214

THE COLLIERY GUARDIAN.

July 30, 1915.

against both systems, but his decision was that in the long
run they had much better adhere to the proposal in the
Bill than 'accept that of average prices.

Sir J. Harmood-Banner said he was thoroughly -at one
with the amendment, as he thought the words in the Bill
were very indefinite. There was a very large body who were
thoroughly in favour of this principle of averages.

Mr. J. A. Pease believed that the system of averages
would be very much simpler than that which the Govern-
ment had /adopted. It would simplify the matter in many
parts of the country, and especially in the North of
England, if these averages for each colliery were taken out
month after month. It was so simple to work on a system
of averages that in his judgment it complicated matters if
they had to deal with each customer, and to try and find
what was the equivalent in regard to a contract when the
circumstances were quite different from those which may be
obtained to-day.

Mr. Walter Roch thought this proposal of average prices
so far from giving more trouble would give less, because
once the average was ascertained it was done so once and
for all. Under the -system proposed in the Bill, the colliery
owner could have the matter worked out for every day in
the year, and he could insist on keeping the coal so that it
might work out at a proper price.

Mr. Runciman said if they took the average it meant the
average not only of the contract prices, but also of what
was called free coal. -Any one who knew the trade knows
that the contract prices were, if not always, yet very gene-
rally, below the prices paid for free coal. The sensational
figures which had appeared in the Press invariably applied
to free coal. If they were to accept the average of free coal
lumped in with contract coal it did not mean that they were
going to have contract coal compared with contract plus free
coal. He thought the Committee would do very much better
if they compared like with like rather than like with the
average of dissimilar things.

Sir C. Cory hoped the clause would be adhered to. If
they had a flat rate for all customers they would be doing
a very great injustice to some as compared with others, and
for the sake or convenience and of justice to the customers
the method proposed in the Bill was the better systeih. If
a man who wias making a contract, say, for 300,000 tons and
who paid promptly on the nail was to be charged exactly
the same price as the man who made a contract for 100 tons
and perhaps paid in three months, and under other con-
ditions, it would be very unfair. As to the hon. baronet’s
remark that the seller would choose a day on which he had
made a higher price and make his contract on the correspond-
ing day, coal owners could not deal with their customers in
that loose sort of way. They had to consider their cus-
tomers, not only for to-day, but also for the future. They
were not all in the fortunate position of the hon. member
for Mansfield of being able to knock 4s. off the price and
yet make a handsome profit. That, at any rate, was not
the case with the owners in South Wales. If they took the
average this brought in a lot of contracts made in 1912
which it would not be the intention of the Committee to
bring in, and which were made at very much lower prices
than the prices of 1913-14. In South Wales they had arrears
of contracts brought forward—arrears of 1912 contract's
delivered in 1913. From every point of view—the con-
venience of the Board of Trade, the convenience of the coal
owners, and the interests of the consumers—the Bill was
better as it stood.

Mr. S. Roberts said this point had been before the
Mining Association. There was a difference of opinion on
the matter, but the majority were in favour of the scheme
of the Bill. They thought that on the whole it would be
more convenient, and therefore they supported the principle
put forward by the right hon. gentleman.

Sir E. Cornwall thought the question whether the
scheme of the Bill or the scheme of the amendment was the
better depended very much on the year. In some years
there was a great variation in price in one part of the
month as compared with another. In regard to such years
the amendment would be much more important. But in
regard to this particular year, where the variations were
comparatively very small, the scheme of the Bill was as
useful as that of the amendment.

Sir J. Walton asked how the buyer of coal was to ascer-
tain the maximum price that the colliery owner could charge?
As to colliery owners choosing particular days on which to
sell because higher prices were obtained on those days in
1913-14, he did not think there was much in that point,
inasmuch as there were very slight variations in prices in
that particular year.

Mr. Runciman pointed out that the Board of Trade was
not going to have a schedule of every parcel of coal sold
on every day in the year in every coal mine in the United
Kingdom. The only cases that would come to the Board
of Trade would be those where the customer thought he had
been unfairly treated. The Board of Trade would then
have power to call for the books and go into the matter with
the colliery owner, and those books would, he hoped, give
the Board of Trade the requisite data for arriving at a just
decision.

Sir A. Markham said in that case no one would know
what he was going to pay. The managers of the collieries
• with which he was associated told him that they did not
know how they were going to take the prices day by day
and strike this average, according to what the actual con-
ditions were. The Bill as it stood, so far from being a
useful measure in controlling prices, would give endless
trouble, not only to the seller of coal, but to the Board of
Trade.

It did not affect him personally, because he had sold all
his household coal in the last two or three months at prices
considerably lower than those which he would be entitled
to charge under this Bill. Of course, if the right hon.
gentleman said that there was to be no inquiry except when
complaint was made, he quite understood that there would
be no trouble.

Mr. MacCallum -Scott thought the discussion illustrated
the fundamental unsoundness of a Bill which attempted to
fix for a long period of time a maximum price, or prices, and
which did not go further and attempt to regulate or control
distribution. If it were conceded that on general grounds
the policy of fixing an average were the better method, then
it would quite easily be possible to fix separate averages for
contract coal and for free coal. The price of coal, as fixed
by the Bill, was not regulated by the nominal standard
maximum which was fixed by the coal; it was regulated
by the coal owners themselves, who would pick and choose
the particular days on which they sold their coal, so that
the maximum returned would really be, certainly many

pence, and possibly even a shilling or so, over that which
the Bill confessed to fix. The variation in price certainly
did serve a useful purpose in helping to distribute business
more evenly over the year. If the average price was fixed,
there would be no such natural corrective in the matter of
prices, and so far as prices were concerned it would not
matter in which part of the year one bought. Therefore,
business would be attracted more and more towards that
portion of the year in which there was the greatest crush of
business. That might lead to congestion. He was not sure
that any of the methods in the Bill were good. They did
not control distribution.

Mr. Russell Rea confessed that, on the whole, he was
inclined to favour the suggestions of the hon. member for
Mansfield. Surely it was easier to ascertain the average,
as the average prices varied little? It must be very much
easier, from an administrative point of view, for the Board
of Trade, which administered this Act, to have the average
inserted here. If the Bill was passed as it stood the buyer
always concluded his bargain in the dark. He cannot pos-
sibly know whether the terms of his contract were or were
not in compliance with the terms of the Act. That might
not apply to that class of buyer who renewed a contract with
the same colliery, but to a certain extent it left him out of
the competition of other collieries. Again, the average price
was pretty certain to be a lower price than the sales in
consideration here. Therefore the seller had the buyer at
his mercy. He was always comparing for the purposes of
sale the numerous sales which he made of his free coal to
outsiders the same day, under pretty much the same con-
ditions, and it was very seldom that there was only one day
that he could take for his comparison. He would take the
day, perhaps, on which he made his biggest contract with
the railway company, so that on the whole it would favour
the buyer to adopt the words of the amendment. He would
have the advantage of the lower price by taking an average,
rather than by making a calculation of the terms proposed.

The amendment was negatived.

A Question of Date.

Sir J. Harmood-Banner : I beg to move, in sub-section
(1), after the word “ sold ” [“ sold in similar quantities ”]
to insert the words “ for delivery not earlier than July 1,
1913.” He said the majority of coal owners considered that
the word “ sold ” would meet the difficulty. Whilst, .there-
fore, the word “ sold ” was accepted, yet there was no doubt
that one set of districts overbore another set of districts in
agreeing to the word. The differences were these : In one
area contracts vrere low and prices were rising all the time
between July 1, 1913, and June 30, 1914. That was the
South Wales district. In the South Wales district all the
time prices were rising, so that it suited them to have the
word “ sold ” and not to have the word “ delivery.” On
the other hand, as regards Lancashire, and he thought
also Yorkshire—in a very large part—the exact opposite pre-
vailed. The contracts were higher prior to June 30, 1913,
and they went down during the whole of the year. So much
so that the Bill, if lit was translated in the way the word
“ sold ” meant on day-to-day prices during the whole of that
period, would adversely affect Lancashire and Yorkshire to
the extent of a shilling as compared with South Wales. He
did not accept the fact that the word ‘ ‘ sold ’ ’ meant day-by-
day prices irrespective of contracts. For instance, during
the month of June, 1913, the date on which most of these
contracts were made, they made their contract for delivery
after July 1. What did the word “ sold ” mean in that
case? If the word “ sold ” in July, 1913, meant the coal as
delivered in pursuance of a sale after July 1, 1913, then he
was quite content to accept the word as it stood; but if the
word was to be construed -as affecting sales made in May
and June for delivery after July 1, 1913, he thought they
would be placed under a very great hardship indeed, because
there was a difference of as much as Is. a ton between the
prices of May and June 1913, and those in a later month
that year in Lancashire districts in gas contracts, and of
lOd. in railway contracts. They would be, therefore, put
back to prices that were made for future delivery, that is to
say, when they came to August or September of this year
they would not be able to compare those prices with the prices
of August and September 1913, but would have to take those
prices at which contracts were being made at that period, say
for December 31, and subsequent dates. What they wanted
was that to the price the consumer paid for coal at that date
they should add the price of 4s., and that should be the price
at which they were entitled to sell.

Mr. Runciman said if there was to be any comparison
made, it must be either with coals for delivery for next year,
say, and with coal delivered in the standard year, or coal
sold during next year with coal sold in the standard year.
To have a different comparison would lead to different results
in different coal fields. Undoubtedly there was a division of
view on this clause, because it helped coal owners in some
districts, but not those in others. On the whole, he thought
they should take the course which would certainly be applic-
able to more of the coal fields to the advantage of the con-
sumer.

The amendment was withdrawn.

“ Similar Conditions.”

Sir E. Cornwall : I beg to move, in sub-section (1), after
the word “ quantities ” [“ sold in similar quantities ”], to
insert the words “or as near thereto as, having regard to
the custom of the trade, may be practicable”; but Mr.
Runciman pointed out that there was a safeguard to be
found in clause 2, sub-section (1); and the amendment was
negatived.

Sir E. Cornwall moved, in sub-section (1), to leave out
the words “ and under similar conditions.” He said men
carrying on business could not stop to have controversies with
people with whom they were dong business while they went
to the Board of Trade and had it settled. There were no
similar conditions. A colliery could say that they were
paying much higher wages than two years ago, and that it
was not under similar conditions, and endless points could
be raised by the collieries to show that purchases were not
taking place under similar conditions to those of two years
ago. He was afraid that there would not be time to settle
the objections between the purchase of the coal and the settle-
ment of these differences, and he did not suppose the colliery
would supply the coal to a merchant who wanted it, and have
these questions settled afterwards. It was not as if the
colliery was being compelled to supply the coal.

Mr. Goldstone supported the amendment. He pointed
out that clause 2 required legal proceedings as a precedent to
Board of Trade intervention. Under the Bill the coal owner
was very likely to suffer because possibly those who had pur-
chased his coal might take the opportunity of using those
words to refrain from settling their just accounts.

Sir A. Markham asked whether, in the event of a colliery
owner desiring to sell 1,000 tons of coal at a given date, when
he had no similar contract for a quantity of coal at or about
that time, he was entitled to sell what quantities he liked.
If those words were struck out, no coal owner could make
any contract or any sale by contract unless it was precisely
the same as in the preceding year.

Mr. Runciman thought these words were necessary to meet
the point the hon. baronet had put. He was advised that it
was not necessary to add to the words in order to make it
clear that the conditions do not refer to war conditions, but
in order to put it beyond doubt, he suggested that they
should insert, after the word “ conditions,” the words
“ affecting the sale,” and so make the comparisons under
similar conditions not allowing for war conditions.

Mr. Maurice Healy said if he were drawing up this Bill
he should put an express provision in it that no question
under it should be litigated otherwise than with the consent
of the Board of Trade.

Sir A. Markham asked if a colliery entered into a con-
tract for the sale of 100,000 tons of coal in the month of
September, and that no contract had been made for five
months previously for anything like the same quantity, how
was that colliery to fix its price under the terms of the Bill?

Mr. Runciman said his hon. friend must not expect him *
to reply to business problems with which he was familiar,
but with which other members might not be so conversant.
Clause 2, sub-section (2), gave pretty wide powers to the
Board of Trade, who would have to ascertain &s nearly as
they could what was happening in the same district in
similar mines to enable them to get over the difficulty if it
arose. A good deal of the criticism they had heard was
based on the assumption that this was a Bill fixing prices.
It did not attempt to do anything of the - kind. All it
attempted to do was to prevent panic prices operating, and
nothing else. It did not mean that every contract made
was to be 4s. more than last year, but if a man asked 6s.
more, then this Bill would come in the way and block it. It
was in no sense an attempt to fix prices for various qualities
and descriptions of coal under various conditions. If any
question was raised on the words ‘‘ corresponding price of
coal,” the Board of Trade was to determine it. That was
the safeguard against undue litigation on the words “ and
under similar conditions.”

Sir A. Markham said the right hon. gentleman was quite
wrong in saying that this Bill did not regulate the price of
each quality of coal. The Bill was actually going to fix
the maximum price of every quality of coal, and the maximum
price under this Bill would operate in all cases except the
collieries with which he was connected. They had been
selling coal—the hon. member behind the Treasury Bench
(Sir E. Cornwall) had been buying it—at 10s. below the
market price. He asserted that the Bill would actually fix
prices for each quality of coal, and the coal owner would
have the last penny to which he was entitled. As to his
question, he had taken counsel’s opinion about this matter.
He had just asked a legal gentleman of the House, and he
told him that a colliery owner would not be allowed to offer
large quantities unless there was some provision put into
the Bill later on.

The amendment was made, adding after the words “ under
similar conditions ” the words “ affecting the sale.”

The Standard Price.

Mr. Anderson moved, in sub-section (2), to leave out the
word “four” [‘‘four shillings”], and to insert instead
thereof the word “ three.” He pointed out that the Com-
mittee on Retail Coal Prices came to the con-
clusion that at that time 3s. for London, including
the increased charges at the pit head, would amply
compensate the coal trade for the extra charges made neces-
sary by the war. But under this Bill the prices would be
6s. higher in London than in the previous period with which
comparison was made. When they came down to the smaller
quantities it would mean that the coal, as heretofore, would
rise to a very high price indeed, especially as there was, so
far as one could see, no legal attempt being made to limit the
operation of the coal rings.

Mr. Denniss said it would have been very much more
useful to the Committee if the hon. member had given the
figures on which he based his claim to reduce the amount to
3s. As a matter of fact, there was a meeting of more than
200 members of the House on this subject, and that meeting
appointed a Committee to go into the question of prices. The
Committee included three colliery proprietors, three ship
owners, three representatives of the Labour Party, and three
representatives of consumers of coal, and it reported that
4s. 3d. was a fair price to put on. The Board of Trade cut
the figure down to 4s., but, on the other hand, he had had
applications from various persons interested in coal asking
that it be raised again to 4s. 3d. He hoped the President
would take this opportunity to give the figures on which he
based the 4s., and that he would do so in such a way as
would convince the Committee.

Mr. J. Samuel said he had an amendment down to substi-
tute 2s. for 4s. The genesis of this figure of 4s. was. he
thought, to be found in what was done by the Committee
upstairs. He attended one of the meetings there, and remem-
bered hearing a very prominent member of the House—a very
large coal owner—state that if 2s. was fixed, the colliery
owners would become more or less millionaires.

Sir A. Markham : I never said anything of the kind. I
said it would mean a profit.

Mr. J. Samuel said the hon. member for Mansfield stated
that Is. would cover all the expenses, and the colliery owners
would make large fortunes. If the price of coal should be
raised to the maximum, that would mean that there would
be a cost to the nation of no less than £37,570,600. If there
was an increase of 10s. per ton upon export and bunker coal,
on 63,000,000 tons it would work out at 4-31,779,000, giving
a total of £69,349,000. The President of the Board of Trade
stated in his speech that every Is. increase in the price of
coal to the home consumer under this Bill meant £9,000,000.
He did not see why the coal owners of this country should
be made a privileged class at the expense of the general com-
munity.

Mr. J. A. Pease said he did not take any exception to the
figures which the hon. member had quoted in regard to
quantities, but he took the greatest exception to the way in
which he had presented his case. He had assumed through-
out the whole of his argument that the whole of the coal was
going to be raised 4s. a ton. He had then gone on the
assumption that the whole of the coal raised was going to
be subjected to this 4s. increase. As a matter of fact, even
if the first assumption was correct, the second could not be
correct, at any rate until after the lapse of some years. His