Introduction: Colonial South Africa, Mineral Revolutions and Finance

Abstract

According to the Ghanaian historian Albert Adu Boahen, by as late as 1880, as much as 80% of the continent of ‘Africa was ruled by her own kings, queens, clan and lineage heads, in empires, kingdoms, communities and polities in various sizes and shapes.

According to the Ghanaian historian Albert Adu Boahen, by as late as 1880, as much as 80% of the continent of ‘Africa was ruled by her own kings, queens, clan and lineage heads, in empires, kingdoms, communities and polities in various sizes and shapes.’¹ The European conquest of Africa was, however, already well underway and it was in southern Africa where colonial forces and settler societies consolidated their power over the greatest stretches of land, capitalising recently discovered mineral wealth. Diamonds, along with the growing wool sector, were the commodities that transformed the basis of southern Africa’s settler economy, much like wool did for Australia, wool and meat production for New Zealand, and fishing, fur, timber and wheat for Canada.² Unexpectedly, and fortuitously, as profitable, crass and exploitive the discovery of diamonds was, it would be gold that took South Africa from the British Empire’s periphery to the centre of imperial political strategy at the close of the Victorian era. South Africa’s gold discoveries would coincide with the transition to a global financial system based on the availability of gold and the ‘spirit of Victorian Expansion.’³

By the mid-nineteenth century, South Africa was a complicated patchwork of British colonies, Boer settler republics and African states. Southern Africa still offered limited economic prospects for European imperialist powers and the increasingly racialised nature of settler colonialism created a violent landscape of socioeconomic inequality, wars of territorial conquest and forced population displacements. Divisive colonial policies and continued settler expansion between the Cape Colony and the Limpopo River left most of the African population with limited and inadequate access to land. The period of the Mfecane, between 1815 and 1840, resulted in the death and forced migrations of thousands of Africans.⁴ It was during these violent years that the formal establishment of the two largest Boer settler republics, the Orange Free State (OFS) and the South African Republic (ZAR), added a further colonial dimension to an already volatile political geography.

The Cape Colony and Natal evolved into established British colonies with settlers lobbying for greater political autonomy and agricultural market reforms. The growth and development of the diamond mining sector in and around Kimberley from the 1870s provided the fiscal impetus for a gradual transfer of power from the metropole to ‘responsible settler governments.’ The independent extra-colonial territories of the ORF and the ZAR, however, experienced a very different sociopolitical climate. Pacified by the conferral of a knighthood by Queen Victoria, and a new source of revenue from coal, President Johannes Henricus Brand was enjoying renewed political stability. As such, he called confidently for greater political engagement between the two British colonies and the Afrikanerbond (Dutch: Afrikaner Union).⁵ Of the two Boer settler republics, however, the ZAR’s independence was more divisive and fragile. Since its establishment after the Great Trek in 1852 as part of the Sand River Convention, the ZAR had a very tense relationship with Britain and her territorial possessions in southern Africa.⁶ Having been granted independence, albeit not complete sovereignty, in the London Conventions of 1881 and 1884, the Zuid-Afrikaansche Republiek—incorrectly referred to as the Transvaal by most British colonialists still bitter at the outcome of the First Boer War⁷—was on the verge of bankruptcy.⁸ President Kruger became a trusted and respected leader for the Boer settlers across the Vaal River, seeking to integrate Afrikaner nationalism into his economic policies, believing a strong, centralised, Afrikaner-led settler state could act as a counter to British imperialism in southern Africa.⁹ Although Kruger’s policies were able to expand and tax the lucrative agricultural market, state finances remained in deep crisis. The ZAR managed to maintain its independence but at huge economic and social costs.¹⁰

The 1886 discovery of significant gold reef deposits on the range of hills known as the Witwatersrand,¹¹ would change the course of southern African history. As summarised by John Illife, the discovery of gold on the Witwatersrand set South Africa on a different colonial trajectory from the rest of the African continent, gradually transitioning towards an industrialising economy, the consolidation of European settler authority, and the development of an unique system of racial repression, making colonial South Africa ‘as distinct from the continent as Pharaonic Egypt.’¹² As much as narratives of colonial South Africa’s exceptionalism have often contributed to oversimplifications and intellectual parochialism in historical studies of Africa’s colonial legacies, the gold discoveries greatly affected the development of Anglo-Afrikaner-African relations and forged a new republican Afrikaner identity. Viewed from a global economic perspective, the mineral discoveries on the Witwatersrand in the early 1880s, transformed the ZAR from a small agricultural economy into an independent Boer republic on the brink of an economic and financial revolution. Almost overnight, Johannesburg was transformed from a small mining settlement into one of the most dynamic and volatile cities in the world.¹³ The ZAR’s economic potential went from the verge of bankruptcy in 1886 to a fiscal output equal to the Cape Colony’s by the end of 1888.¹⁴

Yet, it was not until 1887, a year after the main discoveries of gold, that the real economic impetus was provided by Johannesburg’s burgeoning financial industry. The city experienced a surge of commercial enterprise, with mining, utilities, construction and financial services the dominating sectors. After a visit to Johannesburg in May 1887, the Standard Bank General Manager from the Cape Colony reported seeing a small town of 3 000 people, with new foundations of many buildings and a hive of financial activity that, to him, could hardly be justified as no gold in any significant quantity had yet been produced.¹⁵ The Standard Bank of South Africa had already opened its first Johannesburg branch (a small tent with a piece of paper indicating the opening hours) in October 1886, and additional banks soon followed as small prospectors searched desperately for venture capital before the large colonial banks from Kimberley and the Cape bought out all the claims.¹⁶ Towards the end of 1887, the Standard Bank’s Johannesburg and Cape Town management was convinced that the ZAR had become, and would continue to grow, as the financial centre of southern Africa.¹⁷ Even with the Standard Bank taking the greater majority of early mining finance, the Natal Bank, the Cape of Good Hope Bank and the Bank of Africa opened their doors (or tent flaps) before the end of the year. All the banks were soon doing brisk business, showing confidence and foresight in actively developing the financial infrastructure of a mining town that was still not able to prove its weight in gold.¹⁸

The main financial products and services provided by the young financial industry were related to the purchase and issue of mining equity. Joint-stock companies quickly became the vehicle for combining wealth and spreading risk in the ZAR’s developing mining sector. From the first days of its existence as a financial hub, Johannesburg was linked to mining shares and share market speculation.¹⁹ The first share transactions on the Rand took place in a rustic canvas tent, with trade taking place on Sundays owing to a strictly enforced regulation that prohibited the entry of African workers to the gold reefs on this day. With only the ‘day of rest’ available for financial speculation, initial trading was done in such a hasty and rudimentary manner that most colonial banks issued an official warning to prevent their Johannesburg bank managers from using internal funds to fuel the share mania.²⁰

The rise of the Johannesburg Stock Exchange (JSE) is inextricably linked to this early capital market and the political history of the ZAR. Established in late 1887, the JSE became the financial intermediary that epitomised South Africa’s industrialisation, global economic entanglements, colonialism, anti-apartheid sanctions and the neoliberal financial order. It was the JSE where regulatory simplification and limited financial barriers of entry created a favoured financial climate for a young and capital-hungry mining industry. Drawing lessons from the economic and financial experiences in Kimberley and Barberton, the growth of Johannesburg’s capital market was the defining shift in the shaping of a new financial system in ZAR. From its early beginnings in a canvas tent on the dusty goldfields of Johannesburg, the JSE has served as a vital link and intermediary, connecting South Africa’s natural resource industries with international finance and politics for over 135 years.

At first glance, the JSE’s early history might appear parochial and disconnected from historiographical advances. Despite acknowledging the importance of sound financial systems for financial globalisation throughout the nineteenth century,²¹ historians have preferred to study large ‘global financial centres’ within service-oriented economies, focusing their research on clustering and specialisation, mainly in the City of London, New York and Paris. The specific intermediaries scrutinised include banks and the capital market, with stock exchanges and insurance companies receiving comparatively less attention.²² However, stock exchanges are always much more than mere marketplaces for stocks and securities. They ultimately act as agents for the economy, providing critical insights into the evolution of political, legal and social institutions.²³ As such, they are increasingly becoming recognised as important objects of sociopolitical study.²⁴ Following Douglas North’s definition that institutions encompass the (formal and informal) ‘rules of the game,’ with organisations and entrepreneurs as the players,²⁵ this work demonstrates that the JSE’s early history illuminates the interactions between local, regional and global institutional arrangements that emerged in the context of nineteenth-century financial globalisation.

At the imperial level of analysis, the early history of Johannesburg’s capital market, with the JSE’s expanding financial networks, contributes to a better understanding of how financial capitalism shaped the divisive political identity of colonial South Africa and amplified the British imperial project in southern Africa. Despite its central role in Johannesburg’s growing financial sector, the Exchange was only important to a small, but well organised community of international financiers. Africans and Afrikaners did not invest with the JSE and only a small minority of mostly European miners participated in the speculative trade. The town’s African migrant workers viewed the JSE with great suspicion and regarded the daily trade as an extension of the foreigners’ mining activities.²⁶ Although President Kruger’s government in Pretoria tolerated Johannesburg’s financial industry, it became increasingly concerned about how its cosmopolitan society and growing links to international finance could disrupt Boer authority within the Republic.

Britain and the Cape Colony kept a close watch on the ZAR’s industrial and financial growth. British imperial expansion into Africa followed, to a large extent, the metropolitan demands of finance. The main concerns lay in Egypt and southern Africa, where the City of London’s interests were most prominently represented.²⁷ The Bank of England’s leadership of the international gold standard, coupled with the City’s reliance on gold in its financial market, saw South Africa’s gold producers become integral participants in London’s bullion market almost from the beginning of mining operations in Johannesburg.²⁸ Although British governments of the 1880s could not direct the output and export of South African gold, they could reasonably hope that the ZAR’s dependence on London’s gold market would create favourable economic and political relations between the two countries. Despite its critique and empirical limitations, Cain and Hopkins’ concept of ‘gentlemanly capitalism’ has frequently been deployed to trace the consistently renegotiated social and political values that connected London’s financial institutions to formal and informal empire-building efforts.²⁹ As summarised by Bowen, gentlemanly capitalists were positioned at the heart of Victorian expansionism, and firmly entrenched in the City of London’s international financial sector, from where they strategically marshalled economic resources, moulded public opinion and exerted significant political influence over decision-making processes in the metropole and at the imperial frontiers.³⁰ It was however when gentlemanly capitalism clashed with the aspirations of settler colonialists at the fringes of the empire that the concept became contested and interpreted in contrasting ways.³¹ Nowhere is this more clear than in southern Africa where the City of London’s interests in the ZAR’s economy expose the antagonistic relationship between economic imperialism, informal empire and territorial colonialism.³² As Cain and Hopkins describe, the ZAR’s new mining frontier was populated by financial entrepreneurs whose business activities were distant from the gentlemanly norms and conduct of Victorian Britain, forcing British foreign policy to shift away from cultural idealism and towards political realism.³³ The strategy it adopted from the 1880s onwards would mobilise British finance to further Britain’s influence in the ZAR, as well as colonial politicians, above all Cecil John Rhodes, to isolate Kruger’s Republic within its frontiers.³⁴ As this book argues, Johannesburg’s financial capitalists, though diverging from ‘gentlemanly’ values and objectives, would much like their contemporaries in London, leverage the stock exchange’s nodal status to interfere in the local, regional and imperial politics of late nineteenth century southern Africa.

This book provides a historical assessment of the JSE’s foundation, rise and interaction with South Africa’s mineral revolution and British imperialism during the final stage of the ‘Scramble for southern Africa.’³⁵ Discussing the combined effects of Johannesburg’s financialisation and political mobilisation, the book focuses on the period between the JSE’s establishment in 1887 and the end of the South African War in 1902. Using original documentation from Johannesburg’s banking sector, the JSE, its landlord the Johannesburg Estate Company, the Witwatersrand Chamber of Mines, and many other local and foreign financial intermediaries, this book investigates the institutional design and organisational characteristics of a local capital market with global ambitions in an international financial system committed to gold. As emphasised in earlier works by Kubicek, Phimister and Jeeves, the sociopolitical organisation of Johannesburg’s early mining and financial sectors has significant implications for the study of British imperialism and its links to the Jameson Raid of 1895, as well as the outbreak of the South African War in 1899.³⁶ Despite attempting to balance British financial interests with loyalty to Pretoria’s republicanism before the war, the JSE clearly sided with British commercial, political and legal interests once its legitimacy among foreign investors began to be challenged. This contribution adds a novel argument and new empirical evidence to the historiographical debates on the role of global finance and its links to British imperialism in South Africa.

The Mineral Revolution and Mining Finance at the Stock Exchange

The significance of what historians of South Africa have come to call the ‘mineral revolution’ dominates all perceptions of radical economic and social change from the 1880s onward.³⁷ Although the suitability of the term ‘revolution’ to describe the combined socioeconomic effects of diamond and gold mining on South Africa as a whole remains a matter of historical and historiographical debate, the growth of the mining industry was certainly revolutionary enough in its impact on the ZAR’s finances and political confidence. The development of the gold mining industry ensured that the ZAR, and before too long the whole of southern Africa, experienced a socioeconomic revolution which would come to be dominated by financial capitalism.³⁸

The historiography of the ZAR’s concurrent mineral and financial revolutions provides the source material to reflect on many issues of financial development, globalisation, and European imperialism in southern Africa. It was precisely in the final quarter of the nineteenth century that European capital and enterprise were exported in unprecedented quantities to develop mining in North and South America, Australia, Russia, and southern Africa.³⁹ First in the eastern parts of the ZAR and then on the Witwatersrand, southern African settler economies became a prime destination for international mining prospectors, diggers and financiers.⁴⁰ Johannesburg quickly grew from a mining camp to a financial centre with numerous local, colonial and international financial intermediaries channelling the flow of capital to and from the ZAR’s industrialising economy. By establishing a new market for local, regional and international mining finance, the JSE emerged as the gold mining industry’s primary financial intermediary. It played a critical role in raising capital and forging international networks that strongly shaped the ZAR’s early industrialisation process.

The capital market’s contribution to the capital-intensification of the ZAR’s mining industry naturally raises the standard economic history questions about the interplay between the cost of capital, land and labour utilised in the gold industry’s production processes. The investigation deliberately uses the agency of the JSE to explain some early aspects of racial segregation and labour coercion on the Rand. As will be demonstrated with multiple references to the cooperation between the JSE and the Witwatersrand Chamber of Mines, mining labour costs were initially relatively disproportionately high, but the price of unskilled labour was driven down in the early 1890s by a combination of measures taken by Johannesburg’s industrialists and the Pretoria government. A natural question that arises in this context is whether, given the ready, and relatively cheaply available financial capital to the mines through the JSE, was there eventually a tendency to substitute labour for capital over time? Although this putative substitution effect has loosely been referred to as the ‘economic rationalisation’ of the mining industry, the evidence provided in this book focuses on exposing the capital market’s organisational and regulatory responses, and not its position with respect to major structural shifts in the gold industry’s factors of production.⁴¹

Stock exchanges, primarily in London, and from 1887 Johannesburg, would be where financial and human capital determined the future of South Africa’s gold-driven economy. Although Africa has a long history of trade in securities,⁴² the development of organised stock exchanges on the continent coincided with the first age of financial globalisation and European colonisation in the nineteenth century.⁴³ The expansion of financial services in southern Africa played a key role in the settler societies’ capital accumulation.⁴⁴ British colonial influence ensured that initially shareholding, and later stock trading, became integral to the economy of settler societies. By the end of nineteenth-century Egypt, the Cape Colony, Natal and Rhodesia had well-developed stock markets and complementary financial infrastructure. Although several stock exchanges were already in operation on the African continent in the final quarter of the nineteenth century, the JSE emerged as a financial industry leader in what soon became the wealthiest city in southern Africa.

Finance and Imperialism in South Africa: Revisiting Hobson’s Johannesburg

The predominant theoretical theme that develops throughout this book is the nexus between finance and imperialism. Although there is no definitive theory linking greater financialisation and territorial imperialism,⁴⁵ the ideological battles that shaped the study of political economy throughout the twentieth century have given rise to voluminous works on the subject.⁴⁶ It was the Egyptian financial crisis of the 1880s that expanded the theorisation of British economic imperialism and it would be southern Africa where the theories were originally applied.⁴⁷ The concurrent development of gold mining and finance in Johannesburg turned South Africa into an epistemic testing ground for various economic theories advanced to explain the imperial expansion of Europe (and particularly Britain) in the three decades before the outbreak of WWI.

From Hobson to Hobsbawm,⁴⁸ the South African War was significant in revealing the economic roots of British empire-building and the historical development of capitalism.⁴⁹ In Johannesburg, the way in which early financial aspirations were transformed into imperial territorial interests by powerful mine owners and investors, would rapidly shape the political identity of the Rand and, indeed colonial settler societies across the whole region. For the British social theorist John Atkinson Hobson, the outbreak of the South African War in October 1899 was a clear and dramatic shift in the operations of worldwide forces of international finance.⁵⁰ Victorian Britain’s financial hegemony and London’s dominance over the international monetary market was intended to secure a stable economic environment on the Rand.⁵¹ Furthermore, according to Hobson, the way financial capital linked to the demand for labour, and President Kruger’s inability to provide administrative reforms for cheaper African labour, was the tipping point that spurred British efforts to intervene militarily in the ZAR.⁵²

Although theoretical reasoning in defining the imperial agency in the development of Johannesburg’s financial sector is used sparingly in this book, the JSE was indeed central to Hobson’s understanding of the ZAR’s financial and social structures on the eve of the war. According to Hobson, the greatest gambling instrument in Johannesburg was the stock exchange and it was mostly in stocks, and not land, where the foreign capitalists had invested.⁵³ Hobson argued that if ownership of land was a prerequisite for a franchise in the ZAR, then all the European settlers holding considerable amounts of stocks in Rand mines would have claimed the franchise.⁵⁴ With securities and their value being their only material attachment to the ZAR, Hobson saw the JSE’s members as a microcosm of capitalism’s entanglement with the political economy of southern Africa and the global forces of financial speculation.⁵⁵ Although Hobson’s view that the British war effort was represented by a small group of capitalists fighting for the control of the South African economy has rightly been assessed as over-simplified and coupled with unsubstantiated conspiracy theories,⁵⁶ his first-hand observations of Johannesburg’s financial community as a news correspondent for the Manchester Guardian, led to the publication of Capitalism and Imperialism in South Africa and Imperialism, two standard works for historians of nineteenth-century imperialism.⁵⁷ More critically and disturbingly, it is also in his social analysis of Johannesburg’s financial community where Hobson’s antisemitism became even more explicit and, indeed, inseparable from his political thought.⁵⁸

It is however Hobson’s observations of the international capital market where his theoretical conceptions on the ‘investing and speculative classes’ were applied to the share trade between Johannesburg and London that this book takes up the issues of market influence, manipulations and financial hazard.⁵⁹ Hobson and his radical contemporaries like Rudolf Hilferding and Vladimir Lenin emphasised financial capitalists’ growing political power and economic specialisation in financial operations such as speculation throughout the late nineteenth century in their theoretical understanding of imperialism.⁶⁰ Financial speculation, as defined throughout this book encompasses coordinated profiteering activities from the purchasing, hoarding or selling of shares in an attempt to anticipate or directly influence short-term price fluctuations ahead of the general investing public. It is treated here as the vital function of the stock exchange modality, a framework developed by Flandreau to describe the strategic interactions between the capital market’s commodification of information and empire-shaping.⁶¹ As frequently argued by Phimister, it was the specialisation and professionalisation of financial speculation on London’s Southern African mining market, rather than actual mineral production on the ZAR goldfields, that normalised white-collar crime and financial embezzlement in what some contemporaries already referred to as ‘stock jobbing imperialism.’⁶²

Although this book establishes multiple direct connections made to Johannesburg’s financial sector immediately before the outbreak of the South African War, it would be naïve to directly implicate the JSE in a complex plot to convince the British Empire to go to war with Kruger’s ZAR. Nevertheless, using extensive original documentation from stock exchanges and banks in Johannesburg, Cape Town, London, Paris and a broad selection of Victorian era financial press (another critical aspect of Hobson’s studies of financial capitalism),⁶³ this book indirectly revisits Hobson’s claim that the JSE was the central financial organisation of Johannesburg’s financial capitalists and imperial loyalists.

Sources

This book uses qualitative and quantitative data collected from contemporary business records. As with any historical study of a specific financial intermediary, original internal documentation is the key to illuminating the organisation’s structural, operational and administrative capacity. Business records and financial documents bring to light a different dimension compared to government publications and colonial reporting by providing isolated perspectives on the relationships between the colonial state and the private economy.⁶⁴ Using public or private archival sources does nonetheless come with its share of scientific pitfalls and it clearly needs to be analysed if the ‘information’ found in these sources, is intended to represent fact, fiction, or in many specific cases in this book, speculation. Most of the primary sources used in this book date from a period when Britain and the ZAR’s institutions were oriented towards the exploitation of Africa’s resources and people. By treating archival documents as the link between what is recognised as knowledge and who is in power to record their version, scholars need to move away from treating the archive as a pure data-collecting exercise to approaching it in a quasi-ethnographic manner.⁶⁵ The political and ideological nuances inherent in all the primary documents used in this book, their past interpretations and complex (post-)colonial interrelations, are therefore analysed and critically applied though the analytical lens of a democratic and socially inclusive South Africa.

The primary materials for this book were consulted in numerous private and public repositories in four different countries through a mapping process that followed the global issuance and distribution of South African mining stocks. In South Africa, records on Johannesburg’s early financial history were collected at the Johannesburg Stock Exchange, the Standard Bank Historical Archive, the South African Chamber of Mines, Brenthurst Library, Barlow World Archives, Western Cape Archives and Records Services, and the WITS Historical Papers. Although the JSE’s Meeting Minutes Books constitute the archival core of this investigation, the Member’s Roll Books are also worth their weight in gold. The members’ ledgers recorded the names of all new members, as well as the type of membership subscriptions and their payment details. These ledgers read like the ‘who’s who’ of southern African and international finance of the late nineteenth century, offering previously unexplored evidence on the involvement of specific individuals and social networks in Johannesburg. Additionally in Britain, records located at the Guildhall Library, the British National Archives and the Bodleian Library were consulted to establish Johannesburg’s financial and imperial relationships in the City of London. In France, the Archives historique de Paribas and the Archives diplomatiques du ministère des Affaires étrangères were instrumental in tracing the formation of international financial networks for the trade in ZAR securities in Paris. In Switzerland, Geneva’s Capital Markets of the World Archive and the Basler Afrika Bibliographien provided fascinating insights into Johannesburg’s financial and labour history.

Apart from the most significant archival collections mentioned above, the book employs a wide range of southern African, British, French, and German newspapers to illustrate the global interest in Johannesburg’s financial industry and its products. These newspapers provide a broad overview of financial and political journalism for the period 1886 to 1902, emphasising the crucial role of the press in nineteenth-century financial globalisation. The analysis of Johannesburg’s earliest newspapers shows how the local press collaborated with the growing financial community in their efforts to control the collection, publication and distribution of the gold mines’ industrial information. More importantly for the market in South African mining shares, the changing editorial bias of the international selection of newspapers used in this study shows very different opinions on southern Africa’s Anglo-African-Afrikaner relations and Johannesburg’s role as a financial centre and political hotspot.

Given the range of primary and secondary sources consulted during research, this study provides novel insights into the global understanding of Johannesburg’s early financial and political history. Despite focusing on the institutional framework of the JSE for the majority of the explanatory variables, the book does not develop a corporate narrative but seeks instead to critically deconstruct the Exchange’s organisational structures. It does so by using archival sources to form connections and comparisons across complementary financial intermediaries and political organisations. The study is not conceived as an institutional reference work, but rather, a dynamic investigation into the origins of Johannesburg’s capital market in the highly contested political space of nineteenth-century southern Africa and global finance.

Scope, Approach and Book Structure

The development of specialised financial services and techniques in various global financial hubs towards the end of the nineteenth century forged new social links between different groups of financial professionals such as bankers, merchants, financiers, insurers, arbitragers, brokers, chartered accountants and most importantly for this study, British colonial and ZAR politicians.⁶⁶ These and other layers of social organisational are here operationalised as part of the analysis of Johannesburg’s financial and political microstructures, while in the process, providing a deeper understanding of the underlying imperial expansion in South Africa.⁶⁷

As with most stock exchanges around the world at the time, the JSE was much more than just a market for securities. Stock exchanges of the nineteenth century were considered part of the ‘Big Society,’ in which social norms and ideological convictions were combined with intrinsic motivations such as social prestige and political influence. Far from the metropolitan capitals of European empires, Johannesburg’s settler society consisted of hundreds of diggers, miners, traders, adventurers, agents and speculators, all congregating in a mining town loosely centred on the Market Square. The JSE was where financial aspirations and buccaneering clashed with imperial and republican divisions. Most of the earliest members had very little experience and knowledge of finance. Despite their non-gentlemanly backgrounds, these rugged ‘financiers’ shared the same stock exchange modality as their Victorian counterparts in London and fin-de-siècle Paris, namely using the ‘art of the puff’, a complex technique of company promotions, to inflate financial bubbles.⁶⁸ The early speculative character of Johannesburg’s gold and finance industries serves as an important analytical tool in studying the settlers’ compulsive gambling on anything from stocks, horse racing and football, to dog fighting, boxing and various games of dice.

The contribution of foreign financiers to the commercial expansion of Johannesburg’s goldfields has long been a topic for investigation and debate for radical historians of South Africa.⁶⁹ The development of Johannesburg’s mining industry led to the rise of influential mining magnates and financiers who are often collectively referred to as the Randlords. Although much has been written about the Randlords’ varying connections to British imperialism in southern Africa,⁷⁰ very little is known about their interactions with the JSE, the central financial intermediary of their engagement with the ZAR’s economy. By using the JSE to restructure who owned and controlled the means of production in deep-level mining, the group system’s initiators, the Randlords, were able to establish and entrench themselves in an increasingly international market for South African mining securities. As much as the Randlords were hated by the opponents of Empire for their political manipulation of a fragile imperial system in southern Africa, the City of London supported their financial endeavours and tolerated their political aspirations.⁷¹ The analysis of this emergent social order and its interaction with the JSE exposes new evidence of the Randlords’ imperial ambitions. More importantly for the relationship between finance and imperialism in Africa, the book’s approach is to use the stock exchange as the nodal point of the financial connections between Johannesburg, London and Paris to expose direct links to the ‘Scramble for southern Africa.’ The book’s argument thereby revolves around the JSE as a central lens for the examination of Johannesburg’s financial connections to political networks in the ZAR, Cape Colony, Natal, Bechuanaland, Rhodesia, France and, most critically, Britain. From a quantitative perspective, given the methodological challenges associated with evaluating the performance of any nineteenth-century capital market,⁷² it is not the objective of this study to measure how much financial capital was raised for the ZAR’s mining industry in Johannesburg, London and Paris. Although excellent sources detailing the official price lists of ZAR mining stocks in various markets are utilised, a rigorous quantitative analysis of the convergence of South African stock prices in a global perspective is beyond the scope and argument of this investigation.

This book follows a mostly chronological order with some overlaps allowing for the consolidation of arguments presented. After documenting the genesis of Johannesburg’s financial sector, Chapter 2 begins with the historical assessment of the JSE’s institutional foundations, its rise, and interaction with southern Africa’s diamond and gold mining industries. Chapter 3 then analyses the early growth and development of the social organisation on the JSE, concluding the first stage of Johannesburg’s financialisation with the ‘Golden Boom’, which brought about an era of wild financial speculation, which by the close of 1889, nearly resulted in the closure of multiple gold mines when the inevitable crash finally arrived. Chapter 4 traces the early common history and overlapping organisational structures of the JSE and the Witwatersrand Chamber of Mines. This reveals their initial economic entanglements and subsequent political interdependence, showcasing their joint role in contributing to the racialisation of mining labour and the production of financial intelligence. Chapter 5 investigates the industrial development of deep-level mining through the lens of the capital market, documenting how stock exchanges in Johannesburg, London and Paris supported the industrial transition and contributed to the globalisation of South African gold mining shares. Chapter 6 implicates the JSE and many of its leading members in the planning and execution of the Cecil Rhodes-sponsored Jameson Raid against President Kruger’s government. Chapter 7 consolidates the argument and revises the much-overlooked role and position of the JSE immediately before, during and after the South African War of 1899–1902. The book’s conclusions validate and advance existing scholarly work on the disproportionately influential role played by Johannesburg’s financial sector in South Africa’s mineral revolution and the Anglo-African-Afrikaner conflict of the late nineteenth century.