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The CHAIRMAN. Now, after the disruption of the relations of the Pittsburgh Coal Co. with the miners' union, what effect did that have on your company?

Nr. HERRIMAN. It did not have any effect on our company at all. sir. We are not in that district.

The CHAIRMAN. Did you continue to operate on the union scale!
Mr. HERRIMAN. Yes, sir.
The CHAIRMAN. Did you make any money last year?

Mr. HERRIMAN. No, sir; we did 'not make any. We never have made

any. The CHAIRMAN. This mine is operated by one corporation that takes your whole output?

Mr. HERRIMAN. Yes, sir.

Senator WHEELER. What was your cost of production under the Jacksonville agreement ?

Mr. HERRIMAN. Well, that varies so in different mines, you know. Senator WHEELER. Take the Rossiter Mine, for instance.

Mr. HERRIMAN. I do not think I brought those figures with me. Let me put it this way: The principal item of cost is the labor.

Senator WHEELER. Yes.
Mr. HERRIMAN. In our mines those run as high as 74 per cent.
Senator WHEELER. Seventy-four per cent? You mean 74 cents

per ton ?

It will vary.

Mr. HERRIMAN. No; I mean 74 per cent of the cost; the labor cost per ton, for example, the average of our labor costs during those three years of the Jacksonville scale was $1.63 a ton.

Senator WHEELER. $1.63 a ton?
Mr. HERRIMAX. Yes, sir.
Senator WHEELER. Your labor cost?

Mr. HERRIMAN. Yes, sir. To show you how it will vary during the years, in the three months when we produced 334,000 tons of coal it was $1.71, an increase of some 8 cents.

Senator WHEELER. Yes.

Mr. HERRIMAN. That is the basis. Now, after that we have the expenses

Senator WHEELER (interposing). That includes the loading and everything, does it?

Mr. HERRIMAN. Yes; the labor cost. Now, we have to take care of our supplies and power expenses. We have our taxes, and general insurance, and accident and compensation, in which we use the general term of “ Fixed charges.". We have depletion and depreciation. That is good bookkeeping; but, of course, that doesn't change the

Senator WHEELER (interposing). No.

Mr. HERRIMAN. We do save a little. We allege depreciation and depletion.

Senator WHEELER. You make a little saving on your depreciation and your bookkeeping, in other words?

Mr. HERRIMAN. Yes; but that is proper bookkeeping, you understand.

Senator WHEELER. Yes: I understand.

The CHAIRMAX. How many miners did you have working for you at the peak on the union scale?

Mr. HERRIMAN. Well, we had all of the mines working; that is, we had Rossiter, Commodore, Bar, Clymer, and the two Cooper mines.

The CHAIRMAN. How many miners had you?
Mr. HERRIMAN. About 1,500, practically; nearly 1,600, I think.
The CHAIRMAN. How many have you now?

Mr. HERRIMAN. About 1,100. I have the figures here, I think; I gathered up all these papers rather hastily.

Senator WHEELER. Mr. Herriman, all of the output of your mines is sold to the New York Central Railroad?

Mr. HERRIMAN. I would rather put it this way, that all of the output of our mine is taken by the New York Central Railroad Co.

Senator WHEELER. Well, it is taken by the New York Central Railroad Co.

Mr. HERRIMAN. Yes, sir.

Senator WHEELER. And the New York Central Railroad Co., of course, did not find it necessary to cut wages in order to operate its railroad property, did it?

Mr. HERRIMAN. I am not a railroad officer, Senator, and I could not answer that question. It would just be a matter of conjecture on my part if I attempted to do so.

Senator WHEELER. Well, now, you do know that the New York Central Railroad Co. has been making money constantly during these years while the subsidiary coal company was operating under the Jacksonville agreement.

Mr. HERRIMAN. All railroads were making money at that time, and so was the New York Central, so that it was not in a singular position to any of the rest of the railroads.

Senator WHEELER. No; and I did not mean to pick out the New York Central because I thought so, but I am using that as an illustration; they have all been making money in the last few years, practically all of the big railroads have been making money in the

Mr. HERRIMAN. I would be willing to take that as a statement instead of a question, if you are willing:

Senator WHEELER. Let me ask you that as a question; if you do not know it to be a fact?

Mr. HERRIMAN. I do not say that I do not know it to be a fact, but because I see reports of the railroads as published from time to time, and therefore I assume, as you do, that they are making money.

Senator WHEELER. Let me ask you this: Were you told by the
New York Central Railroad Co. to cut wages out there at the mines?

Mr. HERRIMAN. Is that the end of your question?
Senator WHEELER. Yes.
Mr. HERRIMAN. No, sir; I was not.

Senator WHEELER. Well, did any of the officers of the New York Central Railroad Co. say to you that you must cheapen the cost of production of your coal at any of your mines?

? Mr. HERRIMAN. Well, I would not say that they put it in just that way, but it was common knowledge that we must, of course, get our costs down more nearly to that of others who were willing to sell coal at a lower price.

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last few years.

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Senator WHEELER. In what form did that direction come to the coal company?

Mr. HERRIMAN. None at all; there was no form at all. And may I state it in my own way, sir?

Senator WHEELER. Go ahead.

Mr. HERRIMAN. You know that we are really operating coal mines in that district, and that we have commercial associates who are shippers of their output over the New York Central Railroad Co. As operators of coal mines it was absolutely essential that we should go along with our commercial friends in the matter of obtaining a proper wage scale that would permit them to be in the coal market. We must do that, Senator, and be loyal to our associates. But the New York Central Railroad Co. never gave me any instructions to reduce wages or to do anything but what the current necessities of the business would require. I took the responsibility myself, I will put it that way.

Senator WHEELER. In the central district there have you an organization of the various coal companies, all of them in one organization or association ?

Mr. HERRIMAN. Yes; sir; the Central Pennsylvania Coal Operators' Association, of which we are members.

Senator WHEELER. Did they take concerted action to cut wages in that district?

Mr. HERRIMAN. No, sir; not officially. We took concerted action to make a new agreement with the United Mine Workers of America, and worked very earnestly after April 1, 1927, to try to do that. We held two meetings with our friends of the United Mine Workers of America in the hope that we might get from them a scale that we could work under and at the same time maintain our relations with the union. In other words, we were asking the union to reduce wages, when we would stay with them. We did not want to nonunionize or deunionize this property, and I think that I am not going too far when I say we did not nonunionize it or deunionize it.

Senator WHEELER. You did not do what?

Mr. HERRIMAN. I think that our friends of the United Mine Workers of America did that themselves by not giving this little crowd that was left in central Pennsylvania an opportunity to stand by them, and we were only a little crowd and were standing loyally by them.

Senator WHEELER. Are not some mines operating union to-day in central Pennsylvania?

Mr. HERRIMAN. Well, there are a few, but their output does not amount to anything. I do not think that there are 1,000 tons a day being mined on that plan now. I only know of two such mines, and only know of them because somebody told me.

Senator WHEELER. It was not because the New York Central told you that it was necessary to reduce the cost of production of coal that you went on the nonunion basis?

Mr. HERRIMAN. No, sir; but it was because of the economic situation that prevailed in the district that we as operators in that district did it.

Senator WHEELER. Then it was brought about by the operators rather than the New York Central Railroad Co.?

Mr. HERRIMAN. Yes, sir; we took our responsibility as one of the group of operators.

Senator GOODING. Didn't you say that you were given to understand by the New York Central Railroad Co. that you would have to cheapen the cost of production of your coal?

Mr. HERRIMAN. No, sir; not in the sense of any instructions, Senator.

Senator GOODING. Well, I understood that there was an intimation along that line, that if they continued to take coal and the mines were to continue in operation you would have to cheapen the production of your coal.

Mr. HERRIMAN. Not except to this extent, that it was common knowledge, and they themselves knew that they could buy their coal very much cheaper from other people than we could produce it under the existing circumstances, and naturally it was thought that we would go along with the economic situation in the central Pennsylvania district and get a wage scale that would produce a lower cost.

The CHAIRMAN. Are the New York Central now buying coal more cheaply from others than you can produce it!

Mr. HERRIMAN. Well, now, Mr. Chairman, I think that is true, but I would much prefer, if you will permit me to suggest it, that you would get that from some of our New York Central friends. I have not exact knowledge on that point.

Senator WHEELER. Are you now producing coal cheaper than you were before?

Mr. HERRIMAN. Yes, sir. Senator WHEELER. Of course you have, as I gathered from Mr. Musser, employed no colored labor at your mines.

Mr. HERRIMAN. We never have had any.

Senator WHEELER. You have not any colored labor at the present time, either?

Mr. HERRIMAN. No, sir.

Senator WHEELER. As a mater of fact, you have a higher grade of miners, the subcommittee rather thought, than any other group that

, we visited.

Mr. HERRIMAN. Well, we think so, too, Senator; but that may be egotism on our part.

Senator WHEELER. No; I do not think so. Your books show that your men were more reliable, apparently, and working better than the men were in the most places that we visited.

Senator GOODING. Yes, Mr. Herriman, the subcommittee found by examining the pay rolls that your men were not working as steadily at the present time as they did before you closed down the mines and opened them up again; that is, while you were working on what was called the Jacksonville agreement.

Mr. HERRIMAN. I thought, Senator Wheeler, that you found just the opposite.

Senator GOODING. No; I think not.

Mr. HERRIMAN. My recollection is that our own reports from up there showed that you found the men were making more wages now than at any time, largely due to the fact that they are working steadily-I think six days a week—and were putting out from 5 to 8 tons per man per day, which is the highest output that we have

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had in years. I do not want to dispute the matter with you, but my recollection of the report made to me was that you found just the opposite of the situation you have included in your question.

Senator GOODING. I rather think not. I think at all of the mines we visited, when we came to examine the pay rolls we found that the men were not working as steadily as they formerly were when under the Jacksonville agreement.

Mr. HERRIMAN. You only visited one mine in central Pennsylvania, the Rossiter mine. Might † ask you, Senator Wheeler, was it not your impression that the men were doing better now than then?

Senator WHEELER. My impression was that they were not making more money, but that they were working fully as long hours. At Rossiter was the only place among the mines that we visited where

y that situation did exist; and there I do not think that they were making more money but that they were making the same practically because of the fact that they were, as I recollect, putting in more hours.

Senator WAGNER. Yes; they were putting in more hours, and you have at least 100 less men than before.

Mr. HERRIMAN. Yes, sir.

Senator WAGNER. You carry on your books the price per ton that the New York Central asks of you?

Mr. HERRIMAN. Yes, sir.

Senator WAGNER. How is that price arrived at? There is no actual money transfer, is there?

Mr. HERRIMAN. Oh, yes. We have to have money in order to pay our pay rolls and our other expenses.

Senator WAGNER. Is it on sales that the money is received ?

Mr. HERRIMAN. Yes, we have to have money, and usually it is provided by giving us a price for the coal every month.

Senator WAGNER. How is that arrived at?

Mr. HERRIMAN. By figures I just undertook to state; by taking our various expenses, and cost of labor, and we make up a price, and we will say for a given time it is $2 a ton.

a Senator WAGNER. You take a certain profit?

Mr. HERRIMAN. No, sir; we do not take it-well, yes; we get a little profit, as I explained to your associates, by reason of our depletion and depreciation.

Senator WAGNER. But you charge them about what it costs to produce it?

Mr. HERRIMAX. That is what we try to do. And then when we get in bad shape we have to borrow money.

Senator WAGNER. You say that the New York Central according to your books is receiving this coal now cheaper than before. Does it cost you less to produce it now than it did under the Jacksonville scale ?

Mr. HERRIMAN. The basic cost is as much, but there are certain expenses now that we are having to pay that if you would apply to this account of actual cost it would probably make it more. But the labor cost is not

Senator WAGNER (interposing). That is what I am talking about.

Senator WHEELER. The total cost now is greater than under the Jacksonville agreement !

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