That the various departments, bureaus, boards, commissions, and agencies of the Government, when directed by the President, shall furnish to the Federal Trade Commission, the Interstate Commerce Commission, or the Geological Survey, upon their respective request, any records, papers, and information in their possession relating to any matter which the respective commission is authorized to investigate under the provisions of this act, and shall detail from time to time such officers and employees as the President may direct for service under the respective commissions for the purpose of carrying out the provisions of this act, and upon joint recommendation of the Federal Trade Commission, the Interstate Commerce Commission, and the Director of the Geological Survey, the President may by Executive order direct such transfer of personnel, equipment, and records from one bureau to another as may be deemed necessary in fully carrying out the intent of this act, together with an allotment and transfer of funds from which the transferred personnel is paid. The Federal Trade Commission, the Interstate Commerce Commission, and the Geological Survey shall keep their analyses and compilations currently revised and available for immediate reference, and shall on request, and to the extent that each deems proper in the public interest, place at the disposal of any private or public board, State or Federal department, agency, commission, or other group engaged in the arbitration, conciliation, or settlement of any labor dispute arising in any mine or group of mines from which coal is shipped in commerce, such analyses and compilations, or any of them, and all other data or information, or any part thereof, in the files of their respective offices relating to the matter in controversy. SEC. 19. That the Federal Trade Commission and the Interstate Commerce Commission, respectively, shall have power to make and enforce all rules and regulations necessary for carrying out the respective provisions of this act and to prescribe the method of procedure to be followed in making the respective investigations which they are respectively authorized by this act to carry out and to make. SEC. 20. That nothing contained in this act shall be construed to limit or repeal any of the provisions contained in the Federal Trade Commission act or the Interstate Commerce act and amendments thereto, nor the transportation act, 1920, and that the Federal Trade Commission and the Interstate Commerce Commission, in addition to their powers and duties herein provided, shall have and may use for carrying out the purposes of this act any of the powers and duties which they may have under their respective organic acts and amendments thereto and other acts of Congress. If any clause, sentence, paragraph, or part of this act shall for any reasons be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair, or invalidate the remainder thereof, but shall be confined in its operation to the clause, sentence, paragraph, or part thereof directly involved in the controversy in which such judgment shall have been rendered. SEC. 21. That there is hereby appropriated, out of any money in the Treasury not otherwise appropriated, for the fiscal year ending June 30, 1921, the additional sum of $10,000 each to the Director of the Geological Survey and the Interstate Commerce Commission and $25,000 to the Federal Trade Commission to defray the expenditures incurred in the performance of their respective duties set forth in this act, and until otherwise appropriated for by Congress the expenses of printing or mimeographing and distributing the current bulletins or current reports to be issued as herein provided shall be met in equitable proportion from funds hitherto appropriated to the Federal Trade Commission, Director of the Geological Survey, and the Interstate Commerce Commission and available for printing. Senator KENYON. May I say that Senator Calder desired me to say that he would be unable to be present this morning, as he is compelled to leave the city. Mr. Miller and Mr. Chantland, who have been with the Committee on Reconstruction and Production as experts are here to give the committee any information it desires, at the request of Senator Calder. I suggest, Mr. Chairman, that Mr. Chantland could point out the features of this bill in a general way. The CHAIRMAN. The committee will be glad to hear Mr. Chantland. STATEMENT OF MR. WILLIAM T. CHANTLAND, NEW YORK AND WASHINGTON, LAWYER, NOW ENGAGED AS COUNSEL WITH THE SENATE COMMITTEE ON RECONSTRUCTION AND PRODUCTION. Senator KENYON. Mr. Chairman, may I ask if this bill was prepared at the request of the committee of the Senate on reconstruction? Mr. CHANTLAND. Yes; along the lines directed by them; of course, they prescribed the policy to be put into the bill. I think the bill is a composite structure, in so far as authorship is concerned. I had something to do with it. The CHAIRMAN. But it was prepared under the direction of that committee? Mr. CHANTLAND. Yes, sir. The CHAIRMAN. And along the lines laid down by the Senate Committee on Reconstruction? Mr. CHANTLAND. Yes, sir. The exact draft has had the approval of the only members who attended the meetings of the Committee on Reconstruction-Senator Calder, chairman; Senator Kenyon, and Senator Edge. The two minority members of that committee have not been in attendance. Senator WALSH of Massachusetts. Who are the minority members? Mr. CHANTLAND. Senator Gay and Senator Wolcott. Mr. Chairman, I have just a little preliminary statement that I will make. In a general way, the public has very concrete information of the coal situation. This committee, I believe, has considerable special knowledge of its own. I find that in December, 1917, and January, 1918, your committee held rather extended hearings on the coal shortage at that time, so this seems to be a very proper committee for it to come before. The CHAIRMAN. There are three volumes of testimony taken at that time. The clerk will lay before each member of the committee the three volumes of testimony referred to. Senator McNARY. What is the date? The CHAIRMAN. They began in December, 1917. Senator MCNARY. What was the occasion for it-a resolution? The CHAIRMAN. Senator Vardaman was chairman of the committee. It was authorized and directed to conduct that investigation. I think Senator Reed was chairman at the beginning of the investigation, but before it was concluded the chairmanship passed to Senator Vardaman. Senator McNARY. It was referred to a subcommittee and hearings were held before Senator Reed, chairman, and Senators Vardaman, Lodge, Jones, and Kenyon. Mr. CHANTLAND. It seems for that reason that it is not necessary to go into any history of the situation at this time, except to call attention to the fact that the past year has been a time of riot in the coal industry, so to speak, and the hearings of the Senate Committee on Reconstruction and Production have taken up the coal as the first problem in reconstruction, as being necessary in every phase, of course, of that situation, and they have therefore taken considerable testimony on the coal part of it. I have here a galley proof, and have a few copies for the benefit of each member of the committee. If it desires to receive this in evidence at this time, subject to substitution of the completed testimony later, it is, I assume, for the committee to determine. It is here if the committee desires it. Senator WALSH, of Massachusetts. Mr. Chairman, I think we should receive in evidence all the testimony which the committee on reconstruction has had presented to it dealing with the coal situation in America. Mr. CHANTLAND. And we will supply you with a complete copy as soon as possible, Senator. I think it is sufficient for this situation to have in mind that following the release of the coal industry The CHAIRMAN. Permit me to interrupt you. Senator Walsh, is it your suggestion that the committee receive as evidence, to be considered in connection with this bill, the testimony you refer to? Do you include the testimony taken by this committee on its former investigation as well as the committee on reconstruction? Senator WALSH, of Massachusetts. I think it should be included; yes, sir; and I make that motion. Senator FERNALD. I second the motion. (The motion was agreed to.) The CHAIRMAN. Now, Mr. Chantland, you may proceed with your statement. Mr. CHANTLAND. Mr. Chairman, I was saying that it is sufficient that we have in mind that following the release of the coal industry from the second Fuel Administration last spring a very deplorable situation arose; that very generally unconscionably high prices were charged for coal during the past season. Those in the industry claim that the percentage of unwarrantedly high-priced coal, or profiteering coal, as we call it in the parlance of the street, was small as compared with the total coal output. Be that as it may, the public has suffered, and that fact has been admitted frankly by the representatives of the coal industry appearing before the committee on reconstruction, but when it comes to ascertaining the definite facts in order to lodge the specific blame, the situation is very different. It reminds me of the famous old cartoon of Thomas Nast of the Tweed ring. When finally exposed each one in the circle pointed to the other and said, ""Twas him." One of the objects of the bill before you is to enable the public definitely to know and definitely to place the blame. As the coal situation seems to me from a public standpoint, this committee and Congress has before it four alternatives: First, henceforth to definitely know currently the facts, coupled with power to obtain them-I mean up to date, not historically, but as the thing happens, the facts coupled with the power to obtain them-and to disclose at once the profiteers, coupled with other reasonable matters of regulation, including provision for the Government, through the President, taking full control of the industry whenever any emergency threatening the public health shall threaten, through shortage or unreasonable prices, or arises in the future. Second, definitely to fix coal prices, profits, and margins at all times. Third, for the Government to take over this natural resource industry completely, or, fourth, to leave entirely alone this prime necessity on which the health and even the lives of the people are so primarily dependent. I do not want to be held as speaking for the committee except as one who has been working for the committee, and I would not want my language to be otherwise taken. We believe the time has come when the people will no longer consent to this industry going its own way with the facts unknown to the public. Likewise I believe, and the committee believes, that the present prevailing sentiment in Congress is against either complete nationalization or definite price fixing, except as a last resort. With these ideas the committee has attempted to present a bill intended to give the maximum of relief with the minimum of interference, by covering what it believes to be the essentials to prevent a recurrence of the unspeakable conditions through which we have recently passed. The bill then has two functions, first, preventive, and, second, remedial. In substance the bill provides, first, for what might be called complete and pitiless publicity and information of the industry and trade, concurrently, not historically, once more, but concurrently as the facts occur; second, for the Government taking complete control in emergencies through the President; third, taxing brokers' first sales above a reasonable margin, and taxing subsequent sales between brokers or dealers practically to the point where there will be no profit in them, thus hoping to drive coal in a direct channel of distribution from producer to consumer, and do away with practically all the unnecessary, useless pyramiding, and speculative prices in brokers' or dealers' sales. Senator KENYON. Before you get away from that, let me ask you this: Has the testimony before that committee shown that this pyramiding of sales has been a very potent influence in the raising and keeping up of prices?. Mr. CHANTLAND. Yes, sir. It is fair to say that the testimony shows that between the mine price, no matter how high it may be, and the price that the consumer pays, whatever that may be, there is an unexplained high and unconscionable spread, and the time of the committee has been very largely taken up to ascertain to whom that went, and the best answer we got was from one of the coal men who said that "everybody got it"; it went all along the line. How many resales are in between, we have not been able to determine. Of course there are many instances, but that can only be determined by tracing each separate load of coal or shipment. The CHAIRMAN. Has that been done in any instances of which you can give the committee a definite idea; that is, just what this pyramiding means in the way of resales and increased prices? Mr. CHANTLAND. We have not carried the resales through, but it will be done in some instances to determine definitely. Senator FERNALD. Have you not traced any concrete shipment of any car in any instance? Mr. CHANTLAND. This is what we have attempted, but we have not gone that far yet. Senator KENYON. It is hard to get this cost price at the mines, but we have one certain large order, and then the profit, what the ultimate consumer is paying for it and the hiatus between we have not been able to cover, where a company claims that they buy it from another company, and that company got a commission, and so it goes. Mr. CHANTLAND. What we are endeavoring to do is this: You recall, perhaps, from the public prints that Col. Wentz, president of the National Coal Association, sold a large quantity of coal to the War Department. We are endeavoring to make some specific tracings there. On the stand he stated that a lot of people from whom he bought were operators. On an analysis we found that that was not so as to a large number. He was in error with regard to that, so we have to find out how many dealers were between. Senator FERNALD. That went to the War Department? Mr. CHANTLAND. Yes, sir. Senator KENYON. They were both operators and distributors? Mr. CHANTLAND. Yes; the company are both operators and distributors. I believe it was stated that Col. Wentz bought no coal from his own producing companies. Whether that is entirely true or not we have not ascertained, but we did find-that is, the committee did, that he bought from others who were not operators and at least two or three profits came in between. His contract was to buy at a commission of 50 cents a ton, and I believe up to $11 per ton. I would like to know how many were in between-and when I say "I" I mean the committee-because this seems to me to be responsible for a good deal of this high and extra price. Apparently at the time of the Fuel Administration they started to speak about "tons" of coal. Before that time it was "carloads." Fifty cents a ton on the standard 50-ton car is $25 a car, if the purchaser got that coal over the telephone and turned it over to the War Department; 15 cents a ton as proposed in this bill is $7.50 per car. While before the war it was "carloads," now they have gotten down to that small unit, viz, "tons." Senator FERNALD. If you will excuse me, Mr. Chairman, I would like to have you state, Mr. Chantland, in order that we may have it in the record, just what connection Col. Wentz had with the War Department, what position he held? Mr. CHANTLAND. He was in no position at the time he bought this coal. He was just a citizen. He had been in the service as a commissioned officer. Senator FERNALD. But at the time, he had no connection with the War Department? Mr. CHANTLAND. No, sir; there is an error in the prints, if that impression has gone out. Senator KENYON. It does him considerable injustice? Mr. CHANTLAND. Yes, it does. The CHAIRMAN. Is he connected with the Regular Army? Mr. CHANTLAND. He was in the late war in the Quartermaster Department, and was in the war during a part of the time. He came home and resigned long prior to this deal. The CHAIRMAN. Prior to the late war he had been a private citizen? Mr. CHANTLAND. I think he had. Senator WALSH of Massachusetts. Who was the officer of the Quartermaster Corps that he negotiated with? Mr. CHANTLAND. Col. J. P. Barney is the purchasing agent for the War Department. |