Farewell to prudence: aspects of banking history in South Africa, 1910-1925

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Periodical article

Title:	Farewell to prudence: aspects of banking history in South Africa, 1910-1925
Author:	Jones, F. Stuart
Year:	1996
Periodical:	South African Journal of Economics
Volume:	64
Issue:	4
Pages:	362-380
Language:	English
Geographic term:	South Africa
Subjects:	banking central banks
External link:	https://onlinelibrary.wiley.com/doi/10.1111/j.1813-6982.1996.tb01347.x/pdf
Abstract:	It took five years of mining expansion before the Kruger government was able to establish its own bank in 1891. Then, the National Bank was founded as a vehicle to spearhead the financial independence of the South African Republic. The coming of Union in 1910 presented the Transvaal bank with an opportunity of becoming the principal bank of South Africa, after a decade of relative failure. The coming of Union led the directors of the bank into a policy of expansion by amalgamation with other banks. Political forces in both the Transvaal and the Orange River Colony aided them in the campaign to acquire the Bank of the Orange River Colony and prudence was forgotten in their haste to outbid the imperial Standard Bank. The Great War temporarily ended the competition with the Standard Bank and the accompanying price inflation led to a rise in profits that formed the background to the bank's reckless expansionist policy in 1919-1921. This article gives an overview of the National Bank's prewar expansion and its postwar collapse, which eventually led to its incorporation into Barclays DCO in 1926. Bibliogr.