Brand. A form of resolution eventually came about in July 1876, when Henry Herbert, 4th Earl of Carnarvon, at that time secretary of state for the colonies, granted the Free State payment "in full satisfaction of all claims which it considers it may possess to Griqualand West." In the opinion of Dr Theal, who has written the history of the Boer Republics and has been a consistent supporter of the Boers, the annexation of Griqualand West was probably in the best interests of the Orange Free State. "There was," he states, "no alternative from British sovereignty other than an independent diamond field republic." At this time, largely owing to the exhausting struggle with the Basutos, the Free State Boers, like their Transvaal Republic neighbours, had drifted into financial straits. A paper currency had been instituted, and the notes, known as "bluebacks", soon dropped to less than half their nominal value. Commerce was largely carried on by barter, and many cases of bankruptcy occurred in the state. But as British annexation in 1877 saved the Transvaal from bankruptcy, so did the influx of British and other immigrants to the diamond fields, in the early 1870s, restore public credit and individual prosperity to the Boers of the Free State. The diamond fields offered a ready market for stock and other agricultural produce. Money flowed into the pockets of the farmers. Public credit was restored. " Bluebacks " recovered par value, and were called in and redeemed by the government. Valuable diamond mines were also discovered within the Orange Free State, of which the one at Jagersfontein is the richest. Capital from Kimberley and London was soon provided with which to work them. Pressure on the Cape Colony to annex the territory After annexing Griqualand West, the British initially attempted to incorporate it into the Cape Colony, and put significant pressure on the Cape Government to annex it. The new Prime Minister of the Cape, John Molteno refused, citing the enormous public debt of the territory, as well as objections from portions of the indigenous and settler communities of Griqualand. Local control continued to pass increasingly from the Griqua kaptijns into the hands of the growing digger community of the diamond fields. The prospect of complete dis-empowerment in a "Diamond Fields Republic" became a significant concern of the remaining Griqua. Under pressure, the embattled Griqua leader Nicolaas Waterboer send a formal request to