The Empire Project: The Rise and Fall of the British World-System, 1830–1970 (22 page)

In principle, this extension of commercial activity ought to have been self-reliant – much more so than in early Victorian times. In the age of contract, the diplomatic glove, let alone the mailed imperial fist, should have been redundant. The momentum of commercial change was greater, its rewards more visible, its necessity more accepted. Businessmen had access to more capital and better information. In the era of the limited company, it was easier to transfer capital to regions promising quicker profits. And, as the tide of economic change lapped higher in the non-Western world, finding local partners should have been as straightforward as squaring ‘progress’-hungry rulers. And, up to a point, it was.

In practice, it was much less clear that, even in its own semi-colonial sphere, the City could dispense with political Empire. There were three reasons for this. In some parts of the semi-colonial world, the limited scope of political institutions threw upon the trader the onus of defending his property and commercial rights by agreement if possible, by force if necessary. Produce, markets and especially labour were prizes for those with the strength to seize and hold them. But, to enforce his ‘contractual’ claims in the face of other foreign interlopers, the trader needed either the protection of his government or a licence (like a charter) to make treaties, levy taxes and dispense ‘justice’. Secondly, there were parts of the extra-European world where foreign trade or investment were concessions in the gift of patrimonial or bureaucratic regimes. Here the merchant existed on sufferance or by favour. His status and prospects depended upon the help of diplomatic intermediaries without whose protection the privileges (freedom from taxation, arrest and bureaucratic harassment) that made his business profitable would lapse. Thirdly, there was the question of how the merchant (or investor) could secure himself against default, when the debtor was also the ruler. As trade and finance moved deeper into the Outer World and their stakes grew higher, these ‘political’ risks loomed large in their calculations.

For a late-Victorian government, however, smoothing the merchant's path and standing guard for the investor were not to be undertaken lightly. Each threatened it with complications, embarrassment and expense. Each laid it open to accusations of favouritism or worse. But, where commercial interests could mobilise wider support or claim some higher purpose, they were not so easily brushed aside. They might even be useful to some diplomatic ploy. The result was a frontier of commercial expansion in which the role of government varied between a maximum (annexation) and a minimum (diplomatic inertia). It was a revealing irony that annexation was most likely where local and international conditions made it easiest, not where its economic dividend looked most promising.

British business in Africa

Tropical Africa represented the extreme case. Here was a vast region between the Sahara and South Africa where British (and other European) traders had scarcely ventured beyond the West African coast. Access to the hinterland was barred by physical obstacles or the obstruction of suspicious ‘middlemen’; there were no modern states to lend to nor landed property to mortgage; and commercial information about the interior was often, literally, at the exploratory stage. Even more daunting, perhaps, was the fact that, in the 1880s and 1890s, tropical Africa's commodities – such as they were – were of marginal interest to industrialising Europe, and the principal commercial export, palm-oil from West Africa, sank to its lowest price level in that period.
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Indeed, tropical Africa had a declining share in the trade of an expanding world economy. Yet none of this deterred British entrepreneurs from striking into the interior to carve new business empires out of the African bush.

This paradox, and Africa's subjection to a diplomatic rather than a commercial partition, have led some writers to argue that the motive for commercial activity was only superficially economic, or better described as ‘meta-economic’ – driven less by hope of commercial gain than by a vision of how Africa should be fitted for a commercial future.
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But there was no doubt that those who launched new business ventures into Africa were eager for profits and needed them to attract both capital and publicity. The peculiarity of tropical Africa lay in the harshness of its physical and commercial environment away from the beachheads where Europeans had sheltered hitherto. It was no coincidence that military drop-outs, imperial visionaries, down-at-heel aristocrats and redundant explorers found a berth in African commerce. Nor that the projects for exploiting the interior needed to appeal to a broader constituency of investors in Britain – those who wanted an ‘ethical’ investment to spread the Gospel and stamp out the slave trade as well as those who gambled on a lucky strike. For a century past, British opinion had regarded Africa as an object of charity and as an Aladdin's cave.

In the last quarter of the nineteenth century, British enterprise entered the African interior by three different routes: from South Africa, from India and from Europe. In West Africa, there was a direct connection from Britain to the ‘Coast’ – a vast maritime zone stretching from Sierra Leone to the Congo. British commerce was most active on the Gold Coast, at Lagos – the gateway to the Yoruba states – and at the Niger delta, the so-called ‘Oil Rivers’, where the palm-oil trade was concentrated.
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In 1841 and again in 1858–64, the British government had supported attempts to open the Lower Niger as far as the Benue confluence at Lokoja as part of its anti-slave-trade policy.
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Both efforts had failed, and, apart from a consular ‘presence’ (as consul in West Africa 1861–3, Richard Burton had made the offshore island of Fernando Po his base) and a periodic gunboat, the British oil traders at the Niger mouth carried on their business under the skimpiest kind of informal empire.
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The new departure of the 1880s seems to have sprung less from hopes of commercial expansion than from fears of collapse. Between 1876 and 1881 the price of palm oil fell by more than 16 per cent and was to fall further.
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To protect their position, four of the oil companies trading up-river merged to form the United Africa Company in 1879. The architect of the merger was George Goldie (1846–1925), a failed soldier without obvious talents or prospects.
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Goldie came from a gentry family on the Isle of Man with family interests in one of the merged companies. A visit to West Africa in 1877–8 had suggested how the oil traders’ difficulties could be solved. Goldie revived the old idea of opening the Niger as a thoroughfare for direct trade with the Hausa emirates upstream, cutting out the African middlemen who skimmed the profits. It was obvious enough that this was beyond the means of four struggling companies, amalgamated or not. Goldie's solution was ingenious. In 1881, he reorganised the company on a grand scale as the ‘National African Company’ with a nominal capital of £1 million (far in excess of its modest assets) and offices in Ludgate Hill. He recruited as directors a reputable private banker from the City, a major cotton merchant from Manchester with West African interests (James Hutton) and, as chairman, Lord Aberdare, a former minister, a confidant of Gladstone and president of the Royal Geographical Society. Goldie's real purpose was to obtain a charter for his company, and transform it from a frail commercial bark into an armoured cruiser. A charter from the imperial government would entitle his company to act as its agent in the Niger interior. It would give him the right to acquire territory, levy taxes and maintain a private army to enforce the company's rights. Events played into Goldie's hands. By the early 1880s, the Gladstone government was so alarmed that a French occupation of the Niger would drive out British trade that it reinforced its consular supervision and then, in 1885, declared its own protectorate in the Niger delta. Granting a charter to the importunate Goldie and his influential friends in 1886 solved the tiresome problem of how to pay for this unprepossessing imperial annex.

Goldie's genius was to turn a rickety British enterprise into an Afro-European hybrid, well adapted to its frontier habitat. Behind its European mask, the Company was a modern-day forest kingdom, ruling the trade paths like Ashanti or Dahomey. It gathered treaties and cessions from African rulers in the Niger hinterland and diverted the interior trade into its own forts, factories and steamers. The charter strictly forbade monopoly, but this was a dead letter.
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As a result, Goldie's relations with the independent Liverpool companies still trading in the Delta through African middlemen were bitter. With the middlemen themselves, the Company was virtually at war. By the early 1890s, under growing pressure from French and German competitors, the Company became even more openly a crudely organised state, conducting private diplomacy, waging private war, levying private taxes and paying its way through a commercial monopoly backed by force. It was a risky, but successful, formula. Except for 1886–8, the Company paid a steady dividend, often well over 6 per cent
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and attracted many small shareholders.
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By 1894, it had bought out the remaining Liverpool traders on the river (though not in the Delta). But its main achievement was to turn its ramshackle collection of claims and treaties into an ‘asset’ which the imperial government dared not renounce.

Goldie achieved this through careful politicking and a ruthless publicity campaign. He recruited Frederick Lugard, a half-pay officer lionised for his exploits against Arab slave traders in East Africa. Lugard was a brilliant publicist. Within a few months in 1895–6 he published thirteen major articles reciting British claims, interests and achievements in tropical Africa.
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The Times
came to Goldie's aid. Goldie himself rushed out to lead the fight against the Company's toughest African enemies. As the West African competition grew fiercer, Chamberlain sought the Company's help to drive the French from the hinterlands of Lagos Colony and the Gold Coast while the Company's own military weakness became more and more glaring.
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By 1898, both the French and British governments were eager to settle the local feud in the Niger valley for fear of its wider repercussions. As Goldie had long realised, an imperial partition in West Africa meant that he would have to be bought out, to appease the French, the ‘colonial’ interest in Lagos (whose black merchants reciprocated his hatred) and Liverpool. The pay-out was a bonanza: at £865,000 nearly three times the Company's real assets. The Company lost its charter and its royal prefix and reverted to lawful trade.

In East Africa, the impetus behind British commercial activity came not from London or Liverpool but from India. With the cutting of the Suez Canal and the new short steamship route between Europe and India, opening up ‘branch lines’ into the Persian Gulf and East Africa became much more attractive. The pioneers of this new trade were Mackinnon Mackenzie, a British merchant house based in Calcutta. Its senior partner, William Mackinnon (1823–93) was now manager of the shipping line
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and keen to extend its business into new ports and hinterlands. His partner, George Mackenzie, spent several years reconnoitring the commercial prospects of the Persian Gulf.
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In the 1870s, Mackinnon had tried to lease a stretch of the East African mainland opposite Zanzibar as a bridgehead for a new business empire.
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This came to nothing, but Mackinnon's choice had not been accidental. Zanzibar was already part of an Indo-Arab trading world and Indians were well established as merchants and moneyed men on the East African coast. Zanzibar itself had long been considered part of British India's sphere of influence. By the mid-nineteenth century, its merchants had built a commercial system that linked together the huge country between the Zambezi, the Great Lakes and the Indian Ocean at a time when European traders were barely in evidence. Zanzibar became a great emporium for ivory and the entrepot of the whole coast. Here was a goose ripe for plucking. Secondly, after Stanley's epic trans-African journey in 1874–7, much more was known about the undeveloped wealth of the lacustrine interior and Uganda, which Stanley described as the ‘pearl of Africa’. Thirdly, Mackinnon, like many other Scottish merchants, was deeply affected by Livingstone's call for the reclaiming of Africa by commerce and Christianity at his famous Cambridge lecture in 1857.
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Livingstone's death and burial in 1874 in Westminster Abbey (a measure of his saintly status) was the trigger for a new effort to plant a large missionary centre, ‘Livingstonia’, on Lake Nyasa, where slave-raiding was at its most intense. Mackinnon was heavily committed to the African Lakes Company, set up in 1878 to support the mission project. But his own plans for commercial philanthropy stalled until the German ‘occupation’ of East Africa in 1885 transformed the politics of the East Coast. With the large inland sphere conceded (for Egyptian reasons) by London in 1886, it was obvious to the British consul in Zanzibar (and even more to the Sultan) that the island state was doomed to commercial strangulation and a gradual slide into German control. So Mackinnon revived his scheme for a coastal lease, this time with the Sultan's support, and formed his East African Association to bring the Ugandan pearl to market.

Mackinnon's scheme was ambitious and attracted some heavyweight support. Among his directors were Goldie's friends, James Hutton and Lord Aberdare. There were two ex-consuls and a brace of generals. There was Lord Brassey, the greatest railway contractor of the age. Reborn as the Imperial British East Africa Company, the Association gained its royal charter on the nod in 1887. With its mainland lease, and its right to tax, make treaties and acquire territory, it seemed the perfect commercial vehicle to carve out an informal empire north and west of the German sphere. Uganda would be ruled in all but name from its office in Pall Mall. When German competition threatened its Uganda hinterland, it successfully pressurised a sceptical Salisbury into demanding its inclusion in the new British sphere in East Africa agreed with Germany in 1890. When Salisbury wavered, Mackinnon and his fellow directors threatened to resign and close the Company down.
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In reality, the Company's position was desperately fragile. Its capital was modest – only £250,000 had been subscribed. Its outgoings were heavy. Worst of all, unlike Goldie's company, there was no established trade to divert and no convenient route to the interior. Uganda lay three months’ walk away over a dangerous path skirting the warlike Masai and Kikuyu. Stanley told Mackinnon that he would need 500 men and a railway. Salisbury and his man on the spot, Gerald Portal, thought the Company a shambles and Mackinnon a dilettante.
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