Court Opinion

ID: 4589690
Source: CourtListenerOpinion
Date Created: 2020-11-20 18:44:47.542695+00
Date Added: 2024-06-11T07:50:19.737510
License: Public Domain

Norfolk and Chesapeake Coal Company, a West Virginia Corporation, Petitioner, v. Commissioner of Internal Revenue, RespondentNorfolk & Chesapeake Coal Co. v. CommissionerDocket No. 23310United States Tax Court18 T.C. 904; 1952 U.S. Tax Ct. LEXIS 117; August 26, 1952, Promulgated *117 Decision will be entered for the respondent.  Petitioner seeks excess profits tax relief under section 722, Internal Revenue Code, subparagraphs (2) and (5) of subsection (b).  It is engaged in mining and selling bituminous coal. Its base period net income was larger than its net income for any preceding four consecutive fiscal years.  Held: petitioner is not entitled to relief as it has not established that its average base period net income is an inadequate standard of normal earnings. Clarence A. Bradford, Esq., for the petitioner.Arthur N. Mindling, Esq., and Joseph L. Spilman, Jr., Esq., for the respondent.  Tietjens, Judge.  TIETJENS*118 *904   Petitioner filed applications for relief under section 722, Internal Revenue Code, and claims for refund of excess profits tax for fiscal years ended on March 31, in 1941, 1942, 1943, 1944, and 1945.  Respondent disallowed such applications and claims.  The notice of disallowance also constituted a notice of deficiency with regard to petitioner's excess profits tax liability for the taxable years ended March 31, 1944, and March 31, 1945.  Petitioner contests the disallowance of its claims for relief and related claims for refund, alleging that it is entitled to relief by virtue of sections 722 (a) and 722 (b) (2) and (5) of the Code.Petitioner's liability before application of section 722, the amounts of refund claimed pursuant to that section, and the deficiencies determined by respondent are:Excess profitsRefundFiscal year ended March 31taxclaimedDeficiencyliabilityunder sec. 7221941$ 3,899.28$ 1,822.22194250,829.7137,710.331943111,123.6754,978.081944130,650.4747,720.52$ 8,264.751945177,630.0758,813.4516,762.00Petitioner's excess profits credits, as computed under sections 713 and 742, without regard to section*119  722, are $ 45,920.98 for computing its excess profits tax for the fiscal year ending in 1941 and $ 56,893.37 for computing the tax for the fiscal years ending in 1942, 1943, 1944, and 1945.  Petitioner asks that this Court determine a credit of $ 110,014.90 for use in computing its tax for the fiscal year ending in 1941 and of $ 118,802.27 for use in computing its tax for the subsequent fiscal years.Petitioner is an "acquiring" corporation having in 1937 taken over the assets of two predecessors which are "component" corporations *905  within the definitions of those terms in section 740, Internal Revenue Code.  The predecessors had been in existence since about 1906.  Under the provisions of section 722 (e) (2) of the Code, in computing average base period net income petitioner is to be treated as if the business of its components were an integral part of the continuing business of petitioner.  Unless the context requires otherwise, the petitioner's business will herein be referred to as including the business activities conducted by its predecessors and as if petitioner's operations had been continuous from the earliest dates mentioned.  References to fiscal years are to the*120  fiscal years of petitioner or its predecessors ending March 31, in the year or years stated.Petitioner's corporate income and excess profits tax returns for the fiscal years 1941 through 1945 were filed with the collector of internal revenue at Detroit, Michigan.FINDINGS OF FACT.The stipulated facts are found accordingly and the exhibits attached to the stipulation are incorporated by reference.Petitioner is a corporation, incorporated March 22, 1937, duly organized and existing under the laws of West Virginia.  Petitioner took over all the assets and assumed all the liabilities of two predecessor corporations on or about April 1, 1937.  One of these, the Norfolk and Chesapeake Coal Company, had been engaged for many years in selling coal on a commission basis.  The other, H. T. Wilson Coal Company, had operated a bituminous coal mine in Logan County, West Virginia, for many years.Petitioner's books were kept and its Federal corporation income and excess profits tax returns prepared upon the accrual basis and covering fiscal years ending March 31.Petitioner and its predecessor of the same name sold coal produced by the following corporations from mines located in the counties*121  named:H. T. Harman Coal CorporationBuchanan County, Va.Warrior Coal CoMcDowell County, W. Va.Tierney Mining Co., IncPike County, Ky.War Eagle Coal CoMingo County, W. Va.American Coal CoMcDowell County, W. Va.Mill Creek Coal and Coke CoMercer County, W. Va.Sales were made upon a commission or a tonnage basis and in some cases under exclusive contracts.  During the period December 1938 through March 1939 petitioner also sold coal produced by Consolidation Mines in the Big Sandy-Elkhorn District, West Virginia.The following schedule shows, for petitioner and its predecessors for the fiscal years 1923 to 1940 the comparative net income or losses, that is, the income as reported in the income tax returns, adjusted to conform *906  as nearly as possible to the definition of excess profits tax net income. The figures for 1938, 1939, and 1940 show petitioner's comparative net income:PredecessorFiscal yearsH. T. WilsonN. & C.CombinedNet salesCoal Co.Coal Co.1923$ 33,749 $ 35,281 $ 69,030 $ 3,054,8971924(20,279)58,179 37,900 3,112,4131925(32,673)(9,460)(42,133)1,479,0281926(13,358)(707)(14,065)1,696,552192743,720 10,817 54,537 1,691,3981928(18,220)(5,472)(23,692)1,076,2971929(25,169)(4,850)(30,019)1,757,7811930(6,143)5,041 (1,102)1,702,1851931(16,710)(1,419)(18,129)1,505,6991932(15,322)(17,359)(32,681)1,117.9941933(16,866)(17,782)(34,648)999,79119343,623 44,222 47,845 1,711,95819357,458 20,986 28,444 1,751,4291936(17,333)38,635 21,302 2,285,79619372,402 56,613 59,015 2,876,011193842,343 2,931,390193930,850 2,639,892194082,786 3,590,706*122 Averages:1923-19402,054,5121937-19403,009,500The following schedule shows a condensed comparative statement of petitioner's mining operations during the base period fiscal years:Condensed Operations Statement -- Wilson Mine19371938Sales$ 194,213.95$ 200,086.99 Mining cost174,643.76187,616.81 Gross profit19,570.1912,470.18 General expense19,409.2121,027.92 Depreciation13,520.7613,301.37 Other income15,396.5415,131.34 Net operating expense17,533.4319,197.95 Net profit or loss from operations2,036.76(6,727.77)Non-operating expense1,498.02453.65 Non-operating income64,125.81374.35 Net income adjusted65,237.67(6,807.07)Condensed Operations Statement -- Wilson Mine19391940Sales$ 173,583.80 $ 188,912.40Mining cost160,933.75 163,306.57Gross profit12,650.05 25,605.83General expense19,280.53 20,491.16Depreciation13,142.28 8,927.90Other income14,366.41 14,496.53Net operating expense18,056.40 14,922.53Net profit or loss from operations(5,406.35)10,683.30Non-operating expense39.95 106.80Non-operating income399.28 457.05Net income adjusted(4,840.25)11,033.55*123  The non-operating income for the fiscal year 1937 in the foregoing statement includes a dividend of $ 62,700 from Norfolk and Chesapeake Company.The following schedule shows a condensed comparative statement of petitioner's non-mining operations during petitioner's base period fiscal years:Condensed Statement of Non-Mining Operations19371938Net sales$ 2,681,797.48$ 2,731,302.60Purchases2,455,922.912,512,149.67Gross profit225,874.57219,152.93Direct expenses83,609.9881,721.74Pro-rated expenses84,342.5787,677.23Other income480.00480.00Total income from operations58,402.0250,233.96Non-operating expense1,210.214,189.51Non-operating income17,147.714,970.12Total expense154,535.05168,138.36Net income adjusted71,383.5851,599.66Condensed Statement of Non-Mining Operations19391940Net sales$ 2,466,307.74$ 3,401,793.61Purchases2,268,477.613,141,775.92Gross profit197,830.13260,017.69Direct expenses78,585.5085,454.67Pro-rated expenses84,833.79103,994.31Other incomeTotal income from operations34,410.8470,568.71Non-operating expense2,141.333,370.99Non-operating income5,065.105,661.67Total expense160,495.52187,158.30Net income adjusted38,630.5675,182.39*124 *907   The following schedule shows the total tonnage of Wilson Mine Coal sold during the base period fiscal years:TonnageYearfor fiscal year1937132,7131938123,3231939104,1731940110,686The following schedule shows petitioner's total tonnage sales for the base period fiscal years and the average commission rates realized at the prices in effect during such years:Ratio of totalcommissionsFiscal yearTonnage salesfor sales19371,685.5668.41819381,539.1188.01319391,492.5348.01619401,926.7937.639At the close of the First World War the productive capacity of the bituminous coal industry was approximately 700 million tons. For several years thereafter the demand for bituminous coal was approximately 500 million tons. The excess productive capacity in the industry tended toward a condition of low profits or losses and a decrease in coal prices.  The situation also was affected by the increasing importance of hydroelectric power, gas, and fuel oil as sources of energy.  There were several proposals made in Congress in the 1920's for regulation of the bituminous coal industry.  In 1932 certain producers organized a sales*125  agency, Appalachian Coals, Inc., which was intended to cover the coal fields of southern West Virginia, Virginia, eastern Kentucky, and northeastern Tennessee.  Under the plan operators were invited to become shareholders and to appoint the group as an exclusive sales agent.  Sales were made through the agencies directly representing companies and the primary function of the corporation was control of minimum prices.  Since membership in the group was voluntary it was impossible to provide strict enforcement of the prices adopted.  Although an injunction was granted against the group in 1932 on the ground that the plan violated the Federal antitrust laws, this was reversed by the Supreme Court in March 1933 ( Appalachian Coals, Inc. v. United States, 288 U.S. 344">288 U.S. 344). The Court in effect warned the group that the decision did not bar the Government from taking remedial steps should the plan actually have the effect of unduly restricting interstate commerce.Under the National Recovery Act, enacted in 1933, a code of fair competition was adopted by the bituminous coal industry.  This called for maintenance of minimum prices and the elimination of unfair*126  competitive practices.  The Act gave the code the force of law and made it binding on all operators.  The code became effective in October *908  1933 and remained in force until May 1935 when the decision by the Supreme Court in Schechter Poultry Corporation v. United States, 295 U.S. 495">295 U.S. 495, invalidating the Recovery Act, forced abandonment of the code.In 1935 Congress enacted the Bituminous Coal Conservation Act providing for regulation of the bituminous coal industry.  It created a National Bituminous Coal Commission of five members in the Department of the Interior, and levied a tax of 15 per cent of the sales value of the coal at the mine with provision for refund of 90 per cent of the tax should operators comply with the code.  It contained extensive provisions limiting working hours and wages and providing for the fixing and enforcement of minimum price schedules for bituminous coal. The Supreme Court declared on May 18, 1936, that the labor provisions of the Act were an invasion of state rights and beyond the power of the Federal Government ( Carter Coal Co. v. United States, 298 U.S. 238">298 U.S. 238). In 1937 the*127  Bituminous Coal Act of 1937 (50 Stat. 72) was enacted and became effective April 26, 1937.  It had a projected life of four years from that date, was later extended and expired August 23, 1943.  This Act was designed primarily to provide for price fixing in the industry.  It provided for a National Bituminous Coal Commission of seven members appointed by the President with power to determine and make effective minimum prices for coal. It required producers to pay an excise tax of 1 per cent per ton on output. It levied a tax of 19 1/2 per cent on the mine price of coal disposed of by sale at the mine with the proviso that the tax be not collected from "members in good standing." The code provided for certain district boards which were to prepare schedules of minimum prices for the consideration and approval of the Commission.  The code members were required to report to statistical bureaus of each district on their orders, sales, contracts, invoices, and credit memoranda and to give such other information as the Commission should direct.  The Commission created under the Act issued orders in November 1937 prescribing minimum prices and marketing rules and regulations. These became*128  effective in December 1937 and remained in effect until February 25, 1938, when they were revoked by the Commission.  The prices were generally higher than the prevailing market prices.  In the meantime or shortly thereafter certain Circuit Courts of Appeals issued restraining orders on the basis that adequate hearings had not preceded the establishment of the prices promulgated.The Commission's order of revocation provided, in part:it now appearing that many of the minimum prices established by orders of the Commission have become inoperative due to causes beyond the control of the Commission and that the express intention of Congress * * * cannot *909  be effectuated by the minimum prices remaining in effect and that the condition thereby created is detrimental to the interests of code members.NOW, THEREFORE, pursuant to Act of Congress entitled "An Act to regulate interstate commerce in bituminous coal, and for other purposes" (Public No. 48, 75th Cong., 1st sess.), known as the Bituminous Coal Act of 1937, the National Bituminous Coal Commission hereby orders:1. That the following orders of the Commission relating to Minimum Prices and marketing Rules and Regulations, *129  together with all temporary orders issued in proceedings instituted by petitioners under Section 4, Part II (d) of the Act, are hereby revoked: * * *Following this order the Commission proceeded to gather data for the purpose of determining and promulgating a code of minimum prices based upon adequate hearings.Effective July 1, 1939, the National Bituminous Coal Commission was abolished and its functions were transferred to the Secretary of the Interior where they were administered by the Bituminous Coal Division of the Department of the Interior.The Bituminous Coal Division proceeded to complete the investigation and promulgated an order establishing effective minimum prices and marketing rules and regulations. This order was issued August 8, 1940, and prescribed that the prices and rules should become effective on September 3, 1940.  It also stated that such prices and rules were:* * * subject further to modification, alteration, addition, or any other change made from time to time in accordance with the provisions of said Act, of Section 4 II (d) thereof, and of the rules and regulations issued pursuant thereto.The following schedule shows output (in millions of tons) of*130  bituminous coal and the Federal Reserve Index of Industrial Production for the calendar years 1922-1939:Output of bituminousFederal Reservecoal inIndex of Industrialthe U. S.ProductionYearIndexMillions(1922-19391935-19391922-1939of tons= 100= 100= 100192242295.47382.01923565127.58898.91924484109.28292.11925520117.590101.11926573129.596107.91927518116.995106.71928501113.199111.21929535120.8110123.61930468105.691102.2193138286.37584.3193231069.95865.2193333475.36977.5193435981.27584.3193537284.18797.8193643999.2103115.71937446100.6113127.0193834978.789100.0193939589.2109122.5*910  The following schedule shows the net profits or losses of all corporations in the United States and the net loss of the bituminous coal companies in the United States in the years 1928-1939:Total compiledTotal compilednet profitnet loss,(or loss), lessless tax-exempttax-exemptincome, ofYearincome, of allbituminouscorporations incoal companiesthe Unitedin theStatesUnited StatesAmount($ 1,000,000)($ 1,000,000)1928$ 8,227 $ (25)19298,740 (12)19301,552 (42)1931(3,288)(48)1932(5,643)(51)1933(2,547)(48)193494 (8)19351,696 (16)19364,370 (12)19374,407 (8)19381,608 (31)19394,509 (10)*131  The following schedule shows the value of output of bituminous coal and total compiled receipts of all corporations in the United States for the calendar years 1922-1939:Value of output ofTotal compiled receiptsbituminous coalof all corporationsin U. S.in U. S.YearIndexIndexAmount(1922-1939Amount(1922-1939($ 1,000,000)= 100($ 1,000,000)= 100)1922$ 1,275147.3$ 101,31481.719231,515175.0119,02096.019241,063122.8119,74796.619251,060122.5134,780108.719261,183136.7142,629115 019271,030119.0144,899116.91928934107.9153,305123.61929953110.1161,158130.0193079591.9136,588110.2193158968.0108,05787.1193240747.081,63865.8193344651.584,23467.9193462872.6101,49081.8193565876.0114,65092.5193677189.1132,723107.0193786499.8142,443114.9193867978.4120,45497.1193972884.2132,878107.2Under the 1937 Act, the coal producing areas in the United States were divided into price areas which were subdivided into districts.  Petitioner's Wilson Mine was located in District No. 8, of*132  Price Area One, which also contained Tierney Mines, Harman Mines, War Eagle Mines and Consolidation Mines.  In District No. 7 of Price Area One were the Warrior Mines, American Mines and Mill Creek Mine.  Orders of the National Bituminous Coal Commission establishing *911  minimum prices for coals of code members within these districts were published in the Federal Register of December 3, 1937; 2 Fed. Reg. 3032 and 3040.Petitioner's average base period net income, as adjusted pursuant to section 713, Internal Revenue Code, is not an inadequate standard of normal earnings.OPINION.The petitioner has the burden of proving that its excess profits tax is excessive and discriminatory, and to establish what would be a fair and just amount representing normal earnings. Its tax is deemed excessive and discriminatory for purposes of section 722 of the Internal Revenue Code if its average base period net income is shown to have been an inadequate standard of normal earnings for one or more of the reasons stated in section 722 (b).  Petitioner relies upon section 722 (a) and subparagraphs (2) and (5) of section 722 (b).  1*133  Petitioner is a member of the bituminous coal industry, engaged in both mining and selling bituminous coal. Petitioner's principal contention is that its tax is excessive and discriminatory because the business of the bituminous coal industry, including petitioner, was depressed during the base period by reason of temporary economic events unusual in the case of such industry (section 722(b)(2)).  Petitioner next contends that, if the events are not considered causes which entitle it to relief pursuant to subparagraph (2) of section 722(b), they should be recognized as grounds for relief under subparagraph (5).The parties are in agreement that the bituminous coal industry was a depressed industry prior to 1937.  This condition is shown by the *912  statistics of the industry's characteristic losses or low profits.  It was recognized in the several acts of Congress which sought to alleviate this condition, and in the comments of the Supreme Court in passing upon the legislation.  2 The Bituminous Coal Act of 1937 was one of those measures.  Its provisions were upheld in a decision of the Supreme Court in May 1940.  ( Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381">310 U.S. 381).*134  Under this statute, approved April 26, 1937, the Bituminous Coal Commission, created pursuant to the Act, inaugurated a schedule of prescribed minimum prices which were generally higher than the then prevailing market prices.  These were made effective in December 1937.  In February 1938 the Commission revoked the orders establishing minimum prices.  Certain Circuit Courts of Appeals also enjoined enforcement of the prices.  The Commission then proceeded through extensive hearings to collect facts on which to base a new schedule which was promulgated in 1940, subsequent to the base period, after the Supreme Court had upheld the statute and the injunctions were dissolved.  Whatever benefit accrued to petitioner because of the fixed prices was enjoyed for the period of less than three months during which they were effective. Petitioner contends that the revocation of the original price schedule and the bar by injunction of any fixed prices during the pendency of the litigation, which lasted through the remainder of the base period, constituted temporary and unusual economic events within the meaning of section 722 (b) (2) which had the effect of depressing between February 1938 and*135  March 31, 1940, both the industry of which petitioner is a member and petitioner's business.  Petitioner says that the effect of these actions was to reduce its income during the remainder of the base period and that petitioner's actual base period earnings would have been higher by the difference between the actual market price it received and the fixed minimum prices applied to the same sales tonnage, if these events had not occurred.  Petitioner has submitted a computation reaching the figure of $ 331,306.55 as the amount by which its earnings would have been increased if the fixed prices had remained in effect.*136 We think petitioner has not proved its case.  In the first place it has not been demonstrated that petitioner's average base period net income, as adjusted pursuant to section 713, is an inadequate standard *913  of normal earnings. "Normal" earnings refers to a measure established over a reasonable length of time and under normal conditions by the taxpayer, or by others under comparable conditions. Monarch Cap Screw & Manufacturing Co., 5 T.C. 1220">5 T. C. 1220. In that case we said that the mere fact that a taxpayer's profits were not large does not establish that its business was depressed, when large profits were not customary in its industry.  See also Toledo Stove & Range Co., 1125">16 T. C. 1125. Respondent has computed from the income tax returns of petitioner and its predecessors for the fiscal years 1923 to 1940 the "comparative net income or loss," that is, the income as it would be adjusted to conform to the definition of excess profits tax net income, for the purpose of comparing such income for the base period years with that for the taxable years or the years preceding the base period. Considering petitioner's earnings*137  history as embracing that of its component corporations, in accordance with section 722 (e) (2), it is to be noted that operation of the Wilson Mine resulted in practically continuous losses throughout the fiscal years 1923-1933, inclusive.  The average comparative net loss sustained from the operation of the Wilson Mine for the 14-year period ending March 31, 1936, was $ 6,680 per year.  The average annual operating profit from the mine for the base period years was $ 146.49.  The average annual comparative net income from the non-mining operations for the 14-year period ending March 31, 1936, was $ 11,150, while the average annual operating profit from this part of petitioner's business for the base period years was $ 53,403.88.  The annual average comparative net income realized from all operations for the base period was $ 53,748.  The corresponding average comparative net income for the 14-year period immediately prior to the base period was $ 4,456, and for the inclusive period of 18 fiscal years ended in 1940 was $ 15,410.  There were loss years from 1928 through 1933, and the average of the combined earnings for the following 3 years of net profits, 1934, 1935, and 1936, was*138  less than $ 33,000.  On the basis of these comparisons we cannot conclude that petitioner's business was depressed in the base period or that petitioner's average base period net income of $ 53,748 was an inadequate standard of normal earnings. Foskett & Bishop Co., 16 T. C. 456; Matheson Co., 16 T. C. 478; Avey Drilling Machine Co., 1281">16 T. C. 1281. The earnings of approximately $ 215,000 in the four-year base period were higher than for any four consecutive fiscal years prior to the base period in petitioner's history shown by the record.  The addition of another $ 330,000, or any similar sum, to compute a constructive average base period net income in an effort to establish a fair and just amount representing "normal" earnings in place of this actual average would be wholly unjustified.While it is apparent that petitioner's business was not depressed in the base period years, as compared with other years in petitioner's *914  history, and that is sufficient to dispose of the case, we may observe that the circumstances relied upon as a ground for relief do not constitute temporary and*139  unusual economic events cognizable under section 722 (b) (2).  They were administrative and judicial acts, based upon legislation, and although they had economic effects upon the bituminous coal industry, including petitioner, they were not economic events within the meaning of section 722 (b) (2).  Acme Breweries, 14 T.C. 1034">14 T. C. 1034.Nor do these events or actions, even if they constitute "other factors affecting the taxpayer's business," qualify petitioner for relief under section 722 (b) (5).  Petitioner was in an industry where competition and low earnings were normal conditions.  The projected system of fixed prices was designed as an expedient to improve these conditions.  We may assume, though respondent argues strongly that such an assumption would not be justified, that had the fixed prices continued petitioner would have had better earnings in the base period. These better earnings would not be normal.  The revocation of the prices did not result in an inadequate standard of petitioner's normal earnings in the base period; it merely eliminated a possibility of increased earnings. This is not a basis for relief.  In Alexandria Amusement Corporation, 16 T.C. 446">16 T. C. 446,*140  a theatre which was not permitted to operate on Sundays during the base period years but was permitted so to operate in 1941 and thereafter, sought relief based, in part, upon the earnings it would have had in the base period had it then been operated on Sundays.  We there denied relief, explaining that section 722 is not a means of extending equitable relief to all taxpayers affected by the excess profits tax (p. 456).  The conclusion in that case is likewise applicable here.The respondent did not err in denying the relief sought.Reviewed by the Special Division.Decision will be entered for the respondent.  Footnotes1. Sec. 722.(a) General Rule.  -- In any case in which the taxpayer establishes that the tax computed under this subchapter (without the benefit of this section) results in an excessive and discriminatory tax and establishes what would be a fair and just amount representing normal earnings to be used as a constructive average base period net income for the purposes of an excess profits tax based upon a comparison of normal earnings and earnings during an excess profits tax period, the tax shall be determined by using such constructive average base period net income in lieu of the average base period net income otherwise determined under this subchapter.  * * *(b) Taxpayers Using Average Earnings Method.  -- The tax computed under this subchapter (without the benefit of this section) shall be considered to be excessive and discriminatory in the case of a taxpayer entitled to use the excess profits credit based on income pursuant to section 713, if its average base period net income is an inadequate standard of normal earnings because -- * * * *(2) the business of the taxpayer was depressed in the base period because of temporary economic circumstances unusual in the case of such taxpayer or because of the fact that an industry of which such taxpayer was a member was depressed by reason of temporary economic events unusual in the case of such industry,* * * *(5) of any other factor affecting the taxpayer's business which may reasonably be considered as resulting in an inadequate standard of normal earnings during the base period and the application of this section to the taxpayer would not be inconsistent with the principles underlying the provisions of this subsection, and with the conditions and limitations enumerated therein.↩2. "* * * For a generation there have been various manifestations of incessant demand for federal intervention in the coal industry.  The investigations preceding the 1935 and 1937 Acts are replete with an exposition of the conditions which have beset that industry.  Official and private records give eloquent testimony to the statement of Mr. Justice Cardozo in the Carter case (p. 330) that free competition had been 'degraded into anarchy' in the bituminous coal industry.  Overproduction and savage competitive warfare wasted the industry.  Labor and capital alike were the victims.  Financial distress among operators and acute poverty among miners prevailed even during periods of general prosperity.  * * *" Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381">310 U.S. 381, at p. 395. See also Appalachian Coals Inc. v. United States, 288 U.S. 344">288 U.S. 344 and 1 F. Supp. 399">1 F. Supp. 399↩.