What is the total amount annually paid in coal royalties?  We can arrive at an approximate estimate in this way:  Average output of coal for five years before the war, roughly, 270,000,000 tons; average royalty, 51/2d. per ton, which means, after deducting coal for colliery consumption and the mineral rights duty paid to the State by the royalty-owner, roughly L5,500,000 per annum paid in coal royalties.  Regarding this as an annuity, the capital value is 70 millions sterling if we allow a purchaser 8 per cent. on his money (12.5 years’ purchase), or 551/2 millions sterling if we allow him 10 per cent. (10 years’ purchase).  For all practical purposes the annuity may be regarded as perpetual.

Now the State must acquire these royalties.  That is the only practicable solution, and a condition precedent to any modification in the structure of the coal-mining industry so long as the participants in that industry continue unwilling or unable to agree upon those modifications themselves. Why and how? (1) First and foremost because until then the State is not master in its own house, and cannot make those experiments in modifying conditions in the industry which I believe to be essential to bring it into a healthy condition instead of being a standing menace to the equilibrium of the State—­as it was before the war, and during the war, and has been since the war; (2) the technical difficulties and obstacles resulting from the ownership of the minerals being in the hands of several thousand private landowners and preventing the economic working of coal are enormous.  You will find abundant evidence of this second statement in the testimony given by Sir Richard Redmayne and the late Mr. James Gemmell and others before the Sankey Commission in 1919.

How is the State to acquire them?  Not piece-meal, but once and for all in one final settlement, by an Act of Parliament providing adequate compensation in the form of State securities.  The assessment of the compensation is largely a technical problem, and there is nothing insuperable about it.  It is being done every day for the purpose of death duties, transfer on sale, etc.  Supposing, for the sake of argument, 551/2 millions sterling is the total capital value of the royalties, an ingenious method which has been recommended is to set aside that sum not in cash but in bonds and appoint a tribunal to divide it equitably amongst all the mineral-owners.  That is called “throwing the bun to the bears.”  The State then knows its total commitments, is not involved in interminable arbitrations, and can get on with what lies ahead at once, leaving the claimants to fight out the compensation amongst themselves.  This does not mean that the State will have to find 551/2 millions sterling in cash.  It means this, in the words of Sir Richard Redmayne:  “The State would in effect say to each owner of a mineral tract:  The value of your property to a purchaser is in present money Lx, and you are required to lend to the State the amount of this purchase price at, say, 5 per cent. per annum, in exchange for which you will receive bonds bearing interest at that rate in perpetuity, which bonds you can sell whenever you like.”