ernment, or failed to give the Federal Government, jurisdiction in the Sugar Refining Co. case was the fact that it was confined to a locality within the boundaries of a single State. Now, in that respect is not the mining process similar to that of the sugar refining? Mr. VINSON. Well, it is similar only in this respect, I take it, Senator. It is similar because it is located-or rather one end of that transaction is located-in one State and the other end of it in another State and there is an existing contract for the sale and transportation of that product before it is mined.

Senator POMERENE. That may be so or it may not be so. In the statement of this case the court has held that the sale of the sugar is perhaps an incident to the manufacture, but the primary object is the manufacture, and that is confined within the State. Therefore the Federal Government does not have jurisdiction of that manufacturing under the Sherman antitrust law. And I fail to see the distinction between the principle involved in the case I have suggested and the case which we have under consideration. Now, the court, beginning on page 15, says:

In Gibbons v. Ogden, Brown v. Maryland, and other cases often cited the State laws which were held inoperative were instances of direct interference with or regulations of interstate or international commerce, yet in Kidd v. Pearson the refusal of a State to allow articles to be manufactured within her borders even for export was held not to directly affect external commerce, and State legislation which in a great variety of ways affected interstate commerce and persons engaged in it has been frequently sustained because the interference was not direct.

Contracts, combinations, or conspiracies to control domestic enterprise in manufacture, agriculture, mining, production in all its forms, or to raise or lower prices or wages, might unquestionably tend to restrain external as well as domestic trade, but the restraint would be an indirect result, however inevitable and whatever its extent, and such result would not necessarily determine the object of the contract, combination, or conspiracy.

Again, all the authorities agree that in order to vitiate a contract or combination it is not essential that its result should be a complete monopoly; it is sufficient if it really tends to that end and to deprive the public of the advantages which flow from free competition.

It would be interesting perhaps to read a page or two of that decision, but I will not take the time of the committee to do that now. I would like to have read into this record the balance of page 16 and page 17. I think it would be interesting when it comes to the investigation of the subject.

(That part of the opinion in the case of the United States v. E. C. Knight Co., referred to by Senator Pomerene, is as follows:)

Slight reflection will show that if the national power extends to all contracts and combinations in manufacture, agriculture, mining, and other productive industries whose ultimate result may affect external commerce, comparatively little of business operations and affairs would be left for State control.

It was in the light of well-settled principles that the act of July 2, 1890, was framed. Congress did not attempt thereby to assert the power to deal with monopoly directly as such; or to limit and restrict the rights of corporations created by the States or the citizens of the States in the acquisition, control, or disposition of property; or to regulate or prescribe the price or prices at which such property or the products thereof should be sold; or to make criminal the acts of persons in the acquisition and control of property which the States of their residence or creation sanctioned or permitted. Aside from the provisions applicable where Congress might exercise municipal power, what the law struck at was combinations, contracts, and conspiracies to monopolize trade and commerce among the several States or with foreign nations; but the contracts and acts of the defendants related exclusively to the acquisition of the Philadelphia refineries and the business of sugar refining in Pennsylvania, and

bore no direct relation to commerce between the States or with foreign nations. The object was manifestly private gain in the manufacture of the commodity, but not through the control of interstate or foreign commerce. It is true that the bill alleged that the products of these refineries were sold and distributed among the several States, and that all the companies were engaged in trade or commerce with the several States and with foreign nations; but this was no more than to say that trade and commerce served manufacture to fulfill its function.

Sugar was refined for sale, and sales were probably made at Philadelphia for consumption and undoubtedly for resale by the first purchasers throughout Pennsylvania and other States, and refined sugar was also forwarded by the companies to other States for sale. Nevertheless, it does not follow that an attempt to monopolize, or the actual monopoly of, the manufacture was an attempt, whether executory or consummated, to monopolize commerce, even though in order to dispose of the product the instrumentality of commerce was necessarily invoked. There was nothing in the proofs to indicate any intention to put a restraint upon trade or commerce, and the fact, as we have seen, that trade or commerce might be indirectly affected was not enough to entitle complainants to a decree. The subject matter of the sale was shares of manufacturing stock, and the relief sought was the surrender of property which had already passed and the suppression of the alleged monopoly in manufacture by the restoration of the status quo before the transfers; yet the act of Congress only authorized the circuit courts to proceed by way of preventing and restraining violations of the act in respect of contracts, combinations, or conspiracies in restraint of interstate or international trade or commerce.

The circuit court declined upon the pleadings and proof to grant the relief prayed and dismissed the bill, and we are of opinion that the circuit court of appeals did not err in affirming that decree.

Senator POMERENE. It occurred to me when you were explaining your bill that there would be a grave constitutional question here, particularly as applicable to the first two classes of provisions to which I have referred. And, as Senator Oliver has suggested, when it comes to legal methods designed for the protection of the workingman or miner in a mine, that is largely taken care of, and it seems to me properly, by State legislation.

Mr. VINSON. I think an examination of the later cases, and particularly the one decided about 10 days ago by the Supreme Court, will show that that court has held in a great number of cases, decided both before and since the Knight case, that whenever an article has drifted from any point in one State to a purchaser or to a destination in another State, that all of the agencies, all of the appliances, and all of the people connected with that transportation are under the exclusive jurisdiction of the power of Congress when that Congress exercises that power.

Senator POMERENE. Do you mean to say that the court in this later case has distinguished it from the case in 156 United States?

Mr. VINSON. Not in words; in substance, yes. In the case that they decided two weeks ago that is, a week ago last Monday—it involved the question of the constitutionality of an act of Congress providing for safety appliances on a car. The case went up to the Supreme Court involving a safety appliance on a car which was used exclusively in intrastate commerce, and the court there held that that was a case properly within the jurisdiction of Congress. And I think if you will read the Picture cases (decided somewhere about 207 U. S.)-I have referred to them in the brief that I have filedyou will find that the court is rather positive upon the exclusive power of Congress to regulate everything and every appliance that pertains to transactions between citizens of different States, or interstate commerce, as it is called.

Of course, you take all these appliance acts, and the acts that require cattle to be unloaded and fed or watered within a certain time, and employers' liability acts that Congress has assumed to pass, and the courts have sustained them. They are the exercise of the police power of Congress over interstate commerce. That is the best way I know how to express it. And I think that that power, so far as it affects or pertains to interstate commerce, the transactions that go into that commerce, is fully and exclusively of State action.

Senator POMERENE. In your brief do you discuss the question I have suggested here as to whether or not mining is a part of the commerce in fact?

Mr. VINSON. I do; yes, sir. You can see the difference between the manufacture of sugar at a local point and a man who starts a substance unchanged-unchanged, mark you—on its continuous journey with no stops.

Senator POMERENE. I differ from you as to that.

Mr. VINSON. I mean to say that it may stop in intrastate com

merce.

Senator POMERENE. Oh, no; but it seems to me that the legal principles involved are the same. There isn't any distinction between manufacturing and selling sugar and mining and selling coal. It does seem to me that the same principle is involved.

That is all.

The CHAIRMAN. Senator Townsend, have you any inquiries?

Senator TOWNSEND. Mr. Vinson, I was unfortunate in not being in at the beginning of your statement, which has been exceedingly interesting to me; and fortunately most of the questions that I had in mind have been asked, but I would like to know for whom you appear here?

Mr. VINSON. I appear primarily for myself. I am personally interested in a number of small coal-mining companies. I am attorney for a great number of other small coal-mining companies, and represent one of the large coal companies in the State.

Senator TOWNSEND. And all of your clients, the small and the large, are in sympathy with the proposition which you have presented here?

Mr. VINSON. They are, so far as I have consulted them. I have not consulted all of them; I mean each one separately. I have mentioned this matter to a number of coal companies in Illinois, in Pennsylvania, in West Virginia, and in Ohio. I met a great many coalmining people at this congress at Chicago, and I talked it-perhaps I made myself a bit obnoxious to some of them-but I found no criticisms of the idea. The only question that was raised at all was: "Well, can it be done? If it can, it ought to be."

Senator TOWNSEND. Are the miners of these companies organized? Mr. VINSON. Some of them are and some of them are not. We have very few organizations in West Virginia.

Senator TOWNSEND. Do you represent them, so far as the compensation feature is concerned?

Mr. VINSON. I do not.

Senator TOWNSEND. Have you discussed the matter with them? Mr. VINSON. With some of the individuals, not with the organizations.

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Senator TOWNSEND. Are those companies subject to many losses for damages?

Mr. VINSON. They are.

Senator TOWNSEND. And that becomes a burden upon the companies?

Mr. VINSON. Very great, sir.

Senator TOWNSEND. Do you not think it would be wise, then, inasmuch as that is a burden from which they are seeking relief, that they should at least contribute very largely to the vast fund which you propose?

Mr. VINSON. I think so, Senator.

Senator TOWNSEND. But this really does not-this method that you propose.

Mr. VINSON. They contribute about four-fifths of the whole fund, the way the bill is drawn.

Senator TOWNSEND. But that is to be levied back upon the con

sumer.

Mr. VINSON. That is a part of the cost, just the same as the wearing out of a piece of machinery.

Senator TOWNSEND. But they do not regard it as a part of the cost where they are subject to damages; it is a burden upon them.

Mr. VINSON. It is a burden upon them. That is what they want to avoid.

Senator TOWNSEND. If I understand-I am sorry to have to ask you this, for if I had been here I should have known-do you propose a general fund to be constituted from which damages are to be paid? Mr. VINSON. Yes, sir.

Senator TOWNSEND. And they are to be paid to companies all over the United States wherever damages occur?

Mr. VINSON. Paid to the individuals; yes, sir.

Senator TOWNSEND. Who belong to that company?

Mr. VINSON. Yes, sir; work for it.

Senator TOWNSEND. Is not that going to lead to carelessness on the part of the operators? Is not the company that is most careful, most conscientious in its installing of appliances, safety appliances, etc., going to suffer from the more careless?

Mr. VINSON. I should think not, Senator, because every accident that occurs-that is, not every one, but most of them-results in great injury to the property, for which the owner would get no compensation at all.

Senator TOWNSEND. That would be true in reference to large accidents like explosions, but not ordinary accidents.

Mr. VINSON. Well, the ordinary accidents to the property-say an accident in the mine, collisions, or anything of that sort, unless it is just merely an accident between two miners handling a pick, or something of that sort-must necessarily increase the expense to the operator to clear up the débris, or whatever it is. For instance, you have a collision of two mine cars in your mine. Maybe a man is injured. The electric cars are rather expensive, and they have to be sent away for repairs or maybe new ones purchased. I do not think it would have a tendency to decrease the watchfulness that the mine people have over their mines. I want to say that is very great. They all realize that a mine may be destroyed absolutely

by a spark of fire setting off coal dust, fire damp, or gas. And I have never yet seen an operator, no matter where he was located, who would not use all of the methods that he knew to prevent accidents of all kinds.

Senator TOWNSEND. My own experience in various matters has been that most of the safety appliances which we have in use, even on railroads, have been forced upon the companies; that they have never voluntarily adopted what, to the novice like myself, seemed money-makers for them. And I was wondering whether this was going to be carried so far with reference to coal mining as to induce the owners to install them, because all of the companies in the United States have to help pay this loss where relieved from any damage suits. If it resulted in that it would hardly be the proper thing.

Mr. VINSON. No, sir; it would not. I think the opposite would really be the result.

Senator TOWNSEND. In regard to the second phase of your proposition, you say that the large companies are liable to destroy the smaller ones. Did I understand you to say that the large companies are successfully conducting their business now?

Mr. VINSON. Well, in a way, the large companies that are well organized are not losing any money. They are selling at a very low margin. Last year the average coal brought at the mine throughout the whole country $1.07 per ton-I mean it cost that. The sale price was $1.11. There was a margin of only 4 cents. That did not include any interest or any depreciation for the exhaustion of the coal. And if you add these two items to the cost price, the coal industry, the bituminous-coal industry of the country last year is short of actual cost between thirty-five and thirty-eight million dollars. Senator TOWNSEND. Then one of the objects you have in mind, as I understand you, is to increase the price of coal?

Mr. VINSON. No, not necessarily. It ought to be increased, Senator, because the other industries come here preying upon the coal of the country and not paying for it what they really ought to pay. Senator TOWNSEND. The large companies then are not receiving the price they ought to receive, in many instances, because of the independent companies, the smaller companies?

Mr. VINSON. Because of each other and the independent companies.

Senator TOWNSEND. Then one of the results of this necessarily. would be to maintain a fair price at least to the consumer?

Mr. VINSON. It would be.

Senator TOWNSEND. You have several times used the term "supply and demand." That is the basis upon which you would fix a price?

Mr. VINSON. I think so.

Senator TOWNSEND. Is that the basis that the Government ought to employ if the Government is going into this business?

Mr. VINSON. You mean going in to regulate it?

Senator TOWNSEND. Yes.

Mr. VINSON. We have generally been taught to believe that that is a just basis of price fixing. There are times when it would not be just, because in certain districts there may be a strike that would create an unnatural demand from other districts, and the price