prorated among the mines that need cars that day. Should the mine operator load only part of his allotment today, he is penalized for having those cars not loaded, including those that are partially loaded at closing time today, and those loaded, but not billed out, recharged against him tomorrow. This penalty is a severe one, and one that makes the shipper exert every effort to load and bill out every car each and every day. There is no doubt at all in my mind that it would cost the railroads more money to collect demurrage on cars at coal mines than they would receive in revenue, even if it were possible to check each mine at least once every day.

In times when cars are plentiful the mine sidings are usually filled, as this affords a convenient place to store the cars against the time when they will be needed. Enactment of this bill without excepting coal cars from its provisions would put the coal operator in a position where he could not afford to have any car on the mine siding unless that car was specifically ordered by him and for which a load of coal had previously been sold. Even then, labor conditions, accidents, or temporary shut-downs, over which he has no control, can penalize him by assessment of these exorbitant charges to the point of tremendous financial loss, and could put him entirely out of business. Strikes of a local nature which do not make the headlines, as do national strikes, seriously interfere with mine operation and loading of coal at the particular mine or mines involved. They are as unpredictable as the weather, and in most instances occur on such short notice that empty cars would be placed at the mines and remain there until the matters in controversy were ironed out.

I might mention there, Senators, that this present week we had some disagreement between the miners and the operators as to whether or not the miners were going to take a vacation period, which involved the payment of $20 a week; and the miners in some places were willing to work and make the extra money, and the others were unwilling to work but wanted to take their vacation and the $20, rather than make the money.

One proposal of the miners in certain fields was that they would work if they had returned to them certain fines that had been held up from their pay for certain illegal strikes, and that was ironed out satisfactorily with only 1 day down, namely, Monday.

Now, had these demurrage rules as proposed here been in effect, that would have cost the operators a considerable amount of money just for the Monday shut-down; and had they been down all week, as they might have been had they not come to terms that were satisfactory mutually to all concerned, then that would have run into a considerable amount of money.

Senator REED. If you had a strike on your hands you would not be charged with these cars set in while you were not operating under that condition, would you?

Mr. ESTES. I believe Chairman Aitchison yesterday referred to several cases that the Commission had handled involving demurrage due to strikes; and I am quite sure that that would have to be adjudicated by the Commission before it was definitely determined as to whether demurrage would be charged or not, as to whether the strike was lawful or whether the operator could have had his cars loaded and put out or not.

Senator REED. Mr. Estes, if the tariff demurrage rules do not provide for some consideration of those factors, they ought to, and the Commission ought to have authority to waive the demurrage under conditions that are entirely beyond the operator's control.

Mr. ESTES. Senator, we do not need that now. We do not have any demurrage at coal mines.

Senator REED. Why don't you?

Mr. ESTES. We work under car-distribution rules. If a mine is rated at a hundred cars or has a siding that will hold a hundred cars, it can hold a hundred cars on the siding indefinitely. Senator REED. Provided he does not order.

Mr. ESTES. Provided he does not order any more. He cannot get any more cars until he gets rid of those that he has, and if he is a producing mine it is just as much in his interest to get rid of those cars as in anyone else's interest, and more so.

Senator REED. Suppose he loads 10 of them a day, and at night he is charged against his next day.

Mr. ESTES. If they are operating under the car-distribution rules, of course in times of plentiful car supply the operation of the cardistribution rule is more or less stymied. But we do operate under the hundred percent rule, which is that no mine can get cars if it is holding equal to or more than its daily rating. That would operate like this: A mine is rated at a hundred cars, and tonight at closing time he has 99 cars left. Then tomorrow morning he would get another hundred cars, provided there was a plentiful car supply. If he was holding a hundred cars he would not get any cars.

Senator REED. While we are on this point and departing from your prepared statement here, of course you do not mine bituminous coal until it is sold, do you, or unless you have a reasonable expectation of getting orders?

Mr. ESTES. That is true. Of course, unfortunately, it has been done.

Senator REED. But coal is quite a bit unlike most other commodities in that you do not mine your coal unless you have got an order for it. Mr. ESTES. That is right. We could not store it at the mine; it is not a practicable thing.

Senator REED. You have different kinds of coal. You prepare different sizes, do you not?

Mr. ESTES. Yes, sir; several.

Senator REED. And as they go over the screen your slack will go into one car, and your pea coal will go into another car, your nut coal will go into another car, and your lump coal for domestic use will go into another car.

Now, what do you do with your no-bill cars?

Mr. ESTES. I might say, first, that no-bills today are lower than they have been for a long time. As a matter of fact, a few weeks ago they were lower than they had been for about 10 or 12 years.

Senator REED. That is because you have a brisker demand, is it not? Mr. ESTES. That is because of the demand.

Senator REED. It is a demand for coal and a brisker demand, and you are selling your output virtually as fast as it is being produced. Mr. ESTES. In normal times, of course, when we do not have the extreme demand for coal that we have today, a mine might get an order, we will say, for 500 tons of prepared coal. Well, he cannot

make prepared coal and nothing else; he will have to make certain other sizes. He has so much slack. So that in order to make his 500 tons of prepared coal he will have so many tons of slack. Now, he has no market for the slack, so he has got to load that slack into a railroad car, and that becomes a no-bill until he can get somebody that will buy that slack or fine-sized coal; and of course now when they are glad to get coal of almost any size and there is a rather strong market for all sizes of coal, why, the no-bills have come down very considerably. I might say, we always have the railroads on our neck about no-bills, and rightly so; we do not like to see very many of them ourselves. Senator TUNNELL. When I used to be out in Ohio, when I went one time into the coal mines, they mined by rooms then.

Mr. ESTES. Yes.

Senator TUNNELL. But when I was there a short time ago I saw they were doing what they called stripping it. They were opening it up and loading it on cars.

Mr. ESTES. That is, the two types. Of course, there is the strip mine and the pit mine or the shaft mine. The stripping operation, of course, is on an entirely different principle from that of the deep mines.

Senator TUNNELL. A deep mine is usually not so thick and thin, is it?

Mr. ESTES. Of course, with your deep mine you do not remove your overburden. In a strip mine you have a large shelf, removing your overburden of dirt, and it gets thin, and the veins may vary in thickness depending on just the type of seam of coal that is in that particular area.

Senator TUNNELL. But in that pit method, as you call it, they do not have much space for storage. I can see that. They would not have much space for storing away the slack.

Mr. ESTES. No, sir.

If

Senator REED. They have to raise all their coal immediately. they had to store any it would be on the surface. As Mr. Estes has said, they have no storage facilities around bituminous mines. At least, I have never seen any, and I have seen almost every bituminous coal field in the United States; and if you store it you store it outside.

Mr. ESTES. If you unloaded it, say, from your tipple and put it on the ground you would have to pick it up again, and there would be a certain breakage.

Senator REED. There is a certain percentage, Senator, of coal that goes into slack. Of course, if you can sell all coal around the mine that takes care of everything.

Mr. ESTES. That takes in everything.

In

Senator REED. If, for example, you have a demand for slack, which is an industrial coal, it fluctuates with the activity of industry. the summertime you do not need much domestic coal: your prepared sizes, lump, and so forth. In order to supply your slack orders, as the industrial coal continues through the year, you are likely to accumulate some extra cars of prepared sizes for which you have no market.

Mr. ESTES. That is right.

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Senator REED. In the wir tertime when there is a maximum use for domestic purposes, you are likely to reverse that.

Mr. ESTES. That is right.

Senator REED. Then, in order to make your prepared sizes available for your market, and your slack demand is no more than the average for the year, you are likely to accumulate some slack coal. What percentage of slack do you figure comes out of a ton of mine-run coal when you are making prepared sizes? I presume the percentage varies in different fields.

Mr. ESTES. Senator, I could not answer that exactly, because, in the first place, it is not just prepared coal and slack coal. Due to the increased sale of stokers we now make a more or less fine-sized coal, and I should say as a matter of fact it would depend entirely on what the market was. Sometimes, if the market justifies it, they crush the prepared coal and make the stoker coal and fine coal, depending entirely on the market. It varies in different mines.

Senator REED. I have seen coal operators, of course, crush coal in order to make slack for an industrial demand.

Mr. ESTES. That is right.

Senator REED. It is a pretty tough question; the percentage of slack would vary in different fields because of the different kinds of coal that they are working, and it would vary because of those things that we have discussed here. At times the demand for slack might be so heavy that they would actually crush some coal to fill that order. I have in mind that somewhere around 40 percent of coal would normally go into slack.

Mr. ESTES. I was going to say 30 percent, but I would hesitate to hazard a guess.

Senator REED. I have seen it run perhaps 40.

Mr. ESTES. It would all depend also on the breakability, you might say, of the coal. Certain coals would break more than others.

Senator REED. There are certain coals that slack very easily, and other bituminous coals are harder and do not slack so easily. Mr. ESTES. That is right.

Senator REED. You have that variation throughout the different fields.

Mr. ESTES. Yes, sir. I might say that right now, at the present time, we are operating under very favorable conditions, as the Senator explained. There is the difference between your off sizes, as we call it, in one season, against the other, that now we have a demand both for industrial coal and under our storage program for the domestic coal during the summer months, which makes it a very favorable condition under which to operate at the moment.

Absenteeism is another problem, particularly at this time when the daily earnings of the miners are at a high level. No operator is able to predict in advance just how many men will report for work on any day as this depends entirely upon the feelings of the individual miner as to whether he wants to make more money or has sufficient in his pocket to last him for a while. It might be surprising for your committee to know that the mines' productive capacity may vary as much as 20 or 25 percent on account of this so-called absenteeism. Senator REED. That does not surprise me any.

Mr. ESTES. That is a little varying.

If the coal producer were compelled to wait to order cars until the coal in each individual car was actually sold, the delay to coal movement would be tremendous, because much coal is loaded and moved out from the mines to fill boats at either tidewater or lake ports, cargoes for which must be accumulated in order to fill the boats when docked. Much coal moves out on such consignment. In the mining process different grades and sizes of coal are made, and 75 percent of the production may be sold in advance. What is to be done, we ask, with the remaining 25 percent? The mine either works and sends it out to fill some constant spot such as the lake or ocean movement, and clears up the sale by the time the coal arrives, or the mine shuts down entirely and no coal is produced. If the latter should happen even in a few cases, the program that has been and is now being urged by the United States Government, namely, to produce all coal possible and get it into the hands of the ultimate consumer, would be seriously hampered and curtailed. The coal mine differs from a factory that may be producing a certain manufactured product which can and is often stored in warehouses, and which can be loaded out when cars are ordered and available. Coal mining is one constant process of transportation from the face of the mine, which may be 10 miles underground, until the coal is loaded into railroad cars through the tipple or preparation plant. At this plant it is separated into sizes and grades to meet the requirements of the trade.

I am afraid this is a duplication of what we went over a while ago, but if it is I hope you will pardon it.

This preparation is demanded by the modern coal-burning equipment in plants, utilities, and on the railroads, which equipment is geared to certain sizes and specially prepared coal. It is not practicable to store coal at the mines, and whatever coal is released from the production and preparation plant must move into cars ready for transportation. The uncertainty that surrounds these peculiar operating conditions under even one single shift is doubled or trebled under present conditions when many of the mines are working two or three shifts per day.

So as to coal mines we have a problem entirely different from any known to us to exist in any other industry, and because of which the coal car distribution rules above referred to and previously explained were worked out as heretofore stated. The present plan does not delay cars; on the other hand, it actually speeds up loading when necessary, and there is no problem at the mines when cars are plentiful. We know that demurrage charges will not operate at coal mines either to speed up loading or to produce revenue for the railroads. They will have, in our opinion, just the opposite effect, and will slow down loading when the Government is urging that every ton of coal possible be produced. As previously stated, the Government, through several of its departments, including the Bureau of Mines, the War Production Board, and others, is urging production and more production of coal, and up to this time the industry has met every demand for coal. The railroads have met every demand for cars, and at present there is a surplus of coal cars, as well as a surplus of coal mine productive capacity of about 1,000,000 tons per week.

I do not mean to tie those together, but surplus of coal cars is not enough to handle a million tons per week. The surplus is in the coal mine.