per ton for distribution. Here in London probably our wages cost per ton covers a sum equal to the total distribution cost in a place like Newcastle. Before one can accept the figure, I suggest, it would be very desirable to see the balance sheet and see whether the costs have been properly and fairly apportioned. Mr. Roddis speaks of a gross profit of something about 5s. Id. a ton bringing him in a net profit of perhaps 2s. It is an extraordinarily low rate of cost when you find here in London that a coal carter alone, for taking the coal out, gets 4s. 6d. a ton, and there are loaders and fillers and cleaners and pickers out of slate to be paid beyond that. You have one cost alone there which is considerably more than the total cost. So I think before you take it as final, at all events, that these are the net profits, you might have to see the balance sheet and analyse it and see whether the costs have been fairly apportioned as between department and department. I saw a balance sheet not long since where one quarter's charge for maintenance expenses was, I think, a sovereign, manifestly an unfair charge to make to the department for managerial expenses. Returning to your question. I had thought that the profits returned by the gentlemen concerned were the profits of their trade. It is a very low profit per ton for domestic coal only. You can see here that in no case have we exceeded the selling price obtained generally in the various places, in a good many cases we have sold at a lower figure, and yet on those figures we can show a much greater net profit per ton generally than the trade is showing you for London. Mr. Shinwell: Even allowing for any readjustment which might require to be made as a result of an analysis of the balance sheets? Mr. Cockbaine: I think so, yes. Mr. Shinwell: The profit would be very much greater than the profit shown by the coal merchants? Mr. Cockbaine: Yes. Mr. Morton: I, for one, as coming from Yorkshire, probably the nearest district to our friend from Manchester, would not like it to be accepted that our profits show the same margin as our friend there has obviously shown. I have prepared here, after reading your White Paper, statistics which will probably be useful to you, because I have adopted, as nearly as possible, the lines the argument seemed to run in, and which I am prepared to leave. So far as my Society goes, the margin of profit between the price at the station and the retail price delivered is 12s. 4d. in March. The costs, of which I will give you details, the expenses, work out at 10s. 114d. per ton. That does not leave a margin of profit of anything like 5s. I have given you also, instead of picking one pit or one particular quality, the whole of our supplies for one month, showing the qualities under which we sell them. We divide the whole of our supplies into four different qualities; at least we sell at four different prices. There is considerable variation in the cost to us of all . these coals which we sell at one price. In what we name as Seconds there are seven different prices. You will see quite clearly and quite easily that the average cost of the coal we sell at 2s. 10d. is 2s. 03d. Mr. Shinwell district? How do your prices compare with traders in the Mr. Morton: The prices of the traders in our town are not uniform even among themselves. In some qualities we are probably a penny less, in others we perhaps are a penny more; but, as far as my experience goes, our price pretty well rules theirs. That is my experience, without being able to give you any really definite information. As far as I can see, they seem to fix their prices as near as possible by ours. If we come down they very often follow suit. I should like to say that we had no increases on our prices during the threatened dispute. For twelve months we have not had any alteration in our prices except to create a lower grade of coal than what we were selling previously. Mr. Shinwell Does that apply to traders in the area also? Mr. Morton: As far as I know, they have increased their prices; but, in the same way as our friend from Birmingham mentioned, we have great difficulty in proving exactly what their prices are. Mr. Shinwell: Would you say that the effect of maintaining your prices prevents the traders in the district from boosting up their prices? Mr. Morton: I believe so. I believe that it would do, more particularly so if we had not the great difficulty of obtaining proper supplies. The difficulty we have in obtaining supplies is this the collieries we deal with in the normal way appear to have reduced supplies during the last few months. I do not see any reason why they should, except that there is a greater demand. Probably our friends in London come up and offer much better prices, or something like that. The result is that we do not get our normal supplies. We cannot do anything but complain in a formal way, simply because we are not under contract. After the quantities we get from these collieries in order to supply the demand are exhausted, we have to go outside. We have either to pay more for the coal or obtain an indifferent grade of coal. The result is that we probably get a little bit of both. We feel sure that the complaint we have had with regard to the quality is mainly in connection with the coals we have had to get from outside factors in order to try to make our supplies sufficient. Mr. Nelson: I should like to say that the figure you gave just now of 9d., I think it was Mr. Shinwell: In connection with the coal mechants? Mr. Shinwell: No, not exactly. I have it in view that some of the representatives here this morning spoke of profits much lower than 5s. Mr. Nelson: Yes. Mr. Shinewell: But I could not get out of my mind the startling contrast as between the 5s. mentioned by some of the representatives on the one hand and the 9d. submitted to me by the coal merchants Mr Nelson: That same thing startled my mind. I cannot. explain it; but there must be some gross difference in some form or other as to arriving at those particular figures. The coal markets are open to them just the same as to us. They practically sell at the same price as we do We have proved that we pay better wages than they do, and our costs of distribution are less. There must be some difference that we cannot at present understand. Mr. Shinwell Mr. Morton has just told us his net profit over a period of how long? Mr. Morton: For that month. Mr. Shinwell :-On one month was 1s. 51d. Your average net profit during March was 1s. 51d. What has been your average net profit over, say, the last six months or the last financial year. Mr. Morton: In the last financial year our average net profit per ton was 2s. 83d. Mr. Shinwell: That has no reference to dividends, of course. Mr. Morton: No. Mr. Shinwell 2s. 83d. actual net profit per ton of coal sold? Mr. Morton: Yes. Mr. Shinwell: I think that perhaps I have got all the information I require, unless as I pointed out during the earlier stages, something could be said to me on the question of distribution. It does appear that one of the difficulties confronting us, if not the chief difficulty, is that of effective distribution. On that matter I should like the assistance of the Co-operative Societies. However, unless there is anything more to be said, I shall not pursue the matter further this morning, but analyse the reports of the various representatives in addition to whatever other infomation you leave with me. Mr. Morris I would like to give you our figures. I have the figures for the last complete half-year ending March, 1924. During that period we distributed a tonnage of 20,590 tons. That is all delivered in hundredweight bags, or practically so. It is very little we deliver in any other form. We sell to members and to members alone. If they are not members, we absolutely refuse to serve them. Our carting expenses amounted to £6,249 8s. 4d. and the distribution expenses to £1,196 18s. Od. That is 7s. 2 d. a ton. During that period our profit returned to the purchasers, the members, is 2s. per £1. For the previous three half years our profits have been 1s. 11 d., 2s. 03d. and 2s. 6d. In the corresponding period the figure was 7s. 6d. per ton. Then we come to the summer period. That is from March to September, 1922. The cost per ton during that period was 9s. 1d. In the corresponding period of 1923 it was 7s. 11d. per ton. The difference which arises between the two was brought about by the fact that there was a reduction in transport wages in 1922 as against 1923. As to wages, we pay 5s. to 7s. 6d. over and above the Trade Union rate of wages in that district. Our prices compare with the ordinary.. Our turnover during the last six months has increased at the rate of about 170 tons per week, and, with a membership of 17,000, it shows that we must be appreciated As a matter of fact, we have had letters of appreciation owing to the manner in which we served our customers during the period of the Railway Strike. We kept our prices down when others were going up. Mr. Shinwell: You have no difficulty in obtaining your supplies? Mr. Morris: We have had difficulty, in company with everyone else, during the period January to March. Our wagons were rot bringing us, shall we say, the usual normal quantities of coal. We had to pay high prices. We did not pass on the increased prices to the full to our members. Take, say, colliery A. Their advances from October to March were 6s. 6d. Our retail advances over that period were 3s. 4d. Colliery B's advances were 6s. 9d. We advanced 3s. 4d. Colliery C's advances were 4s. We advanced 3s. 4d. What has enabled us to do this is the fact that we had a little contract for about 20 per cent. of our supplies. Otherwise it would have had to be a different proposition. Mr. Shinwell: That will be very valuable information. You will have no objection to leaving the balance sheets? Mr. Morris I have them all here and I have the expenses in full detail. They do not forget to charge the Coal Department with everything they can. Mr. Youngs: There is one remark I should like to make, having regard to some of the observations that have been made by the representatives of the Wholesale Societies. I am that if there is something that is not very clear, and you want any further elucidation, our representatives will be very pleased to give you that elucidation and help you in any way they can, and if there is some point which has been missed, so far s we can we shall be very pleased to render you that assistance. I am sure that that will apply to my colleagues of the distributing Societies. Mr. Shinwell I welcome that. It makes it quite unnecessary for me to ask for it. I was quite sure of that. It is in accordance with your promise at the outset of our proceedings to give me whatever information was desirable. I note with some pleasure your repetition of that assurance. Now I want to thank you for coming here this morning. It has been very good of you. Some of you have come long distances, and probably at some inconvenience, to meet me. I felt that it was proper that I should meet you so that you should, if I may use an expression that has received some note recently, put your cards on the table. As to whether any of them have been withheld I cannot say at this moment; but when the whole of the information is before us we will be in a position to judge. 1 have approached this question in an impartial spirit. I am only concerned, in my capacity as Secretary of this Department, with the needs of the customers. I am not concerned primarily with the needs of the coal merchants nor, for that matter, the needs of the Co-operative Societies, and I shall not extend to either side an advantage that I feel disposed to withhold from the others. All that I ask for is such information as is essential in the interests of the community. On your part you have promised to give it, and much of it has been vouchsafed this morning, and for that I thank you very much. I am obliged to you. (The proceedings then terminated.) (48210-6) Wt. 5948-3261 1500 6/24 H. St. G. 6 |