over
a period of years has not been high when the risk involved is taken
into account. The fact that a few more mines have proved very
successful and have been able to pay substantial dividends has been the
magnet which has attracted the public to risk its money in new and
unproved ventures. If, however, the Government's policy of taxation
discourages the hope of substantial profits, as in fact it does, due to
the large share of the profits which the State demands, the speculative
attraction of new-ventures disappears and the new capital required will
not be so readily forthcoming.
It
should not be forgotten that over the next few years very large capital
for the expansion of the industry will be required. It has by no means
always been an easy task to obtain the money required for new7
enterprises and even with the enhanced price of gold there is a grave
risk that such a position may arise again. It is going to prove
increasingly difficult, with a return of prosperity in other
industries, to obtain the funds necessary to develop unproved mines. .
. .
Five
years later, when the war had broken out, he again reverted at length
to the problem, and this time was at pains to dispel the illusion that
ownership of mining shares was a monopoly of the 'rich'. Speaking on 25
April 1941, he said:
The
gold-mining industry fully recognizes, and is in sympathy with, the
Government's war effort, and appreciates the necessity for additional
taxation to be levied towards the greatly increased expenditure of the
country at the present time. The contribution of gold-mining
shareholders is, however, a specially heavy one, as they arc regarded
by the State in a different light from shareholders in other companies,
and are singled out for differential treatment. The belief is held in
certain quarters that the gold-mines arc owned by an exclusive and
extremely wealthy section of the community, and that because of this it
is legitimate and reasonable to tax them specially, and that even
heavier taxation than that now in force is justified and should be
imposed.
What arc the facts? I have made an investigation of the position of two companies in our group, viz. Daggafontein and East Daggafontcin, and I think the figures w7ill
be of interest to you. Of the total capital of Daggafontein Mines
Limited, two-thirds is held in South Africa and there arc no less than
4,038 local shareholders, and of these only 36 shareholders are
registered as holding more than 10,000 shares individually. (I exclude
the holdings of public companies, as these in turn are spread over
their shareholders.) Shareholders with not more than 500 shares number
2,780, and included in these are 501 widows. The position of East
Daggafontein is very similar. Three-quarters of the capital is held
locally by 4,052 individual shareholders and there are only two
shareholders holding more than 10,000
