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 ex-Uitlanders held 26 seats in the Transvaal parliament, and were able to exercise an effective influence over legislation.

Both the war of 1899–1902 and the grant of self-government to the new colonies were necessary preliminaries to the success of any unification scheme, but the causes which now led to the question of closer union being raised were not political but economic. Since the development of the diamond and gold mining industries the coast colonies had unduly neglected their own resources and had relied chiefly on the forwarding trade. Hence there was jealousy and competition between the Cape and Natal and a tendency to use the railways (which were state owned), by means of rebates, to counteract the effects of common customs dues. Then, too, an increasingly important factor was the competition of Lourenço Marques for the Rand trade. In a time of acute trade depression this commercial rivalry was disastrous to the welfare of South Africa. In March 1906 the customs convention was provisionally renewed (on a strongly protective basis, and with preference for British goods) but there was a distinct prospect of a tariff war when the convention expired in 1908. Again it was known that the Transvaal and Orange River colonies on their attainment of self-government would each demand full control of their own resources, to the detriment of the unitary services which Lord Milner had established. There were, moreover, dangerous differences on such questions as Asiatic immigration, the status of natives, mining, agriculture, &c. Thus the antagonism between the various states on economic lines was at the end of 1906 greater than any racial divisions. The leading South African statesmen realized that unless an effort to remedy this condition was made without delay affairs would go from bad to worse. In these circumstances Dr Jameson, as premier of Cape Colony, took the first overt step to reopening the question of federation. In a minute dated the 28th of November 1906 the Cape ministry declared its belief that the questions which were causing so much friction should be capable of solution “by some duly constituted South African authority responsible to all parties in the country,” and it appealed to Lord Selborne, as high commissioner, to review the situation in such a manner that the people of South Africa might form a competent judgment on the question. In answer to this appeal, which was backed by the Natal ministry, Lord Selborne drew up a despatch (dated Jan. 7, 1907) in which the whole case for closer union was set forth in a masterly manner. For insight and breadth of view the despatch ranks with that which Sir George Grey drew up in 1858. In the fifty years that had elapsed the case for closer union had become overwhelming and the dangers of isolation much greater. Four or five administrations, the despatch pointed out, were pursuing rival interests, whereas the country had but one interest. Reviewing one by one the questions on which rivalry existed, Lord Selborne showed that the internal self-government which each colony enjoyed accentuated the difficulty of dealing with these questions as a whole. Stability—the thing which South Africa required above everything else—was unattainable so long as there were five separate governments developing different systems in all branches of public life, but no national government with power to harmonize the whole. “The people of South Africa … are not self-governing in respect to South African affairs because they have no South African government with which to govern.” Only by the creation of a central government could South Africa be wisely and successfully governed.

The opportunity for testing the strength of the movement for closer union came with the meeting of an inter-colonial conference in May 1908 to consider the thorny questions of tariff and railway rates. In the meantime the Jameson ministry had given place to the Bond nominee ministry with Mr Merriman as premier (see : History), but the movement initiated by Jameson had received the support of the Bond as well as that of the Botha administration. The delegates at the conference were all representative of the parties in power; that is, with the exception of the Natal delegates, they all represented Dutch ideals in politics. Nevertheless they unanimously resolved “that the best interests and the permanent prosperity of South Africa can only be secured by an early union, under the crown of Great Britain, of the several self-governing colonies,” and they recommended the calling of a national convention entrusted with the task of drawing up a draft constitution. Thus for the first time for two generations both the chief white races of South Africa were found working in cordial cooperation. No appeal was made to the electorate, but the colonial parliaments rightly interpreted public opinion in endorsing the recommendations of the conference. Delegates representative of all parties were appointed, and the national convention to consider the question of union met at Durban in October 1908.

The most prominent members of the convention were Sir Henry de Villiers, chief justice of Cape Colony (president), ex-President Steyn (vice-president), Generals Botha, de Wet and Delarey, Messrs Smuts, Schalk Burger, Merriman and F. R. Moor (premier of Natal), Dr Jameson, Sir George Farrar and Sir Percy Fitzpatrick, the last two the leading representatives of the Transvaal Progressives (i.e. the ex-Uitlanders). The greatness of the opportunity was rightly stated by the governor of Natal (Sir Matthew Nathan), who declared that the convention might create a commonwealth which should add to and not draw upon the strength of the empire—a commonwealth which in culture as in power would be among the foremost nations of the world. After sitting at Durban for a month, the convention adjourned to Cape Town and concluded its elaboration of a draft constitution by February 1909. The fundamental points which the delegates had to settle concerned (a) the basis of parliamentary representation, (b) the status of the natives with respect to the franchise, (c) the position of the Dutch language, (d) the form of government.

The adjustment of tariff and railway rates gave little trouble when once it was agreed to consider the country as a unit. Points (a) and (b) both concerned the franchise, but each had its separate issue (a) raising the question of representation as it concerned the white population only. Suspicions had been raised that the attempt would be made to force union on a Dutch Afrikander basis, which might have resulted had the basis of representation adopted been the total European population. To this the Progressive party would not agree, and they gained support from Botha, Smuts and other prominent Dutch delegates for their contention that “equal rights” could only be secured by making the basis of representation the number of voters as distinct from the number of European inhabitants of any given area. As finally settled, the number of European male adults was chosen as the basis of representation. As the Transvaal and Orange colonies already possessed manhood suffrage, and as the property qualifications in the coast colonies were low, this alteration made little difference. Point (b) raised a graver issue still. The Cape delegates found themselves in isolation in advocating the extension of the electoral system which prevailed in their colony, where there was no colour bar to the exercise of the franchise. The merits of the Cape system—to minimize the differences between the white and native races, typified in the declaration of “equal rights to all civilized men”—or that of the opposite system (as warmly advocated by the Natal delegates as by those from the ex-Boer republics), which would keep the native races in permanent inferiority, cannot here be discussed; it may be stated, however, that the admittance of Kaffirs to the franchise in the Cape had not been attended with the evil consequences feared. At the convention a way out of the difficulty—for a time at least—was found in a compromise, namely, that in the state about to be created the franchise in each constituent part should be that which existed before union was effected. Thus in the Cape the Kaffir would have a right to the franchise, but not in the other divisions of the country. Point (c) was decided by placing, for all official purposes, the English and Dutch languages on a footing of perfect equality. As to point (d) the