Entrepreneurial Efficiency in the British Coal Industry between the Wars: A Comment
IN a recent article in this Review' Mr N. K. Buxton stated that "probably the greatest shortcoming of the coalowner after I9i8 has been seen in his failure to undertake necessary reorganization and so increase the efficiency of the existing capital assets in the industry" (p. 477). The purpose of this comment is to show that whilst Mr Buxton has correctly identified what has come to be regarded as "the greatest shortcoming" of British colliery owners, he has, at the same time, demonstrated a complete misunderstanding of the nature of the issues involved in reorganization. The major criticism of colliery owners in the inter-war years, particularly after I925 and down to the publication of the Report of the Technical Advisory Committee in I945,2 was that they failed to reorganize their industry by means of colliery amalgamation, which can be defined as the fusing together to provide unified units of management of individual colliery undertakings which may consist of one mine only, or of several mines, of equal or varying size. It was believed that there were two major benefits to be obtained from colliery amalgamation. Firstly, an amalgamated concern would be in a position to derive full benefit from the technical and commercial economies of large-scale production;3 and secondly amalgamation could facilitate the elimination of surplus capacity by the closure of redundant mines and the concentration of output in the hands of the most efficient productive units. By his failure to define his terms rigorously Mr Buxton has confused the issues that were at stake. He begins Section iII of his article (p. 479) by stating correctly the problem with which both the Royal Commission of I925 and the Technical Advisory Committee in I945 were concerned, namely that there was a need to increase the efficiency of the industry and this could be achieved by the amalgamation of colliery undertakings. At this point, therefore, it might be assumed that Mr Buxton would proceed to re-examine the issue of efficiency in relation to the size of colliery undertakings. Instead he embarked upon an analysis of the relationship between size and efficiency of mines. He begins by comparing the findings of the Royal Commission on the size of colliery undertakings with information derived from the Ministry of Fuel and Power Statistical Digest from I 9384 relating to the size of mines. In view of the definition of colliery amalgama-