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security of the other Europeans living in these countries, Her sjesty's Government should maintain a control over the sphere of luence, while making all possible use of any Zanzibar surplus or dit for the further development of the whole region for the itual benefit of English commerce and of Zanzibar.

Whether the whole region should be officially declared to be an glish Protectorate appears to me to be a question of minor mediate importance. There is, however, no doubt that King wanga will ask for a Treaty of Protection ; in fact, he has already ne so in the temporary Agreement made between him and myself

the 29th May,* and forwarded to your Lordship in my despatch the same date. A declaration of Protectorate would probably rove to be the simplest course.

Before continuing the development of this idea, I venture to ibmit that the success or failure, and, indeed, the possibility, of ay scheme on these lines for the general benefit of England, ganda, and Zanzibar, must depend very largely upon the powers etained and the attitude adopted by the Imperial British East frica Company on the whole question. Without entering into letails, I may be allowed to point out that the political existence ind powers of this Company in East Africa are based upon two separate documents. The first of these, which should be more accurately described as a series of documents, is a Concession from the Sultan of Zanzibar granting to the Company the lease of certain ports on the coast, and of a strip of land, 10 miles in depth, running parallel with the shores of the Indian Oceali. The Sultan gave to the Company at the same time administrative and judicial powers over his own subjects living in these ports or in this strip of land, and conceded to them all the revenue which the Company might be able to collect in this part of bis dominions from customs duties or other sources, subject, of course, to the limitations imposed by international agreements.

In return for these concessions the Company agreed, after much discussion and negotiation, and after most careful computations of the value of their newly-acquired rights and territories, to pay to the Sultaus of Zanzibar an annual rental of 80,000 dollars, which was equivalent at the time to nearly 14,0001., but which is now worth rather less than 11,0001.

The powers thus acquired from the Sultan of Zanzibar were strictly limited to the boundary-line 10 miles from the sea, beyond which the Sultan's possessions do not extend. The rights and duties of the Company in the interior, as soon as the 10-mile limit is passed, are therefore defined by and dependent on the Royal Charter granted to them on the 3rd September, 1888. Without recapitulating the terms of this Charter, it may fairly be said that Page 83.

+ Vol. LXXIX, page 641.

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The ease as regards the strip of coast-line held by the Company der Concessions from the Sultan is somewhat different. So long the former continue to pay their rent with regularity, they have

undoubted right to retain their rights of administration ; but I ve no hesitation in saying that while it is open to doubt whether ich retention will be to the advantage either of the Company or

the Sultan, there can be no question that it will be to the great isadvantage of the countries lying in the interior which form more articularly the subject of this Report. So long as the Company etain their Concession, it will be in no way to the interest of lanzibar to contribute to the prosperity of its own coast-ports for be sole benefit of the Company; the efforts of the Sultan's Government would, therefore, in all probability, have to be directed to the somewhat clumsy expedient of opening a new road to the interior by the Tana River, which should pass outside the limits of the Company's Concession. In fact, the Sultan's Government, which is a factor of no little importance in the whole question, would be thrown into an anomalous position of opposition to its own ports; it would be a direct gainer by the development of a new port in Witu and by the transport of goods by the Tana River outside the Company's Concession, and it would also profit, though in a less degree, by the conveyance of the Uganda trade through German ports and the German sphere; but the increase of trade from Mombasa, while that town is under the Company's jurisdiction, would be looked upon by the Sultan and Arabs of Zanzibar, as well as, from a more practical point of view, by the fiscal authorities of the Zanzibar Government, as a misfortune rather than a benefit. If, therefore, the Company retain their Concession, it will be difficult to justify any demand being made upon Zanzibar for assistance in developing any scheme of improvement of the interior.

Nor can I imagine that the retention of the administration and fiscal powers conferred by the Concession will be of much advantage to the Company themselves. Now that they have renounced any connection with Uganda and the neighbouring countries, any trade with those countries passing through the Company's ports will presumably be treated as goods “in transit,” and will be, therefore, free from any customs or transit duties at the coast. Article IV of the Act of Berlin (1885)* lays down that

"Merchandize imported into these regions," i.e., a wide zone extending, roughly speaking, from 5° north latitude to 12° south latitude, “shall remain free from import and transit dues.”

The Declaration annexed to the Act of Brussels of 1890+ modifies this Article in so far as it provides for the imposition of import duties, but the exemption from taxation of any kind of all goods in Vol. LXXVI, page 4.

+ Vol. LXXXII, page 55.

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Her Majesty's Government in the interior. It is unnecessary insist upon the complications which would inevitably ensue. enough to say that the situation thus created would, in all probaility, effectually prevent any real progress being made, and would ender almost futile all the expense wbich has been and may be acurred in this district.

In view of these considerations, and of the urgency of now rriving at a settlement of the whole East African question on a vasis which offers, at least, some prospect of being definite and permanent, I venture to express my strong opinion that it is now lesirable, in the interests of British commerce and of the whole of East Africa, from the Indian Ocean to the Nile Basin, that some arrange:nent should be arrived at, without further delay, by which the Imperial British East Africa Company shall cease to exist as a political or administrative body, either in the interior or within the limits of the Sultan's territory.

Without wishing to criticise, and still less to blame, the Com. pany's methods of government, the history of British East Africa for the last five years and its present condition show us clearly that the experiment of combining administration and trade in the same hands has proved a failure, so far as this part of Africa is concerned ; and that the sooner this system is discontinued the better it will be for the native races, for British commerce, for Zanzibar, and, as I believe, for the Company itself. As pioneers, the Company's officers have done good work, and have greatly increased our knowledge of East Africa, and there can be no doubt that a great deal of money has been spent in the hope of opening up the country to civilization and, at the same time, of introducing a profitable trade. In fact, to the founders of the Company belongs the sole credit of the acquisition, for the benefit of British commerce, of this great potential market for British goods. It should, moreover, be remembered, in justice to them, that in the face of many initial difficulties they succeeded, in marked contrast to the neighbouring European colonies, in establishing their influence without bloodshed, and by their own unaided efforts. It does not come within the scope of this Report to examine the reasons for the non-realization of all these hopes.

Should the Imperial British East Africa Company be converted into a commercial, agricultural, or transport Company, or into a combination of Companies occupied with these and similar undertakings, they may still contribute in a very important degree, and, as I believe, to their own pecuniary advantage, to the development of East Africa ; and in this work there can be no doubt that their experience of the country, and their command of capital, would be of the greatest service : but, without going further into

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