from various manufacturers-all kinds of iron and steel material. They are not big manufacturers, all of them that make steel and all kinds of iron products. The man who manufactures those iron products is paying to-day double the amount for his coal that he paid a year ago. He is paying to-day three times nearly the amount, or two and one-half times the amount, for his pig iron that he paid a year ago. He is paying more for his labor than he paid a year ago, and everything that goes into the manufacture of what he is selling to the railroads has nearly doubled within the last year. Now, how is he going to sell at the price of 1916 unless you go back and regulate the price of all that would be sold to him? I do not know of any way.

The CHAIRMAN. That seems logical.

Senator CUMMINS. It is logical, except that it is not complete. Senator KELLOGG. Not complete?

Senator CUMMINS. In order to fix the price we do not have to fix the price for every person who may be engaged in the production or the manufacture of a particular article. It is just as we have seen with regard to the food bill now in the Senate. When you fix the price to some intermediary in the transaction, you fix the price for the producer as well; I mean, if the manufacturer or the intermediary can not sell above a given price he would not be the original purchaser above a given price.

Senator KELLOGG. He would have to.

Senator CUMMINS. But he would not.

Senator KELLOGG. Then he will have to shut up his business.

Senator CUMMINS. Running back, then, to its logical conclusion, it would mean that everybody would quit, the producer as well. I do not think that would be the result.

Senator KELLOGG. You know that there are thousands of little manufacturers in this country who are selling to the railroads. They buy more material from these little manufacturers than they buy from the big steel companies.

Senator CUMMINS. I think from any steel company, that is true. Senator KELLOGG. Then you would force them out of business. They can only buy from the men who mine their own ore, and mine their own coal, and manufacture their own product. The little fellow would not be in it for a minute.

Seantor CUMMINS. My judgment or my view of the question is that the railway companies, in the purchase of steel, buy, as you know, a very large proportion of the steel products of the United States. I do not mean as much as half, or anything of that kind, but a very large proportion. If this bill were the law, it would, in my opinion, at once fix the price of pig iron, even though the railroads did not buy pig iron at all.

Senator KELLOGG. I do not know about that.

Senator CUMMINS. They would have to buy or manufacture necessarily, of course.

Senator KELLOGG. The big manufacturers, receiving pig iron today, under contracts of 1916, are still under the contracts of 1916, $18 a ton, and the general public is paying all the way from $38 to $53 a ton. I do not know how the small effect of iron products to be sold to the railroad companies can force the price of coal down 100 per

cent in the price of pig iron, when certain manufacturers under contract to-day are buying for $18 and the others are paying $53.

Senator CUMMINS. It is simply because they can not sell their pig iron for any such price, and would have to bring it down.

The CHAIRMAN. Let me suggest that we go on now and hear what Senator Pomerene has to say regarding his bill, and then we will take up the general discussion as to what course the committee will take in this matter.

Senator KELLOGG. I suggest that the bill, if passed, should provide or be based on the price for 1917. I think that would cover everything.

The CHAIRMAN. I will state that I am not concluded in my views as to either of these bills. All I suggest is that it will be essential for us to do something on this subject, and I would like to have the views of the committee. We will next hear Senator Pomerene.

STATEMENT OF HON. ATLEE POMERENE, UNITED STATES SENATOR FROM OHIO.

Senator POMERENE. Mr. Chairman, this matter was called to my attention particularly by conditions as they exist in Ohio, and I assume that the conditions there are but a reflection of the conditions as they exist pretty generally throughout the country when we come to the question of the coal supply.

The bill as prepared-not to go into all the details of it-provides that during this war, as a war measure, the President may, when he sees proper, through the Federal Trade Commission, determine what shall be reasonable prices to be paid, etc., and then if the producers are not willing to furnish the coal at those prices the President shall be authorized to take over any or all of those mines he may see fit and operate them on the Government account and pay the operators a reasonable price, and if that is not satisfactory, it gives them the opportunity to bring suit for anything over and above that amount, if they are not satisfied, and the President is given power to fix rules under which those operations may be conducted.

Now, there is, in my judgment, a very grave necessity for some legislation along this line. I do not like it, and I confess that I would be very bitterly opposed to it during normal times, as I view the situation now. But present conditions, in my judgment, are absolutely intolerable, and something must be done. Senator Smith has referred to what he understands to be some of the conditions leading up to this situation. In my judgment there are a number of causes. One of them has been the failure of the railroads to furnish necessary cars, and I think that is in part due to the fact that they probably have not got as complete an equipment as they should have to meet the necessary demands, and in the second place, I think it is in very large part, or has been in very large part, due to the lack of a spirit of accommodation between the railroads themselves, when it comes to the question of returning cars to the owning companies. I have no doubt about that, and that situation, I think, is pretty fully recognized by the railroad people themselves, and it was because of this situation that Congress passed, I believe, the socalled car shortage bill, which gives plenary power to the Interstate

Commerce Commission-and I think it was a long step in the right direction.

Senator KELLOGG. May I ask you whether it is not a fact that the railroads have ordered more coal than they could get, and at the same rates?

Senator POMERENE. Yes; that is a situation that I will detail in just a minute. That is only one of the propositions on a good many of those roads. There are tracks that have been lined with cars loaded with coal and not moving at all. They have been placed on the car sidetracks for days at a time. I know that is true in the State of Ohio, and the result has been that there has not been sufficient empties at the mine in order to take care of the coal as it is mined—and as a rule they mine it and load it immediately on the

cars.

Now, Senator Smith of South Carolina has suggested that there was a lack of labor in the mines. To a certain extent that is true, but it is not the whole truth about it, because in the mining regions of Ohio during the past year, and now, the mines are only operated two or three days in the week, when they ought to be operated all the time, and the miners are idle. Now, it is in part due to a lack or shortage in cars.

The situation has now come to this to-day, as far as Ohio is concerned: The price of coal has been doubled, trebled, quadrupled, and in some cases even quintupled. The mine operators take the position and I have heard from some of them-that they can not help this; there is a sort of hysteria among the consumers of coal and they bid against one another. It is a sufficient answer to say that the operators take advantage of that situation, and they have no conscientious scruples against taking all that they can get for their coal supply. It may be said that that is business, and perhaps they are justified in looking at it from that standpoint, but we, as legislators, can not look at it from that standpoint at all, and if the condition does exist, it seems to me we ought to be doing something in order to ameliorate the condition; otherwise we are going to stop our in-. dustrial system all over this country.

Now, I want to give to you Senators just a few concrete facts as showing the present conditions. Only yesterday I received a letter from a so-called coal bureau in Ohio which has been investigating this situation. They have sent out a communication, and I will read one paragraph from it [reading]:

The executive committee met here a few days ago and canvassed the coal situation. Reports of the bureau indicate that prices are up because of reckless bidding by coal consumers. There is no coal shortage. It is evident to every coal user that he can get coal if he will pay the price.

Another gentleman wrote me to the same effect-a man who is a large manufacturer of paving and building brick in my State; his company has nine plants scattered all over the country-one in Missouri. He told me of a conversation that he had with a coal broker whom I know personally, and that this coal broker said [reading]: You need not want for the necessary coal. I can furnish you all the coal you want, but you have got to pay my price. We have been playing in hard luck for several years, and now is our harvest.

Now, that is the true situation about it. Let me give a few figures as indicating these prices. Here is a letter that I have from a prominent manufacturer-a man who I think is not only an able manufacturer, but one of the best students of the economic questions that it has ever been my privilege to know. He writes regarding the prevailing prices as follows [reading]:

I find that on Goshen run-of-mine coal our contract prices were as follows: 1914, $1.70; 1915, $1.60; 1916, $1.70; 1917, $4.90. Massillon run-of-mine.

We have what we call the Massillon coal there. It is not used for general industrial purposes now, but it is used largely as domestic coal because of its special qualities as a grate coal and for its large number of heat units.

Massillon run-of-mine: 1914, $2.55; 1915, $2.50; 1916, $2.55; 1917, $5.30. Another large manufacturer, a potter, writes me that up until April 1 the coal supply was $1.70. He contracted for it at the mine, lump coal. In the West Virginia mines it was $1.90, and now he has got to pay $4.05.

I have other information here which I know comes in a way that I am satisfied is entirely accurate; that coal companies in Pittsburgh are selling to the railroads their coal at $1.70 and $1.90 a ton, but they are selling it to other consumers at $4 plus, and when this situation is called to their attention they say that the reason for it is that the railroad companies give to us 100 per cent car supply and we can not get it from the others. I have no doubt that that helps along the situation somewhat.

The CHAIRMAN. As to the lower prices to the railroads, may that not have been due to the fact of the existence of a contract that has not yet expired?

Senator POMERENE. No; it is not. One of these contracts, I believe, has been renewed at not a very material advance over what it was before. Now, when it comes to the cost of production in Ohio, the miners only get from 10 cents to 20 cents a ton more than they did under the former or lower prices. The transportation is less in centain parts of Ohio than it was before, as, for instance, there was a large differential in the coal rate between the West Virginia field and Lake Erie and between the Jackson County, Ohio, coal fields and the Athens County coal fields and the lake, which gave the West Virginia coal a substantial advantage over the Ohio coal. There has been a considerable fight, covering a period of years, before the Interstate Commerce Commission and our local commission in Ohio, and finally that rate was reduced either 10 or 15 cents a ton to the Ohio miner.

So I say when it comes to a question of mining of their coal the miners' cost is only from 10 to 20 cents a ton higher; the transportation charge is not increased at all, and in some instances—as in Ohio-decreased, but the price of coal has gone from 90 cents a ton run-of-mine, to $4 and $5 a ton.

The CHAIRMAN. At the place of consumption?

Senator POMERENE. At the place of consumption.

The CHAIRMAN. You say that it is still 90 cents at the mine? Senator POMERENE. Oh, no; I did not say that. It has been advanced somewhat; I have no doubt about that, but nothing at all

like the increase at the consuming end. As I said before to several of the Senators here, there was a case which was called to my attention from my own town-and I know the prevailing price thereI used to know it because I was a very active member of our board of trade that was looking after the local industries, etc., and was helping to benefit the town in every way we could-and there were some years when we could get coal even lower than 90 centsI am speaking of slag-the price being 90 cents a ton run-of-mine. Now, the manufacturers are paying $5, and are glad to pay it. One of those rollers who was in the office in the last month said that it was a recognized rule of rolling mills that it took 1 ton of coal to run 1 ton of steel sheets, and now with $5 coal it means that the increased cost of steel sheets, due to the increased price of coal alone, is $4.10 a ton.

Senator KELLOGG. And in addition to that, as to the coal that goes into the making of pig iron, it takes nearly a ton of coal to make a ton of pig iron.

Senator POMERENE. Yes; but I was simply referring to one operation, in the manufacture of steel sheets.

The CHAIRMAN. Do you know, Senator, whether the price has advanced much at the mouth of the mine?

Senator POMERENE. I say the only item is the increase in the mining cost, which is, in Ohio, 20 cents. I heard yesterday that in some places in West Virginia it had increased 30 cents a ton. So that the only item of increase, as I see it, is the miner's cost of 20 or 30 cents, and instead of being satisfied with that increase in the selling price to the consumer, they have doubled and trebled and quadrupled the price.

Now, this is going to be a very serious proposition, and when it comes to the consumer-I mean by that the domestic consumer of coal-the price in Ohio has been $5, $6, $7, and $8 a ton. I have here a number of letters from some of those men who say that they doubt not that by the fall the price to the domestic consumer will be $8 a ton. Now, that is the situation. I know also that one man who came here to talk with me on the subject said he know that many of these coal operators regarded this condition as outrageous, and that they wanted some relief, but the difficulty was, they said, that there were certain coal producers in the country who were in it for all they could make out of it, and they had that situation to contend with.

The CHAIRMAN. And some of them justified this upon the ground that for many years coal mining has not been fruitful or profitable, and that therefore they should not be deprived of their accrued profit?

Senator POMERENE. That is true. I think it could be shown that even last year they made as much as 35 or 40 per cent profit in their business, and while I do not state this as a fact, it is my belief that their profits have simply been enormous since the first of the year. Senator KELLOGG. I would like to ask what amendment, if any, to the present food and fuel bill pending in the Senate would be necessary to make it comply with the ideas as expressed in this bill?

Senator POMERENE. I have not gone over that food bill so as to be able to answer you as intelligently as I would like to. I may say

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