Earnings. Total Expenses. Profits.
£1,650,355, 5s. 4d. £1,159,026, 7s. 9d. £491,328, 17s. 7d.
Equal to £5, 15s. 2-1/2d. per cent. on the capital of £8,528,989.
Included in the Natal Railway expenses is the sum of £159,328 expended
on permanent work that should have been charged to capital, which, if
added to the profits as it should be, would make an actual profit for
the year of £650,656, 17s. 7d. There are no returns available to show
the result of working the Central South African Railways, formerly the
Imperial Military Railways, during the period of the war. Nor are there
any available now, but considering the past results and the great volume
of present traffic, and the maintenance of the old high rates for
freight and passenger fares, it may be estimated that the earnings of
the Central South African Railways in the Transvaal and the Orange River
Colony will probably be between £5,500,000 and £6,000,000, and the
profits between £2,500,000 and £3,000,000, a very important item in the
revenues of the two new colonies.
[Illustration: STATION YARD, DURBAN
(The Tower of the Town Hall is seen in the background)]
In comparison with other railways in the British Empire the South
African railways hold an important position as regards mileage, and the
average earnings per mile are more than double the average earnings of
several important colonial and Indian railways. The combined earnings of
all South African railways working 5000 miles may be taken at
£11,000,000 for the year. The Canadian Pacific Railway, working 7000
miles, earned £6,002,061. The Grand Trunk of Canada, working 4179 miles,
earned £4,407,016. The Victorian Railways, Victoria, Australia, working
3238 miles, earned £3,337,797. The Queensland Railway, working 2801
miles, earned £1,316,936. The Bombay, Baroda, and Central Indian
Railways, with 2764 miles, earned £3,253,866. The Great Indian
Peninsular and Indian Midland Railways, with 2800 miles, earned
£3,063,066. Comparing with important home railways:--
+---------------------------------+------------+------+-------------+
| | Capital. |Miles.| Earnings. |
+---------------------------------+------------+------+-------------+
|London and North-Western Railways|£118,126,653| 1941 |£13,812,000 |
|Great Western Railway | 84,424,177| 2645 | 11,181,471 |
|Midland Railway | 170,550,931| 2019 | 11,153,792 |
|All South African Railways | 50,000,000| 5000 | 11,000,000 |
| | | |(approximate)|
+---------------------------------+------------+------+-------------+
These figures show that South African railways make high earnings as
compared even with a great railway like the Canadian Pacific, a railway
serving one of the most important trade routes in the world, and
traversing a rich agricultural country, with a population of 5,000,000,
as compared with South Africa's 700,000 whites and 2,000,000 blacks. The
Queensland railways, with more than half the mileage, earn less than
one-eighth the total earned by South African railways, while the
enormous traffic of the famous London North-Western, with its large
capitalised value, only brings in a matter of £3,000,000 a year more
than the railways of South Africa, with their moderate capitalisation of
£50,000,000.
This comparison should bring home to investors the excellent opening
which South Africa affords for safe and profitable participation in the
reasonable railway expansion the country still requires, especially is
this the case with the two new colonies. Another fifteen hundred miles
could well be added. These new railways would have earning capacity
little inferior to the existing lines, and the present margin of profits
is so wide that a substantial reduction in rates would not materially
affect the prospects, because such a reduction would inevitably result
in a great increase in the volume of traffic.
The comparison also leads to the conclusion that the present rates are
excessive. They have been maintained at their high level through the
system of the Colonial Governments looking to the railways for a large
proportion of the revenue. The great pivot of South African industry is
the Rand, with its goldfields, and both Natal and Cape Colony have for
years past taken toll on the Rand traffic, and thereby swelled their own
revenues.
The old Free State and Transvaal Governments in a like manner determined
to fleece the industrial workers, and so save their own burghers from
bearing their due share of the cost of Government. While they were the
greatest sinners themselves, they could not with reason ask the southern
Governments to take the first step towards moderation. As a consequence,
the Rand, dependent for the most part of its food and for the whole of
its industrial equipment on over-sea supplies, became one of the most
expensive places to live and work in that the wide world knows. Under
the new _regime_ there is as yet no improvement; the Imperial Government
is looking for revenue. To the despair of British loyalists the old high
rates are maintained, with the effect of delaying and perhaps
prohibiting the enormous industrial progress which the wealth of the
country would under other conditions make possible. All classes feel the
burden, and at the forthcoming Congress of the Associated Chamber of
Commerce, which will meet at Kimberley, resolutions bearing on the
question are to be submitted. The first affirms: "That the railways,
being the highways of the country, should be worked solely with a view
to furnishing the transit and traffic requirements of the country, and
entirely dissociated from the revenual, political, or protective
considerations;" and "That the policy of raising revenue through
excessive railway rates is an objectionable method of taxation. It is
unfair in its incidence, and bears with especial hardship on the inland
wage-earner."
These resolutions reflect the feelings of the whole inland community of
South Africa.
[Illustration: COMMISSIONER STREET, JOHANNESBURG
Photo by Barnett & Co., Johannesburg]
The Canadian Pacific Railway, with 7588 miles open, makes a net profit
of £2,620,000 on a capital of £53,000,000 as against South Africa, with
5000 miles open, and net profits of over £5,000,000 on a similar
capital. The Canadian Pacific Railway makes a net profit of £371 per
mile against a net profit of Natal railways of £803 per mile, and an
approximate net profit of £1800 per mile of the Central South African
railways (Transvaal and Orange River Colony railways). New Zealand
railway returns for 1902 show net earning of £280 per mile. The through
rate for ordinary goods from Durban to Johannesburg is just over 3-3/4d.
per ton per mile. The rate for ordinary goods on the Central South
African railways (Transvaal railways) for fifteen miles is 9d. per ton
per mile; for fifty miles, 6-2/3d. per ton per mile; for longer
distances, approximately 6d. per ton per mile. The average rate for
goods on the Canadian Pacific Railway is only one-third of a penny
per ton per mile. Were this rate charged on a ton of goods brought from
Durban--the nearest colonial port--to Johannesburg, the cost would be
only 13s. 6d. as against £7, 13s. 4d., the present cost; that is, the
South African through rate is ten times as much as the average rate in
Canada; and the Transvaal rate for ordinary local traffic of 6d. to 9d.
per ton per mile is twenty times higher than the average Canadian rate.
The Canadian Pacific Railway is selected for comparison, because it is a
railway built to develop new and sparsely-populated territory, its
special work being essentially the same as that required of the railways
of South Africa. The Canadian Pacific Railway has doubled its earnings
since 1895. If its policy were copied in South Africa, where the whole
industrial life of the country depends on railways, enormous
developments could be looked for. In South Africa it is fully realised
that, until the burden of excessive railway rates is got rid of, the
costs of living must prohibit any great growth of population, and
without growth of population the development of the natural resources of
the country can only make the slowest of progress. The people are quite
willing to provide the Government with revenue, but they wish to provide
it by different methods than those which obtained in the past.
Owing to exorbitant fares the people of Johannesburg are practically
confined within the limits of the town and its immediate suburbs. They
are compelled to pay high rents. £250 to £300 a year represents the
present rent for an ordinary cottage. The passenger fares on the London
and North-Western are from a 1-1/2d. to 1-3/4d. per mile first, 1-1/4d.
second, and fractionally under a 1d. third. A great reduction is made on
season tickets. Transvaal railway fares average 3d. per mile first,
2-1/2d. second, and 1-1/2d. third, and only a small reduction is made
for season tickets. With high rents and high prices for food, rendered
dear by cost of carriage, the workers, in order to live, must obtain
high wages. High wages mean high-working costs for all industrial
enterprises. Consequently only a few industries, and only the richer
mines, can be worked at a profit. Ordinary industries which can carry
only moderate working costs cannot be undertaken.
Judging from the results of the past six years sweeping reductions are
quite possible while still allowing for a paying railway revenue. Mr.
Cooper-Key has shown, that the excess profits made by the Transvaal
railways alone, after providing for reasonable interest on capital at
the rate of 4-3/4 per cent., were:--
For 1896 £1,162,925.
" 1897 1,111,964.
" 1898 928,623.
For the present year the excess profits on Transvaal railways, over a 4
per cent. interest on capital, will probably amount to not far short of
£1,500,000.
As might be expected after a consideration of the profits and earning
capacity of South African railways, important extensions of the previous
system are projected and in progress.
In the Cape Colony there is a project to connect Saldanha Bay, the
proposed new port, with the main line _viâ_ Hopefield. A southern line
_viâ_ Oudtshoorn and Willowmore will bring Cape Town in closer contact
with Mossel Bay and Port Elizabeth, and open up the southern districts
of Cape Colony. Another line will join the Port Elizabeth midland line
with the eastern system at King Williamstown.
In the Orange River Colony the projected lines are from Springfontein to
Koffyfontein; from Bloemfontein to Ladybrand and Ficksburg; from
Harrismith to Heilbron or Vereeniging. The line from Bloemfontein to
Ladybrand is already partly built. It will open up the wheat-growing
section of the Orange River Colony.
In the Transvaal the most important projected lines are: A line from
Fourteen Streams to Klerksdorp, providing an alternative route from the
Cape Ports to the Rand. A line from Krugersdorp to Rustenburg and thence
probably to Zeerust and Mafeking, opening up a valuable agricultural
country. A line from Springs to Machadodorp or Ermelo, through the best
coal and iron districts of the Transvaal, and providing an alternative
route from Delagoa Bay to the Rand. This line would greatly relieve the
congestion which exists after the high veldt is gained on the present
eastern line, owing to the coal traffic and the over-sea imports having
to be carried over a single line of railway. A line from Pietersburg to
Leydsdorp and thence probably connecting with the Selati railway at its
present terminus. There is a private company formed to build a line from
Machadodorp to Ermelo, and the Government is constructing a coal line
for the mines along the south of the Rand, and another alternative line
from Johannesburg to Vereeniging.
In Natal it is a question of doubling the present main line or of
constructing another single line of railway from Greytown to the
Transvaal. The first plan would be cheaper, and would give more
immediate help to Natal in the competition for Transvaal traffic, while
the alternative Greytown route would open up new country to railway
influence, and materially add to the prosperity of the agricultural
population of that section of the colony. Natal is also about to
construct a line from Maritzburg to Riverside on the Cape-Natal
frontier. The Cape being under promise to connect this point with their
eastern system, and thus provide direct railway communication with
Durban and Cape Town.
In Rhodesia the line connecting Bulawayo and Salisbury is approaching
completion.[13] It is possible that Gwelo, a town on the railway, will
be the junction or next starting-point of the "Cape to Cairo" railway,
or it may be that the route by another new line from Bulawayo to the
Wankie coalfields near the Zambesi may be chosen instead. A line is in
course of construction from Bulawayo to the Gwanda goldfields, and a
line is proposed from Salisbury north to Lo Maghonda. Altogether over
2000 miles of new railway are projected in South Africa. In the
Transvaal the new lines proposed will have a length of over 800 miles,
and at least 500 miles may be considered as lines whose construction is
a matter of urgent necessity.
This forecast of railway development in the immediate future in South
Africa means the raising and spending of another £16,000,000, £8000 per
mile being about the lowest figure that can be reckoned on to build the
lines and provide rolling stock. Transvaal expenditure for new railways
may be estimated for the period of the next three years at not less than
£6,000,000. When built, however, these railways will be sound
properties, thoroughly sure as to their dividend or interest-earning
capacity. Lord Milner referred in a recent speech to what he called the
governmental plant which he said was required before private enterprise
could get to work on making the country productive. Chief among the
governmental plant so referred to are railways, but alongside of the
recognition of the necessity of railways it is to be hoped that
governmental recognition will also be given to the fact that to be of
real use the railways must be run at cheap rates, otherwise the
looked-for benefit will never come.
As regards over-sea traffic, it is hoped that rates may be brought down
by encouraging competition between the various railways from the coast,
and the Transvaal Government has a powerful lever in its eastern line.
The distance from Delagoa Bay to the Rand is only 395 miles, of which
only 56 belong to the Portuguese.[14] From Durban the distance is 483
miles; from Port Elizabeth, 785 miles, and from Cape Town, 1000 miles.
The Transvaal Government has the whip in hand, and it is hoped that it
will use it so that all South Africa will be brought into line on the
question of moderate freight and passenger rates. At present goods are
pouring into the Transvaal at the rate of 21,000 tons per week, and in
addition there are 8000 tons being brought up weekly for the military,
but if rates are not lowered, this great railway activity will prove
only transient, because it is certain that at present the internal
industries are making no progress, and consequently trade must fall off.
[Illustration: MAP OF THE CAPE GOVERNMENT RAILWAYS, BASED ON THE MAP
ACCOMPANYING THE GENERAL MANAGER'S REPORT
(_Scale = 120 English miles to an inch_)]
In conclusion, a word may be said of the important part played by South
African railways in the late war. A German strategist predicted that
with the existing railway systems of South Africa it would be impossible
to feed an army of 250,000 men in the interior of the country. Yet it
was actually done, and not for a brief period only, but for nearly three
years. Besides bringing the food-stuff for this host, and for the civil
population besides, the railways transported guns, ammunition, horses
and men up and down, back and forward as the commander-in-chief
required. The magnitude of this work can be imagined when it is stated
that no less than 126 trains were required for the final concentration
against Delarey at Klerksdorp. The working of the railways during the
war reflects the greatest credit on the managers and employées of all
South African railways. It was impossible to tell when a train would run
through a band of snipers, one or more of its occupants paying the
penalty of death, or when the engine might be hoisted by a hidden charge
of dynamite, and the machine and its drivers turned to wreckage. During
the war the railway service required qualities of endurance and courage
equal to those possessed by the bravest soldier in the field.
[Illustration: MORNING MARKET AT JOHANNESBURG
Photo by Barnett & Co., Johannesburg]
SOUTH AFRICAN INDUSTRIES
At present South African industries (outside of agriculture and pastoral
pursuits) may be said to consist of mining and railways. The railways,
in spite of heavy rates, have made a great mining industry possible.
What could they do in respect of other and ordinary industries? It is a
question of rates. Given recognition of the principle that railways
should be the most essential part of the governmental plant spoken of by
Lord Milner--plainly to be used for developing the country, and not for
the use of extracting revenue to which it is at present put, not
gold-mining alone, but a hundred industries would presently flourish. On
the Rand there are already great engineering works contending against
many difficulties, and especially the cost of labour. These works
execute repairs for the mines, make castings, and even manufacture new
machinery. A great future industry, which for the present is impossible
on account of want of railway facilities, is the exploitation of the
rich iron ores of the Transvaal. It is stated that a syndicate with
large capital has been formed to undertake this work on a large scale
when the conditions are favourable, and within the next few years it is
probable that the Middelburg district will have smelting furnaces,
foundries, rolling mills, and all the varied works of a young iron and
steel industry which may eventually take a leading place in the world.
Mr. Carnegie recently stated that the iron ores of Britain will be
exhausted in twenty-five years, and those of the United States in sixty
years. The extensive deposits of the Transvaal should last for
centuries.
Another possible future industry is the distillation of oil from the
shales of the Eastern Transvaal and the Orange River Colony. These
deposits are at present being tested, and give promise of payability.
Throughout South Africa there are many flour mills. The chief works
being at Port Elizabeth and Cape Town and in the wheat district of the
Orange River Colony. Other industries which have found a footing, and
are now making steady progress, are leather-making, boot and harness
making, wool-washing, jam-making, candle-making, waggon and cart
building from colonial woods. All these industries are carried on
chiefly in the Cape Colony and Natal. In the Transvaal there are pottery
works, a cement factory, many breweries, and one distillery. In the Cape
and Natal there are also several large breweries. One great industry
which has arisen, owing to the mining wealth of the country, is the
manufacture of explosives. There is a large dynamite factory at Cape
Town owned by the De Beers Company, and another--the largest explosive
factory in the world--at Modderfontein near Johannesburg. The
Modderfontein factory cost upwards of three-quarters of a million to
build. The works are spread over a large area, the property comprising
5280 acres. This factory was owned by a company with German, English,
and French interests, formed to work the dynamite monopoly for the
Transvaal Government. The high prices it charged, and the huge profits
it made, being additional direct burdens on the already overloaded
mining industry, were the causes of great discontent. Since the war the
monopoly has been abolished. The company is now practically a British
company, and its policy appears to be to meet its customers, and gain
their goodwill. Prices have been reduced by 30s. a case The prices now
being: blasting gelatine, 67s. 6d.; gelignite, 50s.; and dynamite, 50s.
a case, as against 97s. 6d., 87s. 6d., and 77s. 6d. respectively before
the war. These prices are fair, and it is stated are just sufficient to
give a margin of profit. At present in the Transvaal it is a question of
allowing free competition in explosives, or of just granting sufficient
protection to the existing factory to enable it to live. As the factory
finds employment for nearly 3000 hands, white and black, it would
certainly be a national loss if it had to shut down.
In the nature of things in South Africa all classes of industrial
undertakings are difficult to establish, and probably a moderate
protective tariff would be beneficial to the country in the long run, as
in the initial stages it would serve to turn the balance between profit
and loss. Every industry successfully established adds to the white
population, and is therefore to be welcomed. A policy of moderate
protection then for industries, which could be fed by the natural
resources of the country itself, should be carefully considered by the
Government. Such a policy, together with a thorough cutting down of the
present industry-killing railway rates, would go a long way to make a
speedy beginning in South Africa of the great industrial activity which
is sure to come eventually.
FOOTNOTES:
[13] The British South African Company has decided to expend £2,000,000
on railways in Rhodesia--£1,000,000 to be expended immediately for work
to be completed by the end of next year, and a like sum, towards the end
of 1903, will probably be sanctioned for the purpose of carrying the
Cape to Cairo line north of the Zambesi to the bend of the Kafue, a
distance of 300 miles. When the proposed work is carried out Rhodesia
will have over 2500 miles of railway.--ED.
[14] It is interesting to note that Portugal has strengthened her
position in Africa by granting to Mr. Robert Williams a concession for a
railway from Lobito Bay, near Benguella (in Portuguese West Africa), to
the eastern frontier of the Colony. Lobito Bay is four days' journey
nearer to England than the Cape, and it is described as having one of
the finest harbours in the world, and accommodation for larger vessels
than Delagoa Bay.--ED.
HEALTH RESORTS OF SOUTH AFRICA
BY ERNEST GRAHAM LITTLE
_B.A., formerly Porter Scholar, of the Cape University; M.D. University
of London; Member of the Royal College of Physicians; Physician, with
charge of the Skin Department, at St. Mary's Hospital; Senior Assistant
Physician to the East London Hospital for Children and Dispensary for
Women, Shadwell; late House Physician at St. George's Hospital and at
the City of London Hospital for Diseases of the Chest_