Dr. HARR. We have had excellent cooperation from the Coal Division. Mr. FITZPATRICK. And if you seek information, do they give it to you? Dr. HARR. Yes. Mr. FITZPATRICK. Do they permit you to sit in at trials and hearings? Dr. HARR. Yes. Mr. FITZPATRICK. And are you able to take notes of what transpires, so as to have a record of it? Dr. HARR. Yes. We have excellent cooperation. Mr. Gray has given us anything we ask. Mr. FITZPATRICK. That did not happen with the old Consumers' Counsel, because there was a lot of friction there. Mr. HOUSTON. Does your organization come under the civil service requirements now? Dr. HARR. No. I never did know the technical reason why we did not, but I think probably the Ramspeck Act was passed before this agency was created in the new bill passed last April. I think that is the reason. We wrote the Civil Service Commission and asked them about it, in fact suggested we would like to come under civil service, but they said legally we cannot do it. VACANCIES Mr. HOUSTON. Are you asking for any additional personnel? Dr. HARR. We have four vacancies, but we are not asking for any additional personnel. Mr. HOUSTON. What are they? Miss BROOKER. Associate minerals economist, assistant minerals economist, special agent, and junior attorney. Mr. HOUSTON. How do you expect to select those people? Dr. HARR. I interview them and we get people we think are technically equipped for the job. Mr. HOUSTON. Do you think this estimate is sufficient to carry on your work? Dr. HARR. It all depends on whether maximum prices are set or not. If maximum prices are set, it is going to mean we will have to see there are no violations of the maximum price schedules issued by Mr. Gray. That might require more work. We do not know just how much more that will require. Another thing that is a possibility; there is some discussion, I understand, concerning whether the Consumers' Counsel will be appointed as a part of the so-called Solid Fuels Coordination of which Mr. Ickes has been designated head by the President. We might be part of that picture. If so, I am told we would get appropriations through O. E. M., however. Mr. HOUSTON. Are you authorized to go out in the field and conduct hearings? COMPLAINTS OF PRICE OVERCHARGES Mr. FITZPATRICK. Do you get many complaints from different communities of overcharges that are being made? Dr. HARR. We have had a number of complaints during the summer. That was one of the reasons why we started hearings for maximum prices. But I think, after we started those hearings-and those hearings had a considerable amount of publicity among the coal trade that stopped any tendency towards rapid price rises and, at the moment, we have very few complaints. But there is one thing: If Congress proposes to have a new law passed when this act expires, there ought to be more protection in it for the small consumer, for the consumer of domestic coal-the small retail purchasers. There is protection, in a sense, for the big purchaser of coal, who is pretty able to protect himself. Mr. FITZPATRICK. Take a community, say, a couple hundred miles from the mine and another community a thousand miles from the mine: Would not you think the community only 200 miles should pay a little less, and in many instances they pay a little more? Can you account for that? I could never get any explanation for that. Mr. WOODRUM. The freight rate is usually the same to one place. as to another. Mr. FITZPATRICK. Oh, no. Mr. WOODRUM. That is the long haul and the short haul. Mr. FITZPATRICK. That is all right, but where it is a short haul, they pay more money than where it is a long haul, and they never could give any explanation of how they arranged those prices. Dr. HARR. That is something which I think ought to be looked into, because there appears to be some sort of a tie-up between the railroads and the coal producers, but I do not know enough about it yet to be able to get the answer. Mr. FITZPATRICK. It does not seem quite fair to the communities they are serving today, on the price they are paying. Mr. HOUSTON. I think that is true of gasoline prices, too. Dr. HARR. It might be. Mr. HOUSTON. Is there any great amount of coal exported out of this country? Mr. KERR. No; the export business has not been as large this year as it was last year. Mr. HOUSTON. Is that because of a boat shortage? Mr. KERR. I assume it is principally for that reason, and most of the coal exported from this country goes out of the port of Hampton Roads, and I think the last report I had this year shows it is about 700,000 tons less this year than the same date last year, out of Hampton Roads. The exports were only about 2,000,000 tons. Mr. HOUSTON. I have heard there is a shortage in fuel oil. I do not know whether there is, or not, but I just wondered if the coal business had picked up any. Dr. HARR. I do not think there is any shortage. Mr. KERR. That may pick up. Mr. HOUSTON. But there is no pick-up yet? Mr. KERR. No; no appreciable pick-up. ITEMS OF INCREASE IN ESTIMATE Mr. WIGGLESWORTH. Doctor, as I understand it, your request on an annual basis represents an increase of $2,036. What is the increase, and what is the necessity for it? Miss BROOKER. The increase for the 10-month period is $1,698; $1,403 of that is for administrative promotions under Public, No. 200; the other small amount, $295, is the difference between the positions abolished and the projection of positions this year, and the reduction of the lapses. For 1943 there is no estimate for lapses in salaries. Mr. WIGGLESWORTH. There is no increase in personnel contemplated? Miss BROOKER. There is no increase contemplated in personnel. In fact, this estimate is a decrease. Mr. WIGGLESWORTH. There are how many consumers tons of bituminous coal? Dr. HARR. Sixty-two million consumers of bituminous coal. Dr. HARR. Yes. Mr. WIGGLESWORTH. As I understand from the previous hearings, about 80 percent of the coal is consumed commercially and the balance by small consumers? Dr. HARR. That is approximately correct. TRANSPORTATION OF COAL METHODS Mr. WIGGLESWORTH. What do you mean by "more efficient methods in transportation of coal" that you are working for? Can you hope to accomplish much along that line? Dr. HARR. I think we can accomplish something along that line if this emergency becomes more serious. I do not think you can unless the emergency becomes serious, because it would mean that some of the railroads would probably suffer in the accomplishment. For example, here is a plant that buys coal that is hauled, let us say, a thousand miles, where they could get the same coal, the same quality, the same grade of coal, from a mine 200 miles away; and, if transportation difficulties became seriously involved, I think we can encourage them to buy the coal 200 miles away and save that haul of 800 miles, rather than to buy it where they are buying it now. Because, as Í said before, I am inclined to believe there is a certain amount of tie-up between the railroads and the coal mines, and that leads to inefficient transportation methods. Mr. WIGGLESWORTH. Is that the same thing or different from what you have in mind where you refer to the endeavor to educate consumers in the efficient utilization of coal? Dr. HARR. That is a different thing. We send pamphlets out, give lectures at schools, and have a movie that goes to schools and other places-women's clubs, civic organizations, and so forth-to show how to burn fuel properly in your heater. That is a very educational film and the literature is very well done, and it can be of great assistance to the consumer. DATA ON INCREASE IN COAL PRICES Mr. WIGGLESWORTH. I understand that the Coal Division has authority to fix a ceiling on the price. Dr. HARR. That is correct. Mr. WIGGLESWORTH. That is not under the Henderson set-up? Mr. WIGGLESWORTH. And what about unfair practices you referred to? Dr. HARR. We have the right to institute proceedings before the Coal Division. Mr. WIGGLESWORTH. Under the Coal Act? Dr. HARR. Yes. Mr. WIGGLESWORTH. That is also set apart from the unfair practices in other industries? Dr. HARR. That is correct. Mr. WIGGLESWORTH. I note you refer to a careful and full analysis of the major results of and problems involved in the Coal Act. I wonder, in that connection, if you could furnish for the record a statement that would show the additional cost annually to the consumer as a result of the enactment of that legislation? Dr. HARR. That is, of the Coal Act itself? Mr. WIGGLESWORTH. Yes. Mr. KERR. I think we can get that information. Dr. HARR. I would rather get it actually than to guess at it. Mr. WIGGLESWORTH. Could you also furnish a statement which would show what portion of that increase in cost has gone to the coal producer and what portion has gone to the miner, on an annual basis? Mr. KERR. Well, there also comes into that question, Congressman, what goes to the middleman. The middlemen are not protected under this act, except to a very limited extent. Mr. WIGGLESWORTH. I would be glad if you would include that, too, if you have it. Mr. KERR. All right. (The information requested is as follows:) Minimum prices were made effective October 1, 1940. During that year, prior to that date, bituminous coal other than captive had been produced in the United States at an average cost of 4 cents per ton greater than the average realization therefore. On the total production up to October 1, this would represent a loss of about $10,000,000. After minimum prices were in effect and until coal miners' wages were advanced, on April 1, the average selling price of coal f. o. b. the mines was about $2.02 per ton for noncaptive coal. This represents an advance of 17 cents per ton over the average selling price prior to October 1, and an advance in dollars of about $35,000,000 for the period October 1, 1940, to April 1, 1941. Of this amount it is estimated that $33,000,000 went to the producers and $2,000,000 went to wholesalers and middlemen. From October 1, 1940, to April 1, 1941, there was no change in the rate of pay for coal miners and therefore labor did not participate in the foregoing amount. After April 1, 1941, when the miners' wage advance, amounting to about 22 cents per net ton, became effective the price of coal was increased generally but there is no figure to indicate that the increase was in any greater amount than the wage increase and additional cost of supplies. As of the present, minimum prices have not been increased to reflect the increase in cost effective last spring. Coal has generally sold at more than the minimum prices, so it is impossible to determine what, if any, increases since April 1 the consumers have been compelled to pay over what they would have paid in the absence of the minimum price floor. Retail prices, while not uniformly advanced, were on the average during the winter of 1940-41, about 20 cents above those during corresponding periods in the previous year but it cannot be determined with certainty whether this incease was due to the promulgation of minimum prices. The total effect of this increase was approximately $16,000,000. This change in retail prices of bituminous coal after minimum prices became effective, amounted to an increase of 2.3 percent over retail coal prices for the prior year. It is interesting that the percentage increase is exactly the same as the increase in retail food prices between December of 1939 and December of 1940, as shown by the figures of the Bureau of Labor Statistics, United States Department of Labor. Mr. WIGGLESWORTH. That is all I have, Mr. Chairman. Mr. WOODRUM. If there are no further questions, thank you very much. THURSDAY, DECEMBER 4, 1941. BOARD OF TAX APPEALS STATEMENTS OF HON. J. EDGAR MURDOCK, CHAIRMAN, AND ROBERT C. TRACY, SECRETARY SALARIES AND EXPENSES AND PRINTING AND BINDING Mr. WOODRUM. We will take up next the appropriation for the Board of Tax Appeals. For necessary expenses of the Board of Tax Appeals as authorized by chapter 5 of the Internal Revenue Code, including personal services and contract stenographic reporting services, traveling expenses, carfare, stationery, purchase and exchange of typewriters, lawbooks and books of reference, and periodicals, $550,037. For all printing and binding for the Board of Tax Appeals, $32,000. JUSTIFICATION OF ESTIMATE Mr. MURDOCK. The following justification is offered for the record: The Board is requesting the sum of $506,129 for salaries and $43,908 for expenses for the fiscal year ending June 30, 1943, a total of $550,037. We are also asking for $32,000 for printing and binding for the said period, which amount is the same as that allowed for the fiscal year 1942. SALARIES As shown by the figures before the committee, we are asking for an increase of three employees; one executive accountant and auditor at $6,500, and two associate attorneys in grade P-3, at a salary of $3,200 per annum each. As my predecessor stated, in his hearings before the Bureau of the Budget, we have dropped three attorney positions in grade P-1, and have added five attorney positions in grade P-3, a net increase in our attorney staff of two. The competition is too strong today to get bright young lawyers in the lowest grade or to retain them any length of time without substantial recognition. As for the executive accountant and auditor position, during most of its history the Board had on its rolls a high-grade accountant who received a salary of $7,500, and who was classified in grade CAF-14. After his resignation in 1937 the position was not filled but it has never been abolished. The accounting problems which arose under the Excess Profits Tax Act of 1918 will again appear under the recent Excess Profits Tax Act and it is my belief that the services of such a man will be found a necessity within the near future. The fact that ours is a small organization and must confront a rather heavy task in the months to come impels me to urge most strongly upon the committee the necessity for these three additional employees. In 1939 there were filed with the various collectors of internal revenue just under 4,000,000 individual returns on which a tax was due. The 1940 Revenue Act served to double the number of individual returns. The Treasury advised the Finance Committee of the Senate recently that individual returns to he |