In the first four decades of the century English companies completely dominated the mining, manufacturing, financial and commercial sectors. It is estimated that by 1938, nearly three decades after Union, the share of Afrikaner companies in the different sectors was 1% in mining, 3% in manufacturing and construction, 8% in trade and commerce and 5 % in the financial sector.
After the South African War Afrikaner savings started flowing into trust companies, boards of executive and agricultural co-operatives. In 1914 the company Nasionale Pers was founded in Stellenbosch, which began publishing De Burger in 1915 and De Huisgenoot in 1916. The latter unexpectedly soon became very profitable. Called the Afrikaners’ ‘people’s university’, it was at one stage read by a fifth of all Afrikaner families. In 1918 the Suid-Afrikaanse Nasionale Trust en Assuransie Maatskappy (Santam) was founded and it established the Suid-Afrikaanse Nasionale Lewens Assuransie Maatskappy (Sanlam) The two insurance companies marketed themselves as ‘genuine Afrikaner people’s institutions’. The Sanlam motto became: ‘Born out of the volk to serve the volk.’ After major setbacks in their early years, Sanlam and Santam steadily expanded. In 1925 a journal covering the insurance industry called the rise of Sanlam ‘extraordinarily rapid’. In agriculture the first major advance was the founding in 1918 in Paarl of a wine co-operative, the Ko-operatieve Wijnbouwers Vereniging (KWV).
In the north the Afrikaners took long to recover from the devastation of the South African War. Here the state corporations, Iscor and Escom (a steel and iron plant and an electricity supplier), founded in the late 1920s, provided avenues for Afrikaner managers.
The few Afrikaner enterprises were very modest undertakings. The Afrikaner-Broederbond had a key hand in the establishment of the savings bank Volkskas in 1934, which 60 years later became part of Absa. Driving Afrikaner businessmen was not profit alone, but their determination to prove that Afrikaners could succeed in the world of business, which was considered the domain of English or Jewish South Africans.
Albert Wessels, a successful future entrepreneur, wrote that when he arrived in Johannesburg in 1936, he found only three Afrikaner businesses of any significance: ‘the publishing company Afrikaanse Pers, with its struggling pro-United Party daily, Die Vaderland; the bank Volkskas . . .; and a shop for men’s clothes, soon to fold.’ He added: ‘We remained aware of the fact that our parents had been defeated, and deep in our consciousness there was a craving for rehabilitation and the urge to prove that we were at least the equals of the conquerors and their descendants.’
By the late 1930s Afrikaner farmers had recovered from the Depression and drought. They were aided by farming co-operatives, which had grown rapidly since the 1920s, offering a service without the profit motive and a low-interest advance on the coming crop. The government stabilised the prices of the principal products through new control boards. A considerable part of the risk of farming was removed by the guarantee of a minimum price. By the late 1930s and early 1940s farmers still vociferously complained of labour shortages but the most enterprising among them were ready for the great boom period that followed. Many had built up savings that they were keen to invest.
The 1938 centenary celebrations of the Great Trek provided a spur for the raising of capital, with D.F. Malan and the Free State church leader J.D. (‘Father’) Kestell suggesting that the best tribute to the Voortrekkers would be to save poor Afrikaners through a reddingsdaad, a rescue act.
The Afrikaner Broederbond decided to assign the FAK the task of organising a congress to discuss setting up a large volksfonds (people’s fund) for the rehabilitation of the Afrikaner poor. Early in 1939 the Broederbond’s Executive Council had made up its mind against a ‘charity plan’. It preferred deploying Afrikaner savings and capital in enterprises that could ‘save’ the Afrikaner poor by employing them. In this way the Afrikaners could also become ‘autonomous economically’.
Senior executives at the Cape Town-based insurance company Sanlam came to a similar conclusion. Sanlam was eager to escape from the narrow limits of insurance and agricultural credit to which it was subjected, and to establish its own finance house to centralise efforts to attract Afrikaner savings for investment in promising enterprises.
The driving force of the South African economy were the mining houses obtaining investment funds through their financial corporations, which, as listed companies on the Johannesburg Stock Exchange, attracted funds from investors worldwide. The Afrikaner nationalists took this as their model, but they wanted their finance house to marry three quite different objectives: to make profit for its shareholders, to promote the collective advancement of the Afrikaners and to help Afrikaners escape from poverty by Afrikaner employers offering them respectable jobs.
Tienie Louw’s proposal for a finance house to the Sanlam board captured the spirit of Afrikaner entrepreneurship at that time. It was self-evident that an Afrikaner finance house would have to observe sound business principles, and that the profit motive would not be excluded. ‘But while management would try to make the greatest possible profits for its shareholders, the main purpose will always be to enhance the Afrikaner position in trade and industry.’
The initiatives of Sanlam and the Bond would not make much impact as separate enterprises. The Bond leadership had little business experience and, acting on its own, Sanlam would be seen as furthering its own interests. The Bond-Sanlam alliance that came about provided the credibility vital in a campaign to attract Afrikaner savings for investment. It can hardly be a coincidence that several Sanlam senior executives accepted invitations to become members of the Bond at this point.
The alliance’s first step was to hold an economic congress, called the Eerste Ekonomiese Volkskongres (First Economic Congress of the People). It met in October 1939 in Bloemfontein and was attended by politicians, businessmen and academics. The poor white problem received little attention. Church ministers and populist politicians were conspicuous by their absence. The list of speakers read like a ‘Who’s Who’ of future Afrikaner entrepreneurs.
Considerable effort was made to break down the prevailing opposition among Afrikaners to a form of capitalism in which individuals were enriched without the community benefiting. In his opening address L.J du Plessis defined the goal as mobilising ‘the volk to conquer the capitalist system and to transform it so that it fits our ethnic nature’. This adapted capitalist philosophy was later called volkskapitalisme, or capitalism of the people. It meant that free enterprise was not intended primarily to create wealth for individuals for their own sake, or for a handful of individuals. It had to help the Afrikaners escape from their economic thrall and gain for the people their legitimate share of the economy.
The Volkskongres created three institutions: a finance house, a chamber of commerce and an organisation to assist in a ‘rescue action’. The most important was the finance house, Federale Volksbeleggings (FVB), controlled by Sanlam. Afrikaners were asked to engage in conventional investment in shares in sound Afrikaans enterprises. By 1943 more than £2 million of new investment had gone to buy shares in Afrikaner companies, mostly of FVB. By the end of World War II, FVB had major investments in fishing, wood, steel, chemicals and agricultural implements. Bonuskor, an investment corporation in the Sanlam group, was the first Afrikaans company listed on the Johannesburg Stock Exchange, posted on 26 May 1948, coincidentally also the day when the National Party captured power.
One of FVB’s first loans to a small Afrikaner enterprise was to a company belonging to a young entrepreneur, Anton Rupert. Within two decades, Rupert would build up the Rembrandt group of companies as a world-scale conglomerate with interests in tobacco manufacturing, wine production and luxury goods. It is estimated that the Afrikaner share of certain sectors of the private sector rose between 1938 and 1975 as follows: mining 1% to 18%, manufacturing 3% to 15% and trade 8% to 16%.