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Show Bruchart's Washington Digest Weakness of Unsound Legislation Does Not Remain Concealed Long Old INK A Is Striking Example of Careless Lawmaking; Lawmak-ing; Now Cornea Up the Unworkable Conditions of CuflVy Law That Has Co-t Coal Industry Millions. By WILLIAM BRUCKART WSU Service, National Press Bldg., Washington, D. C. Vi''Ui:i(j'i'U:i. Unsound and ui-woik.iMf ui-woik.iMf laws h;ive a way of con-c-:ilm thi-ir weaknesses fur varying vary-ing lengths of time. It seems to be true, however, that those weaknesses, weak-nesses, like one's sins, will be found out. This is especially true of written writ-ten laws that are predicated upon a formula of how things ought to be done, rather than upon the basis of known acts and customs and living conditions of the people who make up our nation. Take the old NRA, for example. Its glaring weaknesses and impossible impossi-ble prescriptions were discovered rather soon by the persons and businesses busi-nesses who had to abide by the terms of that law. It was not so long, however, before most of us discovered that the artist who had sketched the original design of the blue eagle had made a mistake. You will recall, of course, that the design de-sign had 13 feathers in one wing and 12 in the other. That was bound to make the bird fly in a circle, and how true it was of the law, itself! Even, then, there were many persons per-sons who believed the law was not given a sufficient trial before the Supreme Su-preme court mowed it down. Among those who held a conviction convic-tion that NRA would work was Senator GufTey, the Pennsylvania New Dealer. It is the same Senator Sena-tor GufTey who attempted to destroy, de-stroy, politically, all Democrats who disagreed with President Roosevelttried Roose-velttried to "read them out of the party" in a radio address. Senator GufTey, with the aid of John L. Lewis and the C. I. O., pushed through congress the so-called so-called Guffey-little NRA coal law. The coal industry was divided in sentiment about the bill, as I remember re-member the legislative battle, but Senator GufTey won. There came about a national bituminous coal commission, with power to fix prices, with power to compel a lot of other things, including the right of punishment under other laws if a coal mine owner should commit the horrible crime of selling below cost in order to get rid of his coal. Gufiey Law Cost the Coal Industry Many Millions The first law so enacted was mowed down by the Supreme court just the same as the original and big brother NRA. Senator Guffey tried again. And so for two years, or thereabouts, there has been a law in force that applied the same principles prin-ciples of regimentation as NRA to the coal industry, and during that time, according to official reports, the soft coal industry has lost money. mon-ey. It lost $37,000,000 in 1937, and it lost about $GO,000,000 last year, the coal commission has reported. Naturally, the coal mine owners are not taking this loss without a squawk. It is not a great deal more than a chirp, however, because the production of coal dropped from 442,000,000 tons in 1937 to 342,000,000 tons in 1938. That is pretty rapid reducing, even if the industry were really fat. In consequence of this, and other conditions affecting labor and property, prop-erty, Representative Allen, a Pennsylvania Penn-sylvania Democrat, has introduced fn the house a bill to reconstruct the Guffey law. His proposal would eliminate the price fixing; it would eliminate the special tax on the coal industry for upkeep of the high powered, pow-ered, but more or less futile, coal commission, and it would place the industry again on a basis where its individual mines would be competing compet-ing for public patronage instead of inducing bootlegging of coal. I mentioned above that the industry indus-try had lost money. Well, you and I, as buyers and consumers of coal, not to mention the thousands of great manufacturing plants using coal, also lost money because of the GufTey law. We lost money because of the price conditions. We would be penalized in a big way if the coal commission could ever have accomplished the almost insurmountable insur-mountable job of establishing a set of federally fixed prices. It would have cost us money because we would pay the price that was fixed, and that price would have to be high enough to allow a profit for the lowest grade and most inefficient ineffi-cient mine operator. Ancther Tug of War Between Coal Mixers and Operators One of the reasons the mine owners own-ers lost money was because many who supported the law were convinced con-vinced it would mean increased wages for the workers. The United Mine Workers of America, headed by Lewis, believed so, and two years ago they demanded and obtained ob-tained an increase of 10 per cent. During the debate on the l.vll in congress con-gress it was talked freely that the miners could get a wage increase and it could be passed on to the consumers. con-sumers. This would be true, it was said, because the coal commission would fix the prices and the selling price, as fixed by law, would have to be above production costs. Certainly, Cer-tainly, labor's wage is a part of pro duction costs, and the public would not feel it. The contract then negotiated expired ex-pired recently and a new one is now being considered in the regular tug of war that occurs between miners and operators every two years. In the meantime, however, things happened hap-pened to labor in. the soft coal mines. As I mentioned above, there was a decline in production of coal. It figures fig-ures out at 22 per cent. That obviously ob-viously means that, while labor obtained ob-tained an increase of one-tenth in the rate of pay, it worked only four-fifths four-fifths as much time according to the records available to me. I fail to see where labor gained from the law. Moreover, from the federal relief re-lief authorities I learn that living conditions and buying power among the persons living in coal mining areas have declined almost in direct ratio to decline in production of coal. With respect to the added taxation placed upon the owners of the mines, the surface indications and the original declarations of supporters support-ers of the law have proved to be quite misleading. The law required the industry to pay a tax of one cent a ton and to meet assessments to cover the expenses of boards that were set up in the various regional areas. It is easy to calculate that the one cent tax raised $3,420,000 on 342,000,000 tons, produced last year. But that figure does not show the extra assessments that were paid to the regional boards, nor does it reveal re-veal that every mine owner had to hire extra clerks in the company offices to take care of all of the various and sundry reports that the national commission and the regional region-al boards saw fit to require. Simply Became an Added Expense Borne by Industry Again, it was expected that these costs and taxes would be absorbed a nice word for concealing the facts from the consumers in the selling price that was to be fixed. But, as I reported earlier, the commission never quite got around to fixing the prices under the current law. Hence, the hundreds of thousands of dollars which the law's sponsors said would be passed on simply became be-came an added expense borne by the industry. The law has another feature which you and I, as individuals, do not feel directly. It is another one of those concealed things. The law specifies that no contract can be signed between be-tween operator and consumer to last for more than 30 days. That is to say, no price can be quoted, for more than 30 days in advance. That may not appear important, but it is highly important. The practice of large users of coal is to enter into a contract for a supply sup-ply of coal to last, for example, for a whole year's operation. Having such contract, the owner of the manufacturing man-ufacturing establishment, for instance, in-stance, will be able to know what his fuel costs are when calculating the price of the goods he manufactures and sells. Fuel costs are important, and it therefore becomes plain that large users of fuel have an unknown factor in their expense item for a year's plans. What do they do? They have to estimate that item, and they take the maximum that they can expect to pay for coal and users of their product have to pay that added amount whether in breakfast food or harvesting machinery ma-chinery or railroad freight rates. That one feature of the law alone has completely disorganized the coal industry. Coal Operators Are Left With Supply in Sizes Not Needed The 30-day limit also has had another an-other effect. When a mine owner could make a year's contract or a number of such contracts, he knew whether it was lump coal or stove coal or slack that his customers needed. Without a contract, the big buyers naturally shop around to get the lowest price. A mine operator, therefore, may sell to one firm one month and the next month, some other mine will supply the coaL The result is that one mine may find itself it-self with hundreds of tons, or even thousands of tons, of lump coal when all that can be sold in a given month is slack or stove coal. Well, it is the ordinary practice in business that if too large a stock is on hand, prices are reduced to induce in-duce someone to buy. But not so in the soft coal industry under the Guffey Guf-fey law. If the price is reduced below be-low the actual cost of mining, costs approved by a bunch of accountants sitting here in Washington, the law steps in not the Guffey law, but two other laws. They are the federal trade commission act and the Rob-inson-Patman act Under either one of these laws, the mine operator who cuts prices below costs becomes tagged as a very bad boy who must be punished by fine or imprisonment imprison-ment So, the unwanted coal lies in piles beside the mine, crumbling ana becoming of less value daily as the weather takes its toll. Western Newspaper Union. |