Persons not in the employ of the United States so designated shall receive such compensation as the President may fix. Suitable offices may be rented and all necessary expenses, including compensation of persons so designated, shall be paid as directed by the President out of funds which may have been or may be provided to meet expenditures for the national security and defense. It shall be the duty of any and all such common carriers, and of all persons, firms, and corporations, to obey strictly the provisions of this Act and conform promptly to orders made in conformity with the provisions of this Act, Any violation of the provisions of this Act, or of any order issued in accordance with the provisions of this Act, shall constitute a misdemeanor. Any corporation guilty of such misdemeanor shall be punishable by a fine of not more than $50,000, and any person guilty of such misdemeanor shall be punishable by a fine of not more than $10,000, or by imprisonment of not more than five years. or both such fine and imprisonment, in the discretion of the court.

S. J. Res. 77, JOINT RESOLUTION to provide further for the national security and defense by regulating the production, sale, and distribution of coal.

Whereas by reason of the existence of a state of war there is a national emergency, and it is essential for the national security and defense further to assure an adequate supply and equitable distribution of coal at a reasonable price for the Government and people of the United States and protect them against exorbitant prices for such coal; and

Whereas the prices of coal in many parts of the United States have reached an exorbitant level; and

Whereas a large number of consumers, both domestic and industrial, are unable to obtain supplies of this prime necessity; and

Whereas the failure to procure such prime necessity impairs the health and strength of the people of the United States upon whom the national defense depends, and involves the partial or complete cessation of many industries essential to the supplying of the armed forces with necessary materials and munitions of war; and

Whereas the payment of exorbitantly high prices for coal imposes such an expense on the people of the United States as to materially impair their means of sustenance and their financial ability to assist in providing for the national defense, and also so increases the cost of production of many industries essential to properly arming and supplying the forces of the country that the prices of their products are greatly enhanced to the greatly increased expense of the Government in the purchase of supplies necessary for the prosecution of the war: Now, therefore, be it

Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That it is necessary and proper, in order to execute the powers of Congress to raise and support armies, to provide and maintain a navy, and in order to properly and efficiently provide for the common defense, that the President of the United States shall be authorized and empowered, and he is hereby authorized and empowered, whenever and wherever, in his judgment it shall be necessary for the efficient prosecution of the war, to fix the prices of coal, whether sold at the mine or elsewhere, and whether sold by the coal-mine operator or dealer in coal, and to regulate the methods of sale, routes of transportation, and the distribtuion, apportionment, or storage of such coal among merchants, domestic consumers, industrial consumers, common carriers, and others, and to export; and said authority and power may be exercised by him in each case directly or through the agency of the Federal Trade Commission or such other agency as seem to him fitting for the period of the war and one year thereafter, or for such part of said time as in his judgment may be necessary.

SEC. 2. That if, in the opinion of the President, any such coal-mine operator or dealer in coal ceases to conduct his business or fails to conduct his business efficiently or conducts the same in a manner prejudicial to the public interest, under the regulation and control of the President, as aforesaid, then the President shall be authorized and empowered, and he is hereby authorized and empowered, in each case, to requisition and take over the plant and business and all the appurtenances thereof of such coal-mine operator or dealer in coal, as a going concern, and to operate such coal mine or business, or cause the same to be operated in such a manner as he may direct, for the period of the war or one year thereafter, or for such part of said time as in his judgment may be necessary.

SEC. 3. That any coal-mine operator or dealer in coal, whose mine or business shall have been requisitioned or taken over by the President, shall be paid a fair and reasonable compensation for the use thereof, or damage incurred thereby, during the period that the same may be requisitioned or taken over as aforesaid, which compensation the Presidend shall fix, or cause to be fixed directly by the Federal Trade Commission or such other agency as he may designate.

SEC. 4. That if the prices so fixed, or if in case of the taking over or requisitioning of the mines or business of any coal-mine operator or dealer in coal, the compensation or damages fixed be not satisfactory to the person or persons entitled to the same, such person or persons shall be paid the amount prescribed by the President and shall be entitled to sue the United States to recover such other sum as, added to the amount so paid, will be just compensation in the manner provided by section twenty-four, paragraph twenty, in section one hundred and forty-five of the Judicial Code.

SEC. 5. That the expense of carrying out the aforesaid regulation of the coal industry and trade, or the net expense, if any, of the operation of such business, including the payment of compensation to the owner or owners of mines and to dealers in coal, where the same is requisitioned or taken over, as aforesaid, shall be payable from the funds in the Treasury of the United States not otherwise appropriated, in such manner and at such time as the President inay direct.

SEC. 6. That the President is hereby authorized and empowered to prescribe such regulations as he may deem essential. for the proper enforcement of this resolution, including the fixing of such prices, the operation of coal mines and business of dealers in coal, the purchase, sale, or other disposition of coal, and the employment, control, and compensation of the employees.

Any person who willfully fails or refuses to sell coal at the prices so fixed, or who willfully violates any regulation made by the President for the proper enforcement of this resolution, or aids or abets any such refusal to sell or violation of such regulation, shall be deemed guilty of a misdemeanor and upon conviction thereof shall be fined not exceeding $5,000 or be imprisoned for not more than two years, or both.

The CHAIRMAN. I will state that there are two measures pending before the committee with reference to the fixing of the prices of commodities. One is the bill of Senator Cummins, S. 2354, regarding railway supplies, and the other is a joint resolution of Senator Pomerene, S. J. Res. 77, regarding coal.

I hoped that we might commence the hearings on these bills today, but I now understand that the hearing will have to take place at another day, if the committee should conclude to go into this question. Individually, I regard it as of the highest importance. We are engaged now in a war in which it is exceedingly important to maintain an equilibrium between wages and products, and, it is necessary that we should see that the extraordinary demands of the war do not produce, on the one hand, labor disputes, and, on the other hand, such a rise in prices as will induce labor disputes and divert our attention from the supreme contention abroad to contentions at

home.

I have very reluctantly come to the conclusion that, in so far as products are concerned, particularly basic products, such an extraordinary demand has been precipitated upon the normal supply as to enable the owners of those products to charge almost anything that they want to, and the usual normal prices, which are the result of normal supply and demand, can not be maintained, and that therefore it is absolutely essential that the Government act and act decisively with respect to all basic articles in such way as to prevent the extraordinary demands of war operating in such a way as to unduly increase the war expenses of the Government and at the same

time raise prices of necessaries beyond the reach of the masses of the people.

Senator SMITH, of South Carolina. I would like to ask Senator Cummins a question. Is it your opinion, and the opinion of the members of the committee, that the extraordinary demand has been so inadequately met by organization that supply, that it is not a question of combination any more in restraint, but that the demand has outstripped the facilities for supplying the demand? Is that not true?

The CHAIRMAN. You mean the demand has outstripped the supply? Senator SMITH of South Carolina. I mean the demand has outstripped the supply.

The CHAIRMAN. Yes.

Senator CUMMINS. You will have to consider them both. The extraordinary demand has afforded the opportunity to make combinations possible, although I am not prepared with any proof on that point. But it is a great deal easier to make a combination when the demand exceeds the supply than it is to make a combination when the supply exceeds the demand.

Senator SMITH of South Carolina. That is true; but the question. is this: I have been told by those who are in different businesses that the advance in price of artificial productions, such as coal, lumber, and steel, is such that labor necessary to produce the output to meet the demand is not available, and according to the demand, and regardless of the price of labor, the consequent rise in prices has been due largely to the inability to meet the demands or the facilities for supplying them.

Senator CUMMINS. However that may be, I think the suggestion is probably well founded

The CHAIRMAN. It is my intention to call upon you, of course, Senator Cummins, but I had not quite finished my statement. Senator CUMMINS. Pardon me.

The CHAIRMAN. I think this is an emergency which requires at the outset comprehensive action. Thus far the only committee, I believe, which has seriously considered this question of the price is the Agricultural Committee, and that committe has acted with reference particularly to food, although I believe coal and some other products are included in the bill.

Senator CUMMINS. And fuel.

The CHAIRMAN. And fuel. Now, it seems to me the jurisdiction belongs to this Committee on Interstate Commerce to consider the question of the control of commodities generally, and that we ought to take up this question in a very broad way; that we ought to have the members of the Council of National Defense appear before us to state what they have been doing and what they propose to do with reference to these matters, and the chiefs of the Advisory Commission of the Council of National Defense. This council and this commission were created by Congress to aid in the solution of the problems relating to the national defense, and it seems to me that during the war we should occasionally hear from them upon these subjects. Now, I simply want to call attention to the fact that unless we act quickly we are bound to have very serious labor disturbances in this country. Under the Constitution life, liberty, and property are all sacred, but we do not hesitate to take away the liberties of our

citizens and force them without their consent into the military service, for a compensation fixed by law, at the possible cost of their lives, and it seems to me that all property, certainly the necessaries of life, should be under the same rule, if the public safety and interest require it.

If the committee entertains that view, I should say that we ought to proceed during the coming week and go into this matter thoroughly, so that we will be prepared to report either an independent bill or an amendment to the existing food-control bill, so as to cover this question not only with reference to food, railway supplies, and coal, but all basic commodities necessary to life, industry, and the prosecution of the war, such as iron, steel, copper, etc.

Senator KELLOGG. Coal is covered in it, is it not?

The CHAIRMAN. Yes.

Now, Senator Cummins, as yours is the first bill, the committee will be glad to hear from you.

STATEMENT OF HON. ALBERT B. CUMMINS, UNITED STATES SENATOR FROM IOWA.

Senator CUMMINS. Mr. Chairman, the bill I have introduced touches only one phase of this very important and difficult question. As all of you know, the railroads of the country have presented to the Interstate Commerce Commission applications looking to an increase of substantially 15 per cent in freight rates. The basis of the application is the extraordinary advance in all railway supplies, as well as labor, which has taken place in the last year. Many of you are familiar with the showing that has already been submitted to the Interstate Commerce Commission with regard to these advances in prices. There is some controversy there respecting their extent, but all of us know that there have been tremendous increases in the prices of commodities that the railways must buy. They seem to me to be indefensible and have dislocated the situation, and I agree with the chairman that in this emergency we can no longer depend upon the ordinary and usual laws of competition and other forces which control trade and traffic. To remove from the case pending before the Interstate Commerce Commission the claim of advances and those great advances in those supplies-and to enable the commission to decide the case if it suspends those applications upon fair and reasonable prices for supplies, I have introduced this bill. All of you know that if these advances in rates are allowed, the aggregate of the advanced rates will be somewhere between $300,000,000 and $400,000,000 a year, a burden upon the public which may not be removed when the occasion for it disappears. My bill is limited to railways to common carriers that are subject to the act to regulate commerce. It provides, in substance, that the prices of all railway supplies and that includes, of course, fuel and equipment of various kinds needed in the operation and in the extension and betterment of properties-shall be the unit price in force on the 30th of June, 1916, and a further provision permits an appeal by anyone. who is not satisfied with that price to the President, and he may then fix the price, subject, however, to this limitation, that it must not exceed the cost of manufacture or production plus 10 per cent.

There are suitable penalties in the bill for violation of the act. I hope that its effect will be, if passed, that a very large portion of the claims made by the carriers for increased expenses will disappear, and it will be at once seen that the present revenues are sufficient to meet the necessities of the companies.

Senator KELLOGG. Mr. Chairman, I would like to ask a question. That bill, then, is intended to make the price of June 1, 1916Senator CUMMINS. June 30, 1916.

Senator KELLOGG. June 30, 1916, the price during the war for any man who sells anything to a railroad company?

Senator CUMMINS. Not quite that, but pretty near it.

Senator KELLOGG. It is pretty near it.

Senator CUMMINS. Yes.

Senator KELLOGG. A farmer who sells produce for dining cars and a manufacturer who sells anything-ties or anything else that he makes or produces in any way-to a railroad company must accept the price of June 30. What about the things he has to buy that go into his product? We must go back and fix the price of them.

Senator CUMMINS. We are getting along pretty fast in that respect. Senator KELLOGG. We had better fix the price of everything in the United States.

Senator CUMMINS. But this only deals with one feature of the matter.

Senator KELLOGG. Will you tell me how a man who makes anything to sell is going to sell it at the price of June 30, 1916, when he can not buy his products at that?

Senator CUMMINS. If he can not buy his products, the fellow who gets them can not sell them. The regulation of this price fixes the price all along the line, of course. Whatever articles are embraced in it would be regulated from beginning to end.

Senator KELLOGG. Yes; but the man who sells to a man who manufactures for the railroads is not obliged to accept them under the bill.

Senator CUMMINS. There is no obligation to sell.

Senator KELLOGG. Then it would simply stop the business. The railroad could not buy it at all.

The CHAIRMAN. Your objection, then, presents the larger question that as to all the basic materials there will have to be some method of regulating and controlling the price.

Senator KELLOGG. You must go into the matter of regulating the price of everything manufactured, sold, or produced in this country. The CHAIRMAN. I am prepared personally to consider that question.

Senator CUMMINS. That is not quite the fact, because the railroad companies buy so small a proportion of many things that it might not have any effect upon the price to other people unless there is other legislation.

Senator SMITH of South Carolina. May I ask if you have anything in this bill that would force the vendor to sell to the railroad companies?

Senator CUMMINS. No; you can not do that.

Senator KELLOGG. Let me illustrate what I have suggested for the committee's consideration. The railroad company buys materials