NIGERIA, A PERSONAL HISTORY
by Ian McCall

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Chapter 10 - GEORGE GOLDIE (1): Developing the Niger‘s Resources

George Goldie insisted all his personal papers be destroyed and not made available to anyone. He therefore made it difficult for researchers or unasked biographers to do justice to the contribution he had made to the formation and development of Nigeria. His life characterises the determination of those who drove the companies that opened up the trade there. Born to money (his family made its fortune in smuggling goods into Ireland and England prior to the Isle of Man becoming an integral part of the United Kingdom) and to rank (his father was Speaker of the House of Keys in the Manx Parliament for all but two years of his time on the Niger), George Dashwood Goldie Taubman professed atheism, ran off with his governess whom he married in his thirtieth year after a life thus far noted for licentiousness and irresponsibility. I shall refer to him from now on as Goldie for that was the name he assumed when he was knighted in 1887. His original surname of Taubman was German and the Goldie part that he elected to be known by, was a connection through his mother who came of a Dumfriesshire family in South-West Scotland. If he believed in anything it was that civilisation was a product of increasing prosperity. It was he who was to add the most populous of all the tropical African colonies to the British Empire and would lay the beginning of significant administrative policies in the colonies. Through family finance and connections he took over a small firm, Holland Jacques and Company, that had been trading on the Niger without achieving an acceptable level of profit. His venture into the world of trade and politics in the Niger delta took place in 1875. Fired by the works of probably the greatest and certainly the most cerebral of the African explorers, Heinrich Barth, George Goldie read avidly the vast outpourings of that man’s most inquiring mind.

A number of expeditions by men of experience on the rivers of West Africa, men like MacGregor Laird, Thomas Buxton and William Baikie failed to establish ‘legitimate commerce’ in those parts of the lower Niger where the river had not yet divided into its many mouths. This was due largely to the opposition of tribes allied to the Brassmen who had a vested interest in maintaining the monopoly of the coastal intermediaries. Goldie realised the problem confronting the company was too much competition and was of the private view that monopoly was the only cure. This in his opinion could only come about by amalgamation. He formed a new company which bought the assets of Holland Jacques, gave itself power to amalgamate with other companies as necessary in their joint interest and amalgamated with two bigger and influential companies and smaller British companies under the name of the United African Company. Again the company bought all the assets of the member firms which received shares according to the proportion of the assets it had sold. Their agreement prevented shareholders from operating on the Niger within a thousand miles of Akassa on the Nun River branch but allowed two substantial companies holding shares in the United African Company, Miller Brothers and James Pinnock, to operate their other activities in the oil rivers at Opobo and Benin by allowing them to trade independently outside a limit of 25 miles of any of the mouths of the Niger. In four years and at the early age of 33, Goldie, although a minor shareholder, took on the responsibility of running the amalgamated company, a move which was strongly supported by older and more experienced traders from the larger companies.

While these measures gave the new company a greater bargaining power with producers, particularly of palm oil, and established a new power balance on the river, Goldie’s problems did not disappear. Just as his success seemed certain, a fresh challenge appeared from French interlopers. Unable to compete with British free trade, the French began to look to extend their existing colonies and establish strong economic bases in which they could set up tariffs against rivals and redeem the name of France after the ignominy of the defeat in the war of 1870 and the loss of Alsace Lorraine to which she would never be reconciled. Enterprising French traders began to appear on the lower Niger in competition with the recently formed United African Company. Goldie sensed an underlying political purpose behind their appearance when he linked this move to French activity near the source of the Niger.

The known French propensity for grandiose plans that connected scattered possessions on interior lines had convinced him that a latent threat existed. The French made a treaty with the Emir that gave them the right to trade freely among the Nupe. They followed this with the setting up of stations on the upper part of the lower Niger at Aboh and Onitsha and on the Benue. They even set up in the delta in competition with the United African Company. Prices paid to Africans for their palm oil went up by 25% and competition became cut-throat. Goldie’s response to this was to attempt to revive an old British solution that had been ousted by free trade - the monopoly arising from a Royal Charter which gave political and economic control to the chartered company as in the case of the East India Company well over a hundred years earlier. Legal advice suggested that charters were instruments of incorporation and that a company already incorporated under the Companies Act might not receive such a charter. Consequently, yet another new company was formed which purchased the assets of the old company. It made its balance sheet look sound by a 19th century form of creative accounting and it cultivated and appointed names of repute to the board to extend the influence of the company in high places. It was incorporated as the National African Company Limited.

The British administration did not want any more colonies with their necessarily expensive machinery of government. A protectorate would be established and control should continue to be asserted by the consul on his periodic visits with the assistance of vice-consuls. Any charge on imperial funds was out of the question. Goldie was able to take systematic advantage of the government’s financial embarrassment and gradually attract to the National African Company an official status as agent of the British government. The chairman of the company, Lord Aberdare, a friend and ex-colleague of the prime minister and foreign secretary of the day, was invited to get the views of the traders on the issue of their paying tax to meet the costs of recurrent expenditure. This played into Goldie’s hands for Aberdare ignored the Liverpool interests in the Oil Rivers and consulted only Goldie and Hutton, both directors of the National African Company. The Liverpool interest was the African Association, a group of traders based in the coastal area based outside the area dominated with official sanction by the National African Company. Goldie realised that with finances to administer the Niger region, there would be little incentive for the government to transfer the administration to the company at a later date. If the charter was still the goal, then Goldie and his fellow directors had to ensure that the Foreign Office remained without funds. An earlier and repeated request to appoint David MacIntosh, the company chief agent, as a consul to assist in the struggle with the French was eventually conceded as a result of their refusal to recommend taxation of the traders.

By the end of two years since its formation, the National African Company had achieved much of the political power it had set out to obtain. The relationships between a chartered company that drew its authority from concessions from local leaders and the hands-off protection of the imperial power already existed in theory in every detail except the instrument itself conferring Royal Charter. At this point Goldie was confronted by another possible setback. This time it was the sudden and unexpected entry into Africa of Germany under Bismarck, motivated more by European politics than economics. The aim was to draw Britain more closely into the German system of alliances. Germany had quickly established protectorates in the Cameroons, in South-West Africa and in Togo. It was Bismarck who had proposed the conference in Berlin to secure free navigation and define areas of interest among other items, on the Niger and the Oil Rivers. But it was the French ambitions for colonial expansion that spelt potential disaster for Goldie’s plans. His hope of a monopoly on the river while the French traders were still there was clearly impossible. If Goldie could buy out the French traders before the conference then the British position would be transformed. With only the National African Company trading on the Niger, the British delegates could argue that a proposed plan for an international commission was totally irrelevant. Goldie lent his private fortune to the company to break the French by trading at a loss. By June 1884 the two smaller French firms had had enough and sold out. Protracted negotiations continued with the largest French company, Compagnie française de l’Afrique équatoriale. A week before the conference Goldie was in a position to announce that the French company had capitulated. It agreed to amalgamate with the National African Company in a like way to that in which the original firms had formed the company in 1879. This enhanced Goldie’s reputation and further enhanced the status of the company as quasi-official representative of the British government on the Niger.

The conference adopted a new Niger Navigation Act proposed by the British representatives which did not include an international commission. It was almost inevitable that the new British obligations would be fulfilled by granting Goldie’s company a Royal Charter. It took more time to achieve this as there was resistance in the British cabinet to giving the company carte blanche to raise duties and taxes for revenue and profits. So much did the government prevaricate that Goldie proposed for consideration by the board, and leaked the information in official circles, that if there was no government action forthcoming, the company should be free to open negotiations with any foreign power with the object of placing itself under the flag of that country and transferring to it its treaties and the territory of which it was in effective occupation. After a time there was a compromise solution in which government had a certain control. The document,however, was drafted with such ambiguity that the company was really having a position legitimated that already existed.

The first regulations issued by the company on the day after the charter received its seal in 1886 and the company became known as the Royal Niger Company, were the tariff and licensing regulations. During the life of the company the only regulations ever made to which foreigners had to submit, apart from those setting out the framework for the administration, were commercial ones. Foreigners were any persons not born in the company’s territories including Britons and Africans from the Oil Rivers or Lagos. These rules had the effect of establishing the greatest possible impediments to the trade of competitors according to Goldie’s interpretation of the Berlin Act. Ships could only trade at listed ports of entry where import duties were exacted. What stung the other European firms was not these rules but the duty of 100% of the landed value on spirits which were essential to the palm oil trade. If vessels were proceeding up-river beyond Lokoja they had to pay double duty. The company claimed property rights on all the land adjacent to the river and would not sell any for wharves or warehouses. It was therefore impossible to land, tie up, sell goods or set up shop without the company’s assistance. The Lagos government which administered Lagos and Colony and whose authority extended in effect into the Yoruba lands of Western Nigeria and beyond were told from London to cease corresponding with the Nupe on the middle Niger as this was now regarded as the company’s sphere. The company was also expected to engage France in the contest for the middle Niger. Goldie’s vision now had a shape.

Ian Mcall Auchencrow
Berwickshire, Scotland July 2003

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CHAPTER 11