I certainly would not presume to say that 80,000,000 tons of coal could escape the requirements of this act. As a legal matter and as a practical matter there are very few consuming interests which would care to consolidate legally their interests with their interest in other lines of endeavor.

Senator DAVISs. If you were operating under these codes, and one of these concerns that controls a mine by owning its stock and is now serving them with coal for $1.75 a ton, and the code authorities would say that that coal must be sold at $2.25 a ton, what would happen?

Mr. HOSFORD. Any producer of coal has the right to decline to become subject to the code provided for in this bill. However, in the event of his refusal he must pay the tax provided for under subsection (b) of section 3, amounting to 1912 percent. So that if you had the case of one corporation, even though a subsidiary corporation, furnishing coal to a consuming corporation, no matter what the stock relationship might be, under the provisions of this bill as revised in the House, the subsidiary corporation must charge its parent corporation not less than the minimum price prescribed by the Commission; if it fails to do so, then the producer subsidiary must pay the prescribed tax at the rate of 1912 percent.

Senator DAVIS. But if the producer found that by raising the price of coal, as you pointed out, it. would show an earning, say, of half a million or a million dollars, he would have to declare a dividend back to the consuming company and would have to pay income tax, would he not?

Mr. HOSFORD. That is correct, sir.

Senator DAVIS. And he would have a choice between which was the best for him, whether he should pay income tax or whether he should pay the other tax?

Mr. HOSFORD. That is correct.

Senator AUSTIN. I want to ask a question. What is your interpretation, Mr. Hosford, of the words "relating to prices" at the end of the last insert on page 26? You will note that it is a new section, 4-A, and it winds up with a revised section 4. But these words might be regarded as words of limitation instead of descriptive words. The question is, In what sense were they used?

this question because section 4 covers many things besides prices. It covers discrimination; it covers unfair methods of competition; and I am wondering whether it was the intent of the authors of this amendment to limit this in its application to that subject, namely, prices, in section 4?

Mr. HOSFORD. Your question is directed to one of the provisions, sir, which no doubt should be altered so as to clarify it and accomplish the very object which you speak of. This language, the original section 4-A, in S. 1 was drafted by Mr. Dickinson of the Department of Justice. But in the House committee the language was changed to read as shown in the insert. Frankly, since that time I have discussed this matter with a representative of the Department of Justice and we both feel that there should be a further revision, because, as you have pointed out, the language limits the application of the section to a far greater extent than was ever intended.

Senator AUSTIN. All right.

Senator MINTON (presiding). Are there any more suggestions with reference to page 26? If not, we will pass to page 27.

Senator AUSTIN. May I ask one more question? Is there anything in the brief submitted to be touching on the law question which is involved in that section 4-A?

Mr. HOSFORD. I have not read the brief for some time, but I think Mr. Dickinson in his brief for the Government in the C'arter case dealt with this very question.

Senator MINTON (presiding). Page 28. There seem to be minor changes. On page 29 there seem to be rather substantial changes. Has anyone any question about that?

Mr. HOSFORD. There, again, changes in language and in the admintrative procedure were made by the House committee.

Senator AUSTIN. This, again, involves the question relating to captive coal, does it not?

Mr. HOSFORD. To which do you refer, Senator?

Senator AUSTIN. The second insert on page 29, reading that—

upon the sales price at the mine, or the market value at the mine if disposed of otherwise than by sale at the mine—

And so forth.

Mr. HOSFORD. That is correct, sir. The provision covers a case where there is not an outright sale, and it is necessary for the Commissioner of Internal Revenue to arrive at some determination of value for tax purposes.

Senator MINTON. There is a minor change on page 30. Is there any question about it? Why was the provision stricken out at the bottom of page 33, Mr. Hosford?

Mr. HOSFORD. That is covered at another point in the bill, and that is repetition.

Senator MINTON. Is there any question about the change on page 34?

Mr. HOSFORD. Page 32 and the following pages, Senator Austin, deal with the subject of appeals from orders of the Commission. Senator AUSTIN. And that covers the whole bill?

Mr. HOSFORD. Yes. It follows in a general way the language usual in acts of this character.

Senator MINTON. Is there any question about the amendment on page 35? (No response.) On page 36 there is an amendment providing that they shall submit their books and testify and that they are liable for anything in their testimony that might incriminate them.

Senator AUSTIN. This does not exempt them. This takes away the exemption. They shall not be exempt from prosecution.

Senator MINTON. If he claims his exemption under the Constitution, on the ground that his testimony might tend to incriminate himself, he may yet be compelled to testify, but he may not be prosecuted if he does incriminate himself.

Senator AUSTIN. It says:

except that such individual so testifying shall not be exempt from prosecution and punishment for perjury committed in so testifying.

Senator MINTON. It is for perjury only?

Mr. HOSFORD. That is the customary language, I believe, in similar

acts.

Senator AUSTIN. Yes; it is.

Senator MINTON. Are lines 15 to 21 stricken out, on page 37, because of the Walsh-Healey Act?

Mr. HOSFORD. On page 37, you say, Senator?

Senator MINTON. Yes.

Mr. HOSFORD. The impracticability of operation may have led the committee to strike it out.

Senator DAVIS. Were you in accord with that action of the committee, striking section 12 out on page 40?

Senator MINTON. We have not got past page 38.

Senator DAVIS. I thought you were through with that.

Senator MINTON. I notice in lines 20 to 23, on page 38, you have stricken out a provision with reference to parts of the act being held invalid. Is there some place else in the act where that is taken care of?

Mr. HOSFORD. Yes; there is the usual separability clause.

Senator MINTON. Now, we will get down to Senator Davis' question as to page 40, section 12.

Mr. HOSFORD. Section 12 was stricken out and a proviso was added to subsection (e), as I have it noted at the top of page 20, but the change was made there to January 6, 1937, as being the date, instead of June 16, 1933.

Senator DAVIS. I suppose the Commission is to determine what contracts are unlawful or lawful?

Mr. HOSFORD. I would say this, that it would be a function of the Commission to determine upon the facts in each case whether the contract did or did not comply with the requirements of the act. (Senator Neely reentered the room and resumed the chair.)

Senator NEELY. Are there any inquiries concerning the slight changes on page 41 or 42?

Senator DAVIS. Why did you strike out, on page 42, that part of the bill from line 4 to line 8?

Mr. HOSFORD. There are a number of governmental agencies which are charged with the duty of studying the problem of rehabilitation of mine workers, and the inclusion of that as one of the duties of the Commission might be thought to be merely a duplication of effort and would result in an added expense to the Government.

Senator DAVIS. I presume that part of the bill was in the original Guffey bill where they had a $300,000,000 bond issue, and it was for that particular purpose?

Mr. HOSFORD. That is correct, sir. It was included as a matter of history. I might call attention to the insert following line 15 which requires the Commission specifically to submit annual reports of its investigations to the Congress. The provision was not as strong as that in the original bill.

Senator DAVIS. What was it in the original bill?

Mr. HOSFORD. That they shall file a report on one of the enumerated studies. Now, the Commission is required to keep Congress fully advised as to any changes in the industry and any recommendations which it might have to make as to additional legislation.

Senator DAVIS. I should think it would be wise to have a report from time to time from them in addition to the annual report, if they see fit to report to Congress. What do you think about that, Mr. Hosford?

Mr. HOSFORD. I would assume, sir, that a proper commission would, upon any finding of the necessity for the making of a report, certainly have the power to present its recommendations and its report to Congress at any time. But the thought here was that it should be done at least annually.

Senator DAVIS. I agree with you. As far as the Executive is concerned, and the Cabinet officers, they can report from time to time as well as report_annually.

Mr. HOSFORD. I assume that this Commission would have similar authority to present reports more frequently than once a year.

Senator DAVIS. Do you think that ought to be inserted in the bill?

Mr. HOSFORD. I do not regard it as essential, Senator.

Senator MOORE. Pages 43, 44, and 45. (No response.) That appears to be all, then.

Senator DAVIS. Do you have any further suggestions that you care to make with reference to the bill, now, as amended?

Mr. HOSFORD. Responsive to a request the chairman of your committee made yesterday, at whatever time is deemed appropriate by the committee, and before your final consideration of the bill, I shall present certain further amendments which meet with the approval of labor in the industry and also with the approval of those producers who have been proponents of this legislation. Of course, I am at the service of the committee.

Senator DAVIS. Will the amendments that you are going to submit have the approval of the Commission?

Mr. HOSFORD. That is correct, sir.

Senator MOORE. When will you submit them?

Mr. HOSFORD. I am at your service, sir. They are quite lengthy. Senator MOORE. Are they ready now?

Senator MINTON. Let us not start on them today. I should be in favor of going over another day if they are lengthy. Do they pertain to labor?

Mr. HOSFORD. They pertain to a number of different provisions of the bill, Senator.

Senator DAVIS. And you have stated that these amendments have the approval of the Commission?

Mr. HOSFORD. They have the approval of the Commission, of the producers who favor the measure, and of labor. I am not seeking to bring in a number of amendments which are controversial in their nature.

(S. 1, containing the amendments suggested by the House Committee on Ways and Means, is here printed in full as follows:)

[S. 1, 75th Cong., 1st Sess.]

A BILL To regulate interstate commerce in bituminous coal, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That regulation of the sale and distribution in interstate commerce of bituminous coal is imperative for the protection of such commerce; that there exist practices and methods of distribution and marketing of such coal that waste the coal resources of the Nation and disorganize, burden, and obstruct interstate commerce in bituminous coal, with the result that regulation of the prices thereof and of unfair methods of competition therein is necessary to promote interstate commerce in bituminous coal and to remove burdens and obstructions therefrom.

NATIONAL BITUMINOUS COAL COMMISSION

SEC. 2. (a) There is hereby established in the Department of the Interior a National Bituminous Coal Commission (herein referred to as Commission), which shall be composed of seven members appointed by the President, by and with the advice and consent of the Senate, for a term of four years. The Commission shall annually designate its chairman, and shall have a seal which shall be judicially recognized. Any person appointed to fill a vacancy shall be appointed only for the unexpired term of his predecessor in office. The Commission shall have an office in the city of Washington, District of Columbia, and shall convene at such times and places as the majority of the Commission shall determine. Two members of the Commission shall have been experienced bituminous coal mine workers, two shall have had previous experience as producers, but none of the members shall have any financial interest, direct or indirect, in the mining, transportation, or sale of, or manufacture of equipment for coal (whether or not bituminous coal), oil, or gas, or in the generation, transmission, or sale of hydroelectric power, or in the manufacture of equipment for the use thereof, and shall not actively engage in any other business, vocation, or employment. [No more than two Commissioners shall be residents of any one of the districts hereinafter established.] Not more than one Commissioner shall be a resident of any one State, and not more than one Commissioner shall be a resident of any one of the districts hereinafter established, but a change in any of the boundaries of the districts, made by the Commission as hereinafter provided, shall not affect the tenure of office of any Commissioner then serving. Any Commissioner may be removed by the President for inefficiency, neglect of duty, or malfeasance in office. The Commission is authorized to appoint and fix the compensation and duties of a secretary and necessary professional, clerical, and other assistants. With the exception of the secretary, a clerk to each Commissioner, the attorneys, and such special agents, technical experts, and examiners as the Commission may require, all employees of the Commission shall be appointed [with due regard to the] and their compensation fixed in accordance with the provisions of the civil-service laws and the Classification Act of 1923, as amended. No [employee of the Commission] person appointed without regard to the provisions of the civil-service laws shall be related to any member of the Commission by marriage or within the third degree by blood. The Commission is authorized to accept and utilize voluntary and uncompensated services of any person or of any official of a State or political subdivision thereof. The members of the Commission shall each receive compensation at the rate of $10,000 per year and necessary traveling expenses. Such Commission shall have the power to make and promulgate all reasonable rules and regulations for carrying out the provisions of this Act and shall annually make full report of its activities to the Secretary of the Interior for transmission to Congress. A majority of the Commission shall constitute a quorum for the transaction of business, and a vacancy in the Commission shall not impair the right of the remaining members to exercise all the powers of the Commission. [Upon all matters within its jurisdiction coming before it for determination, it shall have the power and duty of hearing evidence and finding facts upon which its orders and action may be predicated, and its finding of fact supported by any] No order which is subject to judicial review under section 6, and no rule or regulation which has the force and effect of law, shall be made or prescribed by the Commission, unless it has given reasonable public notice of a hearing, and unless it has afforded to interested parties an opportunity to be heard, and unless it has made findings of fact. Such findings, if supported by substantial evidence shall be conclusive upon review thereof by any court of the United States. The Commission may establish divisions deemed necessary for the proper dispatch of its business, and may refer any matter to an individual Commissioner, who shall exercise all the powers and authority of the Commission in the premises: Provided, That any person in interest may, upon written petition, secure a review by the Commission of the report, [finding], findings, or order of such Commissioner.

(b) (1) There is hereby established an office in the Department of the Interior to be known as the office of the consumers' counsel of the National Bituminous Coal Commission. The office shall be in charge of a counsel to be appointed by the President, by and with the advice and consent of the Senate. The counsel shall have no financial interest, direct or indirect, in the mining,