The Daily News. MONDAY, MAY 9, 1921. THE PRICE OF COAL.

Taranaki Daily News, 9 May 1921, Page 4

The Daily News. MONDAY, MAY 9, 1921. THE PRICE OF COAL.

Most householders are directly interested in, and affected by, the cost of coal, the increased cost of which to the consumer has become a serious matter. At the same time, so far as can be ascertained, the mine-owners do not appear to be obtaining undue profits ; in some cases none at all. So far as the State mines are concerned, the official report and statement of accounts show disappointing financial results for the year ending March 31 last, there having been a decided reduction in the the output, and a decrease in the average daily earnings as compared with the figures of the previous year. This (states the report) m'ay be attributed to “the cost of production being higher, due to the reduced output in consequence of the go-slow policy for over six months of the year; also the high cost of material, and the selling of the State coal At far too low a rate.” The recent substantial increases granted to the employees correspondingly raised the cost of production, and the advance in the cost of freight and handling further elevates the cost. As throwing some light on the manner in which the price of coal to the consumer is made up, a return presented by the chairman of the recent coal conference at Wellington, showing the cost of State coal per ton at the Wellington depot from April 1, 1920, to February 28, 1921, should be of interest. The figures were: Cost f.o.b. Greymouth, 22s 6.42 d; marine freight, Ils 2d; wharfage, Is; cartage in, 2s 4d; trimming and yard labor, 8s 5.25 d; cartage out, Ils 2.41 d; rent and rates, 6.44 d; salaries, 10.13 d; repairs, 6.3 d; sacks, Is 9.03 d; freight, 3.23 d; depreciation, general expenses, etc., 6.19 d; total, being actual cost to the department from mine to delivery, 61s 1.35 d, as against 57s 1.58 d at the Christchurch depot and 65s 9.51 d at Wanganui. As the coal was sold at 60s in each case there was a loss instead of a profit. It will be noted that the cost f.o.b. was 22s 6.42 d. This was made up of cost on trucks 13s 0.62 d, haulage to port 2s lid, the remainder consisting of overhead charges, the largest of which was depreciation 2s 6.47 d, the harbor rate being ninepenee per ton. Whereas in 1919 the eo’al had only cost 46s per ton, in 1920-1 it had risen to over 655, due to increased charges of production and handling. In order to obtain a comprehensive insight into all matters connected with the coal industry, a careful study of the report made by the commission of inquiry into that industry in May, 1919, is necessary. Practically every phase of the question is covered in that report, together with tables giving detailed information on all the main points concerning revenue, outgoings, earnings of workers, and other incidental matters. Since that report was issued the costs of production, handling, etc., have increased owing to higher wages of the miners, less coal output per man, “go-slow’ tactics, increased eost. of material, charges, harbor dues and freights, also by reason of less tonnage handled per man on the wharves, and, lastly, by reason of uneconomic distributing methods. It would appear from this repofit that of the total increase in the eost of coal 39 per cent, was due to direct labor cost, and a little more than 60 per cent, to other jxojita Amoxui the causes for the

high cost of production- was that of time voluntarily lost by the miners (estimated at ten per cent.). The more that loss is diminished the greater will be the output, and the lower the price to the consumer. The output in 1885 was 511,063 tons, a steady increase being shown up to 1912, when the amount rose ,to 2,177,615 tons, followed by a drop to 1,885,005 tons, and rising to 2,275,593 tons, but declining to 2,068,419 tons in 1917, and to 2,034,000 in 1918. The exports increased' from 6000 tons in 1878 to 56,000 in 1898, and rose to 332,000 in 1916, falling to 186,000 in 1918. The imports in 1878 amounted to 174,000 tons, and rose to 518,000 in 1914, then falling to 255,000 in 1918. The total consumption in New Zealand in 1885 was 591,284 tons, and by 1914 it had risen to 2,490,755, falling to 2,104,075 tons in 1918, a drop of 386,680 tons, thereby causing great hardship and losses. It may be mentioned that the amount of authorised capital invested in private mines totals nearly one and a half millions, the paid-up capital amounting to over a million and a quarter, the income derived therefrom paying ordinary income tax, as well as rates levied on the value of the coal presumed to be in the area; when rated on capital value rates are also paid on valuation of improvements. Taking the profits over the period 191318, they range downwards from 15.03 per cent, on paid-up capital to a loss of 18.36 per cent., the average being just over , five per cent., out of which interest has to be paid to shareholders, insurance against risks inherent to the industry, depreciation and sinking fund, so that the return yielded does not constitute a fund sufficient for those purposes, depreciation and sinking fund frequently suffering in consequence. Labor and transport are the main items governing the price of coal. The cost of production includes all expense, direct and indirect, up to f.0.b., or f.o.r. at the mine. Taking the figures for the period 1913-18, the only mine showing a fall under this heading (20 per cent.) was the Port Elizabeth (State) mine, due to no development work in progress. The increased cost at the other mines varied from 63.6 per cent, to 6.6 per cent., or from 8s 3d per ton to Is lid, the increased cost of labor varying from 5s 6d to 1.61 d, as against the increase in other costs of from 5s 3Jd to 0.14 d, the difference in eost of bituminous and brown coals being more than double that in 1913. On the average, the increase in the labor cost of all coals which were the subject of the inquiry in any year was about Is 2d, or almost one-third of the increase in the total mining cost. Taking the years 1913-18, the highest cost of production at the fifteen chief collieries varied from 15s 6d to 23s 4d, the lowest 6s 6d to 10s 6d, and the mean 12s 6d to 16s 2d, while the highest direct labor cost was 8s 5d to Ils 7d, the lowest 4s lOd to 5s 9d, and the mean 5s lOd to 8s 2d. In some cases the cost included rail freight to the port, and if this were deducted from the pure raining eost there would be shown an increase of 41 per cent., a third of the price being due to labor cost, which increased by 31. pei 1 cent., but the eost of living has increased in greater ratio. The increase in shipping freights was caused by the higher price of bunker coal from 22 per cent, to 86 per cent., wages 40 per cent., victualling 60-per cent., stores 50 to 100 per cent., labor working ships 70 per cent. The rise in the retail price of house coal amounted at Auckland to 8s 9d per- ton up to September, 1918, due to increased price at the mine of 63 per cent., increased railage 16 per cent., and other costs 21 per cent. This was followed by a rise of'l4s per ton over pre-war price, the cost at the mine accounting for 54 per cent., and increased railage 10 per cent. The cost of distribution rose to such an extent as to prevent small dealers making anything like a profit, the large dealers’ profits being ,6»Jd per ton, though sometimes a loss is made. Altogether no one seems to be making much out of the coal trade.