the
whole development has been the fact that it was always possible to
provide capital as and when it was called for'. This figure, of course,
referred to the field as a whole. In reviewing the methods he pointed
out that
investment
in the Orange Free State gold-field has been widely affected from time
to time by British monetary policy, by our own domestic politics, by
developments in other parts of the world and naturally enough by the
prospects of the gold-mining industry itself. These factors have
superimposed themselves on the basic inclinations of the investing
public and have complicated an already difficult and intricate task. .
. .88
A
year earlier, in 1954, the chairman's review, circulated with the
annual report of Anglo American Corporation, and bearing the title
'Mining finance in Southern Africa', had given some striking
statistical details. Between 1946 and 1953, -£48,263,000 had been
raised in London and on the Continent for all the companies in the
Anglo American Corporation group, f 32 million of which were raised for
South African, as distinct from Rhodesian companies. London had
contributed £23-1/4 million for the South African companies, the Continent £8,6oo,ooo.89 This was not the only source of finance, for
88 He went into some detail:
'Broadly
speaking the capital requirements of the Orange Free State gold-mining
industry have been met by offering investors the choice between
investing indirectly in the mines by subscribing capital in companies
such as yours and thereby spreading the risk, and investing directly in
the mines themselves. The choice of investment within these two
categories has been widened further from time to time to meet varying
conditions and demands in the investment market. Your company provides
an excellent example in the first category, its £18,000,000 of capital
funds having been provided by direct share subscriptions, options,
convertible notes and registered bonds, the last-mentioned having been
issued in such a form as to attract Swiss investment. In the category
of direct investment in the mines and in land development companies,
circumstances have called for share subscriptions, debentures,
convertible notes, free options and convertible loans and often a
combination of two or more of these methods.
'In
addition, of course, the mining houses by means of loan facilities have
provided temporary finance from time to time and have arranged for
various share issues to be underwritten. I think it will be evident to
everyone who has studied the financing of the Orange Free State
gold-mines that the mining houses have played a vital and essential
role in assisting the mining companies to raise capital. Their
reputations and resources have not only provided a stabilizing
influence, but their willingness to accept risks in granting unsecured
loans at times when conditions in the capital market were such as to
prevent finance being raised on reasonable terms ensured a consistent
and adequate flow of capital.'
89 The
first loan by the Union Bank of Switzerland had been made in June 1950.
Ernest Oppcnhcimer, rightly, drew special attention to this important
event in his speech to Anglo American Corporation shareholders at the
33 rd ordinary general meeting 011 16 June 1950:
'A
few days ago the corporation announced the conclusion of an agreement
with the Union Bank of Switzerland whereby the bank will loan to the
corporation the considerable sum of £4,000,000.1 will not here repeat
the terms of that announcement which
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