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1919. NEW ZEALAND.
THE COAL INDUSTRY. REPORT OF THE BOARD OF TRADE.
Presented to both Houses of the General Assembly by Command of His Excellency.
To the Hon. W. D. S. Mac Donald, Acting President of the Board of Trade. INTRODUCTION. Sir — 1. On the 10th September last the appointed members of the Board, together with James Hight, Esquire, M.A., Litt.D., of Christchurch, were authorized and. empowered, by Warrant issued by His Excellency the Governor-General under section 6 of the Cost of Living Act, 1915, to inquire into and report upon the following matters : — (1.) The present cost of the production and distribution of coal in New Zealand. (2.) Any increases in the cost of such production or distribution since the commencement of the present war, and the causes of such increases, (3.) Whether the profits made in the production and distribution of coal are fair and reasonable. (4.) Whether the selling-prices of coal are fair and reasonable. (5.) Whether increased economy or efficiency can be obtained in the production and distribution of coal, and, if.so, in what respects and in what manner. (6.) All other matters affecting the supply or price of coal. (7.) The increases since the commencement of the present war in the cost of living so far as such increases affect men engaged in the production of coal, distinguishing between increases, if any, prior to and subsequent to the industrial agreements made in the coal industry in the year 1917. (8.) The increases since the commencement of the present war in the earnings of men engaged in the production of coal, distinguishing between increases, if any, prior to and subsequent to the said industrial agreements. 2. The Board held sittings at Auckland, Huntly, Glen Massey, Wellington, Christchurch, Dunedin, Invercargill, Nightcaps, Kaitangata, Grey mouth, Runanga, Blackball, Westport, Denniston, Millcrton, and Ngakawau, and heard evidence from 112 witnesses, comprising coal-mine owners, managers and secretaries of coal companies, mine-managers, coal-merchants, dealers, and mine workers. Considerable evidence was also taken regarding the cost-of-living side of the inquiry from storekeepers and other tradesmen in the mining districts relative to changes in prices of commodities. An analysis of the occupations of witnesses is as follows: Mine-owners, managers and secretaries of coal companies, 16 ; mine-managers, 13 ; miners and mine workers, 22 ; wholesale and retail distributors, 31 ; storekeepers, &c., 22 ; other witnesses, 8. 3. The evidence of witnesses was taken mainly in camera. The Board felt that as it had to deal with matters of a highly confidential nature this was the best course to adopt. The result has amply justified the step, as witnesses answered all questions fully and frankly, and the Board would like to place on record its appreciation of the material assistance given.
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4. After consultation with you it was decided not to print the evidence, mainly on account of its confidential nature. 5. At the request of the workers' representatives the Board inspected the working-places and labour conditions generally in the following mines : Taupiri, Rotowaro, Pukemiro, Waipa, Nightcaps, Kaitangata, Point Elizabeth, Blackball, Denniston, and Millerton. 6. The housing-aeeonimodation of mine workers was also inspected generally by the members of the Board in the coal-mining districts visited, but as a detailed inspection was deemed necessary the Board appointed Mr. S. Hurst Seager, architect, of Christchurch, to make a special inspection. The result of this is dealt with later in this report. The mass of data accumulated in the inquiry was enormous and concerned every detail of the producing and distributing industries. The selection of facts and the generalizations necessary to answer the questions of the order of reference have been arranged, according to logical division of subjects, in the eight chapters of the report. The first chapter is a brief summary or survey of the chief outstanding features of the coal industry of the Dominion, providing certain information necessary for those with no special technical knowledge of the industry who would make use of the body of the report, and stating a few general principles that should assist in its interpretation in general depicting the background and atmosphere of the main subject. The second chapter examines and analyses the costs of mining coal, and traces and endeavours to account for the changes in these during the period under review- viz., since 1913 14. The third does the same in respect of the distribution of coal. In the fourth an attempt is made to assess the profits that have been made in the coal business, both mining and dealing, and to interpret their changes. A similar problem in regard to the earnings of mine workers is attacked in Chapter V, whilst the succeeding chapters, VI and VIT, are devoted to similar treatments of the cost-of-1 ving and housing and general social conditions on the mining fields. The final chapter discusses the possibility of improvement at all points in the industry and embodies the chief recommendations of the Board. In order to facilitate reference to the more important findings and recommendations of the report there is included in Chapter VIII an abstract or synopsis, divided according to the numbered subjects in the order of reference. A short index and a contents summary are also attached. The most important findings of the inquiry are distinguished in the body of the report by means of italic type. Note. —in all places where the information given was confidential, mines or companies are indicated not by name but by letter or number. Each mine or company is not indicated by the same letter or number throughout the report—i.e., in one context "A" may indie te a particular mine and in another context a different mine.
CONTENTS. Introduction .. .. .. .. .. .. .. .. .. ~ .. ] Chapter T. General Survey of the Coal Industry in New Zealand .. .. .. . . .. 3 Chapter II Cost of Production of Coal .. .. .. .. .. .. ~ ..24 Chapter 111. Cost of Distribution of Coal .. .. .. .. .. ~ ..35 Chapter IV. Prices and Profits in the Coal Industry and Trade .. .. ... ..50 Chapter V. Earnings of Mino Workers .. . . .. .. .. .. ~ 03 Chapter VI. Cost of Living of Coal-mine Workers .. .. .. .. ~ .. . . 77 Chapter VII. Housing and Social Conditions of Miners .. .. .. .. ~ ..SI Chapter VIII. Recommendations and Chief Findings .. .. .. .. $v Summary of Contents .. . . .. .. .. .. .. , . .. _ _ gg Appendices (Westport Harbour; Railway Matters; Prices of Materials) .. .. jqq Schedule of Tables .. .. .. .. .. . . .. .. .. .. 105 Index .. .. .. .. . . .. .. .. .. .. . ..107 Photographs showing Housing-conditions .. .. . . . . ~ , , _ i At end.
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CHAPTER I. GENERAL SURVEY OF THE COAL INDUSTRY IN NEW ZEALAND. I'AOE l'Atili 1. Coal Resources, Output, and . Consumption 3 5. Organization of Coal-production— contd. (i.) Chief Coalfields .. 3 (iv.) Specialization or Division of (ii.) Classification of the Coals .. 3 Labour .. .. .. 19 (iii.) Some Geological Features .. 4 (v.) Methods of Working .. .. J 9 (iv.) Amount of Coal Resources .. 5 < vi -> Haula g" ■••■ • • 20 (v.) Probable Duration of the Coal <™-) Wages and General Conditions Resources 5 ~.../«,•• " \ ■■ 20 (vi.) Amount of Coal mined .. (i (vm - ) Housln S and <- oneral Soclal Etl " ,■■{-,,. , . Tin vironmont .. .. 21 (vn.) Rate and Amount ot Consump- (ix>) gtftte Akl in [[ n tion; Exports and Imports.. 9 (i. Organization of Coal-distribution .. 22 (vin.) Ownership of Coal-sites .. 15 7 , Some characteristic Features of Coal and 2. Historical Note .. .. 15 the Coal Trade .. .. 22 :S. Capital in the Coal industry .. .. 10 (i.) What is " Coal" as a Commodity ? 22 4. Labour 17 (ii.) Price Comparisons .. ..22 (m.) friability . . . . 22 5. Organization of Coal-production .. 19 (iv.) Proportion of Stock to Total (i.) Localization.. .. .. 19 Supply .. ..22 (ii.) Scale of Production .. .. 19 (v.) Costs for Different Kinds .. 23 (iii.) Development Work .. .. 19 (vi.) Faotors determining Prioe .. 23 I. COAL RESOURCES, OUTPUT, AND CONSUMPTION. During the process of its investigations the Board visited the chief coal-mining fields of tho Dominion. These fields are widely distributed in well-defined areas. (i.) Chief Coalfields. (1.) The North Auckland Field. — The chief mines producing at present are those of the Hikurangi Coal Company (Limited), and the Northern Coal Company (Limited), near Whangarei. The coal is of good quality, and is largely used for steam-raising purposes, for which it is well adapted. The coal from this field is usually classed as pitch, glance, or semi-bituminous. (2.) The Waikato Field. —The chief mines are those of the Taupiri Coal-mines (Limited), the Pukemiro Collieries (Limited), and the Waipa Railway and Collieries (Limited), producing brown coal, near Huntly and Ngaruawahia. (3.) The West Coast Fields. —These fields are developed mainly in the Grey Valley, the Paparoa Range, and the districts between Wcstport, Mokihinui, and Karamea. The coals are chiefly bituminous, though there are also valuable seams of semi-anthracite in the Paparoa Range. The chief mines now worked are those of the Westport Coal Company (Limited), the Blackball Coal Company (Limited), the Westport-Stockton Coal Company (Limited), The Tyneside Proprietary (Limited), the Paparoa Coal-mining Company (Limited), (in liquidation), and the State Mines near Greymouth. On the Inangahua Coalfield, extending from the Buller River to Reefton, there are a few minor collieries producing a superior pitch-coal. (4.) Canterbury. —There are a few comparatively small mines producing brown coal in the western foothills, the chief being that of the Homebush Brick and Coal Company (Limited), and the newly opened mine of the Mount Torlesse Collieries (Limited) at Avoca on the Midland line. Isolated deposits of anthracite are found in the Malvern Hills. (5.) The Kaitangata Field. —This field contains a superior type of brown coal, as well as lignites, the chief mines being those of the New Zealand Coal and Oil Company (Limited) and the Taratu Coalmines (Limited). (6.) Nightcaps, about forty-five miles from Invercargill, producing a superior brown coal and lignites. The chief mine is that of the Nightcaps Coal Company (Limited). (7.) Central Otago and Southland, where there are numerous small mines producing lignites. The mines in the Mokau, North-west Nelson, and North-east Otago districts were not made the objects of special investigation, since they are as yet comparatively unimportant or present no features of peculiar interest. (ii.) Classification of the Coals. The coals mined in New Zealand are extremely varied in character and quality. A common classification is into hydrous and anhydrous coals, the former containing a high percentage of water in chemical combination, the latter a very small percentage. These classes may be further subdivided into five clearly marked kinds :— (1.) Anthracite coal, which is anhydrous, contains a very high percentage of fixed carbon (over 85 per cent.), and is non-coking. Patches exist in Canterbury, in the Paparoa Range near Greymouth, and near Charleston. As yet the supply is of very little economic importance. (2.) Bituminous coal, anhydrous (containing usually under 5 per cent, of water). " The only point in which, as a class, these coals are different in any of the characteristics which are laid down as requisite for a perfect steam-fuel is in the solidity and toughness which enable the coal to withstand the constant attrition it must experience from frequent handling. This defect is, however, comparatively insignificant, and is more than compensated for (except in a few instances) by the purity of the coal, its tendency to cake, and the facility with which complete combustion can be
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effected, so that the loss by the formation of cinders will be much below the average." (P. Galvin, in " New Zealand Mining Handbook," p. 381.) The chief sources of supply are on the west coast of the South Island. (i|§ (3.) Semi-bituminous, or pitch-coal, friable, containing from 5 to 10 per cent of water, and forming a soft coke. The coals of this class show some variety ; the pitch-coals are glossy and clean, and contain more water than the glance-coals. Semi-bituminous coals are used largely for steamraising, and are mined chiefly at North Auckland, North-west Nelson, Reefton, and in parts of the Grey district. (4.) Brown coal, containing from 10 to 20 per cent, of water, forming no coke during combustion, and desiccating rapidly on exposure to the air. The chief sources of supply are the Waikato, Kaitangata, and Nightcaps districts, with some localities in Canterbury and North-east Otago. (5.) Lignite, an inferior coal with a high percentage of water (over 20 per cent.), a clearly marked woody structure, and ight weight in proportion to its bulk. The chief lignite-mines are in Canterbury. Otago, and Southland, where in many cases the deposits are practically quarried and thus easily made available for local consumption. Friability in the case of the bituminous and semi-bituminous coals, and rapid desiccation and disintegration upon exposure to the atmosphere, are general qualities of New Zealand coals which have an important bearing upon methods of mining, upon the problems of the storage and the transport of coal to the consumer, and upon the percentage of the total amount mined or of the total calorific value of the coal as it leaves the working-places that is really available for his use. The classification of our coals is, of course, based mainly on differences in their chemical composition. These differences entail differences in calorific or heating power and evaporative power. The following proximate analyses of representative coal-samples are taken from a table prepared by Dr. Maclaurin, Dominion Analyst, of results obtained in his laboratories.
Table 1. —Analysis of New Zealand Coals, with Similar Analysis of certain Foreign Coals for Comparison.
(iii.) Some Geological Features. Geological facts, besides in some degree accounting for the chemical composition of the coals, control the amount contained in a given area and the methods of mining the.coal. In the first place the seams of coal vary in thickness over a largo range. Seams of about 30 ft. are not infrequent, and some of the lignite-seams run to 80 ft., whilst one of 100 ft. is on record ; but the character of the strata immediately overlying is often such that a great deal of the coal has to be left in situ on working, in order to guard against subsidence. The hardness of the coal, too, often varies much in the same seam, and in many cases stone and dross render mining more difficult and reduce the value of the coal. In the next place, the coal deposits are marginal (see Park, " Geology of New Zealand," pp. 281-4), which helps to explain the great variability in thickness. The coal thins out wherever the basement rock rises in ridges, and it thickens in the basins ; this is a very noticeable feature of the coalfields of New Zealand. Denudation has in some districts worn away great amounts of the coal. " In no New Zealand coalfield are the effects of marginal thinning of the coal-seams and of denudation more apparent than in the Buller Mokihinui district. Owing to these causes the workable area is not more than one-tenth of that originally occupied by the coal-measures. Again, owing to the great thickness of the seams in places and to other causes a very large percentage of the coal is lost, and it is doubtful whether the extraction reaches 33 per cent. Moreover, considerable areas are left
Ana Anal ■ I I* jj! ■ si •I £3° Ana lysis. '-§ jj °£ > Description |of Coal. Locality. Fixed Volatile WotA , Carbon. Matter. w '"''■'■ Per- . h Total ccntage Asn ' I Sulphur of Coke. , I " "I ' Anthracite .. Bituminous.. j Paparoa Coal Company (No. 1 seam) '78-90 16-93 0-40 Paparoa (best) .. .. .. 62-90 33-53 0-67 Mine Crook, Millet-ton Colliery (east). . 57-67 41-14 0-91 Coalbrookdale, Munsic's Section .. 55-73 40-08 2-37 State Coal-mines, Point Elizabeth 56-07 40-58 0-60 (best) State Coal-mines, Point Elizabeth 48-70 41-52 8-36 (household) Tynesidc Mine, Brunnerton .. 156-57 37-22 0-46 Blackball Mine (lower seam) .. 46-67 48-66 3-52 Puponga (west workings) .. .. 49-28 41-51 4-94 Hikurangi Coal Company .. .. 44-56 47-17 4-06 Northern Collieries, Kiripaka (Ngu- 43-08 44-79 4-65 nguru) Taupiri, Taupiri Extended .. 143-73 42-12 11-72 Nightcaps, Southland (new workings) 41-20 38-72 17-56 Kaitangata .. .. .. 38-00 39-96 18-22 Homebush, Canterbury .. .. 31-83 41-82 23-15 Bannockburn, Cromwell, Central Otago 23-75 43-83 26-12 Mataura, Southland .. . . j 19-01 40-77 35-65 3-77 0-37 82-67 2-90 0-33 i65-80 0-28 . 4-62 I 57-95 1-82 ■■ 0-55 57-55 2-75 I 0-49 58-82 8439 15-74 8443 15-75 8227 15-35 7923 14-78 8213 15-32 9-44 9-45 9-21 8-87 9-19 33 • • 33 * • 1-42 ; 0-82 50-12 7143 13-33 8-00 Glance 5-75 ; 2-67 '62-32 1-15 4-70 47-82 4-27 I 0-42 53-55 4-21 | 5-81 48-77 7-48 i 1-03 ,50-56 8064 15-05 7541 14-07 6921 12-91 6810 12-71 6581 12-28 9-03 8-44 7-75 7-63 7-37 Brown 2-43 0-32 [ . . 2-52 0-28 ! . . 3-82 0-40 I . . 3-20 0-41 6-30 0-32 4-57 0-31 | .. 6129 11-44 5737 10-70 5553 10-36 4953 9-24 4291 8-00 3789 7-07 6-86 6-42 6-22 5-54 4-80 4-24 Lignite Anthracite* Bituminous.. For Comparison. 8220 15-34 8120 15-15 7900 14-74 j 9-20 9-09 8-84 Wales . . .. .. . . 89-07 6-51 j 2-27 Sydney, Nova Scotia, Canada .. 60-70 34-93 2-62 Aberdare Collieries .. .. 162-55 41-59 2-46 iples were taken from coal that had teen in store several months, and 2-15 0-86 i .. 1-75 0-41 62-45 3-40 0-55 55-95 2-15 1-75 3-40 33 • • * These sam anthracite is said to dete inthracil ; l -iorate on keepinj I-
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unworked owing to the friability of the coal." (Morgan, "Coal Resources of Now Zealand," 1913, p. 19.) Much of the coal has been subjected to irregular folding and exhibits frequent faults. (iv.) Amount of Coal Resources. The amount of coal available for mining in the Dominion has been estimated by different authorities at various times. Professor Park estimates the total quantity of available coal at about 1,100,000,000 tons, after making the necessary deductions for losses due to faults, disturbances, and mining. This total is made up of —Bituminous, 254,500,000 tons ; pitch-coal, 306,700,000 tons ; brown coal, 520,889,000 tons. Mr. P. G. Morgan, reviewing the available data (Coal Resources, p. 5), estimates the total of coal proved to exist at 1,001,000,000 tons, and the probable coal at 2,385,000,000 tons.
Table 2.—Estimate of Coal in New Zealand (Morgan).
No allowance has been made for loss in mining. "It is quite safe to say that not one-fourth of the coal in the ground is being mined under present methods. Even in the bituminous fields probably two-thirds of the coal in the areas actually being worked is not extracted, to say nothing of areas left uuworked, owing to the coal being too friable to command an adequate market price " (p. 9). Within the seams actually mined in an area it is possible to win as much as 85 or 90 per cent, of the coal, as at Westport and Point Elizabeth, but that percentage does not represent the proportion mined over the whole lease, and in some cases even this percentage may be a very low figure, as low as 15 per cent. Careful estimates of the amount of coal in the two most valuable fields-viz., the Grey field and the Westport field—have been made by the Geological Survey under the direction of Mr. P. G. Morgan. " The Grey Coalfield is estimated to contain 636,000,000 tons of coal, of which about 6,000,000 tons have already been mined, and a further 10,000,000 tons at least left as irrecoverable in worked areas. Of the remaining 620,000,000 tons, about one-fourth, or 150,000,000 tons, may be.mined, provided that conditions as favourable as can reasonably be expected prevail in future. Under almost ideal future conditions possibly one-half, or 300,000,000 tons, may be recovered. These estimates assume that crushed coal will be profitably utilized in the future. The low possible percentage of profitable extraction is due mainly to faulting and irregular folding. The estimate of the quantity of coal in the ground, and of the amount that can be profitably extracted, is based on an interpretation of the field evidence as optimistic as is justifiable." (Bulletin No. 13, New Series, Geological Survey Branch, p. 127.) (v.) Probable Duration of the Coal Resources. The Director of the Geological Survey considers that the proved supplies of coal, more especially bituminous coal, are decidedly limited, and will approach exhaustion within one hundred years, or at most one hundred and fifty years from the present time. (Bulletin No. 17, p. 43.) Writing of the bituminous coal to be found in the Westport district, he says, " The total amount of proved coal originally in the ground is estimated at 123,000,000 tons, of which about one-half, or 60,000,000 tons, may be considered extractable under present conditions, but of this 13,000,000 tons has already been mined, leaving only 47,000,000 tons as mineable. To the proved coal may be added a considerable amount of probable coal that may possibly be proved by boring to exist under the Westport flats and elsewhere. The whole situation, however, calls for the serious consideration of all interested in seeing that the far from inexhaustible coal resources of New Zealand are properly husbanded and utilized to the best advantage. In addition to bituminous coal, there are considerable quantities of brown and lignitic coal (in the district). The full extent of the areas containing these fields is not known at the present time." (Bulletin No. 17, New Series, p. 190.) The same authority calculates that if the present yearly production (1913) increases at the rate of 5 per cent, per annum until half the coal is exhausted, and then decreases in the same ratio until the coal is worked, half the proved bituminous coal " will be mined in a little over fifty-two years, and all in less than one hundred and five years. If probable coal is included, almost half will be mined in seventy-five years, and all within one hundred and fifty-one years." (" Coal Resources of New Zealand," p. 8.) He expresses the opinion in regard to the Westport supply that " if the leases are taken as a whole, then, unless present conditions alter very greatly, not more than one-half, or possibly little more than one-third, of the coal in the mining leases will be extracted before the mines reach the stage of commercial exhaustion. An immense amount of coal will then be irrecoverably locked up in the forms of roof and floor coal not mined from thick portions of the seams, of pillar-stumps, of friable coal not mined because there would be a loss in so doing, of small isolated blocks which could not be economically reached by the transport roads, of thin portions of the seams (which would, however, be considered as of workable thickness in Europe and in most parts of the United States), of somewhat dirty coal (which in various parts of the world would be gladly accepted as fuel), &c. In addition, a considerable amount of coal will have been consumed or ruined by underground fires " (p. 43). The brown and lignite coals constitute the chief fuel reserve, and " quite possibly will be mined in considerable quantity two hundred or oven three hundred years hence."
Class of Coal. Proved (Million Tons). Probable (Million Tons). Possible. Anthracite Bituminous Semi-bituminous Brown coal Lignites Very little 374* 114 234i 278i Very little 477* 341 728 839 Small. Moderate. Moderate. Large. Large. * " These quantities rest to some extent on ovcr-opl in view of the fact that much of the coal is imtnineable.' J timisttc assumptions, and i " (Bulletin, No. 17, p. 43. lught to bo reduced rather than increased, especially
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(vi.) The Amount mined. In estimating the probable duration of the coal available for mining in the Dominion it is necessary to take account, among other factors, of the growth of the rate of production in the past in New Zealand. From the Ist January, 1853, to the 3ist December, 1918, the quantity of coal mined in New Zealand amounted to about 48,000,000 tons, or nearly 5 per cent, of the total estimated proved coal. The following table shows the annual production of coal from 1878 to 1918 (inclusive) :~
Table 3.—Yearly Output of Coal in New Zealand.
With the exception of one year (1889) there is a continuous growth in the annual production up to 1910. The rate of this growth remained fairly even for the two decades following 1880. The output of 1881. was doubled by the end of the following decade, and the output of 1902 was doublethat for 1892. The decade succeeding 1902 showed a falling-off in the rate at which production grew - indeed, an absolute decrease for the year 1911, since which date there has been an alternation of annual increase and decrease till tie last two years, which both show a decrease. Table 4 shows the annual production since 1885 and the moving averages for five-yearly periods so as to bring out clearly the general trend of the movement, which is well depicted on the accompanying graphs.
Table 4.—Production of Coal, 1885-1918.
Year. Tons. yearly Increase or Decrease. Year. Tons. Yearly Increase or Decrease. i Prior to 1878 1878 1879 1880 .. j 1881 .. j 1882 1883 .. ! 1884 1885 1886 1887 1888 1889 1890 1891 1892 1893 .. . 1894 1895 1896 1897 709,931 162,218 231,218 299,923 337,262 378,272 421,764 480,831 511,063 534,353 558,620 613,895 586,445 637,397 668,794 673,315 691,548 719,546 726,654 792,851. 840,713 Increase 69,000 68,705 37,339 41,010 43,492 59,069 30,232 23,290 24,267 55,275 Decrease 27,450 Increase 50,952 31,397 4,521 18,233 27,998 7,108 66,197 47,862 i 1898 1899 ' 1900 1901 1902 1903 1904 1905 , 1906 1907 1908 , 1009 1910 1911 1912 1913 1914 1915 1916 1917 1918 907,033 975,234 1,093,990 1,239,686 1,365,040 1,420,229 1,537,838 1,585,756 1,729,536 1,831,009 1,800,975 1,911,247 2,197,362 2,066,073 2,177,615 1,888,005 2,275,614 2,208,024 2,257,135 2,068,419 *2,034,250 Increase 66,320 68,201 118,756 145,696 125,354 55,189 117,609 47,918 143,780 101,473 29,966 50,272 286,115 Decrease 131,289 Increase 111, 542 Decrease 289,610 Increase 387,609 Decrease 66,990 Increase 48,511 Decrease 188,716 Decrease 34,169 * Appn iximate.
Annua] l'r< eduction. Year. I Quantity. ! Quinquennial Period. Average. Log. of Quantity. r~ 1885 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 1896 1897 1898 1899 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913 1914 1915 1916 1917 I Tons. 511,063 534,353 558,620 613,895 586,445 637,397 668,794 673,315 691,548 719,546 726,654 792,851 840,713 907,033 975,234 1,093,990 1,227,638 1,362,702 1,420,193 1,537,838 1,585,765 1,729,536 1,831,009 1,860,975 1,911,247 2,197,362 2,066,073 2,177,615 1,888,005 2,275,593 2,208,624 2,257,135 2,068,419 i Tons. 5-70847 5-72783 5-74712 5-78809 5-76822 5-80441 5-82529 5-82822 5-83982 5-85706 5'86133 5-89919 5-92465 5-95762 5-98915 6-03902 6-08906 6-13440 6-15235 6-18690 6-20025 6-23792 6-26269 6-26975 6-28131 6-34191 6-31515 6-33798 6-27600 6-35710 6-34412 6-35355 6-31563 1885-89 1886-90 1887-91 1888 92 1889-93 1890-94 1891-95 1892-96 1893-97 1894-98 1895-99 1896-1900 1897-1 1898-2 1899-3 1900-4 1901-5 1902-6 1903-7 1904-8 1905-9 1906-10 1907-11 1908-12 1909-13 1910-14 1911-15 1912-16 1913-17 1914-18 Tons. 560,875 586,142 613,030 635,969 651,500 678,120 695,971 720,783 754,262 797,359 848,497 921,964 1,008,922 1,113,319 1,215,951 1,328,472 1,426,827 1,527,207 1,620,868 1,709,025 1,783,706 1,906,020 1,973,333 2,042,654 2,048,060 2,120,929 2,123,182 2,161,394 2,139,555 *2,168,808 * Approx) hnatc.
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This graph shows the actual increase or decrease in the production of coal, year by year.
This graph shows the rate of increase in the production of coal since 1885.
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This graph shows the general trend of coal-production since 1885.
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Professor Park (" Geology of New Zealand," p. 292) is of opinion that the choicest and most available half of our coal will have been consumed by 1970, and that the date of complete exhaustion should be somewhere about one hundred and thirty years from the present time ; but this estimate is based on the assumption that the rate of increase in production indicated by the decade 1901-11 will continue in the immediate future. This assumption, however, has been temporarily falsified by the abnormal conditions created by the war. The following table shows the contribution of each of the well-defined coalfields to the total output of coal in the. Dominion up to the 31st December, 1918 : Table 5. Approximate Total Approximate Total AT ~„ ,» n Output up to 81st Output up to 31st Name oiil'oamo d. t\ i -n i mm ' December, 1917. December, 1918. Tons. Tons. North Auckland .. .. .. .. 3,613,954 3,739,303 Waikato (including Mokau) .. .. .. 4,929,983 5.354,412 Nelson .. .. .. .. .. 328,287 342.241 BuUer • .. .. .. .. .. 15,053,254 15,634,050 Inangahua .. .. .. .. .. 279,275 395,512 Grey.. .. .. .. .. .. 9,170,671 9,566,773 Canterbury.. .. .. .. '.. 736,660 757,135 Otago .. .. .. .. .. 9,127,443 9,443,892 Southland .. .. .. .. .. 2,919,063 3,069,522 Totals .. .. .. .. 46,158,590 48,192,840 The next table shows how the total output has been distributed over the different classes of coal : — Table 6. Approximate Total Approximate Total „, f „ , Output to the 31st Output to the 31st Uaesoiooai. December, 1917. December, 1918. Tons. Tons. Bituminous and semi-bituminous .. .. 30,048,697 31.171,005 Brown .. .. ..• .. .. 13,774,384 14,480,157 Lignite .. .. .. .. 2,335,509 2,541,678 Totals .. .. .. ..46,158,590 48,192,840 (vii.) The Rate and Amount of Consumption ; Exports and Impoets. The amount of coal annually available for consumption in the Dominion is ascertainable by adding the excess of coal imported over'that exported during the year to the amount mined. Tables 7 and 8 show this information as well as providing a means of comparison with the growth in population.
Table 7.—Coal-production, Exports, and Imports.
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Year. Amount mined. (100 omitted. Amount ex- Amount imported, ported. 000 omitted. 000 omitted. Year. Amount mined. 000 omitted. Amount exported. 000 omitted. Amount imported. 000 omitted. 1878 .. 1879 .. 1880 .. 1881 .. 1882 .. 1883 . . 1884 .. 1885 .. 1886 .. 1887 .. 1888 .. 1889 . . 1890 . . 1891 .. 1892 . . 1893 .. 1894 . . 1895 . . 1896 .. 1897 .. 1898 .. Tons. 162 231 300 337 378 421 481 511 534 559 614 586 637 669 673 692 720 727 793 841 907 Tons. 6 7 7 7 3 7 6 44 46 44 64 79 70 92 79 69 75 86 80 76 56 Tons. 174 158 123 130 130 124 148 130 120 107 101 128 111 125 125 117 113 108 102 111 115 1899 . . 1900 . . 1901 .. 1902 . . 1903 .. 1904 . . 1905 .. 1906 . . 1907 .. 1908 . . 1909 .. 1910 .. 1911 . . 1912 '.. 1913 .. 1914 .. 1915 .. 1916 .. 1917 . . 1918 . . Tons. 975 1,094 1,240 1,365 1,421 1,538 1,586 1,730 1,831 1,861 1,911 2,197 2,066 2,178 1,888 2,275 2,209 2,257 2,068 2,034 Tons. 89 113 160 189 152 165 123 142 129 101 202 277 223 229 212 303 326 332 229 186 Tons. 100 124 150 129 164 147 • 169 208 221 288 258 232 188 364 469 518 353 294 292 255
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Table 8 gives the imports in greater detail, and shows by means of the quinquennial averages and the accompanying chart the general trend of change.
Table 8.—Imports of Coal, 1885-1918.
Graph showing changes in amount of imports of coal, year by year.
Year. Quantity. Log. of Quantity. Quinquennial Period. Average. 1885 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 1896 1897 1898 1899 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913 1914 1915 1916 1917 1918 •• ! Tons. 130,202 119,873 107,230 101,341 128,063 110,939 125,318 125,453 117,444 112,961 108,198 101,756 110,907 115,427 99,655 124,033 149,764 127,853 103,923 147,190 109,040 207,567 220,749 287,808 258,185 232,378 188,068 364,359 468,940 518,070 353,471 293,956 291,597 255,332 Tons. 5-11461 5-07871 5-03032 5-00578 5-10741 5-04509 5-09802 5-09847 5-06982 5-05292 5-03423 5-00758 5-04497 5-06232 4-99850 5-09353 5-17540 5-10670 5-21463 5-16791 5-22802 5-31710 5-34390 5-45911 5-41194 5-30620 5-27432 5-56153 5-67112 5-71439 5-54835 5-46829 5-46479 1885-89 1880-90 1887-91 1888-92 1889-93 1890-94 1891-95 1892-96 1893-97 1894-98 1895-99 1890-1900 1897-1 1898-2 1899-3 1900-4 1901-5 1902-6 1903-7 1904-8 1905-9 1900-10 1907-11 1908-12 1909-13 1910-14 ■ 1911-15 • 1912-10 1913-17 1914-18 Tons. 117,342 113,489 114,578 118,223 121,443 118,423 117,875 113,163 110,253 109,850 107,188 110,336 119,957 123,346 133,046 142,554 151,556 163,117 181,696 206,473 228,671 241,337 237,438 266,160 302,386 354,303 378,582 399,759 385,207 342,485
11
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Graph showing rates of increase or decrease in imports of coal.
Graph showing general trend of changes in import of coal.
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Table 9 shows particulars of the annual total consumption of coal in New Zealand since 1885, the annual consumption per head of population, and the general trend of consumption.
Table 9. —Coal-consumption, 1885-1918.
Graph showing changes in amount of coal-consumption, year by year.
Consumption per Head of Population. Quinquennial Period. Annual Average during Period. Year. Consumption. Log. of Annual Consumption. Quantity. Quantity per Head of Population. 1885 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 1896 1897 1898 1899 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913 1914 1915 1916 1917 1918 Tons. 591,284 607,680 021,721 047,149 028,103 671,948 694,648 -714,354 733,866 752,562 742,108 808,327 ■869,224 957,271 981,040 1,103,665 1,208,954 1,298,451 1,427,980 1,519,474 1,631,994 1,795,002 1,922,728 2,048,281 1,967,642 2,152,576 2,030,223 2,312,962 2,145,196 2,490,755 2,238,103 2,222,908 2,131,173 2,104,075 Tons. 5-77179 5-78368 5-79359 5-81101 5-79803 5-82734 5-84177 5-85391 5-86562 5-87654 5-87047 5-90759 5-93913 5-98103 5-99109 6-04285 6-08243 6-11344 0-15473 6-18170 6-21272 6-25400 6-28391 6-31139 6-29394 6-33296 6-30754 0-36418 6-33147 6-39634 6-34988 6-34692 6-32862 Tons. 1,038 1,044 1,043 1,069 1,027 1,082 1,103 1,112 1,110 1,108 1,072 1,144 1,205 1,300 1,308 1,445 1,554 1,628 1,741 1,798 1,876 2,004 2,092 2,167 2,025 2,168 2,000 2,226 2,007 2,284 2,036 2,022 1,939 1885-89 1886-90 1887-91 1888-92 1889-93 1890-94 1891-95 1892-96 1893-97 1894-98 1895-99 1896-1900 1897-1 1898-2 1899-3 1900-4 1901-5 1902-6 1903-7 1904-8 1905-9 1906-10 1907-11 1908-12 1909-13 1910-14 1911-15 1912-16 1913-17 1914-18 Tons. 619,188 635,321 652,714 671,240 088,584 713,476 727,507 750,243 781,217 825,898 871,595 943,906 1,024,032 1,109,877 1,204,019 1,311,765 1,417,370 1,534,580 1,659,436 1,783,496 1,873,129 1,977,246 2,024,290 2,102,337 2,121,720 2,226,342 2,243,448 2,281,985 2,245,627 2,239,403 Tons. 1,044 1,053 1,065 1,079 1,088 1,103 1,101 1,109 1,128 1,108 1,208 1,283 1,300 1,451 1,540 1,638 1,724 1,814 1,908 1,993 2,035 2,093 2,090 2,118 2,085 2,138 2,112 2,114 2,058
13
H.—44a
Graph showing rate of increase of consumption of coal.
Graph showing consumption of coal in relation to population, year by year.
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14
Graph showing the general trend of total annual coal-consumption.
Graph showing the rate of increase of consumption of coal per head of population.
15
H.—44a
The coal exported is mainly for bunkering steamers trading to New Zealand, and for Admiralty purposes. The amount of exports has crept steadily up from the year 1866, when over a quarter of a million tons was sent away ; but its value since the middle " eighties," when it attained .1 per cent, of the value of the total exports, has remained in almost constant ratio to that total. The marked increase in the " eighties " was due to Government endowment of the two West Coast coal ports, Greymouth and Westport, the institution of their Harbour Boards in 1884, and the improvements effected under the engineering schemes of Sir John Coode and the Boards' own engineers. The amount of coal imported showed very little change till the last dozen years. In 19] 3 and 1914 the yearly figures were more than double those for 1878, and in 1912 and 1915 almost double. The value of the importation has increased in much greater proportion than the amount. The percentage which that value is of the value of our total imports has varied more than the corresponding figures for the export of coal. Table 10. —Ratto of Value of Coal-tmports into New Zealand to Value of Total Imports. 1882-83 .. .. .. .. .. .. 2-percent. 1884 .. 3 ~ 1885-95 .. .. .. .. .. .. 2 1896-1907 .. .. .. .. - .. .. 1 1908-9 .. .. .. ■ .. 2 1910-11 .. .. .. .. .. .. 1 1912-13 .. .. .. .. .. .. 2 1914 .. .. .. .. .. .. .. 3 1917-18 .. .. .. .. .. .. 1 „ Whilst the proportion which our coal-export is of our total exports has remained practically constant at 1 per cent., coal as an import has in recent normal years been slightly increasing its relative importance in the sum of imports. The proportion of the total coal consumed in the Dominion which is furnished by imported coal was comparatively large in early years (from one-third to one-fourth atout 1880) ; it diminished till in 1900 it was about 10 per cent. ; ten years later the proportion was much the same as in .1900 ; but subsequently it increased rapidly, and for 1914 imported ooa] provided more than one-fifth of the total consumption. During the war period, with the shortage of shipping, the proportion fell, till for 1918 it was not quite one-eighth. The great bulk of the imported coal comes from the Newcastle fields in New South Wales, and is specialized to certain uses, mainly railway transport and gas-making. The coal imported from 1878 to 1918 inclusive amounted to 7,524,000 tons, or a little over one-seventh of the amount of coal consumed in New Zealand during that period, and a little over 15J per cent, of the amount produced within the Dominion. The presence of large supplies of coal in Australia readily available for importation at a reasonable price has undoubtedly been one factor in preventing the appearance of monopoly in New Zealand coal-mining. (viii.) Ownership of Coal-sitks. The land at present mined is owned in part by the Crown and in part by private individuals or corporations. The greater part of the more valuable coals are produced from Crown lands or lands vested in some public body, such as Harbour Boards, schools, and colleges. For some years past the policy of the Government has been to reserve to the Crown the ownership of all lands known to possess minerals or, wherever other rights appertaining to the land are alienated or temporarily transferred, to retain ownership of the minerals. The Coal-mines Act gives power to the Crown to resume private lands for coal-mining purposes on payment of compensation. Some of the companies at present operating own part of their fields, but the major portion of these are leased either from the Crown or private owners, in which case rents or royalties, calculated per ton mined, or rents merging into royalties, are paid. 2. HISTORICAL NOTE. The existence of coal in certain parts of New Zealand was known shortly after organized settlement began. The history of the industry falls into three periods :up to the early " eighties," thence up to the end of the century, and from then to the present day. The first was a time of exploration, experiment, and many failures ; the second, one of struggle against adverse circumstances, leading to consolidation of ownership of mines and the utilization of other valuable results of experience ; the third, one of comparative but not unqualified success. The first mention of coal on what are now the chief mining fields of the Dominion was made by Heaphy and Brunner in 1846, who discovered outcrops of lignite in the Westport district. Next yeai Brunner found coal on the Grey River on the present site of Brunnerton. Bituminous coal was discovered in the late " fifties " ; and in the early " sixties " coal-mining began in both the Grey and the Westport districts. A certain amount of coal'was'exported from New Zealand in 1866. Table 11. —Early Exports of Coal from New Zealand. Year. Tons. I Year. Tons. 1866 .. .. ..261 1871 ... .. .. 1,696 1867 .. .. ..973 1872 .. .. ..990 1868 .. .. .. 1,027 1873 .. .. ..724 1869 - .. .. ..750 1874 .. .. .. 1,463 1870 .. .. ..1,672
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It was not, however, till the early " eighties " that ooal-mining became of any importance. Up to that time the Maori troubles in tho North, and the lack of communication facilities on the West Coast, as well as tho small and sparsely distributed population, retarded its development. By the early " seventies " most of the important fields had been discovered, and at the middle of the " eighties " the making of the harbours at Greymouth and Westport cheapened the production and marketing of West Coast coal. The Homebush Colliery, in Canterbury, was opened, in 1873 ; the Nightcaps Company, Southland, was formed in 1880, and the present Westport Company in 1881. The latter's newer mine at Millerton first produced coal in 1896. Towards the end of the " nineties " there was a tendency towards amalgamation of collieries ; the present Taupiri Company was so formed in 1899, and the New Zealand Oil and Coal Company (Kaitangata) in 1898. In 1901 the State Coal-mines Act provided for the acquisition and working of State coal-mines under the direct control of the Minister of Mines ; and two mines, the Point Elizabeth Mine, near Greymouth, and the Seddonville Mine, near Westport, were opened, the output stage being reached in 1904 and. 1903 respectively. The Blackball Company had begun operations near Greymouth in 1893, and in 1905 the Paparoa Company was formed. In the latter year the Westport-Stoekton Company began operations, and reached the output stage in 1908. Still newer collieries are those of the Pukemiro and Mount Torlesse Companies, which began to produce in 1915 and 1918 respectively. The growth in the production, import, and consumption of coal has already been indicated by the statistics quoted in section 1 (vi) and (vii) above. 3. [CAPITALJTN &THE COAL [INDUSTRY. Prom the earliest days the coal industry has drawn a considerable part of the capital used in its development from sources within the Dominion. The necessary investments were made largely by men on the spot more or less familiar with local conditions. Even with the increasing scale of production the proportion of capital drawn directly from abroad is not large. Of the large mining companies whose affairs we investigated, all of which are of the joint-stock limited-liability type, only three have their headquarters situated outside the Dominion, and of these a considerable part of the capital is owned by local residents.
Table 12. —Capital and Location of the Chief Coal-mining Companies operating in New Zealand.
A large part of the capital employed in coal-mining is fixed in form and specialized to particular uses. This fact, as well as the large amount of total capital required to open up and maintain a mine, makes it advisable, in order to minimize the cost of production per ton, to reduce the amount of time the mine is idle to the lowest possible extent. Every day of lost time piles up the standing or overhead charges connected with the capital cost, which must be borne by the output. The interests common to the owners of capital invested in coal-mining are guarded by the New Zealand Coal-mine Owners' Association. This is a body consisting at present of eighteen members, all limited-liability joint-stock companies engaged in coal-production. Its activities are confined in
( Situation of Amomt ()[ Authorized Mead Office. Minos. Capital. Residence of the Holders of the Majority of Shares. i Name of Company. Head Office. Amount of Paid-up Capital. Blackball Coal Company (Limited) .. London £ jondon .. , Blackball, near Grey- 35,000 mouth Auckland .. Hikurangi, near 22,500 Whangarei Christehureh Homebush, Malvern 17,000 Hills iOndon . . Canterbury, inland 100,000 .. Kaitangata .. 192,694 £ 28,330 New Zealand. Hikurangi Coal Company (Limited) .. Auckland .. 16,224 $ Homebush Brick and Coal Company Christehureh (Limited) Mount Torlesse Collieries (Limited) .. London Now Zealand Coal and Oil Company (Li- I „ mited) Nightcaps Coal Company (Limited) .. ' Invereargill Northern Coal Company (Limited) .. Auckland . . 17,000 100,000 192,694 England. nvorcargill Nightcaps .. 40,000 Vuokland . . K i r i p a k a, [near 49,500 Whangarei Wellington Roa, near Greymouth Auckland .. Pukemiro, near ] 60,000 Huntly Junedin .. Kaitangata .. j Uckland.. Huntly .. .. 1150,000 Wellington Brunnerton, near I Greymouth Glen Massey, near 80,000 Ngaruawahia lunedin .. Denniston and Miller- 500,000 ton, near Westport Christehureh Stockton, near West- 200,000 port Wellington Dunollic and Rcwanui, near Greymouth 42^797^ New Zealand Paparoa Coal-mining Company (Limited)* Wellington Pukemiro Collieries (Limited) .. .. Auckland.. 50,000 New Zealand. Taratu Coal-mines (Limited) .. .. Dunedin .. Taupiri Coal-mines (Limited) .. .. I Auckland .. Tyneside Proprietary (Limited) .. Wellington 141,000 33 Waipa Railway and Collieries (Limited) ,, 79,905 Westport Coal Company (Limited) .. , Dunedin .. 450,000 33 Westport-Stockton Coal Company (Li- : Christehureh mited) Government of New Zealand .. .. Wellington 179,19l| * In liquidation.
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practice to dealing with industrial matters that closely affect the common interests of the members, including the demands of workers' organizations and proposed legislation dealing with coal-mines. It takes no part in the fixation of selling-prices, these being arranged by each company separately according to its own circumstances. Among its by-laws are enactments that "No commissions, bonus, rebate, fares, passages, hotel expenses, or allowances of any kind shall be made to any employee of any customer, either by any firm or member or their representative," and that " the provisions of the Secret Commissions Act must be strictly adhered to." The income earned by capital in mining is subject to the ordinary income-tax. For local rating purposes it is the practice to assess the value of the coal presumed to be in the area worked by a coal company. In those cases where the land is privately owned the lessor's interest and the lessee's interest are separately assessed, but as leases invariably provide that the lessee shall pay all rates and taxes arising out of the mining operations, the payment of county rates usually falls upon the company. As soon as a colliery is opened up the Valuation Department assesses the value of improvements effected, and values the coal in situ. In those cases where counties impose rates on capital value, rates are paid on the valuation of the improvements, and on valuation of the coal presumed to be in the area. Wherever counties assess upon the unimproved value only, county rates are imposed upon the valuation of the coal. A certain amount of dissatisfaction exists with the methods of the Tax Department in regard to allowance for depreciation in assessing income for tax purposes, and with the principle of assessing all the coal in situ for local rates. 4. LABOUR. The number and classification of persons employed in the coal-mines of New Zealand for each year from 1878 inclusive are set out in Table 13.
Table 13.—Labour and Output.
The number of workers in and about the mines increased fivefold, comparing the average for 1879-81 with the number in 1914. The ratio of output to labour has increased at a still more rapid rate, so that the output per person employed underground increased nearly 70 per cent, between 1878 and 1916. It is worth noting that the three years of the war period, 1915-17, show the highest triennial average of output per man. The output per underground worker is higher than in most
3—H. 4 lα.
Persons employed. Tons raised per Person employed Underground. Year. Above. Total. Below. 1878 1879 1880 1881 1882 1883 1884 1885 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 1896 1897 1898 1.899 1900 1901 1902 1903 1.904 1905 1906 1907 1908 1900 1910 1911 1912 1913 1914 1915 1916 1917 1918 147 361 393 338 392 388 414 466 512 416 485 590 506 525 590 531 556 554 617 688 803 717 763 833 1,174 1,143 992 1,159 1,136 1,365 1,130 1,053 1,176 1,050 988 1,090 1,102 366 888 890 1,145 1,213 1,111 1,275 1,251 1,334 1,277 1.196 1,298 1,393 1,274 1,347 1,381 1,447 1,599 1,843 2,006 2,082 2,135 2,525 2,436 2,518 2,767 2,902 3,032 3,463 2,925 3,198 3,197 3,558 3,106 3,000 2,893 2,892 513 802 1,038 |963 1,043 1,249 1,283 1,483 1,605 1,499 1,689 1,717 1,846 1,693 1,681 1,888 1,899 1,799 1,937 1,912 2,003 2,153 2,460 2,754 2,885 2,852 3,288 3,269 3,692 3,910 3,894 4,191 4,599 4,290 4,328 4,250 4,734 4,156 3,988 3,983 3,994 443 475 540 456 440 503 481 468 477 523 563 533 516 618 588 609 627 609 593 600 655 665 609 651 687 662 641 633 634 706 681 590 639 711 750 715 703
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other countries. Comparisons of this figure must, however, be taken together with information as to the height and width of the seams, the hardness of the coal, proportion of stone, the distances travelled underground, the amount of machinery used, and so forth, in the different localities or at the different dates compared, as well as the method of < aleulating the average number employed for the year. The number of mine workers decreased by 740, or nearly .16 per cent., from 1914 to 1918. Table 14 shows how the labour-supply has been distributed over the principal collieries of the Dominion during the last two years.
Table 14. —Labour at Principal Collieries.
The efficiency of the coal-worker in New Zealand, in the opinion of competent authorities, compares favourably with that of similar workers in the leading fields of other countries. A fairly large proportion of the miners are immigrants from the mining districts of England, Scotland, and Wales, many of them arriving after having worked for some time in the mines of Canada, the United States, and New South Wales. The coal-miner has strong migratory habits, developed, according to the opinion of the president of the Miners' Federation, largely by the rapidly changing nature of the conditions in which the miner works ; he moves from one place to another to escape bad conditions or to discover better, and these conditions change more rapidly than is the case with most other workers. A classification of the miners in respect of birthplace promises interesting results. A witness of the widest experience and high authority was emphatic in the expression of his opinion that the native-born and locally trained New-Zealander makes the best miner. (On the other hand, the opinion of traders was just as emphatic that the immigrant miner excels in thrift and punctual payment of debts.) It was interesting to find that a very large proportion of the management posts (mine and administrative) are filled by men who have risen to them, through the ordinary grades of labour. The employments in and about and essential to a coal-mine are many and varied. The following is a more or less complete list, excluding the clerical operations, as described by Mr. J. Bishop :— Underground Ijabour.- Hewing (contract work), timbering, trucking and hauling, crushing, baling water and pumping, overmen and deputies, maintenance work, ventilation, lamp-trimming, mine-management. Overground Labour. —Tipping, loading, screening, weighing, blacksmiths and fitters, carpenters, enginemen and stokers, engine-wright, tub-cleaning, general labour. In the personal qualities that control the efficiency of an individual's work the average miner does not appear to fall below the level of other workers. The character of his work, much of which is by no means of a routine nature, calls for the exercise of intelligence, initiative, resourcefulness, and adaptability, whilst the fact that he is in continual contact with his fellow-men conduces to the discussion of ideas, though the position of the mining settlements, and their uniform class constitution, tend to narrow their views. The character of the underground work draws heavily on the mine worker's store of physical and nervous strength ; and the light and air underground, even where conditions are most favourable, can never be as satisfactory as on the surface. The special dangers of mining help to develop certain generous traits of character, and the aggregation and isolation together breed a strong communal spirit; but the general environment is, in present conditions, not such as to moralize the work and the life -both individual and social— to the full extent that should be possible. Whether these conditions are capable of improvement or not is an important subject for consideration in the main part of the report. (See Chapters VTI and VIII )
Name of Colliery. Locality. Class of Coal. Output for 1017. fl- Output i|& o£2 *S& tor 1918. ol« £°c. Sm <°J 5 ■« <? o £ Northern District. Hikurangi Taupiri Extended Pukemiro Waipa Hikurangi .. Huntly Pukemiro . . Glen Masscy Semi-bituminous Brown Tons. 31,881 192,205 89,375 81,718 Tons. Tons. Tons. 1,099,922 95 65,361 1,165,283 109 2,182,181 339 234,633 2,418,470 442 181,966 145 114,458 290,424, 160 319,699 100 69,085 388,784! 73 West Coast District. Coalbrookdale Millorton .. Denniston .. Mangatini .. Bituminous 279,760 200,950 167,122 5,252,425 440 240,096 5,492,521 400 7,601,588 409 179,630 7,781,218 391 1,203,492 280 154,120 1,357,612 276 Westport-Stockton State Coal-mines — Point Elizabeth Liverpool Blackball Dunollie Rewanui Blackball .. 33 • • Semi-bituminous Bituminous 119,411 145,856 132,515 2,255,717 189 95,106 2,350,823 134 472,471 302 113,013 585,484 298 2,588,380 286 121,259 2,709,639 234 33 • • Southern District. Kaitangata and Castle Hill Nightcaps Other New Zealand collieries Totals Kaitangata.. Nightcaps .. All coalfields Brown 33 • • Various 107,274 73,133 445,519 3,507,495 288 124,985 3,632,480; 293 1,254,144 116 53,805 1,307,949! 109 18,329,110 994 434,55418,408,459' 934 2,068,419, |46,158,590! !3,983 2,034,250 48,192,840 3,994 !_ . i I
19
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Where conditions are favourable a low miners combine small farming with their mine-work, or alternate between farming and mining. Surface work, however, whether in town or country, is often repellant to the miner, who has grown accustomed to the even temperature of the pits. The coal-mine workers are organized into unions. There is, generally speaking, a union in connection with each of the principal collieries, a local federation of such unions occupying a welldefined mining field, and finally a national federation of the unions of the Dominion. These unions discharge all the usual functions associated with trades-unions, and in one or two cases promote the organization of co-operative stores. 5. ORGANIZATION OF COAL-PRODUCTION. (i.) The factors determining the localization of most industries are many and of varying force ; with coal-mining they are few, simple, and direct in their action ; coal must be mined where nature has placed it, and only there. The geographical distribution of the industry in New Zealand has already been indicated. The fact that it is not concentrated in one small area is another reason why the production has not been monopolized. (ii.) The scale of production, too, depends largely upon natural conditions ; one essential condition is a plentiful supply of coal. Wherever this exists, together with a large market for the product, the desire to reduce the cost of production per ton will extend the scale of operations of-a particular colliery to the point where the maximum net return is reached. This point will not generally be attained until the original output has been enlarged by successive increments. Whether the scale of production be measured by coal produced, amount of capital used, or number of men employed, the mines in New Zealand do not provide examples of the large scale reached in many of the important fields abroad. Reference to Table 14 above will show that the two main mines of the Westport Coal Company (Limited) at Millerton and Denniston are on the largest scale found in (he Dominion ; then follow those of the Taupiri, Westport-Stockton, Blackball, and Kaitangata Companies, and the State, all of which are large mines, measured by local standards. Of the newer mines, the Pukemiro promises to grow most rapidly. There have been no recent amalgamations of companies with the view to establish economy of production by reducing the costs of management and administration per ton, or by concentration of the labour available upon the most promising parts of a given field instead of the most profitable parts of the several mines. In some cases — e.g., the Westport, Blackball, and Northern Companies- the companies' activities include the carriage of coal at sea by their own colliers ; in other cases, as at Kaitangata and Waipa, they provide railways for its transport to the most convenient point of loading in the State railway system. (iii.) In connection with existing mines a considerable amount of development work is carried out in the shape of boring, tunnelling, &c, in order to test the nature and disposition of the coal-measures on the field and to ascertain the direction in which the most promising results may be expected. (iv.) The specialization or division of labour has been already referred to in the preceding section, and appears to be as highly developed as circumstances warrant. In the strict sense of the term the coal-miners are the workers who hew the coal from the face of the seam. They work in pairs, each pair at a face, and the Coal-mines Act provides, in the interests of safety, that no man may b:>. put in charge of a place until he has worked two years underground. His mate may have had no previous underground experience. (v.) Methods of Working. —The methods of winning the coal, after the shafts and drives have been made, fall into two main classes : the bord-and-pillar method and the longwall method. The former is the, one in general use in New Zealand, owing to the height of the seams and the weak character of the roof. The longwall system is used to a very slight extent in some small mines ; and in some other cases the coal is merely quarried in an " opencast " mine. The following description of the common method, as followed on the Grey field, is taken from Bulletin No. 13 of the Geological Survey (p. 23) :— " The standard width of bord is 16 ft. to 18 ft., and that of pillars may be from 30 ft. to 75 ft Thus the bords may be set out from the headings with centres varying from 48 ft. to 90 ft. " Owing to the seams hitherto worked being as a rule over 8 ft. thick, longwall working has been little employed. This method, however, has been used in the Point Elizabeth State Mine No. 1 for thin portions of Nos. 1 and 2 scams. " In breaking down coal the miner uses the time-honoured method of cutting and holing, followed by wedging, as little as possible. Holes having been bored by auger-drills, and the minimum amount of other preparation done, an explosive is employed to break out the coal. After cleaning and squaring up the face, the coal-getter repeats the various operations of cutting (if necessary), boring, and blasting. Where the, seam is thick he works with a rough kind of bench, keeping the upper part of his face well forward. " The method of working the pillars is to remove slices or ' lifts ' 14 ft. to 15 ft. wide, starting from the end or stenton farthest in and working backwards to the main headings. As a rule, the removal of the last part or stump is troublesome, and it is in places necessary to leave a portion of the pillar on account of the danger or expense of removing it. " The broken coal is filled into small trucks (tubs, boxes, skips, &c), containing from 10 cwt. to 15cwt. From the working-face the coal is transported by hand-labour, and in most cases with the aid of a jig also, to the level below. Hence it is hand-trucked, or drawn by horses, to the main haulageroad, and finally is conveyed to the surface by some form of rope haulage. On the surface the coal may or may not be passed over a picking-belt and through sizing-screens before it reaches the railway-trucks."
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20
A modification of the ordinary bord-aiid-pillar method is that of the panel, which is followed in the Blackball Mine, with a view to reducing the loss from spontaneous combustion of the coal and from uplifting of the floors. " The panels are 200 yards in length on the level, and extend to the rise till the old workings are nearly reached. At 50 yards on either side of the centre-line of each panel well-timbered headings (usual grade 1 in 6 to 1 in 8) are driven in the main or lower seam, and 18 ft. bords with 48 ft. centres are set off on either side. The inside bords are driven till they meet in the centre of the panel, but the outer bords are stopped about half a chain from the boundary. Thus a 66 ft. pillar is left between the panels. "All or nearly all the bords in a panel having been driven, the pillars are drawn as quickly as possible. This work starts from the boundaries of the panel, and the coal is removed in ' lifts,' each about 30 ft. long, this being the width of the pillars, and a convenient length for handling trucks. " When a panel has been worked out, stoppings are put in all the headings. These and other stoppings intended to wall off fires are built of stone with a fireclay centre. As the weight of the roof comes on the stoppings, they are so squeezed as to become airtight, if not so before." On the Westport field the seams are " more or less variable in dip, strike, thickness, and quality, subject to rolls, intersected by numerous faults and stream-valleys, &c," and the workings are there fore somewhat irregular. " The coal is won in the first place from bords " (Bulletin No. 17) "16 ft. to 18 ft. in maximum width, driven on the average 1 chain apart. They are sometimes broken away with a width of 12 ft. but in many cases are begun with the i\ 11 width of 18 ft. The bords are connected at intervals of 1 chain by cut-throughs, ends, or stentons, which are usually of the same widths as the bords. Thus the pillars are normally 48 ft. square, but in practice there is considerable variation. Where the seam is thick, head coal is dropped, usually simultaneously with the working of the piliars, which are removed in ' lifts 'or slices. In the Mangatini section of the Millcrton Mine, where the coal reaches 50 ft. and more in thickness, the pillars are first split, then a small slice or lift is taken off each end. The top or head coal is then shot down (blasting-powder being the explosive*), and alter the broken coal has been filled, another lift is removed in the same way as before. Great falls of coal often take place, and a pair of miners have been known to fill coal for several weeks from one place without ever having to break coal from the face. This process of working the pillars is continued until it is deemed unsafe to proceed any farther. In very thick seams there may be two or even three drifts one above the other, but there cannot well be more than one set of bords and of pillar workings. Necessarily a large percentage of the coal cannot be recovered from those portions of the seams with thickness exceeding, say, 16 ft. or 18 ft. Only by a filling-in method could all the coal be removed without frequent loss of life, but- the cost of such a system renders it impracticable for the Westport district or any other locality in New Zealand until the selling-price of coal increases very considerably." Although the use of machines for cutting and holing is now common in the collieries of the United States of America, New South Wales, and other coal regions, this work is still done by hand in our mines, except in parts of the Taupiri Extended Mine. Machines were introduced by the Westport (Joal Company into their mines and used for some years, but were ultimately discarded because of the men's objection to the contract system under which they were worked, and the introduction of the eight-hours bank-to-bank rule rendering them a costlier method than hand-hewing. Machines were also used in the Westport-Stockton mines for some years, and abandoned owing to the difficulty of fixing a rate of pay for the men working the fillers. The ventilation of the mines is regulated by statutory enactment, which prescribes a certain standard ; so, too, is the method of lighting, which varies with the character of the gases. Where naked lights are used, carbide or colza-oil are the common illuminants. " Taken as a whole," says one authority, " the atmosphere of the mines more than favourably compares with that of the general run of workshops, mills, factories, &c." (Inspecting-Engineer Hayes, in " New Zealand Mining Handbook," p. 386.) Inflammable gases are present in some of the mines, and there have been three colliery explosions with large loss of life—at Kaitangata, February, .1879, thirty-four deaths; at the Brunner, near Greymouth, in March, 1896, sixty-six deaths ; and in the Taupiri Mine, 1914, fortythree deaths. Timbering is also regulated by law, the amount required necessarily varying with the nature of the roof, walls, and floor. The legislation requiring lighting, ventilation, timbering, safe and dangerous places, &c, is strengthened by an elaborate system of periodical Government inspection, and of " check inspection " by employees of the unions, as well as by the daily rounds of the underviewcrs and the vigilance of the men themselves and the underground mine-managers. (vi.) Haulage. —The transport of the coal from the face to the pit-mouth has already been described. More unusual and noteworthy as engineering feats are the systems of haulage from the pit to the point of rail embarkation, particularly at the three bituminous mines near Westport, and, until the opening of the Ngahere Railway, at the Blackball Mine. In the former case the coal is lowered over steep inclines from a height up to 2,000 ft., and in the latter it was conveyed by an aerial tramway over three miles long. (vii.) Wages and General Conditions of Work. —Both the piecework and time-wages principles are applied in mine wages. The miners or hewers are generally paid so-much a ton for hewing (see Chapter V), this standard rate being varied according to the industrial agreement in operation, to allow for differences in height of coal, width of drive, amount of stone or water, &c, as the work
* " Permitted " explosives are now used.
21
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progresses, in some cases wherever the difficulties of working a place reach a certain degree, the miner is paid the standard daily wage of his mine, which is in general 12s. a day plus bonuses. The miner pays for his tools, light, and explosives, some of which, however, are provided him by the company at prices much lower than the market prices. The miner is paid at an agreed rate for all timbering he may do. In addition to hewing he has to fill his trucks and take them to the flat, any distance up to a chain. Every three months there is held a cavil or ballot, according to which the workingplaces are allocated among the miners. In some mines the truckers, who take the coal out from the miner's face to the pit-mouth, also work on contract at piece rates, but most truckers, as well as the other workers about a coal-mine, are paid a daily wage. All the mine; workers obtain coal for their own use at a price much lower than the local market prices. The eight-hours bank-to-bank principle is generally applied, with slight modifications in certain cases. The time actually put in at the working-faces varies with the travelling-distances underground. Double shifts are worked in some mines. Wages are paid fortnightly. The miner's maximum working-time per fortnight is by custom regarded as eleven shifts, since " pay-Saturday "is traditionally an off day. The largest proportion of voluntary absence from work occurs during the early part of the week following pay-Saturday. This has sometimes been used as evidence in support of the contention that such absence is caused mainly by intemperance, though it is obviously the period during which the miner would find it most convenient to take time off voluntarily from whatever cause. Disputes regarding wages and general conditions of work are settled by the process of collective bargaining between the company and the representatives of the men's union. Recently a system has been adopted for the reference of a dispute in the first instance to a local council of representatives of workers and employer, then, if necessary, to a similar district council, and in the last resort to a national council. (viii.) Housing and General Social Environment.- The present condition of the housing-accom-modation available for mine workers is described with some detail in Chapter Vli. It is unnecessary to say more here than that a considerable number of the married miners live in their own houses, that at some of the mines a certain amount of house-room has been provided by the companies themselves for sale or lease to the workers, and that, however satisfactory the position is at some centres, in general it urgently demands improvement. This is true not only of the housing-accommodation itself, but also of drainage and other sanitary arrangements. The situation of the townships is in some cases such that many of the workers have an unduly long distance to travel, often over very inconvenient ways and with no satisfactory means of transport available. Generally there has been in the past insufficient co-ordinated efforts by all concerned to provide for needs beyond those of the moment. Many of the mining townships are remote from the larger centres and the amenities of social life which they provide, with little or nothing to compensate for the absence of these or of the opportunities of enjoying them by means of rapid and cheap travel. In general, the companies have done a good deal to ameliorate the social conditions by providing recreation halls and grounds, clubs, libraries, &c, out of their own funds, but the general problem is too large to be solved by their resources alone, and is one, too, in which the whole community is concerned. In only one or two cases, notably at Runanga and Blackball, has there been any attempt on the part of the miners to establish co-operative stores with the object of obtaining common commodities and services at the lowest possible prices. Primary education is provided in the mining townships as part of the system common to the whole Dominion, no differentiation being made either against or in favour of these settlements. The miner's in some of the townships share the serious disability in regard to the opportunities for the secondary education of their children which all people of similar means suffer in the more remote and sparsely settled districts. Technical instruction in mining and allied subjects is provided at those centres where there is a School of Mines (Westport, Huntly, Reefton) or Technical College, but these are few, and the majority of the mining population is without opportunities of this kind. Almost nothing has been done in the direction of instituting, oven on the, larger fields, some systematic general education of a nature suitable for adult workers, and the demand for W.E.A. and University extension classes, as well as for the lighter recreative forms of education, remains unsatisfied, largely because of lack of funds to provide the necessary teaching and equipment. The health of the mine worker and his family, and his support during illness and injury, are the joint care of the workers themselves through their Medical Associations, the coal-mine owners, who contribute a statutory payment of |d. a ton to the Coal-miners' Relief Fund, and the Government and local bodies, which may subsidize or otherwise supplement the provision thus made. There is hospital accommodation on most of the coalfields, but in one or two instances local needs are not satisfactorily provided for. The provision that no worker shall be entitled to payment out of the Relief Fund unless he shall have been so disabled as to prevent him from working for not less than a week is both an encouragement to the malingerer and a grievance with the more conscientious miners. (ix.) State Aid in Mining. —This is given directly, as by subsidies in aid of prospecting, loans for the development of mines, subsidies to Schools of Mines, the free loan ot prospecting-drills, the advice of its Inspectors and officials of the Mines Department, or indirectly, as by the comparatively low rate of duty imposed on the import of mining machinery. The legislation affecting coal-mining is embodied mainly in the Coal-mines Act (1908, No. 24), and its amendments, and the regulations made under their authority.
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0. THE ORGANIZATION OF THE DISTRIBUTION OF COAL. The groat bulk of the coal disposed of is sold by the mines wholesale, the companies arranging contracts, as with gasworks, shipping companies, the railway, &c, or selling either directly or through agents to merchants or other purchasers f.o.b. or f.o.r. In only a few cases does the coal company retail part of its own coal, the Westport Coal Company, the Blackball Coal Company, the Pukcmiro Collieries, and the State mines being the chief examples. The coal is in each instance graded according to size as it comes off the mine screening plant, the selling-price varying with the grade. In the majority of cases there arc only three or four grades— viz., house or best screened ; steam-coal (of smaller size) ; slack or small; and through coal or the run of the mine (the coal as it comes from the working-face). It has already been noted that the small coal is difficult to sell; the price obtained for it is low and inelastic ; and as it costs the same to mine as the large coal, much of any increase in the cost of mining must be borne by the grades other than small, for which the demand is less elastic. In many of the mines a very great amount of small coal is absolutely wasted for lack of a market. The freight charges from the mine to the merchant's depot are usually paid by the merchant. in some cases (the Westport, Blackball, Northern) the coal companies own colliers that carry part of their own coal, but in general the coal is transported by carriers separate from the mining companies. The impossibility of the mines obtaining the controlling interest in the internal means of transport in New Zealand has been a third powerful obstacle to the growth of monopoly in mining. The process of distribution to each of the chief consuming centres is described in detail in Chapter 111. Only the most general features need mention here. At some of the West Coast mines the coal is stored in bins whilst waiting shipment. It is run down to the wharves in railway-hoppers carrying about 8| tons, which are lifted over the steamer's hold and emptied by automatic opening of the lower part, and then replaced on the body of the truck. At the port of arrival, discharge may be into either hulks, or trucks, or drays, by the slow sling process. In most cases the retailer carts from ship or truck, as the case may be, to his yard, loose or bagged. In his yard the loose coal is trimmed, screened, and bagged, after which it is carted to the consumer. Cartage is mostly by horse and dray. The wholesale merchants have contracts with large consumers requiring coal all the year round for industrial or semi-industrial purposes, and in most cases they also compete as retailers for the house trade. In very few oases is the business of a coal merchant or retailer restricted to dealing in coal; it extends usually to other forms of fuel, to general carrying, and to produce. In only two or three cases is the distribution of coal undertaken by a co-operative society. 7. SOMtf CHARACTERISTIC FEATURES OF COAL AND THE COAL TRADE. Before passing on to the main topics of costs of production, prices, profits, and earnings, we should mention certain leading acts regarding coal itself, and the trade in it, that must be borne in mind in considering these subjects. (i.) In the first place the delinition of " coal "is not so clear as it appears at first sight. When the " man in the street " talks of coal, he has in mind the coal he burns at home in the range and grate ; but this is only one out of many " coals," several of which are used for the same purpose he has in view. There are the coals differentiated according to chemical composition —anthracite or semi-anthracite ; bituminous ; semi-bituminous, glance, pitch ; brown ; and the lignites ; and those are in reality, from the economic standpoint, different commodities. But in addition there are the imported coals ; and, in respect of nearly every class of coal as defined, there are the further distinctions alluded to in the previous section between large coal, steam-coal, through coal, and small coal or slack. These classifications or grades of coal may be combined in all possible ways. It should therefore be recognized that before any deduction be drawn from the mention of " coal," inquiry must be made as to the precise thing meant, some mines seven or eight kinds of coal are obtained. These have all different uses, though, with, relative prices changing, one may be substituted for another. The demand for them is of varying elasticity, elasticity of demand being measured by the degree to which it changes for a given alteration in price. (ii.) Comparison of the prices of." coal " cannot be trustworthy unless the facts under (i) arc taken into consideration. But when comparing prices at one date with those of another we must further ascertain whether there has been any change in the nature of the particular kind of coal in question. For example, the house coal of 1918 in many localities was different from the house coal of 1915 or 1916, even though from the same mine, because of the omission of the second screening in the dealer's depot, thus resulting in a much larger proportion of small. In comparing prices it is also necessary to ascertain any alterations in quality, or in the amount of discount allowed, or in the arrangements as to who shall pay carriage or incidental charges. (iii.) The New Zealand coals are psculiarly friable, breaking easily at every handling. Some are ho friable that they cannot be screened with profit. It is therefore necessary to reduce handling to the minimum, from the desire both to keep down cost and to preserve the quality of the coal. If, for example, a certain coal is screened at the mine, it may yield 40 per cent, large and 60 per cent, small. The large, after being handled en route to market, when screened in a dealer's yard may yield 15 to 20 per cent, of small. (iv.) The high water-content of many of our coals unfits them for storing anywhere for any appresiable period except in the mine itself. The best brown coal will not last even under cover from four to six months without very considerable waste. Consequently, even when production is abundant, the stock of such coal in existence at a given date can never be a large proportion of the total amount
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required during the season. This quality of the coal, conjoined with the last mentioned, makes the problem of storing coal at the mines or ports during waits for shipping a very difficult one. (v.) Though the ultimate market values vary according to the different kinds of coal and their different uses, many of the costs of production and distribution are the same per ton, irrespective of the kind. Much of the cost of transport, for example, is the same whether the coal be large or small bituminous, or large bituminous or small brown. (The Railway Department charges differential rates : the highest on Australian coals, the medium on New Zealand bituminous, and the lowest on native brown coal.) One hewing-rate is paid for all coal in the same mine, with slight variations already pointed out in section 4 (vi) above. Many of the costs of distribution are the same whatever be the kind of coal traded in. (vi.) it may be useful to sot out here some of the main factors determining the price of coal as a preliminary guide to the subsequent more detailed treatment of prices in Chapters 11, 111, and IV. It is a truism to say that the price is determined by supply and demand ; it is necessary to analyse the conditions governing both supply and demand, and. to ascertain how changes in these may affect one another and the price. On the side of demand the leading idea is utility, on the side of supply it is cost; price is fixed by the balancing of considerations of utility against those of cost. The utility of coal to the purchaser depends on the degree to which it serves his particular needs, and the intensity of his needs are determined largely by individual taste, habit, and fashion. But mere desire or need alone is insufficient to constitute an effective economic demand for coal; it must be accompanied by the offer of something in exchange —a price. Purchasing-ability is therefore an essential condition of demand, and, obviously, the total amount demanded at a given price will also depend on the number of persons who enter the market as purchasers. The price which purchasers are willing to pay for a given amount of the commodity is the demand price. But the amount of the price actually paid cannot be fixed solely by the intensity, effectiveness, and amount of the demand. The conditions which govern the supply of coal are also effective factors in fixing the actual price ; the amount demanded may be producible at a high cost or at a low cost, and it is obvious that the higher the cost the higher the price that will evoke that supply and make it available to purchasers, and, conversely, the lower the cost, the lower the price. The cost of production varies according to the degree to which supply is limited. Supply may be limited by nature, by the great cost or effort involved in production, by monopoly, or by legislation restricting the action of producers. These are the broad factors that determine what may be called the supply 'price —that is to say, the price which will just satisfactorily remunerate those who are producing the commodity. The price actually got in the market, where bargaining is free between producers and dealers and consumers, will in the long-run tend to coincide with the supply price or cost of production. But over a short period which is not sufficient to allow the producers to readjust their factors of production to changes in demand the, price may depart much from that point. If the demand rises, then until such time as the supply can be increased by the existing means of production or their extension higher prices will be paid, because increased demand implies a greater effective desire to purchase. The tendency to a rise in price will be strengthened if at the same time there is a change in the conditions of supply leading to a decrease in the amount produced. Such actually were the broad features of the situation in the coal trade in New Zealand during the period under review. Supplies fell off owing to certain causes, mainly lack of shipping and shortage of mine labour, whilst the demand increased through a more intense need for coal, coupled with greater purchasing-power to attain that end. The coal-mining businesses of the Dominion in general conform to the principle of diminishing costs, or, what is the same, increasing returns —that is to say, they are at such a stage of development that, " other things equal," they can increase their outputs at a greater rate than their total costs, so that an increasing output means a decreasing cost of production per ton, or the expenditure of a given sum means an increased return thereto ; conversely, a diminishing output such as has ruled of late means an increasing per ton cost. But " other things " did not remain undisturbed ; besides the mere fall in the output, due to shortage of labour, 'in itself sufficient to account for a rise of cost, there was the increase in the cost of most of the materials necessary to work the mines, and in the cost of the available labour. On the side both of supply and demand the altered conditions were therefore such as to raise market price. In the particular circumstances, lack of ships and labour, there appeared to be little hope of influencing supply in the direction desired, and little, if anything, was done to restrict demand. Rationing apportioned the supply more evenly over those demanding coal, but could not influence the effectiveness of their demand. The rising price had some effect in turning part of the old demand for coal into a demand for some substitute such as wood, which in turn raised its price ; but in many cases substitution took the form of using one kind of coal instead of another, or of using gas, which in itself involved the consumption of coal. The substitution of lignite and brown coals for bituminous as house fuel led to a considerable rise in their demand price, as the demand for the inferior coals is much less elastic than that for the superior—in other words, the demand for them does not fall off in proportion to the rise in their price. When coal rises in price, the inferior qualities can be substituted for the better, and it is comparatively easy for the consumers of the better-class coals to economize in consumption. The different kinds of coal from the same mine are what is technically known as " joint products " —that is to say, they are produced by one and the same process and at the one cost. It is impossible to distinguish between the cost of producing large or house coal and the cost of producing slack from the same working-place. The total price received must be such as to return in the long-run at least the cost of production of both ; but their relative prices, subject to that condition, are determined by the relative demands for them. If cost of production rises, the greater part of the increased cost will be allocated to that one of the joint products—best screened or house, in the case of coal—for which the demand is the more intense, and which, therefore, will attract a higher price.
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CHAPTER IT. COST OF PRODUCTION OP COAL. TAfiP, pAGE 1. Definition .. .. .. 24 4. Other Costs— continued. 2. TotalOostanditsOhangesduringthe Period 25 (vi.) Depreciation and Sinking-fund 3. Direct Labour-cost . . . . . . 26 Charges .. .. 31 4. Other Costs .. .. . . 28 5. Relation of Lost Time to High Cost, (i.) Stores and Materials .. .. 28 Increased Cost, and Output ~ 81 (ii.) Maintenance and Renewals . . 20 (i.) Classification of Lost Time . . 31 (iii.) Rates and Taxes .. .. 29 (ii.) Shifts lost by Miner .. . . 31 (iv.) Administration .. .. 30 (iii.) Time lost by Mines .. .. 32 (v.) Royalties .. .. 30 (iv.) Changes and Causes .. .. 33 1. DEFINITION. References 1 and 2 are most conveniently taken together, witli due regard to the distinction (]) between the production and the distribution of coal, and (2) between the present costs of production and of distribution and the previous cost levels, both before and during the war period. Production is taken to mean all the processes involved in bringing the coal to the point whence it is passed on to the ooal-dealer, wholesale or retail. Therefore the costs of production include all costs, direct and indirect, up to the point f.o.b. or f.o.r. at the mine, freight to market usually being paid by the dealer, and in all cases being easily separated and measured and allocated to distribution-costs. Some companies, however, with mines situated a certain distance from the nearest main railway-line or seaport include in their costs of production the haulage (railway) charges from the mine-mouth to the railway junction or the seaport. For some purposes of this report this definition has been accepted ; for others these haulage charges have been deducted. Wherever it is necessary to do so in the report a note is made as to which cost is referred to in the immediate text. The cost of distribution is denned as the expense involved in the transport of coal and dealing in it from the point of delivery by the mine-owner to delivery into the consumer's bin. For the purpose of assessing the cost of production the Board obtained from the owners of the principal coal-mines in the Dominion an analysis of the output and the cost of mining coal over the period 1913-18. This cost is worked out per ton to a small fraction of a penny for each mine for each of the following particulars :— (1.) Coal-winning : Hewing, trucking, other labour, mine-management. (2.) Haulage. (3.) Screening and weighing. (4.) Maintenance. (5.) Development. (6.) Other costs to f.o.b. or f.o.r. (7.) Stores and materials. (8.) Royalties : (a) Crown, (b) private. (9.) Rates and taxes. (10.) Insurance. (11.) Miners' Relief Fund. (12.) Depreciation. (13.) Administration. (14.) Interest (loans or overdraft). (15.) Total mining-costs. (16.) Mine-owners' profit. (17.) Selling-price f.o.b. or f.o.r
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2. TOTAL COST AND ITS CHANGES DURING THE PERIOD. Table 15 gives the names of the principal collieries or groups of collieries from which complete returns were obtained with their output each year of the period under inquiry. The date in column 1 is that of the end of the company's financial year. This table should be compared with Tables 3, 4, and 14.
Table 15. —Output of Coal of Principal Collieries, 1913-18.
Eight mines, among them most of the largest, show a diminished output during the period. Table 16 shows the complete cost of production per ton of coal mined in the chief mines of the Dominion for the years 1913 to 1918 inclusive. In each case the figures are for the financial year of the mine.
Table 16. —Cost of Production per Ton at Principal Mines, 1913-18.
It should be noted that though comparable horizontally or across the page in respect of different years at the same mine, the amounts in this table and subsequent similar tables are not exactly comparable vertically or down the page, because (1) the mines are at very different stages of development and of varying ages, (2) they are not all producing the same kind of coal, and (3) their financial years, to which the amounts relate, end at different dates, sometimes remote from one another,
4—H. 44a,
Output. Company or Mine. 1913. 1014. 1015. 1010. 1917. 1918. Westport (30th September) Westport-Stockton (31st December) Blackball (31st December) Paparoa (31st August) Tons. 638,963 93,508 143,836 31,869 (31st December) Tons. 521,772 149,633 217,437 50,243 Tons. 615,184 147,018 210,896 43,427 Tons. 512,686 183,132 203,647 32,178 Tons. 484,340 166,716 132,515 33,290 'Tons. 460,993 156,575 121,259 42,668 Liverpool (31st March) Point Elizabeth (31st March) .. Tyneside (30th September) Northern (30th September) Hikurangi (31st December) Taupiri (31st March) 162,373 34,370 55,054 42,676 218,128 (31st December) 109,471 31,325 61,093 45,236 233,933 85,067 116,926 28,190 49,112 64,274 230,936 116,566 125,475 17,285 61,660 48,277 229,109 130,224 127,324 15,758 48,383 124,694 111,671 16,551 50,438 65,361 211,111 182,084 Pukemiro (31st August) Waipa (31st January) Homebush Kaitangata (20th February) 9,732 140,224 (20th February, 1914) 88,453 56,000 8,210 139,685 99,000 8,999 127,880 60,810 89,500 11,837 105,063 86,314 81,100 16,248 93,696 112,264 66,500 10,092 55,105 (six months to 31st August) 60,818 Nightcaps (30th September) 69,953 66,041 79,927 75,666
Mine. Mil inng-eost of Production per Ton. 1913. 1914. 1915. 191(1. 1917. 1918. Increase per'Cent. Increase. £\. B C D V. s. d. 13 5-99 10 10-95 14 4-82 12 4-5 15 6-23 12 6-43 10 0-17 13 5-43 s. d. 14 0-29 10 1-17 16 2-5 10 3-5 16 1-42 11 5-42 8 8-9 13 0-38 8. d. 12 10-7 10 8-8 16 10-78 11 8-25 15 5-64 11 2-23 8 10-69 13 6-51 s. d. 11 2-98 13 4-5 18 0-04 11 10-0 16 8-65 12 6-44 9 11-22 17 1-48 s. d. 11 1-66 16 5-19 19 4-86 19 9'5 19 4-58 14 5-31 12 3-29 20 9-79 s. d. 11 3-3 17 10-21 22 7-61 14 4-5 23 3-77 16 2-444 13 1-91 20 11-49 (6 months) 10 6-25 10 6-6 20 (fall) 63-6 57-2 16-2 50-2 29-25 31-66 56-0 8. d. 2 2-69 (fall) 6 11-26 8 2-79 2 0-0 7 9-54 3 8-01 3 1-74 7 6-06 m ¥ X 1 G H I J 6 5-5 6 11-75 8 11-5 6 9-62 9 5-4 6 7-62 9 4-1 8 4-5 9 1'8 63-0 18-0 (5 years) 4 0-75 1 7-1 K L 8 ' 4-5 7 10-1 8 6-7 9 8-9 11 2-3 10 7-3 26-V 5 (vears) 59-0 (5 years) 6-6 (3 years) 7-5 (4 years) 2 2-8 M 16 0-41 20 9-39 17 7-44 17 7-50 25 6-21 9 5-8 N 17 1-7 18 5-8 18 3-3 1 1-6 O 14 2-24 12 10-52 13 6-66 15 3-99 1 1-75 ♦Highest (to nearest penny) *Lowest (to nearest penny) ♦Mean (to nearest penny) 15 6 16 3 10 11 18 0 20 10 23 4 50-5 7 10 6 6 7 0 6 10 6 8 8 5 10 6 61-6 4 0 12 6 11 5 11 8 12 6 14 5 16 2 29-3 3 8 * Of ;he mines gr ing returns foi six years.
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In using this and similar tables the reader should bear in mind the note to the introduction, p. 2 above. Each mine or company is not indicated by the same letter throughout the tables —e.g., Mine Am one table may appear as Mine Jin another. In some cases — e.g., where a company works two or more contiguous mines—a letter may refer to more than one mine, though such grouping is only occasionally made. The average mining-cost per ton increased in every case except in the case of Mine A (the Point Elizabeth State Mine), where the cost fell 20 per cent., due to the fact that there was no development work to undertake, and the miners wore mainly on pillar-work and with less travelling-distances, as the mine was nearing exhaustion. The lowest rate of increase, omitting Mine N, is 1\ per cent, (fouryears' period only), and the highest 63-6 per cent. For those mines giving data for the whole period, including 1913, there is a wide range of change between the extreme limits of Bs. 3d. increase per ton and 2s. 3d. fall, equal to 10s. 6d. The rate of increase of the mine occupying the middle place is 50-2 per cent. The greatest increase is shown in the cost of producing brown coals. The above table sets out the facts of mining-cost in respect of each mine or group of mines under one management, and indicates the nature and range of variation in each over the period, but it does not give a figure purporting to measure the increase in the cost of mining coal for the industry viewed as a whole. This may be calculated by weighting the average cost at each mine for each year by the output of the mine for the year, and so obtaining an average annual cost per ton for all mines. Calculation from the data available from the mines giving particulars of their costs over the whole period under review showed that the average cost of mining coal increased by over 37 per cent, comparing the years 1913 and 1918 — i.e., from about 13s. 6d. to 18s. 7d. per ton. The cost in question, however, included the rail freight in the case of certain mines selling their coal f.o.b. at neighbouring ports. In order to arrive at the change in the true mining-cost these freight charges have been deducted, giving a result of 41-per-cent. increase in pure mining-cost, or from about 11s. 9d. per ton to about 16s. 7d. From these results and certain other evidence the Board is of opinion that the, total average cost of 'production fer ton of coal at these mines has increased between 1913 and September, 1918, by about 40per cent. The cost of mining semi-bituminous coal has increased least, owing largely to the favourable position of the Point Elizabeth Mine, which is nearing exhaustion and working mainly on pillar coal, with shorter travelling-distances for the miners, and with little or no depreciation and taxation charges. The cost of mining both brown and bituminous coals has increased above the average rate of increase, the latter very slightly, the former very much above it. These mines are thoroughly representative of the industry as a whole during the period, except that their data gives an undue weight to increases in the cost of brown coal. The largest proportionate increases in cost occurred during the two years 1916-17 and 1917-18. So far the comparison has been one of the cost of coals obtained from mines supplying cost data over the whole period 1913-18. If we compare the costs of all coals for which exact particulars were available in each year, whether from collieries working over the whole period or not, the results are slightly different, though showing the same general character. On the average, judging from this data,* it cost about 31 per cent, more to mine coal in 1917-18 than in 1913, representing a change of from 11s. 9d. to 15s. 4d. per ton. This cost actually fell during 1913-16 ; in 1916-17 it rose 12 per cent, above that of 1913; and in 1917-18 it rose 31 per cent. more. One-third of the rise is due to increased labour-cost, as noted below. The cost of producing bituminous coal increased 40 per cent. ;it did not rise till 1916-17, when it increased 17 per cent. The cost of mining semi-bituminous either decreased or remained much the same till 1917-18, when it rose 31 per cent.- higher than in 1913. The cost of producing brown coal had risen 13 per cent, by 1916-17 and 25 per cent, by 1917-18. The total cost of production was highest throughout the period in. the case of bituminous coal and lowest in the case of brown coal (except for one year). The labour-cost throughout was greatest in the case of brown coal; for three out of five years the labour-cost of producing bituminous coals was less than that of mining semi-bituminous coal. 3. DIRECT LABOUR-COSTS. Of the total cost a considerable percentage is represented by the wages of miners, truckers, other underground workers, and the surface workers about the mine. This cost may be referred to as the direct labour-cost. Table 17 gives the actual amounts paid per ton for such labour, and the percentage which such payment in each case is of the total cost of production. This is important as showing, among other things, how much of the value of a ton of coal goes as wages to manual labour employed directly in and about the mine. Tabus 17. —Total Direct Labour-cost per Ton of Coal mined, also expressed as Percentage of Total Cost. (Total cost per ton for the purpose of this table does not include railway freights from mines to selling-point f.o.b. in this case, but includes all other costs, including administration, &0.,.f0r which companies have incurred actual charges.)
Mine. 1913. 1914. 1915. 1916. 1917. 1918. Increase per Cent. Increase. A . . B .. s. d. 6 2-14 47 4 11 38 5 10-58 59 5 1-9 52J a. d. 6 0-89 44 5 1-28 37 6 4 61 4 7-65 50 s. d. 6 0-09 45 5 2-94 40 5 7-44 62 4 10-91 58 8. d. 6 5-2 51 5 8-53 41 6 2-32 61 5 6-53 59 s. d. 7 2-74 43 5 6-3 33 7 11 65 6 4-8 56 s. d. 8 174 40 6 1-65 30 9 1-58 69 7 1-88 54 31-8 24-8 s. d. 1 11-6 1 2-65 f! .. 56 3 3 V .. D .. 38-8 1 11-98 • The defect! showing the percei s in the data fc ntage increase of n- 1913 arc si cost over the ich as to raise unduly the flgi period. ires of cost of that base year, and so dimin isll the number
27
H.—44a.
Table 17.—Total Direct Labour-cost per Ton of Coal mined, etc.— continued.
It will be seen that the average direct labour-costs, with the exception of Mine E (Point Elizabeth), increased. The lowest rate of increase is 3 per cent., and the highest 78' I per cent. There is considerable variation in the rate of increase when we compare mines even on the same field, or mines owned by the same company, the differences being due largely to the different stage of development of each mine. The percentage which labour-cost is of total cost has increased considerably, except at Mine J, Mine I, and Mine L, at which it has decreased, and at Mine 0, where it is about the same. The percentage increase in labour-cost is less than the corresponding increase in total cost at nine mines out of fifteen.
Table 18. —Increase in Labour-cost, other Cost, and Total Cost per Ton of mining Coal, 1913-18.
The figure which gives the closest measurement of the increase in the cost of the manual labour directly applied to the production of coal in and about the mines over the period 1913-18 is that obtained by weighting the average yearly labour-costs per ton at each mine according to the relative importance of the output of the mine in the total output and comparing the results. From the data provided by those mines giving particulars of labour-costs over the whole period it is clear that the cost of the manual labour employed in and about these coal-mines increased during the period 1913-18 by 31 per cent. — i.e., from about ss. lid. to about 7s. 9d. per ton. This result is in close agreement
Mine. 1913. 1914. 1915. 1010. 1917. 1918. Increase per Cent. Increase. E .. s. d. 6 4-19 54J 5 8-92 59 4 9-9 42£ 5 10 60 8 4-55 63£ 5 1 79 s. d. 6 0-61 46 s. d. 5 8-95 52 s. d. 5 I -37 54 s. d. 5 6-81 61 s. d. 5 8-85 63 7 4-32 43 8 7-14 42 8 2 71 11 7-33 58£ 7 8-25 73 6 6 36 6 2-4 47 7 2-48 68J (March 31) 6 3-37 56 5 6 51* 15 0 65 10 e; d. 0 7-34 (decrease) 1 7-4 F .. (decrease) 28-2 G .. H .. 1* .. 5 8-71 43 5 4 09 8 1-87 03 5 4-75 m 5 11-6 42 5 5 61 8 5-96 50_ 5 4-5 79 7 0-91 46 6 0 67 10 4-06 58 5 2-37 78A 6 3 44 5 9-25 53 6 6-72 70 7 6-94 44 No details 12 2-47 59 6 3-37 751 6 8 43 6 203 54_ 7 2-93 79 78-1 40 38-5 3 9-24 2 4 3 2-78 J .. 51-25 2 7-25 K .. 4 0 3 L .. 0 0-79 51 6 6-22 08 3 0 1-61 M .. 7 4-27 (1918 to Aug. 31) 5 8-23 63i 27-3 1 8-04 N .. 5 3-32 5 6-73 19 1 0-05 O .. P .. 4 1-4 50 9 5-74 59 4 1-7 53 11 7 50 4 5-7 52J 11 0-7 63 4 10-8 50i 10 2-8 58 (3 years) 33-6 (5 yoars) 58 (5 years) 1 4-6 5 6-20 ■(■Highest (to nearest penny) f Lowest (to nearest penny) •fMean (to nearest penny) 8 5 11 7 37-6 3 2 4 10 5 9 19 0 11 5 10 8 2 40 2 4 * A railway iharge of 3}d. to 7_d. a ton i: the total cost has been ign< wed. t Of tl l'e mines givini data for the lix years.
Increase in Labour-cost. Increase in T< >tal Coat. Mine. Per Cent. Increase in other Costs. Amount. Amount. Per Cent. A .. B .. C .. s d. 1 11-98 3 3 0 7-34 (decrease) 3 9-24 2 4 38-8 56 10 s. d. 1 8-03 0 1-26 (decrease) 1 7-35 (decrease) 4 5-55 0 0-25 (decrease) 0 0-85 s. d. 3 8-01 3 1-74 2 2-69 (decrease) 8 2-79 2 3-75 29-25 31-66 20 D.. E .. (decrease) 78-1 40 57-2 18-7 F (5 years) .. G (3 years).. H (5 years).. I (5 years) .. T 1 6-25 1 0-05 1 4-6 6 6-26 3 2-78 2 7-25 1 2-65 0 3 0 1-61 1 11-6 1 7-4 26-7 19 33-6 55 38-5 51-25 24-8 4 3 31-8 28-2 1 7-1 18 J .. K.. 0 9-2 3 11-54 4 3-28 1 5-5 2 2-8 9 5-8 7 6-06 4 0-75 7 9-54 1 1-6 1 1-75 7 9-54 6 11-26 26-7 59 56 63 50-2 6-6 7-5 50-2 63-6 L .. M (3 years) N (4 years) n 0 io-6 0 0-14 o .. 5 .3-86 p ..
H.—44a
28
with the results obtained by other methods, as, for example, by a comparison of the total yearly wages bill at each mine over the period with the output of the mine. The increase in labour-cost of the mines giving data over the whole period, both in absolute amount and in percentage rate, has been greatest in the case of brown coal, and lowest in respect of semi-bituminous coal. The increase in semi-bituminous is about Is. a ton, or under 20 per cent. ; in bituminous about Is. 9d., or about 30 per cent. ; and in brown coal over 35., or nearly 50 per cent. In 1913 bituminous coal was subject to lower labour-cost per ton than semi-bituminous by a few pence, both averaging between ss. 6d. and 6s. ; in 1918 labour on bituminous was dearer by a few pence than tbiit on semibituminous, each having increased to about 7s. sd. and 7s. respectively. The difference in the labour-cost of bituminous and brown coals is now more than double what it was in 1913. It would appear that of the average increase in the total mining-cost of all the mines giving data, from and including 1913 to September, 1918, that nearly 39 per cent, is due to increased direct labourcost and a little more than 60 per cent, to increases in other costs than that of wage-labour employed at the mines. When we take account of all coal concerning which we were able to obtain exact particulars of mining - cost, both from mines giving returns or operating over the whole period and from those which could provide such data only for part of the period, we find that the labour-cost in 1918 compared with that in 1913 shows an increase of about 20 per cent. The average labour-cost for 1914 was 4 per cent, less than for 1913 ; for 1916, about 4 per cent, more ; for 1917, 14 per cent. ; and for 1918, about 20 per cent. The labour-cost of bituminous coals from these mines increased on the average by about 28 per cent., or Is. 7d. a ton. It was lower in 1914 than in 1913; i<l 1916 it was 8 per cent, higher than in 1913 ; in 1917, 16 per cent.; and in 1918 (to September), 28 per cent. Semi-bituminous coal increased in labour-cost from about 6s. to Bs. 2d., or 36 per cent., and brown coals about 13 per cent. The labour-cost of brown coal in 1918 was nearly 30 per cent, higher than the recorded 1914 cost. The comparatively low increase in brown coals between 1913 and 1918 is due to the fact that in 1913 no account was taken of those mines which were in an abnormal condition, and that in the subsequent years collieries have been opened up which contribute a fair proportion of the supply at a comparatively low cost. On the average the increase in the labour-cost of all coals forming the subject of inquiry in any year, whether from mines operating throughout the period or not, is about Is. 2d., or almost one-third, of the increase in the total mining-costs. In all these cases the averages are true averages obtained with dvie regard to the relative outputs of the respective collieries. 4. OTHER COSTS, (i.) Stores and Materials. The other elements in cost besides the direct payments to labour have also shown rises over the period. The facts in regard to the more important of them are summarized in the following tables and notes. Table 19 shows the cost, per ton of coal mined, for stores and materials at each of several principal collieries averaged over each year of the period under review, with the amount of increase or decrease, comparing the first and last years of the period for which returns were available in the case of each company. The highest and lowest cost for each year is stated at the foot of the table so as to give a clear idea of the range within which these costs vary from mine to mine. As in all other costs, such variation is caused mainly by differences, first in the natural conditions of the mines, including the nature of the coal itself, and, secondly, in the stage reached in the life of the mines, a new mine, for example, requiring to spend a much smaller (or a much larger) proportion of its total cost on certain given factors or work than an older mine.
Table 19 .—Increases in Cost, calculated per Ton of Output, of Stores and Materials (including Timber), 1913-18.
Mine. 1913. 1914. 1915. 1916. 1917. I 19J8. Increase or Decrease. A s. d. 0 11-75 0 6-88 s. d. 0 10-96 0 7-97 s. d. 0 10-96 0 7-97 0 10-87 0 5-2 s. d. 0 10-88 0 6-75 s. d. 0 10-88 0 6-75 1 0-73 0 5-5 s. d. 0 11-02 0 8-11 1 0-48 0 7-11 0 8-6 0 7-57 0 9-45 1 0-82 0 9-01 1 3-05 s. d. 1 0-19 0 9'02 2 0-13 0 9-22 1 2-4 0 8-57 0 9'08 1 5-02 0 6-11 s. d. 1 2-26 0 9-75 2 4-08 0 9-75 1 3-3 0 11-02 0 9-84 1 7-37 0 9-24 s. d. 0 2-51 0 2-87 1 5-21 0 219 0 6-7 0 4-06 0 1-99* 0 11-1 0 2-52f B n 0 7-56 0 10-87 0 5-2 1 0-73 0 5-5 c D E 0 6-96 0 11-44 0 9'58 1 063 1 0-675 0 7-68 0 10-28 0 10-32 0 11-36 1 5-19 F G H (including renewals) .. I J K L (and repairs) M N 0 11-83 0 8-27 0 6-72 1 3-05 0 6-96 0 11-44 0 9-58 1 0-63 1 0-675 0 7-68 0 10-28 0 10-32 0 11-36 i 1 5-19 1 5-55 0 11-4 1 8-65 2 11-95 I 3-96 0 10 0 9-75 1 1-21 0 10 0 9-75 1 1-21 0 6-7 0 9-64 1 1-61 0 6-7 0 9-64 1 1-61 0 6-9 0 6-32 2 2-9 0 8-9 1 0-99 2 10-57 0 1-4 0 10-9 1 7-99 Highest Lowest 1 3-96 0 6-72 1 1-21 0 5-2 1 1-21 0 5'2 1 5-19 0 5-5 1 5-19 0 5-5 2 2-9 0 6-32 2 10-57 0 6-11 2 11-95 0 9-75 1 7-99 0 1-99* * Decrease. t increase.
29
H.—44a
There is a wide range in the cost as between different collieries at the same time, the ratio of lowest to highest being not lower in any year after 1913 than Ito 2|. The variation in the percentage increase over the period is accounted for by the fact that some companies had fortunately bought heavily for future delivery just before the outbreak of the war, or had. heavy stocks on hand. The rise in the prices of materials used in mining has been very heavy. A table in Appendix C gives the prices of materials used at the State collieries from 1914 to 1918. These prices have increased 144 per cent. The prices paid for stores and materials for other large mines on the West Coast showed an increase of about 125 per cent., calculated on the cost at the central ports and not including the large rise in coastal freights and other final delivery charges. The prices quoted on the North and the South fields averaged about 200 per cent, increase. The range of change has been very wide, some materials in common use having quadrupled in price, others rising by as low as 25 per cent. The precise rise in cost per ton varies in part according to the degree to which the several mines had bought, whether heavily or not, just previous to the outbreak of war. The expenditure on stores and materials formed about 10 per cent, of the total mining-cost in the case of the mine with highest stores-cost per ton in 1913 ; in 1918 this expenditure at the same mine, still showing the highest figures in respect of this particular cost, was about 15 per cent, of total cost. The corresponding percentages in the case of the mine with lowest stores-cost are 4 and 2. Where materials have deteriorated in quality as well as risen in price, as in the case of explosives, the tendency to raise the cost of the coal produced per ton is increased. Some mines required a very much heavier expenditure on timber than others. (ii.) Maintenance and Renewals. Table 20 gives similar information in regard to the cost of maintenance and renewals.
Table 20. —Cost of Maintenance and Renewals per Ton of Coal-output, 1913-18.
There is a remarkably wide, variation from mine to mine in maintenance and renewal cost per ton. The chief factors are the age of the mine and the general natural conditions, the latter exerting an even greater influence than the former. There has been on the whole a considerable increase in these costs over the period, due mainly to increased cost of materials and of labour. In the case of the mine with highest maintenance cost, the proportion which that cost formed of the total miningcosts in 1913 and 1918 was 10 per cent, and 18 per cent, respectively ; in the case of the mine with lowest maintenance costs, the proportion is a very small fraction of 1 per cent, at each of these years. (iii.) Rates and Taxes. The variation in the ratio of taxation to amount of output is shown in the following table :—
Table 21.—Expenditure per Ton of Output on Rates and Taxes, 1913-18.
Mine. 1913. 1914. 1915. 1916. 1917. 1918. Increase or Decrease. A B .. C D .. a. d. 0 0-04 0 0-04 1 2-69 I 1-64 s. d. 0 0-05 0 0-05 0 11-10 0 9-26 s. d. 0 0-02 0 0-47 0 9-78 0 6-11 s. d. 0 0-03 0 0-07 1 1-84 0 11-31 0 5-3 0 1-61 0 2-79 0 3-97 s. d. 0 0-09 0 0-13 1 9-45 0 4-33 0 8-6 0 1-99 0 2-21 0 5-88 8. d. 0 0-06 0 0-03 3 0-1.3 0 2-80 1 5-7 0 2-38 0 1-97 1 2-63 S. d. 0 0-02 0 0-01* 1 9-44 0 10-84* 1 0-4 0 0-47 0 0-07* 1 1 -42 E F 0 1-91 0 2-6 0 0-24 0 1-33 (I 2-35 0 0-86 G 0 2-04 0 1-21 H I ,1 (including stores, freights, &o.) .. K (including railway) I 0-66 0 5 0 1-93 1 3-03 0 5-3 0 1-2 0 9-99 0 4-9 0 1-38 0 6-71 0 6 0 5-1 I 8-38 0 7 1 0 0 1-72 0 2 0 10-07 L M .. .. Highest Lowest 1 2-69 0 0-04 I 6-66 0 0-05 .1 3-03 0 0-02 I I -84 0 0-03 1 9-45 0 0-09 3 0-13 0 0-03 I 9-44 0 10-84* •Deci ;ase.
Mine. 1913. 1914. 1915. 1916. 1917. 1918. Increase or Decrease. A s. d. s. d. 0 3-19 0 4-62 0 3-39 0 1-98 0 1-6 0 1-47 s. d. 0 5-29 0 3-87 0 2-17 s. d. 0 9-51 0 2-62 0 3-12 0 0-5 0 2-31 0 1.89 0 0-9 0 3-71 0 9-575 0 1-81 8. d. 1 3-9 0 8-94 0 6-51 0 0-5 0 2-09 0 1-91 0 1-67 0 4-56 s. d. 2 0-66 0 8-15 0 7 0 0-4 0 2-27 0 1-95 0 1-33 1 1-87 s. d. I 9-47 0 4-76 0 5-4 0 0-lf o o-i-j-0 0-2-j-0 0-77 0 10-51 0 2-7 0 0-69 B C D E* .. .. .. F* .. G H (including insurance and rent) .. T 0 2-15 I 0 2-18 0 0-56 0 0-67 0 3-36 0 5-37 0 6-875 0 4-25 0 1-82 '.'. 0 'i-4 0 0-56 0 2-59 0 3-17 0 2-37 0 2-33 0 0-76 0 7-06 0 4-81 0 1-81 I 0 0-83 0 2-51 1 6-9 0 11-7 J K 0 7-7 0 10-6 I 0-9 0 7-3 L M N .. O 0 5-61 0 8-79 0 8-8 1 1-48 1 0 0 10-89 Highest Lowest 0 6-875 0 5-37 0 0-56 ! 0 0-56 I 0 7-7 0 0-76 0 10-6 0 0-5 1 3-9 0 0-5 1 6-9 0 0-4 1 9-47 0 0-2f
H.—44a,
30
The expenditure on rates and taxes on the production of coal has increased considerably during the war period, between fourfold and fivefold, if account is taken of the widely varying total amounts paid by the different collieries. The taxation charge on the average accounts for from 6to 7 per cent, of the total cost of mining coal. In the case of the company with the highest tax-cost in 1913, taxation represented 5 per cent, of total cost; in the corresponding case for 1918, 14 per cent. Part of the taxation charge is levied on income which varies greatly, and part on capital values which are not subject to such rapid variations as income. (iv.) Administration. This is the cost of management in the widest sense of the term, and includes office and clerical charges.
Table 22.—Cost of Administration, 1913-18, per Ton of Coal-output.
This particular charge shows only a small average increase, despite the falling off in output, which would tend to increase the cost per ton of administration in common with all standing charges. The companies have evidently exercised economy in respect of these costs. In 1913 the highest charge formed about 11 per cent, of the total mining-cost of the coal in question ; the. corresponding figure for 1918 is about 10 per cent. ; the corresponding percentages for the mines with the lowest cost are under 1 per cent, for 1913 and 1 \ per cent, for 1918. The wide range between highest and lowest cost in the above table is due in part to difference of custom as to the contents of administration charges among some of the companies. The high administration charges of the State mines are due partly to the inclusion of hulk-costs in this item.
(v.) Royalties and Rents. Table 23. —Expenditure on Royalties per Ton, 1913-18, of Total Output.
The range of change is nearly 7|d. a ton. The change is due in some cases to variations in the proportions of coal mined by a company from its freehold and its leasehold ; in others to the merging of rents into royalties ;in others to the taking-up of new leases. Royalty accounted for 2$ per cent. of the total mining-cost of the company with the highest royalty charge in 1913, and 4 per cent, of the similar cost in 1918 ; the corresponding percentages for lowest royalty are If and 2J.
Mine. 1913. 1914. 1915. 1916. 1917. 1918. Increase or Decrease. a. . . s. d. 0 2-05 1 1-09 0 9-91 s. d. 0 3-1 0 10-11. 0 7-34 s. d. 0 2-36 0 8-65 0 7-71 s. d. 0 2-78 0 8-44 0 8-09 0 6-4 0 4-39 0 5-61 0 6-3 0 4-02 0 7-125 0 2-06 s. d. 0 3-59 0 7-57 1 1-18 0 7-8 0 8-99 0 6-26 0 8-09 0 5-37 s. d. 0 4-49 0 6-92 0 11-81 0 6-8 1 0-64 0 7-81 1 10-4 0 6-02 s. d. 0 2-44 0 6-17t 0 1-9 0 0-4 0 0-74f 0 ll-26f 1 1-21 0 1-39 0 0-125 0 0-29 B C D 1 1-38 0 9-53 0 10-99 0 4-49 0 7-7 0 2-03 E* 1 7-07 0 9-19 0 4-63 0 7 I 1-76 0 9-21 0 5-94 0 8 0 1-81 ru~ w* D~ PI IT H I 0 2-33 0 2-1 1 0-1 0 5-4 0 5-27 1 1-12 J K 0 6-4 0 9-13 0 11-76 0 3-7 1 9 0 11-86 0 4-4 0 8 1 3-16 0 4-6 0 6-36 1 2-01 0 If 0 3-86t 0 2-12 L M o ii N . .. 0 .: Highest Lowest 1. 7-07 0 2-05 1 1-76 0 3-1 1 9 0 2-03 1 3-16 0 2-78 1 2-01 0 2-33 1 io-4 • 0 2-1 1 ' 1-21 0 11-26-f • Sti ite mines. t Dccre; le.
Mine. 1913. 1914. 1915. 1916. 1917. 1918. Increase or Decrease. J 1 Al .. A2 .. B (including relief) a. d. 0 6 0 6 0 6-5 0 6 S. d. 0 6 0 6 0 6-52 0 6 s. d. 0 6 0 6 0 6-42 0 6 s. d. 0 6 0 6 0 6-8 0 6 0 6 0 1-35 0 3-95 0 1-51 0 0-925 0 5-08 s. d. 0 6 0 6 0 6-53 0 6 0 6 0 1-28 0 4-51 0 4-4 8. d. 0 6 0 6 0 6'4 0 6 0 6 0 2'28 0 5-4 s. d. 0 0-11 C D F * G - .. H .. 0 4-73 0 5-6 0 2-55 0 3-7 0 5-02 0 2-56 0 1-05 0 6-52 0 1-52 0 4-63 0 1-81 0 2-25 0 6-58 0 l-42f 0 0-67 0 2-93 0 l-635f 0 0-6-f I J (including rent) K L .. M N 0 0 7-8 0 10-4 0 4-44 0 6 0 6-8 0 9-8 0 4-34 0 6 0 7-3 0 6-2 0 4-36 0 6 0 6-56 0 8-2 0 5-05 0 4 0 6 0 8-53 0 5-92 0 7-5 0 8-2 0 6 0 4-26 0 6 0 0-4 0 4-48f 0 0-02f 0 4-28 0 6 Highest Lowest 0 6-5 0 2-55 0 10-4 0 3-7 0 .9-8 0 1-52 0 7-3 0 0-925 0 8-2 0 4 1 0 0 5-4 0 2-93 0 4-4f * State mine. t Decrease.
31
H.—44a
(vi) Depreciation and Sinking-fund Charges. Table 24.—Expenditure per Ton Output on Depreciation and Sinking Funds of Coal-mines, 1913-18.
Comparison, of the figures given in the above table is rendered almost impossible by the fact that the companies make provision for depreciation only as the condition of their balances allow, and seldom follow any other fixed principle in assessing this allowance. There have been decreases during the period in respect of some collieries, but this, except in one case, does not imply that the cost is actually decreasing, but only that it has not been fully allowed for. The highest costs are in the case of the State mines, where adequate allowances have been made. 5. RELATION OF LOST TIME TO COST OF PRODUCTION AND OUTPUT. (i.) Classification of Lost Time. Among the causes of both the high cost of production and the increase in that cost during the period a prominent place was assigned by some of the mine owners and managers to the amount of time voluntarily lost by the miners. If such lost time could be diminished there would be not only a lower cost per ton, but a greater output, both results tending to lower the price of coal to the consumer. The cost of production per ton falls the nearer the full working-limit of a mine is reached. If all the working-places were fully manned at every shift worked by the mine the cost of production per ton would approach the minimum possible at that time, since all standing charges would be spread over the maximum possible output. Conversely, the further the departure from the limit of full working the higher the per ton mining-cost. The average number of shifts worked (or lost) per miner per week is therefore an important factor in determining the cost of production. In this connection it is necessary to draw certain distinctions. There is, in the first place, the number of shifts (or days) per year worked by the mine. This varies from time to time, as well as from mine to mine, according to such factors as weather (particularly in localities subject to floods and those dependent upon bar harbours for shipping-facilities) and-the degree of industrial peace or unrest. When a mine is " idle " only certain shift-men are employed in and about it. In the next place, there is the average number of shifts worked per week by the miner expressed as a percentage of the number of shifts worked by the mine itself. In regard to this latter figure we must further distinguish between the absolute amount of time lost — i.e., the difference between the number of times the mine was open and the average number of shifts worked per miner—and any increase or decrease in that amount during the war period, since a. certain amount of absence may be a necessary condition of the miner's health and maximum efficiency, and that amount may not have been realized at a given time within the period. (ii.) Average Percentage of Possible Shifts lost by Miners. General statements in evidence assessed, the time lost by miners at about 10 per cent, of the possible working-time, and alleged that it had shown an increasing tendency during war-time. Analysis of. the mine-records supported these statements in many cases, though in some the position showed improvement since 1914. At one large mine the percentage of time lost had nearly doubled between 1913 and 1918, as shown in the following table: —
Table 25.
Mine. 1913. 1914. 1915. 1916. 1917. 1918. Increase or Decrease. .tt. . . B s. d. 0 9-93 0 11-2 0 1-34 s. d. 0 10-32 1 0-84 0 5-63 s. d. 0 10-27 0 6-41 0 3-72 s. d. 0 9-82 0 6-77 0 103 0 5-6 1 7-49 1 2 s. d. 1 0-88 0 4-32 0 1-51 0 5-5 1 3-95 0 4-95 s. d. 1 6-69 s. d. 0 8-76 0 11-20 0 0-13 0 l-3f 0 8-41 1 2-02f 0 7-13f 0 5-33 0 2-071 0 2-2f 0 2-1 C D 1 10-82 1 8-03 0 1-47 0 4-3 2 7-23 0 0-29 E* .. 1 2-31 0 7-13 0 6-04 1 8-99 JiF* .. rj" G 0 3-54 0 7-18 0 11-2 0 6-2 0 8-28 0 6'23 0 6-5 0 9-85 0 7-64 1 2-35 0 11-37 0 5-11 0 9 0 8-3 H I T 0 7-6 0 7-15 0 8-8 0 5-22 (Feb., 1918) 0 5-78 K (Feb.-Aug., 1918) 0 4-86 L 0 4-86 Highest Lowest 1 2-31 1 8-99 1 10-82 1 7-49 1 3-95 2 7-23 0 8-76 1 2-02f •State lines. Decrease.
Year. .913-14 917-18 Po 31st March, 1918 .. i.pril to August, 1918 .. Percentage of Possible Percentage lost. Shifts worked. 93-38 6-61 90-45 9-54 90-07 9-91 87-69 12-30 Lost by Accident. 4-47 5-36 4-41 4-38 Lost otherwise. 2-13 4-17 5-49 7-87 Ilemarks. Omitting strike-time. Equal to about 7,000 tons of coal.
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At another large colliery on the same field during the year ending 26th April, 1918, over 10 per cent, of the possible working-time was lost through causes other than reported accidents and sickness, and it was stated that the miners could have increased their actual weekly earnings from £4 Is. Bd. to £4 17s. 2d. by working full time during the three months ending at that date. At two other largo collieries in another part of the Dominion the position had improved. At one of these the average number of shifts worked per week per man was as follows: — Table 26. 1914. 1918. Miners .. .. .. .. .. 4f 5| Truckers .. .. .. . . .. 5 5| Surface shift-men .. .. .. .. 5J 5f Underground shift-men .. . . .. 5| 6J Possible (for miners) . . .. .. .. 5 5f This represents a slightly higher percentage of attendance of miners even though the maximum length of the working-week had been increased. At the other colliery there was, said the owners, " little cause to complain " of lost time on the part of the miners ; for the shifts worked during the fortnight preceding our visit the percentage of lost time was 6f. At another field the percentage of shifts lost in the principal mine during the preceding twelve months was 9J ; not quite 3 per cent, of the men were absent on each working-day. Three mines on another field recorded the following data : At one the mine was idle 15 shifts out of 274 possible shifts in 1914, and for nine months of 1918 16 out of 213 possible. When the mine was working the percentage of shifts lost by the men was 4in 1914 and 6in 1918. At the second mine the average time lost per miner was reduced from 1-15 shifts to 1-12 per fortnight, and in the other there was a very slight increase of lost time from 0-9 to 0-94 shifts per fortnight. Two mines in another field both show a reduction in the average number of shifts worked per week by the miner—in the one case from 5 to 4f, and in the other from 4| to 4. In -all cases the truckers and underground and surface shift-men show a higher number of shifts worked per week than the miner, and, comparing the earlier part of the period 1913-18 with the later, they often show an increase in the average number of shifts worked per man per week when the miner shows a decrease, as, for example, in the following case :— Table 27. , Shifts per Week. , 1913-14. 1917-18. Miners .. .. .. .. .. .. .. 4-5 4'o Truckers . . .. . . .. . . .. 4-56 4-87 Shift-men .. .. .. .. .. . . 5-98 6-08 At another field two of the four chief mines show a slight decrease in the amount of time worked by miners per working-week over the period 1913-18. The two other mines show a decrease up to the early part of 1917, and an increase afterwards. (iii.) Time lost by Mines. The time during which mines have been idle has in several cases formed a serious proportion of the total time they could have worked. A valuable analysis has been prepared of the number of days that the State mines at Point Elizabeth and Rcwanui could have worked, the number of days worked, and the causes of the cessation of work. The return covers the period April, 1913, to September, 1918, for Point Elizabeth, and April, 1915, to September, 1918, for the Liverpool Mine. The time lost through pay-Saturdays, holidays, and the cavilling-time has not been included in the possible working-time as defined in the return. The Point Elizabeth Mine stood idle during 13-3 per cent, of its possible working-time, the Liverpool Mine 17-3 per cent. The following shows the number of days the mines stood idle owing to each particular cause : — Table 28. p Number of Days idle, 1913-18. oauso - Point Elizabeth. Both Mines. Strikes .. .. .. .. .. .. .. 109 146 Lack of shipping. . . . .. .. .. 48 108 Harbour unworkable .. .. .. .. 34 59 Slips .. .. .. .. .. .. 3 38J Floods .. .. .. .. .. .. 1 4 Miscellaneous .. .. .. .. . . 1\ 5| Total .. .. . . .. .. 197 \ 361 Number of days mine could have worked, p o int excluding union holidays, pay-Saturdays, Elizabeth. Both Mines - Liverpool. and cavils .. .". .. .. 1,488£ 2,432| 944 Percentage of time lost by mine .. .. 13-3 14-9 17-3
33
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The number of holidays at both mines during the period was 125, of pay-Saturdays 235, and of days lost through cavils 11 \, totalling 371 i days. The number of days worked each year by the mines is as follows : — Table 29. Year. Point Elizabeth. Liverpool. 1913-14 (31st March) .. .. .. .. .. 216 1914-15 .. .. .. .. .. .. ..246 1915-16 . . .. .. .. .. .. .. 237 222 1910-17 .. .. .. .. .. .. ..256 262J 1917-18 . . .. .. .. ~ .. .. 219 197f Annual average . . . . . . .. .. ~ 235 227 Half-year to 30th September, 1918 . . . . . . . . 117 981 The Board obtained particulars of the number of days annually worked by several important mines from 1908 inclusive. Some mines have been open for work for 10 per cent, more time per year over the war period than for the six years preceding 1914, and others have had a shorter workingyear than before the war. There has been an increase on the whole, but it would not average more than 5 per cent, for the Dominion. (iv.) Changes and Causes. The proportion of full working-time (excluding holidays, pay-Saturdays, and days the mine is idle) worked by the average miner may be estimated at a little over 90 per cent, for the earlier part of the period. During the period it has decreased at some mines and increased at others, the net result being'a slight decrease in the average attendance. At one large mine the number of shifts worked per week per miner is the same in 1918 as in 1914 ; at another neighbouring large mine it has increased by one-eighth. In the case of two other large mines, each on different fields, it has also increased by half a shift and by three-eighths of a shift, even though in both cases the number of shifts annually worked by the mines has also increased. In the case of five other large mines the average weekly attendance has fallen off by one-tenth, one-sixth, one-quarter, one-third, and one-half a shift. If we take into account the relative numbers of men employed, and the change in the number of days worked in the year at each colliery, the decrease, in the average time worked by miners during the year over the whole Dominion cannot have been considerable between 1913 and 1918. The explanation of any reduction that exists is to be found in the increase in the average earnings of the miner, and in the greater force exerted during the period by those causes which bring about any absence from work at all. An increase in money earnings tends of itself to make the miner shorten his working-time, until he may be forced to realize that the increased earnings are offset by a rise in his expenditure. The nature of a minor's work is such that he sets a higher value on leisure than the ordinary worker, and, after a certain point is reached in his income, he is prepared to forgo further earnings in return for an addition to its enjoyment, which implies a considerable rise in his standard of comfort. The use he will make of this additional leisure, and its ethical value to the community as a whole, will depend upon his temperament, education, and the general environment society has provided for him. The late Lord Rhondda, writing in 1903 on " The Growth and Direction of our Foreign Trade in Coal," generalizes thus from his own research : " There is a very human disposition on the part of the collier, not unknown among those in other walks of life, to take life.easier as income improves." He then proceeds to quote statistics showing how, as the value of the coal rose, the annual output per person employed overground and underground fell, and conversely. (Journal of the Royal Statistical Society, 1903, pp. 482-83). In New Zealand the output per person employed underground, as calculated by the Mines Department, varied to the following extent for the period under review : — Tablto 32. T Increase or Decrease per lons - Cent, on Preceding Year. 1913 .. . . ■.. .. .. .. 590 1914 .. .. .. .. .. ..639 8.3 increase. 1915 ..711 11-3 1916 .. .. .. .. .. ..750 5-2 1917 .. .. .. .. 715 4-7 decrease. 1918 .. .. .. .. .. ..703 1-7 Comparing 1917 and 1918 with 1913 there is an increase of 21-2 per cent, and 19-2 per cent, respectively in the output per man employed underground. For reasons stated in detail in Chapter V, statistics of output cannot be accepted as a measure of the percentage of possible time worked by the miner, but where increase in output accompanies a decrease in such percentage it cannot be justly argued that the latter in itself is an evil. The following comparison of output per miner per shift is calculated from returns furnished by companies:—
5—H. 44a.
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Table 33. —Output in Tons per Miner per Shift worked.
It is clear that increased output per miner per shift has in general been associated (though not necessarily as cause and effect) with any tendency to increased voluntary absence from work that may exist. An appreciable degree of voluntary absence is a feature associated with coal-mining in all countries.. It is a tradition or custom deeply rooted in the peculiar nature of the occupation, where men work deep underground for wages at a rate high enough to allow of a tolerable standard of comfort without incessant labour. It is, in our opinion, a result of the strain and disagreeableness of the work itself, and the opportunity for a certain amount of leisure offered by the comparatively high wages. Hotels, gambling, and races are not so much the causes of absenteeism as conditions favouring the easy operation of the real causes, and influencing a certain section of the mining population to spend their leisure in certain ways rather than in others. The misuse of leisure is as great among the general population as amongst miners as a body if we take account of differences in environment and the opportunities of using leisure. In a few mining-fields, where alternative methods of spending leisure are few, the prohibition of alcoholic liquors or horse-racing would probably lead to a slightly higher percentage of possible time being worked ; but the average miner is convinced that he works sufficiently long and sufficiently hard, having due regard to his health and efficiency. Any considerable improvement in annual output per man must be looked for as the result of better training of the worker, better organization of labour within and without the mines, and a more intensive application of capital in the shape of machinery, &c, rather than from an extension of the number of shifts worked per year by the miner. The amount of time lost per man per fortnight (eleven shifts) at the two largest mines in the Dominion during the year ending May, 1918, averaged lOB days in the one case for hewers, shift-men, truckers, and horse-drivers, and 1-99 days in the other for hewers, 1-12 for truckers and horse-drivers, and T32 for shift-men. At one mine 0-37 and at the other 0-38 days were lost during the three days immediately following pay-Saturday. As already indicated in Chapter I, section 5 (vii), however, figures of this nature afford no measure of the degree of absence through drink. The consumption of alcohol at certain mining settlements for which data was obtainable may be estimated approximately for the period 1913-18, averaged over the total population, as over 20 gallons of ale and beer per year, and a little under one case of wines and spirits. This is more than 100 per cent, higher than the corresponding consumption of the general population of the Dominion for the same period. But intemperance in mining communities, as among the general population, is confined to a certain section. With rising wages this section has undoubtedly spentniore money of recent years on drink, and at the same time has been able to afford more time off. Other causes of absence cannot be said to have shown any special change in their force during the war period. Accident and illness do not appear to have varied from the normal sufficiently to have caused any pronounced tendency to increased absence. The provisions- of the Workers' Compensation Act that if incapacity fiom injury lasts less than seven days no compensation is payable, and that if it lasts less than fourteen days no compensation is payable in respect of the first seven days, were the subject of general complaint by mine owners and managers as tending to increase the time off in connection with minor injuries. This law dates from a time long before 1914, and, though it probably accounts for a part of the time voluntarily lost through injury, it cannot have had any effect in changing the amount of that time within the war period.
I Increase. Mine. 1913-14. 1917-18. Decrease. 7-55J 5-6] 5-95 5-78 6-55 6-95 7-09 6-23 (1915-16) 5-5 4-38 4-7 7-55 6-75 5-6 5-47 6-39 6-88 7-81 8-23 7-92 5-25 4-25 5-1 Cwt. Cwt. 23 *7 6 c I) El ► F Q I I r 7 17 22 34 t .1 1/ 5 2* 8 In weigh ted average 6-015 6-43 84
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CHAPTER 111. THE COST OF DISTRIBUTION OP COAL. PASS M.UE ). Transport from Mino to Dealer . . 35 2. Distribution - costs from Dealer to (i.) Relation of Transport to Retail Consumer— continued. Prices .. .. ..35 (iv.) Distribution at Christchurch— contd. (ii.) Changes in Transport-costs since (b. ) Prices : Changes and Causes 46 1913 .. . . 30 (o.) Costs .. .. .. 48 2. Distribution - costs from Dealer to Con- (d.) Lignites .. .. 4!) sumer .. .. 37 (c.) Australian Coal .. .. 49 (i.) Definition and Classification of Costs 37 (/.) Increases in Cost of Con(ii.) Distribution at Auckland .. 37 ducting a Retail Business 50 {a.) General Features .. 37 (g.) Profits .. .. ..50 (6.) Prices: Changes and Causes 38 (h.) Suggestions for Improve(c.) Demand and Costs . . 38 ments .. .. 51 (d.) Newcastle Coal .. .. 41 (v.) Distribution at Dunedin .. 51. (c.) Public Apathy ... ..41 (a.) General 51 (/.) Possibilities of Improvement 42 (6.) Pricos : Changes and Causes 51 (jr.) Rates of Profit .. .. 42 (c.) Costs .. .. 52 (iii.) Distribution at Wellington .. 43 (d.) Profits .. 52 (a.) General .. .. 43 (c.) Suggestions for lmprove(b.) Prices: Changes and Causes 43 ment.. .. .. 52 (c.) Costs .. .. 44 (vi.) Distribution at Invercargill .. 53 (d.) Profits .. .. 45 (a.) General .. .. 53 (c.) Improvements suggested .. 45 (6.) Prices: Changes and Causes 53 (iv.) Distribution at Christchurch .. 45 (c.) Costs .. 54 (a.) General .. .. 45 (d.) Profits .. .. ..55 1. TRANSPORT FROM MINE TO DEALER. . (i.) Relation of the Amount of Transport Charges to the Retail Price of Coal. The New Zealand coal-mines are more or less remote from the chief consuming-centres. The cost of transportation by rail or sea is therefore an important item in the cost of coal to the consumer, and is the first in order of the costs of distribution. For example, in the case of Taupiri house coal the cost of transport puts 40 per cent, on to the selling-price f.o.r. at the mine (September, 1918), and represents 23 per cent, of the net cost of coal to the consumer at Auckland. In the case of Westport house coal at Lyttelton sea freight adds 46 per cent, to the f.o.b. cost at Westport, and railage from Lyttelton to Christchurch another 20 per cent. ; while the sea freight represents 19 per cent., and the rail charges, including the railage from mine to Westport, over 13 per cent., of the net retail price at Christchurch. (In the latter case the rail freight from Lyttelton to Christchurch is over 42 per cent, of the sea freight from Westport to Lyttelton.) The Newcastle mine price (155.) is increased by 110 per cent, by the sea carriage (16s. 6d.) to Lyttelton (133| per cent, after Ist March, 1919) ; the railage to Christchurch (ss. 6d., or one-third of the cost Newcastle to Lyttelton) represents nearly 37 per cent, of the mine price ; and nearly 10 per cent, of the retail price at Christchurch (£2 175.) s accounted for by this railage, and 29 per cent, by the sea freight. The following table shows the relation which cost of carriage boars (1) to the cost of the coal as it leaves the principal minefields, and (2) to its cost to the consumer. In each case the figures have been calculated on net price per ton ; the transport in question is carriage by rail or sea, and does not include cartage of coal from ship or truck to dealers' yards, which will be considered under another heading. Table 34.— Showing relation between Cost of Transport by Rail ob Sea and the Net Retail Price of certain Household Coals. Percentage added ~ ~.. , ~ ~.,,,, , ■..-• " ,* Percentage which hrenmt Freight between to Mme-cost* , ~ ° „ , ~ „ . h 6 . T7, . , , is or Net lletail Price. by Freight. Newcastle and Lyttelton .. .. 110 29 (Christchurch price). Newcastle and Christchurch . . . . 147 89 Newcastle and Wellington . . . . 110 32 Taupiri and Auckland .... 40 23 Taupiri and Wellington .... 77 29 Westport and Lyttelton .'. . . 46 19 (Christchurch price). Westport and Christchurch . . . . 65 27J Kaitangata and Dunedin . . . . 22| 15 Kaitangata and Christchurch. . . . 24-| Nightcaps and Invercargill . . . . 35 \ 18| Greymouth (other than State) and Lyttelton .. . . . . . . 39 19 (Christchurch price). Greymouth (other than State) and Christchurch.. .. .. .. 56 27 J * In the case of Westport and Greymouth mine-cost includes railage charges of from 2s. 3d. to 3s. from mine to port.
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In the case of certain coals the total transport charges are greater than those shown in the statistics of freight as usually quoted, since there are certain haulage costs borne by the coal company from the pit-mouth to the point f.o.b. or f.o.r. The following table gives the more important eases in which these extra costs occur :— Tablb 35.—Cost oj? Railway Haulage to Nuarest Port of Shipment PHB Ton or Coal minkd ovjsk a Recent Period. s. d. Point Elizabeth to (ireymouth . . . . . . . . ..23 Liverpool Mine ~ . . . . . . . . ..27 Blackball . . „ . . .. .. . . .. 3 0£ Paparoa .. „ .. .. .. .. ..34 Denniston (Conn's Creek) to Westport., .. .. .. ..28 Granity to Westport . . . . . . . . . . ..30 Ngakawau to Westport . . . . . . . . . . ... 3 0 These rail-costs represent a range of from 16 to 27 per cent, of the total mining-cost of the coal at the shipping-ports, and do not include the Harbour Board charge of 3d. per ton, which is made in some cases to assist in the upkeep of the railways and harbours. It is clear that the railway and shipping charges contribute a largo proportion of the cost of coal, and that improvements iti transport economizing these costs would be important factors in reducing its price. Such improvements might, be effected in— (1) The mechanics of transport; (2) the present system of ownership, administration, and general organization a of the railways and shipping ; and (3) methods of handling the coal whilst en route, including loading and discharging. The possibility of immediate improvements in these directions is referred to in Chapter VIII. (ii.) Changes in Transport-costs since 1913. The freight charges have increased during the war period. The increase in rail freights can be definitely measured, and amounts to 21 per cent., made up of two rises of 10 per cent. —on the 19th September, 1915, and the 25th November, 1917, respectively. The general increase in shipping rates cannot be so definitely measured in percentages because of the unequal distribution, over the various routes, of the particular increases. For example, the contract rates for the carriage of coal in the New Zealand coastal trade were advanced for all ports in 1916 and 1917 by a common rise of Is. 6d. and 2s. 6d. respectively. The percentage increases in shipping freights for coal, calculated from the rates for the chief ports of discharge, show themselves to be as detailed below : — (a.) The increase! in freight rates on Newcastle coal between 1914 and November, 1918, amounted on the average to 52 per cent, to all New Zealand ports, the rises occurring in 1916, January, 1917, June, 1917, and in 1918. (A rise of 3s. 6d. per ton, or 21-2 per cent., on rates to the chief ports takes effect from the Ist March, 1919.) The rises in the freights charged by lines other than the Union Company have been greater. (/;.) The average increase in the freight rates on Westport coal amounted to 55J per cent. Two changes were made, on the Ist July, 1916, and the Ist July, 1917. (c.) The corres2>onding average increase for Westport-Stockton coal is 53j per cent., the rises occurring on the Ist November, 1916, and the Ist November, 1917. (d.) The average increase in the freight rate on State coal amounted tJ 42 per cent., increases being made on the Ist June, 1916, and the Ist December, 1917. Only small increases were made in the case of Auckland and Napier. For other ports the percentage of rises was much the same as on other coals. The difference between the rate of increase of the cost of transport by rail and that of carriage by sea is well illustrated by a comparison of the Huntly-Auckland and Westport-Lyttelton charges. The railage from Huntly to Auckland for 1914-15 was 6s. 6d. per ton, or 39| per cent, of the minecost and 19-3, per cent, of the Auckland retail price. The freight from Westport to Lyttelton at the same period was exactly the same —namely, 6s. 6d., or 35 per cent, of the f.o.b. Westport cost and 16 J- per cent, of the retail price at Christchurch. At the present time the Huntly-Auckland railage is 7s. lid., an increase of 21 per cent., adding 40 per cent, to the mine-cost and being 23 per cent, of the price paid by the consumer. The Westport-Lyttelton freight is 10s. 6d., an increase of per cent., adding 46 per cent, to the present f.o.b. cost and constituting 19 per cent, of the retail price. The increase in sea freights has been caused by the following increases in the cost to the shipowner : — Bunker coal (Newcastle) increased 36| (screened) to 57 per cent, (small). Bunker coal (West Coast) increased 22 (unscreened Westport) to 86 per cent. (State small). Wages increased just under 40 per cent. Victualling increased 60 per cent. Stores increased from 50 to 100 per cent. Labour of working the ship increased 70 per cent. From the particulars supplied us in respect of typical colliers engaged in the New Zealand coal trade we find that the average cost per ton to the shipowner for the carriage of coal increased from about ss. for the year ending 30th September, 1914, to about 7s. 6d. for the year ending 30th September, 1917, equivalent to an increase of 50 per cent. The level of freight rates is, of course, determined also by the conditions of demand for shipping, and this demand during the war period has increased enormously. This factor is referred to in considering the reasonableness of profits. (See Chapter IV, section 2 (i).)
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The main conclusion in regard to this section of the inquiry is that there has been, during, the war period, a considerable increase in the cost of carriage of coal by land and sea, but greater in the latter case. Whilst the railway freight has increased on all routes by 21 per cent., marine freight has risen by amounts bearing different ratios to the original charge when we compare the various routes. These amounts, with the percentage rises in regard to the West Coast and Australian coal traffic of the four chief centres, are set out in the following table. Wherever steamers other than those of the Union Steamship Company were used the freights were higher.
Table 36. —Ordinary Shipping Freight per Ton of Coal.
The percentage increase in the total transport charges is, of course, less than those in marine freight. In the case of the trade from Newcastle Wharf to Christchurch Railway-station the increase is 44 per cent., and of the carriage between the Denniston Mine, near Westport, and Christchurch Railway-station it is 42 per cent. 2. DISTRIBUTION-COSTS FROM.DEALER TO CONSUMER, (i.) Definition and Classification of such Costs. The cost of distribution, other than freight and railage from mine to dealer's yard, consists generally of siding and yard rents, wages of hands employed in unloading, weighing, screening, and bagging at sidings or yards, cartage to yard or consumer or both, depreciation on plant, office expenses (clerical, telephone, insurance, rates and taxes, rent of office, &c), salary of manager (whether owner or not). These costs have been estimated per ton, and in some cases the amounts set down may be accepted as accurate, it having been possible to work them out from the actual records ; but in many cases they are estimates formed on the owner's intimate knowledge of his business, which, generally comprises more than coal-dealing, the labour and plant used in the coal trade being also constantly used in other lines which bear part of their costs. The difference in the estimates given in evidence at the same centre is largely explained by the difference in the circumstances of individual businesses. In particular, the cost per ton varies with the amount of trade done, since the standing charges per ton are much less in a large business than in a small one ; they vary, too, with the length of the average run for delivery to the consumer. In some estimates also there is no allowance for depreciation or expenses of management, and where the dealer owns his buildings the rent charge, though legitimate, may be omitted. The efficiency and economy of operating a business vary, of course, also with the personality of the manager or owner. In selecting estimates for the purpose of arriving at our conclusions wo have endeavoured to choose those of firms that may be regarded as truly representative of the general conditions of the industry as it is carried on at present. (ii.) Distribution at Auckland. (a.) General Features, —Auckland draws its supplies of coal from the North Auckland, Waikato, West Coast, and Newcastle mines. Since the coal from North Auckland is used mainly for steam purposes, that from the West Coast for steam and gas, and the main portion of the diminishing Newcastle supply is for railway and industrial uses, the household demand is provided for almost exclusively by the Waikato lignite-mines at Huntly, Rotowaro, Pukemiro, and Waipa, at distances ranging from sixty-five to eighty miles from Auckland Railway-station. The Waikato lignite is the main class of coal handled by the members of the Auckland Coaldealers' Association and other local coal-dealers. The coal is sold by the mine to the dealers, wholesale or retail, f.o.r. and loose in the trucks at the railage-point, railage being generally paid by the dealers. The mines sell—without prejudice to their regular customers -to any one requiring at least a truck of coal, whether he be a member of a coal-dealers' association or not. The greater part of the coal is , sold to a comparatively small number of merchants, who do both wholesale and retail business, supplying both dealers and consumers directly, though there are dealers who buy straight from the mine without any intermediate merchant. The merchants and many of the dealers have sidings and sheds at which the coal is weighed and bagged from the truck, after the removal of the dross (twelve bags to the ton), stacked on platforms, and delivered into carts as required to fulfil orders. The majority of the dealers are in a small way of business, many of them being storekeepers, greengrocers, express-men, &c. They take the coal from the merchants' sheds at the time most convenient to themselves —sometimes to their premises, sometimes direct to their customers.
Prom Westport and Greymouth Newcastle to Wellington Lyttelton Dunedin Auckland Wellington and Lyttelton Dunedin . . 1914. s. d. 5 7 6 6 7 6 10 3 10 6 12 6 1918. s. d. 9 7 10 6 11 6 16 3 16 6 18 6 Increase. Per Cent. 72 61 54 59 57 48
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38
There is in Auckland no merchant or dealer trading exclusively in coal (with one exception to be specially noticed later on), the coal-trading being regarded as an adjunct to other lines of the whole business. The number of dealers has decreased considerably during the last six years. Dealers compete with one another for the trade of a particular area, there being no block system, and a dealer's cart may travel long distances to fulfil comparatively small orders. The average suburban delivery may be put at one mile and a half. The dealer, of course, arranges his calls in such a way as to economize his time. A man, horse, and cart doing nothing else will deliver from 3to 4 tons a day in £-ton lots. It was admitted that labour engaged on this work does less now in a given time than in the past. Coal is carried in bags to the consumers' bins —these often most inconveniently placed— and it is a frequent practice for the bags to remain with the consumer to be collected at the delivery of the next order, which, of course, adds considerably to the expenditure on sacks. The commonest order is for J-ton lot. Liberal discount, both for cash and for payment at the end of the month, is allowed purchasers both by merchants and by dealers, but less than a quarter of the consumers avail themselves of the opportunity to get the full concession. Of the screened coals from the mine the householder has a choice of two sorts —namely, house coal and kitchen coal (or steam coal). The former is the larger in size, being the result of a larger screening-net. During the war period the proportion of kitchen coal in household use has increased considerably. It costs less to produce and distribute the kitchen coal, which is probably more economical to the average householder. No State coal is placed on the Auckland market. (b.) Prices, —Table 37 shows the changes in the price of household coal at Auckland during the war period as sold by the Auckland Coal-dealers' Association.
Table 37.—Showing the Changes in the Net Retail Price of Household Coals at Auckland, 1914-18.
The rise in the retail price of house coal amounted to Bs. 9d. per ton up to September, 1918. Of this rise, increased price at the mine accounted for ss. 6d., or 63 per cent, of the total increase ; increased railage for Is. 5d., or 16 per cent. ; rise in other costs- special to the retail distributor— Is. 10d., or 21 per cent. For the same period the rise in kitchen coal was Bs. 3d., accounted for by ss. in mining-cost, or 61 per cent. ; Is. sd. railage, 17 .per cent. ; Is. 10d. in other costs, 22 per cent. From the Ist October of this year the price of house coal has risen 14s. per ton over the pre-war price ; 7s. 6d., or 54 per cent., of this rise is due to increased price at the mine ; increased railage, accounts for Is. 5d., or 10 per cent, of the total; other costs ss. Id., or 36 per cent, of the total. Kitchen coal has risen by 135., of which 6s. 6d., or 50 per cent., is due to the increased price at the mine ; Is. 5d., or 11 per cent., to the increased railage ; and ss. Id., or 39 per cent., to increases in other costs of distribution. (c.) Demand and Costs. —A rise in the price of a commodity may be accounted for by conditions affecting the supply or demand, or both supply and demand. The general conditions affecting the supply and demand of coal have been referred to in Chapter I, section 7 (vi). In the particular case of Auckland coals there has been a shortage over the war period, and a shortage in the two senses of that term on the one hand a contraction of coal-supplies, causing them to fall below the normal level; and on the other hand, at certain seasons, an increase in the demand above the normal level. A mere fall in the output of a coal-mine or in the turnover of a coal-dealer will of itself cause the average cost per ton of producing or dealing in coal to rise, because the fixed charges of fhe colliery, of the coal-yards, and delivery, &c, are divided up over a smaller tonnage. The price-raising effect of such a fall, which in the case of New Zealand during the last few years has been considerable (see Chapter I, p. 23), has been aggravated by (1) considerable rises in the prices of materials and labour used in production and dealing, and (2) the unusual eagerness of consumers, beset with the fear of a coal-famine, to obtain supplies of coal often in advance of their needs. In connection with the lastmentioned factor it is to be noted that the undoubted increase in the demand of coal for all industrial purposes (including naval and mercantile marine) has reacted unfavourably on the supply of household coal. Analysis of the costs of dealing in coal, however, suggests that the dealers have not increased the price of house coal beyond the level sufficient to reimburse them for the increased costs of their
19U l t 916 JUnC! ' June, 1916, to July, 1917. I July, 1917, to December, 1917. December, 1917, to September, 1918. Prom October, 1918. House I £ s. d. £ s. d. 1 13 6 1 17 6 £ s. d. 2 1 6 £ s. d. 2 2 3 £ s. d. 2 7 6 41'8 per cent, increase. Kitchen or steam 26 per cent, increase 1 18 9 1 10 6 1 14 9 1 18 0 2 3 6 42 - 6 per cent, increase. Reasons for rise.. Rise at mine of 2s. 6d. on house and 2s. on kitchen coal, 10 per cent, rail freight; rise of 4s. a week carters' wages, 20 per cent, shed wages Rise 3s. per ton at mine; increased cost of distribution 27 per cent. increase Rise 10 per . cent, railage Rise 2s. a ton on house, Is. 6d. kitchen; 10 per cent, rise shod wages ; 6s. a week rise carters' wages, carried since November, 1916; and other increased costs of distribution.
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businesses and their own living, and in view of the character of the demand for coal they could have cleared the stocks at much higher prices. We feel justified in expressing the opinion that the increased costs operating from the side of supply have been alone sufficient to account for the whole of the rise that has actually taken place in the consumer's price. The cost of production of Waikato coals increased about 18 per cent, over the period to September, 1918, or a little over Is. 7d. per ton; the average annual selling-price at the mine being increased by about Is. B|d. It must be remembered, however, that only about a quarter of the mine's output is house coal, a little over one-third kitchen coal, the rest being chiefly slack. Since the price of a certain proportion of the steam coal is fixed for long periods by contract, and that of slack is very inelastic, the bulk of the rise in the price of coal at the mine—due to the rise in the cost of production —has to be borne by the house coal. Hence this helps to explain the rise in the price charged by the mines for house and kitchen coal of ss. 6d. and ss. (7s. 6d. and 6s. 6d. per ton since the Ist October) respectively when compared with the rise of Is. B|d. in the selling-price per ton averaged over their whole output. Table 38 shows in summary form the costs of distribution at Auckland of house coal in September, 1918, as sworn in evidence.
Table 38. —Showing the Cost per Ton of distributing House Coal in Auckland, September, 1918.
There is no item of costs for which the Board did not obtain actual figures as well as estimates. Even in the case of overhead expenses, which it is difficult to ascertain, owing to the fact that actual distribution is only a part of the business, the actual figures obtained by analysing these expenses in large businesses increased from 2J per cent, in 1912 to per cent, in 1918, though only 2f per cent, has been allowed for in the above table. No allowance for depreciation or interest on capital has been made.
Table 39. —Showing the Increase in the Cost of Distribution of Coal at Auckland by Retailers between 1913 and September, 1918.
Cost. Firm A, 10,000 Tons. Firm li. ll'inr, C mtm J) . H,1.55Tons. Eet^' n J.' 000 firm El, Mount Eden, 7,790 Tons. Firm E2, Newmarket, 2,307 Tons. Coal Freight Bagging and loading £ s. d. 0 19 10 0 7 94 0 2 0 £ s. d. 0 19 10 0 7 11 0 2 0 £ s. d. 0 19 10 0 7 11 0 2 9 (actual) 0 1 6 (2s. retail) 0 1 3 0 0 34 0 0 4 0 1 9 £ s. d. 1 0 4 0 8 2 0 1 9 £ s. d. 0 19 9-6 0 8 3 0 2 0-3 £ s. d. 0 19 9-6 0 8 3 0 1 10-7 Loss in sacks 0 I 6 0 2 0 (3s. retail) 0 1 3 0 0 4 0 0 4 0 0 104 (Is. retail) 0 0 5 0 1 6 0 0 I'll 0 0 2-1 Loss in transit and handling Siding charges and shunting Rent of sidings Overhead expenses, &c. 0 1 3 o 6' 94 0 010 0 1 3 0 0 9 0 1 0 0 I 10-2 0 0 0-83 0 0 6-27 0 1 1 -03 0 0 3-24 0 0 5-92 Bad debts Rates and taxes 0 0 5 0 0 24 0 0 10-09 0 0 7-69 Total wholesale 1 14 5 1 14 114 1 15 10 1 15 I 1 13 5-4 | 1 12 7-97 Dealers' shed price Profit (wholesale) 1 14 6 0 0 I 1 14 6 0 0 54 (loss) 1 14 6 0 1 4 (loss) 0 0 6 0 6 0 1 14 6 1 14 6 0 1 0-6 1 14 6 0 I 10-03 Extra loss on sacks Cartage 0 I 0 0 6 0 0 6 0 (7s. 6d. actual) 0 0 2g I'2 2 3 0 6 7 Profit (retail) 0 0 10 0 0 1 (loss) 2 2 3 0 0 7 Retail price 2 2 3 2 2 3
Cost of 1913. September, 1918. Increase. House coal Railage Shunting Depot wages Casual labour Drivers Other stable charges Horse-feed —Chaff „ Oats Harness (new) „ (repairs).. Wheelwright (new) „ (repairs) Shoeing Per Ton. £ 8. d. 0 14 9 0 6 6 Nil. 2 2 0* 0 I Of Per Ton. £ s. d. 0 19 10 0 7 11 0 0 2 3 0 6* 0 I 4|t Per Cent. 344 21 44 384 5 15 0 0 3 0 14 10 0 0 6 3 150 108 50 75 35 50 100 07 0 0 14 0 * Per week. t Per hour.
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The costs of distribution have therefore risen to such an extent compared with retail prices as to make it extremely unlikely that small dealers, as apart from merchants, make anything like a reasonable profit on coal alone. One of the largest retailers (conducting a carrying business also) assesses the increase for the period in question as follows : — Table 40. Rent .. .. . . From £61 to £200 for practically the same land. c. d. s. d. s. d. Coal .. .. .. From 15 6to 20 4 per ton = 4 10, or 31 per cent. Railage .. .. . . From 6 9to 8 2 „ = 1 5, or 21 ~ Bagging and loading .. . . From 1 6to 2 1 „ = 0 7, or 40 ~ Loss on sacks .. . . From 0 9to 1 6 „ =0 9, or 100 Rent and siding charges .. From 0 6to 0 9 „ = 0 3, or 50 ~ Office expenses and bad debts . . From 0 9to 1 0 „ = 0 3, or 33 Delivery —J-ton lots .. . . From 9 oto 9 4 „ =0 4, or 4 Total dealers' costs have increased, therefore, according to this statement from £1 14s. 9d. to £2 3s. 2d. — i.e., Bs. 5d., or nearly 25 per cent.; while the retail price of coal has been advanced in the same period Bs. 9d. for ton lots. Profits in distribution in Auckland are obtained by the larger dealers in the retail trade, not in the pure wholesale. In 1912 a large firm estimated the merchant's profit at 6Jd. per ton : in 1918 the same firm reports a corresponding loss of s|d. The most favourably situated of the wholesale dealers has a large colliery which distributes a large proportion of its own coal, and it gave us an exact analysis of a full year's trading-costs and profit. The profit worked out at Is. Id. per ton, or about 7 per cent, of the expenses. But the company had no bad debts ; its overhead expenses were small, due to the fact of the distribution being organically linked up with the mining ; it had been very fortunate in its buying of sacks in the past ; and it made no provision for depreciation of its distributing plant, On the other hand, its income-tax was particularly heavy, through the fact of the distribution revenue being treated by the Tax Commissioner as part of the colliery revenue. If allowance be made for sacks at current prices the rate of profit falls to about 4 per cent. A few notes are called for regarding some of the items of distribution in the foregoing tables: — Coal: The selling-price of house coal at the mine increased 34£ per cent, between 1913 and September, 1918 ; the selling-price in Auckland by 26 per cent. Distribution-costs have risen, but not so rapidly nor so high as mining-costs, and the distributors have been obliged to carry increased charges for a longer period without proportionately raising the price to buyers, being able in many cases to do this mainly because coal-dealing is only a side-line with them, or a means of increasing their main line of business. Tn October, however, 3s. 3d. of the total rise of ss. 3d. per ton on house coal provided for these increased charges. The position illustrates the general principle that retail -prices are more rigid- less flexible—than wholesale prices. But the point was rapidly being reached in the latter part of last year when advances would have to be made in the retail price in order to afford distributors a rate of profit that may be regarded as reasonable under the present system. After Ist October the rise in the retail price amounted to 42 per cent, compared with the rise of 48 per cent, in the price of house coal at the mine itself. The rise in the price per ton (in ton lots) of house coal at Auckland, compared with the [ire-war period, is now 145., of which 7s. 6d., or 54 per cent., is due to increased mine-cost, Is. 5d., or 10 per cent., to higher railway charges, and ss. Id., or 36 per cent., to increases in the cost of distributing borne directly by retailers. Railage : There have been two increases of 10 per cent, each, equivalent to 21 per cent, in all, amounting to Is. sd. per ton of coal of all grades from Huntly to Auckland. Bagging and Loading : This costs about 2s. per ton, although in the case of one firm which worked out the costs exactly from its own accounts it amounted to 2s. 9d. per ton for labour and shunting trucks, weighing, picking out dross and stones, trucking to the platform, stacking on the platform, redelivery to carts, loss of time waiting on trucks, shortage of coal, and repairs to sacks. The increase in this item is due mainly to the increase in the wages of shed hands and casual labour, amounting to over 40 per cent, on the average for the period under review, and to the shortage of coal-supplies. Loss on Sacks : This amount varies considerably ; it is greater in the retail trade than in the wholesale ; there is more wear-and-tear on the sacks, and there is extra loss through the sacks being left with the consumer until the delivery of the next order. A considerable number of bags is lost every year through dishonesty and carelessness. The loss from all causes in the retail trade is from6d. to Is. greater than in the wholesale. The loss is also greater with hard coals than with soft, and with house coal than with kitchen or through. The bags may be worn out in three or four uses, though when repaired they may last through six uses. The life of the coal-sack is apparently much shorter in Auckland than in the southern centres. The estimates of cost run from Is. 6d. to 3s. per ton at the current price of bags —9s. to 10s. per dozen, twelve bags to the ton. Loss in Transit: This is a considerable item, and it varies in amount according to the kind of coal, the length of distance from the mine tojjjthe market, the number of handlings, the state of the weather, &c. Estimates vary from Is. 3d. to Is. 10-2 d. (an actual figure) for local coals, and 2s. 6d. for Australian coal. The loss in weight is greatest in house coal, one reason being that it lends itself
40
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more easily to pilfering. The loss in general is due to spilling and pilfering en route, evaporation, wind and other weather disturbances while screening. It must be remembered that every handling tends to make dross. The regulation of the Railway Department insisting on at least 6 tons full weight being placed in every truck is responsible for some of the loss, as it is impossible for some trucks to hold 6 tons without great risk of spilling. (This is particularly the case in the South. Island with brown coal and lignites.) Siding Rents : These have increased considerably for the period, those of one firm 400 per cent, in seven years, of another over 200 per cent, in four years. An additional shunting-charge of 2d. per ton has also been imposed during the period. Cartage : This is difficult to assess precisely, because no one carter is engaged exclusively in delivering household coal. The majority of the estimates set down an average of 6s. ; but one firm, having analysed its actual cost as nearly as it could for a period of six months, involving from fifteen to twenty men engaged mainly upon the delivery of coal, found its costs to be 7s. 6d. per ton (including profit). The secretary of the Drivers' Union thinks that 7s. 9d. per ton is a reasonable price for the delivery of coal; 6s. is reasonable for general carrying, in his opinion ; but " a man who is not continually delivering coal is somewhat at a disadvantage. First of all, he has to go to the merchant to get coal, which is supplied to him in sacks ;he has to deliver the coal; there are some very awkward places that will necessitate often the driver putting in thirty minutes in putting coal where it is needed. That driver has often to return the sacks to the coal-merchant, otherwise he is charged lOd. per sack." This sum (7s. 9d.), of course, includes depreciation and profit, as well as provision for the maintenance of the horse, cart, and man. But the majority of the dealers in coal are satisfied if they receive the current rate of wages, and make, very small profit, if any, on the coal-delivery. Cartage per ton delivered increases rapidly as the size of the average order diminishes. It costs much more to deliver a given quantity of coal in bag or £-ton lots than in ton lots. Undoubtedly the shortage of coal during the last four years and the consequent necessity of coal-dealers rationing out their diminishing supplies to consumers has helped to raise the retail price by lowering the average amount delivered per man, and therefore raising the cost of delivery. (d.) Newcastle Coal.- -Only a very small amount of Australian coal is used in Auckland for household purposes. The cost of Australian coal at the ship's slings was as follows : — Table 41.—Cost ex Ship ov Newcastle Coal at Auckland. 1916-17. 1918. Percentage a. d. s. d. Increase. F.o.b. Newcastle .. .. .. ..113 15 0 33J Freight .. .. .. .. .. 11 3 16 3 44f Wharfage .. .. .. .. ..13 13 Harbour - improvement rate (since September, 1917) .. .. .. .. .... 0 6 Total ex ship .. .. .. 23 9 33 0 39 A. large proportion of the coal is taken by the Railway at £1 13s. 9d. Coal taken for Government purposes pays no wharfage or harbour rate, and out of the 2s. 6d. profit the wholesale importer has to pay his oosts— insurance, exchange, loss in weight, and overhead charges. Tin- following is a dealer's estimate (September, 1918) of the distributing-costs of Australian coal in Auckland : Table 42. £ s. d. Cost ex ship .. .. .. .. .. .. 1 13 0 Cartage to yard and trimming .. .. .. ..030 Rent ..' .. .. .. .. .. ..009 Bagging and loading .. .. .. .. ..029 Loss in weight .. .. .. .. .. ..026 Loss on sacks .. .. .. .. .. ..020 Delivery .. .. .. .. .. ..070 Expenses .. .. .. .. .. ..029 Bad debts 003 2 14 0 Since there has been a great falling-ofi in the importation of Australian coals during the war period, the proportion of the total available supply in New Zealand taken by the Government railways has increased considerably. Newcastle coal is harder on sacks than lignite. The loss of weight between Newcastle and Auckland amounts to as much as 5 per cent. —for example, 47 tons out of a cargo of 1,000 tons. (c.) Public Apathy. Though the increase in the price of coal has been felt acutely by the smaller consumers, particularly those taking bag lots, it appears that the majority of the customers of some dealers do not complain of the higher price, regarding this as an inevitable accompaniment of war conditions, or as the necessary result of a, well-deserved increase in the pay of miners and all others engaged in an industry the conditions of which they believe to be most unpleasant. Consumers do not appear to be sufficiently alive to their own interests to take advantage of opportunities of obtaining coal at a lower price, or of preventing a rise in price, or of developing the best and most
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economical methods of firing grates and ranges. Tn Auckland there is not that wide difference in the prices of the same kind of coal which is observable in some of the southern centres ; but the experience of one firm shows that the public is slow to buy in the cheapest market, even when the goods are of similar quality and are brought directly to the notice of consumers. Six thousand people in a large suburban area in Auckland were afforded an opportunity of obtaining their coal at from 4s. 3d. to ss. ])e,r ton cheaper than they could obtain it elsewhere, conditionally upon either cash with order or collection on delivery, and taking no less than three bags (| ton) at a time. Within four months fewer than 150 took advantage of the possibility of making this saving—amounting to over 10 per cent, in their coal bill. ('/.) Possibilities of Improvement. —In the Auckland District itself we gathered only a few suggestions for improvement in the method of distributing coal. (1.) Railways : Complaints were made of the length of time taken by the railway to carry coal from the mine to the dealer's siding ;in many cases the time extended to two or three days. It was alleged, too, that some of the pilfering en route, which undoubtedly occurs, is due to the railway employees. It was suggested that the distribution of coal would be improved if a mineral express train were made up every day from Huntly to the southern markets. The Railway Department, however, states that there is not sufficient business between Huntly and Marton (246 miles) to provide a full train-load, and that existing services provide for coal being carried between them at present in twenty-seven, thirty, and thirty-nine hours respectively. (2.) Bagging at the Mine : A suggestion was made that coal should be bagged not at the dealer's shed, but at the mine. This, however, does not appear to be advisable. It was tried some time ago in Auckland with coal for the Taranaki District, and was abandoned. The practice increased the cost, because of the more rapid decay of the bags, the increased handling, and shortage of sacks. (3.) Baskets instead of Bags : It has been proposed to substitute for bags, wicker baskets, to be filled at the mine, and packed in trucks. These baskets would hold about 1801b. each, are estimated to last seventy-five times, and would cost at current prices from 10s. to 12s. each. While their use would be attended with certain advantages, these would be outweighed by the disadvantages. The baskets would be awkward to handle, and to carry, not fitting comfortably to the spine ; their use would increase the difficulty of detecting short-weight by inspection ; and their comparative rigidity would prevent satisfactory packing with the larger coal. (4.) Increased Use of Small Coals : The greater the demand for the smaller coals such as through coal and slack, or even kitchen or steam, as a substitute for best screened coal, the greater is the probability of a fall in the price of screened. Undoubtedly, the price of house coal would have risen more than it has done but for the increased proportions of kitchen, through, and slack used for household and other purposes. It is clear, however, that the great majority of consumers demand large screened coal as necessary for household use, and any lowering of the price of house coal through this means must be looked for in the direction of the greater industrial use of the fine coals, and the education of the housewife to the possibility and profit of small-coal consumption in grate and range. (5.) Elimination of the Small Coal-dealers, and the Institution of Central Agencies for Mines, Municipal Depots, or Co-operative Coal-stores: The Pukemiro Collieries Company delivers kitchen coal in a certain part of Auckland for 4s. 3d. a ton, or over 10 per cent, cheaper than the ordinary dealers. The Auckland Co-operative Society sells its kitchen coal in ton lots for 65., or 15 per cent, cheaper to its members than the ordinary dealers' price, showing a profit of 3s. 3d. a ton, or over 10 per cent. (The actual profit is less, owing to the average order being below a ton.) In the case of this society most of the clerical and managing work was done without remuneration, but, after making allowances for this, there is still a substantial saving to the consumer. The dealers who are in business on a big scale can subdivide their orders according to localities, and serve several customers within a comparatively small area from one trip of each cart, but the smaller dealer's costs are enormously increased by the long distances he has to travel to fulfil his daily orders. .Consumers could help to systematize delivery, and thereby keep the cost of cartage down, by ordering their coal before their supply runs out. (6.) Correct Weight: There is, of course, a rise in the real price of coal if, the money paid remaining the same, the amount delivered to the consumer is less. This is the problem of light weight. Though the evidence is contradictory, the probability of light weight in coal-deliveries in the Auckland District is established. The temptation to give light weight has, of course, increased with the diminution in the supply of coal, making coal more valuable. It is much easier to give light weight in coal than in most other goods. We were told that frequently dealers bag more than twelve bags to the ton —they sell not a ton of coal, but twelve bags of coal. Small dealers may make another sack out of the twelve obtained from the merchants' sheds. Then there is the probability of pilfering on the way from the yard to the consumer's house. It is estimated by an authority with special means of knowledge that the coal as delivered to the consumer is about 5 per cent, short of the weight as given by the dealer. It is easy to make a partially full bag of coal appear to be full, and when repaired bags are used the possibility of light weight is increased. The responsibility for this shortage of weight must rest on both dealer and carter. The use of hundredweight bags has been suggested as a remedy, but the drivers object to this, as it would moan twenty journeys instead of twelve, and the smaller bag is not so well adapted to the carrier's back as the larger. The small bag is used in Wellington apparently with a net advantage which may, however, be due to the steeper nature of much of the ground to be covered by delivery in Wellington, prohibiting altogether the use of the heavier sack. (r/.) Rate of Distributor's Profit. —It is assumed that the question of the reasonableness of distributors' profits refers to coal-dealing under existing conditions and with the present methods
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ol distribution. In that case the answer is an unqualified affirmative. Viewed in itsell'Fthe business of distributing ooal brings in a very small return to those, who pursue it in most cases not much more than the current rate of wages for: unskilled work, even if allowance he made for the probability of overestimates of cost in the evidence presented. The, coal-dealing business whieli is, in the case ol household coal, carried on for a part of the year only, is regarded by its owner as a part of his general business—a part which, though it is returning little or no direct profit, may enable him to use a larger plant and to keep down costs relative to turnover in his business as a, whole. In many cases it would appear that the profit is constituted largely of the difference between the allowance for bad debts and the discount in the case of those customers who do not avail themselves of discounts, but pay the gross price within a reasonable time. The. further question as to whether existing conditions and methods are reasonable or not — capable of improvement or not—is of general application to the Dominion, and is dealt with in Chapter VIII. (iii.) DISTBIBUTION AT WELLINGTON. (a.) General. —Wellington draws its supplies of household coal from the West Coast, the Waikato district, and Newcastle. Probably the Westport coal constitutes 80 per cent, of the coal consumed in Wellington households. Up to the winter of 1916 household coal was rescreened in the retailers' yards in Wellington. Since that date the coal has been mine-screened only. The cost of transporting the coal from the mines to the wholesale depot at Wellington for the years 11)1 I -18, and the percentage which that cost is of the retail price at the present time, are shown in the following table : —
Table 43.-Cost of Carriage of Coal to Wellington.
The retail dealer takes delivery of the coal at the wharf or the railway-station, carts it loose to his yard, bags and stores it, and thence delivers it as required to the consumer. In Wellington twenty bags go to the ton. Cartage and delivery costs are heavy, because of the naturally steep and uneven configuration of much of the urban and suburban areas. A man with a dray and two horses delivers from 3| to 4 tons per day within the town area, and 2|- to 3 tons within the suburban area ; but frequently two men are required to deliver a load. There are about thirty traders, nearly all of whom are members of the Wellington Coal-dealers' Association, most of them conducting businesses on a small scale, working themselves and employing on the average another man. Neither the association nor its individual members appear to exercise any trade discrimination against nonmembers. The association fixes the changes in the retail prices of Coal, and this scale of prices is generally followed by the trade, though occasionally higher prices are charged by individual dealers. The regular traders in coal suffer hardly any competition from outside sources —little or none, for example, from carriers, who in some other centres do a not inconsiderable trade in small lots direct from the wholesale depot to the consumer. In Wellington the margin for cartage (ss. (id. per ton ; Is. 9d. per quarter-ton ; 3d. per owt.) appears to be so small between the retail rate and the depot rate as to preclude any profit from such trade. (b.) Prices. —The prices fixed by the association are for cash, booked 2s. extra, and Is. discount il paid by the 20th of the month following purchase. It is estimated that the cash business forms about one-half of the total business, and that the majority of the remainder of the other half is monthly discount business. There are two scales of prices—one for the city and the other for the. suburbs—the latter being, for the greater part of the period under review, 3s. more than the city rate, and recently 4s.- more. Table 44 shows the changes in the retail price of each of the chief household coals at Wellington during the period January, 1914, to January, 1918
Table 44.—Retail Prices of House Coals at Wellington, 1914-18.
Cost of Carriage to Wellington from m-si poll and Grey mouth . . liuitly "ewcastle 1014. s. d. 5 7 12 7 10 0 1 1018. s. d. 9 7 15 3 16 6 ! 1 1 Increase per Cent. 72 21 65 llatio of Cost of Carriage to Retail Price. 1.9 per cent. (Westport coal). 29 per cent. 32 per cent.
( , , 26 Jan., 27 May, uraL I 1914. 1914. I s. d. | s. d. Westport .. .. ; 36 0 All soreened .. .. 30 0 Taupiri . . . . 36 0 ! 40 0 Slack . . .. .. 25 0 Mixed Waikato and other.. Newcastle .. .. 36 0 Puponga All unscreened (Suburbs, 3s. ex State (house) .. .. 33 0 | ••■ I „ (small) .. .. 18 0 ; 7 Peb., 1 July, 1916. 1910. 9 Dec, 25 Jan., 17 July, 13 Juno, Sept., 1916. 1917. 1917. 1918. 1918. s. d. ! s. d. s. d. ! s. d. | s. d. 43 0 .. 50 0 43 0 . . | 46 6 I i. | 52 0 .. 54 0 26 6 .. 32 0 45 0 I 51 0 .. 48 0 52 0 .. i 46 6 52 0 ..I .. 39 0 . extra.) (Suburbs, 4s. e: ! 37 0 .. I 24 0 Increase. 8. d. s. d. 39 0 41 6 39 0 41 6 42 0 45 0 25 0 25 0 Per S. (I. ! Cent, 14 0 , 39 18 0 i 50 16 0 | 44 :tra ; booked, 2s ixtra.) 4 0 12 0 0 33£
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This shows an increase of 14s. per ton, or 39 per cent., in the case of the standard household coal. This increase is made up of 9s. 6d. in the wholesale price to the coal-dealer, which rose from £1 ss. 6d. to £1 15s. —a rise of 38 per cent. —and 4s. 6d. in the increased cost of retailing, excluding prime cost. Of the increase in the wholesale price, 4s. has been due to the rise in shipping freight, the remainder to railway increases (about 7d.) and to the rise in the. general cost of production at the mine. The quoted wholesale price includes Is. wharfage, which, has remained unchanged over the period. The increase is, therefore, roughly equally divided between the rise in the mine-cost and the rise in the cost of transport. These rises in the wholesale price occurred on the following dates :■ — Date. Rise ,- Cause. s. d. 14th February, 1916 .. 2 0) Increase in steamer freight, wages, railway 3rd July, 1916. . ..20) carriage, and general cost of production. 10th April, 1917 . . -2 0 Increase in general cost of production. 18th July, 1917 .. 3 6 Increase in freight, wages, and other costs. In the case of another coal supplied from the same field to the Wellington market the wholesale price has increased by the same amount (9s. 6d.), the rises taking place as follows : — Date. ** 18 j Cause. November, 1915 .. 0 4 Increased railage. July, 1916 .. .. 2 8 Steamer freights, and increases in mine wages. January, 1917 .. 1 0) Further increase in the mine-cost of producApril, i 917 .. ..2 0| tion. July, 1917 . . ..36 Advance in steamer freights, and in minelabour cost. The increased cost of retailing the coal is roughly equal to the separate increased cost in mining o! , in transport, each accounting for about a third of the total increase. The extra retail cost has been due mainly to higher wages to the yardmen and drivers, increased cost of forage and of maintenance of ■plant, with a rise in the per ton cost of delivery owing to the shortage of supplies. The retail price of State house coal was increased once only--vi/., in July, 1916, by 4s. a ton, or 12-1 per cent., made up of increased charges —freight, Is. 6d. ; rail, mineto Grey mouth, 6d. (approximate) ; 2s. increased wages, cartage, and other costs. The increase in freight of 2s. 6d. per ton in December, 1917, has not been passed on to the public ; other charges have also increased, and the State depot appears to have been losing at least 3s. 3d. per ton on the hou.se coal it retailed at Wellington in March, 1918 ; the estimate of present loss is about 4s. 6d. Any profit it makes is made out of the ex ship wholesale trade.
Table 45. — Increase in the Prices ex Ship, Wholesale, of State Coals at Wellington, 1915-18.
(c.) Costs. —The following estimate of the present cost (January, 1919) of retailing household coal in Wellington may be accepted as accurate. This estimate differentiates between the city and the suburban trade, and refers to a turnover handled by one man with two horses and a dray, working 275 days in the year, and handling .1,100 tons in the town, or 825 in the suburbs. Table 40. City. Suburbs, s. d. s. d. Cartage to yard .. .. .. ..36* 36 Yard expenses.. .. .. .. .. ..43 43 Sacks.. .. . . . . .. . . ..16 16 Cartage to customer .. .. ~ .. ..6 5 8 7 Total distributing-costs .. .. .. ..158 17 10 Coal ox ship . . . . . . . . . . . . 35 0 35 0 Total retail costs . . . . . . . . . . 50 8 52 10 Average retail price . . . . . . . . . . 53 0 56 0 Profit .. .. .. .. ..24 32 * Average of railway and wharf.
Bate of Profit State Coal. Increase in Price per Ton, 1913-18. Increase per Cent., 1913-18. Per Cent., 1013. Per Ton, 1018. Screened* Unscreened— Point Elizabeth Livorpool Point Elizabeth (small).. Liverpool (small) _l s. d. 9 0 9 0 9 0 7 0 • No sale in II 43-9 43-9 ,64-29 43-75 6-66 7-89 20 7-89 5-05 3-7 6-56 18-52 6-56 1118.
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45
lv this estimate no allowance has been made for the times during which no coal has been available to distribute. During the pant yeai such contingencies have not been infrequent-- in one case during January, 1919, the yard had been bare of coal for ten days, with none in sight. On such occasions the hands are generally kept on, and a large proportion of the expenses continue with no corresponding income. It is to be noted also that the " average retail price " is not the ton rate, but a rate between the quarter-ton rate and the hundredweight rate, as the greater part of the business done by retailers of late has been in small lots. 'Phis fact, however, increases the cost, and this increase in cost, due to the diminution in the size of the average order, has not been fully allowed for in the above estimate. The suburban portion of this estimate refers to a business which is worked from a yard in the city. The following is an estimate of the costs of a retail suburban dealer whose yard is situated in the suburb itself : — ' Tablh 47. s. d. Cartage to yard .. . . 1.0 0 during shortage of supplies— about 7s. with normal supply. Cartage to customer .. .. ■ .. 6 6 Sacks.. .. .. .. ..2 1 Rent and depreciation . . . . .. 16 Coal ex ship .. .. .. .. 35 0 55 1 Average retail price .. . . 56 0 Leaving .. .. . . 011 for bagging, weighing, office expenses, &.e. The increase, in the cost oj conducting a 'retail business, excluding the increase in the prime cost of the coal, amounts to at least 4s. 6d. — an increase of about 40 per cent, over the period since the beginning of 1914. This increase in cost may be analysed thus--s. d. Cartage to yard, rise of .. .. .. .. ..13 per ton. Increase in wages to yardmen and drivers, and in the price of forage.. 2 0 „ increase in other expenses, salaries, rates and taxes, insurance, maintenance, advertising, depreciation, &c. . . . ; I. 3 ~ Total .. .. .. .. .. ..4 6,, Comparing the years ending the 31st March, 1914, and the 3Jst March, 1918, the State depot finds its wages-cost increased from 2s. 9'oßd. to 4s. 1 -9 ld. per ton over all coals, wholesale and retail, and its cartage-costs increased from 4s. l-3d. to Gs. 2'lid. per ton. The total cost of handling and distributing these coals increased by 28-5 per cent, between these years. The cost of handling the retail business is higher, cartage accounting for over 75., or nearly half the total cost (14s. 2-32 d.) on the average of the year ending the 31st March, 1918. The charge for sacks is very much lower than in the case of private firms, being only 347 d. per ton. For that year State coal cost, landed into trucks or oarts at Wellington wharf, £1 ss. 1(>97d., made up of J'.o.b. price, G-reymouth, 15s. 3-97 d. ; freight, 9s. 7d. ; harbour dues, Is. The total cost from mine to consumer worked out at £2 os. l-29d. per ton, the coal then selling at £1 17s. per ton in ton lots. ((/.) Profits. Considering the rises in the prices of materials and in wages in relation to the decreases in the average turnover and in the amount of work per day done by the workmen, we consider the increased charge (4s. 6d.) which retailers generally have passed on to the consumer is reasonable. In this connection it is interesting to compare the changes in the margin available to dealers who take supplies of coal direct from the wholesalers' yards to the consumers. Up to December, 1916, this margin i.e., the difference between the ex depot or ex yard price to the dealer and the cash retail price was -Is. per ton; from December, 1916, to July, 1917, it was 'Is. 6d. ; from July, 1917, it has been ss. 6d. This is an increase of 37| per cent., which is approximately the same as the percentage increase in the retailer's business-costs, excluding the price of his coal. (c.) Improvements suggested. Some four , or five suggestions were made in evidence at Wellington. These are considered in framing the recommendations made in Chapter VIII, section 3. (iv.) Distribution at Cheistchukch. (</..) General. Christeliurch draws its supplies of coal oversea and by rail via Lyttelton from the West Coast (the Westport, Westport - Stockton, Blackball, and State mines being the principal sources), and from Newcastle ; and by rail from Kaitangata, Nightcaps, Homobush, and other lignite-mines of the South Island of minor importance. All these coals are used for house purposes, but the Australian and West Coast coals are also used extensively in industry. The household consumption is distributed more equally over a more varied selection than in the other centres, but the bituminous coals of the West Coast are much preferred, and may be regarded as constituting the standard. Cost of carriage per ton on coal brought to Christchurch is as high as 18s. 9d., or 46 per cent, of the retail price of the particular coal in question, and by sea and rail £1 25., or nearly 40 per
H.—44a
46
cent, of the retail price of the particular coal carried. Compared with Auckland and Dunedin, Christohurch is disadvantageous]y situated in respect of its mines, but the coal marketed there is generally of better quality. Table 48 shows the cost of carriage per ton of some of flic more important house coals consumed in Christchuroh.
Table 48.—Cost of Carriage of Coal to Christchurch.
Distribution is in the hands of coal-dealers, some of whom unlike those in Auckland -are dealers, mainly or exclusively, in fuel. There is a North Canterbury Coal Merchants' and Dealers' Association, which., however, does not include all the dealers. Again, unlike the Auckland dealers, many of those in Ohristchurch do not observe the association's standard prices, but sell at different rates —some higher, and some, generally the larger firms, lower ; in fact, in Christchurch coal of the same kind sells at widely different rates at the same time. This may be due to force of habit on the part of consumers, but it is also explained by the fact that consumers value promptness, courtesy, and fair dealing. Some of the smaller dealers give closer attention to the particular needs of individuals, who are willing to pay an extra price for this consideration. Since there is a greater variety of coals in Christchurch than in Auckland, there is a wider range of wholesale prices. Several dealers, as in the other centres, are engaged in both wholesale and retail distribution of coal. The local and suburban coals (all lignites) are marketed by rail ; the West Coast and Australian are conveyed by sea to Lyttelton, and thence by rail to Christchurch. Some dealers possess railwaysidings into which they discharge coal straight from the truck, others cart from the railway to their yards, either loose or bagged ex truck. In some cases the coal is screened again in the yard, though the practice of double-screening generally ceased with the recent acute shortage. Delivery to consumers is by horse and cart or steam-lorry. The greater part of the area served is Hat. The conditions of delivery are better than at Auckland, Wellington, or Dunedin, and the average run may be put at about two miles for the ordinary trader; but the average delivery per man per day of eight hours, with one horse and cart, is not more than from 3 to ?>\ tons ; in good times that is, with a.plentiful supply of coal—4 tons may be reached. The corresponding average of the State-coal delivery, of which a special record was made for the month of September, 1918, was 3| to 4 tons. Dealers compete for the trade of a particular street or district, arid the houses in one street may be served by several dealers ; but the large dealers arc; able, to a certain degree, to systematize their delivery according to locality. Coal is carried in bags to the consumer. There is competition in the fixation of the retail price, and the custom is to allow the consumer 3s. pel . lon discount for cash (2s. up to June, L 916), and, since June, 1916, 2s. for payment by the 10th of the month following delivery, after which no discount is allowed. (b.) Prices.—Table 49 shows the changes in the cash retail prices per ton of the chiel house coals at Christehurch, August, 1914, to September, 1918, according to the price-lists of the North Canterbury Goal Merchants' and Dealers' Association.
Table 49.—Retail Cash Prices of House Coal at Christchurch, 1914-18.
This table shows an increase ranging from 22 per cent, to 68 per cent, in the retail price of house coal in general consumption. The case of State coal should be excluded from the comparison, as it
1914. 1018. Mining District. Sea and Rail. Bail. Sea and ltail. hail. Newcastle Vestport Jroymouth kaitangata Tightcaps lomebush Lvooa s. d. s. d. s. d. s. d. 10 6 and 4 9 .. 0 6 and 3 9 and 2 4 6 6 and 3 9 and 2 6 11 2 13 5 4 5 s. d. s. d. s. d. 16 6 and 5 6 10 6 and 4 6 and 2 10 10 6 and 4 6 and 3 0 s. d. 13 6 I (i .'{ 5 9 7 7
Coal. 1914-16. February to June, 1916. June, 1910, to January, 1917. January April to August, July to ,., . . to April, August, 1917, to November, .„'_?_'__ 191.7. 1917. July, 1918. 1018. increase Increase per Cent. Australian .. VVestport-Stookton .. Westpovt Blackball .. Kaitangata Nightcaps llomebush, Malvern. . 8. d. 39 0 39 0 39 0 37 0 35 0 33 0 28 0 s. d. 42 0 42 0 42 0 40 0 38 0 34 0 30 0 S. d. 46 0 46 0 46 0 44 0 43 0 38 0 33 0 s. d. s. d. 53 0 [ 58 0 51 0 53 0 51 0 | 53 0 48 0 50 0 45 0 | 48 0 41 0 44 0 35 0 I 37 0 s. d. 57 0 55 0 55 0 55 0 55 0 44 0 43 0 s. d. 58 0 55 0 55 0 55 0 55 0 44 0 47 0 51 0 42 0 42 0 eened.) s. d. 19 0 16 0 10 0 18 0 20 0 11 0 19 0 16 0 7 0 49 41 41 46 57 33, 68 Avoca Slack State 26*0 34 6 30 0 39 0 33 0 39 0 37 0 I 39 0 39 0 39 0 42 0 42 0 (Unscr 02 22
47
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is retailed at a loss. The percentage increase is greatest in the case of the two main lignites. The cost of production of three lignites increased for the period as follows : Table r>o. s. d. increased cost of production at mine .. . . A .. 9 sf, or 59 per cent. .. B .. 7 6, or 56 per cent. .. C ~ 4 Of, or 63 per cent. The corresponding increases in the average selling-prices of these coals at the mines were — Average for Whole Output. House Coal. s. d. s. d. A . . ..72, or 44| per cent. I 1 0, or 69 per cent. B .. .. ' .. 8 ty, or 60 „ i) 10, or 54 0 .. .. .. 3 IJ, or 47 „ 6 0, or 55 Tn comparing the increases in the cost of production and the general selling-prices at the mine with the increase in the price of house coal it must be pointed out that house coal forms about twothirds of the total output, and that the small coal can hear but a comparatively small increase in the selling-price, so that the bulk of the increase in price, due to a rise in the cost of production, has to be borne by the large or house coal. Railage for the period has increased 21 per cent. Table 51 summarizes the main facts in respect of these coals.
Table 51. — Increases in Production and Distribution Costs of Brown Coals for Christchurch, 1914-18.
The changes in the ex ship prices of oversea coals at Lyttelton are shown in Table 52. These ex ship prices include the price f.o.b. at Newcastle or West Coast ports, as the case may be, freight, insurance, exchange, office and other expenses of the wholesale importer. Table 52.—Pricks of Oversea Coals ex Ship at Lyttelton, 1914-18. Newcastle : 1914—August, 235. (id.; September, 255. 6d. 1915—February, 245. (id.; April, 245. 1916— January, 265. ; July, 275. ; August, 28s. 1917 January, 335. ; June, 36a. 6d. 1918 —February, 375. Gd.* ; March, 365. 6d. ; September, 375. 6d. ; October,' 365. (id. Total increase, 13s. 6d., or 553 per cent. Increase in retail price, 395. to 58s. = 195., or 49 per cent. Westport-Stockton : 1914—August, 265. 1915—October, 265. 4d. 1916—April, 28s. ; July, 30s. ; December, 31s. 1917—April, 335. ; July, 365. 6d. ; December, 365. 10d. 1918—May, 375. Total increase, 11s., or 423 per cent. Increase in retail price, 395. to 555. = 165., or 41 per cent. Westport: 1914—285. 1916—325. (id. 1917—385. 1918- -38s. Total increase, 10s., or 36 por cent. Increase in retail price, 395. to 555. = 165., or 41 per cent. Blackball: 1914—245. 1915—245. 4d. 1916—April, 265.; December, 295. 1917—April, 31s. ; July, 335. ; December, 345. 6d. 1918—365. 10d. Total increase, 12s. 10d., or 53J per cent. Increase in retail price, 18s., or 40 per cent. State : 1914—255. 6d. 1916—295. 6d. 1917—345. 6d. Total increase, 95., or 35J per cent. Increase in retail price, 7m. (id., or 22 per cent. * Note. — The rise of Is. in Newcastle coal was duo to the fact that there was no Union boat available, and that the Melbourne Shipping Company, which carried the coal, charges Is. per ton higher freight. Retail prices at Ohristchurbh, it will be seen, have increased at a lower rate than wholesale prices at Lyttelton. The retailer has not increased his price in full proportion to the increase in his prime cost ; therefore either the other elements in his total cost have increased at a lower rate than the cost of his ooal or he has refrained from passing on the whole of his extra costs to the consumer. Table 53 shows how the total increase in retail prices over the period 1914-18 is divided among the separate charges.
Table 58.-Distribution of the Increases in Cost of retailing Coal at Christchurch, 1914-18.
c. A. B. (1. C. Increase in cost of production at mine (on whole output, all coals) .. Increase in selling-price at mine (whole output) .. Increase in selling-price house coal Railage Other distributors' charges 8. d. 7 6 8 24 9 10 2 4 7 10 s. d. 4 Of 3 li 6 0 2 10 2 2 s. d. 9 5| 7 2 11 0 1 4 6 8 Total increase, 1914-18 20 0 11 0 19 0
Coal. Newcastle Westport Blackball Homebush Kaitangata Increase Percentage in of Mini! Total Cost. I Increase. s. d. 4 0 21 4 6* 27 8 10t 4( J 11 0 58 9 10 49 increase Percentage increase hi Percentage in of other of Freight and * Total Import Total Mileage. Increase. Charges. Encrease. s. d. s. d. 6 9 35 2 3 12 4 9(+6d.) 35 0 9 5 4 9(+7d.) 30 14 7 2 4 12 i to Westport. t Based on the retail price of West 'd. increased mileage Blackball to Oreymoiith. Increase in Business Costs of Retailors. s. d. 6 0 5 Of 4 5 6 8 7 10 Percentage of Total Increase. 32 33 24 35 39 Total Increase. s. d. , 19 0 15 0 18 0 19 0 20 0 Increased mileage mines ■ice. } Including 5 tport Coal Con npany, whicl is Is. lower • Inclusive of Od. than the association pi
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(c.) Costs. —Several estimates of the cost of retailing house coal wore obtained in evidence. The chief are summarized in Table 54.
Table 54.—Retail Price (Monthly Credit) of House Coal at Christchurch, September, 1918, with Estimates of Retailers' Costs and Profits per Ton.
Freights, ship and rail, as already mentioned,'form a considerable part of the prime cost to the retailer. In the case of coal from the Reefton field these charges are, a. d. Rail to Greymouth .. .. .. ..52 Grey harbour charges .. .. .. 0 3 Shipping charges .. .. .. ..11 Bto 12s. (according to line), Railage from Lyttelton and weighing . . . . 4 9 Total .. .. .. ..21 sto 225. 2d. Railage from Kaitangata is 13s. 6d. Freight and rail from Westport and Greymouth wharves is 15s. ; from the mine-bins at Granity or Ngakawau to Westport 35., and from Blackball, Dunollie, and Rewanui to Greymouth, 35., 2s. 3d., and 2s. 7(1. The railage from Avoca, the nearest field of any considerable immediate promise, is 7s. 7d. A matter of considerable importance is the probable freight charge on coal over the Midland Railway when opened. The costs of bagging and sacks calls for no remarks of a character different from those made in the case of Auckland and other centres, except that in Christchuroh bags have generally a longer life than in Auckland. The wear-and-tear of bags has increased with the diminution in the size of the average order. The present cost of cartage is felt as a heavy charge. "It is the cost of delivery at present which is causing our profits to be so small," said one witness. Another estimated the cartage-costs on bag lots for some suburban deliveries at as high as 13s. a ton. "We could reduce this cost if we had the supplies of coal" was the common cry. The cartage-costs of the State depot increased by Is. Id., or over 15 per cent., in the two years 1917-18. A dealer employing four single teams, and with a turnover of nearly 1,200 tons, presented the following figures as representing his actual costs :- Table 55. X s. d. Horse-feed .. .. .. .. 151 13 5 Shoeing .. .. .. .. .. 13 17 (5 Harness and drays (upkeep and depreciation of) .. 71 12 4 Sundry items . . .. .. .. .. 9 16 246 4 9 =4s. 2(1. per ton. Carters' wages.. .. .. .. 211 I-i 8= 3 6|d. ~ Total .. .. .. .. .. 458 18 5 = 7s. Bsd. „ The cost of delivery has been increased during the period through (he fact that the men generally employed , are not. as efficient as those of a, few years ago. When the comparison is made with still earlier years the falling-ofl in efficiency is said to he greater, even if allowance b< , made for the .shorter radius of delivery. In a business where the average delivery per man per day is 3to 3i tons, it was 6 tons twenty-two years ago, and in the opinion of the manager should still be not lower than 5 tons. There seems little reason for doubting the accuracy of the general observation that the intensity of labour has slackened of late years. This assertion was commonly made in reference not only to retail distribution, but to loading and unloading of wholesale lots. One witness testified that at a certain large port " about twenty years ago three men in a hold could put out 15 to 18 tons of coal per hour;
Firm A. Firm B. Kaitangata Coal. Firm 0. Brown Native. Finn l>. Westport Coal. Australian and West Coast Coal. Kaitangata Keefion Coal. Coal. s. d. s. d. 44 0 21 0 (Christ- (mine) church railway) 0 3 12 0 9 11 2 0 1 6 2 6 2 6) l"3 1*3 8 6 7 8| 2 3 3 64 0 3 | 0 7 FirmH. State Crev Depot. Coal. *»*" Coal, Cost ex mine or ship s. (1. 38 0 (B.B. 36s. lOd.) S. d. 28 6 s. d. 26 0 s. d. 30 0 a. d. s. d, 36 10 27 3 Wharfage Freight Railage Cartage to shed or yard Bagging, loading, weighing Loss in weight Loss on sacks .. Cartage to consumer Overhead charges, including rents Depreciation Interest on capital Other items 0 9 4 6 1 6 2 6 1 3 7 84 3 64 0 7 o 34 13 6 2 3 2 6 | 5 4 (I 9 1 3 2 4 1 0 6 6 4 0 4 5 4 4J : 4 6 2 ()" 0 9 10 8 2 2 II 1 3 7 0 2 0 (i"7 Total Retail price (monthly) Retail profit.. 60 74 64 0 61 3 60 3 64 0 ' 04 0 2 9 3 9 57 0 56 0 1 0 (loss) 47 2 47 0 0 2 (loss) 55 0 n"o4 '.'. 55 3 43 7 56 0 I 42 0 0 9 1 7 (loss)
49
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to-day there are five men in a hold, and they put out on an average 10 tons only " —that is, the amount per man per hour has fallen from 5 or 6 tons to 2 tons. Another witness gave the figures for the discharge of coal at another first-class port: eighteen years ago four men would discharge 20 to 25 tons per hour ; with five men now the average is 12 to 15 tons. Loss in weight may be put on the average at 2 per cent, for hard coal and 5 to 7 per cent, for lignites, in the latter case due mainly to evaporation. On coals screened in the yards there is additional loss, but the yard-screening has ceased since the shortage became acute last winter. There is also occasional pilfering on the railway, but it is not regarded as a serious element in cost. Complaint was made that the cost, of distributing Kaitangata coal in Christchurch in 1918 was unduly high, as the mine was selling only through an agent, and this agent was charging £2 ss. per ton bagged, ex truck, or 3s. more than the mine-cost plus railage. The practice of soiling through one agent was begun in May, 1918, and continued till October, and was amply justified by the shortage necessitating the appointment of a sole agent to divide up the few truck-loads available per week among the local dealers. The 3s. difference is accounted for mainly by the wages of two men employed by the agent to bag the coal and load the carts, and by the loss in weight en route from the mine, averaging about | cwt. a ton. It is worthy of note that coal of the best household quality from the Reefton or Inangahua Coalfield, which is one of the most extensive in the Dominion, can be landed in Christchurch under present conditions at a cost much the same as that of the Kaitangata coal. As mentioned elsewhere in this report, the development of these fields merits the attention of the State. (d.) Lignites- -Lignite coals of varying quality are available in Christchurch with ex truck prices ranging from £1 Bs. 3d. (Mataura) to £2 4s. (Kaitangata). The railage forms a large proportion of the total landed cost of these coals, in most cases ranging from one-half to two-thirds. The dealers have to allow more for loss of weight and cartage expenses on these coals ; and their prices have advanced at a much higher rate than those of other coals, for the further reason that consumers' demand in regard to them has been less clastic : householders have been willing to pay the greatly increased prices rather than suffer the only alternative of no supply at all. Dealers get a gross profit of about £1 a ton on such coals (out of which to reimburse them for all costs of storing and delivery), but this trade has not been so extensive as to provide them with an undue net rate of profit on their whole turnover, as the coals have found a ready market in their own district. In order to eke out the short supplies of the better coals the Munitions and Supplies Department has latterly compelled all dealers to include a certain amount of lignite as an essential part of every household order. If this had not been done the prices of all the better coals would have been raised still higher than they have been. (c.) Australian Coal.- The wholesale price of Newcastle coal ex ship at Lyttelton in September, 1918, was £1 16s. 6d. per ton, an advance of 13s. per ton, or 55J per cent., on the price in August, 1914. The price is made up as follows : — Tabl,o 56. Ms 1914 _ s. d. s. d. Coal f.o.b. at Newcastle per ton .., . . .. 15 0 110 Freight to Lyttelton .. .. .. .. . . 16 6* 10 G Insurance .. .. .. .. .. ..021 Primage .. .. .. .. .. ..02 Weighing 0 2 1 g Exchange . . .. . . . . .. 0 0} \ Loss in weight (2 per cent.) . . .. . . . . 03| | Overhead charges . . . . . . . . .. 03 J 32 7 22 2 This leaves 3s. lid. a ton out of which to provide rent, travelling-expenses, &c, as well as profit. These expenses have increased greatly per ton, owing to the diminished turnover. The importations of the wholesale firms have been reduced since 1914 by two-thirds. This reduction has been due not to the lack of coal in Australia, but to the shortage of shipping. The Government demand for railway purposes takes precedence of all other requirements. This means that the proportion of the total supply of Australian coal now available for ordinary trade purposes is much less than in 1914— e.g., one firm imports only one-third of the amount received in 1914, and the railways take one-half of the importation instead of one-tenth as in 1914. The gross profit per ton on the trade in railway coal was 6d. before the war and up to 1917, when it became 9d. ; after the Ist September, 1918, it has been 2s. 6d,, the price paid by the Government being £1 14s. Out of the 2s. 6d. the charges for shortage in weight, insurance, exchange, &c, are defrayed. The retail net cash price of Australian coal is £2 18s. as against £1 19s. in 1914, an increase of nearly 49 per , cent. The chief increases in retailers' costs appear to have been — s. d. Coal ex ship .. .. .. .. .. ..130 Railage . . . . . . . . . . . . ..10 Discharging . . . . . . . . ■ . ...03 Duty (primage) . . . . . . . . ■. ..02 Sacks .. 0 6 Cartage .. . . . . ' . . . . .. ..29 Loss in weight . . . . . . . . . . ..03 Office expenses . . .. . . .. . . ..16 Other charges .. . . . . .. .. ..17 * 17s. 6d. if by Melbourne Steamship Company,
7—H. 44a.
8.—44 a
50
(/.) Increases in Cost of conducting a Retail Business. —These generally have reached the amount mentioned in the last paragraph, and are due to increases in the cost of the coal ex ship or mine, in freight and railage, in the wages of yardmen and carters, in the cost of horse-feed, and of repairs and maintenance, and in the general expenses of the business. The rise in the per ton cost became steeper also from the fact of the mere decrease in the supplies of coal. The increases in the retail prices have generally been greater than those in the wholesale price. The increase in the wholesale cost to the retail dealer consists of higher f.o.b. cost at the mine and rises in freight; these are in course of time passed on to the consumer, in addition to any extra cost in carrying on the retail business itself. In the case of a bituminous coal largely used for house purposes in Christchurch, the wholesale price at Christchurch has increased by 10s. Bd., or 34 per cent, over the period 1914-18, whilst the retail price has risen by 155., or 38-5 per cent., the extra 4s. 4d. being made up of increases for cartage, yard expenses, sacks, &c. The changes in the retail prices have been fixed mainly by the North Canterbury Coal Merchants' and Dealers' Association, which- issues a schedule of prices of coal of all grades for varying quantities ; but the association's prices are not adhered to by all dealers. There is effective competition in regard to price. Some influential dealers broke from the association because its price-level seemed to them too high, others again because its prices were not considered high enough to provide a decent livelihood ; prices may be 3s. lower than the association's or 4s. higher. On one or two occasions proposed increases of price have been abandoned by the association because of the opposition of the larger dealers or mine agents. We have had convincing evidence that the agents of at least two important mining companies have taken steps to protect the Christchurch consumer against an increase in the retail price by the distributors (g.) Profits. —The pressure towards increase of the retail price has been incessant because of the rapidly mounting cost of working, especially in the case of businesses on the small or middling scale, which are in the majority. The larger merchants admit that their costs, particularly their cartage costs and their overhead charges, are much lower per ton than those of their smaller competitors. For these reasons, and the fact that they can get only a very small share of the non-house trade--e.(/., the supply of coal to dairy factories, foundries, hotels, and boardinghouses, where the coal may be carted loose, and the demand continues throughout the year—the smaller merchants desire to fix the price for house coal at a level higher than would be necessary to give an adequate net return to the large dealer. "We could reduce the frice to the public by netting from the de-pot, but we would drive the small man out of business," said one of the larger dealers. The obvious suggestion that the size of the normal coal-distributing business should be increased will be dealt with later. We are here concerned only with the trade, as it exists to-day, and the evidence put before us clearly shows that the majority of the coal-retailers have been making quite inadequate profits, despite the increase in the retail price of coal, because prices have scarcely kept pace with the costs of the majority of businesses. Five or six retailers went out of business in Christchurch during 1917-18 through financial losses. A careful, hardworking man can hope to get but a bare living out of his business unless it be on a large scale. To quote from the evidence, " There is one yard that we are running for a man away at the front. I have taken out that balance twice, and the average that that man can make is about £4 per week— £5 at the very outside, for which he has to work all hours. He has to keep his own books and do his own horse-grooming. He turns over 500 to 600 tons a year. Tn another place with a turnover of about 600 tons I have taken their balance-sheet out repeatedly during the last ten years, and the average earnings for those ten years are not beyond £3 10s. a week. They are in the association, and abide by the association prices." A large part of any profit that may be made is accounted for by unclaimed discounts, only comparatively few customers paying cash. Yard expenses, including cartage in and out, are heavy, and even wholesalers, unless equipped with labour-saving appliances, prefer to operate without a yard. " Unless you work a yard yourself," said a witness in the wholesale trade, " you cannot make it pay. ... It (profit) depends on the price at which they are debiting their yard with the coal. When we had a yard we debited it with the c.i.f. cost, and then we could not make it pay. ... If we had that yard to-day we should be worse off. We should have a smaller turnover, and the same rent and yard expenses to pay. Most of the smaller men run their own yards, and they are just getting their labour out of it." The State depot at Christchurch, though free from some of the costs borne by private dealers, makes the whole of its profits from the wholesale ex ship business, the retail business being conducted at a loss. The ex ship prices of the different classes of State coals have increased from 29 to 62J per cent, over the period 1915-] 8, whilst the rate of profit has increased, except in the case of small coal, in greater proportion.
Table 57.—Increase in Price ex Ship, Wholesale, of State Coals at Lyttelton, 1915-18.
Screened Unscreened Point Elizabeth, small Liverpool, small j State Coal. Increase in Price, Increase 1913-18. per Cent. 8. d. 9 0 354 10 6 50 10 0 624 6 6 29 (191.6-18) * Point Elizabeth, t Liverpool. 354 Bate of Profit. Per Cent., ! Per Ton, 1913. 1918. 13< 30 91 r 214* •' 1 10f 184 13 66$ 11 131 94 184 66f ( 30 214* 10t 13 II 50 62| 29
51
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Ex ship sales accounted for more than half of the turnover in 1917. The retail price of State coal (screened for house purposes) increased only 7s. 6d., or 22 per cent., over the period 1914-18, an increase insufficient to counterbalance the rise in the prime cost of the coal, and in the expenses of retailing it. The fact, that State coal is sold at a lower price than other coals is therefore in itself no proof that the private dealers are making undue ■profits on these, even if allowance be made for the difference in the prime costs. (h.) Suggested Improvements. —Some important suggestions were made by witnesses at Christchurch ; these are referred out in Chapter VIII, section 3. (v.) Distribution at Dunedin. (a.) General- -The chief house coals marketed in Dunedin come oversea from Westport and Newcastle, and by rail from Kaitangata, Taratu, Waronui, and other lignite-mines of minor importance. There are about seventy coal-merchants trading in Dunedin and suburbs. There is a Coal-merchants' Association, which consists of thirty-four members, chiefly smaller dealers. There is no differential treatment of non-members of the association by the mines. Trading is, as in other centres, both wholesale and retail. The price charged is either cash, or less Is. discount if paid by the 20th of the month following purchase. The general process of distribution is much the same as in other centres, already described. The coal is sometimes bagged at the truck and sometimes carted loose to the retailer's yard. The predominant order in Dunedin appears to be half a ton. As much as 5 tons a day may be delivered within a mile of a retailor's yard by one man. Two prices are quoted, a price for the city and a price for the hills. The hill rates are generally 2s. 6d. higher than the city rates. No State coal is marketed in Dunedin. The following is the cost of carriage of the chief coals to the railway-station, Dunedin : — Table 58. 1918. 1914. s. d. s. d. Kaitangata .. .. .. .. .. ..67 55 Taratu .. .. .. .. .. ..6 1 4 11 Waronui .. .. .. .. ~ ..52 43 Lignites .. .. .. .. .. ..22 19 Westport (shipping freight only).. .. .. .. 11 6 7 6 Newcastle (shipping freight only) . . .. .. 18 6 116 (b.) Prices. —Table 59 gives a comparison of the net cash retail prices of the chief house coals sold in Dunedin for the years 1914 and 1918.
Table 59. —Net Cash Retail Price of House Coal, 1914 and 1918.
There is an evenness in the rate of increase; the lignites are still the cheapest, and Australian the dearest, coals. Table 60 shows the dates and amounts of the various increases in the retail prices over the period in question. There have been nine different increases—one in September, 1915, three in 1916, two in 1917, and three in 1918. The total increase varies from 7s. 6d. a ton, or 38-31 per cent., in the case of lignites to 17s. 6d., or 48| per cent., in the case of the Westport coals.
Table 60. —Showing the Amounts and Dates of the Various Increases in Cash Retail Prices of House Coal at Dunedin for the Period 1914 to 1918, and the Total Increase per Cent.
Year. 1914 1918 Increase per cent. E aitangata. 8. d. 30 6 44 0 44| Taratu. 8. d. 21 6 31 0 44 Waromii. 8. d. 22 6 33 0 46f Lignites. Westport. s. d. 8. d. 19 6 36 0 27 0 53 0 .Newcastle. s. d. 37 0 54 0 384 48£ 46
Coal. 1914-15. j^|-' 8. d. s. d. Kaitangata .. 30 6 31 3 Nightcaps .. 26 0 27 0 Taratu ..21 6 22 0 Waronui .. I 22 6 23 0 Westport .. | 36 0 Australian .. ; 37 0 May, 1916. B. d. 36 3 July, 1916. 8. d. 37 3 29 6 25 6 26 6 41 6 41 6 Dec, 1916. S. d. 37 9 a. d. 40 9 April, 1917. s. d. 42 6 June, 1917. s. d. 43 0 Fob., Aug., Oct., 1918. 1918. 1918. s. d. s. d. 43 0 j 44 0 310 310 32 0 33 0 53 6 53 6 54 0 54 0 Total Increase. s. d. 13 6 Increase Per Cent. 444 24 6 25 6 38 0 39 6 (Jan.) 21 6 26 0 27 0 44 6 48 0 26 0 29 0 46 6 48 0 28 6 30 0 50 6 52 0 29 0 31 0 51 0 52 0 9 6 10 6 17 6 17 0 44 46f 484 46 Lignites .. 19 6 19 9 22 6 -i 23 0 25 0 20 0 26 0 26 0 27 0 7 6 384
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52
Table 61 shows the increases in the retail cash price of house coal per ton at Dunedin, 19T4 and 11)18, detailing the amount of increase due to each cause.
Table 61.—Increase in Retail Cash Price of House Coal per Ton at Dunedin, 1914-18, showing Amount of Increase due to each Cost.
The increase in the mining-cost is responsible for by far the greater part of the increase in the retail price in Dunedin. Retailers have been responsible for about a quarter of the rise, except in the case of Waronui coal, which has borne an extra share of retailers' increased costs. The prime cost to retailers of the different coals has therefore increased —Kaitangata by 125., Taratu by Bs., Waronui by 6s. 6d., lignites by ss. Bd., Westport by 15s. 6d. These increased costs they have sought to recoup by raising the price of each coal by at least as much, but the costs of their own businesses, besides the prime cost of the coal, have increased. These increases have been most in the case of labour, sacks, horse-feed, harness, and wheelwright repairs. The wages of yardmen have increased 13s. 3d. per week, and the hours have diminished by four per week, equivalent to an increase in cost of ss. 9d., making a total real increase of 19s. a week in the labour-cost. The wages of carters have increased at least 12s. a week. There is no evidence that increased efficiency has accompanied the rise in labour-cost. Employers complain that the men are doing less work although getting more money. It is estimated that the wages increase is equivalent to from 10d. to Is. a ton on the average over all coals traded in ; and the increased cost of bags, horse-feed, shoeing, harness, repairs to carts and harness, probably accounts for another Is. a ton. (c.) Costs. The estimates of the cost of handling given us varied, but a margin of about 9s. between the prime cost and the retail price is required before a net profit emerges beyond the dealer's own wages or salary and his depreciation charges. Cartage to the yard may be put at Is. 6d. a ton ; depreciation, including sacks, Is. 6d. ; office expenses, rents, rates, taxes, Is. ; loading and delivering, 4s. 6d.— a total of at least Bs. 6d. The smaller dealers estimate filling and cartage to yard at 35.; yard labour, sacks, and office expenses at 35.; and delivery and depreciation at 55.: a total of 11s. (d.) Profits. —The actual margins or gross profits were as follows : —
In the case of Taratu and Waronui no truck lots have been available during the 1918 shortage, thus increasing the- cost of the coal to the retailer by Is., and preventing a rise in his gross profit. The actual increase in retailer's costs as estimated for smaller dealers amounts to : — n. d. Filling and cartage to yard . . .. .. ..06 per ton. Office, yard labour, sacks, &c. . . . . .. ..10 ~ Delivery to consumer and depreciation . . . . ..10 Total .. .. .. .. ... ..2 6 The dealers maintain that to obtain a profit they should charge 2s. or 3s. a ton more than the ruling prices, and it is certain that the particular part of the increase in retail price due to dealers' own costs is less in Dunedin than in any other large centre. Several businesses have been taken over by other firms in Dunedin during the past two or three years, the main reason being that the owners were losing on their trade through the shortage of supplies. A business with a turnover of several thousand tons reported a net profit of only £6 for the last year. (c.) Suggestions for improvement mid several complaints made to us at Dunedin are dealt with in Chapter VIII, section 3.
Kind of n.,u 0 „„ Coal. ilailage. s. d. Kaitangata .. 12 Taratu .. 12 Waromii . , Oil Lignites .. (I 5 Westport .. 4 0 (freight) Neweastlo . . 7 0 I Increase *y,g«* p <* Incite. Mine-price Increase. Increase Per Cent. Per Cent, of Total Increase. Retailers' Charges. Increase. I norease Per Cent. Per Cent, of Total Increase. Total Increase. 21 9 21 12 21 9 21 6 534 23 s. d. 10 10 6 10 5 7 5 3 11 6 (including (id. railage) 60 49 36 44 40 80 73 53 70 oo s. d. 1 6 1 6 4 0 1 10 2 0 20 20 53 24 29 II 15 38 24 11 s. d. 13 6 9 6 10 6 7 6 17 6 61 41 .17 0
Table 62. 914 .. 918 .. Kaitangata. s. d. 7 6 9 0 Taratu, s. d. 7 (i 7 6 Waroinii. s. d. 7 6 7 6 I/ignite, s. d. 7 6 8 10 Westport. s. d. 7 0 9 0 Increase 16 ] 1 4 2 0
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(vi.) Distribution at Invercargill. (a.) General. —The chief coals used for house and general purposes are Nightcaps, Wairio, and Kaitangata. Westport is also used and Newcastle in normal times. A number of low-class lignites are in considerable demand during times of shortage. The railage on coal to Invercargill changed as follows :— Table 03. 1914. 1918. s. d. s. d. From Kaitangata .. .. .. .. ..72 89 „ Wairio .. .. .. .. .. ..49 59 „ Nightcaps .. .. .. .. 411 6 0 Lignites .. .. .. .. .. ..311 49 Freight from Westport to Bluff .. .. .. ..8 0 12 0 Newcastle .. .. .. 11 6 18 6 The wharfage at Bluff is Is. 6d., and the railage, Bluff to Invercargill, 4s. on New Zealand bituminous and 2s. lid. on brown coal. Distribution is in the hands of about thirteen dealers, some of whom deal almost solely in coal. These dealers purchase from the mines and retail to consumers. There is very little wholesale trade. Those requiring coal in large quantities for industrial and other purposes buy direct from the mines. The coal is railed direct to Invercargill, and carted from the station to the coalyards. The methods of delivery are much the same as those in other centres. Prices are for cash, for payment the month following delivery, and credit. There is a difference of 4s. between the cash and credit prices ; 5 per cent, is taken off for payment within a month. About half the orders are for cash, the remaining trade being divided between monthly discount and credit. The Coal-merchants' Association comprises all those engaged in the coal trade in Invercargill and fixes the retail prices. No State coal is marketed in Invercargill. (b.) Prices. —The following table states the position in October, 1918, in regard to retailers' prime costs, prices, and gross profits :—
Table 64.—Statement showing Prime Costs and Gross Profits in a Retail Coal Business at Invercargill.
These margins are greater than quoted for Dunedin on page 52. Businesses in Dunedin are on a larger scale and depend to a less degree for their total profits on their coal trade. Table 65 analyses the cost as shown in the first column of Table 64 into mine-cost and transportcost.
Table 65.—Analysis of Cost at Invercargill Railway, October, 1918.
Transport charges account for about a quarter of the retail price of the standard house coal in this centre. The next table shows the changes in the price over the period under review.
Table 66. —Increases in Retail Cash Prices of House Coal, Invercargill.
The main part of the increase is due to the increased cost of mining. The next table shows the proportional parts of the increase due to each factor.
Kind of Coal. Cost Price, Betail Credit Price Invercargill Bail- j Betail Cash Price. Cross I'rolit. less 5 per Cent, way-station. discount. Gross I'rolit. Westport coal Kaitangata coal .. Wairio coal Sightcaps coal Mightcaps nuts .. Lignite .. Joke £ s. d. 2 3 2 I 17 3 I 9 9 I 3 0 0 1.4 6 0 14 0 1 10 0 £ s. d. 2 14 6 2 6 6 1 19 6 1 12 6 1 4 6 I 3 6 I 16 0 s. d. II 4 9 3 9 9 9 6 10 0 9 6 6 0 £ s. d. 2 15 7 2 8 0 2 1 4 I .14 8 I 7 1 1 0 1 1 16 7 s. d. 12 5 10 9 11 7 1 I 8 12 7 12 I 6 7
Kind of Coal. Cost of Coal. Sea Freight, .Railage, and Wharfs Sea Freight, .Railage, and Wharfage. Total. Westport Kaitangata Wairio .. Nightcaps Lignite £ s. d. s. d. ( 12 0 freight ~) s. d. 1 15 9* | 3 11 railage J-17 5 ( 1 6 wharfage J 18 0 8 91 14 0 6 9 I v, -, , 0 17 0 6 0 M onl y 0 9 3 4 9J £ 8. d. 2 3 2 1 17 3 1 9 9 1 3 0 0 14 0 * Including 2s. lOd. or 3s. West Coast railage.
Kaitangata Nightcaps Wairio 1 Kind of Coal. .. i August, 1014. October, 1918. £ s. d. £ s. d. 18 0 2 0 0 12 0 1 12 0 14 0 .1 19 0 Total. Increase, per Cent. £ s. d. 0 18 0 04 0 10 0 48 0 15 0 04
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54
Table 67. —Apportionment of Increase in Retail Cash Price, 1914, to October, 1918.
The retailers increased their cash price by 2s. per ton, made up of Is. from 4th December, 1916 (wages to drivers), and Is. from 24th March, 1917 (owing to increased expenses), and, in addition, obtained sd. from Nightcaps and Bd. from Wairio. (See next table.) Tablo 68 shows how the various increases were distributed over the period, and analyses them in detail.
Table 68. —Table showing Increases under different Headings of Cost of Coal to Retail Dealers at Invercargill, and the Dates of each Increase, 1915-18.
In addition, all credit prices increased Is., June, 1915 ; 6d. April, 1918 : total, Is. 6d.
Table 69.—Increase in Mine-costs, 1913-18, compared with Increases in the Mine-price.
(c.) Costs. —The present cost of delivery of coal in Inveroargill is estimated at Bs. 6d. Table 70. s. d. Bagging . . .. .. .. .. ..10 Cartage to yard . . . . . . . . . . .. ..20 Delivery to consumer. . .. .. .. .. .. ..40 Weighing, sacks, rent, rules, office and other expenses . . .. ..16 Total .. .. ■ . . . . .. .. ..86 No allowance is made for depreciation. This represents an increase on the cost for 1914, chiefly because of increased wages, horse-feed, and increased expenses in maintaining gear. The Progress Co-operative Society analysed its cost for one week in September and found it to be 7s. 6d. a ton.
kaitangata fightcaps Wairio Kind of Coal. M! Percentage Increase ot Total increase. increase. s. d. 15 6 84 7 0 67 11 10 77 ■n-ii I Percentage Including Increase of Total U<!taiI increase. moronse, Charges. s. d. 1 7 1 1 I 0 I 9 10 • 64 s. d. 1 5 2 5 2 8 Percentage T t , i i ,» Increase. Increase. s. d. 7 18 6 23 10 6 164 ! 15 (i
llailage. Mine Increase. Kind of Coal, i=j rH os a. r~t rH ft fe 1916. " j~ ": t~ <D _3 rr_3 3 " O _5rr_3 h S ■ «1 H r. q f. H | <i S 1917. c i I j -g, P 1 P j_ " l-B r. -11 00 o C 6 I s. d.j s. d. 0 9| 0 10 0 6; 0 7 0 6! 0 6 s. d. 2 6 s. d. s. d. s. d. .'.' i"o s. d. s. d. s. d. 2 6.. .. 1 io '.. s. d. 3 0 s. d. s. d. s. d. s. d. s. d. s. d. s. d. 1 6 s. d. [aitangata Jightcaps Vcstport i"o i"o! ;: ..2 0 2 0 2"o 3*6 1 0 i"o 10 0 6 (3) '.'. ! i"o i agnites .. lowcastlo 2 0.. ..6 0 2 o! .. Mine I] icrease. Kind of Coal. 1918. ifi 18. DriversWages increased, December, 1916. Increased Expenses, March, 1917. Total Increase in Cost. Total Increase in ltetaii Price. April. May. June. ne. July. Sept. Kaitangata .. Nightcaps .. Wairio Westport Lignites Newcastle .. s. d. s. d. 5 0 2"o s. d. 2 0 s. d. s. d. 1 0 1 0 2 0 s. d. 1 0 1 0 1 0 1 0 1 0 1 0 s. d. 1 0 1 0 1 0 1 0 1 0 1 0 s. d. 19 1 10 6 14 10 10 0 7 0 s. d. 18 6 10 1 15 6 1 0 1 0
± 3 Mine. Mine. | Increase in Mine- I *2?S&jj_; Percentage which House Coal is cost of all Coal, of Total Supply. l_ ' s. d. s. d. s. d. 7 6 8 2| 15 6 66 to 70 (approximately). 4 Of 3 if 7 0 66 to 70 (first and second coal).
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The society pays high wages- -£3 3s. to £3 Bs. a week—as well as giving half a ton of coal per month to each man. Its secretary stated that its expenses are lower than those of any coal-merchant in Invercargill. No charge for management was included. (d.) Profits. —The gross profits to the retailer on the cash price in Kaitangata are about 9s. 3d. per ton, in Wairio 9s. 9d., and in Nightcaps 9s. 6d. On the monthly credit trade these profits are for Kaitangata 10s. 9d., Wairio 11s. 7d., and Nightcaps 11s. Bd. The expenses of the trade have been shown to be at least Bs. 6d. If we take the largest business, doing an annual turnover of about 2,500 tons, the difference between expenses and gross profits would approximate a little over £300, made up as follows : 1,250 tons at Is., £62 10s. ; 625 tons at 35., £93 15s. ; 625 tons at 55., £156 ss. : total profit, £312 10s., less an unknown amount for unpaid and unduly deferred debts. This sum cannot be regarded as excessive remuneration for the retailer's own labour and trouble, or as containing any considerable element of pure profit. Two coal-retailers have recently gone out of business in Invercargill through financial loss. (c.) Suggestions for Improvements. —Witnesses in this town expressed the opinion that if there were fewer dealers and a larger and more regular supply of coal the distributing-cost per ton could be reduced. The following tables summarize the changes in the retail prices of household coal at the different centres in comparative form, with allocation to the different heads of costs, and the estimates of the actual cost of delivery from the retailer's yard to consumer about September, 1918 : —
Table 70a —Comparative Table showing Total Increase in the Cash Retail Prices of Standard Household Coals during the Period 1913-18, with Division into its several Parts.
Tahltc 70b. —Comparative Table showing Cost or Delivery from Yard to Consumes at Different Centres. Auckland .. .. .. .. .. 6s. to 7s. 9d. Wellington .. .. • .. .. 6s. 6d. to Bs. 7d. Christchurch . . - .. . . . . 4s. 7d. to Bs. 6d. (average about 6s. 6d.) Dunedin .. .. .. .. .. 4s. 6d. to ss. Invercargill . . . . .. . . 4s.
Place. Bise in Cost at Mine. Bise in Transport. Bise in Betailcrs' Charges. Increase in certain Wholesale Charges. Total Increase. Auckland (to September, 1918) .. „ (after September) Wellington Christehureh (Kaitangata) ,, (Homebush) „ (Westport) Dunedin Waronui Taratu s. d. 5 6 7 6 4 6 9 10 11 0 4 6 10 10 5 7 6 10 7 0 s. d. 1 7 1 7 4 7 2 4 1 4 4 9 1 2 0 11 1 2 1 I. s. d. 1 8 4 11 4 6 7 10 6 8 5 0 I 6 4 0 1 6 2 5 s. d. o"c ()"9 s. d. 8 9 14 0 14 0 20 0 19 0 15 0 13 6 10 6 9 6 10 6 Invercargill
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56
CHAPTER TV. PRICES AND PROFITS IN THE COAL INDUSTRY AND TRADE. PAOU PAGE 1. Profits in Mining .. .. ..56 2. Profits in Distribution .. .. 61 (i.) Difference between Cost and Sale (i.) Transport . . .. 61 Price.. .. .. ..56 (ii.) Dealing .. .. ..62 (ii.) The Contents of Profit.. .. 58 (iii.) Measurement of the Rate of Profit 59 1. PROFITS IN MINING. (i.) Difference between Cost and Sale Price. The profits of an industrial enterprise are constituted by the excess of the income over the outgoings. In the case of coal-mines outgoings are the aggregate expenses of producing the coal to the point of delivery to the wholesale or retail buyer, and income the funds obtained by the total sales of coal for the same period as that for which the expenses are reckoned. The cost of production of the coal has already been shown in Table 16. Table 71 shows the average price per ton actually obtained by the mine-owner, with the rate of increase in this price over the war period. It should again be noted that the figures are comparable horizontally, but not vertically, since the several mines are at different stages of development, working often under different conditions and not all producing the same kind of coal.
Table 71 .—Average Net Selling-price per Ton of Coal at Mine or F.O.B. or F.O.R. at customary Shipping-point.
The average selling-price has increased in 'every case; the lowest price being 15-9 per cent, (five years), 21 per cent, (six years) ; the highest 60 per cent. The two mines with returns for the last four years only show practically the same increase, 29| and 30 per cent., though situated on different fields. The highest increases in selling-prices, both relatively and absolutely, are shown by the semi-bituminous coals of the North and the brown coals of the South, which have advanced by about 50 per cent, or from nearly 6s. to 7s. a ton on the average. The brown coals of the Waikato district have advanced by about only half that amount, though the percentage rise is a little more than half. The bituminous coals of the West Coast have risen on the average by about a third, or nearly ss. per ton. If the increase in the average selling-price for the industry as a whole be calculated from the available data in the same manner as the increase in the cost of production (see above, p. 26), it is found that the selling-price of those mines for which data are available over the whole period of 1913-18 increased, when due allowance has been made for relative outputs, by 36 per cent. — i.e., from about 14s. 3d. to 19s. sd. per ton. This figure is to be com/pared with that showing the increase in total cost of production — viz., 37 per cent.*
* The comparison is with the increase of 37 per cent., not with that of 41 per cent, (see p. 26), since the mining companies have to pay out of their selling-prices the cost of haulage from the mines to shipping-ports.
Mine. 1913. 1914. 1915. 1916. 1017. 1918. Increase. Increase per Cent. i\ B .. 0 .. D .. V. s. d. 8 11-125 13 8-05 . d. i 11-12 1 8-OE 1 "o 3 0 25 5 s. d. 8 9-65 13 7-62 16 l-4t 9 10-5 9 9-2 11 8 17 0 8. d. 8 9-625 13 7-62 16 1-43 9 10-5 25 2 3 s. d. 8 6-5 13 7-7c 13 IP9E 9 3 10 2-7 9 6'4 12 0-7E 17 0 s. d. 8 6-5 13 7-78 13 11-95 9 3 10 2-7 9 6-4 12 0-75 17 0 8. d. 8 9-5 17 5-78 17 4-7 9 4 11 4-5 8 9-1 12 1 18 3 s. d. 8 9-5 17 5-78 17 4-7 9 4 11 4-5 8 9T 12 1 18 3 8. d. 9 6-625 21 0-4 17 1-38 10 10 12 7-6 9 7-8 14 0-25 20 0 8. d. 9 6-62 21 0-4 17 1-38 10 10 12 7-6 9 7-8 14 0-25 20 0 25 1 i 3 i 1 1 1 5 1 i s. d. 12 1-5 21 10-64 23 3-34 II 5-3 13 2-6 11 7-9 16 7 24 0 s. d. 12 1-5 21 10-64 23 3-34 II 5-3 13 2-6 11 7-9 16 7 24 0 8. d. 3 2-375 4 8 2-59 4 7 1-91 1 0-8 2 11-9 1 10-7 5 7 8 0 47 00 44-5 (five years). 15-9 (five years). 29-25 (four years). 19'4 (five years). 50-8 50 F .. G .. H .. 11 0 16 0 9 9-2 11 8 17 0 I .. ,T* .. 12 9-95 i ' 9-9£ 2 "7 i 4-6f 5 II-Of 5 8 9 12 4-7' 12 7 12 9'3 17 3-3< 12 4-73 12 10-46 12 5-69 12 10-4f 12 5-61 12 8 12 3-1 16 9-05 6 9 i2 12 6-84 11 2-6 14 6 13 10 14 2-18 17 6-23 12 0-84 11 2-6 14 6 13 10 14 2-18 17 6-23 4 1 ] 1 ] 8 1 3 i 14 1-29 13 8-63 17 6 15 0 15 9'38 20 10-38 14 1-29 13 8-63 17 6 15 0 15 9-38 20 10-38 15 0-23 16 1-8 17 10 18 6 17 0-08 24 0-32 15 0-23 16 1-8 17 10 18 6 17 0-08 24 0'32 3 2 8-28 3 8-11 3 4 5 11 8 3 7-4 2 7 1-2 21 d~ . . K* .. 30 (four years). 23 (three years). 47' 27 42 JY~ . . L .. Hit M .. 12 7 13 4-68 16 11-09 12 7 12 9'3 17 3'36 12 8 12 3-1 16 9-02 N .. o .. * State mine*
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When we compare the selling-prices of all coals for which exact, details were available in each year, whether from collieries working over the whole period or not, the increase in selling-frice is 22 per cent. This figure, however, as in the case of cost of production, does not give a true measure! of the change of the price of all coal, since the .selling-prices and cost of the mines for which exact particulars were not available for 1913 were on the average lower than those of the mines providing data for that year. This figure was lower during 1914—15—16 than in 1913. In 1916-17 it rose 11 per cent, above the 1913 level, and in 1917-18 22 per cent. The selling-price of bituminous coal increased 35 per cent. (3s. 2d.) during the period, though the cost rose 40 per cent. ; that of semi-bituminous coal rose 34 per cent. (ss. 7d.), or slightly more than its cost; that of brown coal 22 per cent. (2s. 7d.) , as against a rise of 25 per cent. in cost. The increase in the price of brown coal for 1917-18 when compared with 1913-14 (a better basis of comparison in view of the incomplete data for brown-coal mines for 1913) is 30 per cent. (3s. Id.), the corresponding increase in cost of production being 31 per cent. The difference between the mine selling-price and the cost of production in each case for each year is set out in Table 73, which also expresses the difference as a percentage of the cost of production.
Table 73. —Mine-profit per Ton, also expressed as Percentage of Total Cost per Ton.
The lowest and highest margins between cost and price were : — Tahle 74. Lowest. Highest. s. d. s. d. 1913 .. .. . . .. .. ..-14-5 2 5-625 1918 .. .. .. .. •. .. —2 2-87 4 2-93 Seven mines get a larger margin in 1918 than in the earliest year quoted by a total of 15s. 5'11d., or an average of 2. 2-4 d., whilst six mines get a lower margin by 4s. 028 d., or an average of 8-05 d. The highest and lowest margins are shown by a different mine each year. The two largest increases in the margin of profit are those of the State mines, though the returns of one of them, the Liverpool mine, are compared over the last four years only. Generally speaking, the decreases in the mine-profit per ton are more significant and typical of the whole output of the period than the increases. The average annual profit per ton shows a range from Is. 10d. gain to Is. lid. loss. If the properly weighted average selling-price be compared with the corresponding average cost of production for the mines giving returns for the years 1913-18 the margins between cost and price are 9d. and 10d. a ton for 1913 and 1918 respectively, or 5-6 and 4-5 per cent, of the cost of production. A comparison of the m similar margins for all mines giving data, whether over the whole period or not, shows a reduction from 9d. to sd. a ton, the latter representing 2-2 per cent, of the average cost. The next table compares the percentage increases in the selling-prices with those in the total cost of production at the separate mines. These generally moved together except where the price lagged behind
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Mlno. | 1913. 1914. 1915. 1916. 1917. 1918. Increase or Decrease between Earliest and Latest Years. Annual Average Profit per Ton. 8. d. A . . .. 1 4-86 9 B .. ..0 10-25 6f C .. . . -0 2-5t — lit s. d. 1 1-94 54 1 3-88 114 1 0 8f s. d. 1 3-38 8 1 0-87 94 1 0 84 s. d. 0 9-58 4§ 1 7-74 13 0 10-4 64 -2 8t -15-|--1 7-92t -13t 1 3'86 114 0 2-96 o 3 24 -0 7f 8. d. I 5-8 7f 1 4-07 94 -0 7t -3ft -1 ot -sit 0 1-97 14 2 11-63 26 0 7-14 ! 3 I -5 9-25t -29t 0 6 54 s. d. 0 8-55 34 0 9-64 2 0-4 124 -0 5-5t -2Jt 0 9-81 4 4 2-93 38 1 4-39 1 1-75 8 1 1-3 104 2 2-7 19 0 10 74 0 11-15 44 -2 2-87t -8t 1 7-25 15 J s. d. -0 8-31t -0 0T61t 8. d. 1 1-68 1 2-07 1 9-9 0 8-2 D 2 2-5 1 4-5 (loss). E* -1 8-55t -12t -0 0-24| +2 6-36J 0 7-17 (loss). P* .. .. -0 8-04-|--5t (i .. 1 7-18 11 H .. .. -1 4-5t 10 -1 7'56t -Hit 0 9-5 5 +4 10-97t 1 0-43 0 1-22 a o i-a 3 0 1 i -0 2-79t 0 9-39 1 4-5 13 0 9-7 9 +2 6-25J 0 8 (loss). I + 0 3-6J 0 4-0 J K 1 6 18 0 7-24 44 0 1-02 tit ( a P-) 1 9-875 20 A 1 5 18 0 1-27 i -6 9-44-i -33t 1 8-875 254 0 9'25 9 1 1 11 0 2-61 1 -0 6-18f -3t 1 2-125 14 -0 0-8t 1 1-45 L .. .. 0 2-62 14 M 0 4-3 2 -0 2-74-|--lt 2 1-875 324 +0 8-53J 0 4-87 M -2 l'85t 1 11-44 (loss). N .. ..2 5-625 384. -010-375t 1 9-93 Highest (to nearest i 2 6 penny) Lowest (to nearest — 1 5t penny) \ 1 10 I 9 2 2 3 0 4 3 4 11 1 10 -1 8t -1 9t -2 8t -1 o-|--2 3t -2 2t 1 11 (loss) * State i mines. t Decrease. X Incrcasi
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costs. The mean increases for the mines, giving returns over the whole period 1913-18, are about the same for cost and sale price—viz., ss. 10d. and ss. 9d.
Table 75.— Comparison of Increases in Mining-cost and Selling-prices at Mine, 1913-18.
Table 75a summarizes the position for the coal-mining industry as a whole in regard to average selling-prices, cost of production, and profit per ton for the period 1913-18 in so far as it is represented by the data in evidence.
Table 75a. — Average Costs, Selling-prices, and Profits per Ton for the Industry as a Whole, 1913-18.
This summary shows clearly that the mining companies have not increased their gains from the industry during the war period relatively to their costs. The factors determining the changes in the average cost of production have been considered in Chapter 11, For the causes of the increased selling-price see Chapter 1, section 7 (vi), p. 23. (ii.) The Contents of Profit. The assessment of either the true amount or the true rate of profit is not an easy matter. The rates of dividend paid to shareholders provide a rough but not exact measure if averaged over a long period. Quotations of rates for short periods only may seriously mislead, especially if the industrial enterprise in question extends, or is expected to extend, over many years. Rate of profit is the ratio of gain to capital, and not' all gains are distributed- to shareholders in the form of dividends, nor should the amount of capital given as the " paid-up capital " be accepted without close examination as the base on which to calculate the rate of gain. The fund from which profits come is the excess of the sum obtained from sales over the corresponding expenses. A preliminary question, therefore, in considering whether profits are " fair and reasonable " (Order of Reference, clause 3), is whether all the essential elements of cost and income have been included in the calculations of costs and selling-prices submitted to the Board. (a.) In one or two cases the coal business is not the only business conducted by the company in question ; but it has been possible to separate the coal-mining costs and income distinctly from the other costs and income. It is only when we come to distribution that this difficulty becomes serious. (b.) The income has been correctly ascertained, net figures being required and obtained in every case. The selling-prices have also been determined in competitive conditions, and cannot be regarded as monopoly revenue. (c.) But, as regards costs, examination shows that the owners' analyses, taking the coal-mining industry as a whole in New Zealand, do not make sufficient provision for certain expenses that should be regarded as inseparable from the industry. If they are not allowed for, the industry cannot hope to hold its own in the long-run with other industries of the Dominion in competition for the capital necessary for its maintenance and extension. In particular, sufficient has not been allowed for depreciation on plant and buildings, and it is unquestionable that in many cases little has been done towards providing the sinking funds which are necessary in view of the fact that a coal-mine is a
Mine. A .. B .. 0 .. D .. Et .. Ft .. Increase in Total Mine-cost to Nearest Penny. s. d. 7 10 3 8 3 2 1 1 1 2 -2 3:]: 6 11 8 3 2 0 I 7 Increase in Average Increase in : s e lMngTrtce! n per Remarks. Selling-price. Mine-cost, per Cent. | { [ nt ' L s. d. 7 I 50 42 3 7 29 27 5 11 32 47 3 4 17 23* 1916-18 only. 3 8 8 30 1915-18 only. 2 8 -20J 21 64 . .'. 8 0 57-2 50 5 7 16 51 III 18 19 ; 1914-18 only. 3 0 .. 29 1915-18 only. 17 27 16 1914-18 only. 7 2 59 45* 1914-18 only. 8 3 56 60 3 2 63 47 G .. H .. I .. J .. K .. L .. M .. N. .. O .. 2 3 9 6 7 6 4 1 Highest (1913-18) Lowest (1913-18) Mean (1913-18) 7 10 -2 3:1: 5 10 8 3 64 60 2 8 -20t 21 5 9 41-5 47 * I'rodneini 1 I I ? at a loss. t State mines. X Decrease.
Coal from Mines giving Exact Data for each ! All Coal to which Data related, 191 3 -18, whether Year of the Period 1913-18. from Alines over the Whole or Part of Period. Tncre-.se Increase Tnereise I Increase 1913. 1918. ini'i -n? P er Cent - I91:1 - 1918 - ioi»lia : Per Cent. 1913-18. ■ 191s _ 18- 1918-18. 19 l 8 _ 18 , . . . s. d. , s. d. s. d. s. d. s. d. [ s. d. Average selling-price .. .14 3 19 5 5 2 36 14 3 17 5 I 3 2 22 Average cost of production 13 6 18 7 5 1 37 13 6 17 0 ' 3 0 20 Average profit .. .. 0 9 1 0 10 0 1 11 0 9 0 5 0 4 44 (decrease) (decrease) Rate of profit per cent, of cost 0 54 I 0 44 .. .. 0 54 II 2J of production
59
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wasting asset, or the a necessary means of insurance against the risks in mining, such as floods, fire, faulting, thinning-out of seams, changes of quality, and so forth. Some of the large mines have made no allowance for depreciation in calculating profits, nor have they built up reserve funds. For example, to take three large collieries, one mine made no depreciation allowance till 1918, and has no reserve fund ; another put aside only £2,500 each in 191.4 and 1915, having made no provision for depreciation in other years ; the third has not treated depreciation as an annual working charge, but has appropriated something as it was possible from the balance available from time to time, setting aside about 1| per cent, in this way during the period under review. Where there is freedom of sale and purchase in a market there tends to be one sale price for coal of a particular grade and quality, allowing, of course, for the expenses of transport from one point to another within the market area. If two mines supply the same class of coal to the same market their selling-prices for that coal cannot differ in the long-run to any appreciable extent, but the cost of production of the two mines may differ owing to differences in advantages for production ; and, since the supply from both is necessary to satisfy the needs of the market, one mine obtains a greater gain per ton than the other. Such differences in the amount of profit per unit of output is a necessary result of circumstances that cannot be altogether removed, but they are minimized by every factor making for freedom of competition, and tend to become greater the less freedom allowed producers and purchasers. If all costs and selling-prices are correctly calculated, the difference would in every case give the amount of pure profit, if such in reality exists. " Profits," however, is a term of loose and varied usage, and is often used to include some of the costs as noted above. Such " gross profits " may have; to provide funds for charges not already allowed for. Commonly the following are such : (a.) Insurance charges. We have already noted that, though the mining companies have included certain insurances in their cost figures, they have not included all that might fairly be charged against the risks of coal-mining. (b.) Depreciation and sinking-fund charges, to allow for wear-and-tear and replacement of capital and wasting assets. The mining-costs quoted make quite insufficient provision for such charges. (c.) Wages of superintendence of the owner of the capital. In the case of mining companies, whose businesses are joint-stock and conducted by salaried managers, this item is negligible, being confined merely to the trivial sum that may be regarded as a shareholder's remuneration for the trouble of making the particular investment and exercising that very general control over the business which is the particular function of shareholders in a joint-stock company. Directors' fees have been included in every case in ordinary costs, as well as the ordinary salaries of shareholders who may also happen to be officials. ((/,.) Interest on the capital invested. No interest has been allowed for in the mining-costs recorded and presented to us beyond interest payable to those who had lent money to the companies by overdraft, debentures, &c. The chief charge on the profits fund of the companies is interest on the actual amount of the shareholders' investments. (<;.) Pure or net profit, which, wherever it exists, is largely a differential return that is, a return due to the company's possession of some peculiar advantage in production or situation over its competitors producing for the same market. I n estimating the actual net profit per ton it is therefore necessary to deduct from the figures of mine-profit quoted in Table 73 a certain amount for insurance, depreciation, sinking fund, and interest charges. In the majority of cases there is insufficient margin to provide for these ; not only is there no net profit, but there is a loss, in the case of a large company the margin, averaging over 1913-48 about Is. 2d. per ton, was insufficient to provide depreciation and interest on capital by Is. 11-38 d., 4-71 d., and 8-04 d. for the years 1913-15 ; and by l-875d. and LO-584d. for the years 1917-18. Similar calculations could be made for other mines. (iii.) The Measurement oh . Rate of Profit. The rates of dividends to shareholders declared by the principal colliery companies since 1913 are set out in the following table : —
Table 76.-Rates of Dividend declared by Chief Coal-mining Companies in New Zealand, 1913-18.
Mine. 1913. .191.4. 191.5. 1916. 1917. Annual 1918. Average for Company. j P. R> jr L i ) 1 i r 0 5 0 10* 10 5 0 0 0 0 10 4 4-6 0 10 0 10 5 5 7-5 0 0 0 0 to 3-95 5 I 0 0 0 0 0 5 10 8-75 0 0 10 10 0 0 0 10 6 6 0 0 0 0 10 10 3 4-15 4-3 4-4 0 o 5 8-75* 0 5 0 20 7 0 0 10 4-65 5-3 0 0 0 3 0 1-7 8-75*, 9-38 10 4-17 7 7-5 3 10 6-7 6 4-17 0 0 0 0 10 10 5-23 5-1 [ .. (8 yoars old, 31st January, 1918) .. .verago dividend unweighted Lvorago dividond weighted according to size of capital ' Plus a bonus= . | = 2i per cent. W( ■age for who! lo period = 4-8 per cent, >i| -hted ave.
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Of the twelve principal coal companies the highest average annual dividend for the last six years is 10 per cent, (and that was returned to a company which for seventeen years- viz., 1880-97 —paid no dividend at all) and the lowest zero. Of the twelve companies, two paid an average dividend of from 1\ to 10 per cent.; two paid an average dividend of from sto 1\ per cent. ; four paid an average dividend of from 2| to 5 per cent. ; one paid below 2| per cent. ; three paid no dividend at all. The weighted figures giving the ratio of all dividends paid to the sum of all the capitals involved are the most significant, and provide the best measure that the declared dividend rate can give of the profits made by the coal industry viewed as a whole and not in relation to any one company or group of companies. It is the dividend return which would be registered if all the capital in question were the property of one shareholder. This weighted dividend ranged during the last six years for the principal collieries of the Dominion from 4-3 to 5-3 per cent., the rate for the whole period being 4-8. The income actually derived by shareholders in general from the money invested by them in coalmines may be said to have returned them directly from about 4 J to 5 per cent., if we allow for capital excluded from the inquiry—a rate that can be regarded only as extremely moderate in view of the ruling rates for pure interest alone during this period. It will be noticed how the very large capital of Company D, with its uniform and fairly high rate of return, influences the figure of the weighted average. But, as stated previously in this chapter, it is necessary to go behind declared dividends on the capital in order to get an approximately just measure of profits. The gain to a company is the whole of its profits for the period, the excess of income over expenditure as shown in its profit and loss account in the balance-sheets ; the rate of this gain is the ratio of the total gain to the total capital that has actually been paid in by shareholders. This latter sum, the capital with which shareholders had actually parted, may or may not be the same as the amount of " paid-up " capital, since subscription may or may not have been at par, and companies may issue their shares at a premium or give bonus stock. The gain to the shareholder is not necessarily identical with the gain to the company, since the whole of a year's profit as set out in the annual balance-sheet is not distributed in dividends to shareholders, but only a certain part after providing for reserves and similar funds. Neither is the whole of the shareholder's profit identical with his dividend ; every receipt and every expenditure of the shareholder arising out of his investment must be taken into account. In addition to dividends on the receipt side are such gains as come from the issue of new shares at preferential rates to existing shareholders, and, less clearly, any rise or fall in the market value of his shares. On the other side there are all losses of capital, whether complete or whenever the nominal value of capital is reduced. The ratio of the net gain thus calculated to the capital actually paid in will be the real rate of profit to the shareholder. Table 77 gives an estimate of the rate of profits gained by the mining companies in New Zealand during the period 1913 18 in so far as it has been possible to calculate it from the data available to us. The companies' balance-sheets show the " authorized " capital and the " paid-up " capital in each case, but they do not state the actual " paid-in " capital, the calculation of which would involve a searching detailed inquiry into the whole financial history of each company. In some cases the amount actually paid in as working capital available to the companies would be greater than the present paid-up capital as shown in the balance-sheets, and in other cases less. It is not possible from the scanty data yet available to give any reasonable estimate of the change in the rate of profit by calculating it on " paid-in " rather than " paid-up " capital.
Table 77.—Profits of Mining Companies, 1913-18.
The average annual returns of the companies over the period 1913-18 therefore range downwards from 15-03 per cent, on their paid-up capital to a loss of 18-36 per cent. This includes all profits, including those not distributed to the shareholders. The average, weighted according to the capital
Average Annual Sum of Capital during Period. Average Annual Total Profits. Bates ol Profit. Company. Nominal Paid-up, to Actual nearest Pound. Paid-in. (1) (2) I Excess of Profits over Losses In Balances. N ominal. Batio of Column 3 to Column 1 (per Cent.). Actual. Batio of Column 3 to Column -2 (per Cent.). (3) I A (six years) B „ 0 „ D E (five years) F G H (four years, 1914-17) 1 (three years, 1916-18) Jt £ £ 41,880 76,819 177,851 441,667 128,028 I £ s. d. 1,818 9 0 5,027 15 2 10,990 2 I 42,835 13 6 3,987 9 1 4-34 6-54 6-18 9-7 3-11 11,255 192,694 50,000 65,435 (debentures) 28,330 916 12 2* 2,075 0 10 7,514 19 9 452 16 10 8-14* 1-08 15-03 0-69 K 5,201 19 6* 1.8-36* Total 1,290,784 65,583 14 7 5-1 * Loss. t In liquid ttion.
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in each company, is a rate of just over 5 per cent., out of which the industry has to make provision for return to the shareholders by way of interest and a large part of the insurance against the risks associated with the industry, as well as providing a considerable part of the depreciation and sinking-fund charges. It is clear that, judged by the current rates in finance during the period, this return does not constitute a fund sufficient for these purposes. Passing from dividends and companies' gains to the question of the actual net gain of shareholders we were confronted by difficulties too great to be overcome in the time at our disposal in attempting an exact estimate of these over the period. The subject, however, is so important that we offer a few remarks by way of definition of this particular return, and suggest the form in which the results of such an inquiry may be summarized. This latter is done by the heads of the blank Table 78 which follows.
Table 78.—To summarize Shareholders' Net Gains.
The average rate obtained means the percentage of gain that would have fallen to all the shareholders if they had subscribed to the shares at par (in the first case) or at the actual price received by the companies, and had either kept their shares ever since or had sold them for the price they bad given. Ft is the gain that would have been reaped if all the capital invested had remained the property of a single shareholder. As a matter of fact, however, shares change hands at varying prices above and below their original price, and to the individual holder the annual profit is the percentage yield to him at the price he gave. But it is impossible to determine the figure showing general percentage of yield over all the period unless the price at which every share was sold during the period is known, and this knowledge is not available. Nor does it seem necessary for the particular purpose to take account of the rise and the fall in the market value of the shares, for the reason that the price which is paid for shares to a previous holder of them does not form any part of the working capital of the business ; the only price that provides capital for the company is the original price paid. The rate quoted, therefore, may be accepted as the truest possible expression of the profits of investors in mining companies over the period. It represents, as Sir William Ashley says, writing of a similar figure for German engineering businesses, " the surplus share of the product which went to those who contributed capital, who undertook the limited risk involved in the investment and exercised the amount of control which falls to the ordinary shareholder- the share, that is to say, remaining after all the working-expenses had been met, including the remuneration both of directors and managers, and the interest on borrowed money. The surplus went to somebody ; and, if it did not go to shareholders who entered later and bought these shares at an advanced price from previous holders, it went to those who had sold out at the capitalized value of the expected dividends." In estimating the return to the capital invested in coal-mining as a whole, as distinct from the return to the owners of capital invested in particular mines, it is necessary to take account of the capital lost in the mines that have been closed down as failures. A large amount of capital was shown in evidence to have been lost in this way in New Zealand, but before the period under review. The fact of such losses, however, is relevant to this inquiry, in so far as it should affect the estimate of the amount necessary to insure against the risks of coal-mining in the Dominion. 2. PROFITS IN DISTRIBUTION, (i.) Transport. The first phase of the distributive process considered was transportation. Transportation is undertaken by the Government railways and by shipping companies. It is impossible to ascertain the profits made by the railways from the carriage of coal on all lines in New Zealand, since separate records of the cost of handling the different classes of traffic cannot be kept. On the lines connecting large collieries with the coal-ports the traffic in coal naturally returns a high profit. Representatives of the coal companies generally express themselves as satisfied with the facilities provided by the railways for the carriage of their coal and the working of the mines, but express no opinion as to the reasonableness or unreasonableness of the railage charges, which are paid in most cases by the dealers, who, of course, pass them on to consumers.
Total Caj Japital. ipital. Shareholders' lleceipts. Sharel ■ihareholdc Le: era' Losses IS. Shareholders' Profit. Profit. p. 7 'S3 Bates ol Company. Totals Nominal Paidup. (1.) Actual Paidin. (20 i oj i KB Total. I g * 8 flis (3.) (4.) (60 d*3 OS ft («.) S I . o go go (7.) o Pi o 43 —j * 0) (8.) 1 Total. Total. Excess of (5) over (9). (10.) CI <- P . ■ 1S33 (11.) I ?] lis O O Bat o (12.) I i
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Thu Union Steamship Company provides the bulk of the shipping for the sea carriage ol coal. Daring the period under review it has had twenty-nine ships more or less regularly used as coalcarriers in the West Coast and Australian coal trade. All of these ships, however, perform other work than the transport of coal, and this mixed service has made it particularly difficult to analyse the cost of carrying coal alone. Many of the ships carried coal and general cargo at different times of the year. In many cases, too, where the cargo one way is coal, the back cargo is general merchandise. By taking, however, the average expenses apart from labour, and adding to them the labour on the coal, the company provided us with data which may be regarded as a fair sample of the trading particulars relative to boats, giving a spread of tonnage from a small collier up to the largest regularly employed on the New Zealand coast. Calculations from this data show the company to have earned by such ships in the New Zealand trade up to the end of 1917 the following profits per ton of coal carried : — Table 79. Year ending Tons oarried. Net Profit per Ton,* s. d. September, 1914 .. .. .. .. .. 218,726 1 3 1915 .. .. .. .. .. 390,332 1 3 1916 .. .. .. .. .. 458,512 1 01 1917 .. .. .. .. .. 503,496 1 0 * Out of tliis depreciation, sinking fund, and periodioa] overhaul charges arc to bo provided. The average yearly cost per ton of running these ships increased in this period by 48-35 per cent., while the average freight return increased 34-79 per cent. No allowance has been made in the cost for depreciation and periodical overhauls. The data for 1918 have not yet been calculated, but the company states that the margin between cost and return shows a slight improvement. It has to be remembered, however, that an unusually large amount of overhaul and general repair work has to be done owing to the postponement of repairs since the outbreak of the war. The position in regard to the Newcastle trade is still more difficult to analyse. The company estimated in September, 1918, that it was importing at the rate of about 190,000 tons a year. Changes from coal-carrying to general carrying are more frequent in the Newcastle trade than in the coastal trade. The difference between the cost and the freight rate is greater, but the voyage is longer, and the ships have often had to run back in ballast. The trade on this run, too, has been worked in close collaboration with the Ministry of Munitions and Supplies. The freight rates charged by the Union Steamship Company are 35 per cent, lower than those asked by the Australian Controller of Shipping. The Australian Controller on occasion provided shipping for the coal trade to New Zealand, but at a rate over 50 per cent, higher than the Union Company's rates (£1 ss. as against 16s. 3d.). The Union Company's rates are over 56 per cent, lower than those of the Imperial Controller, the latter charging £1 10s. as his lowest rate against the Union Company's 16s. 3d. The rates of the Union Company are also less than those of any Australian shipping company which has been operating outside the Controller. The company claims that it has fully considered and rendered its obligations to New Zealand ; that, with the exception of one ship leased to the Navy, it lias parted with none of its tonnage on time charter, though very high rates have been offered to it. The increase in the freight rates may be regarded as moderate when viewed in the light of the increased cost of rendering the service and of the tremendous increase in the world demand for tonnage, the great shortage of shipping, and the enormous revenue that could have been obtained by using the ships beyond the New Zealand trade. One coal company which carries part of its coal-output in its own vessels, and which credits them with the ruling rates of freight, testifies that these ships "barely pay working-expenses." But the Board obtained, particulars from another company with shipping engaged exclusively in the carriage of coal from the West Coast, and these show that the current rates of freight on coal afford a very substantial margin of profit in special cases, even when the ships carry no back cargo. Profits in the wholesale and retail trade in coal have already been considered in Chapter 111, section 2, subsections (ii) (g), (iii) (d), (iv) (g), (v) (d), and (vi) (d), pp. 42, 45, 50, 52, and 55. The general conclusion is that, except in the case of those dealers who are engaged in the retail trade on a large scale, the difference between the cost of coal to the dealers and the price received by them affords but a mere living to those engaged in it. The profits of the retail dealers cannot be assessed as exactly as those of the mining companies because of the mixed nature of the business conducted by them, but the balance of evidence does not suggest that they are not " fair and reasonable " a* the industry is organized at the present time.
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CHAPTER V. THE EARNINGS OF MINE WORKERS. I'AOK PAOIi 1. Rates of Pay and Actual Earnings .. li.'S 5. Real Earnings of Mine Workers as distinguished from Money Earnings .. 69 2. Precautions necessary in Comparisons of (i.) Amount of Wage .. .. (ill Earnings .. .. .. ■ ■ 88 (ii.) Its Purchasing-power .. 69 (iii.) Regularity and Constancy of .'!. Movement in Actual Earnings during the Employment .. '.. 09 Period .. .. .. .. 65 (iv.) Supplementary Earnings; De- , , ductions .. .. 70 4. Examples of Actual Earnings and their (v) Miscellaneous Factors : ChaIncrease .. .. .. .. (><> raoter of Work, Health, &c. 71 1. RATES OF PAY AND ACTUAL EARNINGS. In assessing the increases in earnings since the commencement of the war we must distinguish between rates of pay per unit of time or per unit of output and the earnings actually received by the worker. A 20-per-cent. increase in the rate of pay per ton mined does not necessarily mean 20 per cent, increase in the actual earnings of the miner, since the increase in the rate may be accompanied by some change, not proportionate to the change in rate, in the duration or constancy of the employment, the efficiency of the miner's work, or some other factor or condition influencing the total amount of his output in a given period. The increases made during the war in the rates of pay for workers engaged in the production of coal are set out in the industrial agreements made during this period, though in some cases higher rates may be actually paid and more concessions granted, by way of " yardage " in narrow or steep places, &c, and other allowances, which enable a higher real rate of pay to be earned. The rates for hewing in 1914 were: Buller-—Pillars, Is. lid. ; solid, 2s. 4d. per ton. Grey— Pillars, 2s. 2d. ; solid, 2s. 4d. per ton. North Pillars, 2s. ; solid, 2s. per ton. South- -Pillars, 2s. 3d. ; solid, 2s. sd. per ton. There were some variations e.g., in a northern mine Is. Bd. was the rate in 1914, rising to Is. 10d. in 1916 and 2s. in 1917. In another north mine the rate was increased by 2d. These rates have remained as the minimum or standard; but in the first half of 1916 an increase of 10 per cent, was granted as a war bonus. The date on which the payment of this first war bonus began varied from mine to mine. The second war bonus of 7 \ per cent, was paid from about the middle of 1917, and the third, also of 1\ per cent., from September October, 1918. There has therefore been an increase in the rates paid to miners of at least 17\ per cent, between the outbreak of the war and September-October, .1918, and 25 per cent, after the latter date. The increases granted at the same times to all other workers, those on day-wages at the mine, whether underground or on the surface, were 10 per cent, in each case, making a total increase of at least 30 per cent, in their rates of pay. 2. PRECAUTIONS NECESSARY IN COMPARISON OF EARNINGS. In making comparisons between the actual earnings of miners at two different periods and endeavouring to find the causes of the changes noted attention must be given not only to any change in the rate of pay per ton, but also to alterations in the following factors, among others, influencing the general result: — (1.) The length of the average daily shift. This has not varied in the period under review. (2.) The average number of shifts worked per week. This may vary from year to year. (3.) The percentages of the total number of miners employed which are made up of the numbers of miners who are paid at the several rates from the lowest to the highest. All miners in a mine are not employed at the same rate of pay. At one date 80 per cent, of the total may be engaged at the highest rate paid in the mine, at another date only 70 per cent. ; this will affect the average earnings even if all other things are unchanged. The rates vary according as the miner is working —(i) on low coal ; (ii) on hard coal ; (iii) in narrow places ; (iv) in wet places ; (v) on steep inclines ; (vi) on pillar coal ; (vii) on stone bands ; (viii) on distant faces ; (ix) with or without a mate (without usually in low places). It is true that the rates are differentiated with the object of roughly equalizing earnings, but they do not always actually have that effect. If at one date a larger percentage of men are employed at the higher rates than at the other date in the comparison, this fact alone would help to explain higher average actual earnings, quite apart from any increase in the rate of pay. In these circumstances there might even be an increase in actual average earnings with a decrease in rates of pay. (Example. At first date :20 at 3s. and 80 at 2s. 6d.; average, 2s. 7-2 d. At second date : 90 at 2s. 9d. and 10 at 2s. 3d.; average, 2s. 8-4 d.) (4.) The intensity of the miner's labour. He may work harder in a given time and so increase his earnings, though paid the same rate, and conversely. In one of the largest mines it was said the
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men had been working a little harder than they did prior to the war. Mention of the fourteen weeks' " go-slow " policy early in 1917 is relevant here. (5.) The efficiency of the labour. This may be affected by differences in the training or skill of the miner, or by changes in the mechanical aids to production used by him, or in the general organization of the mine. There appears to have been no noteworthy changes in this respect in New Zealand during the past five years, except that in some cases the explosives used to fall the coal are inferior in quality to what they were before the war. Nor can it be said that the class of miner employed has on the average changed much as regards skill and energy. (6.) Certain conditions influencing the amount of the miner's output in a given time. Most of these have been noted under (3) above. It will be seen from this brief consideration of the subject that the relation of minors' actual earnings to his rate of pay per ton hewed is not a simple matter, but most complicated, and that statistics of average earnings and output per man per shift over a period such as those in Table 80,
Table 80.
which refer mainly to the years ending the 30th April, 1914, and the 30th April, 1918, cannot be understood and interpreted by any one who has not made himself familiar with the changes in all the factors noted above (and others, for the list is not exhaustive) in the mine to which they relate. It is quite impossible to make any reasonable comparison of earnings at one mine with those at another at a given period, or of the earnings at the same mine at different periods without an intimate knowledge of all those conditions. It cannot be argued, for example, without reference to possible changes in one or more of a dozen factors, that since the miner's actual daily earnings have increased more (or less) than his standard rate of pay that ho has therefore been working more (or less) intensely or increasing (or decreasing) his output per day. The relation of output per miner per shift to actual earnings is similarly complicated It is possible, for example, for the miner's output to fall, whilst his actual earnings are rising quite apart from any increase in the standard rate of pay. This may be due to his working during the latter period at a place where more " yardage " is paid (low coal or narrow or steep places), or working on development operations, or in wet places, or in places necessitating much picking-out of stone, for which considerable allowance is made. One or two examples may be cited. If a miner works first at a 10 ft. place at 2s. 4d. and then at a 4 ft. place at 3s. 6d. to 45., the earnings of the low place will in all probability be higher than those of the high place, although the output per shift is lower in the former case. Two pairs of miners working eleven shifts per man for the same fortnight in the same mine (March, 1918) may bo compared : — Wages. .Bonus. Total. £ s. d. £ s. d. £ s. d. A and B fill 689 skips at 9d. .. .. 25 13 9 4 910 30 3 7 C and D fill 488 skips at 9d. .. .. 18 6 0 C and D out 37 ft. at 2s. .. .. 314 0 C and D out 43 ft. at Is. Bd. .. .. - 3 11 8 C and D trucking .. . . ..399 C and D 4 sets timber . . . . .. 0 10 0 5 3 0 34 14 5 C and D earn £4 10s. 10d. more than A and B although their output is over 6 tons loss in the fortnight.
A B ] Mine. Per Cent. Per Cent. Per Cent. Increase in Increase in Increase in Actual Actual Kate of Pay. Earnings Weekly per Shift. Earnings. 16J 28i 36| 164 35i 37 Increase or Increase Decrease or in Shifts Decrease Ilemarks. worked per in Output per Week Shift, per Miner. Cwt. +J* Same Same +23 cwt.* Much higher proportion of high coal. +17* Shorter travelling.distance ; higher coal; slightly larger proportion of pillar work. —Jt —15. Loss pillar and more solid workings. -it -If +33-8* For period 1915-18 only. +|* +22-7* Much pillar extraction; less travelling. C 16i 33 15 D E F G 16i 28 12 164 33 40 16i 3. 171 37 48. H 1 16_ L6i • 22 16 + 7* — _■■(• .. Hewing rate increased by 2d. more than 174 per cent.; travellingdistance increased; moj-e headings, for which better returns. J K '.'. ie. 22J 32 ■ -4-2f + §•* — 7f Larger proportion of men on development work; larger number of yardage places; inferior explosives. ■ ! * Inorei rse. f Decrease.
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The figures of output per miner per shift even when viewed alone, apart from earnings, therefore require to be read with other data before being used as the bases of argument. The following table, for example, has little real meaning until it is stated that during the first year a large percentage of the work done was from " headings " where working-conditions are more favourable, that during part of the second year the " go-slow " policy was in operation, and that during the third there was a more frequent use of explosives, tending not only to increase the per capita output, but also to render the quality of the coal inferior because of the larger percentage of slack. Year Tonnage per Man pel- Shift. 1915-10 .. .. .. .. 6-71 1916-17 . . .. .. .. .. 5-96 1917-18 .. .. .. 6-71 Other important facts to be taken into account in comparisons of real, as distinguished from money, earnings are described in section (iv) below. 3. MOVEMENT IN ACTUAL EARNINGS DURING THE PERIOD. Taking eight large mines typical of the different fields we find, comparing the year ending the 30th April, 1914, with the year ending the 30th April, 1918 (the year ending the 31st March, 1914, with the six months ending the 30th September, 1918, in the case of the last quoted), that the average daily actual earnings of miners had increased by the following percentages respectively : 22, 22\, 28, 28\, 33, 3?,, 35\, and 37, showing that the increase in actual money earned per shift was much greater than the increase in the rates governed by the industrial agreements of 1916 ami 1917. This shows that whilst the miner was working at the coal-face he worked with greater intensity, or efficiency, or in some such different conditions as described in section (ii) immediately above, than before 1914. It is to be noted that the full effect of the 1917 increase in pay had not been exerted upon the average in seven of the cases, as a full year at the higher rates had not been worked by the 30th April, 1918, or, in other words, as about two months at lower rates is included in the last annual average. The amount actually received per miner per week at the same mines in the order given increased for the same period- hy the following percentages respectively : 16, 32, 12, 36J, 15, 40, 37, and 48 J. In three cases the percentage increase in the amount received per week is below the percentage increase in the rates, these three cases being from three different fields. Since these miners increased their daily averages by more than the percentage increase in rates, it would appear that they worked considerably less time over the year in the latter period. In the other cases it was not only much above that percentage, but also above the actual increases in the daily wage. Taking these mines as a whole and giving due weight to the number of men employed it cannot be said that the coalminers " have not generally taken advantage of the opportunity to increase their earnings in proportion to the rates paid," though it is true of the mine which the witness quoted had particularly in view. The truckers' daily wage actually received increased 15A (20), 17 (25), 18J (14J), 20, 20, and 23 (33) per cent, per shift in the same period. Their wage per week in the majority of cases increased in greater proportion, the figures (those stated in parentheses) rising up to as high as 33 per cent. In the case of contract truckers at a large mine the daily rate of increase was per cent, and the weekly rate; 50 per cent. Underground shift-men increased- their daily wages 20J, 20 J, 174, 18J, 19, and 23 per cent., and in the case of the last four mines their weekly wages by 29f, 15f, 20|, and 30J. The weekly wages increased at a greater rate than the daily and at a greater rate than the rates of pay. Surface shift-men increased their daily wages 20, 20, 18$, 20, 18|, and 22 per cent., and in the ease of the last four mines their weekly wages 44, 184., 27, and 23f per cent. The same remarks apply to surface shift-men as to underground shift-men. Miners' actual earnings per shift at these mines therefore increased about 30 per cent., taking an unweighted average and comparing the year ending April, 1914, with the year ending April, 1918, though their rates increased only about 164. per cent. The average for the increase in actual weekly earnings is a very little more. Over the same period truckers , rates increased between 18 and 19 per cent., their actual earnings per day by about the same, and their actual weekly earnings by about 4 per cent. more. Shift-men increased their daily actual earnings by nearly 20 per cent, and their weekly by 25 per cent. The increases in miners' actual earnings ha.ye a very close connection with the increases in the rates of pay provided for by the industrial agreements of 1916 and 1917. In every case quoted, the institution of the new rates of pay was followed, by more than proportionate rises in the actual earnings. The case of the miners employed at two mines may he taken as typical. The first addition of 10 per cent, to the rates of pay was made in March, 1916, and the second of 74, per cent, in June, 1917. When the actual earnings per shift per miner for the Whole of the six months immediately preceding and the six months immediately following the changes are compared it is found that there is a considerable increase. The labour-cost per ton for mines giving returns for each year of the period 1913-18 increased 31 per cent., and that for all. mines providing data for any year 20 per cent. If all the coal mined from 1913 to 1918 could be taken into account the increase in labour-cost would probably be found to be at least 25 per cent. The mine workers in general therefore received about a quarter more per ton. The statistics of the Mines Department show that the output per underground worker increased by about one-fifth from 1913 to 1918 ; the actual increase in the average mine worker's earnings'would therefore a,ppear to be considerably more than this percentage. When the total wages actually paid
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each year to all employees at each of seven large mines in the north, west, and south are divided by the total number of employees it is found that the wages per head, or ratio of wages to workers, increased from 1913 to 1918 by 34, 36, 37, 50, 51, and 55 per cent. The value of these two latter comparisons as to output and wages is discounted, however, by the unsatisfactory nature of the method of recording the total number of employees. The result has probably been influenced in the direction of overestimating the increase by the fact that mine labour was much less migratory in 1918 than it was in 1913. TaBIjE 81.—AVERAGE DAILY ErANINGS PER MINER AT MIKHS X AND V PRIOR AND STJBSEQTTENT TO JNPUSTRTAI, Agreements ot March, 1916, and .Itjne, 1917. s. d. Increase. Average earnings for six months before March, 1916. . 18 9 Average earnings for six months after March, 1916 .. 22 0 per cent. Average; earnings for six months before June, 1917 . . 18 3 Average earnings for six months after June, 1917 25 0 37 per cent. The comparatively low average for the six months before June, 1917, is due mainly to the " go-slow " policy in vogue for a considerable part of that period. It will be seen that the 10-per-cent. increase in rates in 1916 was followed by a 17-J-per-oent. rise in the actual earnings per day. But for the " go-slow " policy and kindred factors the average of 225. would probably have been maintained in the early part of 1917, so that the increased rates of June, 1917, would have been followed by a rise of over 13 per cent, or nearly double the increase of 7i per cent, in the rates of pay. The average actual earnings for the six months following the second agreement were 33J per cent, higher than the corresponding earnings for the six months immediately preceding the first agreement, although the two agreements together provided only for a rise of 17| per cent, in the rates. 4. EXAMPLES OF ACTUAL EARNINGS AN]) OF INCREASES IN ACTUAL EARNINGS. (a.) The actual earnings per man per shift at Mine X* from April to June, 1918, five periods, of the ten highest workers averaged 225. Bd., the highest being 395. 4d. and the lowest 19s. 4d. Average .Daily Actual . ~, . . Earnings. Average Weekl - V ' (b.) Mine A:— s. d. £ s. d. L 913-14 .. .. .. .. .. .. 14 3t 3 7 7} 1917-18 .. - .. .. .. .. .. 17 4Jf 3 18 3$ First three months, 1918 .. .. .. .. 18 7 314 3-| April-August, 1918 (five months) .. .. .. 19 2§ 4 6 3|| (c.) General net averages at Mine Al for fortnight ending 21st June, 1918, 20s. sd. ; at Mine A 2, 17s. 1 Id. for hand and 235. Bd. for machines. The daily wages increased at a much higher rate than the weekly wages. (d.) Mine B, year ending 26th April, 1918 :— Daily. Weekly. s. d. £ s. d. Miners earned .. 18 4-1 3 17 8 (Could have earned £4 12s. sd. by working full mine time.) Truckers earned 18 3-8 411 8 (Could have earned £4 12s. 3d. by working full mine time.) Truckers earned per shift for the four periods preceding our visit an average of 225. OJd. ; 21s. 9'd. ; 21s. sd. ; and 21s. 4£d. ; (highest individual, 275. ; lowest, 14s. 10d.). The miners' general average for the year 1916 was 16s. 10|d. ; for 1917, 16s. 3-3 d. ("go-slow " three months) ; and for 1918 to August, 19s. o.|d.—an increase of 12-f per cent, in three years. ~ ■ Miners. Truckers. (c.) Mine V (average weekly earnings): £ s. d. £ s. d. Year to 31st August, 1914 .. .. .. ..3 7 11 3 9 9 1918 .. .. .. .. 4 17 9 4 4 0 Increase per cent. .. .. .. .. .. 30 \ 17 (/.) Mines Dl and D 2 :- - Miners :—
Year ending Mine Dl. Mine D2. Daily. Weekly. Possible. Daily. Weekly. Possible. 10th April, 1914 .. 1918 .. s. d. 16 54 21 If s. d. 71 1| 96 11 s. d. 81 1 108 8 I s. d. 14 10 20 1 354 s. d. 65 10 89 3 37 s. d. 79 2 108 1 Increase per cent.. . 284 364 * See note on p. 2. f Nearly 22 per e< | 284 l"' r cent, increase. mt. increase. i 16 icr cent, increase. § 34 per cent, increase.
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Mine Dl. Mine D 2. , Daily. Daily. Iruckers :— s. d. s. d. 1914 .. .. .. .. .. .. 10 9 10 6 1918 .. .. .. .. .. .. 12 11 12 7 Increase per cent. . . .. .. .. 20 20 Shift-men (underground) : — s. d. s. d. 1914 .. .. .. .. .. ..110 1] 0 1918 .. .. .. .. .. .. 13 3 13 3 Increase per cent. .. .. .. .. .. 20| 20| Shift-men (surface) : s. d. s. d. 1914 .. .. .. .. .. .. 10 0 10 0 1918 .. .. .. .. .. .. 12 0 12 0 Increase per cent. .. .. .. .. 20 20 The highest-waged miners at Mine Dl increased their daily and weekly earnings by 28| per cent, and 36£ per cent, respectively, and the lower-waged men by a higher percentage—viz., 35£ and 37 per cent. The weekly wage has increased at a higher rate than the daily, especially at Mine Dl, showing there must have been a better average of attendance. It was possible for the miner at Mine Dl to increase his actual earnings by nearly 53 per cent, and at Mine J)2 by nearly 65 per cent, on the assumption that he worked full mine time, an assumption, however, that has little support in mining practice. Whether the miners could have considerably increased their annual working-time without injury to themselves is another matter. Truckers and underground shift-men increased their earnings by 20 per cent. (Another increase of 10 per cent, in their rates has been made since April, 1918.) (g.) Mine E : —
The contract men's earnings increased most, especially the weekly wage, which increased more than the daily. They get the highest weekly wage, but not the highest daily wage. All weekly wages increased more than daily, except the miners' wages, but those of the surfacemen more than those of the underground men, showing that the overground men put in more time at work. (h.) Mine F: -
Uti lcrs. Contract Truckers. Surface Shift-men. Year ending Shift. Week. Shift. Week. Shift. Week. i 30th April, 1914 1917-18 8. d. 17 2-40 22 10-04 8. d. 77 4-8 89 0 s. d. 8. d. 14 0-30 I 65 10-3 18 6-20 | 98 0 s. d. s. d. 10 6 51 11-7 12 5-6 74 94 (youths) 184 44 Increase per cent. 33 15 324 50 I Year ending Undcrgroi Shift. Uni Icrgro.ind Shift-men. ind S Shift-men. Week. Wage Shift. Wage TruckersB Tru I ackers. Week. Shi :t. Week. Shift. Week. 30th April, 1914 1917-18 .. Increase per cent. s. d. 11 1-21 13 0-5 174 s. d. 54 3-4 70 5 29J I s. d. 11 404 13 1-42 154 I I s. d. 56 411 67 6 Nearly 20
Mir nera. lers. Contract Truckers. Contract Truckers. Wage Truckers. Year ending Shift. 8. d. 30th April, 1914 .. .. 17 11-94 1917-18 .. .. 26 6-4 Wee 8. 90 126 Week. s. d. 90 0 126 2 ek. d ( i Shift. Week 1. 8. d. 8. ( 0 2 15 1-7 74 I 1 Shift. s. d. 15 1-7 r Week. 8. d. 74' 9 Shift. s. d. 10 6 12 5 18i Week. s. d. 54 7 62 5 144 Increase per cent. .. .. Nearly 33 40 40 1 1 Underground Shift-men. Surface Shift-mon. Year ending 30th April, 1914 1917-18 I ncreasc per cent. Shift. Week. 8. d. s. d. 11 0 68 2 13 0 78 11 18i 15| Shift. Week. s. d. s. d. 10 0 59 0 12 0 69 11 20 184 !
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Average yearly wage for miners, 1917-18, equals £302 Gs. All workers got increased wages, but only the miners increased their weekly earnings more than the daily wage. (i.) Mine G : —
All increased, both daily and weekly, and all, except miners, increased the weekly wage at a greater rate than the daily. The surfacemen show greater increase in weekly wages. Highest daily wage, miner, 19s. 6-41 d. ; highest average weekly wage, underground shift-man, 83,5. 9|d. (/.) Mine H :
The last six months of the year to April, 1918, show an increase in weekly earnings over the average for the year. All increase the weekly wage more than the daily, especially the miners, truckers, and underground shift-men. (k.) Mine I .•— One miner who worked constantly for the year ending 30th September, 1917, earned over £300. Miners working full time earned from £9 2s. 9d. to £17 ss. for the fortnight ending 30th September, 1918, just previous to our visit. (I.) Mine J :—
(m.) Mine X:
(n.) The following return shows the number of days worked, and (he daily, weekly, and yearly average of the net wages of the miners (coal-hewers) at Mine J :-
Year ending Shift. Miners. Week. Shiftmen. Truckers. Surl Shift. Week. Shift. s. d. 8. d. s. d. 10 5-53 47 8'41 10 8-77 12 2-94 59 7-06 12 8-62 17 25 184 face. Shift. Weok. Week. " I s. d. s. d. 10th April, 1913-1.4 .. I 15 2'51 : 68 5-29 1917-18 .. ! 19 6'41 ' 78 1-64 s. d. H 7-52 13 9-38 s. d. 69 6-33 83 9-51 s. d. 56 6-62 71 11-83 ncrease per cent. .. 28 12 19 20J 27 I
Year ending Mil icrs. Week. Truckers. Shift. Week. Surface S Shift. ihift-mon. Cndergrouni Shift-men. Shift. Week. Shift. Week. 10th April, 1913-14 .. 1917-18 .. s. d. 15 9 19 3 s. d. 74 10 98 8 8. d. 10 2 12 6J 23 8. d. 50 10 67 7 33 s. d. 9 24 11 2 22 s. d. 48 4 59 9 s. d. 11 7 14 3 s. d. 68 0 88 8 increase per cent. 22J 32 23f 23 304
Year ending Miners. Daily. Weekly. Annual. 31st March, 1913-14 30th September, 1918 (six months) £ s. d. 0 17 11-11 1 4 7 £ 8. d. 3 14 5-14 5 10 7-5 £ 8. d. 193 10 0 287 10 0 Increase per cent. 37 484
Year ending 31st March, 1915-16 30th September, 1918 (six months) Incroase per cent. I Daily. £ 8. d. 0 17 6-92 1 0 Oil 104 [ Miners. Weekly. £ s. d. 3 15 0-46 3 17 8-37 34 Annual. £ s. d. 195 0 0 202 0 0
'/ear ending 31st March, 1913-14 1914-15 1915-16 1916-17 1917-18 30th September, 1918 (six months) .. Days worked. Daily Average. £ s. d. 216 0 17 11-11 246 0 16 5-12 237 0 18 0-32 256 0 19 6-44 219 1 3 6-67 117 14 7 £ s. d. 3 14 5-14 3 17 8-06 4 1 11-61 4 16 1-93 4 19 2-43 5 10 7-50 Weekly Average. £ s. d. 193 11 11-76 201 18 11-52 213 12 3-84 250 1 4-64 257 18 6-73 287 12 6 Yearly Average.
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(o.) Return showing the number of days worked, and the daily, weekly, and yearly average of the net wages of miners (coal-hewers) at Mine X : —
Notes to (n) and (o). —1. The first war bonus of 10 per cent, was paid to all employees at Mines J and X on the 20th March, 1916. The second war bonus of 7£ per cent, to contract workers (coal-hewers) and 10 per cent, to all wages-men, making in all 17.| per cent, to coal-hewers and 20 per cent, to wages-men, was paid on the 18th June, 1917. The third war bonus of 7J per cent, to contract workers and 10 per cent, to wages-men, making a total of 25 per cent, to contract workers and 30 par cent, to wago3-men, was paid on the 23rd September, 1918. 2. The " go-slow " policy (when the miners reduced the output and their average daily earnings) was in vogue from the L2th February, 1917, until tho 3rd April, 1917, following which there was a general strike, lasting three weeks. During the period of the " go-slow " policy the miners reduced their daily earnings on an average ss. per day. 5. REAL EARNINGS OF MINE WORKERS. It is tin established fact that there has been a considerable rise in the actual money earnings of mine workers since 19] 3, and that in most cases the rise in daily earnings has been greater than the mere rise in the rates of pay. But higher money wages do not necessarily mean higher real wages ; for, in estimating these, account is taken of all the advantages and disadvantages peculiar to the employment and associated with the money wages paid, and the balance of net advantages is thus ascertained. This balance, therefore, may vary in a manner different from the money wages, and, since in the long-run the worker's attitude towards his work is largely the result of the amount and character of these net advantages, and as the supply of future labour will fluctuate according to changes in them, it is necessary to inquire how the net advantages of mine-work have been affected, during the period under investigation. (i.) The mere amount of money paid as wages per day or week is the chief factor with the less prudent or foreseeing workers. This, as ascertained in previous sections, has increased considerably. (ii.) A very important consideration is the purchasing-power of that amount. The value of a given wage —say, £I—may1—may be different in different localities at the same time or at different (and not necessarily remote) times in the same locality, since the prices of the commodities and services ordinarily required by the wage-earner vary according to time and place, and money has no value except to purchase directly or indirectly goods in exchange for its tender. A weekly wage of £5 received in 1914, when the purchasing-power or value of money was higher than in 1918, is clearly a lower real wage than the same wage at the latter date. This introduces the subject of the cost of living of miners, subject No. 7 of our order of reference, which is of sufficient importance to be reserved for a separate chapter (see Chapter VI, p. 77). It is sufficient here to state the general result of this ■particular inquiry —first, that there has been a lowering of the value of the money unit in relation to necessaries and common comforts of about 35 per cent, since 1913 ; secondly, that the consequent depreciation of the value of the average amount of wage received by mine workers in 1913 has not been altogether counterbalanced by the increase in the amount of the average wage since that time ; and, thirdly, that the readjustments of the amount of wage to changes in prices have not been made so that the changes should practically coincide : in other words, that the changes in wage rates have lagged behind the changes in prices. (This statement is made without here passing any judgment on the question as to whether wage rates should be revised so as to change proportionately to prices.) (iii.) Almost as important as the value of the money earnings are the two related but not quite, identical factors, regularity and constancy of employment. A daily or weekly wage of a given amount is high or low according to the amount of employment available at that wage. The period commonly taken over which to measure that amount is the year, since it is the shortest period which includes the whole range of the seasons, the changes of which have such a direct effect on the amount and character of the work required in a great many industries. It is also a period short enough for the ordinary worker to take into view when deciding whether to offer or withhold his labour in a particular trade or at a particular wage. The amount of wage earned in the year is therefore a better measure of the real earnings than the actual daily, weekly, or monthly earnings. The distribution of work over the year — i,e., whether there are periods of alternate high and low employment (regularity of employment), or whether the employment is evenly spread over the year (constancy of employment), is comparatively unimportant, provided there is an assured yearly amount of work available. The statistics of actual daily earnings given in the earlier sections of this chapter have therefore, in many cases, been converted (or made easily convertible) into figures of yearly earnings— i.e., allowance has been made for employment and unemployment during the year. The amount of unemployment may be due to the worker's own voluntary action, as when being fit for work he refrains though the mine is open, or to causes which he cannot completely control, such as his own sickness or the closing of tho mine through floods or lack of transport. This problem of lost time has been already discussed in Chapter 11, with special reference to its influence in reducing or increasing tho cost of producing coal It is sufficient to mention here that there is no doubt that the average miner in New Zealand could, if he had so willed, have secured an increasing amount of employment per year since 1913. There were more mines, the number of possible working-days at the mines showed no appreciable diminution
Year ending Days worked. Daily Average. Weekly Average. Yearly Average. 31st March, 1915-16 1916-17 1917-18 30th Septembor, 1918 (six months) .. 222 2624 1974 984 £ s. d. 0 17 6-92 0 17 4-66 0 19 9-54 1 0 6-11 £ s. d. 3 15 0-46 4 7 9-33 3 15 2-19 3 17 8-37 i £ s. d. 195 2 0-24 228 4 5-25 195 9 6-15 101 0 1-83
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on the average, the number of miners decreased, and the demand for coal rose —all tending to increase the total amount and the constancy of employment. A rise in money earnings per day, therefore, in this period carried with it also the 'possibility of a still greater rise in annual earnings, owing to more employment being available, and this without prejudice to health and efficiency. Thus, viewed from this standpoint, real wages tended to increase beyond the amount suggested merely by the actual rise in daily remuneration. This was a force operating to counteract to some degree the fall in real wages occasioned by the fall in the value of money and the lag of wages behind retail prices. The degree to which the workers availed themselves of the opportunity thus to offset falling real wages is suggested, roughly, by the facts summarized in Table 80, though the most significant figure, tho number of weeks worked over the whole year per miner, is not definitely calculable from the available data. (iv.) in assessing the real wages of mining we must, on the one hand, reckon in the money worth of any perquisites, bonuses, supplementary earnings, &c, received, and, on the other hand, deduct or make allowance for any peculiar expenses to which the miner may be liable, expenditure on 'purchase and upkeep of tools, extraordinary expenditure on clothes, or on rent, it is then necessary to inquire how far these peculiar sources of income and expenditure have varied during the war period. In a few cases the mine worker is offered the opportunity of obtaining grazing for a horse or cow at a specially low rate ; a common item on the income side is the low price at which he purchases his coal. At all collieries it is customary for mine workers to obtain their coal at a much lower price than that paid by the ordinary consumer. The amount of coal sold to employees at the Point Elizabeth and Liverpool State Mines for the year ending the 31st March, 1918, was 2,558 tons, or 5f tons per adult man employed, representing a bonus of over £3. In most cases the price charged is below the cost of production. The case of the State mines is typical.
Table 82.—Showing Loss due to Coal being supplied to Employees at 3s. per Ton, since the Year ending 31st March, 1913, to the Half-year ending 30th September, 1918, at the State Collieries.
The figures shown in the last column (total) above represent the Department's annual loss through supplying employees with coal at a price less than it costs to produce. The difference between the price to the workmen and the price to the public at the pit-mouth is shown in the following table :—
Table 83.
The following table shows the prices charged the mine workers for coal at the different mines. Since there has been little or no change in these prices during the period, whilst prices to the public have increased considerably, the mine worker, in regard to this particular expense, is relatively to other workers in a better position than in 1913 : — Price of Coal to Employees, per Ton Mlne - (cartage excluded). s. d. Denniston . . . . . . ..30 (miners). ..40 (shift-men). Millerton .. .. .. ..3 9 Westport-Stockton . . . . . . 5 6 Pukemiro .. .. .. ..31 (2s. per load of 1.3 cwt.). Taupiri .. . . . . ..50. Kaitangata .. . . . . ..126 (including delivery). Nightcaps . . . . . . ..90 In some occupations the opportunities for employment open to members of the wage-earner s family are important elements in estimating the net advantages of the occupation. The wage to be
Year. 1913 1914 1915 1916 1917 1918 1918 (half-year) .. Tons. 2,705 2,190 3,030 3,022 2,935 2,558 1,787 j Cost per Ton. Bate to Workmen. s. d. s. d. 8 1-76 3 0 8 1-76 3 0 7 8-24 3 0 6 10-13 3 0 7 4 3 0 7 6'88 3 0 7 11-78 3 0 Loss per Ton. s. d. 5 1-76 5 1-76 4 8-24 3 10-13 4 4 4 6-68 4 11-78 Total. £ e. d. 705 19 6 563 9 5 710 0 7 579 4 2 635 19 2 575 1 0 446 15 0
Year. 913 914 .915 916 .917 .918 918 (half-year) Tons. 2,705 2,190 3,030 3,022 2,935 2,558 1,787 8Ul p!lbilc a< « e t0 Workmen's Rate, j Loss per Ton. 1 s. d. s. d. s. d. 13 2 3 0 10 2 13 2 3 0 10 2 13 2 3 0 10 2 14 6 3 0 11 6 14 6 3 0 11 6 14 6 3 0 11 6 16 3 3 0 13 3 line " or through coal— i.e., as the coal comes from the face. i Total Loss. £ s. d. 1,375 0 10 1,113 5 0 1,540 5 0 1,737 13 0 1,687 12 6 1,470 17 0 1,183 17 9 * At tho mini for " run of the
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compared in such cases is a family rather than an individual wage, but in mining in New Zealand this is not an important consideration ; the mine worker's earnings are not supplemented to any appreciable extent by assistance in his own employment from members of his family. His boys may easily obtain employment about the mine at work specially suited for boys. Though the opportunity they enjoy of obtaining an entry into work leading to their father's occupation may be greater than that of boys in general, the effect of this is offset by the comparatively narrow choice of employments in the average mining township and the limited means of educating children for the various branches of industry and commerce. In the remoter mining camps the prices of the ordinary necessaries and comforts of life arc raised much by the expense of transport, which forms a considerable part of their total price ; but this particular factor is taken account of in the inquiry into the, cost of living and the purchasingpower of the actual money earnings, and must not be reckoned twice. As regards the amountactually paid as rent the miner's position is much more favourable than that of the majority of workers. The nature of the house-room and general domestic conveniences obtained for different rents is described in Chapter Vl]. Defective as these are it is questionable whether better could be obtained in the towns for the same rentals. The evidence showed that rents generally had not advanced in the mining townships during the war period, so that there could have been no tendency to lower real wages from this cause. The chief forms of expenditure associated directly with the peculiar nature of the miner's work to be defrayed out of his wages are working-boots, tools, light, and explosives. The wear-and-tear on boots in underground mine-work is very heavy, particularly for the trucker, who wears out twice as many boots as the miner. According to the evidence given by shopkeepers, the price of working-boots used by mine workers lias increased between 1913 and 1919 by about 10s. 6d. per pair on the southern .fields and 12s. 6d. on the West Coast and northern fields. The increased annual cost to the miner, including the rise in the cost of repairs, is estimated at not less than £1 10s. on the average, and to the trucker at not less than £3. In nearly all cases the miner provides his tools at his own expense ; but in one mine the company provides tools at cost price, and buys them back again from the miners if they leave. The tools are sharpened and kept in order by the companies. The cost of the hewer's outfit of tools has just about doubled during the war period, having risen from about £4 10s. to about £10. Some of the tools, such as banjo shovels and certain boring-machines, have been unprocurable over the latter part of the period. The miners' annual expenditure on renewal and maintenance of tools varies from district to district according to the nature of the coal. It has increased from about £2 10s. to £4 a year. In most mines the miner provides his own lamp and illuminant— carbide or colza or other suitable oil. Colza-oil has increased from 4s. and 4s. 6d. a gallon in 1914 to 9s. and 10s. 6d. a gallon in 1918 according to the locality. The miner estimates the daily cost of lighting where colza is used at sd. in 1918, compared with 3d. in 1914. This would mean an additional expense of about £2 in the year. Lamps of all kinds have increased from 66 to 75 per cent, in price, and carbide by 400 per cent. Explosives are used in many of the mines to break down the coal. Mention has already been made of the many complaints of both men and management regarding the deterioration in the quality of explosives available since the early part of the war, and the consequent effect on output. The nature of the commodity is such as to make it desirable that its supply shall be arranged for by the companies, who deal it out to the men at an agreed price, deducting the amount used by each pair of miners from their gross fortnightly earnings. The price is now generally much below the cost price to the companies, who treat the loss as part of the cost of production. For example, one mine returns its loss on explosives as 0-451 d. per ton of coal mined for 1917, and O-36d. for 1918. The miner may use as much as 4s. worth of explosives in a day, even though the company bear part of their cost. We may again illustrate the general position by reference to the State mines. The difference between the gross and net earnings (given to the nearest penny) set out in Table 84 is the price charged the miners for the explosives used in coal-winning. The difference in the amount of this price is generally accounted for by differences in the hardness of the coal. The Liverpool coal, for example, is much harder than the Point Elizabeth coal. The daily output per miner is added to give some idea of explosive-cost per ton.
Table 84.—Showing Cost of Explosives to Miner in winning Coal.
Year. Point Elizabeth. Daily Daily Daily Avcrago Average ! Difference: Output per I Average Gross Net i Explosives. Miner. Gross Earnings. Earnings. I Earnings. Liverpool. Daily Average Difference: Output per Not Explosives. Miner. Earnings. 8. d. 18 7 17 1 18 10 20 3 24 3 25 4 a. d. 17 11 16 5 18 0 19 6 23 7 24 7 s. d. 0 8 0 8 0 10 0 9 0 8 T. c. 7 2 0 9 7 7 7? 17 ?8' 4 8 5 s. (I. s. d. s. d. T. o. 913-14 914-15 915.-16 916-17 .917-18 September, 1918 19 1 19 0 21 10 22 5 17 7 16 6 5 17 5 17 5 14 19 10 2 0 6 8 20 7 1 10 7 18
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Prior to November, 1915, explosive was sold to the workmen in the State mines at Is. Id. per pound, and " electric detonators " at 2d. each, but owing to the price of the explosives being increased by 10s. per 50 lb. case the rate to miners was increased correspondingly. The miners have therefore been paying since November, 1915, Is. 3d. per pound for explosive and 2d. per detonator. Although the price of explosives and detonators has increased considerably of late the increased rate has not been passed on to the men. The Department of Mines is therefore bearing a loss of £1 7s. 6d. per 50 lb. case on explosives, and 13s.' per 100 on detonators. On an average twenty 50 lb. oases of explosives are used weekly, and about one thousand one hundred detonators. The present price of explosive is £4 10s. per 50 lb. case at Greymouth, to which must be added freight and handling, equivalent to about Is. a case. It is retailed to the miners at Is. 3d. per pound. Electric detonators cost at Greymouth £1 9s. Bd. per 100, and are retailed to the miners at 16s. Bd. per 100. Generally speaking, the increased cost of explosives over the period has been shared between company and miner ; the companies have raised the price to the miners, but not to the extent to which the price has been raised to them by the manufacturers- e.g., at one mine the price to the company has been raised from 9d. to Is. Bd. a pound, the miners getting their supply for Is. The deterioration in the quality of the explosives has, of course, operated as a further rise in price. It is the custom for the charge for explosives to be deducted from the miner's fortnightly pay. In the statistics of wages quoted in this report this deduction has already been made, only net wages being quoted. The rise in the price of explosives to the miner may in some cases have involved an additional expense of as much as £12 a year, but the cost varies from mine to mine over such a wide range that the increase in some cases is trifling ; on the average for the Dominion it would probably not exceed £4. The change from blasting-powder to permitted, explosives, which was made compulsory in some mines, was alleged by the miners in one case to have reduced their wages. The records of cost of explosives per ton, however, show a very slight alteration after, the introduction of the permitted explosive and in the direction of a decrease, not increase. The Chief Inspector of Mines is of opinion that, since the permitted explosives are not such powerful disruptive agents, the men do not get so much coal in a day by their use as they got formerly. Considerations of safety, however, demand the rigorous enforcement of the law, making their employment compulsory in most of our bituminous mines, as is done in Great Britain and Australia. It is clear that in earning the net wage paid him by the companies the coal-miner, and to a less degree the other mine workers, have been put to increased expense for working-gear during the war period. This increase may be assessed as being at the least at the rate of about £10 per year for the latter part of the period. (v.) Finally, there is a group of important factors that influence every intelligent worker in assessing the sum total of the real remuneration of the employment open to him and deciding whether to enter it, or, being already in the occupation, to continue in it. These are no less powerful because they are many of them difficult to measure in terms of money. Such are —the agreeableness or disagreeableness of the work in itself ; the length of the working-day ; the amount of leisure available in the year ; the chances of success, and the opportunities for promotion ; the degree at which the occupation stands in public esteem ; its effect on the worker's health and on the length of the effective working-period of his life ; the extent to which it cramps or enlarges the worker's sense of personal freedom ; and the opportunities its pursuit affords for the exercise of the faculties which the average man delights in using, and for the enjoyment of those pleasures, high and low, which the social standards of the day approve as worthy objects, whatever may be their value in the eyes of the moral philosopher. It is in respect of many of these that the life of the miner appears to the ordinary worker to be at a disadvantage, when compared with the generality of occupations open to himself or his sons, and to require high money earnings in order that its real wages may tend to equality with those in other callings that appeal to him. Underground work in itself tends to repel the normally constituted man, who will demand some compensation in the rate of pay for his loss of sunlight and pure air. Though coal is a " clean dirt," working in it, especially in wet places or on fields with a wet climate, is attended by many domestic inconveniences which the installation of roomy and properly equipped bathhouses at the mines is only now beginning to remove. It is unfortunate that in many cases the erection of these has been retarded by the shortage of plumbing and other necessary materials. Miners work in pairs, and are in close touch with one another and with the truckers, and this circumstance tends to alleviate the drawbacks of underground work, satisfying the natural gregarious instinct of man. There is no doubt that the fact that mining brings men to dwell together in numbers, with interests that are common beyond the average degree of community of interest reached by our townships in general, tends to make it attractive, as well as accounts for some of the strong corporate spirit shown by miningpopulations. Mining, too, is an operation which demands certain qualities of skill, physical strength, endurance, and of character, the development of which is congenial to a vigorous healthy man. Hand, eye, and brain are constantly exercised ; there are problems to solve calling for some initiative and resourcefulness ; and the hour of peril evokes some of the noblest examples of self-sacrificing courage and generosity. That the occasions for these occur almost daily in our mines and never fail to provide examples is unknown to the public, whose attention is occasionally drawn by the more spectacular, the " explosions " and " disasters," but passes 'unnoticed w the simple " nameless unremembered acts of kindness.and of love." The hours of labour are such as to allow a fair share of d.aily leisure to the miner. Though the miner spends eight hours in the mine, his time at the coal-face varies from six to seven hours.
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Miners in wet places usually spend six hours from bank to bank, and receive in addition to their ordinary pay a bonus of 4s. to compensate for the two hours short time. But there are not a few mines where the distance to be traversed between home and pit-mouth is so long as greatly to reduce the miner's free time, and also, especially where the travelling-places are rough, wet, or steep, as well as long, to impair his efficiency in the mine. The amount of walking done by considerable numbers of miners in order to get to their work is remarkable, especially when it is remembered that within any old-established mine itself the travelling-distance between mouth and working-face is generally not less than half an hour. Where the distance is traversed by train or other conveyance the fare has to be deducted from the wage. Only in one or two mines are the companies able to transport the men to their work. Apart from the necessity to labour for his living, which is the common lot of the great majority of mankind, if not all, the miner enjoys considerable freedom. A witness with as intimate a knowledge as anybody of the actual conditions of coal-mining work of all kinds in New Zealand over a great many years gave his opinion that " the miner to-day as a working-man has the best conditions of any working-man in New Zealand, and is better paid for the work done." When asked to express himself with more detail he added, " The miner is practically his own boss, he is on the tonnage rate, and he works when he likes. In any mine he can make from £1 ss. to £1 10s. a day. Ido not think there is any other labourer that can do that. That is done in six hours' actual working-time." This may be accepted as substantially true, with slight modification of the figures for the average miner's possible wage and working-day. The freedom to work when he, likes extends largely also to the freedom to work how he likes, for the miner's influence on methods of work exercised through his check inspectors, &c, and union is not inconsiderable, and restrictions imposed from without are mainly in the interests of his safety in common with the preservation of the mine. The opportunities for promotion appear to be at least as numerous as in the majority of occupations of similar status. The many positions in the mines above the grade of miner are nearly all filled by men who began life at the lowest grade ; this is a striking testimony to the " vertical mobility " of labour and the commendable policy of the companies of rewarding skill and honest service. The mine worker as an individual enjoys no less social esteem, nor fewer social privileges, than those that are the lot of the average worker in our democratic society. Miners as a class have perhaps drawn more public criticism upon themselves than most other classes in recent years, because of the frequency of mine strikes in times of national stress. But there is no evidence that mining requires to be paid at a higher rate in order to attract men into the industry because of any social opprobrium attached to it as an occupation. That such a higher rale is necessary because of the character of the general social environment of the mining townships or " camps " is undeniable, and should be perfectly intelligible after an examination of the facts described in Chapter VII below. The final factors for consideration in the attempt to assess the miner's real earnings are those which influence the length of his working-life. Their results are summed up in the accident, the morbidity or sickness, and the death-rates of coal-miners. The liability of coal-miners to accident may be measured by the ratio of total accidents reported in a given time to the total number of miners employed, or the total number of tons mined in that period. Unfortunately, the definition of a reportable accident varies from time to time, and the number of accidents officially recorded varies also with the closeness of the inspection and any legislative changes in. the financial consequences of a reportable accident to tie worker. Statistics of total accidents are therefore of little value as a means of comparing the safety of different trades or the same trade at different times. But this defect does not apply to the same extent to fatal accidents. These have always been more or less faithfully recorded, and constitute in themselves a better measure of safety. In coal-mining statistics it is usual to take as the index of danger the number of fatal accidents occurring in the industry as a whole during a given time per 1,000 persons employed in and about mines, or per million tons of coal raised during that time. The latter is the better index, because the length of the working-day varies from time to time. Table 85 gives these indices for New Zealand coal-mines.
Table 85.—Fatal Accidents in New Zealand Coal-mines.
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Year. Total Persons employed above and below. Lives lost. Per Million Tons I Per 1,000 raised. | Persons employed. Number by A ccident. 1878 1879 1880 1881 1882 1883 1884 1885 1880 1887 1888 513 802 1,038 963 1,043 1,249 1,283 1,483 1,605 1,499 1,689 J_ J_ _____ * * 194-64 44 6-66 1-92 2-96 1-04 5-28 1-91 4-74 1-6 6-23 2-34 5-87 2-01 * * 35t 2 1 2 2 3 3 7-16 2-66 6-51 2-36 4 4 » No life lost. t Year of Kaitangati i explosion.
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Table 85. —Fatal Accidents in New Zealand Coal-mines — continued.
The methods by which coal is mined, of course, influence the accident, rate, and methods vary according to the nature and character of the coal-seams, the depth of the mines, and local customs. Evidence was given that the use of machines in certain New Zealand mines reduced the number of accidents considerably. Comparisons of accident rates between different countries need to be interpreted in the light of information about differences in methods of working, in intelligence and skill of miners, &c. The mere accident rates themselves may be deceptive. With this caution we quote the following table giving an international comparison from " Hoffman on Fatal Accidents in Coal-mining " (U.S.A. Bureau of Labour, 1910).
Table 86. —Fatal Accidents in Coal-mining. Comparison of Fatal-accident Rates in Coal-mining Countries for the Period 1897 to 1906.
The risk of fatal accidents in New Zealand in this period of ten years was therefore comparatively low ; but during the next ten years 133 persons lost their lives by accident, more than doubling the number per 1,000 persons employed. According to the Mines Statement for 1917, New Zealand in recent years compares most favourably with Great Britain, which stands ahead of all other countries as regards the low proportion of fatal colliery accidents. For comparison it may be stated that during the past four years at British collieries fatal accidents per 1.000 persons employed amounted to 1-53, 1 "35, 0-73, and 122 respectively, and per million tons of coal raised to 484, 3"75, 364, and 4-36. The fatal-accident rate in respect of mine workers in New Zealand collieries is not greater per 1,000 employees than the corresponding rate on the railways, though it is considerably higher than that for factory workers in the Dominion.
Year. Lives lost. Total Persons employed above and 'below. Per Million Tons Per 1,000 raised. Persons employed. Number by Accident. 1889 1890 1891 1892 1893 1894 1895 1896 1897 1898 1899 1900 1901 1902 1903 1904 1905 1900 1907 1908 1909 1910 1911 1912 1913 1914 1915 1916 1917 1,717 6-82 2-37 1,846 12-55 4-33 1,693 5-98 2-36 1,681 1-48 0-66 1,888 7-23 2-64 1,899 8-33 3-16 1,799 6-88 3-33 1,937 83-24 34-07 1,9.12 4-75 2-09 2,003 1-1 0-49 2,153 3-07 1-39 2,460 3-65 1'62 2,754 2-42 1-09 2,885 1-46 0-69 2,852 2-81 1-4 3,288 2-6 1-21 3,269 3-78 1-83 3,692 3-46 1-62 3,910 6-55 3-07 3,894 2-08 1-28 4,191 3-65 1-79 4,599 7-28 3'55 4,290 6-77 3-26 4,328 4-13 2-08 4,250 3-18 1-38 4,734 21-53 10.35 4,156 4-07 2-10 3,988 2-65 1-5 3,983 1-93 1 4 S 4 1 5 (I 5 06* 4 1 3 4 3 2 4 4 6 6 12 5 7 16 14 9 6 49t 9 6 4 * Year of Brunner explosion. t Year of Balph's (Huntly) explosion.
Country. Total Number of Employees at Work One Year. Fatal Ai :icidents. Number. 1 Bate per 1,000 Employees. !_ 1 North America Japan (1902-1906) Russia, Finland (1901-1903). . Victoria New South Wales Prussia France New Zealand Austria United Kingdom Queensland Belgium India (1898-1906) 5,179,343 438,259 330,147 7,902 124,940 4,389,174 1,029,177 27,268 1,186,510 7,973,031 11,714 1,322,510 790,070 16,273 1,355 805 18 267 9,327 2,944 37 1,599 10,319 14 1,401 076 3-13 3-09 2-44 2-28 2-14 2-13 1-81 1-36 1-35 1-29 1-20 1-06 0-80
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The Mines Department publishes each year a detailed description of the facts and surrounding circumstances of individual accidents, exhibiting precisely the conditions in which the accidents occurred. This permanent and accurate record should be of great value in devising means of minimizing the number of serious accidents in the future. Judging by the evidence given by a medical officer in a large mining district the liability to alight accident is considerable. In one mine with about three hundred and fifty workers it was stated that accidents of this nature, for which miners medical officer, occurred at the rate of eighteen a month from January to August of 1918, the average duration of the patient's absence from employment on account of such accident being estimated at three to four weeks. The same medical practitioner stated that there is not much interruption of work among miners owing to illness apart from the results of accident, although he is of opinion that coal-mining makes a greater drain on the nervous and muscular systems than the work of agricultural or general labourers. There is no doubt, too, that the use of the ordinary safety-lamp has harmful effects on eyesight. The influence of their occupation upon the health and average length of life of coal-miners has been the subject of much scientific investigation abroad of recent years, to which brief reference may be , made in view of the absence of any considerable body of reliable local data. The ascertainment of the true connection between occupation and health and longevity is hedged round with difficulties, because of (i) the rapid change in medical knowledge and the power of diagnosing the true nature of diseases ; (ii) the movement of individuals from one occupation, where they may have developed the disease ultimately causing death, into a different trade ; (iii) the existence of numerous occupational diseases which do not directly cause death ; (iv) the occurrence of secondary and ultimate diseases which cover up the condition that originally caused or accelerated death ; and (v) the presence along with the occupational factors, such as coal-dust, of other factors due to locality, &c, which may vary greatly over different coalfields. Coal-workers generally show a high proportionate rate of death from accidental violence, though, as pointed out above, this rate is low in New Zealand compared with countries in general. They show a low proportionate death-rate from pulmonary tuberculosis or consumption of the lung, and this relative freedom has been proved to be the resultant of occupational conditions whicli in some manner protect coal-miners from the fatal consequence of tuberculous infection. Dr. J. S. Haldane, F.R.S., writing in September, 1.918, summarizes the more important results of recent research in Great Britain into diseases peculiar to coal-miners. He says, — " Goal-mining in Great Britain is on the whole a very dusty occupation, but there is no evidence in the mortality returns for either young or old colliers that dust-inhalation has hitherto caused appreciable danger to life in British coal-mining. The death-rate among miners from lung-disease is in England at all ages up to fifty-five not only far below the average for other employments, but even slightly lower than for farm labourers. The death-rate for phthisis alone is also slightly lower than for farm labourers. It is proved that coal-dust and shale-dust, unlike flint-dust or quartzite dust, entirely disappears from the lungs and body in time. It can be realized quite readily what is happening in the lungs of a coal-miner breathing large quantities of coal-dust and shale-dust, as compared with what is happening in the lungs of a gold-miner breathing quartzite dust. As fast as the dust goes in day by day to the coal-miner's lungs it is carried out again by the dust-cells. His lungs, it is true, are probably always more or less black ; but, on the other hand, what lie coughs up is black and full of the dust on its way out again. His black spit is in truth his salvation. On exposing the animals experimented on to relatively small daily doses of coal-dust or shale-dust, and continuing this over a long period, it was found that after a few days the dust in the lungs ceased to increase. The intake of dust was thus balanced by the output. From all that is known about similar physiological processes one may be fairly sure that the capacity for eliminating dust-particles grows with use. If this is so, the practice of constantly getting rid of coal-dust and shaie-dust may help the lungs in eliminating other kinds of harmful particles such as tubercle bacilli, and may thus account for the remarkable fact that coal-miners are, and always have been since statistics were first available sixty years ago, extremely free from phthisis." Experiments carried out in England by the Medical. Research Committee under the National insurance Act have given very reassuring results as far as coal-mining is concerned. So long as the dust in a coal-mine is not explosive, and is not breathed in excessive quantities, it seems to do no harm, and possibly even does some good. Many authorities hold that coal-dust has certain germicidal or antiseptic properties; others that it stimulates the lung-tissue and the growth of connective tissue. Goal-dust particles are round, unlike, in shape as in composition, the sharp flinty particles of stone-dust; but it is to be noted that much coal-dust contains a certain amount of stony particles, and that there is sufficient reason for pursuing the inquiry whether the excessive mortality from non-tuberculous respiratory diseases, such as bronchitis, asthma, and pneumonia, among miners is due to dust-inhalation. The occurrence of these among miners has, however, undoubtedly diminished with the improvement of mine-ventilation, and may result in part, as miners themselves often claim, from the fumes of explosives. The opinion of the Chief Inspector is that permitted explosives do not give as much noxious fumes as gelignite, and that if properly used in an adequately ventilated place they produce no noxious fumes whatever. Where the miner fires without under-cutting or side-cutting, making the explosive do much of the work which the coal-pick should have done, more explosive is used than ordinarily, and more smoke produced. In an indifferently ventilated place this would be injurious to health, and for it the men share the responsibility with the management.
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In 1917 the U.S.A. Bureau of Labour published the results of an elaborate inquiry into the causes of death by occupation. In the table giving the average age at death in nineteen occupations coal-miners occupy the fifteenth place up the scale, with an average age of 513 years, this figure being exceeded only by general labourers, masons and bricklayers, blacksmiths, and farm workers. The average age at death for all the occupations cited was 47-9 years. It would seem from a survey of the facts available, stated by the Journal of the American Medical Association, thai, the occupation of coal-mining is neither relatively nor absolutely unhealthy as compared with other means of gaining a livelihood. It has its special inconveniences and hardships, and is exposed to special dangers from accidents, but these can be, and are in New Zealand, reduced to small proportions by proper care, appliances, and legal restrictions. There is no doubt that in regard to health the New Zealand coal-miner is in a superior position to that of miners in any other country, and is at least as favourably placed as the great body of industrial workers in the Dominion. The war period has produced no noteworthy change in these particulars. The special diseases to which miners arc liable seem to be largely preventable, and greater care and conveniences in changing from the equable atmosphere of the mine to the extremes of heat and cold outside would probably reduce the proportion of respiratory affections, except in particular cases where they may originate through fumes from explosives or the mine itself when ventilation is at fault.
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CHAPTER VI. THE COST OF LIVING OF COAL-MINE WORKERS, PAGE PAGE 1. Preliminary Remarks .. .. ..77 IS. Changes reported j Provisional Results .. 78 2. Data employed .. .. .. ..77 4. Compensating Paotors .. .. ..79 1. PRELIMINARY REMARKS. The real cost of living of a class of people may be defined as the sum of the exertions and sacrifices necessary to maintain the members of that class at a certain standard of living. This cost is measured and expressed in terms of money, and is usually taken to mean the total sum of expenditure involved in the maintenance of the given standard of existence and efficiency. Every one recognizes that the cost of living so expressed is subject to frequent changes, partly because of the unstable and changing character of the manifold forces that affect the supply of the necessaries and comforts of life and the amount of the total demand for them separately and as a whole, and partly also because of the fact that the supply of money, which measures the real cost, is itself a variable quantity and does not at once adjust itself to the changes in the supply of goods or the total population. These changes in the cost of living, however, cannot be accurately determined simply by measuring the extent of the alterations in the prices of the goods and services appropriate to he given standard of living. Such a method is faulty—first, because it takes no account of the relative importance of the actual expenditure on each particular commodity and service ; and, secondly, because it does not allow for those readjustments in the distribution of the expendi ure over all the items that householders make upon the occurrence of any considerable change in the relative prices of commodities. For the purposes of a trustworthy investigation into the extent of changes in the cost of living of a class there should be available for the period in question accurate records of (i) the nature of goods necessary for the customary economic efficiency and comfort of the class ; (ii) the prices at which these goods are bought by the consumers ; (iii) the manner in which the total expenditure i,s made up of the various items, and the proportion which each particular expenditure is of the whole expenditure ; and (i.v) the constitution of the average family in the class concerned and the data necessary for its reduction to that of the standard family, since, for the purposes of comparison, the consumption of families of persons of both sexes of varying ages must be exp essed in a uniform standard unit, which is obtained by expressing the consumption of women and children in terms of that of men according to a scale scientifically determined The principal method employed to obtain this necessary data is that of workmen's budgets of expenditure, which are collected in great numbers according to a uniform plan. All other methods are properly regarded as subsidiary or complementary to this. In New Zealand, unfortunately, this method has never been applied in such a way as to justify any important practical deductions. The inquiry conducted in 1910-11 by Mr. J. W. Collins, of the Labour Department, was a praiseworthy pioneer attempt which achieved certain suggestive results, but the number of returns sent in was insufficient and from too varied a class to found any practical rules of action upon the generalizations tha f > were skilfully made from them. It was the intention of the Board to carry out a thorough budget investigation in respect of the very definite class of worker and the particular localities involved in this coal inquiry. It was thought advisable to postpone the actual preparations of the budget-forms and their distribution until the Board had had the opportunity of personally inspecting the mining districts and the living-conditions of their population. It was in the midst of this inspection that the epidemic disorganized for a time the whole of the social life of the community. We felt that budgets collected over a period containing so much that was abnormal and the results of abnormal conditions would be but few and comparatively valueless ; and it has been found impossible to arrange for this fundamental inquiry to be begun and completed during the period within which our report should be presented. In our opinion it ought to be proceeded with at the earliest opportunity, and a reference to it is included in our recommendations. 2. DATA EMPLOYED. In the absence of the material provided by an intensive or extensive budget inquiry, we used the data provided in evidence tendered by shopkeepers on the mining-fields and by miners' representatives. This material was comprised mainly of quotations of prices of commodities in .1914 and 1918 used in miners' households. These price statistics were compared wherever possible with those of the Government Statistician for the nearest towns—that is, with those relating to HamiLon and Auckland in regard to the Waikato field, with those of Greyinouth in regard to the West Coast, and
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with those of Invercargill and Dunedin in respect of the South. Shopkeepers generally testified that, though their level of prices may be different, yet they move in the same direction as those of the neighbouring larger centres and in a similar proportion. The data generally cannot be regarded as altogether satisfactory either in respect to prices, comprehensiveness of ra.nge, definition of the articles included, the relative quantities consumed from time to time in the, period, or the constitution of the average family, including its proportion of wage-earning members. Those are matters of such vital importance, and their correct ascertainment is a question of the application of methods so numerous and complicated, that they should properly form the subject of a special though subordinate inquiry. 3. CHANGES REPORTED: PROVISIONAL RESULTS. The price statistics collected were classified according to districts and submitted to the Government Statistician, who kindly calculated index numbers registering the changes they showed. The prices of all foodstuffs, common household requisites, including light, and rent quoted in evidence showed increases between 191.4 and the third quarter of 1918 of 74 per cent, for the Southern District (Kaitangata and Nightcaps), 68 per cent, for the West Coast, and 62 per cent, for the Waikato fields. These figures, however, are mere averages of prices and take no account whatever of the relative importance in consumption of the different commodities- for example, an increase of from Is. 2|d. to 4s. 4d. per pound in the price of cream of tartar having the same weight as a rise of from 10s. 7id. to 13s. in the price of sugar per 56 lb. When these prices are weighted in accordance with the scale of relative weights used by the Government Statistician, and based on his view of the relative proportions of the commodities in question actually consumed in workers' households over the Dominion as a whole, the results obtained are very different. The former percentages (quoted in the last paragraph) are indexes of changes in prices ; the percentages that follow are indexes of the most probable changes in the actual amounts expended on food and household requisites, including light, on the assumption (i) that the relative proportions are the same for the mining population as for the total population, and (ii) that these relative proportions have remained unchanged during the war period. Without a special inquiry, such as that hinted at above, there can be no substantial ground for either accepting or denying these assumptions. The percentage increases of actual expenditure thus determined are for the Southern Districts 50 per cent., for the West Coast 54 per cent., and for the Waikato 35 per cent., an average of 46 per cent, for the three. This may be compared with the .Government Statistician's estimate of the increase of the average expenditure on groceries and foods other than meat for the whole Dominion between July, 1914, and September, 1918—viz., 43 per cent, approximately. Comparison may also be made with the movements in the Government Statistician's averages for the towns contiguous to the mine-fields. ; The increases for Hamilton, Greymouth, Dunedin, and Invercargill were approximately 39, 40, 45, and 46 per cent, respectively, or an average of nearly 43 cent., practically the same as for the Dominion as a whole. The Secretary of the Miners' Federation presented certain price statistics in evidence. These were also weighted in a similar manner and the index of change calculated. This showed a considerably higher rate of change for the Northern District than the evidence of shopkeepers warranted, a slightly lower rate for the West Coast, and a slightly higher rate for the South, the average increase for the three being 56 per cent. If the section relating to prices in the North is eliminated from this particular evidence the general result (for West and South) is the same as that derived from the evidence of shopkeepers —namely, 52 per cent. The evidence in regard to the changes in the price of meat varied very considerably from district to district, the range being as wide as from 30 to 84 per cent. The highest rate of increase was in the West, the lowest in the North. An estimate of 54 per cent, is the most reasonable from the available price data given directly in evidence and weighted according to the importance of the various cuts. The corresponding increase for expenditure on meat according to the Government Statistician's returns between July, 1914, and the end of August, 1918, for the whole Dominion was only 37 per cent., and for Dunedin, Hamilton, Greymouth, and Invercargill 35 per cent. The figures for September were 38 and 40 per cent, respectively. These differences suggest the necessity of caution in deducing any conclusion for practical purposes from the evidence tendered. The opinion of the Board is that the increase in the expenditure on all foods, groceries, and light cannot, in view of all the available evidence, be assessed at more than 50 per cent., and that this estimate is necessarily very imperfect and would 'probably require revision after a more intensive special inquiry into this particular problem. The Statistician's estimate of the increase in the expenditure on all foods (including groceries) for the whole Dominion between July, 1914, and August, 1918, is 41 per cent., and for Dunedin, Hamilton, Greymouth, and Invercargill 39 per cent. The corresponding figures for September, 1918, are 41 and 41 per cent, respectively. It is not likely that the rate of change in the expenditure on foodstuffs has been more than 25 per cent, higher in the case of the mining camps than in that of the towns close by, assuming in both cases that the relative amounts consumed are , unchanged, and that the Government Statistician's data, which has been systematically collected and checked, is accurate. Board and lodging has increased, according to the evidence, during the war period about 22 per cent, in the Southern fields, 37 per cent, on the West Coast, and 32 per cent, in the North. Rents in some localities have remained unchanged ; in others there have been slight increases ; the average rise is not more than 5 per cent.
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Boots and common clothing-stuffs have shown the highest rates of increase in price, averaging about 75 per cent, for the mining-fields in general, being lower in the South than on the West Coast and in the North, where the evidence showed the rise to be about the same (about 85 per cent.). This figure represents, however, the rise in average prices, not in the average expenditure on clothing, since there is available no means of accurately weighting the items according to relative amounts used. The prices of working-clothes, socks, flannels, &c, as testified to by represen atives of the Miners' Federation, have increased over all the fields on the average about 62 per cent, (ranging from over 70 per cent, in the Waikato to about 55 per cent, on the West Coast). The price of suits of clothes has increased about 40 per cent, in each locality. A reasonable estimate of the increase in total expenditure on boots and clothing at, pre-war amounts would be from. 60 to 65 per cent, at the most. If Iliis estimate is at fault it probably slightly overestimates the rise. The price of fuel to the miner has undergone but little change during the period. Total expenditure on fuel and light together cannot have risen 20 per cent., which, according to the Government Statistician's estimate of relative expenditures for the Dominion, would be the extent of the increase in order to effect a rise of only 1 per cent, in the total cost of living. Miscellaneous expenditure, such as that on fares, insurance, medical services, education, rates and taxes, &c, cannot be reasonably estimated to have risen more than about 25 per cent, over the whole ; the veal increase is probably less. It remains to combine these results for the several classes of expenditure in order to ascertain the figure that shall measure the general rise in the cost of living. This is done by taking as bases the rises in each of the main divisions of expenditure and the only estimate available—that of the Labour Department inquiry of 1910-11—as to the relative importance of the contribution of each of these classes to the total expenditure. If the total expenditure in 1913-14 be represented as 100, the respective expenditures on food, rent, and fuel and light, clothing, and miscellaneous items are, according to the inquiry mentioned, 34, 20, 5, 13, and 28. Our approximate estimates of the rises in each during the war period, on the mining-fields arc; 50, 5, 20, 65, and 25 per cent. It will be remembered that these percentages err, if at all, in the direction of overestimating the rise in expenditure as distinct from the rise in prices. The combination of these two series of figures yields the final and general result of 35 per cent, increase in the expenditure on living by the mining population. The following table summarizes these results :
From this it would appear that the increased expenditure on food, rent, fuel and light, and clothing has been sufficient to absorb an amount equal to the expenditure on all other items —that is, that on the average the rise in the cost of living between the middle of 1914 and that of 1918 could have been met, apart from increase in income or economy in these expenses, by a complete denial of satisfaction of all wants but those of food, &c. It is again to be noticed that this general result of an increase of 35 per cent, is obtained on the assumption, among others, that the distribution of expenditure over the various items of living is substantially the same as it was in pre-war time, and that the results of the Labour Department inquiry of 1910—11 accurately measure these relative amounts. There is no doubt that, even allowing for the possibility of adjustment within food expenditure as prices have risen, the percentage of the total outlay which is represented by expenditure on food has risen, and that therefore the real rise in the cost of living is probably somewhat higher than 35 per cent. 4. COMPENSATINU FACTORS. The most important of the factors that have tended to counterbalance the rise in the cost of living to mine workers have been the rises in their rates of pay, which, together with improvements in the conditions of their work and opportunities of increased employment, have resulted in substantial additions to their actual earnings per annum. The additions to the actual earnings of miners appear in some mines to have reached 50 per cent., comparing the average for 1917-18 with that for 1913-14. In such cases the increase in earnings is more than sufficient to offset the increased cost of living. But it is to be noted that, though in many instances increased earnings beyond the actual increase, in rates have been made possible through improved conditions of work, yet in many of these also there must have been accompanying drawbacks in the shape of increased exertion and a certain amount of overtime. These and similar factors have been mentioned in dealing in Chapter V with the question, of real wages. Most of them, though sometimes important, are not capable of quantitative expression. It is, for example, impossible to state precisely how the war period has affected the family income, as distinct from the income of the head of the household, though any change in this respect must have a direct influence in tending either to counterbalance or aggravate the burden of rising expenditure
Total l-lxpenditure on 1913-14. 1918. Increase per Cent. Food Rent Fuel and light .. Boots and clothing Miscellaneous ' .. 34 20 5 13 28 51 21 0 22 35 50 5 20 05 25 " Living" .. 100 135 35
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according as the total family income has risen or fallen. We can only repeat our belief that, in so far as the actual wages of miners (hewers) are concerned, they had risen by September, 1918, on the average by about 30 per cent., this average being derived, however, from figures relating to certain mines, and showing a wide range of rates of increase in actual weekly earnings from mine to mine of from 12 to 40 per cent. But the same cannot be said of the bulk of the other mine workers—viz., those who were on day wages —since, though their rates had risen 20 per cent, as against 17|- per cent, to miners, their opportunity of increasing their actual earnings beyond the percentage increase in rates was much more limited. In their case expenditure has probably risen more than earnings, and it is very doubtful whether the rise of 30 per cent, given in October, 1918, was sufficient to cover their increased expenditure at the old standard by that time, not to take account of the arrears of differences between the 20-per-cent. increase in rates given at the middle of 1917 and the rise in the expenditure during the intervening year and a quarter. There is no doubt that the adjustments made in the rates of wages for all mine workers by means of the bonuses granted in 1916 and 1917 (as well as in 1918) lagged behind the increases in their expenditure on living at the pre-war standard. On the assumption that increased cost of house-room, fuel and light, clothing, and miscellaneous items, as estimated above up to September, 1918, was distributed over the war period in much the same way as the increased cost of all foods, which is worked out in detail by the Government Statistician, the living expenditure of the miner had increased by the end of May, 1916, when the first bonus of 10 per cent, all round was granted, to from 13 to 15 per cent. ; by May, 1917, when the bonus was raised to 20 per cent, for day-workers and 17| per cent, to hewers on their rates, the increased living-cost may be put at from 22 to 24 per cent. The latest increase of rates —namely, 25 per cent, to hewers and 30 per cent, to day-workers -was made when the expenditure on living had risen by about 35 per cent. In the meantime, in each case actual earnings had increased by more than the rates. The general conclusion is that the increases in the actual earnings of those mine workers who are on day-wages have been slightly lower than the increases in expenditure on living, and have also lagged behind the latter, a factor aggravating the burden ; that in the case of miners the increases in their actual earnings, taking the mines as a whole, were sufficient to compensate for the increased expenditure on living till the latter part of the period ending with the institution of our inquiry (September, 1918), when the increases to average actual earnings were overtaken by the continued rise in expenditure; and, further, that, since the increases in actual earnings were unevenly distributed over the various fields, there have been many miners, as well as day men, whose rates of expenditure on living at the old standard has increased in greater proportion than their actual earnings. The effect of the increases of September, 1918, amounting to 25 per cent, and 30 per cent., as factors counteracting the rising expenditure on living, cannot be accurately determined until sufficient data as to actual earnings in normal conditions has been accumulated.
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CHAPTER* VII. HOUSING AND SOCIAL CONDITIONS OF MINERS. I'AOE PAdIS 1. Housing-conditions in the Several Mining .'!. Accommodation for Single Men .. 85 Towns .. .. .. ..81 4. General Social Welfare .. .. 85 2. General Remarks on Housing .. .. 84 1. HOUSING-CONDITIONS IN THE SEVERAL MINING TOWNS. Much of the industrial unrest and dissatisfaction of the miners may be attributed to the sordidness of their housing-conditions and monotony of their home life. Early in the inquiry the representatives of the workers asked the Board to give special attention to housing-conditions; and the inspections which, the Board made of the mining villages at Huntly, Pukemiro, Rotowaro, Glen Massey, Nightcaps, Kaitangata, Runanga, Blackball, Denniston, Burnett's Face, Millerton, and Ngakawau showed that in many cases the general conditions were exceedingly bad. Few of the houses in these townships reach the standard of comfort seen in the average workers' homes in our cities. There is no proper water-supply or drainage, and only in isolated instances are there bathrooms. The conditions generally are insanitary, and in certain fields the surroundings are dreary in the extreme. In spite of the disadvantages under which the occupants labour, some of the houses are kept in an excellent manner, and there are not a few well-cultivated gardens, tended with the greatest care and pride. But these stand out as isolated examples on these fields among the general mass of inconvenient, unhealthy, and crowded homes. As the Board felt that expert advice and assistance were necessary in this branch of its inquiry, the services of Mr. S. Hurst Soager, F.R.1.8.A., architect, of Christchurch, were secured. Mr. Seager paid visits to the townships mentioned above, with the exception of Nightcaps, and also inspected the mining camps at Avoca, Rewanui, Paparoa, and Stockton. The following brief notes describe the housing-conditions in each settlement visited :— North Island. Huntly (1,535).* —The old-established Township of Huntly, in the Waikato district, appears to have developed from year to year without ultimate plan, with the result that the houses and streets have been set out in a very uninteresting and inconvenient manner. There is a great shortage of houses, and a comprehensive building scheme should be undertaken. Rain-water only is available for domestic supply. There are no playgrounds for children, and there is no local hospital. There is a sufficient amount of land held by the Taupiri Company on which to form a model suburb, with all conveniences and suitable environment. Owing to the shortage of houses, there is-a good deal of overcrowding. In one case a house of three rooms is occupied by seven people, for which a rental of Bs. per week is paid. (See photograph No. lin the Appendix to this report showing cottages owned by the company and let at ss. per week.) Rotowaro (32). —This is a newly established mining village near , Huntly. Eight houses have been erected by the Taupiri Company on a very suitable site close to the Rotowaro Station and about a mile from the mine, in readiness for occupation by mine workers. The houses are, in Mr. Hurst Seager's opinion, far too expensive, and he advocates the erection of a large number of a cheaper form of construction than those erected by the company. These should be disposed on proper townplanning lines. The old site should be resurveyed so that the houses may be placed in accordance with the contour of the land. It is a very suitable position for a garden village, and if treated in a proper way might be made extremely attractive. Pukemiro (223 ; near Huntly). —This is a comparatively new settlement. The site is considered an excellent one by the Board's expert, but it has not been properly treated. A large amount of money has been wasted by the formation of a 66 ft. road where well-kept foot-tracks only are required. The whole village should be replanned, and a proper type of house erected. There are possibilities of making an extremely attractive garden village. There is good soil, ample watersupply, and good drainage. There are 160 men employed at this mine, which is only in its fourth year of output. Ten houses have been erected by the Pukemiro Collieries Company, and the remainder have been provided by the men themselves. Approximately one-half of the miners live at Huntly, as there is not sufficient housing-accommodation at or near the mine. Most of the huts near the mine occupied by the miners should be condemned as unfit for habitation. (See photograph No. Iα in the Appendix to this report showing huts near the mine itself.) Glen Massey (346). This mining township is situated about eight miles from Ngaruawahia, in the Waikato district, ft appeared to the members of the Board to be very suitable for settlement
* The numbers in parentheses give the population as at the census of 1916.
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purposes ; but the housing is totally inadequate for the needs of the workers, and evidence was tendered to the Board showing that overcrowding exists. In one case a miner, with his wife and five children, are living in a two-roomed cottage, and in another case there are five persons (three children) living in two rooms. At least ten roomy houses are required for immediate needs. The huts provided by the Waipa Company at present have no fireplaces or water-tanks, and both these necessary conveniences should be immediately, provided. The company has bought sufficient land near the mine and is prepared to sell sections at from £35 to £40, which is the price it paid for them. The company is also prepared to carry housing-material over the railway free of cost. South Island. Avoca (21). The mine at Avoca belonging to the Mount Torlesse Collieries Company is situated in ihe Canterbury District, on the Midland line some seventy miles from Christchureh. No houses have been provided for the miners, but tents are placed in a valley subject to floods, and some in positions with a very meagre supply of sunshine, so that in winter for two months in the year it is impossible to dry any clothes in the open. There is a plateau about two miles from the mine with a gentle slope towards the east on which a properly designed garden village could be formed. Trees would have to be planted to give protection from the north-west and south-west winds. The soil is good, the climate fine and healthy, and excellent gardens could be made. The site is about two miles from the Avoca Station. The company has made application through the Board for monetary assistance from the Government for the erection of miners' dwellings. The sum of £5,000 has been applied for. As it was .necessary that some provision should be made for the workers during the coming winter, the Board made urgent representations to you to consider the request favourably, provided that reports from the mining experts as to the probable value and life of the mine are satisfactory. Kailanqata (1,681). —This town, four miles from Stirling on the main line between Dunedin and Tnvercargill, is undoubtedly one of the most favourably situated settlements inhabited by miners. It is in a good farming district, and it was pleasing to note that many of the miners had cultivated gardens and were able to grow their own vegetables. The township is very scattered, but the housing-conditions generally are extremely good. The sections are mostly one-quarter of an acre in extent. The land is all privately owned, but there is a very large number of sections on which more houses could be built. It would be possible to get a clear block of 'some acres and start a model suburb ; but Mr. Hurst Seager considers that, as the village is so well established and so many of tin , houses owned by the miners, it would be best to improve, as far as possible, the present site and to build houses on the land available as they are required. There is urgent necessity in the village for a good drainage-system and water-supply. (See photographs Nos. 2t05 in the Appendix to this report showing—(2) General view of Kaitangata; (3) some of the best homes privately owned ; (4) collection of homes on the rising ground ; (5) collection of homes on the rising ground towards the mine.) Nightcaps (607) is situated some forty miles from Invercargill by rail. Mr. Seager did not inspect this locality, but the Board found the conditions much the same as at other mining townships as to overcrowding, lack of sanitary conveniences, and drainage, though the majority of the houses are substantial and stand in ample spaces. Many of the miners have purchased their own homes through a building society. The locality offers every facility for the creation of a pleasant village settlement, with suitable soil for gardens. Runanga (1,411 ; eight miles from Greymouth). In this settlement reside the majority of the miners employed at the State mines. The town compares favourably with others visited, and there did not appear to be much evidence of overcrowding, nor is there a shortage of houses at present; but houses of a better type should be built to take the place of many of the inferior homes which exist. The Government owns seven houses of five rooms and scullery, which are let for Bs. per week. They cost £300 in 1910. These houses have three bedrooms (12 ft. by 12 ft., 12 ft. by 10 ft., and 12 ft. by 9 ft.), a living-room (16 ft. by 12 ft.), and a scullery (12 ft. by 9 ft,). The scullery is fitted with bath, copper, two wash-tubs, and sink. These are satisfactory homes. There is only tank-water available for domestic use, and the present drainage-system is unsatisfactory. A main open drain runs down the principal street, which, it is alleged, becomes offensive in the summer. With the provision of a better water-supply and drainage-system this township could be made one of the most desirable of mining villages. (See photographs Nos. 6toß in the Appendix to this report showing—(6) General view of Runanga, showing privately owned homes and Masonic Hall : (7) one of the Government houses beautifully kept; (8) Dunollie, looking towards the mine.) Blackball (863) is situated some twenty miles north of Greymouth, a few miles from the main line to Eeefton. Much requires to be done here to put housing-conditions on a satisfactory basis. Mr. Hurst Seager considers that the place should be resurveyed in order to convert it into an attractive village. Although there is at present a number of empty houses, there are few indeed fit for occupation. Houses of four rooms are let at from 7s. to 12s. per week. There is no drainage, only rain-water pans, but no system of emptying, and in some cases there arc cesspits. The miners consider that the houses generally are not fit for habitation. The housing is certainly extremely bad, and the huts which were put up by the Blackball Company, and for which they charge 2s. 6d. per week, are very unsatisfactory. The huts are placed in a row. The windows are fixed so that they canriot be opened, and the door has to be left ajar to admit air. (See photographs in the Appendix to this report showing (9) Miners' homes, 11 ft. Gin. by 9 ft. 6 in., owned by the company and Jet for 2s. 6d. per week; (10) one of the houses- the windows are fixed, and the occupant, to get air and protection from the weather when the door is open, has taken out a pane of glass and put
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a rough piece of iron over the doorway; (11 and 12) two of tin- better class of miners' huts at Blackball.) Roa (45) is situated a few miles from Blackball. All the houses are owned by the Paparoa Company. Complaint was made by the workers that they are often overcrowded- two or three men occupying a hut with accommodation fit for one man only- and that the water-supply and drainagesystem are bad. More houses are required for married workers. The company claims that it is willing to do all possible to supply the miners with proper homes, but had been greatly handicapped owing to the dearth of labour. The huts built by this company compare very favourably indeed with the huts erected at Blackball, as the windows are made to open, and the huts are provided with tanks, cupboards, and brick fireplaces. The rent of Is. a week is very reasonable. Mr. Hurst Seagor considers that Boa should be regarded as a suburb of Blackball, and should be developed on garden-suburb lines. Reefion (1,523). Large adjacent areas have been taken up as coal-mining fields a few miles from Recfton, and here undoubtedly a small garden city should at once be planned and carried out as necessity demands. Waimangaroa (287) is seven miles north of Westport by rail, and is situated at the loot of the ranges upon which Denniston is built. Its value as a mining township is heavily discounted by the long and difficult route to the nearest mines, though there is a supply of suitable land to extend the township if required. The houses generally are very good and, despite the long travelling-distance, are occupied mostly by miners. Denniston (702) is situated upon a hilltop, and is reached by rail journey of ten miles from Westport to Waimangaroa, and from the latter place by motor vehicle over a well-formed road, which winds up and up for seven miles to a height of 2,000 ft. The fare from Westport to Denniston and Burnett's Face beyond averages about 15s. for the return trip. Mr. Hurst Seager considers that the present positions of the houses both at Denniston itself and at Burnett's Face are unsuitable, whilst flic houses generally are extremely bad. It would be better to disregard these and to form a model village on the plateau which lies half a mile from Denniston towards Burnett's Face (526). The opinion expressed by the managers and union representatives is that this position would be quite satisfactory. It is a rocky knoll, and there would be but little chance of any growth ; but, as the trolly-way for the coal passes right over this plateau, it would be a more or less easy matter to bring up enough soil to make a small patch of garden for each house. The houses should be built of concrete, as the sandstone on the spot could be easily broken up with a stone-crusher to form the matrix, or an experiment might be made to use the stone itself to build the houses ; but without further examination Mr. Seager cannot state whether the stone would be sufficiently durable, though it would certainly be quite suitable for use as broken metal for concrete. There are at present at Waimangaroa, Denniston, and Burnett's Face 371 houses and a population of about J, 500 people. If the village was planned for, say, 200 houses on the plateau at Denniston and 100 of these were erected at once the conditions of housing should then be satisfactory. (See photographs in the Appendix to this report showing (13) Plateau between Denniston and Burnett's Face on which it is suggested a township should be formed ; (14) general view of Denniston; (15) some of the cottages erected by the mining company and sold to the workmen; (16 and 17) collection of huts and shacks on the western face of Denniston Hill ; (18) road above the western face loading towards the plateau ; (19) camp to the north of Denniston ; (20) looking down on the camp ; (2.1.) nearer view of the western face seen in general view No. 14 ; (22) general view of Burnett's Face ; (23) collection of huts and houses at Burnett's Face ; (24) typical hut at Burnett's Face ; (25) Burnett's Face —some of the homes.) Granity (667) and Millerlon (843). -Granity is seventeen miles north of Westport by rail. Like Waimangaroa, it is situated on the sea-coast, and Millerton lies on the hilltop three miles away and 2,000 ft. up. There is no further land available for housing at Granity, but at Millerton, which is favourably situated, an attractive township could be formed. (See photographs in the Appendix to this report showing- -(26) Bird's-eye view of Millerton ; (27) house at the side of incline, Millerton.) Ngakawau (157). —This village is beyond Granity and about twenty miles by rail from Wostpori. Several Stockton miners reside here, though they have to spend about two hours in travelling to their working-places. It would be far better, in the Board's view, if a township could be formed on the hill at Stockton (.101), where a few houses have already been built by the company. A road is beingformed from Stockton to Millerton on the Westport Company's lease, so that there may b<; easy access from Granity to Stockton. As the Stockton mines are connected with Stockton village by an electric tram, it would be an easy matter for the miners to be carried to and from their work to the village. This village at Stockton should be properly planned for about a hundred houses, which should be erected as required. The population of Stockton is now about one hundred and fifty. The Westport-Stockton Company has built six four-roomed and two three-roomed houses of a good type. Mr. Seager considers that there is a suitable place at Stockton for forming a model township, including a perfectly flat basin of about 4 acres, which is being reserved as a recreation-ground. There is ample room for many houses on this spot and also on the slightly rounded formation a few chains distant. The houses erected by the company are being sold to the miners, who are paying off the capital cost at the rate of LO3. per week. (See photographs in the Appendix to this report showing—(2B) Homes erected by the company at Stockton, costing £205 each ; (29) well-kept home; at Stockton ; (30) general view of Stockton.)
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2. GENERAL REMARKS ON HOUSING. In many of the mining settlements the housing is generally of a rough or temporary nature Many of the huts wore erected in the early days of settlement, and still do duty as the homes for the mine worker and his family. In many cases no ordinary conveniences have been added, nor have any extra rooms been built, so that overcrowding is rife. The great majority of the houses have no porches or verandas, consequently the children have to crowd into these small shacks in wet weather. It need hardly be emphasized that the climatic conditions in most of the coal-mine districts are not good, and on the West Coast, where the rainfall averages over 100 in. per year, there is every need for the dwellings to be roomy and bright, and to provide ample drying-facilities for the miner's clothes. Apart from overcrowding, there are the; added evils of lack of drainage, lack of sanitation and means of bathing. At Burnett's Face and Denniston (near Westport) the housing-conditions are generally deplorable. Both townships are in a disgracefully dirty state ; the surface drainage is extremely bad ; there are no fences or , privacy ; and there are no baths in any of the houses —the occupants using kerosene-tins and tubs. There are lew trees, and no flowers or gardens to brighten the general dreariness and desolation, and to these drawbacks are added all the disadvantages of a wet, cold, and foggy climate. So unsuitable are the conditions at present that the Board strongly recommends the adoption of a suggestion made by Mr. Hurst Seager that a new village settlemeni should be built on the plateau which lies between Denniston and Burnett's Face. This spot is half a mile nearer the works than Denniston, and there is ample space for laying out a model township with proper water-supply and drainage. The causes which have led to the present conditions of housing in the mining settlements are bound up with the haphazard way in which the villages have grown up, a method far too common in respect of all New Zealand towns. The towns were not pre-planned by a competent authority, nor was due consideration given to local conditions. Plans of some of the townships were prepared, streets and sections marked out in the legal rectangular manner, and it has often been found on application of these plans to the site that it is impossible either to form roads or to build on many of the sections shown. Indeed, many of the sections on the original plan are quite unfit for building purposes. Some are swampy, and others are on steep and rocky mountain-sides along which the whole of the drainage of the land and the household slops of the sections above fall to the sections below. In one case the only available sites for houses were on the site marked for a road, and consequently houses have been built there, and the absolutely necessary tracks and roadways have had to be formed over private property. No thought has been spent on the aspect or prospect of the houses. Had proper consideration been given to the contour and steepness of the land and the possibility of erecting healthy homes on the sites selected, much of the present inconvenience and insanitary conditions would not have arisen. Generally there has been little thought for the health, convenience, or comfort of the workers who are called upon to live on the sites marked out. The hopelessness of the attempt to make comfortable homes under tin 1 , conditions provided tends to create callousness and an utter disregard for the amenities of life, and to acceptance of conditions of housing similar to those found in the Old World only as the result of extreme poverty. There is considerable discontent with the conditions which exist, and there is an earnest desire on all sides to have them- bettered. One aspect of the problem is presented by instances coming under our notice where the miner and his wife and a large family arc living in two or three rooms and are perfectly contented. In one " shack " of two rooms there are father and mother and seven children. The father, on being questioned, said he did not wish for anything better. In eases of this kind it is necessary to protect the workers from themselves in order (hat the children may be brought up in proper living-conditions. Ownership and Rents. The houses may be divided into various classes :— (a.) The fairly convenient four- and five-roomed houses which have been erected by the companies and sold to the miners, who repay the. purchase-money and interest in fortnightly instalments. The exact terms of repayment of these vary ; in some cases some pay £1 per fortnight, plus the interest on the expenditure at 5 per cent., the interest being reducible every six months; in other cases one definite payment covers the interest and reductions of capital on the ordinary building-society scale. (l>.) There are houses erected by the miners themselves on land which they have purchased from the company. In some cases there was no other land available than that which the company offered for sale. Some of the houses erected on these sections are fairly convenient and sanitary, but in many cases the houses are not by any means what they should be. (c.) The owners of the houses erected under the above two systems have often lot them to incoming miners. The houses arc often in a dilapidated state because the owners will do nothing to keep them in repair, and the tenants appear to be prepared to put up with all sorts of inconveniences rather than spend any money upon them. (d.) Houses which have been bought by subsequent purchasers from the original owners. It is only in exceptional circumstances that the original owner gets a proper , return for the money which he has expended. In the greater number of instances he is fortunate if he can sell his interest in the property for one-half of what it has cost him. 11, for example, he has paid off £100 he may sell his right in the property for £50, and it is the risk of this prospective loss which deters many of the miners from creating decent homes or entering upon the responsibility of ownership.
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The groat majority of witnesses examined urged that the miner should not be placed in the position of tenant under the mining company*. There is certainly a great deal of discontent arising from the present haphazard system, but there is no general wish to get decent homes without proper payment of rent. The men realize that the homes should be built simply and comfortably with modern conveniences, and that the rent should be a fair interest on the capital expended. The rents of the houses appear to vary greatly according to locality. Compared generally with the rents paid by workers in the cities they are considerably cheaper. For four- or five-roomed houses., devoid of bathrooms and ordinary sanitary conveniences, the rents range from 6s. to 10s. per week, the predominant rent being Bs. ; three-roomed houses range from ss. to Bs. per week, the predominant rent being 6s. ; while the larger houses of six rooms range from 10s. to 12s. per week, the predominant rent being 10s. 6d. Huts built by the companies for single men, and accommodating two, range from Is. to 3s. per week. Houses appear to be cheaper, as well as (if better quality, at Kaitangata than in any of the other townships visited, the average for a three-roomed house being ss. 6d. ; for a fourroomed house 65., for a five-roomed house 9s. 3d., and for a six-roomed house 10s. 3. ACCOMMODATION FOR SINGLE MEN. With regard to (lie accommodation available for single men, complaints were made as to the increased cost of living during the war period as compared with pre-war days. The rates paid for full board and lodging during such periods in typical mining localities were as follows :- Locality. 1913. 1918. Huntly, Waikato .. . . . . 18s. to 20s. 255. Kaitangata .. .. .. .. 20s. 225. 6d. to 255. Nightcaps .. .. .. .. 225. 6d. 275. 6d. Paparoa .. .. . . .. 18s. 275. 6d. Blackball .. .. .. .. 17s. 6d. to 20s. 255. to 275. 6d. Donniston .. .. .. .. 225. 6d. 255. to 275. 6d. Millerton .. .. .. .. 20s. 275. 6d. to 30s. Men provided with huts pay for this accommodation from Is. to 3s. per week, and for their meals generally from 20s. to 225. 6d. per week. The accommodation provided appeared to be fair, and the meals wholesome. At Mangatini, an isolated spot beyond Millerton, the boardinghouse is run under , the auspices of the, mining company, and accommodates a large number of men. All the food and supplies are carted over the company's trolly-line free; of charge, and electric lighting and coal are provided for a, nominal sum by the company. The service and conditions generally in this accommo-dation-house are. commendable, despite the isolation. 4. GENERAL SOCIAL WELFARE. In addition to the complaints concerning housing-conditions, the mine workers brought before the Board matters concerning their general social and economic welfare. In the Waikato, Nightcaps, and Millerton districts the miners stated they were greatly handicapped by (a) Lack of doctors and qualified nurses ; (b) lack of maternity homes ; (c) long distance from the mining townships to the nearest available hospitals ; (d) the high cost of medical and nursing attention and high fees payable to hospitals ; (c) lack of higher educational facilities for their children. The lack of doctors is due to war conditions, and will no doubt be remedied shortly now that hostilities have ceased. The question of location of hospitals is a difficult one, but the Board inclines to the view of one of the medical men who gave evidence that the needs could be best satisfied by providing a motor-ambulance in each mining viVage and small cottage hospitals for maternity cases, together with an additional bed or two to meet emergency accident cases as they arise. In respect to education, the mine workers stressed, the need of some assistance to enable their children to attend secondary and technical schools. Inva.riably these schools are situated in the larger towns some considerable distance from the mines, as, for instance, at Hamilton (twenty-one miles from Huntly, twenty-nine miles from Pukemiro, and eighteen miles from. Glen Massey), at Riverton (fifteen miles from Nightcaps), at Westport (fifteen miles from Denniston, twenty miles from Millerton, and twenty-three miles from Stockton). In cases of children obtaining scholarships the allowances, it was claimed, should be noreased so as to ease the burden on the parents of having to pay a large portion of the board and lodging fees. Another complaint referred to was the rates ruling for weekly fares on the local railways. Owing to lack of housing and other social facilities many miners employed at the Rotowaro and Pukemiro Mines reside at Huntly, distant six and eight miles respectively, and they complain as to the fare to be paid weekly viz., 3s. 6d. to Rotowaro return, and 4s. 6d. to Pukemiro return —and ask that they should be given the benefit of the workers' weekly tickets issued in the suburban areas. The Railway Department considers that it cannot give any concession beyond the present one, which means a cost of 4|d. per trip as against lid. ordinary fare, and that the suburban-area concession cannot be applied to places where there is no population to necessitate the creation of suburbs outside a congested area, since it is essentially a concession granted to the large number of workers in the main centres of population, to encourage them to live outside the cities in order to cheapen rents and provide the healthiest conditions for themselves and families.
Note. —Some of the social disadvantages of life on the coal-mining fields have already been discussed in Chapter 1, section 5 (vii) and (viii), p 20, and Chapter V, section 5 (iv) and (v), p. 70, which should be read with this chapter.
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CHAPTER VIII. KECOMMENDATIONS AND CHIEF FINDINGS. 1. INTRODUCTION. Tun coal-mining industry of New Zealand cannot be said to have exploited the public, during the period of the war. Though the supplies of coal have not been as regular and uninterrupted as should have been the case with less industrial friction, neither the owners of the mines, nor those actively engaged in the management and direction of the industry, nor the workers in the mines, nor those engaged in distribution have received remuneration that should be regarded as unduly high in existing conditions. It is an industry which experience shows to be one of very uncertain return, of varying cost, and with labour conditions that do not appeal strongly to the ordinary worker. The markets are small and widely scattered, and there is considerable waste in production due to the great amount of small coal necessarily produced with the larger, for which in normal times there is little or no demand at a profitable price. The experience of the past is not very encouraging for the future. The conditions directly and indirectly governing the industry are such that there is not much scope for effecting any considerable fall in the price of household coal relative to the price of other commodities in common demand. But unless certain improvements are made, particularly in the organization of this industry, the relative price of coal will continue to rise, and probably rise rapidly. The means of establishing the permanent conditions necessary to prevent or minimize such a rise have received our chief attention. The main recommendations to this end are set out below in sections 2 and 3 2. IMPROVEMENTS IN THE PRODUCTION OK COAL. Those lines of improvements promising to lead to the fullest results suggested by the evidence gathered and by the examination of the conditions of the mining industry by the Board itself lie in the direction of a more efficient organization of the industry than of any immediate reforms in the technical details of the mining processes. The latter would follow as required in consequence of the broad changes contemplated in the organization, their need being then more clearly apprehended and their institution more easily effected by a body charged with the direction of the industry for the whole of the Dominion, able to command the most expert advisers and possessed of the necessary financial power. With certain exceptions mentioned below the technique of coal-mining in New Zealand is considered by competent authorities to be, relative to the peculiar local conditions, as well planned and carried out as in any other coal-mining region. Among the chief disabilities under which the individual mines labour are the stoppages of work and disturbance of good feeling through industrial unrest, the waste of resources due to a lack of markets (in some cases a permanent lack) for part of their output, and the difficulty of providing such a social environment as will permanently attract a good class of worker. These are only a few among many factors which, influencing the mines directly, have also a peculiar interest for the community as a whole, since it needs a steady supply of coal at a reasonable price and readily adaptable to changes in demand. In view of this undoubtedly strong national interest in the coal-supply the Board devoted considerable thought to the question of the desirability and practicability of " nationalizing " the mines of New Zealand. " Nationalizing " may be interpreted in several senses. The Government of the Dominion might— (i.) Buy the mines outright; and, having done so, might--(a.) Either work them itself, as it does the present State mines ; or (b.) Lease them to concessionaries under strict conditions ; or (ii ) It might institute some form of control of the privately owned mines through a public Department charged with the enactment and administration of regulations binding the industry ; or (iii.) It might obtain representation on the directorates of the chief mines by legislative right or by virtue of financial grants for developmental purposes. All these forms of reorganization may be regarded as varieties of " nationalization." The questions we set ourselves to answer are— (I.) Is nationalization desirable ; and (2.) Ii so, which particular form of nationalization promises the best results for the coal industry in New Zealand ? (3.) If not, what modifications, if any, are required so that the industry may best serve the community during the remainder of its term? The Board, after carefully considering all relevant arguments, is of opinion thai some form of nationalization is wgentl/y needed as an essential step towards removing shortcomings of long standing, effecting needed improvements of a positive kind, and avoiding evils that threaten to turn the industry out of the course of healthy and sane development.
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The chief aims to be achieved by reorganization of the industry appear to be these : — (I.) The introduction of economies in the cost of producing the output of coal. (2.) The conservation of the coal, resources of the Dominion, with due regard to the most equitable distribution of the available supplies as between present and future needs ; the systematic and easy development and expansion of the industry to satisfy the growing requirements of the community. (3.) The concentration of the industry at any given time in the most profitable fields. (4.) The removal of the causes of labour unrest. Subsidiary to this is the institution of proper housing for mine workers. (5.) The inauguration of an efficient system of distribution, ((i.) The regulation of coal-prices in the interests of consumers. A change in organization in the direction of consolidating the several mines of the Dominion under a single central oontrol and management would tend to effect many economies in the costs both of production and marketing, as well as to facilitate the development of a well-reasoned compact policy for the whole country in regard to the opening-up of new fields, the closing-down of unprofitable mines, and the application of the capital and labour resources to those, mines at which the supply of coal required could be most economically won. Such a change would also provide those conditions which seem to promise the most useful results in the distribution of coal by extending to that sphere, in which reforms of other kinds appear to be so difficult to make because of our scattered markets, our small population, and widely diffused mines, the principle of unified and co-ordinated policy and management. The most satisfactory methods of distribution and the lowest prices are found at present in those cases where distribution is controlled by the same agency as production- for example, in the case of the Westport, State, and Pukemiro coals. The elimination of labour unrest and the control of prices in the public interest could both be facilitated by such a change, since it would provide an opportunity for giving that direct representation of labour and consximers on the agents controlling production that promises to be one of the most powerful factors in harmonizing economic classes. But the Board is of opinion that tins desired change should not take the form of State purchase and direct management of the mines. It believes that direct State ownership and management, though it might lead to some of the objects in view, would not foster the highest degree of enterprise, initiative, and resourceful management, nor the necessary single-minded regard for efficient service from all ranks, nor the accumulation out of the profits of the industry of the fund adequate to its future development without becoming a burden on the other industries of the Dominion. The most pressing need is to combine the undoubted advantages of centralized policy and management with those that may reasonably be expected to result from representation of labour and of consumers (through the State) on the controlling body. The Board therefore strongly urges the immediate institution of a Dominion Coal Board (for development and conservation). The Dominion Coal Board should consist of representatives of— (1.) The existing coal-mining companies ; (2.) The employees of these companies ; and (3.) The Crown. It is suggested that the Board comprise five members at most the companies to appoint two members, the coal-workers two, and the Crown one, who shall be president. If the Board took over the function of distribution the employees engaged in that branch would exercise a voice in the selection of the representatives of labour on the Board. The nominee of the Crown should be appointed for a definite term. The representatives of the coal companies should be elected by the shareholders voting by a method similar to that prescribed for the election of the directors of a company under the Companies Act. The representatives of the coal-workers should be elected annually according to a system to be determined after consultation with the workers, in order: to establish some continuity in policy the members of the Board should retire from office not as a whole, but one representative of each of the two interests of capital and labour at a time ; this would involve a two-years term of office for each representative, but he should be eligible for re-election. The Dominion Coal Board should be in a position to achieve effectively the objects detailed above on this page and similar aims. To these ends the Board should be empowered, to take over the existing coal companies with their assets and liabilities at. valuation, and to issue stock to the existing shareholders in exchange for the shares field by them, at the average market value of such shares for the period of the three years immediately preceding such exchange ; such average market value to be calculated and determined by a specially appointed Commission. Existing company law should apply to the Dominion Coal Board, but it should be modified wherever required to permit the Board to exercise the functions necessary to achieve the objects in view. Stockholders should be guaranteed a pure interest rate of 4 per cent, on their paid-up capital. From the balance left, after payment of this rate, working and maintenance expenses, and making provision for renewals and depreciation and reasonable development, there should be paid— (1.) A. risk rate to stockholders, and (2.) Bonuses to stockholders and employees in the proportions respectively of the amount of dividend calculated at the pure interest and risk rates combined and the total amount of the pay roll of the Board
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The Board should also take over, administer, and develop the existing coal-mines of the State. The industry should be subject to taxation and rating in common with all other industries. The Board would probably find it advantageous to organize its business on an extension of the lines followed at present by the Westport Coal Company, which administers its affairs through a general manager, who is assisted in respect of production by a district manager in charge of all the mines on the field, with several mine-managers subordinate, and, in respect of marketing and distribution, by a sales manager and branch managers in the different consuming centres. It should consider the advisability of owning and running steamers for the transport of coal. Among the subjects to which the Board should give attention at the earliest moment are the following, which came prominently under our notice as affecting the production of coal :- (1.) Reference of the methods of mining to be followed in new mines to a committee representative of the best experience and theoretical knowledge, so as to avoid certain present dangers and costly hindrances to production that have followed upon the adoption of unsuitable methods without due consideration. (2.) The provision of suitable housing-accommodation at the mining-fields. We strongly recommend that the Coal Board be em-powered to impose a levy oj 3d. -per lon on all coal raised in the Dominion, to be supplemented by a duty oj 3d. per ton on all imported, coal, jor the purpose oj providing interest and sinking-jund charges jor loans to build- houses and provide suitable means oj recreation jor mine workers on recognized town-planning lines. We are satisfied that the value and probable duration of the industry warrant this step being taken on most of the fields, and that the fund so provided would prove sufficient for the purpose. Its cost we consider to be a fair charge to be borne by the industry itself. The scheme should be worked out forthwith in detail, and inaugurated at places like Avoca and Denniston, to quote two cases —one typical of new mines, the other of long-established collieries with a long life ahead. (See Chapter VII, p. 81.) The miners should be encouraged to form in each centre a housing committee to see that the houses and gardens are kept in proper order and to advise the Board of the needs of the district. (.'}.) The institution of an easy means of transporting miners from their homes to within reasonable distance from their working-faces. This is necessarily bound up with the question of the location of any new mining settlements under (2). (See Chapter I and Chapter V, pp. 21 and 73.) Closely related to this is the duty of arranging with the Railway Department for a better train service between the workers' homes and the mines. It was.asserted, for example, that at Rotowaro and Pukemiro the coal-output could be increased by 4,000 tons per year if so much of the men's time wore not wasted by an inefficient train service. There appears to be need of improvement even in the railway-line serving the State mines at Dunollie and Rewamii in respect of suiting the convenience of the mine workers, as well as on the Blackball line. (4.) The establishment wherever needed—for example, at Huntly—of a motor-ambulance depot with a small dispensary, and a maternity hospital with a bed or two for emergency purposes, and any similar appropriate facilities for dealing with accidents and providing medical attention and comforts for the remoter mining camps. (5.) The desirability of introducing certain improvements in. the technical processes of mining the coal, more particularly coal-cutting machines (see Chapter I, p. 20), double-decked cages as used in Australia (for Huntly), the system of flushing the mines with sand in order to allow of the mining of the maximum amount of coal on the fields. (6.) The transfer of the management of those railways which serve coal-mines only, such as the Greymouth - Point Elizabeth and Westport-Mokihinui lines, to the Coal Board. A certain amount of inconvenience and friction is caused by the fact that the mines have no direct control over these railways. (7.) The modification of certain parts of the Coal-mines Act. We do not feel justified in advising any alteration in the following particulars concerning which representations were made to us. They require consideration by experts in mining itself, and should receive the attention of the proposed Board. (i.) Giving miners the power, at the discretion of the Mining Inspector, of firing their own shots in certain conditions e.g., in wet places, (ii.) The abolition of the provision limiting the number of men employed in a ventilated district to fifty. (iii.) The reduction of the time a miner must spend underground before he may be put in charge of a face. We do not think a prima facie case has been made out for this demand. (iv.) The placing of two names on the board at the mine-mouth—that of the general manager as well as that of the mine-manager so that in a case of disaster both may be held responsible. (8.) The urgent need of improving the coal ports. The further development of the harbours giving outlet to the West Coast mines is a matter of vital importance to the coal trade of the Dominion Upon this depends not only the regularity of the supply of bituminous large coal in the centres of the Dominion, but the possibility of a profitable export, trade in the smaller coals of the districts and the cheapness of that part of the supply marketed here ; for if a steady foreign market can be developed for the bunker coals the other part of the output can be sold at a lower price. We direct particular attention to the extract jrom the evidence tendered to us by Mr. C. N. Boult, Engineer to the Westport Harbour Board, printed in Appendix A, in which he recommends certain improvements as absolutely ne'eessary in his opinion to make Westport Harbour adequate to the needs of the coal trade.
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(9.) The thorough prospecting of fields whose development promises profitable results in the near future. We have in mind in particular the deposits of the Inangab.ua, Reefton, and Waikato fields, as our examination of the districts and samples of coal obtained convinced us that there is a strong case for instituting a thorough and systematic testing of these fields. A feature of the reorganization recommended by us is the introduction oj the mine workers to a voice in the determination oj the business policy of the industry and in the conduct oj the management. We believe that this is the way which promises most for the alleviation of industrial strife and misunderstandings between capital and labour or employer and worker. That the present relationship cannot last and is destined to a rapid change must be the opinion of every one who studies the fundamental facts of the situation without bias. Strong forces are at work that cannot be ignored or altogether counteracted, even if it were desirable to do so ; but they may be controlled and guided so as to effect results that shall be truly constructive and socially beneficial. Unless the period of transition be eased by conscious co-operative effort on the pa.rt of the workers, employers, and the community generally towards the realization of a higher and more humane form of business organization, it may end in the cataclysm desired by none but a few revolutionary fanatics or Utopian dreamers. The best means of establishing better industrial relations is that which shall satisfy the natural demands of the workers to share in the conduct of the business in which they are engaged. It appears to us that the coal-mining industry is one in which such participation may be established. The formation of a Dominion Coal Board would naturally be followed by the institution of works committees or joint pits committees as well as by joint district committees or councils. It would then be no more difficult than it is at present to fix responsibility for the safety of the mines upon a particular individual or group. The industry is one that possesses little in the nature of trade secrets ;it has developed a large body of experience that is the common property of those engaged in it; and it has much to gain from that full and frank discussion by all parties of the details of costs and returns which would be possible were all the min.es under one management and ownership. Certain matters brought before our notice regarding labour organization should receive the attention of the Board. Part of the expenses of the " check inspection " of the mines should in our opinion be borne by it, and the vexed question of contract or wage trucking could be threshed out by the representatives. The provision of the Workers' Compensation Act whereby a mine worker must lie absent from work for a period of fourteen days before he can claim compensation requires amendment-, since it has the undoubted effect of increasing unnecessarily the time off following an injury. 3. IMPROVEMENTS IN THE DISTRIBUTION OF COAL. The organization of distribution is generally much more faulty and defective than that of production. Its shortcomings have been indicated in Chapter 111. Improvements suggested in evidence at Auckland have been discussed on page 42. Those suggested at Wellington refer mainly to details in delivery at the wharf or storage near-by. The State mines should have a depot nearer the ship. The system instituted by the Coal Trade Committee for economizing the time formerly wasted through crowding of the dealers' drays at the wharf should be continued. If there were means of bagging coal at the wharf costs could be reduced. The establishment of a main depot into which coal could be trucked, it was stated by one witness, might save about 3s. a ton, If coal were sent away unscreened from the mine there would be less breakage. At Christchurch and Dunodin the excessive number of men engaged in coal-dealing, and the overlapping of deliveries, which are features of the distribution of coal in all the centres, were condemned. The effect of these, and of the trade convention that the small dealer must be given a fair chance in fixing the association price scale, undoubtedly tends to keep the costs higher than they would otherwise be. The establishment of a monopoly in distribution was advocated by witnesses here and it) other centres. At Dunedin the general trend of the evidence in regard to the methods of delivery was that it is altogether wrong, and that it should be systematized in the direction of restricting the operation of a given dealer to a particular district. The opinion was expressed that there are too many dealers, that the cash, system should be extended at the expense of the credit system, that householders in erecting houses should give greater attention to the provision of coal-cellars, that orders for coal should be given a few days before fulfilment is required, and that if all coal were Stateowned there would be a .more continuous supply, a greater possibility of a cash trade, and consumers would be more willing to give reasonable notice of their requirements. Certain complaints were made against the Railway Department:- - (1.) The coal is delayed unduly on the line between the mines and Dunedin, causing great inconvenience to the dealers and extra cost in the form of demurrage. (2.) There is a loss of time at the railway-station in taking delivery of coal owing to the fact that expressmen and other small dealers can call early and thus hold up delivery to the larger dealers, keeping their drays and men idle for a considerable part of the day. (3.) Every truck of lignite coal is charged up by the Railway Department as 6 tons in weight, though it may be below. The replies of the Railway Department to these and similar complaints made elsewhere are set out in Appendix B, 4 and 5. In regard to the methods of handling coal en route there was difference of opinion among the large importers as to the advantage of mechanical discharge from the ship, some thinking that then', is
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not sufficient trade to return the cost of the appliances. One witness estimated that hopper wagons would save Is. a ton plus the savings in broken coal, and that grabs for discharging would save 9d. a ton. The use of grabs was generally advocated. Some witnesses urged the establishment of bins at the ooal ports in which to store small and bunker coal to be delivered mechanically into the steamers, in order to enable the mines to keep working when the bars are bad. But storing in bins is generally not regarded with favour, as it means increased handling and breaking of the coal, which is very friable. The loading of the coal into the ships at Greymouth and Westport is up to date, as it is done by means of hopper wagons swung over the holds. In order to secure the general application oj the advantages that result from large-scale distributing businesses, the abolition oj overlapping in deliveries, the concentration of depots, and the ownership by the mine of the means of transport to the main distributing-centres, the Board recommends that the Dominion Goal Board be empowered to undertake the business of distributing coal, including its carriage by sea. This function it might exorcise wherever it seemed desirable in conjunction with municipalities and other local authorities, and wherever power to do this is not possessed by these bodies the necessary authority should be granted them by Parliament. The question of the installation of improved mechanical means of handling coal in transit from mines to depots should be decided by the Coal Board after consultation with engineers who have made exhaustive inquiries into this subject. 4. PRICES. If the recommendations made above be adopted they should result in the lowering of the price of coal relatively to that of other commodities. There should be on the supply side (i) lower costs of production, marketing, and distribution generally because of the economies from unified control and the larger scale of business ; (ii) a more regular output; (iii) a more even quality of coal ; and (iv) the probability of marketing a larger proportion of the small coal than is now possible, tending to lower the price of house coal relatively to the prices for the rest of the output. But demand also exercises its own peculiar influence on price (see Chapter I, section 7 (vi)), and there are certain ways in which demand should be modified and which should result in a lower price for coal. In regard to household coal the chief points to be noticed are— (i.) Householders should notify their orders for coal some considerable time before delivery is required. This would facilitate the systematizing of deliveries over different area blocks, making it easier to confine the several dealers to special areas. His would very appreciably affect the cost of delivery per ton. (ii.) Coal-bins should be provided by householders wherever possible in convenient places. These would reduce delivery costs by economizing the time and labour in delivery and diminishing the number of sacks required and lengthening the life of those used. (iii.) If unscreened coal were more generally used for household purposes the coal bill would be smaller. If all household coal were sent unscreened from the mines there would be less breakage and less waste of small coal, enabling it to be sold at a lower price. There is much room for improvement in the prevalent methods of stoking domestic ranges and grates, which do not utilize to the full the heating-qualities of slack and brown coals. Costly screened bituminous coal is used in ranges and grates, and often largely wasted through unskilful stoking, where brown coals or a judicious mixture of brown and bituminous with the use of slack and coke would yield as good results with much less cost. Greater attention should be given to systematic instruction in domestic stoking at technical schools and cookery centres. (iv.) The increased use of gas and electric heating, substituting an indirect for the direct demand for coal, and freeing more of the supply for industrial uses. The demand for coal for industrial purposes may be very considerably modified by the increased use of mechanical stokers, some varieties of which are now used in the Dominion with great advantage ; by other improvements in furnaces ; by the use of dust-firing and by the extension of suction-gas manufacture, as well as by the establishment of plants for the manufacture of electric power on the coalfields. There is urgent need for research in these directions; and the Coal Board, or, failing its institution, the Government, is recommended to encourage and financially assist experimental work which has in view the utilization of that part of the coal-supply which is at present- largely wasted, particularly the slack or fine coal. So far we have considered the price of coal relatively to that of other commodities. Its price, however, may change in common with the prices of other commodities in general, owing to changes in currency conditions, and independently of changes in the conditions of the supply of and demand for coal itself. There is no doubt but that part of the rise in the price of coal during the last five years has been due to the inflation of currency and credit (see the Second Annual Report of the Board of Trade, 1918, pp. 17-18, H.-44). " Every creation by the Government or by the public of fresh credits means an addition to the purchasing-power and therefore an increase of prices. It is only when credits are redeemed by an equivalent in saving or in extra production that their effects upon prices are cancelled." The subsequent trend of coal-prices will therefore depend in some degree upon the financial policy of the Government and banks and other financial houses. If money and credit continue to be inflated beyond the available supply of goods and services any tendency to a lower level of the price of coal will to that extent be counteracted by the effects of such inflation. On the other hand, a wise policy oj
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lending for lef/itimate 'productive, purposes and of enoouraging saving for investment will lend, to accelerate ike effect of all other farces making for a fall in the price of coal. The Board of Trade, whilst recommending the institution of a Dominion Coal Board and unity of administration into the coal industry, is alive to the necessity of preserving as far as possible the principle of competition as a regulator of price. It would therefore view with disfavour any attempt to discourage the importation of foreign coals or to discriminate against their use. The Coal Board should direct all its efforts to improving the efficiency of the industry at every point by keeping the capital, labour, and management at the highest degree of efficiency. In particular it should encourage and assist scientific and experimental work designed to that end, and should take steps to apply to New Zealandwherever suitable the advances in mining-methods that are made abroad. It should bo able to devise a system of healthy regulated competition among its mines. The temptation to raise prices against consumers, which besets all monopolies, complete or partial, especially where there is an understanding between capital and labour, should be safeguarded through the representation of the State upon the Board and by the periodical publication of the main facts of the industry in open reports to Parliament. 5. COST OF LIVING—MINING STATISTICS. The Board recommends that it be authorized, with the assistance of the Government Statistician, to carry out an investigation into the cost of living and the general social conditions of the mine workers of the Dominion on the lines indicated in section 1 of Chapter VI, page 77. It is also of opinion that the Coal Board should devise a system of recording costs, output, amount and character of labour employed, time worked, output per shift, &c, as far as possible uniform for the mines of the Dominion, so as to make it possible to institute those statistical comparisons which are necessary for measuring the changes in the industry. In view of the close connection between occupation, health, and mortality, it is of the greatest importance that living workers be periodically examined in order to obtain accurate records of the diseases from which they suffer. (i. THE MAIN FINDINGS IN RELATION TO THE HEADS OF THE ORDER OF REFERENCE. It remains to indicate the main findings and recommendations of this report in connection with the different heads of the order of reference. Reference No. 1.--The Present Cost of the Production and Distribution of Coal in New Zealand. (i.) The cost of production is analysed in Chapter 11, pages 24-31, and the chief data summarized in Tables 16 to 24. The average cost of production at the mines of coal from all the principal collieries of the Dominion for the year 1917-18, taking into account the different outputs of the several mines, was approximately 15s. 4d. per ton. This does not include the cost of railway haulage from the mine to port of shipment in the case of those mines (on the West Coast and in North Auckland) which reckon this cost in when fixing their selling-prices. Of this cost about 7s. Id., or 46 per cent., was paid directly to manual labour employed in and about the mines. The cost of producing bituminous coal was about 17s. per ton, the labour-cost being nearly 7s. 3d., or about 42 per cent, of the total ; of semi-bituminous, 14s. 5d., including a labour-cost of Bs. 2d., or nearly 57 per cent. ; of brown coal, 13s. Id., the labour-charge being Bs., or nearly 60 per cent, of the total cost. (ii.) The cost of distribution of coal at the time of the inquiry (September to January, 1918-19) is estimated for the chief centres in Chapter 111, pages 38, 44, 48, 52, and 54 (see in particular Tables 35, 36, 38, 42, 43, 46, 47, 48, 54-56, 58, 63, 65, and 70, and their immediate context). The freight-charges vary according to the distances. The costs per ton of retailing the standard household coals were as set forth in Table 88.
Table 88.—Distributing-costs of Standard House Coals, 1918.
The gross profits are analysed in the text into their constituent parts -bagging and loading, delivery into yard, yard expenses, delivery to consumer, overhead and other expenses, net profits.
Centre. Railage or Freight. Wholesalers' Gross Profit. Retailers' Cross Profit. Auckland Wellington Christohuroh (i).. (ii) (iii) Dunedin Invercargill 8. d. 7 11 9 7 15 0 13 6 5 9 6 7 6 0 s. d. 6 9 2 5 4 6 3 0 5 3 s. d. 7 9 15 0 12 li 11 (( 9 o 9 0 9 6
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Reference No. 2.—Any Increase in the Cost of such Production and Distribution since the Commencement of the Present Wab, and the Causes of such Increases, (i.) Increase in the Cost of I'roduelion of Coal, 1913-14 to 1917-18. The average mining-cost per ton increased every one of the principal mines except at one, where abnormal and increasingly favourable working-conditions ruled. The total cost of production per ton of coal mined at all the mines, giving returns for every year of the period 1913 — 18 inclusive, increased about 41 per cent., or 4s. 10d. per ton. Taking into account the cost at all the mines, whether giving returns for ail the earlier years of the period or not, the increase in the cost of production was about 31 per cent., or 3s. 7d. a ton. This latter figure underestimates the actual rise in the cost of production of all coal produced over the period. The cost of mining bituminous coal at all mines giving data, for every year increased about 43 per cent., or by ss. sd. a ton. ; at all the mines from which exact particulars were obtained, by 40 per cent., or 4s. 9d The corresponding increases in the mining-costs of semi-bituminous coals were 13 per cent, or Is. 6d, a ton, and 31 per cent, or 3s. sd. a ton. The mine showing a decrease in the cost during the period was one producing semi-bituminous coal. The corresponding increases for brown-coal production were 70 per cent, or Bs. 4d. a ton, and 25 per cent, or 2s. 7d. a, ton. Certain new brown-coal mines came into operation after the beginning of the period under review. The analysis of cost of production is shown in Chapter 11, pages 24-31 (see Tables 15 to 24 and context). The increases in the cost of production have been made up of increases in every separate item of cost, and have been caused by rises in the prices of materials and the labour necessary, increased taxation, and diminished output due to a reduction in the number , of mine workers, the smaller output increasing the share of standing charges for each ton raised. In the case of a few mines industrial disputes and a slight falling-off in the output per miner have; tended to increase cost. The cost of production per ton due to the wages of manual labour in and about the mines increased at those mines giving returns for every year of the period by 31 per cent., or Is. 10d. a ton that is, by an amount equal to 38 per cent, of the increase in the total cost of production. If account be taken of the labour-cost per ton of all coal concerning which exact particulars were given, whether produced at mines giving returns over the whole period or not, the increase in the labour-cost is 20 per cent., or Is. 2d. a ton, an amount equal to 33 per cent, of the increase in the total cost of production. The increase in the labour-cost of production of all coal mined in. New Zealand during 1913-18 may be estimated at a little more than a third of the increase in the total cost of production at the mines. The ohanges in the cost; of stores and materials per ton of coal raised ranged from a decrease of about 2d. at one mine to an increase of Ik. Bd. at another. The corresponding range for maintenance and renewals was lid. decrease to Is. 9|d. increase ; for rates and taxes, 2d. decrease (State, mine) to Is. 9|d. increase ; for administration, I Ifd. decrease to Is. ] Jd. increase ; for royalties and rents, 4|d. decrease to 3d. increase ; and for depreciation and sinking-fund charges (actually made), Is. 2d. decrease to B|d. increase. The relation of lost time to cost of production and output is discussed on pages 31-4. (ii.) Increase in the Cost of Distribution of Coal, 1913-14 to 1918. This cost has increased everywhere as regards both costs of transport and the costs of conducting wholesale and retail businesses. Chapter 111, section 1 (ii), pages 36-7, deals with changes in transport-costs since 1913. Railage has increased 21 per cent. The general increase in shipping-rates cannot be so definitely measured by a percentage, because of the unequal distribution over the various routes of the particular increases. New Zealand coastal rates advanced from 42 per cent, to 55 per cent. ; Newcastle rates by about 52 per cent., on the average. (A recent rise—March, 1919—0f 3s. 6d. per ton, or over 21 percent., on the rates from Newcastle to the chief ports has not been included in this estimate.) The increased cost of transport has been caused by rises in the prices of bunker coal, labour, stores, victualling, and the general costs of working ships. The increased cost per ton of working coal-ships in the New Zealand coastal trade between 1914 and 1918 amounted to nearly 50 per cent. Dealers' costs have increased because siding and yard rents, the wages of carters and yardmen, the price of sacks, of horse-feed, of repairs and renewals, of gear, and general expenses have all risen, some of them very considerably ; and also to a large extent because the shortage in the supplies of coal, necessitating delivery in small lots, has greatly increased the cost of delivery per ton to the consumer. Table 70a (p. 85) shows the amount of the increase in the cost of distribution of standard household coals during the period 1913-18 at the largest centres, distinguishing between transport, wholesale, and retail increased charges. The detailed estimates of the increases are summarized in Tables 37, 39-42, 44-45, 47, 49, 51-53, 56 57, 59-62, and 66-69, and their context.
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Reference No. 3. -Whether thb Profits made in thi Production and Distribution of Goal are Fair and Reasonable. (i.) Profits in Production. (See Chapter IV, Section 1, pp. 56-6 L.) The annual average differences between the average sell ng-priee per ton and the average cost per ton to the several mining companies over the whole period range from a loss of Is. I Id. to a gain of Is. 10d. (See Table 73, p. 57.) in four cases out of thirteen principal collieries there was a loss on the average ; in two cases the average profit was less than 6d. ; in two cases between 6d. and Is. ; in four cases between Is. and Is. 3d. ; and in the other case Is. 9-93 d. If the increase in the average selling-price for the industry as a whole be calculated from the available data in the same mariner as the increase in the cost of production it is found that the selling-price of those mines for which data is available over the whole period 1913-18 increased, when due allowance has been made for relative outputs, by 36 per cent.--i.e., from about 14s. 3d. to 19s. sd. per ton. This figure is to be compared with that showing the increase in total cost of production — viz., 37 per cent.* When we compare the selling-prices of all coals for which exact details were available in each year, whether from collieries working over the whole period or not, the increase in selling-price is 22 per cent. This figure, however, as in the case of cost of production, does not give a true measure of the change of the price of all coals, since the selling-prices and cost of the mines for which exact particulars were not available for 1913 were on the average lower than those of the mines providing data for that year. This figure was lower during 1914-15—16 than in 1913. In 1916-17 it rose 11 per cent, above the 1913 level, and in 1917-18 22 per cent. The selling-price of bituminous coal increased 35 per cent. (3s. 2d.) during the period, though the cost rose 40 per cent. ; that of semi-bituminous coal rose 34 per cent. (ss. 7d.) or slightly more than its cost; that of brown coal 22 per cent. (2s. 7d.), as against a rise of 25 per cent, in cost. The increase in the price of brown coal for 1917-18 when compared with 1913-14 (a better basis of comparison in view of the incomplete data for brown-coal mines for 1913) is 30 per cent. (3s. Id.), the corresponding increase, in oost of production being 31 per cent. If the properly weighted average selling-price be compared with the corresponding average cost of production for the mines giving returns for the years 1913-18 the margins between oost and price are 9d. and lOd. a lon for 1913 and 1918 respectively, or 56 and 4-5 per cent, of the cost of production. A comparison of the similar margins for all mines giving data, whether over the whole period or not, shows a reduction from 9d. to sd. « ton, the latter representing 2-2 per cent, of the average cost. Table 75a (p. 58) summarizes the chief facts regarding average cost of production, selling-prices, and profits per ton for the coal-mining industry as a whole, 1913-18. The mining companies have not increased their gains from the industry during the war period relatively to their costs. It is further to be noted that in many cases certain charges are not sufficiently provided for in their costs. Of the twelve principal coal-mining companies the highest average annual dividend for the last six years is 10 per cent, (earned by a company which for seventeen years, 1880 97, paid no dividend at all) ; the lowest average is nil. Of the twelve, two paid an average dividend of from 7J to 10 per cent. ; two from 5 to 7| per cent. ; four of from 2|- to 5 per cent. ; one paid below 2| per cent. ; and three paid no dividend during the period. The average rate of dividend paid during the period, weighted according to the relative sizes of the capitals of the different companies, was 4-8 per cent. The average rate of total gains made by the companies — that is, including undivided as well as divided profits — was 5-1 per cent. Out of this the industry has to provide interest to the shareholders, and a large part of the insurance, depreciation, and sinking-fund charges. The general conclusion is that the rate of profit made in the production of coal, taking the industry as a whole, is unduly low. A large amount of capital invested in coal-mining in New Zealand in the past has been lost without making any returns to the owners. (ii.) Profits in Distribution. (See Chapter IV, Section 2, pp. 61-2.) It is assumed that the question of the reasonableness of distributors' profits refers to coal-dealing in existing conditions and with the present methods of distribution. The general conclusion is that, except in the case of those dealers who are engaged in the retail trade on a large scale, the difference between the cost of coal to the dealers and the price received by them affords but a, mere living to those engaged in it. The profits of the retail dealers cannot be assessed as exactly as those of the mining companies, because of the mixed nature of the business conducted by them, but the evidence does not support the charge that they ace unreasonably high. Estimates of the net profits per ton at the several centres are given in Chapter 111, Tables 38, 41, 46-47, 54, 56, 62, and 70, and context.
* The comparison is with the increase of 37 per cent., not that of 41 per cent, (see p. 26), since the mining companies have to pay out of their selling-prices the cost of haulage from mines to shipping ports.
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Profits in tho transport of coal appear to be higher than in mining or retail distribution. For the period 1914-17 the profit earned on the carriage of coal in certain typical parts of the New Zealand coastal trade appears to have ranged from Is. to Is. 3d. a ton, from which depreciation, sinking fund, and periodical overhaul charges have to be deducted. These profits would have been much higher if the shipping in question had availed itself of the many opportunities for much more profitable work abroad during the war period. Higher margins of profit were undoubtedly earned by foreign-owned shipping carrying coal to the Dominion Reference No. 4.—Whether the Selling-prices of (Joal are "Fair and Reasonable. This question has already been answered in the last section. There is no doubt that the price of coal could have been raised much higher than it actually was during the last two winters in view of the competition of consumers for the diminished supplies, but for the influence of public opinion, the action of the local Coal Committees set up by the Ministry of Munitions and Supplies, and the pressure in certain cases brought to bear by some of the leading colliery-owners and large distributors upon the general body of retailers in the direction of discouraging proposed increases in retail prices. In many cases the smaller dealers largely dependent upon coal suffered considerably through prices not rising sufficiently to return them working-expenses. Reference No. 5. —Whether Increased Economy or Efficiency can be obtained in the Production and Distribution of Coal, and, if so, in what Manner. As this question has been discussed in sections 2, 3, and 4 of this chapter, pages 86 90, it is not necessary to repeat the recommendations specified there. Reference No. 6.—A1l other Matters affecting the Supply or Price of Coal. These also have been included in an earlier section of this chapter. Without undue repetition we should like to emphasize here— (i.) The necessity for State encouragement of scientific research and its application to the problem of coal-mining and the utilization of the small coals of the Dominion. A much fuller advantage may be taken of the work done and tho advice given by the State Geological Department, and the University colleges should receive generous financial assistance in the development of research. (ii.) The equal importance of an improvement in the industrial organization of labour at the mines and in its general social environment, particularly in respect of housir g and better educational facilities. (iii.) Systematic technical education in the domestic use of coal so as to diminish considerably the present great waste due to ignorance of the possibilities of small and mixed coals, and of the proper methods of stoking ovens and grates. (iv.) Discouraging every form of inflation of the currency, which inevitably leads to rising prices at the expense of the poorer members of the community. Reference No. 7.—The Increases since the Commencement of the War in the Cost of Living so far as such Increases affect Men engaged in the Production of Coal, distinguishing between increases, if any, prior to and subsequent to the industrial Agreements made in the Coal Industry in the Year 1917. This section of the inquiry presented special difficulties, which, owing to the abnormal character of the period during which the Board was conducting its investigations -- i.e., the period of the influenza epidemic—we were not in a position altogether to overcome. (See Chapter VI, section 1, P. 77.) From the data at its disposal the Board estimates the increase in the " expenditure on living " at the minefields from 1913 to about September, 1918, to be about 35 per cent, at the most. Table 87 shows how this increase is distributed over the five standard classes of expenditure. A more intensive investigation is necessary. The chief factors tending to counterbalance the rise in the cost of living have been the increases in the rates of wages to mine workers, which, together with improvements in the conditions of their work, increased opportunities of employment, and in some cases a longer working-year, have resulted in substantial additions to their actual annual earnings. In the case of many of the underground workers the additional earnings have fully compensated for the rise in the cost of living even at the pre-war standard, although the adjustments made in the rates of pay by means of the bonuses granted in 1916 and 1917 (as well as in 1918) lagged behind the increases in their expenditure (see Chapter VI, section 4-, pp. 79-80) In other cases, and particularly in the case of the surface men on day wages, the increases in actual earnings do not appear to have fully compensated for the increased expenditure necessitated by living at the pre-war standard. Other compensating factors, such as any increase in actual family earnings as distinguished from individual earnings, it was not possible to determine statistically from the available material. We take the view that the order of reference does not require us to express our opinion upon the question whether wages-rates ought to be raised whenever and because the cost of living increases.
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Reverence No, B.—The Increases since the Commencement op the Present War in the Earnings of the Men engaged in the Production of Coal, distinguishing between Increases, if any, prior to and subsequent to the said Agreements. Up to September, 1918, the rates of pay to miners (hewers) had increased by 17| per cent, by two bonuses, one of 10 per cent, in the first half of 1916 and the other of 7J per cent, about the middle of 1917 ; all other workers in and about the mines received two bonuses each of 10 per cent, at the same time. From September to October, 1918, miners received 25 per cent, increase on the 1914 rates of pay, and other workers 30 per cent. Mine workers generally, as explained in Chapter V, section 3, pages 65-6, have received increased actual earnings beyond the increases in the rates of pay. The increase in labour-cost of production has been already stated in this summary (see p. 92). Underground workers' earnings have increased in some cases beyond 50 per cent., and thfi average increase cannot be far from 30 per cent, as between 1913 and 1918. These increases have been due not only to the increase in the rates, but also to the fact that the mine-work has during the war been concentrated largely on those parts of the mines where the conditions of production are most favourable to a high output per worker, and that more time in the year has been put in by workers in many cases. The increase in the wages actually earned by surface workers does not exceed the increase in their rates of pay to such a degree as in the case of miners, but earnings in excess of the increased rates are the rule. The increases in miners' actual earnings have a very close connection with the increases in the rates of pay provided for by the industrial agreements of 1916 and 1917 ; these wore followed in most cases by a more than proportionate increase in actual earnings, the whole of which, however, as pointed out above, cannot be ascribed to the increased rates alone. (For the several factors bearing upon actual earnings see Chapter V, section 2, pp. 63-5.) While the mine-worker's income has increased, his expenditure on tools and other necessaries used in the mine, which he provides wholly or in part, has increased by at least £10 a year. His cost of living has also increased (see last section). The " real wages " of the mine worker as defined and discussed in Chapter V, pages 69-76, had increased very little, if at all, by September, 1918, unless the unknown factor, family earnings, had increased. The effect of the third bonus then granted should be to increase them beyond their level in 1913-14. It is to be noted that these results, like those in respect of profits, are generalizations or averages true of the mass, and that there are to be found within the period particular cases, both of individuals and mines, showing considerable divergency on either side from the average. W. G. McDonald,) ,T. R. Hart, ,-Members of Board. P. Hally, ) James Hight, Assessor. J. W. Collins, Secretary.
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SUMMARY OF CONTENTS. Note. This is rather a selection of some of the more important facts and an indication of the main contents of the report than a real summary. The report itself is so condensed and sets forth so much detailed information that it is difficult to provide a true summary in brief compass. An attempt is made in Chapter VIII, section 6, page 91, which arranges the chief findings under each of the eight heads of the order of reference. Chapter I.- General Survey of the Coal Industry of New Zealand. 1. The situation of the chief coalfields and chief mines thereon is described . . 3 2. The anthracite, bituminous, semi-bituminous, brown, and lignite coals are distinguished by their characteristic features . . . . . . .. .. . . 3 3. Reference is made to the geological factors controlling the mining industry . . . . 4 4. Standard estimates of the coal resources of the Dominion are quoted . . . . . . 5 5. The probable duration of the coal resources, distinguishing between the bituminous and brown coals, is stated according to the estimates of the Director of the Geological Survey and Professor Park, based on all available data . . .. . . . . . . . . 5 G. Statistics are given of the amount of coal mined in New Zealand up to the present time, classified according to coalfields, class of coal, and arranged so as to show the chief trend. . 6 7. Statistics, similarly arranged, are given showing the amount of coal consumed in the Dominion, the rate of change in consumption and the export and import of coal ; the latter also in relation to total imports and total exports .. . . .. .. .. . . 9 8. Reference is made to the ownership of the coal-sites .. .. .. .. 15 9. A brief statement of the historical development of the coal-mining industry in New Zealand, distinguishing between three stages .. .. . . . . .. ..15 10. Details are given of the chief coal-mining companies operating in New Zealand, in respect of the amount of their capital and of the residence of the holders of the majority of their shares, with brief reference to the New Zealand Coal-mine Owners' Association and the taxation of income earned by capital in mining . . . . . . .. ..16 11. The number and classification of persons employed in the coal-mines since 1878, with the output per person employed underground, classified according to coalfields and class of coal produced. The general character and efficiency of the coal-worker in New Zealand. Division of labour in the mines. Workers' unions .. .. .. .. 17 12. The factors governing the localization and the scale of production of the coal-mines. . 19 13. Development work . . .. .. .. . . . . .. .. 19. 14. The methods of working: the; bord-and-pillar method, the longwall method, the panel method. Difficulties of working. The use of machines. Ventilation. Lighting. Timbering . . . . .. . . .. .. .. .. .. 19 15. Haulage. The Westport inclines .. .. .. .. .. .. ..20 16. Wages and general conditions of workers ; distinction between miners or hewers and othermine workers. Settlement of industrial disputes .. . . . . .. . . 20 17. Remote situation of many mining townships ; their general social environment; education ; provision for accidents and sickness ; housing-conditions .. . . . . . . 21 18. The various ways in which the State aids mining .. . . .. .. 21 19. The marketing of the coal by the coal companies. The different grades of coal. The wastage of small coal. The transport of coal to market . . .. .. .. . . 22 20. The general features of the process of distribution of coal in each of the different consuming centres . . . . . . .. .. . . . . .. .. 22 21. The definition of coal. Distinction between the different kinds ; different methods of classification and grading. Importance of definition in connection with price . . 22 22. Precautions to be taken in making comparisons of the price of coal .. . . . . 22 23. Difficulties and extra costs arising from the friability of New Zealand coals . . 22 24. The difficulty and cost of storing New Zealand coal . . .. . . . . 22 25. Many of the costs of production and distribution are the same per ton irrespective of the kind of coal . . .. .. .. .. .. .. .. .. .. 23 26. The main factors determining the price of coal ; the factors of the demand for coal ; those determining the supplying of coal ; the different kinds of coal from the same mine as joint products ; the importance of these in relation to relative prices ; the broad conditions of supply and demand in New Zealand during the period under review . . . . 23
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Chapter ll.—Cost of Production of Coal. page 1. The enumeration of the costs involved in production .. .. .. .. 24 2. The output of coal at the principal collieries during the period 1913-18 .. .. 25 3. The total cost of production per ton at the principal mines, 1913-18, showing an increase in the mining-cost in every case except one, where there were special conditions. The lowest rate of increase is 1\ per cent, (four-years,period) and the highest 63-6 per cent. The total cost of production per ton of coal mined at all mines giving returns for each year of the period 1913-18 inclusive increased 41 per cent., or about 4s. 10d. per ton. Taking into account the cost at all mines, whether giving returns for the whole period or not, and weighting them according to relative outputs, the increase in cost of production was 31 per cen,t., or 3s. 7d. per ton. The latter figure underestimates the actual increase in the cost of producing all coals over the whole period. The changes in the ccst of production of bituminous, semi-bituminous, and brown coals are traced separately .. .. 25 4. The total direct labour-cost per ton at the principal collieries, 1913-18, showing an increase at all mines except one. The lowest rate of increase was 3 per cent, and the highest 78 per cent. This labour-cost is also expressed as a percentage of the total cost. A comparison is made of increases in labour-cost, other costs, and total costs. The labour-cost of production per ton of coal mined at all mines giving returns for each year of the peril d 1913-18 inclusive increased 31 per cent., or Is. 10d. a ton—i.e., by an amount equal to 38 per cent, of the increase in the total cost of production. If account be taken of the labour-cost per ton of all coal concerning which exact particulars were given, whether produced at mines giving returns over the whole period or not, the increase in the labourcost is 20 per cent., or Is. 2d. a ton, an amount equal to 33 per cent, of the increase in the total cost of production. The increase in the labour-costs of production of all coal mined in" New Zealand during 1913-18 (September) may be estimated at a little more than a third of the increase in the total cost of production at the mines .. .. .. .. 26 5. The other costs of production have increased also during the period. Particulars in regard to the costs of stores and materials, maintenance, renewals, rates and taxes, administration, royalties and rents, and depreciation and sinking-fund allowances are given in respect of each particular mine for the period 1913-18, with measurement in increase or decrease and explanation of the causes of the changes . . . . . . .. .. 28 6. The relation of time lost by miners and by mines to the cost of production and the output is discussed. Classification of lost time; distinctions between the different kinds of lost time. Why lost time affects cost of production. The average number of shifts lost by the' miner, with comparison over the period ; comparison of time lost by miners with time lost by truckers and shift-men. Different results at different mines. Time lost by mines. Changes in the proportion of full working-time, and causes of these changes. Slight decrease for the period. Connection of this with the increase in the average earnings of the miners. Variations during the period in output per person employed underground per shift and per year. Intemperance and lost time. Accident .and illness. Effect of the Workers' Compensation Act .. .. .. .. .. .. .. .. 31 Chapter lll.—The Cost of Distribution of Coal. 1. Figures are given to illustrate the proportion which transport charges add to the price of coal 35 2. The changes in the cost of transport since 1913 are detailed, and their causes stated. There has been a considerable increase in the cost of coal by land and sea, but greater in the latter case .. . . .. .. .. .. . . .. .. 36 3. Definition and classification of the costs involved in distributing coal from the dealers. Variation of costs from business to business .. .. .. . . .. .. 37 4. General features of the system of distributing coal at Auckland .. .. .. 37 5. Changes in the net retail prices of household coals at Auckland, 1914-18 .. .. 38 6. Effect of changed conditions of demand and of supply on the price of coal. Relation of the cost of production of all coal to the price of house coal .. .. . . 38 7. Estimates of the cost per ton of distributing house coal at Auckland, September, 1918, and the increase in such cost between 1913-18, with explanation of the causes of the increase shown .. .. .. .. .. .. •. .. .. .. 39 8. Distribution of coal by the coal-mine owner .. . . . . .. . . .. 40 9. Notes on railage, bagging and loading, loss on sacks, loss in transit, siding-rents, cartage .. 40 10. Particulars relating to Newcastle coal .. .. .. .. . . 41 11. The apathy of the public in regard to changes in the price of coal and seizing opportunities of obtaining coal cheaply . . .. . . .. . . .. . . 41 12. Possibilities of improvements at Auckland ; improvement in railway service ; bagging at the mine ; use of baskets instead of bags ; increased use of small coals ; elimination of the small dealer ; correct weight .. .. .. . . .. . . .. 42 13. The rate of profit obtained by the coal-dealers under present conditions is reasonable . . 42 14. Chief factors of the method of distributing coal at Wellington .. .. .. ..43 15. Change in retail prices of the chief household coals at Wellington, 1914-18. Explanation of the increase shown. The increased cost of retailing, roughly equal to the separate increased cost in mining and in transport, each accounting for about one-third of the total increase. Price of State coal in Wellington .. .. .. .. .. 43 13— H. 44a.
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Chapter lll.—The Cost of Distribution op Coal— continued. page 16. Estimate of the present cost of retailing coal in Wellington, with estimate of changes in such costs since 1914 and the causes of these changes .. .. .. .. 44 17. The rate of profit obtained in dealing in coal under present conditions in Wellington is reasonable . . . . .. . . .. .. . . .. 45 18. Chief factors of the distribution of coal in Christchurch ; cost of carriage of coal to Christchurch 45 19. Cash prices of house coal at Christchurch, 1914-18, showing a range of increase from 22 per cent, to 68 per cent. Explanation of these increases. Estimates of cost of retailing household coal in Christchurch. Distribution of the increase in the cost of retail coal .. 46 20. Notes on freight, bagging and sacks, cartage, loss in weight .. .. .. 48 21. Changes in the price of lignite coals .. . . .. .. .. .... 49 22. Prices of Australian coal at Christchurch, wholesale and retail .. .. .. 49 23. Increase in the cost of conducting a retail business. Broad range of retail prices in Christchurch .. .. .. .. .. .. .. .. .. 50 24. The rate of profit in present conditions is not unduly high .. .. .. .. 50 25. Price of State coal at Lyttelton and Christchurch .. .. .. .. .. 50 26. Chief factors of the distribution of coal at Dunedin ; carriage of coal to Dunedin .. .. 51 27. Retail prices of house coal at Dunedin, 1914-18 ; changes in these prices ; the amount of increase due to each particular cost .. .. .. .. .. 51 28. Estimates of the cost of handling the coal .. .. .. . . . . 52 29. Rate of profit .. .. .. .. .. .. .. .. .. 52 30. Chief factors of the distribution of coal at Invercargill; carriage of coal to Invercargill .. 53 31. The retail price of coal in October, 1918 ; changes in this price over the period with apportionments of the increase in each particular cost .. ... .. .. .. 53 32. Estimate of the present cost of delivery . . .. .. .. .. .. 54 33. The rate of profit cannot be regarded as excessive .. . . .. .. .. 55 34. Comparison of the total increase in the cash retail prices of standard household coals during the period 1913-18 at the several centres, with division into its separate parts .. 55 Chapter IV.—Prices and Profits in the Coal Industry and Trade. 1. The difference between the cost and the sale price ; the average not selling-price per ton of coal at particular mines, 1913-18. The average selling-price increased in every case. The selling-price for those mines for which data is available over the whole period increased, when due allowance has been made for relative outputs, by 36 per cent, as compared with an increase in total cost of production of 37 per cent. Comparison of selling-prices of bituminous, semi-bituminous, and brown coals, and of increases in them .. 56 2. Mine profit per ton also expressed as a percentage of the total cost per ton. For the mines giving returns over the whole period, the average margins between cost and price are 9d. and iOd. a ton for 1913 and 1918 respectively, or 5-6 and 4-5 per cent, of the cost of' production. A comparison of the similar margins for all mines giving data, whether over the whole period or not, shows a reduction of 9d. to sd. per ton, the latter being 2-2 per cent, of the average cost .. .. .. .. .. .. .. 57 3. Average costs, soiling-prices, and profits per ton for the industry as a whole, 1913-18, showing clearly that the mining companies have not increased their gains over the industry during the war relatively to their costs .. .. .. .. .. .. .. 58 4. Difficulties of assessing the exact amount of the true rate of profit. Insufficient provision made for certain expenses inseparable from the industry. Definition of gross profits .. 58 5. The measurement of the rate of profit. Rates of dividend declared by the chief coal-mining companies of New Zealand, 1913-18. Average weighted dividend 4'B per cent. .. 59 6. The gains of the companies, 1913-18 ; the ratio of the excess of profits over losses to capital. The average rate of profit, calculated and weighted according to the capital of each company, is just over 5 per cent., out of which the industry has to make provision for return to the shareholders by way of interest and a large part of the insurance against the risks associated with the industry, as well as profit, and a considerable part of the depreciation and sinking-fund charges .. .. .. .. .. .. .. 60 7. It is impossible to obtain an exact measure of the actual net gain of the shareholders .. 61 8. There have been large losses of capital in the coal-mining industry in New Zealand in the past 61 9. Profits made in the transport of coal. Railway profit cannot be measured with any approximation to accuracy. In certain cases the profit on the carriage of coal by sea ranges from Is. to Is. 3d. over the period 1914-17, out of which depreciation, sinking fund, and periodical overhaul charges have to be provided. The increase in freight-rates may be regarded as moderate in the light of the increase of cost to the shipowner, the enormous increase in the world demand for tonnage, the great shortage of shipping, and the great revenue that could have been obtained by using the ships beyond the New Zealand trade. Shipping-rates in Now Zealand trade appear to have been considerably lower than in other parts of the world .. .. .. .. . . .. .. .. .. 61 10. The general conclusion as to profits in the wholesale and retail distributing trade is that, except in the case cf those dealers who are engaged in the retail trade on a large scale conjointly with the wholesale business, the difference between the cost of coal to the dealers and the price received by them affords no more than a mere living to those engaged in it .. .. .. .. .. .. . .' .. .. 62
99
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Chapter V.—The Earnings of Mine Workers. page J. Distinction between rate of pay and actual earnings ; connection between the two ; changes in the rates of pay over the period . . .. .. .. .. .. 63 2 Precautions to be observed in making comparisons of the earnings of coal-workers . . 63 3. Movement in actual earnings during the period. Actual earnings have increased in greater proportion than the increase in the rates of pay .. .. .. . . 65 4. The increases in the miners' actual earnings have a very close connection with the increases in the rates of pay provided for by the industrial agreements of 1916-17 .. .. 65 5. Examples of actual earnings, and increases in actual earnings . . . . .. .. 66 6. The real earnings of mine workers ; the distinction between mine earnings and real earnings. Purchasing-power of wages. Bonuses, supplementary earnings. Expenses peculiar to the work ; tools, light, explosives, length of working-day, amount of leisure, opportunities for promotion, effect on health, general social conditions. Liability of coal-miners to accident; liability of coal-miners to special diseases. Coal-mining is neither relatively nor absolutely unhealthy .. . . .. . . .. .. .. .. .. 69 Chapter Vl.—The Cost of Living of Coal-mine Workers. 1. Definition of cost of living. Possibility of accurately determining changes in the cost. Data required to provide a trustworthy measure of these changes. Defects in such data in New Zealand. Necessity of further detailed investigation. . . . . . .. 77 2. Description of the data employed in the present inquiry .. . . . . 77 3. Particulars relating to expenditure at the minefield.s on food, rent, fuel and light, boots and clothing, and miscellaneous items. The estimated increase of the expenditure on living by the mining population between 1913-14 and September, 1918, is 35 per cent. . . .. 78 4. Counteracting factors. Increases in earnings. General conclusion . . . . 79 Chapter VII. —Housing and Social Conditions of Miners. 1. Relation of housing-conditions to industrial unrest. The mining settlements inspected. The urgent need of immediate improvement. Notes on the housing-conditions at Huntly, Rotowaro, Pukemiro, Glen Massey, Avoca, Kaitangata, Nightcaps, Runanga, Blackball, Roa, Reefton, Waimangaroa, Denniston, Burnett's Face, Granity, Millerton, and Ngakawau 81 2. General characteristics of the housing in mining settlements. Clauses of the present conditions 84 3. Classification of the houses ; ownership . . .. .. . . .. . . 84 4. Rents . . . . .. . . .. . . . . . . .. . . 85 5. Cost and character of accommodation for single men .. . . . . .. 85 6. General social welfare. Medical attendance ; education ; cost of travelling to the larger centres 85 Chapter VIII.- -Recommendations and Chief Findings. 1. General character of the industry and its position during the war .. 86 2. The necessity of improvements in the organization of the industry .. . . .. 86 3. The question of nationalization. Some form of nationalization urgently needed . . . . 86 4. The chief objects to be achieved by the reorganization of the industry . . . . 87 5. The recommendation of the immediate institution of the Dominion Coal Board. Membership, constitution, and functions of this Board . . .. .. .. 87 6. Subjects arising out of the inquiry to which the Board should give immediate attention. Methods of mining ; improvements in housing miners ; improved means of transporting miners to their work ; improved medical and hospital services ; organization of railway service ; modification of certain parts of the Coal-mines Act; improvement of the coal ports 88 7. Relation of labour to the business policy of the industry and the conduct of the management 89 8. Certain recommendations in regard to distribution under the present system . . 89 9. Recommendation that the present system should be altered in order to secure the general application of the advantages that result from large-scale distributing business. The abolition of overlapping in deliveries ; concentration of depots and the ownership by the mines of the means of sea transport to the main distributing-centres. Recommendation that the Dominion Coal Board be empowered to undertake the distribution of coal, including its carriage by sea .. .. . . .. . . . . . . .. 90 10. Certain recommendations in regard to supply of coal and the demand for coal. Ways in which demand can be modified, with the result of lowered prices for coal . . 90 11. Part of the rise in the price of coal during the last five years has been due to the inflation of currency and credit. The wise policy of lending for legitimate productive purposes and of encouraging saving for investment will tend to accelerate the effect of all other forces making for a fall in the price of coal .. .. .. . . .. 90 12. As far as possible the principle of competition should, be preserved as a regulator of price. No discrimination should be made against foreign coals .. . . .. , . . 91 13. Detailed periodical investigations into the cost of living and the general social conditions of mine workers should be made . . .. . . .. . . .. 91 14. Certain steps should be taken in order to improve the collection of statistics relating to the coal-mining industry so as to facilitate the comparisons that are necessary for estimating changes in the welfare of the industry and its importance to the community .. .. 91 15. Brief summary of the chief findings arranged under the eight heads of the order of reference 91
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APPENDICES. APPENDIX A. Evidence given by Charles Norton Boult, Engineer to the Westport Harbouk Board, in connection with the coal-mining industry. Mr. McDonald : I would like you to explain to us the relationship between the harbour and the general coal question and the general trade of the district. Mr. Boult: It is quite obvious that all the coal that is produced or that will be produced in this district must go through this harbour. There is no possibility of any other outlet that could possibly compete with water carriage, whereas it is possible that Grey coal might be railed here and sent from here by sea. This harbour is limited, first of all, by its bar. The harbour is naturally developed by means of training-walls to a depth of some 12J ft. of water at low water, ordinary spring tides, but it has to be further developed by means of dredging to a workable ■•depth for our coal-boats to come in and out. In 1918 on over two hundred days of the year we had a working-depth of from 17 ft. to 18 ft. at low water, and to that may be added from 5| ft. to 9| ft. rise—that is, neaps and spring-tide rise. The bar is continuous and keeps forming ;it is formed partly by the westerly sand-drift which is making up the coast all the time, and partly by the detritus that conies down the river. At the present time the harbour has a first-class suction dredge on the bar, and that is holding the water at the depth I have indicated ; but the banks of the Buller River being soft and low, the river washes down enormous quantities of gravel from erosion, and the Board has at present only one very obsolete bucket dredger, which is about forty years old and about done, to cope with the banks forming here, which finally reach the entrance, and we should really be dredging the river for about seven or eight miles up. Instead of that, there is a series of gravel-banks forming from right down at the lower end of our berthage area up to the Nine-mile. As soon as you begin to disturb these banks you get a constant flow of detritus down the river. We have tried to dredge out a local area, and each time it is filled up almost at once. To open this bar is a question of dredging very large quantities of material. So far we have dredged about an average of 100,000 cubic yards a year. At present we have only got a plant which is on its last legs, and it would take some two or three years to get a suitable plant; and unless we get a plant not only will the river not be fit to cope with the increased trade, but it will go considerably back from what it is at present, and I anticipate that there will be considerable difficulty in handling boats in this port unless a bucket plant is obtained. Further development on the bar would necessitate a larger and more powerful suction dredger out there. I cannot sound too strongly the note of warning about the condition this port will be in in a few years. You will not only be no better off, but you will bo worse off Dr. Hight: What expenses will be involved ? —We have one suction dredger here which is suitable for a hopper. My idea is that you cannot use the type of bucket dredger which is in use in New Zealand. The idea is to have hoppers which steam up to the dredge and take away a load. I have one suction dredge which would be suitable for a hopper. I would require to buy a largo bucket dredger with a capacity of about 1,000 tons an hour, and another hopper. Two hoppers would do us amply here. A dredge of the size indicated and one hopper would have cost before the war not more than £72,000. What it would cost to-day I am not prepared to say. Without interest their running-costs would be something like £9,000 a yoar. Such a plant could, I suppose, in four years develop this harbour sufficiently to enable them to keep it open by working only, say, four months in a year. In that case the plant, being the only one of its kind in New Zealand, would readily get jobs all over the Dominion, because there is no plant of the kind here. That is entirely a question of river-dredging. The bar is being dealt with to a certain extent. You can see that the constant flow of detritus down the river is putting more work on the bar-dredger. A further bucket dredger for the bar in pre-war times would have cost another £65,000j Dr. Hight: What is the biggest collier that the bar will take through now ?—That is a matter for the Harbourmaster to judge. It is his personal business to say which vessels he will allow through. I only provide the water. I suppose it is one of the most difficult bars in the world to deal with. Mr. McDonald : Your contention is that unless the authorities, who in this case are the Harbour Board and the Government combined, immediately take steps to provide additional facilities for dredging the river there is a serious danger of the coal trade of Westport being throttled, and that even if steps were taken now it would be two or three years before any effect was felt ? —That is my meaning, and therefore this matter should be represented to the Government in connection with the coal-supply of the Dominion. A new bucket dredger such as I have indicated would deal adequately and efficiently with all the necessities of this harbour for the next thirty-five years.
101
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APPENDIX B. Memorandum by the General Manager of the New Zealand Railways on certatn Matters submitted by the board to him. 1. The profits made by the railways in regard to any particular class of traffic are not ascertained The impossibility of keeping actual separate records of the cost of handling different classes of traffic, where traffic of all descriptions is dealt with on practically all trains, is obvious. 2. The practicability of running a mineral express train from Huntly to Marton : — The question of the improvement of through goods services is one which is always before the Department, and where a regular business in train-loads is available between two particular stations the Department's practice is to provide a regular service to deal with it. It is only, however, where full train-loads can be obtained from one station to another that this practice can be carried into effect with due regard to economy of operation. In the case of a through mineral-train from Frankton Junction to Marton, there is not sufficient business between the two terminal points mentioned to provide a full train-load. While a mineral-train might be despatched from Frankton Junction fully loaded, the proportion of the load which would ordinarily be consigned to wayside stations between there and Marton is such that for a considerable portion of the journey the train would be running unprofitably unless the Department made provision (as it does) for other traffic to be lifted to compensate for the coal put off en route. The distance from Huntly to Marton is 246 miles, and the existing services provide for coal traffic being carried between those points in twenty-seven, thirty, and thirty-nine hours respectively. These services compare favourably with services in any other part of the world for the handling of imperishable wayside traffic. 3. The railway consumption of coal: — (a.) The Department's system of purchase of coal is by calling for tenders for the supply and delivery required for a period of one year. In cases where no tenders are accepted coal is purchased under special agreement as to quantity and price per ton. (b.) The comparative steaming-values of different classes of coal can be determined only by exhaustive special trials; and owing to the exceptional conditions prevailing during recent years such trials have been temporarily discontinued, with the result that the data which is available does not accurately disclose the condition to-day, owing partly to certain classes of the coal being now off the market, and in other cases the quality of the seam having altered. The Department has, however, satisfied itself of the relative values of available coal; and so far as railway-locomotive requirements are concerned the best results arc obtained from Newcastle coals from approved mines in the Maitland district, such as Bellbird, Stanford Merthyr, Abermain, Aberdaire, Pelawmain, Neath, and Hebburn. Next in order come Westport, Westport-Stockton, Liverpool State Mine, Blackball, and Point Elizabeth State Mine. These are all bituminous coals. Among the lignite coals of New Zealand, Hikurangi, Kaitangata, Taupiri, and Waronui give the best results. The Department has at different times also obtained supplies from Nightcaps, Taratu, Waipa, and Pukemiro. (fi.) The possibility of using a larger proportion of(i.) New Zealand coals : For many years past the Railway Department has utilized all the suitable New Zealand coal which it has been able to obtain. The quantity has, however, been insufficient for the requirements of the Railway Department, and it has of necessity had to import considerable quantities of coal from Newcastle in order to maintain its services. ( i.) In regard to the question of an increased use of small coal, this is a matter that has been under the consideration of the Department for some time, and at the present moment the Department has in hand the installation of a pulverizing plant witli a view to experimenting in the consumption of coaldust. Should the experiment turn out successfully there is a prospect of the Department consuming a considerable quantity of the fine coal which is at present a waste product. The effect of such increase in the consumption of coal-slack would be to largely reduce the Department's requirements in regard to large screened coal. 4. The rate of freight charges for the carriage of coal, with special reference to — (i.) Changes since 1914 and their dates : Very favourable low rates are provided by the Railway Department for the carriage of coal produced in New Zealand, as may be seen by reference to the Department's scale of charges. The only changes in the railage rates on the New Zealand railways since 1914 consist of two general increases of 10 per cent., which came into force on the 19th September, 1915, and the 25th November, 1917. (ii.) The differences in the rates on different lines -e.g., Picton-Blenheim, Lyttelton-Christ-church, and Invercargill Bluff: The rates on the lines mentioned vary only in regard to the total distance covered. From Picton to Blenheim, eighteen miles, the rate on New Zealand bituminous coal is 3s. sd. per ton, and on native brown coal 2s. 6d. per ton. Between Invercargill and Bluff, seventeen miles, the rates are 3s. 3d. and 2s. sd. Between Lyttelton and Christchurch, seven miles, the rates are 2s. 6d. and Is. 9d. The above figures are all exclusive of wharfage charges, and are subject to the two surcharges of 10 per cent., and 10 per cent, mentioned in the previous question.
14— H. 44a.
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(iii.) Method of estimating weights to be charged for : The weight of coal ex ships is ascertained by passing the railway-wagons over the Department's weighbridges. In the case of coal loaded in rail way-wagons at local mines the weights are in almost all cases ascertained by the consignors—that is, the mining companies—for sale purposes and declared by them on the Department's consignment-notes. These weights are accepted by the Department, but are subject to periodical checks at irregular intervals by means of the Department's own weighbridges, and in cases where discrepancies are found the charges are computed on the Railway Department's weights. The responsibility for declaring the weight of the coal consigned rests on the consignor of the traffic; and as regards the bulk of this traffic from New Zealand mines, the wagons are not subject to re weighing by the Railway Department. The consigning company has the necessary weighing facilities, and is interested in ascertaining the correct weight of the outward traffic. The consignee, on the other hand, usually takes delivery of the coal in cart-loads, and can only arrive at the weight approximately by rough-and-ready methods. The Department therefore accepts the view that the probabilities are in favour of the consignor's weight being the more correct when dispute arises between the weight consigned and the weight received; and in any case, if the Department made allowance in freight for alleged shortages in the weight received, it will be evident that it would open the way to serious abuse. 5. Cause in delay of transport of coal: In the matter of transport coal is regarded as a nonperishable article, which, with other articles of a similar nature, is called upon when necessary to give way to traffic of more importance or of a perishable nature. The fact that coal can be utilized in this way to stand aside when necessary to permit of its being used, for making up full train-loads is one of the factors in the direction of obtaining the maximum efficiency in operating, and enables the Department to carry the business at low rates of freight. If it became necessary for the Department to regard coal as traffic which must receive the promptest through transport it would inevitably be necessary for the Department to review the present rates of freight. 6. System of sidings for coal, loading and unloading of trucks : The coal companies provide their own siding-accommodation at mines, usually after consultation with the Railway Department's technical officers in regard to the requirements in view of the probable output. At destination stations where the volume of traffic warrants it coal is dealt with in particular sidings, is always placed there for discharge, and is carted from there by the dealers. The discharge of coal is not undertaken by the Railway Department, but devolves upon the consignees ; and, having regard to the nature of the traffic, the undesi rab.il ity of avoidable handlings, and the extent to which the dealers cart direct from the railway-yard to consumers, this is probably the most efficient and economical method of dealing with the business. No mechanical means of discharge from rail way-trucks are provided, and having regard to all the circumstances it is doubtful if such means would be economically practicable.
APPENDIX C. Statement showing how the Cost of Material principally used at the Mine at Point Elizabeth has increased from the Year 1914 to Present Date.
Prices at Grcymouth. Material. Per 191.4. 1915. 1916. 1917. 1918. .xes lolts, engineers' — I in. and | in. | in. »in. .. 1 in. lolts, coach — J in. and § in. Jin. .. f in f in. Irattico-cloth lolting — 1£ in. .. 2 in. 3 in. 4 in. 5 in. 6 in. 8 in. £ s. d. 0 4 4 £ s. 0 4 d. 9 £ s. d. 0 5 0 £ s. 0 8 d. 0 £ s. 0 9 d. 0 gross cwt. 0 9 0 1 10 0 1 10 0 1 10 0 0 9 1 18 1 15 1 8 0 0 0 0 0 12 0 2 12 0 2 5 0 2 2 6 0 16 3 8 3 2 2 19 0 6 6. 6 0 19 4 4 3 10 3 5 0 0 0 0 )> gross cwt. 11 1 8 0 1 4 0 1 4 0 0 0 61 1 10 1 5 1 5 0 0 0 0 0 9 0 11 0 2 8 0 2 2 0 2 0 0 0 0 10| 0 13 3 2 2 18 2 15 0 1 ol 6 6 6 Of 0 17 4 4 3 10 3 5 0 1 0 0 0 0 n 11 square yard foot 0 0 4J 0 0 5 0 0 10 0 1 11 0 1 lof 0 3 0 0 4 7 0 0 0 0 0 1 0 1 0 2 0 3 0 6 4 U 1 4 3 6 1 0 0 8 0 0 10 0 I 3 0 1 9 0 2 8 0 4 0 0 9 9 0 1 0 1 0 2 0 3 0 5 0 6 0 12 4 6 5 3 2 4 6
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103
Statement showing how the Cost of Material principally used at the Mine at Point Elizabeth has increased from the Year 191 4 to Present Date — continued.
Material. Per Prices at Oroymo' ith. 1914. 1915. 1916 1917. 1918. Bran Chain, r 7 r in. and ' 2 in. Chaff .. Chalk Carbide Cement Klectrie detonators. . Dogs, rail Explosives — Gelignite Viking Monobel Files sack cwt. ton cwt. bag 100 cwt. case £ s. d. 0 6 5 1 17 0 4 17 6 0 10 0 0 19 6 0 4 21 0 16 6 1 2 6 £ s. d. 0 8 3 2 5 0 7 15 0 0 12 0 1 16 (I 0 4 7i 1 2 6 1 8 6 £ s. d. 0 9 9 3 0 0 £ s. d. 0 10 6 3 15 0 ; 8 12 6 0 19 0 I 4 7 6 i £ s. d. 0 14 0 4 5 0 11 10 0 1 14 0 4 0 0 I 12 0 0 5 2 18 7, 2 11 0 1 9 8 3 19 0 2 10 0 2 17 6 2 17 6 2 14 6 45% off list 2 17 6 2 19 6 3 12 6 3 9 6 3 9 6 15% off list 4 10 0 4 10 0 55% off list 25% off list List. Grease— Skip Antifriction Handles— Hammer Shod piok Unshod Axe Pan, shovel ton cwt. doz. each dozen • • >) • • ii 12 15 0 10 0 0 9 0 0 J 6 0 10 0 0 11 6 0 12 0 16 0 0 1 3 0 0 9 0 0 1 6 0 10 0 0 12 0 0 15 0 16 0 0 1 4 9 0 9 0 0 1 6 0 10 0 0 12 0 0 15 0 16 0 0 1 12 6 0 12 0 0 19 0 10 0 0 12 6 0 18 0 25 0 0 2 7 6 0 12 6 0 3 3 0 io o 1 10 0 1 2 0 Iron— Bar, flat Bar, round Bar, square Sheets Angle Shoeing Plain galvanized .. Corrugated Lead— Ingot Red White .. Locks, Champion .. Leather Marline NutsHexagon Square Nails — Wire, 11 in. Wire, 2 in. Wire, 3 in. Wire, 4 in., 5 in., 6 in. Horse-shoe Lead-head Copper Oats OilsCylinder Machine Arctic Rope Circulation Boiled .. Raw Colza Castor Kerosene Via l"» r» 1 v»rt cwt. 11 • • 11 ■ ■ 11 • • 11 • • 11 ■ • 11 • • 11 cwt. ' • 11 • • 11 each lb. cwt. cwt. 33 lb. cwt. lb. bushel gallon • - ?? • • ?j case | Oil 6 Oil 6 ' 0 11 6 0 13 6 0 13 0 0 13 6 1 2 0 0 19 6 0 17 6 0 17 6 0 17 6 1 0 0 1 6 0 0 19 0 1 8 0 1 5 6 1 4 0 I 5 6 18 0 1 6 0 1 3 6 1 16 0 111 0 1 11 0 1 11 0 4 0 0 1 8 6 3 7 6 1 11 0 4 6 0 4 0 0 1 0 0 1 8 0 1 16 0 0 2 6 0 2 9 0 0 7| 1 10 0 1 12 0 2 6 0 0 2 6 0 2 9 0 1 0 2 10 0 2 13 0 0 2 9 0 3 0 0 0 9 1 18 0 3 5 0 0 4 2 0 4 3 0 2 11 2 5 0 4 14 0 4 10 0 0 4 2 0 4 3 0 2 0 1 6 0 1 4 0 1 8 0 1 19 0 1 11 0 1 19 0 3 13 0 3 14 0 0 15 0 0 15 0 0 15 0 0 15 0 0 0 6 1 6 0 0 I 6 0 2 4 1 2 0 1 2 6 1 0 0 0 19 0 0 0 6 1 10 0 0 19 0 3 10 2 0 0 1 18 0 1 7 6 1 6 0 0 0 9 2 2 0 3 0 0 3 0 0 2 17 0 2 17 0 0 2 6 2 17 6 0 1 0 2 10 0 0 3 0 0 4 10 0 5 10 0 3 8 0 1 11 0 2 8 0 2 61 0 2 3 0 5 1 0 5 0 0 2 111 0 3 6 0 8 6 0 12 0 0 3 8 0 2 41 0 2 8 0 2 61 0 2 4 0 4 3 0 4 3 0 2 111 0 2 111 0 8 8 0 16 2 j 0 3 8 0 2 4| 0 2 8 0 2 61 0 2 4 0 3 101 0 2 10 0 3 6 0 2 9 0 4 3 0 2 11-1 0 2 Hi 0 8 0 0 16 2 i 0 5 3 0 5 3 0 3 111 0 4 81 0 13 8 12 8 0 10 0 0 10 6 0 6 0 0 5 0 0 16 0 1 4 2 .Benzine .. • • 33
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104
Statement showing how the Cost of Material principally used at the Mine at Point Elizabeth has increased from the Year 1914 to Present Date-continued.
The prices included on this schedule are what were actually paid by the State Coal-mines Department during the years specified.
Prices at tireymouth. Material. Per 1914. 1915. 1916. 1917. 1918. Picks— 21b. .. 2$ lb. .. 31b. .. doz. £ s. 0 16 0 18 1 0 d. 0 0 0 £ s. d. 0 18 0 1 0 0 1 0 0 £ s. d. 0 18 0 1 0 0 1 8 0 £ s. d. £ s. d. )) J? Rope — Hemp Steel, 1| in. circumference.. Steel, 2 in. circumference . . Steel, 2f in. circumference.. Steel, 2 1 in. circumference. . Steel, 2f in. circumference. . Steel, 3| in. circumference. . Shovels — Long-handle, round mouth Long-handle, square mouth Firing Pan. .. Stove Spikes Steel — Cast Mild Octagon Shear Solder . . .: Twine, binder Tacks, brattice Waste, cotton Wire, galvanized Washers, iron, round Mine-rails cwt. >> J) >> >5 >> >> each doz. each cwt. 2 12 2 16 1 15 1 18 1 15 1 18 0 3 0 3 0 4 0 4 0 18 0 0 0 6 6 0 8 8 0 2 0 3 7 6 2 6 0 1 16 0 1 19 9 1 18 6 0 3 8 0 3 8 2 15 0 0 6 0 0 5 6 1 5 0 2 11 6 2 15 6 2 15 0 2 6 6 0 4 0 0 4 0 3 12 0 0 6 6 0 5 9 2 16 0 2 1.0 0 2 15 0 2 8 0 2 8 6 0 6 8 0 6 0 5 17 0 0 5 9 2 8 0 3 7 0 6 0 .10 0 5 0 8 6 9 cwt. J? )) J? lb. cwt. 2 10 0 14 1 10 2 10 0 1 2 11 2 16 2 5 0 12 1 2 0 0 0 0 6 0 0 0 9 0 1 10 0 0 18 0 1 12 0 2 2 0 0 1 9 2 11 0 3 0 0 2 12 0 1 2 0 2 0 0 10 13 6 1 17 6 1 9 0 2 0 0 0 19 2 11. 0 3 2 0; 1 12 0 3 0 0 0 1 9 3 5 0 4 0 0 3 15 0 1 14 0 1 18 4 4 0 2 4 4 5 0 5 18 2 16 0 0 3 0 0 9 6 ;> >; 1 14 to 2 0 0 9 14 6 >> >> ton 15 15 0 26 3 6
105
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SCHEDULE OF TABLES. No. j.. AeK 1. Analysis of New Zealand coals, with similar analysis of certain foreign coals for comparison .. .. 4 2. Estimate of coal in New Zealand (Morgan) .. .. .. .. .. .. .. 5 3. Yearly output of coal in New Zealand .. .. .. .. .. 0 4. Production of coal, 1885-1918 .. .. .. .. .. .. .. ~ ..6 5. Contribution of each of the woll-defincd coalfields to the total output of coal in the Dominion up to 31st December, 1918 .. .. .. .. .. .. .. .. .. ..9 6. Distribution of total output over the different classes of coal .. . . .. 9 7. Coal production, oxports, and imports . . .. .. .. .. .. 9 8. Imports of coal, 1885-1918 .. .. .. .. .. .. .. .. ~10 9. Coal-consumption, 1885-1918 .. .. .. .. .. .. .. ..12 10. Ratio of value of coal-imports into New Zealand to value of total imports .. .. .. ..15 11. Karly exports of coal from New Zealand .. .. .. .. . . .. 15 12. Capital and location of the chief coal-mining companies operating in New Zealand .. Ifi 13. Labour and output .. .. . . . . .. . . . . .. 17 14. Labour at principal collieries .. .. . . .. .. .. .. . . 18 15. Output.of coal of principal collieries, 1913—18 .. .. .. .. .. ..25 16. Cost of production per ton at principal mines, 1913-18 . . .. .. .. . . 25 17. Total direct labour-cost per ton of coal-mines, also expressed as percentage of total oost .. 26 18. Increase in labour-cost, other cost, and total cost per ton of mining coal, 1913-18 .. 27 19. Increases in cost, calculated per ton of output, of stores and materials (including timber), 1913-18 .. 28 20. Cost of maintenance and renewals per ton of coal-output, 1913-18 .. .. .. .. . . 29 21. Expenditure per ton of output on rates and taxes, 1913-18 . . . . . . . , . . 29 22. Cost of administration, 1913-18, per ton of coal-output . . .. .. .. .. 30 23. Expenditure on royalties per ton, 1913-18, of total output . . .. . . . . .. 30 24. Expenditure per ton output on depreciation and sinking fund of coal-mines, 1913-18 . . . . 81 25. Percentage of time lost between 1913-18 at one large mine .. .. .. .. .. ..31 26. Average number of shifts worked per week per man at one mine .. .. .. 32 27. Average number of shifts worked per man per week (miners, truckers, and shift-men), comparing period 1913-14 with period 1917-18 .. .. .. .. .. .. .. ..32 28. Number of days mines stood idle owing to particular causes—State mines .. .. .. 32 29. Number of days worked each year by the State mines .. .. .. .. .. 33 32. Output per person employed underground, 1913-18.. .. .. .. .. ~ ..33 33. Output in tons per miner per shift worked .. .. .. .. .. .. .. 34 34. Showing relation between cost of transport by rail or sea, and the net retail price; of certain household coals 35 35. Oost of railway haulage to nearest port of shipment per ton of coal mined over recent period .. 36 36. Ordinary shipping freight per ton of coal .. .. .. . . .. .. .. 37 37. Showing the changes in the net retail price of household coals at Auckland, 1914-18 . . .. 38 38. Showing the cost per ton of distributing coal in Auckland, September, 1918 .. .. .. ... 39 39. Showing the increase in the cost of distribution of coal at Auckland by retailers between 1913 and September, 1918 .. .. .. .. .. .. .. .. .. ..39 40. Showing increases in cost of distribution of coal .. .. .. .. .. .. .. 40 41. Cost ex ship of Newcastle coal at Auckland .. .. .. .. .. .. ..41 42. Dealer's estimate of the distributing-costs of Australian coal in Auckland .. .. .. .. 41 43. Cost of carriage of coal to Wellington .. .. . . .. .. .. .. .. 43 44. Retail prices of house coals at Wellington, 1914-18.. .. .. .. .. .. 43 45. Increases in the prices ex ship, wholesale, of State coals at Wellington, 1915-18 .. .. 44 46. Estimate of the present cost (January, 1919) of retailing household coal in Wellington .. .. ..44 47. Estimate of costs of retail suburban dealers .. .. .. .. .. .. .. 45 48. Cost of carriage of coal to Christchurch .. .. .. .. .. .. .. .. 46 49. Retail cash prices of house coal at Christchurch, 1914-18 .. .. .. .. .. ..46 50. Increase in the cost of production of lignite coals .. .. .. .. .. .. ■.. 47 51. increases in production and distribution costs of brown coals for Christchurch, 1914-18 .. .. 47 52. Prices of oversea coals ex ship at Lyttelton, 1914-18 .. .. .. .. .. ..47 53. Distribution of the increases in cost of retailing coal at Christchurch, 1914-18 .. .. ..47 54. Retail price (monthly credit) of house coal at Christchurch, September, 191.8, with estimates of retailors' costs and profits per ton .. .. .. .. .. .. .. .. 48 55 Actual cost of cartage, Christchurch .. .. .. .. .. .. .. .. 48 56. Wholesale price of Newcastle coal ox ship Lyttelton, Septomber, 1918 .. .. .. ..49 57. Increase in price ex ship, wholesale, of State coals at Lyttelton, 1915-18 .. .. .. 50 58. Cost of carriage of chief coals to the railway-station, Duncdin .. .. .. .. ..51
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No. PAGE 59. Net cash retail price of house coal, 1914 and 1918 .. .. .. .. .. .. .. 51 60. Showing the amounts and dates of the various increases in cash retail prices of house coal at Dunedin for the period 1914-18, and the total increases per cent. .. .. .. .. .. ..51 61. Increase in retail cash price of house coal per ton at Dunedin, 1914-18, showing amount of increase due to each cost .. .. .. .. .. .. .. .. .. .. 52 62. Aotual margins or gross profits, Dunedin .. .. .. .. .. .. .. .. 52 63. Railage on coal to Invercargill .. .. .. .. .. .. .. . . .. 53 64. Statement showing prime costs and gross profits in a retail coal business at Invercargill .. 53 65. Analysis of cost at Tnvercargill railway, October, 1918 .. .. .. .. .. 53 66. Increases in retail cash prices of house coal, Invercargill .. .. .. .. .. 53 07. Apportionment of increase in retail cash price, 1914 to October, 1918 . . .. • . .. 54 68. Table showing increases under different headings of cost of coal to retail dealers at Invercargill, and the date of each increase, 1915-18 .. . . . . .. . . . . .. 54 69. Increase in mine-costs, 1913-18, compared with increases in the mine price .. .. .. 54 79. Cost of delivery of coal in Invercargill .. .. .. .. .. • . . . 54 70a. Comparative table showing total increase in the cash retail prices of standard household coals during the period 1913—18, with division into its several parts .. .. .. . . .. 55 70H. Comparative table showing cost of delivery from j'ard to consumer at different centres . . . . 55 71 Average net selling-price per ton of coal at mine or f.o.b. or f.o.r. at customary shipping-point . . .. 56 72. Mine-profit per ton, also expressed as percentage of total cost per ton .. .. .. 57 74. Lowest and highest margins between cost and price .. .. .. .. .. 57 75. Comparison of increases in mining-cost and selling-price at mine, 1913—18 .. .. ■ • 58 75a. Average costs, selling-prices, and profits per ton for the industry as a whole, 1913-18 . . . ' 58 70. Hates of dividend declared by chief coal-mining companies of New Zealand, 1913-18 ... 59 77. Profits of mining companies, 1913-18 .. .. .. .. .. .. .. ..60 ?8. To summarize shareholders' net ga"ins .. .. .. .. .. • • 61 79. Showing profits per ton of coal carried by the Union Steamship Company in the Now Zealand trade up to the end of 191 7 .. .. .. .. . . ..' .. .. .. .. 02 80. Statistics of average earnings and output per man per shift .. .. .. .. ..64 81. Average daily earnings por miner at Mines X and V prior and subsequent to industrial agreements of March, 1916, and June, 1917 .. .. .. .. .. .. .. ■• ..66 82 Showing loss due to coal being supplied to employees at 3s. per ton, since the year ending 31st March, 1913, to the half-year ending 30th September, 1918, at the State collieries .. .. . • .. 70 83. Difference between price to the workmen and tho price to the public at the pit-mouth .. .. 70 84. Showing cost of explosives to miner in winning coal .. .. .. .. .. .. 71 85. Fatal accidents in New Zealand coal-mines .. .. .. .. • • • ■ .. 73 86. Fatal accidents in coal-mining .. . . .. .. .. .. .. . • .. 74 88. Distributing-costs of standard house coals, 1918 .. .. .. .. .. .. ..91 (Note. —There arc no tables numbered 30, 31, 73, 87.)
107
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INDEX. Absence from work, 21, 31-34. Earnings. (See Wages.) Accidents, 34, 73-75. Education, 21, 85, 94. Administration, cost of, 30. Efficiency of labour, 18. Analysis of coal, 4. Elasticity of demandjfor coal, 22. Anhydrous coals, 3, 4. Employment, 69, 70. (See aim Lost time.) Anthracite coal, 3. Evaporative power, 4. Apathy of consumers, 41. I Explosions, colliery, 20. Ashley, Sir W. J., til. Explosives, 19, 71, 72. Association, coal-dealers', 37, 38, 43, 4(i, 51, 53. Exports of coal, 9-15. Auckland, distribution of coal at, 37-43. Australian coal, 4, 15, 23, 41, 49. Family earnings, 70, 71, 79. Avoca, 82, 88. Food-costs, 78, 79. Freight on coal, 22, 23. (iSV.e Transport.) Bagging at mine, 42. Freight on coal, and price, 35-37. Bank to bank, 20, 21. Friability, 4, 22. Bituminous coal, 3, 9, 22, 24, 28, 50, 57. Fuel and light, cost of, 79. Blackball, 3, 16, 19, 20, 21, 22, 45, 82. Board and lodging, 78, 85. : Gambling, 34. Bonuses, 63, 70. Geological features, 4. Boots, 71, 79. Glance coals, 4, 22. Bord and pillar, 19, 20. Glen Massey, 81. Boult, C. N., evidence of, 100. '< " Go-slow," 64. Brown coals, 4, 9, 22, 23, 24, 28, 37, 47, 56, 57. Government Statistician's price statistics, 77. Brunner, 15. Grades of coal, 22. Brunner Mine, 20. Granity, 83. Budgets, workers', 77. Grey field, 3, 4, 5, 15, 16. Buller district, 3, 4, 5. Greymouth, 15, l(i. Burnett's Face, 83. Handling, 22. Calorific value, 4. Haulage, 20. Capital, 16, 60, 61. Hayes, 20. Carbide, 71. Health of workers, 21, 34, 73-76, 91, Carriage of coal. (See Transport.) Heaphy, 15. Cartage, 41, 43, 55. Hewers, 19. Check inspectors, 20, 89. Hewing-rates, 63. (See Wages.) Chemical analysis, 4. Historical note, 15. Christchurch, distribution at, 45-51. Hoffman, 74. Classification of coal, 3, 22. Homebush, 3, 16, 45. Classification of costs, 24, 37. Hospitals, 85, 88. Clothing-prices, 79. Hours of labour, 21, 72, 73. Coaldust and health, 75, 76. Housing, 21, 81-85, 88. Coalfields, 3, 9. Huntly, 81. Coal mined to date, 6. Hydrous coals, 3, 4. Coal-mine Owners' Association, 10. Coal-miners' Relief Fund, 21. Imports of coal, 9-15, 91. Coal-mines Act, 15, 19, 21, 88. Improvements, 36, 42, 45, 51, 52, 55, and Chapter VIII, Coal resources of New Zealand, 5. 86. Coal-sites, 15. Inangahua field, 49, 89. Colza-oil, 71. Increasing returns, 23. Companies, 16, 21. Inflation of currency, 90. Comparisons, precautions necessary, 22, 63, 69. Inspection of mines, 20. Consumers, 41. Intemperance, 34. Consumption of coal, 9. Introduction, 1. Contract system, 89. Invercargill, distribution at, 53-55. Controller of Shipping, 62,, Coode, Sir J., 15. Joint committees, 89. Co-operative stores and societies, 21, 22, 42. Joint products, 23. Cost of distribution, 23, 35-55. Cost of living, 69, 71, 77-80, 91, 94. Kaitangata, 3, 16, 19, 20, 45, 51, 53, 82. Cost of production, 23, 24-34, 91. Councils, local, district, and national, 21. Labour, 17-19, 20, 21, 64, 72, 73, 89, 94 Credit and prices, 90, 91. Labour-cost, 26-28, 65, 95. Currency inflation, 90, 91, 94. Labour, division of, 19. Labour, mobility of, 18, 73. Decreasing costs, 23. Lamps, 71. Definition of " coal," 22. Land, coal, 15. Definition of " costs," 24, 37. Light, 71. Definition of " cost of living," 77. Lighting of mines, 19. Definition of " profits," 56, 58. Lignites, 4, 9, 22, 23, 37, 49, 51. Delivery. (See Cartage.) Living, cost of, 69, 71, 77-80, 91, 94. Demand for coal, 22, 23, 38, 90. Localization of industry, 19. (See Coalfields.) Denniston, 83, 88. Longwall method, 19. Depreciation charges, 17, 31, 39, 58. Loss of capital, 61. Desiccation, 22, 23. Loss of coal in transit, 40, 49. Development-work, 19. Lost time, 31-34. Disputes, 21. Distribution of coal, its organization, 22. Machines, mining, 20, 88. Distribution of coal, its cost, 23, 35-55, 91, 92. Maclaurin, Dr., 4. Distribution of coal, its improvement, 42, 89, 90. Maintenance, cost of, 29. - Dividends paid by mining companies, 59. Materials, cost of, 28, 102. Dunedin, distribution at, 51-53. Methods of mining, 19, 20. Duration of coal-supply, 5, 9. Millerton, 83.
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Miners, 19, 65. Rotowaro, 81. Mining methods, 19, 20, 88. Royalties, 15, 30. Monopoly, 15, 19, 22. Runanga, 21, 82. Morgan, P. G., 5. Mount Torlesse, 3, 1.6. Sacks, 40, 41. Munioipfiil depots. 42. Safety-lamp and health, 75. Scale of distributing business, 42, 50. Nationalization of the coal industry, 86. Scale of production, 19. " Net advantages," 09. Schools of Mines, 21. Newcastle, 15, 35-37, 41, 47, 49, (i 2. Scientific research, 90, 91, 94. Ngahere, 20. Screening, 22, 90. Ngakawau, 83. Semi-bituminous coals, 4, 9, 22, 24, 28, 56, 57. Nightcaps, 3, 16, 45, 53, 82. Shifts, 21, 81, 03. Northern, 3, 19, 22. Shipping-charges. (See Transport,) Shipping, lack of, 32. Opencast mine, 19. Short time, 21, 31-34. Orders, systematization of, 90. Slack, 22, 23, 42, 90. Organization of coal industry, 19, 21, 80. 87. Social conditions of miners, 18, 21, 72, 73, 85. Output per worker, 17, 31-34, 68-65. State aid, 21. Overtime, 70. State coal, 38, 44, 50. State mines, 3, 16, 19, 22, 29, 45, 70, 71, 72. Panel method, 19. ' Statistics, methods of gathering and publishing, 91 Paparoa, 3, 16, 83. Stockton, 83. Park, Professor, 4, 5, 9. Storage, 4, 22. Pay-Saturday, 21. Stores, cost of, 28. Pillars, 19, 20. Strikes, 32. Pitch coals, 4, 22. Supplementary earnings, 70. Pit committees, 89. Supply and demand, 23, 90. Point Elizabeth Mine, 26. Price of coal to miners, 70. Taratu, 51. Prices at Auckland, 38. Taupiri, 3, 16, 19, 20. Prices at Christchurch, 46 Taxation, 17, 29, 88. Prices at Dunedin, 51. " Through " coal, 22. Prices at Inveroargill, 53. Timbering, 20. Prices at Wellington, 43. Time lost by mines and workers, 21, 31-34. Prices, average selling, at mines, 50-58, 94. Tools, 71. Prices, factors determining, 23. Transport, 22, 23, 35-37, 43, 45, 48, 51. Prices of necessaries, 77-79. Transport costs and price, 35. Prices, precautions in comparison of, 22. Transport, loss during, 40. Prices, recommendations regarding, 90, 91. Transport profits, 61, 62. Prices, recommendations regarding output per worker, Travelling-distance of miners, 21. 73, 88. 17,31-34. Trucker, 19, 21, 05, 71. Production of coal, cost, 23, 24-34, 91, 92. Production of coal, organization, 19-21, 80-89. Underviewers, 20. Production of coal, total output, 6-9. Unemployment, 69. (See also Lost time.) Profits, definition of, 58. Unions, labour, 19, 21. Profits in distribution, 42, 45, 50, 52, 55, 01, 02, 93. Union Steamship Company, 30, 37, 02. Profits in production, 56-61, 93. U.S. Bureau of Labour, 76. Promotion, opportunities for, 73. Pukemiro, 3, 16, 19, 22, 81. Ventilation, 20. Purchasing-powor of money, 69. Voluntary absence, 21, 31-34. Railway charges and price, 35, 36. Wages, 20, 21, 33, 03-70, 79, 80, 95. Railway Department, 23, 42, 88, 101. Waimangaroa, 83. Railway fares, 85. Waipa, 10, 19. Railway profits, 61. Wairio, 53. Rates and taxos, 29. Waronui, 51. Rationing of coal, 23. W.E.A., 21. " Real wages," 69-76. Weight, correct, 42. Recommendations, 86-95. Weight, loss in, 40, 49. Reefton field, 49, 83, 89. Wellington, distribution at, 43-45. Relief Fund, Coal-miners', 21. Wesfcport, 3, 4, 5, 15, 16, 19, 20, 22, 43,J45 f>l. Renewals, cost of, 29. Westport Harbour improvement, BS. 100. Rents, 15, 30, 41, 71, 84, 85. Westport-Stockton, 3, 10, 19, 20, 45. S3. Resources, 5. Wholesale trade, 22, 37, 40, 44, 40, 47, 40 Retailer's costs, 37, 38, 44, 45, 48, 50, 52, 54. Workers' budgets, 77. Rhondda, Lord, 33. Workers' compensation, 21 34, 89. Roa. (See Paparoa.) Works committees, 89.
Approximate Cost oj Paper. —Preparation, not given ; printing (1,000 copies), including Illustrations, £220.
Authority : Marcus F. Marks, Government Printer, Wellington. —1919.
Price a».]
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I
No. 1. —Huntly: Cottages owned By the Company, and let at 5s. per Week.
No. 1a.—Pukemiro: Huts near Mine.
No. 2.—Kaitangata: General View.
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II
No. 3.—Kaitangata: Some of the Best Homes, privately owned.
No. 4.—Kaitangata: Collection of Homes.
No. 5-Collection of Homes on Rising Ground near Mine.
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III
No. 6.—Runanga: General View, showing privately owned Homes and the Masonic Hall.
No. 7.-One of the Government Houses, beautifully kept.
No. 8.-Dunollie: Looking towards the Mine.
No. 9.—Blackball: Miners' Homes. 11 ft. 6 in. by 9 ft. 6 in. Owned by the company, and let at 2s. 6d. per week.
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No. 10.—Blackball: One of the Houses. 11 ft. 6 in. by 9 ft. 6 in. Height-front, 10 ft. 3 in.; back, 8 ft. 3 in. Space between huts, 7 ft. 6 in.
No. 11.-Blackball: Better Class of Miner's Hut.
No. 12.—Blackball: Better Class of Miner's Hut.
IV
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V
No. 13.—Plateau between Denniston and Burnett's Face on which it is suggested a Township should be formed.
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VI
No. 14.—General View of Denniston.
No. 15.—Some of the Cottages erected by the Mining Company and sold to the Workmen.
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VII
No. 18.-Denniston: Road above the Western Face leading towards the Plateau.
No. 16. —Collection of Huts and Shacks on Western Face of Denniston Hill.
No. 17.—Another Collection of the same.
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No. 19.-The Camp to the North of Denniston.
No. 20.-Denniston, looking down on the Camp.
No. 21.-Denniston: Nearer View of Western Face.
VIII
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No. 22.— Burnett's Face: General View.
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No. 24.—Burnett's Face: A Typical Hut.
No. 23.—Burnett's Face: Collection of Huts and Houses.
No. 25.-Burnett's Face: Some of the Homes.
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No. 26.—Millerton: Bird's-eye View.
No. 27.—Millerton: Houses at Side of Incline.
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No. 29.—Stockton: Well-kept Home.
No. 28. —Stockton: Homes erected by the Company. Cost, £205.
No. 30. —Stockton: General View.
XII
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Bibliographic details
THE COAL INDUSTRY. REPORT OF THE BOARD OF TRADE., Appendix to the Journals of the House of Representatives, 1919 Session I, H-44a
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85,964THE COAL INDUSTRY. REPORT OF THE BOARD OF TRADE. Appendix to the Journals of the House of Representatives, 1919 Session I, H-44a
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