The African Colony Part 7

PART III.

THE POLITICAL PROBLEM

CHAPTER XII.

THE ECONOMIC FACTOR.

After a three years' war, and at the cost of over 200 millions, Britain has secured for her own children the indisputable possession of the new colonies. In earlier chapters an attempt has been made to sketch roughly the historical influences which may help to shape the future and to describe the actual features of the land which charm and perplex the beholder. We have now to face the direct problems into which the situation can be resolved, and in particular that question of material wellbeing which is the most insistent, because the most easily realised, for both statesman and people. The economic factor in the politics of a country is always a difficult matter to discuss, for it is made up of infinite details, some of them purely speculative, all of them hard to disentangle. If a business man were to do what he never does, and sit down to a.n.a.lyse calmly his position, he would have to go far beyond balance-sheets and statements of profit and loss. He would be compelled to look into the social and economic conditions under which he lived; he would have to estimate rival activities and forecast their development; the money market, rates of exchange, the nature of the labour supply, the effect of political and social movements, even such matters as his own bodily and mental health, and his standing among his fellows, would properly make part of the inquiry. With the private individual the a.n.a.lysis would be ridiculous, because the component parts are too minute to realise; but with a nation, where the lines are broader, some stock-taking of this kind is periodically desirable. But in spite of, or because of, the complexity of the inquiry, the human mind is apt to complicate it needlessly by running after side-issues and losing sight of the main features of the problem. The economic position of a country embraces in a sense almost every detail of human life; but there is no reason why the ma.s.s of detail should be allowed to get out of focus and obscure the synthesis of the survey. Provided we remember that the economic factor is not correctly estimated by looking only at revenue and expenditure, imports and exports, and fiscal provisions, we may safely devote our energies to steering clear of the labyrinth of secondary detail in which the ordinary statistician would seek to involve us.

In the following pages it is proposed to confine the survey to what appear to be the main features of a complex question. It would be vain to embark on speculations as to the payable ore in the ground, market forecasts, suggestions for new industries, and the many hints towards a reformed fiscal system with which local and European papers have been crowded. It is sufficient to note the existence of such questions; the materials for a true understanding of the South African economy are not to be found in them. In particular it is proposed to avoid needless statistics, which, apart from the fact that they are often inaccurate and partisan, are the b.u.t.tress of that particularist logic which is the foe of true reason. Two questions may be taken as the general heads of our inquiry: first, Wherein consists the wealth of the land, actual and potential? and, secondly, How best may that wealth be maintained and developed for the national good?

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 quant.i.ties 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 quant.i.ty 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 mult.i.tude 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 quant.i.ties 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 a.s.sists 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 quant.i.ties 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 quant.i.ties 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 spa.r.s.e 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 a.s.set, 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 a.s.sets 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 cla.s.s 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 a.s.sumed 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 cla.s.ses 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 cla.s.s 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 a.s.sets 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 canva.s.sed 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 ant.i.thesis 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 ant.i.thesis is not absolute, as has been often a.s.sumed: 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 a.s.sistance 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 quant.i.ties; 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 Wit.w.a.tersrand 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 compet.i.tion false promises, which often cut off the supply in a whole territory. To meet the difficulty the Wit.w.a.tersrand Native Labour a.s.sociation was formed, whose duties were to recruit native labour and distribute it equitably to the mines within the a.s.sociation. 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 acc.u.mulated 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 a.s.sociations 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 a.s.sistance from local taxation and from the amended organisation of the Native Labour a.s.sociation, Africa, south of the Zambesi, will be unable to afford the unlimited supply of native labour which is the _sine qua 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 a.s.sistance 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 Nya.s.saland, 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 const.i.tution 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 p.r.o.nounce 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 modic.u.m, 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 b.u.t.tresses 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 a.s.sumes that the new properties are of the same cla.s.s 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 Chinese[17] 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 200,000 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 economic[18] 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 ma.s.ses 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 cla.s.s of small mine-owners, on the a.n.a.logy of the small coal-owners in England.

There is one final argument against imported labour which demands a short notice, for it has been used by many serious men who are not given to captious objections. If we take the original capital of most mines we shall find that it has been extensively watered, and that even on the nominal capital there is a huge appreciation. A mine, to take an extreme instance, begins with a capital of 50,000 in 1 shares; subsequently the shareholders receive eleven 5 shares for every 1 share, making the present nominal capital 2,750,000. The quotation of those 5 shares is, say, 10-7/8, making the total capital value 5,981,250. A gold output which, under present conditions, is not sufficient to pay a fair dividend upon this capitalisation, would be amply sufficient to pay a dividend on the nominal capital, and more than sufficient to pay 500 per cent on the original capital. The question, therefore, of dividend-paying is out of all relation to the actual margin of profit on the working of a mine. The deduction is that the companies have themselves to blame, and must face a depreciation in their shares; and the unfortunate investor who has bought 5 shares at 10, believing a return of 4 per cent on his capital certain, must console himself with the reflection that every man must pay for his folly. This argument is final against any _ad misericordiam_ plea of the companies, but it does not touch the heart of the question. The working of the large over-capitalised properties is one thing, and the development of low-grade properties, on which large sums have been spent and for which no profits have yet been earned, is quite another. The old well-established mines can afford to fight their own battles, and for the matter of that, in spite of their heavy expenditure out of capital during the war, are mostly paying dividends even under present conditions: the new properties, on which the future of the country depends, are not, as a rule, over-capitalised, and, as we have seen, the margin of profit is so small on each ton of ore, that the question is reduced to its bare essentials--Is it possible to mine ore worth twenty shillings at a cost under a pound? But even as concerns the richer companies the argument is scarcely valid, for it leaves out of account that not inconsiderable factor, the credit of the country. It is so essential that new capital should be attracted for the twenty different needs of development, to which any Government loan can only be a trifling contribution, that anything which tends to shake the confidence of the world in the commercial structure of South Africa is the gravest danger. Is it certain, too, that that much-abused epithet of "_bona fide_ investor" is not applicable to the men who bought high-priced securities, not as a speculation, but as a modest investment?

It is often said by opponents of imported labour that its introduction will scarcely have taken place before an agitation will be begun for its withdrawal. So far from being an argument against the experiment, this is precisely the strongest which could be urged in its favour. If the desire of the country is for white labour, then the Chinaman can be tried with little danger. The mine-owners will find in time that work on a time contract by alien labourers is far from satisfactory, and when other circ.u.mstances permit they will no doubt readily adopt that system of free compet.i.tive labour which only a white industrial cla.s.s can create. Had there been any chance of the experiment being tried with complete popular approval, then the danger would have been considerable, for the Chinaman might easily have spread from mining to all industries and trades; but since it will be made in spite of an influential opposition, and will be jealously watched by unfriendly eyes, it seems inevitable that when it has played its part it will be willingly dispensed with. By refusing to accept the experiment we are doing our best to frustrate all hopes of a white population by cramping the development of the country at its most critical time and making a livelihood impossible for many of the existing white working men. When mines are shut down because of a lack of underground labourers, what becomes of the Englishmen who work above ground? It is a significant fact that many white miners, who were formerly the most bitter opponents of imported labour, are now its strenuous advocates, since they and their cla.s.s are beginning to feel the pinch.

But if the importation of Asiatics is undertaken, it should be on a very clear understanding and with a very distinct object in view.

The thing is far too dangerous at the best to be made the domain of unconsidered experiments. The ideal of white labour in the long-run must be preserved; and we must take jealous care that by the creation of a foreign labouring cla.s.s the way is not barred to that industrialisation of the native races on which the future of South Africa so largely depends. A maximum might be fixed by law--say 300,000 unskilled labourers, which could be increased if necessary by later enactments; and in so far as the maximum could not be attained by white and black labour, Chinese might be imported as a complement. The complement would, let us hope, rapidly decrease as new machinery lessened the amount of labour required, and the native districts of Africa were more fully exploited. All imported labour would be subject to rigorous conditions as to compounds, length of contract, and ultimate repatriation--conditions which any ordinary police could enforce without difficulty. At the same time, the Native Labour a.s.sociation should be made a Government department. As a private organisation it is not more efficient, and it is certainly less respected, than a Government department would be. What is wanted in all proper recruiting is the prestige of the Crown. Natives, who have been often deceived by touts, and regard the offers of the Labour a.s.sociation agents as so many idle words, would be ready enough to listen to proposals made under the guarantee of the paramount chief.

It is a risky game for a Government to embark in private business; but the Native Labour a.s.sociation is not a business, but a department, conducted on the lines of a Government department, but without its prestige. Under the Crown its organisation would remain intact, but its status would be raised and its efficiency centupled.

The railway system, immature as it is, has worked wonders for the country. With few lines, and those single and narrow gauge, with exorbitant rates of transit and a frequently ineffective organisation, it has still above all other factors made development possible. In former days, when heavy mining machinery had to be brought by waggons from Kimberley or Natal or Delagoa Bay, a mine required to be rich indeed before it could be worked at a profit, enterprise was costly and perilous, and the result was the stagnation of all activities save that one where enterprise was a primal necessity. Under the late Governments one line ran through the two States, from Norval's Pont to Pietersburg, with small branch lines in the Orange Free State to Winburg and Heilbron, and in the Transvaal to Springs and Klerksdorp.

The Natal line was continued from Charlestown to join the trunk line at Elandsfontein, and the Delagoa Bay line from Komati Poort to Pretoria, with a little branch to Barberton and the beginnings of a branch to the Selati gold-fields. The Transvaal had thus three direct outlets to the coast; the Orange Free State two, for a branch ran from the Natal line at Ladysmith to the little eastern town of Harrismith.

Two broad necessities of railway policy therefore awaited the new Government. The existing system must be perfected and interconnected, new routes to the coast created to relieve the present strain, the railways of adjoining colonies brought into touch with each other, so as to make one general and consistent South African system. But more important than the perfecting of existing arrangements must be the tapping of the rich and remote districts. Occasionally both needs may be exemplified in one line, but, roughly speaking, they are separate branches of railway policy, undertaken on different grounds and in many cases organised and financed on different methods. The experience of the United States, where railways were regarded as the cause and not the consequence of development, and pushed boldly into desert places which in a few years, through their agency, became centres of industry and population, is a safe guide, within limits, for South Africa, provided that the wealth to be exploited is really there, and railway extension does not cripple other works of equal necessity.

Of the first cla.s.s we have three chief examples. One--from Machadodorp to Ermelo--is already partially constructed. The second will run from Springs east to some point on this line, and so provide a direct route for the Johannesburg traffic from Delagoa Bay and avoid the awkward circuit by Pretoria. A further extension is projected by which the Springs-Ermelo line will be continued through Swaziland to Delagoa Bay and a complete alternative through route created. The third is the extension of the present Klerksdorp branch to Fourteen Streams, which would provide a shorter route from the Transvaal to the Cape, an infinitely shorter route from the Transvaal to Rhodesia, and would at the same time bring the coal districts of the country within reach of the diamond industry of Kimberley. In the second cla.s.s there is no limit to the number of possible and desirable railways. The most important is, perhaps, the grain line, from Bloemfontein to Johannesburg by Ficksburg, Bethlehem, and Wilge River, which would bring the great wheat-producing tracts of the Conquered Territory within easy reach of the chief market. Next comes the now completed Rand coal line from Vereeniging to Johannesburg.

Another coal line is projected from Witbank on the Delagoa Bay line to Springs, which would bring the produce of the chief Transvaal collieries directly to the Rand and relieve the congested line between Elandsfontein and Pretoria. Of equal importance in the long-run is a line from Krugersdorp by Rustenburg to some point, such as Lobatsi, on the Rhodesian railway, which would open up a district famous for its fruits and tobacco, and give the pastoralists of Bechua.n.a.land, as well as of the more distant Rhodesia, a straight line to Johannesburg. Other lines of the same cla.s.s are those from Belfast or Machadodorp to Lydenburg, from Nelspruit to Pilgrims'

Rest, and from Basutoland to Bloemfontein. Lastly, and lastly only because of its greater difficulty, the line should be continued north from Pietersburg along the Sand River, brought east between the Spelonken and the Magatoland mountains, past the little township of Louis Trichard, and then turned south across the basin of the Klein and the Groot Letaba to Leydsdorp, where it could join the completed Selati railway from Komati Poort.

The Railway Extension Conference held at Johannesburg in March 1903 sanctioned the immediate construction of most of the lines mentioned above, and recommended the others as objects to aim at when sufficient funds were at the disposal of the Government. As the share of the Guaranteed Loan allocated for railway extension is only some five millions, and as the proportion of any railway surplus which can be devoted to the purpose is, as we shall see later, strictly limited, it is highly desirable to make use of private enterprise so far as possible in new constructions, providing always for an efficient State oversight and an ultimate expropriation. The Klerksdorp-Fourteen Streams and the Krugersdorp-Lobatsi railways have already been arranged for on this principle, and it is probable that the experiment will be adopted in many of the smaller development lines. It is reasonable that a rich company, owning lands or mines, or requiring for its own purposes some special railway connection, should, if it desires a new line, undertake the financing of it. But at the same time the principle of the ultimate State ownership of all railways should be strictly adhered to, for the very good reason that in the railways we have the chief security for development loans, and the most productive of all the State a.s.sets. In few countries in the world is the expenditure on construction and maintenance so small, so that under present conditions they yield a handsome return on capital outlay. The Netherlands and the Pretoria-Pietersburg railways have been acquired from their former owners, and the incomplete Selati and Machadodorp-Ermelo lines will shortly follow. If we take the price paid, with the addition in the latter case of the outlay necessary for completion, as the capital value, we shall find that the net receipts, even after the large reductions in rates which have been made and must be maintained, show a generous percentage of profit.[20] It will be explained later what part this important a.s.set is called upon to play in the finance of the new colonies. So much for the main lines; but a system of light railways, constructed at small expense, is vital to the mineral and agricultural exploitation of such districts as Bethel, Lichtenburg, Wolmaranstad, and Waterberg, in the Transvaal and the southern part of the Orange River Colony. In a flat upland country, where animal transport for some years to come will be precarious and expensive, where the roads are still unsuitable for steam haulage, and where coal is cheap, perfect conditions exist for an extensive light-railway development.

Railway extension, then, is one of the first demands of the country: it is comparatively easy to achieve, and most of the necessary capital has already been found for it. But the omnipresent labour difficulty appears here as elsewhere, not indeed with the magnitude of the mining problem, but with an equal insistence. To carry out the programme sketched above in any reasonable time, say three years, some 40,000 natives will be required. At the present moment the number employed is scarcely 5000, and 10,000 is the limit which the railways may recruit in South Africa by an agreement with the Chamber of Mines. Many natives, such as the Basutos, will work on railways when they will not go underground; and the agreed limit is fair enough to both parties.

But the balance cannot be secured without seriously trespa.s.sing upon the supply grounds of the mines. The Uganda railway was built with imported labour, and it seems inevitable that the Central South African railways must follow suit. The limited funds at their disposal, and the difficulties in the way of the country's absorbing at the moment large numbers of unskilled workmen, make the employment of white navvies alone impossible. The railways, indeed, furnish a fine experimenting-ground for the importation of indentured foreign labour under a short-time contract and a condition of repatriation.

The number they require is small: 10,000 will tide them over all immediate needs; the nature of the work enables a complete supervision to be exercised; and while it is still doubtful whether alien labour can be secured for the mines, experience has shown that for surface railway work the supply is certain. In the congested districts of India and China the small cultivator, to whom land is the object of his life, will gladly leave his home for one or two years if he can return with the money to buy a plot of ground; and when the return home is the cause of the setting out there will be no trouble in repatriation.