States of the country and that they would be actively competing with each other?

Mr. VINSON. They would; yes, sir.

Senator BRANDEGEE. Those companies, themselves, could also form trade agreements and unite with each other if they could secure the approval of this commission, could they not?

Mr. VINSON. Yes, sir.

Senator BRANDEGEE. Then why, if the commission can at all times decide that the price proposed to be charged by those in the combination is too high or is unreasonable, why does it not result in the commission fixing the price if they can keep on making the companies reduce the price?

Mr. VINSON. The commission, I take it, in that respect would use the price as a factor, and maybe the controlling factor, in determining whether or not the combination was exercising its legitimate powers, just as the courts would determine and make that increased price a factor in deciding whether or not the combination was using its power as a combination in restraint of trade; in other words, making the price higher than it should be.

Senator BRANDEGEE. I say, supposing the commission did find that the combination is making the price higher than it should be, if it can order them to reduce the price, why does it not result in allowing the Government to fix the price of coal?

Mr. VINSON. Ultimately the commission would have the power to say that a certain price is too much; you must lower it. That necessarily follows, I take it, with any administrative tribunal that deals with combinations in restraint of trade.

Senator BRANDEGEE. Not only ultimately, but right off the reel, would it not?

Mr. VINSON. That may be.

Senator BRANDEGEE. When you file your agreement the commission will ask what you propose to sell coal for, probably. If you say a certain price per ton, and they say, "That, under the terms of this act, raises the price beyond what supply and demand at present justify, and we can not approve the agreement if you are going to charge that price; you must reduce it 25 cents a ton." You say, "Very well." And you go on three months, and they say, price, which was then reasonable, in view of the then supply and demand, is now unreasonable, in our opinion, and you must reduce it." Now, why does not that give the Government continuing power to fix the actual price of coal on the market?

"This

Mr. VINSON. I do not think it would give it that power. A price, as a matter of fact, as a practical proposition, would be fixed by the general trade conditions."

Senator BRANDEGEE. It certainly gives the Government the power to fix a price beyond which you should not go, does it not? Mr. VINSON. I think so, unquestionably.

Senator BRANDEGEE. Then, by continually lowering the maximum, it practically allows the Government to fix the price, does it

not?

Mr. VINSON. Yes; if the Government can say that the price at which the coal is sold is the result of an agreement by which that price has been unduly raised, or raised beyond what the ordinary

market would demand, the ordinary supply and demand; that, it seems to me, would be conclusive evidence of the fact that the combination was an illegal one and violating the law.

Senator BRANDEGEE. Supposing the Government does not say at all that it is the result of an agreement, but, having authorized the agreement, those in the agreement fix the price at that sum, and the Government says: "This price is unreasonably high, in our opin1on." You provide for no appeal from that decision; but that is final. If the Government, through its administrative commission, can forever say that the price that you are charging is unreasonable, why does it not in effect result in the Government having the power to fix the price of coal on the market?

Mr. VINSON. Well, I think it would to the same extent that a court hearing a case on complaint would say that your price is too high, and therefore it is conclusive evidence that you have an illegal combination. I think the commission would have the same power in that respect that the court would now have.

Senator BRANDEGEE. Have you laid this scheme before any of the independent companies of the small companies of which you speak? Mr. VINSON. Yes, sir.

Senator BRANDEGEE. And they are generally in favor of it?

Mr. VINSON. Every coal operator with whom I have talked, and I have talked with a good many, are very greatly in favor of it. They realize the necessity of something like this.

Senator BRANDEGEE. I think that is about all I care to inquire.
The CHAIRMAN. Mr. Watson, have you any questions?

Senator WATSON. How does the coal industry rank as compared to iron and steel or agriculture?

Mr. VINSON. My recollection is that it is second in importance to agriculture.

Senator WATSON. Do you include anthracite coal in this arrange

ment?

Mr. VINSON. Yes, sir.

Senator WATSON. As well as bituminous coal?

Mr. VINSON. Yes, sir.

Senator WATSON. What would become of the present Bureau of Mines?

Mr. VINSON. A provision in this bill provides that it would be under the present officials, and that the act would be administered by this commission.

Senator WATSON. How is the expense of this commission provided for?

Mr. VINSON. It is, in the bill, to be paid by the Government, the same as the expense of the Interstate Commerce Commission.

Senator WATSON. Why should it not be borne by the business? Mr. VINSON. Well, I do not know. Most of the Government officials, outside of bank examiners, I believe, are paid from the Treasury of the Government.

Senator WATSON. Are you familiar with the early history of the Standard Oil combination? Was that combination made by the purchase of the property or by competitive methods?

Mr. VINSON. My understanding, without having gone through the records in detail, is that the combination was formed in the first

instance by an offer of the Standard Oil people to purchase the independents, and in the event they did not agree upon a price and no sale was made, then the competitive conditions were put in as against that particular plant, and ultimately it was compelled to go into the combination.

Senator WATSON. That is all I care to ask.

The CHAIRMAN. Senator Oliver, have you any inquiries to make? Senator OLIVER. Mr. Vincent, I want to ask you one question, suggested to me by one of Senator Brandegee's question. Is it not the case that the coal industry deals with simply one commodity, handled in very large quantities, produced by the same operation in all plants, and that, therefore, the application of the theory involved in your bill would be easier than it would in any other line of

business?

Mr. VINSON. I think that is quite true, Senator.

Senator OLIVER. It would seem so to me.

Mr. VINSON. Owing to the character of the business.

Senator OLIVER. Now, with regard to the compensation part of your proposition. Does your bill propose that the compensation allowed by this act shall be in lieu of and exclude the right of action for damages to the party injured?

Mr. VINSON. Yes, sir.

Senator OLIVER. Altogether?

Mr. VINSON. Yes, sir.

Senator OLIVER. It would be the only remedy?

Mr. VINSON. Yes, sir.

Senator OLIVER. Do you make any distinction in your bill between injuries received which are palpably the result of negligence and injuries for which the employer under the common law would not be liable because they are not the result of his negligence?

Mr. VINSON. No, sir; none whatever.

Senator OLIVER. Do you not think that is a weak point in your bill?

Mr. VINSON. No, Senator. I think the strong point in the bill is to take every question of the compensation away from a court proceeding. For instance, you have an explosion in a mine that may be the result of an act of the most experienced miner that you have, because they do forget, as we all do; and as a consequence the bill is drawn upon the theory that no man will willingly injure himself. Of course, if he did, that would be a subject for investigation by the commission that would bar him from participating in this fund on account of fraud. But most accidents are accidents that are really not the fault of the man hurt; of course, some of them are; and the bill contemplates that whenever an injury occurs in the line of employment, and it is such an injury as will incapacitate a man from working even temporarily, he is justly entitled to a compensation out of the industry.

Senator OLIVER. I thoroughly agree with you in everything you say, but it seems to me the adoption of this plan would inevitably lead, if not to carelessness, at least to an absence of the excessive care which all miners or all mining operators now feel under the necessity of using with regard to the prevention of accidents.

Mr. VINSON. Yes. I think that idea is covered in another section of the bill, which would give the commission complete jurisdiction

and authority to require the installation of all of the appliances known and their proper conduct in order to prevent accidents.

Senator OLIVER. Oh, I understand that, and that is very largely covered to-day by State laws upon this subject; but all the legislation in the world is not equal to the care that the owner will take, not only of the lives of his men generally, but for fear of the damages that he would be compelled to suffer.

Mr. VINSON. I think the great damage that the owner of a mine is compelled to suffer for an explosion is not the injury to his workingmen, but it is the destruction of his mine. I think that the inducement to preserve his mine would impel him to use all the precautions that he possibly could, outside of any question of consideration that he may have for the welfare of his employees.

Senator OLIVER. I refer to other accidents than those simply caused by explosions. In fact, in thinking over the subject, I am thinking along the line of other lines of industry as well as mining. In applying this principle I should rather think that something ought to be in the bill, perhaps, to guard against negligence on the part of the operators.

Mr. VINSON. Well, that may be. My own idea was to keep these compensation features entirely out of the courts.

Senator OLIVER. Well, that is to be desired; very much desired, I acknowledge.

Mr. VINSON. Yes, sir.

Senator OLIVER. That is all, Mr. Chairman.

The CHAIRMAN. Senator Pomerene.

Senator POMERENE. Mr. Vincent, as I understand your explanation of your bill, there are three classes of provisions: One which looks to the prevention of injuries; secondly, compensation for injuries; and, thirdly, the regulation of trade agreements?

Mr. VINSON. And the conservation of the coal.

Senator POMERENE. Yes; and the conservation of the coal.

Mr. VINSON. Those are all the provisions, Senator.

Senator POMERENE. Now, I take it that you base this bill largely on the interstate commerce provision

Mr. VINSON. Very largely.

Senator POMERENE (continuing). Of the Federal Constitution?
Mr. VINSON. Yes, sir.

Senator POMERENE. Is there any provision in the Federal Constitution under which you would justify these several regulations?

Mr. VINSON. Well, Senator, I do not know, but they might be justified, these particular regulations might be justified under the same power that has been exercised by the Congress in creating the Department of Agriculture and in creating the Bureau of Mines. My own judgment is that the National Government has a police power inherently vested in Congress, which it may exercise, perhaps, not to the same extent that the States would exercise it, but there is that police power there that it does assume to exercise, and its assumptions have been largely upheld by the courts.

Senator POMERENE. Well, is not the primary part of the business of coal mining a mining proposition and not a commerce proposition? Mr. VINSON. No, Senator; I think that the whole proposition is one of transportation.

Senator POMERENE. We control transportation by the Interstate Commerce Commission-by virtue of the commerce clause in the Constitution.

Mr. VINSON. Yes, sir.

Senator POMERENE. Are you familiar with the doctrine of the United States Supreme Court in the Knight case?

Mr. VINSON. Yes, sir.

Senator POMERENE. Well, now, in substance the facts in the case of the United States against Knight were these: That the American Sugar Refining Co. sought to buy out the stock in three or four competitors engaged in similar business-that is, the manufacture of sugar. All of these concerns were located in Philadelphia and the State of Pennsylvania. It was charged that this was a combination in violation of the Sherman antitrust law. The court held in that instance that the manufacture was the primary purpose of the combination, and that the selling was the secondary purpose, and that, therefore, that combination did not come within the provisions of the Sherman antitrust law. Now, I take it that if the primary purpose of that organization had been commercial there would be no question about the authority of Congress. But here you seek in your bill to provide certain regulations looking to the prevention of accidents in a property or a business which, it seems to me, is essentially intrastate, and not interstate; that the commercial part of it is simply secondary.

The same objection, it seems to me, will apply to your compensation provisions.

I would like to have your views upon the constitutionality of those two classes of provisions in view of the doctrine laid down in the Knight case. I have it here before me.

Mr. VINSON. The Knight case was based, or rather the decision in the Knight case, as I recall it-it has been some little time since I read it the decision in that case was based upon the theory or assumption that the business was one of manufacture and was not one primarily of interstate commerce. Of course we can readily understand why that would be so; and therefore, not being one of interstate commerce, but one purely of local manufacture, the power of Congress did not extend to it.

Now, the difference between the facts in that case and those that arise in the coal-mining business are very marked. Coal mining is a transportation problem. There is no semblance of manufacture connected with it; none whatever. There are no manufacturing processes. The first thing a miner does is to chip the coal out of the bed as soon as he strikes it—that is, dig the coal-and then and there, at that point, it starts immediately on its continuous journey in interstate commerce. That coal is sold in interstate commerce before it is mined. So the work that the miner does is done on a contract by his employer to furnish trade to interstate commerce.

Senator POMERENE. Why, Mr. Vincent, is not the digging of the coal from the seam and the carrying of it to the mouth of the mine a process of manufacture?

Mr. VINSON. I think not, Senator.

Senator POMERENE. Well, assuming for the sake of the argument that it is not, it seems to me that that which gives the Federal Gov