Locations and Taxes: Dual Indignities
Foreshadowing the impending adoption of housing in compounds on the mines, local administrators extended the “location” system (which required Africans to reside in specially designated areas) to Kimberley following considerable disquiet in the area, including a revolt in Griqualand West in 1878. This regional unrest convinced these officials, or perhaps simply gave them the pretense that they had been seeking, to herd Africans onto specially demarcated “locations.” These areas deliberately featured little or no fertile soil, thereby compelling location residents to seek wage labor on the mines.
The British colonial administration had first proposed the regional implementation of the location system in 1876. Following a subsequent land survey undertaken to demarcate the prospective locations, approximately one-tenth of Griqualand West was earmarked for Africans, while the rest was reserved for whites. Forebodingly, the racist apartheid system that would come into being some decades later in South Africa drew much of its sociogeographical inspiration from these early forms of segregation and discrimination. Each of the proposed locations was intentionally designed to be too small to be self-sufficient and, thus, was intended to serve as a labor reserve for the mining operations, as well as for white farmers newly entering the area, keen to sell their output in and to Kimberley. However, it wasn’t until after the 1878 Griqualand Rebellion, a brief, unsuccessful revolt, that the location system could be implemented in Kimberley’s agricultural hinterland. Prompted by whites’ fears of black uprisings in Griqualand, and beyond, in 1879 the British colonial government extended the Cape Location Acts to Griqualand West. Meanwhile, in Kimberley proper, the Town Council insisted that these measures also be applied to mining operations within the municipality. The formal “localization” of Africans now replaced the de facto segregation that had heretofore characterized Kimberley’s human geography.[39]Z. K. Matthews’s account of life in “Location Number 2” from the early 1900s reveals how difficult and degrading these sites came to be for Africans:
The threat of a visit from Bird [the white Location Superintendent] was a real threat. . . . Many a time . . . we knew of the coming of Bird by the blowing of whistles and the sound of running feet in the street outside at dawn. . . . These sounds meant that a pass raid was on. . . . On such mornings one of these policemen would knock at our door and shout loudly: “Any one here without a pass?” The policemen were Africans but they were rude and brutal. More than once, while we huddled in a corner behind our mother, they took away one of the relatives who would be staying with us before going to work in the diamond mines, and who would not yet have secured the pass that every African needed in order to legalize his presence in the town. . . . Whenever there was a pass raid, panic ran through our house-hold. . . . [Other times] in order to check the passes of the men as they set out for work, the police would take up posts at the main exit streets of the Location before dawn. From our house we could see the knot of uniformed men, and men running past our door in the opposite direction to get away . . . arresting many of them to take them away . . . into the frightening world of the white men. . . . Public toilets were at distant intervals in the streets. There was no system of sewage or garbage disposal, only a great heap in an open space where everyone threw their waste. It grew huge and foul with the passing years.[40]
While the location system pushed Africans onto the mines, a hut tax instituted in 1879 in recently vanquished Griqualand exacerbated existing economic difficulties and, thereby, drove additional residents to participate in the industry as wage laborers. Just a year later, the inspector of locations noted that from Griqualand West “the greater part of the natives proceed to work in Kimberley for three to six months at a time . . . leaving their wives and children to take care of their stock, etc.”[41]Thus, just as local headmen, such as Waterboer, had experienced a humiliating loss of control, migrant mine workers came to suffer a comparable degradation. With locations, taxes, and jails now each firmly in place, the stage was set for the emergence of, and eventual domination by, consolidated mining enterprises—a development that would further subjugate African labor.
The history of the first decade of diamond mining in South Africa was characterized by unbridled optimism, a massive influx of both regional and more distant labor, racial tension and the attendant erosion of Africans’ rights, and the gradual regulation and stabilization of the industry. Although newly enacted legislation helped provide structure to this “Wild West” environment, a handful of white, typically foreign, commercial visionaries were largely responsible for ushering in the next era of diamond mining in the region. While individual black and white diggers contended for access, labor, and profits, these farsighted entrepreneurs were aggressively increasing their control over the mining operations in and around Kimberley. No longer would the industry be composed of a multitude of small-scale claim owners lacking the capital to invest in the requisite equipment to burrow further and further into the earth to extract diamonds. Rather, it would now come to rest in the hands of a few powerful firms that would dictate how labor was recruited and utilized, how the stones would be mined, processed, and sold and, ultimately, how South Africa, and then the continent, and eventually the entire global diamond industry, would evolve. The following chapter examines these developments, which were every bit as dramatic, formative, and far-reaching as the events associated with the first decade of mining had been.
4: Consolidation and Control
The Birth and Growth of the Cartel
When I am in Kimberley, I often go and sit on the edge of the . . .
De Beers Mine and I reckon up the value of the diamonds . . . and the power conferred by them. Every foot . . . means so much power.
—Cecil Rhodes, De Beers founder, 1891
It is more than I can bear to think my husband—once a claim holder—should have to submit to such indignity . . . (invasive searching). . . . The ill effects it would have on our children to see their father . . . placed on a level with the natives, who, as a rule, do not consider stealing to be a sin. . . . Why place a white man on a level with a black?
—From the July 16, 1880, edition of The Daily Independent (Kimberley) in regards to the proposed searching ordinance
These formulations tell much of the story of what happens next. One comes from the power-hungry founder of De Beers, the other from an exasperated wife of a mine worker. Together, they capture the two main developments in the rapidly unfolding history of Africa’s diamonds: the consolidation of power within the industry by a handful of elite mining companies, on one side, and the marginalization of just about everyone else involved, on the other. Although the wife certainly doesn’t come off as an overly sympathetic figure, Rhodes and his fellow industrialists cared little about the plight of individual white laborers, and even less about African workers. Diamonds and the considerable revenues they generated were now all that mattered. For all the transformation that had occurred in the heart of South Africa over the course of the first decade of mining, these even more revolutionary developments would come to define the next stage in this emerging history.
While both white and black miners were toiling on scattered claims with varying degrees of success, a number of visionary businessmen, including Cecil Rhodes, were steadily increasing their control over the mining industry. In 1876, the existing ten-claim limit was revoked, prying open the gates of the “mineral revolution” to investment capital and thereby paving the way for mine consolidation. Individuals such as Rhodes and Barney Barnato capitalized on the opportunities that the newly liberalized structure presented, aggressively amassing claims and eliminating competition. Capital-poor, white claim owners and semiautonomous African laborers quickly became features of a seemingly distant past, as the industry came to be dominated by a handful of well-funded joint-stock companies—and, eventually, just one: De Beers. This process of consolidation shaped how African labor was procured and managed, how the precious stones were excav
ated, processed, and marketed and, ultimately, how the global diamond industry would develop.
This chapter traces the key developments in this process, including the conditions and events that facilitated the ascension of De Beers; the increasingly dangerous nature of mining as it moved underground; the further erosion of Africans’ legal rights and the attendant, heightened supply and control of laborers, both during the work day and, via the introduction of compounds, “after the whistle blew.” The final topic considered is the development of the industry on into the twentieth century, with a focus on De Beers’s eventual envelopment of global production as the company transitioned from a regional enterprise into the central, controlling entity of the international diamond cartel. Throughout this process, Africans played vital roles in removing diamonds from the continent’s soils—from Sierra Leone, to Tanzania, to South Africa—but because of persistent racism and monopoly capitalism, only a handful of foreign industrialists were able to successfully harness this colossal mineral wealth. The barefaced looting of the continent’s diamonds was now well and truly under way.
The Emergence of De Beers: Consolidation and Stabilization
Long before De Beers came to dominate the global diamond industry, the enterprise’s very existence depended on a series of propitious circumstances and events, some well-timed entrepreneurism, and aggressive, visionary leadership—in other words, some luck but also a great deal of ability. The initial phase of this process of corporate development lasted approximately twenty years, from the 1867 discovery of the Eureka Diamond until De Beers eventually monopolized the output of the Kimberley mine in 1889. This period saw the regional consolidation of British rule, which compelled an increasing number of Africans, from an ever-expanding geographic area, to seek wage labor on the diamond mines. Meanwhile, the move underground required expensive equipment and significant investment capital. In this scenario, a man needed to have ambition, calculation, vision, and, ultimately, financial backing, in order to succeed. Cecil Rhodes and Barney Barnato were two such men.
Setting the Foundation: An Ideal Set of Circumstances
The new remunerative opportunities in the heart of South Africa “pulled” countless Africans to the mines, while a series of regional events “pushed” many others to Kimberley. Yet coercive measures were also required to ensure that these inflows were not interrupted. Enter the British army, followed by its European counterparts. By the middle of the 1870s, a growing sentiment among both private employers and state officials reasoned that additional areas on the continent should come under British control so as to compel even more Africans into wage labor and, thereby, solve the “native labor problem.” For the array of nineteenth-century European imperial powers, including Great Britain, force so often appeared to be the most expedient, effective, and thus attractive course of action. In keeping with this approach, by the end of the decade the British had annexed the Transvaal and fought successful wars against the Xhosa (1877–78), the Pedi (1877–79), and the Zulu (1879); the latter two nations had previously been the most powerful in the subcontinent. With the expansion of British hegemony, these once powerful African states were largely reduced to labor pools.
Following the conclusion of the Berlin Conference in 1884–85, the British continued to forcefully expand and solidify their control in Southern Africa, with the Germans and Portuguese actively “pacifying” the remaining regional populations. Meanwhile, in and around Kimberley, the burgeoning diamond industry had completely consumed all local game, as well any wood utilizable for either timber or charcoal. Collectively, these regional developments drove members of formally independent African communities into the eagerly awaiting arms of mining employers. The mines could now rely on a series of subjugated, geographically diverse labor streams. The “native labor problem” had, at last, been solved.
In order to move forward with the planned exploitation, corporations were needed that could supply the necessary capital to consolidate the scattered claims on the lucrative “dry diggings” sites, profit from economies of scale and employ throngs of workers. Just a short time earlier, Kimberley’s “Wild West” environment had appeared unlikely to spawn such large mining enterprises. In 1871, for example, the year that Rhodes arrived from England, thousands of diggers—many of whom didn’t even know what a diamond looked like—were working individual claims assisted only by relatives and/or perhaps a handful of African employees. Ironically, the De Beers mine opened the same year that Rhodes arrived. Following the sale of the farm, the original owners of the land, the De Beer brothers, disappear into history, leaving behind only their name and acreage that would, over the forty-three years it was in production, yield some 14.5 million carats worth more than £600 million.
Long before this development, though, the incipient industry remained, like the De Beers’s farm, promising, but little more than that. Diamond Field, a local newspaper, described this situation in 1872, declaring: “The average digger is getting impoverished, the lately successful one is barely paying expenses, while only the few happy possessors of exceptionally rich claims are coining money.” Due to this uncertainty, wool, wheat, wine, hides, copper, and ostrich feathers continued to dominate the Cape economy, whereas investment in mining remained limited. In fact, not until 1880 did diamonds surpass wool in terms of export revenues. By that time, South Africa was generating over three million carats a year, far outpacing Brazil, the previous world leader.
By the 1880s, the deep(er) location of the diamonds necessitated significant amounts of capital to harvest profitably. The principal mines had become massive, deep, open pits requiring costly equipment to haul the soils upward and pump out any obstructive water. In response, capital-rich, joint-stock companies were formed to both provide the requisite funding and manage production. In turn, individual claim holders were squeezed out or relegated to much less bountiful sites. With these “pesky,” small-scale competitors out of the way, deep-pocketed industrialists commenced a process of consolidation that would not stop until only a single company remained.
The Magnates
From the early chaos that characterized Kimberley, two individuals emerged to dominate the industry: Barney Barnato and Cecil Rhodes. Commercial success, though, was all that these dueling magnates had in common. Barnato was originally a stage performer who had once starred in his own magic act, playing the role of “The Wizard”—hardly the sort to strike fear in the hearts of his mining competitors. Conversely, Rhodes would go on to become prime minister of the Cape Colony, spearhead British imperial expansion in Southern Africa, have two colonies named after him (Southern and Northern Rhodesia—the modern states of Zimbabwe and Zambia, respectively), and, as part of his last will and testament, establish the prestigious Rhodes Scholarship program. Gardner Williams confirmed that the two colorful characters could not have been less alike. “The little, chunky, bullet-headed, near-sighted Hebrew [Barnato] taking a hand in current sport or traffic, and the tall thoughtful young overseer [Rhodes], sitting moodily on a bucket, deaf to the chatter and rattle around him, and fixing his blue eyes intently on his work or some fabric of his brain, were as unlike as two men could possibly be.”[42]Yet their personal ambitions were identical: to amass as much wealth as possible by controlling as much of the South African diamond industry as possible. In the pursuit of this objective, these visionary industrialists were equally as ruthless.
By the time he was just thirty-five years old, Rhodes controlled 90 percent of the world’s diamond production. Yet for all of his eventual success, Rhodes began his career in Kimberley rather humbly, renting pumps to diggers to clear away water that blocked access to the soil underneath. Beginning in the 1880s, he began using these earnings to acquire and consolidate claims, eventually securing funding from the venerable Rothschild family to finance more significant purchases. Via these procurements, Rhodes sought to achieve monopolistic control of the local output, which would, in turn, enable him to address the problem of steadily sinking cara
t prices due to overproduction. Finally, in 1889, he bought out Barnato’s rival enterprise for £5,338,650, signing what was, at that time, the largest check ever written. For the check writer himself, the field was now clear of competitors. By controlling the entire output of South Africa’s diamond mines, Rhodes could now throttle supply and, if necessary, expand it.
The Evolution of Mining
Well before Rhodes maneuvered De Beers into its commanding position in the industry, mining companies of all sizes operating in Kimberley had been forced to address the immediate problem of how to extract the submerged wealth. As the yields from the richer mines in the dry diggings continued to mount, the potential revenues contained in these diamondiferous soils seemed infinite. The problem, though, which was not inconsiderable, was that these profits were buried deeper and deeper in the ground. Yet the individuals who owned these choice claims, including Barnato and Rhodes, were in an ideal position. They could pay higher wages, hire more workers, mechanize their operations and, thus, reach deeper and deeper points, outperforming—literally outdigging—their competition. The transition to subterranean settings saw manual procedures gradually give way to increasingly mechanized approaches, while operations also became highly organized. This shift to underground mining also delivered new challenges for African laborers, who outnumbered white employees eight to one in “the belly of the earth.”
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