456

THE COLLIERY GUARDIAN.

March 10, 1916.

(2)	Approximately the total quantity of mineral
.available to the undertaking;

(3)	The output likely to be obtained;

(4)	In the case of producing concerns he should have-
full profit and loss accounts for <as many years as
possible; and

(5)	He should be able to form some estimate of the
break-up value of the plant <at the end of the term of
the lease, or when the mineral will be exhausted.

Having satisfied himself on each of these points, he
has then to consider what profits will be made, when
they will be made, and the rate which a purchaser ought
to give for the estimated amount of profit to be made
over the term of the lease, or of the time that the
mineral will last. He will then proceed as in the case
of a mineral area, the rates he will take being 8 per
cent, to 12 per cent, for the investment, and about 4 per
cent, for the sinking fund. He will then add something
to his figure for the break-up value of the plant at the
end of the term, and make a deduction for the cost of
complying with any covenants for restoration and
the winding up expenses. It is often best to consider
the break-up value and the deduction together, for in
some cases the former will cancel out against the latter.

Mr. O’Donahue gives tables dealing (a) with the rates
of interest which the purchaser or lessee would expect
as the return on his investment, and (6) with the quite
different rates of interest at which sinking funds may
be expected to be invested. Useful as his tables are, it
may be pointed out that the best guide to a company or
investor embarking on an undertaking, and to a surveyor
making a valuation, in the matter of the rates of
interest at which sinking funds should be calculated is
given by the rates wdiich can be obtained from first-class
insurance companies for leasehold redemption policies.
For large transactions these rates vary almost from
month to month, depending upon the value of money
for the moment and the expectation of experts, such as
the secretaries and actuaries of the insurance com-
panies, of the rates at which they will be able to invest
money during the years covered by the sinking fund
policy. The value of such policies to royalty owners
and mining lessees is likely to be better recognised in
future.

In mineral valuations experience and local knowledge,
valuable as they are in every kind of business, count for
more than anything else. One element of speculation
has, however, been done away with within the last
quarter of a century in certain valuations, by the fact
that preliminary works in the way of borings are now
usually undertaken before large capital sums are spent
upon sinking.

For instance, in the new Kent coal field the borings
which have been put down cover a very large area of
country, and are still being added to. From these it
will eventually be possible to trace the coal basin from
north to south, and from east to west. While they are
of great assistance, they do not eliminate the great
problem of how far the minerals that have been dis-
covered by their means are of commercial value. In
her coal seams Britain has been the luckiest country on
earth. Her South Wales steam coal series and her
Yorkshire “ Barnsley or Top Hard ” are marvellous
possessions. But she cannot expect to turn up the ace
of trumps every time.

The fluctuations in value of mineral areas and under-
takings have been very great. Carnegie once said of
iron and steel “ that it is either beggar or king.” This
has been equally true of coal and ironstone, the history,
of the coal trade especially, having been that in recurring
cycles of roughly seven or eight years’ duration, the
course of the trade as a whole has usually varied from a
production of no profit at all to a profit which, if not
beyond the dreams of avarice, has been at any rate
satisfactory. In the two main districts profits have
been large enough to make the industry not only repro-
ductive, but highly progressive. There are, of course,
concerns which make money even in bad times, but
there are others which make money only in very good
times. Some few unlucky ventures never make any
profits at all. The average earnings over a long period
are probably a good deal less than the 10 per cent.,
which is commonly taken by valuers as being what
mining capital should produce.

When it is remembered that the unit of production is
the ton, and the rise or fall of Id. a ton in the price
of coal means more than £1,000,000 a year either one
way or the other, it can easily be seen that the reflection
of even a moderate fluctuation in prices on the capital
value of areas and undertakings must be great.

It would seem that mining surveyors have problems
to deal with which are as difficult as any with which
surface surveyors are confronted. The mining districts
are naturally difficult places in which to do business.
The old proverb, Omne ignotum pro magnifico, applies
particularly to owners of land in mineral districts, who
are far more dependent on technical advisers than those
owners who are interested in surface land only.

It is not possible to give iany statistics, but a general
statement may be made that freehold minerals are very
tightly held, and that the numbers of actual sales of
properties either producing income from minerals or
likely to do so has been very limited compared propor-
tionately with transactions in other properties.

As securities for mortgages minerals are not as much
in favour as other real property, and -even if willing to
lend, investors will not as a rule consider anything over
50 per cent. For mortgage purposes, too, surveyors are
naturally inclined to take most cautious views and to
put their factors of safety very high.

DISCUSSION.

In the discussion which ensued, Mr. Thos. Jones, in
proposing a vote of thanks, referred to the question' of
royalties, and said that those who had to do with
minerals knew there were statute tons and long tons of

21|cwts., and the long ton affected very materially the
question of value when they were working out their
eistimaied contents for coal seams or iron mines. Regard-
ing subsidences, they could not take a general rule that
the break must come at right angles at the dip. It was
governed by various factors, one being faults, which
might run against them and break ground far in advance.
They must study local conditions. Most of them dealing
with mineral estates would like to know how to secure
more careful treatment of colliery tips which ignited
spontaneously, emitted noxious fumes, and destroyed
everything around them.

Mr. Ernest Page, K.C., one of the counsel in the
Howley Park case, 'said he understood the judgment
came as a bombshell among mining surveyors and
owners.: The law, however, was declared to be exactly
as it. had been interpreted by the legal profession for
many years. Fifty years ago the House of Lords arrived
at the same conclusion as in the Howley Park case in
Elliott a. North-Eastern Railway Company. Practically
the only difference was that in the earlier action the
Act of Parliament was a private Act, whereas in Howley
Park it was a general Act—the Railways Clauses Con-
solidation Act, 1845. Mr. Page went on to say that the
ownership of the minerals did not pass to the railway
company on payment of compensation; it remained in
the mineral owner, and the sum paid was compensation
to him for being deprived of the right of working that
which was and remained his own. With the much
deeper workings of to-day it might be that the prescribed
distance, instead of being 40 yds., or 150 yds., would
be very much more because the damage sometimes
occurred' from working a large area much more than
150 yds. from the railway. He hoped the law as laid
down would not result in great damage to owners.
Clearly it was not in the interest of the railway com-
panies that large quamities of coal should remain
unworked.

Mr. Forster Brown gave some interesting details of
the Kent coal field. He said that about 200 sq. miles of
coal field had been proved in Kent under the mainland,
and there. was undoubtedly a considerable area lying-
under the Channel between Folkestone and Deal.
Upwards of 35 boreholes had been put down in prospect-
ing and proving this, area to be underlaid by coal
measures, making little short of 100,000 ft. • of borings,
which probably cost not le.s-s than £300,000 to carrymut.
It was said that boring had eliminated one element of
speculation in making valuations, and the Kent coal
field had been cited as an instance of this. He thought
it might usefully be added, however, that the Kent coal
field was the only coal field of importance in ihe United
Kingdom, completely hidden by an unconformably over-
laid capping of secondary rocks, and no definite informa-
tion could be obtained from a study of the surface as to
whether any particular area was underlaid by coal
measures or not, the only way to ascertain what lay in
the ground being by boring or sinking shafts. The
minimum distance beneath the surface at which the coal
measures had been found in Kent was in excess of
850 ft., and in the western portion of the field the thick-
ness of secondary rocks exceeded 1,400 ft. The coal was
soft, and complete cores had not been obtained. The
boreholes indicated, however, that the most promising
seams, in thickness and quality, lay in the lower stratum
of coal measures. Over 1,500 ft. of sinking had been
carried out at the various collieries. Formidable water
difficulties in getting through the secondary rocks had
been met with, and the experience had been bought at
a heavy price. In spite of the high initial expenditure,
he thought it would be extremely difficult for anyone to
make a satisfactory mineral valuation of an area in the
Kent coal field at the present time. The borings and
sinkings indicated where the easiest sinking conditions
were likely to be. The4places where the best seams were
likely to be met with were also indicated, but no shafts
had yet reached to the lower coal measures, and borings,
where a core was not obtained, would never give satis-
factory information as to the true analysis of a coal, the
condition of working it, and the physical condition in
which it would reach the markets. This could only be
ascertained by practical experience in working the seam
itself. The actual underground workings in Kent at the
present time had proved an area of about 600 acres
in seams in the. upper measures. This evidence was
'satisfactory as far as it went, but it gave a very meagre
basis on which to estimate the value of minerals under
an area of 200 sq. miles, largely underlaid by promising
seams in the lower measures. The comparatively small
number of facts known about Kent coal in proportion to
the very large sums of money spent in proving it led one
to consider whether it would not be to* the advantage
of all parties to endeavour to work together, at any rate
in the preliminary exploration of a hidden field of this
character, to arrive as soon, and as cheaply as possible,
at some idea of the value of the minerals. It was
important for the landlord to know this so that
he might have some idea of what were fair
lease terms to1 grant. It was important for the
capitalist to know, so that he might have some
idea as to whether it was worth while investing money
in ;he field, and how much. It was also important for
the Government to know for taxation purposes. There
was not the least doubt in his mind that if the landlords
and the various developing companies had got together
in the first place, and agreed on a definite scheme of
prospecting and development of the field as a whole,
that the facts available to-day could have been obtained
at a very small proportion of the sums actually spent,
and the field would now be in a flourishing state of
development, to the greater advantage of all parties. He
did not mean that landlords should contribute money,
but that they should contribute in this way—instead of
imposing on the colliery companies difficult obligations
with regard to sinking, they should waive all those
obligations until the whole map of the coal field had been
properly worked out, and it was seen what was to be

done, and what was the cheapest way of doing it for the
field as a whole. A limited number of borings placed to
the best advantage, and, subsequently, one, or at the
most, two pairs of pits pushed right through the coal
measures, would have been ample to give a very fair
idea of the character and value of the coal seams existing,
the cost of reaching and working them, their market
value, and their freehold value. An arrangement of this
kind would probably be contrary to a number of pre-
judices, some of them no doubt well founded, and it
might be argued that it would tend to cripple individual
effort and iniiiative. There wns a growing tendency in
this country, however, largely due to the present crisis,
to appreciate the fact that the efficient development of
a nation’s economic resources as a whole was almost
as important a feature in rhe well-being of the individual
as his own efforts, and this consideration would
undoubtedly play a much greater part in the develop-
ment of the resources of this country than heretofore.

: Mr. David H. Turner, Mr. T. A. O’Donahue, Mr.
E. C. Forster, and the Chairman (Mr. A. Lyon Ryde)
also took part in the discussion.

MINING INDUSTRY AND MILITARY SERVICE.

The decisions given by tribunals under the Derby scheme
and Compulsion Act are worth watching. The Sunderland
Rural District tribunal has conditionally exempted two
colliery clerks on the understanding that they remain in their
present service, the military representative agreeing that they,
are indispensable. A plater and chargeman of erections at
Chilton Colliery, where residual plant is being installed, has
been exempted for six months by the Durham tribunal, on
the understanding that he remains at similar work.—Wallsend
and Hebburn Coal Company applied to the local tribunal for
the exemption of a head goods clerk at the colliery, and two
months’ postponement was allowed. A similar decision was
come to in respect of an assistant staithesmaster, aged 22
years, in the employ of the same company.

At Darlington a coal salesman urged that he should be
exempted on the ground that the future of his business
depended upon his being there to attend to it, and that the
supply of coal to the poorer classes, with which he was
mainly concerned, was a necessity in the national interests.
Two months.’ exemption was granted. — At Auckland the
Cargo Fleet Iron Company sought a similar privilege for two
clerks, and pleaded that, owing to the enlistment of others,
these were indispensable, and had to perform about 20 per
cent, more work than normally. One clerk was exempted for
physical reasons, and the other was put back for three
months.

Mr. R. J. Mounsey, assistant managing director of the
North Bitchburn Coal Company, applied to the Darlington
tribunal for exemption from military service on conscientious
grounds. Mr. Mounsey said if he left the coal company’s
offices he thought it would mean that Mr. Hustler . (the
managing director) would have to cease his duties -as.military
representative for Middlesbrough, and in addition Mr.
Hustler had been appointed High Sheriff for Durham. The
application was granted, but the military representative
said he would appeal.

At St. Helens, application was made by a firm of engineers
for two brothers who were employed as mineral borers. It
was .stated that they were engaged in sinking a shaft for
Messrs. B. B. Glover and Sons, and the elder brother was
the foreman of the borers, and the younger was a borer.
Normally borers were scarce, and they were more scarce
than ever just now. Col. Cook said that as this work was
not likely to be finished while the war was on, the work was
not in the national interest. If it were a claim which meant
that a colliery would be opened up quickly and the coal
output increased it would be one for consideration. A post-
ponement until May 18 was granted to the foreman borer,
but the other appeal was disallowed.—At Swinton the
general manager of a local colliery appealed on behalf of
his chief stores clerk and private secretary, and in doing so
he stated that 16 men from the firm’s clerical staff had
enlisted, .and the chief stores clerk was the only one left in
his department. One month’s postponement was granted.—
A firm of colliery proprietors sought exemption for six of
their employees, and said that 62 of 90 employees had
enlisted, and owing to the shortage of labour the firm’s
output—they provided material for the manufacture of
munitions—had been reduced 25 per cent. One man. was
granted exemption on domestic grounds, .and the remainder
were granted exemption conditional on their remaining in
their present .employment.

Mr. W. H. Chambers, managing director of the Denaby
and Cadeby Main Collieries, is the chairman of the tribunal
which is hearing appeals for exemption from military service
in the district around Doncaster. At one of their sittings
last week, he left the chair, and appealed on behalf of a
timekeeper and wages clerk at one of the pits. He stated 17
clerks had left, 14 had enlisted, two had gone to munition
work, and one to fill a vacancy at another colliery. These
clerks had been replaced by 14 women. The application was
granted.—A personal appeal by a colliery wages clerk has
been refused by the Ghorley court.

Many co-operative societies and coal merchants in South
and South-East Lancashire are applying for exemptions for
coal baggers in their employ. In a few cases the applica-
tions are being acceded to, but the majority are being refused.

The South Staffordshire Mines Drainage Commissioners
have applied for exemption from military service of all their
men employed in connection with mine drainage.

At the request of the military authorities, no fewer than
570 men will shortly be withdrawn from the mines in Lanark-
shire. So far as possible, young men will be chosen. It is
understood that the men are to be utilised for mining opera-
tions at the front.

Manchester Geological and Mining Society.—The next
ordinary meeting will be held at Queen’s-chambers, 5, John
Dalton-street, Manchester, on Tuesday, March 14, at 4 p.m.
The following paper will be read : “ Carbon Dioxide as an
Agent in the Extinction of Mine Fires, with Special Refer-
ence to its Use at the Senghenydd Colliery,” by Mr. Edgar
Charles Evans, B.Sc., F.I.C. The following paper will be
open for discussion : “ The Value of the Experimental Fan
in the Mining Laboratory,” by Mr. D. E. Thomas, B.Sc.