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TODAY IN KIMBERLEY’S HISTORY 12 MARCH

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UPDATED: 12/03/2018

12 March 1888, Formation of De Beers Consolidated Mines.
12 March 1888, Cecil Rhodes elected first Chairman of DBCM.
12 March 1907, First Coloured Swimming Championship of Griqualand West takes place at the Lyndhurst Rd baths. Organised by Mr JC September.
12 March 1978, Robert Sobukwe buried in Graaff Reinett.

DID YOU KNOW

The great amalgamation of the Kimberley Mine (under control of Barney Barnato), and the De Beers Mine (under Rhodes), saw the emergence of the greatest mining concern the world had ever seen at the time. Undoubtedly, the formation on 12 March 1888, of what was to become – and still is – the controller of diamonds world-wide, was a quite stupendous achievement by Rhodes, and his speech to the shareholders at the Boardroom on Warren Street on 31 March rates as probably his best financial discourse of his life.

Briefly, Rhodes address was as follows:

“Gentlemen, in putting this resolution to the meeting I might state that when I said to you last year we had completed amalgamation in De Beer’s Mine we really though that we might rest from our labours. We had the whole of De Beers Mine under our control; there were a few interests left, but we felt so perfectly sure that we should obtain them that we said to you, the shareholders of the De Beer’s Company: ‘The De Beer’s Mine is amalgamated and our labours are done.’ We had what we believed to be the best paying mine of all the diamond mines – we firmly believed this, other statements to the contrary notwithstanding – and we felt as your Board that we were perfectly satisfied with the result of our labours. But a change came over our scene. We obtained new managers and new engineers, who pointed out to us…that by a system of underground working there was practically no limit to our production…we felt we were only just beginning diamond mining again…the same engineers who told us this, also informed us that Kimberley Mine could yield the same result, could put out almost the same number of loads. It was a simple question of sinking shafts, continuing tiers of galleries, one under the other – what might be called constructing one house under the other – and the capacity of the output was practically unlimited…What had we to face? One of two things: either an arrangement with Kimberley Mine, or the control of Kimberley Mine; otherwise so far as I was concerned, I should have sold my shares and gone home…we approached the controlling powers in Kimberley Mine in every possible way that you could conceive. I valued De Beer’s Mine at a great deal higher than they valued it; but I was willing to give way in everything, to accept market rates in order that we might obtain an amalgamation which meant control, which meant the saving of our industry. Gentlemen, I was met simply with smiles and the most obdurate statements…”

“You know the story of my getting on board the steamer at Cape Town, going home, and buying the French Company within twenty-four hours, and the excitement caused thereby. But it was only the beginning of the matter. When we had bought and placed a value on the French company, immediately the controlling spirits of Kimberley Mine declared it was worth more, and competed against us. The process had to be gone over again, and someone had to hurry across the water and once more deal with the same facts. But to make a long story short, by fair discussion – and I may say so, whatever outsiders may contend _ by fair discussion I was able to settle with the Kimberley Company in so far as the French Company was concerned, and the settlement finally obtained by me was in a great measure due to the action of Mr Barnato. But I only succeeded by the following arguments: I told them, you can go and offer £300 000 more for the French than we can do, but we will offer another £300 000 on that; you can go on and bid for the benefit of the French shareholders as infinitum, because (I said to them) we shall have it in the end, as we consider it is of vital importance that we should obtain the control of the Kimberley Mine.

“All we possessed was a fifth, but a fifth is a beginning; and after a good deal of consideration, in which, I must say, Mr Beit of Jules Porges & Company was of the most material assistance, we decided one morning that we would buy a sufficient number of Kimberley Centrals to give us control. That was a big undertaking, and meant two or three millions of money. But we said, ‘If only we have the pluck to undertake it we must succeed. Don’t let us go to the shareholders. If we fail they can only make us personally liable!’ I said at first, ‘Where’s the money to come from?’ But Mr Beit only said, ‘Oh, we will get the money if we can only buy the shares.’”

“…gentlemen,” Rhodes continued, “in your speculations in De Beer’s shares, you do not know the risks you have been through. It was not until we decided to buy a controlling interest in Kimberley Mine that we were safe. Well, Mr Barnato settled the matter at last. He yielded finally…(and) settlement gave us control of the Kimberley Mine…our ambition is to make it (De Beers Consolidated Mines) the richest, the greatest, and the most powerful company the world has ever seen.”

This speech, which runs to some eight A4 pages long and 9000 words, was, like most of his speeches, not written, and spoken as it came into his head. At the end of the meeting the shareholders, who had accepted the amalgamation, voted £10 000 to Rhodes, and £5000 to the other Directors, but Rhodes refused, saying in his declining the proposal that the shareholders should thank one man – Alfred Beit.

PT-Cheque_wrote_by_Cecil_John_Rhodes_to_ Barney_Barnato-1888

Cheque written by Cecil John Rhodes to Barney Barnato for control of De Beers

Beit had certainly assisted, and had even waived interest and commission on the loan of £250 000 which he had raised from Jules Porges and Company. Although a lot of credit must go to Beit for the amalgamation, he himself said that he did not know from whom came the idea of amalgamation, but that it was Rhodes who finalized the deal. The idea of amalgamation appears to have originated with Francis Oats, a fellow director. Beit went on to say that “…Rhodes was not a good bargainer, he was eager to get the deal settled; he knew that the properties would be worth more than five millions to us, and he was right; but I think he could have got it a good deal cheaper from Barnato.” Alfred Beit considered Cecil the best speaker he had ever heard, especially when persuading those in his presence to go with an idea.

Rhodes had laid his projected plan for amalgamation before Messrs Rothschild (of London), in 1887, and discussed it with Lord Rothschild and Carl Meyer, of N.M. Rothschild and Sons, both of whom were suitable impressed. Together with Alfred Beit, representing Jules Porges and Company (later Wernher, Beit and Company), the finance for the scheme was raised and Rhodes began buying as many shares in the Kimberley Mine that he could. It would be this seemingly limitless supply of money that would prove the difference between Barnato and Rhodes. Undoubtedly Alfred Beit played a major role in firstly, raising the necessary finance, and secondly, having the wisdom and foresight to interpret Rhodes’ plans. They had met briefly on occasion, and in particular, one evening when Beit was working late in his office. Rhodes asked Beit, a veritable workaholic, what his game was. “I am going to control the whole diamond output before I am much older,” Beit replied. “That’s funny. I have made up my mind to do the same; we had better join hands,” said Rhodes.

The struggle between Rhodes and Barnato to form the Consolidated Mines was not without problems, and legal difficulties in the formation forced Barnato to liquidate his business, the Kimberley Central Company, and on 18 July 1889 a then unprecedented sum of £5 338 650 was paid for the Kimberley Mine. That same month De Beers had also acquired controlling interests in the Bultfontein and Dutoitspan Mines. With the consolidation Gardner Williams, the General Manager, put a comprehensive mining system into place on all four mines.

 

 

12 March 1888, Formation of De Beers Consolidated Mines.
12 March 1888, Cecil Rhodes elected first Chairman of DBCM.
12 March 1907, First Coloured Swimming Championship of Griqualand West takes place at the Lyndhurst Rd baths. Organised by Mr JC September.
12 March 1978, Robert Sobukwe buried in Graaff Reinett.

DID YOU KNOW

The great amalgamation of the Kimberley Mine (under control of Barney Barnato), and the De Beers Mine (under Rhodes), saw the emergence of the greatest mining concern the world had ever seen at the time. Undoubtedly, the formation on 12 March 1888, of what was to become the controller of diamonds world-wide, was a quite stupendous achievement by Cecil Rhodes, and his speech to the shareholders at the Boardroom on Warren Street rates as probably his best financial discourse of his life.

Rhodes had laid his projected plan for amalgamation before Messrs Rothschild (of London), in 1887, and discussed it with Lord Rothschild and Carl Meyer, of N.M. Rothschild and Sons, both of whom were suitably impressed. Together with Alfred Beit, representing Jules Porges and Company (later Wernher, Beit and Company), the finance for the scheme was raised and Rhodes began buying as many shares in the Kimberley Mine that he could. It would be this seemingly limitless supply of money that would prove the difference between Barnato and Rhodes. Undoubtedly Alfred Beit played a major role in firstly, raising the necessary finance, and secondly, having the wisdom and foresight to interpret Rhodes’ plans. They had met briefly on occasion, and in particular, one evening when Beit was working late in his office. Rhodes asked Beit, a veritable workaholic, what his game was. “I am going to control the whole diamond output before I am much older,” Beit replied. “That’s funny. I have made up my mind to do the same; we had better join hands,” said Rhodes.

The struggle between Rhodes and Barnato to form the DB Consolidated Mines was not without problems, and legal difficulties in the formation forced Barnato to liquidate his business, the Kimberley Central Company, and on 18 July 1889 a then unprecedented sum of £5 338 650 was paid for the Kimberley Mine. That same month De Beers had also acquired controlling interests in the Bultfontein and Dutoitspan Mines. With the consolidation Gardner Williams, the General Manager, put a comprehensive mining system into place on all four mines.

After acceptance of the merger between the two mines, Rhodes felt the occasion keenly and only wanted some solitude away from the crowd of well-wishers. Dodging the back slappers and handshakers, he eased his way out of the Boardroom, calling out “Come along Beit, I want you” to the financial genius. He walked down Warren Street on to Old De Beers Road, crossed the railway line – there was no bridge until 1891 – and never stopped, looked up or spoke until he reached the entrance to the De Beers mine compound. The two men, Beit because of his short height having been hard pressed to keep up with the long strides of Cecil, went in. “Got any money on you?” Rhodes enquired of Beit as the African mineworkers swarmed around Rhodes. Beit handed him a chamois leather bag filled with 50 gold sovereigns, and opening it Rhodes scattered all the coins among the excited workers. He then dropped the bag on the ground, turned around and left the compound and a rather stunned Beit to ponder over the distribution of wealth.

From Kimberley Calls and Recalls on Facebook By Steve Lunderstedt

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