cuAP. m1] THE UNION OF SOUTH AFRICA 945 
however, were tied by the fact that in 1901, in order to secure 
the continuance of a supply of native labour for its greatest 
industry, the Transvaal made an agreement with the Portu- 
guese Government under which the old proportion of traffic 
as between the Portuguese and British routes was to be main- 
tained through the medium of railway rates. This question, 
bitterly disputed, was the main source of the conviction that 
there must be some form of federal action to solve the 
difficulties of the position, and its effect was increased by the 
serious financial depression which lies on South Africa as an 
aftermath of the war. The Transvaal alone was in a really 
prosperous position, with an industry every year more 
productive and an abundant supply of native labour for the 
time being, while the Cape was financially in a grave position 
of embarrassment leading to wholesale retrenchments and 
hardship. Natal again had had to face a serious native 
rebellion and a threat of renewed trouble, with the result 
that the colonial finances were seriously embarrassed. 
In these circumstances the natural sentiment for federa~ 
tion, which was strengthened by the proceedings of the 
Conference of 1907, when the strength of the Commonwealth 
and the Dominion of Canada was contrasted with the 
multiple representation of the small white population in 
South Africa, grew steadily. The report of the Native 
Affairs Commission! of 1903-5, which insisted on the need 
of treating native affairs from the point of view of South 
Africa as a whole, was reinforced by the condemnation of the 
actual administration in Natal by the Natal Native Affairs 
Commission of 1906-72 The High Commissioner, Lord 
Selborne, at the instance of the Cape Government, felt that 
a useful purpose could be served by the publication of a 
memorandum on the whole matter, and issued a paper inwhich 
the various points on which unity of action was desirable were 
set forth clearly and in detail® The result of the publication 
* Parl. Pap., Cd. 2399. * Ihid., Cd. 3889. 
* Ibid., Cd. 3564. Cf. also the proposals of 1907 for common military 
action, and various proposals for agricultural co-operation, detailed in 
The Government of South Africa, i. 101; ii, 148, 
1279-2 an