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| Article |
| The Economy in the British Era |
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| The Cape Merchant Class |
Merchants, many of
whom had worked for the East India Company, established themselves at Cape Town
and developed a strong import/ export industry.
Utilising the global reach of British commerce, they prospered
by exporting Cape produce - particularly wine in the 1820s and wool later in
the century. They also imported goods such as coffee, horses, wood and coal to
sell locally and for re-export. As wheat, wine and dried fruit exports grew, so
shipping greatly increased, eclipsing the volumes seen under the VOC, and Cape
Town became the home port for many new companies, no longer just a 'stopping
off place'.
A society in London - the Cape of Good Hope Trading Society - helped the
merchants develop their markets, and represented their interests in London. The
merchants also enjoyed trade networks throughout the empire, and access to
capital in London. In this way British traders at the Cape became a wealthy
class and stimulated commerce by lifting the smothering blanket of monopoly
control imposed by the VOC.
By the 1820s the merchants had become the backbone of a powerful middle class
in the Cape, fewer in number than the Dutch but more active and energetic. They
campaigned for better infrastructure at the Cape, particularly a harbour. They
demanded the relaxation of controls to allow private banks to operate and also
opposed slavery, partly for moral reasons but also to create a much larger and
more fluid pool of labour.
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| Companies and Banks |
The aspirations of
the Cape middle class for the liberalisation of commerce found expression in
the foundation of the Cape of Good Hope Bank by John Bardwell Ebden in 1837,
the first private bank in the Cape and still active today. An investment
company called 'The Board of Executors' began a year later and remains a
significant Cape Town company.
By this time there was a proliferation of joint-stock
companies, mainly based on local capital. Compensation paid for the
emancipation of slaves created capital among the urban middle class. They
financed building programmes for the liberated slaves. The growth in the
wage-earning labour market helped to produce economic growth, upon which the
middle class were able to capitalise.
While individuals in the town prospered by property and
business development, joint stock companies were mainly associated with
agriculture, particularly the growth of the Merino wool industry in the Eastern
Cape.
In 1845 Mutual Life was founded as an insurance company (now
the very large company, Old Mutual). The first major external (London)
investment was in 1855 for the Cape Town Railway and Docks Company. By 1860
there were five local banks and several insurance based institutions. In 1861
the London and South African Bank was formed.
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| Mining and the Economic Boom |
The development of
financial and political structures during the eighteenth century suddenly bore
fruit with the discovery of diamonds in 1867. The Alfred basin of the harbour
had been completed and soon it was the entry point for an unprecedented traffic
of men and supplies ready to take the railway up to Kimberley and try their
luck on the farm of 'de Beer'.
By 1872 there were 50,000 miners living in Kimberley. The
economy of the Cape grew fivefold in five years, 1870 - 1875. For the first
time significant amounts of capital were invested in the Cape by London based
banks and companies, leading to a dramatic increase in local joint-stock
companies.
By the 1890s they were building grand colonial headquarters
along Adderley Street, such as the Standard Bank, which is still in use and a
prominent Cape Town building. |
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