South Yorkshire Times – Friday 18 November 1932
Light on The Coal Quota
Mr. A. T. Thomson Explains
A Trade Barometer
Collapse of the Export Trade
Quota Hateful But Essential
An Industry’s Tragedy
Enlightenment for Mexborough Traders
The Mexboro’ Chamber of Trade on Monday evening in Arcadia listened to an interesting and authoritative account by Mr. A. T. Thomson, managing director of the Manvers Main Collieries, of the working of the quota system for the regulation of the production and sale of coal in this country.
This was the outcome of a resolution at the last quarterly meeting of the Chamber, when it was moved that a conference be held of all Chambers of Trade in South Yorkshire, “as we think South Yorkshire collieries are not getting their fair share of the quota.” At that time it was pointed out that the Chamber as a whole was not fully conversant with the subject: hence the further meeting on Monday, Mr. Thomson kindly acceding to a request for an explanatory talk on the subject.
“None of us likes this coal quota,” said Mr. Thomson, “and we should get rid of it soon as possible if we could.’ The quota was a legacy of the war and the depression which succeeded all war. Before the war they used to export about eight million tons of coal annually from Hull. Last year they exported no more than one and a half million tons from that port, and at sacrificial prices. Continental restrictions upon imports of British coal had hit the Midland coalfield very hard. Enormous tonnages formerly exported were now flooding the home market, with a resultant scramble for trade and domestic price-cutting war. Unfortunately, there was no better remedy than the quota system.
Every month a Quota Committee examined what had been done in that month compared with previous years. They were also notified of the amount of coal left in dumps, and then decided on the quota for the next month. The quota had generally been a trifle more than the amount of estimated demand. The quota does no one any harm and on the whole has done a great deal of good.”
The Winter Trade Slump
But there were other features of the Coal Mines Act of 1931 which were not working out so well. To find the quota of a colliery they must have a standard tonnage. They took 1928 as the standard year. They had the Central Counties Marketing Association as a voluntary organisation before the Act came in. It went well for a time, but later became a fiasco “because every company started monkeying with it.” After the standard tonnage had been found the Committee stated how much should be worked at a particular colliery. They were generous in the Central Counties they allowed them to work a good proportion of what came along. If it was winter trade they allowed more because they anticipated a bigger demand. They were wrong in that assumption last year
“The winter trade seems to have disappeared and the domestic trade has gone phut:
No Revival Yet
In 1930 the quota allowed was 83%. That was a very fair quota for the requirements of the English market. In 1931 it was 80 per cent, and this year it was 67 per cent. Last month it was 67 ½ per cent., and the month before 60—the lowest ever.
“We cannot say that the coal trade is improving. I cannot say that the outlook is any better than it was a long time ago. Unless trade between countries improves, I cannot see that we are going to do any better.”
They had introduced a tariff system, and that probably should have been done some time ago. All other countries in Europe and America had tariffs while England “gloried in free trade.” Last year something had to be done, and now they were finding tariffs useful as a bargaining in instrument. He hoped in a short time other countries would find they were missing something through the English tariffs and would begin to drop theirs.
Gold and Debts
“If France would stop boarding gold and America debts, we should come to a better industrial state far quicker than at present. He thought France would soon begin to feel a draught” through having so much gold and would be glad to unload.
They had to wash out Russia for a long time. The Five Year Plan was an excellent thing, but the Russians were not the people to carry it out.
Coal always followed iron and steel, and if that industry was depressed so was mining. The heavy steel industry was very depressed and coal had to mark time till that industry revived.
Mr. Nott read a press-cutting criticising the Coal Mines Act, arguing that it was not allowing men out of work and not allowing mines to send called foreign customers owing to the heavy penalty the Act would impose.
The Polish “Pull”
Mr. Thomson said their greatest competitors were Poland, and that country had taken nearly the whole of the Baltic trade. The Polish miner was paid about 3s. 6d. a shift, the coal they sent to Danzig was heavily subsidised, and did not cost much for transit. “We have to reduce our costs tremendously to compete. Our railway rates are almost prohibitive, even when we are merely in competition with Northumberland. Those two counties, having their own railways to the sea, can supply call in the Thames 2s, cheaper than South Yorkshire.” Durham and Northumberland had taken the East coast trade, and Scotland had got the West coast trade.
“I am not standing by this Act. I hate it. I have had to discharge over a thousand men, and they have been friends of mine for years and years. I do not like my friends having to mark time till trade comes back. But we cannot afford to work three days a week—and a 60 per cent. quota means only that. We have to dismiss men to get down our overhead charges. I have not got a very fair share, and if I can I shall get some more. I will say however, that the quota system is working very well: but the selling side has broken down entirely.”
Cause and Effect
He heard it said that a colliery not far from Mexboro’ had to decline a big order owing to the quota system. It was not actually due to the quota system, but because the colliery could not afford to take the order at the price. Many collieries had gone into groups. They had to take the minimum price, and in addition were losing many of their old connections and contracts because other groups were nearer the sources of demand. “The price arrangement has practically broken down, but it the quota system goes on as at present it is, I think, perfectly sound.”
Answering Mr. H. Clay, Mr. Thomson said all collieries in the country came under the quota system.
Mr. M. Medcalf said those looking on always appeared to know most about another person’s business, and that was apparently so in the Chamber till they heard Mr. Thomson’a address.
Mr. F. Long thought the quota system the best for the working men, because they got a fair share of what was going. The export trade was almost finished and the home market was not so good as formerly, therefore someone had to suffer,
The Chairman (Mr. W. Barlow): Suppose the quota system was abolished would this neighbourhood get any real benefit?
Back to the Scramble
Mr. Thomson said the quota system was a barometer of the coal trade. When trade was good the quota went up, and vice versa. “If it was abolished we should immediately begin scrambling for markets. In bad times is the past we in this district worked only flue shifts a week, and we thought that was very bad indeed. Under present conditions, and with the quota abolished, we should get hack to that—and to worse and worse. Scrambling for markets means losing money. I must admit the quota system is keeping same pits alive that would be better dead.
It would pay some of us to buy them out, but that would mean some people being put out of work. I think this district would be worse off if the quota were abolished.
A Dole Defender
Mr. J. Allsopp: Suppose the Government subsidised the coal industry, would it be better and cheaper than paying dole?
Mr. Thomson: I am afraid that is beyond my knowledge. It would need some working out.
The dole is an excellent thing and has saved this country. None of us likes subscribing to people doing nothing, but if there is nothing for them to do, the least we can do is to keep them alive and in some kind of comfort.
Mr. A. E. Terry: What would be the position at your pit if a foreign order came along and you had filled your quota, would you be permitted to execute that order?
Mr. Thomson: When you have worked your quota you have finished. You should not work any more, except one per cent. If I got such an order I should look around for some quotas to purchase—we are allowed to purchase other people’s quotas. At the same time I should go to headquarters and ask permission to work the order. I think I should get permission if it was a foreign order.
Wages and Markets
Answering Mr. F. Long, Mr. Thomson said no foreign coal except Polish was equal to English coal. That equality was the reason why England had lost the bulk of the foreign trade. To compete successfully with Poland they would have to drop the wages of the British miner sixty per cent.—and no one would attempt to do such a thing. At the same time the Poles were not producing so much as England, and if trade revived there would be room for both of them,
Mr. F. Green: Does England import coal in any quantity?
Mr. Thomson: Only in strike times.
The Chairman said when the system was brought forward it was not done without thought.The district collieries long ago have tried to get rid of it if they had found it was no use to them.
Moving a vote of thanks, Mr. Allsopp said Mr. Thomson’s talk had been very enlightening. It was the kind of thing the Chamber had lacked. Such talks were educational and widened their outlook.
Seconding Mr C. Marks said the whole thing bristled with difficulties, but Mr. Thomson had given them much food for thought. He thanked Mr. Thomson for what he had said about the dole.
Mr Thomson said it had “only been a chat.” and he was very glad if he had been of any assistance. “I have told you everything you ought to know. (Laughter.) I have not told you everything.”