The coal industry of Britain is of immense importance, and indeed is very largely the foundation of our national prosperity. The annual output in normal times is over 287 million tons, of which about one-third is exported, the remaining two-thirds being used in our industries and for domestic consumption. Coal is our chief export, and we depend upon it for many of the other substances that we use in our daily work, and also for much of our food supply.

We send coal to Denmark and Holland, and receive in return agricultural and dairy produce. We send it to Norway, Russia, and Sweden, receiving in return iron ore, iron, pit timber, eggs, and agricultural products. France, Italy, Spain, Portugal, and South America all take coal from us, and send in exchange fruit, wine, iron ore, copper ore, sulphur, wheat, meat, and other necessary commodities which we either cannot or do not produce for ourselves.

It will thus be seen that it is of the utmost importance to us to develop our coal industry to the greatest possible extent. Whether the coal be used at home for domestic or industrial purposes or exported, markets have to be found for it and an organised system of sales must be adopted.

Selling Price. — The selling price of coal must be fixed so as to leave a margin over the cost of production. The cost of raising coal differs at different collieries. Certain collieries, owing to favourable natural conditions, are able to raise it at a much smaller cost than others. Hence, no matter what the conditions of the coal market, some colliery concerns always make good profits. The public often base their ideas of the profits made by the coal trade on the returns from these good concerns and neglect the fact that natural difficulties often render it almost impossible for a large number of collieries to return more than a small profit, or even to pay their way. It must also be remembered that coal mining is a destructive operation, and the capital sunk in a colliery must be recovered during its lifetime, otherwise it is partially lost when the colliery is exhausted.

The actual cost of raising coal embraces the wages of the miner, the cost of machinery, timber, oil, and all stores used in working the mine. Fees have to be paid to the professional geologist who is consulted as to the advisability of sinking at a given place, and to boring contractors who put down bore-holes to locate the coal. The arrangement of the shaft and the general lay-out has to be planned by a skilled mining engineer, who must also be paid for his services. The mechanical engineer has to design and erect the headgear and machinery, and this also has to be paid for. Skilled men are required to manage and survey the mine, clerks to keep a record of the output, and calculate and pay the miners their wages. Rolling stock has to be provided to take the coal to the various markets, and the railway companies have to be paid for the cost of transit.

Collieries are included in the valuation of the district in which they are situated, and have to pay local taxes. The owner of the land under which the coal is found has to be paid a heavy royalty for the coal extracted, and a rent or surface damages for the ground covered by the heapstead, sidings, and all buildings erected on the surface. Travellers and agents who sell the coal have to be paid for their services. The banker who negotiates bills of exchange and does the ordinary banking business of the colliery draws commission for his work. Places must be provided where buyers and sellers can meet, these places are known as exchanges, and are usually built and run by a combination of those concerns who use them. To keep in touch with the various markets money has to be spent on newspapers, the telephone and telegraph, all of which add to the cost.

Collieries must be insured against accidents and fire, and the miners who work them must also be insured against accident and for workmen's compensation. Fees have to be paid to doctors for attending accidents, and taxes have to be paid for Government inspection of the mines to secure the safety of the workers.

Income-tax, and at the present time in many cases excess profits tax has to be paid, all of which form an additional charge on the coal produced. Money must be set aside for the depreciation of plant and recovery of capital spent on work that becomes worthless when the colliery is exhausted.

It will thus be seen that the difference between the price paid per ton to the miner and that charged to the buyer does not represent profit but has to meet all the foregoing charges first. If anything remains the remainder is profit, and since the object of working is to make profits, the selling price of the coal must be fixed so as to cover all costs and leave as large a margin as possible.

How much this margin may exceed the cost of production depends on the demand. Many of the countries to which we export coal have a home supply. This supply, although insufficient for their maximum requirements, may meet the minimum demand, and thus prevent prices from rising to such a height as they otherwise would. Where a country has no home supply it may be able to obtain coal from other than British sources, and in such cases our coal has to be sold in competition with that produced elsewhere. This again tends to keep prices within limits. The home demand for coal is largely determined by the state of our other industries and manufactures. The greater the volume of business that is done in iron smelting, steel making, cotton-spinning, engineering, and other industries, the greater is the demand for coal. Unless the supply is sufficient the various industries compete against each other to secure their needs, and thus the price is raised. On the other hand depression of trade may cause the demand to fall below the supply, and then the prices fall. Of late years the miners, who have a powerful organisation, have restricted their output whenever supply began to exceed demand, and have thus kept up prices and wages.

How far such action affects other industries and the general prosperity of the country is a debatable point that cannot be dealt with here.

Contracts. — Large consumers of coal often buy what they expect to use during a period of three, six, or twelve months at an agreed price, the coal to be delivered at regular intervals over the period fixed. Such an arrangement is described as a contract. When the market price of coal is rising consumers try to fix long contracts, whereas with a falling market they are disinclined to buy far in advance. Naturally the seller is anxious to fix long contracts when the price of coal is falling and short ones should the market show signs of rising. Modern collieries producing large outputs cannot work entirely on sales made from day to day. In order to have a guarantee of work they must contract for the sale of a large portion of their output, and often have to accept prices little over the cost of production. So essential is it to have this guarantee of work ahead, that during times of depression contracts may often be taken at less than the cost of production.

All collieries have to meet certain fixed charges, and must raise a certain minimum output to do this. As soon as this minimum is exceeded the cost of production begins to fall, and the owners find that they are better with a full output at a low price than a restricted output at a higher price. When large contracts are fixed at low prices which may return little or no profits, then that portion of the output which is sold from clay to day to small consumers is charged at the highest price obtainable. Thus, in the face of a rising market the small consumer is the one who has most to pay. We now see why the miner cannot always understand when the district price of coal may be sixteen shillings per ton, say, and he asks for an increase of wages, he is told that he is not entitled to all he asks as the average selling price of coal is, say, only twelve shillings per ton.

Markets. — Coal is disposed of for home consumption and for export. For home consumption the chief buyers are the railway companies, gas undertakings, and the iron and steel industries. Wool and cotton manufactories, brick-works, glass-works, and other like concerns require large quantities of coal to enable them to carry on their work. There is in addition a large quantity required for domestic purposes.

When the coal is sold for inland consumption, it is usually charged at pit-mouth price, but in some instances a delivered price may be charged. When sold for filling the bunkers of steamships at home ports it is usually charged at a f.o.b. (free on board) price. A similar arrangement generally holds good in the case of sales to firms in this country whose business is that of shipping coal abroad. When sold direct to foreign buyers the prices are generally c.i.f. (cargo insurance and freight), or f.o.t. (free on truck at port to which it is consigned).

The terms of payment vary slightly in different home districts, but are usually net cash in a month after delivery, with a small discount for immediate payment.

The arrangement made with foreign buyers usually depends on the knowledge the seller has of them and the confidence he is prepared to extend, but the political state of the country to which the coal is exported at the time of the transaction is often an important factor in fixing terms.

Imperial Defence. — In addition to the foreign markets already mentioned, coal is sent to a large number of Imperial dockyards and depots outside the United Kingdom, the chief of which are Gibraltar, Malta, Hong-Kong, Bombay, Sydney, Simons Town, Ascension, and Bermuda. Other coaling stations are Kingston, Freetown, Colombo, Singapore, Aden, Port Said, Suez, Durban, Hobart, and West Port, N.Z.

Large quantities of coal are stored at these stations, so that it may be available for the Royal Navy, which has to protect our trade routes and transport against hostile attack.

Coal Distribution and Use. — The characters of a coalfield have already been described in Chapter I. p. 25. So far as the British Isles are concerned we have about thirty separate fields. The most important are those of South Wales, Lancashire, Durham and Northumberland, Staffordshire, Yorkshire, Derbyshire, and Nottinghamshire, Lanarkshire, Fifeshire, and Ayrshire.

Coal is also found and produced in the United States of America, Germany, Austria-Hungary, France, Belgium, Russia, Japan, India, Canada, New South Wales, Spain, South Africa, New Zealand, Mexico, Queensland, Holland, Italy, Sweden, Tasmania, China, Turkey, Servia, Borneo, Peru, Greece, and other countries.

The most important coalfields abroad are those of the United States, Germany, Austria, France, Belgium and Russia. The most extensive coalfields in the world are those of the United States and China. The former are extensively worked and produce an annual output about twice that raised in the United Kingdom.

The immense coalfields of China are only yet being explored, but already their extent is known to be such as will make those found in other parts of the world sink into insignificance.

In the ordinary course of industry and in our domestic consumption, we waste large quantities of coal every year. Much could and must be done to prevent this waste. Coal is capable of giving off a certain quantity of heat during combustion, and we rarely take all possible means to ensure that the greatest possible proportion of this heat should be converted into useful work. There is still room for considerable improvement in our methods of burning coal. Again, coal, as raised from the mine, might in many cases be distilled and certain of the products of distillation used in place of the raw coal. If this were done in all possible cases, the valuable by-products which are otherwise lost could be recovered.

When coal is strongly heated in a closed chamber, or as it is usually termed, destructively distilled, many volatile products are driven off, and a hard, carbonaceous residue called coke is left. Sometimes coal is distilled for the sake of the volatile products, as in the case of gas manufacture; in other cases the distillation is carried out chiefly for the sake of the residue, as in the manufacture of coke. In either case extremely valuable and useful by-products may be recovered.

When coal is subjected to destructive distillation and the volatile portion cooled, water and coal-tar condense while the gases pass over. These gases are hydrogen, methane, ethylene, and small quantities of other saturated and unsaturated hydrocarbons. There is in addition carbon monoxide, carbon dioxide, sulphuretted hydrogen, carbon bisulphide, and traces of other sulphur compounds, and also nitrogen and ammonia. The hydrogen, methane, carbon monoxide, ethylene, and the higher hydrocarbons are all combustible, while carbon dioxide, nitrogen, and ammonia are not. These non-combustible gases and the sulphur compounds are so far as possible removed. The liquid which is formed by the condensation of the volatile products of the coal separates into two portions: an upper portion, consisting of water which contains ammonia in solution, and a lower heavy black substance known as coal tar.

The tar is an extremely complex mixture of different bodies, which vary widely both in quantity and character, depending upon the conditions of extraction. These bodies may be grouped as follows: (a) Hydrocarbons, belonging to the paraffin and the benzene series; (b) bodies containing oxygen — tar acids; (c) bodies containing nitrogen — pyridine bases; (d) bodies containing sulphur; (e) pitch; and (f) finely divided free carbon. The different constituents of tar are in the first place separated by fractional distillation, a process that depends upon the fact that in a mixture of substances having different boiling-points, those with the lower boiling-point distil over first in greatest quantity, while those with higher boiling-points distil over in their order as the temperature is raised. This gradual increase of temperature gives the following fractions

(1) Light Oil, distilling over up to 170 degrees Centigrade.

(2) Middle or Carbolic Oil, distilling between 170 and 230 degrees Centigrade.

(3) Heavy or Creosote Oil, distilling between 230 and 270 degrees Centigrade.

(4) Anthracene Oil, distilling above 270 degrees Centigrade.

(5) Pitch, the residue in the still.

The light oils upon further treatment give what is known as 90 per cent. benzol, 50 per cent. benzol, and solvent naptha.

The middle oil gives crystals of napthalene and impure liquid carbolic acid.

The heavy oil is not treated further, but marketed and used as creosote oil.

The anthracene oil yields anthracene crystals and a liquid which on further distillation gives more anthracene crystals and residual oil.

The pitch is run out of the still while hot, and moulded in blocks and briquettes.

In 1856 Dr. W. H. Perkin discovered a method of making a purple-coloured dye from aniline, one of the derivatives of coal tar. This was merely the beginning of an investigation which has since resulted in giving us a large number of different colours from the same source, and these colours are now known as Aniline Colours. An important industry was thus established which, unfortunately, was soon allowed to pass under German control. The war with Germany has, however, caused the British people to realise the true character of the German nation, and it will be a matter of surprise if the Coal Tar Colour industry is not now wrenched from her, and re-established in the country of its discovery and inception.