Appendix — United States v. General Dynamics Corp.
Supreme Court brief1974
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Volume I—Pages 1464 | MICHAEL Bonk Jn
Supreme Court of the United Staten
OcTOBER TERM, 1973
No. 72-402
UNITED-.STATES OF AMERICA
_ Appellant
V.
GENERAL DYNAMICS CORPORATION, THE UNITED
ELECTRIC CoAL COMPANIES, AND FREEMAN ~
CoAL MINING CORPORATION
ON APPEAL FROM THE UNITED STATES DISTRICT COURT |
FOR THE NORTHERN DISTRICT OF ILLINOIS
2
JURISDICTIONAL STATEMENT FILED SEPTEMBER 8, 1972
PROBABLE JURISDICTION NOTED DECEMBER 11, 1972
Supreme Court of the Anited States
OcTOBER TERM, 1973
No. 72-402
UNITED STATES OF AMERICA
Appellant
—
0 GENERAL DYNAMICS CORPORATION, THE UNITED
ELEcTRIC COAL COMPANIES, AND FREEMAN
* CoaL MINING CORPORATION
*
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
INDEX
Page
Relevant Docket Entries 1
Complaint by the United States filed September 22, 1987 10
Excerpts from Deposition of Frank Nugent, taken September
10-11, 1968 18
Excerpts from Deposition of Nicholas T. Camicia, taken
September 17, 1968 74
Excerpts from Deposition of John M. Morris, taken Septem-
ber 25 & October 1, 1968 99
from Deposition of Frank Frederick Kolbe, taken
October 10, 11, 15, 17, 18, 22, 24, 28, 29, 30, & 31, 1988 126
from Deposition of Robert H. Inman, taken No-
vember 4, 1968 184
Excerpts from Deposition of Joseph C. Tabor, taken Novem- }
ber 8, 1968 214
Excerpts from Deposition of Thomas J. Tarzy, taken No-
vember 14-15, 1968 : 215
II
INDEX
Excerpts from Deposition of Burl Charles Jensen, taken
November 21, 1968
Excerpts from Deposition of Thomas H. Latimer, taken
December 3, 4, & 5, 1968
Excerpts from. Deposition of Joseph J. Gallagher, taken De-
cember 12, 1968
man from Deposition of William I. Kurt, tale Do-
cember 12, 1968
Excerpts from Deposition of Martha Terleke, taken Decem-
ber 16, 1968
Excerpts from Deposition of Charles W. Stadell, taken De-
cember 16, 1968
Excerpts from Deposition of Harold K. Pedersen, taken De-
cember 18, 1968
from Deposition of John P. Maguire, taken De-
23, 1968
Excerpts from Deposition of B. H. Sloane, taken March 7,
1969
Excerpts from Deposition of Hugh E. Petersen, taken March
18, 1969 __.
Excerpts from Deposition of John T. Middleton, taken March
18, 1969 -
Excerpts from Deposition of P. W. Dorrane, taken March 20,
1969 2
Excerpts from Deposition of Leon King, taken March 25,
1969
Excerpts from Deposition of Josephine C. Burton, taken
April 14, 1969
Excerpts from Deposition of John P. Nix, taken April 14,
1969
Excerpts from Deposition of Aldo P. Brazzale, taken April
14, 1969
Excerpts from Deposition of Clarence V. Beck, taken April
16, 1969
291
m
INDEX
“i
Excerpts from Deposition of Winford C. Peterson, taken
April 18, 1969
Excerpts from Deposition of Harold S. Walker, Jr., taken
Aprii 18, 1969
Excerpts from Deposition of William J. Stanley, taken An
24, 1969
— Fes. ee Oe ee
1 :
Excerpt from Deposition of William D. Stiehl, taken May 20,
1969
7.
Excerpts from Deposition of Reuben A. Redard, taken June
10, 1969
„„ Gaunt, taken June
3, 1
Excerpts from Deposition of Gordon J. Morrison, taken June
20, 1969
Excerpts from Deposition of John Samuel Moore, taken June
20, 1969 a
P
June 23, 1969
Excerpts from Deposition of Leroy M. Abrahamson, taken
June 26, 1969
a Gamble, taken June
1969
Excerpts from Deposition of Jack A. Simon, taken July 31,
1969
Excerpts from Deposition of John E. Organ, taken August
1, 1969
Excerpts from Deposition 1 John Paul Weir, taken August
5, 1969
trom Deposition of S. Smith Griswold, taken August
N
—
19, 1969
675
678
Excerpts from Deposition of Bruce C. Netschert, taken Au-
gust 20, 1969 731
Excerpts from Deposition of Abraham Gerber, taken Au-
gust 21, 1969 764
Excerpts from Deposition of Peter O. Steiner, taken October
7-8, 1969 781
The Stipulated Testimony of C. C. Smith, dated December 4,
1968 ’ 832
The Stipulated Testimony of J. R. Sinclair, dated July 9,
1969, and attached exhibits 1-4 838
The Stipulated Testimony of George H. Shipley, dated July
10, 1989 848
The Stipulated Testimony of George B. Knecht, dated Sep-
tember 3, 1969, and attached exhibits 1-10 851
The Stipulated Testimony of David G. Hemminger, dated
September 17, 1969 869
The Stipulated Testimony of John Sant, dated September
17, 1969 870
Excerpts from Transcript of Proceedings before Hon. Edwin .
A. Robson, United States District Judge for the Northern
District of Illinois, Eastern Division, on October 3, 1969... 872
Motion of Frank F. Kolbe to be excused from testifying at
trial, and attached letter dated March 4, 1970 875
Defendants’ Proposed Findings of Fact and Conclusions of
Law filed October 27, 1970 880
Excerpts from Transcript of Proceedings held before the
Hon. Edwin A. Robson, United States District Judge for
the Northern District of Illinois, Eastern Division, com-
mencing March 30, 1970:
Appearances . 1017
Testimony of Jack A. Simon
—cross 1018
—redirect 1037
—direct
V
INDEX
Excerpts from Transcript of Proceedings held before the
Hon. Edwin A. Robson on March 31, 1970:
Appearances
Testimony of John M. Morris
—direct
Excerpts from Transcript of Proceedings held before the
Hon. Edwin A. Robson on April 1, 1970:
Appearances
Testimony of John M. Morris (resumed)
—cross
Testimony of Louis R. Tomey
—direct
—redirect
—recross
1044
1098
1105
1116
1128
1132
Excerpts from Transcript of Proceedings held before the
Hon. Edwin A. Robson on April 2, 1970:
©
Appearances
Testimony of John M. Morris (resumed)
—cross
—recross
Testimony of Reuben Thorson
. —direct
Excerpts from Transcript of Proceedings held before the
Hon. Edwin A. Robson on April 3, 1970 :
Appearances
Testimony of Victor H. Wood
—direct _-
1134
1135
1164
1164
vi
INDEX
Page
Excerpts from Transcript of Proceedings held before the
CCC
Testimony of A. H. Davis (resumed)
—cross 1219 i
—redirect 1227
—recross 1229
i
—cross 1250
Testimony of Reuben Thorson
—cross 1255
Excerpts from Transcript of Proceedings held before the
Hon. Edwin A. Robson on April 7, 1970:
Appearances 1262 |
Testimony of Robert W. Steele |
—direct 1263
— 1269
redirect 1279
Testimony of Thomas H. Latimer
. —direct 1282
—cross 1284
Excerpts from Transcript of Proceedings held before the
Hon. Edwin A. Robson on April 8, 1970:
Testimony of E. C. Hill
—direct de 1290
—cross 4 1305
Testimony of Richard Drollinger
Vil
INDEX
Excerpts from Transcript of Proceedings held before the
Hon. Edwin A. Robson on April 9, 1970:
Appearances
Testimony of George Gamble
—direct
—cross 2
—recross .
Testimony of Thomas Latimer (resumed)
—cross
Excerpts from Transcript of Proceedings held before the
Hon. Edwin A. Robson on April 13, 1970:
Appearances
Testimony of Nicholas T. Camicia
—direct :
—cross .
redirect
Testimony of Samuel F. Sherwood
—direct
—cross - A.
—redirect
Testimony of Norman W. Moser
—direct
—cross 2
Excerpts from Transcript. of Proceedings held before the
Hon. Edwin A. Robson on April 14, 1970:
Appearances
Testimony of Norman W. Moser (resumed)
—cross
—redirect
Testimony of Gordon R. Corey
—direct
4
Page
1328
1351
1354
1355
1362
1370
1372
1377
1384
1385
1391
1398
1399
1402
1404
1421
1443
1444
1446
INDEX
Page
Excerpts from Transcript of Proceedings held before the
Hon. Edwin A. Robinson on April 14, 1970:—Continued
Testimony of John D. Ames
from Transcript of Proceedings held before the
Hon. Edwin A. Robson on April 15, 1970:
Appearances 1456
Testimony of Daric N. Miller
direct 147
Testimony of Frank Nugent
Excerpts from Transcript of Proceedings held before the
Hon. Edwin A. Robson on April 16, 1970:
Appearances 1487
Testimony of Hollie Hopper
—recross 1514
Testimony of Frank Nugent (resumed)
—direct 1515
Excerpts from Transcript of Proceedings held before the
Hon. Edwin A. Robson on April 17, 1970:
Appearances 1540
» Testimony of Thomas L. Craig
Excerpts from Transcript of Proceedings held before the
Hon. Edwin A. Robson on April 20, 1970:
INDEX
Excerpts from Transcript of Proceedings held before the
Hon. Edwin A. Robson on April 20, 1970:—Continued
Testimony of Peter O. Steiner
7 — 1862
Testimony of Robert H. Quig
direct 1593
—cross 1598
—redirect 1599
Testimony of Peter O. Steiner (resumed)
—direct 1601
Excerpts from Transcript of Proceedings held before the
Hon. Edwin A. Robson on April 21, 1970:
Appearances 1630
Testimony of Peter O. Steiner (resumed)
—cross 1631
—redirect 1672
—recross 1677
Excerpts from Transcript of Proceedings held before the
Hon. Edwin A. Robson on April 22, 1970:
Appearances 1678
Testimony of James M. Folson -
—direct 1681
—cross 1695
—redirect . 1711
*Decision on the Merits entered by the District Court on
April 13, 1972 JS. 1
Notice of Appeal to the Supreme Court by the United States
dated June 7, 1972 1717
Order of the Supreme Court noting probable jurisdietion.
dated December 11, 1972 1718
* Not reprinted in Joint Appendix. Citation is to appendix of
Jurisdictional Statement.
1°
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
Civil Action No. 67 C 1632
UNITED STATES OF AMERICA, PLAINTIFF
V.
GENERAL DYNAMICS CORPORATION,
THE UNITED ELECTRIC COAL COMPANIES AND
FREEMAN COAL MINING CORPORATION, DEFENDANTS
RELEVANT DOCKET ENTRIES
Date
1967
September 22 Filed Complaint and 8 copies
October 17 On stipulation order time for defendants to
answer, move or otherwise reply to complaint
hereby extended to and including Nov. 20,
1967.
DRAFT-Robson, J.
1968
March 21 Filed letter re interrogatory No. 54 from
| attorney for plaintiff.
July 16 Enter Pretrial Order No. 1 (DRAFT). En-
ter Protective Order with respect to defend-
ants documents (DRAFT). Enter Order with
respect to defendants Claim of Attorney-
Client Privilege (DRAFT).
ROBSON, J.
September 9 Filed Stipulation and Protective Order cover-
ing disclosure to defense counsel of informa-
tion received by Plaintiff from Coal Com-
panies and Coal Purchasers
Knecht with exhibits 1 through 10 attached.
Pre trial conference held. Order proposed
findings of fact, etc., to be submitted by No-
vember 17 and cause set for further pre-trial
conference on December 5, 1969 at 2 p.m.—
Robson, J.
March 31
April 1
April 1
April 2
April 3
April 6
April 7
April 8
Filed Plaintiff's pre-trial brief.
Cause called for trial. Opening statements
made. Evidence heard for government. Gov-
ernment rests. Order any motions to be made
by defendant to be entered and considered
with case itself. Evidence heard in part for
March 31, 1970—Robson, J.
cause adjourned until April 1, 1970—Robson,
J.
Filed defendant’s motion to dismiss at the
close of plaintiff's case
Further evidence heard for defendant—order
cause adjourned until April 2, 1970—Robson,
J.
Further evidence heard for defendant. Order
cause adjourned until April 3, 1970 at 9 a.m.
—Robson, J.
Further evidence heard for defendant—order
cause adjourned until April 6, 1970—Robson,
J.
Further evidence heard for defendant. Order
cause adjourned until April 7, 1970—Robson,
J.
Further evidence heard for defendant—Order
cause adjourned until April 8, 1970—Robson,
J.
Further evidence heard for defendant order
cause adjourned until April 9, 1970—Robson,
J.
April 13
April 14
April 14
April 14
April 15
April 16
April 17
April 20
Further evidence heard for defendant—
Order cause adjourned until April 13, 1970
Robson, J.
Further evidence heard for 8 Order
cause adjourned until April 14, 1970—Rob-
son, J.
Further evidence heard for defendants. Or-
der cause adjourned until April 15, 1970—
Robson, J.
Filed Defendants’ response to plaintiff’s mem-
orandum request that it be allowed to call
rebuttal witnesses for purposes other than
those originally W
to the defendants.
Filed Plaintiff's reply to defendant’s objec-
tion to the expended scope of questions possi-
bly to be asked of two of plaintiff’s rebuttal
witnesses.
Court rules orally from bench—Order plain-
tiff's motion to expand rebuttal testimony
hereby granted—Further evidence heard for
defendant—order cause adjourned until April
16, 1970—Robson, J.
Further evidence heard for defendant. Order
cause adjourned until April 17, 1970—Rob-
son, J.
Rebuttal evidence heard in part for govern-
ment. Order cause adjourned until April 20,
1970—Robson, J.
Evidence heard in part for defendants. Evi-
dence heard in part in rebuttal for govern-
ment—Order cause adjourned until April 21,
1970—Robson, J.
May 12
May 12
May 12
May 20
May 20
June 8
June 15
June 15
August 3
August 28
until May 1, 1970 at 11 a.m. to rest formally
and to set briefing schedule on the merits—
Robson, J.
Filed Subpoena ad testificandum returned
served on Glen W. Beeman—$2.
Filed Subpoena ad testificandum returned
served on M. A. Shumate. $2.
Filed Defendants’ motion to strike certain
Government exhibits.
Filed Notice
Filed Government’s memorandum in opposi-
tion to defendants’ memorandum in support
of its motion to strike certain Government
Exhibits
defendants’ motion to strike certain Govern-
5 ment Exhibits.
Filed Notice
Filed Response to Defendants’ Reply to Gov-
ernment’s memorandum regarding objections
to Government Exhibits
Filed Government’s post trial brief, (findings
of fact and conclusions of law).
Filed Corrections to Government’s post trial
brief, findings of fact and conclusions of law
filed August 3, 1970.
April 18
June 7
October 27
presentation of a certified copy of this Order
Filed defendant’s reply to plaintiff’s proposed
findings of fact and conclusion of law.
Filed Defendant’s Post-Trial Brief.
Filed correction to defendant’s reply to plain-
tiff’s proposed findings of fact and conclusion
of law.
Filed Government’s response to Defendants
proposed findings of fact and conclusions of
law.
Filed Plaintiff’s Post Trial Reply Brief.
Enter agreed order permitting sale of one-
half interest in Midwest Towing Company,
Inc., with proceeds of sale to be placed in
escrow—Robson, J. (DRAFT)
It is ordered that judgment be and it is here-
by rendered for the defendants. It is further
ordered that the complaint be and it is hereby
dismissed. It is further ordered that costs be
assessed against the plaintiff. (Draft) Rob-
son, J.
Filed notice of appeal to the Supreme Court
of the U.S. by the United States of America.
It is hereby ordered that all funds presently
deposited under the terms of Escrow Agree-
ment dated March 11, 1972 between United
Electric Coal Companies and the First Na-
tional Bank of Chicago are to be released to
the United Electric Coal Companies upon
1972
December 18
Filed depositions of Frank Frederick Kolbe in
12 volumes.
Filed deposition of Harold S. Walker, Jr.
Filed deposition of P. W. Dorrance
Filed deposition of George P. Gamble
Filed deposition of Bernard W. Schotters.
Filed deposition of Leroy M. Abramson.
deposition of Abraham Gerber.
Filed deposition of John Paul Weir.
Filed deposition of Leon King.
Filed deposition of Jack A. Simon.
Filed deposition of John P. Nix.
Filed deposition of Aldo P. Brazzale.
Filed deposition of Josephine C. Burton.
Date
1973
February 5
February 5
February 5
February 5
February 5
February 5
February 5
February 5
February 5
February 5
February 5
February 5
February 5
February 5
February 5
February 5
February 5
February 5
February 5
February 5
February 5
February 5
February 5
Filed deposition of William J. Stanley.
Filed deposition of William D. Stiehl.
Filed deposition of Thomas N. Ward.
Filed deposition of John Samuel Moore.
Filed deposition of Joseph J. Gallagher.
Filed deposition of William L. Kurtz.
Filed deposition of Reuben A. Redard.
Filed deposition of Harry B. Gaunt.
Filed deposition of Winford C. Peterson.
Filed deposition of John E. Organ.
Filed deposition of Gordon J. Morrison.
Filed deposition of S. Smith Griswold.
Filed deposition of Hugh E. Petersen.
Filed deposition of Bruce C. Netschert.
Filed deposition of Peter O. Steiner in two
volumes.
Filed deposition of Thomas H. Latimer in two
volumes.
Filed deposition of John M. Morris in two
volumes.
Filed deposition of Robert H. Inman.
Filed deposition of Joseph C. Tabor.
Filed deposition of Thomas J. Tarzy in two
volumes.
Filed deposition of B. H. Sloane.
Filed deposition of John P. Maguire.
Filed deposition of Harold K. Pedersen.
Filed deposition of Charles W. Stadell.
Filed deposition of Martha Terleke.
Filed Plaintiff’s Exhibits in Twenty (20)
Volumes.
Clerk’s file copy of transcript of proceedings
had before Hon. Edwin A. Robson, on
26, 1969, May 1, 1969 in 2 volumes, July 8,
1969, July 14, 1969, September 4, 1969, Oc-
tober 8, 1969, November 5, 1969, January 30,
1970, February 13, 1970, March 4, 1970,
March 13, 1970, March 30, 1970, April 7,
1970 in 2 volumes, April 8, 1970 in 2 volumes,
April 9, 1970 in 2 volumes, April 18, 1970 in
2 volumes, April 14, 1970, April 15, 1970 in 2
volumes, April 16, 1970 in 2 volumes, April
17, 1970, April 20, 1970 in 2 volumes, April
21, 1970 in 2 volumes, April 22, 1970 in 2
volumes, May 1, 1970, March 30, 1970 in 2
volumes, March 31, 1970 in 2 volumes, April
1, 1970 in 2 volumes, April 2, 1970 in 2 vol-
umes, April 3, 1970, April 6, 1970 in 2 vol-
umes, June 30, 1970 and June 8, 1971, Filed
by the Official Court reporter in 48 Volumes.
Filed Defendant’s Exhibits in 21 Volumes.
10
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
; EASTERN DIVISION
Civil Action No. 67 C 1632
UNITED STATES OF AMERICA, PLAINTIFF
v.
GENERAL DYNAMICS CORPORATION,
THE UNITED ELECTRIC COAL COMPANIES AND
FREEMAN COAL MINING CORPORATION, DEFENDANTS
Equitable Relief Sought
Filed: September 22, 1967
COMPLAINT
The United States of America, by its attorneys, acting
under the direction of the Attorney General of the United
States, brings this action against the defendants named
herein, and complains and alleges as follows:
I
JURISDICTION AND VENUE
1. This complaint is filed and this action is instituted
under Section 15 of the Act of Congress of October 15,
1914 (15 U.S.C. § 25), as amended, commonly known as
the Clayton Act, in order to prevent and restrain the
violation by the defendants of Section 7 of that Act.
2. Each of the defendants is found and transacts
business within the Northern District of Illinois, Eastern
Division.
II
DEFENDANTS
3. General Dynamies Corporation (hereinafter referred
to as GD“) is named a defendant herein. GD is a corp-
manufacture and sale of a wide variety of products
sociated with, among others, the defense, space, nuclear,
and electronic industries. GD, through subsidiaries, is
also engaged in the mining and sale of coal. For the
year ended December 31, 1965, GD had net sales of
$1,472,785,000 and net profit after taxes of $49,269,000.
4. The United Electric Coal Companies (hereinafter
‘referred to as “UEC”) is made a defendant herein. UEC
is a corporation organized and existing under the laws
ended December 31, 1965, 20 had net sales of $21,808,-
576 and net profit after taxes of $2,467,744.
5. Freeman Coal Mining Corporation (hereinafter re-
ferred to as ‘ ”) is made a defendant herein.
Freeman, an Illinois corporation with its principal office
4 ines,
all of which are located in the State of Illinois. In 1965
Freeman had net sales of $81,665,837 and net profit after
taxes of $1,114,220.
III
DEFINITIONS
6. The Eastern Interior Coal Province is defined as the
bituminous coal field which blankets sixty-seven per cent
of Illinois and much of southwestern Indiana and western
Kentucky.. This bituminous coal field constitutes a single,
large bituminous coal region which is geologically united.
2 The Eastern Interior Coal Province sales area is
TRADE AND COMMERCE
8. Bituminous coal represents one of the
F
most
215
112
Ine A es
75
eel 17725
al
hia THe 1 :
A 8
itt gif 1114474
17 Lilli
He nL
1
e 11 41117
e
8112711 1211141 222 15 15
HE
Vv
OFFENSE CHARGED
21. Material Service Corporation, as of December 30,
Riera
ae 11 ae 15 rt)
211 sa 4
1
8
i
77 1167
2 a i at i 5
8 333
1 15 10 U 145
1 1 ali | 1 0 7 i
ial iat 1 1 il : i
1 1 1 Bs
0
175
16
(a) Taking any further action to change, directly or
indirectly, the operation of the business of UEC
or the personnel connected with such operation;
and
(b) Shifting sales, personnel, or equipment or any as.
sets whatsoever UEC to any of the mines and
facilities of GD and Freeman.
3. That GD be required to divest itself of all the stock
nt UN ee
tion.
4. That GD and Freeman be enjoined from acquiring
stock or assets of any other firm engaged in the produc-
tion or sale of bitmuinous coal in the State of Illinois or
in the Eastern Interior Coal Province.
5. That the plaintiff have such other and further relief
which the Court may deem just and proper.
6. That the plaintiff recover the costs of this suit.
Dated:
/s/ Ramsey Clark
RAMSEY CLARK
Attorney General
/s/ Donald F. Turner
DoNALD F. TURNER
Assistant Attorney General
/s/ Baddia J. Rashid
Bao J. RASHID
JOHN E. SARBAUGH
BERTRAM M. LONG
Attorneys, Department of Justice
EDb wan V. HANRAHN
United States Attorney
Joun T. Cusack
Attorney, of Justice
Room 2634 United States Courthouse
AFFIDAVIT
STATE OF ILLINOIS
; 88
COUNTY OF COOK )
JOHN T. CUSA i sworn,
t
States Department of Justice; that he has
ig
if
engaged in the preparation of this proceeding ; that he
has read the foregoing Complaint and knows the contents
and is familiar with the subject matter thereof; that he
is informed and believes that the allegations of fact
contained therein are true; and that his information con-
Subscribed and sworn to before me this day of
» 1967.
Ka M. Rei
2
My commission expires March 22, 1969.
18
{8]
EXCERPTS FROM DEPOSITION OF
FRANK NUGENT,
TAKEN SEPTEMBER 10-11, 1968
FRANK NUGENT,
called as a witness by the plaintiff herein, having been
by me, the said Frances B. Spina, as Notary Public
aforesaid first duly sworn, was examined upon oral in-
terrogatories and he did thereupon depose and testify
as follows:
DIRECT EXAMINATION
BY MR CUSACK:
Please state your full name.
Frank Nugent.
What is your home address?
1630 Sheridan Road, Wilmette, Illinois.
By whom are you employed, Mr. Nugent?
General Dynamies Corporation.
And what is your position at General Dynamics?
Group Vice-President.
And where is your office located?
300 West. Washington Street.
Could you give us a little something about your
educational background, Mr. Nugent?
[4] A Evanston High School, a good many years ago,
and I can’t tell yeu the year, plus night school work, and
so forth; private tutoring, I guess you could say.
Q When did you first go into business?
A I went in the coal business in 1920 with the Rock
Island Coal Mining Company. I remained there for a
short period of time, and then went to work for the
Freeman Coal Mining Corporation on November 14, 1921.
Q Was Freeman at that time headquartered in Chi-
OPOPO PO PO Po
A Yes. ;
19
V
12 1 11
ii a 3] 2
Hee al HE i! :
a eee)
11 4181 151. 31 :
75 Fi 1 ljittee
ig hig l
17537 ie 111 is +? 16113 11
22172127 ul 1 114442 5275
iger seg,
1 ff J
821 Hi 11 41
1 1 1
1 rE 1 1
if 375 45 32 5
4 Ar 1
giles 127 i 773
MeL shade 155
145TH f igs
< See
Q
A
Q Daler Ve teins ns tel
A It was a small mine, I think two or three thousand
tons a day.
Q Do you recall how much this cost Freeman?
A No, I don’t.
how many mines did Freeman operate?
A I think we had operated the Bobby Dick Mine and
Seymour Mine, and we built a mine that we called Free-
burn. I don’t recall the year that we put that mine in.
Q Do you know where that mine was located?
[7] A It was located adjacent to the mine that was
owned by the Cosgrove Coal Company, just outside of
Herrin and off Highway 37, just to the west of Highway
87 and a little north of Johnson City.
Q Do you recall the approximate production of that
mine, sir? :
A It was around, I think 3,000 tons a day, 4,000,
see. Going then to the late 1930’s and the early
how many mines did Freeman operate?
A We next put in the No. 4 Mine. I believe that was
in 1942 or thereabouts, and it was over near a little town
there. I can’t think of the name there, but it was in
the No. 4 mine at Williamson County.
Q
A
a Directing your attention, then, sir, to 1942, you
A Yes.
approximately the same,
that would again be 800,000 tons.
A 7a:
A That is a long time back. I guess around two or
three thousand tons a day.
2 Two or three thousand tons a day?
Q
Western Railroad in 1932, any further acquisitions of
1 between 1932 and 19427
0. 5
* * * *
[13] Q In what year did Material Service [14] ac-
quire Freeman and Burton?
22
In 1942. Not Burton. At that time I don’t believe
oeh,
I believe we went under the name of Freeman in
although I am not sure.
When Material Service purchased Freeman, did
Freeman become a wholly-owned subsidiary of Material
ee
A Yes.
Sfr
F
b
5
é
a
[44] Q I would appreciate, sir, if you would check on
the 1966 dividends of Freeman, which may or may not
be indicated in Nugent Deposition Exhibit 8-A.
Now, Mr. Nugent, let’s go back a little bit and try to
get through quickly here the history of Freeman.
In 1953 or 1954 Freeman was a wholly-owned subsidi-
ary or controlled by Material Service Corporation, is
that correct, sir?
A Yes.
And it was headquartered here in Chicago?
A Yes.
Q And you were President at the time, sir?
A I don’t recall. I have been President, I think for
ten or twelve years. I would say perhaps so, either Pres-
ident or Executive Vice-President.
[109] MR. HEDLUND: I think there may have been
some confusion in the mine numbers, which Mr. Nugent—
MR. CUSACK: Off the record.
55
MR. HEDLUND: Let’s stay on the record.
MR. CUSACK: All right, stay on the record.
MR. HEDLUND: —which Mr. Nugent may have
used. I was not certain. I thought that there. may have
been some confusion between Orient No. 3 and Orient
No. 5, but when we get the transcript back we can make
sure.
MR. CUSACK: Certainly.
BY MR. CUSACK:
Q What I am trying to establish now, Mr. Nugent, is
of the four Freeman mines now in operation, Orient No.
8, Orient No. 4, Orient No. 5 and the Crown Mine, and
the Orient No. 6 Mine which will be in production in
1968, this year, which of these mines have unit train
loading facilities?
A At the present time only Orient No. 5, and a unit
train loading facility is being constructed at Orient No.
6
Q Orient No. 6 and Orient No. 5 are both in the
Southern Illinois Freight Rate District?
[110] A Southern Illinois Freight Rate District, yes.
Q The Crown Mine is located at Farmersville in Mont-
gomery County, Illinois, is that correct, sir?
A Yes, sir.
Q That is about 30 miles south of Springfield?
A Approximately 25, I think.
Q Where does the production of this mine go?
A Two million tons a year, or a little less than that,
goes to the Commonwealth Edison Company.
Q What destination, sir?
A It's usually shipped to Havana, Illinois, for loading
into barges.
Havana is located on the river?
A On the river, on the C. & I. M. Railroad.
Q That is the Chicago and Illinois Midland?
A Chicago and Illinois Midland.
2 Is it then shipped by barge into the Chicago area?
Q
O
Yes, to Edison stations.
Do you know by any chance which particular sta-
tions it goes to?
10
a To all of them at one time or another.
Q To all of the facilities. ;
[111] MR. HEDLUND: To all of the river stations.
BY THE WITNESS:
A All of the river stations, of course.
BY MR. CUSACK:
The same stations served by United Electric
its barge?
A Les, sir.
Q Barge line I should say.
A Yes, sir.
Q Through its production from Fulton County?
A The Buckheart Mine.
Q 3% oe ‘el
the Orient No. 5 Mine goes?
A It is pretty generally spread. We have started to
ship on a unit train contract to the Union Electric Sioux
Plant. It’s not now moving at the rate of a million tons
per year, and it will be moving at that rate at a later
date, but in the meantime the movement of that coal is
pretty widely spread.
10 Does any of this coal go into Wisconsin, for exam-
Pp
A Yes, some of it does go into Wisconsin.
Q Could you tell me whether it goes up directly on
rail to Wisconsin?
[1121 A Up to the time that the Rail-To-Water Facil-
ity, or prior to the time that the Belt Railway was on
strike, it moved over the lake to Wisconsin Electric Pow-
er, Wisconsin Public Service, and others.
Q Could you explain, sir, for the purposes of the rec-
ord, just a little bit on how the coal goes? Does it go by
rail from Orient No. 5?
A The coal would go by rail from Orient No. 5 by the
Illinois Central Railroad, and it could go by other roads
to Chicago. At Markham, Illinois, an Illinois Central
transfer point, it’s turned over to the Belt Railway. The
Belt Railway carries it to a Rail-To-Water transfer fa-
cility. That is located at about 103rd street on the river.
The Belt Railway has been on strike some four weeks,
and movement has been interrupted and now the coal is
moving elsewhere.
Q Could you give us some idea of the amount of the
production of Orient No. 5 that ended up in Wisconsin
in 19677
A Well, it would be a guess because we put coal into
Wisconsin Electric Power from all mines in Southern
Illinois. Coal could move from 3, 4 or 5.
Q Orient No. 3, 4 or 5?
11131 A I don’t have any direct knowledge as to how
much came from each property.
Q But it does move from each of the three Orient
Mines, Orient 3, 4 and 5, into the Wisconsin area?
A Les, sir. ;
Q Does it go to Sheboygan?
A No, it goes to Oak Creek.
Q Where is that located, sir?
A Oak Creek is this side of Milwaukee.
Q Is it on Lake Michigan?
A On Lake Michigan.
Q Does Freeman supply any facilities in Wisconsin
282 of the Lake Michigan Shore, other than at Oak
A Tou mean rail shipments to points?
Q Yes, sir.
A Yes, I’m sure we do, but I couldn't name the ac-
e vou. They may be small.
see.
We have established that most of the production of
Crown Mine goes by combination of rail and barge to
Commonwealth Edison.
A Yes, sir.
[114] Q On its river-served plants.
A Yes, sir.
Q We have also established that Orient 5’s production
is fairly well distributed at the present time.
A Yes, sir.
Q Do you know if any of the Orient 5 production goes
into Tennessee to TVA?
A Yes. I think it does, but not necessarily into Ten-
nessee. It would go into the Shawnee plant on the Ohio
River, just across from Joppa, Illinois.
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very large percen
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coal?
22
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—
5
?
MR. HEDLUND: A general average for all custom-
ers?
MR. HEDLUND: Are you asking for all customers?
percentage of that would be [118] attributed to trans-
MR. CUSACK: Just as a general rule.
portation
I would like to have the question
MR. CUSACK: Yes.
Q (Read by the reporter.)
MR. HEDLUND:
I am not certain that I understand
185 ai
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as I understand is
mining business—
have been able to shi
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which
their coal
Is that a fair state-
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greater distances.
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Q You could have it blended at the destination
22
FS
11
F
(WHEREUPON the taking of the deposition of
FRANK NUGENT was adjourned to Wednesday,
September 11, 1968 at 10:00 o’clock a.m.)
11981 Q Mr. Nugent, the freight rate of the mines
located within the Belleville District is less than that of
,the mines located in the Southern Illinois District for
Q Would you tell us approximately how much less on
a carload lot?
A In the neighborhood of 12 to 15 cents a ton less
ee Gee ene wate ace x
1 ugent, I assume that any mine in the Be
marketing
area obtains a unit train rate, it can ship its coal cheap-
er than that coal mined in a Freight Rate District closer
to that producing area?
A Not necessarily.
Q Will you please answer.
A If the Sioux plant is on the Burlington Railroad,
and since it is on the B Railroad, the No. 5
mine is able to ship to the Sioux plant without involving
12131 Q Is it not a fact, Mr. Nugent, that [214] the
Commonwealth Edison Com does not purchase coal
A This term “Eastern Interior Coal Province” is new
to me in this case, but if by that you mean Illinois, Indi-
MR. HEDLUND: Mr. Cusack, I think the document
speaks for itself. Now, I do not un
: nderstand what you
mean by the question, “What does it indicate to you?”
er
57
2
5
i
‘
5
1
f
9 5
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E
LES
:
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1.
i
8
and for Midwestern coal.
MR. CUSACK: Off the record, please.
(There was a discussion off the record, after which
. the taking of the deposition was resumed as follows:)
MR. CUSACK: On the record.
BY MR. CUSACK:
Q Mr. Nugent, I ask you again to re-examine Nugent
Deposition Exhibit 39-B, including the heading, including
the statement on the top which has an asterisk and then
the following statement:
“Denotes use of additional coal from sources other
than Illinois, Indiana and West Kentucky.”
I want you to examine this, please, sir, and tell us what
this document means to you in regard to the listed utili-
ties.
A Well, first, it may not be entirely accurate, and I
do not know that the consumption figures indicated here-
1
. SN eants in Tennessee and tees
Tennessee coal, obviously there al from Tennessee,
1 and perhaps West Virginia, that went
into the TV
2 Is this for the TVA Eastern Tennessee plants?
A Yes.
12171 A Yes, sir.
A That is reasonably correct.
Q Is it fair to say from this statement, that is, Nu-
gent Deposition Exhibit 39-B, that the coal consumed by
Commonwealth Edison is produced mostly in the State of
Illinois, that is, in 1968, 10,450,000 tons of coal mined
in Illinois was consumed by Commonwealth Edison out
of its total purchases of 11,350,000 tons?
A Yes, sir.
Q On the basis of this document, Mr. Nugent, do you
feel that the public utility companies located in the State
of Illinois purchase most of their coal from mines located
in Illinois?
A Les, sir.
Q Could you give us the
A Basically transportation costs.
Western [218] Kentucky, that is, in mining Districts 9,
10 and 11, enjoy a favorable competitive advantage over
to customers located in Illinois, Indiana, Western Ken-
tucky, Missouri, Southeastern Minnesota and most of Wis-
consin
MR. HEDLUND: May I have the question read,
MR. EISEN: I am sure there was not any—
MR. HEDLUND: I will ask the Court to
transcri in the record so that it is clear that I
MR. HEDLUND: I ask that the Court Reporter tran-
scribe into the record what I have on that piece of paper.
MR. YOUKER (Notary Public): Let the record show
that Mr. Hedlund has handed me a yellow sheet of paper
on which appear the following inscriptions:
In the upper left-hand corner, “Freight Rate Districts”,
and two lines underneath that, “Unit rate possible”, and
two lines beneath that, “Joliet, arrow only R.R.”
Each of those notations has an arrow preceding it,
pointing to the right.
In the upper right-hand corner there are two columns
of what appear to me to be abbreviations.
The left-hand column appears to read as follow:
[220] The right-hand column appears to read as follows:
“Ohio
Penn.
E. Ky.
W. Va.
Va.”
1
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24 3 4.5
di igi
APL
iba!
1
FE 18 gee
A
36
BY THE WITNESS:
A This is a rather involved question, and I think it
could be simply stated in this fashion: I would like to
state it in my own language and see if I have correctly
inter- [222] preted it. :
The question is, do the producers of coal in Illinois,
Indiana and Western Kentucky have an advantage in
serving customers in the Middlewest as against producers
in fields other than Illinois, Indiana and Western Ken-
tucky?
Is that the question in brief?
MR. CUSACK: You may answer that question.
BY THE WITNESS:
A Yes. The producers in Illinois, Indiana and West-
ern Kentucky do have an advantage over producers in
other districts in the territory that you have outlined.
BY MR. CUSACK:
Q What I am trying to delimit, Mr. Nugent, is the
general borders of the area in which the Midwestern pro-
ducers, that is, the producers operating mines in Mining
Districts 9, 10 and 11, have an advantage over coal pro-
duced in other districts.
A Yes. f
I think we established, at least in [223] regard
the TVA utility plants located in Tennessee, that the
TVA plants located in Eastern Tennessee were supplied
with coal by mines located in Eastern Tennessee and in
Eastern Kentucky, while the TVA plants located in West-
ern Tennessee were supplied, by and large, with coal
produced in Western Kentucky and in Illinois.
A Les, sir.
Q Iam trying to delimit, somewhat at least, the boun-
daries here. Now, in regard to the boundary of Western
Kentucky, that is, Western Kentucky being an area
where customers located within Western Kentucky are
served by the coal produced in Western Kentucky, IIli-
nois and Indiana. Is that correct? ;
A Would you restate that, please?
MR. CUSACK: Will you read the question, please,
Mr. Youker.
37
Q (Read by the Reporter.)
BY THE WITNESS:
A I am confused with that. I think that indicates
that. Indiana coal or Illinois coal is used by customers in
Western Kentucky. Is that [224] the question?
MR. CUSACK: Yes, sir.
BY THE WITNESS:
A The word “customers” plural, would indicate some-
body other than TVA.
Now, the TVA has a plant, the Shawnee plant, which
is located in West Kentucky, but I know of no other
plant in Western Kentucky that is served by producers
in Indiana and Illinois.
BY MR. CUSACK:
istri 10 and 11 has a competitive ad-
vantage, let's discuss the State of Iowa.
Could you us what portion of Iowa, in your
pinion, uses coal, most af which is mined within Illinois
Q In regard to the state of Minnesota, will you tell
us that portion of Minnesota which, in your opinion, uses
Kautunien is mined within Illinois, Indiana and Western
A ppt River and minnesota that are served on the
Mississippi iver and served barge, secure their coal
in limited quantities moving to perhaps some plants on
The plants in Minnesota, in the northern part of Min
Q Does not coal mined from the Fulton-Peoria Mining
istri also go into plants in Minnesota?
. gon
wine areas in Wisconsin where Midwest coal, that
coal mined in Illinois, Indiana and Western Kentucky,
has a substantial competitive advantage over coal mined
?
so forth, Wine, or the coal that is used by utility plants
[228] in Wisconsin comes from mines in Illinois, Indiana
and Western Kentucky. ;
Q Thank you.
Again, most of the coal that is used by utilities in
stati? of Indiana is produced by coal mines hey
State of Indiana.
[229] Q Does Illinois coal go into Indiana?
A Yes, in that portion of Indiana which is included
in the Chicago Switching District, Hammond and Gary,
A inois Public Service Company.
Q means Northern Illinois Public Service
Company?
A Yes, sir
es, sir.
Q Could you tell us where it goes in Illinois?
A _Well, Indiana coal moves over the northern part
Yes, sir.
Q In regard to the State of Missouri, Mr. Nugent,
could you tell us that portion of the State of Missouri
the State
MR. HEDLUND: In what respect?
MR. CUSACK: He answered the question.
BY THE WITNESS:
A 1 presume you are talking about quality?
MR. CUSACK: Yes.
[2311 BY THE WITNESS:
A Yes.
BY MR. CUSACK:
Q It is a superior quality coal?
A Les, sir.
Q Mr. Nugent, is it a fair statement to say that most
of the coal consumed in Illinois is mined in Illinois?
A Most of the coal consumed in Illinois is mined in
Illinois?
Q Yes.
A Yes. I think that is a fair statement.
Q Thank you.
Mr. Nugent, I would like now to discuss a little bit
with you the competition, or at least the potential com-
petition between the mines operated by United Electric
and the mines operated by Freeman.
eo
45
ag
Mississippi River?
ty mine of United Electric
!
:
:
i
|
F
4
is because the Fideli
Q Is that located on the
Is this
has better customers?
[283] A The Ohio River.
:
3
=
.
:
i
8
Z
3
5
Q Has that
A Yes.
© 2 5
1232
3
i
42
is because the transportation cost is not competi-
A It
tive. |
Q Mr. Nugent, is it not a fact that United Electric
had a contract to supply TVA with coal?
A Yes, sir.
Q Was this coal from the Fidelity mine?
A Yes, sir.
Q Did United Electric bid on this contract?
A I believe it was a joint bid.
Q By United Electric and by Freeman?
A Yes, sir. 8
Q Asa result of this joint bid and contract, coal from
the Fidelity mine of United Electric as well as from the
southern IIlinois mines of [235] Freeman moved to the
Shawnee plant of TVA?
A Yes, sir.
Q Mr. Nugent, the Banner mine of United Electric
is located where, sir?
A On the Illinois River, not too far south of Peoria.
MR. CUSACK: Let the record show we are handing
Mr. Nugent Mr. Jack Simon’s map, which is Nugent
Deposition Exhibit 38.
BY MR. CUSACK:
Q Mr. Nugent, when was the Banner mine of United
Electric ?
A Oh, I cannot recall specifically. It was several
years ago. :
Q With reference to coal mined at the Banner mine
of United Electric, is it loaded onto barges at the mine?
A Yes, sir.
Q Is it a fact that the preparation plant is located
contiguous to the Illinois River?
A Yes, sir.
Q Is the Banner mine of United Electric a profitable
operation?
A Yes, sir.
[237] BY MR. CUSACK:
Q Mr. Nugent, I now hand you Nugent Deposition
Exhibits 40-A, 40-B and 40-C for identification, and ask
you to examine them, please.
(There was a short interruption, after which the
taking of the deposition was resumed as follows:)
BY THE WITNESS:
A Yes.
BY MR. CUSACK:
Q With reference to the Wisconsin Electric Power
Company contract at Port Washington, Wisconsin, this
is, is it not, for 50,000 tons of coal?
A Yes, sir.
Q The Wisconsin Electric Power Company plant at
Port Washington, Wisconsin is located on Lake Michigan,
is it not, sir?
A Yes, sir.
Q You testified yesterday, did you not, that Freeman
supplied some coal to a utility plant in the State of Wis-
consin located on Lake Michigan?
A If you are asking me if I testified that Freeman
ships coal to the Wisconsin Electric Power Company on
Lake Michigan, if you asked me that question, I am sure
I said that we do. -
‘Q What plant of the Wisconsin Electric Power Com-
pany do you ship to?
A Wisconsin Electric Power Company to Port Wash-
ington and to Oak Creek.
44
However, the coal is ususally consigned to Oak Creek
and it only goes to Port Washington at the convenience
of the Wisconsin Electric Power Company.
[239] =@-"E see. Now, the Oak Creek plant of Wiscon-
sin Electric Power is located how far from the Port Wash-
ington plant, do you know?
3, 4 and 5.
Mr. Nugent, is the Banner mine of United Electric
in competition with Freeman for the business of the Wis-
R. HEDLUND: Let the record show that the wit-
A
Q
A The coal representing this tonnage of 50,000 tons
M
ness is referring to Nugent [240] Deposition Exhibit
That coal had to be transported to Chicago by barge
from the barge to a lake vessel. There
is only one lake vessel equipped to handle a movement of
this nature, and that i the steamer Roen, R-o-e-n, I
days for the Roen, is more than double and perhaps three
times as costly.
[241] BY MR. CUSACK:
Q But it is a fact, is it not, that United Electric and
Freeman both sold coal to Wisconsin Electric Power Com-
pany?
A In. the year of 1960, and I do not believe that
United Electric has shipped any coal to the Wisconsin
Electric Power Company since that time and they are
not shipping any coal in that fashion because the steamer
Roen is not available to them.
Q Who has the steamer Roen tied up?
A Roen is using it for other purposes. It was not a
satisfactory movement for him.
1 Do any of the Freeman mines ship to Ludington,
ichigan i
A I think we have shipped some coal in the past to
Dow Chemical, but in limited quantities.
Q But you have made shipments to Dow Chemical at
Ludington? ;
A No. I cannot say that we have. I would have to
check the records.
12511 Q For Freeman
A Tes.
Q Mr. Nugent, in your opinion, is the coal produced
by United Electric from the Cuba, Buckheart and Banner
Mines in competition with the coal produced by the Crown
mine of Freeman for the business of the Commonwealth
A r ne
MR. C CK: ill you read the question, please,
Mr. Youker? a
Q (Read by the reporter.)
BY THE WITNESS:
A That word “competition” troubles me. If the coal
were available in Fulton County in sufficient quantity and
if they chose to make the price to secure the business,
coal from the Crown mine would not move to Edison’s
river stations.
BY MR. CUSACK:
Q But it does move, does it not?
A It does, yes, because the quantity of coal is not
available in the Fulton County field to meet Edison’s
needs.
r
ut
E
E
i
EFS
iH
named Edwards up in Wisconsin,
name is.
does he work out of, sir?
He works out of—I don’t know where he makes his
headquarters in Wisconsin.
i
A
Q
A
Q
A
Q
A
Gene
Q
A
[282] 8 Among which is Wisconsin Publie Service
*
A No. I do not believe he handles that account. Sheri-
dan handles that aceount.
Q Do you know where Mr. Edwards lives?
A I am not sure, but I think Mr. Edwards lives at
Eau Claire, or nearby.
Q What other salesmen do you recall worked for
Freeman in 19667
A Well, we had a half a dozen other country salesmen
whose names do not come to my mind now.
47
me
AI do not know that it was six. I think we had
eighteen to twenty people all told in our Sales Depart-
ment.
Q You have testified that Mr. Edwards handled some
of Your Wisconsin accounts,
es.
Q Can you give us generally some of the areas cov-
ered by some of your other country salesmen?
[299] Q Is it a fact that United Electric’s [300] larg-
est customer was, by far, the Commonwealth Edison
Company, in 1965?
Q In 1965, who was the second largest customer of
Freeman?
A The Tennesse Valley Authority.
Q Now, Mr. Nugent, I ask you to look at Nugent Dep-
osition Exhibit 44 and tell us how many tons of coal were
sold by United Electric in 1965 to the Union Electric
ae wk Union Electric Company purchased
n e Union e pany
485,870 tons from the United Electric Coal Companies.
[304] MR. CUSACK: On the record.
Q You have six country salesmen. Could you give
5
1
BY MR. CUSACK:
Q Mr. Nugent, at what point in time did the sales-
men of Freeman and the salesmen of United Electric stop
soliciting common customers?
MR. HEDLUND: May I have the question read,
(Read by the Reporter.)
3 — 5 HEDLUND: When did you stop beating your
e
MR. CUSACK: If they did.
MR. HEDLUND: Ask a proper question.
BY MR. CUSACK:
Q Mr. Nugent, do you know whether or not the sales-
men of Freeman and the salesmen of United Electric
solicited the same customers?
A The salesmen for Freeman and the salesmen for
United Electric are continuing to solicit the same custo-
mers.
Q Have they solicited prior to the merger?
A Yes.
These are common customers?
A In the case of the Union Electric Company, [305]
Mr. Davis still handles the shipments of Freeman coal to
Union Electric and Mr. Croak still handles the shipments
of United Electric.
In the case of the Commonwealth Edison Company, Mr.
Tucker and Mr. Gebhart continue to handle the business
of the Comonwealth Edison Company, and Mr. Butler
and—I think he gets some help from somebody else, per-
haps Hamson, still handle the United Electric Company.
Q Now, Mr. Nugent, you testified yesterday with re-
gard to the opening of the Orient No. 6 mine of Freeman.
Where, sir, is that located generally?
A Orient No. 6 is due east of Orient No. 3.
Q Would that be located in the DuQuoin Freight Rate
District?
A Right here (indicating).
MR. CUSACK: Let the record show that the Orient
No. 6 mine is located slightly to the west of the Chicago
49
Eastern Illinois Railroad, which is to the east of the
Orient No. 3
[382] MR HEDLUND: We will so stipulate. I am
A Well, this seems to me to have to do with the pur-
NN
A Oh,
Q Do you recall what company was involved, sir?
8 The Truax-Traer Coal Company.
2 Do you know any reason why Messrs. Falkoff, Mor-
ris and yourself did not vote on this resolution?
[334] BY THE WITNESS:
A 1 presume it must have been
Perhaps we did not want to vote
committee.
MR. CUSACK: Thank you.
BY THE WITNESS:
A I must say, however, that I am not that modest.
BY MR. CUSACK:
Q What happened, Mr. Nugent, in regard to these
discussions with Truax ?
Q United Electric was to
A United Electric was to ivi 3
13351 Q Was it contemplated that the management of
United Electric would be in charge of the company after
its acquisition by Truax?
A Yes, it was.
Q So this was really a discussion of United Electric
acquiring Truax, was it not?
A It was a discussion of United Electric
Truax, but I believe it was initiated by Harold Truax.
Q He came to you to essentially sell his company?
A Exactly.
Q Were these discussions had with the knowledge of
Colonel Crown of Material Service?
A Tes, sir.
Q And with his concurrence?
Q Mr. Nugent, you went on the Board of United
Electric in October, 1959, did you not?
A I think that is right.
13381 Q And you did not start discussing the acquisi-
tion of Truax by United Electric until you went on the
board of United Electric, did you?
A I may have had some informal discussions with
Harold Truax prior to that time.
Q you.
Did Mr. Kolbe, incidentally, disapprove of the acquisi-
tion of Truax by United?
A On the contrary, he was most anxious.
Q Do you know why?
A Well, Mr. Kolbe was a substantial holder of United
Q Do you know, sir, when United Electric began
acquiring coal reserves in the Industry Field?
[339] A Quite sometime back.
Q Could you give us an approximation?
A When I first became interested in United Electric,
I thought it was an unwise investment, and it was dis.
$800,000 in land, money invested in land, so I would as-
t it must have taken a good many years to
much
Q So when you on the board of United Electric,
which was in the fall of 1959, up to that time United
i
:
g
Buckheart—Cuba
is [340] quite a dis-
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A
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122
175
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ett
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if
than it could be produced and
transported to the river from the Industry Field.
Q Is the Industry Field
MR. EISEN: You did not mean to say “Industry”
there, did you, sir? You mean, it could have been loaded
easier from—
Q From the Belleville District, transported to the
river on the 45 cent rate and then up the river and to a
point on the river near the [341] Industry Field, a logical
point for loading, and you could do that for less money
than you could deliver the coal from the Industry Field
to the river.
BY MR. CUSACK: 2
Q Has United Electric continued to hold coal reserves
Q 98 ĩ¹ TT
sitions of land and reserves at the Industry Field at over
.
please explain the difference?
A I think that is not a particularly productive farm-
ing area and land was available at [342] about $125 per
With coal land such as that, of course, if it were bet-
ter located and with an overburden not nearly so high—
I think the ratio there is 30 or 35 to 1—it might be dif-
ferent, but this was a most uneconomical proposition and
a most unwise investment.
Q Whose idea was it to acquire the Industry Field?
A I am afraid that I cannot identify anybody par-
ticularly in the management of United Electric who was
responsible for it, but I believe the minutes will indicate
what my position was.
Q Did Mr. Kolbe agree to United Electric acquiring
coal reserves at the Industry Field?
A I think that Mr. Kolbe, of course, was in charge of
the management and I am sure that he approved of the
purchase.
Q Mr. Nugent, if the Industry Field is, in your opin-
ion, a very unwise investment and has been a very un-
wise investment for United Electric, why, since the time
32 1 3 21 4 33s 1714 HE 323 ‘
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I RAT ig re
11 1 ut i Bey
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i Ge HTH fit i 1
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rH ete eed ae
8 a3 554 „ 5
ft i, Ht i
11 i jb sig
adit ae bi
Hai Me ine ia
% l l %
1 e 2
4220 leck.
ee «oF
Buckheart,
t can be
Field?
ty years
carrying
Q Who buys unwashed coal in Illinois?
A The utilities could use it.
Q Don’t they buy most of the coal in Illinois?
A Well, I think at a time when the
A Yes, sir.
56
Q Do you have any idea how much United Electric
has spent on Industry Field since 1959, when you went
on the board?
A Not very much, because there was not [347] much
[861] BY MR. CUSACK:
Q Mr. Nugent, who are the competitors of the Free-
man Coal Mining Corporation?
MR. HEDLUND: I think you should also, in that con-
nection, start talking about for which customers where.
If Mr. Nugent is able to answer that question, however,
he may do 80. |
BY THE WITNESS:
bag 1 1j ae
10 pie cin .
1111.
uit neha tt 18.
ee i 1 I ee;
is true. I do not think there was such
ago.
are the sizes of the buckets on the shovels
you know?
I was just trying to think. I think 180 yards.
there is one shovel of 180 yards, although I am not
knowledgeable peop
the depth that yow will be able to strip in the next ten
years? : ‘
A I think we have reached our maximum now. [376]
irst, with reference to the coal that is available to strip,
think the Belleville district has gone about as far as
can. There is only one virgin piece of land left there
that is the Denmark acreage.
of the strip land in the State of Illinois is
Het
ihe
5
55
27 57
if
— —
opinion then, sir, that in fact IIlinois is
strip reserves?
ive that in the State of Illinois, to repeat.
that will be mined by the stripping
the process of development but one, and
ororek
|
a
7
1
i
7 2
AER
a f
N
1
3
:
2
i
MR. CUSACK: Off the record.
(There was a discussion off the record, after which
the taking of the deposition was resumed as follows:)
MR. CUSACK: On the record.
BY MR. CUSACK:
counsel a booklet entitled, “Stripping-Coal Resources of
the United States, Geological Survey Bulletin 1252-C,”
Q I direct your attention to page C7 in regard to
Illinois, which states in pertinent part:
“On the basis of work completed and in progress,
concluded nas written commun, Sept. 28, 1966) has
concluded that remaining stripping-coal resources
of January 1, 1966, in beds 18 inches
or more thick and at a maximum depth of 150 feet,
totaled 21,223 million tons. Simon also concluded that
the resources within the same parameters
totaled about 23,000 million tons.”
I ask you on the basis of this Nugent,
whether you agree with the estimate of, to this
document, Mr. Simon in regard to the stripping-coal re-
serves of Illinois?
A I believe I wrote Mr. Simon a letter sometime back,
view of Paul
Weir, a t man in this field, and I think
that the views of Mr. Simon and Mr Weir are not in
i stated and par-
60
[388] Q Did you discuss with Mr. Mullins the [389]
coal reserves situation in Illinois?
A No, sir.
Q In other words, your conversation with both Mr.
Mullins and Mr. Kelce was just general discussions which
would have no bearing on the issues of this lawsuit?
A That is right.
Q In regard to your conversation with Jack Simon of
the Illinois State Geological Survey, Mr. Nugent, what did
Mr. Simon tell you in regard to the availability of strip
reserves in Illinois?
A I called Jack Simon’s attention to the map, and I
think in about the same manner—
se perpen sprammaree
es.
You are referring to Nugent Deposition Exhibit
Yes.
The map of shipping coal mines in Illinois?
Yes.
All right.
I called Jack Simon's attention to the [390] map
in about the same maner that Paul Weir called
Q
A
Q
38?
A
Q
A
Q
A
26
g
siete
: 8
1
In regard to your conversation with Paul Weir, what
did Mr. Weir say to you?
3
an i Fg 7 4 ; At 111 ö
dere aaa
Ha 4 ue . jut 171115
Hl 52 hi S 3359725 it 8 14235 is 11.
a 7 15 ik Gk 3 * 1567 11315 5
14! 111351 @ s 71171 2141715
fy i lis 11 dl Het ta 115
ie epi taal * 1175 4141485
e carat alate
-er
A I have talked to Norman Kelb. I [893] think Nor-
man Kelb is the only one I have talked to at Ayrshire
Collier!
Q Did Mr. Kelb express an opinion to you in regard
to the availability of strip reserves in Illinois?
A Let me answer that in this way, Mr. Cusack, and
maybe it will save some time: The people who are in the
business, knowledgeable, as I said before, such as Mr.
Kelce, Mr. Mullins and Norman Kelb, are thoroughly fa-
miliar with the strip acreage that is available in this
state, and there is not any necessity for any conversation
between me and people in the business as to whether there
are strip reserves available. The question is not debatable,
we know that they are not there, so there just isn’t any-
thing to discuss.
That goes down to cub engineers who have just been in
the business a couple of years. There is not a utility man
in the state buying coal, a knowledgeable utility man,
Se
[394] There is not a salesman selling shovels and equip-
ment who does not know that the reserves are not avail-
able. They have a keen interest in it. The Caterpillar
Tractor Company are knowledgeable in that area. They
know the reserves are not available. Their sales pro-
grams are directed elsewhere because the reserves are not
This is not a question that is debatable among coal
people. It is an accepted fact that reserves are not here.
Q The Humble Oil Company, though, you testified,
was able to buy some substantial reserves in Illinois, is
that correct? f
reserves that were rejected by commercial operators.
“3%
1
838885
2.8 8 88
312140
i ia
; 7225 11725
zk
g fo<o<s poe
1
Kaskaskia River, as is the acreage that belongs to the
Peabody Coal Company.
Q But it is located close to rail transportation, is it
not?
A That is not sufficient to compete. As you well know,
Kaskaskia River is being canalized, and the only
MR. HEDLUND: Not at this time.
MR. KEMPF: May we go off the record for a mo-
(There was a discission off the record, after which
the taking of the deposition was resumed as follows:)
MR. CUSACK: On the record.
BY MR. CUSACK:
Q Is it not a fact, Mr. Nugent, that the Round
Prairie field is located between Beaucoup Creek and Little
228 Creek in [401] Perry and Washington County,
A It is very close to it, but I have no knowledge as to
how nate that Beaucoup Creek be canalized.
[402 see.
Muddy is a pipe dream.
Q i has not been funded, in other words?
A No.
Q Mr. Nugent, do you expect the demand for bitumi-
nous coal to increase over the next ten or fifteen years?
A That is very difficult to say. We have some very
serious competition from nuclear power.
Q Would you characterize the market for coal, for the
production and sale of coal in Illinois and in the Midwest,
as a sellers’ market?
A No. I wouldn't think so.
Q Is it a fact that Freeman can sell every ton of coal
it mines? ;
—
9
—
—
9
Is it a fact, though, that for example, the
of the state of Illinois Department of
present accurately the produc-
i the various mines operating in
we
EI
110
Ut
O
Mr. Nugent, is it your position that The United
ie Coal Companies was derelict in acquiring suffi-
I believe that they were not aware of the seri-
ir situation until it was much too late.
testimony that after you became a mem-
ber of the board of United Electric, [412] you made con-
on.
MR. CUSACK: Read it, please Mr. Youker.
(The record was thereupon read by the Reporter as
above recorded.)
THE WITNESS: All right.
BY MR. CUSACK:
Q Mr. Nugent, is it your opinion that Mr. Kolbe did
not foresee the need to acquire. sufficient strip coal re-
serves? ‘
A I do not want to seem to be critical or unkind to
charge Mr. Kolbe with that responsibility.
I think that his Operating Department and people who
are knowledgeable in that area should have been aware
67
of the situation, and I would be more inclined to criticize
them than I would to criticize Mr. Kolbe. a
[413] N What are the of these operating peo-
ple, sir
A Going wax back, he had some very competent peo-
ple. He had a fellow named Hepburn.
A ior to that he had a man named Morrison, and he
had a very able man prior to Morrison, who is now dead,
and his name slips my mind.
W
A He was, but at the time he headed the Operating
Department, it was then much too late.
Q What about Mr. Morris?
MR. HEDLUND: “Morris”, did you say—
THE WITNESS: Morrison?
MR. HEDLUND: —or “Morrison”?
[414] MR. CUSACK: Mr. Morris.
BY THE WITNESS:
A Mr. Morris was vice-president in charge of sales,
— and I think that he was greatly concerned over a great
many years about the inadequacy of the strip
as were many other people associated -with The United
Electric Coal Companies.
Their sales department could not help but have their
attention called to the inadequacy of reserves by the utili-
ty people upon whom they were calling.
BY MR. CUSACK:
Q Mr. Nugent, when you went on the board of United
_ Electric, which you testified was in the fall of 1959, did
you realize then that in your opinion United Electric had
insufficient coal reserves?
that subject up at
68
attended the first board meeting,
failed to
I attended.
to my question is “Yes”, then?
9607
A Without strip reserves, the company obviously was
3
was in 1959 and in 1
gz 5323
a 14775
E
1416] Material
Nugent, that
Did you ever advise General Dynamics or Ma-
tarda 2 not to aequire any more stock in United
Electric
Corporation stock
in United Electric because they considered it an exeeh
A When—
MR. HEDLUND The question has been asked and
THE : What?
perfectly an int If you would like to continue, it is
right with me.
THE WITNESS: Go ahead.
1420] Q Thank you.
Mr. Nugent, did United Electric have a budget for the
acquisition of coal reserves?
A You say, “did United.” When do you mean?
Q At the time you became a director in 1959.
A No, sir, they did not.
Q Was a budget instituted after you became a di-
rector?
A Yes, sir.
Q How much was budgeted, can you tell us, in 1960,
Q Including in the state of Colorado?
(Whereupon a short recess was taken, after which
the taking of the deposition was resumed as follows:)
MR. CUSACK: On the record.
BY MR. CUSACK:
Q Mr. Nugent, do you know of any coal producers in
ate an Caeswere Previously strip miners that now oper-
MR. CUSACK: I would still like to ask him if he
knows of his own knowledge.
MR. HEDLUND: Let's see if in fact that question
was not asked and in fact Mr. Nugent answered it.
Bae
8
a
3 2 94g au
the town of Ha
yden, Colorado.
is Routt County, is it not?
A No;
MR. CUSACK: That
EXCERPTS FROM DEPOSITION OF
NICHOLAS T. CAMICIA,
TAKEN SEPTEMBER 17, 1968
is a long strip indicating coal producing
is that right?
How is that designated in the industry, if you
?
are several designations.
ious districts, is that it?
; various coal districts. The southern part of
irginia and western part of Virginia, that particular
is called the Pocahontas Field.
That is where all of the Pocahontas low volatile metal-
lurgical coals are found in the United States.
Is there a general description for that like the
Eastern Province?
A It is called the Appalachian Field.
Q The Appalachian Field?
A Yes. That includes all the way from Pennsylvania
down into Alabama.
Q Going west from there, there is a [17] area cover-
ing about two-thirds of the State of Illinois and about
the southwestern one-third of Indiana and a corner of
Kentucky.
A Yes.
Q How is that designated in the industry?
A We call that the Midwest Field, in layman’s lan-
guage.
Q Then west of that, roughly spreading out maybe
fifty to two hundred miles either side of the line along
the borders of Nebraska, Iowa, Kansas and Missouri is
another field, is there not?
A Yes.
Q What is that called?
A I do not know. It is not talked about very much
in the industry because there is not very much coal min-
ing there.
75
Q Is the Midwest Field also referred to as the East-
ern Interior Coal Province?
A L have never heard that name.
Did you use the term “low seam”?
We had low seam mining and middle seam and
thick seam mining.
Q Yes.
A That refers to the height of the seam of coal we
A Well, a drift mine is a mine that—in West Vir-
and a drift mine is one where you j i
rectly into the mountain, as distinguished from a slope
mine which is below the creek level or water level, and
you must slope down to it, as distinguished from a shaft
mine which is deeper down and it is not feasible to use
United Electric has a coal field designated as
12835
1 3˙
i
1
1.
Pave
the conditions that exist at Round Prairie
with | indicate to you that you could not, possibly use this
slope
5 b
i
E
i
8
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f
:
:
8
ial
5
1
:
:
5
255
i
:
1
A
1 1 135 i 111 1235 1
1 0 47 241
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1
13
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21285
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Ee ie
aig MOM MTs ae
1 1451 11
E
Counsel will correct me if I am wrong, Mr.
i
cia, but I think that Mr. Nugent indicated in hi
mony, or estimated that there could be a 55 per cen
believe he said, recovery—
A That is right.
A at Round Prairie.
A Which is very nominal. That is not good recovery.
It is very poor recovery. 5
Se ee ee oe ae ee
mine
A The Crown mine is 55 per cent because it is under
farm land. The recovery at Orient No. 3 is 95 per cent,
the southern Illinois [44] mine.
4
—
[46] Q I believe you testified that Island Creek Coal
did not have any strip operations.
[47] A That is right.
Q You have just indicated now that you met Mr.
Kolbe when UEC was stripping some coal for Island
A Yes. We had some property in eastern Kentucky
that we thought might lend itself to what we call contour
79
mining in that part of the country. There is no such
thing as strip mining. ee
Contour mining, as distinguished from strip mining,
is mining around the top of a mountain in contour,
around the mountain, and going back in to the seam until
it is uneconomical to get any more.
Q Did you do any contour mining yourself, that is,
Island Creek?
A No, we did not.
Q So I take it that you had this relationship with
United Electric because of their particular know-how?
A Their know-how and the fact that they had the
equipment and we did not want to invest that much
money into an operation that we knew nothing about. We
couldn’t take that gamble.
Incidentally, our judgment was very [48] good on that
because United Electric lost money on it, too.
1521 Q Yes.
A From a personal standpoint, I thought it was a
MR. KEMPF: What kind of an advantage are you
talking about?
THE WITNESS: Yes. ;
MR. EISEN: If he understands the question, I will
ask him to answer it.
BY THE WITNESS: 3
A From an operating standpoint, I would sa that
there is a definite advantage. :
177] Q What percentage of UEC’s sales are to [78]
accounts that Freeman also sells?
8 2 no idea. n
ow about the reverse? Do vou know what
centage of Freeman’s sales are to accounts that UEC
7
— eee
sales are to Commonwealth pany.
MR. KEMPF: Would the reporter read back those
f
:
BY MR. EISEN:
Q With reference to the Tennessee Valley Authority,
Freeman sells 15.2 per cent of its coal [79] to TVA and
UEC 4.87 per cent to TVA.
I do not know about that one at all. I do know
of them sell some coal to TVA. I do not know
amounts.
Where is that coal delivered?
I do not know that. 2
You have no knowledge whatsoever, or you do not
the specific place?
=
5
f
f
|
Kentucky?
is not the name. It is near there, though.
fe
RES
8
f
f
:
|
Ohio River.
That is a receiving point for both Freeman and
Sorel porarokrfore
5 5
ig e
5
81
A Tes.
Q With reference to Illinois Power Company, 180]
With to Union Eleetrie Company, Freeman
sells. 4. 1 met cent of its coal to Union Electric and UEC
sells 9 per cent of its coal to Union Electric Company.
Are you talking about 1967, or currently, or are
you quoting—
I will fill in that date for you in one second.
(There was a short interruption, after which the
taking of the deposition was resumed as follows:)
BY MR. EISEN:
Q I believe you said that sounds about correct in each
instance—
A Yes. .
(Continuing) —+so I assume that is approximately
st 2 figures I have been quoting to you.
Les. N
1811 Q If there are any changes as I read these off
that do not correspond with 1966 or 1967, or even present
Q Wit rarert 1 d I said, yes |
ith respect to Marquette Cement Company,
2.6 per cent of Freeman’s sales are to Marquette Cement,
Cement. Would that accord with your knowledge
recollection? *
A I am pretty sure of Freeman but I am not certain
about the percentage for UEC to Marquette. It. sounds
like it might be right.
MR. KEMPF: Off the record.
*
(There was a discussion off the record, after which
the taking of the deposition was resumed as follows:)
MR. EISEN: On the record.
[82] BY MR. EISEN:
Q 2.6 per cent of Freeman’s 1965 sales were to the
Central Illinois Public Service Company at Springfield,
Q Does that remain the same?
I agree with that, yes.
there any other companies that. I have not
whom both UEC and Freeman sell? Let
ite
r
8 gies
111
a 15
3 86 7
— abe
85
iH
i Gey
: 2 8
45 8
185
1
0.
Has UEC solicited any customers of Freeman,
the ones I have named here, and been unable
a transaction of sale? N f
R. KEMPF: May I have that read back, please,
Mr. Youker. *
[83] Q - (Read by the reporter.)
BY THE WITNESS:
A I do not know that they have.
BY MR: EISEN:
Q Does Freeman sell to Inland Steel?
ae
Freeman sells both steam and metallurgical coal to
83
Q The total figures I get from what we have read
here is that approximately 54 per cent of Freeman’s 1965
sales were to customers that were also sold by UEC and
60 per cent of UEC sales were to customers also sold by
Freeman
Do you have a figure which you have in mind, based
on your day-to-day experience in the company, which you
could suggest would be closer than that?
A I have never thought of it in that light, but from
the figures you have mentioned, and if they [84] add up
to that, then I have no reason to question them.
Q Would you say that the percentage has been in-
creasing, the percentage of sales, to common customers
of the two companies?
A No. I do not think so.
Q Other than that one increase to Union Electric that
you mentioned? *
A Yes. No, I do not know of any others.
Q What type of coal does Freeman sell to Common-
wealth Edison? 4
A They sell their Central Illinois Coal, which is prin-
cipally a steam generating coal, utility coal.
Q That is from the Crown mine?
A Yes.
Is any Southern Illinois coal sold to Commonwealth
Edison?
A No; not any of our Southern Illinois coal.
“a _ kind of coal does UEC sell to Commonwealth
ison
A To Commonwealth Edison?
Q Yes.
A They sell their strip coal from their [85] Buck-
heart mine, which is a utility coal.
; 5 5 * *
8 * Could you list the competitors of Freeman
or us
MR. KEMPF: Competitors of Freeman in the coal
industry or in the nuclear industry? In what context are
you talking about competitors? . .
MR. EISEN: In the coal industry.
84
BY THE WITNESS:
A In the coal industry?
MR. EISEN: Yes.
BY THE WITNESS:
A Peabody, Truax-Traer or Consolidation Coal Com-
pany, Bell & Zolle Ayshire. Did I miss any?
MR. CUSA What about Zeiglér?
BY THE WITNESS:
A Bell & Zoller, yes, or Zeigler. se
Bell & Zoller. he. ow
BY MR. CUSACK:
Q One is a parent of the other?
A Yes. I don’t know which is which. I call it Bell
& Zoller. They are operating mines.
BY MR. EISEN:
Q Southwestern?
A Yes.
[108] Q Do these same companies also compete with
United Electric Coal, or if any of them do not, or if
there are others you would like to add, we can take them
one at a time, if you wish.
A Are you talking about United Electric in relation
to these other competitors?
Q Yes.
A Peabody, yes. Bell & Zoller, yes. Sahara, no. Tru-
ax-Traer, yes. Southwestern, yes.
Q You did not mention UEC as competing with Free-
man.
A Yes.
Q And does Freeman compete with UEC?
Q Are all of your mines able to sell coal beyond the
Freight Rate District in which they are located?
A Are all of them able to?
Q Yes.
Yes.
>
85
Q That is, both by UEC and Freeman?
1109] A Yes. | ‘
Q Would you have an idea of what percentage of the
mines’ production is sold in the district where
each mine is located?
A Are you talking about districts or are you talking
about— 8
Freight Rate Districts.
A Freight Rate Districts?
Q Yes.
A It would be small. I would have to look at a map,
if I may.
Q_ I am going to show you a document which has
previously been identified as t Deposition Exhibit
38, I believe. .
A Ves.
(There was a short interruption, after which the
taking of the deposition was resumed as follows:)
THE WITNESS: Now, if you will repeat the ques-
tion for me, concerning Freight Rate Districts, I think
I understand it, but I would like to have it repeated.
MR. EISEN: Would you read the question, please,
Mr. Reporter.
* * * *
[126] MR. HEDLUND: What is the question pend-
ing? Is there a question pending?
MR. EISEN: Yes, there is
. * HEDLUND: May I have that, please, Mr. Vou-
me 5
Q (Read by the reporter.)
BY THE WITNESS: |
A That is a natural understanding of competition,
rivals.
N BY MR. EISEN:
Q That is the way businessmen use the expression
every day, isn’t that right, in the conduct of their busi-
A Yes. |
Q So in that regard, does the Peabody mine in the
86
Fulton County area compete for Commonwealth Edison
business with the Crown mine?
A I do not know that you would call it competition.
Insofar as Commonwealth Edison can get their coal from
Peabody, Crown would not be competition at all.
You can call them competitors only to the extent that
the supply of coal in Fulton County is not sufficient to
meet the needs of Edison, so they [127] have to go be-
yond that area someplace to get the coal.
Q Does Commonwealth Edison pay a premium, do
they pay more per BTU to Crown than they do to Pea- .
body?
A I don’t know what they pay Peabody.
Q Do they pay more for Crown mine coal per BTU
than they do for Buckheart coal per BTU?
MR. KEMPF: Just a minute, please. May I have
the question read, please, Mr. Youker?
Q (Read by the reporter.)
MR. KEMPF: Are you talking about their end cost
per BTU delivered, through their own facilities and
things like that, or are you talking about F.O.B. mine,
or what?
MR. EISEN: The witness has the question.
MR. KEMPF: If the witness understands the ques-
tion, he may answer.
BY THE WITNESS:
A I do not recollect what the prices are. My recol-
lection is that the F. O. B. prices are similar on a BTU
basis. I do not know about the delivered prices.
BY MR. EISEN:
[128] Q Would you say that they were the same?
A Similar; almost the same.
2 Py “almost”, you mean what? One or two cents
a ton ,
A Within a few cents, yes.
Q Could you describe how the location of present and
potential customers of UEC affects its ability to compete?
MR. KEMPF: Will you read the question, please, Mr.
Youker?
Q (Read by the reporter.)
87
BY THE WITNESS:
A I do not exactly understand what you are
at, but if you mean the potential customers that UEC
could possibly serve, any utility with a plant in the fu-
ture that may be near the location of the Fulton County
area, naturally UEC would be in a better position to
compete for it, if they had the reserves to do so. I do
not know if that fully answers what you are driving at.
* > o *
[129] Q What advantages does that coal have now,
in the light of its transportation cost factor, with regard
to existing customers?
near the Illinois River.
2 Do they go down the river as well as up the river?
es.
Q How far down do they go?
A Their present customers?
2 Yes.
I don’t know how far.
[154] Q Yes.
A Yes, sir.
Q What does “control by location” mean?
A If I understand what you are asking, it means that
certain reserves, by the nature of the location of them,
control other reserves that are not readily available to
someone else, what we call checkerboarding.
88
Q With that explanation, does Freeman control any
reserves by location?
A Yes, they do.
ls that in the area of each one of the Freeman
mines?
A In the case of Freeman it only applies to one loca-
tion, and that is the Crown acreage, the so-called Crown
acreage. |
Q Is that in addition to the mining properties which
we have previously discussed?
A I don’t follow the question.
Q The previous figure you have given was 236,501,-
720 tons, plus 360,000 tons recently acquired.
A Oh, yes. It is in addition to that. There are addi-
tional acres that we consider [155] are controlled.
[160] Q Is there a rule of thumb that coal mining
[161] companies follow in this regard?
A You mean as to the price they would pay?
Q No. to the amount of money budgeted for that
purpose.
0 — 5 money budgeted for that purpose?
es.
A There is no rule of thumb. In the case of United
Electric, we have an open bank account, and if we can
find reserves that can be mined at a redsonable price,
we can go get them. I do not think we would have any
trouble.
Q Do you have somebody out looking?
A Oh, yes.
Q Who is out looking?
A We have a geologist who spends his full time, a
fellow by the name of Bill Jensen. We have a land man
named Tom Latimer, who spends all of his time trying
to acquire additional reserves.
We have a Western representative who is looking at
all the Western coal reserves, who is trying to find suita-
ble reserves for stripping, that is, find reserves suitable
for stripping for a proper customer.
Q What is your Western man’s name?
[162] A Tom Tarzy.
89
Is he an executive of the company?
A Yes, he is. He is a ice president, of the Western
operations.
Q Are you spending money at Freeman looking for
reserves also?
A When you say “spending money”, I do not know
what you mean.
Q Well, do you have people out in the field?
A Yes. We are constantly looking for reserves for
Freeman also. a f
Q Who are the gentlemen at Freeman who are out
looking for reserves?
A Bill Mullins, who is our chief engineer at the prop-
erty, and then I look a lot myself, not physically, but I
am always searching, to keep tab on any reserves that
I hear about that may be available.
Q Have you increased the amount of money allocated
for searching for and acquiring reserves at UEC over
the past five years?
MR. KEMPF: I think the witness has already testi-
fied that they have, I think in his words, an open bank
account. I do not know how you [163] can increase that.
BY THE WITNESS:
A Is that the question you asked, if we have spent
more money?
MR. EISEN: If you know, yes.
BY THE WITNESS:
A I would say that we are—I do not know how dili-
gently they were searching beyond five years ago, but I
know that within the last two years we have made an
extraordinary effort to try to find reserves for UEC.
BY MR. EISEN:
Q It is a fact, is it not, Mr. Camicia, that there is
coal being mined today that was considered unrecover-
able, strip coal, twenty years ago? ,
A Yes. That is true.
Some writers have estimated that Illinois is the
leading state in btuninons coal reserves.
A Les.
\
90
Q Have you seen that in coal magazines and so on?
A Yes, I have.
Q Would you say that certain underground coal re-
serves not thought to be commercially re- [164] coverable
today will in fact be commercially recoverable five years
from now?
A If you put a limit of five years, I would say no.
Q Ten years?
A Perhaps some underground coal would be minable,
simply because the prime reserves have been mined out
and you have 2 else, and you must go to it at a
higher price.
Q With reference to the Denmark reserves, are they
about the last of the prime reserves in Illinois?
A As far as I know, in Illinois, yes, that are uncom-
mitted. -
Q Have you tried to buy some of those Denmark re-
serves?
A Well, I understand that Mr. Nugent recently told
me that he had tried to buy the Denmark reserves, and
he has handled that himself.
Q What did he tell you? N
A He just told me that he tried to buy them, without
success. N ö
2 3 said that he approached certain individuals?
es.
[165] Q Whom did he approach?
A Ayrshire.
Q Did he name the man?
A I don’t recall who it was. He told me he had writ-
ten a letter.
Would it be Norman Kelb?
No. It would not have been Norman Kelb.
I think you said they had about 200,000;000 tons.
Yes. That was my estimate of their reserves.
0 Is it possible for them to mine out all 200, 000, 000
tons without construeting new mines?
A Oh, no. They would have to construct a number
of new mines. They have no mines in the area.
Q Oh. They don’t?
A No. It is a virgin piece of property.
PO PO
91
Q Based upon your knowledge and experience, what
would you predict ten years from now will be the factors,
the feasible factors in so far as depth of coal and thick-
ness of coal, seam ratio and so on, as far as strippable
coal reserves?
A There are really two questions there. In so far as
the technical ability to remove overburden [166] is con-
cerned, I think that the limit is pretty well established,
and that is possibly up to 120 feet, and that is by reason
of the spoil banks, the angle of repose of the material
that you dump behind you, that would incline to come in
tg your coaP bearing -pit.
5 * * *
11711 BY MR. EISEN:
Q Have you ever talked to Mr. Simon and asked him
where he got these figures?
A No, I haven’t actually talked to him. I don’t have
to ask him, because I know. Anybody in the coal busi-
ness knows that that kind of reserves are not in Illinois
or any place else.
Q Is there long wall mining in IIlinois?
A There is one installation in Illinois.
Q Where is that located?
A Old Ben 21 mine.
Is it possible to use the long wall method at Round
Prairie?
A No, absolutely not.
Q Why is that? Pa
We are going to get back into that pillar mining
again, but Round Prairie has several reasons that you
could not use long wall.
One is because the limestone comes down right on top
of the coal and will not fracture or break behind mining.
Secondly, there is not enough over- [172] burden to
cause enough pressure on the coal so that you can prop-
erly cut it.
It has to be deeper also, then?
A Yes. .
Q What is the ratio of—first, could you describe for
7 — means in terms of overburden to depth
seam |
92
A Ratio is a cubic yard of dirt to a ton of coal.
Q In other words, the cubic yards of overburden to
a ton of coal?
A Yes. A rougher way to say that is the number of
feet of overburden in relation to the number of feet of
coal.
For example, if you had 100 feet of coal—I mean, 100
feet of overburden and 10 feet of coal, you have a ten-to-
one ratio.
Q So the two things are about the same? Is that
what you are saying?
A Yes, except that the previous definition I gave you
is more technical.
Q Which definition do you use in your business, in
correspondence and so on?
A We use the footage definition, but [173] in our
engineering studies we use the other method.
* * * *
[174] Q When the prime reserves of Denmark are out,
then the feasibility of the higher ratio [175] becomes
possible, or it becomes feasible, really?
A Up to a point, but you have to realize then that
you are getting closer to the costs of underground min-
ing, and your competition there narrows.
There are plenty of good underground reserves
around, that it?
A Not available, no. There are some underground
reserves, some good underground reserves, but everybody
has got them. Somebody has got them all.
Q I don’t know. It seems to me that if atomic energy
poses a possible serious problem to coal companies with
all these underground reserves around, or even strip
reserves, in spite of the fact that they are all taken up,
is it not possible that some of these companies who have
these reserves might want to take a short term profit?
MR. KEMPF: If counsel knows of any availability
of any such reserves which he wislies to submit to us for
appraisal, we will be happy to do so.
* *
[189] Q That coal, as we understand it, is not part
of the same geological layer, or something like that.
93
A It is the same seam of coal. e
2 It is the same seam as the Round Prairie seam
A Yes. ;
Q Is it the same quality as the Round Prairie coal?
A No, it is not.
Q When do yon expect or anticipate that you will use
the Round Prairie reserves?
Q Has UEC ever sought or acquired any reserves on
behalf of Freeman?
A No, they have not.
Q You have separate staffs out lookin g for reserves,
one for Freeman and one for UEC? a
A Tes. However, on some occasions they [190] work
together, where a property may be strippable and deep
mine. : ,
0 * * * 4 / g
Has Freeman undertaken to aéquire strip [191]
reserves at any time, do you know? *
MR. HEDLUND: At any time? I am sorry. Is that
what you said?
BY MR. EISEN:
A Within my knowledge? ö
there
2 ae If UEC found deep re-
commercially recovera e, would they mine it?
A No, they would not. They are not able to mine it.
—
read the question, please, Mr.
—
—
1 883
I 1 og 7 46
(Read by the Reporter)
BY THE WITNESS:
A UEC has not found any deep reserves and none
i
3
MR. EISEN: Will you
please.
Youker.
Q
A No, they do not.
insofar as acquiring reserves is concerned. Was that
your testimony?
A Such reserves would have to be satisfactory re-
serves, minable and merchantable, and capable of mak-
ing a
Q ith that in mind, what have you done, or any-
one under your direction, to acquire reserves
for UEC which would
answered that
96
Q Did Mr. Nugerit tell Ayrshire that he had a blank
check?
A Certainly not. He would not tell them that.
Q Well, I mean—
A You don’t go to buy something and say, “I'll pay
you
ibe
!
17
i
i
i
Assisi
ay
bert =f i
l
get Foal
begat
atk
questions. I
‘he understood Mr. Nugent had written a letter, and I
did not go into it any further than that.
[199] MR. HEDLUND: He has testified, Mr. Eisen,
that he is not familiar with the transaction, that it was
handled by Mr. Nugent. Why don’t you just ask him all
he knows about it?
BY MR. EISEN:
Q Mr. is this all that you have done, to your
knowledge, in attempting to acquire additional reserves
five
Q Does the price specified in the contract remain
constant throughout the duration of the contract?
A No, it does not. It has provisions for escalation
wage increases or contract increases and supply in-
cost of production at this mine”, and we have to prove
our point, and we are allowed that increase.
12171 C ent Goes the contract provide in the event
of a di t
A Each of our contracts are written differently, and
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100
I went to work for the Electric Coal Company, which
was purely a sales company, partially owned by United
ies, with an exclusive sales con-
tract to sell all of United [7] Electric’s coal.
That company went out of existence, or was dissolved
probably in 1931 or 1932, and United Electric moved
their general offices to Chicago from Danville, Illinois,
and established their own sales organization, and I be-
came a part of that in—i init must have been 1931 or 1932,
I guess. I cannot give you the exact date.
I continued in that 3 until they made me Sales
Manager, I think, but I cannot tell you when. They had
a vice-president in charge of sales and I worked di-
reetly next to him as his assistant, more what it was.
i His name was M. M. Soule.
ge made vice-president in
1954, when he retired, and
nt that time. He had been on
In 1959 I was made president of United Electric Coal
Companies, and retired as I told you.
Q Who was your boss when you were vice-president
in charge of sales?
A Well, when I was vice-president in charge of sales,
Kolbe was president of the company and [8] I reported
to him, Frank Kolbe.
* * * „
[14] The two things combined can’t tell you how
much of each—had the effect of increasing the de-
preciation.
Q What was the new IRS guideline for taking de-
preciation, if you recall?
MR. HEDLUND: I am going to object to that ques-
tion. I do not see what materiality that has with re-
spect to any issue in this lawsuit.
MR. EISEN: I will withdraw that question for the
time being.
BY MR. EISEN:
Q If in 1964 the 1959 IRS regulations were still
in effect, wouldn’t the earnings per share of UEC in
1964 be substantially higher?
101
A Will you ask that question again, please, sir?
MR. EISEN: Will you read the question, Mr.
Youker.
Q (Read by the Reporter.)
BY THE WITNESS:
A Yes, they would. The earnings would have been
higher. Your taxes would have been higher and your
depreciation would have been [15] less and your cash
generation would have been less.
I think I said that in this memorandum. I reversed
it. If you will look at paragraph 3 on page 1C—do
you see that? ‘ 1 5 3
[31] Murray was Treasurer before 1959 and remained.
Utterback was made Secretary. I [82] think the same,
practically—I do not know of any officer, outside of
Kolbe who became chairman of the board and then
when he reached seventy he was retired, but all the
rest of them were the same after 1959 that they were
prior.
I think your annual reports will be a better guide
to that than what I can tell you.
Q What advantages, if any, accrued to United Elec-
tric by virtue of being part of or associated with Gen-
eral Dynamics?
contracts ran out or when they asked for new bids,
and — started to develop very strongly in about 1958
or 1959.
The first indication I had of it, or one of the first,
was when Central Illinois Light Company refused to
extend their contract, and when other utilities, when
they had tenders they were putting out for bids over
long term [88] contracts, they just didn’t send us any.
Q Where is Central Illinois Light Company?
A Peoria, Illinois.
BEE ep opops
i
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8 ae
itis
527111 E
: 2
3 5 ~
3 Bs &
Hele
=
2
me
t your experience that in order to fulfill a
as the example we [55] covered here with
to Vipco plant, there is always a little cushion
when you think you are running out of a seam,
always a little more coal that you can always
of there?
can go either way. You can make a big error
„particularly in a strip mine.
ow much additional tonnage, if you recall, did
e out of the Mary Moore mine after June of
cannot tell you. The record will show it.
id you supply anybody besides—
No. A hundred per cent of it went to Vipco.
1
75
K
Eb 5
1 25
—
pops
mE
2
Q Where are they located?
A St. Louis is their headquarters.
Q You had a conversation or a letter [56] from some-
one from that company, where they told you—
A I had conversations with them.
103
was subject of this conversation?
Well, they were coming up for some bids for new
r
think it was worth while to send us a tender because we
could not bid on it anyway under the length of time and
tonnage, and so forth.
Had you been supplying him prior to [57] that
I
rom
Q
A I have a contract with him now.
Q F which mine?
A From Fidelity.
Q What did you say to him at that time?
A Well, he had a map of all of our reserves and all
our acreages that we had to supply him when he made
his existing contract, and there wasn’t much that I could
say to him. He knew it.
I did tell him about our relationship with Freeman and
that we might be able to work out a joint arrangement
some way so that ity could be supplied until it ran
out and Freeman take over beyond, but apparently that
was not suitable to him because he didn’t send us 3 tend.
er, as I recall, on that particular bid.
Q You said, however, that you did continue to sup-
ply him? |
A We are on a contact that will expire in—well, it
shows in the record, I don’t know, in two or three years,
I think. This contract was made about seven or eight
years ago.
Q What did he say when you said that [58] Freeman
reserves could back up your reserves?
A I don’t recall now. I don’t recall every part of
the conversation. I don’t remember what he said.
104
Q Did you submit a bid on that contract despite his
statement?
A We couldn't, under the terms of the bid. I would
ee ee but we
pti
For one thing, I remember, that bid required fast load-
ing for unitized train movement, which meant we would
have had to put in that type of facility at Fidelity to ac-
commodate it.
Q So that—excuse me.
A That was one thing we did not have.
Q So this was one thing that would have prevented
you from taking the contract, regardless of the amount
of coal you had left available?
A That was one thing, unless we decided to spend
the money riecessary to build that sort of a device, which
we might have had to consider seriously from the stand-
point of our [59] reserve position, as to whether or not
we would be justified in spending the money for it.
Q Were there any other customers with whom you
communications or conversations—
Let me finish the question.
I am
(Continuing) —communications or conversations in
which they have discouraged you or refused to accept
!! hiamin tek themed yon hot
insufficient reserves?
A Central Illinois Light at Peoria.
© Sex tat n
here before?
A Yes.
Q Who did you have the conversation with there?
A Mr. Wellington, Q. W. Wellington.
Q Is that “Q” or “Hugh”?
[60] A Q. We called him “Duke.”
Q What is his name, Quincy?
A I think so. He didn’t like it.
MR. EISEN: Off the record.
105
(There was a discussion off the record after which
the taking of the deposition was resumed as follows:)
MR. EISEN: Back on the recofd.
BY THE WITNESS:
A He is vice-president, and we not only talked about
it, but he wrote me a letter which I believe is part of
these documents you have.
BY MR. EISEN:
A They had not backed me up. I said I figured that
they were a complement to us and [61] that would de-
velop in the years to come, when we did run out of coal,
and I was using it as much as I could to preserve our
position with the customers we had, as an indication of
the future.
Q ne af that imine were you supplying—what was
t.
4A Tes. s
„ what mine were you supplying that com-
pany
How much coal is left at the Cuba mine?
I don’t know as of today. Back in 1965, when I
left, I figured that if we were able to get some acreages
we were trying to get right around us, I think at
from
8 Jes, and will until the mine runs out of coal.
4
106
A Well, I didn't have any conversations with them,
but I think our sales people have, and they reported to
me that that was a matter of concern.
Q Which sales people and what companies?
A I can’t remember now—well, I can remember that
Commonwealth Edison is concerned with our reserve
position, yes, but I had no conversations with them.
Who sg bg man at mia gn 1
reported to you by your sales people, who was concern
A That would have been whoever was in charge
then. They change so much. I think it would have been
Glen Beaman.
Q You said “then.”
A No. “Glen”, Glen Beaman. ~
Q No. You said whoever was in charge “then.” When
is your recollection as to when this was? a
A I would say three or four years ago.
* * * *
1751 Q Where was that located?
A Near Madisonville, Kentucky; east of Madison-
ville, Kentucky.
Q Yes.
A In their coal ownership or coal leases they had
underground coal adjacent to it—I forget the amount,
it was not too big—and when they quit mining they
would have to get a place to sell it, and the only place
P go with it would be to put in a bid to the TVA, and
if successful, put in the necessary equipment to bring
the coal to the surface. :
They had everything else there they needed, but you
would have to put in the slope and put some under-
ground mine machinery in.
I presented it to Nugent to see if they were interested
in taking some old equipment they [76] had in some of
their mines in Illinois and putting it down there and
bringing the coal out and putting it through. the plant
that was already there, and selling it to the TVA.
pinay opis
1 1511 H
operate a dock
Does United Electric still own and
BY MR. EISEN:
A
*
5
EE
:
—
5
5
ö
é
i
2
＋
5
MR. EISEN: Yes
109
BY MR. EISEN:
Q Did any of the Iowa utilities located the
Mississippi ever come down and look over the Indi
field?
ls that the same one?
Did you talk with them about the field?
No, I didn’t. I may have been in on a few con-
tions, but mostly it was done by our sales depart-
t.
What was reported to you as to their reaction?
Nothing favorable. Too little reserve, a relatively
and no particular interest on the
POPOrPOr>er>o
>
V
else
5
f
i
>
28 5
k
a
2k.
give “the production cost, profit and cash flow estimates”
of your Industry field.
MR. EISEN: I am going to ask the reporter to mark
the letter Morris Deposition Exhibit No. 23.
(The document was marked Morris
sition Exhibit 23, for iden 10-1-68.)
11711 Q —in 1964 again you seemed to be on the
Verge of success with that field, when Iowa Southern
tilities was interested. Now, is it [172] really a ques-
tion of a prospective utility getting interested in it that
could change the thing? I mean, couldn’t it change to-
Q Is it your testimony that the Industry field will
never be a minable strip mine?
A That is too big a question for me to answer. I
possibly pass an opinion on that. Wouldn’t at-
were
on the verge several times in the
as far back even as 1961, of thinking that it was
almost immediately feasible for mining at [173] the time
Commonwealth Edison was interested, were you not?
A I answered that question. I said nothing ever came
Q But that—wasn’t it—
A We tried to sell them, we tried to sell Iowa South-
ern, we tried to interest Iowa-Illinois Gas—without suc-
cess. So those failures indicated that it was a
marginal proposition at best.
Q Well, what is your opinion on if and when the In-
dustry field will become minable?
MR. HEDLUND: Mr. Eisen, I think that question
has been answered and asked about three times. I think
the record will show that the witness is unable to guess
when, if ever, the field is going to be minable.
BY MR. EISEN:
Q Would you say it would become feasible to mine
83 when the Fulton-Peoria coal becomes dis-
sipa
A I don’t know whether it would or not. I wouldn't
pass an opinion on it, because there are so many—so
many other fields available to the market. I mean, pro-
Yes.
111
ducers able to put coat [174] into different markets by
their locations.
a . * 3
1193] Q Front loaders, the development of machines
to load trucks, also have been advanced, haven't they?
A Front loaders?—I don’t know just exactly
Isn't there a loader made by—I believe it is
Caterpillar, that has advanced strip mining methods?
A That must have been in the last two or three
We never used one of them, or I never heard about it.
mvs Seeman Have you heard of the term “high
lift”
THE WITNESS: High lift. But that isn’t used in
loading trucks in a strip mine, to my knowledge, unless
there has been a development recently.
BY MR. EISEN:
Q Is it fair to say that, based on your opinion, what
is considered unrecoverable coal ts i
feasible tomorrow to mine, that is, in the future?
And unless something develops that I can’t foresee, I
don’t believe that 120 and 150 foot overburden will be
to your experience in the coal business, the historical
nature.
A Well, if it couldn’t be mined by stripping, then,
the only other way would be underground mining. And
I couldn’t voice an opinion on underground mining, be-
cause I never had any experience in it, and I know very
little about it.
Q Did you from time to time investigate the pos-
sibility of developing underground mining properties for
United Electric?
call in Mr. Nugent’s
what [195] could be
I would want to check that with peo-
with it than ourselves,” that he was
counsel with the Freeman
ice?
something about this, and I think where
to the Freeman people.
Weren’t you picking that coal up for yourselves?
41.
822 55 1275 A
„--
5
8
8
§
5
2
8
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8
2
:
oS
more familiar
Q Wel, what was your relationship with this Central
A No, we were not.
Q You were just going to
A I recall
he says “however,
ple 0
Bes
Q
would ask Freeman to give us their opinion on it.
113
A We have no organization, we have no experience
in underground mining. And if we were to attempt to
go into it, it would require building an organization that
had the knowledge and experience and know-how to do
it.
[207] BY MR. EISEN:
Q Did you also, Mr. Morris, at one time investigate
un property west of Greenville, Illinois?
A We may have. I don’t recall it, off-hand.
Do you recall some coal controlled by G. Stuart
Jenkins of St. Louis?
A I remember he owned some coal, yes.
114
MR. EISEN: Let me ask the reporter to identify as
Morris Deposition Exhibit No. 35, a letter dated July
17, 1962, addressed to Mr. Morris from R. J. Hepburn,
relating to G. Stuart Jenkins, underground coal, west of
Greenville, Illinois.
(The document was thereupon marked Morris Deposi-
tion Exhibit No. 35 for identification, 10-1-68.)
BY MR. EISEN:
Q 1 would Uke to show you this letter, Mr. Morris,
and ask you if you can tell us approximately how much
coal in terms of tons was involved in that property re-
ferred to in the letter?
A Yes, I recall it. It is addressed to me, signed by
Mr. Hepburn.
Q Yes, sir, whether you recall how much coal [208]
was involved?
A I don’t recall, no.
MR. EISEN: Will you stipulate that the stipulation
heretofore agreed to with regard to admissibility of
documents applies to Morris Deposition Exhibit No. 357
MR. HEDLUND: Very well.
BY MR. EISEN:
Q I would like to now show you a document, which
I will ask the reporter to mark as Morris Deposition
Exhibit No. 36, being a letter dated March 14, 1966,
from T. H. Latimer to Mr. R. H. Inman, entitled, “Put-
nam County, Illinois”.
(The document was thereupon marked Morris Deposi-
tion Exhibit No. 36 for identification, 10-1-68.)
Q The letter indicates that Putnam County is near
Greenville—
MR. CUSACK: Granville.
Q Oh, that is Granville.
MR. HEDLUND: That is in Ohio.
A Granville—that is a way down on the Mississippi
River, isn’t it?
Q Yes. I have to change that.
[209] A Is that where that Jenkins property is?
Q I don’t know.
MR. EISEN: Did the prior exhibit—was I misread-
ing that, or did that say, “Greenville”?
115
MR. SAMUELSON: Greenville.
THE WITNESS: There is two different towns.
BY MR. EISEN:
Q Do you know whether or not we are talking about
the same area, Mr. Morris?
A I don’t know. Let me look at that letter. Maybe
I can tell you.
Do you mean United Electric Coal has still an-
other area of underground option that we haven’t run
to before?
A We looked at anything we ever heard of. And that
on the record.
Q Well, what happened to Mr. Jenkins’ property,
if you know? Was that referred to Freeman, do you
know, sir?
A It must have been, because you see that notation
in my handwriting on it.
[210] Q Is that your handwriting that says “bad
roof?” 7
A Yes. So I must have asked Freeman about it.
(There was a discussion off the record after which
the taking of the deposition proceeded as follows:)
_ BY MR. EISEN:
Q I will show you the document and ask you if it
doesn’t show a lot of coal in that area?
MR. HEDLUND: I will object to your characteriza-
tion of these documents, Mr. Eisen. I think we will
— faster if we let these documents speak for them-
ves.
Q Were there—well, there is a lot of coal in that
area, is there not, Mr. Morris?
A Let me read this letter. I don’t know that I ever
saw the letter. (Examining document).
Well, you have a question, I believe. I have forgotten
what it was, now.
Q I said that there was a lot of coal in that area,
was there not?
A That is what this letter says. And the figures
are evidently taken from the Illinois Geological Survey
Reports, which could or could not be accurate.
116
[217] Q If, Mr. Morris, after consulting with Free-
man, [218] they advised you that a particular under-
ground opportunity that you had come across was feas- |
ible for mining, would you have kept it, or would you
have turned it over to Freeman?
MR. HEDLUND: I will object to the question as
asking for speculation from the witness as to what might
have happened had something happened. But if he wants
to answer, he may.
A Well, I don’t mind answering it. My thinking
that we were not underground people, didn’t
thing about it. First, we would get their opini
to whether we should even go ahead and try
this underground acreage, whether or not i
put into United Electric, I never
A I would have to look at it to tell you.
[2384] And adjacent to that property Ruby Chandler
Jordan had a lease on about six million tons of No. 9
[235] seam coal, which would have to be mined under-
It was too deep for stripping. And the life
of the Ruby Mine was getting rather close to the end—
I forget when they mined out—and at that time some
consideration was given by Freeman of taking some
of their equipment that they weren’t using, like under-
ground mining machines, and putting it over there and
mining that coal.
Q I think we are duplicating what you have already
told us.
A I think we are.
MR. EISEN: Does the stipulation apply to Morris
Deposition Exhibit No. 467
MR. HEDLUND: It does.
BY MR. EISEN:
Q I would like to show you a letter dated November
20, 1957, to Mr. G. I. Grasty of Richmond, Virginia,
from T. H. Latimer, the subject is “Coal Lands in
Virginia and Kentucky”, and ask the Reporter to
that Morris Deposition Exhibit No. 47.
ik
A No, we didn’t get into that area. It was clear
out of our bailiwick. There were a lot of big producing
companies down there already formidably established in
118
the market and in the coal fields. And sometimes we
would have somebody write us or come into see us, and
if they did, we would take a look at it to see if it was
worthwhile. Plus the fact that in the early days of the
A It was an acreage rather small in the Merrimore
property. ‘ 5 4 5
[241] Q When do you think it will be feasible to
mine the Round Prairie field?
A That is purely a guess. Purely a guess.
Q Do you have an educated opinion?
A I couldn’t give you any time or how many years
it will be. I can only say that the competitive situation
will have to change to where mining that coal would be
profitable.
Q I would like to show you a document entitled
“Round Prairie field’, dated January 16, 1968, which
appears to be a letter, a two-page letter, addressed to
you from Mr. T. H. Latimer, and ask the Reporter to
mark that document Morris Deposition Exhibit No. 48.
(The document was thereupon marked Morris
sition Exhibit 48 for identification, 10-1-68.)
*
[244] Subsequent events indicated that it is going to
be a long time, if ever — 1 wouldn’t say “if ever”, be-
cause maybe someday that field will be mined, but it
will have to come after the competitive situation from
Belleville strip, southern Illinois raw coal, on volume and
unitized train rates have gotten all the business they
want or can handle. Then it might be possible to con-
sider this. But when, I couldn’t give you any idea,
119
o pick parently you felt optimistic about it at this
i half
[270] As of the time you left, had Alcoa furnished you
with any prediction mh when [271] they would be
Q They didn’t indicate you that they would be
; i time?
you feel that you would have an advantage
any other company in mining this coal field?
A You mean United Electrie as such, or United
stead of us by ourselves. I don’t think they would give
us any consideration on mining it as United Electric.
(275] BY MR. EISEN:
Q Did you ever have a conversation with Mr. Nugent
event You discussed the right of first refusal in kr.
ot to use of the Beaucoup
a
120
is the way they put it, and that was about as far as it
went. And I am quite sure I told that to Mr. Nugent.
Q And likewise, they would give you every considera-
2 1 event that they decided to develop it?
es. ;
Aas far as your being the company which would
mine it?
A We would be allowed to discuss it [276] with
mem, and they would probably, knowing them and any
big corporation, discuss it with a lot of other people, too.
* * * *
[298] Q Do they use any in the winter time?
A It depends on the type of contract they have with
the gas company, whereby on [299] cold days when the
gas is needed for home heating, they could cut them off.
And I don’t know now er utilities had that type
of contract or not. Some industries I do know had
contracts where they would get gas when it was avail-
able in the wintertime, and then when it got cold and
the gas was needed for home heating at the much
higher price, why, they could cut them off in I guess
an hour’s notice, I don’t know. Percentagewise, I couldn’t
tell you what it was. But it was substantial, I would
say.
But not in the wintertime was it substantial?
A Not in the wintertime, no.
Do you know what organization or agency would
keep records upon which you would rely in determining
what such percentages were?
A For the utilities, the Federal Power Commission
Records would show it. For other industries, I don’t
know where you would get those records.
Q Does United Electric and Freeman serve gen-
erally the same geographic market area?
[300] A Not entirely, no. Some areas we serve, both
of us. Other areas they serve and we do not, and some
we serve and they do not.
t oma in general, the geographic areas which
serve
served by both of us. One plant of Union
Electric is served by us,.another plant is served by
them. And I don’t think there is much else.
MR. CUSACK: Off the record.
(There was a discussion off the record, after which
the taking of the deposition proceeded as follows:)
GE,
1
if 2 me
15 848
231
business prior to the merger—
1427141
lane iH ,
. elit 77 it
pda eh
523 sel HE 22252
woe foul like
Prior to 1960, were there customers whose busi-
ness both United Electric and Freeman solicited, whose
business was not so solicited after 19607
MR. HEDLUND: Do you want to give us a date,
Mr. Eisen? I think we will move faster if you can
pinpoint the period of time that you were talking about.
A Tou would have to take each mine separately.
Q You would have to?
A If you want an answer, you would have to.
Prior to your association with Freeman—
MR. CUSACK: Off the record.
A I don’t recall of any.
[304] Q What are the outer limits of United Electric
Coal’s sales area for any of its mines?
(There was a discussion off the record, after which
the taking of the deposition proceeded as follows:)
BY MR. EISEN:
Q Is there more or less competition in the coal in-
dustry today than theré was ten years ago?
A There is fewer companies, of necessity, due to the
changed market conditions. But my opinion at the time
just as great. You had a different type of market
I left, the competition between those companies was still
entirely.
E 242
i 5
E
Hl hi
47 £32
Hal #4
HY
715444
I have just a few questions.
CROSS-EXAMINATION
ult i 120
1. 1115 1
A e 4H
n ae
2
1E „1 it ii 3
14 al af
f l. eee
un e 3
3 43 i N i 155 3 11115 5
Ahe ee Filia “hs
Hel HELE aly ae a a
3154 348525 BAS 1775 747 3% 347
ess l-AZ-H-vi- 28I23-Kzs
121 puss
11 gs
1 dis ;
45 1115 5
14237551
fal ltr
pe
fie
iy
211177
211
i Sat ‘
i feasible than
2
A It might be under certain conditions
2 What conditions?
181
EXCERPTS FROM DEPOSITION OF FRANK FRE D-
ERICK KOLBE, TAKEN OCTOBER 10, 11, 15, 17,
18, 22, 24, 25, 28, 29, 30, & 31, 1968
Q And did you then become active in the [9] man-
agement of United Electric as an officer?
Q
A
Q As president of United Electric?
A As president of United Electric. Ware was a min-
ing engineer and had spent several years at one of the
nitrate companies in Chile.
Q And then did you succeed Mr. Ware as president?
A Then later on, Ware resigned to become president
of the International Minerals, and then I became Presi-
*
In what year did you become president of United
Electric?
A 1939.
And you continued on the Board?
A Tes.
110] And how long did you continue as president of
United Electric, Mr. Kolbe?
A Until 1959.
Q And after that, what was your position with Unit-
ed Electric, if anything?
A Oh, I was Chairman of the Board for two or three
Q And do you recall when you resigned as Chairman
of the Board? /
A I think in 62. It will all appear in the minutes.
Bunte Kolbe, could you give us a little background
nited Electric, when it was founded, if you know?
A No. Our sales department was a very fine sales
department. We have always had an outstanding sales
That's S-o-u-l-e?
were not coal peddlers in the sense that you go from one
like a milk man, and
up an order, but they were real sales vice presidents.
Would you like an illustration?
Q Well, yes, that would be fine.
A Well, for instance, Johnny Morris, we wanted to
sell coal to Northern States Power and Light—
them a price shipping it by barge up there that would
be better for them than bringing [24] it up the Lakes.
1311 Q Mr. Kolbe, I now show you what has been
as Kolbe Deposition Exhibit 2, for identification,
and I ask you, Mr. Kolbe, if you can [32] identify this
document?
what is it, Mr. Kolbe?
t is the United- Electric Coal Companies’ 1956
Report. ,
Mr. Kolbe, I ask you to examine that document,
and I ask if you are familiar with it?
A Yes.
Q PT... ie cee &
in recent days?
A Yes.
Q Mr. Kolbe, is the document which has been marked
as Kolbe Deposition Exhibit 2 accurate?
A Yes.
MR. CUSACK: I ask counsel if the standing stipu-
lation applies to Kolbe Deposition Exhibit 2.
MR. HEDLUND: It does.
MR. CUSACK: Thank you.
THE WITNESS: CCC
and Ames.
MR. HEDLUND: I object to that as not responsive.
* * * *
[59] A Tes. — We earned that, those figures.
One year here, as a matter of fact, in 64, we earned
$5.16, and that’s before this 72 [60] cents, which would
have made it $5.88, and, as a matter of fact, the 72 cents
may be low, for all I know.
I see.
So we way exceeded these figures.
As set forth on 9-C?
Yes, yes. I might say it was really a tragedy for
3 that this merger with Crown—with
Truax didn’t go through. We would have gotten—well,
today, on the basis that I mentioned, of 1.45 shares of
Truax for ours, we would have gotten—our stock today
would have been worth a hundred dollars. It was a
tragedy that it didn’t go through.
MR. HEDLUND: I move to strike that testimony as
not being responsive.
BY MR. CUSACK:
Q Mr. Kolbe, I would like to go through some of the
annual reports of United Electric with you for a moment
and ask if you can comment thereon.
PO pO
[74] Q Of old shovels?
soft material coming down into the pit.
Tou see, a lot of this dirt and so forth can run almost
that a serious problem in strip mining, that the
vegetable matter, d it just can rot, and also, if you
have sand, you see, wet sand, it will run almost like
water.
130
[78]
No. 67 C 1682
UNITED STATES OF AMERICA, PLAINTIFF
v8.
GENERAL DYNAMICS CORPORATION, THE UNITED ELECTRIC
CoAL COMPANIES, AND FREEMAN COAL MINING CORPO-
RATION, DEFENDANT
Friday, October 11, 1968,
10:00 o’clock a.m.
Parties met pursuant to adjournment.
PRESENT:
MR. EISEN,
MR. CUSACK,
MR. FUTTERMAN,
MR. SIMS,
appeared for plaintiff;
MR. HEDLUND,
MR. KEMPF,
appeared for defendants.
ALSO PRESENT:
MR. FRANK NUGENT,
MR. J. MICHAEL McGUINN.
(The taking of the deposition of FRANK FRED-
ERICK KOLBE was resumed in Room 2634, 219
South Dearborn Street, Chicago, Illinois, as follows: )
* * * *
[83] Q Are you a member of any other trade associa-
tions or an officer of any other trade associations?
, }
A
Q Were you a member of the Illinois Coal Producers
ion?
A Yes, I was.
Q Mr. Kolbe, yesterday you testified in regard to the
dev
elopment of unimite.
84]
Q Who discovered unimite?
A I did. I got a patent not on it specifically, but on
m of packaging and so forth.
Q a process? :
A Well, it was a container. The duPont Company
I turned it over to the corporation and the duPont Com-
pany paid the corporation $20,000 for the patent.
Thank you.
Now, before, Mr. Kolbe, we return to your testimony
regarding the Kolbe Wheel Excavator, could you please
tell us who were the competitors of United Electric dur-
ing the time that you were a director and an officer of
United Electric?
A Well, everyone who sold coal to the same people
pots did was a competitor, and a number of people who
idn’t.
Q Can you give us the names of these companies, sir?
A Well, I would start out with Truax-Traer. Harri-
son Eiteljorg had a little mine out there that I have for-
gotten the name of.
[85] Then, of course, there was Peabody and also Free-
man, and there were just any number of them.
Q Was Ayrshire a competitor of United Electric?
- 182
A Oh, yes. .
Q Was Stonefort a competitor of United Electric?
A I think so. Yes, they had a mine in Fulton County.
They would be competitors of ours, yes.
Q Thank you.
A You could get that better, probably, from Mr. Mor-
ris, who actually was fighting with all of these people
all the time. 5 3 5 5
196] Q Do you consider, Mr. Kolbe, the wheel a very
important development for the success of United Electric,
that is, contributing to the success of United Electric?
A Oh, enormously. How in the dickens would we have
mined a hundred feet of overburden without it in Cuba,
or 85 feet, and made money? Cuba has been a very, very
successful mine.
Q With high overburden?
A With high overburden, and the Buckheart mine,
the overburden there would just swish out on you, and
we were able to put it back so that it obviated that.
Q Mr. Kolbe, do you have an opinion on the capabili-
ties of a wheel excavator regarding the moving of over-
burden, do you have an opinion as to what is the most
overburden a wheel excavator is capable of moving?
e In Germany they move up to 300 feet. I don't
ow.
Q Of overburden?
A Of overburden. They handle it differently than we
do. They finally have to load it into railroad cars and
transport it away, but it digs [97] up to 350 feet.
11181 BY MR. CUSACK:
Q Mr. Kolbe, do you know whether other mining com-
panies had looked at the Banner mine property prior to
3 acquiring this property?
es.
Do you know which companies looked at it?
Ayrshire, Sherwood.
1 that Sam Sherwood?
es.
PO PO Pp
, 133
Q Did United Electric obtain the Banner mine prop-
erty after Ayrshire, Truax and Sherwood had looked at
it?
Q Do you know whether Ayrshire turned down the
Banner mine property as a new mining property?
A They all three turned it down.
Q All three turned it down before United Electric
ired this property?
A That is right, that is right.
8 20 * > *
[125] Q Tou testified, Mr. Kolbe, regarding the Cuba
mine, the Buckheart mine, the Fidelity mine, the Buffalo
Creek mine, the Rushville mine and [126] what was
the name of that mine near St. Louis?
A Freeburg.
Q Did United Electric operate any other mines while
you were chief executive officer of United Electric?
A Yes. We opened up the Mary Moore mine near
Danville and the Skyline mine near Charleston, West
Virginia.
Q Mr. Kolbe, did United Electric ever operate an
underground mine?
A Oh; we had a small operation at Buffalo Creek.
Q A small underground operation?
A Yes.
Q Could you explain how United Electric got into the
underground mining business at Buffalo Creek?
A We had two advantages. In the first place, we had
a washing plant that was built for the strip mine, so we
would have no additional cost of constructing a washing
plant or preparation plant.
Q Was that a strip mine at Buffalo Creek?
11271 A Right.
All right.
we thought we could do something down there.
Q How long was this underground mine at Buffalo
Creek in operation by United Electric, do you recall?
A I can’t tell you any more. I don’t remember.
Q Mr. Kolbe, one of the contentions of the defendants
in this lawsuit, and Mr. Hedlund will correct me if I am
wrong—
MR. HEDLUND: I may object already, but continue.
BY MR. CUSACK:
Q (Continuing) — is that United Electric [128] does
not have the capability of engaging in underground min-
ing. Do you believe this is a fact, sir?
A First of all, I am not sure that the underground
mining companies do.
Q Do you believe, Mr. Kolbe, that United Electric has
the capability of opening an underground mine if it so
desires?
A Oh, yes. We could do it, yes, but I would just like
to say that this is a very difficult job.
The underground mining companies in 1923 turned out
eighty-one million tons of coal. Thirty years later, in
Illinois, they turned out a little over twenty.
In other words, there was sixty million tons produc-
tion of companies that went out of business because of
fires, roof falls and bankruptcies. It is a tough business,
it is a tough business, and we would have to be very—
any organization would have to be very, very careful
going into the underground mining business.
Q Do you believe, Mr. Kolbe, that United Electric
would be able to go into the underground mining business
and be able to go into it success- [129] fully, under your
management?
(The document was thereupon marked Kolbe Deposi-
tion Exhibit 12 for identification, 10-11-68.)
* * * *
[183] BY MR. CUSACK:
Q Mr. Kolbe, would you please examine Kolbe Deposi-
tion Exhibit 13 for identification.
A Yes.
Q Can you tell us whether United Electric, during
the period of time when you were a chief executive
officer, often did look at underground properties with a
view to the possibility of mining these properties?
A Well, we looked at them but we never did any-
thing much about them. During—
8 r
MR. HEDLUND: Perhaps, Mr. Cusack, you should
let Mr. Kolbe finish his answer.
Q Do you have anything more to say in answer to
that question, Mr. Kolbe?
Be" During these years we had two problems that
£3
D
uf 1 as
Hl 115 1 li
17
HB
1
i
E
1
United Electric mines?
judge that these labor costs in
much.
can
too
of fact,
this—oh,
Huey who
bias
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12
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11 451 15
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year
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188
MR. HEDLUND: '. You mean as a practical matter,
it is properly phrased. Tt cannot
BY MR. CUSACK:
8
have
I got i
I do
Field
and
00 feet
you see
t I
of crea
Shida can
instance, tha
got to
opinion
Truax-
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deeper
the
and every
, the
and the deep
could do.
22 a
1912
a
if
1
am gat
z
£3
LL
1465
**
[165] BY THE WITNEss:
140
Buyers’ Manual, and I ask you, sir, to please examine
this exhibit.
A Yo * * * 5
[168] Q Do you know whether any of that coal comes
in there now?
A Peabody had some mines, but I cannot remember
whether the mines have worked out or not.
Q Thank you, Mr. Kolbe.
Are there trade associations whose membership is
limited to coal producers? 2
Oh, yes. National Coal, National Coal Policy, Mid-
west Coal Producers.
Q Mr. Kolbe, are there any labor unions whose
limited to employees of coal producers?
ine Workers, and Progressive Mine Work-
152
2
Fires
177
52
H
70
a5
E
25
EE
; j
u name a few for us, please?
and Saward’s, which is limited, I think,
Is that S-a-w-a-r-d’s?
*
f
i
Q Mr. Kolbe, based on your knowledge and experience,
what fuel, if any, dominates the steam electric utility
market in Illinois and surrounding states?
coal.
you give us the reason for this, sir, if you
The low cost.
Mr. Kolbe, on a year-around basis, have coal
prices been considerably lower, considerably higher, or
PFE Oe EE ee peel green,
tion
A Oh, they are lower, much lower.
Q What would your answer to that be in regard
to firm oil prices?
141
oe.
pe b Bg, 23
diner : ty By
11 5 He 15 ee
HIRE i 1 I
viel diy FL. ts {iii
111177144 445 ath 1.84% ff
141 b 1.
115 SAL ii i i . Be i: 21235
PPLE Li 111 17357217 % J
1 JJ HT Hy pulls : oi 8 48 ladles
I trea 28221 988 28 *
Q Mr. Kolbe, Kolbe Deposition Exhibits 32-A, 32-B
and 32-C refer to what coal field, sir?
A It is a coal field north of the Fidelity mine, sepa-
rated from it by the Beaucoup Creek Field north of
there.
Q Do you know the name of the field, sir?
A Round Prairie.
Q Thank you, Mr. Kolbe.
Are the coal reserves that United Electric acquired—
excuse me. Strike that, please.
Mr. Kolbe, do you know whether United Electric ac-
quired coal reserves at the Round Prairie Field?
A I just don’t remember all that. I just don’t.
MR. CUSACK: Will counsel stipulate that United
Electric acquired coal reserves at the Round Prairie
Field?
* * * *
12031 Q Mr. Kolbe, who was the president and chief
executive officer of United Eleetrie at the time United
Electric began to acquire underground reserves at Round
Prairie?
A I think Morris was. Wasn't he president? I think
so. Not me.
Q Mr. Kolbe, why did United Electric, if you know,
acquire underground reserves at Round Prairie?
143
A Well, just for the reason given there, that we have
A Yes.
you
A I would have had ideas, as a matter of fact, on
i coal mining, just like I did in
strip coal mining. I might have revolutionized the whole
thing.
Q As you did with the Wheel Excavator and with
Unimite on stripping?
A Yes, yes, drills and one thing and another.
[208] Q All right.
A I also was instrumental in getting the deep coal
field into metallurgical coal. I mean, all of these
Q Mr. Kolbe, do you feel that. United Electric could
mine the Round Prairie Field? :
MR. HEDLUND: That has been asked and answered,
hasn’t it, Counsel?
MR. CUSACK: Yes, I assume it has. Thank you.
7
5
d
i
144
N
BY MR. CUSACK:
Q Mr. Kolbe, have you ever heard of the Ind
Field?
it is located?
Yes.
Q Is that in McDonough and Schuyler Counties?
A
1275 12 11 bes 115 Ht 11275
Hg: 11
f iy % K
nitty tt faunas
583. H. ae HH Ler ee
vipa 111 : ;
1247 1 113755 fale
8
0
3 —
11265
1 15
Aft
7927
O
i
8
a
1 re
11 17
comparison out of my mind.
is elear.
[237] BY THE WITNESS:
A Well, I can make the
MR. HEDLUND: Just so the record is
BY MR. CUSACK:
companies, in fact, who are building an atomic energy
plant, and I understand they are using our method of
beat transfer of that, although I had no idea of getting
into atomic energy, but it is a way of transferring heat
that I think works very well, works better than this
method they use—that General Electric and the other
le use,
1238] The Hanna Coal Company Hanna Compan
Be
want to put in an oil recovery process from shale,
4
g
8
Oil
in the tar sands of Athabeska. They are not using our
process for separating the oil from the sand, or the tar
from the sand, but the Hanna Company would use our
process. a
Now, would have liked to have investigated =
They were going to mine this deposit, open pit mining.
We are experts on open pit mining.
[239] Q United Electric?
A United Electric.
Q Yes.
A I would have looked into that. I notice now there
is a mine in Nevada doing this, and doing very well,
apparently. It was described in the May issue of Na-
tional Geographic.
I mean, with a company with money and with ex-
the world is the limit.
Q What about coal reserves, Mr. Kolbe?
A We would have acquired those coal reserves north
of Canton, the coal reserves over here in Vermilion
County, had they still been available, and also those in—
147
we would have drilled much more
extensively out in—
world, the sky is the limit.
Q Industry?
A Industry, sure. The
MR. CUSACK:
We have no
Thank you very much, Mr. Kolbe.
further questions at this time. There is a
however, that we might have one or two more
possibility,
questions
tomorrow.
148
[242] .
No. 67 C 1682.
UNITED STATES OF AMERICA, PLAINTIFF,
vs.
GENERAL DYNAMICS g TION, THE UNITED ELEc-
TRIC CoAL Cour AND FREEMAN COAL MINING
CORPORATION,
Thursday, October 17, 1968,
10:00 o’clock a.m.
Parties met pursuant to adjournment.
PRESENT:
MR. EISEN,
MR. CUSACK,
MR. FUTTERMAN,
MR. SIMS,
appeared for plaintiff;
MR. HEDLUND,
MR. KEMPF,
appeared for defendants,
ALSO PRESENT:
MR. FRANK NUGENT,
MR. J. MICHAEL McGUINN.
(The taking of the deposition of FRANK FREDE-
RICK KOLBE was resumed in Room 2684, 219 South
Dearborn Street, Chicago, Illinois, as follows:)
[298] Q At this luncheon, Mr. Kolbe, do you recall
telling Mr. Chaffetz and me that while you had been
president of United Electric you had been very reluctant
to undertake underground mining?
149
A That is my position, and I might well have told
vou that.
Q Do you recall telling us, in connection with that,
that during the 1950’s you had been too old to undertake
such a new venture?
A Which you will bring out later, you say.
Q Yes, sir.
Q Do you recall, getting back to the luncheon with
Mr. Chaffetz and myself, telling us that United Electric's
failure to materially improve its reserve position between
1945 and -1950 was because of the following factors:
First, that United Electric had 30 years of [801] re
serves at that time; secondly, that it was in a poor cash
position; and third, that it had been your judgment
at that time that UEC could not afford the substantial
investment that would have been involved in view of the
150
— de
0.
Q My question is, do you recall saying that to Mr
Chaffetz and me at that luncheon?
13021 A Yes. I think I would have said that, because
that is my position.
Q Thank you, sir.
A I should—
Q Well, sir—
MR. CUSACK: Just a moment, please. I do not
think he has finished the answer to the question—
[303] MR. HEDLUND: No. I am sorry, Mr. Cusack.
This is my deposition and I intend [304] to conduct it
the way I wish to and according to the rules.
MR. EISEN: In that case, we are going to move
that the question and answer be stricken.
MR. HEDLUND: Fine. .
MR. EISEN: The witness not having had an oppor-
tunity to complete his answer.
BO el apn soe r
ample opportunity to complete answer on that
partieular question on redirect.
11705
2
Able
Thank you, sir.
BY THE WITNESS:
A Which is my objection to previous questions.
MR. HEDLUND:
A (No answer.)
or conducting conversations with
,
|
|
think that this was not a [321]
there is a very bad com-
and one thing and another, Orient,
and so forth.
:
:
E
b
i
:
:
: 2
245
Au 8 *
731
153
1887 FRANK FREDERICK KOLBE,
CROSS EXAMINATION
(continued : )
BY MR. HEDLUND:
Q Mr. Kolbe, when you and I met,
last week or the week before that, do
me that you had nothing to do with the sales of U
Electric during the 195087
A Very little.
MR. HEDLUND: Would you hand the witness Kolbe
Deposition Exhibit 9-A, 9-B and 9-C, please, Mr.
>
245
eer
dae
a
1
Hs
i
118155 8
11111
4
fi
21
1
12
2 1
13
2 f
Electric’s working capital could be over $5,000,000
Q At the end of that fiscal year, Mr. Kolbe, what
was United Electric’s working capital?
Q It is a fact, is it not, Mr. Kolbe, that United
Electric did not achieve working capital in the amount
of $5,000,000 until 19647
— This deal never went through, did it, Mr. Kolbe?
A $3,438,544.
A Yes.
155
2
a
l
im
hy
re
|
4.
fd
115
fact, Mr.
to the
4,500,000
out
Cuba and
t in
and
diverted.
said that
Was not
to
tons
I object,
Hr
i : i 2112 ae
157
BY THE WITNESS:
A Yes. It was discontinued before the date of this
report, before September 10th, 1954.
BY MR. HEDLUND:
Q Why was it discontinued, Mr. Kolbe, if you recall?
A Because we did not make any money there.
Q It is the fact, is it not, Mr. Kolbe, that you had
substantial losses in that operation—
[401] A Tes.
Q —for that period of time?
A Yes, we did.
Q Who was in charge of that operation?
A The Mine Manager, Mr. Bob Donaldson. I think
we also someone else under whose management it was
—
am
got someone
1 not sure that Donaldson was not in charge of it
when it was put in and we got this other man later. I
would not be sure of that.
You see, I think Reid was the Operating Vice Presi
dent at that time. Let me just see.
(There was a short interruption, after which the
taking of the deposition was resumed, as follows:)
BY THE WITNESS:
A May I see the previous one, the 1953 one, or the
1952 one?
MR. HEDLUND: Certainly.
(There was a short interruption, after which the
taking of the deposition was resumed, as follows:)
[402] BY THE WITNESS:
A Yes. In 1953, Mr. Reid was vice president. It
would be under him.
BY MR. HEDLUND:
Had Mr. Reid any prior experience in under-
ground mining?
MR. CUSACK: If you know, Mr. Kolbe.
a
158
BY THE WITNESS:
A I would not know. I do not remember.
BY MR. HEDLUND:
Q It is a fact, then, is it not, Mr. Koble, tha
77... poe aad bas ome,
states that, “When this operation”, referring to the drift
United Electric got involved in the operations of the
Skyline Mine?
A The realization of this coal was very high, as I
remember, between $5 and $6, and of course, our coal
sold for much less than that, so between the realization
Q Did Island Creek Coal Company come to you with =
this proposition or did you go to them, if you recall? j
A I think I heard about it through Bill Cooke, and
we probably went to them first.
Q Is it fair to say, then, that you initiated the ne-
gotiations that led to this [409] operation?
A I would say we did.
I am speaking of “you” in a personal sense.
A Oh. Yes.
Q If you recall.
conditions with respect to the Skyline Mine?
A This was one of the few strip mines, possibly the
only one in that vicinity, so it would have, we hoped—
we thought—cost advantages.
Q Was Island Creek not stripping any coal—
A No.
[420] (The document was thereupon marked Kolbe
Deposition Exhibit B for identification, 10-18-68. )
BY MR. HEDLUND:
Q_ I now hand you, Mr. Kolbe, what has been marked
Kolbe Deposition Exhibit B for identification, and ask
you if that refreshes your recollection as to another at-
tempt by United Electric to get into underground opera-
tion.
(There was a short interruption, after which the
taking of the deposition was resumed, as follows:)
BY THE WITNESS:
A This says, “In connection with your memorandum
of October 8th”, which I do not have here. It says:
“I am sorry that the underground miner did not
perform. I believe this method of mining has a great
future, but underground mining is not our business,
and under the conditions I think the only thing for
us to do is to continue to [421] wait until someone
in the deep mining field produces a working ma-
chine and a workable system.”
MR. CUSACK: For the purpose of the record, the
memorandum is to Mr. R. J. Hepburn, dated October
9, 1957.
160
BY MR. HEDLUND:
Does that refresh your recollection as to an attempt,
in addition to the drift mine at Buffalo Creek by United
Electric, to get into underground mining?
A Well, this would be exactly contrary to it, wouldn't
it?
“TI think the only thing for us to do is to continue
to wait until somebody in the deep mining field
produces a working machine and a workable system.”
Q Do you recall purchasing the underground miner
referred to there?
A Yes. It was for use at Buffalo Creek.
Q Did you participate in the design of the machine?
A No. What happened was that I saw the possi-
bilities of such a machine and the C. W. [422] Neff
Company, George Harrington, had worked for, I think,
years on the Kinley, McKinley or Kinley machine, and
he had had a man by the name of Robbins working on
that with them.
At the same time Arnold Lamm was working on the
Colmol. There were a lot of people working on this
general idea, and I saw where it would make quite a
difference in the deep coal field.
None of these machines were too good at that time.
I went over and saw the Sunny Hill operation. I was
in hopes that we could use it.
We had, I hoped, an advantage in operating an un-
derground mine in that we could go in from our
pit. We would also have a washing plant. It would
increase the reserves we could put through that plant,
possibly on second shift and so forth. -
The strip coal industry has done a lot of work along
this line. Peabody built a punch miner utilizing part of
this and so forth, and I believe they lost a substantial
amount of money on it, but anyway, they did it. It is a
= logical thing for a strip coal miner to be interested
I went over and saw Arnold’s machine, went under-
ground, with the possible idea of making a small one.
Arnold had that in mind. It didn’t strike me.
A it did, it mined not very much.
Q What subsequently became of the machine?
A I imagine it was simply junked.
Q Would it be fair to say that this venture cost the
company in excess of $600,000? c
A No. I don’t think—you mean the whole deep un-
That was not really question. I did not ask
yu her eee I asked whether—
A That is, though, what you did ask. .
Q If I did, then, I would like to rephrase the question.
In terms of the initial cost of the [425] machine and
any other expenses involved in its use, repair, redesign
or design, do you recall whether or not the total expense
to the company was in excess of 3600, 0007
A Just on that one machine?
162
Tes.
A 8 but I wouldn't think so.
[448] BY THE WITNESS:
A (Continuing) I just want to say that—after 63,
of course, I haven’t kept track of developments in the
coal business too much—that a new way of shipping coal
has come in, which is the unit train, and this new de-
velopment, of course, could affect this Rail-to-Water. I
don’t know whether it has or not, but what might have
been a good investment in good judgment by these seven
coal companies at that time could be changed, of course,
by later developments. I don’t know whether it has
been or not.
The rate on these—on this shuttle service that has
been inaugurated is substantially less than the previous
rate; in some cases, perhaps half as much.
BY MR. HEDLUND:
Q Mr. Kolbe, do you have Kolbe Deposition Exhibit
13 in front of you, and if so, would you review that
once again?
(There was a short interruption, after which the
taking of the deposition was resumed, as follows:)
[449] BY THE .
A Les.
BY MR. HEDLUND:
Q In the margin, in handwriting, appears the fol-
lowing, under the date of 2-25-57:
“Kolbe says not interested.”
Do you recall why you were not interested in this
field, tt that, in fact, was the case?
A It's a deep mine, in four feet of coal, away from
our present operations, and we may have already started
thinking about the Banner property, we had other uses
for our money. F
against it.
[456] At Fidelity similarly the two i
each other. eee dat as lho ypc eh = lara
plant instead of hauled coal way down to
Those would be some of the things. Furthermore,
our selling and executive expenses, our sales personnel
called on the same people as their sales personnel. There
is an obvious economy there.
Perhaps [457] at times we could have used that washing
ours.
in
Q If you know, at that time—
164
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—whether or not it was?
Q
A No.
1516]
2
( Court Reporter) :
How do you spell it in English, please?
BY THE WITNESS:
MR. HEDLUND: On the record.
BY MR. HEDLUND:
Q Did you make an attempt to acquire that?
A It never went very far. The reason why I wanted
to acquire it was that I thought it an ideal mine for the
Wheel. They were working it with two draglines, and
I thought a Wheel would be the way to mine it.
J Do you recall when this attempt was made?
0.
Q It would have been in the 1950’s, would it, Mr.
Kolbe ĩ
A It might have been in the late 1940's.
17 1
pat
12155
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but the patents are being used.
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MR. HEDLUND: In any other areas Mr. Latimer
may have been involved in.
MR. CUSACK: He testified he was a land man, a
competent land man.
16371 Q with respect to explosives?
A Yes. I might say that other people tried to get—
the final break-through was in [638] Indiana, and they
could get no patent on it.
My position with the Patent Office often was this: The
Patent Office said, “Everybody knows that.” I would say
PPP
use it?“
Well, they just had no answer to that one, but that
evidently is just because everybody knows it and every-
body is so smart and has a need for it but doesn’t use
it, doesn’t enable you to get a patent, which I think is an
unreasonable position on their part, but it is their posi-
tion.
Q During your direct examination by Mr. Cusack,
you referred to a number of experiments that you con-
ducted with nitrogen tetroxide.
A Nitrogen?
Q Tetroxide.
A Nitrogen— was it penta or tetra? Was it pentani-
tromethane?
MR. STEVENS: Do you have the page reference, Mr.
Hedlund?
BY THE WITNESS:
A Not nitrogen tetroxide.
171
MR. HEDLUND: Nitrogen tetroxide.
1654] Q In other words, it is your best recollection
that you applied the name Unimite“ to a number of
explosives, only one of which was the ammonium nitrate-
coal dust-nitromethane composition?
A We might well have used it for the one having fuel
oil in it, too. I don’t really see why we would change
We weren’t advertising it to the general public. We
were just using it for our own purposes.
2 It is true, is it not, that the composition ammonium
A
Ej
i
7
Hl
7
z
:
:
8
5
1
8
i
8
8
MR. HEDLUND: I again bring to your attenti
Mr. Cusack, that at various places in the record it
you who brought up Unimite, and I am
try to find out what the facts were.
BS
A No.
MR. HEDLUND: Mr. Youker, will you please mark
for identification as Kolbe Deposition Exhibit S, a copy
— Ar
- 172
(The document was thereupon marked Kolbe Depo-
sition Exhibit S for identification, 10-28-68.)
MR. HEDLUND: Having done so, would you tender
Kolbe Deposition Exhibit S to the [656] witness, please.
(There was a short interruption, after which the
taking of the deposition was resumed, as follows:)
BY MR. HEDLUND:
Q Mr. Kolbe, I direct your attention to Column A of
ee ee eee
MR. CUSACK: Counsel, are you marking for iden-
ae ee
tent?
MR. HEDLUND: Not at this time.
MR. STEVENS: You are directing his attention to
Column A?
MR. HEDLUND: . Column A of Table 1 on Page 2.
THE WITNESS: What page?
MR. HEDLUND: Page 2.
(There was a short interruption, after which the
taking of the deposition was resumed, as follows:)
BY THE WITNESS:
MR. STEVENS: Mr. Hedlund, first of all, the table
to which you have referred does not refer to coal dust. I
do not know what it is. It certainly has to be read in
context with the entire application.
FF einen eee
Kolbe, to answer the question.
2
8
i
8
173
BY THE WITNESS:
A This has only—this doesn’t have kerosene in it or
coal dust, as pointed out. It uses nitromethane.
I tried to get a patent on this, did I not? Did you just
read where I did?
MR. HEDLUND: No, sir, you did not, not on this
composition.
BY MR. HEDLUND:
(The Document was thereupon marked Kolbe Depo-
sition Exhibit T for identification, 10-28-68. )
(There was a short interruption, after which the
taking of the deposition was resumed, as follows:)
174
MR. CUSACK: I note, Counsel, on the second page
it states:
“Agreed to this 9th day of July, 1956, The United
Electric Coal Companies, by Frank F. Kolbe.”
MR. HEDLUND: Fine, sir. Thank you.
MR. CUSACK: Gamal met I pend Ie tossed pai
graph on the first page of Kolbe Deposition Exhibit T
into the record?
MR. HEDLUND: I would be more than happy to
have you do so, Mr. Cusack.
MR. CUSACK: The second paragraph states:
“Hercules Powder Company hereby waives the
royalty payment of three-quarters of one cent per
pound of explosive composition [660] resulting from
the practice of the inventions claimed in United
States Letters Patent No. 2,325,064, made and used
by you, which would become due under the reference
license agreement, so long as Mr. Frank F. Kolbe
continues the devolpment and experimental work in
the practical application and use of explosive com-
positions covered by United States Letters Patent
No. 2,325,064 at the facilities of The United Electric
Coal Companies, and so long as you make available
to Hercules for its unlimited use written -reports of
such development and experimental work, and so long
as you permit authorized representatives of Hercules
Powder Company at Hercules’ election, to visit your
plants and observe such development and experi-
mental work. You further agree to grant and do
hereby grant to Hercules an irrevocable, non-exclu-
sive, royalty-free license, with the right to grant sub-
licenses without accounting to you, under any inven-
tion first conceived or reduced to practice by you
1661] in the performance of the development and experi-
mental work contemplated by this agreement, but
such license shall be limited to those inventions con-
ceived or reduced to practice while this letter agree-
ment is in effect.” :
Thank you.
175
MR. HEDLUND: Will counsel stipulate that the pat-
ent referred to in this letter is the patent that we have
had marked as Kolbe Deposition Exhibit 87
MR. CUSACK: It certainly is. It has the same num-
ber.
BY MR. HEDLUND:
4
15
ü
.
f
with. Now, you gentlemen—
MR. HEDLUND: I meant to Say
MR. STEVENS: I think you should ask him that be-
BY MR. HEDLUND:
Q I will ask you, then, Mr. Kolbe, if prior to this let-
ter you were paying royalties to Hercules.
A No. .
Q Do you recall that prior to this letter you had a
license agreement with Hercules?
A No. I do not recall having a license agreement
with Hercules.
Q Do you recall, after the date of this letter, wheth-
er or not you continued the development and experimental
work in the practical application. and use of explosive
compositions covered by the patent referred to in Kolbe
Deposition Exhibit T?
A Yes, we did—wait a minute. We went [663] ahead
176
with what we were doing on nitromethane and ammo-
nium nitrate and with coal and oil.
Q Do you recall whether or not—
A It is my remembrance that we had gone ahead
with this for some time before any of this ever came up
and before I knew about their work. Now, do you know
when we started using this material?
Q You will recall, Mr. Kolbe, the reference in the
1956 annual report of United Electric, on Page 9, which
states as follows, in part:
“The cost of this operation was substantially re-
duced when we inaugurated the use of a new 2 85
sive a year ago. After years of research“
A Yes. We were doing work on that probably before
we ever inaugurated the use of it.
We hired—as appeared from Huey’s letter, we hired
Mr. Damon, we made a contract with Glenn Damon in
the Bureau of Mines, by which they conducted work on
explosives for us, and I don’t know when all that would
have happened.
I will continue on a little bit from Page 9 of the
1956 annual report, which states in part:
“After years of research we discovered [664] this
compound called Unimite, which had the qualities of
—— compactness and safety, so valuable for our
In addition, Mr. Kolbe, I would like to inform you that
the records of United Electric indicate that the use of
Unimite, including nitromethane, or rather, consisting of
nitromethane, coal and ammonium nitrate, was the com-
pany’s principal explosive beginning on July 14, 1955,
and continuing through May of 1958, and on May 16,
1958, ‘the company began using prilled nitrate and fuel
oil as an explosive.
A It doesn’t say, though, when we originally got the
—when I originally got the idea of using this stuff.
Q No, it certainly does not, Mr. Kolbe, and I think
what you have just said is consistent with the statement
178
BY MR. HEDLUND:
Q You state, Mr. Kolbe, on Page 188, in part:
. . . so we talked to the Aluminum Corporation
of America about establishing a big aluminum
smelter either in St. Louis or along the Mississippi
there, or in Perry County, right at our mine.”
Is it not a fact, Mr. Kolbe, that at the time you origi-
nally talked to Aluminum Corporation, they had a smelter
in St. Louis, if you recall?
A They had an aluminum oxide plant there. I am
t sure whether they had anything more or not.
Q Do you recall whether at that time Unfted Electric
was selling coal to the Aluminum Company facility in
St. Louis?
A Yes, we were—that is, we did from time [673] to
time.
[684] MR. STEVENS: —that your objective is [685]
best accomplished by saying, looking at the documents
you have shown him and the testimony which you just’
re-read, is there anything else? ;
MR. HEDLUND: That is what I am trying to do,
and I thought I had done that.
MR. STEVENS: All right. ’
(There was a short interruption, after which the
taking of the deposition was resumed, as follows:)
BY THE WITNESS:
A I don’t remember (b), which is given here.
MR. HEDLUND: That is on— —
„ e Referring to the letter of. December
+
MR. HEDLUND: All right.
BY THE WITNESS:
A What I remember is (a), if Aleoa—I would like to
go back to the beginning of the deal.
We had large reserves at Fidelity. I was trying to
179
find a market for them. We wanted to negotiate. We
wanted to get Alcoa interested in buying coal from us.
They objected that our reserves would not last the life
of what they wanted to do, so we [686] suggested that
we would buy additional reserves, deep coal, to the north
of us. That was done.
We had no strings whatsoever on that deep coal, but
we thought that they would first use our coal because
it would be cheaper. It was logical that they would.
MR. HEDLUND: I am sorry.
BY MR. HEDLUND:
Q By “our coal”, you mean at Fidelity?
A At Fidelity mine, yes.
All right.
A And when that coal was exhausted, if they needed
more, they would give us serious consideration for mining
the other, and also, that if they ever sold it, as was cov-
ered in that. agreement, they would give us the first
chance of buying it.
Now, that was the whole thing, and we didn’t go into
that if we came to a specific proposition for leasing
Alcoa is willing to consider seriously such a lease. We
didn’t go into that. I didn’t go into that.
I wasn’t considering that we would—the coal was pur-
chased for possible use for their aluminum plant. If they
didn’t want it, they would [687] first consider us as a
purchaser, and that, I suppose, would cover the matter
in (b), but it was not exactly stated the way it is in (b).
734] BY THE WITNESS:
A (Continuing) I don’t know whether this is the
time to go into the whole coal history or not, but you
must remember that the coal industry is a tough industry
and that many people have gone broke in it.
MR. HEDLUND: Yes, I understand that.
BY THE WITNESS:
A.4 Continuing) Therefore, you don’t indulge in the
expansion. It’s quite a venture, this expansion in the coal
industry.
180
BY MR. HEDLUND:
Q Directing your attention to the first full paragraph
on Page 3 of Kolbe Deposition Exhibit Y, do you know
whether as of 1956 the competitors of United Electric
had better organization for prospecting than United Elec-
tric did? .
MR. STEVENS: Mr. Hedlund, I.think it is only fair
to ask you to explain to the witness what you mean by
“competitors.” Do you mean what Mr. Latimer meant,
or do you have a different meaning in this lawsuit, or—
17351 MR. HEDLUND: I have n “meaning at all. I
believe Mr. Kolbe has testified as to Who he believes the
competitors of United Electric were. He certainly under-
stood what the word “competitors” meant when Mr. Cu-
sack asked him, and I will use it in the same sense that
Mr. Cusack asked him, so that he can understand what
I mean by my question.
MR. STEVENS: That does not really help me very
much.
Could I have the question again, please.
Q (Read by the reporter.)
MR. HEDLUND: If you would prefer, Mr. Stevens,
I can ask him with reference to specific companies. I
think that might prolong it.
MR. STEVENS: If he can answer—
THE WITNESS: Let's just answer this.
BY THE WITNESS:
A In Fulton County, let's just take that, I have given
you the amount of coal, and you can determine the exact,
that we acquired after 1939 for the Buckheart Mine. It
was twenty, thirty [736] million tons. The Little Sister,
our next competitor—or next field to us—acquired rela-
tively very little, I think, in addition to the field that
they were right in.
[758] Q Following July 31, 1959, there were five new
directors appointed, or rather elected, to the Board of
United Electric; that is so, is it not?
181
[759] A Yes.
Q Were you in favor of that or opposed to it?
A 1 would much rather have kept my former group
of directors, of course, because we would then have gone
ahead with the Industry Field and done other things.
Q Following July 31, 1959, Mr. John M. Morris was
appointed or elected President of the company and its
chief executive officer?
A Yes.
Q Was that with your approval?
A I would rather, if a change were made, and I would
have been sharply in favor of a change when I got through
with the Banner Mine, I would rather have had Arnold
Lamm as President—not as President but as chief execu-
tive officer. I told Arnold that, but in the first place,
Arnold would not have accepted it because Arnold is a
very, very independent person, and he would not have
accepted the dictation from Material Service.
I would have been in favor of having Johnny Morris
—I would have made Lamm Chairman and * * * chief
executive officer. I would have [760] been in favor of
making John Morris President because he has been an
excellent sales executive, he is perhaps more than a sales
executive, and he is perhaps more than a sales executive,
but I didn’t think he had the mining experience and the
drive to establish new mines and that is what Arnold
would have brought to the picture.
Q I may have asked you this before, sir, but if not,
following Mr. Morris’ appointment as President, did you
nevertheless continue active in the management of the
company?
A I did some things. There’s always a question wheth-
er you should get out or whether you should stay. If you
get out, like the refugee in Germany or whatnot during
the Nazis, if you get out you are powerless to influence
events. You get out, you save your reputation, you do
a lot of things, but you are out and you cannot influence
events. My friends still had and I still had a big invest-
ment in the corporation. I stayed. .
It turned out to be a very good thing that I did, be-
cause Tom Tarzy got a contract with Commonwealth Edi-
' N
182
son. Before that time we [761] had a contract with
Commonwealth Edison which called for from 750,000 to
a million and a quarter tons. Tom worked out a contract
with them for 1,750,000, to two and a quarter million
tons. ö 5
* * * *
18161 Q Do you have an opinion, Mr. Kolbe, given
existing prices for labor, machinery and equipment, and
the present condition as it is known in the Industry Field
of United Electric, what it would cost to mine that coal
per ton?
A Not under today’s condition; I don’t know what
costs are today. .
I pointed out the other day, however, that its competi-
tive conditions have been improved by the recent wage
agreement.
Q There might be a question, might there not, how-
ever, whether its competitive position had been sufficient-
ly improved?
A We thought it a good field in 1959, all of us did,
and I think I have seen nothing to make me think it
isn’t a good field today.
I might say that at-some time in the past I told Mr.
Nugent that if he didn’t like the field and wanted to get
out of it, that I would try to find him a purchaser for
it. He did not care to sell it.
Does that offer still stand, sir?
A I would try to find him a purchaser for it, Yes,
it aces.
[903] A I would like to call your attention that the
retail deliveries of coal to other consumers, which would
cover those for household use—well, it would cover the
customers of Buffalo Creek Coal, [909] that in 1944 it
hit a top of 122,112,000 tons, that every year after that,
rg down to 1965, is less until in 1965 it was 19,048,-
BY MR. CUSACK:
, Q Would that, Mr. Kolbe, account for the discontinu-
| ance of the Buffalo Creek operations?
183
MR. HEDLUND: I object to that as being sugges-
tive and leading. N
BY THE WITNESS:
A (Continuing) It was one of the reasons for the
market. was disappearing. Another reason for our closing
the mine was it was not worth while to bring in bigger
equipment that could have handled higher overburden.
MR. CUSACK: Thank you, Mr. Kolbe.
184
EXCERPTS FROM DEPOSITION OF
ROBERT H. INMAN, TAKEN NOVEMBER 4, 1968
151 I did have a stint in the service. I was a navigator
with the 8th Air Force in England.
Q By whom were you employed prior to your —
ment by Material Service Corporation?
A The United Electric Coal Companies.
For how long were you employed with The United
Electric Coal Companie
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