Evening star., 1938-02-20
Coal Commissions Procedure
Under Heavy Attack in Courts
Controversy Revolves Around Laws Requirement
of Prior Public Hearings Holds
Up Minimum Prices

mining had been bloated and it couldn't
shrink. A coal mine can't be closed down
to be reopened or 3, or 10 years later in
the next boom period The cavity will
either fill up with water or the roof will
cave in and In either case the coal is
irretrievably lost No can coal be stored
above ground to await q future demand.
1t is too bulky.
The natural. or at least the actual con-
sequences, was cut-price war, ruled by fear
and secrecy. that soon dragged the price
to point where coal was selling for far
less than the cost of labor alone
So complete was the generalization that
by 1923 President Harding's Coal Com
mission, created to find q solution to the
evils, reported the only way out was Gov
ernment regulation to end staggering and
criminal 100000, ,oo0-ton annual waste of
the country's greatest natural resource"
The N. R. A., in 1888, gave to the in
dustry profit for the first time in a
decade But with the death of the Blue
Eagle, all the bitter practices, reintensified
by recent depression, returned in full
and runious fury.
These were the conditions when in the
spring of 1887 the successor to the original
Guf1ey Coat Act, modified to meet consti-
tutional requirements, was passed.
Hosford Experienced Coal Man.
The commission was named in May. At
its head was Mr.. Hosford, an experienced
coal man. intimate with the industry's
Ills. collaboration on the act, a Phi Beta
Kappa, and an iron-willed executive. An
xlous to end an insolvent anarchy of mis-
management and wholly red-ink ledeers.
ne estimated that prices could be set in
minimum Of six to eight months.
The act provided for % district boards
to propose minimum prices based on the
cost OF production averaged from every
mine IN the district. The boards of 3 to II
men consisted Of one labor member and at
least two producer members The boards
also were to bring every producer under the
code or levy a tax of 1917 per cent on every
ton OF coal he sold
When statistical data had been accunu.
lated, cost findings made. the prices were
proposed to the commission The approved
prices then had to be co-ordinated among
$50 market areas so there could be no dis
elimination between coal of different
origins at the same point of delivery
All went smoothly enough until it came
time to coordinate the prices. Then, Mr..
Hosford said. I'VE sat here for days in
endless wrangling." great delay was
apparent, so the commission took over the
work to make the act effective"
Two Reasons for Move.
There were two reasons for this move,
the chairman stresses. First was the tax
OF cent per ton producers had been pay
ing on coal sold since the act became effec-
tive. and they wanted something for It,
Second, there was a recession and cut
throat prices, wage cuts and strikes threat.
ened.
1mpatience was general. Senator Guf-
fey, sponsor Of the act, is quoted by F. O.
Wallene, director of Clevelands public
utilities department.. as having assured him
that he (Guffey) had insisted that prices
be put into eject without further delay
Speed was also the pressing desire Of the
commission. That body's counsel made q
study with producer counsel and "a policy
OF fixing prices without prior public hear
ings was evolved" Mr.. Hosford said.
To support this policy there was a de-
cision by the Supreme Court in the Illinois
Central case which said in effect that the
I. C. G. might fix rates without prior public
hearings If on complaint by an interested
party, the price Is stayed pending hearing
The ruling, however, was restricted to the
case at hand and was not intended to be q
precedent.
Chairman Hosford contends the COM
missions behavior has followed this case,
that 800 petitions were received after
prices were set and that the commission
has granted relief in substantial NUM-
Der Of cases." If any one, he says is dis
satisfied, he can come in and show his
reasons and this quasi-judicial appeal for
which the act provides meets the due
process requirements.
Searching for further buttresses to sup
port its acts, the commission found loose
ly constructed sections to back the claim
"AA1S "a AVA P00AS AACaEAl8S WcEC uOt re-
quired. One, in Section 4, Part II (b),
says that district boards shall. under rules
and regulations established by the COM
mission. Coordinate the minimum
prices. =" There is no mention there
Of hearings. it is argued.
Price Mimima to Be Created.
Further down it says co-ordinated prices
shall be submitted to the commission.
which shall 'thereupon" establish the price
minima. Where Is any mention Of hearings
there. the commission asks.
Prior to announcement of the price
schedules November 30, 1887, there had
been front-pase rumblinss of dissension
within the commission. Of rows over patron
age, ana charges that these stories con-
stituted smoke screen to mask division
over the price-fixing policy.
To the question Of whether any such
split had anything to do with the policy
Of setting prices. Chairman Hosford says:
"An actions taken By the commiasion
IN hxtns prices were By unanimous vote"