Bourses, banks, and Boers: Johannesburg’s French connections and the Paris Krach of 1895

Mariusz Lukasiewicz

The 1894/5 Paris boom in South African mining securities set forth the ultimate test of financial resilience for the South African Republic's mining and financial sectors. The financial crash in Paris that halted the international boom in October 1895 exposed the globalized nature of markets for South African mining securities and their impact on colonial politics in Southern Africa. This article reconsiders and qualifies the economic, financial and political connections between South African gold mining and the Parisian capital market for the period 1887-1895. The Paris Bourse and its complimentary coulisse became the new loci of the South African mining market that ultimately crashed after the intervention of Johannesburg's capital elites. Crucially for the future of the South African Republic, the Paris Krach set out the political circumstances for a direct confrontation between Johannesburg's mining capital, British imperialism and President Kruger's republicanism. Exposing new primary material gathered at the Archives Diplomatiques in Paris, the Paribas Group in Paris, the Central Archival Repository in Pretoria and the Johannesburg Stock Exchange in Sandton, this article examines the globalization of South African securities, concluding the investigation with an analysis of the financial and political ramifications of the 1895 Paris Krach.

Bourses, Banks and Boers: Johannesburg’s French Connections and the Paris Krach of 1895 Mariusz Lukasiewicz Institute for African Studies Leipzig University Beethovenstr. 15 Leipzig, Germany mariusz.lukasiewicz@uni-leipzig.de Abstract The 1894/5 Paris boom in South African mining securities set forth the ultimate test of financial resilience for the South African Republic’s mining and financial sectors. The financial crash in Paris that halted the international boom in October 1895 exposed the globalized nature of markets for South African mining securities and their impact on colonial politics in Southern Africa. This article reconsiders and qualifies the economic, financial and political connections between South African gold mining and the Parisian capital market for the period 1887 – 1895. The Paris Bourse and its complimentary coulisse became the new loci of the South African mining market that ultimately crashed after the intervention of Johannesburg’s capital elites. Crucially for the future of the South African Republic, the Paris Krach set out the political circumstances for a direct confrontation between Johannesburg’s mining capital, British imperialism and President Kruger’s republicanism. Exposing new primary material gathered at the Archives Diplomatiques in Paris, the Paribas Group in Paris, the Central Archival Repository in Pretoria and the Johannesburg Stock Exchange in Sandton, this article examines the globalization of South African securities, concluding the investigation with an analysis of the financial and political ramifications of the 1895 Paris Krach. Bourses, Banks and Boers: Johannesburg’s French Connections and the Paris Krach of 1895 South Africa’s 19th century mineral revolutions changed the extent and scope of global mining finance. The largest diamond and gold discoveries in 1870 and 1886 respectively, opened up the richest mineral deposits yet exploited in southern Africa. First in Kimberley in the Cape Colony, and then in Johannesburg in the newly-independent South African Republic (ZAR),1 colonial and international financial intermediaries facilitated the largest wave of mining investments on the African continent prior to WWI (Rönnbäck and Broberg 2019). It was particularly the ZAR’s gold mining revolution from 1886 that stimulated the rise of financial capitalism in southern Africa and integrated the region into global capital markets (Phimister 2018). The development of the ZAR’s gold mining industry ensured that the whole southern African regional economy experienced an economic revolution which would come to be dominated by international financial capitalism (Richardson and Van Helten 1980). Given the political context of the growing Anglo-Afrikaner regional conflict (Nasson 1999), the international development of Johannesburg’s financial sector was in contrast to the parochial visions of President Paul Kruger’s republican government in Pretoria. The historiography of the ZAR’s concurrent mineral and financial revolutions thus provides the source material to reflect on many issues of financial development, globalisation and European imperialism in Africa. It was precisely in the final quarter of the 19th century that European capital and enterprise was exported in unprecedented quantities to develop mining in North and South America, Australia, Russia and southern Africa (Burt 1972). First in eastern parts of the ZAR and then on the Witwatersrand, southern African settler economies became a prime destination for international mining prospectors, diggers and financiers (Richardson and Van Helten 1984). Johannesburg quickly grew from a mining camp to a financial centre with numerous local, colonial and international financial intermediaries channelling the flow of capital to and from the ZAR’s industrializing economy (Arndt 1928). The significant catalyst for early speculation was that banks were not only lending to the mining companies but were prepared to facilitate huge advances against the security of mining shares (Henry 1963). This form of underwriting led to the local Standard Bank being swamped by investment prospectuses from many optimistic mine-owners who were convinced that the future output of Contact HERE Acknowledgments HERE 1 more commonly known as the Transvaal. 2 gold from their reefs would be sufficient to return a good dividend on the capital invested (SBA. GMO 3/1/22. 6 February 1888). However, with British colonial banks providing Johannesburg’s early gold pioneers with short-term credit at relatively high interest rates between 18% and 25% (Henry 1963), alternative financial institutions and sources of financing were needed to capitalize the infant mining industry. Creating a new market for funds, the development and rapid growth of the Johannesburg Stock Exchange (JSE) was seen as the gold mining industry’s main resource for raising financial capital and forging international networks that helped to shape South Africa’s industrialization process. (Lukasiewicz 2017). Despite the positive early development of the JSE and its adjacent business district, most of the marketing and trade in South African mining securities still continued in the world’s biggest capital market, the City of London. Using an extensive network of specialized jointstock banks and clearing houses, the London financial market was able to promote investments in London- and Johannesburg -listed mining securities in Britain and on the European continent. London might have hosted the most capitalized mining market of the 19th century (Harvey and Press 1990), but it was far from being the only one available to international mining investors. Averaging lower short-term interest rates throughout the final quarter of the 19th century (Flandreau and Zumer 2009), Paris held a competitive second place in the rank of international financial centres (Esteves 2011, Cassis 2010). Research on the size and frequency of British mining investments has dominated the Rand’s financial historiography (Rönnbäck and Broberg 2019; Kubicek 1979; Frankel 1967) with little to no interest shown towards French economic and political aspirations in Southern Africa (Maubrey 1990) French bankers who were already heavily involved in promoting South African mining securities in Europe since the early 1880’s (Kubicek 1975), worked closely with London-based brokers to initially underwrite and later purchase their own orders of mining portfolios as part of arbitrage operations across the English Channel (Van Helten 1990). As shown by Esteves (2011), the gradual rise in French investments in South African mining securities throughout the 1880s and 1890s turned Africa into the second largest investment destination in the French foreign portfolio. Estimates by contemporary French observers suggest that Parisian speculators invested between 800 million and 1 billion francs in South African securities between 1894 and 1895 (Hautcoeur, 2007). According to reports by the Banque de Paris et des Pays-Bas (Parisbas), by 1895 French investors purchased as much as 30% of all the mining securities issued in the South African Republic since 1887 (PBA. Participation des capitaux français aurifere sud-africaine. 6 July 1949). This improbable rise and eventual collapse of the South African mining market on the Paris stock exchange in September 1895 led to the most 3 severe decline the Paris Bourse had experienced since the collapse of l'Union Générale in 1882 (Kindelberger and Aliber 2005), confirming that the French Third Republic’s financial reforms of the 1880s were not sufficient (White 2007). The 1895 Paris Krach was only the herald of the real international crash in South African mining securities that was to follow the disastrous political events of December 1895, when Leander Starr Jameson and Cecil John Rhodes’ British South Africa Company (BSAC) militia crossed the border into the ZAR and attempted to occupy Johannesburg on the final day of the year as part of an expanding British empire in southern Africa (Phimister 1993; Blainey 1965). Viewing Johannesburg´s financial sector centred around the JSE as the intermediary between South African gold mines and European investors, this article investigates and analyses the relationship of French investors and financial intermediaries with ZAR mining products on the eve of France’s largest capital boom in South African mining securities. The 1894/5 South African gold mining boom and bust in Paris has been discussed in the context of the French capital market before (Riva and White 2011; Hautcoeur 2007), but no previous study has traced the formation of international networks for the trade in ZAR securities in Paris. Preliminary studies by Kubicek (1979), Van Helten (1985) and Maubry (1990) have all emphasized the importance of the Paris market and French capital for South African gold mining, but have mostly studied Paris´ financial intermediaries as an extension of the London money market, taking little effort to examine the direct financial connections between Paris, Johannesburg and Pretoria. Drawing on previously unexploited archival sources from public and private collections in Paris, Pretoria and Johannesburg, the intended contribution here is to broaden the focus of early South African mining finance away from British financial dominance and draw attention to the financial entanglements between France and the South African Republic. In analysing the social connections that contributed to the international expansion of the South African mining market, this article traces the rise of Johannesburg’s financial elite, loosely conceptualized as the Randlords, through the institutional and organizational lens of the Johannesburg Stock Exchange. Ultimately, and as this article’s contribution to the study of 19th century financial globalization, the evidence presented here highlights how speculation in mining shares from a peripheral settler economy at the tip of Africa prompted the reorganization of Europe’s second largest capital market. Johannesburg’s financial globalization As the political and economic fate of southern Africa would have it, the discoveries of gold in the ZAR in the early 1880s came at a critical time of financial globalization with increasingly 4 interconnected global commodity and capital markets (Hart and Padayachee 2013). Although the Boer republic was not the first territory in southern Africa where stocks and securities were traded, the 1886 Witwatersrand gold rush laid the foundations for the emergence of Johannesburg as the most important financial centre and capital market in sub-Saharan Africa (Rosenthal 1968). The availability of South African mining shares on international capital markets preceded their trade in South Africa. Although the London Stock Exchange (LSE), hosting the world’s largest mining market, was always willing to accommodate new types and sectors of foreign securities, ZAR-registered mining companies in particular found it extremely difficult to meet London’s official listing requirements (Harvey and Press 1990). Attempting to bypass the strictly-enforced rule stipulating the two-thirds public allotment of issued capital, ZAR-incorporated mines regularly resorted to dubious accounting practices by presenting two different (British and South African) sets of accounts with their initial London listing applications (Lukasiewicz 2017). Many companies even resorted to inflating the supposed complexity of the South African Republic’s commercial laws by emphasizing their grievances towards Kruger’s government and expecting regulatory sympathy (Rosenthal 1970). However, and with very limited working capital, no immediate prospects of gold production and ZAR’s inconsistent Gold Law of 1886 making it difficult to recognise and uphold the underground boundaries of land claims (Morice 1888; Michell 1888), South African companies could only, at best, ‘try their luck’ in London. While the London market provided the initial international exposure and recognition of the industrial strides taken by South Africa’s young diamond and gold industries in the early 1880s, it was the JSE – less regulated, more accessible, more ad hoc than its counterparts in Europe – that provided an initial spur to the flotation of companies and their capitalization (Lukasiewicz Forthcoming). Becoming a member of the JSE was the objective of most financiers seeking access and participation in Southern Africa’s biggest stock market. Membership on the JSE and access to Johannesburg’s international trading system provided financiers with a professional platform for engaging with the mining industry and Johannesburg’s expanding financial intermediaries. With the formal organization and regulation of the JSE in November 1887, Johannesburg possessed the financial infrastructure aimed at attracting local and increasingly foreign sources of capital to South Africa’s gold mining industry. More than 200 new companies were already floated on the JSE by the end of 1888 (Goldman 1892). According to The Economist, just before the JSE closed for Christmas in December 1888, the marked valuation of the top-20 performing stocks stood at £12 175 750, more than six times greater than their combined nominal capital of £1 967 500 (The Economist, December 22, 1888). 5 The JSE’s early boom was however never sustainable and as the size and frequency of dividend payments dropped, so did the enthusiasm of local and international speculators (Frankel 1938). The financial decline in mid-1889 turned into a major crisis once it was further confirmed that the oxidation processing methods used at the surface of the main Johannesburg gold reefs had very little impact on the ore to be found below 100 feet. The main implication for Johannesburg’s young financial sector was that with great uncertainty over future levels and rising costs of gold outputs, most Rand shares were now overvalued, and some of ZAR’s earliest company flotations turned out to be worthless (Cartwright 1965). With the colonial banks’ lending capacity severely reduced and the negative reporting on the geological threat to the mines’ long-term cost structures in the international financial press, Johannesburg’s share market took a further turn for the worst. By the end of July 1890 close to half of all companies that listed on the JSE in the previous year were erased from the JSE’s Official List (JSEA, 29 July 1890). It soon became increasingly apparent for the industry that the only way forward was to create a new deep-level industry built on the common interests of international finance and mining. Although some of the Cape Colony’s diamond profits found their way into the ZAR’s mining industry, the combined technical and geological problems, coupled with the Bank of England’s commitment to a fixed price of gold at the centre of a monetary system based on the gold standard (Ally 1994), required a new ownership structure and financial resources on a scale never before encountered in southern Africa. The rationalization of this financial dilemma signalled the start of the “group system” whereby individual mines were incorporated into large international holding companies. In turn, each mine would then be floated as a separate joint stock company with the holding group exercising control through share ownership and the board of directors (Graham 1996). By combining and coordinating their financial efforts in the form of the group system, the Randlords, Johannesburg’s new mining finance elite, amalgamated their capital investments to consolidate and expand dominance of Johannesburg’s deep-level mines (Wheatcroft 1985). The ten largest capitalized mining groups of the early 1890s all owed their origin as much to the first great financial crisis associated with the collapse of Johannesburg’s mining market as to the financial requirements of deep-level mining (Richardson and Van Helten 1980). The syndicates and new corporations that emerged as a result of holding multiple mining portfolios began drawing on new sources of international finance. According to calculations by Frankel, between 1887 and 1914 South Africa’s gold mines absorbed £120 million of capital from abroad (Hart and Padayachee 2013). The Corner House, Gold Fields, the Barnato Group, Robinson Mines and Farrar Investments were all very closely linked to the management of the JSE and the Transvaal 6 Chamber of Mines from its earliest days (See Table 1), allowing the groups unrivalled access to financial intelligence and trans imperial political networks (Lang 1986). The Corner House Group in particular was to facilitate the linking of international capital and engineering expertise in order to develop and determine the future of deep-level mining on the central Rand (Kubicek 1991). [TABLE 1 ABOUT HERE] With Johannesburg’s biggest financial magnates Julius Wernher, James Taylor, George Farrar and Hermann Eckstein all on the General Committee of the JSE at the end of 1889, the Corner House used its London, Paris, Frankfurt and Vienna resources to invest in more mining ground and began searching for a solution to overcome the South African mining market’s poor reputation in South Africa and Europe. From the early 1890s, Barney Barnato in particular as the JSE´s owner and proprietor through his Johannesburg Consolidated Estate, used the fortune he accumulated in the Kimberley diamond industry and his extensive personal networks in London and Paris to market the JSE as credible financial institution, and popularize the international trade in ZAR mining shares. Apart from the great progress made in production efficiency and output by the gold industry, during the period 1890-1892, the galvanization of leading deep-level mining companies, under the Randlords’ group system, would restructure the capital base of the industry in Johannesburg and Europe. The most significant advantage of the group system was the improved access to European capital markets in London, Paris and Berlin and, even more so, underwriting possibilities by large and established European banking houses, such as the Rothschilds, Paribas and even the Ottoman Bank (Richardson and Van Helten 1980). By the end of 1895 South African-registered and JSE-listed stocks were widely traded on the European continent. Apart from London and Paris, smaller exchanges in Hamburg, Frankfurt, Berlin, Vienna and Constantinople were also trading and holding significant portfolios in South African mining stocks (Auchterlonie 2000; Davenport-Hines and Van Helten 1986). The international expansion of Johannesburg’s share market and the arrival of aspiring financiers and mining prospectors from all over the world in the ZAR did not go unnoticed by President Paul Kruger’s administration in Pretoria. Although Kruger’s attitude to economic development in the Boer Republic was often labelled as “anti-capitalist” and his contempt of Johannesburg’s mining houses is well documented, there was no evidence to suggest he was initially against the growth of the Rand’s international mining market (Marks and Trapido 7 1979). The internationalization of the market for South African securities throughout the late 1880s created new taxation opportunities and political responsibilities that the Pretoria admiration sought to capitalize on. Like most financial and economic institutions in Johannesburg, the city’s financial sector developed independently of strict political control from the Pretoria government. Although Kruger’s government rented an office for its Johannesburg district officer inside the JSE, Afrikaners hardly ever ventured to the Exchange, and very few applied for membership, associating the financial institution with deep antiKruger sentiments (JSEA. 28 September 1897). Even if according to Kruger Johannesburg’s capitalists had “burned their tails” during the first financial slump of 1889, the ZAR’s president visited the city in March 1890 to meet with leaders of the mining and financial industry (The Star, March 3, 1890). After committing his government’s support for development of a new railway linking the two cities to facilitate the growth of deep-level mining, the JSE and the Chamber of Mines organised an official celebration in his honour, showing just how crucial the decision was for Johannesburg`s crisis-stricken financial and mining industry (JSEA. 12 July 1895). French interest and investments in South Africa’s mining revolutions The growth of a new pool of international investors presented Johannesburg’s Randlords with an opportunity for accelerated financing of the new deep-level projects, but tested their ability to control the expanding market for South African securities (Kubicek 1979). Influential JSE members such as the Barnatos, Goerz, Neumann and Albu used their British and European connections to encourage buying at exchanges where South African securities were traded. The privileged access to Johannesburg’s financial intelligence and the strategic use of the town’s rudimentary telegraph system provided members with direct trading connections to banks and brokers around the world (Lukasiewicz 2017). Although it is difficult to pin point the exact number of shares available on European markets (Rönnbäck and Broberg 2019), there were as many as 150 different ZAR securities traded on London’s unofficial market for the period 1891-94 and just over 50 on the LSE’s official list. 2 It was however the unpresented interest and investments in the ZAR mining market across the English Chanel that took most financial commentators in Johannesburg and London by surprise (The Economist, October 29, 1892). French capital investments in southern Africa were nothing new and preceded the ZAR’s deep-level mining revolution (Maubrey 1990). The gradual consolidation of French 2 Based on calculations from ‘Mining Market.’ The Financial Times. 1890-5; and Investors Monthly Manual. 1890-1900 8 private and public financial interests reflected a strategic approach to dealing with British colonies and Boer republics in southern Africa (Van Helten 1985). Parisian banks in particular took a very close interest in economic and political developments in Britain’s settler colonies in southern Africa and made their own investments in the Cape Colony’s wool and diamond sectors since the early 1860s (PBA. PTC/166/5. 6 July 1949). The growth in diamond production and exports throughout the 1880s and 1890s led large French banks such as Paribas to include many Cape Colony and Natal bonds in their foreign portfolios (Flandreau and Gallice 2005; Esteves 2011). French financiers such as Jules Porges and Emile Durand had been particularly active on the Kimberley diamond fields since the late 1870s and their Compagnie française de diamants du cap de Bonne-Espérance reflected a financial commitment to the mineral industry in southern Africa rather than any political aspirations (Van Helten 1985; Roche 2011). French expertise in marketing diamonds and mining finance in Europe was so valuable that endorsements by Crédit Lyonnais and Paribas were particularly crucial for the success of any foreign share sale or official issue in Paris, Vienna and Berlin, encouraging Kimberley´s (and soon after Johannesburg’s) financiers to forge closer relationships with Paris’ financial elite (Van Helten 1985; Flandreau and Gallice 2005). The earliest documented attempts to establish French commercial relations and official representation beyond the British settler colonies and inside the Boer Republics came in 1875 with Herman Toubeau´s petition to open a French trade office in Pretoria (NARSA. TAB SS 193. 26 July 1875). Direct French diplomatic interest in the commercial affairs of the ZAR commenced with the opening of the French Consulate in Pretoria in March 1887 (AMAEA. Correspondance Commerciale Pretoria 1887-1895. Tome 7. 3 March 1887). Victor-Stéphane Aubert was sent to Pretoria as France’s first representative to the ZAR in December 1886 after twenty-four years of diplomatic service in the Netherlands (Maubrey 1990). Besides his diplomatic credentials, Aubert was very familiar with mining finance from his commercial experience in Amsterdam’s diamond trade and become convinced that Johannesburg was central to the future economic development of southern Africa (Aubert 1889). With Aubert’s personal recommendation, France’s Foreign Ministry recognized President Kruger’s republicanism as a key in counteracting British expansion in southern Africa, instructing France’s consul to confer the Ordre national de la Légion d'honneur to the President in a pompous ceremony in Pretoria on 6 June 1888 to mark the new dawn of the diplomatic relationship between the French Third Republic and the ZAR (AMAEA. Correspondance Commerciale Pretoria 1887-1895. Tome 7. 3 March 1887). Although initial diplomatic interest was restricted to facilitating investments in the ZAR’s transportation and telecommunication 9 infrastructure, Paris’ growing interest in the Rand directed the French diplomatic mission to focus on new investment opportunities in mining and finance. Paris-based investors became significant purchasers of South African securities during the early days of the Rand gold rush and the collapse of the 1889 boom in Johannesburg and London prompted French banks to actively support the formation of the new group system (PBA. 11DFOM/221/34. 10 July 1894). In a strategic move to help stabilize the ZAR mining market during the 1889 slump, the French government and sought to popularize the early ‘successes’ of Johannesburg’s gold industry vis-à-vis the international investing public at the Paris Exposition Universelle of 1889 (Aubert 1889). As the only non-French colonial territory from Sub-Saharan Africa officially invited to participate in the world’s fair, the ZAR was presented with a unique opportunity to promote its industrial potential at the highest diplomatic stage (Standard and Diggers News, April 4, 1889). Financial intelligence and its dissemination to market stakeholders in the form of media products such as newspapers, journals and periodicals catered to the growing enthusiasm of 19th century investing crowds by providing ready access to prices on local, regional and international markets (Marks 2016). South African and British periodicals reporting on South African gold mining were widely available in France since the mid-1880s. Standard and Diggers’ News and the South Africa Mining Review were in significant circulation in Paris and a number of French financial companies specialized in organizing subscriptions for their customers (Michelet 1896; Lamy 1896). Although the first Annuaires on Johannesburg’s gold fields only appeared in 1896 (Lamy 1896), the first French monograph solely devoted to the financial analysis of South Africa’s gold mining industry came after the first JSE share boom in 1890, from the French pioneer of financial analysis on African gold mining, Henry Dupont. His Les mines d'or de l'Afrique du Sud was the first detailed guide to South African gold mining and paved the way for increasing French interest in South African securities (Dupont 1892). Further and sustained media exposure on South African gold mines and financial products triggered with the help of another Henry Dupont publication, this time in the form of the Revue Sud-Africaine (Revue Sud-Africaine, May 21, 1893). [FIGURE 1 ABOUT HERE] As displayed by many of his contemporaries in Paris, Henry Dupont was not just a financial journalist, but more importantly, an active investor and co-founder of Le Champ d’Or (Dupont 1892), the first French-owned and financed mining company to operate in the ZAR. Dupont, 10 after having travelled through British colonies, Boer republics and Portuguese settlements in Southern Africa as part of a newspaper-financed expedition, established numerous financial contacts with European investors in Johannesburg and Pretoria (Dupont 1892). It obviously comes as no surprise that he used his publications to market the “successes” of the South African gold mining industry, using the example of his “unique enterprise (Dupont 1892).” By French mining market standards, the company was indeed unique. Established in London on 27 January 1891, with the financial backing of the Banque des Chemins de fer et de l’Industrie, the first Board of Directors boasted with the names of European aristocracy and financial elite, including the Prince André Poniatowski (who had just returned from a reconnaissance trip to Johannesburg), Daniel Gueyraud, Count Pisani and, of course, Dupont (Dupont 1892). The company was launched after the London takeover of King Solomon’s Mining Company which was sold due to the unpredictable costs needed to convert the operations to a deep-level mine (Goldman, 1892). The company’s local presence in Johannesburg was headed of J. Berlein, G. Imroth and the French Doctor J. Magin, who were all members of the JSE. By emphasizing the international character of the board, Le Champ d’Or sought to promote an image of financial stability and European familiarity in a relatively unchartered market segment of foreign securities available to French speculators. With the establishment and participation of a consortium of French companies specialized in South African mining, Paris’ capital market was becoming increasingly captivated by new portfolios of ZAR stocks (The Economist, November 17, 1894). The Paris Bourse and the introduction of South African mining securities Although Paris´ financial market was considerably smaller than London and the Paris Bourse’s nominal value of listed shares was half as large as that of LSE at the end of the 19th century, the French capital was Continental Europe’s premier financial and commercial centre (Bussière and Cassis 2005). By the 1890’s, the state regulated Paris Bourse was firmly propositioned at the heart of the French securities market, with the buying and selling of French government debt as its main purpose, both in value and issue (Michie 2007). Throughout the second half of the 19th century the Paris Bourse preserved the duality of an official market with the parquet, where the number of stockbrokers was limited by law (set at 60 in 1724 and raised to 80 in 1898), and a free market, the coulisse, where trade in stocks not quoted on the official list was open to everyone (Cassis 2010). The parquet’s regulated market was organized by the Compagnie des agents de change, the semi-private corporate body with a legal monopoly on all transactions (Hautcoeur, Amir and Riva 2010). Only the authorized agents de change could 11 trade securities on the official parquet since only they could provide guarantees to the investors and had access to the Bank of France settlement mechanisms. There was significant competition and cooperation between the two markets, prompting regular legal battles over which securities were included in the agents’ de change monopoly (Riva and White 2011). Largely free of customs and strictly-upheld regulations, coulisse brokers were much quicker and efficient in recognizing international commercial trends than the government-endorsed agents de change (Riva and White 2011). It may, therefore, not be surprising that between 1890 and 1898, the volume of the business on the coulisse was as much as 50% greater than on the parquet (White 2007). More significantly for the ZAR mining market, it was in fact on the coulisse that the majority of foreign stocks were listed during the 1890s (Hautcoeur, Amir and Riva 2010). Unlike in London, but similar to Johannesburg, major French and international banks were allowed to establish offices inside the Bourse, giving them direct access to the brokers (Michie 2007). Banks also traded stocks on the coulisse where they could participate unhindered by government regulation and intervention. By simultaneously trading on both the parquet and the coulisse, and additionally knowing the state of their customers’ accounts, banks could convince potential investors to buy and sell across their own counters rather than via the Bourse’s official clearing system (Flandreau and Sicsic 2003). The active participation of large international banks on the Bourse was almost always associated with promoting new foreign stocks and shares directly to the investing public. It was indeed the growing French interest and trade in South African mining securities during that provide for an interesting perspective on the market for foreign company stocks in Paris. Until the increased availability of South African mining securities in the early 1890s, French stockbrokers held foreign portfolios made up mostly of fixed income securities such as sovereign and colonial bonds, and to a lesser extent, railway stocks (Esteves 2011; Hautcoeur 2007). After trades in foreign securities off the Paris Bourse were fully legalized in 1893, a boom began in South African gold mining stocks, focused mostly on the Coulisse (White 2007). According to the Revue Sud-Africaine, by the end of May 1893 there were as many as 50 South African mining securities available on the coulisse (Revue Sud-Africain, June 11, 1893). The first significant South African mine that caught the attention of the Paris press was owned by the prominent JSE-member Joseph Robinson (Revue Sud-Africaine, October 15, 1893). Shares in the Robinson Mine, the most capitalized of the mines on the Rand until 1890 (Dupont 1890), were introduced to the coulisse with the help of the Banque Russe et Française in October 1889, and by 1892 nearly half of the mine’s shareholders were based in France (Le 12 Figaro, November 8, 1889). Although contemporary reports also document the availability of shares of Johannesburg-based mining companies such as Salisbury, City and Suburban, and Jumpers (Dupont 1890), there is only limited financial data that can be used to estimate the extent of their circulation on the coulisse and even less to base generalisations about composition of French shareholders. What can nonetheless be observed is that compared to London, Paris was a late entrant to the South African mining market, giving French speculators new opportunities to direct their investments away from sovereign bonds and in favour of private foreign securities (Esteves 2011). The first South African mining company to successfully list on the main floor of the Paris Bourse was the Langlaagte Estate, on 14 June 1894 (Cours Authentique et Officiel. December 12. 1895). It would, however, be a South African banking company specialized in gold mines that succeeded in the first longer period of trade on the parquet (Le Figaro, June 15, 1895). The Robinson South African Banking Company was established and immediately listed on the parquet on 19 August 1895 (Cours Authentique et Officiel, March 5, 1895). Having already collaborated with the Jules Porges and other French diamond investors in Kimberley in the late 1870s, Robinson used his long-established network in Paris to gain market exposure and foster relationships in Paris’ banking sector (Kubicek 1979). According to Le Figaro, the bank was constructed as a major partnership between English capitalists, a Johannesburg-based French mining syndicate run by Paribas and the Société Générale de Paris (Le Figaro, August 17, 1895). Another ZAR listing in Paris with any long-term perspectives was the Treasury Gold Mines. The initial offering in Paris was officially recorded as on 30 July 1895, but the shares only started circulating on the parquet a year later, in July 1896 (Cours Authentique et Officiel, July 2, 1896). The Treasury Gold Mines were a major European reconstruction of the Johannesburg-registered Treasury Gold Mines which was a complete financial failure right from its establishment in 1891. Although the company was brought back to life in London on 24 June 1895, with the subsequent generous financial and political backing of the Banque française d'Afrique du Sud, the bank was able to list in Paris and generate new interest in ZAR mines that were slowly beginning to appear on the parquet (Lamy 1896). While the circumstances might have allowed for other South African companies to list on the parquet, it remains that the isolated cases studied in this section were directly associated with influential banks such as the Banque de Paris et des Pay-Bas (Paribas) and Société Générale that guided their journey onto the Bourse. Apart from Langlaagte, Treasury Gold 13 Mines and the Robinson Banking Company, there were no other South African-incorporated securities on the parquet of the Paris Bourse until well after the September 1895 Krach. New Syndicates and financial intermediaries An active intermediary role in South African gold shares can be traced back to the summer of 1894 and the establishment of the Syndicat Sud-Africaine as part of an international partnership between Johannesburg’s Corner House and Paribas. By allocating portfolios of Rand shares among Parisian investment partners and establishing links with the coulissiers, the Corner House cooperated with several French banks and influential agents de change to publicise the merits of a new wave of South African deep-level mines (Kubicek 1979). Charles-Eugène Dutilleul and Henri-Jules Béjot were two of the first Paris Bourse brokers in the new South African Syndicate (PBA. Transvaal. SGY/B/154). Although Kubicek (1979) claimed that there might have been as many as 25 agents de change involved in the Syndicate, the figure was probably much smaller and constantly changing. Nonetheless, the participation of just a few agents de change indicated the Syndicate’s ability to infiltrate the organizational structures of the Paris Bourse. With the Syndicate established, 1895 would see the development of a further two key institutions that reflected Paris’ sudden rise in demand for information and financial products associated with South African gold mining. In February 1895, a group of French bankers, led by Baron Hély d’Oissel, the then vice-president of Société Générale, Comte Moïse de Camondo, the marquis d'Hautpoul, J. Kulp and E. May, established the Compagnie française des mines d'or de l'Afrique du Sud (PBA. PTC/166/5. 6 July 1949). According to the initial prospectus, the company was created under the auspice of the Société Générale de Paris and La Banque Internationale de Paris. The business objective of the company was to provide financial services and products associated with French commercial interests in southern Africa. In the first annual report, published on 21 March 1896, management assured that the company was already representing 22 South African mining companies in Paris, and had significant influence on the shareholders in their general assemblies (PBA. PTC/166/5. 6 July 1949). The second key French institution of that same year was the Banque française d'Afrique du Sud. Established in late October 1895, with a nominal capital of Fr. 50 million, the objective of the bank was to represent French capital interest in South African mines and secure longterm French commercial interests in the ZAR and Orange Free State (Michelet 1896). The first board of directors boasted some of the most influential French capitalists of the Belle Époque 14 (See Figure 2) with links to the management of the Paris Bourse and extensive European banking networks. The direct connection to the leadership of the Bourse was particularly relevant and confirmed to what extent official brokers tracked the development of the South African market. As head of la Compagnie des agents de change since 1891, Herbault was one of the first Parisians financiers to take an active interest in the industrialization of the ZAR and even drew up an elaborate plan for greater electrification of the Orange Free State with his brother Charles Herbault in 1887 (Oppenheimer 1950). At the time of the bank’s establishment, Étienne Nemours Herbault, the director of the new financial institution, was still the head of the Compagnie des agents de change and would only retire from the position a few days later (Le Figaro, October 25, 1895). There is unfortunately very little concrete evidence available to show if and how Herbault’s departure from the Bourse’s Compagnie des agents was directly influenced by his participation in the growing market for South African mining stocks. However, reports coming out of Paris´ banking community suggested that it was Herbault’s inability to influence the introduction of ZAR securities to the parquet and his close connection to the Wernher Beit Group that prompted his decision to start the new financial intermediary. According to the Financial Times, Herbault’s withdrawal from Paris’ Compagnie des Agents and the new bank’s sole focus on the South African mining market suggested that the “new era of popularity in South African ventures [would] be of longer duration than has been predicted (Financial Times, October 30, 1895).” [FIGURE 2 ABOUT HERE] The formation of the specialist bank illustrated the pivotal role of Parisian financial intermediaries in generating financial and social capital for South Africa’s growing mining industry. French diplomatic observers quickly pointed to the growing influence of Johannesburg´s Randlords in Paris and the close JSE connections (PBA. 11DFMO/221/134), February 1899). It came as no surprise to the French consulate in Pretoria that two of the bank’s four largest shareholders were Wernher, Beit & Co. (5%) and Sigismund Neumann (10%), all with representation in the General Committee of the JSE (JSEA. 12 November 1895). The Banque française d'Afrique du Sud development was also closely linked to the Transvaal Chamber of Mines and Johannesburg’s mining community. In October 1895 the Chamber of Mines appointed the Paris-based bank to be the official representation of the Chamber in France (SACMA. Annual Report for the year ending 1896. 1897). 15 Relying on a growing financial network between Johannesburg and Paris, the Randlords’ expansion from the Rand to the French mining market was personified by Johannesburg-based George Rouliot. After coming to South Africa in 1882 as the General Manager of the Compagnie générale des mines de diamants in Kimberley (Wills 1907), Rouliot became involved in Rhodes’ inner commercial circle during the De Beers amalgamation in 1888 (Newbury 1987). Having supported Rhodes on a number of fruitless exploration campaigns in search of the “second Rand” in Bechuanaland and Mashonaland, Rouliot was invited by Rhodes to Johannesburg and join the board of directors of Wernher, Beit & Co. in 1889. Considered to be the most influential expert on South African mining finance, Rouliot was quickly inducted into the Transvaal Chamber of Mines board of directors (SACMA. Annual Report for the year ending 1890. 1891) Although it cannot be deduced that Rouliot was in any way representing or assisting the expansion of French commercial interests to southern Africa, as a Frenchman, and the first non-British vice-president of the Chamber of Mines (SACMA. Annual Report for the year ending 1895. 1896), his extensive financial experience in South Africa and his close association with the Corner House gained him particular respect in Paris’ financial circles. With careful mediation of the Corner House and the Chamber of Mines, Rouliot was recruited by Paribas to manage the transfer and delivery of South African shares to the Paris market in October 1895 (PBA. PTC/166/5. 6 July 1949). The Banque française d'Afrique du Sud’s initial shares were distributed amongst some of the most influential Parisian financiers of the time, but more importantly, showed the overwhelming participation of Paribas, its founders and directors in its books. Out of the 10 000 shares issued at a par value of Fr. 500, the Paribas purchased more than a half, with the banking group’s cofounder and chairman at the time, Eugène Goüin, purchasing 1300 shares. Additionally, other Paribas co-founders, previous chairmen and directors, such as Bamberger, de Bauer, de Germiny and Noetzlin, became significant shareholders (PBA. PTC/166/5. 6 July 1949). The development of the above-discussed financial intermediaries between August 1894 and October 1895 indicated a coordinated international response to Paris’ growing demand for South African gold shares. The Syndicate, Compagnie française des mines d'or de l'Afrique du Sud and Banque française d'Afrique du Sud shared the same objectives and similar financial roots. The establishment, growth and acceptance of French financial intermediaries specialising in South African mining stocks further illustrated the convergence of European financial networks with Johannesburg’s financial elite. 16 Barnato, Robinson and the summer of ’95 Just as on the British markets, 1895 was the most important year for French investors since the earliest development of the Rand’s gold industry (Lamy 1897). The Fièvre de l'or had attracted French investors throughout the second half of 1894 in unprecedented numbers, with between Fr. 800 million and Fr. 1 billion invested in South Africa’s mines (Hautcoeur, 2007). Initially using London-branches of French banks such as Credit Lyonnais for quick arbitrage operations, Parisian investors were suddenly presented with speculative opportunities on their own doorstep (Van Helten 1985). Although there is little direct causality, it was precisely during this period of over-proportional French participation that the international market for South African securities cracked and triggered a further financial (and political) crisis on the markets in London and Johannesburg (PBA. PTC/166/5. 6 July 1949). According to the co-founder and co-owner of the Banque française d'Afrique du Sud, Jacques de Gunzburg, just before the collapse of the South African gold share boom in Paris in September 1895, French investors “sank up to £ 32 million in Rand stock and shares (Van Helten 1985).” The South African mining market dominated the Paris trade in foreign securities throughout September. (The Financial Times, September 4, 1895.) The British Colonial Office viewed the spike in French investments in ZAR mines with some concern and was anxious that, if the trend continued, it would severely harm British economic dominance in the ZAR. French financial reporters placed great emphasis on dividends paid out by South African companies and unlike the British financial press, paid very little attention to non-dividend paying shares. It was estimated that in 1895 more than Fr. 160 million was paid out in dividends, up from Fr. 89 million in 1894, Fr. 70 million in 1893 and Fr. 55 million in 1892 (Lamy 1897). The French consul in Pretoria, Victor-Stéphane Aubert, was particularly concerned about France’s sudden interest in South Africa’s mining market. From his vantage point in Pretoria, Aubert questioned the seriousness and credibility of financial information coming out of South Africa and London, and its application to financial decisions taken in Paris. Aubert’s much circulated report in early 1895 warned of an inflated Johannesburg market, declaring that it would not take much to depress South African prices locally and in Paris (Revue SudAfricaine, May 11, 1895). The lengthy report, published in the Revue Sud-Africaine and then further discussed in Le Figaro, presented a very pessimistic outlook on the future of the South African mining market in London, and questioned its disproportional and rapid growth in Paris (Le Figaro, May 14, 1895). 17 Even some local financial commentators in Johannesburg doubted the French investing public’s sudden appetite for South African mining stocks. For the first time in its history, the JSE’s General Committee reported on French banks’ interest in the “formalities of sharetrade in Johannesburg (JSEA. 12 April 1895).” The Standard Bank’s Johannesburg branch went as far as stating that France’s new enthusiasm for JSE’s stocks “lengthened the lives” of numerous outcrop mines which were believed to be unprofitable (SBA. GMO 3/2/1/1. 7 August 1895). Further reports in Johannesburg’s The Star (February 4, 1895) and the Standard and Diggers’ News (November 14, 1893) questioned the seriousness of French capital investments in southern Africa’s mineral industry but welcomed the great attention South Africa’s financial sector had received in Paris. The first signs of significant French participation in the South African share trade can be traced back to early March 1895 (Esteves 2011). The publication and wide circulation of Felix Abraham’s (1895) translated brochure in Paris, The Excesses of the Witwatersrand Gold Shares Speculation of 1894, at the beginning of 1895 ushered in a new era “on a level with the zenith they attained in the recent London boom (The Financial Times, March 5, 1895).” The compact brochure introduced the French investors to the financial details of London’s South African mining market and was widely available in French- and German-language editions throughout Paris in 1895. Although British speculators were already caught in the ZAR’s gold fever since the beginning of the year, specialized financial intermediaries in France and lower interest rates led speculators to a new “large bull commitment (The Financial Times, March 5, 1895).” Paris had previously followed London’s fascination with the ZAR market, but this time it would be France at the centre of a new continental rush to South African stocks. It came as no great surprise that the figure who personified the South African gold industry in Paris during the 1895 was the JSE’s proprietor, Barney Barnato. Le Figaro referred to him as South Africa’s very own “Roi de l’Or”. In a lengthy cover page article summarising his fifteen-day Paris stay at the Hotel Bristol in March, Barnato was described as a financial visionary, promoting South African mines and, ironically, was deterred only by “gambling (Le Figaro, March 18, 1895).” Although his control of the JSE through his holding company, the Johannesburg Consolidated Estate Company (Goldman, 1892), was not widely known to Paris’ financial community, the JSE’s General Committee hoped that his stay in Paris would in some way popularize the Exchange and its securities in France (JSEA. 12 April 1895). Barnato returned to Paris again in the first week of September and was to proceed to Vienna and other European financial centres before returning to London in order to establish agencies for his Johannesburg group of companies (The Star, September 19, 1895). Days before arriving in 18 Paris on 12 September 1895, Barnato launched his most dubious Johannesburg-incorporated business venture, the Barnato Bank, Mining and Estate Corporation in London, and before the ‘bank’ began to conduct any business, shares were already trading at three and a half times their nominal value (Leasor 1997). Although Société Générale did not want to help Barnato in marketing his stocks in Paris (The Economist, August 31, 1895), the Viennese Landesbank branch in Paris and the officials of the Comptoir D’Escompte provided Barnato with the necessary administrative support to supply his stocks to the Paris market (PBA. PTC/166/5. 6 July 1949). The peak of the Parisian boom can indeed be traced back to Barnato’s operations in Paris during the first week of September. After revealing his plans for the Barnato Bank to the international financial press, Parisian brokers introduced large quantities of ZAR mining stocks and exploration companies that, for the most part, were underdeveloped or not even in operation (Kynaston 2011). Using the expected slowdown in trading activity during the Jewish New Year celebrations between 5 and 9 September, the coulisse was swarmed by new ZAR shares brought over from London or directly from Johannesburg (Le Figaro, September 7, 1895). As already investigated earlier in this article, Robinson’s entry into the Paris market with the Robinson Bank was made possible by earlier connections to Paribas that helped with the introduction of the Robinson Gold Mining Company to the coulisse (Lamy 1896). Although not alone, Robinson and Barnato were instrumental in creating holding companies and banks geared towards promoting South African gold mining in general, and their own Johannesburgbased mines in particular (Newbury 2009). The new French financial intermediaries were part of the growing South African lobby in Paris to convince the local investors of the integrity of Johannesburg’s deep-level enterprises. Barnato and Robinson’s ability to cultivate close links with influential financial institutions and politicians eventually paved the way for many foreign financial outsiders to enter the Parisian market (Coulson 2012). The Paris Krach and its international impact Despite the rising media exposure around the new French investments in South African mining, the gold mining shares were distributed among a very narrow pool of Paris-based investors (Le Figaro, January 3, 1896). Although the Parisian market for South African stocks was accessible to everyone, only a small circle of financiers with established links to brokers and financial intelligence dominated the trade. According to Kubicek’s initial calculations, the average number of French shareholders in a sample of 29 South African mining companies was 397 compared to London-based shareholders who averaged above 800 per company (Kubicek 19 1979). With large amounts of capital following a small number of well-connected investors, the French financier was attracted to all the tricks and unusual financing techniques of, by then, a very experienced Johannesburg commercial elite. September proved to be the most challenging time for South African stocks in circulation in Johannesburg, Paris and London. Most portfolios introduced to the market by Barnato, Robinson and Farrar throughout September were shunned by the coulissiers who were now convinced that South African speculators had no serious intention to offer the best stocks to the French public and continued to disguise unprofitable individual mines in large portfolios marketed by the Randlords (Kubicek 1979). Le Figaro (October 20, 1895) saw the sudden unexpected turn in the market as a result of the South African deep-level group system introducing piles of worthless stock and believing that the personalities associated with their holding companies would create and maintain the necessary market attraction. In comparison to London where the boom of 1894 tested the South African mining market acceptance between trade on the LSE’s Official List and the over-the-counter market in and around Throgmorton street (Michie, 2002; Kynaston, 2011), the Paris boom and rapid crash was largely restricted to the coulisse. Paris went from bad to worse, when suddenly the coulissiers discovered that the massive over-supply of South African stocks was managed by only a few potential brokers. Although there were no South African mining stocks trading on the parquet in October 1895 (the only ZAR-registered company on the parquet at the time was the Robinson South African Banking Company), the outside mining market influenced the trade on the main floor. The financial panic had spread from the coulisse to the parquet, where according to White (2007), the total value of the Bourse’s share index declined by just over 1% in October and the huge sell-off on the coulisse was held to be the negative driving force for the remainder of the year. On 1 October, Le Figaro’s stock exchange column opened with the sentence, “la bataille de la liquidation est commencé”. Bankruptcy was on everyone’s lips and soon enough brokers were selling whole South African portfolios on the coulisse Le Figaro (October 1, 1895). In order to prevent a major spillover of risk from the defaulting brokers on the coulisse, the Chambre Syndicale des Agents de Change intervened to restrict the relations between the agents and the coulissers (Riva and White 2011). What followed was the largest international crisis in ZAR securities since the 1890 collapse of markets in Johannesburg and London. The volumes of stock trade on the coulisse dropped sharply to levels nearly as low as on the Bourse (Riva and White 2011). Small French investors and large international brokerage houses who a short time before had been paid out dividends beyond all expectation saw their profits and savings depleted. Additionally, the direct 20 involvement of French banks turned the stock exchange crisis into a banking debt crisis (Flandreau and Sicsic 2003). With the Banque de France leading the negative sentiments, the Société Générale and Banque Ottoman’s involvement in the South African mining market was quickly exposed leading to a further decline in banking stocks. (Le Figaro, October 11, 1895). The collapse of the South African market on the coulisse ushered in significant regulatory changes to the structure of Paris’ share trade. The coulisse was blamed for tolerating and abetting dubious stock trades in foreign securities. The coulissiers responded to the accusations by organising themselves into a professional syndicate and adopting a set of regulations that was intended to increase the transparency of the coulisse’s operations (Flandreau and Sicsic 2003). As investigated by Riva and White, the French government intervened to reinforce the Bourse’s monopoly by prohibiting all off-exchange trading in listed securities illegal. The Bourse itself responded to the increased scrutiny from the government by raising the legal number of official agents de change from 60 to 70 and the number of brokerage clerks from 4 to 6 (Riva and White 2011). As a major reform to the Bourse’s risk management practices, the government insisted on pushing forward a joint liability guarantee for all agents de change in law on 13 April 1898 (White 2007). Although the reforms were initially in direct response to the ZAR mining market crash, the reorganisation of the stock market allowed the parquet to succeeded in capturing a major share of all the trade from the coulisse, resulting in a doubling of the Bourse’s trade during the course of 1896 (Riva and White 2011). The JSE and the whole Johannesburg financial community observed the events in Paris with disbelief and great concern. When the fall of prices continued into the final quarter of 1895 it became reasonably clear that the Krach in Paris might easily entail the downfall of the international market for ZAR mining stocks and, just as in 1889, lead Johannesburg’s deeplevel mines and financial sector into a long-term crisis (The Star, October 11, 1895). The largest losses during October were suffered by the Barnato group of companies (See Table 2). Along with Robinson and Farrar, it was Barnato above all who had created the bubble by flooding the market with dubious portfolios of South African stocks (Wheatcroft 1987). [TABLE 2 ABOUT HERE] The major development, however, during the peak of the Paris crisis was the establishment of the aforementioned Banque française d'Afrique du Sud. Despite a very short, but sharp rally in South African stocks after the formation of the bank was announced to the French investing 21 public, the establishment of the bank turned out to be nothing more than a temporary distraction (The Economist, October 26, 1895). Most ZAR shares on the coulisse were still very much under pressure and only two gained in price after the creation of the new bank was announced (See Table 3). It probably was no coincidence that the two companies that managed to hold their value, Langlaagte and the French Mines d’Or (Champs d’Or), were highly prized by the real promoters of Banque française d'Afrique du Sud, namely, Paribas. [TABLE 3 ABOUT HERE] Johannesburg’s Corner House and the Banque française d'Afrique du Sud worked together to bring some stability to the market, ensuring that the better (i.e. dividend-paying) stocks did not collapse completely (Kubicek 1979). The ability to influence the collection and dissemination of financial intelligence in the Parisian press was a critical information component of the South African market. As the bank’s co-owner, Gunzburg’s partnerships with numerous Parisian newspaper editors were of some help in bringing temporary relief to the dismal state of the coulisse, but Paris clearly had enough of the speculation around South African gold shares. Gunzburg’s letter to Le Figaro on 20 October, emphasized that the French public had totally ignored the rapid rise in gold production of the new deep-level mines and focused only on dividend payments was a final effort to save the reputation of Parisian banks, but achieved very little towards injecting any confidence back to the coulisse (Le Figaro, October 20, 1895). The Krach of 1895 confirmed the interconnected nature of the globalized market for South African gold securities (Phimister 1993). The collapse of the Paris market, coupled with the growing uncertainty of the financial sector in Johannesburg, put the JSE under severe pressure to find a common rescue strategy with Barnato’s Johannesburg Consolidated Estate (JSEA. 29 October 1895). The only stock that made solid price gains in Johannesburg during October was that of the British South Africa Company (Phimister 2015). After the publication of the BSAC`s 1894 Annual Report confirming the successful ending of the Ndebele War and a renewed confidence in the development of gold mining in Matabeleland, the recently opened Bulawayo Stock Exchange was flooded by listing applications from various exploration companies (Karekwaivenani 2003, Phimister 1974). Some of these gains were also attributed to Otto Beit, the Director of the BSAC and Rhodes’ financial representative in Johannesburg, being admitted into the JSE`s Candidate Examining Committee, securing one of the most influential positions within the JSE management structure (JSEA. 8 October 1895). As a director of a British chartered company operating from Johannesburg, his much-advertised new 22 position at the top of the JSE’s organizational structures settled some initial doubts on the BSAC’s ability to operate in an increasingly financially volatile and politically polarized South African Republic. The international financial crisis had immediate consequences for the political future of the South African Republic. Members of the Transvaal Chamber of Mines saw the collapse of the international boom as an opportunity for Johannesburg’s mining and financial community to pressure the Pretoria government into more political and economic concessions (Blainey 1965). The Chamber had already galvanised its members to lobby against a political escalation of Kruger’s anti-British policies and Pretoria‘s continued neglect of demands for extending the franchise of the vote to non-Afrikaners residing inside the ZAR (Lang 1986). During the course of his speech marking the opening of the new building of the Chamber of Mines in November, Lionel Phillips, the President of the Chamber and one of the leaders of Johannesburg’s Reform Committee, threatened the authority of Pretoria by claiming that the leaders of the gold industry would not be content to remain politically marginalized in the settler republic which had become wealthy as a result of their collective efforts (Klein 1948). With Rhodes marketing his financial products in the South African Republic and Rhodesia, Johannesburg’s politically agitated population utilised its strategic link to regional and international finance as a drawing card for British support against Kruger (Kubicek 1972). Rhodes soon began to rally his imperial contacts in London, with clear intentions of taking British power into the Boer republics (Phimister 1974). The continued decline of the mining markets in Paris, London and Johannesburg dashed most hopes of any immediate positive change, adding to the already heightened political atmosphere in Johannesburg’s financial community. With Rhodes using his BSAC administration in Matabeleland to influence the Corner House, the Chamber of Mines and many disgruntled members of the JSE, the Paris Krach of 1895 set the perfect backdrop for a direct confrontation between Johannesburg’s mining capital, British imperialism and President Kruger’s republicanism. Conclusion The history and historiography of 19th century South African mining finance reflects the globalisation of financial markets and social mobility during the high age of European imperialism in Africa. Investments in southern African diamond and gold mining industries constituted the largest flow of financial capital from Europe to the African continent during the final quarter of the 19th century. Although much has been written about how the City of London’s financial and political intermediaries influenced the political economy of southern 23 Africa, very little is known about how Continental Europe’s largest financial centre became preoccupied with mining securities and financial intermediaries coming out of the ZAR. In view of this lacuna, this investigation exposed the origins and results of the direct connections between Paris’ financial sector, the ZAR’s gold mining industry in Johannesburg and the political networks in Pretoria during South Africa’s first era of financial globalization. Using the central function of the Johannesburg Stock Exchange, the analysis of Johannesburg’s financial class and its interaction with the Parisian mining market exposed new evidence on the Randlords’ financial and political ambitions. The major objective of this article, however, was to present a comprehensive overview of French financial interests in the ZAR after the transition to deep-level mining in the early 1890s and expose the financial and social connections to the South African mining market leading up to the Paris’ Krach of October 1895. Given the largely nontechnical and descriptive analysis, the list of connections between Johannesburg, Pretoria and Paris put forth is not claimed to be definitive and exhaustive. Rather, the goal was to inquire as to what institutional and organizational developments the connections led. Along with dissemination of South African financial information and intelligence, the contribution of French banks such as Crédit Lyonnais, Paribas and Société Générale to the development of the South African mining market in Paris illustrated how Johannesburg’s Randlords were able to infiltrate the upper echelons of France’s financial and political society. The Paris Bourse and its complimentary coulisse where most of the trade in ZAR securities took place, became the new financial loci of investments and innovation in the South African mining market. More significantly for the study of Johannesburg’s international financiers and their international mobility, it was the presence and active assistance of Frenchmen such as Victor-Stéphane Aubert, Henry Dupont and Georges Rouliot who helped to facilitate the Randlords’ access to Paris’ financial sector and money market. The main analytical dimension illustrates the institutional make-up of French financial intermediaries specialised in the marketing and sale ZAR mining stocks. The internationalisation of the South African mining market in the early 1890’s led to the development of French-initiated and South Africa-oriented institutions such as the Paribas “French Syndicate”, Compagnie française des mines d'or de l'Afrique du Sud and the Banque française d'Afrique du Sud, all contributing to the availability and soon enough rapid popularity of Johannesburg-incorporated mining stocks in Paris throughout 1895. The sudden boom and abrupt decline of Paris’ marché sud-africaine exposed the speculative nature of Johannesburg industrial capitalists such as Barnato, Farrar and Robinson, thus worsening the reputation of 24 the JSE and its financial products in Europe. Although Paris’ South African mining market remained largely restricted to the unofficial coulisse, the appearance and acceptance of the new deep-level mining stocks tested the market duality of the Paris Bourse. As explored through the case of Étienne Nemours Herbault at the head of the Chambre Syndicale des Agents de Change, the introduction of South African mining stocks to Paris throughout 1895 was seen as a significant warning to the regulatory division between the parquet and the coulisse. The combined market and financial crisis of October 1895 threatened the Bourse’s tolerance of the coulisse, prompting a reorganization of the financial system that supported it. This reorganisation allowed the parquet to succeeded in capturing a major share of all the trade from the coulisse. Although the exact sequence and contribution of the Paris Krach to the Jameson Raid of December 1895 was not at the core of the investigation, the evidence presented links France’s capital market to the deterioration of Johannesburg’s economic and political climate that eventually prompted the British South Africa Company’s disastrous military campaign against President Kruger’s government. It is timely therefore that this article re-examined South African mining finance from a different geographic location and used the connections stemming from the JSE as a very different point of reference. Ultimately, the far-reaching international consequences of 1895 Parisian crisis demonstrated that despite the global nature of the South African mining market, attracting foreign capital to the ZAR’s mining industry would remain a constant problem for Johannesburg’s financial elites. 25 References “A Travers Paris.’’ Le Figaro. 25 October 1895. p. 1 “Advance of the heavies.’’ The Star. 4 February 1895. p. 3 “Banque française d'Afrique du Sud.’’ Frankfurter Zeitung. 26 August 1895 “Figaro a la Bourse.’’ Le Figaro. 3 January 1896. p. 4 “Foreign Interest in Mining Industry.’’ Standard and Diggers’ News. 12 May 1892. p. 4 “France.’’ The Economist. 26 October 1895. p. 1403 “France.’’ The Economist. 31 August 1895. p. 1146 “French Speculation in South African Shares.’’ The Economist. 17 November 1894. p. 1405 “Gold for the Paris Exhibition.’’ Standard and Diggers News. 4 April 1889. p. 3 “Kaffirs on the continent.’’ Standard and Diggers News. 21 December 1895. p. 3 “La Bourse.’’ Le Figaro. 1 October 1895. p. 3 “La Bourse.’’ Le Figaro. 12 May 1895. pp. 2-3 “La Bourse.’’ Le Figaro. 14 May 1895. pp. 2-3 “La Bourse.’’ Le Figaro. 11 October 1895. p. 3 “La Bourse.’’ Le Figaro. 15 June 1895. p. 3 “La Bourse.’’ Le Figaro. 17 August 1895. p. 3 “La Bourse.’’ Le Figaro. 20 October 1895. p. 3 “La Bourse.’’ Le Figaro. 7 September 1895. p. 3 “La Bourse.’’ Le Figaro. 8 November 1889. p. 3 “La situation de la Republique de Sud-Africaine.’’ Revue Sud-Africaine. 11 May 1895. p. 3 “Mining Market.’’ The Financial Times. 1890-5. “Mr Barnato at work. 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