From the book: A Documentary History of Indian South Africans edited by Surendra Bhana and Bridglal Pachai
The anti-trader sentiments evident in the previous section had a natural concomitant in the agitation, set loose by whites first in Natal and Transvaal, and soon afterwards in the Orange Free State and Cape, to restrict the further entry of free Indians. Exclusion was considered as the easiest alternative available to those in positions of authority. It would be from similar sentiments that the repatriation schemes flowed later in the twentieth century. The agitation raised the bogey of an uncontrollable overflow from the inexhaustible reservoirs of the East. Indentured Indians, however, were welcome as long as they continued to remain indentured.
The penalty for ending the indenture and continuing to reside in Natal as free Indians was a £3 poll tax. Between 1895 and 1903, restrictive immigration laws sought to minimise the entry of free Indians into Natal. A law of 1897, replaced by one of 1903, devised a literacy test to be applied in a European language to the disembarking immigrant. The intention of the law was clear from the way it was to be implemented. The phrase, 'to the satisfaction of the Minister', gave the immigration officials the discretion to ensure that the law did not operate against illiterate whites seeking entry. This 'Natal formula' was soon to be adopted by the rest of South Africa.
By way of protest, Indians wrote in their capacities as individuals or as officials of organisations and refuted charges of 'invasions', or evasion of the law, pointing out that their poverty and their skin should be no excuse for discriminatory legislation.