EKH Seminar: Christie Swanepoel

Seminar title: Informal financial markets: borrowing and lending of the indigenous population and freed slaves in the Cape Colony

Christie Swanepoel from the University of the Western Cape will present a paper titled:

Informal financial markets: borrowing and lending of the indigenous population and freed slaves in the Cape Colony

The paper is co-authored with Kara Dimitruk and Kate Ekama. Please find the abstract below:

Inclusive institutions, which allow broad access to markets, are seen as fundamental for economic development. For example, institutions that facilitate access to credit are crucial for the operation of financial markets. Of particular concern is how disadvantaged groups, such as by class, race, or gender, gain access to said markets. We are often missing data, particularly in history, on financial market activity of these disadvantaged groups because of the informal nature of credit transactions.

We study the financial markets in the Cape Colony, which were largely outside financial institutions like banks and stock markets, from the seventeenth to early nineteenth century. We use probate records to document new facts about financial markets in the Cape. We first document the credit and debt transactions of groups whose financial decisions we know precious little about: indigenous Khoe and freed slaves from the founding of the Cape in 1673 to the emancipation of the enslaved in 1834. Hereafter, we will not distinguish between the groups but refer to them as “Coloured”, which became an official classification during the period and is a racial and ethnic identity in South Africa today.

We are primarily interested in documenting the extent to which different races interacted in financial markets and the network of these individuals. Did Coloured individuals mainly borrow from other Coloured individuals? Or did they mainly borrow from wealthier European settlers? To answer these questions, we use the Orphan Chamber probate series, or MOOC8-series, which is a rich source for financial market information. The probate inventories list all the individuals’ assets, like landed and slave property and household content, as well as unpaid financial transactions and cash. The records allow us to identify the direction of the debt as well: was it owed by the inventoried individual or was it to owed to them? We use this information to construct a network of the transactions between Coloured individuals and white settlers.

Our preliminary results show that the Coloured individuals’ financial transactions were significantly different to those of the European settlers. The average value of the cash found in the Coloured individuals’ inventory is 78rds and the average value of a transaction involved with a Coloured individual is 96.74rds. This value is much lower than the value of 1751rds from Fourie and Swanepoel (2018), who study all financial transactions but do not differentiate by race. Despite the lower average debt, we do find that Coloured individuals also borrowed large amounts – a maximum debt value, for example, is over 2335rds. There is also a difference in the purpose of borrowing. Coloured individuals borrowed for consumption reasons, while European settlers borrowed for productive purposes. Finally, we investigate the financial interaction amongst races. Most financial transactions were between a Coloured individual and European settler, but we do observe transactions between Coloured individuals as well. We are now investigating the types of relationships, like kinship or slave owner-enslaved, between the identified individuals.