A Historical Swindle

Old Jo'Burg

Old Jo’Burg

An entertaining story emerges from our country’s illustrious past. Its themes of greed and corruption are, sadly, still relevant today; which just goes to show that not much changes with the march of time.

Original Gold Mine Witwatersrand

Original Gold Mine Witwatersrand

The year 1886 sees the discovery of gold on the Witwatersrand. Everyone is stunned by the enormity of the estimated wealth buried there – when people talk about it their eyes glaze over. Then, four years later, the Transvaal Republic announces, ‘A vast new Goldfield!’ The world is again captivated. The dusty little town of Leydsdorp in the north is to become this area’s new capital. There follows an even more surprising announcement: the area is to have its own railway line!

Buildings in Leydsdorp

Buildings in Leydsdorp

Surprising, because the region has no decent roads to speak of, never mind a railway!

People with any knowledge of railway construction realised that something must be seriously amiss. When they estimated the costs involved, then measured these against the total (small) population of the Lowveld at the time, they realised that somebody in the Volksraad in Pretoria had gone absolutely mad. Well, the Volksraad member behind this madness was a Mr B J Vorster, a personal friend of President Kruger’s.

Barend Vorster

Barend Vorster

Barend Vorster and his friends had surmised that when the railway line connecting Pretoria and Delagoa Bay was completed it would not be difficult to put through a branch line running from Komatipoort to the new Selati goldfields the output of which, everybody said, would dwarf that of the Witwatersrand. The Portuguese had already completed their part from Delagoa Bay to the border (although, in fairness, this was the easier section) but it was not until 1894 that the Pretoria link-up would occur.

Vorster and two associates, Porcheron and Stephenson, petitioned the Volksraad for the concession to build the railway line. The Volksraad favoured their bid over other, more solid, company tenders, as it was customary then for the Transvaal Republic to award concessions to burgers first.

Shop in Leydsdorp

Shop in Leydsdorp

Well knowing that they did not have the required capital to finance the deal, however, the Volksraad stipulated that the concession could not be sold to a British Company since they considered there were enough English-speaking people in the Transvaal already. But Vorster and his colleagues were so sure of securing the concession that they had already sold it on, before the Volksraad had ratified the deal!

Now, onto the Transvaal stage comes one of life’s real characters – a Frenchman, Baron Eugene Oppenheim.

 Raadsaal Pretoria

Raadsaal Pretoria

He is a mere 22 years of age, but so impresses Vorster and associates that they sell him the concession for £80 000 plus one twentieth of the capital of the company to be formed. The plot begins to thicken …

Baron Eugene had decided on the company’s name – wait for it – La Compagnie Franco-Beige du Chemin-de-fer du Nord de la Republique Sud-Africaine. The French Oppenheim was going to establish his headquarters in Belgium because there were more loopholes in company law there than in France!

We will never know why Vorster and his friends decided to negotiate with this young 22-year-old. What we do know is that Oppenheim arrives in Pretoria just before the awarding of the contract by the Volksraad and hosts a huge banquet at the Transvaal Hotel in the city.

Coat of Arms Transvaal se Republiek

Coat of Arms Transvaal se Republiek

Everybody who is anybody is invited. The Baron pays £300 for a portrait in oils of President Kruger, to be hung in the Volksraad. He gives away gold watches and spider carriages to members of the Raad; he spends another £6 500 of his own money on “Commissions to principal members of the Executive Council, and the Legislative Assembly, with a view to obtaining the provisional concession”. He says later that he also had to pay the President £4 000. Subsequent investigations prove the Baron to be a liar of the first order, although lavish gifts were given to members of the Volksraad. It was also discovered that the Baron’s company at no time had the stipulated £500 000 to finance the deal.

Oppenheim’s plan was to enter into a contract with one Louis Wuniani to build the line at a maximum cost of £9 600 per mile, which was the amount allowed by the government. Warnant was then to enter into a sub­contract with a British engineering firm that was willing to build the line at £7 000 per mile.

Skukuza Station

Skukuza Station

The total cost of the contract allowed was £1 848 000, as opposed to the £1 348 000 (payable at £7 000 per mile) Oppenheim’s scam involved. This would give the Baron a tidy profit of £500 000. He then cooks the books of the company to show that the capital is in place and begins drawing the 4% interest that the government of the Republic has guaranteed!

Thank goodness then for Mr J M Smit, the Railways Commissioner, who uncovered the swindle. Thus exposed, Baron Eugene Oppenheim, Henri Warnant and their lawyer are charged and found guilty in the Belgian criminal courts. They are fined and sent to prison, though not before they have ruined the contracting firm and cost share and debenture holders of thousands of pounds.

Selati Line Bridge

Selati Line Bridge

So the Northern Railway became a line to nowhere. It was laid from Komatipoort to just before Skukuza Camp in the Kruger National Park. And, all along the way, the line was strewn with picks, shovels, sleepers and impedimenta, which were to lie there and rust – the railway line would only be completed twenty years later.

As for the Selati goldfields, they never lived up to people’s vast expectations and the bustling new capital slipped back to being a sleepy little hollow in the Lowveld. So much for the dreams of mice and men!

Gleaned from “At the Fireside” by Roger Webster

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