1'ai'i:k .M()m:\- an'd (uii.d i:.\tiiA.\(;i:. 165 



expressed in IJritish iiidiie}-. Hut a eonsideval)le (|uantity re- 

 mained in circulation until, in March. 18,^6. it was decided to 

 withdraw them from circulation. The holders were given until 

 30th July to have them exchanged. l>ul long after this a dollar 

 continued to mean i/f) in .S,,uth Africa, often to the great con- 

 fusion of newcomers. The value of the sterling notes was 

 maintained hy the (iold h^xchange system in t!ie same way that 

 had been ado])ted for the rixdollars. They could be exchanged 

 at Cape Town for bills on the Treasury at the rate of iioi los. 

 for a bill of £100. .'sterling notes to the value of £202,698 were 

 issued between 18.^2 and 1839. By 1843 the issues had been 

 reduced to £71,086. In this year the British Government de- 

 cided to rid itself of its liability on the Cai)e money. .Accord- 

 ingly, on 9th November, 1843, it was announced that the right 

 of receiving bills on the Treasury for silver or sterling notes 

 was withdrawn. Holders of notes were permitted to exchange 

 them for specie or for Government 5 per cent, debentures. 



The remainder of the subject can only be briefly dealt with. 

 Since the conversion of the sterling notes the paper money at 

 the Cape has been bank money, though the Free State and the 

 Transvaal have since sufifered from over-issues of inconvertible 

 paper money by their Governments. The present Bank Act was 

 passed as a result of the great crisis of 1890-1. which com- 

 menced with the insolvency of the Union Rank in July, 1900. 

 Other failures quickly followed. These so shook the confidence 

 of the i)ublic that, in country districts. ]iavments in the notes 

 even of the sound banks were refused. It was obvious that 

 some regulation must be placed on note issues in the interests 

 of the public. It will be sufficient to deal with the provisions 

 of the Cape Act. as legislation in Natal, the Transvaal, and the 

 Orange Free State followed the same lines. Banks which wish 

 to issue notes must deposit with the Treasurer Government 

 securities of which the par value is e(|ual to the amount of the 

 intended issue. The total "^um wdiich may be issued by a bank 

 is limited to the amount of its paid-up capital and reserve. If 

 a bank suspetids ijayment on its notes, the Treasurer is to ap- 

 point a i)lace at which " the same shall be ])aid in gold as pre- 

 sented by and for the account of the Government." The 

 Treasurer, in the e^'ent of a bank's default, may sell the securities 

 deposited, and has in addition a first lien upon all the assets of 

 the bank. A halfpenny duty is charged on each note issued, 

 and a tax of 10/- per cent, is levied each half-year on the notes 

 in circulation. Before the war, only notes of £20, £to, and £5 

 had any wide circulation. Recently an attem])t has been made 

 to popularise the £1 note, and at least one bank intends to issue 

 10/- notes. 



Recently the Bank Act has been subject to much criticism 

 by those who wish to see a great increase in the use of paper 

 money. Everyone will admit that we use too much gold, and 

 that a great economy could be efl:'ected by the more general use 



