license to receive discounts as a distributor. Therefore the net effect of this law as now administered is to confiscate a part of our business and a conservative valuation of this business would be at least $50.000. This law, therefore, as now administered, actually confiscates $50,000 of the property owned by farmers and wage earners, the owners of Midland. I should say that, although the Coal Division refused to grant us registration as a distributor of coal, they did indicate they would offer us partial relief. They suggested we might be registered as an intervening agency, or as a limited farmer cooperative. Firstly, we object to any such limitation on our business. We object to accepting any handicaps on our operations which are not imposed on our competitors; we ask only equal opportunities with our competitors. I know you will agree that we should not only ask for equal opportunities, we should demand them, and that is what we are doing. But there is an even more important reason why we have not accepted this offer of limited registration. There is a principle involved, a principle of tremendous importance not only to cooperatives but to the entire public welfare which cooperatives serve. The principle is the right of cooperatives to continue the distribution of earnings on the basis of patronage. This is one of the cardinal principles of the cooperative movement and has been observed for almost a hundred years. We object and shall continue to object to the confiscation of the property of our members. It is of even greater importance, however, that we assure our members of the rights to continue in true cooperative business, assure them that no precedent shall be established here or elsewhere to destroy cooperatives or prevent their expansion into any line of business or any commodity. STATEMENT OF W. A. HACKBARTH, REPRESENTING THE OHIO FARM BUREAU COOPERATIVE ASSOCIATION Mr. HACKBARTH. Mr. Chairman, my name is W. A. Hackbarth. I am manager of the coal department of the Ohio Farm Bureau Cooperative Association. Our organization is registered with the Coal Division as a farmer cooperative, and therefore we are being granted the discounts allowed to farmer cooperatives. We are here to support the application of consumer cooperatives that they be recognized under this act and granted discounts equal to those granted to their competitors. We in the Ohio Farm Bureau Cooperative Association desire to expand our operations into cities, and we are going to do so. In fact, we are doing so. If we attempted to confine our future operations and activities to farmers and thus deny the benefits of cooperation to city consumers, we would be false to the true cooperative principles of open membership to all. We are appearing here, therefore, to make clear that we emphatically endorse the broad principles of cooperation presented here in the amendment offered by the Co-Operative League of the United States of America. The CHAIRMAN. The next witness is Mr. T. A. Tenhune, of the Central Cooperative Wholesale, Superior, Wis. Mr. REED. Before the witness starts, I would like to insert at this point the demands of the United Mine Workers of America, as pre sented to the bituminous coal producers on March 11, 1941, for their contract to commence April 1, 1941. The CHAIRMAN. Without objection it may be made a part of the record. (The document is as follows:) MARCH 11, 1941. INTERNATIONAL POLICY COMMITTEE OF THE UNITED MINE WORKERS OF AMERICA The International Policy Committee declares the recommendations contained herein to the Appalachian joint conference of miners and operators to be the policy of the United Mine Workers of America. The policy shall be a guide for all districts in the bituminous region in the negotiation of wage agreements. It shall serve in lieu of all wage-scale resolutions submitted to the International Policy Committee from the international convention, district conventions, or from any other source. APPALACHIAN JOINT CONFERENCE PROPOSALS 1. That the Appalachian joint wage agreement be extended from April 1, 1941, to March 31, 1943, with the following modifications and changes : 2. Hours of labor.-Without sacrificing the principle of the 6-hour day or in any manner yielding this basic requirement for the bituminous coal industry and the demands of the United Mine Workers of America for future consideration, the present 7-hour day, 5-day week provision of the existing agreement be conceded and extended for another 2-year period. 3. Wage rate increases.-Combined cutting and loading rates shall be increased 12 cents a ton; 11 cents of this shall be added to the existing rates for loaders, and 1 cent shall be added to existing cutting rates. Rates for all regular classifications of inside and outside day men shall be increased $1 a day; 75 cents a day for trappers and partially handicapped old men. Monthly men shall receive a directly proportionate increase. The minimum day rate shall be $6 without exception. Pick-mining rates shall be increased 20 cents a ton. Yardage and dead-work rates shall be increased 15 percent. Rates for conveyor and all other forms of mechanized mining shall be adjusted in any manner which will enable mine workers employed on mechanized units to earn an amount in wages commensurate with their increased productive efficiency. In all cases the minimum established shall be higher than the earnings of hand loaders. Each district scale shall establish as nearly as possible equality in rates for the performance of like work. A standard classification of men employed on the various mechanized units shall be established in order to eliminate varying sizes of crews. Such classification shall be uniform, both as to day and tonnage workers. The principle employed in adjusting rates at all strip mine operations shall be the same as that applied to conveyor and other forms of mechanized mining. Double time shall be paid for all work performed on Sundays and holidays. 4. Cleaning plants and rejects.-Where coal is to be taken to cleaning or preparation plants, the run of face loading method shall prevail. All reject clauses shall be eliminated from district agreements. 5. Guaranteed working days.-Mine workers shall be guaranteed not less than 200 working days each year. Day and monthly men shall be paid at the regular rates of pay provided in the various district agreements, and tonnage men shall be paid at the rate of $7.50 a day for each day less than the guaranteed 200. 6. Vacations.--All men working in and around the mine shall be granted a 2week annual vacation with pay. Day men shall receive their regular rates of pay, and tonnage men shall be paid at the rate of $7.50 a day for the vacation period. Vacations with pay have been accepted by American industry as a basic condition of employment in employer-employee relationships. It is the duty that industry owes to its employed workers in factories and workshops as well as office personnel. There is absolutely no justification for the bituminous coal industry to withhold such recognition and vacation grants from the men who mine the coal which powers the basic industrial economy, and which in turn provides the profits for the multitudes of other employees to enjoy vacations with pay. Taken as a whole, the ability to pay presents no insurmountable difficulties if the industry would tackle the problem as a cooperative undertaking. The acceptance by the miners and operators of a Federal coal agency to regulate the bituminous coal industry and fix prices has placed bituminous coal in the public-utility status. Regulation of the industry constitutes cooperation between industry, labor, and management, and exemplifies progressive industrial democracy at its best. It has brought employer and employee into organized mutual cooperation. The mechanics of this organization should be perfected and made to serve the promotion of better relationships. Our joint conference should be utilized to work out a sane and sound vacation plan and administer it on a cooperative basis as between all producing companies. Certainly vacations in the bituminous coal industry are long overdue. The industry is still in the throes of a period of transition, with new and improved methods of mechanized mining. The pooling of labor vacation costs with an equal tonnage of bituminous coal production has merit, and should constitute a basis for working out this problem of vacations, which the men who mine the coal are entitled to enjoy by every comparable analysis of American industry. 7. Seniority. In all lay-offs for any reason, priority rights to jobs should be given to employees on the basis of length of service. Folowing periods of general lay-offs and shut-downs for any reasons, jobs shall be given: (a) Older employees in length of service. (b) All employes on the pay roll at the time of the original shut-down or lay-off. (c) When the selection of all employees on the pay roll at the time of the shut-down or lay-off has been exhausted, the company may employ such additional men as may be required. 8. Swing shifts and staggered employment.-To protect the interests of the mine workers where swing shifts or systems of staggered employment are practiced, districts shall effect agreements establishing seniority rights designed to discourage the practice of employing new crews, which consequently creates unemployment. 9. Medical care and hospitalization in mining communities.-Many inefficient and dishonest practices in the rendition of medical care and hospitalization in mining communities require the consideration of the Appalachian joint conference. Abuses must be corrected and skillful and adequate medical services must be accorded. Equal participation with the coal company in the selection of physicians shall be accorded. Mine workers shall participate in the supervision of hospitals, medical, surgical, and nursing facilities in all cases where they are financed through the medium of deductions from mine workers' pay. 10. Physical examinations.-To discourage the practice of discrimination which is being exercised against mine workers, the Policy Committee declares that the entire question of physical examinations shall be made the subject of consideration in the joint conference. 11. Safety. The progressive increase of fatal and nonfatal accidents in the Nation's coal industry has become an alarming and tragic problem. Fatalities for the year 1940 reached the figure of 1,420, which is an increase of 342 over the record of the previous year. Nonfatal accidents in coal mines in 1939 were 41,500, which represents a ratio of 49 nonfatal accidents for each fatal accident which occurred during the year. In addition to the stark tragedy of this wastage of human values and the sum total of human misery which it creates, the problem has been important to the coal consumers of the country by reason of its cost burden. Authorities agree that the direct and indirect cost of fatal and nonfatal accidents levies a cost on the bituminous coal industry equal to 20 cents per ton, which in turn is paid by the consumer. In other words, in 1940 the accidents and fatalities of the bituminous coal industry cost coal consumers approximately $90,600,000. Mine explosions are preventable and mine accidents are capable of being reduced to a relatively unimportant minimum. No civilized country in the world exposes its coal miners to the same degree of hazards as exist in our own country. All civilized coal producing nations have a record in this respect which in comparison makes our own national record a shameful one. Every material and social reason requires that this problem be given remedial attention. The mine workers propose that in this contract there is written a clause that will give the right to a safety committee of mine workers to inspect any mining operation, and when dangerous and menacing conditions are found to authorize the men to refrain from work until conclusive inspection and findings are made by State and Federal authorities. In addition, this clause shall permit the International Union, United Mine 302773-41——11 Workers of America, to authorize mourning periods for the dead in our industry, during which periods coal production shall cease. 12. Financial responsibility.-Each association of operators signatory to the agreement shall be financially responsible for all defalcations of mine workers' moneys by all coal companies which are members of such associations. Each operators' association shall be also be financially responsible if an operator member defaults in the payment of the check-off to any district. 13. Differentials.—Existing inequitable differentials within and between districts shall be eliminated, including the loading rates, mechanical day rates, and North-South differentials, and all other factors operating to maintain and widen such differentials and inequalities. 14. Other Provisions.—(a) Operators shall include clause to protect wage scales and conditions in mines whenever mines are let to any corporation, company, or individual for operating purposes. (b) Equitable adjustment of house rents shall be made. (c) Payments shall be made in cash or par check, with consideration only for legitimate deductions. This is designed to prevent the discounting of earnings through the use of scrip, tin money, or other subterfuge. (d) The operator shall be responsible for delivering cars to and from the miners' working places. (e) Only union-made explosives, mine supplies and tools shall be made available for use by mine workers. (f) Foremen or employees who do not come within the jurisdiction of the wage agreement shall not perform the duties of maintenance men or other mine workers on idle days or at any other time. An agreed limitation on the number of men of the classification of foremen shall be included in the Appalachian agreement. (g) Suitable arrangements for the employment of umpires. (h) Mine workers shall not be required to pay for safety equipment and devices. 15. District conferences and agreements.-Joint conferences of districts in the Appalachian region shall be held concurrently with the Appalachian conference. All other districts shall meet in joint conference after the Appalachian agreement is negotiated for the purpose of negotiating wage scales on the basis of this international policy. Wage-scale resolutions affecting local working conditions and rules shall be made the subject matter of consideration by all district joint conferences. Districts shall not negotiate agreements which may grant more favorable conditions to the operators than obtain in other agreements. No supplemental district agreement shall be negotiated unless approved by the international union. THE UNITED MINE WORKERS OF AMERICA, PHILIP MURRAY, Vice President. THOMAS KENNEDY, Secretary-Treasurer. The CHAIRMAN. Give your name and address to the stenographer, and the capacity in which you appear. STATEMENT OF T. A. TENHUNE, REPRESENTING THE CENTRAL COOPERATIVE WHOLESALE, SUPERIOR, WIS. Mr. TENHUNE. Mr. Chairman and members of the committee; my name is T. A. Tenhune. I am here representing Central Cooperative Wholesale of Superior, Wis. I am the head buyer of that organization and as such I am directed to appear here, by the manager of Central Cooperative Wholesale and the board of directors, and present this very important question. This being my first time before any governmental body or committee of this sort, I would like the opportunity of going over my notes, and after I am through with that, I am ready to answer any questions you may want to ask. The CHAIRMAN. You prefer to make your statement without interruption? Mr. TENHUNE. Yes, sir. The CHAIRMAN. You may proceed. Mr. TENHUNE. Several months ago we were surprised to find that the Bituminous Coal Division as not ready to recognize us as a coal distributor because of their interpretation of the Guffey Coal Act. When the Guffey Coal Act was passed in 1937, it did not dawn on us, or any of the other consumer cooperative organizations, that the Guffey Coal Act would ever deprive us of the right to engage in the coal business. We now realize that it is necessary for us to insist on an amendment for this Guffey Coal Act in order to give consumers cooperative wholesales the rightful protection and recognition which is needed. It is hard for us to believe that when Congress passed this act in 1937 that they intended to legislate consumers cooperatives out of the coal business or deny them the right of ever engaging in that type of business in the future. It certainly must have been an oversight on the part of our Senators and Representatives as we do not believe they intended to pass an act which would be so unfair to the many thousands of cooperatives and the general public. It was a larger oversight on the part of the consumers cooperatives not to call this to your attention. Section 304.12 (b) (8) reads as follows: Not to accept or retain a distributor's discout where coal is resold to any person who owns such distributor or who financially or otherwise controls such distributor, except in a case where this Division has determined that such owneship or control is bona fide, is not established primarily to secure indirect price reductions, and is not within the prohibition of paragraphs 11 and 12 of section 4, part LL (i) of the act. The phrase "except in a case where this Division has determined that such ownership or control is bona fide, is not established primarily to secure indirect price reductions" should really have taken care of our consumers cooperatives, as our organization is owned and controlled by the member stores on a bona fide basis and is not established primarily for securing indirect price reductions. Apparently the Bituminous Coal Division feels we do not fall under this classification and it is, therefore, necessary for us to request a very definite ruling in the act, insofar as it applies to consumer cooperatives. The Central Cooperative Wholesale (originally incorporated under the name of Cooperative Central Exchange) was organized on July 30, 1917. Nineteen retail establishments sent representatives to Suprior to a meeting on that date and these representatives put up a collection and raised $15.50 to act as a starting point for our organization. Since that time it has grown to be a relatively large establishment with sales now running about $4,000,000 per year. It is owned and operated by 130 retail organizations which in turn are owned by 50,000 individual consumers located in the States of Minnesota, Wisconsin, and Michigan. These 130 retail organization operate approximately 200 retail outlets. All of the affiliated stores and the Central Cooperative Wholesale are incorporated under the cooperative statutes of their respective States and all are organized on the Rochdale principles, in short, allow for open membership-only one vote per member, no matter how many shares are held, fixed rate of interest on share capital, distribution of net earnings on the basis of purchases which made |