of profit was permitted only in cases where output was fully
maintained and the business was efficiently conducted.
This arrangement was amended retrospectively as from April 1 1919 by the Coal Mines (Emergency) Act, 1920, by which the industry was regarded as a single concern. Where the pre-war standard of profit was exceeded, nine-tenths of the excess profit was paid over to the State, while of the remaining tenth, after the deduction of excess-profits duty, one-half was distributed on a tonnage basis to all collieries and one-half was shared by the collieries contributing the excess profits. The net amount of excess profit retained by the industry was 4% of the gross profits earned.
Owing to the serious fall in the price of coal sold abroad early in 1921 a further variation was made in the existing arrangement by which profits in excess of nine-tenths of the pre-war standard were required to be surrendered and shared as from Jan. 1 1921. On March 31 1921 the period of control was terminated.
The general effect of these intricate arrangements was to curtail the excess profits of colliery owners much more severely than in other industries, and it is difficult to resist the conclusion that the decline in the rate of output after 1916 was largely due to the stifling of incentive in both the management and the workers.
The distribution of the revenue of the industry in 1913, 1918 and 1920 is shown by the following comparisons, the amounts being calculated on the basis of the tonnage of coal disposed of:—
1913 (Jan. to Dec.) 1918 (July to Sept.) 1920 (July to Sept.)
Cost of Production: Wages Stores and Timber Other Costs Royalties Total Cost Proceeds from Sales Balance of Proceeds Coal Raised per Person Employed per Quarter Earnings per Person Employed per Quarter
s. d. 6 4 1 10¼ 5¼
s. d. 15 7½ 3 6½ 1 4¼ 7¼
s. d. 26 3 5 5¾ 2 6¼ 7½
8 7½ 10 1½ 1 6
21 1½ 24 10 3 8½
34 10½ 39 7 4 10¼[1]
65½ tons (average) £21 (average)
58¾ tons £42
50 tons £59
Though not strictly comparable owing to minor differences in the method of computation, these figures show the progressive increase in the cost of production and the disparity in the rates of output and earnings of the workers. In 1913 rather more than one ton of coal was raised on the average for each man shift worked, the average earnings per shift being about 6s. 6d. In the third quarter of 1920 the average earnings were nearly 17s. per shift, while not more than 16 cwt. of coal were raised.
Against the balance of proceeds has to be set the cost of depreciation, interest on loans and the profits in each year, and in 1918 and 1920 excess-profits duty and the cost of control. Various estimates have been made of the amount of capital invested in the coal-mining industry. Owing to the combination of coke, iron and steel-making with the production of coal, the results are necessarily approximate, but for the years prior to the outbreak of the war may be taken at £130,000,000, not including the capital invested in coke ovens and by-product plant. The capital of the industry in 1921 was more than £50,000,000 greater.
During the years 1909 to 1914 the average profits earned, apart from royalties, were nearly 10% per annum of the capital invested, making no deduction for profits carried to reserve and capitalized. In the three years following profits, exclusive of royalties and excess-profits duty, amounted to 17% per annum, and during the years 1917 to 1921, to 15½% per annum. Making allowance for profits reinvested in the industry during the seven years 1914-21, the amount available for dividends, partners' drawings, and income tax represented a possible yield of 11¾% per annum on the capital employed in the industry.
During the quarter ended Sept. 1920 the average price of coal sold at home was just over 33s. per ton at the pit, that of coal shipped as foreign bunkers 67s. 3d. per ton and of coal exported 76s. 8d. per ton. The surplus revenue on the bunker and export coal provided the fund from which the profits of the industry were paid. During the winter of 1919-20 a special rebate of 10s. per ton was granted on coal sold for domestic use, including coal converted to gas and electricity for domestic heat and light. The average selling price at this period did not greatly exceed 19s. per ton at the pit.
The home consumer, it will be seen, enjoyed considerable advantages in regard to the price paid for coal, but the protection of the home consumer extended to the quantities supplied, which were maintained throughout the war and subsequently at the same level, approximately, as before the war.
The quantities of coal shipped abroad during the years 1910-20 and the quantities available in each year for consumption at home are shown below:—
Coal Exported[2] Coal Shipped as Foreign Bunkers Coal Available for Home Consumption
Million statute tons
1910 65.0 19.5 179.9
1911 67.8 19.3 184.8
1912 67.5 18.3 174.6
1913 77.3 21.0 189.1
1914 62.5 18.5 184.7
1915 46.3 13.6 193.3
1916 42.0 13.0 201.4
1917 38.5 10.2 199.8
1918 34.6 8.7 184.4
1919 39.3 12.0 178.5
1920 29.7 13.9 185.9
As compared with the year 1913 the reduction in output amounted in 1920 to 58 million tons which fell almost entirely on supplies for shipment abroad, the home supply suffering to the extent of little more than three million tons. The bulk of the coal shipped abroad, apart from that shipped as bunkers, was supplied to Europe and the countries lying round the Mediterranean Sea as is shown below:—
Destination 1913 1920
Europe and Mediterranean Countries Africa and Asia (exclusive of Mediterranean Countries) South America North and Central America Other Destinations Total: (Coal Cargoes)
Quantity Shipped as Bunkers by Vessels Engaged in the Foreign Trade Coke and Manufactured Fuel Exported in Terms of Coal Total Shipments
tons 63,481,000 2,678,000 6,939,000 160,000 142,000
tons 22,791,000 932,000 557,000 652,000
73,400,000 21,032,000 3,906,000
24,932,000 13,923,000 4,821,000
98,338,000 43,676,000
The chief uses to which the home supply is put will be seen from the following comparison of the distribution of coal in 1913 and 1919:—
Use 1913 1919
Domestic Railways Steamships (Coasting) Gas Works Colliery Engines and Miners' Fuel Blast Furnaces Other Industries and Commercial Uses Total
Million statute tons
35.0 13.6 2.4 17.0 23.0 21.2 76.9
36.5 13.5 1.3 17.8 22.5 15.7 71.2
189.1 178.5
The reduction of 10.6 million tons in the consumption of coal between 1913 and 1919 was almost entirely accounted for by the lessened industrial demand for coal upon the cessation of war.
Plant and Equipment.—While the importance of an adequate supply of coal assured a certain measure of priority during the war to the demands made for colliery plant and equipment, it was inevitable that some falling off should be observed in the provision and perfection of plant and equipment as compared with the years immediately preceding the war. The importance of this arises from the fact that the coal used at colliery engines amounts to about one-tenth of the consumption at home.
In the year 1907 the capacity of the engines in use at coal-mines (including the stratified iron-mines of the Cleveland district) was 2,293,978 H.P., of which some 7% was used for the generation of electric power and light. The capacity of the motors then installed is known, but since the year 1912 the capacity of electrical apparatus in use at coal-mines has doubled.
There were 1,959 mechanical coal-cutters installed at mines in 1910 and nearly 16 million tons of mineral were cut by these machines. In 1920 the number of machines had increased to 5,073 with an output of 30 million tons of mineral. The chain-drive machine has shown the greatest relative increase in the interval, though percussive machines show the greatest absolute increase.
The tenacity with which the industry clings to past tradition is nowhere seen more clearly perhaps than in the maintenance of horses and ponies for haulage work below ground. In 1920 there were 67,748 horses and ponies so employed at coal-mines, or only 3,778 less than in 1912. The number of mechanical conveyors employed at the coal face increased from 274 in 1910 to 823 in 1920.
