THE COALMINERS.

Star (Christchurch), Issue 12726, 22 August 1919, Page 4

THE COALMINERS.

MR MASSEY IN REPLY. [Pee Press Association.] WELLINGTON, August 21. The following reply to the representations of the New Zealand Labour Alliance on the mining dispute lias been forwarded by the Prime Minister to Mr J. Roberts, secretary of the Alliance :—• Cabinet has given careful consideration to the matters submitted to it by a deputation representing the National Alliance of Labour on August 16. In all matters of tho kind it must be borne in mind that the Government has no power to dictate to either party in the industrial dispute, nor has it authority to intervene except by express invitation of the parties, but the Government is necessarily concerned with the interest of the silent third party in all such disputes, namely the general public, and when the Government is asked to impartially review such a position as has arisen with respect to the coal industry, it is bound to consider not only to what extent the terms of settlement proposed by "one party are fair and just from the point of view of the other party directly interested, hut also the effect upon the general public Of such settlement, It is consequently necessary for the Government in a case like the present to ehdeavour to ascertain as accurately as iiossible what is the actual rate of profit made by the employers as they now exist, because if such rate of profit does not exceed a fair and just mercantile profit it is obvious that any increase in the cost of production must be charged to the consumer, the general public, whereas if the profit under existing conditions exceeds a fair commercial profit there exists a margin which may properly be used to increase wages and the cost of production without an increase of cost to tho consumer.

With tlie object and for the purpose of ascertaining the rat© of profit made under existing conditions by employers engaged in the coal industry, the Government directed an inquiry under the Cost of Living Act by the Board of Trade, associating with the Board of Trade under powers conferred by that Act, Mr Janies Hight, professor of economics in Canterbury University College. That inquiry was conducted with great care and ability, and the report, dated May 20, 1919, has been printed and circulated. The Government has no reason to doubt the accuracy of that report, which shows that the average dividend to shareholders in companies owning coal mines in New Zealand is less than five per cent, without making any provision for depreciation and sinking fund, and the Government has further means of itself confirming the accuracy of those figures by reason of its control of the* Sjiato coal mines.

It has been suggested hy the miners that the result of the Board of Trade investigation is not satisfactory and that a different result might have been arrived at hy an inquiry held by a. Royal Commission, hut the scope of matters which may be_ the subject of a Royal Commission is very strictly limited by the Commissions of Inquiry Act. It is not lawful to issue a Royal Commission to inquire into the private affairs of any person or company. For the purposes of the Cost of Living. Act alone Parliament has granted special powers of inquiry into private concerns, out has required that any such inquiry must be conducted by the Board of Trade 'or its delegates. It, therefore, has been apparent to the Government that in respect of the coal industry, an increase in the cost of production cannot fairly he borne by the mine owners. The Government has, therefore, to approach its consideration of wages and conditions from the point of view that prices to the consumer will be increased by an increase in the cost of production. The first point raised by the deputation was an objection to the condition attached to an offer mad© by the mine owners, that condition being that increases in wages and contract prices should not apply in mines where industrial agreements were in force until those industrial agreements had expired. The view taken by the Government upon this point is in accord with that of the miners and of the depatation; indeed, the Government introduced into Parliament in the second session of 1918 section 18 of the War Legislation Act of that year, which for the first_ time empowered the Court of Arbitration to alter the provisions ot an existing award during the term of such award, and required the Court to take into its consideration .alterations in conditions affecting the industry and the cost of living, which had occurred since the date of the award. The Government, however, cannot see that there is any foundation for the suggestion made by Mr Hampton that tho object of the condition was to prevent the operations of the national organisation of coal miners. It is clear that the mine owmers, though separate agreements exist- in the case of mines, have agreed to meet members of the national organisation, and we have met them in conference on two occasions, but it must be recognised that there are practical difficulties in arriving at an agreement applicable in its details to every coal mine in New Zealand, and that if a national agreement is capable of expression so as to have full application to every mine, it must contain separate schedules expressing special conditions for each of the several mines. The Government is of opinion that before the national or-

ganisation insists upon a national agreement it should reduce to concrete form tile terms of such agreement and demonstrate the Aethods by which provision can be made for essential differences between the conditions and requirements of the several mines. With regard to your statement that the improved _ working conditions, for which the miners were asking, were practically all in operation already m the State mines, and that the State mines were paying a minimum waop averaging 14s 71 d per shift for three mines, the Government has been unable to find evidence that working- conditions in the State mines are better than the average conditions existing in other mines, but the minimum wage is very rarely paid because higher wages are earned. The reference bv vou ”to the average weekly earnings" in the i oint Elizabeth mine for the six months ended September 30. 1918, does not provioe a basis of comparison with other mines, because the vrliolfs of the coni from the Point Elizabeth mine is now produced from pillar working, and is therefore, easily gained. ’ The deputation appeared to attach some importance to tiie fact that the price charged to consumers for coal from the State coal mines is less than that charged for coal from private mines. The deputation was apparently not aware that it is only with respect to coal supplied for household purposes that the difference in favour of the consumer applies. For all other purposes cost is the same for coal of the same quality, whether produced in the State coal mines or in private mines, but the State Coal Department actually makes a loss in respect of household coal and. therefore, the difference in price cannot be used as an argument in the consideration of the questions which have arisen between the mine-owners and the workers. Wi th the contention of the deputation that hewers in a mine should not bo required to do any trucking, the Government is in sympathy, subject to the necessary limitation that an exception to the general rule in that respect should be made in cases where' it is demonstrated that coal cannot be extracted at_ a reasonable cost without some combination of hewing and trucking.

Mr Hampton summarised the subjects in respect of which the deputation desired the consideration of Cabinet by stating the following three questions : 1. “Are the miners entitled to a wage equal to pre-war conditions? 2. “ Does the employers’ offer bring the miners’ wage up to that standard ? 3- “If no, why not?” There is little difficulty in consideration of and reply to the first question, as the answer already has been given by the Government when last year it introduced into Parliament legislation which enabled the miners to have thenwages reviewed by the Arbitration Court and raised where the Court considers that increased cost of living, together with conditions affecting the industry, warranted the same. But the second question, which, put in other words, is a question whether the offer of increased wages and prices recently made by the mine-owners would, if accepted, be sufficient to compensate fertile increase in cost of living above prewar cost, is one which only arises because the miners do not consider that the official figures on the subject are accurate. Since August, 1914, the following increases have been granted to miners:— Contract "WageWorker. Worker. Date. Per cent. Per cent. May, 1916 . . 10 10 June, 1917 . . 7i 10 Sept., 1918 . . 7 1 10 Total ... 25 30 The owners’ offer of the present month is a further increase of 10 per cent to contract workers and 15 percent to wage workers, and if accepted would raise the rate of earnings in the case_of contract workers to an average of 35 per cent above pre-war rates and in the case of wage workers to 45 per cent above pre-war rates. That increase appears from official data to be sufficient to cover the increased cost of living and, therefore, to comply with the terms of Mr Hampton’s first question. > The answer to the third question is that there should be no reason to prevent full effect being given to the answer to the first question, and if the matters which Cabinet have to consider at the invitation of the deputation can be reduced into the compass of Mr Hampton’s three questions, then the single matter in dispute appears to be whether, in fact, the official data can he fully accepted by both parties to the original dispute, and if not, whether both parties cannot agree upon some method of testing the accuracy of the official data which would be satisfactory to both. The Government itself has the utmost confidence in the work and results of the Government Statistician and tlie completeness of the inquiry made_ by the Board of Trade, but the margin between the sum arrived at by the addition of 35 per cent and 45 per cent respectively to pre-war earnings, and the sum arrived at by adding the increase in the cost of living to prewar earnings, is not large,' and a fair argument mav he open on the question whether the margin extends beyond one side of the line or the other, and for that reason the Government is of opinion that the quantum of increase cannot in fairness he definitely fixed hv the decision of the mine-owners alone or hv the deci-ion of the miners alone, and should, if possible, bo the

subject of further consideration by both parties. . But here again comes in the question of the effect upon the consumer and the general public- The Government finds from reliable estimates that the offer recently made by the mineowners and rejected bv the miners involves a total increase in the cost of production of from £125,000 to £150,000 and a consequent increase in the price per ton of coal to the consumer of from 2s to 3s. If all the demands made by the miners were conceded (including the six points provisionally waived by the miners), the Government finds that the total increase in the cost of production would he approximately £2,000.000 (two millions), and the increase in the price per ton to the consumer approximately 20s. These figures illustrate and emphasise not merely the wide difference between the demands of the miners and the concessions of the mine-owners, hut also the grave importance to consumers. The result is that while the Government considers an increase in price to the consumers of from 2s to 3s might he histified by the conclusion arrived at, in the Government’s answer to Mr Hampton’s first question, and though it cannot decide that there mav not ho elements outside the official data which might be found to justify some slight addition to that increase of from 2s to 3s per ton, yet first, the Government do not consider it probable that such elements, leaving the official data open to fair question, do exist. and secondly, that even if it could he shown that a margin does exist, which is not fully covered by the owners’ recent offer, such margin could not be large enough to be of practical importance. If the deputation desires the view of the Government upon the second question for the guidance of parties then emphatically the opinion of tho Government is that, firstly, the accuracy of the official data can bo relied on, and secondly, that accepting those data, it appears clear that tho increase offered by the owners would raise the miners’ earnings to an amount at least equivalent in purchasing power to pre-war earnings. There remains a question of the utmost importance which does not fall within the scope of Mr Hampton’s matter, hut which indirectly was rue subject of discussion by the deputation. There exists'in New Zealand a Innmber of coal areas still unopened and still undeveloped. 'The number of men engaged. in mining in New Zealand is insufficient to entirely man and equip the mines which have been already opened, and the supply from the existing mines has been proved to be insufficient to meat tho requirements of the Dominion. Unless the number ol- miners is largely increased, production by means of undeveloped mines is impossible. An increase in the number of miners cannot affect the rate of wages or earnings so long as all that are added can find immediate and full employment. None of the suggestions of the deputation will meet this grave difficulty, which is present and insistent by reason of the present shortage of the coal supply, wnich has demonstrated that the number of men employed cannot by their labour during hours limited by existing agreements produce enough to even approximately meet the demand. That a further reduction of the hours of work would further reduce the possible supply is fairly obvious, but that is not the point of tho Government's present comment. The miners by their organisation made representations to the miners of Australia which prevented the Government proceeding with its efforts to procure labour for the mines from that source. The Government is unable to agree that the statements of the New Zealand labour organisation to the Australian organisation with respect to the conditions of mining work in New Zealand were justified. The conditions that any addition to the number of miners must be of unionists is admitted, but there must be an addition to the number of miners to enable the new development to which reference has been made. Even the Stats is unable to enter upon the enterprise of opening new mines and providing the necessary facilities for that purpose, because it could only obtain the labour necessary for that purpose by reducing the production of the existing mines. The Government invites the deputation to state frankly the position of its organisation upon this subject and to meet the Government fairly in some arrangement to ensure such addition to the number of minors engaged in the coal industry as will enable the Dominion in the near future to rely upon its own supplies of coal for the purposes 'of its growing industries.