various districts. There are seven States represented here; and if we can now get to a place where we can fix a price, and the Interstate Commerce Commission and the railroads can give us the power, I think we can come pretty nearly solving this problem on a fair basis.

Senator CUMMINS. The only thing which terrified me I listened to the operators, and they are just as selfish as I would be, I am sure, under like circumstances was that they felt that a fair profit involved reimbursement for losses which have been sustained by them in previous years. That gave me a great deal of alarm.

Mr. FORT. Well, they have said that up to yesterday, and some of them said it; but they all realized that that can not be. I remember saying to them in my address that "You gentlemen can not expect to get in 3 months what you have lost in 10 or 15 years. There has got to be standardization of prices in the coal trade." These gentlemen have been losing money for the last five years.

Senator CUMMINS. Some of them.

Mr. FORT. I mean a very large percentage of them. Those who have been selling to the railroads have been losing money. The railroads of this country have not paid 5 cents profit to any man along their roads for coal on their roads, if these gentlemen tell the truth, and I think they do.

Senator CUMMINS. But you know it is a matter of rather familiar statistics than more than 90 per cent of the business men of the country fail some time during their lives?

Mr. FORT. Surely.

Senator CUMMINS. The average profit, you know, in life is not large?

Mr. FORT. That is true, Senator. These gentlemen, too, have been failing right and left. A very large number have failed in the last five years.

The CHAIRMAN. Gov. Fort, do you favor the suggestions that were made by your colleague this morning?

Mr. FORT. I signed the report and favor the suggestions if it becomes necessary for the Government to do it.

The CHAIRMAN. Do you think it is necessary now?

Mr. FORT. I think that is a question for Congress to say. You gentlemen are the only ones that can pass a law on that subject, and you are charged with that duty.

The CHAIRMAN. You think, if it is necessary for the Government to intervene, we ought to secure the reasonable price for coal to the consumers of the country, that that plan will work?

Mr. FORT. The pooling?

The CHAIRMAN. Yes.

Mr. FORT. I have not the slightest doubt. It has worked in Great Britain; it has worked in Germany and in Italy. I have not the slightest doubt of it, and it is not an expensive plan. I heard you asked Mr. Colver that. Because the miner operator is still going to operate his mine. He is going to operate it under statute and under Congress; a statute which is going to contain penal provisions if he makes reports that are false, or his employees or agents make reports that are false. The Government need not have, in my judgment, a man in every mine, or anything of that kind; it can be done

at a very small cost per ton of the output of coal at the mines if the Government can levy that upon them.

The CHAIRMAN. You do not think then it necessarily means an army of Federal supervisors?

Mr. FORT. No; I believe that in each district of the seven particular coal districts of the United States, with one man to take in these returns, with a sufficient clerical force to assist him and make his reports and statements to a department official, or the Federal Trade Board, or any other body already established in the United States, that it can be done without great expense, that the cost to the operators of 2 cents a ton or 5 cents a ton would pay the cost of tracing that coal.

Senator CUMMINS. That is pretty nearly in effect, the licensing system that is in the bill which the Senate is now considering, is it not?

Mr. FORT. Well, hardly, I am afraid, Senator. I think that is not quite as broad as this. You do not take the control; you simply license men to do business there. I am not familiar with that, so I ought not say anything.

Senator CUMMINS. It establishes control of the exportation, storage, mining, or distribution of any necessaries, and coal is one of the necessaries?

Mr. FORT. I have not kept up with all of the laws.

Senator CUMMINS. That has not become the law yet?

Mr. FORT. I meant to say the pending act. But the people are frightened. I got a letter to-day from a woman who says she is 63 years of age; she lives in Bridgetown. She wants to know if she will get any coal. She asks if she shall buy her coal now. She has somebody in the family who is a paralytic and can not move, and she must have coal. We are getting that sort of thing every day, That is the trouble with the coal situation. People are going and bidding up the coal and offering any price to get the coal.

I wish this committee would hear Mr. Poston, of the Ohio mines, who was talking to me last night. If he only talked to this committee as he talked to me last night, I think it would be worth your while to have him come up here. I have asked him to stay.

Mr. TURNER. His attorney is here. He is on that other committeehe will meet him in a little while.

Mr. FORT. You gentlemen are interested in the question of conservation of coal. I should like to have you hear him.

The CHAIRMAN. Are there any further questions?

Mr. FORT. I shall be glad to answer anything from anybody, if

I can.

The CHAIRMAN. Very well. Mr. Colver desires to submit some additional matter.

STATEMENT OF MR. WILLIAM B. COLVER, MEMBER OF THE FEDERAL TRADE COMMISSION-Resumed.

Mr. COLVER. Every time this question has gotten up close to Congress another convention has been held in Washington, and more promises have been made. In the meantime the situation has grown progressively worse. This last suggestion which we have is for a new committee of seven in each one of the coal-producing States;

that is 30 States-that means 30 new committees, 210 new committeemen, a committee to be formed in Washington-a central_committee of whom, as I read the resolution, 14 shall be the producers of coal and 6 shall be Government employees, Government officers. The coal operators have met and, in convention and congress assembled, have conferred certain powers now upon Government officials. They have said that they are going to permit them to fix the prices. In the first place, the fixing of those prices will not do a particle of good unless you get your coal distributed. Thirty new committees, or 300 new committees, are not going to solve this problem, Senator Cummins.

Senator LEWIS. There is one point in my mind which has been worrying me a good deal. Supposing you have the agreement, supposing you come down to terms of fixing the price, what method is contemplated to punish, to enforce that agreement, or to compel conformity with it-to punish any violator of it?

Mr. COLVER. Absolutely none, Senator Lewis.

Senator CUMMINS. This is a voluntary arrangement?

Mr. COLVER. I do not propose, I do not pretend to state cause and effect in that relation, but I do say that all that could be done by your servants, the servants of the Congress, the servants of the President, and the servants of the people of the United States, all that could be done has not been effective in even checking the progress. of this evil, and we did send to the Senate the Federal Trade Commission did send to the Senate a week ago to-day, if I remember correctly, the report which has been put in the record here. And it did suggest and beg and urge that this was a most serious situation, and that it must be met instantly; that present relief must be given. I do not say that that was the cause and that the effect was the convention here to-day and yesterday, but there is a coincidence in time, at least. And, as Senator Lewis says, there is a remedy proposed, but no way to enforce it, no man's arm, and the Government's arm is not strengthened in case these promises are fair-weather promises or promises made in very stormy weather. I have not the least faith in promises. We have met promise and promise and promise in these months of work. We want some performance.

The situation which is going to come about in this country next winter is going to be absolutely apalling unless we do something and do it now; and do it not because somebody wants to or because somebody can do it without losing some money, but do it because the people of this country must live through next winter, and do it because the industries of this country must be able to arm the armies and navies for war. That is what we are doing things for to-day. I am afraid I am not testifying-I am making a speech.

It is all of a piece with telling the miners their place is in the mine and exempting them from conscription, and they go to the mine and get two days' work a week, yet we tell them how useful they are and how necessary they are and we do not provide work for them in doing that necessary thing, in getting this coal out of the ground and into people's cellars and into the coal bins and into the industries. of this country.

Fixing prices at the mine will not fix prices to the consumers of coal. Fixing prices at the mine or fixing the prices to the consumers will not solve the problem unless you get the coal to the consumer.

And so the Trade Commission has suggested, and I will read their suggestions, these two remedies. They not only suggest these remedies, but they suggest them and urge that the situation is so critical that the time, the few months, the few days we have to build up next winter's stock of coal are slipping by so rapidly that action must be taken in order to prevent worse than war in this country— a suffering greater than follows a big battle. We have suggested, first, that the "production and distribution of coal and coke be conducted through a pool in the hands of a Government agency; that the producers of various grades of fuel be paid their full cost of production plus a uniform profit per ton with due allowance of quality of product and efficiency of service, giving back full compensation; and, second, we have suggested that the agencies of the United States, both rail and water, be similarly pooled and operated on Government account under direction of the President, and that all such means of transportation be operated as a unit, the owning corporations being paid a just and fair compensation, which would cover normal net profit, upkeep, and betterments."

We have not suggested that any owner of a coal mine be dispossessed of his property. We have not suggested that the Government go in and operate anyone's coal mine. We have not suggested that anyone operate anyone's railroad.

This bulletin, No. 13 or 12, that I quoted from a few minutes ago is the testimony of the railroads themselves that this work is not being done effectively. The coal famine that went over the country last summer was proof that they did not do it as to coal. The fact that the Interstate Commerce Commission took hold of the situation and in 48 hours straightened it out was proof that it could be straightened out if a strong hand took hold of the straightening

process.

We think that the railroads ought to be operated by the railroad officials and by the railroad men. We think that the coal mines ought to be operated by the owners and by the miners, but we think that those two great and fundamental agencies, in peace and in war, must now be coordinated and that the greatest possible efficiency be arrived at, and we say that any remedy that seems to satisfy the situation in June or July, without looking forward to the winter months, all the long winter, is not a remedy and ought not be considered.

We say that letting this plan go on, accepting these promises, awaiting report from the 210 new committeemen, all that, accepting all that, if Congress will give the discretion to the President, not to be used until the situation is so grave that he thinks it should be used, but that if that discretion is lodged with him by the Congress it will go a long ways toward the carrying out of all promises in the best of good faith. And it is going to be too late in August or September or in October or in November. It is going to be too late then to pass the legislation, study the question, and give the power that must be instantly used when the crisis comes. I think it is here. The CHAIRMAN. Mr. Colver, you spoke of pooling the coal. What you mean by that is that the Government is to purchase the coal from the operators?

Mr. COLVER. Yes, sir.

The CHAIRMAN. The entire production?

>

Mr. COLVER. Yes, Senator.

The CHAIRMAN. Have you figured at all about the financial side of that what money would be required for that purpose and expensive machinery employed?

Mr. COLVER. Gov. Fort has answered you as to the machinery required for the fixing of prices. It is negligible, because reports can be compelled, with heavy penalties for misleading or false reports, and could be compiled by the existing agencies. It is not going to need the 5,000 inspectors nor the army of Federal employees that is talked about-not at all.

As to the fund required, the capital to be required for this purpose, understand we are suggesting only that the Government stand for an instant, only for the purpose of acquiring for an instant the property right in the coal so it may say to whom it shall go. That is all.

In our bill, which we have suggested, we provide for $10,000,000 for a working capital, to be returned to the Government at the end of the operation. That is only working capital.

The CHAIRMAN. Do you think a capital of $10,000,000 would cover these operations, your idea being, I presume, to sell the coal about as rapidly as you buy it, and you would expect cash transactions, would you?

Mr. COLVER. I think so.

The CHAIRMAN. You would handle in that way possibly fifty or sixty million tons a month?

Mr. COLVER. Yes; the production being about 600,000,000 tons a year.

The CHAIRMAN. At about what cost do you think per ton, on the average?

Mr. COLVER. There, again, Senator, if I may be excused. because we are going to be called upon to fix prices, and to say truthfully for myself and my colleagues that we have tried to keep that thought out of our minds-we have tried to keep far away from it.

The CHAIRMAN. At all events, you think a working capital of $10,000,000 would cover it?

Mr. COLVER. I think it would be adequate. And, Senator, we think that would not be impaired, for the reason that the Government, owning the coal, would sell it at such slight advance and such an enormous amount of it-the advance would only net 2, 3, or 5 cents a ton— as would provide for the expenses of the whole operation. That would make it possible to follow every pound of stock down to the cook stove it went into, not by Federal machinery but by the fact that one and only one agency would be responsible for everything, and to it would come all complaints.

The CHAIRMAN. After the Government parts with the control of this coal to different jobbers and dealers and individuals, how do you propose to control the price after that point?

Mr. COLVER. We propose to do that exactly as we have done unofficially and without any direct authority of law in the anthracite region. We found that the anthracite coal situation was just as bad as the bituminous, only it is a small area. We found there was a great deal of contract coal there, and relatively little free coal. We felt that by controlling the free coal we could control the market, take the panic out of the market and steady the prices.