Accounting and economic returns in British coal mining: The Carlton Main colliery, 1872--1909

Marianne Pitts and Trevor Boyns

Business History, 2011, vol. 53, issue 6, 917-938

Abstract: Various estimates, both ex ante and ex post , have been produced of the accounting rate of return on investments in the late nineteenth-century coal industry, with some ex post figures also being calculated for individual firms engaged therein, such as the Consett Iron Co. Ltd. No one, however, has previously tried to calculate the economic rate of return from investing in a single coal mine over the duration of its life. In this article we examine both accounting and economic rates of return for the Carlton Main colliery, from its sinking during the 1870s through to its closure in 1909. Our results enable us to judge the accuracy of previous estimates of returns for the late nineteenth-century coal industry, and of contemporary estimates of the potential rate of return in coal mining. We also offer insights into the efficacy of using accounting rates of return as an indicator of the economic rate of return during that period.

Date: 2011
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DOI: 10.1080/00076791.2011.582578

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