The Transvaal from Within: A Private Record of Public Affairs

by Percy Fitzpatrick

Before entering on this subject, we wish to put on record our disappointment with the evidence tendered on behalf of the South African Explosives Company, Ltd. We expected, and we think not unreasonably, that they would be able to give reliable information for our guidance respecting the cost of importation, as well as of local manufacture, of the principal explosives used for mining purposes; but, though persistently questioned on these points, few facts were elicited and we regret to say that they entirely failed to satisfy us in this important respect....

That the principal explosives used here can be purchased in Europe, and delivered here at a price far below the present cost to the mines, has been proved to us by the evidence of many witnesses competent to speak on the subject, and when we bear in mind that the excess charge of 40s. to 45s. per case does not benefit the State, but serves to enrich individuals for the most part resident in Europe, the injustice of such a tax on the staple industry becomes more apparent and demands immediate removal.

After showing that the dynamite monopolists make a profit of 47s. 6d. per case on No. 1 dynamite, and 55s. on blasting gelatine, over and above the price at which the mines could buy explosives if there were no monopoly or protection, the report goes on:—

The Mining Industry has thus to bear a burden which does not enrich the State or bring any benefit in return, and this fact must always prove a source of irritation and annoyance to those who, while willing to contribute to just taxation for the general good, cannot acquiesce in an impost of the nature complained of....

Your Commission inspected the factory at Modderfontein, and it must be admitted that the construction of the works and general equipment are in many respects admirable, and it appears to us greatly to be regretted that so much money should have been invested in an undertaking for the manufacture of any article whereof the ingredients have to be imported at a great cost, four tons of raw material being required to produce one ton of the manufactured article.

It has been proved to our satisfaction that none of the raw material used is found in this country, or only in such small quantities as to make it practically valueless for the purpose required.... All these drawbacks, which make it almost impossible to establish a bonâ-fide industry, fall on the mines and render their task, especially that of the low-grade mines, extremely difficult and discouraging. Another point that has been brought to the notice of your Commission is the prejudicial effect exercised by this monopoly in practically excluding from the country all new inventions in connection with explosives, and, in view of the numerous dynamite accidents that have taken place from time to time, it is to be regretted that it is not possible to make satisfactory trials of other and less dangerous explosives for the working of the mines. These questions have received the careful consideration of your Commission, who are forced to the conclusion that the factory has not attained the object for which it was established, and that there is no reasonable prospect of it doing so. Further, that there are good grounds for believing that the contractors have failed to comply with the conditions of their contract.

For the aforesaid reasons, and in view of the opinion expressed by the Volksraad Dynamite Commission, that the legal position of the Government against the contractors is undoubtedly strong, your Commission desire to recommend that the case be placed in the hands of the legal advisers of the State, with a view to ascertaining whether the contract cannot be cancelled.

Meanwhile your Commission recommend that the Government avail itself forthwith of its right under Article 15 of the Regulations, to take away the agency of trading in gunpowder, dynamite, cartridges, and other explosives from the above-mentioned persons and at once take into its own hands the importation of dynamite and other explosives for the benefit of the mining industry, subject to a duty of not more than 20s. per case or such other less sum as may be determined from time to time.

This protective duty, while considerably increasing the revenue of the State, will at the same time offer ample protection to any industry of this description in the Republic. In the event of cancellation being advised to be possible, free trade in explosives to be at once established, subject to a duty of 20s. per case or such other less duty as may be determined upon from time to time, and manufacturing of other explosives in the Republic to be allowed, and also to be protected by the same import duty....

Your Commission desire further to observe that it is not clear to them, judging from the published accounts of the South African Explosives Company for 1895 and 1896, that the Government receives the proportion of surplus profit secured to it under the contract, viz., 20 per cent., and would strongly recommend, in accordance with Article 6 of the contract, an immediate investigation of the Company's accounts by qualified accountants, in conjunction with the financial adviser of the Commission, in order to find out what amount is still due to the Government under this head.