In the last 2 years, labor and the operators in this industry have worked in harmony, sustained by the promise which this act contains, that cutthroat competition forcing down prices and wages will be eliminated, and that the operators will receive a fair return for their product, and labor a fair wage for its work.

The establishment of minimum prices under the act means that coal must not be sold at prices below those necessary to return the average cost of production. The tremendous surplus capacity of the industry, coupled with a decreasing demand for coal due to competitive fuels and improved methods of burning coal, resulted in a continual price warfare. The consequence has been that for the past 15 years the industry has operated at a loss ranging from 51 million dollars in 1932 to 72 million dollars in 1934. This has led to the wiping out of investments, to precarious standards of living for the families of more than a half million workers, to ghost towns, and to economic waste and human misery.

Since the minimum prices became effective on October 1, 1940, the industry has realized, on the average, its cost of production. Violations of the prices and the marketing rules have been comparatively few, and they have involved only negligible amounts of coal. Consumer complaints have been relatively few in number. Most consumers seem to realize that it is not unfair for them to be asked to pay a price which will give the producers of coal their cost of production. Some of the complaints have a substantial basis and on these rectifications will be undertaken as rapidly as possible.

Another notable feature of the program is that it has been accomplished as a genuinely cooperative enterprise by Government and industry. Regional boards, selected by the industry itself, have participated and cooperated in every step of the process. With hardly an exception, no move has been made, no policy determined, not even a questionnaire issued, without elaborate consultation with the industry. I would like to take this occasion to express my appreciation to those representatives of the industry who, working with the Division, have proved that a vast program of this sort can be successfully carried out on a basis of cooperation between Government, business, and labor.

This program is in marked contrast to the situation in other nations. In every major coal-producing nation of the world, conditions in the bituminous-coal industry for many years have been very much like those in this country. Overcapacity has resulted in low prices and low wages. In every one of these countries, without exception, the industry has been nationalized or has received subsidies or other financial assistance from the government.

The Coal Act, however, is entirely a cooperative measure, the expenses of which are paid directly by the industry. Its administration does not involve Government operation of the industry and it does not cost the Government a single penny, since costs of administration are borne by a special tax levied by the act upon the coal produced. Indeed, in the 4 years of its operation, the Coal Act has resulted in a net profit to the Government. Taxes collected have exceeded appropriations for administration by more than $2,000,000. The problem before this committee is whether this legislation, the product of more than a generation of congressional inquiry, shall be continued or abandoned at this point. Various people asked me the

answer to this question in 1939 and in early 1940 before minimum prices were in operation under the act. My answer, without exception, was that I did not know. Prior to actual experience under fixed minimum prices I felt that the continuance of the Coal Act was an open question. I did not know whether a workable price schedule could be designed, I did not know how it would be received by the industry and the consumers, and I did not know whether the prices would be attacked in a multitude of lawsuits. But we have now had a little experience, more than 5 months under fixed minimum prices, and that experience has been favorable beyond anyone's expectations. I now have no doubt in my own mind as to what should be done. The act should be extended for an additional 2-year period to permit a just appraisal of its operations and to tide the industry and the Nation over a critical period.

The industry has many millions of dollars invested in this act. It has paid more than $15,000,000 in taxes levied by the act to defray administrative expenses. In addition, it has paid assessments to its district boards and has incurred the expenses of hearings, lawyers' fees, and so forth. It has had the benefits of minimum prices under the act for only 5 months. I think that it is only fair to the industry that it be given a run for its money, and that the act be extended for an additional period. For the first time in 15 years the industry has not 'been operating at a loss. A period of 5 months is not sufficient to rehabilitate the industry and place it upon a stable basis.

Particularly at the present time abandonment of the act would have serious consequences. The wage agreement between the producers and the United Mine Workers, the union to which over half a million, or 90 percent, of the mine workers belong, expires on April 1. Negotiations for new contracts are now under way in a meeting being held in New York City. During the last few years, while this act was in effect, promising an end to ruinous prices and holding out hope of fair and stable wages, labor relations in this industry have been excellent. The operators and the mine workers have shown a tolerant understanding of and a desire to work out each other's problems, as well as their own. This is in marked contrast to the situation existing in years gone by. No industry has had a bloodier or more violent labor history than this; nor has any industry had a better record during the past 2 years. It seems to me clear that the Congress should not prejudice this situation by failing to extend the Coal Act, which is the keystone of the industry.

In this connection it should be noted that bituminous coal is still the Nation's basic fuel. Consumers pay more than one and a half billion dollars for bituminous coal delivered at their bins. It supplies about one-half of the power which turns the wheels of our nationaldefense industries. The railroad, steel, munitions, and other defense industries depend upon it. It produces about 49 percent of the electric energy generated in the Nation. Very few consumers can store any significant quantity of coal. If production were disrupted for even a few weeks, some factories would have to close their doors and the continuous operation of railroads and public utilities would be imperiled. The resulting situation would be much more prejudicial to our national-defense program than strikes or lock-outs in hundreds of individual factories.

It is not my province to discuss the labor relations of this or of any other industry. But the situation which I have just described makes

it even more important that the Congress promptly extend the Coal Act. A basic element in the ability of the producers to pay an appropriate wage, and in the power of the workers to obtain it, is the maintenance of a floor under market prices that is sufficient to return cost of production. The Congress should not pull this floor from under the feet of the industry.

In addition the Bituminous Coal Division is performing an important function in the preparations for national defense. The Division's work on defense has been prompted by experiences during the First World War, when the shortage of coal supplies at consumption points resulted in heatless and lightless days, in fuel shortages in vital industries. After the maximum prices set under the Lever Act were taken off, in 1919 and 1920, a runaway market for coal lifted prices for spot coal as high as $20 a ton at the mine. These difficulties were not due to shortages of coal supplies at the mine. They were due to the lack of information, personnel, and governmental machinery to direct coal from the mines to the necessary consumption points by the shortest routes and to control prices. In the absence of the necessary information and control machinery, coal was shipped from the Middle West to eastern destinations and from West Virginia and Pennsylvania to the Middle West. Our railroad system, burdened with other war requirements, was unable to stand the strain, and coal soon became a precious commodity. The producer was able and willing to supply it and the consumer needed it, but there was no way of intelligently directing its distribution.

It was not until August 1917 that the Government set up the United States Fuel Administration. Much damage had already been done, and the Fuel Administration had to secure personnel, get such information as it could, and devise ways of handling the problem. Considerable time elapsed, therefore, before it could take effective steps to cure this situation. This need not occur again. The Division has a nucleous of trained personnel and necessary information and equipment to handle such a situation if it should again arise, and it is engaged in formulating specific measures which, when perfected, can be made promptly effective. In addition, as I have already stated, the act empowers the Division to set maximum prices in the event that market prices rise to unreasonably high levels.

The continued existence of the Coal Act and of the agency charged with its administration will make it possible to anticipate the difficulties which may arise as a result of our defense program in advance of their occurrence, and to avoid repetition of the disastrous experiences of the last war.

In conclusion, gentlemen, I want to impress upon you the necessity for speed in acting upon this resolution. The act expires about 612 weeks from today. If Congress extends the act, we will have to ask for a deficiency appropriation to cover the period from April 26 to July 1, since our current appropriation extends only to April 26. There is little time and much to be done.

Even the brief experience which we have had under the minimum prices has disclosed the desirability of various amendments to the act. After consultation with the various elements in the industry and with consumers and distributors, we shall hereafter suggest various amendments to Congress. Undoubtedly others will have amendments to offer. Necessarily careful consideration must be given to any amendment

suggested, and this will involve detailed and elaborate hearings which cannot possibly be held before the expiration of the act. It seems clear that the only feasible and orderly procedure is to extend the life of the act now, without any substantive amendments whatsoever, and thereafter to consider carefully and deliberately proposed changes in specific provisions of the act.

Accordingly I recommend that the committee act favorably on this joint resolution, with the technical amendment which Mr. Gray will discuss.

Mr. COOPER. Mr. Secretary I am sure the members of the committee appreciate your presence and the information you have given on the subject now under consideration. The sole purpose of my inquiry is to secure information. The original Bituminous Coal Act provided for a board of seven members to administer the act.

Secretary ICKES. That is correct.

Mr. COOPER. The experience under the administration of that Board was very unsatisfactory, was it not?

Secretary ICKES. Well, looking in from the outside, I think it was. Mr. COOPER. The result was that by Executive order of the President, under the Reorganization Act, the Bituminous Coal Commission was abolished and the functions of that agency transferred to your Department.

Secretary ICKES. Over my protest, I may say.

Mr. COOPER. You didn't seek that additional burden?

Secretary ICKES. I was afraid of the job.

Mr. COOPER. I don't recall at the moment, but doubtless you will remember the date of the transfer of the functions of the Coal Commission to the Department of the Interior?

Secretary ICKES. July 1, 1939.

Mr. COOPER. Since that time the act has been administered by a division of your Department.

Secretary ICKES. That is correct.

Mr. COOPER. That would be not quite 2 years?

Secretary ICKES. Not quite.

Mr. COOPER. And I believe you said that the experience under the administration of the act in your Department, in your opinion, has been satisfactory?

Secretary ICKES. So far as we can judge it has been, and I base that upon the reactions we have had, not only from the public, but from the producers and from the workers.

Mr. COOPER. In the latter part of your prepared statement, as I comprehend it, you indicate that some further amendments of the original act might be found desirable.

Secretary ICKES. I don't doubt that.

Mr. COOPER. But in the approximately 2 years that you have been administering the act you have not yet discovered what those amendments should be?

Secretary ICKES. We are not ready to present them now, because unless the act is extended beyond April 26, that would be a moot question. We have had only 5 months of experience in the actual carrying out of the prices, enforcing minimum prices.

Mr. COOPER. I understand you have had but 5 months since the prices were fixed?

Secretary ICKES. That is right.

Mr. COOPER. But it would naturally occur to me that in nearly 2 years' time you may have had sufficient experience to be prepared to

recommend some amendments now.

Secretary ICKES. Does the committee desire us to recommend them now?

Mr. COOPER. My only purpose in inquiring is, if your experience has been such to lead you to the conclusion that some amendments in the basic act are desirable, that now might be the appropriate time for us to have the benefit of your views on that.

Secretary ICKES. The General Counsel, Mr. Fortas, advises me that we have no amendments actually drafted. We have had just 5 months' experience under the prices. It is workable as it stands, and we would like a little more experience before we recommend amendments.

Mr. COOPER The impression that was made on me when you made that suggestion, that amendments might be found desirable, was that you had approximately 2 years experience under the present act, and it should be now extended for 2 more years, and if you consume most of that time before the amendments are suggested, that would approximate 4 years before we get to the point of amendments, and the life of the original act has passed.

Secretary ICKES. We could still introduce amendments at this session after the act has been extended. It would not necessarily mean we would wait 2 years. We would come in whenever we had an amendment to suggest that we thought would help the act. It might be in a month, or 2 months, or 4 months.

Mr. COOPER. My interest was just aroused by your suggestion in your prepared statement that you might find it desirable to suggest amendments.

Secretary ICKES. I can understand that. I think my language might have been better selected. I understand your puzzlement over it.

Mr. COOPER. And you are not prepared now to suggest amendments? Secretary ICKES. No; we are not.

Mr. COOPER. One other point of inquiry, if I may, Mr. Secretary, for the purpose of securing information. Under the original Coal Act very definite and specific provisions were included for a Consumers' counsel, were there not?

Secretary ICKES. That is right.

Mr. COOPER. The purpose being to protect the interests of the consumers of coal, or the public generally.

Secretary ICKES. That is right.

Mr. COOPER. After the transfer of the functions of the Coal Commission to the Interior Department the Consumers' Counsel, or originally contemplated, was not continued, was it?

Secretary ICKES. Yes; it was continued. It was transferred to the office of the Solicitor of the Department of the Interior.

Mr. COOPER. In other words, additional duties were added to the Solicitor of the Interior Department?

Secretary ICKES. We set up a Consumers' Counsel Division in the Solicitor's office.

Mr. COOPER. I feel that some members of the committee are probably very much concerned about the consumers' counsel provisions of the original act. As one who had the privilege of serving on the committee at the time the original act was passed, and at the time it was under consideration, I express it as my opinion at least that