Farewell to Kimberley

If Julius ever seriously considered forming his own company, such an idea was abandoned when Porgès made him manager of the London end of the business. The office was established at the newly built Holborn Viaduct, conveniently close to the diamond dealers of Hat ton Garden.

Meantime at Kimberley, during six months of 1881, a great inflated bubble of speculation known as the "share mania" engulfed the town. It was all very different to the struggles and dreams of the "Grand Old Days of the Diamond Fields". The success of the French Company and flotations by other main groups suddenly produced a frantic scramble to form public companies by small claim holders, desperate for capital to offset their debts. A Stock Exchange, the first in South Africa, was established temporarily at an edifice of brick and corrugated iron known as Beit's Building. When the boom began there had been twelve com- panies, but soon there were seventy-one, in which 8 million had nominally been invested. "The whole of Kimberley took part in these flotations," said one writer. "Regular work came to a stop, interest centred in the share market, life was lived at high pressure, and champagne flowed freely. It was Kimberley's heyday."

It was a heyday also for the common swindler. The prices of shares rose to absurd heights, and plunged dramatically when banks called in overdrafts. Inevitably many companies had to be liquidated, and there were bankruptcies, including that of Rothschild, who had been a main share dealer. There were also suicides, one being a friend of the Wernher family.

Among the principal players in the complicated struggle for power, J. B. Robinson was to end as a loser, though over a matter of years, and he was to rise up again. Barnato and Rhodes, through some shrewd manipulations, had their positions nicely strengthened. Beit was not yet among the big names, but had steered a brilliant course, and it was then, as a future colleague was to say, that his extraordinary financial genius really came to be recognized. He also generously helped to guide various small firms back from "insolvency to prosperity". Even so, one-third of the companies floated in this period had gone bankrupt by 1884.

Beit had a small investment in the De Beers Mining Company, and it was during this time of crisis that, as Julius put it, he came into more intimate contact with Cecil Rhodes. To be more exact, he fell completely under Rhodes's spell. Both men were still under thirty, both more interested in making money than in the opposite sex. Beit, though of course a foreigner by birth, seemed to be mesmerized by Rhodes's grandiose and almost mystic, if jejune, ideas about expanding the British Empire, which included not only enveloping the whole continent of Africa but the "ultimate recovery of the United States of America". Rhodes by then had already entered politics. After Griqualand West had been formally incorporated in Cape Colony, he had been elected a Member of Barkly West, and thus had a seat in the Legislative Assembly at Cape Town.

Over the past decade the fortunes of the Kimberley diamond industry had seesawed from euphoria to gloom. By mid-1882 the situation seemed to be at its most critical ever. In his "Notes" Julius spoke of the cut throat "senseless competition of producing". "Dividends became the exception, and prices of shares in some cases dropped to four per cent of their former values." Gradually the richer parts of the mines were covered up by fallen reef. "It was a time of great hopelessness and improvidence by the owners themselves. The French Company suffered with the rest, but remained in an excellent financial shape. Owing to their having a shaft sunk outside the Mine and thus leading into it, they always managed to get some revenue, and they succeeded in making some purchases of claim properties of high strategical value."

This "hard school of experience" had now convinced claim holders that only combinations among themselves could save the industry from ruin. Amalgamations continued to take place. The question was, who would rise to the top of the pile? In the Kimberley Mine the most powerful, for the present, was Baring-Gould's Central Company, and in the De Beers Mine it was Rhodes's Company. Julius was not happy about his representation at Kimberley, and decided that he would have to return. So in December 1882 he left for the Cape. He was away for fifteen months, and during that time Porgès made constant journeys across the Channel to London, at least twice a month, "returning after dealing with mail and shipments".

So now the letters to the parents resumed. There was smallpox at Cape Town, and he did not linger there. Luckily, with the improvement of the railway system, the journey from the Cape to Kimberley only took four days. "Business looks indescribably miserable", he wrote in February. "Only a few have ready cash. How most of them live is a riddle to me." It was not until 6 April 1883 that he could say: "I am gradually getting a little order out of this terrible mess." A first priority had been to sack his agent Paul Keil.

Julius was living in the institution known as the Old German Mess, frequented by special friends like Alfred Beit, Martin van Beek, Hermann Eckstein and newcomers such as J. B. (Jim) Taylor and Max Michaelis. "I do nothing but business, and my social life is limited to this circle." He got up very early and always first rode to the claims. During the day there were constant meetings, and "therefore I do not feel inclined to do anything in the evenings except playa hand at cards." He went to the Levys' about once a week, but the poor things had suffered in the great game of "share mania". "Visits there would not be very pleasant if one did not at once arrange for a game of cards, which cuts off Mrs Levy's moanings."

All the same, there was some good news to relate. "I have operated a lot in the diamond business in the last month, and what is more important, very successfully. This gives me a special pleasure, as it is my old business, so to speak. But otherwise it still looks dreadfully bad here, and for many there is no future at all. People are leaving the place in hundreds, which is the best thing they can do."

At least sanitation in Kimberley had been much improved. Gone were the days when cesspits "fermented and bubbled up". Dustcarts removed rubbish daily. It has since been estimated that the death rate at Kimberley during the 1870s had been nearly double the rate per thousand found in Calcutta, regarded as the unhealthiest city in the Empire. Julius, however, did not alarm his parents about the smallpox, which arrived in the autumn of 1883. This was a particularly disgraceful episode, for some employers jibbed at paying for medical care and refused even to acknowledge the disease's existence in case it should discourage the arrival of new black workers, or - worse - involve the shutting down of mines. Only when whites became infected were quarantine measures introduced.

Various claims were bought by Julius in the old "poor man's diggings", Dutoitspan and Bultfontein, and also in Jagersfontein, as these mines had been less troubled by reef falls. Such "outside ventures" were managed for the firm by Hermann Eckstein, like Julius a Lutheran, the son of a German pastor from Stuttgart and destined to prove an exceeding lucky choice. Max Michaelis and W. P. Taylor, Jim's brother, were co-opted to deal in diamonds on joint account, along the lines of the arrangement made so successfully with Beit three years before. Most importantly, Beit agreed that when Julius left Africa he would take over the representation of the firm. It appears that Julius was not much tempted to join Beit and Rhodes over their customary glasses of champagne at the Blue Post, for we are told by Jim Taylor (who took the credit of introducing them) that Rhodes still "had no success" with Julius, although Beit "had little difficulty in persuading Wernher to agree to most of Rhodes's great schemes". The great schemes were still in the future. The close camaraderie of the Old German Mess, where "we had such terrific arguments that nobody could hear his own words", was to remain virtually unbroken over the years, with important consequences for all its members.

Gold discoveries at Barberton and De Kaap in the eastern Transvaal brought some hope of a "new impulse in the land" but, said Julius, "I doubt it somehow. The general tone is still very depressed." Levy was now on the verge of bankruptcy, and had been taken on as "a kind of agent" for the dealers Mosenthal & Co.

Julius meanwhile made some nostalgic trips on horseback, eating "mostly sardines and biscuits". He went to Griquatown and found that the old chief, Waterboer, who had been imprisoned after the 1878 uprisings, was getting a substantial subsidy yearly from the British government, "which he invests in spirits and so is not presentable after 10 a.m.". Going on to Jagersfontein, where he said the diamonds were among the finest though very few, he stayed at an inn on the Modder River.

It belongs to a man who in 1872 robbed the Post Office which contained 6,000 of ours. He then sat in prison for a few years. His wife looked after the business in the meantime and did not do too badly. There we now slept together in the living room, and the wife - mother of fifteen living children - dished up the evening meal. The man quietly smoked his pipe, and the governess played dance music (on a Sunday!) to cheer us up, and we spent a comfortable evening.

There were still parties at Kimberley. "People seem to live on their losses. They are so used to their conditions that as soon as there is an opportunity for enjoyment there they are with all their hearts. It is ridiculous, but at my age I still enjoy dancing." Relieved by the successful reorganization of his team, Julius by September was feeling like a "fish in the water". He preferred the warmer weather:

Firstly because I can get up earlier, secondly because when the days are longer and warmer one can get more work out of the niggers. The hotter it is the better they feel. Instead of getting themselves warm in winter by hard work they stand and squat about, and wind their rags about their bodies to keep the cold off...of course in winter wages are just as high or even higher, because there are fewer workers available... The energy of the whites, unfortunately, does not correspondingly increase, and a greater part of the labour troubles here are due to this.

For there was serious unemployment among the white labouring class, and wages were actually in the process of being reduced. Whites were usually employed as overseers in the mines. In September 1883 white workers as well as blacks were required to change into special clothes on entering mines and be searched on leaving them. This so-called "stripping clause" was considered degrading by the whites, "bringing them down to the level of the niggers", for whom they claimed nakedness was after all a "state of nature". Julius had long ago maintained that some sort of personal search was necessary in order to combat IDB, but the resentment boiled over, and there was a strike that lasted for nearly a week. One of the ringleaders worked for the French Company.

Far more alarming was the strike in April 1884. During a march on the Kimberley Mine by white and black workers, six white men, including one from the French Company, were shot dead by armed police: the first casualties in industrial unrest in South Africa. But by this time Julius was already back in London. His mother had been convinced that he would deliberately look for new business just to delay his departure, but he assured her that she was quite wrong, and kept his word, even if he was "fabulously busy, right up to the last moment". (In November 1883 there had been the largest reef fall ever in the Kimberley Mine.) So now, he teased her, he was free to settle down in some quiet cottage with a nice little wife to care for him.