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Mr. WARDEN. Of reducing the cost of our coal per ton, so that we could sell our coal and operate.

Senator WHEELER. But let me ask you this question: How many times have you reduced wages?

Mr. WARDEN. We started on the open-shop basis on what was called the 1917 scale, and then we raised our wages when the price of coal went up, in order that the miners would participate in the rise. Then we kept that scale for a while and reduced to

Senator WHEELER (interposing). How long did you keep that scale?

Mr. WARDEN. Well, that went, I think, from October to January, but as to the dates I am not altogether sure. I can give you that.

Senator WHEELER. And then you reduced wages!
Mr. WARDEN. Then we reduced the scale to around $6.

Senator WHEELER. And you were paying some men as low as $4.08, were you not?

Mr. WARDEN. Outside unskilled men; yes.

Senator WHEELER. Some of them you were paying as low as $4.08?

Mr. WARDEN. Yes, sir.

Senator WHEELER. Do you think you are going to rectify the situation in Pennsylvania by reducing wages so as to meet the prices being paid in southern West Virginia at the present time?

Mr. WARDEN. I do not quite understand your question. Do we think we have to keep on reducing wages in order to meet their competition !

Senator WHEELER. Yes. If they reduce their wages you have to reduce yours to meet it, and so on, if your theory is correct.

Mr. WARDEN. Well, I think the wages to-day have got to be regulated in the districts in which you are.

Senator WHEELER. But, Mr. Warden, if I understand you correctly, and if I have understood other operators with whom I have talked, you felt that you had to reduce wages so that you could compete with West Virginia ?

Mr. WARDEN. Yes.

Senator WHEELER. Then, if West Virginia cuts their miners again you would feel you would have to cut yours again?

Mr. WARDEN. Not necessarily.
Senator WHEELER. Why not?

Mr. WARDEN. Because we may have gone to what we think is the lowest wages that we should pay. Then if we cannot continue operating under those conditions, we have either got to close or do something else. These men have got to have and will have a living scale of wages that they can live on in the proper way.

Senator WHEELER. But that would not eliminate it if West Virginia turned right around and said, “In order to meet competition with Pennsylvania we have got to reduce our wages more.”

Mr. WARDEN. Well, it depends upon whether they think it is advisable to do it or can do it.

Senator WHEELER. Do you think if they possibly can do it they will get cheaper labor there!

Mr. WARDEN. No, sir; I do not.

Senator WHEELER. You do not think that they can reduce their wages?

Mr. WARDEN. No lower than they are to-day; and I think they are paying very good wages.

Senator WHEELER. They are paying about the same as you are?
Mr. WARDEN. In some cases.
Senator WHEELER. And in some cases more?

Mr. WARDEN. Yes--I don't know about more; I will not say that.

Senator WHEELER. You do not think that they can reduce them any lower?

Mr. WARDEN. I would say on general principles that it would not be good judgment.

Senator WHEELER. And still pay a living wage?

Mr. WARDEN. No, sir; I don't say that. I don't think they will reduce them any more.

Senator WHEELER. What makes you think that they will not?

Mr. WARDEN. I don't know; it is just general business judgment. It is pretty hard to define at times, is it not?

enator WHEELER. It apparently is. Mr. WARDEN. Yes.

Senator WHEELER. But, Mr. Warden, if I am in business just solely for the purpose of making money in West Virginia, and I have got to reduce my wages in order to compete with you people to get the business, then I am going to reduce my wages, am I not!

Mr. WARDEN. I said, if you could.
Senator WHEELER. What is to hinder!
Mr. WARDEN. I don't know. I don't think they will do it.

. Senator WHEELER. You say you don't think they will do it; but I would like to know your idea as to just what there is to hinder them from doing it.

Mr. WARDEN. I think they are paying a wage now that is fair and square, and I don't think they will reduce it. That is all. It is a matter of opinion, Senator.

Of course, I am not running the West Virginia business.

Senator WHEELER. But I assume that the West Virginia coal operators are not in business for any philanthropic reason, any more than you are in the Pittsburgh Coal Col

Mr. WARDEN. I have not seen any of it.

Senator WHEELER. Consequently I am assuming that if they have reduced the wages to get business they will reduce wages to get business. Is there anything wrong with that assumption?

Mr. WARDEN. I suppose, nothing wrong with the assumption if it can be carried out.

Senator WHEELER. What is to prevent it from being carried out? Mr. WARDEN. I don't know what would prevent it.

Senator GOODING. Mr. Warden, you know and understand that since the scale of 1917 was in force the increase in freight rates in this country has been practically 100 per cent; that there were two horizontal increases, practically three, made since that time in the freight rates, all of which has contributed to increase the cost of everything, not only to coal mines but everywhere else, in the home, everywhere, and labor generally has been increased in practically all the industries of the country 100 per cent since 1917, unless it is farm labor and labor in the coal mines. The eight-hour day has become the legal day on the railroads brought about by legislation. In other words, we have got a new standard in America. The World War brought us a new standard of civilization, the highest standard that the world has ever known. Do you not think that it is a good thing if we can maintain that standard ?

Mr. WARDEN. I do.

Senator GOODING. Do you think it is a good thing for the development of the citizenship of the country as a whole ?

Mr. WARDEN. Certainly.
Senator GOODING. What are you doing to help it?
Mr. WARDEN. Everything I can, everything I can conceive of.

Senator GOODING. We are glad to hear that. That is what every good American ought to do.

Mr. WARDEN. Yes. I am willing to take my coat off and work at nights, as I have done.

Senator GOODING. Do you not think that a man who works in the coal mines and runs the risk of life and limb is entitled to about the best pay of any class of labor in the United States?

Mr. WARDEN. His risk is not nearly as great in many cases as in other enterprises.

Senator GOODING. I do not know what they are.

Mr. WARDEN. We will have that presented to you by a man who is ready to do it.

Senator GOODING. I shall be glad to have that information.

Senator WHEELER. Just one more question. Do you think that if the Pittsburgh coal operators themselves, I mean in that district; and when I speak of the Pittsburgh district I am taking in all of that country

Mr. WARDEN. What we call our Pittsburgh district.

Senator WHEELER. If all of the operators up there were able to get together and establish a common selling agency, would that eliminate the cut-throat competition that is going on regardless of what the West Virginia people are doing ?

Mr. WARDEN. No, sir; it would not. We have got to reach out in other districts than simply the Pittsburgh territory. We must reach other districts than what is known as the Pittsburgh district. The Pittsburgh district will not consume all our coal.

Senator WHEELER. The difference, Mr. Warden, between the Jacksonville scale on a ton of coal and the present scale is in the neighborhood of from 28 to 30 cents, is it not?

Mr. WARDEN, About that; in some cases more.

Senator WHEELER. You have a differential on freight rates, do you not, of approximately 45 cents to the Gulf?

Mr. WARDEN. To the Lakes, you mean, not the Gulf.

Senator WHEELER. Yes; I meant to the Lakes. So that you could get the Lakes business without the question of a doubt, with a differential of 45 cents, could you not?

Mr. WARDEN. No. We still have West Virginia to take care of. Senator WHEELER. What is that?

Mr. WARDEN. We have the coal from West Virginia which goes to the Lakes to compete against.

Senator WHEELER. You would still have that?
Mr. WARDEN. Yes. We can not get away from that.

Senator WHEELER. What percentage of it do you have to compete with? What percentage of the total ?

Mr. WARDEN. That I would like to have you ask a man who is more familiar with the percentage that goes to the head of the Lakes, of our production.

Mr. EATON. Just one question.

Did you, when this discussion of whether you were going to continue the union policy or discontinue it came up, take the matter up with Frank Jones of the Jones & Laughlin Co.? Mr. WARDEN. No, sir.

Mr. EATON. You did not talk to him about the fact that you were going nonunion and that the Jones & Laughlin Co. should go nonunion?

Mr. WARDEN. No; certainly not. (Witness excused.)

TESTIMONY OF REMBRANDT PEALE, PRESIDENT PEALE, PEA

COCK & CO.

(The witness was duly sworn by Senator Gooding.) Senator GOODING. Give the reporter your name and address and whom you represent, please.

Mr. PEALE. Rembrandt Peale; president of the Peale, Peacock & Kerr Co., with office in New York. I live at St. Benedict, in Pennsylvania.

Senator WHEELER. You will have to speak louder than that, Mr. Peale.

Mr. PEALE. My voice is very hoarse. I do not know that I can help it. I have had a very hoarse voice for a month.

Senator WHEELER. Do the best you can.

Mr. LIVERIGHT (counsel for Mr. Peale). Mr. Peale has been ill for some time, Senator.

Mr. PEALE. I can not help by voice, I am sorry to say.
Senator Gooding. You may proceed, Mr. Peale.

Mr. PEALE. Well, Senator, I do not know where to begin. I have brought with me the data that I was subpænaed to bring.

Senator GOODING. Have you a prepared statement you would care: to read ?

Mr. PEALE. No, sir; I have nothing special.
Senator WHEELER. What company are you with?
Mr. PEALE. Peale, Peacock & Kerr.
Senator WHEELER. What is their business?
Mr. PEALE. Mining soft coal.
Senator WHEELER. Whereabouts?
Mr. Peale. In the central Pennsylvania district.
Senator WHEELER. What office with the company do you hold?
Mr. PEALE. I am the president.

Senator WHEELER. What is the capital? How much is the company capitalized for?

Mr. PEALE. $2,000,000.
Senator WHEELER. Is it a subsidiary of any railroad company?

Mr. PEALE. No. I am a director in the Clearfield Bituminous Coal Corporation. That is the only other company that I am interested in.

Senator WHEELER. Your company is not owned by or a subsidiary of any other company?

Mr. PEALE. No, sir.
Senator WHEELER. To whom do you sell most of your coal?

Mr. Peale. Most of our coal is sold commercially. It goes eastbound over the New York Central, principally, and up into the State of New York and into New England.

Senator WHEELER. Your company was one of the companies that signed this Jacksonville agreement, was it not?

Mr. PEALE. Yes. We had an agreement in our district--district No. 2, not the Jacksonville-but the outlying districts each had an agreement predicated on the Jacksonville agreement.

Senator WHEELER. It was predicated on the same agreement !
Mr. PEALE. Yes, sir; only it applied to our district.
Senator WHEELER. It was for a period of three years.
Mr. PEALE. Yes, sir.
Senator WHEELER. And expired when?
Mr. PEALE. April 1, last.
Senator WHEELER. Did your company live up to the terms of it?
Mr. PEALE. We did; and continued for an additional three months.

Senator WHEELER. You considered that an agreement legally binding upon your concern, did you?

Mr. PEALE. We did, Senator. We had operated for 30 years under like agreements. I do not know that either side ever questioned the fact that we had a perfectly binding agreement between us.

Senator WHEELER. Your company never questioned the fact but what it was a perfectly legal agreement, just the same as you would enter into with any other concern?

Mr. PEALE. Yes. We always considered it a binding agreement.

Senator WHEELER. And it was always acted on as a binding agreement by both parties to the agreement ?

Mr. PEALE. Yes. We both invoked it in our discussions, morally, from time to time, whenever we felt that either side was not carrying it out.

Senator WHEELER. Likewise when you felt that the coal miners were not carrying out their part of the agreement you called them in and called their attention to their provisions in this agreement, and told them that they were not living up to it?

Mr. PEALE. That was our custom. There was an arbitration clause, too, that we invoked under the contract; and they did likewise.

Senator WHEELER. So that you did have an arbitration clause in your contract?

Mr. PEALE. We did.

Senator WHEELER. And you had arbitrated some of your difficulties?

Mr. PEALE. In our district.
Senator WHEELER. I mean, in your district ?
Mr. PEALE. In our central Pennsylvania district.

Senator WHEELER. You likewise considered it a moral obligation on the part of your company; did you not?

Mr. PEALE. Yes; I think we all did.
Senator WHEELER. That is all.

Mr. Eaton. Mr. Peale, I believe that you served as labor adviser to Doctor Garfield during the Fuel Administration?

Mr. PEALE. I did.

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