill does not cover the entire coal industry is not plain. That bituminous coal and anthracite coal are in direct competition in many consuming markets is a fact which I think none will dispute. It seems to me, therefore, perfectly obvious that to attempt to subject the bituminous-coal industry to stringent regulation while leaving the anthracite-coal industry unregulated would place the anthracite producers in a very unfair competitive position with respect to the bituminous producers. This would be unjustifiable discrimination, and if a coal bill should be passed at all, in the face of the opposition testimony as to the false economics and the illegality of such legislation, the anthracite industry should certainly be included within its purview.
Title II of the Snyder coal-monopoly bill, entitled “ The Bituminous Coal Reserve ", would undertake to put into effect a plan which has some supporters in the industry. This plan provides that the Federal Government purchase certain mines and coal-bearing lands, which would be held as a national coal reserve. It is contemplated by the sponsors of this plan that the mines bought by the Federal Government would cease operating and that any employees thrown out of work by the closing of such mines would be moved to other locations and to other industries by and at the expense of the Federal Government.
Such a plan would, of course, create a market for properties for which no economic necessity now exists, thus enabling owners of such properties to unload and escape capital loss. At the same time it would reduce to the extent that operating mines were purchased, the productive capacity of the industry.
From a selfish viewpoint, I might be prompted to support such a plan, provided, of course, that my company might be one of those fortunate enough to participate in any sales of lands which might be made to the Federal Government, because my company, like many others, has coal lands which it would be glad to sell.
I am convinced, however, that my company's real interest would not be served by the enactment of this plan. I believe that the application of the plan would create a precedent which, if followed
to its logical conclusion, would require the Federal Government to buy the surplus submarginal units in all other industries in which any overdevelopment exists. The idea of the Federal Government thus guaranteeing to investors financial backing for their own investment errors is not appealing. The financial burden that would be imposed on the Government would be so great that it would further endanger a credit position that is already causing concern to many people.
I am convinced, therefore, that, appealing as may be the possibility of unloading properties not immediately productive of revenue, the interest of all of us in the industry will be better served in the end by carrying the burden of these lands rather than by supporting a plan which would almost certainly be the beginning of à raid on the Federal Treasury that might cripple the whole Nation and the industrial interests of all of us in the process.
The cost of this plan would unquestionably be very great, and in all probability the $300,000,000 proposed in the Snydercoalmonopoly bill would not even begin to cover the total cost.
Who is to bear the cost of this experiment? The inference in the bill is that the coal producers are to bear it, but as a matter of fact they do not have $300,000,000 of surplus capital with which to buy and give to the Federal Government the lands and mines being considered. It would, therefore, be possible for the industry to remit this tax to the Federal Government only if it could collect it from the public in the form of higher coal prices. I do not believe that the industry can greatly increase the price of coal without the loss of additional tonnages of coal to competing fuels. I do not believe, furthermore, that consumers will be in sympathy with an increase in coal prices to cover the cost of buying these lands and also the cost of providing funds for rehabilitation of unemployed miners. I believe that consumers of coal might very properly take the position that the cost of buying coal lands for the Nation should be borne by all citizens and that the care and rehabilitation of workers displaced from the coal industry, just as in the case of every other industry, should be made the responsibility of all the people rather than that of those only who consume the products of the coal industry.
The Snyder Coal Monopoly bill states that the creation of the proposed National Bituminous Coal Reserve will be for the purpose of
(1) Conserving the national bituminous coal resources.
(2) Promoting the economic production of coal and preventing and éliminating the evil of excessive and wasteful production.
(3) Assuring future supplies in time of peace and war.
(4) Promoting the future interstate and foreign commerce of the United States.
Reference to the 1926 report of the Federal Trade Commission, National Wealth and Income, discloses that the United States Geographical Survey in 1922 compiled data placing the total known coal reserves of the world at some 872 trillion net tons, of which according to the estimates of the United States Geographical Survey, the United States held 51.9 percent of the total. Thus it is seen that for the size and self-sufficiency of its coal reserves the United States easily leads the world. Possessing within our borders more than half of the known coal resources of the entire world assures us of ample requirements either in peace or war. I believe therefore that no need exists for the purchase by the Federal Government of coal lands or mines, either to conserve the Nation's bituminous coal resources, or to assure their supply in time of peace of war, or to further the future interstate and foreign commerce in coal.
I do not believe that purchase by the Federal Government of coal reserves would in and of itself promote the economic production of coal or check the evils of excessive and wasteful production in those coal lands not owned by the Government. Such economic production is largely a matter of improving mining methods or increasing efficiency through technical skill. If mining practices should be subject to regulation at all, such regulation should be by the State legislatures, not by the Federal Congress. This would be the more practical method, and I am advised by counsel that it would also be the constitutional method.
Mr. Hill. Thank you very much, Mr. Carter, for your statement.
Mr. John L. LEWIS. Mr. Carter made a statement rather deflecting on the United Mine Workers with relation to the expiration of the wage agreement. I wonder if I might make just a brief statement of the facts that it might go out in the press at the same time as Mr. Carter's statement.
Mr. HILL. Will you make it now? How long will it take?
STATEMENT OF JOHN L. LEWIS, PRESIDENT UNITED MINE
WORKERS OF AMERICA
Mr. LEWIS. Mr. Carter quotes some newspaper clippings to the effect that in the opinion of the writer thereof the United Mine Workers are trying to exercise undue pressure on the Congress or coercion upon Congress to enact coal legislation, and points to the expiration of the wage agreement and the date as justification for the assumption.
I assume that Mr. Carter believes it when he undertakes to introduce those clippings and desires to further that opinion.
The facts are that the wage agreement in the bituminous industry expired on the 31st of March of the present year. We met the operators, including those operators with whom Mr. Carter was associated in the beginning, in wage negotiations in February. By reason of the confusion in the industry and the break-down of the price structure of the industry, the operators were not in a mood to make new commitments, and so said.
The contract was approaching its termination by limitation. The National Industrial Recovery Board, of which Mr. Donald Richberg was Chairman, called in the scale committee of operators and miners and advised them of the public interest in preventing a cessation of any operations, and suggested that the agreement be extended to the date of June 16. That date was suggested by Mr. Richberg in his capacity as Chairman of the Board.