848A.24/359: Telegram

The Secretary of State to the Minister in the Union of South Africa (MacVeagh)

174. Department’s 173, September 17.

A meeting was held recently, attended by representatives of State, War, WPB,48 OLLA,49 OEW,50 and WSA,51 to consider Gage’s report on gold mining52 and discuss question of increased exports of coal from Union. Following represents combined views of interested authorities here on gold mining and its relation to coal. Subject of coal is being covered in separate message.
Gage’s recommendations, which were accepted on terms outlined in this telegram, are in substance as follows: (A) to satisfy only most critical requirements of gold mines, based on surveys conducted by Supply Council; (B) to initiate no negotiations for reduction in gold mining operations under present conditions of unemployment in the Union and lack of demand for its industrial products; (C) to stimulate South African war production along such lines as to make greatest use of existing plant capacity and of raw materials obtainable in Africa; (D) to review question of gold mining at least semi-annually in order to determine whether conditions have changed.
Decision not to press for agreement to curtail gold mining operations is based on conclusion reached in Gage report and in your 163 of June 1753 that, since need of Union manufactured products has declined, it is no longer necessary to divert labor or equipment from gold mines to manufacturing industries. This decision would be open to reconsideration if circumstances should change. We do not recognize present level of gold mining activities as minimum level which must be maintained in order to avoid economic or political difficulties in South Africa, and we are anxious to obtain greater quantities of coal from the Union, even if that should necessitate curtailment of gold mining activities, as to some extent, it probably will.
Since we do not intend to undertake negotiations for reduction of gold mining, we do not think it necessary to consider gold mining requirements apart from Supply Council, as suggested in paragraph 8 of Department’s 111–113 of June 3. Council should examine need of supplies for gold industry and make recommendations as in case of other South African requirements, but your concurrence in such recommendations must be subject to following conditions. [Page 206]
That supplies for gold mines will not hinder increase in coal shipments. Please notify us at once of any such proposed supplies which might interfere with export of coal.
That coal program is making satisfactory progress. Supplies for gold mines cannot be considered unless this is the case. We have no desire to bargain for coal with gold mining supplies, and we trust it will not be necessary to do so, but we cannot be in position of furnishing critical materials to a non-war industry unless Union is cooperating fully in what is probably greatest contribution it can make to joint war effort.
That only most critical needs of gold mines are to be satisfied. We have no pians to curtail mining activities or to stabilize them at any particular level, but we can provide materials only on minimum basis and therefore expect that present downward trend of operations will continue, at least for some time. For example, we should hope it might be possible to close down marginal mines altogether. Consideration might be given to saving in equipment that could be effected by closing marginal mines and using their equipment in other producing mines.
We expect to be fully advised of all discussions about gold mining as they occur, but foregoing conditions are given as prerequisites to your approval of Council’s recommendations concerning requirements of gold mines. You should use this information to avert any misunderstanding by British and South Africans of position of American member of Council. If you can satisfy us regarding application of these conditions and of others which may arise later in interest of war effort, then recommendations for gold mining supplies will be treated here on same basis as other Union requirements. In other words, we will try to provide such supplies in accordance with recommendations of the Council in which you concur, but quantities finally delivered will be determined by shortages of materials, and other variable factors which cannot be predicted now. In this connection, reference is made to Department’s 63 of April 7 to Capetown, and 129 of June 22 to Pretoria.
Please telegraph your detailed comments on foregoing. We hope that solution of gold mining problems can finally be reached along these lines.
  1. War Production Board.
  2. Office of Lend-Lease Administration.
  3. Office of Economic Warfare.
  4. War Shipping Administration.
  5. Dated August 13, 1943; not printed.
  6. Not printed.