# Transcript of Record — Gray v. Powell > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386401_0466%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Transcript of Record - **Published:** January 1, 1941 - **Citation:** 314 U.S. 402 ## Text ? Frou. 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 Print 503 563 AB hO4 564 570 570 470 j71 S72 572 573 573 jae 5S] 5S 1 H. A. GRAY. ET AL.. 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, -). 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 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, a ton for all coal actually extracted) from the mine. The more coal that is mined, the more wear and tear on the equipment, isn't thet true? Mr. Tynes. That is true: ves. ‘Phe more coal that is mined, the greater revenue to the landowner, too, Mr. Cocker. In other words. the use of the equipment was placed ora basis proportionate te the amount of use! Mer. Tysxes. Vhats right. Mr. Cocker. And that was a convenient method of arriving: at that result / Mr. T¥Nps. Vhat Is nw conventional way of fixing it. Mr. Cooker. Thats a conventional way of doimg it tn a mining territory 4 Mr. Tyses. Thats night. TP onoght say the price was ai dittle low. beeause we were stuck am the depresston i ESE and we had an idve qiine on our daneds. and had at before. and knew how many thousand dothirs a month iteest to lave a nine idle aroune there—-whiat Ha pepwenis te the equipment. The EXAMINER. Mr. Tynes, bien misty mlnes clo the Lorited Thacker Coal Conipany oven! Mr. Tysee. Phat i six. TP beteve. now, The Examiner. And how TREY of those does it operate ¢ Mr. Tynes. None. Tt doesn’t eperate at atl. The Exawinern. Tt is not an operating conimpatiy Mr. Tynes. Tt operates conky during such period as it may have to pepossess ao nitne and have at deft on oats hands ane finely the Josses are less to operate than te let the SO(T4S) mines fill up with water and detertorate. Pt finds a lessee and gets atom wintever terms it ean. vou know, and this was in the very worst of the depression here when we worked this out. The Exawiner. Are all ef the mines owned by the United Thacker located in the State of West Virginia’ Mr. ‘Tynrs. West Virginia exclusively: ves, The Ewvaesxer, And how wan? Four, To inderstand. are leased te corporations other than the Seaboard Airline. Us that correct 4 SO- uM. A. GRAY. ET Al... Vs. LEGH bh. POWELL. IR... FT AI Mr. Tyxes. That is right. The Examiner. Would vou mind naming the lessees of the Thiines ¢ Mr. Tyses. Puritan Ceal Company. Landstreet Downey Coal Company, Turner Coal Company. New Century Coal Convcny. a lease to Syeamore Coal Company—part of the coal leaseliold from ous (they have three er four ownerships:. Crystal Block Mining Company. and the little mine on the mii line of the Norfolk & Western, an isolated tract of ao hididred sad) some acres, operating off and oon as far back as 100, to the Nini Fuel Coal Company. f believe it ts called now, The Examiner. And are these mines what is generally known as commercial mines, or are they railroad mines Mr. Tyxes. Con:mercial mines, all of them. The Examiner. Thank vou. Are there any further questions? Mr. Tynes. Mr. Ansell, Todo reeall TP othink. very 30;146) definitely why July To was selected. Ma first tipres- sion was correct and then TP decided To was wrong. It Was oa matter of trading between Mr. Pliner and aie. Phe lease provides for a minimmm rovalty of S16.8000° Mr. Phonmer wanted me to nmiake that lease for the first vear Ele knew he wanted the property for one vear, and didn't know whether he wanted it for next vear. TP owanted te get the full $16.00 for whatever permed Pimiade fami sign up fer His argument was, “You eat take an old run-down mine ane get your production vapeodhi less thioan SINTN days.” and Posaid. cStart oon Judy fo cone from: that chate on the SLO S00 [. berrige reckoned. That or what that wae byesed an, (OSS FNAMINATION Mr. Mirasy Mr Tynes, could you tel] Ther whether the Loited Phachker tas at all times a representative on those properties f Mr. ‘Ty Nes. Noi twents four hours a thay: The We trive oa Than Whe goes dewn there practically every week. Sotietinies lie stays one day. soretimies s1K, Miro Mrasy. Production is checked an what mieuner? Mr. LYNE. He cheek= the production constantly, cometh pratt otisly, We wei ih sotte rhistaree. the werglits frome the Norfolk & Western direct. Proother cnistanees throwerh the operiing COMMUN, Whe tn turn peeeives the werghit~ cireet) from thre Non folk X Western. Dnoone or two instances the tonnage ts Bordays caleulared on the cabreal comtent bast—-measore the rhtber of cubre feet and measure hy the pers hie Uravity whe oarrive ot the tonnage of coal. aie bei for at even though the railroad weight. tia be far short of that. eae H. AL GRAY, ET AL. Vs. LEGH BR. POWELL, JR, ET AL. 8] Mr. Meany. Has there beet any dispute as to the question of tonnage extracted) from the mine since this jease fas been in effect / Mr. Tynes. This particular mine’ No: none that IT recall. Mr. Meany. On the question of contractor's hability fer any damage to the equipment which is leased to vou, has there been any question of damage ¢ Mr. Tynes. Not at all. The accretions to the equipment ex- ceeded any damage. so pay no attention to it. Mr. Meany. Do vou look to Mr. Pritehard directly ino con- nection with terms of the contract for reimbursement under the contract ¢ Mr. Tyses. For damage. Mr. Meany. You look to him directly ¢ Mr. Tyses. Look to him directly. Mr. Mraxy. You wouldn't consider the Seaboard in any sense, in view of the contention that he is more or less their agent, as surety for any claom they might have against Mr. Pritchard ¢ Mr. Tysrs. We look te Mr. Pritchard exe lusively, as Tsay. with respect to the equipment: to the Receivers of the 30(148) railroad exclusively with respect to the operating pro- visions of the coal lease. Tf Mr. Pritehard, ther agent. conducts his operations incour land tn such a way as te lose 100 acres of coal, we do not look to Mr. Pritchard. we look to the Receivers of the Seaboard Airline Railway Company. Tf they lemme tuna ps, loak tothe Receivers, not Pritchard. Mr. Mevsy. Tn the event such oa dispute did oecur and vou looked to the Seaboard and they refused. would that lave any effect: whatsoever on the renewal ot your lense with the Sea boned Mr. Tynes. Well. it betarlit fave the same efleet as it wonld put any ordinary situation in whieh Vou ape a lessee disregarding the terms of covenant of your lesine, Miro Meany. Then vou weld look to Seaboard as surety / Mr. Tysxes. Tf vou talk to us about renewal. except the Sea- boord by Article 1 of the lease has the right to renew. only look to then: for damages for breach of the contract, Mr. Meany. tno other words. then. in the final analy: the Senbourd Airline Railw aver the Reeeivers of the Reathsas wont be rede by Vou to tye responsible for Mr. Pritchard’ failure te thake good any datiage. Mr. Tys~es. We don't look to Mr. Pritchard at all with respect to the real estate. We look to the Receivers. Our contract is with the Receivers. Ma Pritchard diaasit a thing to deo BOOTLE) owathat. Tf coulis lostoor the mime dy dante thronwerh s2 H. A. wRAY, ET AL., VS. LEGH B. POWELL, ..R., ET AL. their agent. if vou want toe call Mr. Pritchard soi agent—through his activitv—we look to the Receivers. Now. if Mr. Pritchard. with whom we have dealt. destroys one of our mitong taachine- and doesnt repair it, we look te him, The Exawiner. Are there any further questions of Mr. Pynes¢ Mr. Tynes, will vou give Mr. Harrington the copy of the lease 4 Dean assure vou it will be returned in just the sane shape that you releuse it. The witness is excused. A. Reavy, Jr eatled as a witness for and on behalf of the Appleant. was daly sworn and testified as follows: DIRECT EXAMIENATION Mr. Put wer. State vour name, address. and business affilia tion. Mr. Kerory. J. J. Nelly. dir. Wise County. Pigstone Gap. Treasurer of the Glamorgan Coal Land Company. princrniiv a supermitendent of saloons of Wise County and lavinan in the cond business, Mr. Prowewer Mr. Kelly. are vou franthar with the metrn- ment of conveyance from the Ghunorgan Coal Land Companys to the Seaboare Receivers and the contraets whieh linve coh tinted in force since 194 and are now in effect 4 Mr. Wray. TP ohave been familiar with those bur TP have not referred to those since the time of execution im 3b for the purpose of this hearmye today. MOC Ld) Mr. Pruwark. Can vou state whether the mtent and purpose of those agreement. Was te convey fo the Recenvers of the Seaboard Adrhine Railway Company the title te the coal oof Glamorgan Coal Lands. with the exclusive riaht te eNtreet and pine that could? Mr. Kerny. Tt was. Mr Prosser. Under the terms of that arrangement. Mr. Kelly. how are the rovalty payments made ¢ ‘ Mr. Kenny. The revalty payments are made mostly to the Shenandowh Life Dnsurance Company of Roanoke. Virginia. on assignment from the Ghumorgan Coal Lands Corporation, whiel: has st lown meow outstanding with the Shenandoah Life Dnsurance Company. Mr. Puowaer. Ino other words, the payments node te) the Shenandoah Life Insurance Company are an assignment of the rovalties by the lind owners, which assignment lias been accepted hy the Seaboard Receivers. I~ that correct Mi. Kerry. Yes. str, 9 en is A GRAN ET AL Vo. LEGGE S. POWER, sh. bp al. 8S Miro Puc semen. Mr. Kelly, whe owns the mining equipiient, machinery. and se forth. of the Glamorgan Mine at the present time ¢ Mr. Kerry. At the sale of the prope sties of Glamorgan Coals. Leld last month. Mr. WLC. Shik. representing the Peerless Coal Corporat ion, purchased the contracts with the Seabourd ma dod) whieh were then placed on sale, Che Glamorgan Land Corporation purchased the real estate and all other properties of the Crlatiergan Coals, ona it rovckas oWlis title for “it of that property. “There was an nndertanding with the Peerless Coal Corporation that the maning equipment would be cold te-them at the purchase price on at four and one-half cents per ton paiyinent rnitil this equipment wits paid for Mr. Pit MMER. And that anureed sitle is nner whrat Ve ni oht term a conditional sales agreement ¢ Mr. Keory. A conditional sales agreesuent which lias tet been feortiueliy executed. but there i an oral agreement to that effect. Mr. Prowse. Mr. Kelly, does the Giainorgan Coal Corpora: iow own aly stock in the Peerless Coal Corporation ! Mir. Kenny. The Gilanorgan owns te stock inoapy other cor: poration, Mi. Prowaen. Tt las ne interest’ Mr. Kerry. Tt has tie interest in any other, Vir Prior. Whe owns the eapiticl stor hoof the Crlwmeorgan Coal Land Corperation Mor. Wan es The Crliieergan Con Lornid- Corporation stock Is owned by the farnilies of two inelividtual+. the first) wae that of ni father ane the seconel wats that of las partner, OO. Mo Vickers. of Wise, Virginia. Mi Proven. Can vou state: positively of your own knew edye that the Seabed Airline Rathway Company or its ST Oe ea) Recervershipe lias ne =toch ownership Oro nis represen tation on the Board of Dorector- ef the Grhamer gan Souls Cocporation Mr. Kinny. The Seaboard Airlie Conipatiys abel he other cor poration lia any stock of the Calera | onl Corperatios tied las nothing to do with the affairs of the corporation. Mr. Prowse: Can ven state. Mer. Welly. whether or net it Was the PUTT Poe abel qaterd of thas dichentinre of lessee fram the Glamergan Coal Land Corporation te the Receivers te trans fer and vest ou thie Seabodure Recernvers the tithe te the coud pro diced in this bieitie: ? Mir. Kearny. Pro owas onr nyelerstitidtnig that aecoreiig ta the terms of the lease. the way an wines Pointerpreted thers at the time the feaee wie executed, that tle tithe te the coal a }yevtt le aecrue to the Seaboard Airline Railway. S4 H. A. GRAY, ET AL. VS. LEGH R. POWELL, JR., ET AL. Mr. PucwMer. Should vest in the Seaboard Airline Railway Receivers / | Mr. Ketry. Yes. The Examiner. Do you mean by that to such coal as might be mined during the term of the lease? Mr. Kecry. During the term of their lecse: ves. The Examiner. Certainly not toe all the coul lands of the Glamorgan Coal Land Corporation. Mr. Kenny. All of those lands, some 6,000 acres in BOC1S3) coal rights, 3.000 of which is in fee, were available to them if they wished to mine over the entire territery during the term of their lease. Mr. Promaerr. Mr. Kelly. To don't: know whether vou recall the provisions of the lease, but it speaks for itself. My reece! lection is that the Seaboard Reeeivers have the right. the un. limited right, to mine this coal in uniimited quantities. There isnt any restriction to the amount of coal the Receivers have a right to take from the mine. Mr. Keuny. No: there is ne restriction te it at all, (Whereiipon a recess of five minttes was taken.) CROSS PNAMENATION Mr. Hoarriveron, Mr. Kelly. what) officer are vou in the Glamergan Coal Land Company ¢ Mir. Ketny. Tam Treasurer. Mr. Hiskematon. Were vou an officer of the Glamorgan Coals, Tre. ¢ Mr. Kenny. Thad nothing to do with Glamorgan Coals. Tn This was absolutely independent of the Glamorgan Coals, Ine. a Tatton, Mr. Hi verinaren. It clidny't have WHS interlocking ilirectors / Mr. Kenny. None whatever, The Glamorgan Coal Lane Compans refrained from having any interest im the operat ing Whatever, Tt is stiaply a land holding and leasing coi prin. , BO (154) Mr. Harrieton, You don't operate any coal mines at all? Mr. Kenny. No: we deo not. Mr. Harrinetox., And vou didn't have any interest in the mining equipment Mr. Keury. No interest in the old Glaniorgan Coals. no. Mr. Hareineron. Ts the Peerless Coal Company composed of the same tenibers as the Glamorgan Coals, Tine. ¢ H. A. GRAY, ET AL., Vs. LEGH R. POWELL, JR., ET AL. 85 Mr. Kery. So far as | know there is no one connected with the Peerless Coal Company who was connected with the Glamorgan Coals. Mr. Prum™er. [I will state, Mr. Harrington. for your informa. tion, that that is entirely correct. Mr. Hargineron. In the lease with the receivers of your prop- erty. payment is based strictly on a rovalty basis. Ts that correct ¢ Mr. WKeury. There is a minisum. FT dont reeall what that nunimum is, Ttisonarevalty basis of four and one-half cents per ton. but T dont recall the mintniim. There is no maximum as te the mount that can be mined in any one veer. Mr. Hl vikineron., De vou know whiat the full price of the con- ditional seles contract made by the Peerless Company was in that court sale of the Giamorgan Coals, Ine. property / MAC TOS) Mr. Kerry. T don't recall the exact figure at this time. but Clamergan Coal Land Company have mivested im the equipment and in the purchase of receivers’ certificates of the old recetvers, and mm the payment of taxes, probably 85.000 04 4 0K), Mr. Hoaraineron, Glamorgan Coal Land Company bought iti at the court sale ¢ Mr. Kenry. At the court sales ves. Mr. Tivnarsaron. And then qiaede a contract te sell out ote the Peerless Con! Corporat ny f Mr. Kinny. Yes. Mr. Eaner. And the purchase price was the purchase price of the Glamorgan people at the sherdPs sale. os that correct ¢ Mr. Kenny. At the sheriths sale the Ghunergan Land Corpora {eon prireliasedt these assets of the Cilamiorgan Coals at SOT NO brid, and that brad ane the asset idered that the Re celve Ts have hes essential legal authorits to mune coal, vet that could not be put in issue here be- anse that would be a collateral attack on the unde takings of the ‘acon andoon the order of the court, and ne such question may he raised excepl on direct: attack by Somme Party interested, — I just Want to make that point, in order that the record will be clear. The Examiner. Tam sure the Commission will apprectate. and T know IT would like to have a certified copy. if vou will, to be considered as evidence in the case (Gf not offered by vou that is all right}, of the applicable charter provisions of the Seaboard Airline and the applicable provisions of the decree ~ a 106s -H. A. GRAY, ET AL., Vs. LEGH R. POWELL, JR., ET AL. appointing the Receivers with reference to these various mining operations. Mr. Cocke. Perhaps I woull like to explain this situation. The Seaboard Airline Railway corporate charter is one of the most involved legal situations that T know anything about. for this reason: The Seaboard Airline Railway Company, the 80(193) present corporation, for whose affairs these — Mr. Powell and Colonel Anderson were appointed, 1 a consolidated corporation under the laws of five Southern States: Virginia, North Carolina, South Carolina, Georgia, and Florida. It also does business in Alabama as a foreign corporation. Now, the Seaboard properties were origin: ally owned by a dozen or so separate companies. The beginnings of the Seaboard zo back 100 years to the organization under a special Act of the Virgima legisliture of the Seaboard and Roanoke Railroad Com- pany. By merger and consolidation provisions under Acts of the various legislatures the Seaboard Airline Railroad Company acquired a charter which, as IT say, is the charter as a consolidated corporation under the laws of five separate states. and numerous of the charter provisions of the old constituent companies were taken over and became inherent parts of the charter of the Sea- board Airline Railway Company. Te give the charter histery of the Seaboard would be a very involved proceeding, but we wish to comply with the wishes of the Examiner and we will do the best we can to pick around through the corporate history that goes back 100 years with doz- ens of special Acts of the legislatures before general corporation laws were enacted by the various states. It is going to be very involved and difficult proceeding. The Examiner. Now. Mr. Cocke, T dont want it to be too involved. The Seaboard Airline is) incorporated in 30(194) some state as it presently operates—the corporation. it- self is incorporated in one state or more than one state. Mr. Cocke. It is a very curious situation, Mr. Eraiainer. It is what is called a consolidated corporation, whereby charters granted by Virginia, North Carolina, South Carolina, Georgia, and Florida became merged into one charter, and that charter became the charter of the consolidated corporation. The Exawixer. What sovereignty granted that) consolidated charter ¢ Mr. Cocke. Ali of them. Ail the states that TD bave mentioned had to approve this consolidation. The fxaminer. Now, then, vou speak of this consolidation. That is in one instrument, isn’t it? Mr. Cocke. No. As T say, the consolidation is not in one in- strument. It ds in--I can't say whether it is a dozen or more. eo H. A. GRAY, ET AL., VS. LEGH R. POWELL, JR. ET AL. 107 But there were special Acts of various legislatures and consolida- tion agreements which were approved in one way or the other by the authorities of the various states and for that reason it is an extremely involved situation so far as the Seaboard cherter is concerned. I know of nothing like it in any corporate history. The Examiner. I would be interested in this, Mr, Cocke: In having the provisions of the purposes ge the powers granted in the record from the various charters, or from the consolidated charter, as you characterize it. SOC TID) Mr. Harrineron, What [owas asking for was the record of this case in authorizing them to do business in West Virginia. They are coming in and setting up that they are operating a coal mine in West Virgimia. What [ asked the withess was the right of the Seaboard Airline te do business ta the State of West Virginia. Was that right given them under their charter, not taking into consideration the states of Florida or any other states they are operating in. and also whether or hot the trustees were authorized to do business in the State of West Virginia as coal operators. The Exawiner. Will vou also include Virginia. because the Glamorgan mine is in Virginia ¢ Mr. Cocke. Mr. Harrington is under a misapprehension. There is no Seaboard Airline Railway Company charter for doing business in West Virginia. The Seaboard Airline Railroad Com- pany nor the Receivers have any lines of railroad in West Vir- ginia, although they may conduct certam of ther activities related to Interstate operations, such as the maintenance Gf passen- ver offices and solicitation forces in the State of West Virginia. It has no charter to do business in the State of West Virginia. Mr. Harrineton. They are doing business in the State of West Virginia as a foreign corporation, then. Mr. Cocker. No: the Seaboard Airline Railway Company is not doing business as a corporation at all, because the BO(196) Reeeivers are in cherge of the properties. The Re- ceivers don't act on behalf of the Corporation ; they net as a custodian of the properties under the orders of the court and they do not exercise corporate functions as such. They are offi- cers of the court operating under the orders of the Court, The Exyminer. Would it be difficult te submit for the record that part of the consolidated charter that has reference to the purposes of the Seaboard Airline and the powers granted. with particular reference te the acquisition and mining of coal 4 Mr. Cocke. There is ne specitic provision TP know of about the acquisition and mining of coal Our contention is thar the right to acquire coal for ratlroad: purposes is an essential ineident of 108 HH. a. GRAY, ET AL., Vs. LEGH R. POWELL, JR., ET AL. charter power as the courts have repeatedly held. We have per- haps no charter provisions authorizing us te manufacture a rail or manufacture a locomotive, but unquestionably if the Receiver wishes to decide to set up his own manufactory of either rails or locomotives it would unquestionably be an incident of normal charter power. We will endeavor, Mr. Examiner, to give you such charter provisions as we think confer broad powers to which the powers that we are now asserting are necessarily incident. Does that answer your inquiry? The Examiner. Partly. Would you also include the apphi- cable provisions with reference to this same point of the decree of the Federal Court) appointing the Receivers of 30,197) the Seaboard Airline ¢ Mr. Cocker. Yes, sir. ( Whereupon a recess was taken from 11:00 ontil 11:30 o'clock.) DIRECT EXAMINATION Mr. Pruwaer. Mr. Gaudin, will you state your name and resi dence, and in what capacity you are employed by the Seaboard Receivers / Mr. Gavcmiw. Joseph L. Gaudin, Norfoik, Virginia. Tam and have been, since previous to 1934, continuously employed as fuel representative in the Purchasing Department of the Receivers of the Seaboard Airline Company. Mr. Pruwer. What duties, as stich employee, do you per- form in connection with coal produced at each of the mines in- volved in this hearing ¢ Mr. Gacors. Among my other duties To give monthly and weekly instructions to the eaptive mine operators as to the tonnage te be mined and shipped therefrom to meet the Receiv- ers requirements ut specified points on the Receivers’ line to Which such captive mine coal is to be shipped. Mr. Proven. You mean these mines involved in these pro- ceedings ¢ Mr. Gacptn, Yes, sir. Mr. PLeuwMer. Can you state whether or not all of the coal shiped from these mines is sipped to the Receivers for the con- sumption and nse by the Receivers, or is it shipped to any other parties for-any other purposes / 30188) Mr. Gacpin. It is shipped to the Receivers and to no other party except a small amount of house coal that is sed by the labor employed around the mine, Mr. Promoter. Ts it vour understanding that that house coal is disposed of fer account of the Seaboard Receivers é Mr. Giacpin, Yes, str. H. A. GRAY, ET AL., VS. LEGH R. POWELL, JR., ET AL. = 109 Mr. PuumMer. Can you tell us whether or not coal shipped from this mine by or for account of the Seaboard Receivers is shipped at the Receivers’ own risk ¢ oat Yes, sir: the receivers own the coal and it. ts shipped bySar for the account of the Receivers, and the Receivers have to stand any loss due to wrecks, theft, or other losses in transit, and to the extent, of course, stich losses can’t be recov- ered by the off-line carriers, Mr. Pucmaer. What other duties do you perform with re- spect to the so-called captive mine coal? Mr. Gavuptn. I arrange for the approval of payment of vouch- ers, both for the compensation to the Receivers’ operator, pay- able by the Receivers for the work and service performed by him, and for the royalties payable to the Receivers’ landowners, Mr. PrumMer. Can you state whether or not these royalties are paid by the Receivers to or for the account of the land- owners ¢ Mr. Gavotn. Yes, sir. Mr. PruomMer. From whom do you receive instrue- 30(199) tions as to the distribution of coal from: these mines ¢ Mr. Gavptx. From the Transportation Department, The Examiner. Of the Seaboard Airline Receivers Mr. Gavors. Yes, sir. Mr. Pucsaaer. Can you state, Mr. Gaudin, whether or not work and service performed by the operator emploved by the Receivers at these mines is performed solely for the Receivers? ' Mr. Gaupix. Yes; solely for the Seabourd Receivers, Mr. PuromMer. So far as your knowledge goes, these oper- ators produce no coal there—no coal is produced at these mines except for the Receivers ¢ Mr. Gavorn. That ts correct. Mr. Eanet. Mr. Plomimer is continuing his leading: questions and for the purpose of the record we would like to have the wit- ness give his answer, rather than Mr. Phimmer give the answer for the witness. The Examiner. We can get along just a little bit) faster on noneontroversial matters, To have ino mind that leading ques- tions are not really objectionable. We are turving to expedite the hearing a little bit. To will ask Mr. Plamiuner to state his questions in some form other than a leading form if possible. Mr. Prumaer. Alb right. Mr. Examiner. 1 will have that in mind in the future. Mr. Gaudin, have you any knowledge as to whether or not any of the coal produced at either of 30(200) these three mines has ever been rejected by the Sea- hoard Receivers / Mr. Gacpix. T have no knowledge of any rejections. —_— * 110.) H. A. GRAY, -ET AL., Vs. LEGH R. POWELL, J3., ET AL. Mr. Purm™er. I understand, so far as your information goes, none of this coal has ever been rejected Mr. Gacprs. None of this coal has ever been rejected. Mr. Prum™er. Is it your understanding (and T think vou have so testified) that this coal is coal belonging to the Seaboard Receivers ¢ Mr. Gaupix. It is my understanding that the coal is owned by the Receivers. Mr. Prewaerr. Let us assume, for the purpose of argument, that seme rejection of this coal would oceur. What, in your judgment, would occur’ Would the Receivers have any use for that coal ¢ Mr. Gacprx. Yes. Tf the coal was on Tine and was rejected, as you said, and was unfit for locomotive use, we would take that and send it to some of our stationary boilers, where it doesn't require that high grade of coal. Mr. Puumaer. That is all of my question. CROSS-EX AMINATION Mr. Exner. Am I correct, Mr. Gaudin, that the procedure with reference to the shipping and instructions as to the trans- portation of the coal mined is the same for all three miines ¢ Mr. Gacpin. It is the same, except for the amount of tonnage that we would order. Su (201) Mr. Exner. So that when we go inte some detail as to the transportation destination, the responsibility for the coal at these various mines, vou speak for all three mines, with the exception of the tonnage ¢ Mr. Giauptn. I speak for ail three with the exceptien of the tonnage. Of course, at different mines we would bill coal to different points on different routes, becwise all of the mines are net located im the same freight rate group. Mr. Eaner. Do you know, Mr. Gaudin, the extensiveness of the various designations for us by the railroad company ¢ Mr. Gavpts. TI know where i give instructions for the coal to be shipped. T designate the billing point and after that coal reaches our line then it becomes an operating proposition and the distribution of the coal thereafter is done by che Operating Department. Mr. Eanrt. Do you have any knowledge of where the coal coming out of those three mines, or for what specific area of the railway’s operation that coal is allocated ¢ Mr. Gavorn. As T said a moment ago, that question T couldn't answer, because that is an Operating Department problem. I can testify as to the billing points. q ee I H. A. GRAY, Er AL. Vs. LEGH R. POWELL, JR., ET AL. I1]] Mr. Eaxer. Where do you bill the coal coming out of the mines ¢ Mr. Gavorn. In the case of the. William-Ann, as a general thing IT bili it to Ryan, Virginia: Hartman, Virginia: Coolan, North Carolina: and Gibson, North Carolina. In the 30(202) case of the Chilton mine No. 1 PE generally bill it to Apex, North Carolina, and to Hann. Virginia. In the case of the Peerless Coal Corporation, that coal as a general thing is billed to Wiggins, South Carolina. You understand, Gee asionally we have to change those destinations. We might bill a portion of this coal to Stubbs. North Carolina. The Examiner. Could you give the ager number of net-tons billed during the course of a vear, say 1936, to these various destinations that you have just testified to? Mr. Gavupts, T could not. T dont have that information, The Examiner, Those billings represent practically the entire tonnage of the mines with the exception of such coal as is sold to the emplovees ¢ Mr. Gaupin. That's right. Mr. Raner. Where do you take supervision of the coal from the three mines ¢ Mr. Gavpin. T didn’t understand that. Mr. Exner. Where does your supervision of the coal from: the thres mines occur! You say you assume the responsibility of that coal for its distribution. Mr. Gacptx. We own the coal. Mr. Eanet. I know you own the coal, but when do vou take it off the hands of your operator? Mr. Gacpex. Well, when the operator loads the coal at the tipple in the cars. it is our coal in the mine. The receivers have the lease. He performs the service and his agreement is for leading the coal in the ears. 60(203) 0 Mr. Eaner. Who loads the coal in the cars / Mr. Gaumwy. The Receivers’ operator. Mr. Eanrr. Isn't there some period when there is an inspection made’ According to the contract, that coal js Inspected, Mr. Gacprx. We have a fuel inspector and he makes periodi- eal inspections of the coal produced at all three of the captive mines. Mr. Fanet. What about the coal that reaches its destination and under the terms of the contract may not be satisfactory / Mr. Gavorn. Well, if a car of coal should reach our line of rail- road and was unsatisfactory and rejected, unfit) for locomotive use, we would take that car of coal and use it at some pump station or stationary boiler: or some place of that sort, inasmuch us it Is our coal, 112 4H. A. GRAY, ET AL., Vs. LEGH R. POWELL, JR., ET AL. Mr. Exner. Is the price of that coal that is rejected different from the price of the coal under the contract ? Mr. Gavprx, We don't buy the coal, but the compensation that we would pay the operator for the work and service performed would be the same on that coal as it would on the other coal. Mr. Eaner. If I understand you, then, the responsibility to that coal from the operator so far as the operator is concerned ceases at the tipple, and the responsibility from there on is the responsibility of the railway company. with the 30( 204) exception of that coal that may ultimately be rejected at its destination, not meeting with specifications, Am I correct in that? Mr. Gacprs, Yes: that is our responsibility after it is loaded on the railroad cars. Mr. Exner. Do you have any supervision of the actual mining of the coal by the operator? Mr. Gavprn. No, sir. Mr. Eaner. Do you have any authority to instruct him as to who should be employed at that mine ¢ Mr. Gavcprx. No, sir: I do not. Mr. Eaner. As to how the coal is to be mined--taken out of the mine ¢ Mr. Gavprx. No, sir: T think our specifications cover that, as to how they shall mine the coal, the grade of coa!. Mr. Eaner. You stated that vou approve the vouchers for pay- ment. Will you explain the detail, how you arrive at the ap- proving of these vouchers for payment ¢ Mr. Gavoi~. Well, under the agreement. if Tam permitted to speak of all three of them at one time. practically the same handling. Mr. Eaner. Pardon me, but if you think one agreement is dif- ferent from the others. you may set out where it is different. Mr. Gacprn. Twill state it separately. then. In the case of the Wi lliam-Ann mine, under the agreement the operator prepares at the end of the month a statement which he sends to B0(205) the Receivers showing the coal mined, loaded, and shipped under the agreement. This statement shows the date the coal is shipped, the individual car numbers and initials, and the net weight, and the operator's compensation for the work and service performed. When that statement reaches the Purchasing Agent's office T approve the compensation to be paid the operator. Then 1] send it to the Auditing Department Mr. Eaner. What do vou base your approval on? You say you approve that statement, Mr. Gavuprx. On the agreement. H. A. GRAY, ET AL., VS. LEGH RK. POWELL, JR. ET AL. 113 Mr. Exner. Are there seme records that you may possibly have that will verify the amount of tonnage claimed produced by the operator? Mr. Gavptx. This statement that I was telling vou about shows the total tonnage he shipped under my instructions. Mr. Eaner. Is that statement checked with any record of yours ¢ Mr. Gaumy. No: I don't check it with any record in so far as the tonnage is concerned, beeause there would naturally be a variation from the tonnage I direct him to mine and ship on account of the coal being weighed, he not having the avatlable weight right at the mine at the time he loads the coal. Naturally there would be some variation up and down, but it doesn’t amount to very much. Mr. Eanxer. Could you state the details of your transaction in the appreval of the «statement submitted by the 30(206) operator for a given month--what you base that on? I fuelagent.and im conmmection with H. A. GRAY, ET AL., Vs. LEGH BR. POWELL, JR., ET AL. 115 the Purchasing Department, would you have any 30(209) knowledge as to how much coal was sold commercially by the Seaboard —s ay or its Receivers prior to May 1937—say within the year ef 1936 Mr. Gacpin. No, sir: T would not. Mr. Meany. You wouldn't know how maiiy tons they seld or what they realized from the sale of that? Mr. Gavuptn. Ne, sir. Mr. Mrany. When vou received orders from your various Division Superintendents as to their requirements to furnish orders to your mines. is that based upon the knowledge of use of certain equipment—in other words, some of which ts stoker equipped and others which is manually fired, as to the sizing of coal that might be ordered from the mines ¢ Mr. Gavoiw. IT dont receive orders from the Division Super- intendents. The Transportation Department furnishes me with an order showing the requirements and, of course, in so far as the grade of coal is concerned, we use the same yrade of coal on all of cur locomotives. We have stoker fired locomotives and hand fired. Some are stokers and some are not stokers. Mr. Mrany. About what percentage of your equipment is stoker equipment ¢ Mr. Gevuprs. T couldn't answer that, inasmuch as that is a Mechanical Department propesition. T have no knowledge of it. Mr. Mrany. That is all. The Examiner. Are there any further questions, Mr. 30¢210) Ansell? Mr. Anseun. Was any of the coal that has been shipped to the railway from any of these three mines during the period under which these arrangements linve Leen in effect sized coal? Mr. Gavprs. Yes: if vou wish toe term it sized. T imagine this is what vou mean: From the Glamorgan mine we receive a straight run oof mine coal. From the Williai-Anmni mine and the Chilton No. 1 we take a six-inch crashed ran of mine coal, large lonips broken down to six-ined. Mr. ANSELL. Phat is the only zing that i done? Mr. Gavupinx. That is the only sizing -0 faras Pknow. i have ne knowledge, Mr. ANspin. That is all. The Examiner. Are there any further question 6 (No re- sponse.) “Phat is all, Mr. Gaudin. (Whereupon. at 12:05 p.m, the hearing was recessed to re- convene at 1:30 p.m. of the same day.) 116 3H. A. GRAY, ET AL., Vs. LEGH R. POWELL, JR., ET AL. BO0(211) AFTERNOON SESSION The Afternoon Session of the hearing convened at 1:30 o'clock in the Rose Room of the Hotel Washington. Washington. D.C. Exariiner Canrrecn. The hearing will be reconvened. Mr. Cocke. Ti: view of what T understood Mr. Harrington to til me during the lunch hour, that counsel for the Commission would not insist on the production of the various charter pro- Visions in view of what has gone before in the record T would like to have that confirmed on the record that they will not insist on that Mr. Harrineton’ In view of the fact that counsel say that at is going to be such a hard job to get the copy of the con-olidated articles of the incorporation of the Seaboard Airline Railway, tn my talk with the other members of the legal grein sion we have decided not to request that at this time—if it meets with the approval of the Examiner Examiner Cantrece. That meets with the approval of the Examiner, Mr. Pucmeer. In view of the evidence introduced at) this hearing. to the effect that Peerless Coai Corporation has, since the filing of the receivers’ petition. and before this hearing. suc- ceeded the receivers of Glamorgan Coals, Inc., as the 30(212) parties performing for the receivers the work nd service of extracting, mining, and loading the coal y re- duced at the Glamorgan Mine, Appheant’s petition is amen led to show such snecessorship and te make relevant testimony gi en at this hearing with regard to Peerless Coal Corporation and it Operations. Examiner Cantrene. Before we continue with the hearing, Mr. Harrington has requested that vou gentiemen, attorneys for the :eceivers for the Seaboard, furnish for the record copies of the supplemental decrees, as T understand it, with reference to the Oper ation of the three mines involved. Could you let ome know when those supplemental decrees could be furnished ¢ Mr. Cocker. Promptly: they are in printed form. Tt is just a question of getting back to Norfolk and mailing them here, Examiner Cvnrrene. Within the next week Mr. Cockr. Oh, ves. Mr. Pucwer. Mr. Perey, will vou take the stand. if vou Please / Whereupon C. Ancen Perry, called as a witness on behalf of the Receivers for the Seaboard Airline Railway. having been previously sworn, Was examined and testified as follows: Seen emma H. A. GRAY, ET AL., vs. Lech R. POWELL, JR., FT AL. 117 3O(213) Direct examination by Mr. Plumes: Q. Will vou please state your name and residence and in What capacity you are employed by the Receivers of the Sea- board Airline Railway ¢ A. ©. Allen Perry, Norfolk, Virginia. And T have been since previous to 195¢2and now am. employed as Chief Clerk, Trans- portation Department, of the Receivers of Seaboard Airline Rail- Way Company. Dam over 21 years of age. (). Mr. Perry, what are your duties ¢ A. TP have general supervision of the office of the Transporta- (ion Department of the Receivers. and my duties include the distribution of coal obtamed by the receivers for use in the opera- tion of the railroads in their possession and control T esti- mate the monthly coal requirements of the receivers and = ad- vie the Purchasing Department thereof. On the basis of this estimate Talso inform the Purchasing Departinent of our weekly foliage requirements. Q). What duties do von perform in connection with coal dis- tribution shipped to the receivers from the three mines invelved In this hearing. that is from the Glamorgan Mine in Wise Counts. Virginia, the William Anne Mine in’ Mingo County, West Virginia, and the Chilten Block No. 1 Mine in Lagan County, West Virginia 4 Oz dad) A. Talse have charge of and direct the distribution Of coal shipped tothe Receivers from each of these three ines, (). Mr. Perry by Whom is the coal shipped to the Receivers bry each of these mines, being consumed and used / A. Ttts all consumed or used by the Receivers in the operation of the railroads in their possession and control. Mr. Pruusaer. That is all niy questions, Cross-examination by Mr. Eaner: (). As T understood the last que-tloy, it Was—by whom was the coal shipped and consumed from those three mines, and as J nnderstand Your answer, Vou only answered as to its COnSHInptton, the consumption of that coal / Mr. PLiomMerr. You answered as to both. did vou pot? The Wirrnrss. The question was only as to constimption. Mr. PuoMMern. Oh. ves. May T restate what Tasked him? It Was--"Mr. Perry, by whom is the coal shipped te the Receivers from each of these three Milnes, being consumed or vised 4 The Wrrness. By the Receivers of the Seaboard Airline Rail- Wayoin the operation of the railroads in their control or POSSeSsion, Mr. Denvsey. He didnt ask hin who was shipping MM21TS) the coal. | “= ———— LIS Ww. A. GRAY, ET AL... VS. LEGH R. POWELL, JR., ET AL. By Mr. Eaner: Q. Following that question, Mr. Perry, who ships the coal to the Keceivers to be consumed in the operation of its railroad COMpany f A. From these three mines / (). Yes. A. The Peerless Coal Company and Daniel H. Pritchard from the William Anne operation, and from Chilton Block No. 1. Q). And from the Glamorgan Mine / A. The Peerless Coal Company is the shipper who advises us of the shipnients made, Q. How ts that done. by bill of lading or how / A. How do they advise us? Q. How do vou advise them and hew do they in turn advise vou’ What is the detailed transaction there, could you explain that ¢ A. These operators have instructions from our Purchasing De- partment to wire the Transportation Department of the Seaboard each day by Western Union wire. the number of cars of coal they ship to the Receivers. QQ). How is that confirmed? Is that wire later confirmed / AL Wei lver get oa mail confirmation giving the Soe216) individual car numbers of those cars that are shipped on that day. Q. What is that mail confirmation; is ita bill of lading? A. No: that mail confirmation te the Transportation Depart- ment is simply a confirmation of the telegram. giving the mum- bers of the cars. (J. Do vou iltimately receive any other evidence of the ship- ment of that coal and the receiving of it, by the recervers of the Tathway company A. When that coal is shipped. as soon as that coal is shipped, it then becomes a Trensportation Department responsibility, and we follow at 0 the foreign thes to see that it comes to the Seaboard: follow tt Up to see that it goes to its proper hill destination and then is distributed to the districts over which it Is Supposed to go. (J. Where does that destination Wppear in the records ¢ ALT dont believe Tounderstand exactly what you are trying to vet at, Q. [Ts it on a dead-head billing or on a bill of lading? AL AM of this coal—all of these mines are loeated on other lines than the Seaboard. It has to move over the other BO( 217) tines on regular revenue billing and up te its billed destination. When it is received by the Seaboard at | OR RCN NET RERI t H. A. GRAY, ET AL., Vs. LEGH R. POWELL, JR. ET AL. 119 the junction point, our people make out the company bill that travels with the car until it is unioaded. Q. Now let’s get just a little more detail on that. Two of the mines are in West Virginia, that is the William Anne Mine and the Chilton Block No. 14 A. Yes. Q. Now that coni is billed with a regular bull of lading: am I correct ¢ A. Yes, Q. And where ts the junction point where that coal is trans- ferred from that Lill of lading from the other railway company or transportation company to your own line? A. The Chilton Bloek is located on the C. & O. That coal reaches us at Richmond from the C. & O.. at Richinond. Q. Richmond, Virginia ¢ A. Yes: and the Richmond. Virginia, ageney of the Seaboard rebills that coal on a Sereboard Company waybill. However, the original billing goes through to its billed destination, in addition to this company waybill. When the coal reaches its billed dest: nation ‘his through line billig is taken up and reported to the Accounting Department, and the company waybill follows the earuntibitis nnloaded on the chute or disposed of. SO¢2IS) Q. Is that the same with reference to the William Anne Mine? Only that the junction os different ¢ A. Yes. The William Anne Mine coal comes to as at Peters. burg. Virginia. and Durham, North Carolina. and is handled in the same manner. (. Now, the coal from the Glamorgan Mine, is there another transportation faeity other than the Seaboard Airline Railway used in its transportation ¢ Al Yes: the Grlamorgan Mine is located on the Interstate Rail- road and it taioves up to Miller Yard. Virginia. It as there turned over to the Clinehfield Raglroad, Whe bi ing it to the Sea- board at Bostick, North Carolina. () Now, Cal Vou explain how the bill of lacing is thade out, if you can? A. No: DT guess Thad better net attempt to explain that. Q. Do vou have any of those bills of lading here with vou? AL No. Q. As Tounderstand it. then, Mr. Perry, the bill of lading i- prepared at the loading potnt where the coal is loaded ¢ A. To understand it is prepared by the railroad agent at the loading pomt or the nearest agency to the loading porn. (). And it ts shipped from the Peerless Coal or BaQQ1Y) awrichard to the Seaboard Airline Receivers at a destina- tien over these fore lines. through vour dines. to it. 7 ae 120) oH. 4. GRAY. ET AL. Vs. LEGH R. POWELL, JR.. ET AL stopping point, where itis consumed or used or where it is to be stored ! A. Yes, Q. T+ that through bill ef lading received in advance or at the same tine that the coal arrives at its ultimate destination 4 A. To understand that it accompanys the coal. Q. Phen what is done with that bill of lading ¢ A. Tt moves with the car to its billed destination and then is reported by that agency at thet billed destination to the Account: iug Department to indicate the receipt on line. Q. What Tam trying to find out is, as a result of that bill of lading being forwarced to the Transportation Division at the point of destination. is it than tispected. is the coal imspected, to wee that at conforms with the coal mentioned im the bill of lacing ¢ A. That coal travels on railroad weights. That coal is weighed by the oryrnating ratlroad, ' Q. Where is it weighed ¢ A. Well, Dean't say. T know the railroad weighs it. The coal that originates on the Triterstate ts weighed on the Interstate by a regular cernitied weighnaster. Beer) QQ. Wheres A. TP don’t know. but rt las to be weighed before it can be billed to carry a certain amount of coal, (Q). De vou know where it is weighed for the Willan Anne Mine? A. No: DT con't. Q. When vou spoke with reference te the Interstate you re ferred to the Clameorgan Mine 4 A. Yes. Q. Do vou know where itis weighed for the Chilton Block No. 1¢ A. No, str. The practice of course is to weigh all shipments of coal at the first scaling pomnt that it passes. Q. Ist weighed again / A. Te it weig'red again? Q. Yes. A. No. (). I needed by the Receivers A. Yes. Q. That is what vou mean‘ A. Tanade tention of it heme placed on the chute. DTamesnt a Wis Pelee ee chiite -o that it could he placed Or locormet ve- at these couling stations. Q. The chute mesa a conliig station 4 A. That i- right. aT $i a 124 it. A. GRAY, ET AL.. Vs. LEGH R. POWELL, JR. ET AL. Examiner Canrrenn. TE would like te ask vou one ques- BO¢227) tion on that, Does it sometimes happen, then, that the coal which was forwarded by the contractor to some destination on the route of the Seaboard Airline Railway itself is umoaded andl then reloaded: or is it, the car itself, transferred / The Wrrness. Ordinarily the coal moves in the same ear from the mine and ts dumped oon to the chute to be pat in the loce- motives, Examiner Caxtrenm. Are there any occasions where the ear is titdoaded and stored and then preloaded on cars of the Seaboard Airiine ¢ The Wrrness. Yes, Examiner Cantrenn. Does that happen with any degree of regularity or is that very oecasionally ¢ The Wresess. We ordinarthy maintain what we call a “pre- fect supply” of coal on our line in case anything should bappen that our supply would be eut off. so that we ean comtinne te oper- ate. We call those storage piles, that is. coal stored on the ground to be picked up and used as needed, Recrossexanination by Mr. Meaxy: Q. One question. Ate there any so-colled exchanges of coal at an8 Titerseetion pommt. with other carriers, at common loading chitites ¢ A. Yes: we have cme ar ts 4, hii ZUS ) (). Are these exchange. made pursuant te the “7. When Ver approached them on this proposition of pur- chasing coal oor entering into this contract of tease with the Chilton Block No. 1 Mine. did vou consider that at that time. or dri vou approach then with the purpose at that time, of selling them coal ¢” H. A. dRAY, ET AL.. Vs. LEGH R. POWELL. JR.. ETAL. [3] A. DT approached them with the plea of leasing che mine to them, No. 1 Mine. Q. You acted then as an agent for the Dingess-Kumi Coal Company ¢ A. No, sir: TP did not. Q@ You acted as president of Chariton Block ¢ AL TD acted as an individual. Q. You were president of the Chilton Block Mine at) that tine / A. That as right. Q. Did the Chilten Block Mine have a lease on Chilton Block No. Tat that time ¢ A. They did. q. What was your proposition to the receivers of the Seaboard Airline at that time / A. This mine had been abandoned and T asked theme if they would be interested in leasing this mine and opening it up. and them taking the coal from the No. 1 Mine ef Chilton Sac2z4t) Bloek Coal Company, which had been shat down for ap- proxtmiately ten years or more, Q). Now what arrangements did vou make in reference to the production of coai from that mine at that time. with the receiwers of the Seaboard Airline ¢ A. That) IT could prodice the conl from the Chilton Block Mine No.1 for their account. for ther sole account, Q. Did you specify at that tune whot the price would be per ton for the coal produced on the Chiltom Block Neo. 1 Maine? A. When I first approached therm Q. Or at any time thereafter. A. Yes, sir. Q. What price, do vou remember, was set at that time ‘ Mr. Prum™Mer. That is shown by the contract. Mr. Hiarkinoron. This witness knows it. The Wreness. T have severa] prices in my head. As close as IT can remember it was $1.37). a ton. By Mr. Harrineton : Q. That was in 19344 A. Yes. Plus the royalty. Q. What is the price you receive now for coal delivered to the receivers of the Seaboard from this Chilton Block No. 1 tine 4 A. 81.641. a ton, subject to adjustment, they paving 80(242) the reyai.y of ten cents a ton. Q. Do the Seaboard Airline Receivers have any con- trol over your operations on the Chilton Block No. 1 Mine. in reference to your hiring and discharging the miners and buying supphes and equipment, and so forth ¢ 132 86H. A. GRAY, ET AlL., Vs. LEGH R. POWELL. JR.. ET AL. A. They do not. Q. You de all that on your own account ¢ A. T de. Further, you asked a question yesterday, IT think. did T belong or did my mine belong to a union. Q. IT don't think T asked that question, but you can answer it now vou brought it up. A. T betong to the Operators’ Association and T pay dues in the Operators’ Association of Logan and Williamston. By be- Jonging to this association they have a contract with the union, of which T am a member. Q. What union ¢ A. United Mine Workers of America. Q. I don’t believe T asked that question. A, Seme one did: T thought T would clear it up in your mind, Q. Now, Mr. Pritchard, in the operation of this Chiltea Block No. 1 Mine do you have houses that you rent to the miners? A. I do. Q. Do you operate a store on the premises? 30 (245) A. T do. Q. Do you sell coal out of that store or through the store f A. To the store? Q. Through the store. A. No. Q. You don’t vell any coal? A. Not through the store. QQ. Do vou self if at the mine ¢ A. To onr employees only. The price is set by the United Mine Workers. Q. Do vou sell any coal to anybody else besides your emipl vees : A. I do not. QW. Do you operate the William Anne Mine ¢ A. T operate it for the Seaboard Airline Railway Company, SIT, Q. Jam asking you do you operate the William Anne Mine? A. For the Seaboard Airline. Q. But you are in charge of production of the coal of the William Anne Mine ¢ A. That is right. Q. Do you operate that in the name of a corporation A. I do not. SO 244) Q). In your own name ¢ A. I do. Q. Do you keep a set of books in your operation of that mine? A. I do. A AE TL CRT A AIR ee H. A. GRAY, ET AL., Vs. LEGH R. POWELL, JR.. ETAL. 133 Q. Have a separate bark account 4 A. APs, Q. Pay vour employees / A. T do. Q. Buy all your own improvements ? A. T do, Does the Seaboard Airline Railway have any control over your operation of that mine ‘ They should bave as far as eur mining conditions are con- cerned, to see that T operate the mine in the proper way the mine should be managed, so we would get the proper recovery from the coal under the ground, Q@ You have a lease on that property. don’t you. from the United’ Thacker Coal Company 4 A. No, sir: T do not. Q. You have a contract with the United Thacker Coal Com- pany for the lease of the improvements, do you ¢ A. TP do: ves. IT pay them a rental. Q. For what / A. On the mining equipment and improvements on S0(245) the proverty. Q. You don't think that you have a lease on the property of the William Anne Mine to take effect in the event that the lease held by the trustees or the receivers of the Sea- bourd Airline Company should) terminate with the United Thacker Coal Company ¢ A. T do. (). How long does that lease run for / A. T couldn’? answer that question. (@. You signed a lease and you don't know how long it runs? ALT have so many leases that I really don't remember the exact time, (). IT will try to refresh your memory. A. All right. Q. Does this lease run for a period of thirty years from the date ef May K-+4054 ¢ A. Tam going-to say that Tam ignorant on that question, but Twill have my auditor—— Q. 1 will show you a copy of a Jease which seenmis to be made between the U hited Thacker Coal Company and yourself, Examiner CANTRELL. As an individual ¢ Mr. Harrixeton, As an individual. The Witness. Does that say thirty years / 3)( 246 ) Mr. Harrineron. Yes. The Wirsess. My name is on there. By Mr. Harnincion: Q. Then itis for thirty years! A. Phat is right. Q. At the time you made this fease was there anether lease made on the same day to the trustees of the Seaboard Airline Railway Conipariy A. T don't remember, sir. Q. Do vou remember going to the Seaboard Airline Railway Company and interesting them in the William Anne Mine?‘ A. I do. Q. Do you remember bringing these parties together, the Sea- board Airline trustees and the officers of the United Thacker Coal Company, for the purpose of making a lease? A. IT do. Q. And doe you mean that they didn't make a tease at that time? A, No: nl do not, Q. Well. have vou ever read this contract of Tease ! A. Yes, sir. Q. Well, isn’t the lease made to the triistees of the Seaboard Airline company. inade subject to your lease, or is 30(217) vour lease made subject to therr lease! A. No: their lease is made subject) te my lense. That is if Mr. Tynes, who is my counsel and also the vice presi- dent of the United Thacker Coal Company would not enter inte a lease with the Seaboard Airline Railway for the period of time that they requested, so T possibly might: say that To underwrote the lease. In the event that they gave up the lease then I would pick the lease up at that time and carry it on. Q. Asa matter of fact isnt it true, Mr. Pritchard, that Mr. Tynes wouldn't make this lease with the Seaboard until vou did come inand make a lease which would be co-extensive with this lease and would take its place in the event that the Seaboard Airline receivers would pass out of existence or be merged with some other corporation 4 A. Tecoulda’t answer that question, but Mr. Tynes is here and he could answer it for you. Q. Tam asking you: T thought probably yeu would know that. You say you have a lease with the United Thacker Coal Company covering all of the improvements on the William Anne Property / A. We have a lease on that; ves, sir. @. And you use that property in the production of coal under your contract with the trustees of the Seaboard civ tedeel Vite TNe, puarts., }? rt | evtete Tee casing of this gndtane equipment: for Che pippese td tise lenses. leases and lets the exelusive right dust ~Pated, Pras teenter pen this sane Wilbon Anne leasehold for the pair of nit adel remeviig all the HE per Diiscker Seam of cea underlying satd leasehold. Examiner Casgienn. May DP interpose one question. What is rer White ls the adate of the execntren ef the partrentiap tease cotecrn ver are now testifying. Mr “Pynes? The Wriness. Phe date of the exc nities af this~ iease te saves) Me. Pritchard i of Che execution and delivery of t cmt the delivery. is sipoomeneqiied asthe « hie ‘ | t preapert, tm the Sober receivers, Kxaniner Cantrene. World vou mind fer the purpose of ti ' ry. he Thier adipte ae | the ene Tyo jaan Pied ede divers of that Jen i reasit Pie Worrsess. Phe alate of the acknowledgement by the United Pha iy 4 ch) Coteaprates ism Tite bshiba cheas od uly 1054: by the thre: layoof daly Testoand by Daniel H Pritchord, the vith cay of Aiily Ld, [believe iypom conipatiseti it will be fou that eaehioof thase acknow lecde ments. respeetivelyv as sub eequent fo the correspon bing acknatijedsy tie tof the fease io the ~ abaarel receivers, xcnener Cantrenn. And the lease was. as a matter of fact. deliveredt 4 The Wurrsess. Delivered mannally several day-— evaniiner C ANTRE’ L. Sribsecqrient tar the lust dite of eNecutpen of whieh vou have testified 4 ; The Wrrsess. Yes. Now Part 2 of this lease is nothing in the workt but onr standard form of conventional lease of this William Anne leasehold for coal mining and development: pur: poses In se far as the Upper Thacker Seam of coal is concernesdt, And among the conventional terms is the conventional period H. A. GRAY, ET AL, Vs. LEGH R, POWELL, JR. ET AL, 143 within Which te remove the eoals, HAP Vears, [sit tivuat “Or, eo) Mr. Ansell. its ¢ omipared with five vears as the hat N dun tite ease of the Seaboard, Mio Anse. Pt seems tome that if he ts gomy te be allowed le draw pra lease anil then read in certain portions tat TPoam ered nay to have te insist) thiat the whole lease vo om evidence. DP don’t believe the withess should) be allowed to pick eorGuil parts of the lease and then describe other parts as Dewi conventional or aneouventional, MI. Coc ne, Mr. Plarvinericn here not this heater tite the case ane as asked Mr. Tyne aorithber of questions about this cdeoewu- joent. Now. we are iaterested> in miaking ia ~ phon as Hessible ix enacts What. so fur ae tlits heaping ix TREES the pro- otis sr this lease are wheel: are werhiahe to this ense are. if Mr: 3a fan wants to introduce the entire lease. that is his eal crea bat he shonld not have the right to deny us the right toclurify at by having Mr. Ty iies read inte the record what we rested as the pertinent provistans rod whieh he regards as the pertiy qi PrP ON istonis. Mr. Asser. Prois trie that Mr. Harrington idk speak about the lease. but Doamo net representita Niro Phoreingteons chents. beat MEV OW Th. ] -tute i is contrary to every pute of ex rn ee denice that a Withess Lies ye rhgiitedd tea pen Lynden record before any court those parts of a written ristrinment tliat he wishes to rend. witht pritren tive hay tite evidbener the entire eso tibent. The Wriniss Uf lhe Witht= te Pinthe ua corps of it, the oWher of this dectrament will be very hid te let bine cho gt. Mew Dbanmrwetosn. This ie the scdiie thing me was breneht out on direct examination. vesterday, that thas lense vas im eNistenes between the Lorated Thacker Coal C crnipeuren and Mr. Pritchard, ated VP it is te toe rissecde it praurt of thi- recor | nvked vesterdas that the inetrument be introduced ii evidence, bat thes objected to itoen the eromned it) Was tee eApenisive heeateefit as oa large document. Mie Cae tne. T dort ree al} that. COW the record discussion.) The Wreness. Powould dike the record te show. Mr. Examiner, that this lease frome the two laricthords te Mr. Prit: hare. clated May 1. 1854. was duly ada in the Offiee of the Clerk of the County Court of Mine > minty, West Virginia, on Olete ber 1th, 1935. in Bonds. Contract wind Be ases Boo k No. Ze. page 4)2. Mr. CocKF. DPhiat will probably bee Ie Nivthat rj I) !- dle seGibert : s follows: Trecledits tit of ( ‘ontl Mi Wide ts hart wi k aq })- ment ag Near Delbarton. Minge County. Wet Virginia, 144 WH. A. GRAY, ET AL., Vs. LEGH R. POWELL, JR.. ET AL. 30(266) Being also coal lease at termination of lease of same date to receivers of Seaboard Airline Railway Company. United Thacker Coal Company, Cole & Crane, Trustees, Lessors. to Daniel H. Pritchard, Lessee.” That is the Applicant's case. Examiner Cantrete. Do T understand, Mr. Cocke, that for the purpose of the reeord. avd limited for the purpose of showing the execution of a lease subsequent to the lease from the United Thacker and Cole & Crane to the receivers of the Seaboard Air- line Railway Company. vou are introducing the lease from the United Thacker Coal Company amd Cole & Crane Company, to Mr. Daniel H. Pritchard ¢ wir, Cocke, Ard for, of course, the purpose of showing the document referved to is subject to the prior rights of the receivers of the Seaboard Airline Railway under their lease from United Thacker Coal Company and Cole & Crane, trustees, Examiner Cantreni. And for those purposes vou will submit to the Commission a true and correct copy of the complete Instrument Mr. Cocker. That is correct. Examiner Canrrens., [Ts that satisfactory ¢ Mr. Awsenn. So far as their case is concerned; yes. Examiner Cantrern. Tt will be received in evidence as Apph- can't Exhibit. 30 (267 ) (The document above referred to was received in evi dence and marked as "Appheant’s Exhibit 7.7) Exapiner CAntrenn, Does anyone have any further questions of Mr. Tynes! Ts that your case ‘ Mr. Cooke. That is the Applicant's case, Mr. Harrineros, T have nothing farther. Mr. Awseen. Tf the Court please To wish to move the mitrodue- thon of the entire lease about which there has been controversy, on behalf of the intervenor in this case, District Bonrd No. 8, I believe that the entire lease is pertinent to the subject of thi- hearing and DP believe at all should be a evidence and be con- sidered by the exaniuner, Examiner Canrrens. The entire lease will be considered by the Examiner. “Those portions net offered by the applicant will be considered as offered by the intervenor: is there any ebjection to that? Mr. Cooker. No, Examiner Cantrenn. Are there any further proceedings im thi- particular hearing‘ Tf not it is concluded, (Wherespon oat) 3:45 o'clock, P.M. the bearing wa- conclided.) BO(L6T1.) | Reporters’ certificates to foregoiig: transcript onutied in printing. | H. A. GRAY, ET AL., Vs. LEGH R. POWELL, JR.. ET AL. 145 30 (268) Unirep Srates DEPARTMENT OF THE INTERIOR BITUMINOUS COAL DIVISION Washington, D.C. Docket No. 49-FD Hl (269) Director Gray. The hearing will please come to order, We will now proceed with the oral argument on exceptions to the Examiner's report taken by the Seaboard Air Line Railway Company. Docket No. 49-FD. This is a transeript of the order. to go in the hearing [handing document to the reporter |. (Said order is in the following words :)} Usrrep Starrs DervartMeNntT oF THE TNTERIOR RITUMINGUS COAL DIVISION Washington. D.C. Docket No. 49 FD In the Matter of the Sranoarp Atm Line Raipway Company - AppeLicatioN ror Exesprion CNper Sreetion 4. TT (1) or THe Birtuminous Coan Act or 1937 Notice of continuane of oral arquinent on erce ptians taken to Eacamines x fiiulinds of fact and recomiimne ndations “tothe Examiner’s Findings of Fact and Reconimendation in the ebove entitled matter, heretofore noticed to be heard on the 22nd day ef August 1989. in the Hearmg Room of The Bituminous Coal Division. at the Walker Buitding. 734 15th Street, NW... Washington. D. C.. is. for good cause shown, continued to Sep- tember PZ. at the same places and commencing at the hour of 11:00 a.m. Dated August 15. 1933). ~ x Notice is hereby given, That oral argument on exceptions taken HH. A. (RAY. Dire Chor, T9333. SU(2ZTO) Colloguy Director Gray. Ts counsel for the applicant ready / Mr. Deranry. Mr. Director. TE represent the Seaboard Air Line Railway Company. My name is Williani H. Delaney. Our as- sistant general counsel was to argue this matter: and through : misunderstanding at least this hearing in our knowledge was set for 1 o'clock today. vos ~~ 146 Wo AL GRAY, ET AL, Vs. LEGH BR. POWELL. JR ET AL, Director Gravy. It is merely a typographical error, I will open the hearing and adjeurn it until 2 o'clock. Mr. Drnaxey. T have phoned the airport. and they advise me that the plane gets im at 1:55. DT heve requested them to page Mr. Pobitisten nie have hiuum come here dlirect from the airport: so that it will culy take him a few minutes. Director Gray. That will accommodate everybody, Mr. Detaxey. If it is agreeable with you then that the hear- ing be withheld until then. : Director Gray. Yes. (Whereupon a recess was taken im this ease from 10:05 until 11 clock a.m.) (The following proceedings Vere Yard at Tb: 1h weloek al mes) Director Gray. The hearing will come to order, We will now proceed with the oral argument on the exceptions taken to the Examiner's — findines of fact im Docket Ne. so(vel) 9 FD. In the Matter of the Seaboard Aur Tune Rail “us C naprunay. [Ts counsel for the capepo lic agit ress 4 Mr. Jounston., Yes. -ir. Director Gray. How much time will yeu rake, Mr. Johnston? Mr. Jousstos. Twould like to ask what the nature of this pre- ceeding is. [Ts this an ex parte proceeding or just what nature it , Pirectat Cinay. Counsel for the Divisie th expects to he here. | lon t believe they pitetiel ta Mihe vhs araument, Mer. Minuern. No. We do net intend teoinake any argument. Mr. Jousston. Po think Pecan make my statement reasonably brief. Iuet ine ask vou this previenis te sGitilg how anueh time we will take: Is the Director at all familiar with this record or with the exceptions ¢ Director Gray. No. Mir. slogrxsres. “Uhen i might take mea ditth: longer. Director Gray. Bowill take the oral arguments and take the whole thing mito consideration. Mr. Jouxston. Let me put it this way: To will try to: get through as nearly to hialf an dior as T can. J director (ikAY. All riehit. Are there ay other interested purties Mr. Freneu. My name ts Robert He Freneh. Tam appearing here for District Board No. s. DT world like to make a so(vTz) statement for the purpose of the record when it 1 proper. FP dont want to make any eral argument. I am not prepared to make any oral argument. Director Gray. How long a time do you thing you will take ! Mr. Frencu. Not over two or three minutes. Director Gray. All right. Mr. Johnston. Proceed, H. A. GRAY, ET AL., Vs. LEGH R. POWELL, JR., ET AL. = 147 Avquntu nt Ay Mr. Johnston Mr. Jonson. ‘These are exceptions to the report made by the Examiner to the Coal Commission, as it was then, now trans- ferred to this division. The facts in brief are that the applicants are receivers appointed by the Federal Court im the Eastern Dis- triet of Virginia for the properties of the Seaboard Aur Line Railway.a railroad operating in tive states—-Virginia, North Caro- Lina. South Carolina, Georgia, Florida. and Alabania. “Phe receivers were appointed by the court for the property of the raiiroad in 1930, They have been operating ever since. In 1034, pursuant to court orders authorizing them to do so, the receivers acquired coal in place at three mines. Two of the mines were acquired in 193d and one oh the early part of 190, all ptirstiane to court orders. The mines so aequired, that is to say, the coal bought in place. are located two of the mines in West Virginia and one in the State of Virginin. Those COVE VarTices from the fee owners of 30(273) the coal in place were for a term of years and provided for renewals. which have been made from time to tine. and the renewals are now in effect. The Examiner made detailed findings as te the provisions of those contracts, and I dot think at this time taat the detailed provisions are material. The effect was that the receivers acqtured coal in ptace. Contermporaneous with the execution of those or shortly after the purchase of the coal and the execution of this purchase agree- nent. the receivers made two contracts for the mining of coal for their account. One of those contracts Was with a corpora tion. Whieh imines the coal from the mine in the State of Vir- ginia. The other contract was With an individual, Eo He Pritel ard, who mines the coal for the neconpat of the receivers at the two West Virginia mines. The contract provided: in substance or set up that the agents. in one instance the corporation and oi the other an individual, shall mine the eoal for the account of the receivers, load it ap their cars and ship it in the name of the receivers to thenisel ves it designated locations in the States of Virginia, North Care- lina, and Seuth Carolina. “Phe contracts provide for payment of the agents on a basis of a fixed cost per ton. They are rather complicated instruments, however: and they have alternative provisions for payvnient either on a cost-plus basis or a fined price basis; and they have various provisions for ad- (274) justhent of the pavinenits to the contractors in the event of Inereased social SeCUPLLy or other fixed costs, The contracts, as T say. liave been renewed from time to time; and are now in effect and will be in effeet. as To understand it, about two more years purstiant to the last renewals. 14S H. A. GRAY, ET at... ¥s. LEGH R&R. POWRLL, IK. ET AL. Now, the contracts. that is. the purchase contracts with the fee owners, provide that the receivers shall pay the taxes on the coal In oplace. Toone contract the receivers pay the land taxes direet to the state. and in another the rovalty agreements ineliade an atrount sufficient te take care of the taxes referable to that coal, whieh are patdoin turn by the fee owners. The tax levied under section AL tne one cent tax. 1. petted by the recervers, All of the coal produced at all three mines is entirely con- sumed by the receivers in the operation of the railroad for loco: Inetive coal, The Contl is owned an Place a the receiver 5 and. of course, when extracted is owned by the receivers, Phe title sin them. no tithe passing. Ne formal sate takes place between the agents who are operating the mines for the aceount of the receivers and the railroad.” On those fact-. that are tndisputed, the Exariiner declined to grant the PNCTU PT Long The exemption. as vou know, under Seecion & L. pro- 30(275) vides that the code section 4. the code provision of the wet. shall not ayply te coal consumed by the producer or to con] transported ly the prodineer te himself for COTS tpt lon boy hin. And of course, itisthe pros it ran of the receivers that they [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386401_0466%3A1. Public record. Not legal advice.