TOPIC:

Shaun (Sturgy) wrote in a comment on the thread Annotated Gouvernement’s Noten “It’s a timely reminder that no army can sustain itself without money”. This is an interesting subject when it comes to the Boer War.

The traditional manner in which countries finance war is through a combination of taxation, borrowing, printing money and, whenever possible, plunder of enemy assets. This principle definitely applied to the British Empire during the Boer War. It is estimated that the British Government spent around 220 million Pound Sterling on the Boer War, which based on Bank of England inflation figures is the 2025 equivalent of 23.5 Billion Pounds. The ZAR Government, in contrast, is estimated to have spent on that war less than 2 million Pounds (213 million in today’s money). Even with a liberal margin and adding an amount for the OVS Government expenditure, it doesn’t alter the fact that the Governments of the Republics spent a pittance (something in the order of 1 to 2%) compared to what their enemy forked out on fighting the war.

Factors that caused the enormous discrepancy were the obvious difference in size of the respective armies (roughly 10 to1 in favour of the Empire), the fact that British and Commonwealth troops, equipment and transport means needed to be shipped in and out over a distance of thousands of miles and of course the massive cost associated with securing conquered territory (garrisons, blockhouse lines, establishment of local governments, reconstruction of damaged infrastructure, the compensation schemes, etc). Add to this the establishment and running of POW camps in exotic far-away places and it becomes clear why fighting the Boer War became very expensive for the Brits.

There were other factors causing the discrepancy: A significant part of the war cost of the Republics was contributed by the Burgers directly, without involvement of their respective Governments. Burgers brought their own horse, guns and clothing to the battlefields, salaries were postponed/ forfeited, and the Boer’s natural ability to live off the land-complemented by stores and armaments raided from the enemy - allowed the commandos to operate largely without Government involvement and, by commandeering goods, with relatively small amounts of cash in hand. Also importantly, the Republics unlike the Empire, didn’t have a massively expensive navy to finance and maintain.

It is widely suggested that the Boer commandos operating on a financial shoestring was due to the fact that the Republican Governments simply didn’t have the means to provide more funding. This assertion is pertinently wrong, at least as far as the ZAR is concerned. Although it is true that from late 1900 the roaming ZAR Government and the commandos in the field faced cash (gold and coin) shortages, that wasn’t because the ZAR financial situation was in a bad shape. On the contrary, the ZAR had at that time actually substantially more financial assets at its disposal than at the beginning of the war*. The dominant reasons therefore were twofold: Over the first 8 months of the war the ZAR obtained a large quantity of gold (just short of 500,000 ounces) from operating some of the goldmines for its own account. The second factor was the secret Government decision (taken well before the fall of Pretoria) to ship the bulk of the ZAR’s coin and gold reserves to Holland, a country in which it already kept various bank accounts and valuable shareholdings. The grand idea behind the latter scheme was to supply the commandos with cash, armaments and other goods from Europe. That this didn’t materialise had various grounds (predominantly the British naval blockade of African Ports), and is the main reason that much of the ZAR financial assets were never applied to pay for the war efforts.

* This observation is vehemently disputed by many “Boer” works on the matter, and for good reason. Just after the war the British were trying to get their hands on these assets and a denial of their existence was a first, and obvious, step to thwart that. However, the denial by former ZAR Government officials of the existence of significant financial assets in Europe persisted when the need for secrecy had long evaporated. This gave rise to rumours of incompetence, grift and even self-enrichment, and probably formed the basis for the tale of “Kruger Miljoene” buried somewhere in the Highveld. The financial assets of the ZAR were officially depleted by the mid 1920’s. A Portion of these funds was demonstrably used to aid Boer causes; Nevertheless, the destination of a potentially large amount remains unknown. The man responsible for managing the ZAR funds in Europe during and, oddly, for the decades after the war was my parsimonious compatriot Willem Leyds, Leyds maintained throughout his life that there were no funds over and above those publicly disclosed and properly dispensed. Leyds also promised after the war to supply a full and detailed account of his handling of the ZAR funds. However, during the remaining 38 years of his life he never did and that, in my opinion, is sufficient reason to believe that he lied.

Hi EFV,

Thanks for that wonderful summary; call me quirky but I find macro economics very interesting and I follow the works of Ray Dalio.

The Boer War makes for interesting study; those expense levels will be felt in the interest, debt market and taxation.

Here are a couple of quick on line summaries:

1. Yields

• Pre-war yields: Before the war began in October 1899, British consols (a type of perpetual government bond) typically yielded around 2.5%.
• During the war: As the government issued new war loans and investor uncertainty grew, yields climbed to around 3.0% to 3.5% by 1901. This reflected both the increased supply of debt and the perceived risk of prolonged conflict.
• Post-war stabilization: After the Treaty of Vereeniging in 1902, yields gradually declined as confidence returned and borrowing tapered off.

The Bank of England raised its discount rate from 2.5% to 4% during the war to manage inflation and support the pound. This tightening also contributed to upward pressure on bond yields.

A timely reminder that Government spending drives up interest rates; this is currently visible with the current long end bond yield in England back to 1990’s levels. The bond market is making a come back.

2. Taxation

• Increased taxation: The British government raised taxes to support the war, including duties on tobacco, alcohol, and sugar. The 1900 budget introduced a new income tax rate of 1 shilling and 3 pence in the pound (about 6.25%)—a significant increase at the time.

3. Debt

• War loans: Britain issued government bonds to raise capital. The 1900 War Loan raised £30 million, and another £32 million was borrowed in 1901. These loans were subscribed by domestic and international investors, reflecting confidence in Britain’s financial stability.
• National Debt: The war added substantially to Britain’s national debt, which increased by over £100 million during the conflict.

Very interesting subject; at least to myself

Regards,
Shaun

Thank you, the legend of the "Kruger Millions" has over the years been the subject of a number of historical and fictionalised accounts, Kruger's Bluebacks (Vissers) and Kruger's Alp (Hope), respectively being some of the more historically accurate and/or entertaining reads.

Following on Everhard's post, the following translation of a interesting article which appeared in the Dutch newspaper Algemeen Handelsblad of Monday 24 October, 1932, entitled “PAUL KRUGER'S MILLIONS”, dealing with the legend of the Kruger Millions and Dr. Leyds' response.

From legend to historical truth. - Communications of the former ambassador Dr. W.J. Leyds.

R. - Last week, Reuter took the trouble to send us a telegram from Pretoria to inform us that finally, after 32 years, the mystery of Paul Kruger's so-called Millions had been solved, thanks to the discovery of a small notebook.

It must be said, a writer of a good detective novel couldn't have improved on Reuter. The story, sent from South Africa, concerned the old story that President Paul Kruger had departed for Europe in such a hurry in 1900 (aboard the Dutch warship "Gelderland") that he hadn't had time to secure the state's assets - Reuter, certainly for the sake of romance, preferred to refer to Kruger's own assets in his telegram! - to safety. Therefore, he entrusted it to Noome, someone close to him in whom he had great confidence, and since then, stories had circulated that the gold at the time had ultimately been hidden.

After the war, even treasure hunters went to work. Indeed, an attempt was made to search the seabed for "the Kruger treasures", as a variant of the legend held that the gold had indeed been sent by ship, but that the ship sank [a schooner in St. Lucia Bay] with man and mouse (therefore including its precious cargo). Reuter doesn't mention this last point, but he does mention that the matter has now been clarified, thanks to the discovery of Noome's notebook.

In this regard one could read in the article in question:
From the neatly written notes it appears that “Oom Paul’s” treasure consisted of 62 boxes of gold bars.
From Nelspruit the gold was sent by train to Delagoa Bay, and a note underlined in red ink states:
August 30. Departed from Nelspruit for Delagoa Bay.
August 31. The gold is delivered to Wilcken & Ackermann.
September 3. Attending to the gold again.
Further notes show that when the gold was transferred to Wilcken & Ackermann, the Boer Republic received credits for the amount of the gold's value, as well as large quantities of foodstuffs and supplies, including 44,000 bags of flour.
Ships were chartered and large sums were made available in Europe to support the Boers who had sought refuge there.

The legend of the buried millions is now solved for good!

As soon as we saw the above, it occurred to us that we had already come across interesting information about this whole affair elsewhere, information that was almost identical to the facts presented here. We began searching and found what we were looking for in one of the publications of Dr. W.J. Leyds, who, as ambassador of the South African Republic during the Boer War in Europe, did so much for the Boers. Over the years, he has published much important material on the history of the Boer Republics. And there is more to come. For when we visited Dr. Leyds, who lives in The Hague, in connection with this history, he told us that he was busy preparing a new collection of "Correspondence", drawn primarily from the old embassy archives. The forthcoming publication will cover the period from late November 1900 to 1902, i.e., from Kruger's arrival in Europe until the Treaty of Vereeniging.

Now, if one opens volume II of Leyds' third collection, "Correspondence (1900)," which came off the press a year ago, one will find on pages 137 and following what exactly happened, namely that the Executive Council decided on August 28, 1900, to approve a draft contract whereby the government of the South African Republic sold 64,142 ounces of raw gold to the firm of Wilcken and Ackermann, Lorenzo Marques, at a price of £ 3.10 per standard ounce in coined Transvaal or English gold, to be paid by that firm to the South African government. This has now come to pass. The raw gold, no longer the property of the Boer Republic government, was shipped to Europe (Hamburg) by Wilcken and Ackermann on the "Bundesrath". The government received the purchase price in hard cash, which was spent in South Africa itself. Incidentally, there is no truth in the "chartering of ships" or the provision of significant sums in Europe to support the Boers who had sought refuge there. Dr. Leyds thus confirmed this once again, pointing out that even now, in the Reuter telegram, it seems still difficult to distinguish between the raw gold shipped to Europe, the aforementioned property of the firm, and that the latter had provided its compensation in South Africa with coined gold used there.

Mr. Leyds believed the explanation for the legend surrounding Kruger's missing, and soon-to-be-hidden, treasures lay in the fact that the public had known at the time that treasures had been shipped from Pretoria after August 28th, but that the outside world had been unaware of what had happened to them: that they had been used to fulfill the agreement reached with Wilcken and Ackermann, following a secret decision by the Executive Council.
Perhaps, however, now that Noome's notebook in some respect supplements, or at least confirms, what was stated about this matter in Leyds’ publication, the legend has been permanently dispelled. From the perspective of recording historical truth, this is a gain, but naturally, from the perspective of romanticism, a loss, as is always the case with all legends refuted by sober reality.

Fascinating thread! May I cautiously expand the scope to include pres. Kruger's personal wealth? I assumed he lived a humble life free of material possessions until I read this:
www.scielo.org.za/scielo.php?script=sci_...18-229X2014000200005
In it I read: Pres. Kruger "paid £40 000 over to the government of the South African Republic in May 1899 as a loan... Dr W.J. Leyds, who was in close contact with Kruger while the former president was in Europe, was under the strong impression that Kruger did not think it likely that this loan would ever be repaid." It was not repaid.
The attached maps taken from this article show he owned at some stage AT LEAST 46 farms, often for speculation.

Sturgy, interesting statistics, thanks. Rob, for the farm Geduld on its own (# 34 on the list) Kruger received 100.000 Pond. By all accounts Kruger died a wealthy man. In the context of his land assets in South Africa some post war visits to Kruger (as diarized by Bredell) could be of interest.
Tunguska, the sale of 64.142 ounces of ZAR gold to Wilcken & Ackermann is well documented and was often used by Leyds et Al to support their version of events . Considerably more of interest in this context though, and only fleetingly mentioned by Leyds, were the 6.500 Kilograms of gold (208.000 Troy Ounces, today’s value over 60 Million Pound Sterling) that arrived from South Africa on the German steamer Bundesrath at the Dutch port of Vlissingen on July 11, 1900. This gold officially belonged to the Nederlandsche Crediet Vereniging (Now NedBank) but indications are it was actually owned by the ZAR. (for more detailed arguments, refer the thread on “the disappearance of the Kruger Millions”)

Tunguska, you mention KRUGER'S BLUEBACKS, a book by Everhard Vissers published in 2018. The author is of course none other than our esteemed colleague EFV...