This section is from the book "The Gardener V1", by William Thomson. Also available from Amazon: The New Organic Grower: A Master's Manual of Tools and Techniques for the Home and Market Gardener.
The effects of charcoal are almost wholly mechanical, and its value consists in keeping retentive soils porous, and in absorbing ammonia from the air and decomposing matter with which it comes in contact. It has no affinity for ammonia, but merely stores it up, and gives it off again to the plants. We use it constantly, especially mixed with composts, for potting plants with, in order to keep the soil open, and as a medium to store up nutriment that is supplied in a liquid form. In flower-borders that are adhesive it is an excellent material to mix in to keep the soil open and porous. It may have the effect of brightening the colour of flowers, but we cannot say from experience that it has. The best way to apply it is to incorporate it thoroughly with the soil. We suspect the moral of the narrative to which you refer is the most valuable and reliable part of it.