CHAPTER IX.
THE TRUTH ABOUT THE GOLD MINES.[12]
1.—That Gold is Mine!
Let us see in what terms Dr. Kuyper justifies the Boer policy of exaction:
"The Leonards and their set are very ready to tell us that the taxes in Johannesburg exceed in proportion those levied in every other country.... As to the quota paid by Uitlanders to the State, we beg leave to remind the British of two points: first, that they are exempt from all military service; secondly, that it is a far more serious matter for the Boers to pay with their lives, and the lives of their sons, than it is for these wealthy owners of gold mines to pay so much per cent. upon their enormous dividends; and that if they do pay the Transvaal some thousands of pounds, they pocket their millions. Moreover, love for the Transvaal has never entered their metallised hearts."
This little gem merits careful analysis. Mr. Kuyper shares the belief that one has only to go to Johannesburg to shovel in the gold. If the working of mines were so simple a matter, Boer intelligence would be equal to the undertaking. As they are not worked by them, it must be because there are difficulties. These difficulties have been overcome for them by the Uitlanders. Once overcome, the Boers present themselves and say: "That gold is mine!"
"Why then did you not take it yourselves?"
The Boers, who pride themselves upon driving their teams of oxen, but who consider that to in-span them is work only fit for Kaffirs, consider gold mining beneath them, let alone that they have not the capacity for it. They leave it to the Uitlanders: all the same, Dr. Kuyper holds it just that it is they who should take the profit.
2.—The Proportion of Gold per Ton.
Gold ore is found in infinitesimal quantities in large deposits of waste matter. In 1898 of the 77 Gold Mining Companies at work, three-fourths reported a yield of 1/2 oz. per ton; some only 6 to 7 dwts. per ton. Consequently we find mines worked where one ton of rock will yield 1/2 oz. of ore, or perhaps only half as much. There are other mines which swallow up the capital, and give no return at all.
3.—Cost of Production.
In 1892 gold producing in the Transvaal cost 35s. 6d. per ton; in 1897 the cost was reduced to 28s. 6d.; in 1898 to 27s. 6d. This reduction of cost is in no way due to any reforms made by the Government, but to improvements in the methods employed, and especially to the more extensive use of compressed air drills.
Out of 8,965,960 tons of ore raised in the Witwatersrand nearly 18.2 per cent. had to be thrown out; that is: about 1,634,500 tons of ore were rejected as sterile. In some cases the proportion of sterile ore has amounted to as much as 40 per cent. The cost of production from the deep levels is 34s. 6d. Out of the profits of each month, expenses and the cost of working material have to be met. (Speech of Mr. Rouliot, President of The Chamber of Mines, January 26th, 1899.)[13]
Mr. J.H. Curle in his valuable work The Gold Mines of the World, published in 1899, estimated the debts of the Rand Companies at £5,515,000. "It is not unusual," he writes, "for the directors of a deep level mine to spend £500,000 before one single ton has been crushed."
4.—A Gold Mine is an Industrial Undertaking.
According to the report of the Industrial Commission appointed to inquire into the mining industry, there were, in 1896, 183 gold mines in the Transvaal. Of these 79 had been gold-producing, while 104, still in process of development, had as yet produced nothing. Of the 183 only 25 had paid dividends.
In 1898, a year of great progress, of the 156 mines situated in the Rand, 40 only were paying dividends, representing, on an average, a return of 8.7 per cent.
In reality, a gold mine is as entirely an industrial undertaking, as is any other form of commerce; for its proper development it requires men of the highest capacity, not a mere set of adventurers, as Dr. Kuyper and other Pro-Boers tell the simpletons who judge without examining facts. This is what is said on the subject by Mr. Curle, who saw the mines at work during his extended and conscientious enquiry:
"The average mine manager, whether in South Africa, or India, or Australia, or wherever I have met him, is an extremely capable man. Of course, there are exceptions—some managers are not capable; some are not even honest, but, as a rule, those in actual charge of our gold mines to-day are men who can be relied on, but I do not wish to confine my praise to the managers only. The mine captain, whose valuable qualities are known more to the manager than to outsiders, is usually a most capable man, and devoted to his work. Many and many a time, after his hard day's work should have been over, has a mine captain cheerfully started off with me on a three or four hours inspection of his workings, only too delighted to oblige, and asking merely that his visitor should show an intelligent interest in what he saw. To these men, and to the other heads of departments, to battery managers, cyanide works managers, assayers, samplers, surveyors, office staff; the shareholders in every mine owe a debt which they do not realise and which is often inadequately acknowledged. Amongst these men—I could give hundreds of examples—there is the greatest sense of duty to their employers, and from one year's end to another, by day and night, in the bush, on mountain tops, in fever swamps, in wild and deep places all over the world, they faithfully carry through their arduous work."
Such is the type of Uitlander the gold mines have attracted; add to them, mechanics and the most highly skilled artisans: for it is to the interest of the mines which pay high salaries to employ the most skilled labour.
A population such as this, has nothing in common with the adventurers who rushed to the placers of California, or with the fancy picture of the "wealthy metal-hearted mine owners," presented to us by Dr. Kuyper.
5.—Distribution of the Gold Production.
Dr. Kuyper speaks of "the vultures" who come to rob the country of its gold; we would point out to him that before gold can be extracted from the rock, a vast amount must be sunk in it. We have just seen that the cost of production often exceeds the profits.
Dr. Kuyper, in his childish innocence, imagines that "the vultures" carry off the gold as soon as it is extracted.
Had he taken the trouble to ascertain the facts, he would have seen that the greater part of this gold remains in the Transvaal, and either goes to the Government, or to defray the cost of production.
I borrow the following figures from the supplement to The Critic of July 8th, 1899.
Let us take the last five years:—
| Gross Profits. | Dividend to Shareholders. | Paid to Boer Government. | |
| 1894 | £7,930,481 | £1,595,963 | £2,247,728 |
| 1895 | 8,768,942 | 2,329,941 | 2,923,648 |
| 1896 | 8,742,811 | 1,918,631 | 3,912,095 |
| 1897 | 11,514,016 | 2,923,574 | 3,956,402 |
| 1898 | 15,942,573 | 4,999,489 | 3,329,958 |
| ————— | ————— | ————— | |
| £52,898,823 | £13,767,598 | £16,370,387 |
Thus upon £52,898,823 worth of gold produced between the years 1894 and 1898 only 25 per cent. of this amount went to the shareholders, 30 per cent. was paid to the Transvaal Government, while the cost of production absorbed 45 per cent. The two last figures show that about 75 per cent., that is to say, three-quarters of the entire production remained in the Transvaal; and we have only taken the average of the last few years, during which the cost of production has been reduced to a minimum, thanks to the perfecting of the methods of working.
Let us add that while according to the above table in 1898 the estimate of the revenue was £3,329,000, the expenditure rose to £3,476,000. In 1899, the estimate of the revenue was £4,087,000.
From 1894-97 the amount paid directly into the Transvaal Exchequer had exceeded the shareholders' dividends; and when the reverse happened in 1898, the Government of Pretoria determined to put that matter right.
6.—Cost of Production and the Transvaal.
Dr. Kuyper also complained that the entire cost of production was not absorbed by the Transvaal. In his statement of January 26th 1899, Mr. Rouliot proved that the greater portion was in point of fact expended there. He gave the following figures concerning the expenditure of fifty-six companies in 1898.
The mines had only imported direct to the amount of £369,000, paid for machinery, which could only be constructed in Europe, and for Cyanide, to avoid having to buy the latter from a local trust, which raised the price 100 per cent.
Through local firms they had imported machinery and certain products to the amount of £324,438. From local merchants they had bought machinery, &c., to the amount of £2,487,660. They had paid £767,600 to the Dynamite Monopoly. They had distributed £3,329,000 in salaries to their employés, native or European. If we take it that the expenditure of the sixty other Mining Companies, gold or coal, in the vicinity of Johannesburg, was similar to the above, we have a total of something like nine million pounds sterling put in circulation, plus purchases of dynamite, plus merchandise bought through the medium of local tradespeople. Thus we see that the bulk of the cost of production actually remained in the Transvaal.
7.—What the "Vultures" brought.
Before Dr. Kuyper's "vultures" came to despoil it, the Transvaal was in a very shaky condition. It was heavily in debt and the Exchequer was empty; the Boer having always had a horror of paying his taxes. In 1884 when Messrs. Krüger and Smits came to London to sign the famous Convention, and stayed at the Albemarle Hotel, they found themselves, after the first few weeks unable to pay their bill, and Baron Grant had to come to their assistance. Now the "vultures" have been pouring some millions annually into the coffers of the Transvaal; a certain proportion of which has stuck to the fingers of Mr. Krüger, his family and intimates. The "vultures" have brought riches, industry, and civilisation into a wild and uncivilised country. The simile of the bird of prey is more applicable to the Boer than to the Uitlander.