JOKERS IN THE COAL LEASING BILL

...This clause contains a "joker" and leaves the consumer entirely unprotected...

...The clause purporting to prevent transportation companies and their stockholders from being interested in any lease is made futile by the absence of any provision for its enforcement or penalty for breaking the law...

...The Nelson Coal Leasing Bill (Senate Bill 9955), reported with amendments on January SO, is unduly favorable to the special interests both in its open and in its concealed provisions, and leaves the consumer of coal wholly without the protection against extortion which it pretends to give him...

...The advantage to lessees under the bill, as compared with the Cunningham-Guggenheim bargain, is therefore forty-five cents per ton, or more than thirty-five millions of dollars for the available coal in the thirty-three Cunningham claims...

...All that would be necessary to defeat it would be for a leasing syndicate to organize a selling company, which company, being beyond the jurisdiction of the Commission, could charge the consumer whatever his necessities would compel him to pay...

...Other provisions of the bill are undesirable, but these are sufficient to show that it must be radically amended before its passage would be safe...

...By the official estimate of the Land Office expert, there are more than eighty millions of tons of available coal in the Cunningham claims...

...This price is not to be increased during the period of the lease, which is for thirty years...

...And it limits for twenty years in advance the maximum royalty the people of the United States can receive, and fixes it at a fraction of its true value...

...By the agreement of July 20, 1967, between the Cunningham claimants and the Morgan-Guggenheim syndicate, the syndicate undertook to pay merely the cost of mining, as estimated by the syndicate's expert, or $1.75 per ton, for all coal used by its railroad, and to pay $2.25 per ton for all coal to be sold to the public...

...The bill provides that the price at which coal may be sold shall be controlled by the Inter-state Commerce Commission, but such control covers only sales made by the lessee...

...THE NATIONAL CONSERVATION ASSOCIATION is now and has steadily been, a vigorous advocate of the immediate opening of the Alaska coal fields to development under a system of leasing by the Federal Government...

...The bill does not provide for the classification and disposal of coal in Alaska according to its value, as is now provided by law for Government coal in the United States...

...If the Morgan-Guggenheim syndicate should succeed, directly or indirectly, in leasing the coal lands covered by the Cunningham claims under the royalty fixed in this bill, the net profit to the syndicate above what it would have made out of its bargain with the Cunningham claimants would be from eighteen to more than thirty-five millions of dollars, according to whether the whole or only half of the coal was included...

...As it stands, the bill is a most unfortunate example op the legislation so common in the past under which at every critical point the people get the worst op it...

...In other words, the syndicate was to get fuel for its railroad at cost, while it was to pay a profit or royalty of fifty cents per ton on all coal intended for the market...

...But any bill for the purpose of developing Alaskan coal under lease should be fair to the people of Alaska and the Pacific Coast, and free from "jokers" favorable to the special interests...

...As against this royalty of fifty cents per ton established by actual bargain, the Nelson Bill proposes to lease the coal at a royalty of five cents per ton...