ought not to be raised in order to meet that unnatural and temporary demand.

Senator TOWNSEND. Suppose the Government is asked to intervene in this matter, because it is something that affects the general welfare?

Mr. VINSON. It does.

Senator TOWNSEND. The Government would not have any business to deal with this question simply for the benefit of a coal miner or a coal operator, would it?

Mr. VINSON. Not for a single coal miner or operator. But if the Government passes a law and lets it remain on its statute books, if it drives even a single operator out of business-that is sufficient-because of competitive conditions that it will not allow him to meet, the Government should see to it that it is remedied in some way. Senator TOWNSEND. I quite agree with you. But it occurs to me that this Government hasn't any business to meddle with any of the affairs of the country, the business interests of the country, for the benefit of a few individuals. It is only as that business affects the good or the ill of the whole people that it has a right to intervene. Now, I think Mr. Brandegee brought this out pretty clearly; it seemed so to me, at least. If the Government is going to do any thing about it, ought it not to insist that the coal operators shall receive fair and reasonable compensation rather than what supply and demand may happen to call for?

Mr. VINSON. If there is a difference between what is fair and supply and demand, then I take it the Government ought to confine itself to the proposition of what is fair.

Senator ToWNSEND. It seems so to me.

I think I have nothing further, Mr. Chairman.

The CHAIRMAN. Has any other member of the committee any further questions?

Senator CUMMINS. I believe I want to ask a question. With entire respect, of course, to the Supreme Court, is it not generally understood among the members of the profession that the Knight case, if not overruled, has been very much entrenched upon by later decisions?

Mr. VINSON. That is the impression, Senator.

Senator CUMMINS. The safety-appliance case to which you referred, and which was decided a week ago Monday, I believe, presented substantially this sort of situation, did it not: A railroad company that was itself engaged in interstate commerce

Mr. VINSON. And intrastate, both.

Senator CUMMINS. Interstate and intrastate, had a car that in itself did not pass beyond the limits of the State.

Mr. VINSON. Yes, sir.

Senator CUMMINS. But was engaged wholly in local or intrastate

commerce.

Mr. VINSON. Yes, sir; that is correct.

Senator CUMMINS. And the question was whether the act of Congress which required that car to be equipped with a safety appliance was a constitutional provision.

Mr. VINSON. That is as I understand the decision.

Senator CUMMINS. And the Supreme Court held that notwithstanding the fact that the car itself had never been engaged in interstate commerce, and because it belonged to a company that was engaged in interstate commerce, must be equipped with a safety appliance precisely as though it were itself engaged in passing from State to State.

Mr. VINSON. I understand that is the substance of the decision as you have stated it.

Senator CUMMINS. Without saying anything about the exact facts of the Knight case, are you able to reconcile that decision with all the reasoning of the Knight case?

Mr. VINSON. Senator, I am not able to reconcile the reasoning in the Knight case with a great many cases that have been decided since that time. For instance, you take the Northern Securities case; you take that case, and you take the Standard Oil Co. case, and the Tobacco case, and the reasoning in the Knight case, if put in parallel columns along with the reasoning of the court in the other cases, would require some trouble to harmonize them, I think.

Senator CUMMINS. I have not seen anyone who could harmonize them. I did not know but what you had found some way in which they could be reconciled.

Mr. VINSON. No, sir. I do not claim to be a genius.

Senator TOWNSEND. I just want to ask one question more that occurred to me at the time, but I forgot it. Is the cost of producing coal gradually being reduced?

Mr. VINSON. No, sir; it is gradually increasing.

Senator TOWNSEND. So that the economies of production and manufacture have not materially reduced the cost of production? Mr. VINSON. Well, I am speaking now as a whole.

Senator TOWNSEND. I want to ask you that question in reference to your best equipped mine, your big mines.

Of

Mr. VINSON. In the best equipped mine the production of coal is not any cheaper now than it was last year or the year before; that is, generally speaking. Of course, they are using better appliances and more labor-saving machinery wherever they can be installed. course, to that extent the cost of production is, to some extent, lessened. But the cost as a whole of course, that includes the small cost-increased, from 1904 to 1910, 9 cents a ton, while the price of cual remains stationary.

Senator TOWNSEND. The price of coal at the mine?

Mr. VINSON. At the mine; yes, sir.

Senator TOWNSEND. How has the price of coal to the consumer been during that time?

Mr. VINSON. That is, to the consumer who buys at the mine?

Senator TOWNSEND. I am talking about the man who burns it in his stove.

Mr. VINSON. I expect he is skinned a good deal.

Senator TOWNSEND. He pays more now than he did before, does he not?

Mr. VINSON. I do not know. I am not sufficiently well acquainted with the details of the retail trade in the cities to know. Senator OLIVER. I do not think there is much difference. Senator TOWNSEND. There is more than 9 cents, is there not?

Senator OLIVER. I think not; not bituminous coal. I think the consumer gets bituminous coal to-day fully as low as he got it 10 years ago, if not less.

Senator NEWLANDS. Anthracite coal has increased, has it not? Senator OLIVER. I do not know anything about the anthracite business.

Senator TOWNSEND. You have said that you deliver your coal directly to the consumer in some instances.

Mr. VINSON. Yes, sir.

Senator TOWNSEND. At boats, etc.?

Mr. VINSON. Yes, sir.

Senator TOWNSEND. How does that price to the consumer compare, if you know, to the price that his competitor has to pay who does not get it directly from you?

Mr. VINSON. Do you mean the consumer's competitor?

Senator ToWNSEND. Yes.

Mr. VINSON. The prices, as I understand it, are substantially the same all over the country for the same grades of coal-I mean to the consumer. You take all the lake business, and the price of coal at the lake, or rather at the distributing points on the lake, are substantially the same for the Pittsburgh district and the eastern Ohio district and the West Virginia coals; there may be a slight fluctuation, but not much; dependent, of course, to some extent upon the intrinsic merit of the coal.

Senator TOWNSEND. That is all.

Senator WATSON. You spoke of 25 per cent of the coal now being wasted. Do you think you would save some of that in this arrangement, some of that 25 per cent of the coal that is now being wasted? Mr. VINSON. I think so. I think that you could save in this way, Senator: As you know, a miner who is not careful and who does not rob his pillars in a scientific way has quite a loss in the method by which he operates in taking out his pillars and in the results which follow. If he is required to take these pillars out in the way they ought to be taken out, and the way we have them taken out in our mines, and the way you have them taken out, there would be a big saving of the coal; that is, much more would be recovered and go into the trade. There are smaller mines which do not pay much attention to this feature. Sometimes the rock comes down and squeezes the vein down to a foot of squeezing it out. It is necessary, in many instances, to cut through that rock until you get to the coal on the other side, that being a very expensive proposition, and if the small miner who runs up against a fault of that sort is selling his coal at about what it costs, and in some instances less, he is not going to the expense of cutting through that rock to get to the coal on the other side. As a consequence, when the mine is abandoned that coal is still in the mine.

The CHAIRMAN. Are there any further questions?

Senator NEWLANDS. Mr. Vincent, would it be possible to pass a State law containing substantially all of the provisions of this law which you have drawn up? Would there be any difficulty in passing it, in the first place, in the State of West Virginia?

Mr. VINSON. I think there would be a great deal of difficulty, if it would not be entirely impossible, in getting a law like that or any other law along that line adopted by all of the coal-producing States.

Senator NEWLANDS. Well, suppose you should just pass it in the State of West Virginia?

Mr. VINSON. If we were to pass it in the State of West Virginia, the chances are that the first time that we got an agreement there that we might combine our small operations, we would be met by an indictment from the United States court, and when we undertook to plead a defense under the State statute, they would say that the State had nothing to do with it, that it was interstate commerce, and consequently the Sherman antitrust law was the supreme law of the land.

Senator NEWLANDS. But everything that relates to the conservation of the coal itself, and everything that relates to the protection of employees, and the compensation for injuries could be included in a State law, could it not?

Mr. VINSON. Protection, Senator, has already been attempted, I take it, by almost every State in the Union that has anything like extensive coal mining. The difficulty is the laws that the States have are not applicable to the differing conditions in the same States.

Senator NEWLANDS. You say that if you came to the point of making an agreement amongst operators such as is contemplated by this bill you would then probably find yourself confronted by an indictment under the Sherman Act?

Mr. VINSON. Yes, sir.

Senator NEWLANDS. Would you not also run the chance of an indictment under a State law?

Mr. VINSON. No, sir; not in West Virginia.

Senator NEWLANDS. You have no State law on the subject?
Mr. VINSON. We have the common law.

Senator NEWLANDS. Would you not, then, under the common law?
Mr. VINSON. No, sir.

Senator NEWLANDS. As I understand it, the Supreme Court has declared that the Sherman law is simply a declaration of the common law.

Mr. VINSON. In a certain sense, that is true.

Senator NEWLANDS. Therefore, if the common law prevails in your State, such combinations as are forbidden by the Sherman Act would be forbidden by your common law?

Mr. VINSON. Reasonable combinations are not violations at common law. They are not violations of law at common law. Any combination was held to be legal and enforceable, even in a court of equity, that was not in unreasonable restraint of trade, and this unreasonable restraint only covered such transactions as have for their purpose and object the raising of prices beyond what was just and fair and the creation of monopolies. Therefore, combinations at common law were not only permissible but enforceable, so long as they were reasonable.

Senator NEWLANDS. Then, if such combinations as you refer to are permissible at common law, are they not permissible under the Sherman law, interpreted as it has been by the Supreme Court? Do you not understand that the Supreme Court has declared that Congress, in passing the Sherman law, simply intended to declare the common law, and that whilst the general rule of common law was that all restraint, all combinations in restraint of trade were void, yet that

without stating them, exceptions to that rule existed, and those exceptions the Supreme Court practically gave vitality to in their decision-do you not understand that to be the case?

Mr. VINSON. I understand, Senator, that that is the impression most people have of the result of those two decisions. My own understanding is that those two decisions, when carried out and applied to the practical conditions, are far from receding from what the court decided in the Securities case and the Joint Traffic Association case, and that was this, that any combination, whether it was reasonable or unreasonable, was a violation of the Sherman antitrust law. Any agreement, I mean, that lessened competition. Now, they decided that in the Railroad case in the first instance. To-day the Department of Justice has not brought suits against the railroad companies for getting together and combining and agreeing and fixing rates between competitive points. I suppose that the reason the Department of Justice has not done that is that, as a matter of fact, rates between competitive points can only be made and fixed in that particular way, and yet the Supreme Court has decided that that is a violation of the Sherman antitrust law. So that every time a rate is fixed between Chicago and New York it must be the result of a conference between the representatives of the different railroads operating between those points, and they agreeing upon the price that the public shall pay for its transportation. That is the very thing that this court has said was condemned by this Sherman antitrust law.

Senator NEWLANDS. In what case was that?

Mr. VINSON. There are two cases, and then it was repeated in the Northern Securities case. The two cases were the Trans-Missouri Freight Association and the Joint Traffic Association. And then the Northern Securities case was the one that spoke most learnedly upon the question. They said frankly, and all the judges agreed to that, that Congress had prescribed the rule of free competition without limit, without restraint, or without taking into consideration any conditions at all; while that decision, in the line and view of what the court had said before, of course, made us all believe, naturally, that any combination, no matter how small or insignificant, just so it affected interstate commerce, violated that law and made it subject to its penalties.

Now, then, the practical effect, when you come to apply the decision of the court to existing conditions in both the Tobacco and the Oil cases, it seems to me I may be wrong-but it seems to me that the practical effect of both those cases is to carry out the original declaration of the court.

Senator NEWLANDS. Then you do not take the view that the Supreme Court in its recent decision has simply declared that the Sherman law means what the common law did upon the subject and that it has vitalized all the exceptions to the common law regarding combinations that were not in unreasonable restraint of trade?

Mr. VINSON. The court has unquestionably said that in its opinion; there is no question about that. But when the court comes to apply its decree and its judgment to the case before it, it is on the basis, and they are enjoined all these subsidiary companies are enjoined that they must go on into real, actual competition one with the other.