611.45A/3–2851

Department of State Policy Statement1

secret

Union of South Africa

a objectives

The fundamental objectives of US policy toward the Union of South Africa are: 1) To maintain our present friendly relations, recognizing South Africa’s position as a member of the British Commonwealth, its importance as a source of various minerals in which we are interested and its strategic position in time of war; 2) to influence South Africa to adopt a more reasonable attitude toward the difficulties it has experienced in the UN; and 3) to encourage South Africa, as improvement in its foreign exchange position permits, to relax the import and exchange controls which have restricted our access to South African markets in recent years.

b policies

Relations between the United States and the Union of South Africa have always been friendly, but under the Smuts regime they were subjected to the over-riding considerations of Commonwealth and, more particularly, British interests. The Nationalist Government which came to power as a result of the general election in May 1948 has no sentimental attachment to the Commonwealth. Nevertheless it has participated in Commonwealth conferences when it has considered that South African interests would be served thereby.

South Africa, because of its natural resources, temperate climate and present and potential capacity for economic development, occupies a pre-eminent position on the African continent. Its reactionary racial policies, and the difficulties which those policies have engendered in the UN, impede the full realization of South African potentialities in African and in world affairs. Strained relations with India and Pakistan resulting from the discriminatory treatment of the Indian minority in the Union embarrass the United Kingdom and the Commonwealth. This particular conflict, and the effect which it has in the UN of aligning colored nations of the world against white South Africa provides a useful subject for Soviet propaganda against [Page 1434] the West. Our interest in strategic South African minerals, in the strength of the Commonwealth and in the unity of the free world are sufficient to justify an effort on our part to influence the Union Government to adopt a more conciliatory attitude in the UN, both with respect to its international responsibilities for the territory of Southwest Africa and the Indian minority question.

Through our USIE activities in South Africa, using information and educational exchanges, friendly relations can be strengthened and South African knowledge and understanding of US policies and attitudes affecting South Africa can be furthered. Since South African good will is conditioned by misinformation on US intentions in political-economic fields and by distortions of American social conditions, such USIE activities can make a useful contribution to the realization of our policy objectives.

1. Political

The general election in 1948 brought to power a Nationalist Government representing primarily the nationalist Afrikaner element of the population. This Government has gained in strength since taking office while its opponents have lost ground. A number of the leaders of the Nationalist Government and the majority of its supporters are narrowly racialist both in their attitude toward the colored problem in South Africa, and in their identification of Afrikaner culture with the South African nation. While these racialist ideas, particularly with respect to the relations between the English speaking and Afrikaans speaking sections of South Africa, may no longer claim the full allegiance of more enlightened Nationalist leaders, the basic strength of the Nationalist Party is in the rural areas which for the foreseeable future will continue to regard the English element in South Africa with hostility and distrust. The weak Afrikaner Party, which is generally considered to be more moderate than the Nationalist Party, is having difficulty in maintaining its integrity in the face of Nationalist efforts to effect a fusion of the two parties which now form a coalition government. With the recently concluded agreement between the leaders of the two parties on the question of the colored voters, the principal point of difference or obstacle to amalgamation has been removed. The leader of the Afrikaner Party, Mr. N. C. Havenga, is likely to succeed Prime Minister Malan in the event of the latter’s retirement from office because of ill health. Presumably this would mean a fusion of the Afrikaner and Nationalist parties.

Legislative restrictions in racial matters in South Africa, such as regulations regarding native residence, pass laws, and the color bar in industry, have always been more rigid on the books than in administrative application, and, in fact, in many localities have not been strictly enforced. The Nationalist Government has encouraged a [Page 1435] harsher administration of existing laws and has enacted the Group Areas Bill providing for territorial segregation in implementation of its apartheid program.2

Although the natives (Africans) comprise 80 per cent of the population, they are represented only indirectly in Parliament through three European members in the House of Assembly and four in the Senate. The Nationalist Government opposes the continuance of these representatives in the House of Assembly, but their removal has not yet been politically feasible.

The problem of the treatment of Indians in South Africa was first brought to the attention of the UN General Assembly in December 1946. A resolution passed by that session expressed the opinion that the treatment of Indians in South Africa should be in conformity with international obligations under agreements between India and South Africa and relevant provisions of the UN Charter. Discussions in the second and third sessions of the General Assembly did not further a solution of the problem. As a result of discussions between Dr. Malan and Mr. Nehru at the 1949 Conference of Commonwealth Prime Ministers, negotiations were initiated between the parties to the dispute for the holding of a round-table conference. These negotiations were broken off by the Indian Government when South Africa refused to delay enactment of the Group Areas legislation until after the Conference. At the Fifth Session of the General Assembly a resolution was adopted calling on the three governments to hold a round-table conference. In the event of failure to hold this conference before April 1, 1951 or to reach an agreement in the conference within a reasonable time, the resolution recommended that there be established a commission to assist the parties in the carrying out of appropriate negotiations. The resolution also called upon the governments concerned to refrain from taking any steps which would prejudice the success of their negotiations and in particular the implementation or enforcement of the provisions of the Group Areas Act. The question was also placed on the agenda of the next regular session of the Assembly by virtue of this resolution.

The Assembly’s resolution is the strongest passed on this question and is most distasteful to the Union Government. The specific request [Page 1436] that South Africa refrain from implementation or enforcement of the Group Areas Act is perhaps the most obnoxious aspect of the resolution from the South African point of view since they have consistently maintained that the question of the treatment of the Indian minority is a matter of their internal concern and barred by Article 2, paragraph 7 (domestic jurisdiction clause) of the Charter from the scope of the Assembly. Since the Union Government maintains that it entered into negotiations looking toward a round-table conference as a result of talks held between Dr. Malan and Prime Minister Nehru and not in response to any previous action by the United Nations it will undoubtedly renew with increased vigor its argument that this question is an internal matter and will probably not proceed to negotiations under this resolution. In view of the fact that it is unlikely that the parties will have agreed to the holding of a round-table conference by the first of April of this year, the question of the appointment of the commission called for by this resolution will arise. The US vote for this resolution caused such resentment in South Africa that it is doubtful whether at the present time efforts on our part to persuade South Africa to comply with its provisions would be helpful, but whenever circumstances permit we should endeavor to exercise a moderating influence.

South Africa’s refusal to submit a trusteeship agreement for Southwest Africa also resulted in a dispute in the UN. With the exception of Southwest Africa, all territories held under mandate from the former League of Nations either have become independent or have been placed under the trusteeship system. By letter of July 23, 1947 the South African Government informed the UN that it had abandoned for the time being its plan to incorporate Southwest Africa into the Union but would administer the territory in the spirit of the mandate and submit reports to the UN on the administration. However, on July 11, 1949 the Union Government informed the Secretary General that it would not submit any further reports to the UN. The Nationalist Government resented the manner in which its administration of the territory had been criticized on the basis of the initial report to UN. Legally, South Africa argued, the obligations, under the mandate, including the obligations to submit reports and transmit petitions, lapsed with the demise of the League of Nations and had not been transferred to the UN.

Since the status of Southwest Africa was not entirely clear, and since conflicting opinions were held regarding the legal aspects of the Union’s obligations under the Covenant of the League and Chapter XII of the Charter, the US supported a resolution in the fourth session of the General Assembly requesting an advisory opinion from the International Court of Justice. The Court’s opinion, while stating that South Africa was under no obligation to submit a trusteeship agreement, [Page 1437] held that South Africa could not unilaterally alter the international status of Southwest Africa and was obliged to submit reports to UN on its administration of the territory and to transmit petitions.

In the fifth session of the General Assembly the US supported a resolution accepting the Court’s opinion, urging South Africa to do likewise and setting up a committee of five nations to negotiate with South Africa on the procedural arrangements necessary to give effect to the opinion. South Africa adopted a moderate attitude in this session and indicated its willingness to give careful consideration to any resolution passed by the Assembly. At the same time it considers that the Court opinion was issued without the benefit of information which has subsequently come to light concerning the transfer of responsibilities from the League of Nations to UN and that the opinion should be revised, particularly in its finding with regard to the submission of reports and transmission of petitions. South Africa is not happy about the terms of the resolution or the fact that the United States does not agree with its legal arguments respecting the Court opinion. There remains in this case, however, the possibility of the views of the United States having some influence with South Africa.3

Pan-African aspirations which were voiced by General Smuts during the war have been played down during the past several years, and the emphasis has been placed on closer economic and trade relations with neighboring territories, particularly the Rhodesias. The present Government has evidenced a sensitivity to developments in neighboring African territories and, particularly, has voiced a demand for the British High Commission territories. In recent months this subject has been quiescent and South Africa has made no formal request to the British Government for the incorporation of these territories. Dr. Malan and other Nationalist leaders have also advocated an African defense arrangement which would serve to coordinate plans for the defense of the African continent. The urge to expand the Union’s influence northward is evident not only in this proposal, but also in such policies as the closer political association of Southwest Africa with the Union, the transitional customs union with Southern Rhodesia, and, more indirectly, the readiness to participate in and sponsor scientific cooperation in Africa.

2. Economic

South Africa is the world’s largest producer of gold. Normally, its merchandise imports tend to absorb its gold output but, owing to the reduced volume of imports available from abroad during the war, and to a heavy capital inflow from the UK, the Union’s wartime gold output found its way principally into monetary reserves which until 1945 rose by a substantial amount. With the termination of the war [Page 1438] and the release of pent-up import demands, a large import surplus developed that was financed out of reserves, sharply reversing the previous favorable reserve movement. This post-war depletion of South Africa’s gold holdings prompted the imposition, in November 1948, of controls on imports from all non-sterling countries. A drastic diversion of purchases to the sterling area ensued, however, with a consequent drain on the Union’s sterling resources, and in July 1949 the South African Government brought sterling area imports also under control, although in a favorably discriminatory manner. This discriminatory application of import controls was shifted on January 1, 1950 from a sterling area/non-sterling area basis to a soft currency/hard currency area basis, made operative through a system of differential import permits.

After the devaluations of September 1949, South Africa’s external position began to improve. The reduction in imports resulting from the import control policy reduced the Union’s gold and dollar payments. On the other hand, the rapid rise in wool prices increased dollar earnings, and there was a revival of the inflow of capital that was interrupted in mid-1948. In consequence, during 1950 South Africa’s hard currency deficit fell to such an extent that some of the Union’s gold production became available once more for augmenting monetary reserves.

This improvement in reserve position led the South African Government, on January 1, 1951, to relax the degree of its discrimination against hard currency imports. Although such a step was most welcome some doubt remains whether continued discrimination in any degree against hard currency imports can be justified. The discrimination was represented as necessary to insure South Africa an adequate flow of capital, but the propriety of imposing discriminatory import restrictions to secure capital is open to question.

In addition to the application of exchange and import controls, the South African Government had attempted to improve its balance of payments position by realizing a greater foreign exchange income from its gold output. It instituted the sale of gold for non-monetary (i.e., industrial, professional, and artistic) purposes at premium prices, and in 1949 sought the concurrence of the International Monetary Fund in a proposal that would allow a Fund member to sell one-half of its gold production at market prices for either monetary or non-monetary purposes. The Fund, supported by the US, reaffirmed its objection to premium gold transactions and accordingly rejected the South African scheme. Although this rejection did not prevent the sale of gold at a premium for legitimate non-monetary purposes, such sales being technically outside the scope of the Fund’s sphere of interest, the volume of South African sales for what are ostensibly non-monetary purposes has become so large that there is growing [Page 1439] concern that South Africa is, in fact, contravening the Fund’s gold policy.

In 1949 South Africa unsuccessfully sought to obtain an Export-Import Bank loan of $100 million. In the loan negotiations, the South African Government objected to the gold deposit requirements for that portion of the loan taken by private banks and appeared to be of the opinion that because South Africa had an excellent credit record the Bank should act favorably on the application without going too closely into the purposes for which the loan was to be used. The failure to obtain a loan on terms satisfactory to South Africa created some resentment against the US which lessened with the passage of time. South Africa has recently received a loan of $60 million for transport improvements and expansion of electric power facilities.4

Initially the South African exchange regulations required that non-sterling shipping charges be deducted from the importer’s exchange quota which placed American shipping lines in a most disadvantageous position vis-à-vis sterling shipping lines. The US informed the Union of its view that artificial changes in shipping patterns brought about by exchange regulations are undesirable in principle and harmful to world trade and that convertibility of exchange in the case of transport should be kept outside exchange regulations. In response to our representations, the South African Government altered the administration of its exchange controls in such a manner as to place all shipping on an equal footing in the carriage of commercial cargoes. US shipping is allotted approximately 45 per cent of Government cargoes. This is an improvement over the situation some months ago when the system of priorities gave an even greater preference in the carriage of Government cargoes to South African and British ships and charters.

c. relations with other states

South African ties with the UK have loosened since the Nationalist victory in the 1948 General Election, primarily in the sense of greater independence of action and alignment with the UK on the basis of [Page 1440] self-interest rather than sentiment. The Malan Government, for the time being at least, wants South Africa to remain in the Commonwealth. Dependence on the UK for capital, fear of Communism, and concern for the future of white supremacy in Africa have counterbalanced extreme isolationist and nationalist sentiments. Although the Nationalist party platform favors a republican form of government, Nationalist leaders have reaffirmed the commitment not to introduce a republican constitution until a definite mandate has been obtained from the electorate. Furthermore Nationalist leaders have taken the line that South Africa can follow a similar course of constitutional development to that of India. Thus Nationalist aspirations could be satisfied and at the same time it would be possible for the English section of the population to accept such a solution of the republican issue since the Commonwealth connection would be maintained.

Although cabinet ministers, including the Prime Minister, have attended Commonwealth conferences at London, the present government prefers bilateral arrangements to multilateral negotiations centering in London. The Malan Government attempts to limit its Commonwealth relations as much as possible to matters specifically affecting South African interests. In the case of African defense arrangements, however, the Malan Government favors a multilateral approach in which South Africa, because of its dominant position in Southern Africa, would be the leader. The UK has discouraged this approach and apparently prefers bilateral arrangements radiating from London.

South Africa which until recently was outside the main currents of international politics except for its membership in the Commonwealth, now feels the need of a more assertive foreign policy. The purpose is multiple: to counteract adverse overseas publicity regarding its racial policies, to ward off charges of isolationism within the Union Opposition, and to influence the colonial policies of other African powers. In an effort to garner support in the UN General Assembly and also to improve its position in Africa, the Union is giving increasing attention to its relations with various countries, particularly Mediterranean, Atlantic, and Commonwealth powers. Its information service in the US, Canada, and countries having African colonies is being expanded.

The South African whites are strongly anti-communist because they are acutely aware of the vulnerability of South Africa’s colored population to Communist propaganda. Prime Minister Malan has said more than once that the Union would not remain neutral if war came and the South African Government has taken a decision to regard any attack on the continent of Africa by a Communist power as an attack on South Africa to be resisted by all the force at the Union’s [Page 1441] disposal. In support of this decision South Africa plans to make available for the defense of Africa an expeditionary force consisting of an armored division. South Africa has also sent an air squadron to fight in Korea.

d. policy evaluation

The role of the native in South Africa is the omnipresent issue involving the major parties and affecting almost every aspect of South African life. The question of race relations was a paramount issue in the 1948 general election, and the effectiveness of the Nationalist appeal to the fears of the electorate demonstrated that a substantial section of the white population relies on repression as the answer to this problem. South Africa, by reason of the human and material resources which it possesses, should have considerable potentialities for further development. Unless its racial policies can be developed on something other than a substratum of fear and discrimination, however, its progress will be hampered and the development which it has already achieved will be endangered.

The jealous concern of the present Nationalist Government to preserve the culture of the Afrikaner Volk led to a reversal of the policy of encouraging immigration adopted by the previous government. The check on immigration was explained on the ground that the ethnical proportions of the white South African population must be preserved—that is the numerical superiority of the Afrikaners must not be destroyed by unlimited immigration. More recently there have been indications that the South African Government will make an effort to obtain immigrants from Germany who in the opinion of the present Government, would be more readily assimilable in the South African community. Immigration continues to be a political question in South Africa, since both groups, English speaking and Afrikaners, view immigrants as potential voters and oppose or support immigration on the basis of whether particular immigrants are likely to weaken or strengthen their respective positions in South Africa.

Our relations with South Africa have always been friendly but the UN disputes in which South Africa has been involved since 1946 have periodically produced a strain which unfortunately is likely to continue. It is in our interest to maintain friendly relations with South Africa because of strategic considerations and also because South Africa represents a good market for our products. In December 1950, South Africa’s ability to defend itself and to contribute to the defense of the area of which it forms a part was determined to be important to the security of the US, and it was therefore found eligible to use the procurement facilities of this Government under the Mutual Defense Assistance Act. The US and the UK have signed a contract with South [Page 1442] Africa covering the procurement of uranium.5 South African exports of manganese, diamonds and other strategic materials are also important to the US.

While we are not in a position to influence one way or another the maintenance of South Africa’s constitutional relationship with Great Britain, our interests would not be served by the withdrawal of South Africa from association in the British Commonwealth, particularly if such withdrawal were accompanied by a policy of narrow nationalism and isolation. Our policy should take note of the lack of experience in international affairs of many of the leaders of the present Government and their extreme sensitivity to criticism. We should endeavor by the exercise of patience to encourage South Africa to continue her cooperation with other countries, and particularly her participation in the UN.

  1. Department of State Policy Statements were concise summaries of current U.S. policy toward a country or region prepared by ad hoc working groups in the responsible geographic offices of the Department. The policy statements, which were intended to provide information and guidance for officers in mission abroad, were referred to appropriate diplomatic missions for comment and criticism. The statements were periodically revised. For the previous statement on South Africa, November 1, 1948, see Foreign Relations, 1948, vol. v, pt. 1, p. 524. In this connection, see also Ambassador Erhardit’s letter of January 30, to Shullaw, p. 1428.
  2. Despatch 63, April 16, from Capetown, reported that the Group Areas Act became effective on March 30, 1951 by government proclamation of that date. The despatch, which provided an analysis of the government action, concluded as follows:

    “The Proclamation of the Group Areas Act brings the Union of South Africa another step nearer to the present Government’s goal of apartheid. In the future persons must live and own businesses in areas according to their race. This, the protagonists of the measure claim, will preserve ‘racial purity’. … Implementation of the Group Areas Act will increase racial tension, lower non- European living standards, and condone such present standards of living as do not conform to the human rights enjoyed in Western democracies, and will stimulate non-European unity.” (845A.411/4-1651)

  3. For documentation on the South West Africa question in the United Nations in 1951 and the U.S. attitude thereon, see vol. ii, pp. 673 ff.
  4. On January 23 the International Bank for Reconstruction and Development announced two loans to the Union of South Africa totalling $50 million. One loan of $30 million for 20 years at 4 percent interest, guaranteed by the Union of South Africa, was made to the Electric Supply Commission, an autonomous state agency, to assist in the expansion of its 6-year power development program. A second loan of $20 million, for 15 years at 3¾ percent interest, was made to the Union of South Africa for the expansion and improvement of the state-owned transportation system. Simultaneously with the two IBRD loans, a group of eight commercial banks in the United States extended a loan of $10 million to the Union for purposes complementary to the IBRD loan for transportation improvement and development. For a summary description of the loans to South Africa, see International Bank for Reconstruction and Development, Sixth Annual Report 1950–1951, pp. 19–20. A digest of the Bank’s announcement of January 23 was carried in the Department of State Wireless Bulletin, January 23, 1951, No. 22, p. 4. For previous documentation on the negotiations of the loans from the IBRD, see Foreign Relations, 1950, vol. v, pp. 1809 ff.
  5. For documentation on the agreement of November 23, 1950, under reference here, see Foreign Relations, 1950, vol. i, pp. 493 ff.