"7. It must be borne in mind that these native territories cost the Colony for administration some £9000 per annum for administration of magistracies; the receipts are some £3000, leaving a deficit of some £6000 per annum. To this deficit has to be added some £150,000 for regular troops. The last rebellion of Transkei ended in capture of some £60,000 worth of cattle, and that from natives of Colony driven into rebellion, and cost Government of Colony with Basuto war nearly £4,000,000. It is surely worth while, from a financial point of view, to investigate the administration of the Transkei. "8. The present state of the Transkei is one of seething discontent and distrust which the rivalry of the tribes alone prevents breaking out into action, to be quelled again at great expense and by the ruin of the people, and upset of all enterprise to open up the country. Throughout the Transkei is one general clamour against the Government for broken promises, for promises made and never kept. Magistrates complain no answers are given to their questions; things are allowed to drift along as best they can. A fair open policy towards the Pondos would obtain from them all the Colony could require, but as things are now, the Pondos are full of distrust, and only want the chance to turn against the Colony. There are in Transkei 399,000 natives, and 2800 Europeans. Therefore, for the benefit of these 2800 Europeans, 399,000 natives are made miserable, and an expenditure of £210,000 is incurred by the Colony with the probability of periodical troubles. "9. However disagreeable it might be, the Commission of Investigation should inquire into the antecedents of each magistrate, and also his capabilities. "10. With respect to Basutoland, it is understood that no revenue from that country is to go to the Colony, therefore it can be no object to Colony to insist on the installation of magistrates in that country. If the magistrates of Transkei are the cause of discontent among the natives, then what object is there in insisting on their installation in Basutoland? The Pondos, a far inferior people, are happy under their own chiefs--far happier than the natives of Transkei. Why should the Colony insist on sending men who are more likely to goad the Basutos into rebellion than anything else? The administration of Basutoland is on a scale costing £30,000 per annum. "11. It is argued that should the Colony go to war with Masupha the other chiefs would hold aloof. This is quite erroneous. A war with Masupha means a war with the Basuto nation, with a rising in the Transkei, and perhaps in Pondoland, and would affect Natal and Her Majesty's Government.