Before the war, practically all the gold mines of the Witwatersrand were controlled by British and German capital. The first American company entered the field in 1917 and some French capital has also been invested. The German position was strong, as the German companies controlled half, and perhaps more, of the capital invested in gold mines. The report of the South African Custodian of Enemy Property issued early in 1918 showed that no less than 26,000 enemy shareholders in gold, coal, and other mining concerns in the Union owned stock to the aggregate nominal value of $37,500,000. As gold is by far the most important mineral of the Transvaal, it is probable that the greater part of this German capital was invested in gold mines. The enemy firms were wound up or went into voluntary liquidation, and enemy shares in mining corporations to the face value of $24,000,000 were taken charge of by the Custodian of Enemy Property.[178]
[178] “Engineering and Mining Journal,” May 11, 1918, p. 888.
The control of the gold mines of the Transvaal is centered in the following six companies: Central Mining & Investment Corporation, the Consolidated Mines Selection Co., Johannesburg Consolidated Investment Co., the Consolidated Goldfields of South Africa, the Union Corporation (formerly Ed Goerz & Co.), and the General Mining & Finance Corporation. The last two companies were absolutely German before the war. The Central Mining & Investment Corporation controls probably 50 per cent. of the output of the district. American capital is interested in the Consolidated Mines Selection Co. Another American company, the Anglo-American Corporation of South Africa, Ltd., was registered at Pretoria on September 25, 1917, with an issued capital of £1,000,000. The immediate object of the corporation is to participate in tendering for leases of certain Far East Rand gold-mining areas.[179]
[179] U. S. Commerce Reports, December 15, 1917, p. 1033.
It has been reported that French capital controls about 10 per cent. of the annual output. For many years the majority of the mining engineers in the Transvaal were Americans.
The Germans had not only acquired a considerable control through the investment of capital in mining properties, but they also exercised control through their trade in mine supplies. Orenstein-Arthur Koppel Co. had established an important trade in rails, mine trucks, and similar supplies, and continued to do business even after the beginning of the war. Soon after the sinking of the Lusitania, a mob destroyed the offices of the company in Johannesburg and burned a stock of much-needed supplies. At the outbreak of the war it was feared that there might be serious obstacles in the way of the gold-mining industry continuing a normal course, because of the possible difficulty in obtaining enough of the cyanide, mercury, and zinc used in gold extraction, much of which had been previously supplied by Germany. The necessary materials were obtained from other sources, however.
Rhodesia is controlled by the British South African Co., organized by Cecil John Rhodes, for whom the colony was named. The company is entirely British; it is the government, levies the taxes, administers the laws, and controls the mining industry. Companies and individuals are permitted to locate mining claims much the same as they are in California. The Goldfields Rhodesian Development Co., which has large Rhodesian mining interests, is an offshoot of the Consolidated Goldfields of South Africa. It is safe to say that the gold mines of Rhodesia are owned and worked entirely by British capital. A percentage tax is levied on the output of the gold mines.
In Australia, before the war, much the same conditions existed as in South Africa. The large gold-mining companies were seemingly British; their headquarters were either in Australia or in London and their directors and managers were British. It is certain, however, that a considerable amount of German capital was invested in the companies. Among the important producing companies are the Associated Gold Mines of Western Australia, Great Boulder Proprietary Mines, Ltd., Golden Horseshoe Estates Co., Ltd., Ivanhoe Gold Corporation, Ltd., all of Western Australia; the Mount Morgan Gold Mining Co., of Queensland; the Mount Boppy Gold Mining Co., and the Mount Lyell Mining & Railway Co., Ltd., of Tasmania.
Through the vigorous action of the Australian prime minister, William M. Hughes, German capital was expelled early in the war from all the industries of the commonwealth, including gold, lead, and zinc mines, smelters and refineries, and buying organizations. In January, 1916, to safeguard the financial position of the commonwealth, the prime minister issued decrees providing that no new flotations of companies or increases in the capital of existing companies would be allowed without the consent of the treasurer of the commonwealth; that companies incorporated in Australia would have three months to discontinue the holding of their shares by persons of enemy nationality or origin, whether naturalized or not; and that in the future no transfers of shares to persons of enemy nationality or origin would be permitted.[180]
[180] U. S. Commerce Reports, February 21, 1916, p. 733.