cutting down official salaries and
exercising strict economy, contracted (July 1904) a loan for L3,000,000.
It also passed a bill imposing a graduated tax (6d. to 1s. in the L) on
all incomes over L1000. A substantial excise duty was placed on spirits
and beer, measures of relief for the brandy-farmers being taken at the
same time. The result was that while there was a deficit on the budget
of 1904-1905 of L731,000, the budget of 1905-1906 showed a surplus of
L5161. This small surplus was obtained notwithstanding a further
shrinkage in revenue.

Dr Jameson's programme was largely one of material development. In the
words of the speech opening the 1905 session of parliament, "without a
considerable development of our agricultural and pastoral resources our
position as a self-sustaining colony cannot be assured." This reliance
on its own resources was the more necessary for the Cape because of the
keen rivalry of Natal and Delagoa Bay for the carrying trade of the
Transvaal. The opening up of backward districts by railways was
vigorously pursued, and in other ways great efforts were made to assist
agriculture. These efforts to help the country districts met with
cordial recognition from the Dutch farmers, and the release, in May
1904, of all rebel prisoners was another step towards reconciliation. On
the exclusion of Chinese from the colony the Bond party were also in
agreement with the ministry. An education act passed in 1905 established
school boards on a popular franchise and provided for the gradual
introduction of compulsory education. The cultivation of friendly
relations with the neighbouring colonies was also one of the leading
objects of Dr Jameson's policy. The Bond, on its side, sought to draw
closer to Het Volk, the Boer organization in the Transvaal, and similar
bodies, and at its 1906 congress, held in March that year at Ceres, a
resolution with that aim was passed, the design being to unify, in
accordance with the original conception of the Bond, Dutch sentiment and
action throughout South Africa.

Native affairs proved a source of considerable anxiety. In January 1905
an inter-colonial native affairs commission reported on the native
question as it affected South Africa as a whole, proposals being made
for an alteration of the laws in Cape Colony respecting the franchise
exercised by natives. In the opinion of the commission the possession of
the franchise by the Cape natives under existing conditions w