A glimpse of Graaff-Reinet
Graaff-Reinet is a jewel of a town in the Great Karoo, frequently just bypassed by travellers through on their way down south from Gauteng. Yet the town is important for several reasons. It was the fourth town in South Africa to have established a magistracy, or drostdy. It therefore became an important legal centre for the surrounding areas, including many large farms. The town also happens to boast the greatest number of museums for a town in South Africa. This is partly because of the interests of the Rupert family and others who have supported the town’s heritage. It is in a room of the town’s municipal museum that FISA will be establishing a display to record the fiduciary history of South Africa.
The Graaff-Reinet Board of Executors was established in 1856. Together with its competitor in town, the Midland Agency and Trust Company (established in 1864), these two entities not only acted as executors in deceased estates but increasingly become deposit-takers, often paying a higher rate of interest than the commercial banks.
The Depression years
A.de V. Minnaar of the Human Sciences Research Council in a paper titled “The Collapse of the Graaff-Reinet Board of Executors during the Great Depression (1924-1934), gives a fascinating account of how a confluence of events during the Great Depression, triggered by the gold standard crisis and in the surrounding areas exacerbated by a severe drought, led to the Graaff-Reinet Board of Executors closing its doors on 20 October 1931. It was later placed under judicial management but its failure caused uneasiness in other small towns whose boards were experiencing the same problems. (A run was also begun on the Midland Agency but a personal appearance by its directors persuaded the crowd not to withdraw their deposits.)
According to A. de V. Minnaar, the collapse of the Graaff-Reinet Board of Executors had significance not only for the local inhabitants but for the wider South African public as it led in 1932 to the Companies Act 1926 Amendment Bill to be introduced in parliament. This bill was designed to assist a company seek judicial management to keep it going until it found itself in a more favourable position. This helped a number of smaller companies to survive the Depression years and also protected depositors dependent upon interest income to get through those difficult years.
Midland lives on
As will by now be clear to readers of the FISA Heritage series, a veritable maze of name changes ensued over the years. In the case of Midland Agency and Trust Company, it merged with the Graaff-Reinet Board of Executors which was later taken over by Syfrets Trust Company during 1969 to become Syfrets Trust & Executor Ltd (Graaff-Reinet). Twenty years later, the shares were bought by Bloemboard and the company name changed again to Midland Board of Executors Ltd. After several further iterations the changes of hands, the company was renamed Midboard Financial Services in 1998.
FISA member and MD of Midboard, Andre Olivier, says that during all these changes the original reason for the establishing of a trust company remained exactly the same and “the same personal and confidential service to local people endured.