The Coal Question William Stanley Jevons

Chapter V - Of the Price of Coal

"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. 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
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]

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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]

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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 coals, 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

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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 5 6

Manufacturing

Derbyshire... Best Coal... 9 0

Common... 6 6

Cost of Getting...5s. to 5 6

North Staffordshire... Best... 9 2

Common... 6 0

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Cost of Getting...2s. 4 6
6d. to

Lancashire... Best Coal... 6 3

Lately... 5 6

South Wales and Large Coal... 6 6

Monmouthshire...
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

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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.

Notes

1. Evidence of Alex. Raby. First Report on Coal Trade, 1800, pp. 76, 77.
2. See Chap. XV.
3. Metallum Martis, p. 8.
4. Mineral Statistics for 1860, p. xxiii.
5. The comparison in the First Edition of the change of price of coal with
the average change of price of commodities was erroneous, owing to a
numerical oversight. The fall of prices between 1794 and 1860 was in
the ratio of 100 to 81. See Journal of the Statistical Society, June 1865,
p. 294.

Chapter V - Of the Price of Coal 56