The African Colony: Studies in the Reconstruction

by John Buchan

I.

The cardinal economic fact is the existence of gold—gold as it is found in no other country, not in casual pockets and reefs, but in quantities which can for the most part be accurately mapped out and valued months and years before it is worked; gold which is mined not as an adventure, but as an organised and stable industry. The Main Reef formation extends for sixty-two miles, from Randfontein to Holfontein,[15] but three-fourths of the gold mined has been produced in the central section, which is only some twelve miles long. In 1886 the district was proclaimed a public gold-field, and since that day ore worth nearly 100 millions sterling has been extracted. The development took place in spite of difficulties which vastly increased the working costs. The dynamite and railway monopolies, the heavy expense of the transit of machinery from the coast, the absence of subsidiary local industries to feed the gold industry, forced the work into the hands of a small circle of rich firms who could provide the large capital and face the heavy risks of a new enterprise. It is clear, therefore, that mining on the Rand, while a notable enterprise, has necessarily been a slow one, since the two natural factors, the amount of gold in the soil and the labour of working it, have been complicated by many artificial hindrances. The past is not the true basis for estimating the future of the industry; the proper premises for a forecast are the two natural factors—the quantity of gold in the earth and the normal cost of winning it. It is the first that concerns us at present.

All estimates must be merely conjectural, and can be used only with the greatest caution. But in the multitude of conjectures there may be such a consensus of opinion as to ensure us a fair certainty that this or that is the view of those who are best fitted to judge. Mr Bleloch, in a calculation based on the report of the most eminent engineers, values the amount of gold still in the Rand at 2871 millions sterling, showing a profit to the companies concerned of over 975 millions. If we put the life of the Rand at one hundred years, which is a mean between conflicting estimates, we shall have an average, allowing for reserve funds, of 8 millions to be paid yearly in dividends to shareholders. In 1898 twenty-six companies paid dividends amounting to over 4 millions: therefore, on Mr Bleloch’s figures, we can promise at least one hundred years to the Rand of twice the prosperity of 1898. These figures include the deep levels, but do not take into account any of the Rand extensions, in which the Main Reef has been traced for over 300 miles. It is certain that in the direction of Heidelberg and Greylingstad gold in payable quantities exists for not less than seventy miles, and it is at least probable that a similar extension exists in the Potchefstroom and Klerksdorp districts in the west. So much for the peculiar “banket” formation of the Rand, which must remain the type of stable gold-mining,—stable, because the element of uncertainty over any group of properties is reduced to a minimum, and the high organisation necessary and the large initial outlay produce a community less of rivals than of fellow-workers. Quartz reefs and alluvial deposits are found in many parts of the country. In Lydenburg and Barberton, where the earliest gold mines were sunk, several producing companies are at work; and this type of mining will develop equally with the Rand under a system which abolishes monopolies and assists instead of discouraging enterprise. In the northern districts, around the Wood Bush and the Zoutpansberg ranges, there are quartz and alluvial mining, and indications of “banket” formation, and in the all but unknown region adjoining Portuguese territory, if tales be true, there may be gold in quantities still undreamed of.

No figures are reliable, all estimates are disputed, but from the very contradictions one fact emerges—that there is gold enough to give employment to a greatly increased mining population for at least fifty years, and to decentralise the industry and create large industrial belts instead of one industrial city. Nor is gold the only mineral. From Pretoria to Piet Retief run coal-beds, many of them of great richness and good quality, covering an area of more than 10,000 square miles. It has been calculated that 60,000 million tons are available. The quality of the coal in the undeveloped beds lying to the south of Middelburg is, in the opinion of experts, equal to the best British product. Iron-ore is abundant in many parts, particularly in the coal-bearing regions of the east. Lead has been worked near Zeerust, and there are good grounds for believing that copper in large quantities exists in Waterberg and in the tract between Pietersburg and the Limpopo. Diamond pipes are found in several places in the region due east of Pretoria, where the new Premier Mine seems to promise a richness not equalled by Kimberley; and it is probable that places like the Springbok Flats and the western parts of Christiana are highly diamondiferous. Sapphires have been found in the west, and diamonds and spinels are reported from the northern mountains. Few countries have a soil more amply mineralised; but the sparse population, mainly absorbed in the quest of one mineral, has done little to exploit its wealth. Mining, save for gold and coal, is still in the Transvaal a thing of the future. The agricultural and pastoral wealth is dealt with in another chapter. But we may note an asset, which is wholly undeveloped, in the cultivation and protection of the natural wood of the north and east, and the planting of imported trees. Timber in an inland mining country is a valuable product, and on the soil of the high veld new plantations spring up like mushrooms. Ten feet a-year is the common rate of growth for gums, and in the warmer tracts it is nearer twenty. Many indigenous South African trees, which a few years ago, under an unwise system of timber concessions, were disappearing from most places save a few sequestered glens in the north, might under proper care become a lucrative branch of forestry. Current estimates, rough and inaccurate as they must be, are the fruit of a very general conviction, which on the broadest basis is amply supported by facts. There is sufficient natural wealth—mineral, pastoral, and agricultural—to provide a sound industrial foundation for the new States. It is only on the details of its exploitation that experts differ.

In any calculation of natural wealth there is another factor to be noted which controls production and dictates its method. Whatever the natural riches of a country may be, climate and situation must be weighed in their practical estimate. A diamond pipe at the South Pole and acres of rich soil in Tibet are practically as valueless as a fine anchorage on the Sahara coast or a bracing climate in Tierra del Fuego. In the new colonies we have throughout three-fourths of their area a climate where white men can labour out of doors all the year round. The remaining fourth is less pestilential than many places in Ceylon, Burma, and the Malay Peninsula, where Europeans live and work. There are certain very real climatic disadvantages—frequent thunderstorms, hailstorms in summer when fruits and crops are ripening, rains concentrated over a few months, a long, dusty, waterless winter. But these are difficulties which can be surmounted for the most part by human ingenuity, and at the worst they place no absolute bar on enterprise. From the standpoint of health the climate is nearly perfect, inducing a vigour and alertness of body and mind which in the more feverish life of cities may ruin the nerves and prematurely age a man, but in all wholesome forms of labour enable work to be done at a maximum pressure and with the minimum discomfort. In valuing, therefore, the natural assets of the new colonies, we need write off nothing for climatic hindrances. The situation is a more doubtful matter. They pay for their freedom from the low heats of the coast by the absence of private outlets for trade and the consequent difficulties which all people must meet who have to hire others to do their shipping and carrying. It is not the difficulty of Missouri or Ohio or other inland states in one territory, but of separate peoples, with interests often conflicting, who have to submit to weary customs and railway arrangements before their outlet can exist. This is one, perhaps the only, genuine natural limitation which all schemes of economic development must take account of.

The country is not new, and therefore in sketching its natural wealth we do not exhaust the preliminaries of the question. There are ready-made industrial conditions to be considered which may modify our estimate of the initial equipment. Such are the commercial structures already built up in the great commercial centre, which for this purpose represents the new colonies; the nature and future of the labour supply; the existing markets; the already prepared means of transit. The gold industry, as was to be expected from its nature, has fallen into the hands of a few houses. Eight great financial groups control the wealth of the Rand: the Eckstein group alone has interests which might be capitalised at 70 millions; the Consolidated Gold-fields at about 30 millions. The reason for this state of affairs is obvious. Gold-mining in the Rand fashion is a costly business, and altogether beyond the reach of the small man: claims were bought up by the financiers who were first in possession, and, since they were able to hold and develop, the entry of other financial houses has been blocked. But the great mining firms do not confine their activity to gold. They own millions of acres of land throughout the country, and many valuable building sites in the towns. Originally, doubtless, land was bought purely as a mining speculation, but they are not slow, in the absence of minerals, to make out of it what they can. These Rand houses are the bugbear of a certain class of politician. The Rand is closed to the small man, so runs the cry; a system of trusts is being created; in a little while the country will be under the iron heel of a financial ring. It is assumed that the mining firms will turn their attention to ordinary commerce, and oust the independent trader and cultivator and the small manufacturer. Certain trading experiments by some of the chief houses, and an attempt to grow food-supplies for their own employees, give a certain support to the forecast.

If the Trust system in its American form were ever to become a reality in South Africa, the obvious and infallible checks against too wide an expansion would arise there as elsewhere. A trust can only exist in full strength under its originators. There can be no apostolic succession in trust management; the second or the third generation must be on a lower scale, and the great fabric will crumble. A huge combination can only be maintained by perpetual energy and ceaseless labour, and, like the empire of Charlemagne, it will dwindle under a successor. A trust can be created but not perpetuated. No group of directors, no paid manager, can maintain the nicety of judgment and the sleepless care which alone can preserve from decay an artificial structure imposed upon an unwilling society. But in the case of the new colonies there are special reasons which make this development highly improbable. A trust flourishes only on highly protected soil, and Free Trade must long be predominant in the Transvaal. Again, while there can never be a trust in gold, the market being unlimited and beyond any possibility of control, gold-mining must remain the chief interest for any group of firms who desired to establish a trust in other commodities. Now gold-mining is one-third an industry and two-thirds a scientific inquiry. An ordinary trust is concerned less with production than with the control of the markets and the methods of distribution. But all progress in Rand mining depends on nice and speculative scientific calculation. To reduce the working costs by improved appliances, so that ore of a low grade may become payable, is so vital a matter with every great firm which is concerned in gold-mining, that the commercial or trust side, which must be concerned not with gold but with other forms of production, is not likely to be given undue prominence. Human capacity is limited, and no man or body of men can meet these two very different classes of problems at the same time. The experiments of mining firms in other trades have been due far more to the immense cost of imports and the absence of subsidiary industries than to a Napoleonic desire for consolidation. There is room, abundant room, in the Transvaal for ironworks and factories, for the private trader and the independent farmer; and the bogey of the great houses resolves itself in practice into little more than a stimulating example in progressive business methods.

The foregoing remarks do not, however, touch the question whether or not the gold industry is to remain a preserve of a few groups. If it is, there can be little real objection. The market for gold can never be controlled like the diamond-market, and there is small fear of a gold-mining De Beers dictating to the world. Moreover, the great groups are not static but mobile, constantly dividing and subdividing, throwing off subsidiary companies and adding new ones, no more monopolists than the cotton-spinners of Manchester or the shipbuilders of Glasgow. The fact remains that they own most of the mining rights in the country, and all development must lie very much in their hands. The owner of the minerals on a farm in Potchefstroom is at liberty to form a company and work them himself. But the case will be uncommon, since the bulk of the mineral rights are already absorbed, and, on the Rand system of mining, an unknown adventurer would have difficulty in raising the large initial capital. It is only in this sense that there is any meaning in the charge of monopoly. A more real grievance is that a great house will often buy up claims throughout the country and leave them unworked till it suits its pleasure, thereby hindering industrial development. This, in a sense, is true, but the reason is to be found mainly in the difficulty of development under recent conditions,—conditions which, for the matter of that, would have pressed far more hardly on the small man than on the rich firms. So far as the gold industry is concerned, the plaint of the humble citizen on this score is a little ridiculous. He asks an impossibility, and in his heart admits the folly of the request.

It is time that the anti-capitalist parrot-cry were recognised in its true meaning. On the Rand it is not the wail of a downtrodden proletariat or of the industrious small merchant whose occupation is gone. It is the dishonest agitation of a speculating class who find their activity limited by the strenuous and rational policy of the great houses. I would suggest as a fair parallel the outcry of small and disreputable publicans in a rising town where it has been found profitable to open good restaurants and decent hotels. Without capital the Transvaal is a piece of bare veld; with capital wrongly applied it is a hunting-ground for the adventurer and the bogus-promoter. The gold industry depends on capital, because only capital combined with intelligence and patience could have raised it from a speculation to an industry. But facts are the most eloquent form of apologetics. At the moment over 30 millions have been spent on development by producing companies, leaving out of account the large administrative and office expenses. How much has been spent in the same way on mines which have not reached the producing stage it is impossible to say, but the figure must be very large. To start an ordinary deep-level mine costs nearly a million before any profits are made. Surely it is right to see in an organisation which is prepared to face such an outlay some qualities of courage and patience. It is possible that the great houses may find themselves in conflict with the best public opinion on certain matters before the day is done; but it is well to recognise that the very existence of an industrial population is due to capital wisely and patiently used by the strong men who were the makers of the country.

Last in our calculation of assets comes the existing or accessible machinery of exploitation and production—the labour supply, the means of transit, the available markets. The first is a complicated matter on which it is hard to dogmatise. For some months it has been the most strenuously canvassed of South African problems. On its solution depends without doubt not only the future prosperity but the immediate insolvency of the country. And at the same time, being bound up more than other economic questions with far-reaching political interests, its solution has become less a commercial adjustment than a piece of national policy. As was to be expected in this kind of discussion, the true issues have been habitually obscured. The antithesis is not between labour and no labour, but in one aspect between the cheap, unskilled native and the dear, more highly skilled white; and in another between a limited supply, which means the curtailment of enterprise, and an unlimited supply, even of a lower quality, which would allow full development. Again, the antithesis is not absolute, as has been often assumed: the true solution may lie in a compromise, a delicate cutting of the coat to suit the particular cloths employed in its making.