Regulation Illegal?

The bituminous coal industry has not had a profitable year since 1925. Price wars, bootless labor squabbles, excess capacity, invasion of its markets by fuel oil, gas and water power have starved it. Its rachitic bones show through in dingy, paint-scaled mining towns, in the pay average of its workers: $902 (before deductions) last year, although their daily wage scale is $6 ($5.60 in the South). Prime exemplar of old-fashioned atomic competition, the industry has 13,500 producers, none of whom does 5% of the total business.

Easiest short-term remedy for coal's ills is enforced price-fixing. But last week, as the Interior Department's Bituminous Coal Division was readying its first schedule of minimum prices, Attorney General Robert Houghwout Jackson had to go before the U. S. Supreme Court to defend the act on which they were based. Its attacker: Sunshine Anthracite Coal Co., which 1) objected to classification of its "Arkansas anthracite" as soft coal, 2) argued that in any event the Bituminous Coal Act was an illegal delegation by Congress of its legislative power.

Meanwhile the act, passed three years ago and not yet in working operation, was thoroughly kicked before the United States Chamber of Commerce (see col. 1). The kicker: John De Lorma Adams Morrow, president of Pittsburgh Coal Co., No. 1 U. S. bituminous producer. His summary: "This act is one of the greatest monstrosities that ever adorned the statute books. . . ." His remedy: voluntary control of prices and competition by the industry under Federal supervision.

New Deal regulation of coal began with NRA, died in the Schechter chicken coop. The first coal regulation act (Guffey Act) passed with the help of a strike threat by John L. Lewis in 1935, was knocked out by the Supreme Court a year later. The second act, passed in 1937, created a National Bituminous Coal Commission, which at once tangled itself so thoroughly in politics that Franklin Roosevelt reorganized it out of existence and turned its job over to the Department of the Interior. There for nearly a year Director Howard Adams Gray and his able General Counsel Abe Fortas have been laboriously writing prices and codes, scheduled to become effective this summer.

Simple as ABC is the technique of the act: that a soft-coal producer must subscribe to the code and its minimum prices or pay an admittedly ruinous tax of 19 1/2% on the sale price of every ton. Complicated as relativity is its minimum price structure. For each producer ships between five and 20 classes of coal to from one to 100 marketing points. In the Gray-Fortas schedules there is a minimum price for every kind of coal at every shipping point, shaded one way for water transportation, another for rail. In its eight-month survey of the coal business the division has filled 75,000 pages of transcript, has not yet got around to counting the prices it has set. Best guess: 250,000.

Since the act was passed, $12,579,897 (financed by a one-cent tax on every ton of soft coal) has been spent or appropriated for its administration, and virtually no practical results have followed. Another $1,886,963 of coal-tax collections goes into the U. S. Treasury. Although many a mine-union leader (and a few producers) hopes the price schedules will straighten the industry out, even they are anything but confident. To the Supreme Court, Able Constitutionalist Jackson called the act "well within the Federal power," but said, "I don't know whether it is ever going to work." Even if it survives the Court and starts to work by fall, it expires next April, can continue only by Act of Congress before that time.

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