216

THE COLLIERY GUARDIAN

July 30, 1915.

paid to them at the pit head was not responsible for the
enormous increase which was put on the price of coal when
it was delivered to the householder. But unless they could
touch the contracts, the old game would go on of the house-
holder being exploited by the middleman. The position of
the municipalities was severely prejudiced if the Bill stood
in its present form. Take the case of the county borough of
Stoke-on-Trent, where an extra price of 6s. per ton had been
put on the old contract.

Sir G. Cory said contracts in South Wales were made for
the whole year. If they were going to deal with the con-
tracts which were higher, surely they ought to deal with the
contracts which were lower as well; otherwise the unfortu-
nate coal owner who made contracts would be at a loss. He
did not think it was fair to deal with one class of contract
and not with others.

Sir R. Adkins submitted the true principle of the Bill
should be : When a Government brought in a Bill in such
abnormal times as these to deal with a state of things which
had arisen, the Bill ought to be made to apply, as far as
possible, to the whole period in which such state of things
had arisen recently, so that they were not dealing merely
with things which happened to-day, but which had happened
under war conditions. He could not see that the two kinds
of contract were really in the same position. Those which
had been made, which would have been within the powers
of this Bill, the Bill would not interfere with. Those which
could not have been made under this Bill had been made
within the last few weeks, and which applied to months and
•months ahead, ought to be brought under the Bill.

Mr. Samuel Roberts said in South Yorkshire me colliery
proprietors recognised six months ago that it would not be
right for the colliery owners to exploit this war for the sake
of increasing prices, and they agreed that prices should not
be extended beyond the price which this Bill allowed. He
believed that undertaking had been properly carried out.
With regard to old contracts, if the Government were going
to interfere with the present contracts which had been made
at the advanced prices, in all fairness the other point of
view ought to be considered. There were contracts running
at the present time which were made before the war at
prices which were not remunerative, and which were being
worked at a loss by the collieries.

Mr. Anderson asserted that in London large contracts had
already been entered into, though the coal had not been
delivered, and coal was 8s., 9s., and 10s. higher than it
was the previous year. Last year the London County
Council contract for Graigola Merthyr large smokeless coal
was Ils. 3d. per ton at the pithead. This year the London
County Council were offered the same coal at 21s. There
was one argument which could be used with regard to the
London County Council contracts. A number of coal owners
on their own account had voluntarily entered into an arrange-
ment with the London County Council, that if Government
legislation was carried they would associate themselves with
that arrangement, and would re-arrange their contracts on
the basis of it. If one or two coal owners could do that, why
should there be any discrimination between one coal owner
and another? The Glasgow Corporation’s new bill for their
coal supply for gas and electricity was as follows :—811,000
tons for gas at an increase of 5s. 3d., and 160,000 tons for
electricity at an increase of 6s. 3d. The total increase in the
coal bill was going to be over £265,000. The very best way
that they could help the Glasgow Corporation to practise
economy was by relieving it of the increase on its contracts,
and allowing it to get back to more normal figures. The
same thing was true of the traders. Under this Bill they
would certainly be setting up discrimination as between one
set of dealers and another. If only 20 per cent, of free coal
remained, they were practically going to do no good for
the consumer.

Mr. Pretyman said they did not propose to answer this
amendment on the point of the sanctity of contracts. In the
original draft of this Bill it was hoped and intended to make
it a delivery Bill, but when that came to be considered from
a practical point of view, the actual difficulty of giving effect
to a Bill drawn on these lines, they came reluctantly to the
conclusion it was beyond the scope of the Bill, and that it
would alter its character. Price was only one item in a
•contract, and, if they altered the price of any contract between
'two persons, they could not possibly resist the demand for the
whole terms of the contract to be revised. If they were to
•accept any amendment which went back on the existing
contract, it would mean that the responsibility would be
thrown on some tribunal, presumably the Board of Trade,
to adjudicate not only on prices, but on all clauses in a
contract made between buyer and seller. If they made a
sudden change of that kind there would be no time for adjust-
ment in the matter of wages, and they would be bound to
assent to the demand that wages based on prices which had
-been prevailing during the last few months should be revised.
Under the scheme of the Bill existing prices, even if there
were no panic, would be brought down. Their only claim
was to prevent any crisis in the future. What the coal owner
had to look at was not what he was getting for any par-
ticular contract, not what he was getting for 20 per cent, or
70 per cent, of his coal, but what his total receipts were in
proportion to his total outgoings, and what was the average
price he was getting for the whole output of his colliery. The
effect of the Bill would be that in due course there would be a
period when practically the price of the whole of the coal
would be reduced to this standard. If they drew a diagram
of prices they would find that instead of a sudden drop, which
was always most injurious to the trade concerned, they would
have a gradual fall, and, during that fall, the different
interests'—the interests of the wage earner, the wage payer,
and the people who were using the coal—would have some
opportunity of adjusting themselves to the new conditions.
Again, a very large number of people who had contracted to
buy this coal had sub-contracted to sell it. That would
take them into a most difficult region beyond the area covered
by the Bill. He had entered upon this question himself with
a feeling that it might remain a delivery Bill, and not a
contract Bill, but, after hearing the whole case argued by
people whose wishes, he believed, were the same as his own,
but who had practical knowledge not only of the coal trade,
but of the whole area of trade which would be covered by
the effects of carrying this amendment, he came to the con-
clusion that to carry out that principle would be impracticable.

Mr. Booth said the experience of a number of collieries
in the country, taking them from the commencement of the
war until now, was that they had made a considerable loss.
If part of a contract—a complicated contract—had been per-
formed, and it was worked for some little time, he defied
any lawyer to go back and restore the original conditions.
There were many contracts placed not only before the war,
but after the war, which were now being executed at a loss.

Immediately they struck certain men they let others off.
Suppose a colliery had sold 100,000 tons to a big factor or
merchant, and he had placed it all out. Was the latter
bound to give that advantage to the consumer? The Board
of Trade could not follow it out from man to man, from
contractor to sub-contractor, and from sub-contractor possibly
to a third sub-contractor, and ultimately to the consumer. If
hon. members who so lightly cheered a certain sentiment
would only make themselves familiar with the trade, how
coal was bought and sold, and how it was distributed, they
would pause before they attached themselves to some of
these amendments.

Mr. Maurice Healy referred to the position of Ireland
under the Bill. He said nothing would be easier than to
introduce into the Bill a clause which would protect the coal
factor or the sub-contractor who had re-sold coal on the
strength of the contract which he had made. Although it
perhaps would impose a great burden of labour and difficulty
on the Board of Trade, whatever they put into this Bill, diffi-
culties would undoubtedly arise, and whatever they did there
would not be a complete solution for all the difficulties. There
was no difficulty in dealing with the sub-contractor if the
Board of Trade would have the courage to face the difficulty
and deal with it. All that would be necessary would be to
impose by statute, on the top of the common foim of contract
by which the coal owner protected himself, a clause enabling
the coal factor, in case he was hit by his contract being broken
under this Act, to get similar benefits against the man who
was purchasing from him.

The Case of the Public Utility.

Mr. Mackinder recalled that on May 6 last a great meet-
ing was held in London of the users of coal, and especially
of representatives of the public utility companies and muni-
cipalities. The question was being asked at the present
time : what could be the state of inefficiency which could
allow nearly three months to go by before a Bill was intro-
duced, apparently designed to meet the very difficulty which
they raised last May?—a Bill which was introduced in a
form which is almost ironical to them, and which will be
described as a Bill shutting the door when the horse had
been stolen. The hon. member pointed out the position of a
corporation like that of Glasgow, which contracted for some-
thing like one million tons of coal, and which had to earmark
its supply, because it was under statutory obligations to
deliver gas and electricity, and which, at the present time,
had thrown upon it demands for increased supplies of elec-
tricity in order to meet the new munitions factories and the
departments which were being set up in old works and in
new establishments for that purpose. The delay of this Bill
would cost the people of Glasgow £70,000.

Mr. Dickinson expressed the opinion that if this Bill went
forward in the shape in which it then was, the Government
would be considered to have fathered a political fraud. It
was no good saying that it was merely a Bill in order to
prevent panic prices, and that it did not affect the actual
price. The consumer would not look at it that way. He claimed
that from the time that the Government established a Com-
mittee to investigate this question, and the Committee
reported every coal owner had due notice that something
would be done to reduce and limit the charges which he
would make for coal. Therefore, they were perfectly justified
in interfering with every contract that was made subsequent
to that date—that is, contracts made during April, May, or
June. No less than 80 per cent, of the whole 12 months’
supply was already contracted for at prices exceeding the
maximum which this Bill was going to lay down. He had
looked into the figures in consultation with a coal merchant
on whom he had great reliance, and his estimate was that if
the coal was sold at the prices at which it had been sold
under contracts recently, the poor man in London would be
paying at least 37s. per ton for his coal in the winter. He
also pointed out that contracts had been fixed up on the
sliding scale system, notwithstanding that it was condemned
unanimously by the Committee; and he asked if the Bill
was going to interfere with such contracts. He also referred
to the system of fixing prices in London, and said he thought
it was almost certain that if the majority of these great coal
merchants under contracts were paying at the rate of 7s.
more than the fixed price, and not 4s., they would fix the
consumer’s price on the higher figure, and not on the basis
oi the smaller sum in respect of free coal in small quantities.
He thought they ought to aim at putting the whole of the
mines of the country on the same basis, from the passing of
this Act and onwards, as regards price. There was not a
very complicated system of sub-contracts. He had put down
on clause 3 an amendment, which proceeded on these lines,
namely, that all contracts made on March 24, on the passing
of this Act, should be subject to revision on the application
of either party to the contract, and such application should
be made to the county court judge, who would have to adjust
the price on the basis of the statutory amount.

Mr. Dundas White said the coal owners in most districts
had certainly taken the opportunity to raise the price as
high as possibly could be done. He should be content if the
Government went the length of saying that the class of
annual contracts, made during May, June, and July, should
be subject to revision. Surely the municipalities which
entered into those contracts, and other people, might well
come to the Government and say : “ We gave you notice
of this difficulty as far back as May, and you have done
nothing but let it stand over, and stand over, until now
we have had to enter into contracts, and you decline to save
us from a difficulty which is of your own creation.”

Mr. G. Thorne considered the only fair wTay was for the
Government to give either party to the contract the right to
cancel it if, in view of the new situation created by the Act,
they thought it unfair to either of them.

Mr. T. M. Healy said speeches of the Parliamentary
Secretary produced on him the impression of an official new
to office, overpowered by the Departmental chiefs. The
permanent officials of the Board of Trade did not want to be
bothered, and if this amendment was carried it would treble
their work. It would be a splendid thing in a country like
Ireland, now that they had got everybody handcuffed to his
June contract, to go into the coal business. If anyone adver-
tised, offering coal to the Irish people at 3s. under any other
man by virtue of the Act, he would make a fortune. If they
put in a clause enabling the sub-contractor to appeal to the
county court judge, he ventured to say there would not be
much litigation, because he would get the concession as a
matter of course. The amendment might, perhaps, go too
•far in applying to all contracts, but it should certainly apply
to contracts made since this agitation began—that is to.say,
May and June contracts. Again, look at the hardship of
statutory companies. Would not the House have been flooded
with private Bills to enable gas companies to. raise their
statutory charges but for the hope and expectation that the

Board of Trade would deal with this matter? They were up
against the vis inertice of the permanent officials of the Board
of Trade, and the sooner it was known and stated the better.

Sir E. Cornwall also supported the amendment. At the
same time, he said, one must recognise that there were very
serious obstacles in the way of the Government invading con-
tracts. But it seemed to him that it was possible to have a
compromise between a general breaking into contracts, and
that the action of the Bill should be applied to contracts
made, say, since the Report of the Retail Committee. If
they did not apply this Bill to contracts, it meant that the
cost of house coal in the country would be from Is. 6d. to
2s. a ton more. If the Bill did not apply to manufacturing
coal and its contracts, then it meant something between Is.
and 5s. per ton. Again, there was a very serious matter
which had not been mentioned with regard to the effect on
the prices of household coal and manufacturing coal in
London. There was nothing in the Bill with reference to
freights, which had a very very important bearing on the cost
of manufactured coal in London. It might have a far larger
bearing on the cost of coal than the question of applying the
Bill, or not applying it, to contracts.

Sir A. Markham thought it was essential that those people
who had to buy to carry on public utility services should
have their supplies secured. The demand for coal was
greater than the supply, and it was therefore essential for
all merchants and people to secure their contracts. What
had happened on the Coal Exchange since this Bill had been
introduced was that the coal owners had gone there, and,
through their agents, said, “ Unless you buy at once at prices
which were given you, now we will not give you coal at all.”
Therefore, innumerable contracts had been entered into in the
last few days by merchants who wanted their supply of coal;
otherwise they would not get it. More contracts were being
made, and simply for the reason that there was this shortage
of coal. Railway companies were paying to-day in some cases
in Wales double the price they were paying for coal 12
months ago. Parliament, however, had guaranteed the divi-
dends of railway companies, and, as a consequence, the House
would have to make good to the railway companies the enor-
mous difference in these charges. The hon. member for
Sheffield (Mr. S. Roberts) made a statement that the coal
owners of Yorkshire last February entered into an arrange-
ment that they would not increase the price of coal above
that approximately in this Bill. He challenged him to name
one colliery that did so.

Mr. S. Roberts : I could name a great many.

Sir A. Markham : I ask him to name any colliery selling
coal right up to the end of June, when coal was selling at
f.o.b. Hull and Grimsby as much as 25s. I do not know
whether he has the daily returns, as I have, but I can assure
him the figures I have given are market prices. No such
combination was ever made. The association to which he
referred is only an association which deals with railway con-
tracts and certificates.

Mr. S. Roberts : The hon. baronet does not attend the
meetings of that association, and does not know what takes
place. I do, and I know five months ago the association met
and we decided amongst ourselves not to charge more than
this Bill charges, and I believe that understanding has been
honourably carried out.

Sir A. Markham : The hon. member is quite mistaken.
My representative attends all those meetings. _We are not
talking about contracts; we are dealing at this particular
moment with free coal, when coal has been sold. The public
has had to pay. We have all had our finger in the pudding;
I have had mine. I have had more than I am entitled to.
Sir A. Markham, continuing, said if the Government
passed this Bill in its present form, it would do much harm
to the Coalition Government in industrial districts, because
the working people, under contracts which had already been
made, would be paying as much money in the coming winter
as they did last winter.

Sir A. Mond said one of the great difficulties which would
arise if the present intention of having two lots of coal prices
—a high contract price and a lower maximum—was carried
out, would be that those who wished to buy at the lower
maximum price would never get any coal at all, because all
the coal that was available would go to those who had made
contracts at the higher price. He knew cases in which con-
tracts were in existence at the lower price, and the coal
owners had refused to deliver under those contracts unless
they did so at the higher price, on the ground that they had
better contracts, and therefore they would not sell under the
old contracts during the war. It was no use looking at this
question from the point of view of the London household coal.
The whole doctrine of the sanctity of contract was built
upon the idea that there were two independent contracting
parties, who were at liberty to contract or not to contract.
In this case one of the parties was bound to contract or close
down their gas works or electric lighting works. He could
not understand why the President of the Board of Trade did
not give some warning to all these public bodies that he was
going to produce this legislation and tell them not to buy
for a month.

Mr. Runciman on Commercial Morality.

Mr. Runciman said that when his right hon. friend (Sir
A. Mond) suggested that it was part of the duty of the
President of the Board of Trade to give a private tip to one
of the parties to a commercial transaction, he thought they
had got into a new commercial code. This amendment did
not strike merely at local authorities, it dealt with every-
body who might have bought coal before the introduction
of the Bill. He understood that a large number of local
authorities had been squeezed in Scotland, as well as in
England, but there appeared to be a good deal of exaggera-
tion about the extent to which the relief that could be given
by turning this into a delivery and not into a sales Bill,
would be likely to confer upon the local authorities. As a
matter of fact, his information was that although a good
many local authorities had made their contracts, there were
also a very large number who had refrained from doing so.
So had private individuals, and so had large numbers of
merchants. It had been quite overlooked that there were
very large coal fields in Great Britain which did not run
from August to August or from September to September,
but from January to December. Their contracts were made
in the winter, and every one of these would get the full
benefit of the Bill.* If there was any case at all, it- was
certainly the case of the local authorities, who might be
squeezed. The mover of this amendment provided that con-
tracts that were made before the Bill was introduced should
be torn up. It was true that they had done many hold
things during the war, but he knew none so bold as definitely
to tear up commercial undertakings which had been entered
into, and which would really mean not only that they would