TRANSACTIONS OF SECTION F. 755 



The following Papers were read : — 



1. On Mining Boy allies and their effect on the Iron and Coal Industries. 

 By Professor W. E. Soklet. 



§ 1, iristorical.—liocal customs still existing in various parts of England and 

 "Wales point to a condition of things in which extensive rights to the working of 

 minerals were possessed hy the inhabitants of mining districts. But Enghsh law 

 favoured the extension of the rights of private property at the expense hoth of 

 such communal rights and the claims of the sovereign, till possession of the surface 

 became the best prima facie claim to possession of the minerals imderneath, and 

 the legal maxim was adopted, Cujus est sohim, ejus est usque ad ccelum, et deinde 

 usque ad inferos. The same tendency to private ownership was checked or reversed 

 in most European countries by the French Mining Law of 1791 (re-enacted in 1810), 

 which nationalised the minerals, and allowed of their being worked only on con- 

 cession from the State. 



§ 2. Descriptive. — The exhaustion of mines by working induces the private 

 owner or landlord to charge the lessee or worker of the minerals (1) a royalty or 

 tonnage-rent on the quantity of mineral removed ; (2) a fixed or certain rent, to 

 provide against the amount of his royalties falling below that sum ; and, in some 

 cases, (3) rents for instroke or outstroke, shaft, and wayleave, also calculated on the 

 tonnage or royalty principle. An estimate of the amount of these rents and account 

 of their variations can hardly be given in an abstract. 



§ 3. Incidence of Eoyaliies : Opinions of the Trade. — The following summary 

 may, I thuik, be taken as fairly representing the views of those engaged in the 

 trade who have expressed their opinions on the subject : — 



(1 ) That royalties, being a fixed money payment for quantity of output, are 

 heaviest just when trade is depressed and prices low ; 



(2) That English trade is at a disadvantage in competing with foreign 

 countries where there is little or no royalty to pay ; 



(3) That it is unfair for the landlord's rent to remain undiminished when the 

 wages of workmen are being reduced, and the profits of the employer disappear ; 

 and even — a platform sentiment — that it is unjust for the landlord to claim any 

 share of the minerals under his land, seeing he did not put them there. 



§ 4. Economic Theory of Royalties. — The theory of mine rents is usually treated 

 by economists as on a par with that of agricultural rents (Ricardo's ' Works,' p. 45, 

 Bagehot's ' Economic Studies,' p. 127), though attention may be drawn to the fact 

 that the mine is exhausted by working. Now, if the rent of a mine is determined 

 in the same way as that of a farm, rent will not enter into the price of the product 

 at all, so that its abolition woiJd not cheapen coal and iron, but only enrich certain 

 mining lessees, while its nationalisation would not affect the mining industry any 

 more than the confiscation of any equal amount of other property would. But 

 farm-rents and mine-rents have to be treated differently, owing to the fact that the 

 farm is not exhausted by workmanlike cultivation, whereas tlie mine is exhausted 

 by being worked. Thus, when the economist says of agi-icidtural rent (1) that 

 the ' worst land ' cultivated (expenses of production on which determine the price 

 of the product) pays no rent, or (2) that the produce yielded by the last application 

 of capital and labour to the soil (that application which the farmer is only just 

 induced to make) pays no rent, the same cannot be affirmed of mines. (1) The 

 • worst mine ' worked does pay a rent, because it is not indifferent to the landlord 

 whether his property be disfigured, and a possible future source of income exhausted. 

 (2) The produce of the ' last application ' of capital and labour to the mine pays 

 the same royalty per ton as any other portion of the yield. The theory still holds, 

 that the price of the product is determined, in the long run, by its expenses of 

 production in the least advantageous circumstances, i.e. in the ' worst mine.' But 

 this worst mine pays a rent or royalty which therefore enters into price. This 

 royalty paid by the 'worst mine' may be called the minimum royalty, and is a part 

 of expenses of production. Any royalty higher than this, in so far as it is higher, 

 does not affect price, but is a payment from tenant to landlord for the exceptional 

 advantages of a particular mine. 



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