CHAPTER XI. 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.

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:—

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.

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