Senator Davis. I had but one industry in mind when I voted for the National Industrial Recovery Act, and that is the bituminous coal industry. I wanted to be helpful to them, and thought it would help them. I am beginning to believe now, since I have listened to many of the operators, that it would be a mistake on my part if I voted to extend the time of the National Industrial Recovery Act, because you are all opposed, seemingly to me, to any sort of governmental regulation whatsoever.

Mr. CARTER. Well, Senator, let me add my plea to those that you will hear from others to to persuade you, if you have such a conviction, to change your mind.

Those of us in the coal industry may differ as to the perfection of the code. I believe that there is substantial agreement in the industry that the code has been of benefit to the coal industry and that part which you played and to which you have just referred in connection with the N. I. R. A. has been fruitful of results in the bituminous coal industry.

We do not want the coal industry to lose the code. There may be some that do, but I believe that the bulk of the industry would like to continue the code. We can change and modify and improve the code as we go along.

Senator Davis. I just want to repeat that the idea that I had in mind especially when I voted for the licensing section of the N. I. R. A. was nothing more nor less than to help the industry from destroying itself. Now, I might have been mistaken in that.

Mr. CARTER. I believe that the industry welcomed an opportunity under the N. I. R. A. to have a code and to have an opportunity to solve many of the problems that the antitrust laws had certainly imposed bars against when we were seeking to solve them prior to the passage of that act.

I know that in my case that I desired, and I believe I am correct in saying that it was the overwhelming sentiment of people operating mines in southern West Virginia and in Virginia in the low volatile fields with which I am particularly familiar, to cooperate and get the best instruments they could under the N. I. R. A.

Senator Davis. You believe, then, that the N. I. R. A. has been helpful to the coal industry?

Mr. CARTER. I do believe

Senator Davis. And you believe it because of the fact that you have been more or less regulated by yourselves with the approval of governmental officers?

Mr. CARTER. The answer to that, Senator, is "yes", but let me explain my answer. We have been permitted to regulate ourselves, but I believe that government, when it permits any group to undertake such regulations, should of necessity impose some restrictions and supervision in the public interest. To that extent, I do answer

yes” to your question. Senator Davis. The production of coal, if I remember correctly, is running less than 350,000,000 tons now. The normal production of coal-I mean where conditions are normal-runs about 550,000,000 tons, does it not?

Mr. CARTER. Well, the production of the country has been 550,000,000 tons.

Senator DAVIS. It has been 700,000,000.

Mr. CARTER. Yes.

Senator Davis. And it has a production capacity of about a billion tons.

Mr. CARTER. I do not know what the real productive capacity of the industry is, Senator.

Senator Davis. If it is necessary to have somebody at this time regulate the industry, will it not be necessary to have some regulatory power when we even get to producing 750,000,000 tons?

Mr. CARTER. We have that regulatory and supervisory power today, Senator.

Senator Davis. Yes: but you got it through the N. I. R. A.

Mr. CARTER. That is true, and it is my understanding that the President has requested and recommended to the Congress that the act be extended, at least in some modified form for a further period.

Senator Davis. But many of the coal operators have stated here that they do not want any form of governmental regulation. Will not your condition be just as bad when the country gets back to normal and you are consuming 550,000,000 tons of coal a year? Will it not be just as bad then as it is now, or was prior to the passage of the National Industrial Recovery Act?

Mr. CARTER. Senator, as to conditions now, I believe that the coal industry has as a whole during the past year enjoyed one of the most profitable years that it has had for a long period of time. So its condition today is better than it has been.

Senator Davis. Yes; but it is under governmental regulation. You could not regulate yourselves; you were just crucifying yourselves in business. If I take the testimony that has been given here from men in the coal business and from workers, the wage had dropped from $7.50 a day around the mines to $1.50 in and about the mines, and that the production of coal had dropped from 97 cents a ton down to around 40 cents a ton, and in many instances much lower than that. All this that you claim has come to us through governmental regulation. I want to be helpful, so far as I am concerned, to the bituminous coal industry, for God knows I have seen nothing but poverty stark through these mining regions of Pennsylvania and West Virginia. I want you to get it clearly in your mind, and I want to state it to Mr. Hawthorne, that I am not one of those who believe in governmental ownership of the industry. I am seeking here to get the truth and apply the truth to this industry, with the hope that we will drive poverty out of the coal-mining area.

Mr. CARTER. I believe, Senator, that you will find the coal opera. tors all over the country—I know that you will find the coal operators in southern West Virginia—anxious to cooperate with you in anything, in any reasonable effort, to bring about improvement; not only in our own industry, but in any other industry.

No one desires poverty, but I am here, and others will appear before you, to try to help give you these facts that you seek. What I am trying to do now is to prevent, if I can, any mistake being made that will not help but will seriously cripple the coal industry; and it is my opinion that the enactment into law of the Guffey bill would do that. I believe the Guffey bill would seri. ously, if not almost beyond hope of repair, injure the coal industry.. Senator Davis. Is there not anything at all about the Guffey bill that is helpful to the coal industry!

Mr. CARTER. At the moment, I do not believe there are any sections in the Guffey bill, when you strip the objectionable features that I see in it from them, that could be salvaged, Senator.

Senator Davis. Outside of your wanting to extend the National Industrial Recovery Act to work under these particular coal codes, what would you suggest that the Government itself might do to be helpful to the industry?

Mr. CARTER. Let it alone.

Senator Davis. And let it go back to the condition that existed in the coal industry prior to the enactment of the National Industrial Recovery Act? Do you want it to go back again to the condition in West Virginia and in Pennsylvania and in Kentucky and in Tennessee that existed prior to the adoption of the National Industrial Recovery Act?

Mr. CARTER. Senator, I do not want the coal industry or any part of it to retregrade in any fashion.

Senator Davis. But you could not help it. There was testimony here that a man did not get more than 20 cents an hour and worked 1 day a week. Do you want it to go back to that?

Mr. CARTER. Senator, of course, the answer to that question is “no.” No person wants conditions of that kind to exist in any district.

Senator Davis. That is what happened to it prior to that time.

Mr. CARTER. Is it not a fact, Senator, that the real problem of coal industry is that we have a greater productive capacity than the needs of the country require?

Senator Davis. There are some parts of the Guffey bill that prevent the opening of other mines and increasing that production. Not only that, but there are some parts of the Guffey bill that want to retire some of this production. There are some good features in the bill, surely, although you yourself will not admit that there is anything good about it and think that you ought to be let alone.

Mr. CARTER, Senator, I have reiterated a number of times that I, and many of those with whom I am associated, many of my competitors, desire a continuation of the coal code under an extension of the existing act or in some modified form, and that we may then evolve, through the process of trial and error and by this cooperation

Senator Davis. You cut prices among one another, and as you cut prices and reduce the wages you destroy the buying power of the country. How many of these coal miners can live as the American standard of living requires they should live! How many of them can live in the coal-mining area?

Mr. CARTER. Senator, I do not know the answer to that question.

Senator Davis. You surely cannot raise the standard when the maximum of coal is only so many million tons and you are going to open new mines and produce more tonnage to reduce the work that you have for the men in the mines.

Mr. CARTER. Senator, people engage in business enterprises with the hope of profit. The past experience of the coal industry and the overproduction that exists in it are not conducive to the entry in any major way today of new capital into the industry. There may be exceptions to the rule, but, generally speaking, the coal industry has not invited capital.

Senator Davis. Do you think now that we ought to induce capital to come into the industry and open more mines?

Mr. CARTER. I have not advocated it, Senator.

Senator Davis. I would take it from what you said that that is what you meant. That is, what you wanted was more money to come in and open up more mines, to distribute what little work you now have for the coal miners, and the little business you have to distribute that?

Mr. CARTER. I am sorry that I did not make myself clear. Yesterday afternoon in the early part of my testimony I said specifically, Senator, that I believed there was a necessity to solve basically the problem of the coal industry, and that there should be a reduction in the number of mines operating.

Senator Davis. Just a moment ago you said, or at least I understood you to say, that we are not bringing any new money into the industry. What would you want to bring it in for, to open up new mines?

Mr. CARTER. Senator, I thought you asked me a question as to the flow into the industry of new money to open new mines with the idea of diluting the business that is already there; and I was saying that in an industry that is already overdeveloped there was not much outside capital to embark in it. Perhaps I misunderstood your question.

Senator Davis. I asked you if you want to regulate the amount of production of coal so that the employer will receive a reasonable return on his money invested and the worker will get reasonable pay for the work that he does.

Mr. CARTER. Let me see if I understand your question.

Senator Davis. A part of the Guffey bill provides that you cannot open up a new mine unless it is approved by a commission. The question I want you to answer is, would you want to open up any new coal territory at a time now when we have a production capacity of practically three times what we are consuming?

Mr. CARTER. Your question is, Do I want to open up new production capacity?

Senator Davis. Yes. Do you not think there should be regulation on the part of the Government to prevent the opening of any new mines so long as the bituminous-coal industry is in the condition that it is now in?

Mr. CARTER. Senator, I must confess that I believe that people who are so badly informed as to conditions in the coal industry as to desire to invest their capital in coal mines should probably be allowed to do it.

Senator Davis. Should probably be allowed to do it? Then, you do not believe that the Government ought to say to folks, “ Here is the information on coal. Production is three times that of consumption. If you go in you lose your money."

Mr. CARTER. Senator, part of my reasoning is based on this fact: I do not believe, generally speaking, that the Government should prohibit a man from engaging in any enterprise. If a man saves a thousand dollars and desires to invest it in a corner grocery store

or a little mine; perhaps just a little one—there are many such in the country-I do not believe that he should be denied that right.

If he is foolish enough to select such a field for his enterprise as an industry that is already over-developed, his own stupidity and the competition in the industry which he enters will destroy him. We cannot, much as we would like to do it, save every man from making errors or incurring losses.

Senator MINTON. You do not believe that it is necessary to have legislation to prevent people from jumping on a sinking ship?

Mr. CARTER. I do not believe it is, Senator. I do not believe many people jump on a sinking ship.

Senator Davis. Following your theory, you do not believe in regulating the stock exchange. You would allow a broker to do anything he wants to do or to send out any prospectus that he wants to send out, so long as he gets business. Mr. CÁRTER. I do not

think that is a fair comparison. Senator Davis. What is the difference in issuing a prospectus saying that you are opening a coal mine and that the coal consumption is so much and you will get your share of it, when you know he cannot get it unless he goes in and practically destroys the industry; I mean its destruction when he sells below cost, and when he pays a wage that is below that which will keep the worker on what we might term this American standard of living?

Mr. CARTER. Senator, you have injected now two or three new things for me to consider, and it makes your quesion a little more difficult for me to answer.

Senator DAVIS. A man who has traveled through the coal fields should have no difficulty in answering that question. The more mines you open there the more competition there is in coal. My experience has been, in dealing with this coal question, that the wages have gone down as the result of that.

Mr. CARTER. Now, Senator, we have today a basis and, as a matter of fact, I am not sure that it does not afford a basis for the stabilization of the coal industry. We have pretty generally recognized in the country now minimum rates of pay and maximum hours of labor. If you protect the individuals who work in the mines from any ill effects of competition, so that the pressure upon them from that competition to which you refer does not deplete their rates of pay, you will have accomplished the major thing that, as I understand, you are seeking to do—the protection of the people in the mines. Now, you cannot afford in any industry opportunity for work or employment for 10, if there is only enough for 5.

Senator Davis. But it seems to me you want to open up more mines.

Mr. CARTER. I am sorry you have that feeling.

Senator Davis. You want to increase production rather than decrease it.

Mr. CARTER. I do not recall, Senator, that I suggested that the coal industry be expanded. I am sorry I left that impression.

Senator Davis. I asked you a direct question, if you did not think that part of the Guffey bill which prevents the opening of new mines and increasing production is good, and you said "no."

Mr. CARTER. I did. I do.

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