economic
development of the country. The political difficulties and risks which
are felt in varying degrees throughout Africa have not affected our
confidence in the future of South Africa and the Rhodesias. But we will
solve our problems only if we have the ability to adapt ourselves to
changing circumstances. In the sphere with which we are concerned here
it seems to me that the economic potential and value to shareholders
and to the community of a company such as Rand Selection, as it is at
present constituted, is much less than in the past. By modern standards
it is a medium sized company filling no clearly defined role in the
investment field, and though it has an excellent portfolio, it is not
well equipped for raising money on a large scale, and in particular is
no longer favourably placed to bring money to South Africa from abroad.
Its rights of participation in the new business of Anglo American
Corporation which fell due for renewal at the beginning of October
last, while profitable and attractive in themselves, have in recent
years been to some extent an embarrassment from the financial point of
view, and we were faced with the choice of either reducing our share in
this new business or taking steps to increase our resources.
Rand
Selection Corporation, as expanded in accordance with our proposals,
will be in a very different position. It will provide a safe and solid
medium of investment in the economic future of Southern Africa. While
it will not itself seek to initiate new business, it will be admirably
placed, both because of its financial strength and its connexions, to
participate in business initiated by others. Anglo American Corporation
has agreed to increase substantially the proportion of any business it
undertakes which it offers to Rand Selection Corporation, and it is not
unreasonable to expect that the association of other large business
houses with this reconstruction plan and their representation on the
board of the enlarged company, will also lead to opportunities for
profitable new business. The size and strength of the company should
make it a most favourable channel for attracting money from overseas,
and it would be possible for it to undertake large new interests
without affecting its character and solidity as an investment medium.
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