NATIONALIZATION A policy which of late years has been espoused by the Miners' Federation of Great Britain is that of the nationalization or so cialization of the coal mining industry. Whatever form it takes, whether ownership by the State, with State control, or some form of guild socialization—as, for instance, ownership by the workers in the industry for their benefit—it implies the elimination of the individual employer and the destruction of private enterprise.
The miners, however, did not welcome Government control of the coal mines when it was first mooted in Dec. 1916, being sus picious of what was entailed thereby. On Dec. 20, 1916, the exec utive of the Miners' Federation adopted a resolution, "That the executive views with the utmost concern the declaration of the prime minister that the Government contemplate taking control of the whole of the mines of the country, and before any definite action is taken, we ask the prime minister to grant an interview to the executive committee at the earliest possible date." Event ually, that view has completely changed.
At the beginning of 1919, when the miners put forward a series of demands, there was included a demand for the "nationalization" of the collieries. And again, upon the issue of the four separate and diverse reports of the Sankey commission (see SECTION IX.), the report of the miners' representatives advocated State organi zation and ownership. The report of the chairman (Mr. Justice Sankey) recommended the immediate acquirement of the coal royalties for the State, which was to pay just compensation to the owners thereof. He also recommended a scheme for the local ad ministration of the collieries, and that legislation be passed for acquiring them for the State, after the scheme had been worked for three years from the date of the report ; during that time the coal control, then in existence, was to be continued. The reasons for nationalization of minerals and collieries which animated the miners' representatives and the chairman of the commission may be epitomized as follows : (a) Coal being a principal national asset of the United Kingdom, and a wasting asset, it is in the State's interest that it should be worked and used to the best advantage.
(b) The ownership of coal is vested in about 4,000 owners, among whom, though many are reasonable, there are some who are a hindrance to the development of the industry.
(c) Under a system of corporate ownership, boundaries of under takings are arbitrary and irregular, making it difficult to work the mines, while the coal at present left between the separate mines is lost.
(d) Drainage and pumping of the mines could be more effectively carried on under a system of nationalization than under individual ownership.
(e) Competition between coal owners for the export trade fre quently prevents the industry from getting the full value of the coal.
(f) The system of inland distribution of coal being in the hands of many private individuals, the consumer is unable to obtain the coal as cheaply as he should. It is estimated that there are 28,0o0 retail distributors of coal in the United Kingdom.
(g) There are about 3,00o pits owned by about 1,5oo companies or individuals in the United Kingdom. Were these combined under State ownership, standardization of materials and appliances would be possible, with the resulting economies.
(h) Though all the above economies and improvements could be effected under a system of unification without nationalization—by a system of "rationalization," as it has come to be called—it is, or was, agreed that, as the workers think under private ownership they are working for the capitalist, and when a strike takes place a contest between labour and capital is set up which is much less likely to apply with the State as owner.
The miners' representatives were opposed to any compensation whatever being paid to the owners of the coal (royalty owners). Sir Arthur Duckham, a Government nominee on the commission, reported in favour of unification under private ownership. The colliery owners' representatives and two of the Government nom inees on the commission reported in favour of the State purchase of the coal but against nationalization of the collieries. They stated that "the evidence submitted to the Commission affords no ground for belief that nationalization would have the effect of reducing the price of coal," and that "without co-operation, na tionalization, even if otherwise advisable, would in no way secure increase of output or continuity of production. The evidence has clearly shown that strikes are not prevented by State ownership and management," and were emphatic that nationalization "in any form would be detrimental to the development of the industry and to the economic life of the country." The Government of the day rejected nationalization, and after the great strike of 1920 the objective for the time being of the miners' representatives had got narrowed down to a national pool of wages and profits. But nationalization of minerals and mines is the avowed policy of the Labour Party in Great Britain.
As a remedy for such defects as unscientific use of coal, costly getting of coal, imperfect selling and transportation arrangements, etc., the Samuel commission (reported March 6, 1926) did not recommend the adoption of the policy of nationalization. They remained unsatisfied that such a system was workable or that it offered a clear social gain. "We perceive in it" they said (p. 233 of the report) "grave economic dangers, and we find no advantages that cannot be obtained as readily or more readily in other ways." They were of the opinion (p. 237) that, "The way to prosperity for the mining industry lies along three chief lines of advance : through greater application of science to the winning and using of coal, through larger units for production and distribution, through fuller partnership between employers and employed. In all these respects progress must come mainly from within the industry." The author of Coal Mining Industry during the War in the con cluding chapters of his work, refers thus to nationalization:— "The economies of administration and working attainable under a system of aggregation must be patent to every broad-minded and enquiring student of the mining industry. Keen competition between rival coal owners allows the foreigner in normal times to exploit the coal output of the country. Great economies could be achieved, too, by a centralized system of purchasing of stores, and important far reaching economies could be secured by centralization of pumping and to some extent winding plants, and further, underground haulage would be simplified and cheapened by the abolition of eccentric boundaries.... The gains or drawbacks of nationalization, on the other hand, hinge upon definite principles of human action and experience. Whatever results may accrue from such a policy, from the record of observation I find great difficulty in believing that it would make for efficiency. During the period of control the representatives of the State did their best, and they were often unfairly criticized, but it is certain that no experienced head amongst them would care to put forward the claim that public management has a genius for either efficiency or economy. It was imperative at the time to impose unified action in important matters, where there was no existing machinery within the industry capable of doing so. But the virtue was in the co-ordination and not in the head directing it, and there can be no doubt that joint action from within, had it been available at the moment it was required, would have produced a more effective and economical mechanism. A prominent instance of this was the system of voluntary district coal distribution which was carried on by a committee of the coal owners. Even if nationalized control were not vetoed by the inherent physical difficulties of the case, it would still have the disadvantage of removing from the industry the great energizing forces of personal responsibility and initiative." In Great Britain and America there are no State-owned mines. The German State formerly owned a large number of collieries. The Prussian State owned and managed three large coal mines in Upper Silesia, now in Polish territory, three lignite mines and eight bituminous coal mines in the Ruhr, together producing about tons per annum. Prussia also had control of the Hi bernia coal mines, which, however, were run on the lines of a private company. In 1924 all these mines were denationalized, though the State continued to hold all the shares and other capital, the only difference being that, though the directors are appointed by the State, the officials and control generally of the mines are not under the State.
British Empire. In the British Empire there are several cases of State ownership of collieries on a very small scale, e.g., the Udi mine in Nigeria, the Mount Mulligan mine in Queensland and the James and Liverpool collieries in New Zealand.