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Mr. BARKLEY. I do not know that there is any way to remedy that situation, but would not that probably result in a discrimination against the home consumers of coal, unless the States take some action which will enable some agency of the State to fix the same kind of regulations, applicable to home consumption, as we are trying to fix here for interstate shipments?

Mr. AITCHISON. Well, if the States are desirous of preventing that discrimination why should they not take action similar to that which Congress is now considering?

Mr. BARKLEY. It might be necessary to call the legislatures into extraordinary session in order to do that.

Mr. AITCHISON. That has been done in some States.

Mr. BARKLEY. Section 5 provides that “the Interstate Commerce Commission is authorized, and is hereby directed, to receive and consider the said recommendations of the Federal Fuel Distributer and in its discretion to issue such order or orders for priorities in car service, embargoes," etc. interpret the words “in its discretion ” to apply to the manner in which these orders are to be issued or that there shall be orders issued ?

Mr. AITCHISON. I think the intent of the section—whether it is happily worded or not—was to create a form of orders which the commission should consider and which should be sufficient to justify us in making a car service direction solely upon the matter of distribution, as recommended by the Fuel Distributer, or prices recommended by him.

Mr. BARKLEY. While it has created a little confusion in my mind, the intent of that language is that after this recommendation has been made to the commission, then it is to be in the discretion of the commission whether it will act at all?

Mr. AITCHISON. That is the case.
Mr. BARKLEY. And if so, how?
Mr. AITCHISON. Yes, sir.

Mr. HUDDLESTON. Under the transportation act, as now in effect, the Interstate Commerce Commission has power to deal with car distribution for intrastate commerce as well as for interstate commerce?

Mr. AITCHISON. That question has never been passed upon. Happily, we have been able to avoid any issue with the States on that.

Mr. HUDDLESTON. Let us assume that there is a certain limited car supply, and that the placing of these cars in intrastate commerce will effect the supply for interstate commerce: Necessarily, it follows that the commission would have the right to protect the supply for interstate commerce, although it meant the shutting off of the supply for intrastate commerce?

Mr. AITCHISON. I do not know that it would necessarily mean the shutting off of the supply, but it would mean that they would be put on the same basis. There would be no discrimination against intrastate commerce. I think you are right in that regard, but it is a question that has not yet been passed upon.

Mr. HUDDLESTON. Do you not think that Congress under the commerce clause of the Constitution has complete control of the instrumentalities of commerce?

Mr. AITCHISON. Yes, sir.

Mr. HUDDLESTON. Which includes cars that may be used in intrastate commerce?

Mr. AITCHISON. Yes, sir. I think, also, that there can not be two rules of distribution, one for interstate commerce and the other for intrastate commerce.

Mr. HUDDLESTON. Under that power, do you not think that this bill would authorize the commission, if it should be so minded, to deal with the subject of placing cars for intrastate coal?

Mr. AITCHISON. In speaking for the presidential committee, I might say that we discussed that question, and there is no intent by virtue of any language, or otherwise, to either extend or diminish the customary power of the Interstate Commerce Commission with respect to car service, except to include this special form of emergency control. In the case you mention, if we have that jurisdiction, it is covered by the language of the bill, but that question has never passed upon by the courts, and we are not seeking here by indirection to acquire any jurisdiction we do not have.

Mr. HUDDLESTON. Is it your idea that the commission will have such power?

Mr. AITCHISON. Speaking simply for myself, I think that Congress, in pursuance of the delegation of powers, has given the commission authority to prescribe just and reasonable car rules to meet the emergency, and to the

extent that State rules may differ from them, or tend to defeat the application of the interstate rules, they must stand aside.

Mr. HUDDLESTON. I have in mind that where coal producers are permitted to charge for intrastate coal a higher price than they are allowed to obtain for interstate coal, they will discriminate against interstate coal, and the result, or the effect of this bill, would be to greatly diminish by diversion the supply of coal for interstate purposes, so that it seems to me that in order to deal with the subject intelligently we are compelled to deal with the whole situation.

Mr. AITCHISON. I believe we can prevent the diversion from interstate commerce of an undue proportion of the cars.

The CHAIRMAN. Mr. Aitchison, you have about six minutes remaining. Who would like to question Mr. Aitchison further ?

Mr. NEWTON. I simply want to say that it was my idea that the bill was designed to cover just that situation.

Mr. RAYBURN. You have stated that the purpose in asking for the power conferred by this bill was to fix the price of the coal at the mine only.

Mr. AITCHISON. I have since qualified that.
Mr. RAYBURN. In what way?

Mr. AITCHISON. I think that it covers the case where the coal is offered for interstate movement and up to the point where it becomes mingled with the general corpus of property in the State.

Mr. RAYBURN. Where would that be? Illustrate that for me.

Mr. AITCHISON. I think I can give you a good illustration : Coal moving from Ohio to Toledo naturally would be intrastate coal, provided at the time it starts from the mine in Ohio its destination at the lake front is in the intent of the consignor there fixed, but if that coal is simply pausing at Toledo, and is designed for the Northwest, for transshipment by water, it is interstate coal, although the movement is wholly within the State, and the Supreme Court has so held.

Mr. RAYBURN. What effect would that have?

Mr. AITCHISON. I think that the bill would clearly cover the case of the production of coal by an Ohio mine for transshipment from a Lake Erie port in Ohio to a point in some other State, but it would not cover production at the same mine destined to the same port where the intent was that the coal should be consumed locally. That is, perhaps, as extreme an illustration as I can give.

Mr. RAYBURN. Can you tell me what was the price of coal on an average at the mine six months ago?

Mr. ArTCHISON. Not offhand.

Mr. Hoch. So far as the constitutional power is concerned is this bill based solely upon the theory that in regulating interstate commerce Congress has the power to determine the conditions under which a commodity may enter interstate commerce?

Mr. AITCHISON. That undoubtedly entered into consideration, but the theory of the bill is broader. It is based upon the welfare clause, upon the post-road section, and upon the Army and Navy clause.

Mr. Hoch. Do you think that, as a matter of fact, under the constitutional power the question of emergency enters into it?

Mr. AITCHISON. Yes, sir; I do, and especially under the welfare clause.
Mr. Hoch. Which welfare clause in the Constitution?

Mr. AITCHISON. The preamble, to take care of the general welfare, which is the main purpose for which the Government was created. If the sovereign is impotent in time of emergency to prevent its own dissolution, its whole purpose fails,

Mr. Hoch. Do you think that the phrase “ general welfare” in the preamble is a grant of power?

Jr. AITCHISON. I think that it clearly states the right of the sovereignty, and that it constitutes a grant of power. I make no pretense of being a constitutional lawyer, and that may be said to be a layman's opinion.

Mr. Hoch. Under your present view, do you think there is any limitation upon the power of Congress to determine that an emergency does exist in reference to the general welfare, as contemplated by the preamble of the Constitution?

Mr. AITCHISON. The Supreme Court of the United States, in the recent case of Stafford 1. Wallace, a packing-house case, states that

“Whatever amounts to more or less constant practice which threatens to obstruct or unduly to burden the freedom of interstate commerce is within the regulatory power of Congress under the commerce clause, and it is primarily for Congress to consider and decide the fact of the danger and meet it."

I think that the same rule applies here.
Mr. GRAHAM. What is that citation ?

Mr.' AITCHISON. Stafford v. Wallace, decided May 1, 1912, Advance Sheets, page 476. I think the same principle applies in the case of the welfare clause,

Mr. Hoch. When you were answering the question a few moments ago with reference to fixing the price, whether at the mine, or in the hands of brokers or anyone else, to be shipped in interstate commerce, you had in mind there solely th question of the power of the Interstate Commerce Commission under this bill?

Mr. AITCHISON. Yes, sir; because this is virtually an amendment to the interstate commerce act, and the conditions prescribed in it, of course, fall within the limitations of section 1 of the interstate commerce act, in stating the proviso, with which I am certain Mr. Rayburn is familiar.

Mr. Hoch. If this bill has been based upon the other powers, under the general welfare clause, then you do not need to limit yourself solely to interstate shipments, and the question of whether it is coal intended for interstate shipment or intrastate shipment would not be considered?

Mr. AITCHISON. That is true, provided Congress wishes to do it, but, as I said, the intent of the committee framing the bill which has been submitted to you. was primarily for the purpose of prescribing a policy, at least, providing for such a degree of decentralization as was possible.

Mr. Hoch. I think we are touching upon the fundamentals of this bill, so far as the constitutional power is concerned, and if the welfare clause of the Constitution gives ('ongress the power to do these things then it gives it the power to control the coal, whether it be in interstate commerce or in intrastate commerce. That is, it also gives it the power to fix the price locally, regardless of any shipment at all.

Mr. AITCHISON. To continue the decision

“This court will certainly not substitute its judgment for that of Congress in such a matter, unless the relation of the subject to interstate commerce and its effect upon it are clearly nonexistent."

Mr. Hoch. I simply wanted to get your ideas upon the question of what theory this bill is based upon, so far as the Constitution is concerned.

Mr. AITCHISON. It was not with the committee in framing the bill originally a question of how far we could go constitutionally, but our attempt was to utilize our existing machinery which localizes the distribution in the States and to place upon them responsibilities where the power of Congress was lacking.

The CHAIRMAN. You are in favor of the passage of this legislation ?
Mr. AITCHISON. Yes, sir.

Mr. HUDDLESTON. Do you believe that the general welfare provision of the Constitution is such a grant of power that this power could be founded upon it alone?

Mr. AITCHISON. Yes, sir; I think if it were founded on it alone, it would stand, bearing in mind the state of facts recited in the first section of the bill.


Mr. WALLACE. Mr. Chairman, my attention was called to this bill yesterday. and I have given it some study. As I understand it, the bill takes cognizance of the fact that nearly all the coal bins in the country are empty; that the bituminous coal miners have started to work, but that there is a danger, judying by past experience, that everyone will try to fill his coal bin completely immediately; that that will cause competition in buying, or, in fact, a buyers' panic, and that there will be a runaway market in which the prices will go soaring; and that in order to aver such a situation, as I understand it, there are provisions in this bill that there shall be a coal distributor controlling it. As I understand it, it is provided that the industries shall get what coal they need immediately to keep them going, but that no one shall be allowed to get all the coal he desires, or so much coal as to make it impossible for other people to get coal, and so, in that way, it is sought to avert a buyers' panic. We are in favor of that bill, or I would say, we are in favor of that much of the bill. We think it would have a tendency to eliminate the parasite from the industry that gen

erally appears in such circumstances as the present—that is to say, the wash buyer, if you understand what I mean by that term. I mean the man who never does anything toward producing a ton of coal; the man who does not consume any coal; the man who fills no purpose, but who in times of panic will buy a number of cars of coal, take a profit from it, and possibly pass it on to others who are just such buyers as himself.

I believe the bill could be made more explicit if it would outlaw just such purchasers as that. As I have said, inasmuch as the buying public, or the coal consumers, would be assured that the Government would see that they got coal as they needed it, and, recognizing that the bituminous coal industry can not only produce the peak demand, but can produce 25 per cent more than the peak demand. I believe that that part of the bill will be sufficient, also, to proTect the public. Į want to say this, that I am not in favor of any fixation of prices at the mines or anywhere else. The reason I am opposed to that is based upon past experience. The experience is that the Government fixes a maximum price, and that maximum price immediately becomes the minimum price. Furthermore, the Government can not, by its act, confiscate the property of the citizen, and, hence, the mine that is not economical, or the mine that is inefficiently managed, or the high-cost mine, becomes the standard, and the cost of coal is raised instead of being reduced at any attempt at price fixation that the Government can make and keep within its powers granted by the Constitution. Now, I believe that by protecting the consumers from this condition, or by averting fear, which is panic, and by making them recognize that the Govern. ment will see to it that they will get coal as they need it and when they need it, and the recognition of the fact that the industry is capable of producing plenty of coal, you will be able to prevent a runaway market. It will result in distributing the coal on hand as it is produced evenly over the country, and it will be beneficial. I want to say in connection with this that my fear of price fixation is based upon past experience.

If the gentlemen here will let their memory go back to the two industries that have been most disturbed in the last few years, you will find that they were industries that ran constantly prior to the war. There may have been local strikes here and there, but there was nothing very serious. There was never a railroad strike in the 30 years prior to the war of such consequence that it endangered the public. There was never a coal strike prior to the World War of such consequence that it endangered the public welfare generally, but since or during the war, recognizing those two industries as essential industries, there was Government price fixing in connection with them. There was Government price fixing and Government wage fixing at that time, and from that time, there has been a tendency to demand Government interference, or a tendency on the part of the Government to interfere. Instead of preventing disturbance in those industries, they have caused a disturbance in the industries. The men in looking to the Government for their wages will hold the Government responsible for the disagreeable circumstances that arise in their everyday life because of the wage they lack, or because of the wage that they think they should have, but which they have not got. The blame is put on the Government, and I doubt whether the Government itself can stand under those circumstances. I repeat that the fact is that when the owners of the industry and their men were let go untrammeled, each recognizing the other's rights, they had no such disturbances, and the sooner we get back to that condition the sooner we will have eliminated the periodical disturbances. I think that if we permit the Government now to intercede to the extent of fixing wages and fixing prices we will only have another just such disturbance in the immediate future or in the near future. That condition will continue.

I do not know that I have anything more to say except that I believe that this use of the Government power will have that result. I can not say much about constitutional power or whether this power is granted to the Government, or not. I am not a constitutional lawyer, but I am somewhat of an observer, and my observation is that if the necessity arises, the power is granted, and there is not much question of whether the Government has that power, or not. If that power is used to distribute the coal so as to insure sufficient coal for the needs of the people, and to permit no one to grab it all, and thus cause a panic through competition in buying, the coal industry would be benefited. That is true, because, otherwise, a few people would fill their bins, or they would try to do it, and others would have to go without it. Then, the business of those that would go without would be lost to us forever. No one would be injured by that use of the power of the Government, and I do not believe

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any question would be raised as to whether, or not, the Government has that right. The experience of the past indicates that some order in the distribution of coal is necessary.

Mr. BARKLEY. You have spoken about the fact that when the Government has fixed a maximum price it has become the minimum price. Is there any way to be absolutely sure of that? In other words, if there had been no maximum price fixed by the Government, is it certain that the price which would have been charged would not have been higher than that which the Government actually fixed?

Mr. WALLACE. If there was an absolute scarcity of coal, that might be truethat is, if the production of coal did not quite come up to the demand for the current demands for coal, then I believe there would be that danger, but we have here the assertion that the coal industry has 300,000 more miners than they need in the industry. Now, with order in the distribution of coal, and with the mines always producing a little more than is called for, I do not believe there will be any danger of the price being raised above what the Government would fix as a minimum price. Remember that the Government would have to consider the high cost of mining as its standard.

Mr. BARKLEY. I understand that recently, in an effort to get a voluntary agreement as to price, Mr. Hoover, in conferring with various coal operators, fixed on a maximum price for the whole country, but that price varied some, dependent upon the cost of production. Do you know anything about that?

Mr. WALLACE. If you were to place a flexible price upon the coal, dependent upon the cost of production, you would eliminate the incentive for efficiency.

Mr. BARKLEY. I understand that.
Mr. WALLACE. You would have a cost-plus system,

Mr. BARKLEY. I am not urging that, of course, but, under this law, if the Government is given that power, could not the price be adjusted according to the cost so that the higher cost would not necessarily be the standard for the whole country?

Mr. WALLACE. I believe there would be more difficulties. There are other questions that enter into the bituminous coal industry that you gentlemen possibly have had no opportunity to know about. For instance, I worked in a coal mine. I dug coal in the little town of Quincy. There were three veins of coal there. One vein is harder to dig than another, but the people wanted that coal. It is a better quality of coal, and does not burn up the stoves. The women paid higher prices for that coal. The cost of mining it was a little higher. Now, that is the case all over the country. There are so many variations that you might say there are as many variations as there are coal mines. Some have a higher cost than others. Some of them are dependent upon proximity to markets. If it were not for the freight rates that equalize them, they could not operate them.

Mr. BARKLEY. I have seen it stated in the papers, and I have heard from various sources, that there are many thousands more miners in this country than the mines actually need under normal conditions.

Mr. WALLACE. Yes, sir.

Mr. BARKLEY. Assuming that is true, is it your belief that the surplus labor will be immediately put to work in the production of coal, that being necessary by reason of the idleness of the mines during the last two months?

Mr. WALLACE. Yes, sir. There are surplus men that can accommodate the surplus mines.

Mr. BARKLEY. Under those conditions, how long do you think it will take for the supply to catch up with what it would have been if there had been no cessation of work?

Mr. WALLACE. Two months or less than two months. In my opinion, immediately upon knowledge that the Government is going to see that each industry and each domestic consumer and the needs of the Northwest will be taken care of, I believe things will become normal.

Mr. BARKLEY. Do you think that prolonging the anthracite strike will have any effect upon that?

Mr. WALLACE. It will have some effect, but I think the anthracite strike will be settled. Of course, I do not know whether it can be or will be, but of course there are some anthracite markets that will be supplied with bituminous coal. That will require more bituminous coal.

Mr. BARKLEY. Will the continuance of the railroad strike affect it?

Mr. WALLACE. Naturally, if they can not haul the coal it will prevent the men from working,

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