Together with Leyds, Kruger summoned Middelberg to discuss amendments to the railway concession. The matter was resolved after a couple of weeks of hard talks and telegraphs to and from Amsterdam. On the one hand, the outcome imposed restrictions on the company. The Republic was given more say in the fixing of tariffs and routes, and the deadline for completing the eastern line was brought forward to 31 December 1894. In addition, the company had to accept that there would also be a southern line, from Pretoria via Johannesburg to the Vaal River, where it would connect with the ‘Cape’ line coming from Bloemfontein. Finally, the Netherlands-South African Railway Company lost its preferential rights on all local lines. By way of compensation it acquired exclusive rights to all mainline links to other countries, which of course included the Transvaal section of the southern line. The eastern line would also get another branch, this one going to Barberton.
The new concession was a gamble for both parties. For the Netherlands-South African Railway Company it entailed far greater entrepreneurial risks. More kilometres of railway line had to be laid within a shorter period of time. The government in turn staked its key political objective: Johannesburg had to be linked to Lourenço Marques before being linked to any ports in the Cape Colony. The payoff for both was that the political storm died down. The parliamentary debate on the amended draft concession took its usual course. A special parliamentary commission pored over the proposal at Kruger’s home, where the ‘old president’ bombarded its members with arguments, intimidation and abuse until they gave in and agreed to his demands. On 25 June 1890, the Volksraad passed the amended concession as it stood.66
It was less easy for Kruger to impose his will on the world outside Pretoria. In late 1890, the international financial world was facing a crisis, which continued into 1892. Credit was hard to come by throughout that period. Investors were holding onto their money. This was a major setback for a railway company that needed large sums of working capital to lay extra kilometres of track in a shorter period of time. At the same time the gold-mining industry on the Rand had the pyrite problem to deal with. Mercury turned out to be ineffective for extracting gold below a certain depth. The first laboratory tests using potassium cyanide as a substitute were promising, but it took time to adapt the production process. In 1890 and 1891 the revenue was substantially lower than expected, which meant that the Transvaal was in difficulty as well. With its main source of income declining, it couldn’t afford to keep up its extravagant spending of the past few years.
But Kruger was slow to grasp all the implications. As if the problems with the railway weren’t enough, in July 1891 he allowed himself to be talked into a new adventure by the French Baron Eugène Oppenheim—the Selati railway running from the eastern line near the border with Mozambique to the Selati goldfields. He even allowed Oppenheim to look for backers in Europe on behalf of the Republic. Leyds was strongly opposed. Although the line would open up his eponymous Leydsdorp, his misgivings outweighed his vanity. Through Beelaerts van Blokland he had Oppenheim investigated and discovered he was ‘peddling government loans’ left, right and centre and in the process ‘irreparably damaging our country’s credit rating’. Kruger was furious with Leyds when he heard about it. The Oppenheim episode led to one of the fiercest clashes between the two men. Leyds wrote to Beelaerts van Blokland about the matter some time later. ‘Once, after a terrible scene, I was on the verge of handing in my resignation.’ But he didn’t do so and in the end got his way. Oppenheim was given to understand that he was to put an end to his shady dealings.67
Their financial woes would have to be solved in some other way. The railway company was in serious trouble. The most pressing problems were dealt with by obtaining loans, but the company hadn’t managed to secure the long-term loans it urgently needed. It was November 1891 and its funds were running out. How was it to proceed?
Rhodes & Company
Pretoria, July 1892
The reprieve came from an unexpected quarter. Anyone who might have predicted in November 1891 that the railway company would be rescued by Rhodes, Robinson and Rothschild would have been declared insane. But just over six months later that’s exactly what happened. The Netherlands-South African Railway Company, the most important vehicle of Kruger’s vision of independence, was kept alive by British investors. It doesn’t sound logical and at the time it came as a shock.
It started with an act of desperation by chief engineer W. Verwey, in Middelberg’s absence the company’s top man in Pretoria. In early December 1891, a telegram from Amsterdam with bad financial news reduced him to ‘a state of insomnia’ in which he saw no option but to turn to the Cape Colony. By his own account, it was ‘to save the honour of the enterprise and of myself’. The idea in itself wasn’t so bad. The Cape Colony had an obvious interest in the completion of the southern line. At the same time, there was someone influential in Cape Town who was known to be unsympathetic towards Kruger.
Cecil Rhodes hadn’t been idle since his first meetings with Kruger and Leyds at Veertienstroom and Blignautspont in January 1885. In 1888 he forced a merger with his last competitor in Kimberley, resulting in a diamond monopoly for De Beers Consolidated Mines. In 1889, he and his usual business partners incorporated the British South Africa Company (BSAC) under a royal charter, which gave it almost sovereign rights over a vast territory to the north of the Transvaal. In 1890, with the support of Jan Hofmeyr and his Afrikaner Bond, he became premier of the Cape Colony. Hence Rhodes held three very different key positions—speaking of conflicts of interest, Leyds was a novice by comparison—but in each of those capacities he was passionately committed to the expansion of the British Empire. His dream encompassed the entire continent of Africa. His stalking ground was the whole of southern Africa.68
In Rhodes’s ideal of a federal South Africa under British rule there was no place for an unmanageable Boer republic striving for independence, especially not since it had become the economic hub of the region. The Rand’s gold had turned everything on its head. The Transvaal could no longer be ignored, circumvented or isolated. It was a factor to be reckoned with. The gold mines were already in the hands of like-minded magnates. If Rhodes could now gain control of its links to the outside world as well, he would have the Transvaal in the palm of his hand. Kruger’s concession in 1890, agreeing to the construction of a southern line, had been an important first step in that direction. Cape Town and the Colony’s other ports, Port Elizabeth and East London, would get their railway links to Johannesburg—at least if the railway company kept to its contractual obligations for the construction of the Transvaal stretch—and not go bankrupt in the meantime.
That would of course be another option for Rhodes: the railway company insolvent and swept away, the path clear for a new, preferably British, company. But there was also something to be said for consenting to Verwey’s request and helping the railway company out of its financial quagmire. There were actually three reasons in favour of doing so.
First, there was another contender, Natal. It was also a British colony, that much was true, but, like the Cape Colony, it had its own administrative responsibilities, its own economic policies and its own harbour. Durban was 300 kilometres closer to Johannesburg than East London, the Cape Colony’s closest port. Moreover, the railway line from Durban already went as far as the Transvaal border, and Natal had eagerly been currying favour with Kruger. If the railway company went bankrupt, Kruger might choose a connection with Durban, rather than a link to the Cape line.
The second reason was that, besides the southern line, Rhodes had another iron in the fire, or at least that is what he believed. A man of no small ambition, he had in mind to buy the last, Portuguese stretch of the eastern line, and take Lourenço Marques into the bargain. The Portuguese were strapped for cash. In the City of London Rhodes found sufficient capital and enthusiasm for this spectacular takeover, which would rein in the Transvaal once and for all. To make the investment pay off, however, there would have to be an e
astern line.
There was a third reason, too. With the railway company in a weaker position, it would probably be possible to make further demands, for example about the operation of the southern line. All things considered, the chances were good. As a result, the Cape commissioner for public works, James Sivewright, received permission to negotiate with Verwey. Amsterdam was also in favour. The talks were fairly brief. On 10 December 1891 Sivewright and Verwey reached an agreement. The Cape Colony would provide construction funds of at least £300,000—the final total came to £550,000. In return, the Cape railway company would receive not only bonds in the Netherlands-South African Railway Company, but also the right to maintain the service on the southern line—in the Transvaal itself—until the eastern line was completed.
It was a bitter pill for the Netherlands-South African Railway Company to swallow and a disappointment for Kruger and Leyds, but there was little choice. And that was only the beginning. The funds from the Cape Colony were intended for the southern line. The longer eastern line would need far more working capital. In February 1892, with blood, sweat and tears, the railway company managed to prise loose an additional 600,000-guilder loan from Dutch and German bankers. The Transvaal government, however, had nowhere to turn other than to one of the Randlords, J.B. Robinson, for a loan of £100,000 to increase its share in the company.
These were still only drops in the ocean. Many more times those amounts were needed and a capital investment of that magnitude could only come from Europe. Both the governors of the railway company and the Transvaal government—represented by the director of the National Bank, W. Knappe—went to see what the prospects were. A few months later Knappe came back with the first bite. It had come from the heart of the City of London, no less, from the eminent Rothschild family. This, again, was not what one would have expected, but the explanation is simple.
The bank had a considerable interest in Kimberley and Johannesburg; it worked in close collaboration with Rhodes and knew all there was to know about economic developments in the region—including, of course, on the Rand. In the spring of 1892, thanks to potassium cyanide, the goldmining industry had recovered completely and was anticipating another spectacular boom. The Rothschilds were sufficiently confident to give the South African Republic the substantial loan it wanted—£2,500,000—on condition of ‘the money being spent exclusively within the limits of the Republic’. That clause had been discreetly proposed by Rhodes. The Transvaal was obviously not meant to use the money to whisk Lourenço Marques from under his nose.
Nor did that happen. Pretoria spent almost the entire amount on shares in and loans to the railway company. In order to do so, Kruger and Leyds had to get the approval of the Volksraad. The Rothschild loan was on the agenda for late June 1892, but three weeks before that date they faced their first test, Leyds in particular.
His term of office as state secretary was drawing to an end and at the beginning of June the Volksraad voted on the possibility of re-electing him. It was more than just a formality. Scores of memorandums had come in, strongly critical of Leyds, both personally and about his work. His detractors recalled the comments of two years earlier, after the exposure of his letter to Schmüll. The main issues were again his failure to attend church and his ‘Dutch’ way of doing things, but this time, more importantly, the conflict of interests inherent in his roles as state secretary and government commissioner of the railway company. Leyds had no option but to resign as commissioner, which put an end to the debate once and for all. He was re-elected state secretary by 20 votes to three. The motion regarding the Rothschild loan still required the usual bullying and coaxing, but in the end it went through intact. In early July 1892 the contract was published in the Transvaal Government Gazette. Both Leyds and the railway company could move on.69
Rhodes also moved on, tirelessly. He had so much to do, and so little time. Diamonds, gold, political power—not bad for half a lifetime, for a man who was not yet 40. But he wanted more, much more—more railways and another harbour, but most of all, more land, infinitely more land to fulfil his boundless dreams. The satirical magazine Punch illustrated him full-length as a modern Colossus of Rhodes, the giant of classical antiquity straddling Africa ‘from Cape to Cairo’: a telegraph system, a railway and then casual annexation. ‘I would annex the planets if I could,’ he famously said. By comparison, a mere continent wasn’t all that ambitious.
So, to the north, deeper into the interior. Bechuanaland, wrangled into the orbit of British rule in 1885, was only a stepping stone. Rhodes had set his sights on the territory beyond it, the endless savanna north of the Limpopo River, where the biblical land of Ophir was said to have been; King Solomon’s mines, too, in the north-eastern region known as Mashonaland. Fortune-seekers dreamed of the wealth waiting to be amassed there. By comparison, the Rand paled into insignificance. Rhodes was impatient to take possession of the country. There was only one problem—actually two.
Firstly, the territory happened to be inhabited. The Ndebele had been living there since the late 1830s, when the Voortrekkers drove them out of the Transvaal. King Mzilikazi had been succeeded by his son Lobengula. From the royal capital in Bulawayo he ruled in name over a territory which roughly corresponds to present-day Zimbabwe. His authority was more or less recognised by the other peoples living there, among them the Shona. Lobengula was a sight to behold, according to his white visitors, and there were quite a few of them. Rhodes bombarded him with envoys, all of whom returned with vivid descriptions of a cruel but charming tyrant, ‘very much like a wild beast’, but with ‘a very pleasant smile’, and in all his obesity ‘every inch a king’. Some returned with a signed agreement as well, and that of course is what Rhodes was after. The coveted document was obtained in October 1888 by his trusted business partner, Charles Rudd. In exchange for a thousand Martini-Henry rifles with ammunition, a steamboat on the Zambezi River and a monthly stipend of £100, Lobengula relinquished full and exclusive rights to all the mineral resources in his country. Legally, the contract was full of holes, but that didn’t bother Rhodes. He had obtained the concession he wanted and, a year later, a royal charter for his British South Africa Company, which gave him sovereign rights in Matabeleland and Mashonaland.70
That was one problem solved. The other involved the Boers. At the age of 16, Kruger had helped drive Mzilikazi from the Transvaal, which in his view created a lasting bond between him and the Ndebele. He was bound by the provisions of the Convention of London of 1884 on the eastern and western frontiers of the Transvaal, but the agreement said nothing about the northern frontier. So Kruger considered himself free to enter into treaties with the Ndebele as he pleased. And so he did. In 1887 Pieter Grobler, on behalf of the South African Republic, signed a peace and friendship agreement with Lobengula. Hence Kruger, too, possessed a document which he believed gave him certain rights—and entitled him to some form of compensation when ‘consul’ Grobler was murdered near the Bechuanaland border in July 1888. Kruger was convinced that Rhodes was behind his death. The matter was settled by payment of compensation to Grobler’s widow, but the legal principle remained unresolved. Who had the oldest rights or the strongest claim to the land north of the Limpopo?
In January 1890, rumours began to circulate that a group of Boers in the Transvaal were preparing to embark on an old-fashioned trek to Mashonaland. The situation threatened to escalate. The new high commissioner, Sir Henry Loch, who had just arrived in the Cape, insisted that Kruger put an end to the expedition. After a difficult start, Kruger had built up a good relationship with Sir Henry’s predecessor, Sir Hercules Robinson, and he hoped to achieve the same with Sir Henry. He invited him to attend a personal meeting. Rhodes was welcome too. Leyds had recently returned from his leave in Europe and would accompany Kruger.
The meeting was held in the same place where five years earlier Kruger and Leyds had been involved in the unsuccessful negotiations over Goshen and Stellaland. This time the talks would go down in history as t
he Conference of Blignautspont. The name suggests rather more than what it actually was. The Berlin Conference, held from November 1884 to February 1885 at which Western diplomats carved up the continent of Africa, now that was a real conference. The meeting held at Blignautspont on 12 and 13 March 1890 was simply a gathering of four white men in a tent in a tiny spot on the veld. The Scramble for Africa in miniature. Conspicuously absent were the black leaders over whose fortunes they were deciding: King Lobengula of Matabeleland and Mashonaland, King Ngwane V—also known as Bhunu—of Swaziland, and the chiefs Sambane and Mbikiza of Tsongaland.
Their fates were bound together by an idea which Kruger had expressed some time earlier and which he was hoping to formalise at Blignautspont. He was prepared to relinquish all claims north of the Limpopo, in exchange for Britain’s agreement to give the Transvaal a free hand in Swaziland and Tsongaland, including Kosi Bay. This went too far for Loch. With his striking long, grey beard he could be mistaken for a Boer leader, but he spoke the language of the cricket pitch not the bush. Leyds described him as ‘a pleasant but quick-tempered man with a jingoistic streak’, who relied too heavily on ‘information from subordinates who loathe us’.71 Loch’s counter-proposal came in the form of a ready-made draft convention with less favourable—and non-negotiable—terms for the Transvaal.
Kruger was put out by Loch’s unwillingness to compromise and said he would have to consult the Executive Council and the Volksraad. As a result, nothing was signed at Blignautspont. After months of haggling, the two parties finally reached an agreement on 2 August 1890. Leyds had always had reservations and was still not in favour of the deal, but that was the price Kruger was prepared to pay for an independent railway line and harbour. Under the convention, the Transvaal waived all rights to Matabeleland and Mashonaland, and agreed to the British colonial railway system being extended up to its borders. In return, Britain recognised the validity of all the concessions the Boers had acquired in Swaziland, which was to be administered jointly. The Transvaal also gained the right—and this was Kruger’s main objective—to buy a strip of land in Swaziland and Tsongaland, just wide enough to build a railway line and a harbour. An extra condition was that after buying the land, the Transvaal would join the customs union between the British colonies and the Orange Free State.72
The Boer War Page 10