5

ENTER THE MAGNATES

In the aftermath of the rebellion, the British government installed a new regime in Kimberley, determined to ensure that Griqualand and its turbulent mining community brought no further trouble or expense. In place of a governor, it appointed an ‘administrator’, Major Owen Lanyon, a tall, swarthy Irish martinet who made no attempt to hide his distaste for the primitive living conditions or his impatience with local dignitaries. To resolve disputes over land, the British administration purchased for the sum of £100,000 the Vooruitzigt farm, containing Kimberley mine, De Beer’s mine and Kimberley town, becoming, in effect, the ‘proprietor’.

Kimberley soon developed a more staid character. Banished were the grog shops and black prostitutes that had made Saturday nights in Kimberley the stuff of legend. The town now boasted churches, chapels, a synagogue, schools, temperance societies and a public library. Streets were regularly watered to keep down the dust. On Main Street, the Craven Club, with its reading room, card and billiard rooms, provided a convenient rendezvous for well-to-do diggers. Nearby, the Varieties Theatre offered entertainment in elegant surroundings. ‘It looks exceedingly neat and comfortable,’ reported the Diamond News when the theatre opened in November 1874. ‘The walls are papered and decorated with handsome pictures. The stage has been erected upon the latest principles, so as to afford everyone present a full view of the actors. On either side of the stage is a splendid mirror seven feet in height, draped with red and damask curtains.’

A new residential suburb named Belgravia was laid out in 1875, attracting ‘leading merchants and men of leisure’ who built brick houses with all the trappings and comfort expected of a Victorian bourgeois lifestyle. A telegraph office opened in 1876, providing a direct link to Cape Town. Census figures in 1877 showed Kimberley to be the second-largest town in southern Africa, with a population of 13,500. When Dutoitspan and Bultfontein were added, the total population of the diamond fields was set at 18,000 - 8,000 whites and some 10,000 non-whites.

With the aim of sorting out the grievances that had led up to the Black Flag revolt, a royal commissioner, Colonel William Crossman, was appointed to examine the workings and finances of the mining industry. Crossman concluded in 1876 that the system of restricting the number of claims that claim-holders could possess, put in place to protect the interests of individual diggers and prevent mining companies from gaining control, was no longer viable. The future of diamond mining, he argued, belonged to capitalists and companies; and he recommended that no limit should be imposed on the size of holdings. Lanyon concurred with these findings. His interest, above all else, was to make sure that Griqualand was solvent.

A new breed of mining entrepreneur emerged. Some came from the ranks of the more successful diggers; some were Kimberley traders who had made their fortunes importing equipment and supplies; the most active group in purchasing claims were diamond merchants. All relied heavily on international connections. A slump in the price of diamonds in 1876 brought work on many claims to a standstill and enabled men with capital backing to pick up claims cheaply from forced sales. Within the space of four years, the number of claim-owners in Kimberley mine halved.

In the first four months of 1877, Jules Porges, a Paris-based diamond merchant, spent £90,000 buying up low-priced claims, giving him a 10 per cent interest in the Kimberley mine. Porges later teamed up with two Kimberley dealers, Sammy Marks and his brother-in-law, Isaac Lewis, who had turned their small trading business into a substantial mining company. In 1880 they merged their claims to form a joint-stock company, Compagnie Française des Mines des Diamants du Cap du Bon Espérance, otherwise known as the French Company. It controlled one-quarter of the Kimberley mine and was by far the largest mining operation on the diamond fields.

Another major player was Joseph B. Robinson, a cold, cantankerous claim-owner notorious for his ill-temper, meanness, and proclivity for seducing other men’s wives and daughters. The son of 1820 settlers, he had been among the first diggers at the Vaal River before moving to Colesberg Kopje. By the time the British took control of Griqualand, he had become one of Kimberley’s leading figures; he owned the only brick residence then there and provided the carriage for Governor Southey to make his grand entrance into the town in 1873. He also bought a newspaper, theIndependent, to promote his political standing. Tall, with piercing blue eyes, he was renowned for his sour, tight-lipped expression and his habit of wearing a white pith-helmet. Successful as a lone operator, Robinson had interests in several mining ventures, but his principal vehicle was the Standard Diamond Mining Company which gained control of substantial parts of Kimberley mine.

The most colourful of the new entrepreneurs was Barney Barnato, a Jewish kopje-walloper born in the East End of London and known in Kimberley more for his performance as a music-hall entertainer than for his talent for business. A cousin of David Harris, who had won £1,400 in an hour playing roulette in a Kimberley bar, Barnato had arrived in the diamond fields in 1873 carrying a box of poor-quality cigars in the hope of starting a business career there. ‘He was a strongly built young fellow,’ wrote Louis Cohen, who first met him in a canteen, ‘wore a pair of spectacles on his uninviting dust-stained face, and had the ugliest snub nose you could imagine, but as good a pair of large grey blue eyes as ever flashed through a pair of glasses.’

Barnato found it difficult, however, to make any headway as either a digger or a diamond buyer. He survived by working as an actor, appearing in various roles at the Theatre Royal, a one-storeyed corrugated iron building with a bar running the length of one side. Facing hard times, he moved into a back room in a sleazy hotel, a notorious rendezvous for illicit diamond dealers, that was owned by his brother Harry. Together they managed to accumulate enough money to buy four claims in Kimberley in 1876, risking their entire capital. From such precarious beginnings, the mining interests of the Barnato Brothers began to prosper, albeit under a cloud of suspicion about the origin of their wealth. By 1878, their claims were bringing in an estimated £1,800 a week. By 1880, they had become major players in the diamond trade, with offices in London.

Amid this rising galaxy, Cecil Rhodes was no more than a minor contender. In partnership with Rudd, he began to build up a group of claims in a part of De Beer’s mine known as Baxter’s Gully. De Beer’s was considered to be one of the poorer mines; claims could be purchased there more cheaply than in Kimberley mine. Whereas Kimberley’s claims were officially valued at over £1 million in 1877, those of De Beer’s were worth only £200,000; of Dutoitspan, £76,000; and of Bultfontein, £30,000. Nevertheless, De Beer’s mine, reaching only one quarter of the depth of Kimberley, was cheaper to dig and less prone to reef falls.

Rhodes’ personal standing in the mining community, moreover, was at a low ebb. His reputation had been severely damaged as a result of his handling of pumping contracts. As well as his contract in Dutoitspan, Rhodes had won a bid at the end of 1874 to clear Kimberley mine of water in two months and to keep it dry for the following two months. Pumping was a hazardous business. Pumps frequently broke down; wood supplies for the steam engines were scarce; there were endless delays in bringing in new equipment. On one occasion, a boiler exploded after Rhodes, in a fit of absentmindedness, forgot to feed in water. By May 1875, to the intense frustration of claim-holders, parts of De Beer’s remained flooded. But, by promising to order new pumps from England, Rhodes was given an additional contract, to begin once the pumps had arrived in Kimberley.

In the meantime, the De Beer’s mining board employed a 35-year-old Mauritian engineer, E. Huteau, to supervise pumping operations at the mine. Huteau succeeded not only in keeping the mine dry when the rainy season began at the end of 1875, but he kept operating costs below Rhodes’ contract price of £400 a month, making Rhodes’ contract appear unnecessary. On 26 December, however, Huteau’s pumping operation failed spectacularly and the mine flooded. On inspection, it was discovered that an engine had been sabotaged. Rumours abounded that Huteau had previously been approached by a man offering a bribe of £300 to sabotage his pumping equipment. Angry diggers with claims under water insisted that Huteau identify the culprit.

By chance, the royal commissioner, Colonel Crossman, appointed to investigate diggers’ grievances, opened his first session in Kimberley Hall on 5 January 1876 and was swiftly drawn into the furore. Crossman sent for Huteau who confirmed, under oath, that he had been offered a bribe, but he refused to name the culprit. Threatened with legal action, Huteau suggested a compromise: he would write the name on a piece of paper and hand it to the royal commissioner. Crossman read the paper, then immediately called out for Mr Cecil Rhodes to appear before him. As Rhodes could not be found - he was at Dutoitspan - the matter was adjourned.

Two days later, Rhodes told Crossman that the story was ‘fictitious’ and announced that on legal advice he had decided to ask the attorney-general, Sidney Shippard, to prosecute Huteau for perjury, thus preventing Crossman from pursuing his own enquiries and effectively ending public discussion of Rhodes’ conduct. Shippard, an Oxford-educated lawyer, was part of Rhodes’ circle of friends. Though a preliminary hearing was held six days later, at the following hearing Shippard announced that he would not proceed with the prosecution. Without giving any reason, Rhodes dropped the case. Nor did he make any further attempt to clear his name.

In March 1876, Rhodes left Kimberley for Oxford. ‘My character was so battered at the Diamond Fields,’ he wrote from Oxford, ‘that I like to preserve the few remnants.’

Paying a visit to Kimberley in 1877, the English novelist and travel writer Anthony Trollope was impressed by the riches it produced but complained of the heat, the dust, the flies, the food, the living conditions, the high prices and the barren landscape. ‘There are places to which men are attracted by the desire of gain which seem to be so repulsive that no gain can compensate the miseries incidental to such an habitation.’

Kimberley’s most notable feature, he wrote, was Market Square, mentioned by local residents with pride, but which boasted only one building higher than one storey. ‘This is its only magnificence. There is no pavement. The roadway is all dust and holes. There is a market place in the midst which certainly is not magnificent. Around are the corrugated iron shops of the ordinary dealers in provisions. An uglier place I do not know how to imagine.’

The mean-looking corrugated iron houses, in which rich and poor alike lived, were bereft of comfort. The cost of transport made many materials prohibitively expensive. Trollope continued:

It is difficult to conceive the existence of a town in which every plank used has had to be dragged five hundred miles by oxen; but such has been the case in Kimberley. Nor can bricks be made which will stand the weather because bricks require to be burned and cannot be burned without fuel. Fuel at Kimberley is so expensive a luxury that two thoughts have to be given to the boiling of a kettle . . . Lath and plaster for ceilings there is little or none. But a canvas ceiling does not remain long clean, or even rectilinear. The invincible dust settles upon it and bulges it. Wooden floors are absolutely necessary for comfort and cleanliness; but at Kimberley it will cost £40 to floor a moderate room. The consequence is that even people who are doing well with their diamonds live in comfortless houses, always meaning to pack up and run after this year, or next year, or perhaps the year after next. But if they have done ill with their diamonds they remain till they may do better; and if they have done well then there falls upon them the Auri sacra fames. When £30,000 have been so easily heaped together, why not £60,000; - and when £60,000 why not £100,000? And then why spend money largely in this state of trial, in a condition which is not intended to be prolonged, - but which is prolonged from year to year by the desire for more? Why try to enjoy life here, this wretched life, when so soon there is a life coming which is to be so infinitely better?

The surrounding countryside he found equally dreary, stripped of all timber. ‘I do not think that there is a tree to be seen within five miles of the town.’ A period of drought had turned the landscape brown. ‘When I was there I doubt there was a blade of grass within twenty miles . . . Everything was brown, as though the dusty dry uncovered ugly earth never knew the blessing of verdure.’

Trollope was taken to Klipdrift - or Barkly, as it had been renamed - for a ‘picnic’ on the banks of the Vaal River and encountered there a solitary prospector, struggling to survive:

As we rowed down the river we saw a white man with two Kafirs poking about his stones and gravel on a miner’s rickety table under a little tent on the beach. He was a digger who had still clung to the ‘river’ business; a Frenchman who had come to try his luck there a few days since. On the Monday previous - we were told - he had found a 13 carat white stone without a flaw. This would be enough perhaps to keep him going and almost to satisfy him for a month. Had he missed that one stone he would probably have left the place after a week. Now he would go on through days and days without finding another sparkle. I can conceive no occupation on earth more dreary, - hardly any more demoralizing than this of perpetually turning over dirt in quest of a peculiar little stone which may turn up once a week or may not.

Yet, despite his dislike of the diamond fields, Trollope was enthusiastic about the way the diamond industry, far more than the efforts of missionaries or philanthropists, he said, had brought ‘civilization’ to the black population. ‘The work of civilizing as it has been carried out by simple philanthropy or by religion is terribly slow. One is tempted to say that nothing is done by religion and very little by philanthropy. But love of money works very fast.’

While the teaching of religion had never brought large numbers of blacks to adopt European ways, said Trollope, he was convinced that European habits would bring about religion. ‘When I have looked down into the Kimberley mine and seen three or four thousand of them at work . . . I have felt that I was looking at three or four thousand growing Christians.’

It was for this reason, said Trollope, that he regarded Kimberley as ‘one of the most interesting places on the face of the earth’.

Rhodes returned to Oxford in 1876, still harbouring ambitions of becoming a barrister. At the age of twenty-two, he was already wealthy, worth about £40,000, but believed that a professional qualification would give him greater standing and advance his career. ‘On calmly reviewing last year,’ he wrote to Rudd from Oriel College in 1876, ‘I find we lost £3,000 owing to my having no profession. I lacked pluck on three occasions through fearing that one might lose and I had nothing to fall back on in the shape of a profession.’ He referred specifically to missed opportunities at Dutoitspan and De Beer’s. ‘If I had not funked collapse,’ he said, none of those failures would have occurred. ‘You will find me a most perfect speculator if I have two years and obtain a profession. I am slightly too cautious now.’

During the seven terms that Rhodes spent at Oxford between 1876 and 1878, he made little impression. The Dean at Oriel, the Rev. Arthur Gray Butler, who became a friend and advisor, described his career at Oxford as ‘uneventful’ and recalled: ‘He belonged to a set of men like himself, not caring for distinctions in the schools and not working for them, but of refined tastes, dining and living for the most part together, and doubtless discussing passing events in life and politics with interest and ability.’

He rarely attended lectures and tutorials, appearing to be easily distracted. A fellow student recalled that he carried diamonds in a little box in his waistcoat pocket. ‘When he condescended to attend a lecture, which proved uninteresting to him, he pulled out his box and showed the gems to his friends, and then it was upset, and diamonds were scattered on the floor, and the lecturer looked up and asking what was the cause of the disturbance received the reply, “It is only Rhodes and his diamonds.”’ His frequent failure to attend lectures involved him in what he described as ‘tremendous skirmishes’ with Oriel’s dons.

He was a more familiar figure among a group of wealthy bon vivants. He took up hunting and polo and joined the Bullingdon, a drinking club whose members enjoyed parading in the High Street with horsewhips and hunting cries on festive evenings. Another of his favourite pastimes was to attend horse races.

Nor did Rhodes make much effort to pursue a legal career. He paid fees to enrol at the Inner Temple in London and attended a number of dinners, but never sought any instruction in law. ‘My law experiences, up to the present time,’ he wrote in 1877, ‘consist of eating dinners and the theatre.’

Indeed, his attention was more often focused on events in Kimberley than on gaining a professional qualification. He followed the fluctuating fortunes of the diamond trade with avid interest, keeping in close touch with Rudd by correspondence, offering him advice and encouragement. During a slump in 1876, he wrote: ‘If bad times have got you in a mess, do not funk. They are temporary. Diamonds in themselves are more liked than ever, all the swells now wear them in preference to anything but the people hit in foreign loans have been as you can understand selling their houses and diamonds, dropping their carriages and horses in town.’ He was nevertheless cautious about acquiring more claims or property. ‘Do not plunge for much more at the Fields. We have sufficient block at De Beers to make a fortune if diamonds last and have enough property in Kimberley. If we make more money I would sooner say lend it or go in for a nest egg here at home.’

Rhodes returned to Kimberley during the long vacations of 1876 and 1877. He returned again in 1878, intending to stay for only six months, before completing his final term at Oxford, but he was soon caught up in a hectic bout of mining activity. The introduction of steam engines to cope with the growing depth of Kimberley mine had created boom conditions. ‘Steam is rampant, and steam engines are the investment of the day,’ reported the Diamond News in 1877. Diamond output and labour productivity grew by leaps and bounds. Even though diamonds fetched only two-thirds of the price they had in the early 1870s, profits soared. By 1879, the average rate of profit of private companies in Kimberley reached 30 per cent. The surge in profits set off a scramble for claims. By 1879, just twelve private companies or partnerships controlled three-quarters of Kimberley. The same process of consolidation occurred in De Beer’s.

Combining with other claim-holders, the Rhodes-Rudd partnership built up a syndicate with the second-largest holding in De Beer’s and set their sights on gaining control of the entire mine. Following the lead of the French Company in Kimberley mine, they launched a joint-stock company on 1 April 1880, naming it De Beers Mining Company.

Late one night, as he walked past the office of a German diamond merchant, Alfred Beit, and noticing he was still at work, Rhodes decided to look in on him.

‘Hallo,’ said Rhodes, ‘do you never take a rest, Mr Beit?’

‘Not often,’ replied Beit.

‘Well, what’s your game?’ asked Rhodes.

‘I am going to control the whole diamond output before I am much older,’ said Beit.

‘That’s funny,’ said Rhodes. ‘I have made up my mind to do the same.’

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