Since most nationalized railways do not pay it is interesting to take a look at the African balance sheet. Almost without exception the South African railways have been operated at a considerable net profit. These profits some years have been as high as £2,590,917. During the war, when there was a natural slump in traffic and when all soldiers and Government supplies were carried free of cost, they aggregated in 1915, for instance, £749,125.
One fiscal feature of these South African railroads is worth emphasizing. Under the act of Union "all profits, after providing for interest, depreciation and betterment, shall be utilized in the reduction of tariffs, due regard being had to the agricultural and industrial development within the Union and the promotion by means of cheap transport of the settlement of an agricultural population in the inland portions of the Union." The result is that the rates on agricultural products, low-grade ores, and certain raw materials are possibly the lowest in the world. In other countries rates had to be increased during the war but in South Africa no change was made, so as not to interfere with the agricultural, mineral and industrial development of the country.
Nor is the Union behind in up-to-date transportation. A big program for electrification has been blocked out and a section is under conversion. Some of the power generated will be sold to the small manufacturer and thus production will be increased.
Stimulating the railway system of South Africa is a single personality which resembles the self-made American wizard of transportation more than any other Britisher that I have met with the possible exception of Sir Eric Geddes, at present Minister of Transport of Great Britain and who left his impress on England's conduct of the war. He is Sir William W. Hoy, whose official title is General Manager of the South African Railways and Ports. Big, vigorous, and forward-looking, he sits in a small office in the Railway Station at Capetown, with his finger literally on the pulse of nearly 12,000 miles of traffic. During the war Walker D. Hines, as Director General of the American Railways, was steward of a vaster network of rails but his job was an emergency one and terminated when that emergency subsided. Sir William Hoy, on the other hand, is set to a task which is not equalled in extent, scope or responsibility by any other similar official.
Like James J. Hill and Daniel Willard he rose from the ranks. At Capetown he told me of his great admiration for American railways and their influence in the system he dominates. Among other things he said: "We are taking our whole cue for electrification from the railroads of your country and more especially the admirable precedent established by the Chicago, Milwaukee & St. Paul Railway. I believe firmly in wide electrification of present-day steam transport. The great practical advantages are more uniform speed and the elimination of stops to take water. It also affords improved acceleration, greater reliability as to timing, especially on heavy grades, and stricter adherence to schedule. There are enormous advantages to single lines like ours in South Africa. Likewise, crossings and train movements can be arranged with greater accuracy, thereby reducing delays. Perhaps the greatest saving is in haulage, that is, in the employment of the heavy electric locomotive. It all tends toward a denser traffic.
"Behind this whole process of electrification lies the need, created by the Great War, for coal conservation and for a motive power that will speed up production of all kinds. We have abundant coal in the Union of South Africa and by consuming less of it on our railways we will be in a stronger position to export it and thus strengthen our international position and keep the value of our money up."
Since Sir William has touched upon the coal supply we at once get a link,—and a typical one—with the ramified resource of the Union of South Africa. No product, not even those precious stones that lie in the bosom of Kimberley, or the glittering golden ore imbedded in the Rand, has a larger political or economic significance just now. Nor does any commodity figure quite so prominently in the march of world events.
In peace, as in war, coal spells life and power. It was the cudgel that the one-time proud and arrogant Germany held menacingly over the head of the unhappy neutral, and extorted special privilege. At the moment I write, coal is the storm center of controversy that ranges from the Ruhr Valley of Germany to the Welsh fields of Britain and affects the destinies of statesmen and of countries. We are not without fuel troubles, as our empty bins indicate. The nation, therefore, with cheap and abundant coal has a bargaining asset that insures industrial peace at home and trade prestige abroad.
South Africa not only has a low-priced and ample coal supply but it is in a convenient point for distribution to the whole Southern hemisphere,—in fact Europe and other sections. On past production the Union ranked only eleventh in a list of coal-producing countries, the output being about 8,000,000 tons a year before the war and something over 10,000,000 tons in 1919. This output, however, is no guide to the magnitude of its fields. Until comparatively recent times they have been little exploited, not because of inferiority but because of the restricted output prior to the new movement to develop a bunker and export trade. Without an adequate geological survey the investigations made during the last twelve months indicate a potential supply of over 60,000,000 tons and immense areas have not been touched at all.
The war changed the whole coal situation. Labour conflicts have reduced the British output; a huge part of Germany's supply must go to France as an indemnity, while our own fields are sadly under-worked, for a variety of causes. All these conditions operate in favor of the South African field, which is becoming increasingly important as a source of supply.