industries. Although I submit that the average mineworker is a skilled man, we might as well face the fact that quite a few firms have an age limit for employment which does not contemplate employing men beyond the age of 40.

In many sections of the coalfields the payment of unemployment compensation has been exhausted, which further intensifies the problem and requires maintenance of the idle population on the basis of a subsistence level through surplus food commodities and in many cases on the basis of public assistance.

In the Economic Report the suggestion is made "that unemployment compensation is the bulwark for sustaining purchasing power." These payments generally run to a maximum of from 26 to 30 weeks. To give a typical example of unemployment compensation benefits running out, I am taking a county in the anthracite coalfields to illustrate the problem.

In Schuylkill County of Pennsylvania there is total unemployment of 13,450, of which 11,700 are males and 1,750 are females. Of this number 3,654 individuals are receiving unemployment compensation, while 1,328 receive partial unemployment compensation.

These figures would fairly indicate the number of people receiving unemployment compensation in other coal districts; or relatively only one-third of the total number of unemployed are receiving unemployment compensation. All the others in the category of unemployment have exhausted the maximum number of weeks of unemployment compensation. While it is true that some of the slack of unemployment could be taken up through the acquirement of new industries and public works, the fact remains that it would only partially alleviate the situation and it would take considerable time to supply even a partial remedy.

Repeating the language of the Economic Report "that unemployment compensation is the bulwark for sustaining purchasing power"I might say that it would become a greater bulwark if these unemployment compensation payments were to be made for the duration of unemployment and I certainly would highly recommend this step to the Congress as the proper basis for the development of plans and policies for general rehabilitation of these distressed labor areas. I further submit that the cost would not be too great upon the Government nor upon the unemployment compensation funds.

The machinery is there to work out this matter and the whole general program could be implemented by the payment of unemployment compensation during the period of unemployment without difficulty. The mining industry is not a roving industry. It cannot be moved from place to place.

The Federal Government could do a great deal of work in bringing about increased productivity, if it would put its own house in order, as for instance curbing the dumping of residual oil on the eastern seaboard.

This gets to a matter raised by the chairman with one of the other witnesses.

In 1955, approximately 36 million tons of coal were displaced by the dumping of Venezuela waste oil-this is a waste oil, a byproduct of the refineries and as I indicated in previous statements to various congressional committees, this waste oil is coming not from a free coun

try but from a country where a dictatorship form of government is in existence. This government operates much on the same plane as the dictatorship forms of government which prevail in Soviet Russia and other countries behind the Iron Curtain. For the first quarter of 1956 the figures indicate that the dumping of this residual oil has been increasing and, if kept up at this rate, it will displace approximately 40 million tons of coal this year.

The dumping of waste oil should be stopped, or be placed on a proper quota basis. The Federal Government could assist in bringing about stability and increased productivity by the creation of a national fuels policy-I might say there is pending in the Senate a resolution on this subject that was introduced by former Senator Myers and has been kept alive ever since in the Senate which policy would be protective of our natural resources and national defense and each fuel would be placed upon its proper competitive foundation.

We should also give some consideration to the question of exporting coal to Europe and go into the matter of providing some basis for proper equitable ocean-freight rates. It seems to me that we have a potential overseas market of approximately 50 million tons of coal per year.

I think, Mr. Chairman, that the needs and requirements of Europe and of Asia for coal from this country are increasing rather than decreasing.

An intensified research program for greater uses for coal should also be built up by the Government. Legislation on this particular subject is now pending in the Congress.

I think in the Saylor resolution it was adopted by the House very recently.

Last but not least, and more important at the moment because it can be made effective immediately, is the matter and necessity of payment of unemployment compensation by the Federal Government for a period beyond the 26 or 30 weeks now in effect for the duration of the unemployed period.

I have given a great deal of study to this entire matter and it is my judgment that the foregoing suggestions are the most practical and realistic that could be applied to relieve the distressed unemployment areas and to provide for the individuals and families affected. Assistance is necessary and requisite to carrying out the purpose of these various plans and the suggestions in the Economic Report, all of which would lead to stability and improvement of the economic situation in the distressed labor areas in the various coal-mining sections of the United States.

I might also add that stability and increased productivity in the mining industry would not only affect the situation in the mining industry itself, but other collateral industries would likewise be benefited; and in an economic sense, general improvement for the people in industries directly and indirectly affected by coal production would result therefrom.

One of the members asked a question with respect to the unemployment situation in Pennsylvania.

I would say roughly that over 300,000 people are now unemployed in Pennsylvania, and that of this number, approximately 65,000 are unemployed mine workers, the balance in other industries.

We have about 65,000 men now employed in the mines in Pennsylvania, both anthracite and bituminous.

That is all I have, Mr. Chairman.

The CHAIRMAN. Governor Kennedy, I am very sympathetic with this whole question because my State is in a comparable position with yours. The State of Kentucky is a coal-mining State to a great extent, but some of the things you suggest are not in the jurisdiction of our committee. Unemployment compensation, social security, taxation, tariffs on foreign shipments, are all in the Ways and Means Committee. We have no jurisdiction.

Mr. KENNEDY. They are in some of the bills. In the Douglas bill

The CHAIRMAN. We have no jurisdiction over those matters.

Mr. KENNEDY. They are in the Douglas bill in the Senate. They are in the flood bill in the House, dealing with respect to unemployment compensation, but I gathered that you wanted to get our opinion as to not bringing in new industries, but how to build up the industries that we may have and get them started.

I pointed out the ways we could do it.

The CHAIRMAN. We have had to ask the help of the Ways and Means Committee in those things, and sometimes they have done it, but often they won't. I was just suggesting that.

I certainly am in favor of providing any remedy we can to alleviate the conditions that now prevail.

I will call the committee around again under the 5-minute rule. Mr. Multer?

Mr MULTER. Mr. Kennedy, you referred on page 2 to some of the statistics, indicating the unemployment in one county in Pennsylvania. I have been told that the way our governmental departments are now getting up their statistics on unemployment is to take those who are on the unemployment rolls and that is the way they count the unemployment.

Do you know whether or not that is right?

Mr. KENNEDY. I found that out 3 years ago, in the juggling of figures in Washington and in Harrisburg, that they approached it on that basis, which was not a true picture of unemployment.

Mr. MULTER. In other words, in this very instance you give us, their figures would report only about 4,900 unemployed, while the actual count is 4,900 drawing unemployment compensation and 13,500 actually unemployed?

Mr. KENNEDY. That is right.

Mr. MULTER. You refer to one other matter here, which is of interest to me, and that is building up the export of coal, and you refer to the export of coal to Europe.

Our distinguished chairman authorized me to make some investigations as to the operation of our Export-Import Bank in Japan, Thailand, and Turkey last fall, and it seems to me that there, too, was a good field for export of coal, and we could pay for the differential in the cost, because of the long freight haul, by lowering the interest rate. In other words, Export-Import Bank is lending money to these foreign countries all over the world with which to buy American products. I was told that all we need do is cut the interest rate on those loans and the differential in the interest rate will make up for the

difference in hauling your coal from the mines to these foreign countries.

I wonder if you have explored that at all.

Mr. KENNEDY. Yes; I have. I know a little about the Export Committee. We have a committee that has been working on it for quite some time.

Take for instance the money we give to countries in Europe, like Belgium and France and those other countries. They are taking that money and they are not buying our coal. They are buying coal from Poland and from where they can get it, mostly from Poland.

Belgium, took our money and bought their coal from Russia.
England has been buying coal from Russia.

Mr. MULTER. The excuse is they buy it cheaper.

Mr. KENNEDY. That is what they claim, but of course the difficulty in exporting our coal is this ocean freight rate. It is up now to about $10.60 a ton, and we have a committee that tried to work out an arrangement where we would take over-I mean the industry and the UMW-and export this coal we believe at around a figure of about five and a half or six dollars a ton, as against the ten that is now being paid for these charter boats, but there is a tremendous market in Europe and Asia for this coal.

Mr. MULTER. Have you or your organization taken up with the Export-Import Bank the question of having them, if necessary eliminate the interest on those loans and use that to pay the differential in the freight?

Mr. KENNEDY. We have not.

Mr. MUMMA. Mr. Multer, you mentioned Thailand and the Far East.

Mr. MULTER. Yes.

Mr. MUMMA. I have read a statement in the paper regarding the Japanese Chamber of Commerce. There was a representative of Russia there. He offered to lay coal down in Japan for some $8 a ton cheaper from Manchuria than from our supplies. I don't think the interest rate would overcome that, in deference to you.

Mr. KENNEDY. That is where they subsidized it.

Mr. MUMMA. Russia?

Mr. KENNEDY. Yes.

Mr. MUMMA. They have less freight rate. You are talking about five and a half that it ought to be. Would that be in American bottoms or Greek?

Mr. KENNEDY. That is the basis we approach it on, on American. bottoms, because we don't want to have anything to do with foreignflag ships.

Mr. MUMMA. Do you think $5-a-ton profit for hauling that coal is sufficient?

Mr. KENNEDY. At least that.

Mr. MUMMA. You have foreign-flag competition. It couldn't be that high.

Mr. KENNEDY. That is what it is. They sail it under the Panama flag, the Greek flag, and all those rates are about $10 a ton-all of it, and people tell us, who know the ocean transportation system, that they could ship it for $5.50.

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Mr. MUMMA. Those Greeks would be in there if that is so. I don't doubt your word, Mr. Kennedy, but I don't believe there is any business that there is much profit in on a commodity like coal.

Mr. KENNEDY. One of the gentlemen, Onassis, who owns Monaco, where the wedding is taking place, he is the fellow who profited most from it.

Mr. MUMMA. What?

Mr. KENNEDY. The fellow who owns the country, and the casino, that is where his money came from.

Mr. MUMMA. That prince is busy now.

The CHAIRMAN. We are on the 5-minute rule.

Dr. Talle?

Mr. TALLE. Thank you, Mr. Chairman.

Mr. Kennedy, on page 4 of your statement you mention a point which I believe is a good one. You would encourage intensified research programs to promote new uses of coal.

Mr. KENNEDY. Yes.

Mr. TALLE. I believe some of our schools of mining are trying to do something along that line, aren't they?

Mr. KENNEDY. Yes. Pennsylvania State University and the University of Pittsburgh, the Mellon Institute, then the Bituminous Research Institute; Pennsylvania is about to pass a bill creating a commission for further study of greater uses for coal.

Mr. TALLE. You are familiar with the tremendous quantity of lignite in North Dakota. The western half of the state is underlaid with lignite and some of it is on the surface. The School of Mines there has for years engaged in research of this kind; and I believe the School of Mines in Montana has done, and is doing, good work. Mr. KENNEDY. The Federal Government had a project in Colorado on that same subject, and it was abandoned about 2 years ago.

Mr. TALLE. I would think that probably our United States Bureau of Mines could be very helpful in promoting the research you suggest. Mr. KENNEDY. They could be, and they are at the moment. At Pittsburgh the experimental station is doing a lot of work on it. Mr. TALLE. Isn't it true that in many localities it is cheaper to produce electricity by the use of coal than by water?

Mr. KENNEDY. Much cheaper.

Mr. TALLE. It seems to me you have made a good point there.
Thank you, Mr. Chairman.

The CHAIRMAN. I believe the chairman will indulge himself to ask one question:

Isn't it a fact that almost all of the coal-carrying railroads that are dependent on coal are now using diesel engines?

Mr. KENNEDY. That is correct.

The CHAIRMAN. Hasn't that done away practically with the roundhouse?

Mr. KENNEDY. It has. It has displaced about 50 million tons of coal, but I would say to you this afternoon, or this morning, that they will be back on coal before very long.

The CHAIRMAN. They can operate trains with diesel engines with fewer people, can't they?

Mr. KENNEDY. That is right. But at the present moment they are about to develop a coal-burning gas engine for the railroads that I believe will displace the diesel in efficiency and in cost.