THE COLLIERY GUARDIAN

AND

JOURNAL OF THE COAL AND IRON TRADES.

Vol. CX.

FRIDAY, JULY 30, 1915.

No. 2848.

Price of Coal

DEBATE IN

As briefly announced in last week’s issue of the
Colliery Guardian, the Price of Coal (Limitation) Bill,
introduced by the President of the Board of Trade, was
considered in Committee of the House of Commons
on Thursday, the 22nd inst. The report stage was
reached on Tuesday, when the Bill was read a third
time, and passed. Below is a report of the debate :—

Sir J. Walton moved an amendment to restrict the
operation of the Bill to coal sold ‘ ‘ for household and
domestic consumption, for railways, gas, electric lighting,
waterworks, and controlled munition works, where dividends
are limited by Acts of Parliament, and -also for public
authorities.”

This would leave, he said, undertakings which were left
free to make unlimited profits and where freedom of con-
tract ought to be continued.

The only sign of commercial sanity, in his judgment, that
the Bill contained was the absence of any provision to secure
coal for shipowners making colossal profits at present at the
expense of the nation at less than market prices. It might
be necessary under certain circumstances that the State
should commandeer from the coal owners a sufficient quan-
tity of coal to satisfy the requirements not only of the Navy
but also of the public utility works and the other require-
ments stated, as a first charge upon the output of the coal
of the nation; that would prevent them being in danger of
not getting their coal because a little higher price was
offered by some outside buyers in this country or perhaps a
much higher price were offered if the coal were being sold
for export.

The President of the Board of Trade (Mr. Runciman)
said the aim and object of the hon. member was directly
contrary to the principle of the Bill, which provided for a
limitation of the price that the coal owner was to have.
The amendment would mean that the cotton trade, except-
ing those establishments which were manufacturing for the
Army or the Navy, would get no benefit at all from the Bill.
That was equally true, not only of the cotton, but of the
pottery industry and a very large number of others.

Sir J. Walton : It is because you do not limit in any
way the price that the products of those concerns shall be
sold at, as you limit the price of coal.

Mr. Runciman said there was only one way of dealing
with that larger subject, and that was the taxation of war
profits.

The amendment was negatived.

The Kentish Mines.

Mr. Ronald McNeill moved an amendment to confine the
Bill to mines, the average output of which exceed 500 tons
a day, largely in the interest of the Kent coalfield. He
pointed out that the Kent pits had during the period of com-
parison ending in June 1914, instead of spending money in
advertising their products, sold the small quantities of coal
which they could produce at prices very much below the
ordinary market prices, as a means of pushing the new
article. These few pits had not been able during the last
year, so he was informed, even to pay interest on their
debentures, and during the last winter these particular
mines never succeeded in selling coal at a higher price than
22s. 6d. per ton.

Mr. Runciman said the great hopes which had been
centred upon the Kent coalfield had unfortunately not
amounted to very much up to the present. The amendment
would affect, not only the Kent coalfield, but mines all over
the United Kingdom. At a later stage, he believed, a pro-
posal would be made to exclude the three coal mines of
Ireland, and they would not resist the proposal. But in
South Wales, in the Midlands, in the North Country, and
in Scotland there were large numbers of collieries that pro-
duced not even such an amount as 500 tons a day. What
the Kent collieries required was a much larger output,
rather than that they should be allowed to charge higher
prices for their coal. The only way in which these pits
could get a larger demand for their coal was not by putting
up the price, but by undercutting the coal which had to come
by rail or by ship—both very expensive and inconvenient
methods at the present time. Under Sub-clause (2) of
Clause 1, it was open to the Board of Trade to take into
consideration any special class of coal mine.

The amendment, by leave, was withdrawn.

(Limitation) Bill.

PARLIAMENT.

The Case of the Factors.

Sir E. Cornwall moved to leave out the word “ coal ”
[“ owner of the coal ”], and to insert instead thereof the
words “ mine from which the coal has been won.”

He said they were unable to make up their minds as to
whether the Bill as drafted was intended to apply solely to
the owner of the mine from which the coal had been won,
or whether it was intended to include the factors. If it was
intended to include the factors in the persons selling the
coal at the pit’s mouth, then it seemed rather unfair to the
factors to deprive them of any profit from their business. At
the same time, if the Bill as drafted excluded the factors,
that seemed to be undesirable, because it left them free
to charge any price they could get, and there was the very
great danger of the coal being sold by the owner of the
colliery to the factors and their being able to inflate the
price, or to bring about a condition of things which it was
the object of the Bill to avoid. He had an amendment later
on which proposed to limit the factor’s gross profit to Is. per
ton; the House could then say what profit, gross or net, the
factor should have.

Mr. Runciman said it was very much more difficult to
ascertain the profits which a man was making than to
ascertain the prices at which he was selling a commodity.
It was much better to deal with the price of coal at the
pit’s mouth from the point of view of accurate business than
to deal with it by way of limitation of profits, which could
be juggled. The owner of the coal might be either the mine
owner or the factor. The coal should be borne away from
the pit’s head not above a standard price, and whether it
belonged to the mine owner or to the factor was an imma-
terial fact from the consumer’s point of view.

Sir E. Cornwall suggested that the right hon. gentleman
might meet the factors between now and the report stage
to ascertain if it was possible to make some amendment
later on that would suit them.

The amendment was withdrawn.

Sir A. Markham’s “ Average ” Scheme.

Sir Arthur Markham moved in Sub-section (1), after
the word “ exceeding ” [‘‘exceeding by more than ”], to
leave out the words “ by more than the standard amount
per ton the price of coal of the same description, sold in
similar quantities, and under similar conditions, at the pit’s
mouth at the same coal mine, on the corresponding date (or
as near thereto as, having regard to the course of business,
may be practicable),” and to insert instead thereof the
words “ the average prices realised by rail, inland water,
or land sale, respectively, for coal of the same description
at the pit’s mouth at the same coal mine.”

He said he and others at the collieries with which he was
associated disliked this clause very much. The sales at
August 1, 1913, might have been made at a low price, and
say there were two sales of 1,000 tons each—one at 10s. and
the other at Ils. It was quite clear that the coal owner
would have some difficulty in saying which price he was
going to take. The coal owner might refuse to sell at all,
and say that he was not going to make the sale at that
low price, and that he would only sell at such times as he
happened, from time to time, on looking at his books, to be
able to sell at a higher price. Coal varies enormously from
day to day according to the people to whom the coal owners
sold.

Some years ago he raised the question of the average
profits made on coal, and, taking a series of years, the
average profit—the gross amount, not the actual dividend—
was somewhere about 8d. a ton. The capital sum might
vary per ton of coal from 10s. or even from 7s. per ton.
This provision would enable a coal owner to get Is. a ton
more if he worked his books correctly. He assumed that
every coal owner knew exactly the prices at which he sold
his coal until this Act came into operation, and when these
prices were known any buyer of coal would know what price
he had to pay by adding to what the coal owner made in the
corresponding period of the preceding twelve months. When
this matter was discussed by the coal owners they were
practically divided; half wanted to get the average price
over the twelve months, and some wanted to take the clause
as it stood as best suiting their book. But he did not think
that Parliament should regard the matter as one for the
convenience of the coal owner. Undoubtedly it would be to
the interests of the consumer that each colliery should issue

a price list showing what had been the average price for
coal, whether by rail, canal, or land sale, and then he would
be able to determine the price, and everyone would I now
where he was. He had a consequential amendment later
on providing that the price lists should be deposited in
Somerset House, and every buyer on going to Somerset
House could obtain the maximum prices at which every
colliery was entitled to sell its coal until this Act came to an
end. In point of fact, the coal owner sold from day to day,
and from month to month, and he would always take advan-
tage of the best prices in his books during the preceding
twelve months, and, therefore, he would get more money
as the Bill stood than by the amendment.

Mr. Laurence Hardy pointed out that the words “ by
more than the standard amount per ton ” would have to be
included, if not it took away the whole benefit of the Bill.
This Sir Arthur Markham admitted. .

Mr. Runciman said if his hon. friend had really meant to
leave it at the price in 1914, he felt .quite sure that he would
not be representing the view of the coalowners in regard to
the benefit they would procure from this proposal. In one
of the interviews with the representatives of the Mining
Association they told him that they would prefer the average
price, as suggested. He considered that proposal, and it
certainly appeared to raise considerable departmental diffi-
culties. Moreover, he was not quite sure that it would
achieve entirely the end in view, because of the different
conditions under which coal wras sold in many parts of
England. For instance, it was pointed out that a firm of
old connection, who had been buying from one colliery for
thirty or forty years, and might have had no variation in
the terms of their contract during the whole of that time
excepting as regards prices and quantities of coal to be
delivered per month or per annum, was in a better position
than others by the mere fact of having that long connection,
because the coal owner happened to be on good terms with
the firm who bought from him, the parties were almost in
the position of a sort of limited partnership. In bad times
the consumer did not beat him down too hard, and in good
times the coal owner did not put too heavy a price on the
consumer. Although there might not be much difference in
the figures that appeared in the contract, the terms given
to old customers were better than those given to new.
But in arriving at the average price a great deal depended
on the terms of the contract. In some coa] fields the view
was strongly held by the coal owners that the purchaser
of even quantities of coal, making no difference in winter
or summer, was better worth having than the customer who
bought in a small amount in summer, and a large amount
in winter, because the colliery owner could carry even loads
throughout the year. In regard to the conditions of pay-
ment, the well-established firm might be allowed more easy
terms of payment than those who were in a new position
and not so strongly established. There are other con-
ditions not only as to delivery and payment, but as to des-
cription of coal, quantities to be delivered in certain times
of pressure, when ease was to be given by the customer to
the coal owner, or when it was desired to have a larger
amount of screened coal in order to get the advantage of the
fluctuations of the market. All these considerations created
difficulties in regard to the average price, and he came to
the conclusion that, from the point of view of the Board of
Trade, on whom the duty was thrown to deal with the
matter, it would mean an overwhelming amount of work,
and that it would not be the clean-cut arrangement pro-
vided by the Bill as it stood. At another interview which he
had with representatives of the coal owners, he was much
surprised to find that they had apparently changed their
minds. Certainly many of those who were in the room
preferred the draft in the Bill as it was now to the sugges-
tion made by his hon. friend, and it really meant that the
number of gentlemen from one district at one interview
happened to be large and that the same district was badly
represented at the second interview. It was a case largely
of competing coal fields or coal fields in which there was a
great division of views. He was bound therefore to form
his own views irrespective of their representations. The
method in the Bill was the easiest way of saving the
customer from extortion and of enabling him to make com-
parisons, and of ascertaining whether he was getting the
coal at fair or unfair prices. If the case was brought to the
Board of Trade, it is much more easy for them to inquire
under the system of the Bill rather than to do it by taking
the system of averages. There is a further departmental
difficulty that they should be overwhelmed with the vast
quantity of returns. There was something to be said