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Source Material on the South African Economy: 1860-1970, Volume 3: 1920-1970

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D. Hobart Houghton; Jenifer Dagut (1973). Source Material on the South African Economy: 1860-1970, Volume 3: 1920-1970. Source Material on the South African Economy: 1860-1970. Oxford University Press, Cape Town.
Type primary source
Scope Economics and economic history of apartheid
Method primary document
Period studied 1920–1970
Regions South Africa, Witwatersrand, Native Reserves/Bantu Areas, Orange Free State goldfields
Themes origins segregation, mining migrant labour, agriculture land, manufacturing industrial policy, bantustans removals influx, labour markets wages, inequality poverty unemployment, business and state, macro fiscal finance debt, politics ideology elections, demography urbanisation, methods data sources
Citation key houghton1973

Argument

This is a teaching anthology of extracts from official reports, parliamentary debates, statutes, journal articles and corporate statements covering South African economic development from 1920 to 1970. The editors argue in their prefaces that the 1920s were a decade of stagnation and conflict, during which rival forces (free trade vs protection, integration vs segregation, poor-white relief, the colour bar) shaped later developments. Devaluation in 1932 launched an industrial break-through and growth continued to 1970. Extracts are selected to represent all shades of opinion, with short editorial preludes; the volume makes no single sustained thesis beyond this periodisation and its emphasis on gold, industrialisation and the race-labour question.

Evidence and method

Extracts from commission reports (Low Grade Mines 1920, Drought 1923, Economic and Wage 1925, Native Economic 1932, Industrial Legislation 1935, Van Eck 1941, Fagan 1948, Tomlinson 1955), House of Assembly debates, Carnegie Poor White report, Reserve Bank and Planning Council reports, statutes (Industrial Conciliation Act 1956, Physical Planning Act 1967), journal articles (SAJE), company annual reports (ISCOR, IDC), Chamber of Mines survey, and Oppenheimer statements. Editorial introductions add national income, employment and trade figures.

Place in the debates

Findings

  • White mine wages rose far faster than African wages during the First World War, and the ratio was a trigger for the 1922 Rand Rebellion. (p. 12)

    During the war, wages of white mine-workers had risen by 60 per cent, while non-white wages had increased by only 9 per cent.

  • The Low Grade Mines Commission found the colour bar was maintained mainly by custom, white worker fears and unions, not just by regulation. (p. 41)

    Custom, public opinion and Trades Unions are therefore at least as powerful as doubtfully legal provisions in establishing and maintaining an effective colour bar.

  • The Economic and Wage Commission majority held that white living standards depended on cheap African labour. (p. 93)

    the relatively high wages of white artizans are due to and dependent on the employment of large numbers of unskilled native labourers

  • Carnegie data indicated large-scale white poverty around 1930. (p. 66)

    The figures obtained show that 17.5 per cent of all the families with children at school were described as 'very poor'.

  • Reserve populations were increasing while agricultural returns fell, a sign of reserve impoverishment (Victoria East 1875-1925). (p. 77)

    while the population has increased by over a 100 per cent the financial return from the products of agriculture and pasturing has fallen 46 per cent

  • National income grew rapidly after devaluation in 1932, driven by gold exports and capital inflows; growth increased dependence on gold. (p. 123)

  • Government revenue came heavily from gold in the 1930s boom. (p. 124)

    Thus some 60 per cent of the increase in State revenues came from increased taxes and other direct receipts from gold mining.

  • The Van Eck Commission criticised protection for raising costs and argued industry should use more African labour, constrained by racial restrictions. (p. 166)

  • Capital flight after Sharpeville caused a balance-of-payments and confidence crisis in 1960-61. (p. 183)

  • The Physical Planning Act used employment of Bantu workers as the control trigger to restrict industrial growth in white urban areas. (p. 256)

    an extension of a factory means any increase in the number of Bantu employees employed in such factory.

  • Oppenheimer argued that excluding Africans from training and skilled work was the root of economic difficulties. (p. 261)

    The refusal to train and use African and, to a lesser extent, Coloured and Indian labour fully and effectively lies at the root of our economic problems

Evidence ledger

Sources used

Source Kind Period How used
Union Statistics for Fifty Years (Bureau of Census and Statistics, 1960) official statistical series 1910-1960 Supplies national output, gold prices, exports and employment figures used in the editors' introductions to Parts 4 and 5.
Report of the Low Grade Mines Commission, 1920, U.G. 34/1920 commission or official report 1919-1920 Estimates the effects of marginal-mine closure, the legal and customary colour bar, and native wages in gold mining.
Report of the Economic and Wage Commission, 1925, U.G. 14/1926 commission or official report 1925-1926 Divided commissioners' views on agriculture, the colour bar, industrial legislation, protection and the African's place in the economy.
Final Report of the Drought Investigation Commission, 1923, U.G. 49/1923 commission or official report 1923 Documents drought losses, overstocking, kraaling and soil erosion in white farming areas.
Carnegie Commission, The Poor White Problem in South Africa, Part I: Economic Report (Grosskopf chapter; Joint Findings) commission or official report 1932 Provides estimates of rural impoverishment, farm mortgage debt and numbers of poor whites based on school questionnaires and census occupations.
Census of 1926 occupational data and school questionnaires (as used by Carnegie Commission) population census 1926; 1929/30 Used to estimate that 220,000-300,000 whites were poor or very poor.
Census of 1921 (and earlier censuses) population and literacy figures population census 1904, 1911, 1918, 1921 Used by Mills and Henderson for the native population size, literacy and local population changes.
Native Affairs Blue Book 1875 and Victoria East Civil Commissioner's returns 1925 state archives 1875 and 1925 Compares African sales of produce and purchases in 1875 and 1925 to show declining rural prosperity.
Macmillan's samples: Grahamstown 1915, a Karroo congregation, Johannesburg Public Relief Board/Rand Aid records author survey or fieldwork 1915-1919 Tests the official 1917 estimate of 106,518 poor whites with local samples.
Official Year Book of the Union of South Africa No. 9, 1926-7 official statistical series 1926-7 Source for the civilized-labour policy and Prime Minister's Circular No. 5 of 1924.
Hansard: House of Assembly Debates 1924, 1925, 1927, 1969 parliamentary debates 1924-1969 Used for the Governor-General's speech, the civilized-labour definition, the protection debate, the ISCOR Bill and the 1969 petroleum gas announcement.
Social and Economic Planning Council Reports No. 12 (1948) and No. 9 (1946) commission or official report 1946-1948 Narrates currency and banking history from 1920 to 1932 and analyses migratory labour and the Reserves.
Report of the Select Committee on the Gold Standard, S.C. 9/1932 commission or official report 1932 Records witnesses' positions on abandoning the gold standard and the committee's advice against it.
Kemmerer and Vissering, Resumption of Gold Payments, U.G. 12/1925 commission or official report 1925 Foreign experts' advice on tying the currency to gold or sterling in 1925.
Report of the Native Economic Commission, 1932, U.G. 22/1932 commission or official report 1932 Describes the economy of the Reserves, overstocking and erosion on the basis of commissioners' observations.
Frankel and Herzfeld national income estimates, 1911/12-1942/43 national accounts macro 1911-1943 Shows the national income rise from £234.7m to £394.8m in 1932/33-1938/39 and attributes it to gold exports.
Report of the Industrial Legislation Commission, 1935, U.G. 37/1935 commission or official report 1935 Assesses the Industrial Conciliation, Wage and Apprenticeship Acts, the skilled-unskilled wage gap and the Labour Department's inspectorate (24 to 37 staff, 1927-34).
Third Interim Report of the Industrial and Agricultural Requirements Commission (van Eck), U.G. 40/1941 commission or official report 1936-1941 Analyses national income, occupation data (1936 census, 1936-37 earnings), the Government Mining Engineer's gold ore estimate, and the tariff and labour policy.
Government Mining Engineer's estimate of ore to be milled (Table XXX) official statistical series 1940-1965 projection Projects gold mining shrinking to one-seventh of its size within 25 years.
Reconstruction Committee of the Department of Agriculture, Reconstruction of Agriculture 1944-5 commission or official report 1943 Documents farmers' economic disabilities and state measures of research and erosion control.
Richards, Viljoen, McLoughlin and 'Economists' Protest' articles in South African Journal of Economics (1935-38) secondary literature compilation 1935-1938 Debate on the Marketing Act, including Richards' table of excess national costs of agricultural assistance (£7,473,000 in 1933).
H. H. Bennett, Soil Erosion and Land Use in the Union of South Africa, 1945 commission or official report 1944-1945 Expert assessment of erosion, citing an official estimate of a 25 per cent loss in fertility.
Legislation: Forest and Veld Conservation Act 1941, Industrial Conciliation Act 1956, Physical Planning Act 1967 legislation gazette 1941-1967 Quoted as statutory texts of conservation, job reservation and control of factory employment of Bantu.
South African Reserve Bank Annual Economic Report 1961 and Quarterly Bulletin official statistical series 1956-1966 Describes the 1960/61 slowdown and capital outflows; supplies balance of payments tables.
Statistical Year Book 1966 (Sadie and du Plessis articles) official statistical series 1955-1966 Review of 1961-66 development and the 1955-65 balance of payments with tables.
Industrial Censuses of the Bureau of Census and Statistics (as used by Steenkamp) industrial mining census 1935-36 to 1960-61 Supplies average annual earnings of white and Bantu workers in the Steenkamp table.
Corporate reports: ISCOR Annual Report 1968; IDC Annual Report 1968; Financial Mail Sasol supplement 1964 company records or reports 1964-1968 Gives output, sales values, capital and loan figures and the development of Sasol.
Chamber of Mines, Mining Survey no. 62, April 1968 chamber of mines or recruiting records 1960-1966 Gives mineral reserves, output and export figures for 1960 and 1966.
Economic Development Programme for the Republic of South Africa 1965-70 commission or official report 1965 Official forecast of white labour demand and supply.
Native Laws Commission (Fagan) 1948, U.G. 28/1948 and Tomlinson Commission Summary 1955, U.G. 61/1955 commission or official report 1948-1955 Evidence and projections on migratory labour, urbanisation and development of Bantu areas.
Hoernlé, South African Native Policy and the Liberal Spirit (1939); Oppenheimer speeches (1950, 1971); van Eck 1951 lecture secondary literature compilation 1939-1971 Contemporary opinion and eyewitness accounts on separate development, the Free State goldfields and the first border industry.

Inference

Quantification: Descriptive tables.

This is a documentary source-book. Edited extracts from official reports, parliamentary debates, statutes and journal articles are arranged chronologically with short editorial preludes. The editors make no systematic argument of their own. Inferences come from contemporaries (commissions, economists, politicians), with some tabulated statistics.

Key claims

Claim Basis Strength
The 1920s were a decade of depression: national output at current prices fell from R487m in 1920 to R434m in 1932 and per capita income declined. (p. 11) Union Statistics for Fifty Years, cited in the editors' introduction. Partial data
The Low Grade Mines Commission estimated that closing marginal mines would harm tens of thousands of workers and State revenue, and that the effective colour bar would persist even if the legal bar were abolished. (p. 23) Low Grade Mines Commission 1920, Chamber of Mines statements, Collie's estimates, Annexures G and H on mining occupations. Partial data
The number of poor whites cannot be exactly counted, but estimates range from over 100,000 to over 300,000 depending on the method. (p. 56) Macmillan's local samples and the 1917 official estimate; Carnegie school questionnaires and the 1926 census occupational groups. Partial data
African rural economies in the Reserves deteriorated through overstocking, erosion and population pressure; in Victoria East the financial return from agriculture fell 46 per cent between 1875 and 1925 while population doubled. (p. 77) Henderson's comparison of the 1875 Blue Book and 1925 returns; Native Economic Commission observations. Partial data
The post-1932 boom, with national income up 68 per cent in 1932/33-1938/39, was driven by export earnings and capital inflow generated by the higher gold price after devaluation. (p. 112) Frankel and Herzfeld national income series and gold company capital issues. Systematic data
The van Eck Commission found South African manufacturing uneconomic and protection costly, argued gold mining would decline, and recommended freer use of African labour in industry. (p. 150) Third Interim Report using national income, occupation tables and the Government Mining Engineer's ore estimate. Partial data
Post-war growth averaged about 5 per cent a year, with manufacturing displacing agriculture and mining and a major shift of non-white labour to industry (non-white manufacturing and construction employment rising by over 500,000 in 1945-65). (p. 162) GDP series, Reserve Bank Bulletin, employment table in the introduction to Part 6. Systematic data
Skilled-labour shortages in the 1960s, with whites earning four to five times non-white wages, are held to constrain growth and non-white employment. (p. 202) Houghton's use of government earnings data and the Economic Development Programme forecasts. Partial data

The author's caveats

The editors say selection was necessarily rigorous and that statistical series for the later period are easier to obtain from government publications, so extracts concentrate on problem areas. Several extracts themselves flag data limits: the Carnegie report says an exact poor-white enumeration is impracticable; Macmillan doubts the exactness of the 1917 figures; Mills notes early censuses of Africans were inaccurate; Steenkamp says the available general statistics do not permit a precise analysis of unskilled wages.

Gaps in the evidence

As an anthology the work is not designed to test claims, so it offers no independent verification of the extracted statistics. Evidence from the African and employee side is thin: recruiting and wage records, oral testimony and household surveys are largely absent, as are the mine and company archives behind the commission evidence. Original census and industrial-census microdata, Native Affairs files and the commission oral evidence existed then and are largely accessible in archives now. They would allow the claims on wages, poverty and the effects of the colour bar to be tested directly.

Replicability: Data public and well described.