MINING AND TRANSPORTATION OF COAL.

A bill (H. R. 13354) prohibiting common carriers from owning or leasing coal lands,

Be it enacted, etc., That it shall be unlawful for any common carrier subject to the provisions of this act to acquire ownership of any lands underlain by coal or of any coal underlying any lands, except as may be necessary and intended for its use in the conduct of its business as a common carrier.

SEC. 2. That it shall be unlawful for any common carrier subject to the provisions of this act to lease or sell upon a royalty basis to any person or persons, firm or firms, corporation or corporations, any lands underlain by coal, or any coal underlying any lands, whether the ownership of such lands and coal or such land or coal has been heretofore or may be hereafter acquired by said common carrier.

SEC. 3. That from and after January 1, 1916, it shall be unlawful for any common carrier subject to the provisions of this act to transport from any State, Territory, or the District of Columbia, to any other State, Territory, or the District of Columbia, or to any foreign country any coal or products of coal or products from land underlain by coal manufactured, mined, or produced by it or under its authority, or by any person or persons, firm or firms, corporation or corporations, to whom or to which said common carrier may have or hereafter may have leased or sold upon a royalty basis any lands underlain by coal or any coal underlying any lands, except such coal or products of coal or products from land underlain by coal as may be necessary and intended for its use in the conduct of its busines, as a common carrier.

COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE,

HOUSE OF REPRESENTATIVES, Washington, D. C., February 5, 1914. The committee assembled at 3 o'clock p. m., Hon. William C. Adamson (chairman) presiding.

The CHAIRMAN. What is the subject you wish to speak about, Mr. Cooper-the mining and transporting of coal?

STATEMENT OF JAMES A. COOPER, JR., ESQ., OF TERRE HAUTE,

IND.

Mr. COOPER. Yes, Mr. Chairman; it is in reference to the commodities clause of the Hepburn Act. I am here with these gentlemen representing them as attorney. My personal knowledge of the matter is not extensive; and I want to make a brief statement and then let them testify in reference to the matter.

What we desire to submit to you is in reference to the Hepburn amendment of June 29, 1906, to the Interstate Commerce Commission act. That amendment, you will remember, was intended to divorce transportation from production and to prevent the railroads from being in competition with their shippers. That amendment was thought at the time it was passed to cover the matter of manufacturing, mining, and production of commodities by railroad companies, and also the owning of them.

But as construed by the Supreme Court in the Delaware & Hudson case, in 213 United States Reports, page 366, the operation of the clause was cut down very materially; so that if the railroad disassociated itself from the commodity before the act of transportation began it was held not to be within the meaning of the act.

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The CHAIRMAN. In other words, they can mine it and sell it, and then haul it?

Mr. COOPER. They can mine it and sell it, and then haul it; yes. sir. Or they could mine it and bring it to the pit's head and sell it to an independent company composed of their own stockholders, the railroad forming another corporation to go on with that business.

Now, the situation which presents itself here is in many respects analogous to the anthracite coal situation. It is the bituminous coal situation in Indiana and Illinois. There are approximately 3,000,000 acres of coal lands in Indiana and Illinois, about 1,000,000 of which are presently available for coal operation from a commercial standpoint; the other 2,000,000 acres will not become available until the further passage of time, with improved methods, additional railroad, and switch facilities, and higher prices.

Of the 1,000,000 acres of coal available at present, it is estimated that about 160,000 acres are in Indiana and the other 840,000 acres in Illinois. It has come about that of the Indiana available coal lands 60 per cent have come into the ownership of the railroads oper ating in Indiana, either directly or indirectly, through stock ownership in other companies or by bond holding in other companies or by financial backing by any one of various methods.

In Illinois the proportion is a little more than 60 per cent abou! 66 per cent. In other words, of the 840,000 acres of available coal lands in Illinois at present, approximately 541,000 acres are in the hands of railroads, besides 75,000 acres in the hands of large holder who are believed to hold for the railroads, a total of 616,000 acres. In Indiana, of 160,000 acres of available coal lands about 93,500 acres are in the hands of the railroads.

The independent operation of coal has gone on in Indiana for about 50 years. The railroad activity in coal has been confined almost wholly to the past five years, that is to say, since the Hepburn Act was construed by the United States Supreme Court, as before related. on May 3, 1909. In the lapse of 50 years the independent operators, therefore, have come into possession of 40 per cent of the available coal; and in the lapse of about five years the railroads have come into the possession of about 60 per cent.

Now, to state this briefly, this situation is at present existing throughout that whole field, that of the 1,000,000 acres of available coal lands now owned and in the channels of commercial coal mining nearly 90 per cent is to-day financially bankrupt, destitute o power to operate successfully and destitute of power to borrow

money.

The operation of the railroad-owned companies by their official has been such that they have sacrificed the coal companies in orde to maintain the full rates of carriage for the railroads; the railroad have, in the case of some of them, as the proof will show, had t guarantee the payment of the bonds of the coal companies. T stock is worthless; the bonds are well-nigh worthless in some in stances, although of course in the case where the railroads have guaranteed them they have value. Large numbers of independe coal operators have been driven out of business; and to-day the sit ation presents itself that the prominent coal operators see ahead them practical extermination.

With that in mind, feeling that the enforcement of the Sherma Antitrust Act requires proof of definite acts, requires litigation, a