When in 1864 M. Pretorius again became president the Trans vaal was suffering from the depression which at that time affected the whole of South Africa, and it had trouble with the Zulus, with the Bechuana, and with the powerful tribes in the Zoutpansberg. Schoemansdal (named after Com.-gen. Schoeman) in the Zoutpansberg, was then the most important settlement of the district. In 1867 Schoemansdal and a considerable portion of the district were abandoned on the advice of commandant-gen eral Kruger, and Schoemansdal was burnt to ashes by natives. It was not until 5869 that peace was patched up, and the settle ment arrived at left the mountain tribes in practical independence.
Meanwhile the public credit and finances of the Transvaal had gone from bad to worse. The paper notes, issued since 1865, had been constituted by law legal tender for all debts, but in 1868 their power of purchase was only 3o% compared with that of gold, and by 187o it had fallen as low as 25%. Civil servants, who were paid in this depreciated scrip, suffered considerable distress. The revenue for 1869 was stated as £31,511; the ex penditure at L30,836.
Disputes on the Bechuana border had been constant; they be came again prominent by the discovery of alluvial diamonds in the strip of land between the Vaal and Harts rivers, to the sovereignty of which there were rival claims. A little later the famous dry diggings on the De Beer and other farms were dis covered. They were south of the Vaal and to them the Orange
Free State laid claim. But there was a rival claimant in the Griqua chief, Nicholas Waterboer, and since 1862 the Griqua claims had been urged by his agent David Arnot, a clever Cape Colony attorney, who in the end bluffed all his opponents. The various claims including those of the Barolong Bechuana to land north of the Vaal where, as at Bloemhof, Transvaal authority was in fact exercised, were submitted to the arbitration of R. W. Keate, lieutenant-governor of Natal. His award was made in Oct. 1871, and was admittedly just on the evidence produced. It gave Waterboer all he claimed—though he had no title what ever to the diamond fields—and the Barolong, an area which the Transvaal actually held. Now Waterboer, before the arbitration court met, had offered his territory to Great Britain and it was known to all the parties that the offer would be accepted. Ac cordingly a few days after the publication of the Keate award, Sir Henry Barkly, the high commissioner, took over as British territory Waterboer's land (see GRIQUALAND). This included the triangular piece of land above the confluence of the Vaal and Harts rivers, in which diamonds had first been found. As to the land awarded to the Barolong, no steps were taken to enforce the Keate award ; the Transvaal Boers remained in possession of Bloemhof and all the farms they held—and disputes with the Bechuana continued.