October 25, 1918.

THE COLLIERY GUARDIAN.

867

scarce for forward booking. Little if any house
coal is offered in the open market in Manchester,
and the supply in Yorkshire is inadequate. Slacks
are scarce. No surplus of superior grades is available
in Cardiff for private trade. Secondary sorts and
best bunker smalls are going well, but inferior
grades are accumulating. Supplies do not equal the
continued active demand in Scotland.

Patent fuel makers in South Wales are busy, and
could greatly increase the output if labour were
obtainable.

Chartering remains dull, and the tone for Scandi-
navian ports has been rather variable in Newcastle.
Rates are firmly maintained in Cardiff.

The Coal Controller’s figures for the four weeks
ended September 14 show an increase of 1,800,000
on the previous four weeks, but a decrease of 1,758,000
compared with the corresponding period last year.

A Government report at an early date will embody
the results of investigations carried out by the
Director of Fuel Research into the use of pulverised
coal for metallurgical and other purposes in the
United States.

The Board of Trade has issued an Order requiring
weekly returns from all persons consuming two or
more tons of coal or coke per week.

The Petroleum Production Bill and the Petroleum
Production (No. 2) Bill were both read a second time
in the House of Lords on Tuesday, and the motion
to refer both to a Select Committee was negatived
without a division.

The Miners’ Federation of South Wales decided to
call a coal-field conference failing a satisfactory reply
to the demand for an eight hours day for surface
workmen.

The annual meeting of the North Staffordshire
Institute of Mining Engineers will be held in the
Central School of Science and Technology, Stoke-
on-Trent, on November 4, commencing at 5 p.m.

A special commission to inquire into conditions
and Government reductions affecting the coal
industry in foreign countries will shortly leave the
United States for Europe.

The question of coal and mineral
Coal traffic on the railways of the United
Transport. Kingdom has recently been discussed
in considerable detail by Mr.
Kelw’ay-Bamber, in a paper read before the
Institution of Locomotive Engineers, and, as the full
text has now been published in the journal of that
institution, we take the opportunity of discussing its
main features. The chief object of the paper was to
indicate a method whereby the load-carrying capacity
of British railways, and their revenue-earning
powers, might, in the author’s opinion, be sub-
stantially increased. As the net result claimed for
this scheme amounts to a considerable reduction in
dead weight hauled, in addition to other economies,
Mr. Bamber’s plan certainly merits serious attention,
even although it is not put forward as a scheme
which could be at once put into operation, but rather
as a possible achievement in the course of the next
decade.

Briefly, the suggestion is based upon the proved
efficiency, under certain conditions, of the high-
capacity wagon, of a type similar to those already in
use in South Africa. The subject is not by any
means new, but it has not before been handled in
such thorough detail. There is no doubt, also, that
the tendency in some countries has been progressively
in favour of increased carrying capacity of coal
wagons. In India, for example, there has been a
gradual rise in the load of four-wheeled mineral
wagons, which has now reached 23*25 tons, the body
length remaining constant at 19*25 ft. This is
rendered possible by the fact that the Indian
railways concerned have a broad gauge, 5 ft. 6 in. A
similar tendency is also seen in the mineral railways
of the United States, whose gauge is 4 ft. 8J in. The
3 ft. 6 in. gauge of South African railways, however,
closely corresponds with that of the railways of
Great Britain, and that country, therefore, serves
well for the purpose of comparing the relative
efficiency of high and low capacity wagons.

Mr. Bamber very properly urges the importance
of increasing the coal-carrying and revenue-earning
capacity of British railways as a pure measure of
reconstruction after the war. It is a question which
was referred to by Sir Albert Stanley, in his
lecture at Saddler’s Hall, to which we drew attention
in this column a week ago. It is not, of course, to
be expected that any proj ect for increasing the gauge
of- English railways would be regarded as a practical
proposition at the present time. But Mr. Bamber
confines his attention to what might be done to
increase the efficiency and reduce the working
costs in this country within the existing
limitations of British main line load restrictions.
He claims that the South African railways
are using the most up-to-date coal wagons extant
complying in over-all height and width with the
requirements of the railways of Great Britain, and
running under very severe conditions both of grade
and curve. These are the 45-ton bogie, flat bottom
high-sided, and 45-ton bogie self-discharging hopper
coal wagons.

It can easily be shown statistically that these high
capacity wagons possess considerable advantages,
which may be summarised as follows :—The number
of vehicles to be handled is reduced by 77 per cent. ;
there is an improvement in the percentage of paying
load to gross weight hauled by 22 per cent.; the
dead weight hauled is reduced by 33| per cent.; the
coal consumption is diminished by about 40 per cent. ;
the train length is reduced by about 47 per cent.;
and the gross weight per foot of wagon length is
increased by about 63 per cent. In addition to these
improvements may be added the increased efficiency
of both locomotives and sidings.

But there are obvious obj ections to the application
of Mr. Bamber’s plan to the railways of this country.
In the first place, it is necessary to remember that
the English railways are at a disadvantage in com-
parison with those of newer countries. Our railways
were made under conditions which hardly exist in
the case of South Africa or the United States, where
the railroads act as pioneers in opening up new
towns, and are comparatively free from such obstruc-
tions to the loading gauge as tunnels and overhead
bridges. There are, also, in Great Britain no such
long-distance haulages as exist in the above-named
countries. Then it is also necessary to consider the
conditions of trade, and the proportion of small
traders. There are large numbers of coal merchants
in Great Britain who would be unable to handle
large consignments. Colliery screening and delivery
appliances, and the wagon tips at docks are not in
general adapted for dealing with coal wagons of 45-
ton capacity. As was pointed out by Mr. A. D.
Jones, the president of the Institution of Locomotive
Engineers, in discussing Mr. Bamber’s paper, the
transport point of view is not the only one to be
considered. It is not contended that existing arrange-
ments in this country are the best from an economic
standpoint, but these conditions exist, and have
grown up with the coal trade. To alter them in
order to make larger units general would be a
matter of considerable difficulty. High capacity
wagons, up to 30 tons, have, it is true, come into use
for special purposes, and perhaps there may be
discerned a growing tendency to increase the capacity
of ordinary coal wagons, which are now commonly
constructed to carry 15 or 20 tons ; but it would seem
beyond the bounds of feasibility to expect a whole-
sale conversion to 45-ton capacities within anything
like the limit of time suggested by Mr. Bamber,
except by the aid of the most drastic legislation,
involving the compulsory scrapping of much existing
plant.

The war has taught us, among many other things,
however, that there is undoubtedly room for consider-
able improvement in the handling of the coal traffic
on British railways. Sir Albert Stanley has hinted
that a complete reversion to pre-war methods is not
to be expected. Mr. Bamber, therefore, has done
good service in dealing with this question from the
traffic standpoint, and his figures appear to be
quite incontrovertible. We should like, however, to
see the question treated also from the point of view
of capital expenditure involved in making so great
a revolution in practice as this scheme would entail.
Not that this would necessarily prove prohibitive in
view of the large annual saving that might be
effected. But the financial question is, nevertheless,
an important consideration, and one that must
necessarily prove a vital factor in any proposition of
this nature.

A paper by Dr. J. 0. Stamp,
Trade published recently in the Journal
Fluctuations of the Royal Statistical Society,
and Profits, examines the effect of trade fluctua-
tions upon profits, as revealed by
statistics. The subject is interesting in itself; but
Dr. Stamp’s treatment of is particularly so, owing
to the large part that is taken up by a discus-
sion of coal-mining profits. This attempt to estab-
lish a correlation between trade movements and
trade profits is new. As the author says, “ with all
the recent mass of writing on trade cycles and the
skilful production of ‘business barometers,’ there is
little to show us from the most accurately adjusted
barometer and skilled reading of its movements
what precisely is the change ‘ in the weather ’ that
may be expected to follow or accompany its indica-
tions.” The reason for this, in his opinion, lies in the
difficulty of obtaining sufficiently accurate informa-
tion to enable a proper comparison to be made
between profits and trade statistics. This is very
true. Few people have ever considered statistics
from this point of view. There is no very precise
knowledge respecting the relative influence of quan-
tity and price upon profits, and most business men
are particularly shy of statistics when applied to the
practical purpose of predicting the future trend of
trade.

Dr. Stamp has already done valuable service in his
careful analysis of the profits represented by the
assessments to income tax under Schedule D, pub-
lished in the volume, “ British Incomes and Property:
The Application of Official Statistics to Economic
Problems.” * The present paper is, in fact, an
application of the results arrived at in that volume to
the practical problem of establishing a rel.tionship
between trade activity and profit making. His

* London: P. S. King and Son Limited, 1916.

object is not to discover a causal relation so much as
to examine what evidence there is of concomitant
variation. He acknowledges many difficulties in
estimating for any trade the connection between
output and profit, and not the least of them is the
extreme complexity of such statistics of profits as are
available. Taking, for example, coal mining, it
happens that income tax assessments on mines have
always been shown separately. The fact that metal-
liferous mines are included probably makes very little
difference, since their number is relatively unimpor-
tant. These assessments, also, are based on the
average profits of the preceding five years. Dr.
Stamp gives a diagram showing, by means of a
curve, the fluctuations in coal profits between the
years 1871 and 1913, based upon these five-year
averages. From these curves he deduces the nine-
years moving average and the linear trend for
specified periods, whence a coefficient of deviation is
obtained, and certain equations are established. We
do not, however, propose to follow Dr. Stamp in his
purely statistical methods, not only because it would
be difficult to do so in the space at our command, but
also because such a course would be unprofitable to
the non-statistical reader. Fortunately, in the case
of coal mining, other statistics are available in addi-
tion to income tax returns. A Parliamentary paper
(No. 197 of 1903), on “ Wages and Profits in Coal
Mining,” gives for the years 1886 to 1902, average
prices, computed wages, computed receipts and
gross profits for each year. The figures for gross
profits are merely the balance after deducting wages
from receipts, and since they include royalties and
other expenses, they are very different from net
profits. Nevertheless, these figures may be legi-
timately used for comparative purposes, and when
thrown into a series of curves certain relationships
can be established.

Thus, looking first at the years in which there is a
negligible change in output, it is assumed that the
whole change in profits is due to change in price.
Upon this assumption, it is found that for a change
in price represented by one point, profits change
three and a third points. It is also deduced that a
change of one point in output involves a profit
change of rather more than one point, but probably
not greater than 1’5.

Taking next the years in which there were
increases in profits, and using 1*5 as the common
factor to eliminate the effect of the output changes,
the author finds that in the case of small changes (less
than 30 points), the profit change is 2’5 per unit of
price change, and in the case of large changes, 2*7 per
unit of price change ; or 2’57 for all increases.

In the case of decreases in profits, it can similarly
be shown that the profit change per unit of price is
3*7 for small changes, 4’1 for large changes, or 3*8
for all decreases.

From this the interesting result is obtained that a
rise in price has had less effect in raising profits than
a fall in prices has had in diminishing them, and the
difference is more pronounced in the case of large
changes than for small ones.

Again, where a year of rising profit is followed by
another rise, or conversely where a year of fall is
followed by another fall, the succeeding year tends
to show a diminished factor, i.e., the effect of the
second price change in altering profits is not so great
as the first. He attributes this to the rapidity with
which wages follow prices in the coal industry.

If allowance is made for the fact that royalties do
not usually vary with the price of coal, and that the
whole of the fluctuation in price is borne by the coal
owner, the broad fact emerges that price has been
fully four times as powerful as output in causing
fluctuations in coal mining profits.

It is necessary, however, here to repeat the
caution that what are called profits in the
Parliamentary return are not net profits, but simply
the balance left after subtracting wages from the
total receipts.

It is interesting also to compare the curve based
upon the Parliamentary return with that repre-
senting the income tax assessments, the most
noticeable feature being the lag in the peak positions
shown in the latter, making it appear as if the
profits of one year were influenced by the trade
activities of the year following. Thus the year 1900
was one of abnormally high prices and high profits.
But this is not reflected in the income tax assess-
ments until the year 1901. Dr. Stamp finds that the
reason for this is to be found in the statutory pro-
vision for special relief in income tax assessments
when there is a sequence of diminishing profits
(known as the 133rd Section). The effect of this is
partly to advance profits a year, i.e., the assessments
ecorded for 1900 would approximate actually to the
profits of 1901. It must be remembered, also, that
the income tax assessments are five-year averages
only, and do not fully reflect the true condition.
Thus, even when the profits are nil, dead rents and
royalties would still be assessed, so that the effect of
bad times is not fully shown, and the actual fluctua-
tions from the highest to the lowest point of
aggregate profits is wider than the figures would
indicate. Nevertheless, these diagrams, and Dr.
Stamp’s deductions from them, are highly instructive
to students of the economics of the coal industry.

We have confined the above remarks to the coal
mining industry only, although Dr. Stamp’s paper