are not forced to employ agents to sell their coal on commission, or brokers who do likewise. Such large companies, therefore, are in a position to accept orders from anybody who may come to them in the respective territory in which they are located.

To the second class belong the companies which sell part of their product to their own representatives in certain markets, and which may give to an agent or broker, who may sell on commission, territory in which they sell a certain number of thousands of tons during the year. The sales which this class of companies may make direct are not restricted in any way, excepting by tonnage to supply orders, or by reason of doubt as to the payment for the coal, but in such territory as they give over to an agent, similar to the territory in the New England States which it given over to agents, it is not within the power of such selling company, under present conditions, to accept orders from anybody else within that particular territory.

To the third class belong the companies whose tonnage is not large, and which are not able to establish offices and put their own salesmen on the road to make sales, which are entirely dependent upon what is known as the agent or broker to contract for their tonnage, which sell the same on commission; and the coal companies which have a few certain customers to whom they directly sell, and it is the third class which will likely be destroyed by the provisions of section 3 of the bill, for agents or brokers will not make contracts with the mine owners unless they are given certain territory to sell in.

The great majority of those engaged in the mining of coal are men who have come from the ranks, men who secured their knowledge of coal mining by practical experience. A great number of these men have no knowledge of the sales end of the business.

There is a wide difference between the mining end and the sales end of the business. The people at the mines are not in touch with the peculiar and varying market conditions, and in the majority of cases when they have attempted to market their product they have not been successful. These mine owners are almost entirely dependent upon agents, brokers, or dealers, and these agents, brokers, and dealers are responsible for the expansion of the industry.

For instance, the jobber in Chicago, covering the West and Northwest, can sell West Virginia coal in that territory to much better advantage than the producer could. Ilis traveling expenses are less; he is closer to his trade; and the trade itself prefers to buy nearer home. But if the jobber has to send men out all over his territory to work up a trade for any particular coal; if he has to advertise and circularize it, only to find, what would be possible under section 3 of this bill, that the consumer or a rival jobber or the operator himself could take that business away from him, then, indeed, there would be no incentive for him to push any particular grade of coal or to try to expand the market for the coal of any particular State.

The agents and brokers selling on commission, and particularly the small dealers throughout the country, could be driven out of business under this bill. Their customers could apply directly to the mine owners and compel them to sell to them, if

responsible, and could thereby eliminate such dealers, agents, and brokers. This would be destructive to the coal dealers of the country who have given years of their lives to the upbuilding and development of their business and have large sums of money invested therein.

The CHAIRMAN (Mr. TAGGART). The time of the gentleman has expired.

Mr. AVIS. May my time be extended? May I have further time?

Mr. VOLSTEAD. How much time does the gentleman desire? Mr. AVIS. I would like to have about 15 minutes, if I may. Mr. VOLSTEAD. Very well. I will yield to the gentleman 15 minutes.

The CHAIRMAN. The gentleman from West Virginia is recognized for 15 minutes.

Mr. AVIS. Now, what will this result in? Suppose that I am a small coal operator; that a dealer is representing my coal in a certain territory in which, at great expense of labor and money, he has built up a trade. What, under this section, will prevent the trade he has built up from coming directly to me, and thus deprive him of the fruits of his labor in that territory? In any event, what is to prevent a large competitor from eliminating me as a factor in that particular territory by buying up my entire output, either by himself or through some other person or agent? Those are some of the evils that are to be met if this section becomes the law.

Another thing I want to impress upon you is

Mr. HARDY. Mr. Chairman, will the gentleman yield?
Mr. AVIS. Yes.

Mr. HARDY. I suppose the gentleman would concede that if he could present to any court the facts that the purpose of this buyer to whom you refuse to sell was simply to eliminate you, your refusal would not be held to be arbitrary?

Mr. AVIS. Absolutely; but how can I show that? I can not look into the gentleman's breast and know what motives actuate him when he applies to purchase my coal. Again, the section will be unavailing if I am to have the right to question your motives when you offer to buy my coal. And there is no more reason why the coal industry-I am referring to the bituminouscoal industry-should be selected for such special legislation than the timber industry or any other industry. It is true that coal is a natural product, but no more so than timber. no more so than cotton and wheat. I will concede that if the industry were in the hands of a monopoly it would not only be our right but it would be our duty to pass laws to prevent a monopoly of that kind; but when the coal business is in the shape that it is in to-day, when very few, if any, of the men engaged in producing coal have made a dollar during the last year-and I doubt whether more than a very few of them have made anything in the past five years-why make it criminal for the small producer to endeavor to survive? Why force him into bankruptcy because he can not compete with his large competitor, who has selling agencies of his own to dispose of his product? You can readily see that if I am a small operator and my customers are likely to be taken away from me, and I can not prefer them this year over some other applicant, as has been expressly provided by this bill, I will not know what orders

I will be assured of next year. If I am deprived of my customers this year by one man who buys my whole product or, say, by a half dozen men who in times of strikes or scarcity of coal are not regular customers, and who buy my entire product, what am I going to do next year for customers? I will have to go out into the market and scramble for new customers and if I am a small operator, with a small margin of capital upon which to work, and can not promptly secure orders, I will have to go to the wall, and there will be no redress for me.

Mr. HARDY. Would you not be in better shape if other business were placed in the same category with you? I take it that if you could present to the court the fact that you were necessarily required to refuse to sell to one customer because you had other customers whom you had agreed to supply, you could not be held to be arbitrarily refusing to sell. But would you not be in a little better shape if section 3 were amended so as to make it apply to all business?

Mr. AVIS. I do not know. I have not thought of that. I know this, that section 2 provides that if I am engaged in interstate coal business I can not select my own customers.

Mr. HARDY. Except upon the theory that your business is already a monopoly.

Mr. AVIS. There is no one who charges a monopoly of the coal business. Living for 25 years, as I have, in a coal region, I have absolutely never heard of a single abuse that this section is stated to be aimed at. And I ask any gentleman within the sound of my voice to recall an instance when a responsible buyer or a responsible dealer could not purchase bituminous coal. The man who mines the coal and takes the risks must have the right, as long as he has no monopoly, to prefer and to discriminate in favor of his own customers, and to arbitrarily, in some instances, refuse to sell his coal to others.

Mr. TAGGART. How can a coal dealer be damaged if he is simply compelled to sell his product at the market price? You say there is an overproduction. Would it not help it out some if some one had a right to take your output and lay down the money for it?

Mr. AVIS. I will answer the gentleman's question by an illustration, if he will pardon me. Suppose the gentleman from Texas [Mr. HARDY] is a large coal operator. Suppose that I am a small mine owner and have a certain number of customers. What is to prevent the gentleman from Texas, whose coal is in competition with my coal, sending his agents to me and buying my coal for this year, and when my customers find that I can not supply them, what do they do? They will go to some operator or dealer who can supply them, and they will probably be lost to me for the future.

Mr. TAGGART. Will the gentleman yield for a further question right there?

Mr. AVIS. Yes.

Mr. TAGGART. Up to date we have said nothing about the price. I presume the gentleman had in mind the market price, as everyone else did. But if you had contracted to deliver your whole output to me, then you have a right to refuse the gentleman from Texas.

Mr. AVIS. The Constitution of the United States, in my opinion, would protect the obligation of such a contract. But

I am talking of a case where the contract is not made and where I simply hope that the man who has been my customer for years will continue to give me his trade, and where he has been taken away from me by some person purchasing all of my coal and preventing me from supplying him. Now, will the gentleman permit me to answer him further by asking a question? The gentleman is a lawyer, is he not?

Mr. TAGGART. I have been charged with that.

Mr. AVIS. All right. Now, why should not the gentleman be required to furnish his services to the first responsible bidder? Why should the gentleman be permitted to select whom he will serve or not serve as an attorney any more than a coal operator, unless he has a monopoly of that business?

Mr. TAGGART. My services are not one of the products that nature has furnished, to begin with.

Mr. AVIS. I hope nature had something to do with it. [Laughter.]

Mr. TAGGART. Well, I have observed cases where nature seemed to have fallen short.

Mr. AVIS. That is doubtless true.

Mr. TAGGART. Anyhow, we will not bandy words over that. This section of the bill is intended

Mr. AVIS. Will the gentleman please confine himself to a question, unless he can give me a little more time.

Mr. TAGGART. I will put it interrogatively. Is not this section intended to correct this particular abuse, to relieve persons who absolutely must have coal, and who have been arbitrarily refused by those who produce the coal?

Mr. AVIS. I think the answer to that question would come better from the gentleman. I know of no such abuse.

the gentleman know of any such abuse?

Does

Mr. TAGGART. I do not come from a coal region. Mr. AVIS. But the gentleman comes from a coal-consuming region. Do you know of a single instance, or can any member of this committee point to a single instance where a responsible buyer could not get coal if he wanted it?

Mr. TAGGART. If that is the situation, there will never be a case under this section, if that happy condition continues. Mr. AVIS. I am afraid the gentleman is not acquainted with the sharp competition that exists in the coal business in this country. And I want to say, in this connection, that a late report issued by the United States Government shows that the average selling price of soft coal at the mines in the United States is $1.15 a ton. On the other hand the same report shows that the Government is operating a mine in one of the Western States I do not recall whether it is in one of the Dakotas or Nevada-and it is costing the Government $1.65 a ton to get out its coal.

The competition is so sharp and so severe that the mines have not for years been running full time. My remarks are directed to bituminous coal, for I know nothing about the anthracite coal region. I believe I did call attention to the fact that Mr. E. W. Parker, of the United States Geological Survey, stated that in 1909 the coal industries of Indiana, Illinois, Ohio, and West Virginia combined did not make but 1 per cent on the capital invested. I mention these things to show that there is no monopoly of the soft coal industry, and that the mine owners should be given the right to select their customers.

The coal business of the country is entitled to at least a little consideration. Let me call attention to one effect of the present tariff law. Prior to the acquisition of the Hawaiian Islands by the United States those engaged in commerce between Hawaii and the United States had the right to secure the cheapest transportation possible. The result was that they availed themselves of the cheapest transportation, and if a Japanese ship or a British ship or an American ship, or whichever ship offered them the cheapest transportation, they patronized that ship.

We have a law that requires that all commerce between the United States and Hawaii shall be carried in American bottoms. Now, we had a protective duty on coal of 45 cents a ton. That permitted us to ship and sell coal to Hawaii. What has the Democratic majority done? By your taking off all the duty on coal and admitting it free we have absolutely lost the Hawaiian market to our coal, and it is now supplied by Australia in British bottoms.

Mr. WEBB. Will the gentleman yield?
Mr. AVIS. Yes.

Mr. WEBB. The gentleman understands that the law of which he complains was made by the Republican Party, compelling passenger and freight traffic between the ports of the United States to be carried in American coastwise vessels. When we took over Hawaii a public official ruled that the Hawaiian Islands were a part of the coast of the United States, and did the very thing the gentleman complains of.

Mr. AVIS. Neither the Republican Party nor a Republican official ruled that the gentleman's party should take off the countervailing duty on coal so that American coal could not compete with Australian coal. That is what the gentleman's party did, and we can not now put a ton of coal in the Hawaiian market.

Now, I want to read, in connection with my remarks, portions of a letter received by me from a most distinguished gentleman of West Virginia, Mr. Edward W. Knight, who has given years of study to the coal business. I desire to call attention to the fact that he is one of the leading Democrats of that State. I wrote him about section 3, and he replied as follows:

If it is the purpose of the bill to prohibit all preferences and discrimination by sellers of the products of mines as between customers or persons desiring to become customers, whether consumers or middle men, that purpose is both unfair and dangerous.

Mining and selling of coal is not a business in the nature of public service; if it were, it would and should have, among other things, the right of eminent domain, which has always been denied by the courts, notwithstanding some legislative attempts to relieve hardships by undertaking to give rights of ingress and egress, drainage, etc., over the lands of others. Nor is mining monopolistic in its nature; certainly softcoal mining is not.

In the absence of a monopolistic character and of protection by a fixed schedule of prices binding sellers and buyers there is neither necessity for nor justice in such regulation of the business as is practiced with respect to carriers. telegraph companies, water companies, etc.

The coal producer, like other merchants, has always discriminated, and I think must always be permitted to discriminate between customers or would-be customers. The best prices are given and should be given to the customer who buys the largest quantity or pays most promptly, or who buys at a time of year when business otherwise might be slack, or who makes a contract for a year or a term of years. Similarly in times of strike or shortage of product from other causes the coal producer usually gives and should be permitted to give preference