Cecil
Rhodes left a controversial legacy because of his contribution to British
imperialism and apartheid. But behind his racist and imperialist beliefs, he
proved himself to be a shrewd talented businessman.
A Colossus of
Controversies
Born
on July 5, 1853, he was born to a priest with a terrible health. It forced him
to take a local school for education rather than a boarding school like his
brothers. In 1870, after finishing his basic studies, his parents decided to
send him to the Cape Colonies with his brother in hopes of giving him an
opportunity to build his fortune and also in hope of improving his heath with
the place’s warmer climate.
In
1870, he arrived in South Africa and embarked on a business career. He entered
the cotton industry before shifting to the lucrative diamond industry. In the
middle of 1870’s he survived a heart attacked and spent time in the wilderness
to recover where he developed his imperial vision for Britain epitomized with a
railroad connecting Cairo and Cape Town.
Then
on, he devoted his wealth to the expansion of the British realm, advancing to
modern day Botswana and Zimbabwe, then known as Rhodesia (named after him). He
became Prime Minister of the Cape Colony in 1890 and, with a single failed plot
heightened tensions, with the Boers which culminated in the Second Boer War in
1899 that damaged British military pride. His disastrous plot of inciting an
uprising within an independent Boer state brought his resignation as Premier in
1896 and recalled to London to answer a parliamentary inquiry. He did returned
to Africa only to die on March 26, 1902. His subjugation of the rights of
blacks and his contribution to expansion of British realm through sinister
plots led to criticism of Cecil Rhodes.
Funeral of Cecil Rhodes |
A Boss at 18
Cecil
Rhodes’ business skills led to his meteoric rise as one of Britain’s empire
builders. Although controversial in other endeavors, the company he founded De
Beers with its famous slogan “a diamond is forever” continues to be leading in
the diamond industry. His impact in politics and diamonds all started in 1870.
In
September 1, 1870, he arrived in Durban in hope of improving his health with
the warm climate as well as becoming rich. With only £2,000, he set out with
his brother, Herbert Rhodes, in establishing a cotton farm in Umkomanzi Valley,
just south of Pietermaritzberg. The brothers entered the cotton industry, which
they saw as an opportunity after the success of early planters settling in the
area. Besides, demand for cotton remained high due to the industrial revolution
in textile back in Europe.
The
brothers initially met with problems. Their neighbors showered them with
pessimism and promises of failure over their planned cotton farm. Their first
harvest of cotton failed due to their lack of knowledge. They planted the
cotton plants close to each other that spread infestation of bore-worms and
caterpillars faster. Moreover, monkeys also proved to be a challenge in their pursuit.
They,
nonetheless, persisted and innovated to make their plantation a success. In the
next season, they planted their crops farther to each other and placed maize in
between to divert the attention of the pest from the cash crop. Their ploughing
technique rather than hoeing also helped them. By the end of 1871, the brothers
succeeded in harvesting cotton, which allowed them to plan the expansion of
their plantation to 100 acres. They made a name for themselves by winning a
local agricultural show and becoming a prominent cotton grower in the area.
Cecil
learned the basics of business management from the cotton plantation. His
adventurous brother always set out in expeditions leaving him at the age of 18
managing the plantation. Surprisingly, he worked well with black laborers and
became meticulous and open to new profitable opportunities.
In
1872, the Rhodes cotton plantation met a downturn along with the whole
industry. The source of their irrigation dried up and profits started to drop
significantly. The brothers abandoned the cotton industry with hope for another
profitable venture in the booming diamond industry, where Cecil Rhodes made his
name better known.
Diamond Rush
In
1871, Cecil Rhodes received a letter from his brother Herbert convincing him to
enter the booming diamond trade that sparked a rush across the Cape Colony.
They kept their cotton plantation for another harvest before finally leaving it
in favor of a more profitable venture.
Diamonds
in the 1870’s commanded great price. For centuries, this beautiful work of
Earth’s underground only belonged to the rich, powerful, and royal. Its beauty
brought it in high demand but the lack of supply drove its price off the
charts. India’s Goloconda mine supplied the diamonds of the world before it was
exhausted and Brazil’s Minas Gerais took the leading source of the stone. Yet,
the Minas Gerais mine failed to increase the supply of diamond significantly
and decrease the price.
The
high price of diamond caused the rush that followed after in 1867 when children
found a diamond near the banks of Orange River. Following the discovery of the
so-called Eureka diamond, diamond boom towns marked the landscape like Hope
Town, De Beers, and Kimberly to name a few that hosted thousands of miners hoping
for a fortune like Rhode brothers.
In
October 1871, Cecil embarked in a trip to follow Herbert in Kimberly. Along the
way, he passed several mining towns and saw the environment waiting for him,
tent cities complete with hotels, taverns, stores, and diamond trading shop. He
witnessed utter chaos from the sounds of thousands of people of various
nationalities and dust flying in the air and stuck into everyone’s skin.
When
he arrived, his brother already set the foundations for their diamond mine.
Their mine in Kimberly was located in a kopje (a hill in the middle of a vast
plain). The whole kopje was divided by miners into sections called claims and Cecil’s
brother owned 3 claims worth £ 5,000. They then began digging their claims
looking for yellow soil in the ground where the diamonds can be found. Little
by little, Cecil learned mining and trading diamonds with the help of his newly
arrived brother Frank.
Cecil
learned to manage the mine single handedly when Herbert went to his adventures
in the north and Frank returning to England to enter the military. He
supervised his workers scrupulously and even mined diamonds himself. He worked
hard to earn more and buy more claims starting a cycle that expanded his
diamond mining enterprise. His work, however, took a toil in his health and he
had to take a respite in 1872.
He
survived a heart attack and took a convalescent trip across South Africa. When
he returned, he was a man with a vision – to make the whole Africa a British
colony. He believed money bought power capable of realizing his vision and so,
he worked hard with a strong purpose.
De Beers Mining
Company
Charles Rudd |
In
1873, Cecil, who now manage the mining solely, decided to partner up with
Charles Rudd to expand his control over more claims in the Old De Beer Mines
which he called “nice little mines.” His partnership with Rudd allowed him to return
to England to pursue studies in Oxford which lasted until 1881, leaving his
business under capable and trusted hands.
While
attending Oxford, he usually returned to the Cape Colonies, which he saw as
more lively and interesting than his boarding house. In 1874, he visited his
mines and found a declining diamond industry because of the sudden depletion of
yellow soil that contained the precious stones. Rhodes, however, believed
otherwise and showed incredible leap of fate and risk taking. He and Rudd
believed the blue soil beneath the yellow soil contained the same large
quantity of diamonds. He then started to purchase claims of pessimistic miners
and took over significant share of area in Old De Beers that overshadowed his
mines in Kimberly, which he later decided to sell.
Now
centered in De Beers, he analyzed the problems of the diamond industry. He
concluded that the decline in the diamond industry came as a result of over
mining brought by competition of numerous small miners. The increase in supply
of diamond dropped the prices that translated into lower revenue. The low
revenue failed to yield huge profits due to large expenses in maintaining the
mine as well as labor. Rhodes then saw amalgamation as a means to attain
stability and profitability in the industry.
This
objective of his resulted to new ventures, such as water pumping. The open
mines continued to be plagued by flooding, which Rhodes saw as an opportunity
to achieve amalgamation. He saw pumping service as a building block to work his
way up in convincing small miners to join his grand plan.
Rhodes
showed great charisma and persuasion skills in starting his water pumping
business. He bought a brand new water pump from a farmer that he negotiated
with relentlessly for days and weeks. He then faced the problem of transporting
it to the mines, only solving it when he convinced a Boer cart driver to
deliver the pump with only a check serving an IOU as payment. His water pumping
business then helped to give him the capital and the network necessary to
advance his plan.
From
1876 till 1878, Rhodes continued his studies in Oxford. While in England, he
talked to trading companies and banks on the importance of uniting small scale
mining into a large corporation.
In
1880, with his profits from the water pumping business and mining, he convinced
remaining small scale miners in Old De Beers to form the De Beers Mining
Company with the initial capital of £200,000 and Rhodes and Rudd as main
directors.
De Beers Consolidated
Mines Ltd.
From
uniting the De Beers miners, Rhodes set his sights into uniting the 2 biggest
mining centers in the Cape Colony – De Beers and Kimberly. Kimberly mines
hosted another amalgamated mining company called the Kimberly Central Diamond
Mining Company, led by Rhodes’ biggest rival – Barney Barnato.
Barney Barnato |
Barney Barnato or Barnett Isaacs began as a poor Jewish tobacco seller in the Cape
Colonies. Slowly, he sold all his tobacco and entered the diamond trading and
mining industry. Soon enough he became a formidable diamond businessman with
Barnato Diamond Mining Company as his vehicle. Like Rhodes, he saw the value of
amalgamation and did so in Kimberly. By the 1880’s small Kimberly miners,
Barnato Diamond Mining Company, and the French Compagnie Française des Mines de
Diamant du Cap formed the Kimberly Central Diamond Mining Company that
challenged Rhodes domination of the diamond industry.
The
Barnato and Rhodes rivalry became intense in diamond and soon moved to other
industries, in particular gold. In 1886, 2 prospectors discovered gold in
Witwatersrand, just few files south of Pretoria, causing a gold rush in the
area. However, miners soon found out the gold ore was found inside rocks and
required crushing by large equipment that small-scale mining lacked. The
competing Barnatto and Rhodes both heard the news and problems. Barnatto backed
out while Rhodes took the challenge of making the mine profitable. Rhodes
invested in area that became known as the Rand and in 1887 established the
Goldfields of South Africa Ltd. Miners in the area built a tent city which grew
to become Johannesburg. In this field, Rhodes won big time as his gold company
grew to become one of the most highly valued company in the world and the Rand
as one of the most important mines.
The
rivalry of the 2 diamond magnate reached its crescendo in 1888. Rhodes took the
upper hand when he received financing from the famous Rothschild and started to
purchase shares in the Kimberly Mines. Furthermore, he also took interest in
the French company whom Barnato partnered with. His purchase of shares of the
Kimberly Central Diamond Mining Company led to rise in its prices that attracted
shareholders to sell their stakes to Rhodes. Competition also intensified in
production as both companies increased their output and dominate the market.
The action led, however, to price decline of diamond that damaged the industry.
Finally, Rhodes succeeded in bringing Barnato to the negotiating table.
The
negotiation saw Rhodes meeting with Barnato personally. Rhodes respected
Barnato as the latter does to the former. Rhodes knew he had the upper hand,
but he feared Barnatt’s story of a whole bucket load of diamonds he was
prepare to sell to substantially drove prices further down. With the help of
Alfred Beit, the negotiation ended and Barnato sold the Kimberly Central
Diamond Mining Company for over £ 5 million.
The
merger resulted in 1888 the foundation of the renowned De Beers Consolidated
Mines Ltd. with Rhodes, Beit, Barnato and F.S. Philipson Stow (another talented
associate of Rhodes) serving as life director. Rhodes foundation of De Beers
Consolidated Mines marked his domination of diamond industry by controlling 90%
of the world’s supply.
With
De Beers Consolidated Mines and the Goldsfield of South Africa in his list of
achievements, he proved himself an excellent businessman. He used profits to
build housing to his workers and do philanthropic works, such as financing
scholarships which became known as the Rhodes Scholarship that even to this day
helped thousands of students to pursue their studies.
Aftermath
Cecil Rhodes (1900) |
Rhodes
success also financed much of his ambitions. He used it to become a politician
and even becoming the Prime Minister of the Cape Colony. His diamonds could
also be called as blood diamonds as it financed land grabs from local African
chiefs either through dubious purchase or by force. He used it to hire
mercenaries to crush resistance of those who oppose his northward ambition. He
also used the money to purchase arms which he smuggled to Johannesburg and
start an uprising by local British against the Boer Republic. His actions
eventually backfired leading to tensions that culminated to the Boer War in
1899.
Conclusion
Disregarding
what happened to the fortune built by his companies, Cecil Rhodes proved
himself as one of the greatest moguls in history. As he consolidated the diamond
industry, he stood in par with John Rockefeller who did the same in the oil
industry.He showed great perseverance and taste for hands-on management, which
meant devotion. He had a goal which helped him to work further to succeed,
despite his goal disgust many today. He displayed charisma, persuasion, and
skill to make other trust him leading to his successful amalgamation of miners
to form the dominant company in the industry – De Beers. Cecil Rhodes maybe despised
as an imperialist, racist, or warlord, but he certainly can be admired as a
businessman.
See also:
Who was Lord Dalhousie?
Who was Lord Dalhousie?
Sources:
Williams,
Basil. Cecil Rhodes. London:
Constable and Company Ltd., 1921.
Le
Seur, Gordon. Cecil Rhodes: The Man and
His Work. London: John Muray, 1913.
Maurois,
Andre. Cecil Rhodes. London: Collins,
St. Jame’s Place, 1913.
Woodhouse,
Christopher Montague. “Cecil Rhodes.” Encyclopedia
Britannica, Inc. Accessed on September 3, 2017. URL: https://www.britannica.com/biography/Cecil-Rhodes
"Rhodes, Cecil." Encyclopedia.com. Accessed
on September 3, 2017. URL: http://www.encyclopedia.com/history/encyclopedias-almanacs-transcripts-and-maps/rhodes-cecil-0
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