Transcript of Record — Gray v. Powell
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TRANSCRIPT OF RECORD
UPREME COURT CF THE UNITED STATES
OcToRER TERM, L940 /
No. bat
S 4.- GRA. AS DIRECTOR
ON DENISTON Gn THE
PerER PE PoeG ret ea.
OF SHE BITUMINOUS
DEPARTMENT Ob THE
PEP TONERS
Vs
feteee fe. eer... JR. ANTI HENRY ¥V
Ls RECEIVERS OF s]
COMPANY
ANDERSON,
VbONRD ATR EINE RATELWAY
N WREP Of CERTIORARE To THE UNITED STATES eiRee it
OChNIOOR APPEARS FOR th FOURTUY CiRerii
PREEEION POR CERTIORARI PILE NOVEMBER cre. ee
CERETIORARE GRANTED
JANUARY G, 5081
SUPREME COURT OF THE UNITED STATES
OcTOBER TERM, 1940
No. 603
H. A. GRAY, AS DIRECTOR OF THE BITUMINOUS
COAL DIVISION OF THE LePARTMENT OF THE
INTERIOR, ET AL. PETUPIONERS
Vs.
LEGH Ro POWELL. JR. AND HENRY Wl ANDERSON.
AS RECEIVERS OF SEABOARD AIR LINE RAILWAY
COMPANY
ON WRIT OF CERTIORARI Oo THE UNITED SPATES CIRCUIT
COURT OF APPEALS FOR THE FOURTH CIRCUUT
INDEX
Origina Print
Proceedings before National Bituminous Coa! Comiunisston H ]
Appheation of Receivers of Seaboard Air Line Railways
Company for exemption | }
Notice of hearing (dated August 11, 1937 4 5
Memorandum from ©. F. Hosford, Jr. (dated September
14, 1937) - 10 5
Order of reference (August 11, 1937 i a
Affidavit of proof of service of notice of hearing in Docket
No. 49- FD. - 12 6
Notice of hearing (dated August T1, 1087 Leann )
fomitted in printing} 12-A th
Affidavit of proof of service of notice of adjourned hearing,
Docket No. 49-FD 13 6
Notice of hearing (dated August 11, 1937) (Copy)
fomutted in printing! 14 7
Affidavit of proof of publication of notice of hearing in
Docket No. 49 FD 15 7
Authorization to publish notice of hearing — - It) i
ZSTOSD 41 —]} 1
S|
Preeeestings before
| po
INDEX
National Bituminous Conl Commission-
Coomtinredd Original Print
Affidayit of pubbeation of notice of hearing in the Ash- ;
land Dailv Independent (September 24, 1937) aes Is Ss
Petition of Receivers of Seaboard Air Line Railway Ce.
for continuanee of hearing - 20 8
Memorandum granting continuance of | hearing in Doe ban
No 49 FD 24 10
Petition of Distriet Board @S for leave to intervene 25 1]
Transerpt of testimony in Docket No. 49° FD 20 12
SEPTEMBER 22, 1937
\
Caption and appearances . 30 (1) 12
Colloqus .. eo (%) 13
Petition of appleant (cops) fomitted in printing}. 30° (4) 14
Petition of intervenor (eopy) [omitted in printing! 30° (4) 14
Applicant’ s wittesse=
Irittain, Frank R 360°) 1S
Piummer, bL. i 30 3S 24
Plamimer, EB. Bo reeatled 300 Ho. 3H
Tynes. Buford ¢ boo1t4 63
Nelly.) J.. oF 30 0144 82
Shunk, Walter © 300557 S6
SeEVTEMBER 23, 1957
Caption and appoaraness 30 (167 -a 92
\y " ‘Ant = WAIthesses
Pynes, Buford C. reealled 3018S 92
Piumimer, L. Bo reealled 30 «176 a4
sh ink, Walter C. reeniled 30 (972 Q5
tiaudin, Joseph L 30197 10S
Perry, C.) Aten 30 (212 Lie
Pritc! Drrinel H 30 1231 126
Tynes, Baford Co (reeatled 30 (255 130
SEPTEMBER 12, 1930
Caption and appearances | 30 268 145
Notice of coutimenanee of oral argument it Omitted
on exeeptions to examiner's tndings + a3 %
of fact and recommendations printing} |30 269 145
Coltloquy id0 1270) 145
Argument by Mr Johnston (omitted in printing] 30 (272 7
Statement by Mr. French omitted in printing} 30 (297) 159
Ofiers in evidence:
Comptroller's Contract No. 23781 A) deed of lease) 35-163
Comptroller's Contract No. 23781-A (supplemental
agreement eat 49 172
Comptroller's Contract No, 23781-C. RAD RT chy . 58-A 179
Exhibit A--Statement of all terms, provisions, ete. 59 =: 182
INDEX
Proceedings before National Bituminous Coal Commissicna—
Continued,
Offers in evidence Continued. Orizinal
Letter dated Jane 30, 1936, to Reeeivers of Seaboard
Air Line Railway Company ‘Contract #23782 A) 72
Letter dated June 19, 1936, from Receivers of Sea-
board Air Line Ry. Co. (Contract #23782 A) 74
Supplemental indenture, dated April 14, 1936 (Exhibit
#2) 7s
Supplemenial indenture, dated April 14, 1936 (Exhibit
#2) XI
Letter re indenture of lease dated May 1, 1934, from
Receivers of Seaboard Air Line Rv. Co Sh
Indenture of lease dated May 1, 1934 (Comptroller's
Contract No, 23782. A) S7
letter dated April 28, 1937, re agreement No. 24363
Sup., dated April 28, 1937 125
Letter dated June 30, 1936, from Dingess-Ram Coal
Co, to Receivers of Seaboard Air Lire Ry. Co 128
Agreement No. 24363 Sup., dated June 36, 1936
‘Contract No. 24863-A) 130
Letter dated July 13 1935 5, from Dinge ss-Rum Coal
Company to Rece deers of 3. A. L. Ry. Company 134
Agreement #24363 dated July 5, 1935 137
Contract No. 23781. B, decree Sate d August 2, 1937 141
Exhibit A — ment of terms, provisions, ete.,
dated August 2. 1937 144
Exhibit B Spe eifieations for locomotive steam
coal 154
Exhibit C -Cost statement 155
Supplemental agreement, dated April 1, 1935 1i7
Agreement No. 23781, dated July 10, 1934 17a
Agreement #23782 Sup., dated May 25, 1937 RE
Agreement #23782 Sup, dated April 28, 1937 194
Agreement #23782 Sup., dated June 30, 1936_...--- 200
Supplemental agreement, dated June 18, 1936 —- 204
Specifications for locomotive steany coal, dated
June 1S, 1936- 208
Agreement dated June 5, 1936... - 210
Agreement dated May 14, 1936 213
Acreement dated April 14, 1936- 216
Letter dated April 6, 1935, from receivers of 8. A. L. Ry.
Co. . 219
Agreeme nt dated Ma~ , 1934... 221
Agreement dated May = i 247
Agreement dated Apri! 28, 1937. 249
Specifications for locomotive steam coal, agree-
ment dated April 28, 1937... ...--- sa 253
Agreement #24363-Sup., dated June 30, 1936. eye 255
Agreement dated July 5, 1935.....-..--.--------- 261
Hi
Irint
196
198
282
285
287
289
200
292
293
312
313
317
319
324
1V INDEX
Proceedings before National Bituminous Coal Conmiiission
Cont inved Original
Order on qietion for extension of time to file brief F
Brief snd argument on behalf of appleants
Brief for antervenor, Distret Board Nols -
ite pos ood applicants to boat for intervenor, District: Board
Nos
Letter of transmittal from SALE. Ry. Co, dated Oetober
7, 1937, to A.C. Pree. Washington, D.C.
Indenture of coal mining plant and equipment lease by
Reeeivers of So ALL. Ry. Companys
Apphestion Ne ToS in D.C. U.S. against Seabourd
Air Taine Ryo Company, Consolidated Cause in
Lquitv, No. 214
Order No. 16S in Equity Cause No. 234
Appleation Neo 146 in Destriet Court of the United
States against Senteard Air Line Kw. Company, et
al
Order No. 146 a. Equity canse No. 214
Copy of letter dated May 4, 1934, to S. ALL. Rv. Co
Cops of telegram: #23782. 44, dated April 28, 1934.
Plan Gessehold interest of a coal company, ete.)
Report of Pxamuner
Abstract of the evidence
Letter of transmittal dated Judy 28, 1988, to 8. ALE.
Kv. Co
Copy ef letter of transmittal te Distriet Board #8. July
28, 1938
Memeorandum, dated August 10, 1888. reextension of time
Copy of telegram dated August 10, 1938, to S. ALL,
Rv. Company, receivers
Applicants’ exceptions to proposed report and reeomamnuen-
dations of the trial examiner and brief
Notice of oral argument on exceptions taken to examiners’
findings of facet and recommendations _
Affidavit of service
Letter from S. ALL. Rasriwayv Ce., dated August 10, 1939_
Notiee of continuance of oral argument on exceptions
Athdavit of service
Order denving application for exemption. .-
Pinding- of fact. conclisions, and Opler of the Ssirector
Serviee of order, findings of faet. conclusions. and opimien
of the Director
Certifieate of the Bituminous Coal Division, United States
Department of the Interior [omitted in printing}
Proceedings in UL SC. C. AL. Fourth Crreuit
Petition of Reeeivers te review an order of the Tituminous
‘Coal Division of the Der uttimnent of the Interior
Appearance for petitioners
Notitiention of the fling ef petition to review
2067
DHS
Bu
3a4
349
Bil
HAT
ys
ed
ot
Vrint
238
320
349
373
382
383
427
444
INDEX
Original
Notice of motion of petitioners fer suspension order
Appearance for respondents
Minute entry of arguinent on motion of petitioners for suspern-
sion order
Order suspending order of Bituminous Coal Division and setting
case for argument on the merits.
Petition of Bituminous Coal Producers Board for Distriet No
S for leave to intervene
Certificate of service
Notice of petition to intervene — .
Certificate of service.
Response of petitioners to petition for leave to intervene
Minute entey of argument on petition for leave to intervene
(rder granting leave to intervene
Minute entry of argument of cause on merits
Appearance for respondent, Intervenor
Opinion, Parker, J
Decree ran
Issuance of mandate. :
Order authorizing Clerk to use original transeript of reeord in
making reeord for use on application for wrt of certiorart -
Clerk’s certificate fomitted in printing)_ -
Order allowing certiorari
ye 1
Sol
je2
Abed
Vv
503
563
AB
hO4
564
570
570
470
j71
S72
572
573
573
jae
5S]
5S 1
H. A. GRAY. ET AL.< VS. LEGH R. POWELL, JR, ET AL. |
} Before the National Dittnmiuneus Coal Comunissien
Tn re Applheation Under Provisions of Section & A of the Bitu-
minonus Coal Aet of 1937 of Legh Ro Powell, Jr. and Henry
W. Anderson, as Receivers of Seaboard Air) Line Railway
Company, for Exemption
Applic ation for or me ption
Aug. 4. 1937
The undersigned, Legh R. Powell. Jr. and Henry W) Ander-
son, as Receivers of the properties and assets of Seaboard Air
Line Railway Company (hereinafter called “Applicants”), pur-
~uant to the provisions of Section 4-A of the Bituminous Coal
Act of 1937, file with the Honorable The National Bituminous
Coul Commission this, the Applicants’, verified petition for ex-
emption from the provisions of Section 4 of said Act, and
respectfully show herein as follows:
i. That under and pureuant to orders of the United States
District Court for the Eastern District of Virginia, tiled in the
eause therein pending entitled “Guaranty Trust Company of
New York and Merrel P. Callaway, as trustees, et al., Complain-
ants against Seaboard Air Line Railway Company, et al., De*ond-
ants.” Consolidated Cause in Equity No, 2¥4, and in the Constit-
nent Causes numbered 2138, 214, 228, and 229 of said Consolidated
Cause, Applicants are the duly appointed and acting Receivers of
the property and assets of Seaboard Air Line Railway Company.
Certitied copy of order of said Court. filed on December v3,
1930, in said Constituent Cause No, 215 appointing the
2 undersigned Legh R. Powell, Jr. as stich Receiver, and
certified copy of order of said Court filed on December
30, 1922, in said Consolidated Cause No. 214 and in said Constitu-
ent Causes thereof, appointing the undersigned Henry W. An-
derson as such Receiver, have heretofore, and as hereinafter set
forth, been Sled with the National Bituminous Coal Cominission.
2. That under said orders of said Court Applicants were au-
thorized and directed to take possession of and te manage and
operate, and are now in possession of and are continuing to man-
age and operate, the railroads, properties, and assets of said
Seaboard Air Line Railway Company.
3. That in their operation of said railroads and properties
under and pursuant to said court orders, and in order to secure
a dependable source of supply. owned and controlled by Apph-
cants, from which to obtain the coal, or a large portion thereof,
used by them in such operation, Applicants several years prior
» HOA. GRAY, ET AL. Vs. LEG? Ro POWELL, JR., ET AL.
to the effective date of the Bituminous Coal Act of 1927 acquired
Ly appropriate iastrument of conveyain.c from the respective
landowners, and owned and since said date have owned, and now
own, the exclusive right to extract and mine for Applicants’ own
use and consumption in their operation of said railroad and prop-
erties, the coal ja, on or under those certain boundaries or tracts
of coal bearing linds at what are respectively known as “William-
Ann” Mine, located in Mingo County, West Virginia, “Chilton
Block No. 1° Mine, located in Logan County, West Virginia, and
“Glamorgan” Mine, located in Wise County, Virgima, all
3 of said mines being located in District No.8 of the Districts
organized under the provisions of Section £ of the Bitumi-
nous Coal Act of 1937.
4. That Applicants have heretofare for several years prior to
the effective date of the Bituminous Coal Act of 1937 employed,
have since said date employe and now employ, certain individ-
uals te perform for Applicants at and for an agreed conipensa-
tion paid by Applicants to such individuals, che work and service
of extracting mining and loading on railroad cars at the mine
tipple. for shipment to Applicants and for use and consumptien
exclusively by Applicants in thetr operation of said railroads
and properties, the coal in, on or under said tracts or boundavies
of land so owned by Appleants: said individuals performing said
work and service for Applicants at said mines, respectiveiy, being
is follows:
Willian: Anon Mine—D. HE. Pritchard.
Chilton Block No. 1. Mine—D. H. Pritchard.
Glamorgan Mine—A. E. Stone and Walter C. Shunk, as Ke-
cervers of Glamorgan Coals, Incorporated
That the said coal se extracted. mined. and loaded by said
individiials at each and every of said three mines is. in each case,
coal owned ly and the property of Applheants, is coal consumed
by Appheants and is coal which is shipped by said individuals,
acting for and as the agent ef Applicants, to Applicants for use
and consumption by Appheants un their operation of said: rail-
— and properties,
4 Appheants state and assert that they are the pre.
Prt at each of said mines of the aforesaid coal produced
thereat within che meaning and intent of the Bituminous Coal
Act of 1937, and are included in the term “preducer,” as that
term is defined by Section 17, paragraph (co). of said Act, and
that Applicants, the said) coal produced at each of said three
mines and the transactions and commerce im said coal, are, under
and by virtue of the provisions of Section 4 (1) of Said Act,
H. A. GRAY, ET AL. Vs. LEGH R. POWELL, 1R., ET AL. 3
specifically exempted from all of the provisions of Section 4 of
said Act.
7. Applicants further state and assert that under and by virtue
of said specific exemption provided for im said Section 4 (1),
that they and the said coal and said transactions and commerce
in said coal, are also, and irrespective and independent of their
aceptance, heretofore filed as hereinafter stated, of membership
in the Co'e promulgated under said Act, exempted fron the
tax imposed by Section 38 (b) of said Act by the provisions of
suid Section 3 (b).
s. Applicants also state and assert. in support of and as their
further claim to exemption from the obligation>. duties, or lia-
bilities Imposed by Section 4 of said Bituminous Coal Act of
#37, that the provisions of Section 4 o1 said Act have ne apple
cation to Applicants, or te the coal produced from said iaines,
or any thereof, or to the transactions and commerce in said
coal, in that said Scetion 4 relates and applies only te
d coal which is sold or the title to which is otherwise trans-
ferred, and to transactions and commerce in coal which
involve the sale or other transfer of the title to said coal,
% Applicants state and assert that no sale or other transfer
of title by Applicants, or by the said individual. performing
said work and service for Applicants, of the said coal produced
at and shipped to Appheants from any of aid mires, eccurs
or is made; but said coal so extracted, mined and shipped is the
sole and exclusive property of Applicants and is coal consumed
by Applicants and transported by them to themmelves for con:
sumption by them in their operation of said) railroad ane
properties.
10. Appheants further state that in order to protect and fully
preserve the rights of Appl cants and of the receivership estate
of Seaboard Air Line Railway Company, Applicants heretofore,
on the vist day of July 1937, filed with the National Gitumineous
Coal Commission acceptance by them of membership in’ the
Bituminous Coal Code promulgated under the provisions of the
Bituminous Coal Act of 1937; that Applicants felt. and still feel,
und claim and assert, that the filing by them of such acceptance
Was not necessary or required but that such acceptance was tiled
by them as a precautionary procedure and, by virtue of the pro-
visions of Section 3 (f) of said Act. without any preclasien or
estoppel of Applicants from contesting the constitutionalty of
anv of the provisions of said Act or of said Code, or of the
validity or application either to Applicants or to any part of
the said coal produced at said three nitnes: that a copy of
—-*
4 H. A. GRAY, ET AL., VS. LEGH R. POWELL, JR., ET AL.
( said acceptance by Applicants was filed with E. C. Maban,
Acting District Secretary for District No. 8, Knoxville,
‘Penn, together with certified copies of the aforesaid orders of
the United States Distriet Court for the Eastern District of
Virginia, and that in connection with said acceptance Applicants
have heretofore also filed certified copies of said Court orders
with the National Bituminous Coal Commission.
11. That Applicants further claim and assert that if. and to
the extent that, any of the provisions of Section 4 of the Bitu-
minous Coil Act of 1937 relate or apply. or purport to relate or
apply, to said coal produced at said mines, or any thereof, or to
said) transactions in said coal, said provisions of said Act are
unconstitutional, void, and of no effect. in that said provisions
of Section 4 of said Aet are (i) violative and in contravention
of the commerce clause of the Constitution of the United States,
to wit: Article-One, Section S, Clause 3 thereof. and (il) vio-
lative and in contravention of the due process clause of the Con-
stitution of the Unifed States, to wit: the Fifth Amendment
thereof,
Wherefore, Applicants pray that exemption from all the pro-
Visions of Section 4 of the Bituminous Coal Act of 1937 be granted
by the Commission to Applicants, to said coal produced at each
and every of aid three mines and to said transactions and com-
merce im said coal, and that the Commission enter an order (1)
that Applicants, the said coal so produced and the said Cransac-
tions and commerce in said coal. are not subject to the previsions
of Section 4of said Act, (41) authorizing and directing that
i any and all assessments paid or other payments made by
Appheants prior te the effective date of said order under
or by virtue of any of the provisions of Section 4 of said Act.
he refunded and repaid to Appleants., and cin) for such other
and further relief as to the Commission shall seem right and
proper in the premises,
Leon R. Powerit, Jr.
Henry W. Anderson,
cls Receivers of Seaboard
Air Line Ratliray Company.
WRLC. Cocke,
General Counsel for
Receivers of Seahoard Air Line Raliway fom pany.
L. B. Prom Mer,
General Attorney for
Receivers of Seaboard Alr Line Railay Company.
[Duly sworn to by Leah Ro Powell, Iv purat omitted in
pro tind, |
H. A. GRAY, ET AL... Vs. LEGH R. POWELL, JR. ET AL. 5
NATIONAL BittumtNous Coan ComMMISsION
©
WASEINGTON, D.C.
Docket No, 49-FD
In the Matter of the Appuicarion or Receivers. SEABOARD AIR
Lint Rainpway ror EXEMPTION
Votice of hea ring
Notice is hereby giver. that the Commission has assigned the
above entitled case for hearing on the 300 day of August 1937,
ut ten (10) o'clock A. M.. at a Hearing Room of the Commission,
Carlton Hotel, Washington, D. C.
As provided in the Rules of Practice and Procedure before
the Commission, the applicant shall at such hearing present evi-
dence in support of the appireation, and all other interested
persons may appear and be heard.
By order of the Commission.
Dated this Lith day of August 1937.
{ SEAL | EF. W. MeCuniougu, Secretary.
10 Before National Bituminous Coal Commission
Mi Meord nal ”)
SEPTEMBER 14, 1957.
To: F. W. McCullough, Secretary.
From: C.F. Hosford, Jr.. Chairman.
Subject: Change of order of assignmetit, Docket No. 49 FD, Sea-
board Airline Railways Company.
Please take note that subject appleation will be heard) by
Examiner Tilman D. Cantrell in place of Examiner Charles S.
Mitchell.
(Sed.) ©. F. Hosrorp. Jr.
te I. Hosford, Jr.
lt NATIONAL Brremixous Coat COMMISSION
WASHINGTON. D.C.
| Title omitted. |
Docket No. 49-FD
Order of re fe rence
Upon due consideration the above entitled matter is hereby—
1. ( ) Reserved for consideration by the fill Commission :
v. (X) Assigned and referred to:
(a) ( ) A Board of —_--_- Commissioners.
-*
f- H. A. GRAY, ‘ET AL., VS. LEGH R. POWELL, JR., ET AL.
(h) ( ) A Coramissioner,
(©) ( ) A board of 2222 - employees,
(d) (NX) An examiner,
for the Purpose oo
lL. ( ) conducting an investigation and making a report’ to
the Conimission.
2. (XX) conducting a hearing and submitting findings of fact
and the recommendation of an appropriate order in’ the
premises.
By order of the Commission.
Dated this Lith day of August 1937.
| SEAL | (Sgd.) F. Wircner McCutsoven.
F. Witcher McCullough,
Secret ferry.
lv Before National Bituminous Coal Conmunis-ien
Criy or Wasnineron,
District of ¢ ‘ohum bla xs 7
Atidavit of proof of KEP CICE
Sherman E. Burt, Assistant to the Seeretary of the National
Bituminous Coal Commission. being first duly sworn. on his oath
deposes and says: That he served upon Receivers, Seaboard Air
Line Railway Company, the Consumer's Counsel, District: Board
No. 8, and the Commissioner of Internal Revenue a true and
correct. copy of Notice of Hearing, Docket No. 48- FD. a true
and correet copy of which is attached hereto and made a part
hereof, by mailing it properly addressed with postage prepaid
te the above named parties an the ilth day of August. 1937,
(Sgd.) Suerman E. Burr.
Subscribed in my presence, and sworn to before me this 14th
day of August 1957.
| se AL | z (Syd.) ANNAN. JotNson,
; (Title) Votiry Public.
My Commission expires August 6, 1938.
12-A | Notice of hearing omitted in printing. |
13 Before National Bitun inous Coal Commission
+ .
’ J -
Ciry or WASHINGTON,
District of Columbia, ss:
Affidavit of proof of service
Sherman E. Burt, Assistant to the Secretary of the National
Bituminous Coal Commission, being first duly sworn, on his oath
Maw
H. A. GRAY, ET AL., VS. LEGH R. POWELL, JR., ET AL. 7
deposes and says: That he served upon Receivers, Seaboard Air
Line Railway Company, the Consumers’ Counsel, District: Board
No. 8 and the Commissioner of Enternal Revenue a true and cor-
rect copy of Notice of Adjourned Hearing, Docket No. 49 FD,
a true and correct copy of which is attached hereto and made a
part hereof, by mailing it properly addressed with postage pre-
paid to the above named parties on the 3rd day of September
i937.
(Sgd.) Suerman FE. Beer.
Subscribed in my presence, and sworn to before me this Sth
dav of September 1937.
| SEAL} (Sed.) Exeanor L. Harry,
(Title) Notary Pabhlic.
My Conimiission expires,
14 i Notice of hearing omitted in printing. |
ep Before National Bituminous Coal Commission
City oF WASHINGTON,
District of Columbia, gas
A thrlavit of proot of pub i witha;
Eugene J. Earley, Administrative Assistant of the National
Biteminous Coal Commission, being first duly sworn. on his oath
deposes and says: That he sent by letter on the Luth day of
August 1937. to the Ashland Indepengdgnt. Ashland. Kentucky,
for pubbeation. a true and correct ye ae f Docket No. 49 FD,
Notice of Hearing. “In the matter of es fla he ition of Receivers,
Seaboard Air Line Railway Company for exemption” a true and
correct copy of which is attached hereto and made a part hereof,
(Sud.) 0 Eucenrt | Eavrcey
Subscribed in my presence, and sworn to before me this 13th
day of August 1937.
| SEAL | (Sgd.) ANNAN. JomNson, |
(Tithe) Notary Public.
My Commission expires August 6, 1938.
16 Avoust 12. 1937
AsHnAND INDEPENDENT, Ash/and, Kentucky.
GENTLEMEN: This is your authorization to publish on one day
Docket No. 49-FD, Notice for Hearing, copy of which is
attached,
-< j
S H. A. GRAY. ET AL., VS. LEGH R. POWELL, JR., ET AL.
Please note government regulation provides that the adver-
Uisemient must be set solid without paragraphs.
Very truly yours,
Nationan Brruminous Coan Comission.
By FLW. MeCuitoven, Seer tary.
Enclosure:
KE as.
Mr. Hand.
iy | Notice of hearing omitted in printing. |
is A Adarvit of pu Alive “tion
Asitanp Datty TNpereNDENT
ASHLAND PUBLISHING ©O.. INC.
Ashland. Kentucky
Srare of Kenruecky.,
County of, Boyd, xx
Before me a Notary Public in and for the state and county
aforesaid, came the undersigned B. F. Forgey, who states that
he as president of the Ashland Publishing Company. publishers
of the Ashland Daily Independent, the paper designated as the
official organ for all legal publications in the city of Ashland,
Kentucky, and that there was published the attached Notice of
Hearing—Department of the Interior, National Bituminons Coal
Commission—Docket 49 FD and Docket 31-FD, in the Ashland
Daily Independent on August br, 1937,
(Sgd.) B. F. Forery,
Preside nt, Ashland Publishing f'a.
Subseribed and sworn to before me this the 24th day of Sep-
tember Ly.
(Sed.) Ertien Wansney.
Ne tary Puhlie, Boyd County, AY ntuckhy.
My Comunission expires February P38. 1940,
1) | Notice of hearmg oluttedt in printing. |
4) Before National Bitunimous Coal Conimission
| Ad tition of Te ah R. F airs 7, aud HT MPU W. A rule Poli, Us
Le CeT OTS of Ne aboard d lir rites Railivay Comp: THY, for CON -
timuance of the hearing set for A NQust 3), L907
Aug. IS, 1937
The undersigned, Legh R. Powell, Jr, and Henry W. Ander-
son, as Receivers of the properties and assets of Seaboard Air
H. A. GRAY, ET AL., Vs. LEGH R. POWELL, JR., ET AL. ]
|
Line Railway Company, hereinafter called “Applicants,” respect-
fully show to this honorable Commission :
That pursuant to the provisions of Section 4-A of the Bitu-
minous Coal Act of 1937 Applicants filed with the Honorable
The Nationa! Bituminous Coal Commission, on the fourth day
of Augnst 1937, their verified petition for exemption from the
provisions of Section 4 of said Bituminous Coal Aet of 1s,
That by its Order No, 49-FD, dated the 11th day of August
1937, the Commission notified Applicants that hearing upon
their petition for such exemption would be held on the 3h
day of August i937, at ten o'clock A. M., at a hearing room of
the Commission, Carlton Hetel, Wasinngton, D.C.
That the said order was received by Applicants on the Izth
day of August 1937,
That the time between the receipt by Applicants of sa:d Order
No. 49-FD and August 30 1937, the date fixed therein for the
hearing upon Applicants’ said petition for exemption, is not
-ufficient to enable Applicants and or their counsel to collect
th» docugnentary evidence and arrange for the oral evi-
21 dence it will be necessary for Applicants to present at
said hearing in support of their said petition, and which
evidence Applicants are informed and believe the Commission
will require be full, complete, and in detail.
Applicants state that the railroads in their possession and
control and being operated by them are extensive and that the
operation thereof requires a large staff of officers and other em-
ployees; that at this season of the vear many of their othcers
and other employees are on vacation, and their official and cleri-
cal forces are now, and will for not less than thirty more days,
be materially depleted thereby: that among their officials now
absent on vacation is their General Counsel, Mr. W. R. C. Cocke,
whom Applicants will desire to participate in the presentation
of Applicants’ case at said hearing and who will not be available
until after the date set by the Commission for said hearing.
Applicants further state they are advised that) the executive
officer of one of the corporations from which Appheants acauired
title to certain of the coal invelved in Applicants’ said petition
for exemption lad, prior to the issuance of the Commission's
said Order No, 49-FD, departed on an extended vacation and
will not return or be available to your Applicants as a witness
until the middle of September 1987, or later. Applicants also
state that their inability to lave these parties present at) said
hearing may prejudicially affect Applicants and the receivership
estate of Seaboard Air Line Rulway Company which is being
administered by Applicants under the control and direction
po
10 H. A, GRAY, ET AL., Vs. LEGH B. POWELL, JR., ET AL.
22 of the District Court of the United States for the Eastern
Distroet of Virginia.
Applicants further state that a number of the parties connected
with the transactions of Appheants at the respective mines re-
ferred to in Applicants’ petition for exemption are seattered,
reside at distant points and that more time will be required in
arranging for their attendance as witnesses for Applicants at
said hearing than is avatlable between the date of sari Order No.
40-FD and the date now set for said hearing.
Applicants are advised it is the desife ef counsel, who will
represent Applicants at said hearing to confer in advance with
counsel for the Commission and if possible agree with counsel
for the Commission upon the stipulation of certain material and
relevant facts and chereby conserve the time of this honorabtie
Commission. Such conference cr conferences will require counsel
for Applicants to go to Washington, D. C.. and will consume fuir-
ther time.
Wherefore, Appheants pray that the Conunission enter its or
der contnning and pestponing the hearing upon Appheants’
sud petition for exemption, for a period of not less than tairty
dave from and after August 30, 1937, and for such other and
furvier relief as te the Commission shall seem right
pd and proper in the premises.
Leon R. Powers, Jr..
Henry Wo ANbERSON,
As heeceivers of Scahoard
Avr Line Raliray Company,
‘
L. B. Prewarer,
(rs fie ret | fife “tre Af Jor Re it Pa, a of Ny ahoara Avr Line
ey .
PRadieay Compare
| Duly serorn to a) Legh PR. Pore MP Jr. peat anerbhe d in print
ing. |
O4 Nadtowan Brruminous Coss CosMMisston
WASHINGTON
Memorandum qranting continuance
AvGustT 20, 1937.
To: Mr. A. G. Price. Chief of Docket Section.
From: F.C. Faris.
Subject: Appheation of receivers of Seaboard Air Line Rail-
rewd for continuance of hearing, Docket 49-FD.
The application for continuance of the Seaboard Air Line
Railroad has been granted and the hearing will be on September
H. 4. GRAY, ET AL., VS. LEGH R. POWELL, JR., ET AL. 11
15 in the Patio Room of the Carlton Hotel. This will serve as
notice of continuance,
; (Sgd.) E. C. Faris, Jr..
Clerk of Leas MHS,
2) Brrore NatioNan BiruMinous Coan Cox Misston
UNITED STATES DEPARI MENT OF THE INTERIOR
Docket Number 49-FD
Inthe Matter of Application of Receivers or Sranovrp Ain Line
Rainway por Exemptions
Pi tition of Bituminous Coel Producers Board for District &
for leaie to ante PeCCchHe
The petitiover, Bituminous Coat Producers Board for District
by its attorney, respectfully requests the National Bituminous
( ‘cal Commission to enter its order in the above-entitled matter
allowing the petitioner to intervene in such matter and: assigns
in SUpeport thereof the following reasons:
(1) The petitioner ix the district board of code member- or-
ganized pursuant to the provisions of subsection (a) of Part I
of Section 4 of the Bittnituus Coal Net of 1937 (Public. Num-
ber 48. Toth Conggl-t sess.) for District So as such district. is
described in the Mimex to said Aet. with address at Transpor-
tation Building, Cincinnati, Obie,
26 (2) The application of Receivers of Seaboard Air Line,
hereinafter referred to as applicants, for exemption from
the code. filed in this matter, shows that the mines involved
herein are located in Mingo County, West) Virginia, Logan
County, West Virginia, and Wise County, Virginia, respectively,
and are. therefore, included within: the territory comprising
said Distriet S as described in the said Annex to the said Act,
The application of the applicants further indicates that,
if said application be granted, all commerce in all coal produced
at said mines in Mingo rsa West Virginia, Logan County,
West Virginia, and Wise County, Virginia, respectively. will be
exetupted from the provisions of Section 4 of the said Act.
(4) The petitioner is informed and believes that. beginning
with the third day following the filing of the appheation herein,
all commerce in all coal preduced by the applicants at the said
mines in Mingo County, West Virginia, Logan County, West
Virginia, and Wise Cownity, Virginia, respectively, has been
exempted from the provisions of Section 4 of said Act and
287059—41-——2
e
_
tN
"1. A. GRAY, ET AL., Vs. LEGH R. POWELL, JR., ET Ai.
shall so remain exempted until such time as the Commission
shall act upon the application, pursuant to the provisions of
the second paragraph of Section 4-A of said Net,
(5) The petitioner has imposed upon it by the terms of said
Act important and extraordinary duties in respect of the execu
tion of the provisions of Section 4 thereof which require that
at all times it be capable of ascertainment of both the commerce
in coal and the producers thereof which are subject
to the provisions of said Section 4 as far as they relate
to District s and otherwise.
The Det. 1Oner further prays, in the event that its petition
for intervention in the above-entitled cause should) be granted
hy the Commission as set forth hereinabove, that the National
Bituminous Coal Commission enter its order denying the apple
eation of the applicants in se far as it relates to commerce in
coal produced at the -aid mines located in Mingo County, West
Virginia, Logan County. West Virginia, and Wise County, Vir-
vinia, respectively, and assigns in support thereof the following
reasons:
(1) ‘The petitioner is advised and believes that certain coal
produced at the said mines in Minge County, West Virginia,
Logan County, West Virginia, and Wise County. Virginia, re-
spectively, is not coal consumed by the preducer or coal trans-
ported by the producer to himself for consumption by him,
(2) The petitioner is advised and believes that the commerce
in certain coal produced at the mines im Mingo County, West
Virginia, Logan Counts, West Virginia, and Wise County, Vir-
yimia, respectively, is such commerce in coal as deseribed and
covered by the third paragraph of Section 4 of said Act) as
“interstate commerce” and, therefore, subject to the application
of all of the provisions of said Section 4.
The petitioner farther prays fer such other relief as the Na-
tional Bituminous Coal Commission may deem necessary and
proper. :
srumiNnous Coat Propucers Bowrp For Districr §,
i“
ye)
By Secctiaina eas Attorney,
‘ on Trans por tation Building, Washington, )). c,
a irore THE NatrioNar Britt minous Coan
COMMISSION
Wednesday, September 22, 1937
A hearing on petition for exemption under Sections 4 and 4(a)
of the National Bituminous Coal Act. by the Receivers of the
Seaboard Airline Railway Company, (Docket 49-FD) was held
i, ~
x
4
H. A. GRAY, ET AL., Vs. LEGH R. POWELLS, JR.. ET AL. 13
at 10°10 o'clock al im... Wednesday, September 22, 1937. in the
Rose Room of the Washington Hotel, Washington, D.C.
Examiner, Troman D. Cantrrei.
Present for die Conunission: Legal Division: Leo W. Harring-
ton, Carl D. Sheed. Marketing Division: E. 8. Meany. Con-
sumers’ Counsel: Wim. S. Eichelberger.
‘ l Pye UMA S
W. OR. Cocke. Counsel for the Applicant. L. Bo Plummer,
general attorney for the Applicant. © W. EL Delaney. Attorney
for the Appiteant. Bo Tl Ausell, counsel for District Board
Noo s, in opposition to the application.
30(2) a ( ‘ologuy
The Exawiner. Gentlemen’ we are waiting just a few minutes
for Mr. Eden. Tam advised he will be here in just a second. In
the meantime while we are waiting for Mr. Eden wil! vou give
your appearances to the reporter f
Mr. PruowMerr. We have already cone so.
Mr. Hannineron, Yes.
The Examiner. TP think we will go on without Mr. Eden.
I would like for you to make an opening statement if) vou
Will, please, so that we can better follow the introduction of
evidence here.
Mr. Cocke. Mr. Pluniumer will make it.
Mr. Premarr Mr. Examiner, this is a proceeding on the appli-
cation of Legh R. Powell and THenry W. Anderson as receivers
of the Seaboard Air Line Railway Company, filed ander the pro-
visions of Section 4 (a) of the Bituminous Coal Act of 1937. for
exemption from the provisions of Section 4 of that Aet.
As set forth in the receivers’ application exeniption is claimed
by them by virtue of the provisions of Section 4 Gi) of the
Act. which Section reads as follows: "The provisions of this
section shall not apply to the coal constmed by the producer or to
coal transported by the producer te himself for consumption
by him.”
8003) The position of the Receivers is that they are producers
of the coal at each of these three mines within the purpose
and intent of this section 4 (1) of che Act: that the coal produced
at each of these mines is the Receivers own coal. It is coal
which is transported by them for themselves: for consumption
or use by them, and coal which is actually consumed or used
by them in the operation of railroads in their possession and
contre! and is hence, coal exempted by the provisions of Section
14 H. A. GRAY, ET AL.. Vs. LEGH RB. POWELL, JR.. ET AL.
4 (1) of the act: expressly exempted from: the provisions of Sec-
tion fof the Act.
The Eximiner. Mr. Reporter, Ido not beheve it will be neces-
sary to take down the opening statement if yeu please.
(Whereupon the balance of the opening statement was made
off the record.)
The Examiner. Are there any other interested) parties other
than the ipplicant here this morning é
Siro Awsece. Mr. Examiner my name is B. TL Ansell. counsel
for District Board No. 8, a board of producers organized under
Section 4 of the Act, with authority giver: under the Act over
Distriet Now Sas described in the Annex to the Aer,
It appears from the appheation filed in this matter that
BO) there is production and commerce of coal mvelved and
scaled from mines within the territory of District No.
s. The District Board perceives it is interested mm this matter
by reason of the duty imposed upon the Board under the Act
———_ . °
and wishes to file this petition for leave to intervene. “Tlie pe-
tition also tneludes a prayer that the applicant’. application in
this matter be denied. For the reason, first. that the applicants
are not entitled to exemption under either paragraphs of Section
4, whereunder they claim.
Therefore. we ask that the Examiner receive the petition on
behalf of the intervenor which has been drawn im accordance
with the Rules and Regulations of practice before the Conunt=
sion. copy of which has been served upen the applicants.
‘The Examiner. Mr. Ansell, do vou want a copy of this peti-
tion to be made also as part of the reecrd as Mr. Plummer re-
quested of the application itself ¢
Mr. Anxsewn. I do.
The Examiner. The petition of the Iniervenor will be ae-
cepted,
i Petition of Applicabt omitted. Printed side page. 1
ante, |
Bai Ld) | Petition of the intervenor omitted, Printed side page.
25 ante. |
s0(19) CONTINUATION OF PROCEEDINGS
Mr. Harrtncton. Have you an extra copy of that petition for
the Legal Department?
Mr. Awsent. And filed the requisite number of copies?
Mr. PucouMer. Mr. Examiner I would like to ask if the appli-
cation of the Receivers for exemption is being made part of the
record ?
H. A. GRAY, ET AL., Vs. LEGH R, POWELL, §R., ET AL. 15
The Examiner. Yes. The application of the Receivers for
exemption is being made part of the record. Yes, sir.
Are you ready to proceed now gentlemen
Mr. Poeser. Yes: we are recdy to proceed, We will call
our first withess,
The Exawiner. Have you more than one witness /
Mr. PrumMir. Yes.
The Examiner. Let us swear all of the witnesses at the same
Urine.
Me. Prosar. We will swear three, if that suits you, initiadly
aid then if we decide to put on more you can swear them.
Tie Examwingr. As you please.
(Whereupon three prospective witnesses for the Ap-
26.20) phicant were produced and duly sworn. )
Frys R. Brrrrais: was produced) for and on behalf of the
applicant and having: beea previonsty duly sworn, was exainined
and testitied as follows:
Direct examination by Mr. PrumMer:
Q. Will you stare your name and residence and in what eapae-
sty Vveu are employed by the Receivers of the Seaboard Aw
Line Railway Company: and if so employed, how long have you
been so employed: and whether you are of age ¢
A. Frank R. Brittain, Portsmouth, ¥ irginia. To am and have
heen since previous to 1934 continuously erniploved as Contract
Cierk and Custodian of Records for the Receivers of the Sea-
board Air Line Railway Company. Tam over twenty-one years
of age.
Q. Are you employed, Mr. Brittrin: are you not, as custodian
of contracts ¢
A. Yes, sir: contracts.
Q. Of what do your duties consist 4
A. T examine, record, index, and file as part of the contract
records of the Receivers contracts of the Receivers. T also make
und distribute to the departments interested abstracts of such
contracts.
Q. Have vou as such custodian received for filing, ab-
30(21) stracting, and recording the respective instruments of to
the Receivers of the coal in what is known as the Gla-
morgan mine; in what is known as the William-Ann Mine in
Mingo County, West Virginia and what is known as the Chilton
Block, No. 1 mine in Logan County, West Virginia ¢
A. I have.
Q. Have you as such custodian received for filing, abstracting.
and recorded the contracts between the Receivers and the respec-
~\
16 H. A. GRAY, ET AL. V<. LEGH R. POWELL, JR.. ET AL.
tive individuals or corporations who have in the past and are now
performing for the receivers the work and service of extracting,
mining, and loading for the Receivers the coals produced in each
of .7 three mines ¢
. LT have.
= Are you familiar with these instruments of conveyance of
the coal to the Receivers and with the contracts that those in-
dividuals or corporations who have performed and are now per-
forming this work and service for these Receivers at these three
mines ¢
A. Tam.
4). T hand you the following set of papers marked “Comp
trollers Contract No. Z3781L A." Please examine these papers and
identify them and state what those papers cover,
Mr. Cockr. We propose to ask that these original documents
be received but that we be permitted to substitute copies because
these are the originals for the Receivers’ files.
SO 22} The Examiner. That request will be granted and you
will of course substitute certified copies ?
Mr. Cocke. Yes,
The Examiner. That will be all right.
Mr. Puuom™er. I think it will save time if we have this wit-
ness identify them, naming the contracts in each case,
‘the Examiner. Do LT understand that each coutract is already
identified ¢
Mr. Prummer. It will be identified by the witness himself.
The Examiner. By the witness himself #
Mr. PicsMen. Yes.
The Examiner. T don't object to that. ‘That ts all right.
Mr. Pucwaer. To owill withdraw that question and put it this
way if 1 may.
. By Mr. PuomMer:
Q. Do vou identify thi, set of instruments to be the instru-
ments of convevance to the Receivers of the coal in the Glamorgan
Mine?) Mr. Brittain, To am asking you another question. Do
you identify these instruments as being the instruments of eon-
veyance to the Receivers of the coal in the Glamorgan Mine?
A. I do. J
30623) The Exvainer. Do” vou feel very strongly about not
having the exhibits identified by the reporter ¢
Mr. Purwaer. No. Tam asking that the reporter may iden-
tifv this as Exhibit No. 1, for the Applicané.
(Whereupon Comptroller's Contract No. 28781 40 was marked
“Applicant's Exhibit No, 1° for identification.)
H. A. GRAY, ET AL., Vs. LEGH R. POWELL, JR. BT AL. = 17
Mr. Cocker. I ask that we be permitted to substitute copies
in place of the originals of these decuments.
The Examiner. Yes.
By Mr. PrumMer.
Q. L show you this paper marked “Comptroller's Conutraet”—
a set of papers marked “Comptroller's Contract: No, 23782-A."
Do you identify these papers to be the instruments of conveyance
to the Receivers of the coal in the Willhiam-Ann Mine ¢
A. I do.
(Wherenpon Comptroller's Contract Ne. 23782-A was marked
“Applicant's Exhibit No. 2° for Identification.)
Q. LT hand you a set of papers marked “Comptroller's Contract
marked 24363-A.° Do vou identify those papers as being the
instruments of conveyance to the Receivers of the coal in’ the
Chilton Block No. 1 Mine?
A. IT do,
SO(24) Mr. Puum™er. Task the reporter to identify this as
Exhibit 3.
(W hereupon Comptroller's Contract No, 24363 A was mi: arked
“Applieant’s Exhibit No. 3° for Identification. )
Q. | hand you a set of papers cnarked "Comptroller's Con.
tract No, 23781-B."° Task that it be identified as Exinubit 4. De
vou identify these papers to be the contracts providing for the
performance for the Receivers of the work and services of ex-
tracting., mining, and loading coal for the Receivers at the Gla-
morgan Mine ¢
A. I do.
(Whereupon Comptroller's Contract No. 23781-B was marked
“Applicant's Exhibit No. 4° for Identification. )
Q. To hand vou a set of papers marked “Comptroller's Con-
tract 23782 - BO which T request be identified as Exhibit 5. Do
you identify these papers to be contracts providing for the per
formance for the Receivers of the work and services of ex-
tracting, mining, and loading coal for the Receivers at the Wil-
liam-Ann Mine /
A. I do.
(Whereupon Comptroller's Contract No. 23782-B was marked
“Applicant's Exhibit No. 5” for Identification. )
Mr. PucmMer. I request the —s to mark this as Exhibit
No. 5
By Mr. PucumMer: {
Q. I hand you a set of papers marked “Comptroller's
80(25) Contract 24363-B.” which I request to be identified and
marked as “Exhibit 6.° Do vou identify these papers to
Is H. A. GRAY, ET AL., Vs. LEGH R,. POWELL, JR., ET Ab.
be the contracts providing for the performance for the Receivers
of the work and service of extracting, mining, and loading coal
for the Receivers at the Chilton Block No. 1 Mine ¢
A. I do.
(Whereupon Comptroller’s Contract No. 24363-B was marked
“Appheant’= Exhibit No. 6° for Identification.)
Mr. PrucemMer. Mr. Examiner. we tind there is one instrument
Which constitutes part of this Comptroller's Contract 2a782-A
offered as Exhibit No. 1. which we omitted to hand to the witness
and we ask permission to add that and offer it to be added as
part of that same exhibit.
The Examiner. Yes.
Mr. Cocke. T understand that is an instrument which has only
been recently executed and we would like to have Jeave to supply
additional copies of that instrument as soon as we can have it
copied.
Mr. Puemmer. We have no copy.
The Examiner. T see that it is nota dong instrument. T imag-
ine it can be done during the course of this hearing. Tt is only
two or three pages long.
By Mr. PLrumMer:
30(26) * QT will ask the witness to identify these instru-
ments as partof such instrument of conveyance in which
the Receivers acquired tithe to the coal at the William-Ann Mine,
Do vou identify that contract as beige a part of it?
A. IT do.
( Whereupon the sad Papers were marked “Applicant's Ex-
hibit 1 (ad for Identification.)
The Examiner. As Touncerstand it, the first instrument with
reference to this particular contract with this mine was iden-
tified as Exhibit No. 14
Mr. Harrineron. Mr. Examiner: do To understand now that
those instruments are being offered here for identification only ?
The Examiner. They are being offered for identification only
at this time. They are not offered in evidence vet.
Mr. Pruomaer. Mr. Examiner, I ask that the original—these
original conveyances and contracts which Mr. Brittain lias just
identified be received in evidence and that we be permitted to
withdraw them and substitute copies of them, certitied by the
Witness as such custodian of the records. “s
We also ask that those copies as so certified be identitied by
the Exhibit Numbers in the place of the originals. 1 to 6. and
1 (a).
H. A. GRAY, ET AL., Vs. LEGH R. POWELL, JR., ET AL. 19
Mr. Harrincton. Mr. Examiner. IT wish at — this
20(27) tame to enter an objection to the admission of these
documents as evidence in this case,
The Examiner, The documents offered by the Applicant and
introduced as Exhibits 1 to 6. inclusive and 1 (ay will be ac-
cepted in evidence subject to the cbhjection: with the right of
the appheant to furnish certified copies of each of the said
exhibits.
Mr. Cockr. May we ask what the grounds of the objection
to the introduction of these doctuuments i ¢
Mr. Harrineron. Well. the grounds are that first, we liave not
had an opportunity of reading over those documents and there-
fore we might have some objection that we could offer at this
tine. But we now submit and mitke a general objection for
the reason that we want to read the instruments over and. then
later, if we find there is some material here we wish to object
to we cap save ourselves by this general objection.
Mr. Ansenn. Tohave had ne opportunity to examine any of
ithe documents offered for identification and mow offered for ad-
mission into evidence. T have no objection to their going in
provided they are going in subject to a motion to strike them
out, Which To may make after [ have had an opportunity te
eXanaine them,
The Examiner. Mr. Ansell, these exhibits. as vou
30,28}; see, are rather lengthy. FE do not: believe any of vou
gentlemen would have an opportunity. to make a real
study of the exhibits at this time without a considerable delay
of the earing.
Mr. Ansene. As T stated. Mr. Rxaminer., T have no objection
provided that the record show T reserve the right to meve to strike
them out and ask that the gris consider that motion,
The Examiner. Let the record show that reservation. It will
be considered et the time of the finding of facets, or recom.
mendations,
Mr. Cocke. May Toamake an additional observation, Mr.
Examiner /
The Examiner. Yes.
Mr. Cocke. T cannot imagine that it would be proper on any
legal grounds that fean conceive of, to admit any of these doeu-
nents subject to anv motions to strike from the record. ‘These
documents are offered in evidence in support of the Application
made by the Receivers for exemption. Whether these documents
bear out the claim for exemption. of course is the question which
is directly in issue before vou now. But certainly to show what
the situation is and what the relationships of the Receivers are
20) H. A. GRAY, ET AL., Vs. LEGH R. POWELL, JR., ET AL.
to these three mining operations, it is inconceivable that
30 (29) these documents are not relevant to prove those facts. We
therefore insist, in order that the record may be clear,
that these documents are plainly admissible in evidence and not
conceivably subject to any motion to strike.
Mr. Awnsenn. To think, as a party to these proceedings, Tam
certainly entitled to examine those documents before they be sad-
mitted into evidence. Tami very much surprised that the gentle-
mnan takes the position that he does.
The Examiner. Mr. Ansell, as I understand Mr. Cocke, the
exhibits offered here are mainly for the purpose of showing
the relationship between the Receivers and—-are they coal com-
panies or separate corporations from the Receivers ¢
Mr. Puum™Mer. As to these Seaboard Receivers¢ In the sense
of any stock ownership ‘
The Examiner. The three mines that you referred to here are
corporations separate and apart from the Receivers
Mr. Pruumaer. Yes: these landlords are entirely separate and
apart from the Receivers. The Receivers lave no stock.
The Examiner. The purpose of the itroduction of these ex-
hibits is to show the relationship between the Receivers and the
corporation or other individuals mvolyved.
30(30) Mr. Cocke. The contractual relationship.
Mr. PrumMer. The purpose is to ‘sy the nature of
the transaction; the terms and provisions of the contract, which
are in effect.
The Examiner. T understand that the objections of the Legal
Division and the Intervenor to be merely this: That they have
not had an opportunity to read the exhibit- at this time, nor
have [—and that they are merely reserving their rights, as vou
gentlemen would do, to object if they find out at some subsequent
trme when they have had time to study the exhibits, that they
are improperly accepted into evidence. So they are accepted
subject to the objections made,
(Whereupon the documents referred to were marked in evt-
dence.)
By Mr. Pucmoer:
Q. You have with vou, have vou not, copies certified by vou,
of the original documents which have been identified and offered
in evidence?
A. I have.
Q. Is each copy a true and correct copy of the original and
has attached thereto your certificate to that effect ¢
A. Yes, sir.
H. A. GRAY, ET AL.. VS. LEGH R. POWELL, JR. ET AL. 21
Mr. Pucomwer. Mr. Examiner, these are the copies which I
hand to the Reporter to substitate for the originals.
BOB L) Mr. Cocker. Mr. Examiner, I distike to spend any more
time on preliminaries than is absolutely necessary but in
view of the objections made by counsel I would like to have this
situation made entirely clear.
We have witnesses here who are capable of identifving the
acthal execution of those original documents, as having been
properly executed for what they may be worth legally.
Does the objection go, Mr. Ansell, to any question of the ex-
ecution of the imstruments or merely to their admissibility 4
That is. do vou make any question as to the execution of them?
Mr. Harrinetox, We make ao question of the legality of the
instruments themselves.
Mr. Cocke. T see. ATP right.
The Examiner. That is true of the Intervenor, too?
Mr. Anseci. Well. it may be. Of course, never having had
any occasion Whatsoever to knew what they are. outside of the
siatement of counsel, T do not know what niy objection to them
may be. T objeet simply because TP did not have an opportunity
to examine them,
The Examiner. Well, Mr. Ansell. T do not understand. What
Mr. Cocke says--vou are not objecting to the introduction and
identification of these documents whatever they might
30(32) contain, and identification of then; as documents o: as
contracts of the appheant company here. In other
words, Mr. Ansell, you are not requiring a more strict identifica-
tion of the documents! Are you not objecting to the way they
were offered or introduced in evidence ¢
Mr. Anse. Well, as I] recall. tirst they were offered for iden-
tification as contracts that were entered into by certain predeces-
sors of the Seaboard Air Line Railway or Receivers. In view of
counsel's statement, which [T have no occasion to doubt, T would
be perfect!y willing te say they are those instruments.
Mr. Cocke. Mr. Ansell, here is the—what I may say, to ilus-
trate—here are the formal drafts of the documents showing the
signature of the Peerless Coal Corporation by W. C. Shunk, its
president, and then the signature of the witness, and then the
signature of Legh Powell and Henry W. Anderson, as Receivers
of the Seaboard Air Line Railway Company; also witnesses to
the execution and the signature of the Receivers.
Now, my question is whether or not your broad reservation of
the right to object to these instruments would, by any possibilty,
include any challenge as to the proper, formal execution of the
instruments themselves.
2” H. 4. GRAY, ET AL.. Vs. LEGH 8. POWELL, JR.,. ET AL.
Mr. Anseun. Mr. Examiner, Twill concede. as far a:
30(33) District Board s is concerned, that these documents are
what they purport to be and as described by the witnes-
and by counsel,
The Examiner. Will vou proceed then, Mr. Phiammer ¢
Mr. Proven. T understand then, counsel is excepting to the
geniimeness of these instruments.
The Examiner. That is correct, the Examiner understands that.
Mr. PrumMer. Here is one additional instrument, Mr. Ex-
amiper, Which T desire to hand to the witness.
By Mr. Prumarer:
Q. To hand you an instrument, being an agreement between
the Receivers of the Sea Board Air Line Railway Conipany
and the Peerless Coal Company, dated Seprember 1. 1987. be-
tween the Receivers of the Seaboard Air Line Railway Coni-
pany and the Peerless Coal Company and ask the witness if
he identifies that contract as being ene of the instruments under
which the Receivers acquired title to the coal at the Glamorgan
Mine?
A. I do.
Mr. PromMen. Task that it be—
Mr. Hankkineron Cinterposing). Cannot the witness identify
then himself, without the attorney identifving it for him? 1
mean. the witne-s is familar with these contracts and T think
he would be in a position to identify them by his own
80(34) statement rather than by it leading: question of counsel.
By Mr. Presauer:
Q. Powill ask the witness then, to state from his knowledge
of the contract that it is such eontract.
A. This is an agreement by the Peerless Coal Corporation
to assume obligations and it agrees to perforni the duties assumed
by the Ghanergan Coals, Ine. under the contract already intro-
duced, for mining and manufacturing coal.
QQ. That ts really a part of Exhibit 1. Mr. Examiner, and we
wold like to have it be admiutted as an exhibit.
(Whereupon the papers referred to were marked “Applicant's
Exhibit 1 ¢b).° in Evidence.)
Mr. Promer. This is a part of Comptroller's Contract
Y8TSL A which has been previously introduced,
Mr. Harkixerox. Do you offer that in evidence /
The Examiner. Yes.
Mr. Puom™er. Yes: 1} am offering that in evidence.
Mr. Harrington. TI wish to object to the introduction of this
document mn evidence for the sarae reasons stated i. the objec-
H. A. GRAY, ET AL., VS. LEGH R. POWELL, JR., ET AL. 23
tion to the other instruments introduced here, Exhibits frem 1
to Gand 1 (a).
Mr. PromMer. We understand, Mr. Examiner, that the objec-
tion of counsel to this is not directed to the genuineness of
this instrument.
BURBS ) The Examiner. That is the understanding.
Mr. Awnsenn. Mr. Examiner, To ohave an objection to
nuke with the same reservation and the same objection with
reference to the other exhibits offered, as to their genuineness.
Mr. Prcm™Mer. We have no further questions to submit to this
WITHESS.
The Examiner. Does the Legal Division have any further
estlons ¢
Cross-examination by Mr. Harrineron :
Mr. Brittain, are you familiar with the contract, or deed,
or lease, maade on the l2th day of July 194. wherein between
the Glamorgan Coal Land Corporation and the Receivers are
lessees in that imstrument /
A. Yes, sir.
Mr. PrumMer. May I interrupt? Is that one of the exhibits
already introduced in evidence? Well, then, this witness was
purely for the purpose of identification and we submit the in-
sfrument is the best ev idene ‘eto stute the contents.
The Examiner. Mr. Harrington, May 1 sugeest—you havg
had ne Opportunity whatsoever to see what these exhibits are,
I will call a recess for fifteen minutes to give you an
30,36) opportunity to check over the exhibits in a general sort
of way and to talk with Mr cimmmer and Mr. Cocke,
And at that time if yeu have any further quescions of this
Witness Why then vou may ask them.
(Whe reupon a fifteen minute recess was had.)
Mr. Cocke. Mr. Examiner. in view of the natural desire of
the other counsel to have some understanding as to what, not
only what these documents which have been introduced in evi-
dence contain but alse what the purpose is and how they work,
ho has occurred to us that it might save time in the tong run
and be iuminating in this hearing if we were to place Mr. L. B.
Plummer on the stand and have him sworn and explain those
documents, subject. of course, to cross-exomiination,
Mr. Plummer has for vears been intimately fanulinr with all
the details, ell of the details of these particular transactions.
He has participated in all the negotiations for the making of
these contracts. As a matter of fact he has himeelf been the
draftsman of mostly all of them and T think it would be helpful
not only to the Examiner but to the other counsel if he were
— ]
24 H. A. GRAY, ET AL., VS. LEGH R. POWELL, IR. EF AL.
te take the stand and desertbe these imstruments, ther essential
proviscons and the manner in which they operate. And
BUST) if there is no objection to that, of course, we would
like to have that done,
The Examiner. T think it would be helpful to the Examiner,
Do the attorneys have any objection to the attorney Mr. Plum-
mer explaning these exhibits offered in evidence ¢
Mr. Harnineron. [ object: IT would like to have it understood
that some of the parties who signed these contracts be called
and some of the officers and the Receivers of the different coal
cogupanies be placed on the stand and give us a cliamee to cross-
eXamine in these contracts, besides the attorney.
Mr. Cocke. There is no officer of the Receivers but we lave
some Witnesses here who are of the Receivers organization and
will be glad to expiain any question.
Mr. Harrineroxs. You have witnesses here or any of the officers
of the coal COL pales that signed these contracts ¢
Mr. Cocker. Yes.
Mr. Hargineron. And you are going to call them as with -sses
too?
Mr. Cocker. We will be glad to, :
Mr. Harrixeron. Then that will be all right to me if) vou
put him oon the stand.
: The Examiner. You have the ful! right of -cros<-examiination
of Mr. Plummer who is now appearing as a witness for the
purpose of explaining the exhibits.
BCBS) Whereupon L. B. Puoaer was called upon asa witness
on behalf of the Appheant and, having been first duly
sworn, testified as follows :
i ad
DIRECT EXAMINATION
The Examiner. Let me make one further statement. T said.
“For the sole purpose”: T don’t want to try to limit the testimony
vou are seeking to adduce through Mr. Plummnier.
Mr. Cocke. T understand that.
By Mr. Cocke:
Q. Your name is L. B. Plummer ¢
A. Yes,
Q. You held the position with the Receivers of the Seaboard
Air Line Railways Company as general attorney. do you not. Mr.
Plummer #
A. Yes: T do. :
Q. Mr. Plummer, for a number of years you have been in the
Seaboard law department, the member of that organization which
Soe
H. A. GRAY, ET AL... Vs. LEGH R. POWELL, JR., ET AL. 25
has been most intimately famyhar with the negotiations and the
drafting of the instrument~ relating to these transactions which
are now the subject of this hearing ?
A. Yes, sipp-the preparation of these contract-———
Q. (Interposing.) Talk a little louder, please.
30(39) A. The preparation of these contracts has been part of
my duties and T have also participated in each of the
negotiations which have resulted in the making of these con-
tracts. T personally drafted each one of these contracts. And
IT think Tam, of course, thoroughly familiar with the provisions
of them.
Q. Now, when you—-will vou firsi, with reference to each of
these three sets ef documents describe in brief detail just) what
these documents are, without any argumentative conclusions, but.
merely stating briefiy what the contents are and th» way in which
these contracts are designed to operate. And T would suggest,
since the oldest of these transactions, going the farthest back,
is that with the United Thacker Coal Company and begin with
that and deseribe it and take up the others thereafter.
Mr. Harrixneron. Pardon me. Will vou describe that—iden-
tify that as exhibit what / \
Mr. Cocke. That is Exhibit 2. Bat this is the oldest of the
transactions and has more of a background.
Mr. Harrineton. Well, T would like to have them identified,
too,
By Mr. Cocke: ae
Q. You go ahead in your own words.
A. In the point of tine. an arrangement which has stood for
some time and is still in force. that at the Wiliam.
80.40) as the oldest. And T think it would clarify the situation
somewhat for me to give you a Tittle of the histories
summary of this particular arrangement and the other similar
arrangements.
Tn 1934. the William-Ann Mine—the coal in the William-Ann
Mine had been leased by the United Thacker Coal: prior to 1924
by the United Thacker Coal Company and the Cole and Crane
‘Trustees. That lease was—I don’t know whether it was to Mr.—
it Was to a corporation. And a default occurred in that lease
and the lease was cancelled and the properties were recaptured,
which had belonged to the lessee corporation when recaptured by
the lessor companies, the landlords. And the mine had been shut
down,” Now, at that stage of the matter the Receivers entered
into an arrangement with the owners of these coal-bearing lands
and the then owners, through recapture, of the mining equip-
ment.
ied 7}
:
26 HM. a. GRAY, ET AL., VS. LEGH R. POWELL, JR., ET AL.
Q. Who are thos¢ owners
A. Those owners were the United Thacker Coal Company and
the Cole and Crane Trastees.
By Mr. Harrincton :
Q. Are they the owners of the fee and of the plant?
A. They are the owners of the fee and of the plant. These
negotiations resulted in an arrangement under which the
Receivers of the Seaboard acquired directly by grant from the
land-owners, the coal at this mine: the exclusive right
80(41) and privilege to extract, mine, and produce that coal
or cause it to be extracted, mined, and produced for their
account.
By Mr. Cocke:
Q. Let me interrupt vou there Mr. Plummer to ask whether
or pet prior thereto or during any of these transactions which
you have se far described or will hereafter described, whether at
the present time there is any sert of stock ownership or other
kind of relationship other than is shown by these documents
introduced in evactence between the Receivers of the Seaboard
Air Line Railway or the Seaboard Air Line Railway itself with
either theentied Thacker Coal Company or the Cole and
Crane ‘Trustees ¢
A. Absolutely mone.
Mr. Harrinerox, What is the name of that other company
please ¢
Mr. Cocke. United Thacker Coal Company.
The Wrrness. United Thacker Coal Company.
Mr. Cocker. And the Cole and Crane Trustees.
The Wrrness. The trustees.
By Mr. Cocker:
Q. Now what is the distinetson in respect to the ownership of
the fee of these lands between the United Thacker Coal Com-
pany and the Cole and Crane Trustees, if vou happen to know
It?
A. Weil. it is my understanding of that, Mr. Cocke,
SOed2) that some of those hinds included in this mstrument of
conveyance are owned separately by the United Thacker
Coal Company and by the Cole and Crane Trustees. The pur-
pose of this lease. this grant. is to convey to the receivers the
entire property interest of both the grantors in this coal.
Q. Ail right now, will vou proceed with your story ¢
The Exasiner. May bask one question to clarify my thought
on this?
The Witness. Yes.
eal | J
bj
ie ed” Seip ag a
Ae
BPs Marty,
ae
sed
Bs
3
2
i
4
4
g
H. A. GRAY, ET At., Vs. LEGH R. POWELL, JR., ET AL. 27
The Examiner. Does the United Thacker Coal Company own
the top works and the mine equipment or is that owned by the
United Thacker Coal Company and the Cole and Crane Trustees ¢
The Wirness. I am not——
The Examiner (interposing). | rather understood that the
mining equipment and the property itself; that is, the title of
the works belonged to one company and pessibly the fee of the
coal to another company: is that correct ?
The Wrrness. I am not prepared to say how that ownership
is div ed: if at all, it is between the two grantor companies, but
indeed one. It is owned either solely by one or jointly by both.
I don't know. But the Receivers—but neither the Receivers or
the operator at this mine own the mining equipment.
30( 43) Mr. Cocker. I think there will be witness to succeed,
that will come after Mr. Plummer, some time in the
course of the hearing, that can give vou that information.
The Examiner. I don't know that that is at all important.
Mr. Cocke. If it is I think we can develop that information,
By the Witness:
A. (Continuing.) The Receivers of the Seaboard Air Line
Railway Company acquired in the manner [ have stated the
ownership of the coal at this William-Ann Mine. They then
negotiated an arrangement, a contractual arrangement, with Mr.
Daniel H. Pritchard as an experienced operator, for the opera-
tion of this mine; extracting, mining, and loading of the coal
on railroad cars at the mine for shipment to the Receivers.
Now, that arrangement, originally, it is my recollection, I
am quite sure, the contract will indicate it, was for a period
of one years with the privilege of renewal in the Receivers in
beth cases, for successive yearly periods. The duration of the
grant and the duration of the contract with Mr. Pritchard. the
Cperator, Was co-extensive in time.
Now, at the expiration of that first year and within the time
required by the contract) provisions, the Receivers exer-
cised their right of renewal. And these contracts have
30(44) since that time, since 1934, been each successively re-
newed by the Receivers. And by agreements which are
filed now in this case between the Receivers on the one band
and the land owners and between, on the other hand. the Receiv-
ers and the operator. And these arrangements have hence been
continued continuously in effect) since 1934, and are now in
effect and continue in effect until, under the existing agreement,
until October 1. 1938, with the right in the Receivers to renew
both the grant from the land owner and the contractual arrange-
28TN59— 41—--3
si
28 H. A. GRAY, ET AL., Vs. LEGH R. POWELL, JR.. ET AL.
ment with the operator for a further period of one year, at the
Receivers option,
Q. In other words, as T understand it, it is an option for
renewal which runs from year to year?
A. Yes. sir. Although it was originally. Mr. Cocke, for a
period following the first year term of the agreement, I believe
it was in the original grant. But now, Emight say this much,
the right of renewal has been one which has been in coutempla-
tion by the parties when the original agreement was made, And
the Receivers have simply renewea the agreement. Of course
the renewals have been subject to changed in tonnage and some
adjustment of the compensation to the contractor, you see, from
itme to time, where those——
Q. (Interposing.) Without attempting to state ail the minute
details of these instruments will you state briefly their
80(45) mest prominent provisions, just by way of a short de-
scription ¢
A. Well, T would say that these contracts give—the agree-
iments or the grant from the landowners to the Receivers give
the Receivers the right te--the exclusive right to extract) and
mine this coal for them own use. Now the Receiver—the con-
tractiial arrangement with the contractor provides that the con-
tractor shall extract mine and load a certain tonnage from each
of these mines within a minimum and a maximum limits.
Now the Receivers pursiant te the contract provisions Isstle
tistructions each month to the operator indicating the amount
of tonnage they will require for their next seceeeding month.
That is foliowed by weekly instructions. Thus. Cie amount of
cont, Of course which the Reeeivers desire to take and do take
from those mines is dependent and fhictuates of course, with
their business, Now then, the arrangement with Che landowners
is that the Receivers pay directly of course to the landowners
or for their account. a rovalty. which they pay. and these con
tracts prowe that, of course. “Chese grants or conveyances pro
video in line with the usual practice, for mininitun rovalties to
be paid the lindlord. These royalties, as T have stated. are
paid by the Receivers directly to or for the aceount of the land-
Owlhers,
30(46) (). Does the contractor himself participate in any way
directly or indirectly in the peyment of these royalties to
the landowner?
A No. Those royalties are paid by the Receives. directly to
the landowner for their account. In one of the cases royaltie-
nave been assigned by the landowner in the Glamorgan Com-
panies to the Shenandoah Life Insura.ice Company. These roy-
H. A. GRAY, ET AL., Vs. LEGH R. POWELL, JR. ET AL. 29
alties have been asigned in one case by the landowners to the
Shenandoah Life Insurance Company.
Q). You are not referring to the United Thacker Coal Com:
pans :
A. No. That is a different arrangement. You want me to
confine this to the United Thacker Company ¢
Q. Yes.
- Suppose we strike that out.
(). Mr. Plummer, state briefly the basis on Whieh the Receivers
compensate the contractor for his services in extracting the coal
froin the property leased to the Receiver by the United Thacker
Coal Company and the Cole and Crane Trustees.
‘The Receivers compensate the contractor ona flat: stim-per-
ton basis of coal produced at this mine.
Q). Who pays the expense of the mining of the coal ¢
A. Well. initially of course, that expense is paid by the
operator, He secures reimbursement of it, of course,
80(47) when he is compensated by the Receivers.
By the EXAMINER:
@. May Task one question now’ There is a matter of defini-
tion of terms there. i understand when you refer to the com-
tractor you speak of the United Thacker Coal Company and the
Cole and Crane Trustees /
A. No. They are the lessors and grantors of the coal.
Q. When you refer to the operator ¢
A. Tam referring to Mr. Pritehard——
Mr. Cocke. (Interposing.) He is the contrector,
By the Wrrnrss:
A. (Continuing.) He is the contractor who is emploved hy
Receivers to extract, pune, and Joad this coal for the Re-
CeLVORS, I
By the Examiner:
Q. Then the contractor end operator are one and the same: is
that correct 4
A. Yes. sir: yes, sir; one and the same.
Mr. Cocke. He physically operates the mines under a contract
to do so, with the Receivers.
By Mr. Cocke:
(. Now, Mr. Plummer, will you proceed to describe in’ the
sume general way, briefly, the type of instrument under which
the Receivers have acquired the mining rights in these
SO(48) other mines; and also, the manner in which the coal i
extracted.
30 HW. A. GRAY, ET AL. Vs LEGH R. POWELL, JR., ET AL.
A. In the case of the Glamorgan Mine—--
The Examiner. Would you please identify that then as Exhibit
No. 1b: is that correct /
The Wriness. Exhibit No. 1 Yes.
By Mr. Cocke:
Q). Exhibit No. 1.
A. In the case of the Glamorgan Mine the Receivers have
acquired by, grant or conveyance—and conveyance— from the
Glamorgan Coal Land Corporatio: the owner of the fee in the
land. the tithe te the coal produced at that mine, And it has
the sole and exelusive right to extract, mine and load and ship.
of course for the Receivers own account, the coal produced at that
mine. The Receivers of the Seaboard Air Line Railway Com-
pany: the corporation, have absolutely ne interest in the form
of stock ownership or otherwise in the Glamorgan Coal Land
Corporation. Et) ts an entirely separate and tichepenederit
company,
Q) In other words the relation: hip-—wned this might saver of
Hi conclusion ana if Veu object l will withdrew the question —
hetween the Reeeivers and the owners ef the Clhimergan Mine
are purely arhis length transactions ¢
A. Absolutely.
Q. With no interest of the Receivers im the owner
SOCIM) corporativen !
A. Entirely so. Now, at the Glamorgan Mine the Re-
ceivers. in this contract: with this-—-at th time they weduired
title co the eoal in that nine they entered inte a contractural
arropgement with Cllanvergan Coals. Ine. Now, Gelamergean
Couls, Ine. had aegrived ina) foreclostre sale all the properties
of the Stone Gap Colliery Company, which formerly owned the
inihing equipment at this maine; and the tithe te that mining
equipment, The Receivers acquired tithe te this coal from the
Glamorgan Coal Land Corporation and concurrently they en:
tered inte a contractural relationship—arrangement—with Glam-
orean Coals. Ine. which is identically similar in) principle and
effect with the arrangement that we have wich Mr, Pritchard at
the William-Ann Mine. under which Glamorgan Coals, Tne.
nerformed, and up te the time of the appomntment of the Re-
evivers, Whieh oceurret on dannary 16, 1937, for its properties.
pet formed the work and service of extracting, mining, sel loadl-
ing at the nine this coal and shipping the coal for account of
the Receivers to the Receivers for const ptlon and tse by the
Receivers.
Now. that concludes the arrangement in the Glamorgan case,
Q. Now, what happened at) the Glamorgan f You men-
q
3
L™‘ Sawa a
H. A, GRAY, ET AL, Vs. LEGH BR. POWELL, JR. PT AL. 31
tioned the fact that the Receivers were appointed for its
30(50) properties. Now, what was the stbsecuent course of
events with respect to that particular operation ¢
A. The Receivers were appointed, First it was—there was
only one Receiver, Mr. A, E. Stone was appointed Receiver of
the properties and assets of Glamorgan Coals, Inc.. by decree
of the Wise County, Virginia, Superior Court on January 16,
1937. An order appomting Mr. Stone Receiver directed that he
continue to carry on the business of Glamorgan Coals, Inc., and
Mr. Stone as Receiver, continued the perf: cmance of the contract
between the Glamorgan Coals, Inc., or Seaboard Receivers. Sub-
sequently, TE think. in February, was it, dir. Shunk? Is he here?
Mr. Sutnk. February lth.
By the Wrrness:
A. (Continaing.) February 14th, Mr Walter TL Shunk by
decree of the Wise County, Virginia, Circuit Court, was ap-
potted coal receiver of the properties of the Glamorgan Coals,
Tne. The coal receivers continue to carry out and perform the
contract between the Glamorgan Coals, Ine.. and its Receivers.
Relative to wage increases and increases in the price of materials
and so forth, some modifications of course, were made in
the terms of the agreement—some inerease allowed
S0(5L) in the compensation allowed to the operator and the
Receivers of the Glamorgan Coal Co... Ine. was in-
creased, Now, what is the date of that decree we liad there /
April? :
By Mr. Cocke:
(). The exact date is not necessary. The approximate time
is all right.
A. The decree was liter entered in the Glamorgan Receiver-
ship Cause, to which was attached: (aid that has been introduced
now in this case). to which is atttejed a statement marked Ex-
tubit A. which sets forth all the terms and conditions of the
contract in eifect) between the Glamorgan Coals, Ine. or its
Receivers and the Receivers of the Seaboard Air Line Railways
Company, as of April 22. 1937. The Court entered an order
directing the Glamorgan ‘Receivers to adopt that contract: con-
taining the terms and provisions set forth in that instrument,
exhibit. attached to that decree and to carry out and perform
it. ‘The order was subsequently entered ——
By Mr. Cocke:
Q. May I interrupt just one second, Mr. Plummer? You have
named the exhibit number of the decree of the Glamorgan num-
ber four ¢
32 H. A. GRAY, ET AL., VS. LEGH R. POWELL, JR., ET AL.
The Examiner. Number four?
The Wreness. Number four! That is not number four. That
is one; that is the decree, marked exhibit four ¢
20(52) Where I said February 14th a little while back it
sliould be February 12th.
The Examiner. What year was that, 1936 or 1937 ¢
The Witness. 1957.
By the Witness :
A. (Continuing.) After the entry of the order directing the
Receivers of Glamorgan Coals, Inc... to adopt and continue to
carry out and perform this contract, and order was entered dt-
recting the sale of the properties and assets of the Glamorgan
Coals. Inc. That order provided that the right—or right, title,
and interest of Glamorgan Coals, Inc.. er its receivers, should be
sold along with all the right, title, and interest: of Gianergan
Coals, Tne, or its Receivers under the existing agreement with
the Seaboard Receivers should be sold as part of the assets of
Glamorgan Coals, Inc. subject to the assent of the Seaboard
Receivers to the sale and transfer of the contraci. Now, that
condition was inserted in the order because the contract: between
the Receivers and Glamorgan Coals, Ine.. provided that the
rights of Glamorgan Coats, Ine., should not be transfered or a--
signed without the consent of the Seaboard Receivers. At the
sale of all the right, title, and interest of Glamorgan Coals, Ine.,
and its receivers, under this contract, that property Was
30(53) bought in—bid in—by Mr.--a representative of the—
acting for the Pearless Coal Corporation.
By Mr. Cocke:
Q. Let me interrupt von to ask whether the Peerless Coal Cor-
poration was one in which the Receivers of the Seaboard, or
Seaboard Air Line Railway Company itself, had any interest by
stock ownership or otherwise ?
A. Absilutely none. It is an entirely separate and = distinct
and independent company, and the Seaboard or the Receivers
have po interest in it whatever through stock ownership or other-
Wise,
By Mr. Harrineton :
q). When was that court sale made ¢
A. Pardon me ¢
Q. The court sale
A. That was August 23rd. Mr. Shunk, when was the sale made
of the contract rights?
Mr. Suunk. August 23rd.
———
H. A. GRAY, ET AL., VS. Lo 3H KR. POWELL, JR., ET AL. 33
By the Witness:
A. August 23rd.
Now, the sale of the properties and assets of the Glamorgan
Coals, Inc.. and its receivers, were duly confirmed by order of
the Keceivership Court, the Glamorgan Receivership Court.
By Mr. Cocke:
Q. That is. the Wise County 4
50(54) A. Yes. The contract was then entered into between
the Seaboard Receivers and the Peerless Coal Corpora-
tion under which the Receivers assented to the purchase by the
Peerless Coal Corporation of all the right, title, and interest of
the Glamorgan Coals, Inc., and its receivers under this contract
with the Seaboard Receivers.
Q. That is the agreement marked for the purpose of identifi-
eation | (b)*% Exhibit 1 (>).
A. (Continuing.) And under that agreement Glamorgan Coals,
Inc.. agree to carry out and perform the obligations on the part
of the operator te be carried out and performed under that
agreement. And the terms containing the terms and conditions
set forth on a statement attached to it, marked Exhibit A. which
is identical to the same statement of terms and conditions as I
have previously referred to as attached, as part of the decree
in the Wise County Circuit Court, authorizing the, and directing
the Glamorgan Receivers to adept the contract and carry out
and perform it and continue to carry out and perform it. That,
Mr. Cocke, outlines that.
Q. Now will you proceed with the outline of the third
operation ¢
A. In the case of the Chilton Block No. 1 M!ne——
Q. ¢Interposing.) Which is described in the papers
30(55) marked “Three”“—three, isn't it Exhibit No. 3/4
A. Three.
The Examiner. That mine is known as the Chilton Block
No, 1?
By the Witness:
A. Yes; that is what we call it and as it is described in these
contracts and described in our petition for exemption. Now,
in the case of the Chilton Bleck No. 1 Mine, the Receivers, under
the same general plan acquired by assignment and transfer from
the Chilton Block Coal Company the right to take the coal from
the Chilton Block Mine: acquired the ownership of the coal and
with the assent of the Dingess-Rum Coal Company. which is the
owner of the fee of the land and who had previously leased the
right to take the coal from this mine to the Chilton Block Coal
. ee
34 H. A. GRAY, ET AL., VS. LEGH R. POWELL, JR., ET AL.
Company. At the time of this transaction, this arrangement
was effected. the Chilton Block Mine had not been operated for
some time. Now, the Receivers employed, under a contractual
arrangement entirely similar to the one existing in the William-
Ann Mine case, Mr. Daniel R. Pritchard, to extract, mine, and
load the coal on railroad cars and ship it for the account of the
Receivers to the Receivers, at this Chilton Block No. 1 mine.
Q. Mr. PuumMer. Have the Receivers of the Seaboard or the
Seabdard Air Line Railways Company itself, any owner
80(56) by stock, or otherwise, or any connection with Chilten
Block Coal Company or the Dingess-Rum Company ¢
A. Absolutely none. They are both entirely separate legal en-
tities and neither the Seaboard Receivers nor the Seaboard cor-
poration has any interest in stock, share, ownership, or other-
Wise, :
Q. Nor as far as you know, have any of the directors or officers
of the Railway Company /
A. That is the same thing, as far as any interlocking direc-
torates and it is true of all the other companies.
Q. In other words, there is no sorth of intercorporate tie-up
iInvany part of these transactions or operations which vou have
described ?
A. No, sir.
Q. Go ahead.
A. Well now, that pretty generally—I have stated--I think I
did—under the same general arrangement, that the Receivers
employed Mr. Pritchard to perform the services at this mine. T
might add. right there, that this Chilton Block arrangement
was made originally in 1935 and it has since been continuously
In effect, through extension and renewal agreements, effective
with both the landowners and the operator at this mine.
Q. Now, have you any further statement te make in
30157) connection with these transactions Mr. Pliammer. before
your testimony is closed, as to the history of these cpera-
tions?
A. T just thought that thE Xora iner and counsel would be
interested in——
Q). Talk a licle bit louder please.
A. (Continuing.) It ocenrred to me that the Examin’r and
the-e counsel would) perhaps -be interested in one other point
of history connected with these transactions. These original—
these original arrangements between the Receivers at the Wil-
liam-Ann Mine and at the Glamorgan Coal Mine were made
at the time when the N. R. A. Code was in effect.
__ aaron
se
%
H. 4. GRAY, ET AL., Vs. LEGH R. POWELL, JR., ET AL. 35
The Receivers, from their desire, of course, to indicate to
the Code Authorities that they were not seeking in any way
to de anything to evade the provisions of the N. R.A. Code,
or otherwise, decided that before they would enter into these
arrangements that they would submit this plan to the N. R.A.
Code Authorities.
I accompanied Colonel Anderson, one of the Seaboard Receiv-
ers, to Washington prior to the titne these contracts were entered
into. We explained the plan fully to Mr. Donald Richberg,
who at that time was general counsel for the N. R. A. Mr.
Richberg indicated to us that there was no legal objection to
it at all but before committing himvelf one way or the other
he desired- to consult the Bituminous Coal Authorities and the
head of the division who was just about to
30(58) meet him in conference. So we gave him this memo-
randum and he conferred with the head of the N. R.A.
Code Division.
Q. What was the memorandum? One describing the——
A. .interposing.) Well, it’s just an outline, exactly what I
have stated, that is, the plan of this what we proposed.
And two days later we received a telegram from Mr. Ri berg
to the effect that they saw no legal objection to it at all.
I merely wish to add that the present arrangements in effect
at each of these mines are identically the same in principle and
in in effect, with what were in effect at that time and put into
effect with the approval of the N. R.A. Code authorities.
Mr. Cocke. That is all T have to ask. Are either you or Mr.
Ansell to cross-examine /
Mr. Harrineton. Do you want to recess
The Examiner. Is it twelve o'clock ¢
Mr. Harrineton. It is twelve o'clock.
The Examiner. Do you gentlemen bave any preference as to
how long we should recess? Do you prefer and hour or an hour
and a half?
Mr. Cocke. I think an hour would be sufficient. T should like
to complete this if we can, today.
Mr. Harrineten. I wavit to glance over these contracts and an
hour and a half would suit us better.
30 (59) The Examiner. In view of that we will recess for an
hour and a half, until i: 30.
(Whereupon at 12:00 M. a recess was had until 1:30 o'clock
p. m. in the above-entitled matter. !
fh
36 H. A. GRAY, ET AL., Vs, LEGH R. POWELL, JR., ET AL.
30 (60) AFTERNOON SESSION
(The hearing was resumed at 1:30 o'clock p. m.. at the expira-
tion of the recess. )
Whereupon L. B. PreumMer, the witness on the stand at the
taking of the recess, resumed the stand and was further examined
and testified as follows:
The Exvminex. Mr. Cocke. you may proceed with the examina-
tion of the witness.
Mr. Cocke. Mr) Examiner, I stated at the close of the morning
session that T had ee my examination of Mr. Plummer,
but there are a few o™ver questions that have occurred to me. So
I would like to proceed. if Tmay, with a brief further hearing.
The Examines. All right, sir.
Direct examination (continued) by Mr. Cocxe:
Q. Mr. Plummer, the various documents which have been in-
troduced in evidence numbered respectively as exhibits constitute
all the contractual arrangements both with the lessor owners of
the land and with the contractors employed by the receivers
to remove this coal ¢
A. Yes. They constitute all of the existing documents
30(61) between the landowners and lessors on the one hand
and the operators and receivers on the other.
Q. Are there any other agreements of any nature or under-
standings, oral or otherwise, bearing upon or in any manner sup-
plementing these written documents which have been introduced
in evidence ? 5
A. None whatever.
(). Then these written documents already Introduced as ex-
hibits in this hearing are the sole repositories of the agreements
between the various parties in interest ?
A. That is correct.
Mr. Cocke. Mr, Examiner, the intervention filed by this coal-
producing board for District No. & states in support of it. claim
that the petition or application of the receivers of the Seaboard
Airiine in this matter should be dismissed on the gorunds, 1. that
the petitioner is advised and believes that certain coal produced
at the said mines in Mingo County, West Virginia, Logan County,
West Virginia, and Wise County, Virginia, respectively. is not
coal consumed by the producer or coal transported by the pro-
ducer to himself for consumption by him; and, second, that the
petitioner is advised and believes that the commerc? in certain
coal produced at the mines in Mingo County, West Virginia,
}
H. A. GRAY, ET AL., Vs. LEGH R. POWELL, JR., ET AL. 37
Logan County, West Virginia, and Wise County, Virginia, re-
spectively, is such commerce in coal as is described and covered
by the third paragraph of section 4 of said act as “im-
80(62) terstate commerce,” and is therefore subject to the ap-
plication of all provisions of said section 4. Now, we
wish to traverse both ef these statements or conclusions: and I
assume that it will not be necessary for us to file any written
reply or rebuttal to that statement.
The Examiner. I assume that that is correct, and T will so rule
at this time,
Mr. Cocke. Very well.
By Mr. Cocke:
Q. Now. Mr. Plummer, will you state briefly and so far as your
own knowledge goes and your own understanding that may be
supplemented by the additional testimony from the witnesses
what disposition is made of the coal produced at these three
mines, shipped by whom and to whom, and how that coal is used
or disposed of: and also whether or not it is a fact, as set forth in
this intervening petition, that some of this coal is sold by the
receivers in the market instead of being consumed by themselves /
Will you state briefly what the facts are as far as your knowledge
goes?
A. So far as my knowledge of the facts goes, none of this
coal produced at either of these mines, except small quantities
commonly known as house coal, which ts sold as a necessary
incident to the mining operations to mine empioyvees., is
sold——
BOCK ) Q. You mean coal for their own houses ¢
A. Yes. For their domestic use—is seid by the re-
eervers. Tt is all with that exception shipped from) the mites
to points on the Hines of railroads owned by the Seaboard Airline
Railroad Company and operated by the receivers and is used or
consumed by the receivers in their operation of their raitroads.
Q. You do know further, do vou not, that there are outstand-
Ing positive and definite instructions issued by the receivers
through their duly authorized officers that no coal produced at the
mines shall he sold otherwise than for these small domestic
purposes to the miners there at the mines ¢
A. Yes: T know positively that advice was given by me as
veneral attorney to the various departments of the Seaboard that
none of this coal except this so-called house coal should be sold
or otherwise disposed of. My information is that clear and post-
tive instructions were issued by the law department to that effect.
It is further my understanding that none of this coal shipped to
the receivers from this mine or shipped from the mines is being
<old or otherwise disposed of. and that all of it is being consumed
3S H. A. GRAY,’ET AL., Vs. LEGH R. POWELL, JR., ET AL.
and used by the iines in the operation of these railroads.
30 (64) Q. Now, Mr. Plummer, in the past—T am not speak ne
of the present—but in the past were there any instar :es,
isolated or otherwise, within your knowledge in) which there
had been sales of coal: and, if se. have any such occasional
instances been entirely discontinued: and. if so. when?
AL Tt was brought to my knowledge, T think. in the early pare
of May.if Tam not mistaken, that some of this coal. after its
receipt on the railroads operated by the receivers had ty some tse-
lated cases and in some infrequent transactions beos sold te i-
dustries Toeated nearby and in order to meet their emergency
requirements,
Q). Tn mail or large quantities f
Al In =mall quantities. Just a car ata time. was my nader
standing. | farther understand that pursuant te advice given
by the law department, instructions were issned in May, accord.
ge to bis recollection, as soam as this know ledye was brought te
our attention. that these sales te industries should be diseon-
tinned. 1 further understand that they have been discontinued.
(Seo far as vou loanow, those istructions have been observed ;
at the present time /
Al So far as — knew, those instructions have been strictly
observed: and we have witnesses here to testify ioe that
effect,
BueGD) Mr. Cooke. T think that is all. “The witness t+ ready
for cross-examination.
Cross-examination by Mr. Povrrineros :
Q. How long have you been attorney for the Seaboard Airline
Railway Company ¢
A. LT have been attorney for the Seaboard line continuously
since iz. PT passed the bar examination ii E910. it is my
recollection.
Q. Could you tell us where the Seaboard Airline purchased
their coal from prior to the making of the contracts between
the companies mentioned here /
A. 1 cannot tell you that of my own knowledge, because the
purchase of coal, of course, is not within the province of the
law department. But T can siate that my information is that,
of course, they purchased this coal from the ordinary coal pro-
dacers. Who they were IT don’t know. Tam not informed.
@ Did they purchase coal from the Glamorgan Coal Com-
pany!
A. I can state positively that the Seaboard receivers never
purchased any coal from the Glamorgan Coal Corporation,
Q. Iam speaking of the railroad now.
H. A. GRAY, ET AL., Vs. LEGH R. POWELL, JR., ET AL. 39
A. T am speaking of the railroad. The Seaboard
80(06) Railroad Company or its receivers never purchased any
coal from the Glamorgan Coal Corporation or the Gla-
morgan Coals—which one are you referring to?
Q. The Glamorgan Coal. the one which is in operation of
the coal lands.
A. No: they did not.
@. And at the time this contract was made you just went out
wha tarde itoin D4. and was that made for the purpose of
eeading or contravening any act of the “it. Alf
A. Absolutely not. it was niade as a business move or meas-
wre in an effort to secure the coal as cheaply ts they could.
(). Phe reason T asked that question ts that you stated in
yeur direct examination that voit submitted these contracts to
the direeor or the administrator of the N. R.A. Code for his
epproval,
A. Yes: that was done because it was the unanimous view of
cH othe counsel for the receivers was that the receivers were
entirely within their legal rignts to make arrangements of this
sort. However, the recervers, as I explained before, felt that om
view of the then existence of the No Ro AL Bitunitnens Coal
ugreemept, they should submit the matter to the Code authors
ties: and. if possible and proper, get their concurrence in the
entire legality of these arrangements, which wa. done.
BON GT) Q. Do the railroad companies receive all of their coal
from the contractors mentioned in your petition, or
cothey have to bay other coal in the open market /
A. Oh. ves: this supply that we get fron these mines repre
vents onlyoof course, a portion. The Seaboard Airline receivers,
IT stppeose, consume over a million tons of coal a vears and. of
course, this is just a part of their coal supply.
(). You signed the petition filed bere, Mr. Plianiuer. as atten:
nev for the Seaboard Airline Kailway Company, did vou net?
A. Pf signed the petition as general counsel for the receivers.
Q. You ask in this petition, for the return of ail assessments
patd and other pavinents meade hy thie appleants prior to the
eHective date of this order. De you know of any payments
that vou have made ¢
A. Tdon't know whether the Seaboard receivers have made any
payments. We wrote a letter, concurrently, T think, either just
hefore or just after the petition was filed, in answer to an iqiiry
Which came to us from District No. &. asking whether the re-
celvers are going to pay this assessment levied under section
& (b) of the Act. We wrote the District Board that this peti-
tion was being filed, asking if it would be satisfactory to
40 H. A. GRAY, ET AL.. Vs. LEGH R. POWELL, JR., ET AL.
30(68) them to withhold any payment of it) pending action
of the Commission upon this petition. That was on
the ground, of course, that if we obtained this exemption or are
entitled to it, then we are not liable te that 3 (b) assessment,
because that is a provision of the Code—not under 3 (b) assess-
ment. It is under some provision of section 4-4 (b). That
ix my recollection.
Q). The Seaboard Airline Compeny receivers have accepted
the Code, have they not 4
A. Yes, sir.
Q. Have the contractors mentioned in this petition, Daniel
Pritchard and the Peerless Coal Company, accepted the Code ¢
A. Tt ois my understanding that they did. as far as the re-
eeivers are concerned. To think as far as the operators are con-
cerned, they have. of course, accepted membership in the Code
with full reservation of their fegal rights pursicint ty ao pro-
vision of the Act itself. which says that they shall not be
estopped or peecluded on their part from contending that they
are not subject to the Code or the provisions of the Act.
Q. With reference to the William Anne mine, whe operated
that mine before the receivers took it over /
ALT cannot answer that question: but. based on informa-
tio that Mr. Pritehard gave me during me previous
30(60) testimony. Po ounderstand that it) was operated by the
corporation. dust what company that was f dont know,
We had no transactions with that company at all as far as T
know. DT don’t know of any.
Q. Your contract or lease was made between the United
Thacker Coal Company and the Cole and Crane trustees 4
A. Yes. Tomay explain there, if TP omay repeat. what DT said.
Those companies had previously leased or conveyed the coal in
this mine te this corperation which had previously operated it.
‘That corporation owned at the time of that lease the mining
cquipment. “Chat corporation defaulted in the performance of ite
lesse Provisions, The lease was terminated by clue trotiee by
the United Thacker Coal Company to the Cole and Crane
trtistees: and they repossessed or recaptured, rather, the mining
equipment and machinery in the foreclosure of a tien which
their lease ouve them.
That invested the tithe to this mining equuiiphaent in the United
Thacker Conl Conipans and the Coal and Crane trustees or one
or the other of them. T don’t know which one ef them: owned it.
That was the status of the thing at the time that the receivers
nade this contiactual arrangement with the operator, and at the
tine they obtained this convevance from the mine owners,
q@. How big a tract of land does this lease cover /
~
H. A. GRAY, ET AL., Vs. LEGH R. POWELL, JR. ET AL. = 4]
30170) A. I cunnot answer that, but it is all described in the
lease. I think the acreage is given in there. Do you
recall that, Mr. Cocke ¢
Mr. Cocke. The lease which we introduced in evidence will show
that. However, Mr. Tines will succeed Mr. Plummer om the
stand as a witness for us, and T think he can give you all of that
detail.
The Examiner. Is Mr. Tines one of the operating officials ¢
Mr. Cocke. He is counsel for the United Thacker Coal Com-
pany.
The Examiner. Are you going to introduce any witness who
is an operating official of any of the companies involved here ¢
The Wrrness. Do you mean the landowners, or the operators ¢
The Examiner. Of the mining companies themselves. _
The Wrrness. Tf the Examiner desires to hear any of them
on any point, we have them here ready to go on.
Mr. Hariineron. Well, Mr. Plummer seems to be very familiar
with all the terms and conditions of all the contracts that are
drawn up here; and I think he is qualified to testify here on
cross-examination the same as he has testified on direct
examination.
Mr. Cocke. Tam not questioning vour right to examine
30(71) Mr. Plummer, Mr. Harrington. 1 said that any details
that Mr. Plummer is not entirely familiar with Mr. Tines
could supplement in any way that we have information.
Mr. Harrineton. What was that last question ¢
The Wrrness. You asked me if IT was familiar with the acreage
and what acreage was involved; whether it was large tracts of
land or not; and T said that T cannot answer that. The lease
here, of course, will answer that. The properties are described
in that by metes and bounds.
By Mr. Harrineron :
Q. T just wanted approximately the acreage that was covered
by the agreement. .
A. T cannot tell you what acreage it is. T don’t know.
Q. Then the contract was made with the Glamorgan Mining
Company to operate the property ¢
A. You are speaking now of the Wilham Anne mine ¢
Q. The Witham Anne mine.
A. The contract for operation was made with Mr. Daniel KE.
Pritchard individually as the operator of this mine for the
recelvers,
Q. That was a contract with Pritchard ?
A. Yes: that is the one. It is tied in with the United Thacker
Coal Company grant.
Q. That is the Willian Anne mine /
42 H. A. GRAY, ET AL., VS. LEGH R. POWELL, JR., ET AL.
30( 72) A. That is the William Anne mine. Yes, sir.
Q. Is Mr. Pritehard considered an independent con-—
tractor in your contract with him to operate this mine ¢
A. Of course, that is a question, T suppose. of law. to be deter-
mined from the facts and cireunmstances of the ease. Ino miyv
opinion, if you desire me to state it, TP think that Mr. Pritchard
is operating the mine—that is, the Willian Aune mine and the
Chilton Block mine—as a party employed by the receivers for
that purpose: and TP think that the receivers are producing coal
at those mines through the agency or instrumentality of Mr.
Pritchara
Q. in the contract he is mentioned as an independent. con-
traetor,
A. That ix in there to protect the receivers against claims or
possible claims of third partivs.
Q. Your liability is limited from the acts of Mr. Pritchard
mm the operation of this rine!
A. We are protected under the contract provisions against
any liability, and we eertamly have a right of rennbursement
there ueainist Mr. Pruehard. I think. for—
Q. Will vou piewse answer my question, and then yeu may
fuske o statement afterward,
A. Yes.
Q. Fo beliewe in veur contract with Mr. Pritchard the re-
ceivers had a right te reyoet certain coud that does not
B30:73) five up to certain specifications. Ts that true ¢
A. Ethink that is correct. Yes.
Q. Do vou knew whet i dene with that coal when it is Ye-
jected?
AL No: Thave no knowheige of that. TP don’t know whether
SUTnN of the coal has ever beer rejected. T understand that it
has all been in complance with these requirements,
Q. Does Daniel Pritchard do basiness as a sole trader or is
he meorporated ¢
A. He does business as an individual only. He is not incor-
porated. We perfected our relations with bim or our arrange-
ment with him as an indiviaual.
@. Does he have the exclusive right to hire and discharge
miners in the operstion’ef the mine?
A. L think he does,
Q@. Does he pay the Social Security tax and any other tax
that might occur in the operation of his mine ¢
A. What do you mean by “any other tax”?
(2. T mean personal property tax.
A. For instance, the tax assessed under this Act ?
H. A. GRAY, ET AL, Ve. LEGH RB. POWELL, JR. ET AL. 43
The tax assessed on the immprovementy and the Social Se-
curity tax on his employees.
A. Well, T.think he pays all taxes of that character ex-
cept the Social Security tax. He is expected (oe get
80(74) rennbursemenat out of the compensation which the re-
ceivers pay him.
Q. I an jast asking you vow whether be pays the taxes.
A. [chink he does, so far as T know. [imagine he does.
(!. Now, in your lease contract with the owners of the fee, does
that lease cover or include the uuiprovements at the topple?
A. Of course, the lease speaks for itself on that. But my
recotlvetion of the provisions of that jease is chiat the landowners,
that is, the owners of this mining equipment and machinery, and
so forth, agreed to permit the contractor or the operator to use
that mining equipment in the conduct of the mining operations
at this mine. dust what the arrangement ts between tiie con-
tractor and the operator and the iandowner as to the-—-+
QQ. The use of it?
A. The use of it and as to the compensation T don't know. But
the point that Tam trying to make is that the contract that they
have — the landowners oblige tes the Jandowners—-—
r€ Po permit the contractor to use the mine /
To permit the contractor Co use this nie and equipment
Pe property.
Q. ‘That the contractor is responsible to the lindowner
80°75) for any damage that might occur fo the improvemetits
on the property ¢
A. [should say he was. Of cotirse, P want to say right through
that that is an arrangement, of course. in which those improve-
ments and machinery were owaed by Glamorgan Coals. Tnicor-
porated, and not by the landowner. The Glamorgan Coals. In-
corporated, in its contract with the Seaboard receivers agreed to
Juse that mining equipment and property in the contract of these
mining Operations.
(). Who owns the fee in the Glamorgan mine /
A. The Glamorgan Coal Corporation.
Q. The Glamorgan Coal and Land Corporation ?
A. Yes; it isa separate and distinct entity from the Glamorgan |
Coals, Incorporated.
Q. What company was foreclosed on and the property sold—
the Giamergan Coals, Incorporated. or the Glamorgan Land
Corporation 7
A. You mean recently?
Q. Yes; recently. The sale of August 23.
287059—41——-4
Fr C:sCts;
>
44 H. A. GRAY, EY AL., Vs. LEGH R. POWELL, JR., ET AL.
A. That was the Glamorgan Coals, Incorporated, ihe oper-
etors,
Q. All that they lost, then, was the improvements and the
property at the time of that sale?
A. They lost the improvements and the property.
30 (76) Q). And the title to the property rests in the Glamorgan
Coal and Land Cormpany ¢
A. Yes: the Glamorgan Coal and Land Corporation.
QQ. The Glamorgan Land Corporation ¢
A. The Glamorgan Land Corporation.
Q. The Peerless Coal Company, then. is only the owner of the
improvements and the property
A) That is my understanding. TP think that as a natural result
of the sale of the properties and assets of the Glamorgan Coals,
Incorporated, was thar the Glamorgan Coal and Land Corpora-
tion acquired through foreclosure of its lien, which was an old
lien for royalties due to this company some vears ago, and then it
foreclosed that hen, and the Ghimorgan Coal and Land Corpora-
tion purchased at this sale this mining equipment and property
which previously belonged to the Glamorgan Coals. Incorporated.
Now. PE think that the same arrangement lias been made be-
tween the Glamorgan Coal and Land Corporation and the Peer-
less Coal Company under which the Peerless Coal Company has
acquired the right to use this mining equipment and property
in the operation of this mine. That is the way that the situation
stands.
Q. Well. new. asa matter of fact. the Peerless Coal Cor-
SO(77) poration is the contractor at the Glamorgan mine at this
time. is it net?
A. Oh, ves.
(). There has been a veparate contract trade between the re-
ceivers of the railroad and the Peerless Coal Corporation
A. Yes.
Q. Which has heen introduced ines hence ¢
A. Tt is a separate contract in the sense. as I -tated before, that
the Poerless Coal Land Corporation at the sale bought inthe right.
title, and interest of the Glamorgan Coals, Incorporated, or its
receivers in this contraet with the Seaboard; and they bonght it
subject to the ascent of the Seaboard, hecause the contract is net
essignable without the assent of the Seaboard, They bought tn
the lease under that contract subject to the assent of the Seaboard
receivers. ‘The Seaboard receivers liave recently, following that
purchase, entered into a contract with them under which they
have assented to the transfer to the Seaboard of this contract to
the Peerless Corporation. The Peerless Coal Corporation has
agreed in that contract to continue to perform and carry out the
H. AL GRAY, PT AL. Vs. LEGH 8. POWELL, IR. ET aL. 40
cbligations of the. contract on the part of the operator to be carried
ont and performed,
Q. Your petition alleges that A. EL Stone and Walter
C. Shunk as receivers of the Glamorgan Coals, Tnceorpe-
30¢78) rated, are the operators of Glamorgan mine. Is that
correct f
A. Yes. sir: that ts correct. They were at the time the petition
wa- filed.
() At the time the petition was filed ¢
A. This other development has since occurred,
Q. Who are the real operators now of the Glamorgan mine ¢
A. The operator now is the Peerless Coal Corporation.
Q. Is that company in receivership?
A. No: that is a newly organized company. organized at the
towe that the rights under this contract were purchased. [tis a
recently organized company.
Q). How does that company operaie in reference to the produc-
tien of this coal?
A. They operate in identically the same way that the Gla
morgan Coals operated before.
&. They have adopted the Glamorgan Couls contract !
A. Yes: they adopted their contract and assumed and cureed
tocurry out its performance.
(). The receivers, then, agreed to and dd pay the Peerless Coal
Corporation on a cost plus basis ¢
A. Nogit is net a cost plus basis at all
Q. On a straight cost ¢
A. Tt is an agreed flat compensation per ton.
Q. A flat compensation based on cost ¢
mac Te) A. No: T don't know what it is based on. Tt is bases!
ona bid submitted. Tt is a flat sum which presumably
includes all the cost and is designed te give the operator some
profit. Otherwise T den’ “TEP pase he world have submitted it.
(). Do the receivers have any control over the Peerless Com-
pany in the operation of the mine?
A. In what aspeet
Q. With reference to the employment of the miners or in ref
erence to directing then: how they shall mine the coal.
A. Not that I know of.
The Exawiner. You are addressing these questions to the
Glamorgan Company, are vou?
Mr. Hareineron. No,
The Examiner. Exhibit No. 2. or to all three mines ¢
Mr. Harrineron. The Glamorgen mine. that is being operated
hy the Peerless Coal Company.
46 H. A. GRAY, ET AL., VS. LEGH R. POWELL, JR., ET AL.
The Exawiner. That is the one that vou are addressing these
qiiest lois tocar elo Vou mern all three of them 4
Mr. Pixnnixeros. Loam addressing it only to che Glamorgan
mine,
Bv Mr. Harrineron :
Q). The receivers for the railroad company hold a dease on the
Chilton Block No. 1 mine, do they?
(SO) A. Yes. ‘
(3. That is a lease giving them the right to mine the
coal in that particular mine?
A. Yes.
QQ). They don’t own the fee in there. do they ¢
A. No: ot is the same nature of tithe as in these other cases.
fnoother words, inaimy opinion and judgment—the contract will
determine that--the Dingess Run Coal Company. who operated
toat the time i was transferred to the receivers—the transfer
tas assented te by the Dingess Rum Coal Company. We in effect
own thi coal We have acquired it in this privity of assent by
the Dinwess Run Coal Company to the Seaboard receivers in
respect to this coal.
(J. Do vou operate that on the rovalty basi-. the same as you
do the others /
A. Yes,
()) Paying -0 much a ton?
A. We pay so much a ten royalty to the landowner or for his
ere aa.
(). This preperty is operated by Mr. Pritchard as contractor
AL Yes: the Chilton Block No. 1 ix operated by Mr Pritchard
tndivielually.
(). Hew do vou pay Mr. Pruchard ¢
Best) AL We compensate dim there on a flat -nm per ton
losis, It i the sine arrangement, ldentically on the
sine arrangement.as inthe Wilham Anne niine.
(). How do vor pay dim? By che month or week or how?
A. We pay hun by the month. except that sometimes maybe
When fie vet. a hittle hard up he bias Wart some a little earher:
and we det him have itoen account. We pay him monthly on
monthly statements.
Q. Do vou give hink a check for the coal that he bas delivered
in the cars to vou for that month?
A. He reports the cars. We receive his report: on these cars
as te loading and so forth and weights amd tonnage, and the
tonnage ts computed from: that: and on that basis the flat sum
per ton is meultiphed by the number of tons. and he is paid on
that basis: and the receivers based on that pay directly io the
ae 4
H. A. GRAY, ET AL, VS. LEGH R. POWELL, JR. ET AL. 47
landowner or for the Jandowner’s account the royalty on that
coal.
Q. You pay the royalty? The receivers pay the royalty ¢
A. Yes. The receivers pay the royalty.
Q. And the contractor pays all other obligations against tue
property ¢
A. He pays all
(. Taxes /
A. Yes. He pays all taxes, except that he does not
40(S2) pay such taxes, for instance, as are assessed under section
% (a) of this Act. He does not pay taxes to the land-
owner on the land. The receivers pay those taxes.
(). He pays the taxes on all the improvements
A. L think under an arrangement he pays the taxes on that.
Mr. Tines will probably have to elaborate that a littl for you,
because that is determined to some extent on the arrangement
Ietween the landowner and Mi. Pritchard under which he is
permitted to use this mining equipment and property, He can
testify as to that.
(3. Does the Seaboard Airline Railway connect with all these
properties that are involved 4
A. They have no connection with them at all. They are all
located on other railroads.
Q). What arrangement is made as to the payment of freight
on the railroads after the coal is loaded into cars and before it
is received by the Seaboard Company or the receivers ¢
A. We have another witness to testify as to that. But my
understane'ng as to how that is handled is that the cars are
loaded ane ~hipped by the operator for the accoune of the re-
ceivers and consigned to the receivers. The receivers pay for
the coal. These shipments are made at the receivers’
(83) risk, and as coal owned by them. In the event that a
wreck or something off-line happens, then the receivers
would have to stand that loss. unless. of course, and to the extent
that they could recover from the off-line carrier.
By Mr. Cocke:
Q. They pay the freight ?
A. The receivers pay the freight.
By Mr. Harrineton : ;
Q. Do you know where the inspection takes places on this coal
by the receivers ?
A. No: Edo not. LT don't know just where it is inspected. I
think it is in the mine, but I don’t know.
Q. I beg your pardon ¢
a -
48 H. A. GRAY, ET AL., Vs. LEGH R. POWLLL, JR., ET AL.
A. T imagine it is at the mine. I don't know where if is ia-
spected,
Q. Do you have a witness here who can testify to that ¢
A. Yes; we can show that by another witness.
Q. Mr. Plummer, can vou explain to us the provision in the
contract which provides that in the event that you can purchase
coal in the open market for ten cents below the price set in the
contract with your company, that you can declare the contract
nuli and void #
A. TL don't recafl any such provision in the contract where it
specifies a difference of ten cents at all. There is a pro-
30(S4) vision in the contract to the effect that if the receivers—
by reference to ten cents you mean to refer to the royalty
cost to the receivers! There is a provision in this contract which
gives the receivers the right in the event that they can buy coal
from other sources, acquire it from other sources, at a cost to the
receivers, made up of the amount of compensation that thes pay
the contractor, plus the anwount of rovalty and taxes that they
pay the landowner, then the receivers shall lioive the right to
cancel the contract.
Q. IT want you to explain that part of the contract.
That provision is in there. There is a further provision
that the receivers have that right unless, upon my recollection,
Unless within 60 days the operator will reduce his price to meet
MW. That is just simply a provision put in there for the receivers’
protection. That simply gives the receivers the vight to deter-
mine Wh other they are going to continue this arran cement or not,
depending lipaon low expensive i" might be to then
Q. In other words, if you can buy coal in the op on market for
ten cents less Chan the coal produced by vour contractor costs
you, you have a right to ge out and buy that coal?
A. No: you mean under the provisions of the contract
BO So) now! That is a provision of the contraet—-that if we
ean buy coal somewhere else—
Q. That was what Twas asking you adeut.
A. Yes: we have the right te go out and buv it. Yes. DT think
weocan do Ghat under the provisions of this contract. T don't
recall just what that term ois. That is my recollection. Bat 1
know that we have the right. if we find that we can procure coal
somewhere else cheaper. we have the right to cancel this arrange
mient,
Q). OF course. this arrangement cheat yeu have with these con
tractors is more or less. DP oassume, for your own convenience in
order te bay coal as cheaply as Vou prose bls ean’ Ts that true?
Of course, one purpose inomiotking this agreement is to save
=
H. A. GRAY, ET AL.. Vs. LEGH R. POWELL, JR., ET AL. 49
the receivers money in the cost of the coat. That is, of course,
one of the objects. in making tlie agreement, That) is just an
ordinary business transaction.
Q. Well, now, Mr. Plaummer. you know as a matter of fact
that the receivers have no control over the contractor in the
production of his coal¢é Isn't that true ¢
A. In what respect do you mean ¢
Q. As to how mach coal he produces,
A. No.
Q. Or how he will pay his employees ¢
A. Oh, yes.
BU(S6) Q). Or in what manner?
A. We do have control over that, absolutely, in that
we have the right to specify the amount of coal which we
require,
Q. In other words, the only obligation that you have is to
specify how much coal you will want during the month 4
A. No. We have the right to specify how much coal we want.
produced there at this mine.
Q. And what kind?
A. Not what kind.
Q. You have the right to reject this coal. have you not?
A. We have a right. of course. to require the contractor to
produce this coal between maximum and minimum limits. Phat
was put in there for the protection of the receivers in the event
that there are fluctuations in their business and in thea fuel
requirements.
Q. The of the coal is costing vou too much, ten certs too
much, and if you can buy coal for ten cents below the price that
the contractor bills you for. then vou can Geclare this contract
null and void ¢
A. Well, we can cancel the contract tf we see fit. Tt is our own
coal, We can continue to mine it or te produce it or net as we
see fit.
It does not have to be ten cents Jess. Ti ean be
S0(57) any amount less ¢
A. That is why T asked vou about the ten cents. 1
didnt recall any provision in there about ten cents.
Any amount. If vou can buy it in the market for any
amount Jess than what he bills vou for. veu can cancel this
contract ¢
That is simply for the receivers” protection,
Q. Tam asking vou if that is a fact.
A. Yes.
Mr. Cocke. The contract ~peaks for itself,
50 H. A, GRAY, ET AL., Vs. LEGH R. POWELL, JR., ET AL.
The Wirxess. The contract speaks for, itself. That provision
is in there. It is clear. 1 think you can see it.
Mr. Harrinerox. But) you are testifying under cross-
examination.
The Wrrness. Sure. There is a provision in the contract :
which gives the receivers the right in the event that they find
that they can precure coal Cheaper than under this arrangement,
to cancel this arrangement, in other words, to discontinue pro-
ducing their own coal if they see fit to do so; the right to go
-out in the market if they want to if they can buy it cheaper
than under this arrangement. Then they can cancel this ar-
rangement with the contractor or operator.
30 (88) By the Examiner:
(). Mr. Plummer, has this arrangement at any time in
the past heen cancelled with any of the mines in question ¢
A. No. This arrangement——
QJ. What in your opinion would be the result so far as the con-
tinued operation of the mine is concerned if such arrangement
were cancelled ?
A. Well, if such arrangement were cancelled, we would either
have to make a new similar arrangement with somebody else who
would be willing to perform the service for us at a cheaper cost
to us, or we would have to go out and buy the coal. We have
got to have the coal somewhere,
Q. But so far as the mine itself is concerned, the operator of
the mine, would it mean a continuation of the operation of the
mine, or would the mine cease to operate upon the cancellation
of your agreement with it?
A. Tt would cease to operate unless we made a similar arrange-
ment: unless the receivers elected to operate it themselves and
go ahead and pay the required people to run it. We claim that
we are doing teat now: that we are simply doing that through
the instrumentality of the contractor, In any event the receivers
would still own the coal and would still be liable for the mini-
mum royalties under the contract.
HOS) Q. It is your contention that the receiver has abso-
lute management and control of the contracting mines
us to the operation ¢
A. No. We don’t contend that exactly. We contend, sir, that
we own the coal; that it is our contract; and that the receivers
are producing this coal through the agency and instrumentality
of the contractor for the operator. It is the receivers’ coal. The
contractor has no interest or title in the coal at all. It is the
receivers’ own coal, in the ground continuously. The receivers
own the coal until it is consumed and used.
ie Shales.
H. A. GRAY, €T AL., Vs. LEGH R. POWELL, JR., ET AL. 51
Mr. Cocke. May Task a question there that T think will clarify
the situation, Mr. Examiner?
The Examiner. Yes.
By Mr. Cocke:
Q. Uf Mr. Pritchard's arrangement is cancelled on the William
Anne mine. he cannot any further operate that mine except with
the consent of the receivers ‘
The Examiner. That is my question.
A. Oh. no. Absolutely ne. He has no interest in the coal at
all. He has no right to dispose of it. None at all.
By the Examiner:
Q. Your answer would be the same as to the other two mines
involved here?
30 (M0) A. The same as to the other two mines involved. Ab-
solutely. He has no right te dispose of that coal. The
sole right to dispose of that coal and the sole ownership of it is
in the Seaboard receivers.
The Examiner. Pardon me, Mr. Harrington. IT didn’t mean
to interrupt. T wanted to get that straight.
By Mr. Hyreimetoye .
Q. Along that line of questions. you contend that the Sea-
beard Airline Railroad Company is the producer of this coal
A. Yes.
Q The actual producer in the operation of the mine!
A. We say that the Seaboard receivers are the producers of
this coal,
Q. Then what do you think that this contract ts. for the min-
ing of coal?
A. I think that that is nothing in the world but an arrange-
ment uaider which the receivers have ensploved these individuals
ty operate these mines for them.
Q. That is a matter of opinion anyway. T think you have
answered that question.
A. That they are producing this coal through the ayency and
instrumentality of these operators.
The Examiner. To would like for the record te show spe-
cifically just which corperations are members of the
80°91) Code and which ones are not. In other words. T should
like you to tell us whieh of thes corporations invelved
in this proceeding are Code members, and whether or not Mr.
Damel Pritchard himself is a Code member. You stated that
you didn't know, but that vou thought that they were.
The Wrrness. If I may state that subject to confirmation as
to Mr. Pritchard and as to the Peerless Coal Corporation. I
a2 H. A. GRAY, ET AL., Vs. LEGH R. POWELL, JR, Ey AL.
would say that the Seaboard recet.ers have accepted member-
ship.
By the Exatiner:
() You can answer that specifically as far as the Seaboard is
concerned ¢
A. The Seaboard receivers have accepted membership in the
Coal Code. Tt js my understanding that Mr. Pritchard has ae-
cepted membership in the Code. T- that correet, Mr. Pritchard ¢
Mr. Priverntvrp. No. T have not.
The Wrrness. Mr. Pritchard lias not.
Mr. Shunk. how about Peerless Coal Corporation ¢
Mr. Sut sk. The Code was accepted. Mr. Pluananer, according
te my infortaation, ny the receivers of the Glamorgan Coals.
The Wriesess. In other words. the predecessors in interest,
which were the Glamorgan Coals recervers, accepted rmember-
bership in this Coal Code. Phe Peerless Coal Corpo-
30,92) ration is a very recently: organized company: and I
vnderstand from Mr. Shunk that that company hes net
accepted memiberstip in the Code.
Mr. Suuxk. We assume. since we pureliased the contract, the
new company pureha ed the contract, the Peerless Company,
from the Glamorgan Coals receivers. that we are members of the
Code therefore. We have not as a new company, Mr. Fxam-
thie y, asked for membership ini the Corde. We assumed, <inee
We purchased the comtrnet fron: the (viumorgan Coals with the
Seaboard Aurline recelvers, that thes had accepted the Code and
had become menibers.
The Exswinen. Pounderstand that that is) vour contention.
Bat the fact is that the Peerles. Coal Company ds a corporate
CMtIEV Is tet a Code member’ Ts that correct /
Mr. Satnk. Yes. sir.
The Examiner. Now. with reference to the others ¢
The Worrness. That as all that are invelved—the Seaboard
reeervers, op course, and the landowners. Phe landowners are
net producing: the coal, se they are net rivelved. “The Peerless
Coal Company and Mr. Pritchard are the operators, vou see
By Mr. Harrineres :
(). Mr. Plammer, does the Seaboard Atrline Company have
any control over the purchase of supplies bw the
BOCES) contractor da the Operation of the mine?
A. Thes have control in this aspect: that we have
aright. af course. te check up the supphes purchased and so
forth. Wei have the right te keep. von might sav. abreast of
how the contractor's costs are running.
(J. To mean direct “Upervision over the prea r hase of supplies.
£
ee
Rie een”
H. A, GRAY, ET AL. Vs. LEGH R. POWELL, JR. ET AL, 03
A. No: we don’t control the purchase of supplies. Ele ean
purchase them. of course, as his requirements necessitate.
(). Did To understand vou to sav. Mr. Plummer, that the con-
tractor does make a profit on the price that he charges the
railroad for the coal 4 —
A. Tevanot answer that. T dont know if he does or not. It
is tis rick whether he makes a profit or how much he makes. It
isa flat sume per ton compensation to him.
() Tn vour contract with Mr. Pritchard on the William Anne
nine does the contract provide for a cost basis‘ Ts it based on
the cot of the coal 4
AJ Nor oii gives the receivers the right at their option te
change this method of compensation, which is a flat sum, from
that flat stm per ton compensation to a cost plus basis if thes
soeleet. But the receivers have never availed of that privilege.
Q. Toam not referring to that) particularly. Tam
SOCSE) vefervone to this figure mentioned here mi the contract
of SE6G per ton, What dees that figure refer to/
A. TP dowt know. Vhat is an offer or price submitted by Mr.
Pritchard, and presumably Ho oinclades his estimated cost and oa
reasonable profit to himself? for the serviee thet he performs.
Q. That is the figure thet has been accepted as part of this
contract up Exhibit 6. isnt at?
A. We have accepted it.
Q. That is the contract figure. isn't it/
A. Thats what we are paying him, plus the amount that
We fave to pay in rovalties te the lindowners and the taxes
that we have to pay.
Q. Tam speaking of the contract now: aet anything that you
~penel outside of it.
A. Yes: that represents the cost.
Q). That represents the cost 4
A. That represents the cost, except that im addition to that
the receivers pay the section 3 (a) taxes. They pay Yhem direct
on the theory that we are the producer of the coal and consuming
it. We pay that tax, which ts one cent per ton.
Q. Now. that sam includes the four cents per ton that os paid
as Sochal Security ‘axes!
A. Yes.
ay Qs) Q. And it also imelucde~ the 4 eent. a ton. the amount of
the mmerease in wages effective on atidafter April 1-1. 137 ¢
A. That ss right. Yes, sir.
(). And ito mnelides two and a half cents per ton ob mecourt of
the increase of cost of unsigned materials and supplies?
A. Thatis right. And the reason for that, Dmight point ont to
Vou, ts that. of course, throne fivuires were based on estimates when
ot H. 4. GRAY, ET AL., Vs. LEGH R. POWELL, J8., ET AL.
this contract was made. The recetvers have the right te check
these items: and if they find that. as vou have just read——-
Q. They liave already been accepted. haven't they. at the con-
tract price?
A. They have been accepted, subject to the right of the ac-
counting departinent te check these figures,
Mr. Hanrineron. Olives. Thave ne farther questions,
The Examiner. Mr. Ansell. do vou lave any cross-examination /
Ma. ANsenn. DT sugeest that Consumers” Counsel may have some
eXamination,
The Examiner. Does Consumers’ Counsel have any examination /
Mr. Ercrecerrerk. No questions.
Sue) Mr. AN*ELI. Then l should Tike to borrow from Con-
simmers Cous el COPS of the extiubits that we had this
morning.
The Examiner. Pocan fer vou have mine or anv ones that are
available here.
Cros--examonation by Mr. ANsELL:
Q) Mr. Plummer. To believe vou stated on direct examination,
and Edireet vour attention particularly to the Wiliam Aine mine,
that the original lease entered inte for the right to the coal con-
tained in that property was fora period of one vear. with terns of
renewal forone vear. [sit that a fact ¢
A. What was the date of that?
Q. Tt was entered into on May 1. 143d. and Cerminalble Jats t.
135. which isa period of 14 months.
A. That may be se
(.. And there was a renewal provision,
\. Renewable for snecessive yearly periods. DP think. after June
1935. Those periods are somewhat changed by -ipplenmients ate!
o forth.
Q. Po vou know why the original lease was entered inte fora
period of Tt raontlis 4
A. What period do vou men 4
(). May 1. 19354, te duly 1. 1935.
ESD) A. Do think the reason for that was this: that of ts
tis recollection that the Seaboaurd—and T think the other
rathroads in the country—ostally negonate for them coal supply
p the batrer poart of June for the first pruert oft Asay, Thi be May
or Augie. However, there are other withe-ses tere that ean in-
dicate that. We hadon mind that fact in fining the termi of that
lease.
Q. Toassume that the termination date. July 1. 185. was set
without any relation te the expiration of the National Pndustrial
Recovers Act?
t
‘
H. A. GRAY, ET AL... Vs. LEGH R. POWELL, JR... ET AL. .
; RPE ON Cy si
~~
=
~
‘ A. Oh, ves.
Q. You don't believe that that wa. considered at all?
A. Absolutely not.
Q. Without attempting mivself te follow the siceessive leases
through, To come to one in the Williams Anne mine. Exhibit 2.
dated April 14. 1936.
j A. Do you know what the nature of that isé Tam asking so
Tecan identify that particular agreement.
(Mr Ansell handed a paper to the witness. )
The Wrrness. What is your question ¢
»\ Mr. ANSELL:
Q. Cai you explain why that was entered inte on April 1.
36. 1f the periods of renewal of the lease were to run for
periods of one year starting Judy tl, 19354
A. Welly in’ each stiecessive Year it Was ip to the
BUS) receivers to determine whether or not they were going
te exercise this right of renewal While it is truce that
the grant for this particular year did not expire until June
30, E36, in April 1986. the receivers sHuplv determined thet
they were going to exercise that right of renewal: and thies
negotiated an extension with the landowners. That is the only
reason TP oxnow for it, diet aminute. Letame rend this further
Provision, My recollection is that it would appear from the
provision ii that contract at that time that a deeision was es
pected from the Supreme Court on this Collard Coa] Con porn
Case,
(). What would that have to do with this ¢
A. Tt -tmply involved a testing of the legality. of this Criithy
Act.
x Q. How did that affect you people ¢
A. So far as the legality of the contraer is coneerbed we
felr that it did not affeet us,
Q. Did not affect vous
i AL Did not affect us. But naturally. just hike any other
business proposition, we feit thar if the Net was de lareedd rin
constitutional, the whole market world probably dwenk. said. it
TORR RS Sem Ee Oe
fist be dere advantageous for us to eo out and buy the coal
rather than te continue the caftiped tetne UPriaiiwedient~
S099) Pherefore we just ~inaiply provrded thisat Thies bnterlit frave
; Wn Interins eNtelision. sane iden batey We eXtended ot
further.
Q. So oon April Ta. 1086. rather than wiving notice to the
United Thacker Coal Company and the Coal and Crane Trustees
that seu would extend this lease for a period of a veary Ven re
effect advised then: that vou would extend it fer a premio ofa
ow HLA. GRAY, ET AL. Vs. LEG R. POWFLL, JR... ei AL.
vear op the event that the Suprenie Court did not hold that the
iirst Guify Aco was aneonstitutional in the meantime 4
A. TP dont think that that is the effeet of it at all. It is
simply a precautionary measure by the receivers to put them-
selves in the position of leaving themselves free in the event that
the Gutfy Act should be declared unconstrutional and the coui
market should break and they found that it would be more ex
pensive to them to obtain coal this way, to terminate the contract
und det it fall at the end of the vear.
Q. There is another part of Exhibit 2. a supplementary in.
denture dated May 14. 136. Tash von if you can tell me whi
that was entered inte hating a paper to the wittiess |.
A. Let me see new what this says. [After looking at paper. |
That seems to have been an interim: extension or an extension
for a short period from July 31. 1986 to and inclusive
SO(L00) of August 20, 1996: and T stppose that. while there
isntoany reference in this te the Guiffy Net. DP suppose
that it is pending legislation for the same reason that induced
the receivers to agree on that interim extension to hiold this
question epen as in the other case,
Q. Withont my referring to the copies ef the leases in the
case of the Glaniorgan mone and the Chilton Bloek Neo To mine.
Mr. Plituuer. can vou tell me whether similar supplemental
tndentures were ninde ta those cases 4
A. Those contracts speak for themselves. But miy recollection
Is that it was not meeessary om these cases. for the reason tint
the first renewal of the lease fron: the Gbunergn Coal and Panel
Corporation and the related arrangement. contractual arrange
ment, with the contractor, was extended for a periad of two
Vears—that ts omy reeedlection of it—with a further right of re.
newal In the case of the Chilton Block mune Wis recollection is
that that lease arrangement was originally for one year: and
that it was afterward extended under the optrorial renewal
provision,
Q. do deheve vou stated upon cross-exaniimation by cormused for
the Commission that mo veur opinion. although Mr. Pritchard
was deseribed in certain leases as oan ridependent contractor, he
Was in faet an eriplovee of the Seahoard Airline Rathway or its
receivers !
BOCTOn) A. Thats my opinten. TP othink he is vers provers
under the decision of the courts entitled to aet im that
dual relationstap. He can be an agent between the parties and
at the same time can be an individual contractor as a third party.
Q. So that the only control which the receivers of the Seaboor |
Airline Railways exercised over Mr. Pritchard was in the spec
H. A. GRAY, ET AL., Vs. LEGH R. POWELL, JR., ET AL. ayy
bes
pe"
3
Bi
|
fication of the temnaye that was to be delivered over certain
perteds of time. Is that true ¢
: A. Phat is my recollection,
Bat agam the contracts will have
to speak for themmel ves.
But that is mv recollection of the faet—
that the receivers did not retain under these contract provisions
any contvel over Mr. Pritchard's enaployment of his miners and
the manner in which he could do the Work. On ep L believe there
Is a prevision om the contract requiring him to comply with all
lawtal regulations atid so forth with respect to that.
(J. When vou speak of the contract ~peaking fer iteelf. do J
Understand vou to dean that all contrel whieh the Seaboard
Airline Ratiway Company or its receivers may exercise over
Mr. Pruelard os expressed i that comtracdt 4
A. TD should say se.
(). De Vou Kriaw whether there Is al lador coblibact with any
labor organization for the qinung of the coal at the Wilinon
Anne nine?
suchoz) ALT dont know.
(). Was there any entered inte by the mceivers of the
Seaboard Airiiie Railway Company
A. No,
Q Mr. Phoumer, what did the Peeriess Corporation acquire
by reason of this purchase on August vo. leat. ef all Ge mehr,
tithe, and uiterest ca the Glamorgan Coals. Incorporated. or its
receivers under the Seaboard Airline agreement ¢
A. Tt acquired the sane rights an! interest under that eontraet
Which the Glamorgan Coat Corporation ar its receivers had pre
Vieusty enjoyed. Tn other words, whatever rights they had, they
acquired,
Q. Do vou know what rights they had ¢
A. Yes: they had the right of compensation. for instance.
They had the mght to perform this work under the contract,
And they had the mght te require pavinent of compensation for
the work and service which the contract provided. That. of
course. is stibjeet to the assent of the Seaboard receivers, becuse
of a provision in the conteact wheel prolubirs the transfer of the
assigninen., without ther consent
QW. So that the transfer would be a sale¢
A. T should say that it would mean a sale of the right to
mine the coal. To think that thar
Bo.b0s) of the decree. T dont remember it.
of that decree was filed.
Mr. Cocke. Yes: it has been filed.
A. (Continued) You will find at in that decree. Of course,
you understand that Glamorgan Coals, Incorporated. and the
receivers of the Glamorgan Coal-. Tnecorporated, hive neo thie
was ‘he Janguage
Tthink that a copy
Qs H. A. GRAY, ET Ak.. Vs. LEGH R. POWELL, JR., ET AL.
Whatever to this coal. All that they fad was a contractual right
niider the agreement to mine this coal for the receivers, and to
receive compensation for it. “Phatais what passed in this transfer
to the Peerless Coal Corporation,
yy Mr. ANSeLL:
Q. Mr. Piuminer, TP believe you sated on direct: examination
that shortly prior to or about the time that you ortgiaally en
tered into the contract of Jease with the United Thacker Coal
Company and the Coal and Crane Coal Conipeny as trustees for
the right tTomtmhe the coalat the Williaa Anne property vou or
other representatives of the reeeivers of the Seaboard Airline
Railways approached Ma. Niehberg with reference to that trans-
aetion,
Ne Yes.
QQ. Why were they approwhing Mr. Richberg?
A Well the receivers. as To stated fofere in my testimony,
counsel for the reeervers an counsel for the landowners.
SUCTOd) amd also counsel for the operator which was involved
In this proposed trapsaction. unanimously agreed that
there Was nothing whatever in those arrangements violutive of
the NORA. Code provision. However, the recervers ace operat-
tna these properties under the direction of the Federal Court:
ch the receivers naturally felt that maybe some charge might
be miade that they were seeking to evade the provisions of this
Act. and they preferred before they made these arrangements
(fective that Colonel Ansell and Pee to Washington and confer
sath Mr. Riehberg and Tay the plan before hint and obtain his
me pprowal atid the approval of the Code authorities, which we did,
QQ. Who do von mean ov the "Code anthorities” ¢
Vhe Bithiainons Coal Division. My recollection was that
Myr. Richbery ~trted that the head of the conl division was the
party that he had conferred with.
(). Yor domt knew who that was :
\. No: TP don’t know,
(). You yvourelf saw Mr Richberg on that wension ¢
\. Absolutely. Yes. <ir,
0 Woot question shd vou present to Mr. Richberg ?
\ We sapey gove him a memorandnii. a short memorandum.
mowho th we eurtined the essential features of this plan-—first, the
Hoe sition of the tithe to this coal by the receivers
MOET) throne 4 owner, the emplovmer of a contractor or
eperautoy hy the receivers to prods the coal, nnd point-
rhe enrit that the coal Was to he used and consumed by the
receivers in tho operation of the railread. That was the sub-
C1 Aen
H. A. GRAY, ET Al.., Vs. LEGH R. POWELL, JR.. 71 ye)
eo
stance of the plan. “Phat the substance of these plans. aud it
ix still in effect in each case in all its essentials.
Q. You state thet all interested counsel were in accord that
the agreement was not violative of the Code /
A. T mean that it was net violative. To miean it did) not con-
fliet with any Code provisions.
Q. What was the effect of the agreement insofar as it related
to the Bituminous Coal Code under the N. Ro A.¢
A. My recollection is that there was some price provision in
the No ROA. Code. TP don't remember. T think there was some-
things of that sort. In other words, they established prices in the
No. AL Code for coal in sales, didn’t they
QJ. Tojust want vou to tesitfy,
Ao Thats my recollection. that they did. They published and
established and promulgated a code for bituminous coal, and in
that code they established certain prices,
Q. The effect oof vour agreement was to remove the
coal which is supphed to the Seaboard Atrline Company
SOCTOG) through these mines from the operation of the price
provisions of the No RL AL Code?
AJ No. fo wonldn't put it exactiv that was. The object of
teese arranyvements was to enable
Q. Lain speaking of ats effeer. Mr. Phanmer.
A. Well, all right. The effect. Put it this way: Phe pur-
pose and itent and etfeet of these arrangements was to enable
the receives to precare a coal supply at less cost to the receivers
than if they had te go out in the open market and buy the coal.
QJ. That is. at less than the Code prices ¢
AL Well, ves. “They naturally were seeking to save money.
They wanted to buy the coal as cheaply as they could. So they
vorcerved the plan oof buying the coal in the ground and en-
ploving these parties to produce at for then.
Q. TP believe vou stated that subsequent to this conference with
Mr. Rocliberg vou received a telegram from: hin 4
A. Yes.
Q. Do vou have that telegram with vou. Mr. Plammer/
AJ No. TP havent at with me. but To would be lad to file a
copy oft. Tn fact. the telegram is not addressed te me. Tt was
addressed to Colonel Ansell. To think we filed a copy
With that mesvorandium: copies of that telegram. with
the N. ROA. Code authorities at the time ond later.
Q. You speak of the NO R.A. Code authorities, De) vou know
What Code authorities they were /
A. Tt was the Bituminous Coal Division. “Phat ts iv reeot-
lection of it. The clivision tneler which Wl conte Wits established
BLOAT)
OnTON—4]
ty) ‘2. ws GRAY. ET AL... Va. LEGA &. POWELL. JS... ET AL.
for bituminous coal under the N. Ro A. under which that coal
was administered by what they called the Bituminous Coal Divi-
sion. Phat is what T mean by “the Code authorities.” To mean
the parties that were charged with the administration and se
ferth of that Code, and of the promulgation of it.
QO. DS you mean the Board of Operaters that adiunmistered
the Code 4
AL No. T dent hnow just how the thing was created. It
has been so many vears ago. DT have forgotten,
QW. Do vou know where it was filed 4
A. Where what was tiled /
Q). Copies of that velegram: and memorandum,
Nf think ait was the District Board. But T think that we
filed a copy of tliat with the then Tyistrict Board created under
the N. R A.
(). In Cineiniiati?
BUC TUS) A. My recollection is that it was in Cincimnat:. TPean
very easiiv and would be perfectly willing to let the
Comtilsston have copies of that corbespondence if they desire Ut.
Mero ANsenn. TP have nothing further.
Mir. Cooke. Po would tike to ask Mr. Plummer one or two
(qdestions,
Redirect exaimimation by Mr. Cocke:
(J. Mir. Pituimer, under the provisions of these three sets of
instruments, Pf ioany one or more cases of rights reserved in
the contracts with the contractor the receivers should terminate
the arrangement with the contractor, would that erther directly
or indivectiv relieve the receivers of the continuing obligation to
prary the ros alties to the owners of the properties, the lessors of
the properties /
A. in the case of the Woilhan Anne mine and the Chilton
Block mine it would met. We would still be liable for the roev-
altie. under the contract. My recollection is—and Twill let Mr.
Ansel! speak for himself—that in the case of one or more mines
we have a corresponding provision in our Jease on the Glamer-
gan Coal and Land Corporation to the receivers which gives us
the right in the event that we should terminate the contract. or
arrangement with the operater, that then we have the
30 (109) right to terminate the lease. In these other cases that
right does not under the existing contracts exist,
Mr. Cocke. That is all,
30 (110) The Examiner. Mr Harrington, do you or Mr. Sneed
have any question /
Mr. Harrincron. No questions,
Mm. An GRAY, ET AL, YS. LEGH KR. POWELL, FR., ET AL. oO]
The Examiner. T would like io ask one clarifying question. a
veries probably in one. Mr. Plammer, To recognize that this situe
tion Is clear to you gentlemen because vou are very familiar with
it. Tt is just a bit confusing to me. There are about seven cor
porations invelved im this particular proceeding, aven't there ¢
Mr. Prosimer. Yes, sir.
The Examiner. Now with reference to the United Thacker
Coal Conipany. it is a corporation
Mr. PromaMer. United Thacker Coat Company is a corpora-
thon: ves, sir.
The Examiner. Where is that incorporated 4
Mr. Proswwer. Tcant answer that. Mr. Tynes. in what State
is tonited Thacker Incorporated ¢
Mr. Tynes. In Maine.
The Examiner. Do the receivers of the Seaboard Airline own
any of its stock /
Mr. PrumMer. None wiiatever,
The Examiner. Do vou know anything concerning the stack
ownership of the United Phacker Coal Conipsriy /
Mr. PrcemwMer. T have no knowledge of ul but DT doe kas
retther the Receivers nor Seabourd Adriane Railway owns any
of it.
MM LT) Mr. Cocke. Or any officer or director,
The Exawiser., With reference tow te the Peerless
Coal Corporation, do vou knew where that corporatien 1s
organized ¢
Mr. Puom™er. Its organized asa corporation in the State of
| Virginia,
The Examiner. And do veu know anything concerning ‘lie
stock ownership of the Peerless Coal Company ¢
Mr. Prosaer. TP do not. but TP know neither the Seaboard Aa
line nor its receryers own any of the stock.
The Exaxiner. Ts theres anyone here who can testify com.
cerning that /
Mr. PrumMer. Yes: Mr. Shunk.
The Exananer. T should like for Mr. Shunk to be called a.
witness in that respect.
Now with respect to the Ghaunergan Coal Land Corporation,
where is that organized ¢
Mr. Pruca™er. That is a corporation of Virginie.
The Exxminer. And the same question with reference to the
ownership of steck.
Mr. Prcwaer. The Seaboard Receivers or Seaboard Airline
Company has no interest whatsoever im the stock and has no
representatives on its Beard.
| Eas
2 H. A. GRAY, ET AL. Vs. LEGH RB. POWELL, JR... ET Ab,
The Exawiner. And do you knew anything concerning the
stock ownership of that partictlar corporation /
Mr. Prowarrr. Except as hearsay. To uncderstand Mr.
30(i12) Kelly. who is here. is one of the stockholders and he wall
testify aus to that,
The Exanener. With reference to Glamorgan Coals, Ine.
Where is that organized /
Mr. Pucsaer. That ix defunct. It passed out of existence. It
was a Virginia corporation,
The Examiner. Andoit ism receivership or just defuanet,
Mr. Proven. Tt is virtually closed out. Tt is in receivership
wand all properties and assets have been sold.
The Exawiner. And they have been purchased by whom
Mr. Prosever. As DP stated. DP think the mining equipment and
property have been purchased bys Ghanergan Coal Land Corpo-
pation. Gaameorgan Coal Land Corporation, TP understand. bas
leased that naming property to Peer’ess Coal Corporation,
Neither Seabourd Receivers tor Seaboard Corporation have any
~tock ownership evointerest in either one of them,
The Exasiner. Phe Chilton Block Coal Conipany is a core.
rations is it netoand do you know where otis organized ¢
Mr. Pruowsterk. That isa West Virginia corporation,
Phe Exaywixek. And wiat do vou know concerning ti
he stock
ownership ¢
Mio Puc uwer. Neither the Seabourd Receivers or Corporation
have HY Titerest ii it,
The Exawinern. Naud os there someone here who can testify
as ote othe -teck ownership oof the Chilton Block Coal
Company ¢
a Bee Mr. PecwMer. Yes. =ir.
Phe Exavinek. TD ouncderstand there are no firther
corporations invelved in this proceeding other than those that
Thave questioned you about just now,
Miro Prowser, Nome whatever,
Phe Fx awiner. Hlow about the Dingess Rum Coal Company /
Mir. Prowserr. PE think that is iheorporated in West \ irginia.
Neither the Seaboard Adriine nor the Seaboerd Receivers hiave
anv daterest whatever in that corporation. in the stock owner:
shpat otherwise.
The Baasinen. Do vou know what person or persons own the
stock of that particular corporation /
Miro Prawwen. T do not.
Phe Examiner. Ps there nhvote here whe could testify as te
ihiat 4 :
Mr. Cooke. DP don't think soe. tindess Mr. Tynes might. He will
testify right after Mr. Plummer,
H. A. GRAY. ET AL.. V=. LFGH BR. POWELL, 1H. ET AL. 5
Meo Pivrrineren, Did ven say who owns the steck of th
Chilton Block Corporation ¢
Mr. Prosar. Pean't say. Phe Seaboard Receivers and Sea
beard Airline Railway Company have no interest whatever iii i.
Mr. Harnixeron. Do vou know whether Mr. Pritchard own-
the miagerity of the stock in-that corporation
The Exawiner. A witness will be put on the stand who will
testify with reference to that. Mr. Harrington.
Mb dda) Boerorp (. Tywes. catled as oa witness for and on
behalf of the appleant. was daly sworn and testitied
as follows:
DIRECT EXAMINATION
Mere Cocnwe. Will vou state vour iaume snd oanitiads fer the
recor / . : :
Mi. Ty~es. My name is Buford ©. Tynes. Huntington. West
Virginia. a lawyer by profession. and interested in the caal bars
hess.
Mr. Cooke. Mr. Paynes. what connection if any dive von with
the United Thacker Coal Company. one of the concerns abort
Which testimony has previously been given in this hearing 4
Mr. Pyses. Toate vitee president ana ehie teil Codlbseb cea a caati
COPpOrAniOn, abd tiave beer sueh for the last ten or twelve Veur~
Prior te that time and back as faroas P91 Db ovwas general gaan
ayer and general counsel. As vice-president Tana in charge and
have been for thease vears of the companys plivsionl properties un
West Virginia, inehucding all its conl anil Pipher levticks,
Mr. Cooke. Mr. Tynes. wilh vou state what relationship: the
United Thacker Cond Company has by way of ownersiip ot
otherwise te the coal properties Known as the Wolltam- Ann pon
and leased to the Seaboard Recemvers /
Mr. Tywes. Tn that connection, Mr Cocke. if you. writ Pevaiiit
me Po owill go far enough afield of voir question te
TTS) oaiswer seme of the questions that apparenthy were
the I Xsanuiners raged, hie alae conse] for the ae
shall 7?
The Exawiner. Phat wonld be satisfactory. stbpeet te ans
Ob pection cotpsed Tra liave te offer,
Mer. Tyses. The Unated Thacker Coal ©. Pany owns a fittle
ever 60 percent of what is known mm the eco boas the Willi,
Ann leasehold Minge County. The Colo a € rane Real Betate
Trust owns the remaining 46 pereent Go chat aereage. The
aerenge is owned dio severalty div the respective owners as |
Hisgs e risermect,
Mr. Coen. That means ai fee owhership rn thee ferried.
| aa
t\4 H. 4. GRAY. ET Al... ¥5. LEGH BR POWRLL. IB. ET AL:
Mr. Panes. A fee ownership is the land. The properties of
the two ownerslops were co-mingled da such a way so that no
part of the coal leasehold which approximates 4,000 acres could
be decsed by either of the two land owners separately. The
Coated Uhacker Coal Company owns the frontage in fee simple.
The Coie & Crane ownership is around in the center of the 4,000
vere boundary, for all practical purposes. To give the back-
ground. in 1422 the two landlords leased the property to the
Wilhanm-Ann Coal Company, which operated the property. te
the fall of 1933, sometimes successfully and sometimes not sue-
cessfully. with the result that as of the fall of 1933. or in Jannu-
aryoor February of 1034. that company had fallen into arrears
inits rovalties tothe extent of. oh T don't recall, seventy
SO( 116) five toe ninety thousand dollars. included in which total
Was about S22.006 for the last twelve months in tonnage
rovalties,
The two landlords conchlided after consulting the William
Ann Coal Conipany as te its future hopes and expectations that
we could not allow the operating company to fall further inte
arrears. and therefore we mist repossess the property. So in
February, DP beheve. the two landlords ander my supervision and
direction andl Jaber. tmiade a common oral reentry into the lease-
hold, took possesslon of the leasehold: that reenury carried with
aH perinanent inprovements. or in common parhince. fixtures ;
and we had the shertPiaake a levy for the last vear’s taxes under
the West Virginia law—neot the last vear’s taxes but the bust
ta royalty. one years rovalty. and sold the movable property
for that one vears delinquent rovalty or rental and the United
Thacker Coal C omipany bewght the movable property in for the
amount ef the veurs back rental.
The improvements of a permanent nature whieh were fixtures
were all on the fee lands owned by the United Thacker Coal Com-
pany and none on that owned by Cole & Crane, further than that
~ome of the underground rat] may have gone throngh some of the
ownership of Cole & Crane. But the mining camp. tipple. side
track=. out-buildings of every character, iichiding supply hoses,
electric transformers, were all on the land owned in fee
SOCEIG) sample by the United Thacker Coal Company, which
company today stil owns those improvements,
Inthe late winter or early spring of 14 Mr. Daniel Pritchard,
Who is known very casually to the United Thacker Coal Companys
as bemg the brother of the two Pritchard bovs who had been
operating unsuccessfully the Willam-Ann Coal Company. asked
The if the United Thacker Coal Company would be interested in
finding a lessee for the old William-Ann plant. and if se. if we
H. A. GRAY, ET AL., Vs. LEGH R. POWELL, JR., ET AL. 65
would give him an opportunity to find the lessee. T toeid him
that we would. and he did.
Subsequently he came to me with the suggestion that he had
found he hoped a lessee who would take the property over, who
would be acceptabie to the landowners, and that after a trip to
Norfoik he would be prepared te divulge the name of the
prospective lessee and the terms upon which he thought that
prospect would lease the property. He returned subsequently,
probably two weeks later, and stated that the Seaboard Airline
Railway Company was the prospective lessee. T knew it was then
in receivership. He stated they probably would not be accept-
able, but on further reflection, which was almost immediately, I
said they would .probably be a very acceptable lessee as their
monthly rentals would be taxed as court costs.
Out of that in the next two or three we
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