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On 28 December 1932, “... [the] Government issued a proclamation under the Finance Emergency Regulations Act of 1931, relieving the Bank of its obligation to pay its notes in gold coin on demand and making such notes legal tender for any payment by the Bank as from that day”, writes De Kock (1954, p 163).
On 29 December 1932, The Minister of Finance clarified that the Union had fully cut the link with the gold standard, and the banks would be left free to determine the level of the South African pound in accordance with their exchange resources (De Kock, 1954, p 163).
General Smuts was not impressed. In an interview granted to the Rand Daily Mail which was published on 30 December 1932, the General “expressed his amazement that the Government, in abandoning the gold standard, should have continued its ‘bewildering blundering’ by omitting to follow sterling”.
General Smuts called for the government’s resignation.
On 31 December 1932, Prime Minister J B M Hertzog issued a rebuttal: “The enemies of our people and our country are for the moment triumphant. Organised finance, assisted by Afrikaner treason, has forced South Africa off the gold standard,” reads an excerpt published in the Rand Daily Mail (31 December 1932).