The African Colony: Studies in the Reconstruction

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.

It is almost entirely a mining question. In most other industries the work can be done by white men with the assistance of a few natives. In agriculture, as things stand at present, sufficient native labour can be procured, and under an improved system of taxation the supply might be largely increased, within limits. The demand in agriculture should diminish rather than increase, save in the tropical and sub-tropical regions, where native labour is always plentiful. On the high veld a single farmer, if he ploughs with oxen, wants a boy as a voorlooper and another to use the whip; but this and similar work may well be performed in time by his own sons or by white servants. Railway construction will draw heavily on the supply, but its requirements are, after all, limited and small in comparison with the immense needs of the mines. For in the latter a very large number of employees is necessary, the bulk of the work is unskilled, and the conditions under which it must be performed are frequently such as to deter the ordinary European. The case is not quite that of labour in the West Indian plantations with which it has been compared, but there are many points of resemblance. The labour, on the current view, must be cheap; it must exist in large quantities; and the work is bound in certain respects to be hard and unpleasant – not perhaps harder than coal-mining in England, but, taking into account the superior average of comfort in the new colonies, indubitably more unattractive to the local workman.

Before the war some 90,000 natives were employed in the Witwatersrand mines. The average cost was from 1s. 6d. to 2s. a-day, food and lodging being provided; but the expense of acquiring the labour considerably raised the actual price per man. The old method was by a system of touts, who were paid as much as £5 a-head for their importation. The system led to great abuses, chicanery, needless competition false promises, which often cut off the supply in a whole territory. To meet the difficulty the Witwatersrand Native Labour Association was formed, whose duties were to recruit native labour and distribute it equitably to the mines within the association. Its agents were paid by salaries instead of by results, and the various native locations in the Transvaal, Swaziland, and Portuguese territory were exploited by them. But with all its efforts the mines were inadequately supplied. The 90,000 natives barely sufficed to maintain the status quo, and there was no margin for new development. The war scattered the accumulated supply. The local natives grew rich in military service, and declined to leave their kraals. Those imported from a distance returned to their homes, and the whole work of collection had to begin again. In October 1902, which may be taken as a fair date to estimate the condition of things after the war, only 31,000 natives were at work, one-third of the former staff. By May 1903, after herculean efforts, the supply had increased to a little over 41,000.

The problem is, therefore, a very serious one. To return to the old state of things the present supply must be doubled; to provide for any adequate progress it must at the lowest estimate be multiplied by ten. Any wholesale increase to the mining wealth of the country must come from the exploital of the deep level and the low-grade properties. The working costs per ton of ore run from 17s. 6d. to 30s.; on the Rand the average is about 27s.16 But the ordinary low-grade mines produce ore worth little more than 18s. to 20s. a-ton. To make their development possible the working cost must be reduced to 15s. -17s. Improved machinery may do something, but the first necessity is cheap labour. But where are the natives to come from? The efforts of the Native Labour Associations have not succeeded in showing that the need can be met from any of the old supply grounds. New taxation and the spending of their war savings may drive some of the Transvaal natives to the mines; but as the total native population of the colony is only about three quarters of a million, the whole working male force, which may be taken at one in ten, would not meet the demand. In addition to this we have the fact that no taxation would reach more than one-half of the population, and that of this half three-quarters is probably unfit for mining work. The total native population south of the Zambesi is at the present moment a little over 6 millions. Supposing this field were worked to the uttermost, we should still scarcely meet the demands likely to arise within the next five years for the gold industry alone; and such exhaustive exploitation is beyond the wildest dream of any Chamber of Mines.

The case may be stated thus. With all assistance from local taxation and from the amended organisation of the Native Labour Association, Africa, south of the Zambesi, will be unable to afford the unlimited supply of native labour which is the sine quâ non of mining progress. It would therefore appear that a new ground of supply must be sought. By those who admit this (and as will appear later, there are some who do not) three solutions have been advocated, none of which is unattended with difficulties. The first is to find a recruiting-ground in the vast district between the Zambesi and the White Nile, a region more densely populated by the aborigines than any other part of Africa. This scheme has been urged by Sir Harry Johnston with all the weight of his unrivalled experience. The advantages of the solution are numerous. Those natives live directly or indirectly under British sway. They are unsophisticated, and the old rate of wages would mean undreamed-of wealth to them. Moreover, the experiment would be of a certain assistance to Central Africa, for on their return home with their wages money would be put into circulation, the standard of living would rise, taxes would be easier to collect, and Government and governed would mutually profit. On the other hand, there are very many reasons against the proposal. Uganda and Nyassaland, to take the two chief instances, are in need of labour for their own development, and will strenuously resist its exportation. Their nascent civilisation will be dislocated if they are made the hunting-ground of labour agents. Nor is it clear that the Central African native is suited for mining purposes, since both in constitution and the food he lives on he differs from his southern kinsman, and, in the opinion of many good authorities, his transplantation to the high veld would mean a swollen death-rate. Overtures have also been made to Northern and Southern Nigeria, but the answer from those territories is still more hopeless. It is too early to pronounce on the future of the Central African scheme. A fair prima facie case can be made out for its success, and the result of the first experiments has not been wholly discouraging. But in any case it is certain that from this source no unlimited or permanent supply can come. A modicum, perhaps gradually increasing, may be secured, and in this day of small things we can be thankful for any increase in native African labour. But great care is necessary in its working. There must be no hint of coercion; the native must be vigilantly looked after from the day he leaves his kraal to the day he returns at the end of his twelvemonth’s service, – for the districts must be nursed, and it is on the report of the first batches that the success of the enterprise depends. The transport will cost money, but it is doubtful if it will work out at more per head than the old premium for importation.

The second solution has roused a storm of opposition, and its adoption would mean the overthrow of the old economics of the mining industry. It is proposed to use Kaffirs only in the deepest levels and in work unsuited for white men (for which the present supply will suffice), and in all other tasks to employ white labour. The white workman on the Rand under present conditions will be more than four times as dear as the native, costing 8s. 6d. as against the Kaffir’s 2s. a-day. Many arguments to justify the expense have been brought forward, of which the weakest is that the white man can do four times the Kaffir’s work. In many branches of unskilled labour he can barely compete with him. The real argument is concerned with the more general aspects of the problem. In a highly organised industry there is bound to be a higher maximum efficiency and regularity from a staff of white employees, who are working intelligently to better themselves and have certain political and social interests at stake in their labour. On political grounds, again, it is most desirable, for apart from relieving the strain on congested home districts, it would provide a feeding-ground for South African development, a material wherewith to colonise the wilds of the north. The sons of the white men would go out to farm and mine for themselves; and in two generations, when the Rand has become a normal industrial centre, we should have that interchange of population between town and country which is one of the buttresses of civilisation.

The white labour movement has roused bitter opposition, partly from the mining houses, and to some extent from white workmen on the Rand, who wish to make a monopoly of their position. Many of the arguments against the scheme need not detain us. There is no objection to white and black labour working side by side, any more than there is an objection on a tropical fruit-farm to a white man digging an orchard and a Kaffir carting manure for it, or on board ship to a white mate and a black cook being part of the same crew. The white man will have the presence of his fellows, the chance of advancement, and a higher wage to support his self-respect, which must be a brittle article indeed if it requires further strengthening. Nor is there much justification for the fears of those who see in white labour the beginning of endless labour troubles, culminating in the tyranny of the working man. The situation would be the same as in any other industrial city – as in Manchester, Sheffield, or Glasgow, where the bulk of the population are industrial employees. Strikes and lock-outs will come, but it is better to have in an English city a free and vigorous English population, than to bolster up the chief industry by an exotic labour system. Besides, there is always the Kaffir as a counterfoil, a very strong argument to inspire moderation in the labourer’s demands. White labour remains the ideal, the proper aim of all right-thinking men; but for the present it is more or less an impossibility. It simply does not meet the economic difficulty. Unless the Mines are content to make the gran rifiuto, curtail production, and play a waiting game, – a decision, as we shall see, quite as ruinous to the country as to the shareholder, – cheap labour under present conditions is a sheer necessity. One argument on economic grounds has been brought forward for white labour, which runs somewhat as follows: Expansion and development depend upon an unlimited labour-supply; white labour gives such an unlimited supply, – therefore it would pay to give four times the present wage and secure expansion rather than keep to the old scale and stagnate. Supposing a mining group to have a capital of ten millions, of which four are sunk in working mines, three held in reserve, and three invested in good but undeveloped claims. The present state of things allows of a dividend of 40 per cent on the first four millions; white labour would reduce the dividend to 20 per cent. But if white labour allowed the exploital of the unworked claims, so that a dividend of 20 to 25 per cent could be paid on the other six millions, it would be good business for the firm. It would, but it is not the problem before us. The argument assumes that the new properties are of the same class as those at present paying dividends, whereas they are in the main of so low a grade or demand such an immense initial outlay that, so far from showing a profit with dear labour, they would be the ruin of their promoters.

The third proposal is to introduce Chinese17 labour under short-time contracts and a rigorous supervision. Its supporters argue with much reason that the Chinaman has been found useful as a deep-level miner; that he is thrifty, intelligent, law-abiding, and tolerably clean; that, supposing 200,00 °Chinamen were employed in the mines, it would still mean not less than 40,000 white workers, so that white labour would increase in a liberal ratio; that a proper compound system and a strict limit to the term of engagement would secure the country against the economic dangers which threaten Australia and the United States. It is not yet certain that this ample supply of Chinese labour can be obtained, the matter being in process of investigation; but there is this to be said for the proposal, that it is the only one which touches directly the needs of the situation. The others are counsels of perfection, ends of policy on which all are agreed; this alone offers an immediate satisfaction to a very pressing want. The only argument which can be brought against it is not economic18 but political, – that its use would endanger the success of those very aims on which all are agreed. The Chinese are the born interlopers of the world. Whatever care we take there will be a leakage: a Chinese population, more feared, apparently, for its virtues than its vices, will grow up in the cities, the small trades will be shut to Europeans, the whole standard of life for the masses will be lowered, and the moral and social currency of the nation debased. The real case, therefore, of the opponent of Chinese labour, is that it is not possible to carry out the proposed plan; that we cannot import men on a fixed contract and deport them at the end of it; that we cannot build our compound walls so high as to prevent a leakage into the outer world; that, in short, the law is too weak to do its duty. There is no difference between any of the disputants on the danger of letting the labour loose in the country; but the one side maintains that with proper precaution this peril can be averted, the other that it is like the sea when it has found an entrance into a sea-wall, a little trickle which inevitably becomes a deluge. It is not a very convincing contention, though we can respect the honest political instincts which support it; indeed, there is a touch of that familiar fallacy, the “thin-end-of-the-wedge” argument, which opposes an undoubtedly beneficent reform because of its possible maleficent extension. The conflict is between an instant economic need and a potential political danger, and, with all desire to move cautiously, the wisest course would seem to be to meet the one, and trust to the good sense and courage of the people to avert the other. The problem of alien labour is indeed becoming a familiar one to many Crown Colonies. The Colonial Office has been asked to sanction the importation of Chinamen to Ashanti, and the Rhodesian Immigration Ordinance of 1901 made the enterprise legal for Southern Rhodesia.19 In the Transvaal there is a unique field for an experiment on sane and politic lines, and for the creation of a sound administrative precedent for other colonies to follow. There is a result, too, which may reasonably be hoped for from the provision of cheap labour which would be of direct political value. It would enable some of the smaller properties throughout the country to be worked at a profit, and so might in time redeem the gold industry from the capitalist monopoly, which it must remain under present conditions, and create a class of small mine-owners, on the analogy of the small coal-owners in England.