¹ Annual Report of the Transvaal Chamber of Mines (hereafter A.R.T.C.M.) for the Year 1910 (Johannesburg, 1911), 224–9.Google Scholar

² On British and European capital investment in the Transvaal gold mining industry, see Van-Helten, J. J., ‘British and European economic investment in the Transvaal with specific reference to the Witwatersrand gold fields and district, 1886–1910’ (Ph.D. thesis, University of London, 1981), chs. 1, 3 and 8Google Scholar; Kubicek, R. V., Economic Imperialism in Theory and Practice: The Case of South African Gold Mining Finance, 1886–1914 (Durham, N.C., 1979)Google Scholar; Frankel, S. Herbert, Capital Investment in Africa (London, 1938), 95Google Scholar; on the considerable financial risks involved when investing in South African gold mining shares see Moreau, Georges, Etude sur l'état actuel des mines du Transvaal; les Gîtes, leur Valeur (Paris, 1906).Google Scholar

³ A.R.T.C.M. 1913 (Johannesburg, 1914), 287Google Scholar; Schumann, C. G. W., Structural Changes and Business Cycles in South Africa, 1806–1936 (London, 1938), 44Google Scholar; see also Richardson, P. and Van-Helten, J.J., ‘Labour in the South African gold mining industry 1886–1914’, in Marks, S. and Rathbone, R. (eds.), Industrialisation and Social Change in South Africa 1870–1930 (forthcoming).Google Scholar

⁴ On the impact of the mineral discoveries on social relations of production throughout southern Africa, see Bundy, C., ‘The emergence and decline of a South African peasantry’, African Affairs, lxxi, 285 (1972), 369–88CrossRefGoogle Scholar; Delius, P., ‘Migrant labour and the Pedi’, in Marks, S. and Atmore, A. (eds.), Economy and Society in Pre-Industrial South Africa (London, 1980), 293–312Google Scholar; Trapido, S., ‘Landlord and tenant in a colonial economy: the Transvaal 1880–1910’, Journal of Southern African Studies, v, i (1978), 26–58.CrossRefGoogle Scholar

⁵ See Mandel, E., Late Capitalism (London, 1978), 44–74, 108–46Google Scholar; Kemp, T., Economic Forces in French History (London, 1971)Google Scholar; Landes, D. S., The Unbound Prometheus: Technological Change and Industrial Development in Western Europe from 1750 to the Present (Cambridge, 1969)Google Scholar; Cain, P. J. and Hopkins, A. G., ‘The political economy of British expansion overseas 1750–1914’, Economic History Review, xxxiii, 4 (1980), 463–90.Google Scholar

⁶ Marx, K., A Contribution to the Critique of Political Economy (Moscow, 1970), 154.Google Scholar

⁷ Graham, M. R., ‘The Gold Mining Finance System in South Africa with specific reference to the financing and development of the Orange Free State Goldfield up to 1960’ (Ph.D. thesis, University of London, 1964), 8–11Google Scholar; Marx, , A Contribution, 154–5.Google Scholar

⁸ Vilar, P., A History of Gold and Money, 145–1920 (London, 1976), 39–89Google Scholar; Keynes, J. M., A Treatise on Money, ii (London, 1930), 150–5.Google Scholar

⁹ Sraffa, P. (ed.), The Works and Correspondence of David Ricardo, i: The Principles of Political Economy and Taxation (Cambridge, 1961)Google Scholar, passim; also Marx, , A Contribution, 158, 170–6.Google Scholar

¹⁰ Scammell, W. M., ‘The working of the Gold Standard’, Yorkshire Bulletin of Social and Economic Research, xvii (1964), 32–45.Google Scholar

¹¹ Ibid. 35; Triffin, R., Our International Monetary System: Yesterday, Today and Tomorrow (New York, 1968)Google Scholar, passim.

¹² Morgan, E. V. and Morgan, A. D., Gold or Paper (London, 1976), 11–16Google Scholar; Whale, P. Barrett, ‘The working of the pre-war Gold Standard’, in Ashton, T. S. and Sayers, R. S. (eds.), Papers in English Monetary History (Oxford, 1953), 151–64.Google Scholar

¹³ Marx, , A Contribution, 184–5Google Scholar; for an orthodox monetarist exposition of the relationship between the quantity of gold and prevailing price levels, see Friedman, Milton and Schwartz, Anne, A Monetary History of the United States, 1867–1960 (Princeton, 1963).Google Scholar

¹⁴ Ford, A. G., The Gold Standard, 1880–1914: Britain and Argentina (Oxford, 1962), 28Google Scholar; Mandel, E., Late Capitalism (London, 1978), 44–74.Google Scholar The second industrial revolution of the late nineteenth century was the result of the invention of the internal combustion engine and new inorganic chemicals, and the increased use of electricity.

¹⁵ Vilar, , A History of Gold and Money, 332–40Google Scholar; Cassel, G., The Downfall of the Gold Standard (Oxford, 1936)Google Scholar, passim; Bloomfield, A., Short- Term Capital Movements under the pre-1914 Gold Standard (Princeton, 1963), 28–9.Google Scholar

¹⁶ Perrings, C., ‘The production process, industrial labour strategies and worker responses in the Southern African gold mining industry’, J. Afr. Hist., xviii, i (1977), 129–35CrossRefGoogle Scholar; Johnstone, F. A., Class, Race and Gold. A Study of Class Relations and Racial Discrimination in South Africa (London, 1976), 17–20.Google Scholar

¹⁷ Vilar, , A History of Gold and Money, 319–331Google Scholar; Innes, D., ‘Capitalism and gold’, Capital and Class, xiv (1981), 5–35.CrossRefGoogle Scholar

¹⁸ Of the major industrialized countries, the United States was still undecided about the wholesale adoption of the gold standard and the financial and political debate was dominated by the question of whether the country should adopt a so-called ‘bimetallic standard’; see, inter alia, South Africa, 13 April and 28 Sept. 1889; Rosenthal, E., Gold, Gold, Gold (London, 1970), 195–7Google Scholar; Bloomfield, , Short-Term Capital Movements, 4–5Google Scholar; also Barlow Rand Archives, Sandton, South Africa (hereafter BRA) HE 59, p. 96, Wernher, Beit and Company to H. Eckstein and Company, 4 Aug. 1893. The outbreak of the First World War effectively shattered the edifice of the Gold Standard although, as this article shows, it was already under severe strain in Britain and elsewhere before the commencement of hostilities in August 1914.

¹⁹ Bank of Englànd Archives, London (hereafter BEA), Secretary's Letterbook, 16, pp. 226–7, Secretary to Dr Stephen Emmens, 14 Jan. 1898, noting that, ‘…all persons shall be entitled to demand from the Issue Department of the Bank of England, Bank of England notes in exchange for gold bullion at the rate of £3. 17s. 9d. per ounce of standard gold’.

²⁰ Aldcroft, D. and Richardson, H., The British Economy 1870–1930. (London, 1969), table 11, 65Google Scholar; Brown, A. J., ‘Britain in the world economy, 1870–1914’, Yorkshire Bulletin of Social and Economic Research, xvii (1965), 46–60.CrossRefGoogle Scholar

²¹ Richardson, P. and Van-Helten, J. J., ‘The gold mining industry in the Transvaal, 1886–1899’, in Warwick, P. (ed.), The South African War (London, 1980), 22.Google Scholar The use of cheques had become very widespread in Britain by the late nineteenth century and notes and coin had become a small proportion of the total money supply, which, in turn, had drastically reduced the Bank's cash requirements. Monetary expansion and growth in trade had, strictly speaking, proceeded apace without any commensurate increase in the supply of gold.

²² E., and Morgan, A., Gold or Paper, 13.Google Scholar On the activities of the Reichsbank and the Banque de France during the period of Britain's financial hegemony see Bloomfield, A. J., Monetary Policy under the International Gold Standard, 1880–1914 (New York, 1959)Google Scholar; Feis, H., Europe, the World's Banker, 1870–1914 (New York, 1930; reprinted 1974), ch. viGoogle Scholar; also Lindert, P. H., Key Currencies and Gold, 1900–1913 (Princeton, 1969), 15–21.Google Scholar

²³ For a detailed account of the Baring crisis, see Pressnell, L. S., ‘Gold reserves, banking reserves and the Baring crisis of 1890’, in Whittlesley, C. R. and Wilson, J. S. G., Essays in Money and Banking, in honour of R. S. Sayers (Oxford, 1968).Google Scholar For the Bank of England's views on the collapse of Barings, BEA P20603, f. 38, George Goschen to Governor of the Bank of England, 12 April 1891; BEA Letterbook, no. 21, p. 230, W. Lidderdale to G. Goschen, 27 Feb. 1891, where the Governor noted, ‘it may be of interest to you to know that the cost to the Bank of acquiring the £41/2 million of gold obtained from Russia and France last November was over £107,000…[this] not only involved a considerable loss but deprived the Bank of profits which certainly would have been secured had we adhered to the old and well proved method of raising the Bank Rate till the gold flowed in naturally’.

²⁴ de Cecco, M., Money and Empire. The International Gold Standard, 1890–1914 (Oxford, 1974), 95Google Scholar; Public Record Office, Kew (PRO), T 1/8523 D 17099*, Sir R. Welby to Seer., 27 Nov. 1890, on Financial Crisis, November 1890. Throughout the 1890s and early 1900s the relationship between City bankers and Treasury mandarins was close and they shared a common approach to financial crises, which was based on almost unshakable belief in the quantity theory and an actuarial obsession with balancing the nation's books. Neither Treasury minutes nor Bank of England correspondence ever hint that the solution to Britain's apparent shortage of gold should be sought outside the confines of the Gold Standard mechanism, for example, by obtaining physical control over the Transvaal gold mining industry.

²⁵ BEA, BAR/B432–2, Hankey Books. On the question of the Bank of England as the lender of the last resort, see Sayers, R. S., The Bank of England, 1891–1944, I (Cambridge, 1976)Google Scholar, passim.

²⁶ BEA, Secretary's Letterbook, no. 16, p. 107, A. Sandeman to Chancellor of the Exchequer, 18 Dec. 1896; also BEA, Secretary's Letterbook, no. 16, p. 174, A. Sandeman to E. W. Hamilton, 7 Jan. 1897.

²⁷ ‘Our cash reserves and central stock of gold‘, a speech delivered at the Leeds Chamber of Commerce, 28 Jan. 1891, cited in Bankers' Magazine, li (1891), 429–30.Google Scholar

²⁸ Goschen's idea of creating a second reserve of gold by the issue of £1 notes was rejected as it was widely felt that sovereigns rather than notes were acceptable among commercial, trading and banking circles; see BEA, P 206.03 f. 13, ‘Replies from the Agents to Questions…with regard to the suggested issue of £1 and 105. Notes’.

²⁹ Ayre, G., ‘How to strengthen and maintain our national gold reserves’, Bankers' Magazine, lxxii (1901), 589–600.Google Scholar The increased financial strength of the newly-emerging joint-stock banks such as Barclays, National Provincial and so on helped to erode the effectiveness of the Bank Rate as an instrument of monetary control: see Goodhart, C. A. E., The Business of Banking, 1891–1914 (London, 1972), 193–209Google Scholar; Sykes, J., The Amalgamation Movement in English Banking, 1815–1924 (London, 1926).Google ScholarLindert, (Key Currencies, 77–8)Google Scholar argues that by the early 1900s increases in the Bank Rate could also attract gold from abroad. My own research and Sayers (‘The gold market’, in Ashton, and Sayers, (eds.), English Monetary History, 140–50Google Scholar) suggest otherwise. Sayers observes that in 1906–8 gold devices and open market operations were widely used to secure gold even if later on, just before the First World War, the gold devices had become ‘the doubtful expedients of a temporizing adolescence’ (150).

³⁰ Scammell, , ‘The working of the Gold Standard’, 29–40.Google Scholar

³¹ The Economist, 15 Feb. 1890. For a detailed outline of the annual average price of gold on the London market, 1886–1903, see Van-Helten, ‘British and European economic investment’, appendix v, fig. 3.

³² Sayers, , ‘The gold market’, in Ashton, and Sayers, (eds.), English Monetary History, 142Google Scholar: PRO, CO 291/56, Bank of England to Colonial Office, 6 Mar. 1903.

³³ Sayers, , ‘The gold market’, in Ashton, and Sayers, (eds.), English Monetary History, 134–5.Google Scholar

³⁴ ‘To be sure, discount-rate increases and related policy measures had, at least in Britain and certain of the other leading gold-standard countries generally demonstrated their effectiveness in stemming gold losses’ (Bloomfield, , Short-Term Capital Movements, 89Google Scholar). Ford, (Gold Standard, 25)Google Scholar claims that ‘arguments based on this distribution of gold…must not be pressed too far for they ignore other quick international assets and liabilities which played a vital part in the finance of trade (e.g. the Bill on London, London balances), and which must be taken into account when assessing the strength, or weakness, of any monetary centre. London could economise on gold holdings, like any good banker, because of the quality of her other quick international assets, her institutional structure, and because, such was the power of Bank Rate and the London Market rate of discount, gold would always flow in the last resort from other monetary centres.’

³⁵ Ford, , Gold Standard, 33Google Scholar (my emphasis).

³⁶ C. 9458 (1899), Statistical Abstracts for the United Kingdom, table 42; Cd. 6399 (1912–13), Statistical Abstracts for the United Kingdom, table 53.

³⁷ Ibid.

³⁸ Bloomfield, , Monetary Policy, 47–52.Google Scholar

³⁹ de Cecco, , Money and Empire, 135.Google Scholar

⁴⁰ Eissler, M., The Metallurgy of Gold (London, 1900), 578–9Google Scholar; Arndt, E. H., Banking and Currency Development in South Africa, 7652–1927 (Cape Town, 1928), 426Google Scholar; see also note 53 below.

⁴¹ BRA, HE 53, p. 62, J. B. Taylor to Jules Porges and Co., 17 Feb. 1888.

⁴² BRA, HE 49, Jules Porges and Co. to H. Eckstein and Co., 26 July 1889.

⁴³ By 1898, some 99–7 per cent of South African gold was shipped via the Cape: cf. Cd. 6399 (1912–13), 244.

⁴⁴ On the activities of the South African shipping Ring see Cd. 4686 (1909), Report of the Sub-Committee upon Evidence taken in South Africa with Minutes of Evidence and Appendices; Porter, A., ‘Britain, the Cape Colony, and Natal, 1870–1914: Capital, shipping and the imperial connexion’, Econ. Hist. Rev, xxxiv, 4 (1981), 554–77Google Scholar; Solomon, V., ‘Early Commonwealth action against shipping conferences: the case of South Africa’, J. Imperial and Commonwealth Hist., ix, 3 (1981), 308–17.CrossRefGoogle Scholar

⁴⁵ PRO, CO 417/259, Evans to Acting British Agent, 14 March 1899.

⁴⁶ Cd. 4686 (1909), Appendix ivb, 17 and Part III, Minutes of Evidence, 6, 9, 103.

⁴⁷ Cd. 4668 (1909), Report of the Royal Commission on Shipping Rings with Minutes of Evidence and Appendices. Part I, The Report, para. 23, 9. on deferred rebates.

⁴⁸ BRA, HE 49, Jules Porges and Co. to H. Eckstein, 14 Feb. 1889.

⁴⁹ Often the ‘native’ gold from South Africa was lodged in the vaults of the Bank of England for temporary safe-keeping before it was collected or sent to the refiners. BEA, CCP/141, ‘Bullion business of the Bank of England’, Private memo by George Forbes, 31 Dec. 1869; BEA, FE 13 and CCP/11, ‘The Bank of England as a dealer in bullion’, memo by Lord Addington, 6 Aug. 1889 with notes by H. R. Grenfell, dd. 17 Aug. 1889, T Hankey: 18 Aug. 1889: also A.R.T.C.M. 1905, 150.

⁵⁰ Rothschild Archives, London (hereafter RAL) 129/27A, Wernher, Beit and Co. to N. M. Rothschild and Sons, 12 Feb. 1895.

⁵¹ See above, note 45.

⁵² Goldmann, C. S., South African Mines: their Position, Results and Developments, I (London, 1895), 270–1.Google Scholar

⁵³ By the early 1900s there were some nine different types of gold amalgam, bullion and so on, which Rand mining companies sent to Europe for smelting, assaying, refining and sale. See A.R.T.C.M. 1903, 222–6; generally speaking gold was sent abroad in the form of: (1) amalgam: value to be determined on average of preceding 3 months; (2) retorted gold: 73s. per bullion ounce; (3) gold bars: 84s. per fine ounce; (4) precipitates: 835. 6d. per fine ounce (cyanide); (5) gold buttons: 73s. per bullion ounce (precipitates); (6) lead bullion: 83s. 9d. per fine ounce; (7) cupel gold: 73s. per bullion ounce (lead bullion); (8) precipitates: 83s. 6d. per fine ounce (chlorination); (9) gold buttons/bars: 83s. per bullion ounce (precipitates).

⁵⁴ Koch, F., Der Londoner Goldverkehr (Berlin, 1905), 112Google Scholar (my translation).

⁵⁵ Bankers' Magazine, liii (1892), 7Google Scholar; Ibid, lxix (1900), 2.

⁵⁶ See Scammell, W. M., The London Discount Market (London, 1968), 164–5.Google Scholar

⁵⁷ Fraser, M. and Jeeves, A., All that Glittered. Selected Correspondence of Lionel Phillips, 1890–1924 (Cape Town, 1977), 392–402Google Scholar; successive volumes of Skinner, W. R., The Mining Manual (London, 1902–1910).Google Scholar

⁵⁸ Henry, J., The First Hundred Years of the Standard Bank (Oxford, 1963), 114, Appendix D, 339Google Scholar; Arndt, , Banking and Currency, 133–53Google Scholar; BRA, HE 4, Outline of Bank and Mint Concession, 16 Jan. 1890.

⁵⁹ Henry, , Standard Bank, Appendix D, 339Google Scholar; Cd. 623 (1901), Report of the Transvaal Concessions Commission, 213 ff.

⁶⁰ Arndt, , Banking and Currency, 158.Google Scholar

⁶¹ For a fuller discussion of these points see Van-Helten, , ‘British and European economic investment’, 130–7Google Scholar; Perrings, , ‘The production process’, 131–2.Google Scholar

⁶² See Marks, S. and Trapido, S., ‘Lord Milner and the South African State’, History Workshop Journal, viii (1979), 52–80.Google Scholar

⁶³ BRA, HE 49, Jules Porges to H. Eckstein, ii Apr. 1889.

⁶⁴ PRO, CO 417/259, Evans to Fraser, 14 Mar. 1899.

⁶⁵ Ibid.

⁶⁶ BRA, HE 66, p. 345, Wernher, Beit and Co. to H. Eckstein and Co., 15 July 1899.

⁶⁷ Koch, , Goldverkehr, 109Google Scholar; BRA, HE 66, p. 346, H. Andreae to Wernher, Beit and Co., 7 July 1899.

⁶⁸ Koch, , Goldverkehr, 190–1.Google Scholar

⁶⁹ Economist, 15 Apr. 1899.

⁷⁰ BRA, HE 171, G. Rouliot to Wernher, Beit and Co., 3 May 1896.

⁷¹ Economist, 21 May 1898. By the late 1890s it was also estimated that to ship £100 worth of goods from Johannesburg to London cost 14s. 11–48d. and from same to Hamburg cost 155. 6·62d.

⁷² The Standard, 20 May 1905.

⁷³ Sayers, ‘The gold market’, in Ashton, and Sayers, , English Monetary History, 52–5Google Scholar; Goodhart, , Banking, 202.Google Scholar

⁷⁴ BRA, HE 46, Jules Porges and Co. to H. Eckstein and Co., 11 Apr. 1889.

⁷⁵ RAL71/0C28 L3 Bullion Dept., South African, Indian and Australian Gold, 9 Jan., 20 Feb. 1905.

⁷⁶ See note 74.

⁷⁷ Burke, G. and Richardson, P., ‘The decline and fall of the cost book system in the Cornish tin mining industry, 1895–1914’, Business History, xxiii (1981) no. i, 6–7, 11.Google Scholar

⁷⁸ Marks, and Trapido, , ‘Lord Milner’, 56–7.Google Scholar

⁷⁹ Ibid., quoting de Cecco, , Money and Empire, 118–19.Google Scholar

⁸⁰ Economist, 16 Dec. 1899.

⁸¹ See above, note 36.

⁸² Goodhart, , Banking, 583.Google Scholar

⁸³ Savers, , ‘The gold market’, in Ashton, and Sayers, (eds.) English Monetary History, 147.Google Scholar

⁸⁴ Hobsbawm, E. J., Industry and Empire (Harmondsworth, 1969), 191–2Google Scholar; Cain, P. J., Economic Foundations of British Overseas Expansion, 1815–1914 (London, 1980), 59–67CrossRefGoogle Scholar; Cain, and Hopkins, , ‘The political economy’, 486–7.Google Scholar

⁸⁵ BEA, Secretary's Letterbook, no. 21, p. 313, Lidderdale to Goschen, 22 Jan. 1891.

⁸⁶ Sykes, , Amalgamation Movement, Appendix 1, 194Google Scholar; Trewelha, P. H., ‘The development of the world economy and the war in South Africa, 1890–1910’ (M.A. thesis, University of Sussex, 1970)Google Scholar, passim; Goodhart, , Banking, 209–20.Google Scholar

⁸⁷ ‘The maintenance of an adequate Reserve is proved to be the concern of all Bankers, not merely the Bank of England. Were it not that the Bankers act upon the assumption that the Chancellor of the Exchequer can always be relied upon to come forward to the assistance of the Bank, I have no doubt they'd recognise it their responsibility in practice– as it is, they [the Joint Stock banks] disregard it entirely unless in great emergencies…One might have thought that in their own interest Bankers would have tried to help the Bank of England [during 1890–1] by supporting [discount] Rates, knowing how much easier it is to lose strength than to gain it. Not only, however, did they leave us to our fate, but, after keeping larger balances for a while they reduced them to a joint half million above the average for 1890…And yet we are exhorted on all hands to maintain a strong Reserve!’–BEA P 206.03, f. 44, Lidderdale to W. Rathbone, director of London & County Banking Co. Ltd., 11 May 1891.

⁸⁸ Clapham, J., The Bank of England, I (Cambridge, 1944), 380Google Scholar; Goodhart, , Banking, 105.Google Scholar

⁸⁹ de Cecco, , Money and Empire, 76–102.Google Scholar

⁹⁰ Ibid. 100.

⁹¹ Clapham, , Bank of England, I, 372Google Scholar; Bankers' Magazine, lxxiii (1904), 414–20Google Scholar, and Cole, A. C., ‘The gold reserves of the United Kingdom’, Bankers' Magazine, lxxiv (1905), 753.Google Scholar

⁹² de Cecco, , Money and Empire, 101.Google Scholar

⁹³ The other great mineral-based industry of South Africa, diamond mining, did suffer from periodic crises of over-production at least until 1888 and the formation of the De Beers monopoly; see de Kock, M. H., Selected Subjects in the Economic History of South Africa (Cape Town, 1924), 259Google Scholar; also Van-Helten, , ‘British and European economic investment’, 135.Google Scholar

⁹⁴ de Cecco, , Money and Empire, 135Google Scholar; Goodhart, , Banking, 105.Google Scholar

⁹⁵ Arndt, , Banking and Currency, 423.Google Scholar

⁹⁶ See above, note 35; Sayers, , ‘The gold market’, in Ashton, and Sayers, (eds.), English Monetary History, 134.Google Scholar

⁹⁷ Confidence has always played an inordinately large role in monetary history, particularly in the case of banking (e.g. ‘run on the banks’) and paper currency (German hyper-inflation of 1923): see Leijonhufvud, Axel, Keynes and the Classics (London, 1969), 30–45.Google Scholar

⁹⁸ In relation to countries, such as Russia and Argentina, whose balance of payments with Britain was always adverse, Britain‘s position as the lending nation was very powerful and gave it the ability to attract gold whenever it was required: cf. de Cecco, , Money and Empire, 187–8.Google Scholar

⁹⁹ ‘National banking and the gold reserves’, The Star, 23 Feb. 1904.