Constructing Boland Bank: organizational change and transformation in the South African trust company movement, c.1940–c.1970

Abstract

The embedded South African Trust Company narrative of being the aristocracy of local South African financial institutions that rested on their long history of financial stability, conservatism and trustworthiness in the absence of any form of statutory regulatory control became outdated in the post-Depression and Second World War period. This article traces and analyzes the attempts at a process of organizational and managerial change aimed at modernization through amalgamation (mergers) and diversification. It draws on the Pettigrew tradition of a processual and contextualist approach with its elements of content, context and process. Moreover, the study is influenced by the role of change through narration, which has received support within the field of Management Studies in the last two decades. The way these managers narrated about the necessity for change and its content is an important focus as it highlights change through thick description. In the case of the trust companies, the main drivers for change were not only provided by internal but also external factors – the Registrar of Banks. This is an important difference to the framework that focuses primarily on internal mechanisms and agents in explaining organizational change.

Keywords::

• amalgamation
• mergers
• Boland Bank
• South African banking
• Registrar of Banks
• organizational change
• processual and contextualist approach

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

^1. National Archives of South Africa (NASA), Registrar of Banks (RB), 36/3A Southern Cape Trust Ltd annual reports, Annual report of Caledon Trust Limited, 1961, n.p.

^2. Syfrets Archive (SA) Minute book Association of Trust Companies, 4 May 1954–14 December 1956 (Notes for an address delivered at the 22nd annual general meeting of the Association of Trust Companies in the Union of South Africa held at Kimberley on Monday 16 May 1955, 2).

^3. (SA) Minute book Association of Trust Companies, 15 August 1932–14 December 1936 (Meeting of representatives of trust companies in the Union, 10 October 1932, 2–3). The aim of the Association was to form a united front to look after the interests of trust companies on a national basis.

^4. (SA) Minute book Association of Trust Companies, 15 August 1932–14 December 1936 (Meeting of subcommittee of executive committee of the Association of Trust Companies, 1 November 1932, n.p.); (SA) Minute book Association of Trust Companies, 15 August 1932–14 December 1936 (Constitution of the Association of Trust Companies, 2).

^5. SC–842: Report of Select Committee on Bank Bill. Minutes of evidence, 16–17, 119, 128. While deposit business constituted approximately 5% of the turnover of urban trust companies, the figure for rural companies was between 40% and 50%.

^6. Standard Bank Archives (SBA) GMO 3/1/78, GM-LO, 5 March 1926, 664–667.

^7. (SA) Minute book Association of Trust Companies, 19 December 1939–14 December 1942 (Report of the Executive Committee of the Association to be presented to the Eighth Annual General Meeting of the Association, Monday 9 December 1940, 4). JH Hofmeyr, secretary of Paarl African Trust, retired at 81, after 44 years of service, while CG Auret (bookkeeper) and Vosloo Webb (clerk and assistant secretary) retired after 42 and 32 years respectively.

^8. (SA) Minute book Association of Trust Companies, 19 December 1939–14 December 1942 (Report of the Executive Committee of the Association to be presented to the Eighth Annual General Meeting of the Association, Monday 9 December 1940; 6); (SA) Minute book Association of Trust Companies, 15 August 1932–14 December 1936 (Chairman’s address, First annual meeting of the Association of Trust Companies, 27 November 1933, 5, 6).

^9. SC–842: Report of the Select Committee on Bank Bill. Minutes of evidence, 19, 20, 135, 143; (SA) Association of Trust Companies, 4 January 1937–11 December 1939 (Annual meeting, 12 Dec 1938, minute No. 104, n.p.).

^10. (SBA) INSP 1/1/341, Mi-Ot 1933–1935, Inspection Report on Paarl Branch, 11 June 1934, 13.

^11. Cape Archives Depot (CAD) LC 228 no.C302 AMT (Memorandum and articles of Association of the African Mutual Trust and Assurance Company Limited: Articles of association of the African Mutual Trust and Assurance Company Limited, 18 August 1900, 10); Boland Bank Archive (BBA) balance sheets AMT, 14 August 1901–27 September 1962 (Annual Report, 1934: Board Report, np).; Boland Bank Archive (BBA) balance sheets AMT, 14 August 1901–27 September 1962 (Annual Report, 1942: Board Report, np); (BBH) Minute book PAT, 27 December 1929–7 December 1933 (Board meeting, 31 January 1930, 4). During the first four decades of AMT’s existence, the board only had two chairmen: A.C. Koch served from 1900 until his death in 1933, while his successor, J.P. Malan, who had served as a director from 1900–1933, remained chairman until his death in 1941. Similarly, T.J. Louw served as chairman of PAT for 25 years until his retirement in 1930. The Laing family of Caledon was represented on the board of the Caledon Guardian and Fire Assurance Company for three generations from its inception in 1918.

^12. (SA) Minute book Association of Trust Companies, 1968–1969 (Annual meeting, 6 May 1971: Chairman’s address, 2, 6).

^13. (SA) Minute book Association of Trust Companies, 1968–1969 (Annual meeting, 6 May 1971: Chairman's address, 4).

^14. (BBA) Minute book AMT, 26 July 1917–20 September 1923 (Board meeting, 20 November 1919, 178; 18 March 1920, 211); (BBA) Minute book PAT, 1900–1926 (Annual general meeting, 1 November 1922, n.p.).

^15. (BBA) Minute book PAT, 2 September 1943–16 September 1948 (Board meeting, 4 October 1945, 121).

^16. In 1940, US$1 = SA£0.2513. At this exchange rate, SA£53 million was equal to approximately US$211 million; SA£98 million = US$390 million; SA£76 million = US$302 million.

^17. The Fabulous Years 1961–1966 (The Boom Years, 9, 11, 13) 1967. Supplement to the Financial Mail, July 14.

^18. The Fabulous Years 1961–1966 (The Boom Years, 11, 13) 1967. Supplement to the Financial Mail, July 14.

^19. Nedbank Archive (NA), OB/5 Archive Reserve Bank, 1945–1958, Document No.129, President of the Reserve Bank – B.H. Holsboer, general manager Nederlandse Bank, 12 July 1957 and Document 130, Extract from concept annual report of the president of the Reserve Bank entitled ‘Monetary and Banking Situation’, 4–5.

^20. (SA), Minute book Association of Trust Companies, 22 July 1949–26 March 1954, Chairman’s address during annual general meeting, 21 April 1952, 6. Because building societies did not have to pay dividends or tax, they could build strong reserves from their profits. The income generated from these reserves was almost sufficient to cover all their administrative costs, which enabled them to operate on a very small interest rate profit margin with regard to loans to the public versus their own money invested.

^21. (SA) Minute book Association of Trust Companies for 1959 and 1960, Presentation by P.C. van der Merwe of AMT during 1960 annual general meeting entitled ‘The Land Bank Competes’, 1–4.

^22. (SA) Minute book Association of Trust Companies for 1961 and 1962, Presentation by P. le F. Mouton of Malmesbury Board of Executors and Trust and Fire Assurance Co. Ltd. during 1961 annual general meeting entitled ‘Fixed Deposits Co-operative Societies’, 1–2; (SA) Minute book Association of Trust Companies for 1957, Paarl meeting of Western Province and South Western Districts members, 25 February 1957, 2.

^23. (SA) Minute book Association of Trust Companies, 22 July 1949–26 March 1954, Chairman’s address during annual general meeting, 21 April 1952, 6.

^24. (SA) Minute book Association of Trust Companies for 1959 and 1960, Chairman’s address during annual general meeting, 4 May 1959, 7–8.

^25. (BBA) Balance sheets of AMT 14 August 1901–27 September 1962, Chairman’s address during annual general meeting, 20 September 1957, np.; (SA) Minute book Association of Trust Companies for 1958, Presentation delivered by P.C. van der Merwe of AMT during annual general meeting, 12–13 May 1958 entitled ‘Income Tax Payable by Trust Companies and Deposit-Taking Institutions’, 1–4; (SA): Minute book Association of Trust Companies for 1958, Memorandum on the lightening of income tax, 2 October 1958, 1–4.

^26. (SA) Minute book Association of Trust Companies, 19 December 1939–14 December 1942 (Executive Committee, 29 October 1942, minute No.167. Letter from Registrar of Banks – secretary Association of Trust Companies, 21 October 1942); Act No. 38 of 1942: Bank Act, 1942.

^27. SC–842 Report of the Select Committee on the Bank Bill, 18, 142, 144.

^28. National Archives of South Africa (NASA): Archive of the Registrar of Banks (RB) 9/1. Banks. The Boland Board of Executors (Malmesbury) Ltd. Registration September 1943–February 1971, Secretary Malmesbury Board of Executors – Registrar of Banks, 6 February 1946, n.p.

^29. Act No. 38 of 1942: Bank Act, 1942, 303.

^30. Act No. 38 of 1942: Bank Act, 1942, 303.

^31. Act No. 38 of 1942: Bank Act, 1942, 22, 24, 162, 163, 181.

^32. Act No. 38 of 1942: Bank Act, 1942, 20, 23, 121, 133, 135.

^33. (SH) Minute book Association of Trust Companies, 19 December 1939–14 December 1942, Chairman’s address annual general meeting, 14 December 1942, 7.

^34. (NASA) RB 1/1. Banks. AMT. Registration, 1943–1966 (Dr. Arndt–WJ Vos, 28 November 1947, n.p.).

^35. (NASA) RB 9/1. Banks. The Boland Board of Executors (Malmesbury) Ltd. Registration, September 1943–February 1971 (Secretary Malmesbury Board of Executors – Registrar of Banks, 6 February 1946, n.p.).

^36. (NASA) RB 9/1. Banks. The Boland Board of Executors (Malmesbury) Ltd. Registration, September 1943–February 1971 (Registrar of Banks – Secretary Malmesbury Board of Executors, 13 February 1946, 1).

^37. (NASA) RB 9/1. Banks. The Boland Board of Executors (Malmesbury) Ltd. Registration, September 1943–February 1971 (Secretary Malmesbury Board of Executors – Registrar of Banks, 17 March 1947, n.p.).

^38. (SA) Minute book Association of Trust Companies, 21 December 1942–23 May 1949 (Executive Committee, 13 September 1948, n.p. and attached memorandum submitted by the Association of Trust Companies of South Africa in regard to the operation of the Banking Act, 1942, 1)

^39. (SA) Minute book Association of Trust Companies, 22 July 1949–26 March 1954 (Chairman’s address annual general meeting, 21 April 1952, 7).

^40. (NASA) RB 1/1. Banks. AMT. Registration, 1943–1966 (General manager and secretary – Registrar of Banks, 15 September 1948, 2)

^41. (BBA) Minute book PAT, 25 October 1955–5 September 1957 (Board meeting, 7 February 1957, 96).

^42. (BBA) Minute book, 17 July 1959–27 April 1961 (Board meetings, 30 October 1959, 25 and 10 December 1959, 36); (BBA) Minute book PAT, 1951–1969 (Annual general meeting 1959, Chairman’s address 10 December 1959, 62).

^43. (BBA) Minute book AMT, 18 December 1958–19 December 1963 (Special board meeting, 31 March 1960, 111).

^44. (SA) Association of Trust Companies, Minute book, 1963 and 1964 (Minutes annual general meeting, 5 May 1964, Annexure B: Speech by Dr M.S. Louw, chairman of the Bonus Investment Corporation of SA Ltd., 1–5).

^45. (SA) Minute book Association of Trust Companies 22 July 1949–26 March 1954, Chairman’s address during annual general meeting, 21 April 1952, 2–4.

^46. Extra-ordinary Government Gazette of the Union of South Africa, 29 July 1938, No. 2551, 10. Apart from Act No. 19 of 1941 that restricted the ability of trust companies to advertise their trust and estate services, the 1937 Registrar of Deeds Act stipulated that the Registrar of Deeds would in future only accept documents with regard to the registration, cession or change of mortgage bonds that were submitted by a practicing attorney, notary or conveyancer. This affectively barred trust companies and boards of executors from the deeds office.

^47. (SA) Minute book Association of Trust Companies, 22 July 1949–26 March 1954, Chairman’s address during annual general meeting, 21 April 1952, 4–5.

^48. (SA) Minute book Association of Trust Companies, 4 May 1954–14 December 1956, Note for an address delivered by W.P. Rousseau at the 22nd Annual General Meeting of the Association of Trust Companies held at Kimberley on Monday 16 May 1955, 1. Already-established building society practices such as the compulsory repayments on mortgages and the monthly repayment of capital and interest on housing loans was only phased in by AMT in 1959. (BBA) Minute book AMT, 18 December 1958–19 December 1963, Board meeting, 19 March 1959, 19; (BBA) Minute book AMT, 18 December 1958–19 December 1963, Board meeting, 16 June 1959, n.p.

^49. (SA) Minute book Association of Trust Companies, 22 July 1949–26 March 1954, Chairman’s address during annual general meeting, 21 April 1952, 2–3. While the total assets and funds under administration of 42 trust companies increased from £46,839,727 in 1941 to £84,986,070 in 1951, the total assets of 49 building societies increased from £66 million in 1940 to £236 million in 1950.

^50. (SA) Minute book Association of Trust Companies for 1968 and 1969, Chairman’s address annual general meeting, 6 May 1971, 5.

^51. (SA) Minute book Association of Trust Companies for 1959 and 1960, Chairman’s address during annual general, 4 May 1959, 10.

^52. (SA) Minute book Association of Trust Companies for 1959 and 1960, Presentation by J.A. Chubb at annual general meeting, 3–4 May 1960 entitled ‘The Functions of a Trust Company Director’, 3.

^53. (SA) Minute book Association of Trust Companies for 1961 and 1962, Presentation by C.R.B. de Villiers, Registrar of Financial Institutions entitled ‘The Investment of Trust Funds’ delivered at annual general meeting, 8–9 May 1962, 5.

^54. (SA) Minute book Association of Trust Companies for 1963 and 1964, Presentation by I.K.M. Scheepers during annual general meeting, 7 May 1963 entitled ‘Trust Companies and the Criteria of Professional Management’, 1, 10.

^55. (SA) Minute book Association of Trust Companies, 22 July 1949–26 March 1954, Address on closer cooperation between members of the Association, delivered by Loe Smuts at the annual general meeting on 21 April 1952, 1–2.

^56. (SA) Minute book Association of Trust Companies, 4 May 1954–14 December 1956, Chairman’s address during annual general meeting, 16 May 1955, 6.

^57. ‘Trust Institutions in Boland are 15 Dogs Fighting about One Bone’, Die Burger, October 26, 1959.

^58. (SA) Minute book Association of Trust Companies for 1961 and 1962, Presentation by Registrar of Financial Institutions during annual general meeting, 8 May 1962 entitled ‘The Investment of Trust Funds’, 4–5.

^59. (BBA) Minute book PAT, 25 October 1955–5 September 1957, Board meeting, 7 February 1957, 95; (SA) Minute book Association of Trust Companies for 1957, Minutes of a meeting of Western Province and South Western Districts members at Paarl, 25 February 1957, 1–3); (SA) Minute book Association of Trust Companies for 1958, Minutes of regional meeting of Western Province and South Western Districts members at Paarl, 10 February 1958, 1–3.

^60. (BBA) Minute book AMT, 18 December 1958–19 December 1963, Board meeting, 19 November 1959, 82; (SA) Minute book Association of Trust Companies for 1959 and 1960, Executive Committee, 20 November 1959, 34.

^61. (SA) Minute book Association of Trust Companies for 1959 and 1960, Executive Committee, 22 January 1960, 2.

^62. ‘Boland Board: Adjusting to Changing Times’, Financial Mail, January 29, 1971.

^63. (BBA) Minute book PAT, 16 July 1959–27 April 1961, Board meeting, 19 May 1960, 65.

^64. (BBA) Minute book PAT, 1900–1969, Director’s report to annual general meeting, 10 November 1960, 66.

^65. (BBA) Minute book PAT, 1900–1969, Chairman’s address at annual general meeting, 22 December 1960, 3.

^66. (NASA) RB 1A. Banks. African Mutual Trust and Assurance Co. Ltd. General.1943–1966 (Minutes of meeting of AMT, Caledon Voogdy and PAT, 21 March 1961).

^67. (BBA) Minute book AMT, 18 December 1958–19 December 1963, Board meeting, 16 March 1961, 201.

^68. ‘Financier Killed on his Birthday’, Cape Argus, May 4, 1971; ‘Boland Board: Adjusting to Changing Times’, Financial Mail, January 29, 1971.

^69. (BBA) Minute book AMT, 3 March 1932–21 December 1939 (Financial committee meeting 22 May 1937, 464; 3 June 1937, 467; Balance sheets AMT, 14 August 1901–27 September 1962 (Annual report, 1909, np).

^70. (BBA) Minute book AMT 18 December 1958–19 December 1963 (Board meeting, 21 June 1962).

^71. (BBA) Balance sheets AMT 14 August 1901–27 September 1962, Annual report, 1962, Chairman’s report, 27 September 1962.

^72. (BBA) Balance sheets of African Mutual Trust and Assurance Company Ltd., 14 August 1901–27 September 1962, Chairman’s address at annual general meeting, 27 September 1962, n.p.

^73. (NASA) RB 9/3. Banks. The Malmesbury Board of Executors and Trust and Fire Assurance Company Ltd. Financial Statements and Reports, March 1944–March 1965, Secretary – Registrar of Banks, 8 March 1962, 3.

^74. (BBA) Balance sheets of AMT, 14 August 1901–27 September 1962, Chairman’s address at annual general meeting, 27 September 1962, n.p.

^75. (NASA) RB 9/2 Part 1. Banks. The Malmesbury Board of Executors and Trust and Fire Assurance Company Ltd. Memorandum of association and statute, December 1944–December 1968 (Secretary – Registrar of Financial Institutions, 27 April 1962, 1.

^76. (BBA) Balance sheets of AMT, 14 August 1901–27 September 1962, Chairman’s address during annual general meeting, 27 September 1962, n.p.; (BBA) Minute book AMT, 15 February 1940–23 July 1987, Annual general meeting, 27 September 1962, 44.

^77. (BBA) Minute book AMT, 18 December 1958–19 December 1963, Board meeting, 27 September 1962, 305.

^78. (BBA) Balance sheets of AMT, 14 August 1901–27 September 1962, Chairman’s address at annual general meeting, 27 September 1962, n.p.

^79. (SA) Minute book Association of Trust Companies for 1961 and 1962, Executive committee, 8 December 1961: Confidential addendum, 1–2.

^80. (SA) Minute book Association of Trust Companies for 1961 and 1962, Executive committee, 19 March 1962, 9–10 and also confidential addendum, n.p.; Chairman’s address at annual general, 8 May 1962, 1.

^81. (SA) Minute book Association of Trust Companies for 1961 and 1962, Presentation by Registrar of Financial Institutions at annual general meeting, 8 May 1962 entitled ‘The Investment of Trust Funds’, 1.

^82. (NASA) RB 1A. Banks. African Mutual Trust and Assurance Co. Ltd. General. 1943–1966 (Registrar of Banks – manager and secretary AMT, 9 March 1961.

^83. (BBA) Balance sheets AMT 14 August 1901–27 September 1962, Annual report, 1962, Chairman’s report, 27 September 1962.

^84. (BBA) Minute book Caledon and South Western Districts Board of Executors Limited, 1940–1972, Chairman’s address at annual general meeting, 28 September 1962, n.p.

^85. (BBA) Minute book Caledon and South Western Districts Board of Executors Limited, 1940-1972, Chairman's address at annual general meeting, 28 September 1962, n.p.; (SA) Minute book Association of Trust Companies for 1961 and 1962, Executive committee, 19 October 1962, 40.

^86. (NASA) RB 27 Vol. 1. Boland Bank Limited. General, 18 October 1943–3 September 1971, J.A. Stofberg, AMT manager and secretary – Registrar of Banks, 11 February 1963, 2.

^87. (BBA) Minute book AMT, 18 December 1958–19 December 1963, Board meeting, 24 January 1963, 323–324.

^88. (BBA) Minute book AMT, 18 December 1958–19 December 1963, Board meeting, 18 April 1963, 337; (BBA) Minute book PAT, 10 January 1963–11 June 1964, Board meeting, 18 April 1963, 26.

^89. (NASA) RB 27 Vol. 1. Boland Bank Limited. General, 18 October 1943–3 September 1971, J.A. Stofberg, manager and secretary – Registrar of Banks, 19 April 1963, n.p.

^90. (NASA) RB 1/3 Vol. 2. Banks. AMT. Financial statements and reports, July 1965– June 1966, Chairman’s address at AMT annual general meeting, 18 November 1963, 1–2.

^91. (BBA) Minute book PAT, 1951–1969, annual general meeting, 25 June 1964, 89 Chairman’s address annexure A, 1.

^92. (BBA) Minute book PAT, 10 January 1963–11 June 1964, Board meeting, 30 January 1964, 100; Board meeting, 20 February 1964, 104.

^93. (BBA) Unmarked file, J.A. Stofberg, general manager BBE – chairman and board MBE, 24 February 1964, 1.

^94. (BBA) Unmarked file, J.A. Stofberg, general manager BBE – chairman and board MBE, 13 March 1964, 1–3; (BBA) Minute book AMT, 10 January 1963–11 June 1964, Board meeting, 19 March 1964, 110; (NASA) RB 27 Vol. 1. Boland Bank Limited. General, 18 October 1943–3 September 1971, Memorandum containing BBE offer to MBE, n.d., 6.

^95. (NASA) RB 27 Vol. 1. Boland Bank Limited. General, 18 October 1943–3 September 1971, J.A. Stofberg, general manager BBE – Registrar of Banks, 16 May 1964, 1–2.

^96. (NASA) RB 27 Vol. 1. Boland Bank Limited. General, 18 October 1943–3 September 1971, J.A. Stofberg, general manager BBE - Registrar of Banks, 16 May 1964, 1–2.

^97. (NASA) RB 9/3. Banks. The Malmesbury Board of Executors and Trust and Fire Assurance Company Limited. Financial statements and reports, March 1944–March 1965, Registrar of Banks office note with heading: Malmesbury Board of Executors, 13 September 1963, n.p.

^98. (NASA) RB 9/2 Part 1. Banks. The Malmesbury Board of Executors and Trust and Fire Assurance Company Limited. Memorandum of association and statute, December 1944–December 1968, Y. Heyns, secretary – Registrar of Banks, 29 May 1963, n.p.

^99. (NASA) RB 9/2 Part 1. Banks. The Malmesbury Board of Executors and Trust and Fire Assurance Company Limited. Memorandum of association and statute, December 1944-December 1968, Y. Heyns, secretary - Registrar of Banks, 29 May 1963, n.p; (BBA) Minute book PAT, 10 January 1963–11 June 1964, Board meeting, 21 May 1964, 131; (NASA) RB 27 Vol. 1. Boland Bank Limited. General, 18 October 1943–3 September 1971, Registrar of Banks – general manager BBE, 2 June 1964, n.p.

^100. (BBA) Minute book PAT 1970–1988 (Extraordinary general meeting of shareholders, 5 August 1971).

^101. (BBA) Minute book BBE, 1970–1976 (Extraordinary general meeting of shareholders, 5 August 1971, np).

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Anton Ehlers

Anton Ehlers holds a PhD in History from Stellenbosch University. He is currently a senior lecturer in the History Department at Stellenbosch University. He specializes in business history.