THE ROMANCE OF THE TRANSVAAL.

Press, Volume LIII, Issue 9862, 11 March 1896, Page 3

THE ROMANCE OF THE TRANSVAAL.

(Abridged from Chambers's Journal). African gold is no novelty, for the Portuguese carried back golddust (and negro slaves) from Cape Bojodor 450 years ago. The ruins of Mashonaland were discovered in 1864 by Karl Mauch, who also discovered the goldfields of Tate, on the Zambesi, of which Livingstone had reported that the natives got gold there by washing, being too lazy to dig for it. When Karl Mauch came back to civilisation people laughed at his stories of ruined cities in the centre of Africa as travellers' fables, but a number of Australian gold-diggers thought his report of the Tate goldfield good enough to follow up. So about 1867 a band of them went out and set up a small battery on the Tate River for crushing the quartz. This may be called the first serious attempt at gold mining in South Africa since 'the 'days of the lost races who built the' 'cities whose ruins Karl Maxich discovered arid which Mr Theodore Bent has described. A Natal company assisted the Tate diggers with supplies, and enough gold was found fo justify the flotation of the Limptfpo Mining Company in London. This was in 1868. The diamond discoveries in Griqualand soon drew away the gold-seekers, who found the working expenses too heavy to leave gold mining profitable, and for a time the Tate fields were deserted. They were taken up again, however, twenty years later by a Kimberley enterprise, out of which developed the Tate Concession and Exploration Company, to whom ex-king Lobengula granted a mining concession over no less than 800,000 square miles of Matabeleland. While the Tate diggers were pursuing their work a Natalian named Button went with an experienced Californian miner named Suthei'land to prospect for gold in the north-east of the Transvaal. They found it near Lydenburg, and companies were rapidly formed in Natal to work it. Such big nuggets were sent down that men hurried up, until soon there were some 1500 actively at work on the Lydenburg field. The operations were fairly profitable, but the outbreak of the Zulu war, and then the Boer war, put an end to them for some years.

It is to be noted that much as the Transvaal Republic has benefited from gold mining, the Boers were at first much averse to it, and threw all the obstacles they could in the way of the miners. And it was this attitude of the Boers, especially towards the Lydenburg pioneers, that led to the next development.

One of the tributaries of the Crocodile river (which flows into Delagoa Bay) is the Kaap river, called also the River of the Little Crocodile, which waters a wide deep valley into which projects the spur of a hill which the Dutch pioneera called De Kaap (the cape). Beyond this cape-like spur the hills rise to a height of 3000 ft., and carry a wide plateau covered with innumerable boulders of fantastic shape—the DuiveP Kantoor. The mists gather in the valley and dash themselves against De Kaap like surf upon a headland; and the face of the hills is broken with caves and galleries as i by the action «ea, but wall* by-the

action of the weather. Upon the high-lying plateau of the Duivcl's Kantoor were a number of farms, the chief of whioh was held by one G. P. Moodie.

One day a Natal trader named Tom M'Laughlin had occasion to cross this plateau in the course of a long trek, and he picked up with curiosity some of thj bits of quartz he passed, or kicked aside, on the way. On reaching Natal he showed these to an old Australian miner, who instantly started up country and found more. The place was rich in gold, and machinery was as quickly as possible got up from Natal on to Moodie's farm. ■ On this farm was found the famous Pioneer reef, and Moodie, who at one time would gladly have parted with his farm for a few hundreds, sold his holding to a Natal company for something like a quarter of a million. Then ther» was a rush of diggers and prospectors back from the Lydonburg district and the De Kaap "boom" set in. The beginning was in 1883, and two years later the whole Kaap valley and Kantoor plateau was declared a public goldfield. Two brothers called Barber came up and formed the centre of a settlement, now the town of Barberton. Every new reef sighted or vein discovered was the signal for launching a new company—not now in Natal only, but also in London, to which the goldfever began to spread (but wa s checked again by the De Kaap reverses).

Some fifteen Natalians formed a syndicate to " exploit" this country on their own account. Some were storekeepers in (he colony, some waggon traders, and some merely waiters on fortune. Only eleven of them had auy money, and they supplied the wherewithal for the other four, who were sent up to prospect and dig. After six months of fruitless toil the money was all done, and word was sent to the four that no more aid could be sent to them. They were " down on their luck,'' when, as they returned to camp on what was intended to be their last evening there, one Edwin Bray savagely dug his pick into the rock as they walked gloomily along. But with one swing which he made came a turn in the fortunes of the band, and of the land, for he knocked off a bit of quartz so richly veined with gold as to betoken the existence of something super-excellent in the way of a "roef." All now turned on the rock with passionate eagerness, and iria very short time pegged out what was destined to be known as "Bray's Golden Hole."

But the syndicate were by this time pretty well cleaned out, and capital was needed to work the reef and provide .machinery, &p. So a small company was formed in Natal under the name of the Sheba Reef Gold Mining Company, divided into 15,000 shares of £1 each, the capital of / £15,000 being equitably allotted among the fifteen members of the syndicate. Upon these shares they raised enough money on loan to pay for the crushing of 200 .tons of quartz, which yielded eight ounces of gold to the ton, and at once provided them with working capital. .Within a very few months the mine yielded 10,000 ounces of gold, and the original shares of £1 each ran up by leaps and»bounds until they were eagerly competed for at £100 each. Within a year the small share capital (£12,000) of the original syndicate was worth in the market a million and a half sterling. This wonderful success led to the floating of a vast number of hopeless or bogus enterprises, and worthless properties were landed on the shoulders of the British public at fabulous prices. Yet, surrounded, as it was by a crowd of fraudulent mutators, the great Sheba mine has continued as one of the most wonderfully productive mines in South Africa. Millions have been lost in swindling and impossible undertaking in De Kaap, but the Sheba Mountain, in-which was Bray's Golden Hole, ha« really proved a mountain of gold. • The De Kaap goldfield had sunk again under a cloud of suspicion, by reason of the company-swindling and share-gambling which followed upon the Sheba success/ when another startling incident gave a fresh impetus to the golden madness. Among the settlers in the Transvaal in the later seventies were two brothers called Struben, who had had some .experience, though not much success, with the gold* seekers at Lydenburg, and who took up in 1884 the farm of Storkfonstcin- in. the Witwatersrandt While attending to the farm they kept their eyes open for gold, and one day one of the brothers came upon gold-bearing conglomerates, which they, followed up until they struck the famous " Confidence Reef." This remarkable reef at one time yielded as much as a thousand ounces of gold and silver fp the ton of ore» and then suddenly gave out", being in reality not a "reef" but a "shoot." There Wtare other prospectors in the district, but none had struck it so rich as the Strubens, who. purchased the adjacent farm to their-own, and set up a battery to crush quartz, both for themselves and for the other gold-hunters. .The farms were worth little in those days, being only suitable for grazing ; but when prospectors and company promoters began to appear, first by units, then by tens, and then by hundreds, the Boers put up their prices, and speedily realised for their holdings ten and twenty times what they would have thought fabulous a year or two previously. And it was on one of these farms that the city of Johannesburg was destined to arise, as if under a magician's wari[|, of huts, in eight years, an. area three miles, by one half, With suburbs stretching many miles 'beyond, wisi. handsome streets and luxurious houses, in the very heart of the desert.

It was one Sunday evening in 1386 that the great " find " was made which laid the base of the prosperity of the Johannesburg to. be. A farm servant of the brothers Struben went over to visit a friend at a neighbouring farm, and as he trekked homeward in the evening, knocked off a bit ,of rock, the appearance of which led him to take it home to. his employer. It corresponded with what Struben had himself found in another part, and, following up both leads, revealed what became famous as the Main Reef, which was traced for miles east and west.

A lot of the " conglomerate " was sent on to Kimberley to be analysed, and a thoughtful observer of the analysis there came to the conclusion that there must be more good stuff where that came from. So he mounted his horse and rode over -to Barberton, where he caught a "coach" which dropped him on the Rand, as it is now called. There he quietly acquired the Langlaate farm for a few thousands, which the people on the spot thought was sheer madness on his part. But his name was J. B. Robinson, and bje is now known in the'' Kaffir Circus " and elsewhere as one of the " Gold Kings" of Africa. He gradually purchased other farms, and; in a year or two floated the well-known Langlaate "Company, with a capital of £450,000, to acquire what had cost him in all about £20,000. In five years this company turned out gold to the value of a million, and paid dividends to the amount of £330,000. The Robinson Company, formed a little later to acquire and work some other lots, in five years produced gold to the value of one and a-half million, and paid to its sharehplders some £570,000 in dividends. With these discoveries and successful enterprises the name and fame of " the Rand " were established, and for years the district became the happy hunting ground of the financiers and antftoor pfiomotem. The Raadr-dP tEtfe

watersrandt, is the topmost plateau of the High Veldt of the Transvaal, at the watershed of the Limpopo and the Vaol, and on the summit of the plateau is the gold-city of Johannesburg, ''some five thousand seven hundred feet above the sea.

Li the later eighties and earlier nineties the principal feature in Johannesburg was the Stock Exchange, and the main occupa. tion of the inhabitants was the buying and selling of shares in mining companies, many of them bogus, at fabulous prices. The inevitable reaction came, until once-resplendent "brokers" could hardly raise the price of a " drink "; though to be sure, drinks and everything else cost a small fortune. To-day the city is the centre of a great mining industry, and the roar of the " stamps " is heard all round it, night and day. From a haunt of gamblers and " wild-catters," it has grown into a comparatively sedate town of industry, commerce, and finance, and the gold-fever which maddened its populace has been transferred (not wholly, perhaps) to London and Paris. In fact, all Europe has been inoculated with the disease which at one time mad* Johannesburg a marvel and a reproach. That disease is a craving for speculation in the shares of gold-mining companies, and the markets in which dealings in those shares are centred is now called the "Kaffir Circus." The fact that South Africa is now producing two tfnd a half million ounces of gold per annum, at a gross profit of about three millions sterling, has fired the imagination and stirred the cupidity of hundreds of thousands of people who have not taken the trouble to inquire what it all means. It took the British public some time to realise that there is gold in South Africa, and for a long time the " speculative investor" of the stock markets fought shy of African ventures ; but when he did go in, he went in with a rush, which has become madder and madder. The climax of madness waß reached in the present year.

A small handful of men, a few years ago, dropped into the Rand and acquired properties for, in the aggregate, less than a couple of millions, which in the space of eight years reached a realisable value of two hundred millions at the market quotations for shares. Some of these men are now reputed to be worth ten and twenty millions apiece, but how much of the " worth" may be actually realisable, and how much exists only on paper or in prospect, one cannot say. The whole goldmining industry of South Africa is now in the hands of companies, and these companies are " controlled" by some half-dozen' cliques, each of which has its " king." It is a very curipm business altogether, quite "without parallel in the history of human endeavour, and a contrast* to the experience of Australia, where combined effort in the way of companyworking only came into operation when individual diggers had " creamed " all the nuggets and fallen upon evil times. -

We have seen it stated that there is at the present moment more real financial and technical talent concentrated at Johannesburg than at any other part of the world. This may be so, but assuredly there has been more mad greed and reckless folly concentrated in the " Kafir Circus " at home than the world has seen since the, South •Sea days. Anything Afr'can put on the market was taken up with a rush, and the bigger the premium, the greater the rush. Besides the gold-mining companies, there an companies for buying and holding real estate, for exploration, for lending, and for a variety of other purposes, including, it is to be feared, the purchase of much that is worthless, and the promotion of a good deal that must be profitless. Even among legitimate enterprises, the manner in which the variou* cliques have re-bought and re-Bold theii ' own companies among their ■ own companiei —subdivided, amalgamated, consolidated, and separated—is something quite bewilder' ing. "Claims" acquired for, say, £6000 have, in the course of these transfers and elaborations, in an incredibly short time reached the capital value of £120,000,. or more, almost before a hand's turn was done on them: If a good property adjoins a had one, the way to get rid of the bad one is to amalgamate it with the good one and float a new company to acquire both at four timet the original capital, and so on.

Once the arena of speculation was transferred to London—with ramifications to thi provincial exchanges^—nothing could satisfy the greed of the speculative public. Large | operators and small gamblers alike seemed 'to lose their judgment and to swallow in blind faith anything that came out of Africa' at any price. Then France .caught the , infection, and the small French investors, las well as the dabblers on the Paris Bourse, swung round from Egyptian and Spanish securities to ' African (and ' afterwards Westralian, though to nothing like the same extent) gold shares. The extent to I which France' went into theße shares ' during the fever of last summer cannot have been less than seventy millions sterling, and indeed by some has been computed at 100 millions. Yet only two "years ago, the capitalised value of all the Witwatersrandt companies was under 18 millions. A year later, namely, at the end of 1894, it 'was 55 millions, though, not more than" 1£ million had meanwhile been paid in dividends. This year, such has been the inflation that at one time the capitalised value of all the South African companies (including Charterland, &c.) was as high .a* ,300 millions! There has been a* set-bacjc since, but the inflation is still enormous, for most of the companies have not yet paid any dividend at all, and it is doubtful if "the legitimate profits of all of them together will this year exceed 2£ millions.

The latest estimate of the gold resources of the Witwatersrandt is that, if raining can be prosecuted to a, depth of 5000 ft or so, something like £700,000,000 of gold should be obtained within the next fifty years, at a cost of about £500,000,000. This would leave a clear profit of £200,000,000 in fifty years on a capital (taking the mid-October market valuation of the Witwatersrandt group alone) of £150,000,000. This is little more than 2£%, even supposing all the ex-' pectations of "deep-level" mining • are realised, although there is no experience to guide. Is the game worth the candle 1