Page 53 - SARB: 100-Year Journey

Portrait of W H Clegg, 1931. /SARB
necessarily a lack of coordination in their activities which led to a too great profusion of credit at some times, and to a too great stringency at others. This was in no way the fault of the existing banks who, as separate and independent institutions, naturally resolved in their own and separate orbits. But there was a fault in the system – a fault which the Reserve Bank was ordained to remedy.” (South African Reserve Bank, Reports of Ordinary General Meetings, 1921−1929, p 1).
On 22 May 1922, Clegg informed stockholders at the second ordinary meeting that: “Last December we received the first instalment of our supply of Bank Notes, and thereupon gave the requisite statutory notice to the Treasury that the Bank was in a position to issue notes. The Treasury, in accordance with the Act, then gave notice to the other banks that their issues of notes must cease on the 30th June 1922.” (South African Reserve Bank, Reports of Ordinary General Meetings, 1921−1929, p 2).
Furthermore: “The notes of the other banks were withdrawn as fast as possible until the 30th of June, 1924, when the commercial banks transferred the liability for their outstanding notes, amounting to £443,000, to the Reserve Bank. Thus, in the absence of any Government issues the Reserve Bank has full control over the note circulation of the Union,” writes De Kock (1929, p 52).
43