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STABILIZATION OF BITUMINOUS COAL MINING INDUSTRY
MONDAY, JUNE 17, 1935
HOUSE OF REPRESENTATIVES, SUBCOMMITTEE OF THE COMMITTEE ON WAYS AND MEANS,
Washington, D. C. The subcommittee met at 10 a. m., Hon. Samuel B. Hill (chairman) presiding.
Mr. Hill. The committee will be in order. The Chairman of the Ways and Means Commitee has referred H. R. 8479 to the standing Subcommittee on Internal Revenue Taxation of the Ways and Means Committee, for hearings and for a report to the full committee.
H. R. 8479 will be printed in the record at this point. (H. R. 8479 is as follows:)
(H. R. 8479, 74th Cong., 1st sess.) A BILL To stabilize the bituminous coal-mining industry and promote its interstate commerce; to provide for cooperative marketing of bituminous coal; to levy a tax on bituminous coal and provide for a draw. back under certain conditions; to declare the production, distribution, and use of bituminous coal to be affected with a national public interest; to conserve the bituminous coal resources of the United States and to establish a national bituminous coal reserve; to provide for the general welfare, and for other purposes; and providing penalties
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
TITLE I-THE BITUMINOUS COAL INDUSTRY 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 controlled production 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 and the normal governmental revenues derivable from such industry; 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, so 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; that practices prevailing in the production of bituminous coal directly affect its interstate commerce and require regulation for the protection of that commerce, 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 labor relations at the mines.
NATIONAL BITUMINOUS COAL COMMISSION Sec. 2. 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 nine members appointed by the President, by and with the advice and consent of the Senate, for a term of four years or until the prior termination of this title. The Commission shall annually designate its chairman, and shall have a seal which shall be judicially recognized. Any person appointed to fill a 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, District of Columbia, and shall convene at such times and places as the majority of the Commission shall determine. Five members shall have no financial interest, direct or indirect, in the mining, transportation, or sale of, or manufacture of equipment for, coal, oil, or gas, or in the generation, transmission, or sale of hydroelectric power, or in the manufacture of equipment for the use thereof; two members shall be representatives of the producers and two members shall be representatives 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 necessary traveling 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 fact supported by any substantial evidence shall be conclusive upon review thereof by any court of the United States.
TAX ON BITUMINOUS COAL Sec. 3. There is hereby imposed upon the sale or other disposal of all bituminous coal produced within the United States a tax of 25 per centum on the sale price, or in the case of captive coal the fair market value of such coal at the mine, such tax, subject to the later provisions of this section, to be payable to the United States by the producers of such coal, and to be payable monthly for each calendar month, on or before the first business day of the second succeeding month, and under such regulations, and in such manner, as shall be prescribed by the Commissioner of Internal Revenue: Provided, That in the case of captive coal produced as aforesaid, the Commissioner of Internal Revenue shall fix a price therefor at the current market price for the comparable kind, quality, and size of coals in the locality where the same is produced: Provided further, That any such coal producer who has filed with the National Bituminous Coal Commission his acceptance of the code provided for in section 4 of this Act, and who acts in full compliance with the provisions of such code, shall be entitled to a drawback in the form of a credit upon the amount of such tax payable hereunder, equivalent to 99 per centum of the amount of such tax, to be allowed and deducted therefrom at the time settlement therefor is required, in such manner as shall be prescribed by the Commissioner of Internal Revenue. Such right or benefit of drawback shall apply to all coal sold or disposed of from and after the day of the producer's filing with the Commission his acceptance of said code in such form of agreement as the Commission may prescribe,
BITUMINOUS COAL CODE SEC. 4. While this title is in effect and for sixty days thereafter, the provisions of the antitrust laws of the United States shall not apply to any producer of bituminous coal who has accepted and obligated himself to comply, and who complies with the provisions of this section, or to any marketing agency or board created under and operating in compliance with this section. The provisions of this section shall be formulated by the Commission into a working agreement, to be known as the “Bituminous Coal Code”, and herein referred to as the “Code." Producers accepting and operating under its provisions are herein referred to as “Code members.”
For the purpose of carrying out the declared policy of this Act, the code shall contain the following conditions, provisions, and obligations:
Part -ORGANIZATION AND PRODUCTION (a) Twenty-two district boards of coal producers shall be organized. Each district board shall consist of not less than three nor more than seventeen members. The number of members of the district board shall, subject to the approval of the Commission, be determined by the majority vote of the district tonnage during the calendar year 1934 represented at a meeting of the producers of the district called for the purpose of such determination and for the election of such district board; and all known producers within the district shall be given notice of the time and place of the meeting. All but one of the members of the district board shall be producers or representatives of producers truly representative of all the mines of the district. One such producer member shall be elected by the majority in number of the producers of the district represented at the aforesaid meeting. The other producer members shall be elected by votes cast in the proportion of the annual tonnage output for the preceding calendar year of the producers in the district, with the right on the part of the producers to vote their tonnage cumulatively: Provided, That not more than one officer or employee of any producer within a district shall be a member of the district board at the same time. The remaining member of each district board shall be selected by the national organization of employees representing the preponderant number of employees in the industry. The term of district board members shall be two years and until their successors are elected.
In case any marketing agency comprising a substantial number of code members in any producing field within a district establishes, to the satisfaction of the Commission, that it has no representation upon the district board and that it is fairly entitled thereto, the Commission may, in its discretion, after hearing, increase the membership of such district board so as to provide for such representation.
Marketing agencies may be established or maintained within any district by a voluntary association of producers within any producing field therein, as such producing field may be defined by the district board, and function under such general rules and regulations as may be prescribed by the district board, with the approval of the Commission, for the purpose of preventing any unfair practices as defined in this title. Each such marketing agency shall impose no unreasonable or inequitable conditions of membership and shall be truly representative of at least one-third of the tonnage of any producing field or group of producing fields.
The term "marketing agency" or "agencies” as used in this title shall include any trade association of coal producers complying with the requirements of a marketing agency and exercising the functions thereof.
The district boards and marketing agencies shall each have power to adopt bylaws and rules of procedure, subject to approval of the Commission, and to appoint officers from their own membership, to fix their terms and compensation, to provide for reports, and to employ such committees, employees, arbitrators, and other persons necessary to effectuate their purposes. The territorial boundaries or limits of such twenty-two districts are set forth in the schedule entitled Schedule of Districts" and annexed to this Act: Provided, That the territorial boundaries or limits of any district or districts may be changed, or said districts may be divided or consolidated, after hearing, by the Commission.
(b) The expense of administering the code by the respective district boards shall be borne by those subject to the jurisdiction of such boards, respectively, each paying his proportionate share, as assessed, computed on a tonnage basis, in accordance with regulations prescribed by such boards with the approval of the Commission. Such assessments may be collected by the district board by action in any court of competent jurisdiction.
(c) Nothing contained in this Act shall constitute the members of a district board partners for any pur ose. Nor shall any member of a district board be liable in any manner to any one for any act of any other member, officer, agent, or employee of the district board. Nor shall any member of a district board, exercising reasonable diligence in the conduct of his duties under this Act, be liable to any one for any action or omission to act under this Act, except for his own willful misfeasance, or for nonfeasance involving moral turpitude.
PART II-MARKETING The district boards and code members shall accept and be subject to the jurisdiction of the Commission to approve or to fix minimum and maximum prices, as follows:
(a) All code members shall, in their respective districts, report all spot orders to the district board and shall file with it copies of all contracts for the sale of coal, copies of all invoices, copies of all credit memoranda, and such other information concerning the preparation, cost, sale, and distribution of coal as the Commission may authorize or require. All such records shall be held by the district board as the confidential records of the code member filing such information.
Each district board may set up and maintain a statistical bureau, and the district board may require that such reports and other information in this subsection described shall be filed with such statistical bureau in lieu of the filing thereof with the district board.
Each district board shall, from time to time on its own motion or when directed by the Commission, establish minimum prices free on board transportation facilities at the mines for kinds, qualities, and sizes of coal produced in said district, with full authority, in establishing such minimum prices, to make such classification of oals and price variations as to mines and consuming market areas as it may deem necessary and proper.
In order to sustain the stabilization of wages, working conditions, and maximum hours of labor, said prices shall be established so as to yield a return per net ton for each district in a minimum price area, as such districts are identified and such area is defined in the subjoined table designated “Minimum-price area table", equal as nearly as mathematically possible to, and not less than, the weighted average of the total costs, per net ton, determined as hereinafter provided, of the tonnage of such minimum-price area, including, but without limitation, the total cost of production, the cost of selling, and the cost of administration.
MINIMUM-PRICE AREA TABLE
Area 1: Eastern Pennsylvania, district 1; western Pennsylvania, district 2; northern West Virginia, district 3; Ohio, district 4; Panhandle, district 5; Southern numbered 1, district 6; Southern numbered 2, district 7; West Kentucky, district 8; Illinois, district 9; Índiana, distirct 10; Iowa, district 11; that part of Southeastern, district 12, comprising Van Burean, Warren, and McMinn Counties in Tennessee.
Area 2: Southeastern, district 12, except Van Buren, Warren, and McMinn Counties in Tennessee.
Area 3: Arkansas-Oklahoma, district 13. Area 4: Southwestern, district 14. Area 5: Northern Colorado, district 15; southern Colorado, district 16; New Mexico, district 17.
Area 6: Wyoming, district 18; Utah, district 19. Area 7: North Dakota and South Dakota, district 20. Area 8: Montana, district 21. Area 9: Washington, district 22. The minimum prices so established shall reflect, as nearly as possible, the relative market value of the various kinds, qualities, and sizes of coal, shall be just and equitable as between producers within the district, and shall have due regard to the interests of the consuming public. The procedure for establishment of minimum prices shall be in accordance with rules and regulations to be approved by the Commission.
A schedule of such minimum prices, together with the data upon which they are computed, including, but without limitation, the factors considered in determining the price relationship, shall be submitted by tne district board to the Commission, which may approve, disapprove, or modify the same to conform to the requirements of this subsection, and such approval, disapproval, or modification shall be binding upon all code members within the district, subject to such modification therein as may result from the coordination provided for in the succeeding subsection (b): Provided, That all minimum prices established for any kind, quality, or size of coal for shipment into any consuming market area shall be just and equitable as between producers within the district: And provided further, That no minimum price shall be established that permits dumping.
As soon as possible after its creation, each district board shall ascertain the weighted average of the total costs of the tonnage produced in the district in the