Lack of development in the de facto Indian residential areas encouraged,
in the early 1940's, a growing nwnber of prosperous Indians to buy homes,
for both residential and investment purposes, in the predominantly European
residential areas of Natal. This development precipitated a demand by Natal
Europeans for segregatory legislation. Aware that this would put South
Africa out of step with the trend of international opinion and would serve
to complicate further the difficult position of Britain in India, Smuts initially
attempted to defuse the issue by encouraging negotiations between representatives
of the Indians and the Durban City Council.
Fortunately for Smuts, the Accomodationist1 Indian leadership proved
willing to co-operate with the Durban City Council in attempts to find a
local non-legislative means to curb "penetration" without at the same time
having to concede the principle of segregation. By 1943, however, these
attempts had failed for the Indian leadership proved incapable of substantially
curbing a process which only the provision of adequate housing could
prevent. At the same time, the Durban City Council, which must bear much
of the blame for the lack of provision of adequate Indian housing, failed
either to offer concessions or the hope of real improvements in Indian housing.
Thus Smuts, faced with the prospect of unimpeded "penetration"
becoming a devisive issue in an election which he hoped would provide
overwhelming endorsement both for his 1939 decision to go to war and for
the extension of the South African war effort he shortly proposed to undertake,
was finally, in 1943, forced to intervene directly by "Pegging" the
further purchase by Indians of European residential property.