present
conditions is unpayable. An increase in dividends would undoubtedly
take place, but the greatest advantage that would accrue to most of the
mines would be through the extension of their scope and the lengthening
of their lives which would follow the ability to work lower grade ore
and to secure additional working capital. The wealth that would accrue
to the country through the working of huge bodies of ore which in
present circumstances cannot be worked would be very large. As stated
at the end of paragraph 6, a reduction of 45. per ton in working costs
would more than double the life of the Witwatersrand gold-mines,
bringing into commission over 335 million tons of ore which otherwise
would not be worked. If this doubling of the life of the Witwatersrand
were brought about by a reduction of 45. per ton in working costs, it
would cause the expenditure of additional working costs totalling about
-£185,000,000, namely, the difference between 670 million tons at 155.
per ton working costs and 335 million tons at 195. per ton. If the same
additional tonnage were brought into commission by the devaluation
method, an additional sum of approximately .£385,000,000 in working
costs would be expended. . . ,23
Though
the select committee of the House of Assembly reported in favour of a
continuance of the then existing currency arrangements, in the end
wiser counsels prevailed. The resignation of Mr. Tielman Roos from the
Bench on 2 December 1932 and his pronouncement in favour of devaluation
and the formation of the 'Fusion' Government led simultaneously to a
speculative flight from the currency, the hoarding of gold and a rise
of gold shares on the Stock Exchange. The right to convert notes into
gold was suspended on 27 December 1932—which severed the link with the
gold standard. The situation was ultimately regularized by the passage
of the Currency and Exchange Act, 1933, and the announcement by
Government of the intention to maintain the South African pound on a
parity with the pound sterling.24 A new era had begun.
♦ IX ♦
On
11 January 1933 the Chamber of Mines called a special meeting to
discuss the situation. At that moment, no decision had been taken as to
what the precise future policy of Government was to be: gold
had been abandoned but nothing more had been done and the exchange
position was leading to difficulties. The chamber took the view that
23 Statement by the Gold Producers' Committee presented to the Select Committee, paragraph 27.
2414 Official Year Book of the Union of South Africa, pp. 1059-60.
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