Mexborough and Swinton Times November 19, 1926

Colliery Amalgamation
The Pros and Cons
Interview with Maj Leslie

The policy of the huge undertaking which he controls had already indicated major J Leslie (chairman of the Denaby and Cadeby collieries Ltd) as a believer in the greater efficiency of the big unit in modern industry. This week we talk an opportunity of seeking a more general statement of his view on this subject, which form so large and important a section of the last Coal Commissions report.

“Your statement of the annual meeting of the Denaby and Cadeby collieries seems to indicate that you are a believer in amalgamation in the coal industry. Are you prepared to take it further and suggest that it would be for the advantage of the industry as a whole if the process became general?”

“If we can get the necessary efficiency of management. The bigger undertaking needs bigger men. All the advantages of the big concerns are lost if you have not the men to make the most of them.”

“Is the development through technical education of the right men, keeping pace with the tendency to large groupings of industrial concerns?”

Captains of Finance Wanted

“There is something more than technical efficiency required. The technical men of the real industry are second to none. But it is not so much the technician that I am referring to. The men who are wanted to run each such big undertakings as we are discussing have to be more financial experts, with a wide grasp of policy and commercial practice.”

“And those are the men who are difficult to find?”

“Well, yes; good men are always difficult to find. The late Mr Markham had a great organisation. He had it because his undertaking was big enough to pay for the best man in each of their department. Most undertakers could not afford to pay the price for such men.”

“Then it cuts both ways; not only must the men be big enough for the control of such large and intricate dealings as amalgamations on a large scale demands, but the undertaking must also be big enough to command the services of the best, and therefore most expensive men?”

“Yes.”

“Assuming the men to manage them can be found, you do expect the large unit as the best one for the modern industrial world?”

“Yes, because of their greater efficiency in the command of capital, and the spreading risk to the shareholders, as I said in my speech at my Companies meeting last week; and because it tends to cut out the fierce competition and underselling.”

“How does amalgamation affect the relations of master and man – does it tend to lessen the liability to periodic upheaval such as have occurred in the coal industry in the last few years?”

A Course of Stoppages

“I think this stoppage would have occurred, amalgamation or no amalgamation.

You see in South Yorkshire since the war there has occurred a thing which never occurred before. We used to send great quantities of “Yorkshire Hards” out to the Baltic every summer. Now, during the summer, we are having to restrict output by working short time, and to stack our coal. None is going to the Baltic now. That means a heavy summer drop in prices. The coal industry, it must be remembered, has a wages bill in much larger proportion to its profits than any other industry. And to this industry with the largest wages bill comes the greatest fluctuation of prices. Unless they are stabilised by returning to the gold standard you at once turn a slight profit in the coal industry into a serious loss. No area is making 2 shilling a ton profit, which is what the rise in sterling cost the coal industry. I don’t say that amalgamation would prevent stoppages such as this; I do say that if we do not find some kind of stabilising prices we shall have this trouble again.”

“That suggests some kind of national control of the industry, at least as to prices?”

“I won’t go so far as that. I think such a development must take place voluntary. You must get the big men to agree on it.”

“And that agreement will be more readily reached if and when, like many other industries, the coal industry as a raise itself in big units instead of scattered and small units?”

“Oh yes. If you can get five big fellows into one room, working under one control, you do away with the distrust with which they formally looked on each other, and you have taken a big step towards joint, voluntary action.”

The Personal Element

“Do you find a definite trend of feeling towards the principle of amalgamation in your industry?”

“The personal element enters in a good deal. If you’re going to affect economies it means someone may be cut out, and someone is going to have to work under someone else. If you’re going to make two or three big undertakers into one, you might have joint heads, but there has to be someone in supreme control, and naturally each man has an objection to handing over to someone else.”

“But what do financial considerations – the greater facility for obtaining capital, and the greater security of return through the spreading of risk – outweigh these merely personal considerations in the end? I mean, want the man who provides the money ultimately dictate the policy, without regard to such personal considerations?

“Financial consideration always the last word. Brought in South Yorkshire at present few other collars are in need of money. There is no call for fresh capital, in many cases, so the point doesn’t arise.”

“In regard to present stoppage, you anticipate a boom on the resumption of work?”

“Oh, for two or three months. Then we shall be face again was a summer drop in prices. And one thing these fellows are forgetting; every day of the stoppage we are losing markets for hundreds of thousands of tonnes – not abroad, but at home. Thousands of people are turning over from coal fires for heating and cooking to gas and electricity. And they will never go back.”

“But don’t developments in gas and electrical usage being a corresponding new avenue of disposal of your coal?”

“Yes, but only for our small stuff. It doesn’t pay to break up our best goal for these purposes. We cannot hold our own with oil unless we have stable prices.”