COAL INDUSTRY

Evening Post, Volume CXXXVIII, Issue 18, 21 July 1944, Page 6

COAL INDUSTRY

ITS WAR HISTORY

FACTS BEHIND SITUATION

Recent events have brought the acute coal situation more sharply into review (says a statement by the Associated Chambers of Commerce of New Zealand). Coal is a vital element in our war production, and the provision of greater supplies is urgent if essential needs are to be met. How can this be obtained? It can only be by (1) importation and (2) local production. As regards importation, Australia needs her own coal and cannot supply us, so local production must therefore be increased.

Wliat are the elements necessary for the maximum production of coal? Firstly, a sufficient number of mines adequately equipped; secondly, a sufficient number of workers to man and work the mines effectively; and, thirdly, a proper spirit of co-opera-tion between the workers and the owners, or the State. In none of these three fundamental requirements does a satisfactory condition of affairs exist. Firstly, as regards the mines themselves, they are not as adequately equipped as they should be, because of removable disabilities an understanding of which requires knowledge of events in the coal-mining industry since before the outbreak of war. Before the war, the mines were not being worked to full capacity, and they could have produced a larger output than there was a demand for. Newcastle coal was being imported to be used with New Zealand coal in the production of gas. The two staple users of New Zealand coal were the railways and the gas companies, consequently they were obtaining their coal at lower prices than the small consumer. Then, following the outbreak of war, the price of coal was fixed by the Government at the level existing in September, 1939. Supplies had to be continued to the railways and the gasworks at the old low nrices under which the railways have commandeered about 300,000 tons. With 1939 prices still remaining pegged today the average sales realisation per ton is lower than in 1939. In April, 1940, the agreements between the employers and the miners expired, and came under review at a conference under the terms of the agreement. Because of the conditions that existed—namely, fixed prices and increasing costs—the mine owners were unable to make concessions to the men, and they proposed that the old agreement carry on for two years. The miners took the matter to the Government, who advised the owners to meet the miners again. At the end of this second conference, the owners informed the Government, they were quite unable to meet the demands of the men. The Government then said that if the demands of the men were acceded to, the Government would subsidise the production of coal so as to recoup the companies for the extra cost involved, and to keep down the cost of coal to consumers. Accordingly, in May, 1940, the miners were granted increases of 5 per cent, in the rates for contract workers, and It, per cent, in day-wages rates. This, with similar increases to colliery officials, was estimated to cost Is Id per ton on coal production. Just prior to | this date the Price Tribunal had examined applications to increase selling prices of coal on account, of the higher prices of colliery stores, and had advised the Government that costs had risen 5d per ton on this account The Government consequently subsidised the mine owners to the extent of Is 6d per ton to cover the increased wages and stores, and to avoid an increase in the selling price of coal.

Similar events occurred in 1942. The miners made new demands which the owners could not meet. Again, the Government undertook to cover by sub-

sidy the extra costs involved in meeting the demands of the men. As the result of these further increases of 5 per cent, in piecework rates and 13.8 per cent, in wage rates as from May 1, 1942, the Government introduced an additional subsidy on coal production ranging from 6d. per ton to 2s 7d per ton, according to the localities in which the mines were situated, and according to the costs of production. This arrangement was to be reviewed at the end of 1942, as it was known that costs would be greater owing to mine maintenance and the ' necessary replacement of j equipment. That subsidy, however, has never been reviewed by the Minister of Mines. Many thousands of pounds in subsidies are unpaid, and despite the most persistent efforts of the owners, the Minister has allowed the position to drift on, until now it has reached such proportions it would seem that the Minister'is purposely making the financial position of the mining companies so untenable that they are forced to sell and so comply with a programme of nationalisation of mines embarked on by the Minister. Outstanding arrears of subsidies payable to the companies at the average,, rate of 3s per ton over the last 18 months exceed £100,000 in the case of the mines other than the Waikato-con-trolled mines. The latest accounts of one of the best-known coal companies show that the company had to draw £15,000 from an insurance reserve to enable it to maintain its dividend. The actual profit on the operation of this company's mines was less than 6d per ton. With regard then, to the first requirement of maximum production of coal, namely, the requisite number of mines, adequately equipped, the fact is that the financial difficulties under which the companies are labouring have militated against the proper carrying out of developmental work in the mines, and against the proper maintenance of plant, machinery, and equipment. The latter would, if it could be adequately attended to. not only ensure the operating soundness of the mines, but also result in a greater output of coal than at the present time. There are actual concrete cases of where the installation of developmental equipment would lead directly to more coal production, but the companies, already carried on uneconomically because of the combination of pegged prices . and increased costs that have not been compensated for, have not the wherewithal to undertake these works. The mines were well equipped at the beginning of the war, but they are not so well equipped today. Owing to the shortage of man-power, men cannot be spared from coal-mining to undertake ordinary maintenance, leave alone developmental work. It is also the case that part of the maintenance and equipment troubles have been due to difficulties in obtaining supplies. MINISTER'S AIM NOT DENIED. In a sentence, the industry is sick because the Minister of Mines will not face up to the issue of adequate compensatory subsidies for increased costs. Since the Minister, is quite evidently aiming at nationalisation, it is only a matter of time, under such conditions, before the mines are ripe for falling into the hands of the State. Further aspects of the. coal-mining .situation will be dealt with in due course. In the meantime the Minister has given a reply—it is not an answer —to the recent summarised statement on the whole subject by the president of the Associated Chambers of Commerce. The Minister has made a number of completely inaccurate statements, and others which are only half-truths. With all of these the Associated Chambers will deal in the course of an orderly survey of the whole of the facts in the coal industry. In the meantime, it is notable that the Minister, while denying that nationalisation of the mines is the policy of the Government—which the president of the Associated Chambers did not suggest—does not deny it is his own policy, which was suggested very pointedly.