HL Deb 08 March 1900 vol 80 cc337-42

My Lords, I beg to move for a Return with reference to each of the railways in the Orange Free State and in the South African Republic respectively, showing whether such railways belong to the State or to private companies; and also giving the cost or capital value of the same. The object and purpose of this motion will, I think, be sufficently transparent and clear to your Lordships. In a certain set of circumstances which, I hope, may not be very far distant, it will be necessary to consider very carefully and closely the value of the railways in the two republics, and it seems to me essential that we should possess, so far as it is possible, the requisite knowledge in order to enable an intelligent opinion to be formed. It is not possible for an individual to secure this information with accuracy, but so far as I have been able to do so, I have looked into certain figures and facts which I have been able to obtain with regard to these railways, and if your Lordships will pardon me for a minute or two I will make a short statement with regard to them. I will take first the Orange Free State. The railway communication of the Orange Free State consists chiefly of the railway which runs throughout that State, and which originally was made by the Cape Colony. It was also originally worked by the Cape Colony, but there was a clause in the agreement by which the Orange Free State was enabled, if at any time it should see fit, to purchase the same. Some few years ago, for reasons which I dare say we can now imagine, the Orange Free State saw fit to exercise this right of purchase, and they acquired the railway from the Cape Colony for £2,450,000, of which loan they have repaid £650,000. At the present time they owe to the Cape Colony £1,800,000. I wish to point out in passing that on this showing alone there is a clear sum of £650,000 by which the capital cost of this railway has been diminished, and which could be otherwise used in any future arrangement. I think that is all I need say with regard to the Orange Free State, although it is true that there is another short line which starts from the border of Natal, coming from Ladysmith, and which goes down to Harrismith and to Bethlehem. That railway was made by the colony of Natal, and at the present time, I believe, is worked, or was worked until October last, by them. When we come to the Transvaal Republic the question is a very much larger one. The railway system of that Republic, speaking broadly, belongs to one large and powerful company which has its headquarters in Holland, and which has in many very important respects mixed itself up in the business and the affairs of the State. Originally the concession in respect to the Netherlands Railway was given in the year 1884 to certain Hollander and German capitalists. In 1887 that concession was floated by them, and the company appeared in the following form. There were 2,000 shares of 100 guilders each. The nominal capital of the company at that time was £160,000 in round figures, and I would ask your Lordships' attention to the shares and the way in which they were divided. To the German shareholders 819 shares were allotted, carrying with them thirty votes; to the Republic itself 600 shares were allotted, carrying with them six votes; but to the Hollander portion of the shareholders 581 shares were allotted, carrying seventy-six votes. Therefore the Hollander shareholders, with less than one-third of the shares and less than one-third of the capital, had double as much voting power as the Transvaal Republic and the German capitalists put together. Your Lordships will not be surprised, when I say that this arrangement was made at the time when Dr. Leyds was the attorney of the Transvaal Government. The system of railway extends now to 717 miles, and the capital, as it now stands, is £1,667,000, besides which obligations have been issued amounting to £7,000,000, so that the whole capital is £8,667,000. At the present moment—and this is a very important point—there are 14,000 shares issued, of which 5,758 shares belong to the Transvaal Republic and 8,242 to other persons. With regard to the pecuniary transactions and the financial position of the company itself, it appears from the accounts of 1898, which are very difficult indeed to understand, and are, I think, not intended to be understood, that there are no less than three different forms of giving dividends, but, as far as I can make out, the shareholders—of whom, of course, the Republic represents nearly three-sevenths—received about 14 per cent. upon their money, besides which there was a surplus which amounted to £608,000, of which 85 per cent., by the concession, went to the State, and 15 per cent. to the shareholders. Under that clause, in the year 1898, the sum of no less than £575,000 was paid to the South African Republic. It will be seen, therefore, what a valuable asset this ought to be. Not merely have you the value of the shares, but if things continue in the same way as up to the end of the year 1898 the State, or those who represent the State, will have at their control the sum of nearly £600,000. Your Lordships can calculate for yourselves on how much capital that sum alone would pay interest. The head office of this company is in Holland, but fortunately the line itself is in the Transvaal, and hereafter it is quite possible, and I hope it is quite certain, that very careful investigation will be made into the transactions of this company and into the manner in which they conduct their business. There is one other line in the South African Republic about which I should like to say a word. It is the Pretoria to Pietersburg line. I find that that line was registered in 1896 under British law. Fifty thousand £10 shares were issued, of which 30,000 belong to the Government and 20,000 to other persons. But, besides that, there have been two issues of debentures, one of £250,000 4 per cent. debentures issued by Messrs. Morton, Rose and Co., and another of £700,000 which has been guaranteed by the Government. The history of this line is rather pathetic. It was finished in 1899, and in October of the same year, on the outbreak of the war, was seized by the Republican Government. At the present time the contractor's and others have, I understand, raised law suits. There are further lines in the Transvaal, on which it is hardly necessary to say anything. In respect to one, a Mr. Barend Vorster, a member of the First Raad, by presents and by corruption of every sort and kind openly administered to the members of the First Raad, and subsequently justified by President Kruger, obtained a concession. I do not know what the capital of the company is, but although the line itself is reported to be only 200 miles long, debentures for £500,000 were issued. That was also an arrangement which was made under the administration of Dr. Leyds in the year 1890. Your Lordships will not be surprised to hear that the contractor took the contract at £9,600 per mile, and two days later sublet it at £7,000 per mile, thus putting over £500,000 in his own pocket. There are some other smaller lines in the Republic. There is a line from Pretoria to Koomati Poort, and a line from Koomati Poort to Leydsdorp, with regard to the financial position of which I can obtain no information. I hope I have said enough to show that it is very desirable that we should have the information I ask for as early as possible. I submit to your Lordships that my inquiry for information is not a premature one. It has been said more than once lately that persons who have made similar motions have been endeavouring to divide the skin of the bear before he is dead. I do not propose to divide the skin of the bear, but I want to know whether he has a skin, and, if he has, what the value of that skin is. The mistake we have always made hitherto with regard to South Africa is that we have never done anything, or begun to do anything, until it was too late. The liabilities already entailed by this war amount, I think, to something like £60,000,000. This is to be paid, in the first instance, by the taxpayers of this country. It is quite clear that Parlia- ment ought, and the taxpayers will expect them, to conduct the most minute investigation into the property of the two Republics, so as to ascertain what their powers are of paying for the war which they have forced upon us against our will and in so insolent a manner. I daresay there maybe other inquiries of the same sort which will have to be instituted. There should be a proper inquiry into the present position of the National Bank of South Africa, another of the financial concerns which have been largely, if not chiefly, started and held in Holland. I hope your Lordships will agree with me that it is desirable that this information should be laid upon the Table. I move accordingly.

Moved, "That an humble address be presented to Her Majesty for a Return with reference to each of the railways in the Orange Free State and in the South African Republic respectively, showing whether such railways belong to the State or to private companies; and also giving the cost or capital value of the same."—(The Earl of Camper down.)


My Lords, there is no objection to granting the Return which the noble Lord has moved for, though I cannot hold out any hope of being able to furnish it within any very brief interval of time, because much of the information that will be required to render the Return complete has yet to besought for. If the noble Lord will communicate to me the exact form in which he would like the Return to be made out, the Department which I represent will do its best to meet his wishes. The noble Lord has given a slight sketch of the history of the main lines in the Orange Free State and the South African Republic, and although the figures at my disposal do not in every respect entirely tally with those quoted by the noble Lord, yet I think the general sketch he has given to the House is an accurate one. The chief authorities at present available on this question—and there is a great deal of information to be found in them—are, in the first place, the Report of the Industrial Commission of the South African Republic; secondly, the Report on the Finances of that Republic for the year 1898; and last, but by no means least, the Experts' Report of the Delagoa Bay Tribunal, which contains a mass of information on South African Railways. The noble Lord will not expect me now to express any opinion on the part of Her Majesty's Government on those points of future policy on which he has touched. But I can assure him that the Government are fully alive to the importance in South African politics of the system of South African railways. It is a commonplace—the influence of railways in this century on the development—social, industrial, and political—of various countries. But I do not know any region in the world in which the railway system is likely to play a more important part in these respects than South Africa.

On Question, agreed to.