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CANTOR LECTURES.

On Monday afternoon, 25th inst., Mr. R. LANGTON DOUGLAS, M.A., delivered the first lecture of his course on The Majolica and Glazed Earthenware of Tuscany."

COLONIAL SECTION.

Tuesday afternoon, April 12th; The Right Hon. EARL GREY, in the chair.

The paper read was

THE REGENERATION OF SOUTH
AFRICA.

BY BEN. H. MORGAN.

I am afraid that the words South Africa have not to-day an altogether pleasant ring to the ears of the everyday, stay-at-home Briton. Let me say at once that such a feeling is only natural, but let me also add, that it is, like many other natural emotions, quite unreasonable. There is a section of the British public which knows only of South Africa that it is a land producing, though at some cost, gold and precious stones, a parched treeless country inhabited by millions of black men and by a handful of whites, about sufficient to populate a decent-sized European capital, a goodly proportion of the superior race being engaged in agricultural work, pursued in leisurely and old-world style. This conception of South Africa as it exists to-day, in the

The lectures will be published in the Journal main is not incorrect, and yet the conduring the autumn recess.

LISTS OF MEMBERS RESIDING

ABROAD.

Lists of members resident abroad have been prepared, and can be obtained by members on application to the Secretary.

The following lists have been printed :1. Members Resident in India, Persia, China, Japan, the Malay Archipelago, &c.

2. Members Resident in Africa.

3. Members Resident in Australasia and Polynesia.

4. Members Resident in the Dominion of Canada and Newfoundland.

5. Members Resident in the West Indies and British, South, and Central American Colonies.

6. Members Resident in the United States of America.

7. Members Resident in South and Central America and Mexico.

8. Members Resident on the Continent of

Europe.

clusion to which it would naturally lead, to wit, that this is a land without a future, would be totally erroneous. South Africa, won for this country by the polity and valour of generations of great Englishmen, of which the soil has been watered by the blood of thousands of Britain's bravest sons, is a land of immense natural wealth, the exploitation of which has been retarded by racial conflicts, at times by official supineness, at other times by the errors of adminstrators, and yet again by those long fits of indifference which seem constitutional in the stay-at-home Briton. But I hope to show that South Africa is only waiting to be regenerated by the free use of British capital, and, above all, by the liberal application of British brains.

It may freely be admitted that of late South African affairs have not tended to win the regard of the investor and man of affairs at home. The proposal to introduce Chinese labour in the Transvaal and Rhodesia has offended many honest British prejudices, call them convictions if you will; the dictatorial

What that colony

tone assumed by the South African shipping "Ring" or "Conference" (recently strengthened by the absorption of the only competing line) has justly alarmed and offended commercial men; the undisguised reluctance of South African banks and manufacturers here to give credit to South Africa has naturally caused anxiety in business circles, an anxiety which has not been allayed by the failure of the Transvaal loan. But there are difficult crises in the lives of all young men, and as a civilised country South Africa is very young. requires of us in the old country is sympathy, occasionally advice, at times help, and at all times intelligent comprehension. I would say to all business men who feel any concern in the future of South Africa, study the land and its resources on the spot if possible, but above all, keep from your eyes the distorting glasses of politics. I am no politician, but like other British citizens, the daily papers, with their columns of political speeches, are before my eyes, and it is impossible not to feel grief that certain politicians, possibly well meaning, should lay themselves out, apparently of set purpose, to belittle South Africa and disparage those who have laboured in sincerity for its welfare, whatever error of judgment they may have committed. I am afraid that the political pamphleteer and the hustings orator have, between them, sown broadcast misconceptions on South African affairs. Unhappily these misconceptions are not confined by any means to the people who listen openmouthed to the glib patter of tub orators. Many men of standing in the City, of good repute on the exchanges of this great commercial land, have the haziest notions as to the actual resources and present needs of South Africa. In short, John Bull, after settling a long bill for the war which gave him undisputed possession of the Transvaal and of the Orange River Colony, has begun to ask himself whether he has not paid too much for these bits of real estate. This is only natural, but it is in the established order of things that a strong swing of the pendulum in one direction should be followed by an equally marked oscillation in the opposite sense. Extravagant expectations of the economic value of the new territory have inevitably been followed by an all too pessimistic view of the South African outlook. I trust that a calm and dispassionate analysis of the real resources of these broad lands, of the actual conditions of existence there, and a review of the most crying com

mercial needs of the situation, may bring conviction even to the inveterate "Little Englander" that in the two new South African colonies the British crown has received two gems of great price.

THE WAR AND AFTER.

New South Africa dates from the protracted and sanguinary war which began in the autumn of 1899 and closed in May, 1902. War is always in itself a calamity. No thinking man can look back on the carnage, on the incalculable amount of human and animal suffering, caused by the late Boer war without a shudder, yet no impartial person who has had the opportunity of comparing Dutch South Africa before the war with what it is today can refuse to admit that out of evil great good has come. It is not my province to-day to deal with South African politics, past, present, or future, but I cannot help recording the belief that only by the determination of that obstinately fought fight-waged to the bitter end by the brave burghers of the Dutch republics-could the barriers have been broken down which a century of racial antagonism and mutual misunderstanding had raised between two kindred though distinct peoples. Not perhaps from any inherent vice, but from their position as an independent and a semi-independent State respectively, the Transvaal and Orange Free State were stubborn obstacles to the advancement of South Africa. An imperium in imperio, as the Romans said, had grown up in our South African Empire. There was a state within our dominion which was necessarily hostile to it and inevitably attracted the interested supporters of England's foes wherever they might be. If anyone at this time of day were inclined to doubt the necessity of the late war-which yet was not of our seeking-let him recall the frenzied delight with which each British reverse, small or great, was greeted in a dozen European capitals. Could such a focus of anti-British sentiment as the Transvaal Republic became have existed much longer without provoking a possibly more envenomed and destructive conflict than the one of which the happy termination some two years since became, as I am firmly convinced, the prelude to the regeneration of South Africa?

SOME CAUSES OF THE PRESENT

DEPRESSION.

That the South African market is at present suffering from severe depression is beyond

dispute, but I think it can be shown that this stagnation is due to no decline in the vitality of the land, but is purely the result of an overstocking of the market, itself the result of a natural if ill-timed outburst of speculative activity which had been penned up during the long war. This state of affairs has been aggravated by the arrested development of the mining industry, and the slow progress of railways and other public works on account of the scarcity of suitable labour.

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When the war came to a close a "boom in mining enterprise was confidently expected, not altogether without reason. Speculative traders were not slow in laying in big stocks of machinery and supplies of all kinds, but owing to the sharp check to the staple industry of the Transvaal through the cause mentioned, the "boom" so long expected and hoped for, failed to "materialise."

This overtrading in a too-confident anticipation of a buoyant market was undoubtedly promoted by the large amount of money which was put into circulation during and after the war, in the shape of pay to the troops, compensation to British settlers whose homesteads had been wrecked, repatriation of Boer farmers, to say nothing of the colossal sums spent in railway, harbour, irrigation, and other public works. But this inflation was followed by a collapse inevitable under the circumstances, with this result, that many South African merchants were left with big stocks which they could not realise; much of that stock is still being carried. Until this big volume of goods has been absorbed by consumption, trade cannot resume its normal course. In 1897 imports were £26,779,000, while in 1902 they amounted to £47,167,500. To say that in 1902 speculative buyers overtraded to the extent of ten or twelve millions sterling is, I think, to make quite a reasonable estimate. Another incentive to the speculative spirit in South Africa at that particular time lay in the low rate of American freights which then and for some time after stood at 10s. per ton. As compared with the record year 1902, we must expect to see a considerable diminution in imports, perhaps for three or four years, until some portion of the present heavy stocks has been cleared away. That the present depression, or as colonials say, "set back," is of a permanent nature, it cannot, for a moment, be believed. This land, with its rich soil, its boundless mineral wealth, and its almost inexhaustible gold and diamond mines, has all the elements of great and abiding prosperity. It has been said that

figures can be made to prove anything. But the broad outlines of statistics can no more be smoothed away than the towering crests and scarps of the Alps. In the ten years from 1894, the imports of South Africa have risen from £13.922,700 to over £52,500,000. It may be noted that in the most prosperous pre-war year the imports did not total £27,000,000. True it is that part of this increase, as already shown, is due to speculative over-buying. But making all deductions for over-trading, which after all is only the intelligent anticipation of business that may be delayed for a year or two years, but must come at last, there still remains most striking expansion in trade, which is only another name for purchasing and consuming capacity.

When, however, we come to analyse the import returns, and to distribute the respective shares in this great trade among, the lands which do business with South Africa, the results are such as to give business men in this country serious matter for reflection. According to the Board of Trade statistics, the British share of the South African import trade in 1897 was £14,588,700, while our competitors in foreign lands sent goods to the value of £12,190,300. In 1903, the foreign trade with South Africa had risen to over £25,000,000, leaving to Great Britain about £27,500,000. It is to be feared that these figures are even less satisfactory than they look at the first glance. It is only too probable that some of the trade credited to Great Britain really consists of re-exports which, by rights, should be included in, and would sensibly increase the £25,000,000 claimed by foreign exporters to South Africa. In any case, a comparison of 1897 with 1903 shows that while British imports into that land have increased by some 12,911,300, foreign imports have grown by about £12,809,700. This expansion of foreign trade in a market, the possession of which has cost this country so much, is a matter of serious concern to all who desire-and what patriotic Englishman does not?-the growth of trade within the Empire, in other words, the increase of that Empire's wealth by the interchange of goods produced within its borders.

Now, we may usefully consider how British men of business may legitimately secure a larger share of the trade which is flowing into South Africa, and must of necessity continue to grow and grow, whatever temporary halts may be called by passing economic clouds, or even by the perversity of politicians. It will be

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remembered that at the close of the war I was commissioned to visit South Africa, and report on the state of and openings for trade there. In my report, issued immediately after my return, I made, amongst others, the following suggestions for improving and facilitating trade :

That transit dues in South Africa should be abolished.

That South African railway rates should be reduced, and a uniform classification of goods provided for all the South African railways.

That freight rates should be reduced, and the "rebate" system abolished.

That a system of "through bookings" should be established.

That a uniform Customs tariff should be adopted, and a preference given to British trade if possible.

That a permanent trade commissioner should be appointed in South Africa to keep our home manufacturers posted as to the varying requirements of the market.

Since those suggestions were made transit dues have been abolished. A uniform Customs tariff has been arranged for practically the whole of South Africa; reductions have been made in South African railway rates; a common classification of goods agreed upon; and, further, the various colonies have given to British goods a preferential tariff in their markets. There is no doubt that these reforms are facilitating trade enormously, and that their introduction has only been possible since the whole of South Africa has been placed under the British flag. Much more, however, has to be done, to place South African trade on a proper footing, and in this connection I would refer to the hampering influences of the shipping "ring" controlling South African freights.

THE SHIPPING MONOPOLY.

This question of shipping is to my mind one of the most vital issues that affect the position of British trade in South Africa. I may repeat once again that to the best of my belief the present hold which American manufacturers exercise in South African markets is largely the result of the low freight rates which prevailed for many years subsequent to 1890. It was greatly by virtue of these rates that American goods were able to take the place of British manufactures. The reason why the

Report on South African Trade." London: P. S. King and Son.

British manufacturer has been to a certain extent shut out from his own market and has seen trade which should have come his way pass into the hands of alien competitors is to be found in the existence of a shipping ring, technically known as the Conference, which absolutely controls shipping rates to South Africa. This is no new grievance. The | leading Chambers of Commerce in South Africa and the Natal and Transvaal legislatures, besides numerous Chambers of Commerce in this country, have openly condemned its excessive charges and methods of operation. The existence of the Conference and its effect on British trade in South Africa have in recent years been ventilated by the daily Press, not always it is true with the judicious reticence that should come of knowledge. But broadly speaking, it is true that for some time and even now to a certain extent British merchants are subject to a heavy differential rate as compared with American competitors. For some time ships sailing from New York to South Africa, which were controlled by the Conference, were carrying American freight at 10s. per ton, as compared with the freights of 25s. to 50s: per ton which the British shipper had to bear. Again and again was I assured by merchants in South Africa that they had filled up their order books with American goods, simply because the freightage from the United Kingdom prohibited trade with the Old Country.

I hold no brief against the Conference, and I would be the first to acknowledge the great debt which South Africa owes to British shipping. But there is a point at which the repayment of a debt with interest becomes usury, and I think most business men who have calmly examined this subject will agree with me that the interest exacted by this Conference became exorbitant some time ago. If there is one feature more than another in this system which should condemn it in the eyes of business men, it is the so-called rebate system which is still part and parcel of the methods of the Conference. The meaning of rebate is this, that 10 per cent. is added to the freight charges paid by the South African merchant, to whom, however, this particular charge 1S refunded at the end of six months or so, provided that he has not in the meantime shipped goods by any line not controlled by the Conference. The meaning and object of this system is, of course, simply to bind the British merchant in the toils of the Conference, and to put it out of his power to

protect himself by organising a cheaper or more efficient service,-by giving the present shipping monopolists a "big revolver" to present at his head the moment he shows any signs of insubordination. It may be said

that the forfeiture of the rebates would

after all only mean one loss, but it must be remembered that the total amount of the money included under the term "rebate" is very large, and that in these days of narrow margins, merchants naturally shrink from the sacrifice which would be involved in leaving these rebates in the hands of the Conference. Individually, no doubt, the British shipper is helpless, but it is a question whether the mercantile community in this country interested in South Africa would not do well to organise an alternative line capable of bringing the present Conference to reason. No doubt such a step would involve the sinking of a certain amount of dead capital, but in the interests of British trade in South Africa a strong decisive step like this is, at any rate, worthy of the most serious consideration. Many of you are probably familiar with the details of the competition for freights that has been going on for some time past between the Houston line (a new comer) and the Conference lines, and you are doubtless aware that an agreement has just been arrived at under which the Houston concern joins the "ring." For many reasons, which I need not detail here, the Houston competition has always been regarded as a mischievous interference with the freight market, and one that could produce no permanent good to South African trade, and this opinion has now been justified. An alternative remedy might be found in bringing pressure to bear upon the Government of the day with a view to giving contracts to any line which it might be possible to organise in the interests of what would be in a special sense "free trade." It must be admitted, however, that all Governments are adverse to radical measures of this nature, and it is, of course, possible that deputations with such an object in view would waste valuable time. The question whether shipping rings, federations, or conferences ought not to be subject to some impartial international tribunal, modelled on the lines of our Railway Commission or of the American Inter-State Commission is, perhaps, too large for this paper, but the subject is one that will commend itself to men interested in the world's commerce, that peaceful exchange of commodities which has after all been the main

agent in building up modern society as it is, and was the prime factor in the grand civilisations of antiquity.

THROUGH BOOKINGS.

But it is not merely in the question of freight that the British manufacturer is handicapped, serious as that disability undoubtedly is. German and American manufacturers have managed to win from us an appreciable amount of trade by the more scientific manner in which they present their goods to the South African buyer. I am referring to the subject of through bookings. In the old days, the system of quoting f.o.. British ports, answered its purpose very well. But that time is passed. The British shipper has to meet a relentless opposition in every market to which he can send his goods. His profits are, in many cases, so narrow that he cannot afford to give his competitors a single point, nay half a point, in the game. Now the system of through bookings which has been brought to great perfection by German, and especially American shippers, is primarily designed to place the seller in the best possible position to offer his buyer the most favourable terms. Transport is, after all, as essential a factor in the price of commodities as labour, coal, or any other item in a manufacturer's bill of expenses. The virtue of through booking is this, that the buyer in Johannesburg knows exactly what a particular machine or parcel of goods will cost by the time they are placed in his warehouse, or delivered to his customer, and, at the same time, he is saved the use of forwarding, and other agents. It is herein that the practical American has stolen a march on the conservative British merchant. Take the operation of through booking. As a concrete instance, a miller at Minneapolis, in the State of Minnesota, knows to a cent. what it will cost to ship a given parcel of flour to Hong-kong some seven thousand miles away. This is because a certain enterprising railway manager in the United States has had the thought to provide what are there called "through rates" or, as we should say, "through bookings," from Minneapolis, by rail to the Pacific and thence by sea to Hongkong. In the same way American, and let me add Canadian enterprise, has made it possible for a merchant in Shanghai, Tokio, or Yokohama, to book through rice, tea, or any other merchandise to Chicago or Boston, to Winnipeg or Montreal.

British merchants who feel inclined to treat this as a question of detail had better place

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