West
Rand and Klerksdorp districts . . .' and it also acquired 'the entire
interests in this corporation and its affiliated finance companies in a
number of prospecting ventures in the Orange Free State and Transvaal'.
The fourth of these creations was the Orange Free State Investment Trust Limited, founded in 1944
to
consolidate all the holdings of the group in the Orange Free State. ...
In future it will be the policy of our corporation [i.e. Anglo American
Corporation] to hold a permanent interest in the Free State through
this new finance company. . . . Prospecting work already done in the
Odendaalsrust area . . . has proved a payable deposit large enough to
form four important mines, and the probabilities are that further
prospecting ... in the Free State will prove further areas to contain
gold in payable quantities. ... I would add . . . that the financing of
this huge development at a time when the London market is not open for
new issues raises great problems. . . .'
Ernest Oppenheimer became chairman of all these companies and remained so for the rest of his life.
Though
the policy of forming such holding and financing companies, once
established, was consistently pursued, there was nevertheless a moment
of time when Ernest Oppenheimer was not quite sure whether, taking all
circumstances into account, the policy was really a wise one. In a
memorandum prepared for his friends in the City of London, written
sometime in August 1930, he had this to say:
The
object in forming the Anglo American Corporation was to acquire a
leading or controlling position in certain directions. It was
recognized that every company formed would be a subsidiary company,
which would look to the corporation for its financial needs and that
the latter's technical organization would supply the necessary
technical advice. In short, the formation of mining companies was
creating the corporation's 'goodwill' and from them would flow the
regular business.
During
the last few days—when thinking over the proposed Bwana finance—it
became evident to me that the functions of the old Anglo American
Corporation were being lost sight of and perhaps even superseded and,
if this continued, it could only lead to loss of prestige.
Formerly,
when a subsidiary required financing, the Anglo American Corporation
was the house to whom it looked, and the corporation did not hesitate
to increase its capital to meet the needs of its expanding business;
the issued capital was increased from £1,000,000 to £4,000,000 in a
comparatively short time.
' Ernest Oppenheimer, presenting the 28th report of the Anglo American Corporation to the shareholders on 27 April 1945.
