Mr. HUDDLESTON. Mr. Wallace, it is my recollection that we produced 6,000,000 tons of bituminous coal last week.

Mr. WALLACE. Six million tons-that is not sufficient. I do not know about that, and I am not sure. I have not had the figures. It is possible that that might be so, considering the fact that the mines have been idle a long time. The people might go in there and dig coal one day and find that they could not load it.

Mr. HUDDLESTON. In what districts are the miners idle?

Mr. WALLACE. A good many of them are idle in the Pittsburgh district of Pennsylvania, in Fayette County, Pa., and in the Kanawha district of West Virginia. That is true in scattered mines over the country.

Mr. HUDDLESTON. Settlements have been made.

Mr. WALLACE. Settlements have been made with the large producers.

Mr. HUDDLESTON. How long do you think it would take to get back, we will say, to 8,000,000 tons per week.

Mr. WALLACE. We ought to be doing that this week, or more than that this week. I should say 12,000,000 tons.

Mr. SANDERS. Mr. Aitchison stated that the average production last year was 8,000,000 tons, I believe.

Mr. HUDDLESTON. Mr. Wallace, what I had in mind was the car supply situation and the fact that many mines have been abandoned and many men have abandoned the industry, men who used to dig coal have gone to doing other things. They have left their original work, and there are many other factors that enter into the proposition.

Mr. WALLACE. There is a fact there that must be considered. I understand the coal industry, possibly, better than any other. You must consider the fact that there is a good deal of idleness in the mines, within the mines, which is not due to the miners and not due to the operators, and that is due to the fact that they do not get the cars they want. I think there is a scarcity of men. I should say that one-fifth of the men have left the mines, or are not working in the mines, and four-fifths will have to get out as much coal as five-fifths.

Mr. HUDDLESTON. How long will it be, do you think, before they can reach that big production?

Mr. WALLACE. It might take a day or two; there will be some fields where it would take a few days.

Mr. HUDDLESTON. The highest production we have ever had in this country was during the war, in 1918, when a single week's production amounted to 13,000,000 tons. When we did that we then strained ourselves to the extreme limit. Mr. WALLACE. In March we produced 12,000,000 tons.

Mr. HUDDLESTON. We gradually worked up to that production.

Mr. WALLACE. You must remember this, that while that was a wonderful production, a big production, some of our most competent miners, our ablest miners, young men, were abroad.

Mr. HUDDLESTON. About 75,000, I believe.

Mr. WALLACE. The mine forces had been diluted with men less competent, and I believe with the force that is at work now at least 11,000,000 tons ought to be produced.

Mr. HUDDLESTON. Within a few weeks.

Mr. WALLACE. Practically immediately.

Mr. LEA. Referring to the matter of available cars, if the railroad s rike and the coal strike were terminated, there would be a limitation on the distribution, on account of the impairment of cars, would there not?

Mr. WALLACE. There would be something in that.

Mr. LEA. Is it not true that there are also strikes, independent of the big strikes, pending in localities over the country?

Mr. WALLACE. Yes; but still the number of men at work will overproduce the current demand; the number of men who are at work will soon make up the deficit.

Mr. LEA. In addition to the current demand, there is a depletion of the normal surplus?

Mr. WALLACE. Yes; and that is a danger. If I understand this bill, it is intended to prevent that from becoming a real danger by supplying the demand and a little bit more.

Mr. RAYBURN. I understood you to say you were against the general policy of Government price fixing?

Mr. WALLACE. Yes, sir.

Mr. RAYBURN. Do you think this bill ought to be amended and that the provision giving the coal distributors the power to fix prices should be eliminated? Mr. WALLACE. Yes, sir.

The CHAIRMAN. Will you have the committee to understand that you favor the general purposes of the bill?

Mr. WALLACE. I favor the general principles of the bill, but am opposed to any price fixing.

Mr. RAYBURN. The general principle is that of price fixing, is it not?

Mr. WALLACE. I can not say that it is. I think it is a matter of coal distribution, to see to it that the coal is distributed at the places of the buyers.

Mr. RAYBURN. If the draftsmen of this bill say that the main part of this bill is to regulate and prevent profiteering they do not agree with you as to the main part of this bill.

Mr. WALLACE. There is profiteering outside of the work at the mines; more away from the mines than at the mines, absolutely.

The CHAIRMAN. Was I correct in understanding that you thought the bill was aimed against profiteering and for that reason was desirable?

Mr. WALLACE. Yes, sir.

The CHAIRMAN. I would like to say to the members of the committee and to the witnesses that an arrangement has been made with the Secretary of Commerce to be here as near half past 10 as possible, and it may be necessary that the witness who is testifying at that time will have to be interrupted. and I would like to proceed with the next witness with that understanding. Mr. Farrell, will you make a statement to the committee now?

STATEMENT OF MR. PATRICK J. FARRELL, CHIEF COUNSEL INTERSTATE COMMERCE COMMISSION.

The CHAIRMAN. Will you qualify, Mr. Farrell, by stating the position you occupy?

Mr. FARRELL. I am chief counsel of the Interstate Commerce Commission. The CHAIRMAN. I may say, gentlemen, that Mr. Farrell is here by invitation of the chairman and not by any solicitation of the commission or himself.

Mr. FARRELL. It occurred to me, Mr. Chairman, that there was one thing that might be added to what has been said by Mr. Commissioner Aitchison. In the decision of the Supreme Court to which the commissioner referred, the case of Stafford v. Wallace, which has not yet been reported in such a way that the citation can be given

Mr. GRAHAM. Is that the stockyards case?

Mr. FARRELL. That is the stockyards case, yes. The Chief Justice made a very thorough review of the decisions relating to interstate commerce and when he reached what we perhaps would call the North Dakota case, the case of Lemke v. The Farmers' Grain Co., decided on February 27, 1922, he said:

"In that case it was held, on the authority of the Swift case, that the delivery and sale of wheat by farmers to local grain elevators in North Dakota, to be shipped to Minneapolis, when practically all the wheat purchased by such elevators was so shipped and the price was fixed by that in the Minneapolis market, less profit and freight, constituted a course of business and determined the interstate character of the transaction. Accordingly a State statute which sought to regulate the price and profits of such sales, and was found to interfere with the free flow of interstate commerce, was declared invalid as a violation of the commerce clause," indicating that an attempt by a State to fix the price before it reached the railroad at all, pending the time when it was being delivered to the elevators, although an interstate shipment, was violative of the commerce clause, since the grain when shipped was not all, but mostly, shipped in interstate commerce. I thought perhaps you would wish to have a reference to that decision.

Mr. SANDERS. What is your connection with the Interstate Commerce Commission?

Mr. FARRELL. Chief counsel.

Mr. SANDERS. You are an experienced lawyer?

Mr. FARRELL. I have been with the commission twenty-odd years.

Mr. SANDERS. You think the constitutional power upon which this bill is based is the commerce clause, do you not?

Mr. FARRELL. I am not certain what the result of an examination by the Supreme Court of the present bill, if it were enacted in its new form, would be. It is not my understanding that the welfare clause referred to has here

tofore been used to any great extent in making our statutes. Whether it will be used in the future, I do not know, and what the result will be, if it is, I am unable at this time, of course, to predict.

Mr. SANDERS. Based upon your general experience as a lawyer, and giving an opinion about this bill and the constitutional power upon which it is based, you would rely chiefly upon the commerce clause, would you not?

Mr. FARRELL. I would, if I could. If I could come within the commerce clause and accomplish the purpose which seems to me to be the thing planned, I would do so.

Mr. SANDERS. And if you did not think you were within the commerce clause you would be doubtful whether the bill would stand?

Mr. FARRELL, I would have doubts, because I am not aware that any such question has ever been decided by the Supreme Court.

Mr. SANDERS. As a matter of fact, the Supreme Court has held that the general welfare clause in the preamble of the Constitution is not a grant of power.

Mr. FARRELL. It nevertheless explained for what the proposed powers which follow were granted.

Mr. SANDERS. Then the draftsmen of this bill are not depending on the welfare clause

Mr. FARRELL. (Interposing) Yes, but

Mr. SANDERS. As to the matter of price.

Mr. FARRELL. Except that the Constitution must be read in toto and not in pieces, and the purpose in view is one of the things to be considered in determining the power granted.

Mr. SANDERS. It seems to me, in reading the bill, that those who drafted it, drafted it on the narrow margin of the commerce clause, and provided a way to fix the price so they could use the commerce clause.

Mr. FARRELL. It has been true, ever since I have known anything about the decisions of the Supreme Court, that the extent to which the powers conferred upon the Federal Government by the Constitution could be used would depend upon the changes in circumstances and conditions that take place from time to time, and, as far as the absolutely exclusive jurisdiction of States is concerned, that is confined to matters which do not affect interstate or foreign commerce; and, in determining whether certain matters do affect interstate or foreign commerce, the Congress of the United States has practically exclusive discretion. That is to say, the Supreme Court looks to the Congress to interpret the Constitution as to what it was intended the Federal Government should regulate and does not interfere with the interpretation of the Congress unless it is clear that the thing which Congress assumes or declares exists does not in fact exist.

Mr. SANDERS. That is because it is assumed by the court that each Member of Congress, bound by his oath to support the Constitution, carefully weighs the constitutionality of every law he votes for, and when the case comes to the court it comes with the sanction of a majority of Congress and the President, and, being a coordinate branch of the Government, they will not overturn the act unless the other branch is clearly wrong.

Mr. FARRELL. Yes.

Mr. DENISON. Is there any other attorney whom the chairman consulted, except Mr. Farrell, who is present?

The CHAIRMAN. So far as the chairman knows, the other attorney consulted was Mr. Esterline, who, before we had reached our conclusion on Saturday to hold a hearing, had already started to Chicago.

Mr. DENISON. Then, I would like to ask Mr. Farrell one or two questions. This bill, if I understand it correctly, Mr. Farrell, gives the Interstate Commerce Commission the right, in its discretion, to fix or determine the price of coal to be shipped in interstate commerce?

Mr. FARRELL. I think this bill does not give the Interstate Commerce Commission any authority to fix the price of coal.

Mr. DENISON. What authority does it give?

Mr. FARRELL. It simply gives the Interstate Commerce Commission the authority to determine what should be the rules applying to the distribution and transportation of coal, in view of the purpose of Congress to prevent extortion in the sale of coal for interstate-commerce purposes.

Mr. DENISON. That is stating it in one way, but as a lawyer let me ask you this: I will leave out the repetition and go to the meat of the thing in section

8209 22

*

"The Interstate Commerce Commission is authorized, and is hereby

5. It says: directed, * * in its discretion, to issue such order or orders for * * * embargoes * * * against any carrier or region, municipality, community, person, copartnership, or corporation, * * * so as best to meet the emergency, prevent extortion in prices charged for coal." If that means anything at all it means that the Interstate Commerce Commission must itself determine whether a price is an extortionate price. And if in its judgment it finds that it is extortionate it has the authority to issue an embargo against that person or company. That presupposes a consideration of the price to be charged, does it not?

Mr. FARRELL. It presupposes that the Interstate Commerce Commission will determine whether the purpose of the bill, which is to get coal to certain districts, will be interrupted by an extortionate price.

Mr. DENISON. It has to determine whether or not that is an extortionate price.

Mr. FARRELL. In its own mind it will probably arrive at a conclusion as to whether a particular price is an extortionate price.

Mr. DENISON. If the commission determines that a certain price for coal will be an extortionate price it will order an embargo against that shipper and prevent him from selling his coal.

Mr. FARROLL. It will prevent him from selling his coal by not allowing him to get cars, but it will not otherwise.

Mr. DENISON. It will prevent him selling that coal.

Mr. FARRELL. I think not; I think it will only be because of his inability to ship it in interstate commerce.

Mr. DENISON. Is not that the same thing?

Mr. FARRELL. I think not.

Mr. DENISON. If a man can not get cars in order to complete the sale, or deliver it, he can not sell it.

Mr. FARRELL. I think one thing would be more comprehensive than the other. The authority under the bill would not be entirely comprehensive, so far as selling coal is concerned.

Mr. DENISON. If the Interstate Commerce Commission decides that a price which a coal company or an individual charges for coal in interstate commerce is an extortionate price, it will prevent that company or individual from selling it.

Mr. FARRELL. I doubt if you could give the Interstate Commerce Commission any such authority under the Constitution. You would have to limit it to the

purposes for which the Federal Government operates.

Mr. DENISON. I am asking about the facts.

Mr. FARRELL. I am saying that in my judgment the fact is not that the bill gives the Interstate Commerce Commission absolute power to fix the price of coal to be sold

Mr. DENISON (interposing). It gives the commission power to prevent him from selling coal in interstate commerce.

Mr. FARRELL. To ship it.

Mr. DENISON. If they conclude that his price is extortionate?

Mr. FARRELL. They are not, by the provisions of the bill, given authority to prevent him from selling his coal at all, but they can embarrass him in selling it and having it shipped in interstate commerce by refusing to allow him cars if he does not fix a reasonable price.

Mr. DENISON. Do you not think they have the power to prevent him from selling his coal in interstate commerce if they have the power to withhold transportation for that purpose?

Mr. FARRELL. I understood you to ask me what the bill did.

Mr. DENISON. That is it. Does not the bill give the commission the power to deny the right of transportation from one State to another if the price is extortionate?

Mr. FARRELL. That is exactely what it does do.

Mr. DENISON. That is taking away from him the power to sell under those conditions?

Mr. FARRELL. The power to sell that particular class of coal and ship it. Mr. DENISON. The right of an individual to sell or dispose of his property, or his coal, is a property right?

Mr. FARRELL. Not absolute.

Mr. DENISON. Is it your judgment as a lawyer that the right to own property includes the right to dispose of it?

Mr. FARRELL. Qualified always. No man has the absolute power over his own property, even.

Mr. DENISON. I am not asking about the absolute power. I am asking if you do not think the right to sell or contract to sell private property is a property right, under the Constitution?

Mr. FARRELL. Certainly; but you must always have in mind that the general welfare overrides private welfare.

Mr. DENISON. Now, then. this bill will authorize the Interstate Commerce Commission, under the conditions named in the bill, to deprive the owner of coal of a certain part of his property.

Mr. FARRELL. I am not sure it was his property right, because that seems to carry the idea that it is his absolute property right. A man's property right as an individual is qualified by the public's right, so I can not answer your question affirmatively in the way you have asked it.

Mr. DENISON. Do you think Congress has the right to determine the right of a person to sell his property; is that a legislative or judicial question?

Mr. FARRELL. I do not think Congress is exercising that right in this bill. It is simply providing that if he does sell for shipment in interstate commerce that he shall not exact an exorbitant price. I do not think the Congress could prevent a man from selling unless it could show that if he did sell, the public, in a particular over which Congress had power, would be embarrassed or unduly interfered with.

Mr. DENISON. Do you think Congress has the exclusive right to determine that question, so that if he is not satisfied with the judgment of Congress, he has not any other relief?

Mr. FARRELL. Under this bill he could not ship that coal in interstate commerce unless he complies with what the Federal Government, through its agencies, determine to be a reasonable price, provided he could apply to a court to review what the administrative tribunals of the Government might say that to be.

Mr. DENISON. This bill does not give him any right of review in the courts? Mr. FARRELL. He would always have that right; the bill could not deprive him of a right of review in the courts to determine whether his constitutional rights had been taken away from him.

Mr. DENISON. If the Interstate Commerce Commission should, in its judgment, find that the price a man was going to charge for his coal was extortionate, and would stop him by issuing an embargo, what would be his remedy?

Mr. FARRELL. First, to determine whether Congress in conferring that authority upon the Interstate Commerce Commission, had exceeded its powers under the Constitution; second, to determine whether, even if the power under the Constitution had not been exceeded, the administrative tribunal which had exercised the power, had kept within the power.

Mr. DENISON. So the only remedy he would have would be to go into court and attack the constitutionality of the law.

Mr. FARRELL. And the lawfulness of the act of the administrative tribunal in complying with the law.

Mr. DENISON. You think that is givng a man his day in court?

Mr. FARRELL. I think so.

The CHAIRMAN. If Mr. Farrell will wait a few moments, we will hear Secretary Hoover at this time, according to our arrangement, and then other members of the committee may want to ask you some questions.

Mr. Secretary, the discussion is on the wisdom of passing this bill which is before the committee. H. R. 12472, to declare a national emergency to exist in the production, transportation, and distribution of coal and other fuel, etc., and the committee will be glad to hear from you in reference to that.

STATEMENT OF HON. HERBERT C. HOOVER, SECRETARY OF

COMMERCE.

Secretary HOOVER. Mr. Chairman, I will be glad to answer any questions from the committee.

The CHAIRMAN. You have been referred to by the chairman of the committee as being in favor of this legislation.

Secretary HOOVER. Yes. I am convinced there is a very great necessity in the country for some restraint on profiteering in coal and some further authority in the matter of distribution.