Broomhill Collieries Ltd.

Registered in 1900

Warning: This is not intended to be an exhaustive history of the company, but an indication of the changes of ownership and the links between companies and directors in those companies. Only collieries, pits etc. in the North of England are shown - the company may own other properties etc. outside this area and there may have been other changes of ownership etc. for which we currently do not have details.

The annual general meeting of Broomhill Collieries (Limited) was held on Friday at Newcastle-on-Tyne, Captain John E. Rogerson, D.L., J.P. (the chairman), presiding.

The Chairman, in proposing the adoption of the report and accounts, said :— Since our last meeting the glorious and victorious peace has closed a fateful chapter in the history of the world. Let us hope it will soon be ratified. During the greater part of the year under review we worked under war conditions, and the remaining part in that early, difficult period of transition from war to reconstruction — so during the 12 months to June 30 we experienced a shortage of men, restrictions, scarcity of tonnage, superfluity of regulations, which of necessity much hampered our activity and production. The demobilization of the Army, taking all the circumstances into account, has bee carried out by the Government rapidly and efficiently. The miners were amongst the earliest to be sent home, and the members of our clerical staffs have also returned. We are right glad to have them all back again, and are ever mindful of the great and heroic efforts which won this greatest of all wars. We have a grateful and reverent remembrance of those who sacrificed their lives, and I am sure it will be your pleasure that this company should subscribe to the memorials to the fallen that are to be provided in the districts in which our collieries and offices are situated, as we have done during the was to funds raised for the benefit of sailors and soldiers and their dependants. Employment has been provided for men home from the front by starting work, since the close of the financial year, at Newburgh Colliery, which, as notified to you at the time, was closed in 1914.

The balance-sheet shows a strong and satisfactory position. In past years large sums have been written off our assets and further depreciation this year is not considered necessary. The cash position is exceptionally strong, being with debtors £410,442. A good portion of this sum will, however, be paid to Government, the approximate amount of which cannot yet be stated, but ample provision has been made in the accounts before you. We have not written down our Government stock, but have provided for this contingency by ample reserves. The cash balance also includes the amounts received for insurance on the steamers Broomhill and Axwell. This money is ready for the purchase of vessels to replace these two steamers when opportunity occurs.

Steamship Bondicar, when released from Government service, underwent extensive repairs and survey, and it is running at a profitable rate on time charter regularly from Amble. The tug Palmerston has also been thoroughly overhauled and repaired. Though the number of steamers loaded at Amble has considerably increased since the last year, no interest has been paid to us on our Warkworth Harbour Debentures. We have, in fact, had to give financial support towards the maintenance of the harbour. It is our constant effort to load as much of our output at Amble as possible, but steamers suitable for that port are scarce. We hope the tonnage conditions will gradually improve, both in our interests, in that of those we employ, and those who are dependent upon the trade of the harbour.

The total profit, after provision for Government claims, is £86,444 9s. 4d., which includes that from steamers, investments, farms, heavy salvage by the tug Palmerston, and other sources of income, apart from coalmining. This result justifies us in proposing a final dividend of 10 per cent., free of income-tax, placing £48,250 to reserve and sinking fund, and carrying forward a substantial sum to next year. Out of the £86,444 9s. 4d. profit, Preference shareholders had £7,350, and the Ordinary shareholders, including proposed final dividend, £29,750 — a small proportion of the gains compared to the large sum payable to the State and rate authorities.

During the existence of the company the Ordinary shareholders have received an average of 5.21 per cent. per annum on their capital. So if the mines were nationalized the State would have to pay presumably, say, 5¼ per cent. interest for the purchase money, and as they would doubtless lose some of this by inefficient bureaucratic management, the general public would have a heavy burden to bear on this particular undertaking. Our colliery is not singular in this respect. If we are to be limited in our profit when we can make it, it is difficult to see how the bad times are to be weathered, for come again they assuredly will, and they will affect the mines even if nationalized. In reading some of the speeches and articles, one is almost led to believe that people imagine it is as easy to decree a profit in the coal trade as it is for the Ministers to clap 1s. extra on the income-tax. If the State had to go through some of the troubles and ups-and-downs that have afflicted Broomhill during the last 19 years, Ministers would be sadder and wiser, and the tax payer much poorer.

The profit on coal during the year was made out of the export trade. We are all agreed home requirements must first be provided for, but after that, if the exports are restricted, or reduced to a trifle, the alternative will either be a stoppage of many pits, a cessation of the continuous development of new seams, with resulting unemployment, a heavy advance for home-consumed coal, or a heavy subsidy from the State. A substantial reduction of our coal export trade would prevent us from re-establishing the value of the pound sterling, the continually increasing depreciation of which compels us to pay from 15 to 20 per cent. more than we should do for our gigantic imports of food and raw materials, without which our country cannot be supported. With diminished exports the revenue, especially the income-tax, must fall off.

Gentlemen, I am not going to detain you by a long disquisition on the question of nationalization, or deal with the circumstances which led up to the appointment of the Coal Commission. A substantial increase in wages and reduction in working hours was granted by the Government, and I am glad in your interests, and in the interests of the country generally, that the Government declined to adopt the policy of nationalization of coalmines. The Government, however, have declared their intention of nationalizing mining royalties, but we do not as yet know on what terms. It is stated an Act of Parliament will be introduced for the purpose this week in the House of Commons. I trust that the sense of justice and rectitude will urge the House of Commons to see that a fair price is paid by the Government for what they propose to take over as national property. This is an important matter to the shareholders of this company, who are owners of the Amble Manor royalty, which, you will remember, was acquired by purchase some time ago. The Government propose that there should be a deduction made out of the purchase money for the purpose of creating a fund to improve the social conditions and the conditions of life amongst the miners of the country.

There is a further proposal to be submitted to Parliament by Government that the profits of the coal trade should be limited to 1s. 2d. per ton of coal raised, and, so far, for one year, which will amount to about one-half of our pre-war standard. Pending the Act, we can only surmise the details, but if it means that we are to defray from that sum heavy taxation, debenture interest, sinking fund, Preference shareholders, provision for depreciation, reserve, development and new machinery, and a return of capital, then it will be confiscation. It would be opposed to all past principles of English justice and equality of all citizens before the law to allow a large body of shareholders, some 150,000, to invest their money and devote their energies to creating and building up a trade under the protection of Parliamentary statutes and custom, and then to turn round and take, first 50 per cent., then 60 per cent., then 80 per cent. excess profits above a fixed standard, and now say that standard is to be reduced by about 50 per cent. What is there left for depreciation, development, renewals, new machinery, all as necessary as pit props for the mines, or as food for the ponies. I hope that the policy to single out one industry and apply to it a limitation of profit, insufficient to meet all general charges, or give any return on capital invested in good times, will not commend itself to the sense of fairness of this nation nor, I hope, to the House of Commons. My friend and colleague, Lord Gainford, put forward with considerable cleverness and ability the proposals on behalf of the owners that the men should receive a minimum wage and a percentage of the profits, which seems in principle a fair basis of meeting the desire of the men to share more of the profit of the industry and to give them a direct interest in increased production. The coal trade, like other great industries in this country, has been built up by private capital and resources, individual initiative and enterprize, without subsidies or Government grants. It, together with these industries, has established the financial strength of this country, which enabled us to defray the enormous charges and expenditure of the war. The coal trade has been the backbone of these industries, and has provided cheap fuel for this country, and established a remunerative and indispensable export trade. One would think it would be the policy of the Government to support and encourage such a trade.

It is surely flagrant injustice to colliery shareholders, who alone are penalized, when other shareholders in other industries retain the benefit of their annual earnings, of course, after paying taxation, for which colliery companies are equally liable. Poor encouragement to the policy of thrift and saving so incessantly enjoined upon us to provide the means of developing the industries of the country and of recuperating our national financial strength. An essential to foster enterprize, saving, and investment, is the prospect of peaceful and secure development of all undertakings, and a fair return on money invested, and the certainty that this money will not be arbitrarily confiscated.

I am convinced the success of the past can best be maintained, and the coal trade carried on and developed to the greatest advantage of all, by a continuance of that policy of security of tenure and freedom, giving full scope to individual initiative and enterprize, by harmonious cooperation between employer and employed, which I am wishful to see established, and with conviction on the part of the miners that the prosperity of the industry is something which closely concerns them.

On these lines this great and essential industry can and will flourish.

Lord Gainford, in seconding the adoption of the report, said :— Gentlemen, in seconding this report perhaps you will allow me for a few moments to dwell upon the present critical situation. We are smarting as coalowners under a sense that we have been hardly dealt with by the Government in the past, and under a prospect that we are about to be further ill-treated, and in a very unfair way. I want not merely the shareholders of colliery companies, but the miners and every other class of wage-earner, to realize the unfair treatment which has been, and which is being meted out to the coal industry. We entered patriotically during the period of the war into an agreement with the Government accepting our pre-war rate of profits, which they guaranteed to us under an Agreement Act which is still in operation.

Money to-day obtains a much higher rate of interest than it did before the war. To push an undertaking you require a lot more money for working capital. The cost of materials has enormously increased, and an undeveloped colliery requires at the present time something like two-and-a-half times the sum required in the pre-war period. We have, however, been quite content to go on working on an agreement which based our profits, under different circumstances, on a pre-war period, when investments earned much lower rates than they do to-day. With that undertaking we were for the time being quite satisfied, and we recognize even to-day that the position of the coal trade is not quite normal. Our industry has been hit by many mistakes made by the Government, the high minimum, for instance, given to the workmen has been reflected in a diminished output. There are more men now employed in the coalfields of this country than before the war, but the aggregate output is something like 50 million tons less per year. In that situation there is a demand much greater than the supply, and consequently profits in connexion with export trade have risen considerably ; at the same time the average cost at the collieries is higher to-day than the selling price of the inland coal.

We were content for a time to see a limitation of price secured to the consumer under the Limitation of Prices Act, and are still anxious that he should be protected in regard to quantity as well as price. Instead of the present control being extended the trade might have entered into an arrangement by which all parties could be properly represented on local committees, whose duty it would be to see that inland consumers were protected fairly both in quantity and price, whilst at the same time the trade would secure the advantage of the high export prices that now prevail. That export trade is one which is full of interest to your company. You have weathered difficult periods in the past, as the chairman reminded you. We have only paid an average of 5.2 per cent. since the inception of the undertaking 19 years ago ; there were times when you received no interest or very little interest for the money which you invested in these collieries, and we had a right to expect that during the present period advantage could be taken of the export prices which have recently prevailed, and thereby to increase the profits of your company.

Under the Agreement Act, a very small percentage of the export profits really came into your pockets, the main portion, of course, went into the State, first of all in income-tax and then in excess profit duty, and subsequently in a large contribution to the Coal Controller ; but under the suggested legislation which has been indicated in the House of Commons by the Prime Minister and Sir Auckland Geddes, it is proposed to go back upon that agreement, which is still in operation, and it is fair now to deprive you of the profits which you have been making during the last eight months, and the profits which we expect to be able to make during the rest of the current financial year ending March 31 next ? The only justification for an act of that kind is the fact that words used by Mr. Bonar Law on March 21 last in the House of Commons are interpreted in that sense. It is true he accepted in spirit and in letter the recommendation of Mr. Justice Sankey, but there is, in my view, no ground for believing Mr. Bonar Law had in his mind at the time the idea that profits should be limited to 1s. 2d. per ton. Most of us were under the impression that the interim report dealt exclusively with matters relating to wages and hours of the men. Outside these subjects there was a great number of recommendations made by Mr. Justice Sankey which certainly have not been accepted by the Government in spirit and in letter, and they do not propose to accept them. But even if some people thought such a pledge was given in regard to 1s. 2d. it would be open to the Government to explain the unfair position which would be created to the trade and how detrimental it would be to the State to now carry out a pledge given in the very different circumstances which prevailed in March last, and to be asked to be absolved.

The effect upon the trade of the company under a restriction of profits of this kind has been already indicated by your chairman. It will deprive the industry of money which is essential to progressive development of the collieries, and it has shaken the confidence of those who would invest their capital in colliery enterprises, and any such limitation of profit must recoil on the future output of the country. We want more coal produced ; we want industry to flourish, and surely this, of all moments, should not be the one taken to destroy confidence. People outside should realize that with any reduction of a possible future output, which proposals of this kind must produce, must be detrimental to the interests of the State, and wage-earners in the long run will suffer most.

The trade is smarting under a strong feeling that a great injustice is being done, for whilst we were quite prepared to contribute 40 per cent. of our excess profits like all other classes of shareholders throughout the whole country, yet to limit our profits in an exceptional manner is not only unjust but harassing.

We also resent the action of the Government without any consultation with the industry, suddenly to reduce the price of coal for household purposes by 10s. per ton. Of course everybody welcomes the reduction in the cost of living, and is glad to pay less for his domestic coal, but what it means is that £20,000,000 has to be found from somebody in order to secure a dole for the reduction of the cost of living. Approximately 40 million tons of coal in this country come into domestic use, practically one ton per year per head of the population, that means, with 10s. per ton reduction, £20,000,000 have to be found somewhere. Why the coal industry, of all industries, should be asked to contribute £20,000,000 in order to help the Government to relieve the cost of living is to me quite inexplicable. Household collieries, moreover, have been recently carrying on their operations at a dead loss, and of all classes of coal, the household coal is the most expensive to produce ; and therefore these collieries of all the collieries are least able to bear the further loss of 10s. per ton. No one is more anxious than we are to give satisfaction to our own customers, particularly to the poorest householder. The coal trade ought to be placed in a sound economic position, and naturally household collieries, already financially strained, view with consternation an additional burden being superimposed.

I do not want to occupy your time here this morning in dealing upon too many details, but I do desire that people in this country should realize that the coal trade is being unfairly treated, and that there is no case established for any special reduction of its profit. A reduction of its profits would only recoil upon every industry dependent upon fuel, and will prevent that increased production essential to national progress. Finally, I would say that it has been asserted that in resisting some of these proposals, the coalowners have realized that they had better accept the best terms they can for their industry and accept a system of nationalization, and the attitude the coalowners have adopted is because they are riding for a fall. I wish to emphatically deny any such suggestion ; I am authorized by the Central Committee of the Mining Association to say we are not prepared to accept any terms in regard to the nationalization of our industry. We believe that to sell the property of our shareholders to the State would be detrimental from every point of view, and, on patriotic grounds, directors cannot for a moment entertain any such proposals, and they intend to defeat all efforts made towards the nationalization of any industry. The directors have been entrusted by the shareholders to carry on the industry in the interests of the shareholders, and they believe that if they are only given fair play they will succeed in doing so. It will be for the ultimate advantage of the country.

The nationalization movement comes from a section of the community which are mainly composed of Socialists and Revolutionists. These individuals would be the very first, if they now got their way, and succeeded in inducing the State to purchase with scrip a great industry of this kind, to tax out of existence the very scrip which might be issued by the State in payment of the mining property. I, therefore, warn the public that no safety for their securities lies in that direction. It would mean to the workmen loss of freedom ; he would have to work for the State under State direction, and where the State ordered him to go, and on wages determined by the State. The cost of coal would be raised against all consumers in the absence of competition and personal interest in success : in fact, nationalization would spell disaster to industry and ruin to the State.

The report and accounts were adopted, and the payment of a final dividend of 10 per cent. for the year (free of income-tax) was proposed and carried. The retiring directors and auditors were re-elected.

A vote of thanks to the chairman concluded the proceedings.

Source: The Times Newspaper

Registered – November 1, 1900, to acquire the businesses of the Broomhill Coal Co., Ltd. (registered August 24, 1891, see vol. for 1898), and Radcliffe Coal Co., Ltd., the steamers of the Broomhill Shipping Co., Ltd., and the whole of the £170,000 debentures of the Warkworth Harbour Commissioners. The property taken over included :- (1) The leases of Broomhill and Chevington Royalty. Hadston Royalty, and Togston Royalty, Hadston Farm, about 550 acres, and 32/64th shares in the s.s. "Ringwood," belonging to the Broomhill Coal Co., Ltd. (2) The s.s. "Turrethill," and "Broomhill," both belonging to the Broomhill Shipping Co., Ltd. (3) £170,000 Warkworth Harbour Commissioners five per cent debentures. (4) Lease of coal mines under lands at Amble, Hauxley, and Low Hall in Togston, and elsewhere in the original parish of Warkworth, Northumberland (the freehold of this property, including brickworks, buildings, &c., was acquired in 1906, for £67,115). Lease from the Crown of. coal mines under the foreshore and bed of the sea at or near Warkworth; leasehold brickworks and other leases and rights belonging to the Radcliffe Coal Co., Ltd. The collieries of the Broomhill and Radcliffe companies embraced a mineral area of about 10,000 acres, with works, railway sidings, plant, &c. The purchase consideration was £615,000, payable £565,000 in cash, £30,000 in debenture stock and £20,000 in fully-paid £1 ordinary shares, the vendor to the company being Davison Dalziel.

Coal Output – For year 1912-13, 738,809 tons; 1913-14, 701,111 tons. No later figures obtainable. The company now owns the two steamers "Bondicar" and "Broomhill."

Capital – £350,000, in 175,000 six per cent. cumulative preference (with priority for capital) and 175,000 ordinary shares of £1 each; all the shares are issued and fully paid.

Debentures – £95,532 four-and-a-half per cent, first mortgage stock, redeemable at 105 per cent, at the expiration of 25 years from January 1, 1901, by the operation of a sinking fund. After paying debenture interest, providing for the sinking fund, and paying the dividend on the preference shares. a sum equal to 10 per cent. of the amount distributed by way of dividend on the ordinary shares is to be carried to a reserve fund until such fund is equal to the nominal amount of the preference shares issued; until a sum of £50,000 has been accumulated to the credit of this reserve fund, no greater dividend than 10 per cent. per annum will be paid on the ordinary shares; all surplus profits, after paying such 10 per cent, per annum on the ordinary shares, will be paid to the credit of such reserve fund until it reaches £50,000. Interest on debenture stock is usually paid January 1 and July 1. In November, 1900, all the preference shares, 155,000 ordinary, and £295,000 debenture stock were offered for public subscription.

Dividends – On ord. shares :- 3 per cent, in August, 1901, for half-year; 1901-2. 5 per cent.; 1902.3 to 1905-6, nil; 1906-7, 10 per cent. ; 1907-8, 10 per cent.; 1908.9, 5 per cent.; 1909-15, nil; 1915-16, 10 per cent.; 1916-17, 20 per cent.; 1917-18, 15 percent.; 1918-19, 20 percent.; 1919-20,20 per cent.; 1920-21, 5 er cent.; 1921-22, 5 per cent.; 1922-23, 12½ per cent.

Accounts – For year ended June 30, 1923, submitted in Newcastle November 30, 1923, there was a profit of £72,640, making with balance forward a sum of £108,790; debenture interest absorbed £3,261.

Source: Mining Manual & Mining Year Book for 1924