PAPF.R MDNRV AND rill': (iOLD EXC]IANr.l<: 

 STANDARD AT TITR CAPE. 



Bv Vroi. R. Lkslih, M.A.. F.S.S. 



When the Dutcli first estahhslicd their scttlenient at the 

 I'ape. they naturally introduced the Dutch coinaj^e. The rix- 

 doUar or reichs-thaler. the standard coin, was worth 4S stivers 

 Dutch, or four shillin.ii^s in British money. Six stivers or pence 

 made a skilling. and eii^dit skillir.ij^s a dollar. Till 17S2 the ctir- 

 rencv consisted solely of coins; there was no pa]:)er in circula- 

 tion. In this year, as Holland was at war with En<^land. the 

 Governor at the Cape, Joachim van Plettenberg, found it im- 

 possible to im]X)rt the usual sui)plies from the Mother Coimtry 

 for the military and civil establishments. On 31st May he there- 

 fore issued paper mone}' to the amount of 47,696 Pds. 4 sk. A 

 promise was given, first by the Governor and afterwards by the 

 Dutch East India Company, that the ])ai)cr would be exchanged 

 for specie as soon as the necessary supplies could be obtained. 

 Further issues continued to be made till by 1784 the amount 

 in circulation had risen to 925,219 Rds. The notes were issued 

 for amounts as small as two stivers, though, by the time of the 

 British occupation, the lowest denomination in circulation w^as a 

 skilling (6d.). The promise to pa}- sj^ecie for these notes was 

 partially fulfilled in 1787. 1788, and 1789, when 825,904 Rds. 

 were cancelled in exchange for specie and bills on Holland. 

 This measure established the credit of the paper and made it 

 easy for the Government to increase the circulation when, as 

 happened immediately, the need again arose. At the surren- 

 der of the Cape to the British forces in 1795 the issues had 

 risen to 1.291,276. Of this amount, 677,366 Rds. had been lent 

 to individuals through the Lombard Bank, which was estab- 

 lished by the Government with a paper money capital in 1793. 

 This sum was secured by mortgages on the property of the bor- 

 rowers. The Dutch East India Comjiany was responsible for 

 the balance of 613,910 Rds. 



This forced increase in the su})j)ly of money naturally 

 caused a fall in its vahie, though the extent of the depreciation 

 is uncertain. A ])etition to the King by the inhabitants of the 

 Cape in 1825 stated that these early issues passed in exchange 

 with Holland at a premium of only 7]- per cent., which was re- 

 garded as about the equivalent of freight and insurance on 

 specie. But this is the evidence of those who were trying to 

 show that the calling down of the dollar to 1/6 was unjust. On 

 the other hand, contemporary writers state that the paper money 

 depreciated to the extent of 50 per cent. As usual when in- 

 flation occurs, the rise in prices was not uniform. Imported 

 articles rose far more than local products, so that the farmers 

 obtained only the customai) ])rices for their ])roduce. while 

 they had to pay more for all they purchased. With the excejv 



