October 4, 1918.

THE COLLIERY GUARDIAN. -

703'

WHY GERMAN COAL COMMANDED
THE BELGIAN MARKET.

By E. Cornand, Paris.

During the many years I have been connected with
coal business, both in Belgium and France, I have
often heard English coal exporters utter astonishment
at seeing the rapid progress of the introduction of
German coals on these markets. In fact, Germany,
who in 1903 only supplied about 2,000,000 tons of fuel
to Belgium, had for the year 1913 attained the figure
of 6,671,177 tons, represented by—

Coal ................5,210,687	tons.

Coke ............... 1,002,190	„

Briquettes ........... 458,300	,,

as against only 2,281,344 tons of English coals supplied
that year. In the same way the French market had
been actively worked by the Germans shortly before
the war, and I know that in 1913 they had secured a
large share in the supply of big French railway com-
panies. I shall not insist on the special methods
generally practised by Germany in order to develop
her foreign trade; but there are other factors which,
in buyers’ opinion, were absolutely in favour of the
German coals, and which greatly accounted for the
rapid increase of their trade in Belgium and France.

I think these circumstances were, and are perhaps
still, ignored by British coal exporters, and as 1 believe
that the Belgian market will soon become of great
interest to them after the war, and certain special
conditions which so far favoured the German trade
will disappear or perhaps be in favour of English
trade, it is certainly to the interest of British coal
exporters to know how they actually stood vis-a-vis
their competitors in the opinion of the consumers. I
will therefore hereafter make a comparative statement
of the general conditions of German and English trade
on the Belgian market, such as derives from my own
experience in the trade.

From the examination of arguments used by the
buyers to justify their turning to Germany for their
supplies, it appears clearly that the greatest cause
of loss of trade to English coals was due to the
ignorance of business circumstances by most coal ex-
porters, who, unaware of the reasons which caused
the preference to turn to German coal, “ went on in
the same old way,” gradually causing British trade
to be cut out by Germany.

Be it well understood that when I hereafter men-
tion “coal exporters,” I do not pretend that all of
them ought to be included in my critique, but I wish
to express the opinion of buyers in general which I
used to receive when approaching them on the subject.
Some remarks may sound very hard in English ears,
but I think it is preferable for them to know what
was going on rather than ignore such important facts
and have no chance to regain the Belgian market.

1.	Vendors.—All German coals were sold in Belgium
by the Rhenisch-Westfalische Kohlen Syndikat (here-
after called ■“ Syndikat ”), who, with only a few excep-
tions, had the full control of the sale of coals produced
by the greatest district in Germany—in fact, the only
one able to compete on the Belgian market; therefore
buyers had only one vendor to deal with, and were
sure to be always able to renew their contract for such
coals as suited their requirements.

English coals were, so to say, always sold by “coal
exporters” (hereafter called “vendors”), who
generally traded “ on spec,” and had no control what-
ever over the production of any mines. Sales by the
mines direct were so scarce that they are not worth
talking about; therefore buyers were never sure to
be able to renew a contract with the same vendors.

Even in the case of vendors, who were known to
only sell quantities they had covered with the mines,
renewal of contract was not at all a certainty, with
the result that buyer ran the risk of not being able
to continue to get from his vendors a certain coal
which he had been used to for a certain time and
which suited his purpose.

2.	Quality.—(a) The Syndikat, being the only sales
agent for the coal offered, disposed of the mines’ pro-
duction as best suited the requirements of business,
(b) The Syndikat was thus able to accept only a very
small list of options for a big contract, or even only
one brand if the business was not too important.
Only the options or brand contracted for were. sup-
plied, exclusive of all other qualities. This resulted
in an absolute uniformity in the quality, which
naturally pleased the buyer, (c) This uniformity in
the quality, I must add, was greatly facilitated in
the case of Belgium by the possibility of delivering
by wagons or barges of only 300 tons, which rendered
the supplying by one mine very easy.

In the case of English coals, however, (a) vendors,
having in general no sales agency for any coals, could
only get them if any were available at the mines;
(b) therefore, and especially because most of the
vendors worked “on spec,” they were compelled to
ask long lists of options for an important contract,
leaving a greater margin for variability in the quality
of the various cargoes. In buyers’ idea, this was not
an absolute inconvenience, as vendors were supposed
to do their best to maintain all round the average
quality of coals the buyers required. However, in
practice this was rarely obtained. Vendors either
abused the options granted, or sometimes supplied
qualities outside of the list, whether compelled to do
so or not. Seeing the numerous options granted by
buyers, simply in order to facilitate matters to the
vendor, the latter, when prices were unfavourable,
often supplied cargoes composed exclusively of the
lower grades on the list, only supplying the good
grades when prices perfiitted to do so with a good
margin of profit. It often happend that, owing to
delay in traffic, wagons did not turn up in time, and
the vendor, in order to despatch the steamer within
her lay hours and avoid demurrage, completed the
cargo with whatever coal he could get, disregarding
the quality, with the result that buyers often received
coals unsuitable for their requirements. The result
of this was generally that the various cargoes delivered

under a contract differed very much in quality.
Buyers when prices were high, received very bad
cargoes, which in some vendors’ idea was easily made
up by the supply of a few extra good cargoes when
prices permitted. In practice, however, this does not
at all satisfy buyers, who first of all require an abso-
lute uniformity in quality. (c) It is quite certain
that coals cannot be economically shipped* from
England in small quantities as is the case for German
coals. Fairly big tonnage has to be used in many
cases. Therefore when buyers give English vendors
a long list of options, it is because they realise that
the general business circumstances do not always
permit English vendors to supply only a few deter-
mined grades of coals within the loading time of a
steamer. They know that in certain cases it is neces-
sary, in order to avoid delay in the loading, which
might cause a loss to the vendors in the way of de-
murrage, to make up a cargo with other than first
grade coals if these cannot be had in time, and this
is why buyers grant additional options to be thus used
only in case of need. Vendors, however, do not
generally look at this in the same way, and have a
tendency to make the best out of such a contract by
supplying according to the state of the market, and
not according to what they could get at the mines.
Vendors should understand that this is one of the
points most in favour of German coals, and it is cer-
tainly the only reason why certain important indus-
tries who want an absolute regularity in the quality
of their coals gave up the English to purchase exclu-
sively German coals, which always gave satisfaction.

3.	Coals Sold Under Analysis.—As German con-
tracts are made for small lists, or even for a single
grade, the coals offered are well known to the buyers.
As they, moreover, know that German coals are
always carefully handled and screened (German col-
lieries being up to date • and fitted with the most
modern appliances), and therefore very regular in
quality, they buy them as they are, without imposing
any analysis guarantees.

The case is not, however, the same in England,
where a good many collieries are absolutely old-
fashioned and modern washing and screening appl-
ances rare. Therefore, as buyers know they may
expect a great irregularity in quality on cargoes com-
posed of coals chosen from a very long list of options,
they impose certain conditions of ash, moisture, vola-
tile matter, and even in some cases sulphur and
phosphorus, excesses on given percentages being
charged with a penalty calculated per ton and per
unit in excess or fraction thereof.

These conditions were only introduced in order to
compel vendors to make up the cargoes with a maxi-
mum proportion of first-class brands on the list, so as
to avoid penalties. However, a great many vendors
easily found the way to attain the necessary limits
of ash, etc., without thereby improving the quality of
the cargo. The worst about this was that vendors
thought buyers did not discover this, but they were
perfectly aware of these methods, though they pre-
ferred to say nothing, and turned simply to other
sources. Be it known that in the case of Belgium,
where coals are generally scientifically controlled By
the consumer, it was impossible to lure him for any
appreciable time.

4.	Delivery.—The Syndikat always regularly de-
livered the quantities as stipulated in the contract,
without taking any arrears which have to be subse-
quently made up by hurried deliveries. Never have
I heard of any buyer finding himself without coals or
being compelled to take delivery of more coals than •
he wished to handle.

This was, unfortunately, the case with vendors.
They supplied regularly as long as it suited them,
but if the conditions of the market exposed them to a
reduced profit or a loss by delivering, or if better prices
could at a certain moment be obtained elsewhere, they
did not hesitate in taking important arrears on the
quantities due per contract, thus compelling the
buyers to purchase coals on the market, for which
they had to pay up. In many cases buyers were
not able to find suitable coals, but were compelled
to take them to avoid stopping their works. When
afterwards conditions were in their favour, vendors
started delivering at top speed to make up the arrears
thus created, which was even worse. If at any given
moment prices or freights dropped and permitted to
realise immediately a big profit by hurrying deliveries,
vendors loaded cargo upon cargo, disregarding buyers’
ability to take delivery, and compelling them, to say
the least, to stock the coals if they had any space, or
pay demurrage on wagons or barges if they had no
room for the coals. In each case this entailed con-
siderable additional expense for the buyer. The case
has even often been known of vendors, who had
stopped deliveries because it did not suit them to
supply, offering buyers one or more cargoes outside
contract at a higher rate, and this for the very quality
of coals which were due under contract. Of course, .
buyers in some cases had to accept, and they did so;
but they also remembered the thing, and similar cases,
when repeated a sufficient number of times, finally
disgusted buyers, who turned to other quarters for
their requirements.

All this I have witnessed many a time, and there
lies another of the reasons why buyers came to prefer
the German coals, even if it cost them a little more
{(which was not the case), as they knew what extra
price they eventually paid on a contract which ensured
regular deliveries, whereas they could never know
what expenses they would have to meet through
irregular deliveries on contracts made in England.

5.	Renewal of Business.—The object of the
Syndikat, which was formed by the collieries them-
selves, and really was only some sort of collective
sales agency, was to sell as much coal as possible in
order to permit the development of the mines by the
opening up of new markets and a consequent reduc-
tion in the cost of extraction. Therefore the Syndikat
did not simply sell such coal as was available for
export, but kept on hunting up fresh markets in
order to permit of an ever-increasing production.

To this effect the Syndikat was always ready to make
what sacrifices were necessary to secure a contract held
by competitors when it suited his arrangements, and
whenever the Syndikat had thus succeeded, all neces-
sary concessions were eventually made to prevent
business from returning to old quarters.

This constant increase in business was the very
factor that permitted reducing the cost of extraction
and other general expenses of carriage and/or
freight, and the consequently easy cutting out of
competition. Therefore, whatever the conditions of
the market were, coals contracted for were regularly
supplied. As the mines were in direct touch witn
the buyers through their collective sales agency, they
were themselves reaping the profits of regular and
increased business, and it was therefore only natural
that they should do all they possibly could to keep
a contract when it had once been secured.

As against this general policy English coal ex-
porters had only in view to sell whatever coals they
could get at the mines with as great a profit as possible
to themselves, without trying to exceed a certain
tonnage they used to handle, say, per annum, and
which they seldom exceeded. Most of the exporting
firms had established for themselves a certain “turn-
over ” which as soon as attained put a stop to their
activity for a certain period.

There was no fixed policy whatever. Coal was sold
as it was extracted. If it found a market, all well
and good, but if it could not be disposed of, the coal
was stocked at the mines. Eventually the latter closed
down for a certain period pending better times.
Nothing was done in the way of ensuring a sufficient
outlet to avoid this eventuality or to permit increased
production and extension of the mines.

As a matter of fact, English coals only rested on
their old-established reputation of quality to find a
market. This was, of course, a mistake, as that
advantage had long ceased to exist as a consequence
of jbhe improvement for washing and cleaning coals
adopted specially in Germany and other countries
competing with England. It is quite certain, from
a practical point, that coals mechanically brought to
a certain standard of quality, and which, therefore,
are sure to be permanent in quality, are preferable
to coals which naturally correspond to this standard
without any mechanical treatment being necessary.

Let us take one important factor in the quality of
coals—i.e., the percentage of ash. Coals mechanically
treated to attain a certain fixed percentage will
always contain the percentage desired, and not exceed
it. Such is not the case with “natural” coals, which
are supposed to contain “ about -------- per cent, of

ash.” Sometimes that coal will contain less, but very
often the percentage will seriously exceed the limit.
Therefore the most important factor of regularity in
the quality, which is a necessity in most modern
applications of coal, is much easier to obtain with
a mechanically treated coal than with a “natural”
coal, though the quality of the former may originally
be inferior to that of the latter. It is therefore
natural that in a great many cases the mechanically
treated coals of Germany were preferred to the
“natural” coals of England.

As regards vendors in general, it is quite certain
that once they held a contract, and same turned out
to their satisfaction, they did everything in their
power to keep it. But if the contract in question
had not absolutely given them satisfaction, if by the
time of renewal they found a tempting business in
other directions, they did not hesitate in declining
to renew the contract just expired to take up fresh
business, instead of trying to maintain the old con-
tract and take up the new business as well. As a
consequence business was then almost invariably
picked up by the Germans, who, as everybody knows,
always had a keen eye for business that did not yet
belong to them.

The result of this absolute lack in policy was that
the mines, who always disposed of their production,
held out for high prices as long as the coal was readily
bought. A nice profit being in turn added by the
vendors compelled the latter to confine their activity
to quarters that could not easily be worked by the com-
petition'. But as a consequence of competitors even
increasing business which. enabled them to reduce
prices where this was necessary to get a contract,
English coals were slowly being abandoned in quarters
which had been looked upon by vendors as absolutely
inaccesible to the Germans.

An instance of this is the contracts booked by the
Syndikat in 1913 with French railway companies for
shipment to Bordeaux, and also, I believe, to
Marseilles.

I could deal with this subject further by developing
the intimate connection existing between the German
coal and metallurgical industries whose combined
interests called for an ever-increasing foreign market
for coals, but this has already been extensively dealt
with in numerous studies of German methods. I,
however, always noticed that most of these studies
hint at proving only Germany’s black actions, which
are supposed to be the only reason of their industrial
development. I wished to prove that in the case of
their coal exports there were other very important
reasons which I think vendors should nq^ ignore, and
which are only a natural consequence of the Germans’
general education based upon methodism.

Miners and Sir A. Stanley.—Sir Albert Stanley (Presi-
dent of the Board of Trade) and Sir Guy Calthrop (Coal
Controller) on Sunday addressed between 5,000 and 6.000
Cannock Chase miners at Heath Hayes in furtherance
of the effort to increase the coal output.- It was urged by
both speakers that the coal position was>extremely serious,
and that we were millions of tons short. Every endeavour
would be made to release as many miners from the front
as possible, but miners at home must not make extreme
demands. A resolution was carried recognising the neces-
sity for greater production, but asking for the return of
a sufficient number of fit miners, irrespective of their
medical category.