Page 83 - SARB: 100-Year Journey

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The Native Trust and Land Act of 1936, an amendment of the Land Act of 1913, extended the size of the land set aside for ‘Native reserves’ from 7.3% to 13%. This law prohibited land ownership by black South Africans outside these reserves. In later years, more draconian legislation followed, providing for the removal of black South Africans from their homes to effect the official policies of segregation. This is the framework within which white South Africans, although the numerical minority population, entrenched their economic dominance and acquired 90% of the land in the country.
In April 1933, the US also abandoned the gold standard (South African Reserve Bank, 1971, p 40), long after Britain and South Africa had done so in September 1931 and December 1932 respectively. This was a boon for South African gold earnings, which increased sharply. This led to the development of secondary industries. However, job reservation coupled with tight controls on the movement of black South Africans meant the benefits from this newfound prosperity were limited to white South Africans.
“[The] years between the country’s departure from gold on 28th December 1932 and the outbreak of World War II, [meant] the previously depressed state of the economy was transformed rapidly into one of unprecedented prosperity and expansion. ... Accelerated industrialisation in response to war requirements also contributed to far- reaching changes in the structure of the South African economy during the period.” (South African Reserve Bank, 1971, p 33).
This rapid industrialisation gave rise to several dilemmas and dichotomies. Chief among these was the fact that black, Coloured and Indian South Africans were prohibited from living in the cities, but were permitted to work in urban areas, provided they did so in low- wage jobs. Thus, a consequence on this racial social engineering was South Africa’s migrant labour system. The government controlled the movement of migrant labourers through the deployment of a permit system, which found expression in pass laws.