990 THE FEDERATIONS AND THE UNION [PART IV 
1909, and as ascertained by the Comptroller and Auditor- 
General! The Commission appointed to decide the financial 
relations of the Union and Provinces may also award com- 
pensation to the municipalities of Cape Town and Pretoria 
if it considers it: desirable, such compensation not to exceed 
1 per cent. for twenty-five years on their municipal debts at 
January 31, 1909. One-half of any such grants shall be 
applied to the redemption of the debts of the townsconcerned, 
so that at the end of the period the principal sums due should 
be substantially diminished. At any time after the payment 
of the tenth annual grant to any town the Governor-General 
in Council, with the approval of Parliament. may withhold 
or diminish the grant made. 
More important is the fact that the Transvaal has decided 
to make large concessions to both the Cape and Natal on 
railway matters. For years the most burning internal 
question in South Africa has been that of the division of 
traffic between Delagoa Bay, Natal, and the Cape ports. 
Not only has the Delagoa Bay route the natural advantage 
of distance from the mining centre of the Transvaal, but the 
mining industry on which the whole greatness of the Colony 
vests is vitally interested in preserving access to the recruiting 
ground for native labour for the mines existing in the 
Portuguese territories. Hence one of the first actions of 
Lord Milner in the administration of the Transvaal was to 
conclude with the Government of Mozambique an agreement 
for the right of access to that source of labour in exchange 
for the maintenance to the port of the advantage over the 
Cape and Natal ports which it enjoyed while the Transvaal 
was a Republic hostile to the British Colonies, through the 
fixing of the railway rates for the transit to the port from 
the mining area. Naturally the other Colonies resented this 
*'s. 133. By ss. 18 and 23 Pretoria becomes the administrative, Cape 
Town the legislative, capital. The arrangement is illogical and a com- 
promise; it is neatly criticized in The Empire Review, xviii. 117, and it 
may be added that the official residence of the Governor-General is at 
Johannesburg. Rhodes’s house, Groote Schuur, is set apart for a residence 
for the Prime Minister. but his official work will mainly be done at Pretoria.