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Some interesting background reference to the gold shipments from SA during the war was found in the Master Thesis “Die Geschiedenis van die Nederlandsche Bank en Credietvereeniging, 1888 – 1902” by Ansophie Marié Joubert, Randse Afrikaanse Universiteit (November 1986).

The ZAR Government (Treasurer-General Malherbe) contacted the Nederlandsche Bank en Credietvereeniging (NBCV ) in Pretoria in February 1900 with the request to arrange for the transport of ZAR owned ru-goud (unprocessed gold) from Pretoria to Europe. The NBCV was at that stage unable to comply as British sanctions prohibited valuables (notably gold and precious stones) from being physically transported out of the ZAR and OVS. This made any precious cargo hailing from the Republics un-insurable and subject to confiscation by the British which, in turn, forced the German owners and Captains of ships sailing between Lourenco Marques and Europe to refuse such cargo.

During the first months of the Boer War the normal business of the NBCV had come more or less to a halt. The only activity that showed promise was the bank’s International Wissel (Bills of Exchange) business, a type of business that was prohibited for banks operating in territories controlled by the British. Simply stated, International Wissels allowed clients to hand in gold at the Pretoria branch and receive cash therefore in the branch in Amsterdam. The facilitating bank charged a more or less hefty provision for this service.

This potentially very lucrative business had a serious problem in that it was essentially unidirectional (from SA to Holland). Because of the British sanctions, physical assets accumulated in unsafe Pretoria while cash reserves in Amsterdam were drained. For this business model to work properly, it was imperative for the NBCV to be able move gold out of the country at one stage or another to turn it into cash somewhere safe.

The NBCV Directors in Holland tried to deal with the local cash shortage by raising additional funds through the sale of share capital. This was for various reasons not very successful. A solution to the overall problem came from the Pretoria branch itself. In March or April 1900 the directors got in touch with relevant British authorities with the request for permission to ship ru-goud from its ZAR based branches to the one in Holland. In what must have been one of the most significant British administrative blunders of the war, the NBCV obtained this permission and was allowed proceed with gold transports unhindered.

A.M. Joubert argues in her thesis that because the ZAR Government had “run out of coined money” the Treasury had started paying “the public” with ru goud. According to her, the NBCV then bought up this ru-goud from the public and shipped this to Europe. There are a few problems with those statements. The 6.500 kg of gold sent in the May 22, 1900 shipment can never be explained by the bank’s ru-goud purchases from “the public” for reason that the ZAR treasury did not spent much (if any?) ru-goud in the 8 weeks prior to the shipment. The ZAR Treasury still had (confiscated) coined gold as well as unstamped gold discs (the Kaal ponden) and also had started pushing Bluebacks into circulation. Also, how did the NBCV pay the sellers of ru-goud? The bank’s 50.000 Pond gold coin reserves had already been halved by a forced sale to the ZAR Treasury (which actually did pay in ru-goud). Even if the NBCV had had the capacity to purchase large amounts of ru-goud from the public through the issue of Wissels, no financial institution in its right mind would at that point in time have taken on the risk associated with creating a payment obligation of 840.000 Pond in Europe on the basis of gold sitting in a bank that almost literally had the enemy on its doorsteps.

The solution to this conundrum seems pretty straightforward if one makes the connection between the ZAR Government approaching the NBCV for arranging physical gold transfers to Europe in February 1900 and the subsequent request by the NBCV for permission to undertake gold shipments a few weeks later. While some Bundesrath gold shipment of May 22, 1900 undoubtedly belonged to the NBCV as per Joubert’s assertion, it is most likely that the vast bulk of the shipment was the result of a secret arrangement between the ZAR Treasury and the NBCV. The NBCV may officially have taken title to the ZAR gold to comply with the stipulations of the permission, but the risks involved in moving this quantity of gold by train through war torn country and over dangerous seas would have been too high for the conservative NBCV to bear or accept without proper protection by- and guarantees from- the ZAR Government.

In the subsequent Wilcken and Ackermann (W&A) transaction of August 1900 used by the ZAR Treasury to transfer further gold reserves to Europe (64.000 ounces, see previous post by David), W&A earned a provision of 10 Shillings/Ounce of gold (equal to 12,5% of value). If the Dutch bankers were paid the same provision to facilitate the shipment to Vlissingen, then the NBCV could have earned on this transaction 26.250 ounces of gold to a value of 105.000 Pond.

What happened with the gold when it arrived in Holland? Joubert states that the gold was refined either in Paris or London (!) then melted into smaller bars which were subsequently sold to Dutch and, notably, French banks.