The Quota System with reference to the Coal Industry
| Published date | 01 October 1934 |
| Date | 01 October 1934 |
| DOI | http://doi.org/10.1111/j.1467-9299.1934.tb02394.x |
| Author | John Rankin |
The
Quota
System
with
reference
to
the Coal Industry
By
Xr.
Jom
T.
HANKIN
[Lecture delivered to the Institute
of
Public Administration (Slzefietd
and North-East Midlands Regionnt
Group),
at
the University,
Shefield.
on
11th December, 1933-Revised September.
19341
HE
Coal Mines
Act
of
1930
was an epoch-making Act.
It
marked
T
a
new departure
in
the relation of the State towards industry.
In
the management
of
any business probably
two of
the most impor-
tant factors, which the Executive zealously guards because upon theni
the profitability
of
any business largely depends, are
(a)
the volume
of
the production
of
the business and
(b)
the prices
at
which the
products
of
the business are to be sold.
Part
I
of the Coal Mines Act,
1930,
as
I
shall show in detail later, regulates the liberty
of
the
Executive of every coal undertaking in the country in
both
of
these
vital regards.
Most of us are
of
course familiar with
the
restrictions which
Parliament has imposed upon what are known as
"
Statutory
Companies "-that is
,
Railway,
Gas,
Electricity
,
and similar under-
takings providing services
of
public utility. Such Companies have
had conferred upon them by Statute what are, in effect, monopolistic
rights
of
supply
of
these services within defined areas, and it
is
therefore,
I
think admittedly right that, in the interests
of
the public,
and
to
prevent exploitation
,
Parliament should impose restrictions
upon
such
undertakings, to ensure that these monopolistic powers are
not abused. This
is
done in various ways according to
the
nature
of
the services rendered. In the case
of
Gas and Electricity Companies,
for example, the dividend is limited to
a
specified return upon the
capital, after which
all
profits
must
be applied in reducticn of the
charge
to
consumer-and
SG
on.
There have also, of course, been many Acts of Parliament regu-
lating
workmen's wages and the hours and conditions of work. In
such
circumstances, and for such purposes, statutory regulation
appears
to
be
not only desirable but necessary.
In the case
of
the Coal Mines
Act,
1930,
however, it
is,
so
far as
343
A2
Public
Administration
I
am aware, the first Act which Parliament has passed-at least since
the advent of the Industrial era in this country-which regulates-r.
as
some would say-interferes with, the right
of
the individual trader
possessing no monopolistic powers or rights, to manage the com-
mercial side of his business as he might think fit. For it places such
traders under statutory regulations as to the amount
of
their produc-
tion and the price or prices below which they were not allowed to sell.
To
understand properly how it was that
this
far-reaching Act
came
to be passed, it is necessary to
go
back a little way into history-not
a
very long way, you will be relieved to hear-in fact, no further
back
for
my purpose to-night than the year
1926.
In that year the
General Strike occurred. Its immediate cause was
a
national stoppage
of the miners in consequence of a wages dispute, which continued
for
seven months until 1st December,
1926,
although in some parts
of
the country production had recommenced earlier.
The effects of
this
long
stoppage upon the coal industry were
disastrous. Exports virtually ceased, while almost
20
million tons
of
coal were imported-an unprecedented state of affairs in the history
of
the
British coal industry.
On
the full resumption of work, most colliery undertakings
embarked upon
a
policy
of
maximum production. This,
in
turn,
led
to a policy
of
severe price cutting, on the part of many coalowners,
to
secure trade, and
in
the result, according to figures published by the
Mining Association, the British coal industry as a whole, lost during
1927 nearly
~5,500,ooo.
But
even prior to
1926
the trend of trade had been moving against
the British Coalfields.
A
study of the statistics of the industry from
1800
shows a continuous increase in production, and from
1850
(when
the production was
50
million tons per annum)
an
extremely steep
and continuous upward trend until
1913,
when the production reached
287 million tons per annum.
It
is perhaps illuminating to interpolate here that, had that curve
continued, the production in
1930
would have been
350
million tons
per annum.
Unhappily it did not continue; output fell steeply during the
War
years; there was
a
catastrophic drop in
~gzr,
owing again to
strikes;
a
quick rebound to the
1913
level in
1923,
owing to the occupation
of
the
Ruhr; but in
1927
output had fallen to
251
millions,
a
drop of
36
millions as compared with
1913,
of which
29
millions was export and
7
millions home consumption.
On the other hand, the output of Europe, excluding Great Britain,
had
increased between
1913
and
I927
by
58
millions;
so
that while
the total output of Europe had increased
22
millions, the British
output had declined by
36
millions. Moreover, the world demand
for
344
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