18-K. Beachhead

South Africa's gold country, richest in the world, has long been the envy of U.S. capitalists. The fabulous Ridge of the White Waters (The Rand) has produced over 400 million ounces of gold in the past half century. But while American businessmen were permitted to admire the bonanza, and even to purchase British gold stocks, they were always denied any substantial holdings. The Dark Continent's gold mining was strictly a British-South African show, no uitlanders wanted.

Early this year the exclusiveness of this combination underwent a significant change. British capital, once exported in large amounts, was kept at home by rigid exchange controls. South Africa felt the pinch. It needed upwards of $300 million to develop the new Orange Free State field (TIME, April 29). Industrial expansion and new mining machinery would soak up millions more. Although sound and prosperous, South Africa did not have this sort of money on hand. U.S. businessmen, still outside the golden circle, saw the chance of a lifetime. Two U.S. firms lost no time taking it.

Last week Wall Street's Ladenburg, Thalmann & Co. and Lazard Freres & Co. announced the formation of the American Anglo-Transvaal Corp., a privately-financed company to promote mining and industry in South Africa. (No stock in the new company will be offered to the public for the time being.) The London firms of Lazard Brothers & Co. and J. Henry Schroder were invited to share in the original $9 million subscription of American Anglo-Transvaal, and accepted.

American Anglo-Transvall, will operate on a partnership basis with the Anglo-Transvaal Consolidated Investment Co., Ltd., a $32 million holding company, one of the most active in South Africa. American Anglo-Transvaal will supply the cash; Anglo-Transvaal (with active subsidiaries in steel, oil, glass, coal, lumber, manganese) will provide the knowhow.

The profits of this first big beachhead of U.S. capital in Africa looked good. After every South African gold strike there has been an overall industrial boom. If it comes out of the workings of the Orange Free State field American Anglo-Transvaal, through its option to participate in any of Anglo-Transvaal's operations, will be in on the ground floor.

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