23 JUNE 1939, Page 36


Sir George Albu's review at the meeting of the General Mining and Finance Corporation underlines the strength of the position this Kaffir finance house has been building up in recent years. Apart from the disclosed reserve of ki,000,000, which goes against a total issued capital of only L1,264,579, there is a large hidden reserve in the conserva- tive valuation of investments. These are carried at a book figure of £2,535,098, but Sir George emphasised that this was substantially below the current market value. On the earnings side the strength of the position is that this Cor- poration relies on dividends from its investments and not on capital profits from transactions in the share market. So far as can be judged, the prospect for revenue is quite pro- mising, for while lower payments must be expected from Van Ryn Gold, one may expect West Rand Consolidated to maintain its current rate and East Rand Proprietary and Durban Deep to pay larger dividends in due course. As to the future of the gold mining industry Sir George is confidently optimistic. The sterling price of gold, firmly based on the American buying price of 35 dollars an ounce, should be well maintained, and production costs show no sign of any runaway rise. At the same time, he directed attention once again to the potential danger of a shortage of native labour. Fortunately, this danger is mitigated by the success which has attended the recruitment—on a limited scale—of natives from the northern territories and of the extended use of mechanical methods. * * *