How is the State to acquire them? Not piece-meal, but once and for all in one final settlement, by an Act of Parliament providing adequate compensation in the form of State securities. The assessment of the compensation is largely a technical problem, and there is nothing insuperable about it. It is being done every day for the purpose of death duties, transfer on sale, etc. Supposing, for the sake of argument, 55½ millions sterling is the total capital value of the royalties, an ingenious method which has been recommended is to set aside that sum not in cash but in bonds and appoint a tribunal to divide it equitably amongst all the mineral-owners. That is called “throwing the bun to the bears.” The State then knows its total commitments, is not involved in interminable arbitrations, and can get on with what lies ahead at once, leaving the claimants to fight out the compensation amongst themselves. This does not mean that the State will have to find 55½ millions sterling in cash. It means this, in the words of Sir Richard Redmayne: “The State would in effect say to each owner of a mineral tract: The value of your property to a purchaser is in present money £x, and you are required to lend to the State the amount of this purchase price at, say, 5 per cent. per annum, in exchange for which you will receive bonds bearing interest at that rate in perpetuity, which bonds you can sell whenever you like.”
The minerals or royalties being acquired by the State, what then? For the first time the State would be placed in a strategic position for the control and development of this great national asset. Having acquired the minerals and issued bonds to compensate the former owners, the State enters into the receipt of the royalty payments, and these payments will be kept alive. We must now decide between at least two courses: (a) Is the State to do nothing more and merely wait for existing leases to expire and fall in, and then attach any new conditions it may consider necessary upon receiving applications for renewals? Or (b) is the State to be empowered by Parliament to determine the existing leases at any time and so accelerate the time when it can attach new conditions, make certain re-grouping of mines, etc.? My answer is that the latter course (b) must be adopted. The same Act of Parliament which vests the coal and the royalties in the State, or another Act passed at the same time, should give the State power to determine the then existing leases if and when it chooses, subject to just compensation for disturbance in the event of the existing lessees refusing to take a fresh lease.
Why is course (b) recommended? (i) Most leases are granted for terms varying from thirty to sixty years. They are falling in year by year, but we cannot afford to wait until they have all fallen in if we are effectively to deal with a pressing problem. (ii) The second objection to merely waiting is that some colliery-owners (not many) might make up their minds not to apply for a renewal of their leases, and might consequently be tempted to neglect the necessary development and maintenance work, over-concentrating on output, and thus allowing the colliery to get into a backward state from which it would cost much time and money to recover it—a state of affairs which could and would be provided against in future leases, but which the framers of existing leases may not have visualised. I do not suggest that upon the acquisition by the State of the minerals all the existing leases should automatically determine. But the State should have power to determine them on payment of compensation for disturbance.
A National Mining Board
At the same time a National Mining Board consisting of representatives of all the interested elements, colliery-owners, managerial and technical staffs, miners, and other grades of workers, and coal consumers would be formed (the Mines Department already has a National Advisory Committee); the mining engineering element must be strongly represented, and provision must be made for first-class technical advice being always available. It would then be the business of the National Mining Board to work out its policy and decide upon the broad principles which it wishes to weave into the existing structure of the coal-mining industry by means of its power of granting leases. The following principles will readily occur to most people, and are supported by evidence which is, in my humble judgment, convincing, given before the various commissions and committees which have inquired into this industry during recent years.
Firstly, More Amalgamation or Unification of Collieries. At present there are about 3000 pits owned by about 1500 companies or individuals, and producing an aggregate output of about 250 million tons per annum. Already there have been many large amalgamations. (i) Many fortunately situated small pits making a good profit will be found, but on the whole small collieries are economically unsound. In many cases at present the units are too small, having regard to the class of work being done, to the cost of up-to-date machinery and upkeep and to the variableness of the trade. Broadly I believe it to be true that the larger collieries are as a general rule more efficient than the smaller ones. (ii) In respect of co-operation in pumping, larger units would frequently make for efficiency and reduced cost; Sir Richard Redmayne, speaking of South Staffordshire before the Sankey Commission, said that we had already lost a large part of that coalfield through disagreement between neighbouring owners as to pumping. (iii) The advantages of larger units in facilitating the advantageous buying of timber, ponies, rails, machinery and the vast amount of other materials required in a colliery will be obvious to most business men.
I do not propose to chop up the coalfields into mathematical sections and compulsorily unify the collieries in those sections. I am merely laying down the broad principle that to get the best out of our national asset the National Mining Board must bring about through its power of granting leases the formation of larger working units than at present usually exist. The geological and other conditions in the different coalfields vary enormously, and these form a very relevant factor in deciding upon the ideal unit of size. It is conceivable that in certain districts all the colliery-owners in the district, with the aid of the National Mining Board, would form a statutory company on the lines of the District Coal Board, described in the Report made by Sir Arthur Duckham as a member of the Sankey Commission. One advantage accruing from unification (to which recent events have given more prominence) is that it mitigates the tendency for the wages of the district to be just those which the worst situated and the worst managed colliery can pay and yet keep going, and no more. This tendency seems to be recognised and mitigated in the Agreement of June, 1921, on which the mines are now being worked. Secondly, Provision for Progressive Joint Control, that is, for enabling all the persons engaged in the mining industry either in money, in brains, or in manual labour, or a combination of those interests, gradually to exercise an effective voice in the direction of their industry.
Some of the arguments for this principle appear to me to be (i) that, as indicated in my opening remarks, a sufficiently large number of the manual or mainly manual workers in the industry ardently desire a progressively effective share in the control of the industry; (ii) that this desire is natural and legitimate, having regard to the great increase in the education of the workers and the improvement in their status as citizens, and that so far from being repressed it should be encouraged; (iii) that it is the natural development of the system of Conciliation Boards and (occasionally) Pit Committees which has prevailed in the industry for many years, though more highly developed in some parts of the country than others. So far, these organs have been mainly used for purposes of consultation and negotiation; the time has come when with a more representative personnel, while not usurping the functions of a mine manager or, on a larger scale, the managing director, they must be developed so as to exercise some effective share in controlling the industry. (iv) While working conditions are not so dangerous and unpleasant as the public are sometimes asked to believe, the workers in this industry are exposed to an unusually high risk of injury and loss of life, and thus have a very direct interest in devising and adopting measures for increased safety. These measures nearly always mean expenditure, and thus an increased cost of working, and so long as their adoption (except in so far as made compulsory by the Mines Department) rests solely with bodies on which capital alone is represented and labour not at all, there will be fruitful cause for suspicion and discontent. The miners are apt to argue that dividends and safety precautions are mutually antipathetic, and will continue to do so as long as they have no part or lot in the reconciliation of these competing obligations. The question is not whether this argument of the miners is well-founded or not: the point is that their suspicion is natural, and any excuse for it should be removed. (v) The exceptionally large items which wages form in the total cost of coal production indicates the important contribution made by the miners to the welfare of the industry and justifies some share in the direction of that industry.
Upon the basis of typical pre-war years, the value of the labour put into the coal mining industry is 70 per cent. of the capital employed, and 70 per cent. of the annual saleable value of the coal, and yet this large labour interest has no share in the management of the industry.