Of the Price of Coal
The Coal Question: Of the Price of Coal
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Historical E-Book: The Coal Question: An Inquiry Concerning the Progress of the Nation, and the Probable Exhaustion of Our Coal-Mines
Author: William Stanley Jevons
Edition Used: London: Macmillan and Co., 1866. (Second edition, revised)
First Published: 1865
Chapter V "CHEAPNESS and goodness," said Yarranton, "is, and always will be, the great master and comptroller of trade," and the reader will see that the whole question of the exhaustion of our mines is a question of the cost of coal (The Coal Question: Of the Price of Coal) . All commerce, in short, is a matter of price. "Will it pay to do this at this price?" or, "Will it pay better to do this here at this price or there at that price?" Such are the leading questions which govern every commercial undertaking in a free system of industry.
The exhaustion of our mines will be marked pari passu by a rising cost or value (Value theory) of coal; and when the price has risen to a certain amount comparatively to the price in other countries, our main branches of trade will be doomed. It will be well, therefore, to inquire whether there has been any recent serious rise in the price of coal such as would be the sign of incipient exhaustion. Had a considerable recent rise occurred, as I have heard asserted, it might be argued that no such evil results have followed as alarmists prophesy, and then the optimist would conclude that, perhaps, after all, "dear coal" is not the fatal thing some suppose; this country may surmount that evil, it will be said, as it has surmounted worse evils.
From what reliable accounts I have been able to meet with, it is certain that there has been no such recent rise of price as could at all operate as a check upon our industry. Yet it is certain that coal has been cheaper in the past than it can again be, and that in the Great Northern market the growth of demand during the last century has been accompanied by a considerable but indefinite rise of price.
Where coal, indeed, used formerly to be had almost for the asking, it now bears a fair price. In the palmy day of the Staffordshire "Thick Coal" the price of the best large coal was 6s. per ton of 21 cwts., and 120 lbs. to the cwt., or 5s. 4d. per ton of 2,240 lbs. Coal was a drug about Birmingham, "so much so, as to cause the coalowners to give great extra weight.... There are many other veins at present not thought worth getting, or from one to three yards thick; inferior coals are sold at 3s. per ton, and from that upwards, in proportion to their quality; the small coals, for working engines, are sold from 1s. to 1s. 6d. per ton; the supply produced for the manufactures of the country would always be sufficient, in my opinion, without increasing the present price, as there are many new collieries now opening."[1]
The anticipations of the Ironmaster who gave this opinion before the Committee of 1800 have not proved true. The price of best coal in Staffordshire is now nine shillings or more per ton, and many writers concur in stating that the magnificent "Thick Coal" of South Staffordshire has been either used or wasted away. The wonderful "black country" already leans for its supplies of coal and ore upon neighbouring parts;[2] it seems to be already overshadowed by the approaching decline of prosperity. "He that liveth longest, let him fetch fire furthest," was a proverb quoted by Dudley,[3] two and a half centuries ago, with reference to the lamentable waste of the Thick Coal, and now the force of the proverb is becoming apparent.
The late strike of Staffordshire miners was occasioned by the high price of coal. The activity of the iron trade for the last year or two had led to several advances in the price of coal and rate of wages; but though the price of iron remained pretty high, it was found the trade could not bear the cost of coal. To prevent injury to the staple industry of the district, the coal proprietors, somewhat arbitrarily, determined to reduce the price of coal by cutting down the wages of the miners, and in this they have been at least temporarily successful. But it is feared that the interruption of business occasioned by the strike may have already contributed to forward that migration of the iron trade to the newer coal-fields which must soon take place.
It is almost impossible to get such general and uniform statements of the price of coal as would warrant us in drawing comparisons over long periods of time. The variations in the quality, size, and distance of supply constantly affect the price, independently of duties and other obstacles. Almost all the quotations of prices refer to the London market, and are useless, because the prices there are not only affected by freights, but have been burdened, more or less, by duties and charges of a most complicated character.
The only series of prices I have been able to make out gives the average price of the best large coal as put free on board at Newcastle, and the other shipping places of the North. The first two prices (1771 and 1794) are derived from the Report of the Select Committee of the House of Commons on the Coal Trade in 1830 (p. 7). The prices of 1801—1851, are from a table of yearly prices published by Mr. Porter, in his "Progress of the Nation" (p. 277), and are the average shipping prices as returned to the Coal Exchange in London under Act of Parliament. The last price (1860) is an average computed for the General Committee of the Coal Trade of Newcastle, and communicated to the Mining Record Office. [4]
| Average Shipping Price of Newcastle Coal | ||
|---|---|---|
| Year. | s. | d. |
| 1771... | 5 | 4 per ton. |
| 1794... | 7 | 6 per ton. |
| 1801... | 10 | 4 per ton. |
| 1811... | 13 | 0 per ton. |
| 1821... | 12 | 8 per ton. |
| 1831... | 12 | 4 per ton. |
| 1841... | 10 | 6 per ton. |
| 1850... | 9 | 6 per ton. |
| 1860... | 9 | 0 per ton. |
This is probably as good and comparable a series of prices as could be got; yet it is very difficult to draw inferences from it beyond the contradiction of any recent considerable rise. The great rise of price up to 1811 was more or less due to the depreciation of gold and paper currency, or to the other causes, whatever they may have been, of the great general rise of prices. The subsequent fall is, of course, partly due to the restoration of our currency, and to the other debatable causes of a general fall of prices.[5]
There are, however, at least two other circumstances not to be lost sight of in comparing early and late prices of coal.
Firstly, there is the limitation of the vend, an arrangement which used to exist among the coal proprietors of the North, to limit the amount sold by any colliery, in order that each colliery might have a share of the trade proportional to its capabilities. This combination maintained itself at intervals for about two centuries, and was much complained of because it was supposed to raise the price of coal. It may have had some effect, especially upon those better kinds of coal of which the price is quoted.
Secondly, there is the practice of screening [[coal]s], whereby a considerable portion of the coal raised at the beginning of the century used to be separated out and burnt as waste, the whole cost of raising the coal being paid in the price of the large coal sold. Though coals are still generally screened, the "seconds," "nuts," and even the "dead small," or "slack," are usually sold for manufacturing purposes at prices proportional to the size of the coal. The total price thus returned is increased by more than is represented in the price of the large coal.
Both the limitation of the vend and the practice of screening would thus tend to raise the earlier quotations of price of large coal, as compared with late quotations, and thus disguise the real rise of price due to the growing demand and the depth of the mines.
I take it, therefore, to be pretty certain that the cost of the best quality of Newcastle coal has been considerably more than doubled within a century by the growing depth of the collieries. It is not to be said that trade is much affected by the price of the very best coals, which are chiefly valued for household purposes. But from the price of such coal we learn what we should have to pay were all coals drawn from the depths of 1,000 or 2,000 feet or more. The mines of South Wales, Scotland, and Yorkshire are yet shallow, and the coal cheap enough. The cost of the coal, especially, which supports the great and rising iron trade in South Wales and Scotland, is only four or five shillings per ton.
The following are some returns of the price of coal published by Mr. Hunt in the Mineral Statistics for 1860:—
| Description of Coal | Price per Ton | ||
|---|---|---|---|
| s. | d. | ||
| Newcastle... | House Coal... | 9 | 0 |
| Steam... | 8 | 0 | |
| Gas, Coking, and Manufacturing | 5 | 6 | |
| Derbyshire... | Best Coal... | 9 | 0 |
| Common... | 6 | 6 | |
| Cost of Getting...5s. to | 5 | 6 | |
| North Staffordshire... | Best... | 9 | 2 |
| Common... | 6 | 0 | |
| Cost of Getting...2s. 6d. to | 4 | 6 | |
| Lancashire... | Best Coal... | 6 | 3 |
| Lately... | 5 | 6 | |
| South Wales and Monmouthshire... |
Large Coal... | 6 | 6 |
| Small... | 4 | 6 | |
| Scotland... | Average... | 4 | 0 |
| Cost of Getting... | 2 | 8 | |
The average cost of getting coal throughout the country was stated to be 4s. 10d. per ton, not including profits, rent, and other charges.
In the very various prices of coal from the several collieries of the Newcastle district, we have evidence of the rise of price due to the depth of mines. Shipping prices of coal are given in full detail in the Report of the Committee of 1838 (p. 240); and taking the coals classed as Newcastle Wallsend only, we find the price varying from 6s. 6d. to 11s. 6d., the nuts and small coal ranging down to 3s. 9d. It is obvious that the difference of five shillings per ton in Wallsend coal must either be absorbed by the expenses of deep mining, or else it must make the fortune of the proprietors or workers of the mines. That in some cases prodigious profits are made, as in the case of the original Wallsend mine, is well known. But this cannot usually be the case, otherwise the wide areas of land yet known to contain untouched seams of coal of the finest qualities, would at once be broken up by speculators, who are never wanting. That deep mines are so deliberately opened is a sufficient proof that the highest prices obtained are, taking all mining risks and charges into account, only an average equivalent for the capital invested. These deep pits can only be undertaken at present in search of coal of the finest household quality. The Monkwearmouth Pit was sunk to win the Hutton seam, which yields coal of the highest possible character. The Dukinfield Deep Pit was undertaken to follow the celebrated Lancashire "Black Mine," a four feet seam of the finest coal, selling for 10s. per ton at the pit's mouth, the small coal returning 5s. 6d. per ton.
The high prices, which are necessary in order to tempt speculators to undertake deep mining, afford a rough but sure indication of the effect of depth upon the cost of coal. When the general depth of coal workings has increased to 2,000 feet, little or no coal will be sold for less than 10s. per ton, and the choice large coal will have risen to a much higher price. Our iron and general manufacturing industries will have to contend with a nearly double cost of fuel. And when with the growth of our trade and the course of time our mines inevitably reach a depth of 3,000 or 4,000 feet, the increasing cost of fuel will be an incalculable obstacle to our further progress.
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