Labour policy—false and true

by Lynden Livingston Macassey

The South Wales Strike of 1915

The South Wales miners gave notice to terminate on June 30, 1915, the peculiar agreement under which, since March 1910, their wages had varied within a minimum of 35 per cent. and a maximum of 60 per cent. above the basis rate of 1879, according to the selling price of large coal f.o.b. in Welsh ports. When coal sold between 14s. and 14s. 9d. per ton, wages were 50 per cent. above the 1879 basis, and they were raised or lowered by negotiation for each 1s. up or down in the price. In March 1913, wages had reached the maximum and had remained there. The prices of Welsh coal in 1915 on yearly contracts, on which the bulk of the business was done, were 18s. to 19s. per ton, prices for other coal being up to 35s. per ton. The South Wales miners demanded a new standard 50 per cent. over the 1879 basis; abolition of the maximum; a new minimum 10 per cent. above the new standard to be paid when the average selling price of large coal was at or below 15s. 6d. A selling price of 15s. 6d. meant, under the 1910 agreement, wages 57 per cent. above the 1879 basis—and under the claim meant wages 65 per cent. above that basis. The rest of the miners in Great Britain had claimed a war bonus of 25 per cent. on earnings, and Lord St. Aldwyn had awarded 17½ per cent., which was accepted. The South Wales miners’ chief purpose was to establish a higher minimum as against a post-war depression in trade, and to secure during the war higher wages as coal mounted in price. Negotiations between owners and miners broke down—the former agreed to, the latter refused arbitration—the Navy relied on South Wales for coal—a strike was imminent. Mr. Runciman, the President of the Board of Trade, offered the South Wales Miners’ Executive generous terms which the Executive accepted “as the basis of negotiations,” viz., a new standard 50 per cent. above 1879 provided that the alteration of the standard should not in itself effect an immediate change in wages; abolition of the maximum and minimum of 1910; and the levelling up of rates of certain men. The men rejected these terms—Mr. Runciman very properly would go no further. Mr. Lloyd George then secured the issue of a Royal Proclamation under the Munitions of War Act, 1915, making it an offence punishable under that Act to take part in a strike in the South Wales mining industry, whereupon 200,000 men promptly struck work by way of reply. Mr. Lloyd George himself went to Cardiff and the strike was settled by the Government giving to the miners practically all they had asked, with full indemnity against their breach of the Munitions Act. It was the first time the Government had, measured its strength against organized Labour and the Government’s capitulation had a far-reaching repercussion. Compulsory arbitration was discredited and by the Government.

Government War-time Control

The nation’s dependence on coal was manifested early in the war; output fell as miners loyally responded to the call for men; prices rose as domestic consumers competed with munition industries for fuel. Early in 1915 exports of coal had to be curtailed by Government—in July 1915, the Price of Coal Limitation Act had to be enacted, limiting the price to be charged for coal at the pit’s mouth. Our Allies began to protest against the price charged to them for coal, and coal-owners, exporters and shipowners agreed voluntarily with the Government to limit the price of Ally coal. But that did not go far enough, and ultimately in 1917 under D.O.R.A., powers were conferred on the Board of Trade to regulate prices, and the distribution and transport of coal both for home and Ally use.

Trouble continued to develop in the South Wales mines, and the supply of essential steam coal was in danger. The Government accordingly took over, from December 1, 1916, control of the South Wales coal-field, and as, elsewhere, industrial and transport difficulties were causing great anxiety, they also took over, from March 1, 1917, the rest of the coal-mines in the country, and constituted a Coal Mines Department. The actual management of individual mines was left to their respective owners, the Department directing them how to dispose of their supplies so as best to meet the needs of the country. It was inevitable that as control of the mines had been transferred to the Government, the wages of mine-workers could be a matter no longer for district adjustment but for national settlement by Government, and, since 1917, this was the course adopted. It is unnecessary to go into the question of miners’ earnings, they will be found in the volume of Appendices to the Coal Industry Commission’s Report (Parliamentary Paper, 1919, Cmd. 361, pp. 55 and 109). An admirable comparison as between 1914 and 1920 is contained in Professor Bowley’s book, Prices and Wages in the United Kingdom. The point to be noticed is that after 1917 wages were paid really out of a national pool consisting of the aggregate profits of the coal industry with the national exchequer behind them. As a result of control, some coal-owners, from their position and circumstances, realized large profits; others suffered considerable losses. To provide compensation for the latter, under an agreement made between the mine-owners and the Coal Controller, scheduled to, and confirmed by, the Coal Mine Control Agreement (Confirmation) Act, 1918, a fund was provided by pooling a prescribed percentage of excess profits. The disparity in the relative profit-making capacity of firms which had always existed was of course materially intensified by control; before the war it had not, however, materially affected industrial conditions. Events soon proved the impracticability of continuing the 1918 compensation provisions. There had existed arrangements for securing supplies of coal to our Allies at prices approximating to those charged in this country for inland consumption—these were terminated in 1919, and the prices of export coal immediately mounted. Some coal-owners, who were granted export permits, realized large profits; others, who had previously suffered loss owing to their being restricted to inland trade, continued to labour under heavy financial difficulties, which were made still more onerous by the reduction of the price of household coal by 10s. per ton in December 1919. To maintain the compensation arrangements of 1918 would have involved the State in heavy subsidies, as a large share of the export profits would have been left in the owners’ hands, and loss, for which compensation would have to be paid, would still have been inflicted on collieries producing for the home market. The Coal Mines (Emergency) Act, 1920, was accordingly passed, which repealed the Act of 1918 from April 1, 1919, and provided a new fund from which compensation was to be drawn for collieries working at a loss, but into this fund all excess profits were to be paid, and not a percentage only, as in the case of the 1918 fund.

The Sankey Commission

The shortage of coal, of labour and of transport in 1918, when the German offensive was at its height, led to the rationing of coal, gas and electricity, which continued for about two years. After the Armistice, in November 1918, trade activity increased, the industrial demand for coal grew, and the domestic demand as well, when demobilization was accelerated. The Coal Mines Department only just managed, with the greatest difficulty, to secure an equitable distribution of coal, and this it accomplished with great efficiency. These difficulties were increased by the miners’ threat to strike in the beginning of 1919 unless demands for increased wages and reduced hours were conceded. The Government replied by passing the Coal Industry Commission Act, 1919, which set up a Commission under the chairmanship of Mr. Justice Sankey. The Interim Report of the Commission (Parliamentary Papers, 1919, Cmd. 84, 85 and 86) recommended a national increase of 2s. per shift to all adult colliery workers, a 7-hour day underground and 46½ hours per week for surface workers as from July 16, 1919. These recommendations were put into operation by the Government. Section 1 (f) of the Act required the Commission to inquire into “any scheme that may be submitted to, or formulated by, the Commissioners for the future organization of the Coal Industry, whether on the present basis, or on the basis of joint control, nationalization, or any other basis.” On this matter the Commission presented four reports (see Parliamentary Papers, 1919, Cmd. 210 and 360): (1) by the Chairman; (2) by the Labour representatives; (3) by the representatives of coal-owners and employers in other industries, except Sir Arthur Duckham, and (4) by Sir Arthur Duckham. Reports (1) and (2) recommended nationalization of the industry; report (3) acquisition of royalties by the State, the continuance of private enterprise coupled with the establishment of Pit Committees representative of management and miners, and District Councils and a National Council representative of coal-owners and miners—for the purpose of discussing working conditions and other questions in the settlement of which both parties are interested; report (4) recommended State acquisition of royalties, the district unification of colliery interests to be worked through District Coal Boards, on which the workers would have some representation, with a Pit Committee at each mine. Each of the four Reports recommended the setting up of a Mines Department.

The Mining Industry Act, 1920

The Government announced, in August 1919, that they could not accept the policy of nationalization, but intimated their readiness to apply the Duckham scheme, but the owners and the miners objected to this. Subsequently, the Government put forward a scheme which was ultimately incorporated in the Mining Industry Act, 1920, providing a compromise mainly on the principles of Report (3)—that of the representatives on the Commission of the coal-owners and employers in other industries. This provided for (1) regulation, for a period not exceeding one year from August 31, 1920, of the export of coal, and of the pit-head price of home coal and bunker coal for coastwise shipping; (2) the future ordering of the industry on a permanent basis, by the co-ordination of all the Government’s powers and duties in regard to mines and minerals in the hands of a single Department—the Mines Department of the Board of Trade created by the Act; (3) the grant to the mine-workers of a greater voice in the ordering of the industry by means of representation on Pit and District Committees and Area and National Boards, and (4) the constitution of a fund to be applied for purposes connected with the social well-being, recreation and conditions of living of workers in or about the mines and for research and mining education. The Government also decided that the control of the coal industry, which had been essential as a war-measure, should be removed as soon as export prices fell to something approximating to the inland price. A start was made, in June 1920, in the direction of freeing the distribution of inland coal from restriction by placing it in the hands of local committees of the coal trade.