I have no idea in my own mind but what they felt that somebody ought to be prosecuted for the high prices of coal.

Another attempt was made to secure an indictment, not only against these same people but against others who had acquiesced in a way for a few days until this indictment was found.

Senator TOWNSEND. When was that-the time you are speaking about? Was that before the fixing of the price here?

Mr. VINSON. Yes, sir.

Senator TOWNSEND. You have been explaining what this standardization was. The record will show. I was not in the room when you made that statement.

Mr. VINSON. Yes, sir. This was in February, or the last day of January of the present year.

The CHAIRMAN. When was this fixing of the prices which operated on the members of the jury?

Mr. VINSON. I think either the last day of January or the 1st day of February of this year. I think it was about that time, and the indictment followed shortly after that.

Senator POMERENE. That was on the $3 rate?

Mr. VINSON. Yes, sir. The producers of other grades of coal, such as by-product coal and splint coal and gas coal, some of them reduced their prices, not so much, though, nor did they get down to $3. I am speaking now of the spot price, which I will explain to you in just a minute. Another investigation was had before another Federal grand jury, in which the grand jury was in session a good long while-10 days or 2 weeks and that grand jury came to the conclusion that what, was done by these coal operators in West Virginia was justifiable and ought to have been done; consequently they refused to find any indictment.

The effect of the indictment, and especially the trial and prosecution upon the leading operators in this smokeless section, simply made it impossible for other operators to get together and even discuss the question of prices at all. They absolutely refused, because, of course, they did not want to be indicted, and they felt that they had been advised-and they had an idea that the Department of Justice also felt-that if two coal operators got together and discussed their prices and came to an agreement about what they should be it would subject them to indictment and prosecution.

Senator POMERENE. May I ask you a question right there?

Mr. VINSON. Yes, sir; I shall be very glad to have you ask me any question that you may think of.

Senator POMERENE. You say this grand jury came to the conclusion that what the operators did was just and reasonable and right?

Mr. VINSON. Yes, sir.

Senator POMERENE. And you made that same statement, with regard to the jury. I assume you referred to the New York case? Mr. VINSON. Yes, sir.

Senator POMERENE. How do you know what the reason was that prompted this grand jury in not returning an indictment?

Mr. VINSON. The instructions of the court in both cases. The court told them what was reasonable. In other words, the court advised the jury that tried the case and the grand jury that investigated the other case again

Senator POMERENE. Well, as lawyers, we do not know what the evidence was that was presented to the grand jury at all. It is impossible to know what the promptings were that led to that conclusion.

Mr. VINSON. I will state all the principal facts almost in a sentence in just a minute.

The CHAIRMAN. Senator Pomerene, may I suggest that we allow the witness to proceed with his statement and then we will ask him such questions afterwards as we may desire?

Mr. VINSON. It does not interfere with my statement at all, Mr. Chairman.

The CHAIRMAN. Gov. Goodrich expressed his regret that he had been unable to present his entire statement, and he came in later, at Senator La Follette's request, and put in his statement for the record. I think we had better have the witness conclude his statement and then ask him questions afterwards.

Mr. VINSON. If I may, I should like to answer the Senator's question now. The court instructed the grand jury and also the New York jury, to the effect that this combination or agreement reached by the operators, if it were a reasonable one under all the circumstances, was not a violation of law, and the jury found it was a reasonable combination in both cases.

Now, to go along with my statement. The activities of the Department of Justice in prosecuting the cases where the indictments had been found simply frightened other operators away so they would not discuss prices at all amongst themselves. The consequence was it went back to the old condition again prior to the time that this $3 basis was reached; that is, the operators simply sold coal at the price the purchaser bid for it. The operators had nothing whatever to do with the fixing of these high prices. Men came and made offers, telegraphed offers, and wrote offers, that they would pay so much a ton for so much coal, and that is the way the high prices came about, as far as the operator was concerned.

Now, I should like at this particular time, if I may, to anticipate a little bit. That condition existed, and these trials came on and were in progress in New York, and the prices were still soaring-$4, $5, $6, and $7 a ton-individuals, however, making the deals and accepting the offers that were made. The operators throughout the country as a whole, including West Virginia and Kentucky, were requested to meet here in conference. They were not advised as to what the purpose of the meeting was. They did meet here some three or four weeks ago-about the 18th of June, I believe, although I am not quite sure that that was the date, but about that time—in response to this demand that they meet here.

There

The telegrams, I think. were issued by Mr. Peabody, the chairman of the coal committee of the Council of National Defense. was a very large and a very representative gathering of coal men from all over the country. They were told, after they assembled, by Secretary Lane and by Gov. Fort, of the Trade Commission, and by Chairman Peabody, of the coal committee, and one or two representatives that is, I mean, when I say representatives, people who are associated with the Government-that something must be done; that the operators themselves must get together then and there and standardize these prices and reduce them. Of course the other coal men being in New York on trial, who were doing precisely the same

thing, made some of the operators hesitate. But there was present on the rostrum, along with these gentlemen, a Mr. Lewis, connected with the Department of Justice. The statement was made by some of the people there, namely, Gov. Fort and Secretary Lane, and probably Mr. Peabody-although I am not sure that if these prices were fixed by the operators and fixed at a reasonable maximum price. that we should have nothing to fear from any prosecutions on the part of the Department of Justice, and immediately a resolution was passed unanimously fixing, or appointing, rather, a committee of seven from each State to confer with these gentlemen and fix the price of coal, pledging the operators to abide by it, whatever might be agreed upon. That was passed unanimously, as I say. That was in the afternoon, and an adjournment was taken until the next morning; and the next morning word came in that the Attorney General had said that any such arrangement was a violation of law and would subject us, or anybody who participated in it, to prosecutions and fines or imprisonment.

Senator POMERENE. Was there a written opinion on that subject? Mr. VINSON. I did not see any, but that was the report that was brought in. Then, in order to get something done, the operators passed another resolution unanimously requesting Secretary Lane and Gov. Fort and Chairman Peabody and his committee-I understand there are some 12 or 15 members of that committee, I know there are quite a number of them-to themselves fix a tentative price—that is, a tentative maximum price—until the Trade Commission had the opportunity and the time to find out and determine what the cost of producing coal was; and then, after that cost had been determined in that investigation, that cost, then, should be the basis of the price to be arranged thereafter. The same committee was instructed by the operators to take the matter up when the cost question was settled and reported on by the Trade Commission and acquiesced in, the price to be fixed by those same people.

Those gentlemen then got together, and they fixed the pricesI mean Secretary Lane, Mr. Peabody and his committee, and Gov. Fort, and announced that the price for coal, run of mine, in West Virginia-I am not sure whether it covered southern Kentucky or not, but certainly eastern Kentucky-eastern Kentucky, and Pennsylvania-should be $3 a ton, and lump,and nut should be $3.50, those prices to continue until the report of the Trade Commission, and then they were to be reduced, according to what the Trade Commission found was the cost of producing the coal. I am here to say that that agreement, or, rather, the fixing of that price, which was acquiesced in by the operators present, has been lived up to as far as eastern Kentucky and West Virginia are concerned, literally, with the possible exception of one or two, about which Gov. Goodrich spoke this morning.

Owing to the fact that we have something over a thousand mines in the two districts, and people connected with them, it would be well nigh impossible, unless we had a very fast organization, to compel every man of that thousand to keep a moral agreement, which that was.

Secretary Lane, Gov. Fort, and Mr. Peabody have been criticized for taking that action. Gov. Goodrich said this morning-not in

criticism, as I understand it but he said that, instead of reducing the price of coal in Indiana it had had the opposite effect; that coal that had been selling around $2 up to $2.75 had gone up to meet this price. I know nothing about mining conditions in Indiana except as I have read about them.

Senator TOWNSEND. Where do you operate?

Mr. VINSON. In West Virginia and northeastern Kentucky, and I have no doubt that what he said is actually an unquestioned fact, as investigation has found it to be so. They are producing about 18,000,000 tons of coal in Indiana. In Pennsylvania, northeastern Kentucky, and West Virginia they are producing, in round numbers, at the rate of 250,000,000 tons of coal. That coal was selling at the time this agreement was entered into, and immediately before, on the basis of $5.50 and $6 a ton. I think that those gentlemen should be commended for saving to the public $3 a ton at the least on 250,000,000 tons of coal, even if to do so the price had to be raised 50 or 75 cents a ton on 18,000,000 tons of coal.

So, Mr. Chairman, I think the criticism against these gentlemen for doing what they did is not well founded; that is, judging by results and judging by the conditions that existed at the time.

I stated before the other Senators came in that the fundamental cause of the coal shortage, and the consequent high price of coal, was due to lack of railroad facilities. I think every man who knows anything about the coal business, or is connected with it, will state frankly that that is the primary cause of it all. Now, it must be understood that not a pound of coal can be mined and sent away unless there is a railroad car at the tipple to take that coal from the mine as it comes out-not a pound. So the mining of coal is just as dependent upon the railroad cars to put it in as it is upon the miner to dig it. The limit-and I may say the only limit of production in this country to-day in the coal business is the limit that is placed on the industry by the carriers. If that cause is removed, the evil will stop. Of course, it is a question how to remove the evil.

Senator POINDEXTER. What have you to say in regard to the apparent results in Indiana that Gov. Goodrich spoke of this morning, namely, that after sufficient cars were furnished the price of coal did not go down?

Mr. VINSON. I think that was perfectly natural, Senator, and for this reason: This agreement was entered into in June, about 30 days ago. They are only mining there, as I understood the governor, about 18,000,000 tons; that would be 1,500,000 tons that have been mined since this arrangement went into effect, and it is so small that unquestionably the men felt that they could get the price, and why not get it. There is no doubt that they felt that way about it. They felt that the Government-or rather Government representatives, presumably speaking with authority-had said that a proper maximum price in Indiana was so much, and they felt justified under the circumstances in continuing it notwithstanding they had an increased car supply. But that is so small a proportion of the coal that is produced all over the country that it is absolutely infinitesimal when it comes to the question of price.

Senator POINDEXTER. I do not want to interrupt the thread of your argument

The CHAIRMAN. I will say, Senator Poindexter, that the understanding was that the witness should conclude his statement and then questions should be asked afterwards.

Mr. Vinson, are you through with your statement?

Mr. VINSON. Not quite. I would like to say a little more upon the railroad question if I may be permitted. I think it will throw a lot of light on the subject that you gentlemen have under investigation if I simply read to you a little memorandum about coal cars.

The four great coal-carrying railroads in the country, the Baltimore & Ohio, Chesapeake & Ohio, Norfolk & Western, and Pennsylvania, have, all told, 302,367 cars; that is, the four of them combined. There was, in November-and the same condition prevails up to this time, substantially, although it is a little better, ranging from 8 to 10 per cent better the following situation: The Baltimore & Ohio, with 56,625 cars, had only 70 per cent of cars furnished to its mines; the Chesapeake & Ohio, having 37,502 cars, had only 54 per cent; the Norfolk & Western, with 36,000 cars, had only 51 per cent; the Pennsylvania Railroad, with 171,770 cars, had at that time 82 per cent of coal cars that were available to supply the mines on their own line of railway; that is, all told, these four coal carriers were using coal cars to the extent of 82,886 cars in November, and the same condition practically prevails to-day. You naturally want to know where those cars were and what is being done with them. If we take the New England railroads, the Boston & Maine Railroad had 135 per cent of coal cars on its line; that is, of what it owned. It owned 7,600 coal cars, and yet it was using on its own line 17.824 cars. The New York, New Haven & Hartford owned 7,865 of its own cars and yet it was using on its own line at that time 24,685 cars. The Erie Railroad had 24,309 of its own cars-I am speaking of coal cars now-and yet it was using 27,066. The Philadelphia & Reading road owned 330,014, and yet it had on its line 372,915 that it was using, belonging to other railroads.

So, the combined four railroads-the Boston & Maine, New York, New Haven & Hartford, Erie, and Philadelphia & Reading-all the coal cars they had were 369,800, and yet they had other cars belonging to other railroads amounting to 72,698.

Now, if you realize that 82,000 cars were deducted from the car supply of those four coal-carrying railroads, then you might find where, to some extent at least and to a very large extent, these cars had gone and what disposition was made of them.

Now, simply to follow that up. Take the Michigan Central. It owned 4,000 cars and used 20,000 cars on its own line.

Senator POMERENE. Twenty thousand coal cars?

Mr. VINSON. Yes, sir. The Pierre Marquette owned only 3,255 cars and used 10,750. The Wabash Railroad had 5,387 and used 11,130. The Chicago & North Western had only 12,300 cars and used 38,400. The St. Louis & San Francisco Co. owned 10,000 cars and it had 14,000 cars.

Senator POINDEXTER. I did not get the figures of the Reading.. Mr. VINSON. The Reading owns 330,014 coal cars.

Senator POINDEXTER. 330,014?

Mr. VINSON. Yes, sir.

Senator POINDEXTER. That is more than the Pennsylvania Railroad Co.?