maximum prices for coal” (p. 16 (c)), with the exception of a single, sole, stark section of only eight lines-section 17, page 39.

(j) There are provided here no standards, no tests, no safeguards, no method by which the consuming public may have a full and fair hearing before the coal commission.

(k) Bill provides with meticulous care for details within the industry but there is only a single afterthought for the consumer, and the emphasis should be just the reverse.

(1) Such proposed regulation for an industry like the railroads would undoubtedly be opposed by all shippers, including the shippers of coal.

(m) Full provision should be made for public protection, both in selection of personnel for the commission and in method for presentation of consumer interest and for full publicity with respect to costs in the coal industry.

4. As carriers of coal the railroads believe the proposed legislation will be detrimental to the coal industry itself and will reduce the tonnage carried by rail.

(a) Coal tonnage represents 34.1 percent of total freight tonnage carried by rail and 19.7 percent of total freight revenues.

(6) These figures demonstrate the substantial interest of rail carriers in the welfare of an industry which they want revived and prosperous, with increasing tonnage moving by rail.

(c) Coal industry, like rail carriers, is not a monopoly, but has effective substitutes.

(d) Railroads have found that when they alone are regulated while their competitors are free, the result is a loss of business and they believe the coal industry will experience the same results.

(e) Increase of prices of coal under the provisions of this bill is demonstrated and this will stimulate the use of substitutes.

() Stimulation of substitutes will reduce bituminous coal output and reduce rail tonnage.

5. The rail carriers are opposed to the provisions for setting up a bituminous coal reserve.

(a) The coal lands purchased are to be controlled as to operation by the selfinterested coal commission.

(b) Funds for purchase of coal lands are derived from a tax on the sale price of coal, including railroad captive mines.

(c) We object to the principle of such a tax, just as we object as producers to a coercive tax for compelling compliance with the code.

(d) Provisions of the bill designedly enable producers to pass the tax for a reserve fund on to the consumers above costs and profits.

(e) The consuming public, including the railroads, will be compelled to provide for unemployment and rehabilitation of this industry, in addition to assuring costs and a profit.

(1) More than one-fourth of this burden would have to be borne by rail carriers, who, themselves, have an important unemployment problem to meet and who are not financially able to make such contribution.

(g) Such additional costs of coal to consumers would further stimulate the use of competitive substitutes.

(h) It would tend to aggravate, rather than correct, wasteful mining in connection with price-fixing provisions.

(i) It would further increase railroad operating costs by millions of dollars annually.

(j) It apparently has for its purpose the validating of investments in coal properties, whether made wisely or unwisely.

(k) It transfers wholly to the consuming public, away from the industry itself where it belongs, the important responsibility of management and labor leaders with respect to employees.

(1) If such reserve is to be set up, then it should be derived from excess profits, protected by this law under penalty.

6. The railroads earnestly object to section 12 of this bill, which gives to the Bituminous Coal Commission authority to grant or withhold certificates of convenience and necessity with respect to railroad facilities leading to coal mines.

(a) This is an invasion of the field of regulation now occupied by the Interstate Commerce Commission.

(6) Other commodities than coal would move over such a track and thus the Bituminous Coal Commission would be in control of the transportation of commodities other than coal.

(c) Full, complete, and detailed investigation by Interstate Commerce Commission, an experienced and nonpartisan (so far as any special industrial interest is concerned) body is required to be made before certificates are issued.

(d) The coal industry to have unimpeded right to appear and produce facts.

(e) Regulation of transportation in the public interest is a task of the Commission and no part of this duty should be taken from it.

V Provision is confined solely to the railroad facilities and disregards trucks and waterways which handle millions of tons of coal.

(g) There can be no valid reason why this power should be taken from Interstate Commerce Commission and given to such an independent body as herein provided for.

(h) This provision should be eliminated.

7. We contend that section 18 of this bill, which authorizes the Bituminous Coal Commission to become an active partisan before the Interstate Commerce Commission with respect to rates, should be eliminated.

(a) The Interstate Commerce Commission should be permitted, of course, complete access to data accumulated by the Coal Commission for its information.

(6) No Government body should be authorized to become an active partisan in a question such as rates present.

(c) It is unfair and inequitable so far as rail carriers are concerned to have the influence of a Government body, self interested as this one is, to appear as an active partisan before the Commission.

(d) Îhis section should be eliminated from the bill.

There is this further consideration that grows out of the long years of experience by railroads under iron-clad regulation:

The regulation of an industry does not secure stability within that industry or provide anything other than a strait-jacket and thus prevent a fair opportunity by competitive methods to retain traffic or secure the return of legitimate, economical and desirable business that has been lost unless and until corresponding regulation is applied to effective substitutes.

The very existence of effective competitive substitutes here, oil, gas, hydroelectric power, and anthracite, demonstrates a lack of actual monopoly: Railroads have faced such effective competitors. The bituminous coal industry might well take warning from this experience of the railroads. It is inevitable that the plan provided for in this bill to give the bituminous-coal industry monopolistic powers under the guise of regulation, will prove a bitter disappointment, unless and until they are in themselves and are administered in the public interest. Even then there will be the same disappointing result unless and until corresponding regulations are effectively applied to competitive substitutes.

We believe this bill as written is unfair, unjust, and will not work in the public interest.

Mr. Hill. I want to say that the witnesses who follow must be considered briefly. The committee is under the necessity of hurrying along with this bill, and we are going to be compelled to limit the time from now on. You may shape your statements with that in view.

The committee will now adjourn until 10 tomorrow morning. (Whereupon, at 5:30 p. m. an adjournment was taken until tomorrow morning at 10 o'clock, Thursday, June 27, 1935.)




Washington, D. C. The subcommittee met at 10 a. m., Hon. Samuel B. Hill (chairman) presiding.

Mr. Hill. The committee will be in order. I will call Mr. Fleming.

Mr. CALDWELL. Mr. Chairman, my name is Caldwell. Mr. Fleming is a partner of mine. He had to go back to Chicago, and I am here in his stead. My name is on the list also.

Mr. Hill. We have some other witnesses who are entitled to be heard first. I thought were we accommodating him by calling him first today.

Mr. CALDWELL. I may say that my clients are here also. They have been here some time.

Mr. Hill. You live here in the city?
Mr. CALDWELL. I live here; yes, sir.

Mr. COOPER. I think it would be fairer to take some of these men who have come from a distance, Mr. Chairman.

Mr. Hill. Mr. Fleming had said that he had to be away, and we therefore would hear him today.

Mr. CALDWELL. He had to go back, Mr. Chairman.
Mr. HILL. Then we will hear you later, Mr. Caldwell.

The next witness is Mr. D. T. Buckley, Washington, D. C., representing the American Wholesale Coal Association.

Mr. Buckley, we shall be glad to hear you. The committee will allow you 2 minutes; and if you do not finish your statement in that time, you have permission to extend your remarks.



Mr. BUCKLEY, My name is Daniel T. Buckley, and I appear before your committee in behalf of the American Wholesale Coal Association, which represents 1,100 wholesalers of bituminous coal in the United States who annually distribute 20 percent of the commercial tonnage produced by mines of the United States. On the basis of 288,000,000 tons produced for commercial use during the year 1934, this would amount to approximately 57,000,000 tons distributed through wholesalers.

We are not appearing in opposition to the enactment of this legislation, neither are we appearing in favor of the bill as now written, because we consider that it is essentially a producers' bill.

Title I, section 2, on page 3 of H. R. bill 8479 establishes a National Bituminous Coal Commission, which, as set forth in the bill, would comprise 9 members appointed by the President for a term of 4 years, 5 of whom shall be so-called "impartial members”, 2 shall represent the employees, and 2 shall represent the producers.' We feel that the wholesalers should be represented on this commission by one member, because:

The National Bituminous Coal Commission has the power under this bill to prescribe the amount of commission that shall be allowed to the wholsealer for the services that he renders for the producer in the sale and distribution of his coal, and our experience under the N. R. A. has made us very skeptical and suspicious as to the treatment that we might receive at the hands of any commission.

Under the N. R. A. there was set up a code for the wholesale coal industry, which provided among other things, the right of free bargaining between the wholesaler and the producer as to the amount of commission he should be allowed off the published code price on coal sold by him. It was recognized under our code, therefore, that the wholesaler had the right of making an agreement with an individual producer as to the amount of commission that should be allowed him. However, the several subdivisional code authorities of division no. 1, namely, eastern Pennsylvania, western Pennsylvania, northern West Virginia, Pan Handle of northern West Virginia, Ohio, Southern no. 1, and Southern no. 2, persistently published rates of commission or discount which violated the provisions of the wholesale coal code setting forth the right of free bargaining. It was not until February 8, 1935, that Wayne P. Ellis, Acting Deputy Administrator of the Bituminous Coal Code advised the several subdivisions that the wholesale discounts and commissions published by them were not in order and had not been agreed to by the wholesalers, and should be withdrawn from their price schedules. This order was disregarded by all the subdivisions.

After several conferences between the Wholesale Coal Code Authority and representatives of the several bituminous subdivisional code authorities set forth above, which resulted in repeated disagreements as to an equitable commission for the wholesaler, the National Industrial Recovery Board on March 4, 1935, appointed a special committee-comprised of W. E. Hotchkiss, Roger B. Sheppard, W. Jett Lauck--to deal with the matter of rules and regulations and discounts of the bituminous-coal industry in relation to wholesalers. Hearings were conducted on March 5 and 6, 1935, with representatives of both the wholesalers and producers present. After deliberating on the evidence introduced at the hearings for over

3 weeks, the special committee referred the matter back to the divisional administrators having jurisdiction over the Wholesale Code and the Bituminous Code, who forthwith called another meeting between the interested parties, with the thought in mind of bringing the parties into agreement. This meeting also ended in a disagreement, and the Divisional Administrators referred the matter back to the special committee for their further consideration.

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