MONOPOLIES IN THE TRANSVAAL AND THE NETHERLANDS RAILWAY COMPANY.[16]
1.--_Article XIV. and the Monopolies._
The avowed taxes are far from representing the whole of the burden laid
upon the Uitlanders by the Government of Pretoria.
The Convention of 1881 guaranteed freedom of commerce; nevertheless,
from 1882 onwards "the triumvirate who ruled the country," says Mr.
FitzPatrick (_The Transvaal from Within_), "granted numbers of
concessions, ostensibly for the purpose of opening up industries. The
real reasons are generally considered to have been personal." In 1884,
Article XIV. renewed the guarantee of freedom of commerce; the Volksraad
itself one day passed a resolution condemning monopolies in principle:
and in December 1895 the President granted a monopoly for the
importation of products, under the guise of a government agency with a
commission to the agent!
One of the first monopolies established was for the manufacture of
spirits. The quality of liquor it supplies to the natives is atrocious.
To drunkenness is attributed a loss of 15 per cent. on the labour of
90,000 natives whose pay and food are equivalent to £40 per head, a loss
therefore of £550,000 a year.
[Footnote 16: _Le Siècle_, April 5th, 1900.]
2.--_The Dynamite Monopoly._
Two despatches, one from Mr. Chamberlain, dated January 13th, 1899, and
the other from the Transvaal Government, dated March 9th, 1899, indicate
how Mr. Krüger always meant to interpret Article XIV. of the Convention
of 1884:
On October 13th, 1893, the Transvaal Government granted a monopoly of
the dynamite trade to Mr. L.G. Vorstman for a period of 15 years. The
price of No. 1 dynamite was fixed at £4 15s. per case, of which 5s. was
to be paid to the Government.
The Transvaal Government maintains that this monopoly does not violate
the freedom of labour, as it was established in the interest of the
State, not in that of the concessionaires, and that the manufacture of
dynamite is forbidden to the Boers as much as it is to foreigners.
Mr. Chamberlain in his despatch denies that the dynamite monopoly has
been established in the interest of the State; and points out that even
according to General Joubert, Vice-President of the Republic, this is
really not a State monopoly but the monopoly of one, Lippert, because it
is he who has derived the greatest profits from it.
The monopoly company has always failed to fulfil its engagements; the
installation was to be completed in two-and-a-half years: in October,
1896, the company was only able to produce 80,000 cases, the
consumption at that time amounting to 200,000. The commission of the
Volksraad estimated that between 1897 and 1899 it would be necessary to
import 430,000 cases in addition to the quantity produced by the
company. It is more to the company's interest to import than to
manufacture, since importation affords a profit of £2 per case, and to
the State a duty of 5s. Were dynamite imported by the State itself, the
latter would realise about £860,000 instead of, as at present, £107,500,
making a difference of at least about £752,500.
The price at which dynamite is sold is from 40s. to 45s. above its real
value, from which excessive charge only certain individuals, living for
the greater part in Europe, derive the benefit. This fact is attested,
not by the English, but by Mr. Philipp, State Director of the
Manufacture of Explosives. The Commission demanded that all dynamite
should be manufactured by the State, and imposed a duty of 20s. per case
on all imported dynamite.
These resolutions were passed by the Volksraad Commission in 1897; the
monopoly has continued to exist, and in 1899 it was proposed to prolong
it for a period of fifteen years. On May 1st, 1898, it is true, the
price was reduced by 10s.; the company giving up 5s., and the State
renouncing the whole of the 5s. duty. It had therefore no interest in
maintaining the monopoly; 2s. of the net profits were still payable to
it, it is true; but there are no public accounts.
By way of compensation new taxes were imposed by the Government. Mr.
Rouliot, President of the Chamber of Mines, in his speech, January
26th, 1899, put it thus:--
"It is a burden borne by us on another shoulder, not a lightening of the
burden."
Allowing for the increased consumption of dynamite, it has been
estimated that, even with a further reduction of 5s. per case, the
annual burden imposed upon the industry by the monopoly would, at the
end of the period, amount to from £687,500 to £825,000. The Transvaal
Government in its reply of March 9th, 1899, did not dispute these
figures, but stated simply that, "the government had the right to judge
what was most advantageous to itself."
The complaints of the British Government on behalf of the mining
industry of the Transvaal, were founded solely upon the statement of the
Volksraad Commission itself. This mania of the Government for a monopoly
by which the shareholders profit greatly and the State hardly at all,
proves that there are other interests at stake than those of the public.
At its meeting on February 3rd, 1899, the Witwatersrand Chamber of Mines
decided to guarantee a Government loan of £600,000 at 5 per cent., to be
applied in buying-out the concessionaires of the dynamite monopoly.
3.--_Railways._
A concession for all the State railways was granted on April 16th, 1884,
to a group of Hollander and German capitalists, and confirmed by the
Volksraad on August 23rd following. In 1887 the shares, to the number
of 2,000, representing a capital of £166,666, were held as follows:--
By Germans 819 shares carrying 30 votes.
" Hollanders 581 " " 76 "
" The Republic 600 " " 6 "
This astonishing division of votes which gave to the Transvaal
Government 6 out of 112, although it subscribed one-third of the
capital, and assured to the Hollanders twice as many votes as the other
holders put together, although they only provided one-third of the
capital, was the work of Dr. Leyds. The contract for the construction of
the first 70 miles is not less surprising. Messrs. Van Hattum & Co. were
to build the line, at a cost mutually to be agreed upon by them and the
railway company; and they were to receive as remuneration 11 per cent.
upon the amount of the specification. The 11 per cent. was to be
proportionately decreased by a sliding scale so arranged that it
disappeared by the time Van Hattum & Co. had exceeded the contract price
by 100 per cent. Beyond that the company had the right to cancel the
contract. From this it follows, that, by deciding to lose the 11 per
cent., Messrs. Van Hattum could make a gain of 89 per cent. This they
did, and whole sections of earthworks, which should not have cost £8,000
per mile, cost £23,000 instead. A thousand Hollanders were brought out
to work on the line; and sent home again at the expense of the
Government. In a country which abounded in stone, the Komati Bridge was
built of dressed stone imported from Holland, with the cost of a transit
of 7,000 miles.
4.--_The Drift Question._
The Cape Colony Free State Railway ends at the Vaal River, 50 miles from
Johannesburg. Thence goods are transmitted by the Netherlands Railway at
a charge of 8-1/2d. per ton per mile, the rate being 3d. over the rest
of the line.
In order to escape this rate manufacturers resorted to the use of
ox-wagons; Mr. Krüger forbade them the drifts in order to compel the
transit of goods by railway. This was another flagrant violation of
Article 14 of the Convention of 1884, which called forth the
intervention of Mr. Chamberlain. The indignation at the Cape was so
great, that Mr. Chamberlain having asked the Cape Government, whether,
in the event of war resulting, it would pay half the cost, and undertake
the transport of the troops by the railways, the proposal was accepted
by an Afrikander minister! Mr. Krüger yielded and re-opened the drifts.
5.--_Methods of Exaction._
A reduction of £100,000 was made on the railway tariffs; but in July,
1897, the duties on corn and food-stuffs were increased by £200,000. At
the end of 1898, a certain number of these were lessened, but not that
on flour. A comparison of the list of duties between 1897 and the end of
1898 shows that they were increased on twenty-eight products, and
decreased on four.
Coal travelling a distance of 25-1/2 miles, the charge made by the
Netherlands Railway Co. is 4s. 5d., which is 8-1/2d. per ton per mile;
while the Free State Railway only charges 5-3/4d. and the Natal line
3d.
The Company collects the customs dues for account of the State, as
security for the payment of interest on their shares and debentures.
Dr. Kuyper is quite willing to admit that the "financial administration
leaves something to be desired," but he adds that, "while at the Cape
the taxes on produce are at the rate of 15 per cent., in the Transvaal
they are only 10 per cent." But it is easy to see how, by means of
railway tariffs and various combinations, due to the cunning of Mr.
Krüger and his Hollander friends, it has been possible to enhance prices
of every description.