would indeed have been uncharacteristic of Julius if he had avoided
talking business with Porgès, even on his honeymoon.
Business was his world, and for years to come Birdie was forced
to accept this. In any case Porgès had to plan another
visit to Africa. More capital was needed urgently for investing
in heavy machinery on the Rand, and here the key figure in Paris
to be won over was Rodolphe Kann, now a considerable friend of Julius.
Another matter for discussion was Beit's return to Europe as a full
partner in the firm, which would involve changes in structure and
Kann and his brother Maurice were originally from Frankfurt. Through
them Julius became interested in collecting Italian Renaissance
bronzes. Since he also was beginning to acquire Flemish and Dutch
paintings, the Kanns suggested that, like Porgès,
he should seek the help of Dr Wilhelm von Bode, at that time assistant
keeper of the sculpture and paintings department at the Kaiser Friedrich
Museum in Berlin and later to be that museum's celebrated director-general.
Julius seems to have made a start by actually buying and offering
to the museum two very acceptable Flemish pictures, dated about
1500. In his letter to Bode Julius said that although he lived in
England "part of his heart" was still in Germany.
Wernhers had moved into a pretty mid-Victorian house, which the
amused Rodolphe Kann called "bijou", 38a Porchester Terrace in Bayswater,
not far from Birdie's mother. In those rather heavily furnished
rooms, with plenty of draperies and curtains, potted palms and ostrich
feathers in vases, space for objects of art must have been limited,
so it is something of a surprise to learn that in 1890 Julius whilst
in Berlin bought the splendid (about three foot six inches high)
late fifteenth-century Spanish picture St Michael and the Dragon,
by Bartolome Bermejo. This masterpiece, originally from the church
at Tous, near Valencia, was to prove one of the most important pictures
in his entire collection. No doubt Bode recommended it because of
its rarity, and very likely it had been turned down by the museum.
The Flemish influence is obvious in the style, and the dragon is
certainly bizarre, like something dreamed up by Hieronymus Bosch,
but the glowing colours and the gilding, and the richness of the
details, including the depiction of jewels, must have appealed strongly
to Julius. Even so, the final effect is awesome, and one cannot
quite visualize it hanging in Birdie's drawing-room at 38a Porchester
Terrace. It was said to have been in a bad condition, and no doubt
was thus considered a satisfactory bargain.
meanwhile had been in London and had been introduced by Julius to
Beit, who had invited him to stay in his rooms at Ryder Street.
He was a shy man and thus obviously felt at ease with Beit. For
many years thereafter he helped him and, to a certain extent, Julius
in building up their enormous art collections. Beit's first major
acquisition was The Milkmaid by Nicolas Maes.
also acted as a dealer, and in his autobiography claimed that he
was able to secure several masterpieces for Beit at specially low
prices. The tradition is that he did not charge a commission; even
if this were true, which seems unlikely, Beit in his typically generous
way would surely have compensated him somehow.
admitted frankly that he hoped his clients would support the Kaiser
Friedrich, and both Beit and Julius obliged with gifts of money
and pictures. But there were grumbles about the Kanns, who bought
at auction and would only afterwards consult Bode about values,
thus avoiding paying a commission. There were hints that they might
instead remember the museum in their wills, but unluckily this never
came to pass.
arrival in London from Africa had been delayed, partly because of
developments on the Rand, partly because of unrest at Kimberley,
where commercial decline and unemployment were being blamed on De
Beers Consolidated. Early in June effigies of Rhodes, Beit and Barnato
were burnt outside the De Beers offices. This was followed by the
horrific disaster of a fire in the De Beers Mine, involving the
deaths of a third of the workers.
was now far from being a mere frontier outpost. Its gabled and fretworked
houses were not unlike Simla in India; it had become a metropolis,
"respectable", what with the arrival at long last of the railway,
and the installation of electric street lighting, the first in South
Africa. But the amalgamation of the mines had meant redundancies,
and white workers were being left destitute. The rich were being
tempted away to Johannesburg, which in spite of its discomforts
was being systematically planned in bricks and mortar. Shopkeepers
and merchants at Kimberley were also feeling the effect of the "closed
compound" system for black workers, once strongly promoted by Julius
Wernher among others as a way of combating IDB: workers, when not
in the mines, were kept shut in a kind of fortified area with its
own shops, baths and eating-houses, from the moment of their arrival
until their departure months later. No alcohol was allowed. Blacks
were also being subjected to humiliating body searches after work.
They were stripped naked, every orifice being probed, even open
sores, and their hair, armpits and spaces between the toes minutely
examined. Even more unpleasantly, they were purged with castor oil
in case diamonds had been swallowed. And it has to be admitted that
these last methods did produce some dramatic results. On a yearly
average 100,000 carats worth were recovered until 1901. A certain
amount of the De Beers work-force was convict labour: another saving.
mortality rate in the closed compounds was high. These compounds
have been seen as a crucial development in South African labour
had succeeded in arousing Rodolphe Kann's interest in the Rand,
and Jim Taylor was asked to follow this up with a "seductive" selling
letter. "There can be no doubt," Taylor therefore wrote to Kann,
"about the ultimate success of the gold industry on the Rand. It
is only a question of time, energy, practical mining and the investment
of more capital... Two years ago not a hole had been made and there
was no habitation anywhere on the Main Reef. The district was populated
by a few hundred farmers who owned nothing but the land they lived
on and who subsisted on the produce they raised from their lands."
he said, there were 3,000 houses and 1,700 inhabitants. (By 1892
the total population of Johannesburg was estimated at 21,715, of
which 15,005 were white.) Kann had no need to be told that the mining
of gold was quite different to that of diamonds, and that the problem
of IDB did not exist.
their arrival at Johannesburg Eckstein and Taylor had erected a
temporary wooden office on the corner of Commissioner and Simmonds
streets, but this was to be reconstructed in brick in 1889, and
later elaborately faced with ironwork. Whether fortuitously or,
more likely, by design, it faced the Stock Exchange, already an
imposing structure and designed to be permanent, though, as it happened,
much of the dealing was done out of doors in a chained-off area
between the two buildings. Known as the Corner House (partly a play
on the German meaning of Eckstein's name), it was to become famous
in the future city not only as a landmark but as the seat of a great
dominion that controlled the world's richest goldmines, and much
else besides. In 1904 the Corner House was rebuilt yet again, appropriately
the tallest building in Johannesburg.
spite of occasional glooms there was little doubt about the eventual
importance of this ridge in the heart of southern Africa. By 1894
a railway connection had been laid to Pretoria from Delagoa Bay.
There was a racecourse at Johannesburg. A fine new clubhouse, the
Wanderers, had been built, fit for tycoons and magnates.
a future there is before us in South Africa!" wrote the mining engineer
Theodore Reunert. A vast country waking up, as it were, from the
sleep of ages, and realising all at once that it is destined to
playa great part in the world. A superb climate, a fertile soil,
boundless mineral wealth, and, all round, millions of idle hands
waiting to be employed in its extraction."
which some could only utter Amen. Flora Shaw, the brilliant journalist
and admirer of Rhodes, thought Johannesburg "hideous and detestable",
without taste or dignity, dusty in the winter, a quagmire in the
summer. To Barney Barnato's cousin Lou Cohen it was a place where
men smoked like Sheffield and drank like Glasgow, and where the
air was perfumed with the odour of barmaids, who knew their prices.
The historian A. L. Rowse had two Cornish miner uncles who died
at Johannesburg, one crushed to death by a skip let fall by a drunken
his childhood Rowse used to hear of the "raw horror" and the gin
palaces of Johannesburg where concertinas provided the favourite
music and the dust from the mines clogged the lungs. By 1895 there
were ninety-seven brothels in central Johannesburg.
Wernher had been responsible for giving the firm a name for fair
play, and Eckstein and Taylor were expected to maintain this at
Johannesburg. The Corner House acted as a holding finance company
for the mines they floated. Each mine had its own directors and
management, but the firm had control over appointments and major
decisions. Hermann Eckstein's biographers have described him as
human, lovable and dynamic, with a skill in "frenzied negotiations"
while still maintaining an equable temperament. His portraits show
a pleasant bearded face and smart, well-cut clothes, and his wife
has gone down in history as having been the prettiest girl in Kimberley.
But an equable temperament did not help Eckstein's chronic insomnia
and other nervous ailments. He was without any doubt an immensely
respected figure in the South African financial and mining community,
and was given the 'unquestioning support' of his superiors in Europe
with virtually unlimited credit. Soon regarded as Johannesburg's
First Citizen, he was the natural choice as first President of the
Chamber of Mines. The policies of the Chamber of Mines, it need
hardly be added, on such matters as the control of wages and the
organization and flow of the "millions of idle hands" came almost
to be equated with those of the Corner House.
was three years younger than Eckstein. Their Lutheran upbringing
was something in common, but Eckstein's meticulous habits and formidable
energy appealed to him far more. Then there was that bond, shared
with Beit, of having roughed it together at Kimberley. The Corner
House partners kept one-fifth of the profits and were free to invest
on their own accounts. The rest of the profits went to London. Every
week Eckstein wrote a long letter to 29 Holborn Viaduct, so detailed
that business colleagues and rivals were amazed by Julius's intimate
knowledge of the topography of the Rand, which of course he had
never seen, and its personalities, even its gossip.
also strove to keep the firm out of politics, knowing Julius's attitude.
He used to say that whenever someone came into the office and talked
politics he would see Julius's face on the blotting paper before
Porgès and Julius had been nervous of seeming to be
too closely allied with the controversial J. B. Robinson, so the
Johannesburg office became known simply as "H. Eckstein".
was still in his twenties, six feet tall and South African born,
regarded as an excellent mixer; "he knew everybody by their first
names." Eventually he became based in Pretoria when it became important
for the firm to be in more direct touch with the government and
in particular the wily old President, Paul Kruger, whom Carl Meyer
of Rothschilds aptly described as a "queer old Boer, ugly, badly
dressed and ill-mannered, but a splendid type all the same and a
very impressive speaker". Kruger was, unfortunately, a man of very
little education, in spite of his intelligence, with a literal belief
in the Old Testament, and convinced even that the world was flat.
of the first companies to be floated by H. Eckstein was the Robinson
Gold Mining Company, named -naturally- after the "steely eyed" J.
B. Robinson and registered in February 1888. The Robinson Syndicate
owned a half share of claims pegged out by a certain Japie de Villiers.
Claims on the Rand were much larger than at Kimberley: 150 by 400
Cape feet, approximately one and a half acres. It was the brilliant
young Taylor who had spotted the capabilities of that mine: five
to eight ounces out of a ton of crushed banket. Robinson had bought
the half share for £1,000 but Villiers wanted £10,000 for the rest,
which he did receive, though in shares (later to be bought back
by H. Eckstein for £80,000).
afterwards other companies and syndicates were floated in order
to develop holdings, such as the Randfontein Estates Gold mining
Company, the Modderfontein and Ferreira Companies, to mention a
few of the largest. Then J. B. Robinson was persuaded, without much
difficulty, to sell his share of the Robinson Syndicate for what
then seemed to be the astonishing sum of £250,000. He moved on to
the West Rand, but came to realize that he had made a mistake, and
considered that he had been swindled by Beit, who thereupon (with
all his partners) was listed as an arch-enemy. It was reckoned that
over the years the properties of the former Robinson Syndicate were
to earn the firm over £100 million. All the same, J. B. Robinson
was to become one of the world's wealthiest men.
that boom year of 1888 gold production had increased by 10 per cent.
The Robinson Mining Company crushed in October 726 tons for 3,551
ounces. In November this total had increased to 4,000 ounces. Eckstein
wrote to Julius in October that there was a net profit of £71,000
for the Company "after very considerable writing off and taking
in shares at the lowest prices". He added: "We start consequently
on a very defined and safe basis, and shall show a very handsome
balance at the end of December."
in 1889 he wrote to say that the net profit for the whole concern
in the previous year was £860,505.6s.6d., which "will no doubt be
considered satisfactory". "It could easily have been fixed at over
£1,000,000, but I preferred my usual rule by taking everything at
what I may term safe values." An elaborately secret telegraphic
code for "high-priority" deals had perforce to come into operation.
arrived at Johannesburg from Paris and was suitably impressed, so
much so that he was able to report favourably to financial associates
in Europe, notably the Rothschilds of Germany, Austria and France.
"In fact," Taylor wrote in his autobiography, "all those who had
made money out of the diamond shares became eager to participate
in the gold shares." This "broadening of the market" was a vital
phase in the expansion of the industry.
had successfully floated his own company, Gold Fields of South Africa,
with a capital of £250, 000. Even if he could not quite compete
with Eckstein or Robinson, the company proved extremely lucrative,
and he drew for himself one-third of the profits. New properties
were acquired and there was some playing around with shares. In
1892 when the company was renamed the Consolidated Gold Fields of
South Africa its capital had been increased to £1 1/4 million.
now the Johannesburg scene was enlivened by the appearance of Barney
Barnato, at last a Member of the Cape Legislative Assembly (he had
campaigned in Kimberley from a carriage drawn by four horses in
silver harness). Proclaiming that he was in a "financial Gibraltar",
he tried almost desperately to catch up in the buying of properties.
"He is awfully jealous of us", wrote Eckstein. Soon Barnato's investments
were calculated to be in the region of £2 million, and this precipitated
an "orgy" of speculation in South Africa. The telegraph line from
the Cape was perpetually jammed with buying orders. Half the male
population of Johannesburg, we are told, hung around the Corner
House, as if waiting for a pronouncement from an oracle. "If there
is anyone in Johannesburg", it was said, "who does not own some
scrip in a gold mine, he is considered not quite right in the head."
the midst of such frantic excitement Porgès came to
survey the sources of the huge new addition to his wealth. First
he went to Kimberley, where there were matters to be settled concerning
the London Diamond Syndicate, mostly Julius's brainchild. An enormous
diamond, 428 1/2 carats, had been discovered in the De Beers Mine.
It was exhibited at the Paris Exposition of 1889. But Porgès
missed a much larger diamond, 969 1/2 carats, which was to be found
in the Jagersfontein mine in 1893. Porgès found the
population of Kimberley dwindling. De Beers was building a model
village called Kenilworth for white employees, a counter-part of
a sort to the closed compounds for the blacks and again with its
own shops. The output of diamonds was having to be restricted, and
racial tensions were increasing. Porgès confessed
that he left with a feeling of slight gloom. The vibrant atmosphere
of Johannesburg was certainly a contrast. He arrived there at a
time when the Randfontein Company was about to be floated, with
a capital of £2 million in £1 shares, later to be sold for four
times as much, with useful profits all round.
collapse and panic were to follow later in the year. This may have
been anticipated by Porgès, who had by then already
made the sensational decision to retire from the firm. Perhaps he
felt that the empire was becoming altogether too complex and unwieldy.
Perhaps, as seems possible, he was worried about his health. Or
perhaps, as one would almost prefer to think, he simply decided
that he had made enough money and wanted to enjoy it and invest
some of it in works of art. Madame Porgès certainly
wanted him to build a palace that could compete with the chateaux
of the French aristocracy. After all he was still only fifty-one.
As it happened, he was to live on well into his eighties, which
was much more than could be said of most of his colleagues. He
has been regarded as one of the most significant figures in the
early development of South Africa's wealth, but even now is thought
of as "shadowy". Yet it is not quite true that he "simply disappeared
into private life". He kept up several interests in Africa, and
was partner in syndicates with Kann and Michel Ephrussi which co-operated
with the Corner House. Meanwhile the firm of Jules Porgès
and Company was reconstituted on 1 January 1890 under the name
of Wernher Beit, the partners being Julius Wernher, Alfred Beit,
Max Michaelis and Charles Rube.
hand-over was no gift though. Porgès took with him £750,000
in cash and £1 million in shares. A further £500,000 was deposited
with Wernher, Beit, to be paid over the next two years. Wernher,
Beit was left with £1 million in cash, diamonds and non-speculative
investments, and around £2 million in shares and interests of a
newly designated firm remained a private company, with no shares
issued to the public. Julius Wernher and Alfred Beit were considered
the ideal combination, with Julius the necessary brake on his partner's
enthusiasms. Beit was intuitive, daring, while Julius made sure
that there were always enough funds for an emergency. It was said
that Beit never seemed to mind who joined them in new ventures,
but that Julius "viewed some of the new alliances with horror" and
was always warning the Corner House not to spread the firm's interests
too widely. In many cases Julius proved right, and Beit did get
into serious trouble when one of his cousins began forging his signature.
Beit had no desire for fame - unlike Rhodes. But in spite of the
alarmingly long hours he spent in the office, he seemed capable
of enjoying social life. After all he was now a very eligible bachelor,
and on his first return to Johannesburg he gave a ball for a hundred
and fifty people. To Percy FitzPatrick he was the "ablest financier
South Africa has ever known". As always, his energy was prodigious.
He built himself a house in Hamburg, and visited Dr Bode in Berlin.
In 1891 he trekked with Rhodes (by then Prime Minister of Cape Province)
with Lord Randolph Churchill up to Mashonaland, part of what soon
was to be known as Rhodesia. He also accompanied Rhodes to Cairo.
Wernher, so Taylor thought, would have been the perfect Chancellor
of the Exchequer. He gave the City confidence and was described
as "blameless". A stranger entering his office was conscious of
being in the seat of power and would be afraid of wasting the great
man's time. He also loved his home and read a great deal. Those
who were allowed into the family's close circle realized that it
was a special privilege. The occasional presence of Beit in London
did lessen Julius's load of work, and for the first time in years
he took holidays, in Scotland and to Dresden or Nuremberg, for instance,
and above all he was able to visit his ailing mother in Frankfurt
more frequently. Even so his family life suffered.
the time had still not come for Birdie to take to entertaining on
the grand scale, or to be launched into the longed-for haut monde.
Sometimes there were dinners at Porchester Terrace for international
financiers, such as the Rothschilds, Raphaels, Schroeders, Mosenthals
and Lipperts, but Julius would also take them to the new Savoy Hotel
restaurant. On 7 June 1889 the Wernhers' first child was born, Derrick
Julius. Soon afterwards a great shadow fell on their household,
which left Birdie "exhausted and broken" and was responsible for
a miscarriage. This was the death of her much loved sister Daisy
Marc, after long and horrible suffering. Mrs Mankiewicz seemed to
go into a decline and "was never happy again". Observing the family's
reactions, Julius wrote to his sister Maria, who was coping with
their own mother: "One is inclined to doubt His goodness when one
sees such tragedies."
Derrick was always the great consolation. His doting parents called
him Sweetface, and he was indeed beautiful as a baby, chubby with
curly, dark hair. As he grew older, he was dressed in Fauntleroy
suits, and it was obvious that he had a quick brain. The second
son, Harold Augustus, was born on 16 January 1893, and the third
and last, Alexander Pigott, on 18 January 1897. But Derrick was
the favourite and consequently spoilt. He was to cause his father
a lot of pain. Under the circumstances Julius's letter to Birdie
about Derrick, written on 29 September 1891, is worth quoting:
great fear is how he will turn out, and you know my ideas! I would
not like a child of mine to be a useless self indulgent idler
simply because he is left so much a year - my pride would be to
have a man as a son who will take his place in the world!
it happened, the son whom he thought the least intelligent, Harold,
was the one who followed most closely in his footsteps as an outstanding
man of business. Julius, on a visit to his mother, missed the State
visit of the new German Emperor, William II, but insisted that Birdie
should watch the procession. On his way home he went to Paris to
buy pictures. It was the centenary of the French Revolution and
he climbed the Eiffel Tower. Staying as usual with "Porgi",
as he called Porgès, he reported that his old chief's
legs were shaky with rheumatism but was amused to watch him gobble
up his food - "two smacks and the plate is empty".
couple of years later Julius and Porgès went on a
"bachelors' holiday" round Italy: Genoa, Florence, Rome ("the longed
for spot of every German for centuries past") and Naples. Madame
Porgès corresponded by telegram, but Birdie dutifully
kept up a flow of letters. "Porgi shows wonderful endurance",
Julius wrote, a comment which seems to show that there had indeed
been some worry about health. "He is jolly and chatty, never reads
anything, although he bought many French novels and Darwin's Descent
of Man. When it is hot he sits in his salon wearing only his red
striped under vest. Anyone coming in by mistake would think an acrobat
was lodging there."
new crisis hit De Beers, with the discovery in September 1890 of
yet another diamond mine only four miles from Kimberley. It was
named the Wesselton after the Boer farmer Wessel who had originally
owned the site. The secret was kept until February when the place,
inevitably, was "rushed". It seemed to be a divine answer to the
misery of the poor whites of Kimberley, but Rhodes was determined
that it should not be proclaimed a public digging, which would mean
the end of the De Beers monopoly. At once he started negotiations
for purchase. There were angry demonstrations in protest, and some
subtle counter-arguments were produced. How long, for instance,
would this mine last? A new independent mine would only mean a fall
in the price of diamonds, and De Beers would have to restrict its
operations, with more men out of work. A foreign syndicate would
move in, which would mean "ruin and disorder".
December, therefore, after various jugglings, the mine was safely
under the control of De Beers. Not unexpectedly, we read in Julius's
"Notes" that "the firm [Wernher, Beit] was largely instrumental
in bringing about the various deals".
there was a lively new addition to the Corner House. This was Lionel
Phillips, whose abilities had been spotted by Beit when at Kimberley.
[Phillips had arrived at Kimberley in 1875, having walked most
of the way there from Cape Town.] Jewish, born in London, and
described as "wiry" with "immense energy and tenacity of purpose",
he had hoped once to be the manager of De Beers. But Beit's offer
was more tempting: £2,500 a year, expenses paid and 10 per cent
of the profits from managing the firm's interests in the Nellmapius
Syndicate, which owned nearly 2 1/2 million acres, including possible
goldmines, in the Transvaal. Phillips arrived at a hectic moment,
with Porgès about to retire and the Johannesburg share
market in a state of collapse after potential disaster had been
discovered in the mines.