A decade of
recession and drought

East London's growth was slow during its first decade. Indeed, its civilian population in 1857 was still less than 153 -- representing just 25 families.

Although this would double with the arrival of the German settlers, the newcomers were mostly poor and therefore did little to change East London's economic situation.

The port's annexation to the Cape Colony had created economic mayhem, and its inefficient Commissariat Surf-Boat Establishment had driven British Kaffrarian trade overland through Graham's Town.

There was also a critical shortage of accommodation. Because King William's Town was under military control, merchants there could not speculate on land, and so they grabbed whatever was available at East London.

They did not build, however, and this left a critical shortage of shops and homes. What did exist was marketed at exorbitant rentals. Traders and artisans therefore abandoned the port.

Sir George Grey's decision to introduce the German peasant farmer immigration without Colonial Office approval would also be devastating.

British Kaffraria depended on the Imperial grant of £40,000 per year but this was halved in 1858 to punish Sir George. The subsidy was ended in 1861 and, because the Crown Colony had no other source of revenue, a decade-long recession ensued.

British Kaffraria was also a political hot potato. There was no love lost between its residents and the Cape Colony. Indeed, the former cherished their independence while the latter was not interested in saving them from their economic woes.

The Governor himself knew there was no way for British Kaffraria to survive except through annexation to the Cape Colony -- but how to achieve this?

In 1859 Sir George offered Parliament an ultimatum: annexation of British Kaffraria or the restoration of East London to its proper home. Parliament chose the latter and East London at last ceased to be part of the Cape Colony.

Sir George's successor, however, pursued the objective of British Kaffrarian annexation, using every trick at his disposal to bring it about. Indeed, Sir Philip Wodehouse played the Eastern Cape separatist movement as his trump card.

The Eastern Cape -- centred on Port Elizabeth and Graham's Town -- believed it was being disadvantaged by the Western Cape's dominance in Parliament. Its parliamentarians therefore pushed for a federation of two colonies in place of just one.

Sir Philip saw in this an opportunity to force the annexation of British Kaffraria. He held a session of Parliament at Port Elizabeth as a sop to the separatists, and then introduced a motion of annexation right at the end, when the majority of Western Cape parliamentarians had already gone home.

His plan was successful and the Bill was carried narrowly but Sir Philip suspected it would be repealed later. He therefore turned to the British Government to introduce its own Annexation Bill -- which it did -- to take effect should the Cape refuse to annex British Kaffraria.

The Cape Parliament could do nothing because either way the annexation would go ahead. In 1866, with much grumbling, British Kaffraria -- and East London -- became part of the Cape Colony.

The change of status, however, was no salvation. By now the Colony itself was in the grip of a major recession triggered by drought and the civil war in America. East London therefore continued to stagnate.