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60°. In many of the seams which are comparable to the flat-lying seams in other areas, there are many rolls and faults, necessitating hcavy grades or frequently three of four systems of transportations from the working face to the surface. In all of the mines where the seams are not flat-lying and natural drainage is not obtainable, various amounts of water add still further to the cost of production. In one instance, 16 tons of water are pumped for very ton of coal produced. Under these conditions, the Alabama coal industry has been unable to increase its daily production per man to the point reached in competitive fields.
The hourly productive ability of coal miners in district 12 under the bill (Alabama and southern Tennessee and Georgia) having been increased when the 8-hour day was put into effect, and further stretched, in a much less degree, when the 7-hour day was established, is not susceptible to further augmentation, except by the installation of mechanical aids. Inefficiencies that existed under the 8-hour day were of necessity remedied during operations under the 7-hour day, leaving little hope of improvement from this source.
The physical characteristics peculiar to the coal seams of this area do not permit, except in the most favorable locations, in the cleaner but thinner coal seams, any substantial mechanization. Presence of thick partings of rock preclude any opportunity of miners loading additional coal per hour at many mines. It is indisputable, therefore, that the 6-hour day will decrease the daily production of Alabama coal mines at least 15 percent, additional to the decrease suffered when the 7-hour day became effective.
Thin pitching seams, and the thicker seams with many inherent impurities, necessitates high capital investment per ton of capacity, and high maintenance and operating costs. The capacity of housing facilities, hoisting engines, preparation and washing plants, slopes, shafts and other transportation facilities is based in most instances on 8- to 10-hour operating cycles.
During the first 9 months of operation under the 7-hour day Alabama coal mines lost at the annual rate of $250,000. There is no hope of increasing the realization by increasing the present sales price, which prices have not proven compensatory, because of the competition of oil, natural gas, and hydroelectricity on all sides. To further increase cost by decreasing working hours, resulting in further curtailing production would be economic death to the coal industry of Alabama.
The only alternative would be to make major capital investments in transportation equipment in every mine to the end that output might be maintained and cost increases minimized. This would entail heavy capital expenditures, beyond the financial ability of the individual companies.
The steady loss of commercial tonnage in this field from 13,900,000 tons in 1926 to 6,800,000 tons in 1934 has been accompanied by severe capital losses. During 1934 and 1935 to date several mines have been forced from the aforementioned causes to discontinue operations. No further capital is available for the speeding up of production in an industry in which conditions still existing have forced the abandonment of the utilization of practically half of its productive capacity in the past decade. This is definitely true since the commercial mines of Alabama (excluding captive) lost 272 percent in tonnage in 1934, as compared to 1933; while the coal production of the country as a whole gained 7 percent.
The market problems of the Alabama coal fields must be taken into consideration if an additional burden of cost as contemplated in this bill, both in the form of taxes and in the practical effect of shorter hours and increased wages, is to be imposed upon it.
The territory into which Alabama ships its coal consists principally of five States: Alabama, Florida, Georgia, Mississippi, and Louisiana. Higher wages and greater production costs are not paid by the producer, but by the consumer, and the ability of this consuming area to pay a higher price for the coal consumed is the measure of increase or decrease in hours and wages which may be made and yet continue to operate. Such a determination cannot be made nationally to fit the needs or desires of the producers and miners in the larger producing areas where the limit of the market to absorb a higher cost has not been reached.
In the consuming area of Alabama coal fields the average hourly common-labor rate is 31 cents; as against the hourly outside common-labor rate in the Alabama coal industry of 40 cents.
This area contains 9 percent of the population of the United States; and, where in the United States as a whole 56 percent of the population is urban and 44 percent rural, in the Alabama consuming area only 32 percent is urban and 68 percent is rural.
Of this population 38 percent is Negro; while only 9.7 percent of the population of the United States is Negro.
In this consuming area only 34 percent of the families own their homes; while in the United States as a whole 48 percent are home owners.
In 1933, which is the latest year for which the figures are available, the Alabama consuming area paid only 2 percent of the income taxes of the United States, and the value of its manufactured products was only 3.4 percent of the value of the manufactured products of the United States.
In former years the production of electric power has been a great outlet for Alabama coal. The use of coal from our coal field for this purpose has declined 80 rapidly that it has reached a point which must be given serious consideration in the application of any regulation which will further prevent the use of coal. In 1933 this area produced 542 percent of the total electric production of the United States. Of the electric production in this area, 60.50 percent was produced by water power, 22.22 percent was produced by gas, 15.92 percent was produced by fuel oil, and only 1.33 percent was produced by coal.
With such a market condition confronting it the coal industry of Alabama must look with alarm upon any agency tending to further increase the cost of production, which must necessarily be reflected in an increased price. With the lowest wage rate it has the highest cost and the highest selling price east of the Mississippi River. This high selling price is not high enough to meet the cost, but it cannot be increased because it is dangerously near the point where Alabama's customers, using at least 1,500,000 tons of industrial coal, will convert to competitive fuels. With the loss of this there will be an added loss of 500,000 tons of resultant domestic sizes. This annual loss certain to result from any increase in price means 800,000 less man-days for Alabama coal miners and between 4,500 and 5,000 more miners will be on public relief. In the years immediately preceding the code the Alabama coal industry has struggled valiantly and in a vain effort to meet the competition of other fuels. For the period of operation under the code it has distributed its capital in the form of wages, as represented by an operating loss of over a quarter of a million dollars, and depleted its reserves of coal without profit.
Neither our coal seams, our markets, our conditions, or our competition permits a wage scale equal to the other regions. The inevitable and persistant drag of a national organization such as established by this bill is to simplify by making uniform. Our experience with the National Recovery Administration demonstrated that, and this bill bristles with the same idea. We survived then under an injunction. We do not propose to submit ourselves to that situation again. Bill H. R. 8479 states in title I, section 1, its policy “to prevent
the establishment of disparate labor costs detrimental to fair competition.” Our experience of the past 2 years leaves no doubt as to its intent and confirms our fear of its design to adjust permanently differentials which have been created by many years of commercial necessity, and will be altered in the years to come by new and ever-changing commercial requirements. It attempts to level economic inequalities between different sections of the country without recognizing that these economic inequalities are caused by geographical position, climatic conditions, freight-rate structures, and other factors that are entirely outside and beyond the control of the coal industry. In setting up machinery of administration by strong central governmental commission, by artificial curtailment of production, by allocation, by governmental purchases of coal properties, and by rigid control of wages and hours it will, in our fixed opinion, effectively defeat the purpose of stabilizing the industry-work serious detriment to the people engaged therein-and greatly increase the cost to the consumers of fuel, especially to those least able to bear the same, viz, the householder who is dependent on coal for heat and comfort of himself and members of his family.
The minimum price based on the average cost of any district for all sizes, grades, and qualities of coal will have the effect, within the district, of increasing the production of higher quality coal at the expense of those mines mining the lower qualities and to the extent that the allocation to the individual mines will permit. As between districts the district having the lower cost will extend its markets far into those areas now being served by the higher cost producing districts.
The basis of allocation of production control set out in the bill, section 16 (5), in which a plan will be recommended for all districts and producers on January 6, 1936, leaves the producers in doubt and dread as to their probable standing in the future.
Whatever plan may be proposed it must be on a nationalized basis and can have only one ultimate result. This result would be that the producing districts
having the lower cost and consequently the lower minimum price would increase its production at the expense of its higher-cost neighbors up to its allotment. Thus it is assured that there would be concentration of tonnage in the more fortunate areas and the larger districts would become larger and the smaller districts would become smaller. We are a small district and a high-cost district, but it is in the public interest that we should survive, and we intend to take our stand to that end.
It cannot be hoped that the various boards and commissions can be depended upon throughout a long period of years to preevnt injustices. Politics and govern mental control have never been divorced in the public interest. Tribunals of this sort set up in the public interest are susceptible to political or regional influence where overwhelming majorities are involved in the national set up. Pressure will inevitably be brought upon any central governmental board in the interests of heavy volumes of production or large percentages of employees or of special consumer blocs. Succumbing to such pressure these boards then become the champions of the larger groups and the interests of the smaller groups are subordinated.
The industry, which includes both the producers and labor, is extremely selfish and short-sighted if it does not consider the man who pays the bill. To the consumer of Alabama coal there would be an increased coal bill amounting to not less than $2,000,000 per year, if the demands for shorter hours and increased wages by the sponsors of this bill were made mandatory and further taxes imposed by legislation as the bill under consideration provides and permits.
The consumer is not bound by this law, if enacted, and in the Alabama consuming area will turn all the more quickly to the competitive fuels, such as natural gas, fuel oil, and wood and to coal mined in other States where a lower cost of production obtains, all of which are so readily available for industrial and domestic uses.
In conclusion we believe that it is inconceivable that any effort to solve the problems of industry will seriously contemplate the sudden and drastic readjust. ment and regimentation of industrial districts which will result from the enact. ment of this bill.
We believe that a combined political and economic control is not practical or constructive.
We believe that before owners will see their mines abandoned, their employees idle and their properties condemned to liquidation, or before the miners will see their means of livelihood vanish there will be many agreements in violation of this bill and to the further detriment of those who would be duty bound to a Federal statute.
We believe that the Code of Fair Competition under the National Industrial Recovery Act has gone a long way toward self-improvement of the industry and at no injustice to the consumer-and, in passing, let me say that the coal operators of Alabama did voluntarily and are continuing to observe and comply with the provisions of the code, notwithstanding the recent decision of the Supreme Court.
The helpless condition of the coal industry, which was years in the making, cannot be remedied in a short time. The road to recovery may yet have many rough places ahead and the outlook may be discouraging, but it is obvious that from the depths of the depression in which we now find ourselves that we cannot see through the fog of uncertainty and with a clear vision look into the future. Certainly, at this time we cannot see clearly enough from a long range perspective to chart a rigidly and arbitrarily defined course for the bituminous coal industry such as is stipulated in the bill under consideration by your honorable committee, and which, if enacted into law, will prove so disastrous to the coal, coke, iron and steel industries, the workmen dependent thereon for a means of livelihood, and the consumers of fuel in the trade territory accessible to the coal fields of Alabama.
Mr. Hill. I will state for the record that the following-named firms have sent wires to me stating that they were placed on record as favoring the Guffey coal bill, and advising that they are not in favor of it, and want their names registered as opposing the measure:
Kemmerer Gem Coal Co., Norton Va.
Greenwood Coal Co., Mount Hope, W. Va.
Mr. CHARLES C. DICKINSON. I understand he wanted to file a brief.
Mr. HAWTHORNE. I would like to file a statement for Mr. Dickinson.
Mr. Hill. You may file a statement for Mr. Dickinson.
(The statement referred to follows:) ADDRESS OF CHARLES C. DICKINSON, PRESIDENT DICKINSON FUEL Co., CHARLES
TON, W. VA., BEFORE THE NATIONAL RETAIL COAL MERCHANTS ASSOCIATION, ATLANTIC City, N. J., JUNE 21, 1935
It is not without some hesitancy that I undertake to talk to the members of the National Retail Coal Merchants Association about a subject so important to them and to their customers as the Guffey-Snyder coal control bill (H. R. 8479), now being considered before a House of Representatives Ways and Means subcommittee.
Never within the lifetime of any of us, or within the history of this Nation, for that matter, has any measure been presented to the Congress that has been 80 fraught with danger to the coal industry, of which you all are important factors; never, I say, has any measure proposed to lodge so much power in the hands of one politically-appointed commission; never has any measure threatened, if enacted, to establish such dangerous precedents affecting all other industries, as does this atrocious and undemocratic Guffey-Snyder bill.
The bill has been called by some of its proponents, a "little National Recovery Act” for the coal industry. But, gentlemen, I tell you that it is a big National Recovery Act" running riot into autocracy. No such governmental control or inquisitorial powers can be found to compare with it this side of the borders of the United States of Soviet Russia. It undertakes to inquire into, and to lay down, the rules and regulations that would govern practically every phase of coal mining and marketing from the face of the coal in the mine to the consumer's bin.
This iniquitous measure even goes so far in its brazen effrontery as to provide for an initial (mark that word, “initial”) expenditure of $300,000,000 of the already-overburdened taxpayers' money for the purchase, through the Commission, of "marginal" coal acreages under the guise of "conservation”, and for the rehabilitation of the miners it would inevitably throw out of work under its own terms.
The most distinctive and most outstanding difference between the "Code" proposed under the Guffey-Snyder bill and the old Code, promulgated under the now extinct National Industrial Recovery Act, is that the National Industrial Recovery Act code provided for control of the industry by the industry and for the industry, whereas this measure would attempt to define and regulate by statute, and through the almost unlimited powers given a commission, every phase and character of coal mining and marketing, including relationships with employees. Even the back-yard mine of the farmer, who, with the help of his sons or neighbors, mines a few tons of coal in an endeavor to trade the product of their labors for a few shrunken dollars in order to keep off the relief rolls, is not forgotten; the Guffey-Snyder bill would regulate him, too.
More astounding than the provisions of the measure itself, however, is the claim of its proponents that Congress has the legal right and power to enact the Guffey-Snyder bill under the commerce clause of our Constitution, and to bludgeon all producers of bituminous coal into acceptance of its destructive provisions by exercise of the Federal taxing power.
In introducing this bill in the House of Representatives at a time when the ink was hardly dry on a unanimous decision of the United States Supreme Court, clearly denying the right of Congress to control intrastate commerce, and also denying any right to an unlimited delegation of its power, the proponents of the Guffey-Snyder bill are, in effect, thumbing their impertinent noses at a basic tradition of the country which harbors them. Shall we countenance such a studied disregard of the supreme tribunal of the land?
Lawyers of outstanding reputation from throughout the United States, including the best legal minds in almost every coal-producing section, have carefully studied the Guffey-Snyder bill and are of the unanimous opinion that the measure is unquestionably illegal for many reasons.
It is worthy of note, on the other hand, that I know of no such written opinion published by the attorneys for the proponents of this measure other than one short and carefully worded memorandum, and no favorable oral opinion has been secured from any lawyer other than the few directly connected with them.
It may be significant to mention here that if, at the end of a few months, the bill is found unconstitutional by the United States Supreme Court, its authors, the United Mine Workers of America, will have been able, in the meantime, to use it as a vehicle for a contract with the coal producers of the United States, whereby they hope to secure a reduction of the work day from 7 to 6 hours, and an increase in the wage scale from $4.60 to $5 per day to $5.10 to $5.50 per day for this shorter work day, or a wage increase of about 28 percent.
I have no quarrel with organized labor as such. A properly conducted mine workers' organization, joining in a fair and properly related wage scale that will give the producers under such labor contracts an equal opportunity to share in the usual and normal markets of the producing field is a good and stabilizing factor in the mining and marketing of coal, and, so long as the mine workers' unions are conducted along those lines, I expect to cooperate with them.
I do not feel, however, that a wage scale that may be agreed upon by two-thirds of the producers should be imposed upon an unwilling minority, as provided in the Guffey-Snyder bill; nor do I think those who contract with some employee organization, other than the majority union of the Nation, should be forced to have a member of such majority union on its district marketing organization.
The bill is patterned generally after the Interstate Commerce Act, except that it is more drastic and more specific. Under it, the Coal Commission would be given complete control of the details of each coal producer's business. The Interstate Commerce Act provides for an independent, judicially minded commission, whereas the Snyder bill specifically provides for 2 representatives from the coal producers and 2 representatives of the miners, upon a commission of 9 members.
If the two representatives of the producers are from the North or from the South, and could, through logrolling, with the assistance of the two labor representatives, get one of the disinterested members of the Commission to vote with them, they could control the industry regardless of the will of the other four disinterested members.
These members of the Commission would each be paid $12,000 per year, and would have the right to employ clerical and engineering and other assistants, ad infinitum. In addition to making some 40,000 prices for the producers throughout the United States and the correlation of these prices, together with the standards of fair competition, the Commission would also enforce the provisions in regard to labor, purchases, and management of the bituminous coal reserves and compile the tons of statistics incident thereto. In short, the Commission must be gifted with the combined wisdom of the Interstate Commerce Commission, the Department of Labor, Bureau of Mines, as well as the Department of the Interior, under which it operates.
If by chance such a commission is created, it may be expected to grow as did the little Interstate Commerce Commission of many years ago, and to also have a fine new building of its own on Constitution or Pennsylvania Avenue, followed by others for oil, copper, iron, lumber and cotton and every other industry until the Government is obliged to condemn other property along the Avenue radiating from the Capital in order that every industry may have a building for those who know more about its management than those who, through the use of their brain and energy, have developed them.
It is not my intention, and it would not be possible within the limited time at my disposal this morning, to discuss the details of this Snyder bill. However, I know you are particularly interested in its marketing provisions and what you would have to charge your customers for the coal which you sell them in the