¹ For an account of the prewar sterling area see: Drummond, I. M., The floating pound and the sterling area, 1931–39 (Cambridge, 1981)CrossRefGoogle Scholar; and Cain, P. J. and Hopkins, A. J., British imperialism (2 vols., London, 1993), II, ch. 5Google Scholar. For wartime developments: Savers, R. S., Financial policy, 1939–45 (London, 1956)Google Scholar. For the post-war years see Strange, S., Sterling and British policy: a political study of an international currency in decline (London, 1971)Google Scholar; Krozewski, G., ‘Sterling, the “minor” territories, and the end of formal empire, 1939–1958’, Economic History Review, XLVI, 2 (1993), 239–65Google Scholar; Cain, and Hopkins, , British imperialism, II, 281–5Google Scholar; and Hyam, R., ed., The Labour government and the end of empire (4 parts, London, 1992), pt. II, doc. nos. 95–8.Google Scholar

² Drummond, I. M., The gold standard and the international monetary system, 1900–39 (London, 1987), p. 42CrossRefGoogle Scholar; and Floating pound and the sterling area, chs. 3–5.

³ In 1956, according to the South African census of that year, £454 million of external capital was invested in South African mines, including £308 million invested in gold mines. Frankel calculated that the accumulated capital of gold mines existing at the end of 1965 was £639 million. South African Reserve Bank, ‘The foreign liabilities and assets of the Union of South Africa: final results of the 1956 census’, supplement to the Quarterly Bulletin of Statistics, no. 50 (1958), tab. 1Google Scholar. Frankel, S. H., Investment and the return to equity capital in the South African gold mining industry, 1887–1963: an international comparison (Oxford, 1967), p. 17.Google Scholar

⁴ The value of agricultural exports is shown in Table 1; the value of gold exports can be judged from Fig. 2. In the years 1932/3 to 1938/9, the average value of gold exports accounted for over 70% of the value of all exports, with agricultural exports accounting for just over 20% of all exports. Frankel, S. H. and Herzfeld, H., ‘An analysis of the growth of the national income of the Union in the period of prosperity before the war’, South African Journal of Economics, XII, 2 (1994), 124.Google Scholar

⁵ While sterling was convertible (or at least partially so), the Bank of England's intervention in the London gold market was one of the principal means by which it managed the sterling price of gold (which was in effect the sterling-dollar exchange rate). The London gold market was, to a remarkable extent, based on the sale of South African gold. See Fig. 1.

⁶ de Kock, G. H., A history of the South African Reserve Bank (Pretoria, 1954)Google Scholar, chs. 14, 17 and 18. Gregory, T., Ernest Oppenheimer and the economic development of southern Africa (Gape Town, 1962)Google Scholar, ch. 8. The inter-relationship of Britain's world-wide economic and political influence was acknowledged publicly and explicitly by the Radcliffe committee which did not think it possible to dissociate sterling area arrangements ‘either from the long-standing trading relationships that lie behind them or from the political and other links by which most members of the area are joined in the Commonwealth’. Britain, parliament, committee on the working of the monetary system [Radcliffe committee], Report, Cmnd. 827 (1959), p. 240.

⁷ Britain's (and the sterling area's) central reserves of convertible external exchange are shown in Fig. 3. This figure also shows that these reserves were, until the late 1960s, held mainly in gold. Drummond, , Gold standard, pp. 39–42Google Scholar; and Floating pound, ch. 1.

⁸ Drummond, Floating pound, ch. 4.

⁹ In presenting their case before the select committee on the gold standard, representatives of the South African federated chamber of industries put forward three reasons for a return to parity with sterling. First, this would be the quickest way of drawing capital back into the country. Secondly, devaluation would remove the price advantage gained by imported manufactured goods. Finally, ‘there would be every opportunity to recover the trade with Rhodesia which has practically ceased to exist in many cases’. South Africa, Report of the select committee on the gold standard (Gape Town, 1932), pp. 665–8Google Scholar. For the views of the gold producers' committee of the Transvaal chamber of mines see ibid. pp. 468–543.

¹⁰ Davenport, T. R. H., South Africa: a modem history (London, 1987 edn), pp. 302–8.Google Scholar

¹¹ Drummond, Floating pound, ch. 4.

¹² Drummond, I. M., British economic policy and the empire (London, 1972), chs. 1–3Google Scholar. So entrenched became the dependence of South African fruit growers on the British market that the chairman of the South African deciduous fruit board said, in 1960, that ‘One of the most important factors contributing to the economic welfare of the South African fruit fanner were the preferences which the Union received through its membership of the Commonwealth’. Robertson, H. M., ‘Can industry afford to break the economic link?’, Optima, X, 3 (1960), 128.Google Scholar

¹³ Sayers, R. S., The Bank of England, 1981–1944 (2 vols., Cambridge, 1976), II, 568Google Scholar. Sayers, Financial policy, chs. 8 and 10.

¹⁴ Sayers, , Financial policy, pp. 306–20Google Scholar. Henry, J. A., The first hundred years of the Standard Bank (London, 1963), pp. 261–9.Google Scholar

¹⁵ Wright, K., ‘Dollar pooling and the sterling area, 1939–52’, American Economic Review, XLIV (1954), 560.Google Scholar

¹⁶ De, Kock, History of S.A.R.B., pp. 241–4Google Scholar. Henry, , Standard Bank, p. 261.Google Scholar

¹⁷ For South Africa's relative significance as a contributor to the post-war ‘dollar pool’ see Fig. 3. The figures shown for South Africa were not published, though they were guessed at. The British government, conscious of the political dangers of advertising which independent members of the sterling area were net drawers from the ‘pool’, refused to reveal publicly the full details of drawings and contributions by countries such as South Africa.

¹⁸ Sayers, , Financial policy, pp. 313–15.Google Scholar

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²⁰ Sayers, , Financial policy, pp. 319–20.Google Scholar

²¹ P.R.O., Treasury papers, T 236/2268, note by A. T. K. Grant, 25 June 1947; T 236/2269, Eady to Playfair, 16 Aug. 1947 and Bridges to Catto, 22 Aug. 1947.

²² T 236/2269, Catto to Bridges, 23 Aug. 1947.

²³ T 236/2269, Catto to Bridges, 23 Aug. 1947 and note by Bank of England, 25 Aug. 1947.

²⁴ DO 35/3518, Attlee to Smuts, 27 Aug. 1947. The South African government's concern about capital goods had been expressed by Hofmeyr. He had been ‘informed by Oppenheimer that all gold mining machinery for new Free State mines must come from United Kingdom and he had some fears lest deliveries of machinery from United Kingdom to Union might suffer through priority being given to United Kingdom to manufacture for export to hard-currency countries’. T 236/2269, Baring to Machtig, 25 Aug. 1947.

²⁶ T 236/2270, Herbert to Fisher, 26 Sept. 1947. T 236/2271, note of meeting, 10 Sept. 1947. Johannesburg, William Cullin library, Hofmeyr papers, A1/D1 1/2, Holloway to Hofmeyr, 1 Oct. 1947.

²⁶ A few months after Smuts's defeat a British Treasury official complained that ‘South Africa is getting 9% of our total exports of capital goods; the only country getting a higher proportion is India with 10%’. T 236/1514, R. Burns to J. J. S. Garner, 1 Sept. 1948.

²⁷ T 236/2272, note by A. T. K. Grant, 2 April 1948. DO 35/3518, Baring to Machtig, 27 Oct. 1947. T 236/2269, Treasury note, 15 Sept. 1947.

²⁸ Geldenhuys, D., ‘The effects of South Africa's racial policies on Anglo-South African relations, 1945–61’ (unpublished Ph.D. thesis, Cambridge University, 1977), pp. 99, 103, 111 and 117–18.Google Scholar

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³⁰ T 236/2274, note of Treasury and Bank of England meeting, 24 Nov. 1948.

³¹ T 236/2275, notes by H. G. C. and Flett, 28 June 1949. T 236/2276, note by L.P., 26 July 1949.

³² The political importance of seemingly insignificant agricultural exports should not be underrated. A good example is jam which, if compared to wool, was of no consequence from a balance of payments perspective (see Table 1). Jam was, nonetheless, vital in certain parliamentary constituencies, including those of two long-serving Nationalist cabinet ministers: Eric Louw and Eben Donges. In 1948, Louw made direct personal appeals to British ministers in his efforts to encourage greater British jam imports from South Africa. Dönges was known to be similarly concerned about the scale of these imports. T 236/1514, McNeil's report on talk with Louw, 11 Oct. 1948; note of conversation between Cripps and Louw, 15 Oct. 1948; Baring to C.R.O., 25 Oct. 1948.

³³ Pretoria, Central Archives Depot, Holloway papers, A80/8, Holloway to Steyn, 28 July 1949; A 80/10, Steyn to Holloway, 5 Aug. 1949.

³⁴ A 80/10, Steyn to Holloway, 1 Sept. 1949. DO 35/3520, note by Pickard, 14 Oct. 1949.

³⁵ DO 35/3520, note by Pickard, 14 Oct. 1949. Gregory, , Oppenheimer, p. 566.Google Scholar

³⁶ DO 35/3520, Baring to C.R.O., 20 Oct. 1949 and 16 Nov. 1949.

³⁷ DO 35/3520, Baring to C.R.O., 16 Nov. 1949.

³⁸ T 236/2277, note by Flett, 18 Nov. 1949.

³⁹ DO 35/3520, note of meeting, 28 Nov. 1949.

⁴⁰ T 236/2642, note by Flett, 30 June 1950. T 236/2914, Thompson-McCausland to Brittain, 24 Sept. 1951. T 236/3272, note by Flett, 28 Nov. 1952 and note by Rowan, 10 June 1953.

⁴¹ A 80/12, message to Cobbold, 16 March 1954. T 236/4083, note by Halley, 13 Dec. 1954. For the rise in sales of South African gold in Britain after the reopening of the London market see Fig. 1.

⁴² P.R.O., premiers' (prime ministers') papers, PREM 11/539, note of meeting between Havenga and Swinton, 12 June 1953. DO 119/1167, note of meeting between Havenga and Butler, 12 June 1953.

⁴³ DO 35/5632, biographical notes on Louw, undated.

⁴⁴ For Britain's significance as a market for agricultural goods see Table 1. For Britain's overall significance as a customer and as a supplier see Fig. 4.

⁴⁵ Jones, S. and Muller, A., The South Africa economy, 1910–1990 (London, 1992), p. 223.CrossRefGoogle Scholar

⁴⁶ DO 35/7139, note by Home, 13 July 1955.

⁴⁷ DO 35/7139, Laithwaite to Home, 13 July 1955.

⁴⁸ DO 35/7139. note by Home, 18 July 1955.

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⁵⁰ T 236/4877, Heathcoat Amory to Dönges, 18 Dec. 1958.

⁵¹ T 236/4083, note by Hillis, 15 Feb. 1954. T 236/4877, Heathcoat Amory to Donges, 18 Dec. 1958.

⁵² T 236/4873, Heathcoat Amory to Macmillan, and Treasury note, 17 Feb. 1960. The Radcliffe committee (which studied the problems of British monetary policy over a period of almost two years) concluded in August 1959 that ‘Although there have been occasions when the functioning of the sterling area has thrown an added strain on the reserves and when the capital requirements of the area have added to the total load on the reserves of the United Kingdom, we are satisfied that it is in the interest of this country to maintain existing arrangements’. Radcliffe committee, Report, p. 240.

⁵³ T 236/4873, Heathcoat Amory to Macmillan, and Treasury note, 17 Feb. 1960. T 236/4874, note by Pliatsky, 30 Dec. 1959. The sterling area may, as Krozewski argues, have become less valuable ‘when the dollar gap closed, and after convertibility was re-established in 1958’. But there is nothing in the evidence available in connection with South Africa to suggest that the British government itself viewed the sterling area as having diminished in importance prior to the end of 1960 at least. Krozewski, , ‘Sterling, the “minor” territories, and the end of formal empire’, p. 241.Google Scholar

⁵⁴ P.R.O., cabinet papers, CAB 128/34, CC21(60)3, 29 March 1960, and CC22(60)3, 1 April 1960.

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⁶¹ The conclusions drawn by this paper thus accord with those accounts that have emphasized both the many continuities of South African government policy which were unbroken by the advent of National party rule and the pragmatism of Nationalist governments supposedly bent from the outset on implementing a ‘grand plan’ of apartheid. For an early expression of this view see Hyam, R., ‘The myth of the “magnanimous gesture”: the Liberal government, Smuts and conciliation, 1906’, in Hyam and G. Martin, Reappraisals in British imperial history (London, 1975), p. 184CrossRefGoogle Scholar: ‘If the Nationalist government brought a new feature to the South African scene it lay…in their efficiency in securing their electoral base’. Such views have been the subject of considerable debate but they have recently gained more widespread acceptance: see Phimister, I. R., ‘Secondary industrialization in southern Africa: the 1948 customs agreement between Southern Rhodesia and South Africa’, Journal of Southern African Studies, XVII, 3 (1991), 430–42.CrossRefGoogle Scholar

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