The Natal Land and Colonisation Company was incorporated in 1860 in London. Its capital was partly subscribed by City financiers, the rest being made up of land obtained from Natal land speculators in exchange for fully-paid-up shares. On the basis of very little research, it has been assumed that it was a land-speculation company which held its land against an expected rise in value and rack-rented to black squatters. The deduction has been that this kept land out of the reach of white settlers and thus retarded the development of the white economy. Study of the Company records has shown this view to be entirely erroneous. The primary objective of the Company was to borrow surplus capital in Britain at a low interest rate and invest it in Natal at a higher rate. The landholdings of the Company were used as collateral for raising funds on the London market or sold, when the market permitted to release capital for reinvestment. Only the profit on land sales was distributed to shareholders. This relatively straightforward plan of operation was modified between 1860 and 1890 in reaction to changing economic circumstances in Natal. The Company initially lent large sums on mortgage, but a severe depression between 1865 and 1869 led to large-scale defaulting on repayments and the Company was forced to foreclose. This vastly increased the Company's rural landholdings, and brought in several established plantations and a large number of urban properties. The Company invested unsuccessfully, in the plantation economy, was prevented by the colonial and imperial governments from investing in railway and coal-mining development and, owing to a poor land market, sold only a small proportion of its land. For income, it relied on leasing land to white settlers, renting urban properties and collecting hut-rents from black squatters. This last practice brought it into conflict with white settler interests as it gave blacks an alternative to wage-labour. The Witwatersrand gold discoveries stimulated economic development in Natal, particularly urban development, and the Company finally found a profitable and stable investment area in urban property.

Thesis (M.A.)-University of Natal, Durban, 1991.