Mr. EATON. Were you the operators' representative on the United States Coal Commission?

Mr. PEALE. I was.

Mr. EATON. That was a commission appointed by President Wilson to adjust the differences between the miners and operators?

Mr. PEALE. Yes.

Mr. EATON. And that commission handed down a certain decision, did it not?

Mr. PEALE. Yes, sir.

Mr. EATON. I wish you would state to the committee whether or not that decision was the basis of the subsequent Jacksonville wage agreement?

Mr. PEALE. That decision was the basis of the subsequent Jacksonville agreement. We handed down an award, after being some three months with the matter under consideration, during which time we held extensive meetings for a couple of months, hearing both sides. We went into the history of the wage question very fully and we had the assistance of the Government, the Department of Labor and the Department of the Interior, and we finally reached a conclusion that granted to labor an average increase of 27 per cent over the 1917 agreement.

That agreement went into effect and was promulgated by the President and became effective April 1, 1920. There was no variation in the agreement, substantially, between that and the Jacksonville agreement, except the variation that Mr. Lewis testified to, that in August of 1920 there was an increase in the day rate of $1.50 a day, raising it from $6 to $7.50.

So that substantially that agreement stood until last April. Of course, there may have been some slight variations in different districts applying it; but that was the basis of the agreement.

Mr. EATON. As you have told the committee, you lived up to both the letter and spirit of your contract?

Mr. PEALE. We did.

Mr. EATON. And after it came to an end I believe there was a temporary wage agreement for two or three months to which you were a party?

Mr. PEALE. Yes. In our district we met with the district organization and agreed, just before the 1st of April, that we would continue temporarily to go ahead under the same terms and conditions that were effective up to April 1. I think Mr. Herriman read into the record the terms of the agreement we came to.

Mr. EATON. And that continued, I believe, sir, until July, 1927? Mr. PEALE. Yes.

Mr. EATON. In between the period of the expiration of this threeyear agreement and the subsequent discontinuance of the temporary agreement, did you have any conversation with the officials of the New York Central Railroad regarding coal prices?

Mr PEALE. No; I don't think I did.

Mr. EATON. What was the general talk about prices that the railroads were paying for coal in that time? Were prices going up or going down?

Mr. PEALE. Prices generally were coming down. Prices generally were falling.

Mr. EATON. Were the efforts which the various railroads made to purchase, based upon that descending scale from time to time, as you recall it?

Mr. PEALE. I presume they were, but I can not answer that because, as I remember it, our prices did not vary. We continued on shipping from month to month on the same prices we had before, as near as I recall; but I think that in the record it will show, in my papers, whether it did vary or not.

Mr. EATON. Did you have any conversation with Mr. W. C. Bowers, manager of purchases and stores for the New York Central, with reference to coal prices or the policy of the New York Central? Mr. LIVERIGHT. May I ask counsel to state within what period he refers to?

Mr. EATON. After April 1, 1927, and during the summer of that year.

Mr. PEALE. I presume I did. I do not remember it specifically, but it was customary to talk to the purchasing agent, Mr. Bowers, when we wanted to ship coal; and my recollection is, as I say, that our prices did not vary; that we went right ahead on the same basis. Mr. EATON. Did you have any talk with Mr. Herriman of the Clearfield, in which the matter of the continuance of the relationship between the operators of central Pennsylvania and the United Mine Workers was discussed?

Mr. PEALE. Yes. His company, like ours, belonged to an association of many years standing, and they discussed freely matters of wages, and it was the medium of our dealing between us and the United Mine Workers. I presume that we discussed that in meetings where he was present and where he was not. He was very often there, although he was not a member of the executive committee.

Mr. EATON. Did Mr. Herriman ever say to you, in substance, that the New York Central was being charged with maintaining the Jacksonville wage agreement by continuing its union relationship?

Mr. PEALE. No, sir; I do not think he did specially state that. Mr. EATON. Did he ever say to you that this relationship would have to be severed?

Mr. PEALE. With the union?

Mr. EATON. Yes.

Mr. PEALE. No. We all viewed it as an economic question, Mr. Eaton, and not one of a fight of the union. We came to the point in 1926 when central Pennsylvania produced 49,000,000 tons of coal, and of that 49,000,000 tons only about 15,000,000 tons, if I remember correctly, was actually produced under the wage of the Jacksonville scale. So our troubles were not only that we have West Virginia, and so on, that we have talked about here to-day, but we had a lot of competition among ourselves.

In other words, a good deal more than half of the district, some thirty or thirty-two or thirty-three millions, against the fourteen or fifteen that were on a lower basis of production, was involved, and we felt it necessary-I am talking, now, from the standpoint of commercial shipping-to try to do something to enable us to stay in the market.

Mr. EATON. When you say some companies were on a lower basis, did you have reference to the companies in No. 2 district that abrogated or renounced their contracts?

Mr. PEALE. Yes, sir.

Mr. EATON. So that the trouble up there primarily arose out of a number of companies renouncing or saying that they would no longer regard as valid and binding the agreement?

Mr. PEALE. Yes, certainly. You can readily see that when we were working on one scale and other companies were working on another we were at a serious disadvantage.

Mr. EATON. So that what really developed was an endless series of internal competition, one party cutting the price and then the other?

Mr. PEALE. Yes.

Mr. EATON. As I understand your business record, you have been a union operator for some thirty years?

Mr. PEALE. I have, since the union first started in Central Pennsylvania; and I see sitting right before me Secretary Wilson who was the man with whom we had the pleasure of dealing at that

time.

Mr. EATON. I know that you will state frankly to the committee your views on this-I do not know what they are sir-but I wish you would tell this committee whether you prefer to operate union or nonunion and what effect you think that has on the industry, sir.

Mr. PEALE. That is a large question, and I am going to answer in this way.

I think both the United Mine Workers of America and the operators are just as likely to see the light of redemption as anybody else. I think we could both improve on our methods. I believe that we undoubtedly were better off under union methods, and I have always favored union methods, provided they could be so arranged that our competitive conditions could be maintained.

Mr. EATON. In other words, Mr. Peale, the union methods, if the competitive condition were taken out of it, would solve the problem? Mr. PEALE. It would help to stabilize the industry, and there are a few more things we might want them to do. But as a general proposition, I think that under union methods properly administered, with proper cooperation between the company and labor, my experience has been that if they can be maintained properly, equitably and in a competitive way maintain our competitive relations with other districts, that is the best thing that can happen to us. I may have many friends who disagree with me, but that is my opinion.. Mr. EATON. I do not know, sir, your experience, but have the United Mine Workers ever failed to keep their contract with you? Mr. PEALE. Oh, we have had lots of local grievances, and they have with us, but as a general proposition; no.

Mr. EATON. Of course, your local grievances were the very ones that were to be taken care of under the arbitration clause?

Mr. PEALE. Yes. We were off on the side lines and not interested in many of these contests that went on in a larger way.

Mr. EATON. As far as you know, Mr. Peale, is it not a fact that a wage scale agreement, when it is fairly and religiously observed both by the operators and the men, tends to stabilize the industry as perhaps nothing else that has ever been devised does stabilize it?

Mr. PEALE. I think I have answered that question.

Mr. EATON. You did say that you had your prices then of coal sold to the railroads?

Mr. PEALE. Yes.

Mr. EATON. I will not take time to go over them, if the witness will identify them-and also the public utilities, if you please, sir. Mr. LIVERIGHT. There was no call for public utilities.

Mr. EATON. Well, whatever the call was.

Mr. PEALE (producing and handing papers to Mr. Eaton). Here are the railroad figures.

Mr. EATON. Mr. Reporter, may we have these marked as exhibits?

Senator GOODING. They will be marked and received as exhibits. (The statements referred to and submitted by the witness were marked, respectively, "Exhibit Peale No. 1," and "Exhibit Peale No. 2," and are as follows:)

PEALE EXHIBIT 1

R. Peale interests-Production tonnage and realization, years 1919-1927