South Africa Scripophily
by Mario Boone
outh Africa is not only one of the most
beautiful countries in the world, it is probably also one of the most
with a history that goes back as far as mankind.
The first permanent European settlers were Dutch. Under the orders of
the Dutch East India Company (VOC), Jan van Riebeeck founded in 1652 the
first white settlement at the
Cape of Good Hope. It was the beginning
of a long colonization process by which Dutch, German and French
colonists (so-called Boers) went deeper and deeper into the unexplored
African inland, often leading to bloody conflicts with the native
inhabitants, the Khoisan and Bantu
tribes such as the Xhosa and Zulus.
In the beginning of the 19th century, the British took control over the
Cape and many Boers went further
to establish their own republics:
Transvaal and Orange Free State. However, Great Britain didn't give in
and tried to unite the whole of South Africa under its authority. In
1910, and despite two Boer Wars led by the legendary Paul Kruger, London
achieved its goal. In the following years, South Africa increased its
autonomy towards Great Britain and went more and more its own and well
South Africa had an economy largely based on agriculture and without any
major industries. As a result, very few old stocks are known.
The discovery of Diamonds
In 1869, this
was all to change. It that year, the discovery on the banks of the
Orange River of the Star of Africa, a 83,5 carats rough diamond, became
the catalyst for the great diamond rush. While at first 'wet' diggings
along the banks of the Orange and Vaal rivers were pursued,
it was only a matter of months before major finds were made 'inland'.
Six major diamond mines were discovered during the "Great Rush"
(1869-1871) : Bultfontein, Koffiefontein, Jagersfontein, Dutoitspan, De
Beers and Kimberley (the
richest of all). From than on and
up till today, no other country would mine more diamonds than South
Africa does. In those early days, some 3600 different mining claims were
bought by individual persons. Consolidation (economics of scale) made of
course much sense and after a change of law in 1876, this was exactly
what happened. After a fierce battle for overall control of the diamond
fields between Barney Barnato and the legendary Cecil Rhodes, the
latter took de facto control over almost the complete South African
diamond industry. He amalgamated his holdings into
the De Beers Consolidated Mines. By 1929, the German-originated
Oppenheimer family took control over De Beers and continues up till
today to run what is by far the world's biggest diamond business.
discovery of Gold
Even more important than diamonds for
the South African economy was the discovery of gold in 1886 when George
Harrison found an outcrop of the main reef of gold-bearing conglomerate
near Johannesburg. Unlike the earlier Californian and Australian
discoveries, this field was not an alluvial deposit where thousands of
freelance gold diggers could work, it was the tip of low grade reefs
which could be mined only at depth and at great initial capital cost.
There was very little capital in South Africa at that moment, so many
mining companies were founded and listed on the stock exchange in
London. Here again, consolidation took place among the successful
companies (i.e. those who had claims where enough gold could be
extracted to make a profit) while many others were quickly dissolved
because of lack of fortune. While for diamonds, only 'De Beers' really
stands out, there are seven big gold mine companies who make that South
Africa was, and still is, the world's largest gold producer: Gold Fields
of South Africa (founded by Rhodes), Rand Mines (now Randgold),
Johannesburg Cons. Investments, General Mining (now Gencor), Union
Corporation (now Gencor), Anglo American (founded by Oppenheimer, now
AngloGold) and AngloVaal. Up until today, South Africa has produced no
less than 35% of all gold ever mined in the world!
Collecting South African stocks & bonds
The historical significance of
collecting South African certificates is obvious from the above text.
Yet, there is more: several pieces are very attractive, most ones are in
English and sometimes with interesting foreign influences. Overall,
there are a few hundred different pieces known, though almost all are
quite rare because of the low number of stocks issued (most were small
companies), yet prices tend to be rather moderate thanks to the fact
that Scripophily is not yet very well known in South Africa.