I move as an amendment to this amendment—

This amendment has been discussed by members of the various parties, and agreed to by them.

I second.

Amendment, as amended, put and agreed to.

I move—

It will not be necessary for me to detain the House very long on the third reading of this Bill, because I only want to return for a moment to two clauses of the Bill discussed also during the second reading of the Bill and at the Committee Stage, and relating to matters to which the hon. Minister promised to give further attention with a view to putting right in the Other Place what we on this side still believe to be wrong in the Bill. Before dealing specifically with these two clauses, may I just say that we, on this side of the House, accept this Bill because it will have the effect of making it easier for immigrants to come to South Africa and for people to acquire South African citizenship. From that point of view, we welcome the principle of the Bill. But the Bill as it stands—and I come now to the two clauses mentioned —still leaves in doubt the position of children of mixed parentage who may come as immigrants to South Africa. This is one of our objections to the Bill as it stands now. The second provision to which we object is the one which does not permit an appeal to courts of law in respect of Section 13. The Minister has, as I have said, promised to give this matter his further consideration and we appeal to him to consider what will mean a change in the contents of this Bill. We realize that he cannot change the contents in this House now but we ask him to do it in the Other Place, so that the contents of the Bill in its final form shall be different to what it is now in respect of these two particular provisions, namely Clauses 6 and 13. We think that immigrants to South Africa will benefit from such an alteration, but I leave it to the hon. Minister to effect the necessary amendments.

Motion put and agreed to.

Bill read a third time.

This clause gives effect to certain changes in the basic pensionable emoluments of Railway servants, and it also enables the results of consolidation to be given full effect to as far as the Pension Acts were concerned. There is one question which I would like to ask the hon. Minister in this regard. namely about the definition of “fixed date”. According to the Bill this date is either—

1. (a) the first day of April 1961, if on the day immediately preceding the date of his retirement he was an officer or an employee paid on a calender month basis; or
2. (b) the sixteenth day of March 1961, if on the day immediately preceding the date of his retirement he was an employee other than one referred to in paragraph (a).

I wonder if the Minister could indicate to us in this connection whether the Joint Superannuation Fund Board did at any time recommend that these provisions should be made retrospective so that existing members could get the benefit of the last seven years of their service as was the case with the partial consolidation. If the hon. Minister could clear this point up, it would help a lot.

It has not yet been finally decided whether anything could be done to assist members in the service who have less than seven years to go. The matter is, however, still being discussed by the Joint Superannuation Fund Committee and I am awaiting the report of that Committee and its recommendation, if any.

If the Joint Superannuation Fund Committee does recommend it, is it then likely that we will have further amendments next year to this Bill?

Yes, it is possible.

Clause put and agreed to.

On Clause 9,

I would like the hon. Minister to clarify this clause. As I read this clause, it safeguards the rights hitherto vested in the Governor-General, rights in respect of what might be called the private part, as opposed to the naval part, of the harbour at Simonstown. The hon. Minister knows that there have been certain transfers of properties and rights in a portion of that harbour between the Railway Administration and the local authority, transfers of works and buildings and a jetty which impinge upon the area below the high-water mark which is normally vested in the Governor-General under the Seashore Act. Will there be any change in that position under the provisions now in the Bill?

In order to meet the position, the Railway Administration is relinquishing jurisdiction over the harbour and intends handing it over to the municipality of Simonstown. That is the purport of this clause. I do not therefore think that there will be any change.

Clause put and agreed to.

On Clause 12,

I move the amendment standing in my name, namely—

It is the present practice to confine the recovery of overpayments to 12 months where the servant concerned is not aware of the irregularity, but where such servant has been aware of such irregular overpayment, the Department has insisted on full recovery irrespective of the period involved. This amendment is in the interest of clarity and will ensure that where a servant is aware of irregular payments having been made to him, the Department will not be restricted in recovering the overpayments to any specific period.

We have no objection to the amendment just moved by the hon. Minister on Clause 12. I would like to move as an amendment—

We feel that it is palpably unfair that when a servant has been overpaid without his knowledge and on the authority of a senior officer, that he should be made to suffer financial hard-snip when recoveries are made from his wages. It is clear from the wording of the clause that where a servant has been overpaid for a period of say 12 months, he can be called upon to pay it back within say two months. That can cause considerable hardship and I think that it would be fair to offer some protection to such servants. The object of my amendment is to give a servant who has received overpayment without his knowledge, an opportunity to repay the amount overpaid over the same period over which he has received it. The amendment is, however, so worded that it will not be binding upon the servant because he still has the discretionary right to say that he will repay the amount overpaid say in six months. From the point of view of morale my amendment is justified because the servant will at least know that he has that protection. I know the hon. Minister will probably say that each such case is properly investigated by welfare officers, but the Railway Administration is a large organization and as is the case will all large organizations there is the personal aspect which can easily give rise to ill-feelings. It is impossible for the Minister or the management to control each individual case, but by the addition of this provision, the staff will at least have the security that when a mistake is made and they are overpaid they will not be called upon to pay for that mistake.

I fully agree with the sentiments expressed by the hon. member in regard to the question of the recovery of overpayments, but I will explain why it is not possible for me to accept his amendment. I had the whole matter investigated and I find that if recovery of an amount overpaid to a servant is spread over the same period during which the overpayment has been made, administrative difficulties may arise in that the remaining period of service of the servant concerned may not be sufficient to apply such legislative provisions—in other words, a servant might only have six months to go before retiring from the service whereas recovery would have to be made over a period of 12 months, or where he was aware of the overpayment, for a period of perhaps three years. If the Administration is going to be bound by this provision, administrative difficulties might arise and the Administration might be unable to collect such overpayments, and difficulties and complications might arise with the recovery of the balance still due. What I am, however, prepared to do is to give an assurance that in the application of the new Section 3bis recovery will be effected wherever practicable over a period which shall not be less than the period over which he was erroneously granted increments—in other words, I am prepared to give the assurance to do what the hon. member for Turffontein (Mr. Durrant) has suggested, where that is practicable. But the Administration cannot be bound legally by the proposed proviso because it may be impracticable to apply it in certain circumstances. The Administration’s Chief Legal Adviser also considers that the inclusion of such a proviso in the Bill would be cumbersome. The present practice is that in determining the instalments by which an amount overpaid are to be recovered from a servant, such servant’s marital status, the size of his family, his rate of pay and financial position, the length of service before reaching the age limit, and other factors are taken into consideration. In the majority of cases, moreover, the servant concerned is asked to give an indication of what instalment he can afford and, if at all possible, recovery is made accordingly. In short, all cases are treated sympathetically. So that we go even further at present than what the hon. member asks for in his amendment, namely we ask the servant what he can afford to pay and the actual instalment might even be less than it would have been had he been required to repay over the period during which the overpayments were made.

I want to point out that where there is an overpayment the fault surely lies with the staff in the offices. It is due to carelessness on their part and if the employee was unaware of the fact that there was an overpayment, is it reasonable to hold him responsible for repaying money which was paid to him due to the carelessness of the staff? I do not think that is right. We have the same position in the Department of Pensions. Overpayments are also made to our old people in respect of their pensions and then it is subsequently deducted with the result that those people suffer. The same applies to the railway worker. I should like to know from the hon. the Minister what happens in the office; are those people called to account when they are careless?

I agree with the hon. member that it sounds unfair that when a person has been overpaid for a certain period and he was unaware of it, that the money should be recovered from him. That is why we have the provision that money can only be recovered in respect of the preceding 12 months, although he may have been overpaid for a period of three years. But the fact remains that he has received money to which he is not entitled and which was not due to him. That is the position. If anybody, for example, receives stolen goods and he is unaware of it that it is stolen goods, it does not mean that he can retain those goods when the theft is discovered.

Quite right.

This is a case where the person was not entitled to the money which he had received. That is why he must repay it but we limit it to a period of 12 months from the date on which the mistake is discovered. As far as the officials who are responsible are concerned, if it is proved that there was negligence on their part action is taken against them under the disciplinary regulations and they are punished.

That was what I wanted to know.

That is done. If it is found that it was due to pure carelessness or inefficiency, that person is charged under the disciplinary regulations and punished.

I must frankly admit that the point raised by the hon. the Minister in the case of servants who have been overpaid and have a certain period of service left to them which is limited, would obviously not be covered by this provision. I must admit that that point did not occur to me when I moved my amendment. I am happy to accept the assurance of the hon. the Minister in this regard, and I hope that that assurance will be conveyed to the General Manager’s office so that that information can be conveyed to the staff through the usual staff circulars and that it will not remain merely an assurance given in this House. With that remark I would ask leave of the Committee to withdraw my amendment.

With leave of the Committee, the amendment proposed by Mr. Durrant was withdrawn.

I move the amendment standing in my name on the Order Paper as follows—

This amendment to Clause 12 is, I think, easy to follow. Clause 12 (3)bis deals with the recovery from the salary or wages of servants of increments irregularly granted. The amendment which I have moved will enable subsection (2) (a) to read this way—

in place of three years—

The effect of this amendment is that the treatment of the servants will be on a parallel basis. At present if they are underpaid for a period of three years they can only recover their underpayments for a period of one year. That is in terms of the present Act. The Bill as it now is will entitle the Minister to go back three years in respect of overpayments, and I think it is only right that the treatment should be the same whether there is underpayment or overpayment. It is for that reason I have moved this amendment. I hope the hon. the Minister will see his way clear to accepting it.

I have no objection to that amendment and I am prepared to accept it.

Amendments proposed by the Minister of Transport and Mr. Eaton put and agreed to.

Clause, as amended, put and agreed to.

On Clause 23,

I want to tell the hon. the Minister that I do not feel quite so happy about the amendment he proposes here in respect of the Level Crossing Act of last year. The effect of the amendment to the original Act that the Minister here suggests, is that when it is proposed to extend any bridges over any railway lines, or to widen them as a result of railway necessities, those additional works will be financed out of the Level Crossing Fund. As I read it that is the effect of this amendment. Now I do not think that that is a healthy policy, particularly when regard is had to the objective for which the Level Crossing Act was established. That Act was introduced for the purpose of speeding up the elimination of dangerous level crossings. But the effect of this amendment will be that wherever the Administration wishes to double any of its tracks, and consequently the bridges concerned, instead of financing that work from capital funds of the Administration, the Administration now proposes to finance those works from the Level Crossing Fund. That will mean that less money will be available for the elimination of level crossings. I ask the hon. the Minister whether that is a healthy policy? This looks to me to be a sort of back door approach to financing capital works of the Railway Administration from the Level Crossing Fund. Surely once a bridge has been built in order to eliminate a level crossing in terms of the planning of the Railway Administration, if, as a result of further development of railway traffic in later years it is found that that bridge has to be extended, that additional capital work should be financed by the Railways themselves. Obviously the effect of this will be that less money will be available for the elimination of dangerous level crossings. Is it healthy that we should embark on financial procedure of this nature whereby funds are taken from the Level Crossing Fund which has been established for the specific purpose of eliminating as soon as possible dangerous level crossings, and to use those funds in order to finance additional capital works for the Railway Administration? I put that point to the hon. the Minister and I should appreciate a reply from him as to why this procedure is now being adopted.

The point that the hon. member has made is a good one, but I would point out that all I am now doing is to place the Railway Administration on the same basis as a local authority and a Provincial Administration. What happens in practice is this: It might be decided to build a bridge to eliminate a level crossing. At the present time the road traffic necessitates a narrow bridge only, but the local authorities know that in five or ten years’ time the road traffic at that point will increase to such an extent that a wider bridge will be necessary. When planning that bridge in terms of engineering designs, instead of planning it to provide for only present-day requirements, it is planned for future requirements. In other words, the wider bridge is not absolutely necessary at this stage. That wider bridge is financed out of the fund, so that all I am doing is to place the Railway Administration on the same basis. In other words, a bridge might be required for, say, a single line only at the present time, but the Administration knows that the traffic will increase to such an extent that in five or ten years’, time a double line will be necessary. Therefore, instead of building that narrow bridge now and making provision for a single line, the bridge is lengthened in order to provide for the future doubling of the lines. Formerly, under the parent Act, the Administration had to bear those costs, whereas the local authorities’ costs were paid out of the fund. As the Administration is a contributor on the same basis as the other authorities, we consider it is only fair that the Railway Administration should be placed on the same basis so that where the normal engineering planning requirements are for a wider or a longer bridge for the future, that that should be defrayed out of the Level Crossing Fund.

I thank the hon. the Minister for that explanation, but can we perhaps follow the same procedure of getting a further assurance from the hon. the Minister similar to the one we received on an earlier clause? As I understand the hon. the Minister’s explanation, this will only apply in casts where it is decided to embark upon the elimination of a particular crossing. Therefore the money that will be used in terms of this provision will be for the elimination of that crossing plus additional requirements over and above what is actually necessary in terms of to-day’s traffic. Can I therefore have the assurance of the hon. the Minister that these moneys will not be used for later development once the original structure has been erected, and that the financing of those additional structures …

But the provisions of the whole Act are against that. This is only for the elimination of new level crossings.

That may be correct, but this is an amendment to the Act …

No, the Bill as a whole provides only for the elimination of level crossings after a list has been compiled by the Committee. So that old structures that have already been built cannot be financed out of this fund.

That is correct, but the way this clause is worded it does not read that way.

This clause has to be read in conjunction with the other clauses of the Bill.

I accept that, Sir. I am not quite sure of the legal aspect, but as I read the clause, this is the effect.

Standing by itself, yes.

If the hon. the Minister will assure me that there is no intention to finance normal capital development from the Level Crossing Elimination Fund, I accept that.

That is the position.

Clause put and agreed to.

On Clause 24,

I dealt with Clause 24 at the second reading, and the hon. the Minister gave an explanation of the reason for the necessity to validate certain regulations which were passed as far back as 1956. I asked the hon. the Minister whether it was not possible to introduce a little streamlining in the control of the regulations which are agreed to and which are eventually put into effect; so that immediately a regulation is agreed to and becomes effective the necessary authority will be obtained from the State President to give effect to it. In most cases where these regulations are introduced in respect of payment, it is of benefit to the railway servants that they go through. One cannot envisage any action being taken against a servant because of a regulation being found to be ultra vires because it has not received the consent of the State President. But I am thinking more of regulations in terms of the Disciplinary Code. We might find that an amendment to the regulations in respect of appeal board procedure, where a servant is charged for some offence and where that servant’s defence can prove that the charge is incorrect because the regulations have not been approved of by the State President. I ask the Minister, if a regulation is agreed to and is put into effect, that there should be a streamlining of the procedure to make quite sure that at that point the regulation is submitted to the State President for approval in order to avoid the sort of thing I have mentioned. It does provide an escape for somebody who may be guilty of a very serious charge of misconduct. I feel that it is necessary that regulations do receive the approval of the State President as soon as possible.

I can only say that that is the intention and the desire, that that should be done whenever practicable. But it does happen on occasion that it is found to be impracticable, and in those circumstances we have to come and ask for validation. But where it is in any way possible to do so, I agree with the hon. member that it should be done.

Clause put and agreed to.

Remaining Clauses, Schedule and Title put and agreed to.

House Resumed:

Bill reported with amendments.

Amendments in Clause 12 considered, put and agreed to and the Bill, as amended, adopted.

I move—

I do not wish to prolong discussion on this Bill because we had a very full discussion of its subject matter on the motion to go into Committee of Supply. However, we stand by our contention made in the course of that debate, that we think it quite a wrong practice that new items of the nature included in these Estimates should appear here and not in the Brown Book, particularly if they are items which fall under the general planning programme of the Railway Administration which is discussed every year by this House. We concur that when it comes to urgent works which have to be completed in a particular year or have to be started immediately, there is a good reason for putting them in hand. But when we get a long list of items accounting for some £22,000,000 to £25,000,000 of railway expenditure, we think this is the incorrect procedure to follow. I took the opportunity of looking up Kilpin on this subject, and it seems to me, from his interpretation of the objects of Additional Estimates, that they are to finance work for a particular financial year but not for succeeding years.

On the Motion to go into Committee on this particular Bill, I raised the principle of enhancement of pay for overtime work, and the Minister indicated that this provision, as far as the Administration and the Staff Associations were concerned, had not been agreed to. However he accepted in principle the policy of enhanced payment for overtime. He said that he hoped that some time in the future that principle would be re-introduced into the service of the Administration. We fought this issue out earlier in the year, and I am not altogether happy about the position, but in view of the fact that the Staff Associations have accepted this position to get the full benefits of consolidation, and that they have accepted it as a temporary measure, I do hope that the finances of the Railways will be sufficiently buoyant in the very near future to enable the Minister to re-introduce enhanced payment for overtime, which is, I think, a principle which should be applied throughout. The present position should not be allowed to develop and create a precedent for others to follow to the detriment of the workers generally.

Motion put and agreed to.

Bill read for second time.

House in Committee:

Clauses, Schedules and Title of the Bill, put and agreed to.

House Resumed:

Bill reported without amendments.

I move—

Mr. Speaker, as hon. members of this House know, the Export Credit Re-Insurance Act of 1957 provides that the Government may reinsure exports to countries outside the Union and the losses on such exports when those losses are occasioned by political factors. The insurance usually covers a percentage of the amount. It may not cover more than 90 per cent of the loss and in actual fact it covers approximately 60 per cent to 90 per cent and the maximum period is five years. Furthermore, hon. members are aware of the conditions which have to obtain for an amount to be paid out under this re-insurance scheme. In order to refresh their memories I want to read out the items set out in Section 2 of the Export Credit Re-Insurance Act of 1957. It reads—

1. (a) the operation of a law, or of any order, a decree or regulation having the force of law, which in circumstances beyond the control of the insured and of the buyer—
   1. (i) prevents, restricts or controls the transfer of payments from the buyer’s country to the Union; or
   2. (ii) prevents, restricts or controls the importation of goods into the buyer’s country;
2. (b) the occurrence of war between the buyer’s country and the Union or any other country;
3. (c) the occurrence of war, hostilities, civil war, rebellion, revolution, insurrection, or other disturbances in the buyer’s country; or
4. (d) such other causes as the Minister may, in consultation with the Minister of Finance, deem to arise from risks not normally insurable.

Those are the political factors in respect of which the Government may re-insure exports to other countries. The types of goods that may be re-insured are listed in Section 1 of the Act, and this is where the difficulty lies. The types of goods which are included in trade with countries outside the Union are dealt with, inter alia, in Section 1 (ix) which reads as follows—

(ix) “trade with countries outside the Union” includes any transaction (including a transaction for the rendering of service) involving a consideration in money or money’s worth accruing from a person in the course of carrying on business or other activities outside the Union to a person carrying on business in the Union.

The difficulty that now arises is that it would seem that certain types of goods which are exported to countries outside the Union are not covered by the existing Act. In the past goods exported from the Union and sent to agents and goods sent abroad on consignment were re-insured under the Act. Here I am thinking particularly of our deciduous and citrus fruit which is exported either to agents or on consignment and which is re-insured under this Act. Our legal advisers, however, have some doubt as to whether we can insure goods of that type. They feel that there must be an actual sale, that an agreement of sale must be entered into between the importer in the other country and the local exporter before goods of this type can be re-insured. It is necessary to get clarity on this point in view of the fact that those goods have been re-insured in the past and we will also continue in the future to re-insure under the Act goods which are sent abroad to agents or on consignment. It is necessary to clear up this matter and that is why we wish to bring about this minor amendment as well as a consequential amendment which will state the law clearly. No new principle is involved in this Bill.

The object of this Bill as I understand it from the hon. the Minister is to fill a gap in the original drafting, and to make it clear that the original intentions of the Act can now be carried out. On that basis we have no objection to it.

Motion put and agreed to.

Bill read for the second time.

House in Committee:

Clauses and Title of the Bill put and agreed to.

House Resumed:

Bill reported without amendment.

I move—

This Bill is similar to the one which I moved some time ago in connection with the Iron and Steel Corporation. The main object of this Bill is, in the first place, to increase the directorate of the I.D.C. from seven to nine members. The reasons are more or less the same as in the previous case, namely the tremendous increase in the activities of the I.D.C. It is not necessary for me to remind hon. members that when the I.D.C. started in 1941, it had a total capital of approximately £500,000. To-day they have a total capital of R117,000,000. If hon. members had taken note of the recent expenditure of the I.D.C. they would have noticed what a tremendous variety of interests were served by the I.D.C. and I think it is in the interests of the Corporation that its directorate be increased so that they may specialize in more directions, and so that a greater variety of interests may be represented on their directorate. That is the main object of this Bill. There are two further minor matters. The one is a purely technical matter, namely to substitute “Minister of Economic Affairs” for “Minister of Trade and Industry”. The second small amendment is to enable the I.D.C. to act as trustees for debenture-holders when debentures are registered. In the past the I.D.C. has acted as trustees for debenture-holders when debentures were registered. But recently there was a case in Natal where the Deeds Office doubted whether the I.D.C. had the power under the Act to act in this capacity. As in the case of the previous Act, the interpretation is that the I.D.C. does have that right. They have done it in the past and they wish to retain the right to do so in future as part of their activities. I suggest, therefore, that this be stated clearly in the Act.

We have no objection to this Bill. We have already accepted the same principle when the hon. the Minister introduced the Iron and Steel Bill. We do however regret that we will not have an opportunity of discussing more fully the activities of the Industrial Development Corporation. There are a number of questions we would like to ask the hon. the Minister. We had no time during the Committee of Supply to do that and I hope that the hon. the Minister will give us an opportunity next session to discuss fully the Industrial Development Corporation which is playing such an important role in industry and commerce in this country. I hope that the Minister will see to it that such an opportunity is given to this House in order that we may discuss the ramifications of this very large organization.

I should like to endorse what the hon. member for Pinetown (Mr. Hopewell) has said. This is not the opportunity to enter into a long discussion on the ramifications of the finances of the Industrial Development Corporation, but there are certain things, now that we have additional members of the directorate, to which we should give our attention. We have a vague idea—only a vague idea—as to how the money of this Development Corporation is invested. Then, when Amato crashed as they did, we found that the Industrial Development Corporation was involved.

Order, order!

I am not going to discuss these, Mr. Speaker, I am merely mentioning them. We now find the Industrial Development Corporation is entering into shipping in a big way. I simply ask the hon. the Minister this question: Will he please let us know how public money is being invested? It is surely the duty of Parliament to know that. I should like the hon. the Minister to give that his very serious consideration, now that he is receiving these extra directors. It is unfair to the Minister of Finance; it is unfair to this House; and it is unfair to the country that we should be treated in this stepmotherly way.

Motion put and agreed to.

Bill read a second time.

House in Committee:

Clauses and Title put and agreed to.

House Resumed:

Bill reported without amendment.

I move—

Mr. Speaker, I should like to avail myself of the opportunity presented by the second reading of the Appropriation Bill, which gives effect to the resolutions of the Committee of Supply and which is therefore the most important fiscal measure for the present financial year, to enlighten the House as to the budgetary position as I see it to-day. In my Budget speech in March I estimated the surplus on Revenue Account for the year 1960-1 at R38,000,000. The final figures are not yet available but according to the latest figures the surplus will be approximately half a million rand more. When I drew up my Budget I made allowance for a small reduction of imports and consequently also for a reduction of import duties in comparison with 1960-1 but not to the extent to which it now seems necessary as a result of the recent tightening of import control. On the other hand, the revised figures in respect of Inland Revenue collections during 1960-1 show that possibly we were rather conservative in our estimates for 1961-2. The net result, however, may be that our total revenue may be less than I anticipated, and the Treasury will therefore have to be very strict when considering applications by Departments for additional funds in the course of the year.

On Loan Account we started the year with a considerable unexpected surplus of R26,500,000, mainly as a result of the fact that the requirements of the Railway Administration were much less during 1960-1 than we had expected. On the other hand it now appears that it will be much more difficult than I expected to raise sufficient long-term loans internally to redeem local stocks in the sum of R128,500,000. Only R43,000,000 of the first loan of R75,500,000 which is repayable on 1 June, has been converted into new loans, and present indications are that new cash subscriptions will be insufficient to make up for the shortfall of approximately R30,000,000. If, however, the balance of payments position improves, as I expect, it is possible that the present tightness in the capital market may be eased and that when the two further loans totalling approximately R50,000,000 have to be converted later this year, we shall then be able to raise additional long-term loans. Here too, however, it is clear that the Treasury will have to be exceptionally careful and strict in considering departmental requests for further funds on Loan Account.

Mr. Speaker, I confine myself to this succinct exposition of the financial position. I will have an opportunity at a later stage to deal at greater length with specific matters of policy but I am always mindful of President Kruger’s words that it is often wiser to wait for the tortoise to put out its head.

Mr. Speaker, I do not blame the hon. the Minister for deciding to wait, and as far as the tortoise sticking out his neck is concerned let me say at once that my immediate reaction to the Minister’s speech is to move the following amendment—

1. (a) is responsible for the alarming decline in the country’s economy; and
2. (b) is making it impossible to restore the expansion and rate of advance which is vitally necessary for the maintenance and increase in the national income and the standard of living of all races through the development of our natural resources to their fullest extent”.

Sir, as the Minister said, this is probably the most important Bill of the Session, providing as it proposes to do for the financing of the country during the coming year. The Minister has given a summary of how the budgetary position has developed since he introduced the Estimates, so this is the conclusion really of a series of discussions and debates on the budgetary position, and I think it is necessary in a very few words just to sum up the position as it was presented to the country by the hon. the hon. the Minister in his Budget on 15 March.

On that occasion you will remember, Sir, the hon. the Minister told us. that our economy showed “a sparkling health and vitality”. He told us that his main problem was the balance of payments difficulty, which he described as an old weakness. He said that as the result of the fall in reserves, the outflow of capital during past months, there had been a considerable fall in bank liquidity and the general credit position and he told us that in order to offset that position the Government had taken steps to maintain the credit position generally as far as possible. He told us that the Government had lent the banks some R51,000,000 on a short-term basis, and he told us that he had reduced the cash deposits which the commercial banks have to lodge with the Reserve Bank to 6 per cent, and he told us that he had kept the bank rate down, and that he thought the then pattern of interest rates was satisfactory and suitable to the country. In a few words, he told us that the object of his Budget was to encourage capital development, domestic savings and capital investment, to conserve foreign credit and to attract foreign capital, and he assured the House that he was firmly convinced that if his Budget proposals were faithfully followed and they were not affected by what he called economic gales from abroad, this year would be a year in which our economy would reach new heights. That was the picture presented by the Minister three short months ago. It is true that he did then, and has since, expressed some forebodings as to what the future held, but the official picture presented by him on behalf of the Government was. that we have an economy full of sparkling health and vitality and that he looked forward to reaching new heights in the development of our economy during the coming year. One is bound to ask what the picture is now.

Our reserves have continued to fall from R194,000,000 then to some R147,000,000 last week, an amount of about R47,000,000, in spite of certain special payments which the Treasury has received from abroad. As a consequence the Minister has been compelled since 15 March to reverse his whole policy. During the whole of last year while the position was deteriorating the Government’s policy was to expand, or if not to expand, at any rate to do all it could to maintain the credit facilities and the bank liquidity which are essential for the normal working of the whole economy of the country. In reversing that policy he has recalled the short-term Government loans, which was of course inevitable. He has increased the bank rate, which has led to a general upward revision of interest rates in all sections of the economy. He has increased again, instead of reducing, the cash reserves that the commercial banks have to keep with the Reserve Bank. I understand that he is likely to increase it still further as soon as he is able to do so. He has imposed severe currency restrictions which may have had some effect of reducing the outflow of capital but which has certainly also had an effect on restricting legitimate business. The buying of forward currency to meet future commitments, especially capital commitments, the giving of irrevocable letters of credit to cover deliveries, whether they are of consumer goods or of capital machinery and plant, are normal prudent steps taken by any sensible business concern which is able to do so, and to cut those off is a very serious interference indeed with the normal functioning of the economy of the country. He has in addition to that imposed severe import control and he has put on a larger number of new duties, some of which affect the industrial affairs of the country in that they are raw materials or manufactured goods, sometimes, used in things like the building industry. He has, with his colleague, the Minister of Economic Affairs, tried to cushion that with a system of rebates and suspended duties which make it very difficult indeed for the ordinary business man to do proper costing or to present proper tenders for work for which he hopes to get a contract. Then, of course, last Friday the Minister made this statement in regard to further restrictions. This statement, which was made quite unexpectedly on Friday evening, is the most drastic step so far that the Minister has felt compelled to take to preserve the financial stability of the country. In the first place, South African citizens are now prohibited from buying South African and Rhodesian securities on the London and Bulawayo stock exchanges. Apart from the importance of that, it seems to me to indicate very clearly what a topsy-turvy world we are living in. Last year, when the outflow of capital took place on a large scale, the Minister was at pains to explain to the House that this had its bright side, that as the result of patriotic South Africans buying up South African shares from abroad, the money was now in the country and strengthened our economy. In the beginning of this year the hon. the Prime Minister eulogized that practice. Talking of the outward flow of capital, he said that these “two phenomena have their credit side in that South Africa has acquired possession at low prices of valuable domestic shares, with the result that the dividends can be kept for our own fatherland and we can reap the profits”. You see, Sir, we have this extraordinary position that in January patriotic citizens were applauded by the hon. the Prime Minister for buying South African shares to strengthen our economy, but in June it is a crime accompanied by heavy penalties to do so. Nothing can be more clearly indicative of the change that has come over the country than these new restrictions the Minister has imposed.

The second main restriction, of course, is that the proceeds of securities—and may I say that it is not quite clear what the Minister means by “securities I think there is a certain amount of doubt in the minds of people as to what he means by it, whether it includes securities of all kinds, including bonds and mortgage bonds or even cash actually held by the banks here from overseas people, and I hope the Minister will clarify that when he replies to the debate. Anyway, the proceeds of securities sold in South Africa by non-residents will be blocked. That means that the overseas investor cannot get his money out of the country, and the effect of course will be that there will be no more private investment capital coming to this country from overseas, and thereby one of the main objects of the Minister’s Budget of three months ago, i.e. to attract foreign capital, is now being scrapped and made impossible by his own actions. There are certain works and undertakings in the course of erection in this country, and I suppose those concerns will have to complete them, but the prospect of any new investment capital coming to this country seems to have disappeared completely. There is no doubt that last Friday evening South Africa’s credit dropped with a bang. The hon. the Minister referred to the International Monetary Fund and said that he had discussed this matter intensively with the represents of the Fund when they were here recently. Well, the only inference that one can draw from his reference to the Fund and his statement that intensive discussion took place is this, that in introducing these restrictions, which the Minister himself has said he regrets very much having to do, he was acting on instructions from the International Monetary Fund as a condition precedent to obtaining the R27,000,000 for which he has applied. In other words, this country, which always prided itself on its strong financial position and its standing in the international money world, is now reduced to accepting conditions from the International Monetary Fund for the acceptance of a paltry loan of R27,000,000. What a position to be in! So, you see, Mr. Speaker, that in all the steps the Minister has had to take, he has had to reverse his whole policy of encouraging expansion, as he would have liked to do, and now he has a policy of contraction and restriction in an endeavour to prevent further deterioration, and he has landed us in what the economists meant when they spoke about South Africa preparing for a siege economy. Of course the results of these steps are already being seen, although not anything like the extent to which they will be seen in the near future. We have dearer money and less of it. The building society rates are up, which will affect every small bond-holder in the country, if not in the amount of interest he has to pay then in his period of redemption which will have to be lengthened to enable him to cope. The property market all over the country is moribund. Overdraft facilities and bonds are virtually unobtainable. Commerce, what with import control and currency restrictions and the growing contraction of credit throughout the country, is in a state of uncertainty. Retrenchment is being foreseen in many branches, of industry. I am sure the Minister can find out from his colleague behind him that what I say is true, and if they do not know I myself could give him instances of where retrenchment is being foreseen and feared, and other hon. members of this House can do the same.

Incidentally, the hon. the Prime Minister has done his best to add to the general uncertainty and bewilderment in the country by the way he has handled this question of a general election. From his flippant reply to the Chief Whip here a few days ago in the House, it is quite clear that he does not understand that a general election causes a good deal of uncertainty in the country, and the way he handled the matter when he replied to the Chief Whip gave me the impression that the hon. the Prime Minister has no conception of the state of affairs in which he has landed the country. There is no doubt that the past three months have seen a marked and startling deterioration in the economic and financial position of the country, and that the Minister’s hope of reaching new economic heights showed no sign whatever of being fulfilled. Indeed, if we read again the Minister’s speech in March, it reads like a pipe-dream. On the contrary, if we go on as we are doing to-day there is no doubt that we are heading for a very serious position indeed, because all these restrictions and contractions, and all these brakes on the economy of the country, must have a snowballing effect; they grow and grow until they reach every section of the community, and the position becomes critical for the whole country.

I regret having to move this amendment, because I think the position is so threatening for the whole country that it would be much better if it was not necessary to move an amendment of this sort, indicating that the Government is proving completely incapable of handling the position. I think unfortunately this amendment is the only way we have of trying to make hon. members opposite realize the responsibility that rests on their shoulders, because if we go on in the way we have been doing, and I must say that the hon. the Minister will agree that I am not generally regarded as being unduly optimistic in respect of his doings, but I have been surprised at the speed at which the position has altered in this short three months since the Budget speech was made. If we go on as we are doing now, and if the pace of the recession continues, before very long it will not be a question of what the Government can do but a question of all hands to the pump in order to try to save ourselves from running on the rocks. It may be that the Minister’s steps he has taken to stop the outflow of capital will be effective. I hope they will be. I do not think he has gone far enough yet, but I hope they will be effective because it is vitally important that this financial haemorrhage which has been taking place over the past year should be stopped without, if possible, further imperilling our credit.

The hon. member for Bellville (Mr. Haak) usually comes into these debates and usually devotes himself to telling us what difficulties other countries are having. He tells us of the difficulties Canada, Australia and Britain are having, as if that had anything to do with us. We all know that those countries are having difficulties, but we all know that the causes of those difficulties are quite different from the causes of ours. I hope that if the hon. member for Bellville takes part in this debate he will devote his intellect to telling us what we are to do in this country and let him leave the other countries to settle their own troubles.

The South African pound has always been a strong currency, probably one of the strongest in the sterling area. One cannot say that to-day. There is talk of a possible debasement of our currency, devaluation. It is true that the hon. the Minister issued an emphatic denial that such a thing is contemplated or will be done, but when you look back at the number of strong denials the Minister has made before that there will be no restriction on the repatriation of capital, he will permit us to say that we doubt what value can be attached to his statement, although I concede that it is a statement a Minister of Finance is bound to make. But it is an indication of the way in which things are moving.

I also hope that the Minister will get his loan of R27,000,000 from the Monetary Fund. After the way he has toed the line, I think he probably will, but what will he do if he does not get that loan? Presumably he has an alternative, because for South Africa to be unable to meet its commitments overseas will just about be the last straw, and I hope that if the Minister is unable to tell us that he has got approval of this loan he will be able to give the country some assurance that if that loan is refused it will not be dealing a fatal blow to the credit and the standing of South Africa overseas. But assuming the Minister succeeds in what he is doing—and I hope he will succeed—what has he achieved? He will have cured nothing of the conditions from which we are suffering. He will have achieved the stoppage of the outflow of capital and he will have achieved the obtaining of a comparatively short-term loan from the Monetary Fund, but he will have succeeded at the unbelievably high price of a curtailed and restricted and a shaken economy. The Minister spoke to us about reaching economic heights. It is common cause that if we are to make full use of the opportunities for expansion and development and increasing the wealth of the country, we need at least some R50,000,000 a year from abroad for private investment purposes. In the restrictions that the Minister has imposed it would appear that he has abandoned any hope of any inflow of foreign private investment capital, and one asks where this money is to come from? It is no good blaming the Press or the United Party for the position with which the Minister is faced at present. The facts are staring us in the face. The difficulty is that the Government still refuses to face them. For the last 12 years we have never ceased warning the Government of the inevitable results of the path they were following. We have often warned them and offered to co-operate with them if they would stick to economic questions and bread and butter matters affecting the welfare of the country. We have done all we could to open their eyes, instead of which they have continued over 12 years frittering away our golden oportunities whilst they played party politics, scorning the goodwill which we had acquired and blandly assuming that it was indestructible, and recklessly imperilling the confidence that the rest of the world had in us and in our financial institutions and in the strength of our economy. All the time that we warned them they have been heading steadily towards isolation. Well, now we have it. We stand alone, and we stand alone at a time when our whole financial and economic fabric are shaken and are bewildered and have no clear view of the future. We stand alone at a time when we are threatened with the loss of South West Africa, and we are threatened with even worse than the loss of South West. I am not going into further details, but the Government knows very well what those further threats are. At the moment the Minister of Economic Development is puzzling his head over the question of the European Common Market. He made a statement last week saying that he was watching the position closely. I am afraid that is very poor consolation, because it is quite apparent that the United Kingdom, by economic circumstances, is being slowly compelled to join the E.C.G., and if she does the other members of E.F.T.A. will do the same thing and you will have a big economic bloc for the whole of Western Europe. What has held the United Kingdom back so far has been the question of Commonwealth preferences. As we have seen in the Press, the U.K. Government is now sending Ministers abroad to discuss with members of the Commonwealth way? and means of preserving for those members of the Commonwealth some measure of preferences in the event of Great Britain joining the Common Market. Of course that does not apply to us. If Great Britain joins the Common Market our preferences go. We have already had a slight indication of the problems in the sugar industry. That industry is desperately worried. They have been left out of the United States purchases of sugar to replace the sugar that they got from Cuba. They have an export quota which they enjoy under the Commonwealth sugar agreement and they are very much afraid that they are going to be excluded from that Commonwealth sugar agreement and if they are, of course, since the price which they are obtaining under that agreement is several pounds a ton more than the domestic price of sugar, it means that the domestic price of sugar will have to be increased throughout the country to make up the loss of the sugar industry and of course that will affect the whole of the canning and jam industries. If preferences go and if at the same time the costs of canning in this country go up as a result of the increase in the price of sugar, it simply means that the whole of our canning industry is going to collapse except in the internal market. That is just an indication of the things that are looming up that we will have to deal with in the near future. What is the Government going to do? The fact is that this little Republic of ours cannot stand alone—strategically, politically, financially, economically. Without friends—and we have good would-be friends in different parts of the world if we would only give them a chance to be our friends—without friends and without active supporters no country can survive and nor can we. This European Common Market is a case in point. All over the world to-day countries are forming into blocs and combines and groupings for their own protection and for their own economic interests. That is why Britain is being compelled to join the Common Market, and the question is where do we find friends with whom we can work? I say “we” because whether you like the Republic or not we are all members of that Republic; we are all subjects of it and we all have a common concern to see that it is a Republic in which we can all live in peace and security and, I hope, prosperity. That is the question lying at the bottom of all the problems which the Minister is having to face, that he is having to face as far as I can see, without any idea of how he is going to solve them, and it is a problem Which has been created and aggravated by the pig-headed refusal of this Government to face ineluctable facts. Sir, the second part of my amendment reads like this—

Nobody in this House will question the fact that what is implied in that part of my amendment is absolutely vital if we are to progress in this country, to raise the standard of living, to increase our wealth and to develop the enormous resources with which Providence has blessed us. I say that a government that cannot hold out concrete hopes and concrete plans whereby the country can reasonably expect in the near future that this development can be resumed, has no right to remain the Government of this country. I think that the lesson, the message, of the last three months is this, that the Republic is moving into great danger and I do not believe that this Government can save it. I think the moment of truth is approaching very rapidly for South Africa, and I charge this Government first of all with completely failing to warn the people of what is threatening or of opening their eyes to the dangers which are massing up in front of us and I charge them too with doing nothing either to meet the threats or to avert the threats if and when they come and therefore I wish to move this amendment as a mark of no confidence in the Government.

I second the amendment.

The hon. member for Constantia (Mr. Waterson) has made his customary speech this morning.

A good speech.

The hon. member says that he has made a good speech. In other words, here we have one of his own supporters saying that in the past he has made bad speeches. The hon. member for Constantia has once again linked the question of this party’s racial policy to our economic policy and he wants us to change our racial policy so that our economic policy will meet his and the United Party’s wishes. This is a matter about which we have had much to say in the past 13 years. The National Party is determined to implement its racial policy, and it regards the economic pressure which may be exercised on it from time to time in an attempt to change that racial policy, as a cold war and as far as that cold war is concerned, it is prepared to play its part and not to give way. When we discuss economic matters, the House must accept that this Government has been elected to implement this racial policy, and it is going to do so even if it results in possible temporary setbacks in the economic field, as the hon. member claims. I do not think that it will cause such serious setbacks as the hon. member claims. We must accept that pressure is being exerted by people who think that by so doing they can achieve certain objects in spheres other than the economic sphere. We see this everywhere in Africa. Throughout Africa to-day we see that the outside world does not have the required confidence to invest in African countries. To the north of us economic conditions are to a large extent chaotic. In Rhodesia they are also trying to exercise pressure to persuade Welensky to do this or that and then everything will supposedly go well with Rhodesia, but Welensky is refusing just as we are refusing. I say that hon. members opposite want us to change our racial policy to fit in with an economic policy which will suit them. But even if we were to change our racial policy in South Africa and even if we were to do everything which the leftist-inclined liberals of the world want us to do, Europe and America will still say that South Africa only forms part of Africa and that it will be dangerous to invest their money here. I am not quite as pessimistic as the hon. member for Constantia. I am perhaps even more optimistic than the hon. the Minister. I think that our position in South Africa is by no means as weak as the hon. member infers from the measures the hon. member announced here last week. Let us just examine for a few moments what our economic position is to-day. I am now referring more specifically to foreign exchange and related matters. We find that we have a favourable balance of trade, and we have had this throughout. South Africa does not have any balance of trade problems. The problems with which we are faced are capital problems, problems of capital outflow, and I want to give figures to prove this. In 1959 we had a trading surplus of R128,000,000, in 1960 of R30,000,000, and in the first five months of this year a surplus of no less than R178,000,000. When one examines these figures and one also examines what certain economists have said, namely that South Africa should get away from the idea that she must obtain money from abroad to be able to develop, then I wonder whether we are not suffering from the growing pains involved in our development towards becoming a creditor country. I saw the other day that an expert—I almost think it was the brother of the Leader of the Opposition—said that we could redeem foreign investments to the value of R100,000,000 annually in South Africa and that it would not weaken our economy. I do not want to go into that aspect, because I do not think it is relevant; I am merely mentioning it.

A second phenomenon which we must bear in mind is the fact that every year, except when something exceptional happens, we have a fall in our foreign reserves during the period January to June/July/August, and we had the same position under the United Party. This is a fact which has become traditional in South Africa.

If that is so, why have these restrictions been introduced this year?

I wish the hon. member would make his own speech later on; I am now making mine. The point is that every year we have this seasonal fall in our foreign exchange reserves. Let us examine a number of past years: On 1 January 1947, our assets stood at R496.6 million. On 30 June they stood at R400,000,000, a fall of R96,000,000; in 1948 there was a fall of R167 3 million; in 1949 a fall of R82.1 million; and in 1951, when we had the tremendous rise in wool prices (wool to the value of £93,000,000 was sold in that year), we had a fall of R11.9 million. The figures for the following years were R30.6 million; in 1953, R52.8 million; in 1955, R54.3 million; in 1958, R51.8 million; and in 1960 R83.6 million. These were falls which took place between January and June, and this year’s fall up to the end of May—and at the moment the figure differs very slightly from the figure at the end of May—only totals R27.4 million, far less than during these other years which I have mentioned. Of course we take into account that in the meantime R27,000,000 has been borrowed from the I.M.F., but even this brings the figure to R54.4 million which compares very favourably with the previous years which I have mentioned. We therefore do not need to concern ourselves as far as that aspect is concerned. The difficulty is merely that in January this year we started with a slightly lower figure because last year we had an outflow of R 194,000,000 in foreign capital.

Where will we start in January of next year?

I also want to point out that the Reserve Bank’s cover at this stage is still over 32 per cent, while the legal requirement is only 25 per cent. It is very difficult to come down to this 25 per cent because when one’s assets fall, one’s liabilities after all fall as well. The Reserve Bank itself has a certain amount of foreign exchange which it can convert into gold and then it is immediately included in its gold reserves which can therefore also improve the position. Furthermore the commercial banks each have quite a few million pounds abroad which they are keeping for what they call “in case”—for contingencies. There are quite a few of them; there is only one commercial bank of which I know which does not keep any money abroad. This money can all be brought into account so that the position in reality is not as bad as it seems on paper or as bad as one would infer from the various arguments which have been put here. To-day we have the phenomenon that foreign companies which have branches in the Union are systematically withdrawing capital which they have invested in this country and attracting South African capital to these companies. I am completely in favour of this being done, but then the South African capital which they attract must have an interest in the sense of shares or joint control in that company. But that is not what is happening here. No, they are simply entering into loans with our commercial banks wherever they can and then they meet their obligations in their own countries with our money. I am glad that the hon. the Minister is taking steps to rectify this position. Last year alone R 16,000,000 was sent out of the country in this way. This of course excludes the R8,000,000 uranium loan.

Please do not embarrass the Minister any further.

I want to make another point and it is that in my opinion this capital outflow, this flow of capital from the country, is drying up. The figure I have just given, namely that there was a fall of only R27,000,000 over the last six months in our foreign exchange reserves, is already an indication that the flow is far slower than it was last year. But I want to mention one or two other facts that indicate that the outflow is declining. The first is this: Last year we had a tremendous rush to buy shares which foreigners sold here in South Africa. A matter of R 104,600,000 worth of shares was. bought by Union citizens from foreign holders; shares to the value of R37,200,000 were sold to the outside world; there was consequently a net loss of South African capital totalling R67,400,000. I am very sorry that we do not have figures for all the months since January 1961, up to date, but the closing months of 1960 showed a gradual decline in such purchases and also in foreign transactions. But in January 1960, only R6,000,000 worth of shares was bought from the outside world and there was a R3,200,000 increase in shares sold to the outside world. We therefore only suffered a loss of R2,800,000 for the month of January which is quite a normal figure and which is not at all disproportionate. As far as that is concerned, I am therefore inclined to agree with one of the British financial journals which has said that this outflow is drying up and that it cannot continue much longer. The foreigners who took fright have already pulled out. Those who remain do not frighten so easily and they will not lightly withdraw their money. I think that the hon. the Minister need not concern himself greatly about whether this outflow will continue.

We have a far greater problem, and this problem is represented not so much by foreigners as by people in this country, and I should now like to deal with this problem. I am referring to South African citizens who take their money and deliberately send it out of the country. They are not doing so on a small scale but on a large scale. If one can buy a South African investment in England which gives one a seven per cent interest yield and it gives one a six per cent yield if one buys it here, then one takes a chance. That may also be a reason.

It is not likely.

Well, it is quite probable. From what I know of certain businessmen in this country, they will do so if they can only earn one-eighth of one per cent. If they see an opportunity to circumvent the law, they will try to do so. We have the position in South Africa that there is a financial regulation which prohibits South Africans from sending their money abroad without obtaining special permission. This regulation has existed since 1951 and the object is that only persons, who can prove that they genuinely require money abroad to pay for certain things and who obtain the permission of the banks or the Treasury, may send their money out of the country. The law lays down that anyone who is found guilty of a contravention of the regulations relating to scrip, foreign exchange, gold, bank notes, cheques, postal orders, bills, bonds, redemption of debts, or goods is liable to a penalty of R10,000 or five years’ imprisonment or both. This is the legal position, but what do we find? When we examine the returns of the Reserve Bank, we find that at the end of 1959 the following amounts were invested abroad on short-term alone—I am not referring to long-term investment, although there may also be contraventions in the case of long-term investments—namely £27,200,000 in direct investments, and £38,900,000 in indirect investments, a total of £66,100,000 or R132,200,000. In 1960, according to the Reserve Bank’s latest report, namely that for March, the position was as follows—

This gives a total of R48,000,000 which left the country in 1960. But I am only going to discuss the short-term investments. When we add these investments to this R132,000,000, we have a total of R146,200,000 which is lying abroad on short-term moneys at this stage. We do not have figures showing what happened during the period from January up to the present, but it is quite clear to me that this is happening on a far larger scale than ever before. I have here a statement by the General Manager of Volkskas, a person who often travels abroad and who investigates this type of thing. This is a person who has attended all these conferences with the Governors of the Reserve Banks and other bank heads; he therefore knows what is going on in this, regard. He gave an interview on the sixth of this month and he said the following—

That is the position which I have just quoted.

Is it illegal?

Of course it is illegal.

When business was suspended, I had pointed out that at the end of last year South African funds totalling R146,000,000 were invested in short-term investments abroad. Since then this amount has increased considerably; otherwise Mr. Hurter, the General Manager of Volkskas, would not have made the statement which I have quoted. He knows what is going on in this regard. The amount must be much more by now. I want to point out that these are exclusively short-term investments. This is money which one invests abroad with one or other institution on a short-term basis at a certain rate of interest. As soon as the money is used for buying shares or paying accounts, it is removed from the list of short-term investments. It is therefore clear that as this money is removed, it is continuously being supplemented and this process is increasing instead of decreasing. I want to point out that since January we have had a trading surplus of R178,000,000; the Monetary Fund has lent us R27,000,000 and our overall reserves have fallen by R27,000,000. This is a total of R232,000,000. One must of course make provision for invisible imports. One cannot determine how much they total; information in this regard is not yet available. They must represent a considerable amount. In any case it must be very close on R200,000,000 which has left the country by one means or another and is no longer available to-day. In this regard I think the main reason is not the purchase of foreign-held shares because I have pointed out that according to the statistics the purchase of foreign-held shares is declining. I think the main reason is the fact that people are sending their money out of the country; some with the approval of the authorities who should apply this regulation which I have quoted and which has been in its present form since 1951, and who are not doing so properly. I say that it is understandable that there will be short-term moneys lying abroad from time to time with a view to trading requirements, but we must remember that to-day we have very rapid air communications with the outside world and that one also has telegraphic transfers. One can send any amount abroad within 24 hours if one has to pay an account. Here we have an amount which is lying abroad on a short-term basis and which is sufficient to pay for approximately two months’ imports. I say that the amount lying abroad in short-term investments is completely disproportionate. It is somewhere between R150,000,000 and R200,000,000 and we must get this money back. The regulation which I have quoted is nominally applied by the Treasury but in practice it is applied by the Reserve Bank and the commercial banks. I feel convinced that these banks are afraid to take strict action against such people; otherwise we would already have had prosecutions under this regulation because money which should not have left the country has undoubtedly been leaving the country. If that is not the position, then the banks have knowingly allowed money to leave the country unlawfully and that is an unpatriotic action. I feel that if this outflow of money had not taken place by these means, many of the measures we are now taking to protect our foreign reserves would probably have been unnecessary. Allow me to say a few words on short-term investments in South Africa. In 1948-9 there was still reason for a person who had money to invest, to do so on short terms abroad because we did not have a properly developed short-term money market in South Africa. But Mr. Havenga then established the National Finance Corporation. Since then various other institutions in this country have also been concentrating on the establishment of a short-term money market and the Treasury is also playing its part. There are therefore sufficient facilities for a person who wants to invest money on short term to do so within the Union. He need no longer send his money abroad. Here I just want to say this to the United Party: I hope that they and particularly the hon. member for Johannesburg (North) (Mr. Plewman) who nowadays is also being imitated by the hon. member for Constantia, will stop their stories to the effect that the Government should not borrow short-term funds for long-term expenditure. If one has a short-term money market in the country, one must do so; otherwise one does not create investment possibilities for one’s short-term funds. I just say that in passing.

I want to conclude with these remarks: I say that if it had not been for this outflow of short-term funds—perhaps to a large extent unlawfully—then our foreign exchange position would have been far better to-day and it would not have been necessary to take all these steps which the Minister has now unfortunately been obliged to take. The hon. the Minister announced the other day that all persons holding foreign assets had to submit a return of those assets within 30 days. I am sorry that he did not make that period seven days, because I feel that this is a matter which calls for urgent attention. If this measure is applied effectively in future, I hope that we shall recover so much of this short-term money in the near future that most of these measures which the Minister has announced can be repealed to the benefit of the country. I feel that the measure relating to the blocking of the funds derived from shares sold by foreigners will be very effective in the short term, but I agree with the hon. member for Constantia to a certain extent that in the long run it may have a detrimental effect. I therefore hope that it will be found possible in the very near future to repeal this particular measure. I just want to mention this one point: In a year during which one does not have any foreign exchange difficulties, it is easy to relax the application of this 1951 regulation somewhat; it is easy not to apply it so strictly, but when one is faced with foreign exchange difficulties, as we had after Sharpeville last year, and the Minister of Finance asks for strict control to be exercised, one expects a fall in this type of foreign investment and that is not what has happened in the Union. In 1959 we had R132,000,000 invested in short-term investments abroad. This was the same figure as we had in 1956. From then on the figure remained more or less constant at approximately R130,000,000 —between R128,000,000 and R132,000,000. But during the very year that the Minister has asked that the foreign exchange regulations should be strictly applied, namely 1960, the figure increased to R146,000,000. Judging from Mr. Hurter’s statement which I have read, it is far higher to-day than this figure of R146,000,000. In other words, here we have the phenomenon that while the people who exercise control have been asked to exercise control more strictly, they have allowed such funds to leave the country on a greater scale than was the position when we were not faced with any exchange difficulties. I want to ask the Minister whether he will not seriously consider removing this whole question of the control of foreign exchange from the banks and placing the whole matter directly under the Treasury or under the control of the Treasury together with the Reserve Bank.

Before I make some comments on the remarks of the hon. member for Pretoria (Central) (Mr. van den Heever), may I stake my claim to the prize for the best under-statement of the year by saying that the Republic of South Africa might well have been born under happier auspices and in better economic circumstances.

Mr. Speaker, I do not know which will embarrass the Government more, the very able and statesmanlike speech of the hon. member for Constantia (Mr. Waterson) in an attack that he would have wished not to have made, or the defence of the hon. member for Pretoria (Central), who started his speech by demonstrating that such measures as these were hardly necessary, and went on to draw our attention to the fact that money was leaving the country apart from money which has been tending to leave because of the action of overseas investors, and then he suggested that even more drastic control, in effect an ultimate sort of nationalization of the banks, and control of credit would be a means to this end. I would ask the hon. member for Pretoria (Central): Why? And it is for this reason that I am not going to deal so much with the matters so well covered by the hon. member for Constantia, the line about figures, the argument between borrowing long and paying back short, and so forth, because I think we face something here—I could wish that it were not so—in our economic situation that goes beyond the normal conventional arguments which are made in a Budget debate. We face basically something of which the figures, if we are not very careful, are merely the symptoms. It is a disease that we face, a cancer at the heart of South Africa, both economically and otherwise, of which the financial repercussions are the outward manifestations. And on that question the hon. member for Pretoria (Central) has given the usual answer of the Nationalist Party: “Ons sal nie buk nie.”

Mr. Speaker, the crisis that we face is a crisis of confidence, both externally and internally. It is very fine to have an economic machine that might under certain circumstances for a country of our size be the envy of the world; it is very fine to have human resources which under certain circumstances can rank with human resources of any country in the world; but if the spirit and the belief to work that machine is lacking internally and the belief is lacking externally that that machine can ultimately work without other changes than purely financial changes, then it is idle for us to get up, as so many of us have got up here on many occasions desiring, even if we voice criticism, the best for our country, and say “basically the economy of South Africa is sound”. The hon. member for Pretoria (Central) has said that this was not merely an income problem and that so far as our trade was concerned, there was much over which one could still be optimistic. He said it was basically a capital problem. As I have indicated it is a true diagnosis on the surface that the shortage of capital is the immediate problem that we are facing, but the basic problem is one of confidence. I do not want to go over the list of the deflationary steps that the Minister has been forced to take as outlined by the hon. member for Constantia, and I think in his analysis of the position, he exercised restraint. The consequences of such deflationary steps are not difficult to imagine in the short term. The hon. member for Constantia has indicated certain points in that respect for the country. For the ordinary man in the street, deflation means retrenchment, a diminished opportunity for work—a fall perhaps in the cost of articles, but also a drastic cut perhaps in the purchasing power, in the means to purchase. I don’t want to go too deeply into that, but it is my case here that if something is not done to restore the basic cause of the disease, then the only ultimate alternative to the deflationary path that the Government is forced upon at the present time, will ultimately be an inflationary path, the path hinted at by the hon. member for Constantia, the path where the rand of South Africa stands in danger. I do not need to tell the House that it is worth while taking drastic steps to prevent such a step as devaluation. I do not want to go too deeply into that, but what devaluation means for the ordinary man in the street is taxation of all the holders of money and savings to the extent that devaluation takes place and a transfer in effect of those resources to the sector of the entrepreneur. For a short time you get an artificial stimulation of the economy that will save you for a time, until such time as wages and prices begin to rise and compete again. To that extent even desperate measures such as the hon. the Minister has taken, or shall I say, serious measures such as the hon. the Minister has taken to safeguard the position, may in the short term be justified, but in the long term they can only be justified if they succeed in avoiding the step that I have indicated. Otherwise in many ways it might have been better to have gone straight to that step rather than that the Minister of Finance should be forced into the position where he has to make denials in a field where denials are always taken as a danger sign. On that head I do not wish to say much more.

What I wish to ask this House, is what is the picture that we present to the outside world, the world of whom we ask confidence; and what is the picture that we present to our people inside, the people of whom we also ask faith and confidence and hard work for the future?

In becoming a Republic we took a step that in the views of those who desired a Republic was the final corner-stone of the independence and the liberty of South Africa. Perhaps the hon. the Prime Minister will forgive me if I quote a non-White politician on the Continent of Africa who said to his people “Liberty means sweat”. That is a thing that the South African people would be quite willing to undertake, the responsibilities that come if indeed our freedom is greater under a Republic than it was before; if indeed freedom involves greater responsibility, I am certain it is a step the South African people would be prepared to take if they felt they were following the leadership in which they could have confidence, confidence not for the immediate present, but for the long-term future. And what is the picture that our Government’s policies present to those citizens of our country and to those beyond our borders? In the first place, we are an individualist society, a capitalist society, and therefore broadly speaking the West will have no quarrel with us on that ground. But we are a capitalist society in which at the bottom we deny the elementary requirements of the successful working of a capitalist society, and that is great mobility of labour—the opportunity of men, not only to make their labour available where it will fetch the highest price, but also that internal mobility within an industry which enables a man to rise in that industry and through incentive to become a better worker, a more valuable member of the community. This is restricted in our country. It might be said by hon. members that it is traditional in this country to restrict. Mr. Speaker, we in South Africa have now reached what I might call the tertiary stage of development of a capitalist society. We have got beyond the stage of a largely undifferentiated agricultural production; we have got beyond the stage of a combination of that and primary production where we were purely a supplier of raw materials to countries who had need of them beyond our borders. We have got to the stage of great secondary industrial development, and I say at that stage if you are a capitalist society and you wish to win the confidence of people who have experience of that type of society, then you must not in your political policies adopt courses that are in direct conflict with the future success of that society.

What are you referring to?

It is that labour must be mobile, that capital should be mobile, that the labour can go where it can earn the highest return. This is the condition of an individualist society. But let me go beyond that. Let me give another aspect of the picture this society presents to the outside world. What country in our stage of development and with our population would seek to find the whole of its defence potential, the whole of its administrative potential, the whole of the executive potential of its field of commerce and industry and the higher class of its labour from one-fifth of the total population? Countries looking at us from the outside measure us by their own experience, and this is one of the questions they would ask: How is such a society without a great influx of new blood from the outside, holding to the tenets it does, to survive? Mr. Speaker, there is no country in the world to-day which has not come to realize that the greatest basic wealth of a country is not even its material resources, but is the potential to which you can raise the human resources of that country, and if we at the particular juncture of history at which we find ourselves desire that our total human potential shall be derived only from a small section of the population, then not only do we put ourselves into great disadvantage in the world, but we draw attention of the world to the ultimate weakness of the policies we are following. The Government divides the economic life of South Africa into two great sections, that section which is inhabited by 11,000,000 of our 15,000,000 population, the so-called White area, which more correctly perhaps could be called the permanently White controlled area, and another section with admittedly the lowest standard of living of the country where another 4,000,000 live, and the practical policy of our Government which it offers to the world as a solution—and I am talking in the economic sphere; I am imagining us being examined by the economic estimators of the world as a field for investment and so on—the policy is to say that that lowest developed portion of the country must now receive very special attention so as to carry a much greater population. In theory the Government says that they are so going to develop it that it is going to carry an immensely greater population than it does at the present time. The reality of what the Government does of course is another thing. I am speaking of the theory of the Government. Now obviously on the very tenets that the Government holds, the question of the need of capital from the outside becomes the greater when you wish to carry out a vision of that kind, as the hon. member for Constantia so well stressed: As we could measure the economy of the country before the policies of the Nationalist Government began to spoil it, when something like £60,000,000 to £70,000,000 a year of foreign investment were required for the development so to speak of this essential 11,000,000 area without regard to special diversion of resources to the 4,000.000 area. So that is one of the economic consequences of that policy that if you are to carry it out you need more capital resources. In other words, the sine qua non of carrying out apartheid is an expanding economy. I do not deny the sincerity of the preaching of such a doctrine, but it is at that time that the Minister of Finance is in a position of coming with deflationary measures. Now the Government will say that these policies of the Government bear little relation to the problems I am posing. The hon. member for Pretoria (West) explained to us that this is all due to the fact that we are in a cold war. Mr. Speaker, can hon. members on that side honestly maintain that position? We are now going to face a very rough and difficult road, all of us together, and as the hon. member for Constantia has stated, standing increasingly alone. What I want to ask this Government is this: Was the journey that we have to take now really necessary? Could it not have been avoided if the attitude of the Government and those they have persuaded in supporting them, had not been that in an epoch of revolutionary changes in all spheres in the world, an epoch in which the pressures are so great that even the strongest nations have to modify policies and bend ideas, that they stand and say: Here we stand, there can be no change.

Do you want us to modify and go under?

“Ons sal nie buk nie” says the hon. member for Aliwal. Let us see even if that slogan is particularly true. When I first came to this House, gentlemen on this side of the House strongly urged that we needed immigrants to strengthen our population. but hon. members on the other side said “Nonsense! The honour to belong to South Africa is so great that we can apply a very severe sieve on what comes in; we don’t need all the immigrants you talk of, we only need a handful of specially selected people”. And this year, what does the Government do? It comes with a Bill relaxing the immigration requirements. Too late do they realize that some of the warnings given by this side of the House at least were wise. “Ons sal nie buk nie.” In another sphere we came at a moment of great crisis in South Africa, and we said “Why not listen to the grievances of certain people to avoid the type of emergency under which South Africa is in danger of permanently living?” and the leading spokesmen of the Government said: These are not grievances. These people do not want really what they ask for; they don’t want a pound a day; they don’t want a modification of the liquor laws; they don’t want modification of the pass laws, they want our country. And in a very recent debate, the Government came before us with a modification of the Liquor Act, and says “Gentlemen, this was a grievance, we must attend to it”. “Ons sal nie buk nie.” Since early last year this country has gone through some tremendous, and they should have been educating, experiences. Last year we had a state of emergency over the whole of the country, this year an emergency was declared in Pondoland; we had a virtual emergency over the period when the Republic was to be declared. And the only lesson that the Government learned from these experiences, other than the minor concessions that I have mentioned, was that they (the Government) are always right. In that same period, Mr. Speaker, we had votes against us at the court of world opinion, which even if subject to political influences, should be enough to make even a more powerful country than ours consider its position—not as to whether it should bend before world opinion, but its position as to whether perhaps it may not be just here and there mistaken.

What do you want?

I will tell you what I want. I have offered criticism, not negative, but criticism of the Government that is only fair, and when you offer criticism, you should offer something constructive in exchange. I speak primarily from the economic point of view: If you wish to expand the economy of this country, as it must be expanded, as it should have been expanded over the last 12 years, instead of being ridden right into the ground, then you would begin to consider the economic needs of your society, and not say at every turn: Self-preservation is more important than economics. In the last resort, in South Africa, economics is self-preservation. I once defined in this House a Nationalist as a man who believes in race suicide as a matter of self-preservation, and nearly everything the Government has done lately has confirmed that definition as a correct one. It is common cause on all sides of the House that we must expand the economy to raise the standard of living of all sections of our people and to make room for the mouths that are coming forward of all sections of the population.

How would you do it?

I want to say to the hon. member for Vanderbilpark that you can only do it in the way it has always been done in human society, by giving every man the opportunity to express himself and to contribute to the wealth of the country, irrespective of colour. You cannot have a labour force indefinitely with one set of rules for the top section. You cannot save the top section in that way. So long as the gulf between the real wages of the bottom section of our population and the top section of the labour force remains what it is, the top section is always in danger of being pushed down to that of the lower level. Your only hope, speaking pure economics and leaving humanity out and leaving production out, is to lift that bottom level. If you wish to make the best use of your manpower in production, you cannot rely, however able they may be, and whatever case you may like to make for the better training and better opportunities for a small group, you cannot rely ultimately only on one-fifth of your population. I am not speaking anything but economics at the moment. I am not talking power politics or humanity. That is the way South Africa must go if it hopes to have a future. Because apart from everything else, apart from the pure economic angle, you cannot ultimately build a stable society based ultimately on the values that we have adopted so long, values of racial discrimination. The hon. the Prime Minister said that so far as his party is concerned, he recognizes that sooner or later we must turn from race discrimination, and he says the answer lies in the development of the reserves. Mr. Speaker, as far as our group here on this side of the House is concerned, do you suppose that if we could easily believe that such a policy was practical, if we could easily believe that such a policy was just, if we could easily believe that such a policy was the only salvation for our country, that we would not advocate it with you? Do you think we stand here, at this juncture in our history of our country, to oppose our own countrymen simply for the sake of opposing them, simply for the sake of some petty party political gain? We stand here to try and tell the truth so far as we can see it—we do not claim to have all the truth in our own hands—but we try to tell the truth to the Nationalist Party and South Africa, and we say that the policies followed by the Nationalist Party are in the last resort a running away from the truth, because in our belief ultimately they are quite unpractical policies. What have they amounted to so far in practice? To control the drift to the towns, one of the greatest problems of any society during an industrial revolution, and the Government has a dream of a drift-back of the factories to the borders of the reserves. And mark this, Mr. Speaker, that if we could move 10 per cent of our factories, and it could be done economically, and it could be justified purely on the basis of decentralization, how would it deal with the central problem—the central problem of that area of 11,000,000 people, that area where integration and partnership agreements are adopted, whether it be on an unequal basis or not, and have been adopted so long as we can remember? All that happens is you transfer the incidence of that integration policy from one geographical area to another. Where is the eventual disappearance of racial discrimination as your objective, as you justification for this policy, which we concede not to be unjust, but to be untrue, because it is deluding the people of South Africa in telling them that there is an escape route that way? If you succeed in some measure in doing this where in those border factories which are created will there be greater opportunities for the Bantu who have become more highly educated, because that is the case for the development of the reserves that certain people, those more fitted, will be given opportunities in their own areas to express that ability within them that they cannot express in the so-called White areas? And, Mr. Speaker, when we speak of the so-called White areas, it is not merely to adopt a political slogan; it is because nothing was built in those areas except by the joint efforts of White ability and Black labour, and in that respect has not the Black labour some kind of a claim to some kind of a say in those areas, as well as the White direction? Mr. Speaker, when you present this kind of case to the outside world, those who are hostile to us, you can imagine what they say; but those who are friendly to us and do not have to be here to examine the consequences of the general economic set-up, because they are familiar with it, they have more experience of it than we have, what do you think their attitude will be? The story that our problems in the economic sphere are peculiar because we have different races is nonsense. The economic problems do not alter according to the colour of a man’s skin. These men over there shake their heads sadly and they say to us “Look, the greatest countries in the world are making steps of adaptation in the world in which we find ourselves, in this dangerous world of to-day; you are a small country, we think you are mistaken in making no attempts in such an epoch to change what you are doing; cannot you reconsider the matter?” Mr. Speaker, I am not one that thinks South Africa should bow to the will of the outside world simply because it is the will of the out-side world. What we should do here we should do because it is right and because we can justify it. But on what basis can we ultimately, to anyone or before any court in the world, justify a society that is based, in this year 1961, on racial discrimination? And on a deliberately adopted policy of inequality in one sphere, unless we offer something more than the hon. the Prime Minister can offer in the other sphere. Because, able as the Prime Minister is, and logical as he is, once some major false premises have been got over, I think even he will concede that such an expression with regard to the future of the Coloureds and the Indians as “a state within a state” is not a policy, it is mystical moonshine. It has the same value as a slogan such as “Racial Federation”, unless these policies are backed with some concrete expression of the removal of discrimination that they claim to remove.

Mr. Speaker, my time is coming to an end. Before I move the amendment which I wish to move I would like to quote to the hon. the Prime Minister the words of the only republican that Great Britain ever knew—and, incidentally, something a dictator. He said once: “I beseech you, in the bowels of Christ, to consider that perhaps you may be mistaken.” I move the following further amendment—

1. (1) abandons impracticable policies of separate development as a justification for racial discrimination;
2. (2) accepts the inevitable consequences of economic integration;
3. (3) takes steps to decrease inter-racial tensions; and
4. (4) takes steps to improve our external relations and international standing.”

I second the amendment. There is a proverb in the French language that has been quoted in this House before—“Plus ca change, plus c’est la même chose”. The more things change in the field of the economy of this country the more, to the regret I hope of all who have the interest of South Africa at heart, the more we come back to debates in this House that follow the same kind of pattern. For years past this side of the House has been warning that side of the House that the pursuit of racialist policies would sooner or later, apart from all their own wrongs and all their other harms, spell ruin to the economy of South Africa. Much has changed from the days six, seven and even eight years ago when the hon. gentlemen on the other side of the House were able to point to every sign of prosperity, to a high credit rating for our country, to rather an optimistic economic outlook, as compared with the day now when the hon. the Minister has just had to take a step which is little more or less than an admission on his part that the chance of maintaining or re-creating confidence in South Africa’s economy has virtually vanished. Yet even in these circumstances, even when it has been made so apparent that the warnings given from this side of the House for so many years have been justified, we have the retort to which my hon. friend has referred, that the Government proposes to do what it can to improve the situation of the nation only within the framework laid down by its own ideological policy. In those days of some years ago when one spoke in economic and financial debates, and when one spoke chiefly of race relations, one was accused of dragging politics in where they did not belong. At least I believe it has now become clear even to that side of the House, that it is in their political policies, and especially virtually exclusively, their racial policies, that they must seek the cause of the economic troubles from which our country suffers. In this fact; in that political factor is almost the sole cause of our difficulties. In this fact lies the essential strength of the attack that the Opposition has to make upon the Government.

If it had been necessary to impose currency control and necessary to take all the steps that the hon. the Minister has had to take, because of some purely economic factor, because of a drop in the price of our raw materials on the world markets, or for some other reason such as that, then it would be permissible for the Government to come and to say “This, after all, is beyond our control, all we can do is to take the measures which we have taken and try to save the situation”. But that is specifically not the case, and hon. gentlemen on the Government side of the House point out to us that that is not the case. It is true even now that fundamentally the economy of the country remains sound and even profitable. The fact that we have reached the pass that we have reached is therefore due, virtually exclusively I say, to the political policies pursued by the Government of their choice and on their own responsibility, and on nobody else’s.

What would have been the position if we had accepted your policy?

We have had, in recent weeks, analyses of what has brought the country to the pass that she is in. We have had these analyses not only from those of us who take part in politics, but we have had them from some of the country’s leading business men. I make no apology for quoting some of these. I think we should have them as a basis for examining the economic situation as it stands before us. The Chairman of the Anglo American Corporation, Mr. Oppenheimer, formerly a member of this House, in the chairman’s report he delivered recently, referred to the need for economic growth and for a rising standard of living for all our people, more especially if any attempts were to be made to carry out the policies which the Government professes. To that aspect I shall return. He said that capital inflow on a fairly large scale is essential if we are to realize the country’s full economic potential. That point has been sufficiently dealt with here to-day. And he said, Sir, and I want to say this lest I be accused of misrepresenting the Government’s actions—and I want to say that I support this strongly—that in the circumstances of the continued outflow of capital the Government is compelled to resort to control, and that these controls were unavoidable and, as an interim measure, even right. Nobody disputes that. But what we are asking, and what my hon. friend, the member for Durban (Musgrave) (Mr. Williams) asked a moment ago, is that we should try to see beyond the symptoms to the cause. And this Mr. Oppenheimer, in his chairman’s report, attempted to do. He said—

Social, human and political problems, Mr. Speaker, that are the real causes of our difficulties. He says—

This is the problem. Sir—the political, social and human matters in our country. There is no need for us to criticize, and we do not criticize the financial steps that the hon. the Minister has taken. What we do is to criticize the Government of which he is a member for having brought the country to the position where it was necessary for him to do so.

This, Sir, is the problem: these human relationships and these political matters. Can we not seek a policy to remove the cause of our disease instead of attempting to prescribe palliatives for the symptoms? Can we not seek a policy which is positive, a policy which seeks to build up prosperity for the country? Can we not have a prosperity policy instead of a series of palliatives, of temporary and dubious effect?

What policy?

The hon. gentleman asks what should that policy be. I am going to tell him, to the best of my ability, what it should be. I am going to begin by quoting again from the chairman’s report of one of our great mining and financial houses…

Multi-racial nonsense!

… to see what those men as economists and leaders of finance prescribe. I quote again from the report of Mr. Oppenheimer to Anglo American. He said—

Another report from one of our great mining and financial houses is that of Sir George Albu to the General Mining and Finance Corporation—

Then further on he says—

This, fundamentally, Mr. Speaker, is the confidence requirement as my hon. friend put it just before I got up to speak.

The first confidence requirement is that if you want confidence from the Western world you have to behave like a Western nation. If you want the support and friendship of the civilized nations you must measure up to the standard of that civilization. And the first of the standards of that civilization is the recognition of the worth of human individuals—economic worth just as much as human worth and political worth. But this, of course, is not the only requirement for confidence. It is not merely true that all the nations that call themselves Western and civilized—in fact I think all the nations in the world believe in this, in the individual. It is not only a confidence requirement for our economy, it is also an efficiency requirement. If we want an efficient economy it is also essential that we should use the labour of every individual available to us properly.

Mr. Speaker, what is wealth? The wealth of the country surely is the output, the creative work, the production that can be done by each one of the people who work in our country. Our wealth is not the gold that lies in the banks or even the gold that lies untapped underground; it is what each of those who work in South Africa can contribute toward the welfare of the nation as a whole.

In previous debates in this House enough figures have been quoted for it to be unnecessary for me to quote again the evidence that while productivity, the measure of individual production, has been rising rapidly in so many other countries of the world, it has been stagnant, or perhaps even been falling in South Africa. Quite apart from the fact that we require and must have the confidence of the outside world, even if we want to try and pull ourselves up by our own shoestrings, let us try to do that efficiently. Let us try and make the best use of the greatest asset we have, which is the working capacity of our people. This relatively low productivity figure from which we suffer has been ascribed by leading industrialists, firstly, to lack of that capital which makes it impossible for us to mechanize as a modern economy should and, secondly, to lack of flexibility in the employment of our labour force; that lack of flexibility which results from the web of colour bars, pass laws, influx control, job reservation and all the other measures which make it impossible for the South African economy to operate in the same way that the economy operates in other Western countries. So that when the hon. member for Brits (Mr. J. E. Potgieter) asks me what is the prosperity policy that South Africa needs, I say it must rest on these two points: The prosperity policy must rest on, firstly, being able to obtain the capital we require, which means that we must substitute for our racialist society a merit society; and, secondly, it depends upon using the labour of South Africa properly, which means that we must substitute for our controlled economy a free economy. Because it is, in fact, a controlled economy that we have when pass laws, influx control, job reservation, industrial colour bars and all these other restrictions operate to direct labour on the basis of considerations other than the economic requirements of the country. That is what I mean when I refer to a controlled economy.

It is at this point, Sir, that I think I should refer, in passing, to a most extraordinary remark amongst the many extraordinary remarks made by the hon. member for Pretoria (Central) (Mr. van den Heever) who, in the course of expressing his defiance, of the views of the outside world said—”Of course there are a lot of liberalists in the outside world who are seeking to apply economic pressure in order to work their political will upon us.” And he said that the same is being done in the Federation to Sir Roy Welensky. But, said the hon. member, “Sir Roy Welensky is refusing to listen to them”. Sir, to make a comparison in this House, of all places, between what the present Government of South Africa is doing and what Sir Roy Welensky is doing is surely far-fetched by even the most far-flung standards of Nationalist oratory! What is the policy that Sir Roy Welensky is practising? What is it in relation to the criteria that I have just put? Is it not the policy of a merit society? Is it or is it not a policy of qualified franchise without regard to race? Is it or is it not a policy of expanding economic opportunity?” I do not want to deal with the details of Sir Roy Welensky’s policy, but let us have it clear that his is a policy which strives to distinguish between individuals on grounds of merit and not on grounds of race. And what sort of economy is it? He had pass laws, certainly. But he has tried to do away with them.

He got away from them.

As my hon. friend says, he has got away from them. He is doing his very best, where remnants of a racial society remained, to remove it. But the hon. gentleman on the governing benches, not content with the height of the racial barriers they have already erected, are for ever placing precarious brick on precarious brick on top of the walls that are holding back our country from prosperity. I say that to suggest that what is happening in the Federation could conceivably be any justification for the policy of this Government, or for any other policy based on racial discrimination in South Africa, is to talk the worst kind of nonsense.

Why should it not be possible for all South Africans to subscribe to a plan for building the prosperity of South Africa? What, after all, is required? Firstly a willingness to grant rights to responsible civilized individuals on their merits. This is what, most of the time, unless we happen to be talking politics, we would call justice. Is there really any need for us to be afraid of it? Why is it that we should be afraid of allowing every human being to do the best work of which his hands are capable? It would appear to be not only justice but common sense. Why should we be afraid of it? Yet, as I say, these are the essential ingredients of a prosperity policy for South Africa. These are the basic requirements. [Interjections.]

Sir, I know there is a fear among the hon. gentlemen on the other side of the House that by implementing a policy of that sort you will be endangering separate development, which is to them a very much cherished idea. It will be endangering the separate development of the races in South Africa. But this is quite untrue. In fact, the contrary is true. If the hon. gentlemen really wish to implement separate development as they have put it forward as a policy, they know as well as we do that very great capital resources will be required to carry it out. And it is only with an expanding economy and with large-scale capital formation and capital imports that there is the remotest chance of the hon. gentlemen ever being able to carry out their policy of separate development. Of course we differ very widely indeed from the hon. gentlemen in the ultimate objective of their separate development policy, their separation policy. But we have agreed in terms—and I now do so again—that it is necessary that there should be intensive development of the areas which we call the Native reserves. My hon. leader has said in this House before that for any money sensibly spent on the development of those areas, the Government will have the full support of this party. I say that again now. That, after all, is the basis, economically, of what those hon. gentlemen say they want to do. So let us agree to make the intensive development of the reserves one of the first aims of our prosperity policy. There is no reason why it should not be. But remember that the Government will not have the resources to carry out any worthwhile development of those areas unless they have, first, restored confidence and mobilized their resources for the task.

What is the choice which we really have to face? Apartheid obtained by the methods which this Government has practised over 13 years has ceased to be an option. It has ceased to be part of the choice. The choice is whether we are going to have a multi-racial society which we have to-day, and which is a multi-racial society with poverty and strife, or whether you are going to have a multi-racial society with prosperity and harmony. Because for so long as the Government by its policies keeps South Africa starved of the capital which it would require for any measure of separate development, that separate development is even more impossible than it would be in circumstances of prosperity. The one thing that is getting further and further away as a result of the impoverishing policy that the Government is practising is the ideal of building up separate development on any worthwhile scale. For us to obtain prosperity in South Africa we must have good race relations and we must have civilized standards of government. It is quite simple.

What is the test?

The test of whether we have these things or not—in terms of the hon. member’s interjection—is what the hon. the Minister had to do last week. That is the measure.

In the time that is left to me, Mr. Speaker, I should like to follow this general thought that I have expressed into a more particular channel. After all, we are not the only people in South Africa who have been saying for a long time past that it is essential from the point of view of South Africa’s external relationships, and from the point of view most particularly of her economic position, that something should be done, that some sort of gesture should be made that will indicate that the Government is prepared to move away from the policies that have done the country so very much harm. Singled out by very many speakers, not only politicians but by businessmen and others—singled out for special mention have been the Cape Coloured community. It has been felt that within the ambit of Government policy it might be possible to do something for the Cape Coloured people which the Government would be unwilling to do for Africans or Asians. Or it has been felt by many people that because of the special historical and demographical position of the Coloureds vis-à-vis the Whites, the Government ought to do more for the Coloured people than for the other groups. I want to say at once, before I start to discuss the position of the Cape Coloured community, that the Progressive Party has no special policy for the Cape Coloured community or for the White or the African or the Asian groups. We believe that all South Africans must be treated on their merits, and we make no distinction whatever on a group basis. So that what I am going to say with reference to what I believe ought to be the policy for the Cape Coloured people applies equally to all the other groups within our society. I speak of the Coloured people because others have been doing so and because I believe it may be beneficial, it may be constructive and helpful to do so.

Just recently—I think quite wisely—the Nationalist Party, with the Deputy Minister of the Interior in the lead, held a conference at Goodwood where they discussed the question of policy as affecting the members of the Cape Coloured community. It appears to have been, as far as it went, a great success, in that all those there present pronounced their satisfaction with what this Government was doing. I want to point out in passing that all those present were not only Nationalists but that all those present were White. But whether it was just White people deciding what was good for the Coloureds or whatever it was, I think what was said at that congress deserves to be examined very thoroughly. I think that credit deserves to be given where credit ought to be given for what little is being done. The hon. the Deputy Minister made a speech there, as reported in the Burger on the 12th of this month and he spoke of the necessity for socio-economic advance. He said—

So what the hon. gentleman is telling us is that certain socio-economic advance is necessary and that the Coloured man has a great contribution to make, but that paramount must be the interest of the White man wherever the Coloured man is under consideration.

What is it that the Coloured people deserve? What is it which, so far as one can see, they want? I concede at once the validity of much what the hon. the Deputy Minister said. They require schools, they require amenities, they require institutions. Above all, they require jobs. They require socioeconomic opportunities. The hon. the Deputy Minister has and I am prepared to accept that the hon. the Deputy Minister is doing whatever can be done within the framework and with the resources available to him to provide them. As to what the hon. the Deputy Minister said about the Coloured people choosing “eiesoortige ontwikkeling” I would concede that, at any rate, very many of them do not want to be integrated socially with the Whites or with any other type of group. I think that what they do want is social dignity—that “menswaardigheid” of which the hon. the Deputy Minister speaks. One has to consider what, for a Coloured man—let us say a man of some development, a man who has been through a school, who has a matriculation certificate and who is perhaps an artisan—quite an average ordinary sort of Coloured man—what is “menswaardigheid” for him? Surely the first essential of human dignity for a Coloured man is freedom of opportunity, freedom to do the best work of which he is capable; freedom to earn as much as he is able to earn so that he may give to his children an even better standard than he himself has attained. And surely one immediate barrier standing in the way of the “menswaardigheid” of the Coloured man is job reservation. Another is the Group Areas Act, and all those regulations, if not laws, which in various ways restrict his opportunity.

Apart from economic opportunity, surely it is part of the “menswaardigheid” of the Coloured man who, as we are told day in and day out, is after all a Western man, a man very closely related to ourselves in so many ways—surely it must be part of his “menswaardigheid” as it is part of ours that he should have the share to which he is entitled in conducting the affairs of the community in which he lives and making the laws which he must obey.

This question was put to the Deputy Minister at Goodwood, according to the Burger of 10 June—

Then the Minister goes on with an explanation for the reasons why it is his view that to have Coloured Representatives in Parliament would lead to integration and why he was not prepared to have it. Nowhere in the whole of this answer is there any suggestion that there is a better reason for keeping Coloured men out of this House than simply that White men do not want them in this House. In other words, here again, whatever is done for the Coloured people is done on the basis that first the White man must have what he likes and he must have his paramountcy, and then the Coloured man, this man to whom we want to give “menswaardigheid”, can come in and get some of the crumbs that have fallen from the table.

What do hon. gentlemen think the Coloured people want? I believe many of them are in frequent touch with Coloured people. I am quite sure the Deputy Minister is. The Coloured man wants freedom of opportunity. He wants to be treated like a human being, and he will not rest under inferior treatment in any sphere. One more thing I would say from my own knowledge, that the Coloured man also will not rest as long as some other group in South Africa is being given inferior treatment on the grounds of race. He wants freedom of opportunity for himself and also for the African. That does not mean that he wants to mix with the African. In many cases he does not. The Minister is right when he says that. It does not mean that he is even fond of the African. In many cases he is not. The Coloured men, at any rate those to whom I talk and who belong to what is regarded as the right wing of Coloured opinion, are very insistent on this point.

Now let me turn to the practical, if not the ideal, sort of approach, the sort of approach taken by the Deputy Minister when he deals with the Coloureds. He simply says there are things we can do and we are doing them, and there are things we cannot do because the leader of the Nationalist Party and the Federale Raad say we must not. Further on in the same speech the Minister says: “Moet ons nou sê wat oor 50 jaar die posisie moet wees?” I think that is wise, certainly, for a man in his position. But the Prime Minister does not lay any such restriction on himself, either when he speaks of the Coloureds or of any other group. He insists on seeing the future, if only dimly, for a very long time ahead. He tells us where the ultimate destination of the Coloured people is, something which the Deputy Minister wisely refrains from doing. The Prime Minister tells us that eventually the Coloured people will have their own Parliament in their own state within our state. I do not want to spend time on this, but I do want to tell the House what was told to me by a friend of mine who is a member of the legal profession, when I mentioned this policy of the Prime Minister to him. He said: What happens when there is a Coloured Parliament and a White Parliament, each having jurisdiction over its own people, and the Coloured Parliament prescribes that its people should drive their motor-cars on the left-hand side of the road, and the White Parliament says they must drive on the right of the road? Both the parties in that collision will be entitled to sue for damages. [Interjection.] Is it not apparent that this is nonsense? This mystical moonshine, as my friend so aptly called it, this suggestion that you can end up with two Parliaments with jurisdiction in the same area, of course we know in practice perfectly well what it means. Again this policy, if it is ever applied, will be applied in the practical manner of the Deputy Minister. It will be applied so far as the interests of his own party and the White people allow it to be applied. It will end up with the Coloured people having as their supreme body some sort of legislature with some delegated powers, but entirely under the control of this Parliament. The Prime Minister has told us that when that stage is reached, the Coloured representatives will go out of this House as did the Natives’ representatives. What is offered to the Coloureds is a Parliament which is manifestly inferior to this Parliament, and you are back to the one simple fact of racial discrimination. When everything has been said about good neighbourliness with proper boundaries and every vague phrase has been produced which can be produced to make it look that in the case of the Coloured the Government is really determined to give him “menswaardigheid”, we will find that there is nothing of the kind. I have given credit where it is due. I believe the Government will spend money to provide socio-economic assistance for the Coloureds, which is badly needed, and as far as it goes I will accept it, but there will be no “menswaardigheid”. Sir, I have Coloured professional colleagues who qualified with me at the university here, who wrote every examination that I did and did better than I did in most of them, and who have gone further in the profession and have taken degrees higher than I have been able to reach, who are to-day distinguished professional men rendering outstanding human service and living according to the highest civilized standards. What reason has the Government ever produced why these men should not be here? The reason that the Minister produced at Goodwood is a perfectly adequate reason as far as he is concerned, that the Federale Raad does not want it and his party does not want it. But then they talk about “menswaardigheid”. Let us have it clear. I believe that the Coloured people on the whole and with exceptions do not insist on social integration. I believe that in the same way they do not insist on the universal franchise, but I believe they insist on the “menswaardigheid” of which the Minister speaks, and that means to the Coloured man, as it means to me, that every man and his wife in all the provinces are entitled to political and economic privileges according to their merit as measured by objective criteria. It is as simple as that. As long as a different yardstick is to be applied to the White man or woman and the Coloured man or woman, the Coloured people will not be satisfied and will not feel that they are getting a square deal and that they have “menswaardigheid”. What I have said about the Coloured people applies, I believe, with very minor variations to people of all races in the country, and certainly in our view without any variation the treatment meted out to the members of one race as the treatment meted out to the other, because that is both justice and common sense. So our appeal to the Government and to the country is that sheer prejudice as a guide to policy should be thrown overboard. Policy should be guided by some sort of consideration which can be objectively measured and demonstrated to be true. A policy based purely on prejudice, which is to-day buying South Africa nothing but poverty, should be thrown overboard, and instead policy should be adopted which will buy for South Africa the other alternative, prosperity in a multi-racial society.

At the end of the hon. member’s speech he appealed to us on this side, but the test for that appeal will be when he puts it to the electorate and sees what the results are. We cannot answer that appeal; the voters of South Africa must give the answer.

But let me turn to a point on which we agree. It is gratifying to hear from hon. members on those benches, and this applies to the United Party as well, that in recent years we have reached a great measure of agreement as regards the development of the Bantu homelands. There may be differences as to the methods we use, but in the main we are gratified that we have gained their support for this policy of ours and that they agree fully with us that the development of the Bantu homelands is essential for the continued existence not only of the White man but of all of us.

There is one point which has struck me particularly while members of the Progressive Party have been speaking, and it is that they are so fond of using the word “merit”, but I have never yet heard one of them give a definition of the world. When one of them participates in the debate again, we should very much like him to tell us how he defines the word “merit”, and what exactly do they mean by it because “merit” is the key to their whole policy.

We have listened with very great interest to the Opposition saying—and this also applies to the United Party because basically there is no difference between the amendment they have moved and that of the Progressives—that we are responsible for the fact that our economy has retrogressed and how different the position would have been and how we would have flourished if we had followed a different policy. We can answer this allegation in various ways, but I want to do so on a purely financial basis. If what hon. members say is true, namely that if we had followed a policy which is being followed elsewhere in Africa, we would not have been faced with these difficulties, we could also have expected the yield on loans floated by those particular countries to be far higher than those of South Africa, but what is the actual position? Take Kenya’s loans. There they have a 4½ per cent loan. The price today is £63 and the yield is £8 16s. 3d. In East Africa there is a 5 ¾ per cent loan at £72 which gives a yield of £8 17s. 6d. In Uganda there is a 3½ per cent loan which is equal to £70 and gives a yield of £8 18s. 3d., while our South African loans at 5½ per cent stand at £80 and give a yield of £7 19s. 7d. In other words, if that policy is so economically sound, these loans should have stood at a considerably higher level than those of South Africa because even though we have gold they after all have the confidence of the world.

Allow me just to make one remark before I proceed, and I am referring to the hon. member for Constantia (Mr. Waterson). I find it so striking that the hon. member approaches our economy on the basis that any progress we make depends solely and exclusively on the vicissitudes of the outside world, as though we have no enterprise or initiative or confidence ourselves. Throughout his whole speech he said repeatedly: This will happen abroad and this will be the effect on South Africa. He even had to go so far as to meet imaginary difficulties, just as the hon. member for Musgrave (Mr. Williams) who came within a hair’s breadth of referring to devaluation and then swung away. Thus the hon. member for Constantia has also said that if we lose South West, and he has put forward all sorts of scaremongering stories in that regard, but he never mentioned that we also have an inherent faith in our economy and that we can meet these difficulties ourselves. After all it is not £. s. d. which are decisive in any economic system, but the spirit of the people who set the pace of that economy. We have had economic problems in the past and we shall certainly have them again in the future, and we are not the only ones either, but the fact remains that as we have shown in the past, so we shall show in the future that we have the enterprise and the confidence to meet these problems.

We are living in a period of prophets of doom and Jeremiahs and to-day we have two types. The one type consists of the type of person whom we heard speaking here to-day in the shape of the three Opposition speakers. These are the politicians. It may be their right to carry on as they are doing. Whether it inculcates confidence in our economy and stimulates our economy I leave to the imagination of the House, but let them have that right. In any case the voters do not believe them. But characteristic of the attacks of the politicians is that they always try to create the impression that South Africa alone is undergoing a period of economic tension and no other country, and this only applies to South Africa because we are following a racial policy which is in conflict with the policies of the other countries of the Western world.

The second type of prophet of doom which we have—and I am surprised that the hon. member for Maitland (Dr. de Beer) has quoted with such great pleasure from these speeches—consists of the chairmen of certain large companies, and it has almost become customary in South Africa when they hold an annual meeting for them to exploit the platform represented by that company for political purposes. This happens year after year. This year we had this again in the case of Mr. Oppenheimer and recently also in the case of Sir George Albu. If it is the ambition of these chairmen of such financial institutions which also have shareholders who support this side of the House, to make political speeches then they should enter the political arena, but why do they seek out their annual meetings to advocate a policy which is aimed at undermining confidence in this country and undermining the policy of this side of the House? We want to warn these people that, as they are businessmen, they must confine themselves to the business world and if they want to enter the political arena they have every right to do so, but they must not use their annual meetings as a platform to attack this Government and deliberately to sow suspicion against this Government which is neither in the interests of South Africa nor in the interests of the shareholders of their companies.

I have said that it is so characteristic of the Opposition that they claim that the period of economic tension which we admit we are experiencing is unique to South Africa. Let us examine the position in comparable countries. In the first place I want to remind the House of what happened recently in Australia. Their reserves were also at a very low level, namely £A250,000,000, as a result of the removal of their import control measures. At the beginning of this year Australia was also obliged to approach the International Monetary Fund for assistance and that assistance was granted. Take New Zealand. [Interjections.] Why do hon. members say that this tension is unique to South Africa and that it is solely attributable to the Government’s racial policy? The Opposition amendments make it quite clear that it is only South Africa which is undergoing a period of tension and that this s solely due to the Government’s racial policies, but I am proving that we are faced with a world symptom and that it is not unique to South Africa. Take New Zealand. Her reserves also stood at a very low level at the end of last year, that is to say at £50,000,000. New Zealand has never belonged to the Monetary Fund, but as a result of the difficult problem facing her as a result of the fall in her reserves, she has now also applied to become a member of the Monetary Fund and the application is now under consideration. But there is another aspect. Approximately 14 days ago New Zealand floated a loan on the London market under particularly favourable conditions, and what was the result? The underwriters were left with approximately 80 per cent. South Africa has never had such an experience.

Let us examine the position in Great Britain. Her balance of payments is also facing exceptionally severe pressure. Her export position is not satisfactory, with the result that the monetary authorities are experiencing heavy pressure to consider increasing the interest rates, to such an extent that the question of devaluation will come pertinently to the fore. In Canada there is a conflict between the Bank of Canada and the Government over certain measures which are being taken to restore steady economic growth, because Canada is also going through a period of depressed economic conditions and unemployment. We in South Africa are not yet even experiencing the same measure of unemployment as Canada. Is it necessary to refer to America’s position. Hon. members are surely all familiar with it. Here I have given examples of comparable countries which show clearly that what we are experiencing at the moment is also symptomatic in their case. Consequently, in the light of these facts, can hon. members take it amiss when we criticize the Opposition for the fact that these prophecies of doom are aimed at undermining confidence in South Africa which is basic to our economy? If they were to approach the matter along these lines and say that in comparable countries the same problems are being experienced, we would have common ground on which we could argue, but when South Africa is singled out and it is said that it is as the result of the policies of the Government that this and that is happening and that this and that will happen in the future, we cannot discuss the matter with them. We shall oppose these methods in order to retain confidence in our economy for so long as it is possible.

I concede that there are two factors in our own economy which are having a very limiting effect. One factor is the tendency of our country to import. We can do something about this. South Africa is a country which still imports 30 per cent of its national income. This is one of the highest, if not the highest figure, in the Western world. We know of no other country which has such a high import figure. I concede that to a large extent these imports also include capital goods which we require, but in addition there are far too many luxury articles which are not necessary. Just walk down the street and you will see imported sweets, imported clothes and imported shoes. This is one of the factors which represents one of our greatest difficulties. I want to go so far as to say that in my opinion the tendency to import is the greatest single factor which is responsible for the disequilibrium in our balance of payments position. We know that the Minister of Economic Affairs has tried to do a tremendous amount in this direction, but it is the task of all of us to support him; it is not only a task for the Government. We must not only say: “Buy South African,” but we must also produce our essential requirements in this country and we should concentrate on exports. The policy which the Minister has followed has had an exceptionally salutary effect, as we also saw from the report in last night’s Argus which referred to a large increase in our exports and to a fall in our imports. We are gratified that the measures which the Minister has introduced have had these results, but when we bear in mind that in 1958 we over-imported to the extent of £80,000,000, this was one of the factors which contributed to our reserves falling to £72,000,000 in May 1958. But we did not accept that position. Our economy is so active that it fought back and 18 months later our reserves again stood at £156,000,000. Last year we once again over-imported to the extent of £60,000,000. I concede that this was unexpected because we did not expect these developments. But it is the task of every one of us, and it is in this regard that I criticize the Opposition, namely when it is essential to build up confidence and to establish equilibrium in respect of our tendency to import, they are the very persons who are trying to sow lack of confidence.

The second factor which is a problem in our case is that South Africa surely occupies a unique position in the world as regards foreign shareholdings. There is no other country in the world where so many of the shares in its most important product, namely gold, are held abroad as our country. It is a very good thing when the sun shines and the weather is fine, but when dark clouds build up it can disrupt one’s economy. Thus we have found in recent years, when there were rumours of war or of tension between America and Russia with which we have nothing to do, the Stock Exchange declined. Our fate is settled by all those who say “Buy London or sell London”. No other country except South Africa is in this position. The Minister has now taken all these other steps which will make us less dependent on the vicissitudes of the London market. How often has it not happened during the past year that we have had to pay for what has happened in Africa? When there are difficulties in Algeria, it is in Africa and then South Africa has to suffer as a result. Nor is it in the interests of foreign shareholders that their shares should be subject to these fluctuations. When the Minister takes action aimed at trying to maintain a certain position in this country which will be reflected by the Stock Exchange of this country and which is a far better position than being subject to all the vicissitudes of the outside world, we are told that South Africa is rapidly approaching her doom. These statements are being made just because we have drawn a distinction between the Stock Exchange of this country and that of the world. No, we have also come of age in the economic sphere. This is the same argument as hon. members have used so often hitherto—the argument of foreign capital. Of course we welcome foreign capital, but the time when foreign capital set the pace for our industrial development is past. Let the true position be reflected by our Stock Exchange without it being subject to all these other fluctuations. The measures which the hon. the Minister has taken are not only in the interests of the shareholders of South Africa, but the interests of the other non-resident shareholder are also being looked after in this way.

I do not want to be long. Hon. members opposite have concentrated their motion on the racial policies of the Government, and have urged that we should accept another policy; that we should amend our racial policy. No, I also see great changes taking place in the Western world, and these changes will be reflected in our economic position as well. Let us look at the position in this way: Hitherto tremendous pressure had been exerted to the effect that Britain should grant citizenship and other rights to non-White citizens of the Commonwealth when they arrive in Britain. The Afro-Asian members of the Commonwealth enjoy citizenship rights in that country. Pressure is also being exerted on Canada to absorb some of these non-Whites but the reverse is not true. Let us take Ghana as an example. In Ghana the British do not enjoy citizenship rights. In Ghana the English-speaking White is an expatriate. In no other country in the world is there as much discrimination as there is in Ghana itself, the very country which attacks us so bitterly, and the same applies to other Afro-Asian countries. They are the people who take the lead in attacking us at UNO. We are accused of being the worst oppressors and discriminators, while our policy is aimed at achieving self-government without discrimination and without domination. And they do this while they themselves apply the worst forms of discrimination. I therefore say that this process which is taking place will in the course of time cause a reaction amongst the Whites of the Western world; they will see quite clearly that what is happening is that the non-Whites have an open door in the Western countries, but that the door is shut fast to Whites in the non-White areas. Is this the brotherhood of nations, or is this discrimination in its very worst form? UNO itself will eventually realize that a policy of discrimination is being followed which is not in agreement with the principles of the Charter.

I am surprised at the hon. member for Mayfair (Dr. Luttig) warning the chairmen of two of our mining houses for making speeches in which he said they imported politics. Surely the hon. member for Mayfair as a man who has had experience in the business world knows that a chairman of a company is responsible to his shareholders. He must report to them in his annual report, and in accounting to them in that report he must explain why there is no further development and why development must be curtailed. Either these mining houses must get their capital for development from within their own organization or they must get it from overseas or from the savings of people in the country and if they find that conditions in the country are such that they are precluded from developing their mines and their options to the extent that they would wish to do so, surely they would be failing in their duty if in their annual report they did not indicate to their shareholders those factors which prevented them from developing as fast as they would have liked. I am surprised at the hon. member for Mayfair not recognizing that fact. He is not assisting the Minister of Finance by giving a warning such as that, because surely if the Minister of Finance wants to get the position right in this country—and I am sure he does—he want to reverse the outflow of capital and get capital flowing back to this country because the Minister of Finance has always said to the outside world that he is in favour of the system of private enterprise and therefore he wants capital to return to this country. I am sure that capital will not be encouraged to come to this country if the Minister of Finance gave a warning to company chairmen on the lines of the warning given by the hon. member for Mayfair. Surely it is the duty of the chairmen to tell their shareholders the truth as they see it. If they find that further capital is necessary and that capital must be encouraged and that there are factors in the country which discourage that inflow of capital, factors such as the policies of the Government, they should say so. Similarly if they find that the policies of the Government with regard to labour conditions are such that they militate against the development of the mines they should also say so. I have yet to find some of the other organizations supported by the Government side refraining from praising the Government when it suits them to do so but of course when a financial organization supported by the Government praises the Government it is not politics—then it is just good finance.

The hon. member referred to the sterling position in Britain and drew a comparison. I want to draw his attention to a statement made by one of the financial writers a day or two ago who said this—

When was that written and by whom?

Two days ago by Harold Fridjohn. The hon. member knows that the problem in this country is a capital problem. He admitted during the course of his remarks that the country’s exports exceeded its imports, and he admitted that imports had decreased. What we are faced with now is a capital problem and if we are going to have any improvement in the position in this country, we need to have further economic development and in order to get that we have to have political stability and economic growth.

But we have political stability already.

I did not think that the Chief Whip on the Government side would rise so quickly. I thought he was more intelligent than that—I am sorry to have over-rated him. I can take the hon. the Chief Whip through the various portfolios, when he talks about political stability. Let us start with this new Republic. Did we have political stability when we had our celebrations with many of our young fellows called out on defence duties and when we had virtually a state of emergency throughout the country. Is that what you call “normal”; is that what you call political stability…

But you wished to have a revolution.

Is it political stability when you not only alert your Permanent Force but cancel all leave for the police and call up certain A.C.F. regiments? [Interjections.] The hon. member for Pretoria (Sunnyside) (Mr. Horak) calls it a cold war. Fortunately it is not a hot war. But to call that political stability is stretching credulity too far altogether.

Let us examine the various portfolios. Let us start with the Prime Minister. The Prime Minister on his first journey out of South Africa as the leader of this country failed overseas. He failed to accomplish what he had promised to accomplish and when he returned and introduced his Republic, he had to have it virtually with an armed guard. We had republican celebrations behind bayonets and a state of emergency throughout the country. There is plenty more to be said about the Prime Minister and his administration of the country by other members, but let us come to the Minister of Lands, Forestry and Public Works. The Minister of Lands has not told us this Session where the lands are going to be for the Coloured people. There is uncertainty amongst the Coloured people who want to know what their future is to be. The Indian people in Natal are very uncertain as to what the Government’s policy is going to be with regard to them on the question of land. This Minister is also responsible for forestry. Go to any of our timber producers throughout the country and you find that they are disturbed. They want to know what the long-term policy of the Government is going to be. They are concerned because the Minister of Forestry is planting trees, the Minister of Bantu Administration is planting trees and the farmers are planting trees, and they want to know what is going to be the economic effect of this on their industry, long term. Last year the wattle farmers ran into difficulties and they asked the Minister to intervene. He went on a trip to South America and we have heard little or nothing since, but their main grievances have not yet been settled. The wattle industry is still in difficulty. Sir, there is no time to go into greater detail as far as the Forestry Department is concerned, but that is another Department which is causing anxiety amongst the timber farmers. Then I come to the next portfolio in order of seniority—External Affairs. External Affairs is certainly not the brightest jewel in the Cabinet crown. The Minister of External Affairs has failed and failed miserably. His tirades against the Press, both internal and external, are well known in this House and of course his venture with the Press Commission has been enlarged upon so often in this House that there is no need to mention it again. Next, in order of seniority we come to the Minister of Justice. Can we say that justice is evenly handed out for all people in this country, irrespective of race, colour or creed? Surely when the Chief Whip of the Government party talks about political stability, he cannot talk about political stability as far as the Department of Justice is concerned.

You are making a queer speech.

Sir, we are dealing with a queer Government, because all these factors form the background against which you have to measure the economic growth of the country. If the body politic is sick your economy will be sick and all these factors, as reported in the outside world, and the acts of the Government as reported in the world outside, are factors which militate against the return of capital and the re-investment of capital in this country.

Then I come to the Minister of Transport. In his Department we find that on frequent occasions recently South African Airways going overseas have made non-stop journeys from here to Europe. Is that because there is a danger of airports in Africa being denied to South Africa? Can the Minister give us any information? Has he had any threat because there are rumours to that effect? If there are rumours to that effect and those rumours are allowed to continue, they are factors which increase the economic risk for overseas concerns as far as investment in this country is concerned. There has been more than one air journey which has been non-stop. The Minister of Transport has told us nothing about that.

Then take the Minister of Education, Arts and Science. What is he contributing to uniting the nation with his division of children in the schools? The Minister of the Interior has a lot to answer for. With his administration of the Group Areas Act and the Population Register Act the Minister is responsible for the administrations of Acts which have caused more suffering and bitterness amongst all sections of the country than we had ever seen in the years prior to 1948. The administration of those Acts has caused racial frustration and tension which have a marked effect on the economy of this country.

There is much more tension all over Africa.

Sir, I suggest that what we are concerned with here is the position of South Africa. It is no consolation to me to be told that something is worse somewhere else. What I am concerned about is that things could be a good deal better in this country with a different Government, and it is because of this Government’s policies that our economy is in the sad state in which it is to-day.

Why don’t you become a dictator and refuse to allow people to vote?

We are well on the way to dictatorship now. Then we come to Bantu Administration which, as we all know, is the bone of contention and has bedevilled the debates in this House for the last 13 years. There is no peace in this country and tensions have increased throughout the past 13 years, and the position has been worse in the last year and a half than at any other time in our history. The administration of Bantu Affairs has its effects on our economy and it is contributing to the deteriorating position. Then take Agricultural and Technical Services. Sir, ask any member of the farming community how difficult it is to get decisions from the present Minister of Agricultural Technical Services. Even this Session his handling of the Water Bill indicated to us that the Prime Minister might be well advised to make a change in that Department. Then we come down to the next Minister in order of seniority, the Minister of Bantu Education. There we find more and more people having to be provided with educational services from a fixed amount, and that amount is getting less and less. Is the Minister of Agricultural Economic and Marketing satisfied with the way in which the co-operative societies are conducting their affairs? We have had very little time during Committee of Supply to deal with the Minister of Agricultural Economics and Marketing, but he is concerned with the co-operative societies and I wonder if he is going to do anything to allay the fears of the canning industry in the Cape Province. Is he prepared this Session to tell us anything about the Langeberg Co-op?

I do not suppose he has ever heard of it.

I have here the balance sheet of the Langeberg Co-op and the auditors’ reports.

You are giving us a political mixed grill.

It is all very well for the hon. member to laugh, but here we see in the balance sheet of the Langeberg Co-op. that all stocks have been valued at selling price less 7½ per cent and there is even provision for the valuing of stocks for 1958-9—stocks which are more than 12 months old and unsold. The auditors have qualified the balance sheet. Their report runs into over three foolscap pages qualifying the balance sheet under various headings. It refers to the fact that they are not satisfied with the stock valuations. They refer to the lack of information in the pool account; they refer to the diminishing reserves and they refer to an amount of R2,450,000, which is the pool shortage as at 31 October 1960. Here we have an industry in which the farming community in the Western Cape is vitally interested and we find a balance sheet which is qualified in many respects. [Interjections.] No, they show no profits, only losses.

What do they owe the Lank Bank?

We find that they owe the Standard Bank R1,800,000; they owe Volkskas R1,800,000; they owe the Land Bank R1,511,758 and they have a further loan of R10,911,000 with the Land Bank. This is all owing by Langeberg to Volkskas, the Standard Bank and the Land Bank. Sir, here we have farmers who are wanting assistance in times of difficulty and in times of falling prices and when they go to the Land Bank, the Land Bank tells them that they are short of funds. That is where some of the funds of the Land Bank are—tied up in the Langeberg Co-op. Is the Minister of Agricultural Economics and Marketing satisfied with the running of this organization?

Sir, when we go to the various Departments of State we find cracks in every single one of them. It is not only the policy of the Government which is to blame, it is their administration of these Cabinet portfolios. The administration of these portfolios is a contributory factor in this economic disaster which is facing this country.

The Minister of Economic Affairs has been doing his best with regard to the development of markets overseas. He has sent three missions overseas recently. We have had no detail this Session as to what has happened. It is true that these missions have only just returned and we commend the Minister for having sent missions overseas to develop our export markets. Sir, there are many other facets of the Minister’s Department about which we require information. We have the Industrial Development Corporation at times entering into the field of the private sector and competing with the private sector. Only last year there was a suggestion that the I.D.C. was going to finance the buying of a big commercial distributive organization which in our opinion is contrary to the objects of the I.D.C., which is mainly concerned with industrial development. The I.D.C. was not required to enter into the commercial distributive field. Fortunately at the last minute they were out-bid by another organization, so they did not proceed with that venture. We also want information in this House about the I.D.C.’s interests in Rhodesia. Then we want further information about the development of Escom, the Electricity Supply Commission which is a great organization, and yet comparatively little has been done over the past 13 years to supply electricity to the agricultural community. When we hear the Prime Minister telling us that it is part of his policy to develop border industries, one of the first questions that we have to put to the Minister of Economic Affairs is “What is the Electricity Supply Commission doing to establish power stations in the vicinity of these border areas and what facilities are being provided for these border areas?” Because it is foolish to establish border industries without power and without transport.

Then we come to the next Minister, the Minister of Posts and Telegraphs. Perhaps the less we say about him the better. It is no good asking him anything about the radio because he says he has no control over that organization whatsoever, so I do not know where we can discuss slanted news. Lastly we come to the Minister of Defence.

Please spare him.

I can assure the Minister of Defence that I shall not be too hard on him because he has only recently taken over this portfolio and he did not have a very good legacy to take over. But we are entitled to know what the Department of Defence is doing in South West Africa, because when the Department of Defence mobilizes troops it becomes world news and it affects the flow of money. Surely the Minister knows that finance is very nervous.

Where did we mobilize troops?

Has or has not the Minister sent troops to South West Africa?

I said how many—a few.

My point is that when you move troops to South West Africa, unless the reason is publicly stated that movement of troops is the basis of rumour, and that rumour starts the uncertainty. The Minister says that the troops were sent there to stop smuggling. What was being smuggled—diamonds, liquor or arms, or were they smuggling Nationalists from over the border back to South Africa again? Sir, when you send troops beyond the ordinary borders of South Africa—and the Minister knows that it is not part of our mandate to keep troops in South West Africa—then the country is entitled to an explanation.

Sir, I have left until last the Minister of Finance, not because he is last in seniority but because he is responsible for the administration of the nation’s purse, and on the efficiency with which the other Departments are administered will depend his ability to conduct the finances of the country on a sound and efficient basis. The Minister has not given us very much encouragement. We find great difficulty in accepting everything that the Minister has said. On 17 April the Minister said this when he referred to the question of prohibiting capital from leaving the Union—

Mr. Speaker, during the Budget debate I and others raised this matter, and that was the reply given to us by the Minister of Finance. We raised the matter again and the hon. the Minister on 4 May said this—

The hon. the Minister couples these two together—

Has it been sufficient? On 4 May, only a month ago, the Minister made this statement, and in spite of the denials when we raised the matter during the Budget debate, when the Minister replied on 17 April he told us the rumours were baseless and that he had the position under control; and again on 4 May the Minister told us again that the rumours were baseless. He coupled it then with the question of devaluation. I can see the Minister coming to this House in a few months’ time and telling us that there is now unity in South Africa, unity of the highest kind because he had been able to unite the funds of South Africa with the people of South Africa by getting the funds of South Africans overseas, and bringing them back to this country to unite them with the people. But of course that won’t be called “forced transfer of capital back to South Africa In ministerial language it will be called” uniting the funds Then the Minister will go on to tell us that the South African rand is now equal in value to the currency of that other great republic, the United States of America, the rand being equal to the value of the dollar. But in other language it will be that the South African currency has been devalued. How much faith can we place in the assurances of the Minister? Already to-day we have two rounds. We have the one rand that is equal to 10 shillings sterling, and we have the other rand that is already being quoted by the Swiss banks at a discount of between 7 and 10 per cent. We would like to know from the hon. Minister of Finance and from members on his side what suggestions they can make to improve the position. The hon. member for Constantia said we were suffering from financial haemorrhage. Mr. Speaker, what we need to-day, if the patient is not going to die, or alternatively is not going to take a long time to recover, is a blood transfusion, and we need blood-donors. Is the Minister going to look for his blood donations to the public of South Africa? Is he going to insist on higher taxation in order to make up his short-fall? Or is the Minister going to look for overseas capital, and if so, how is he going to get it? Because, Mr. Speaker, so long as the Government pursues its present policies, so long as the Government carries on in the way it is doing, it is not going to get any blood donations from the outside world, because it is the policies of this Government which are militating against capital development and against the introduction of further capital into this country, and I deny the suggestion of the hon. member for Pretoria (Central) when he says that the policy of this Government has nothing to do with the economy of the country. Mr. Speaker, it has a great deal to do with the country, and until such time as this Government changes its policy the financial haemorrhage will continue and the patient will surely die.

The hon. member who has just sat down opened his speech, and this was the main theme of his speech, with a catalogue of criticisms of the Government and the National Party. I now just want to tell him this: If this is a preview of the propaganda criticisms which that party intend levelling at this party, then it is not an advertisement of their readiness for battle, but an indication of their pending destruction. As far-reaching as his criticism was, so flat was it, and while he has perhaps tried to make a “new look” Budget speech, it was merely a repetition of the “old look” criticism of the administration of this regime. As regards the hon. member’s closing remarks which were relevant to a certain extent, I shall come back to them in dealing with the speech of the hon. member for Constantia (Mr. Waterson) because the hon. member for Constantia, in marked contrast to his colleague, has made a speech to which any parliamentarian could listen with pleasure, although a South African must have been struck by the terrible tone of “from the depths of misery”. He sung this refrain to such an extent that he came to the conclusion that this was an instance where even he and his party wanted to assist. Then we must realize that he regards the position very shortly. The hon. member made one remark which I consider unfortunate and to which I want to refer. At one stage he referred somewhat disparagingly to “this little Republic of ours”. I just want to tell the hon. member this: I cannot imagine that when the House of Commons debates whether Britain should join the European Common Market, a speaker will rise and refer to the economic problems which are forcing Britain to join the European Common Market and speak disparagingly of “this little kingdom of ours”. In any case, I would not speak in that way. But we are on the way to better days, and I hope the hon. member will come with us.

The first submission which I want to make in contra-distinction to the main theme of the hon. member, is this: Although we are experiencing difficulties to-day, indisputable difficulties, which call for our attention, South Africa is a rich country. We are a rich country in comparison with, if I may put it in this way, Australia, for example, 60 per cent of the exports of which are represented by primary products such as wool, meat and grain. Only 15 per cent of our country’s exports consist of wool, fruit, meals and other agricultural products; the remainder are not agricultural products and are not so sensitive to price changes. About 50 per cent of our exports come from gold, uranium and diamonds. Basically we are blessed with the resources which make us a rich country, and those who are far more hostile towards us than the United Party, for example the editorial writer of the Economist which has taken so much delight in recent times in always saying the worst about South Africa, made this concession as recently as 3 June. He said—

If this is the worst our enemies can say, I think we are entitled in making it our primary basic premise that here we are dealing with a very strong economy. From which point of view should we regard this position? In the first place I want to associate myself with the two basic submissions which formed the central premise of the hon. member for Constantia, and I think the whole House agrees with them. In the first place we on this side and the Government too believe and are showing by our actions that South Africa’s economy must maintain its expanding tempo for every possible reason—our own self-interest, our guardianship over the non-Whites, and from every possible point of view; in the second place—and this is an associated aspect—to be able to maintain our expanding economy, the capital required for expansion must be made available. Then we come to the basic premises which are at dispute between us. The hon. member for Constantia at once based his criticism on the fact that this Government’s racial policies were frightening capital away from the Republic in order by so doing to attract capital. In principle this is what the Progressive Party are also asking. Here I associate myself with what the hon. member for Pretoria (Central) (Mr. van den Heever) has said, namely: When we speak of South Africa’s economy, we must accept this racial policy of the National Party Government as an unalterable given fact. The public has repeatedly chosen this policy and we stand for the principle that White self-government will be maintained in our areas. Consequently it is an unfruitful basis for debate to say that we should try to protect our economy by removing this basic given fact. Our National Party policy in this matter is as basic an economic fact for South Africa as the fact that we do not have navigable rivers or that gold is found in the earth. It is a fact which we must take into account to-day and which we must not try to argue away. I therefore want to ask: Within the framework of this policy which is a political and social given fact at the moment, how can we achieve the expanding economy and find the required capital? In this regard I want to remark in passing: It is always being said that this policy must be sacrificed and then we shall have a position which will result in a more favourable economic climate. But the policy which the hon. member’s party advocate in this regard, and which is advocated far more strongly by the Progressives, is that they always base their stand on the argument that if we change our racial policy, the Whites will still retain political leadership in South Africa. But this is not a justifiable contention. This is a contention which they put forward but it is a completely unjustifiable presumption.

Then I come to the next point I want to make, namely: In his speech the hon. member for Constantia made it his main point of criticism (and the Progressive Party even more so) that adjustments to our policies would attract capital from abroad and that only by an adjustment of our policies would the Government be able to create a climate which would attract capital. I now want to ask hon. members: Is there anything to substantiate this presumption? I say: No! The facts show the reverse, namely that no adjustment of racial policy will attract capital because in Rhodesia there is limited “partnership”. Is it attracting capital to Southern Rhodesia at the moment? No. In Northern Rhodesia there is a more for reaching “partnership”. Is it attracting capital? No. In Kenya there is complete capitulation and that is not attracting capital. And in the various Black countries such as Nigeria and Ghana there is a limited measure of capital inflow, but there is not a capital inflow of such scope that they can achieve an expansion whether in their total national income or in their per capita earnings which is comparable with that of the Republic of South Africa. In other words, the realities of the African situation show that such a so-called adjusted policy will not attract capital either.

Before I submit my opinions regarding the solution of this problem, within the framework of our policy, I just want to touch upon this point with reference to what the hon. member for Pinetown (Mr. Hopewell) has said regarding the measures which the Minister of Finance has taken and which are aimed at preventing the repatriation of foreign investments which are realized by the sale of shares in this country. The hon. member has described this as a form of breach of faith as a reason to reproach us. I just want to make this submission: Seeing that that party’s main speaker has based his attack on the fact that South Africa has had to take steps to find capital for the maintenance of an expanding economy, is it logical for the hon. member for Pinetown to criticize us on this point? Does the hon. member not see that every £1,000,000 which is spent on buying back foreign domiciled shares, represents £1,000,000 which cannot be used in the expansion of South Africa’s economy and new industries? And with a view to the attitude which that party itself has adopted, namely that above all else we must provide for the capitalization of an expanding economy, they must surely concede that, seen from their point of view, it is quite correct also that the capital resources of South Africa should be preserved and utilized in the first place for the object of expanding our present economy still further, rather than to repatriate foreign investments to South Africa. In saying that, I am in no way derogating from the general premise that we should like to repatriate foreign investments to South Africa because it may be profitable for South Africans. But that is seeing the matter from the point of view of the individual investor. From the point of view of the country it is obviously the first priority that capital should be found to maintain the tempo of an expanding economy, and seeing that we have now once and for all crossed this most important rubicon, by restricting the repatriation of foreign capital, I believe that we must not lightly repeal this present decision until such time as we are sure that South Africa’s capital resources are adequate to maintain our expanding economy, and in addition we can, as a bonus, repatriate foreign capital as well. Before I put the point which I should like to discuss, I want to reply to the suggestion, made particularly by the Progressive Party, and a suggestion which the United Party have made not on this occasion but on previous occasions, namely that a root weakness in South Africa’s economy is that we are not utilizing our potential man-power resources because, as they allege, we do not want to utilize our Black man-power resources; we encircle them with colour bar restrictions on their movements, etc. In this respect our reply is in the first place that this party’s policy of border industries and development within the reserves will in fact create unequalled possibilities to utilize such increased potential as is available in the shape of our Black labour resources. Why do not hon. members support that policy? Why does the Opposition as a whole not support that policy? Let the improved utilization of Black Labour then take place within a social framework which is acceptable to the whole country. Why do they oppose that policy? In this regard I want in the second place to put this pertinent question to hon. members opposite: They claim that the most effective economic cure will be to remove economic restrictions on Black labour in South Africa. But there are no statistics or information as to what additional production would result from the removal of all restrictions on Black labour in South Africa. In other words, what would be the additional production potential of Black labour if all restrictions were to be immediately removed. It is very easy to generalize and to say that if the colour bar and the restrictions on their freedom of movement were to be ameliorated, South Africa’s national income and her per capita earnings would rise tremendously. That is guessing. They have no information in this regard. And when we examine the production of the Congo before the debacle caused by the disappearance of Belgian supervision, we find that production in that country had risen to a national income of approximately £380,000,000 per annum; the per capita rate of production by those Natives was at that time infinitely lower than our per capita production in South Africa. I do not say that a substantially higher productions is not possible; I am only saying that it is absolute nonsense to claim that the removal of restrictions from Black labour so that they can move wherever they like, can bring about a proveable or significant increase in the wealth of the Republic.

I now want to explain my attitude and to express my faith in the policy of the Minister of Finance and the Government for meeting this obviously difficult situation. The first point I want to make is that we must form capital by means of import control. The hon. member for Mayfair (Dr. Luttig) has already made the point that 30 per cent of our national income goes abroad to pay for the importation of all sorts of edibles and things to wear and to ride and to pay for all sorts of things which represent the pleasures and luxuries of life. Let us just examine the importation of motorcars. In 1956 things went well and we only imported over 78,000 motor-cars, which figure rose to 111,000 in 1957, to 124,000 in 1958 and by 1959 (the last figures I have available) the figure was 114,000. It is obvious that these imports are excessive, and when we think of our total imports to the value of approximately R1,200,000,000 it is clear that enormous savings can be effected and an enormous amount of capital formed. The hon. member has committed himself to a figure and has referred to R25,000,000, but I think he meant £25,000,000. per annum in capital which would be required from abroad to enable us to maintain our growing economy—that is to say R50,000,000. Sir, we can save R50,000,000 many times over through the application of import control which is already being done, and I believe that if our Government can go further as regards import control, it should go as far as possible. We concede the natural limitation in that one cannot destroy bilateral trade by import control, and that one cannot excessively restrict the State income which is based on import duties, but bearing in mind these factors, I believe that this is the first method for overcoming our capital shortage. The second method for creating capital and wealth is the possession of technical knowledge. Technical knowledge is to be found in our own brains, our own universities, our own research institutions. We must develop these assets. These are our inexhaustible gold mines. May I refer the House to the description by the Nobel Prize winner, Seminov, of the people I now have in mind. He said—

One real technician is worth 100 ordinary workers. It is said that 20 per cent of the total population cannot provide the industrial leaders required for the whole population which includes the non-Whites. What is the position in mighty Russia? An elite consisting of 5000,000 members of their Communist Party provides the leadership for the whole 200,000,000 people. If we develop fully the brainpower and the mental resources available in our nation, we shall have the basic strength to create wealth. And next to technical knowledge, I believe in work, and this applies to the Whites and the non-Whites, but perhaps primarily to the Whites. South Africa has become a little easy-going as regards work. It is not without reason that the extract which I have read from the Economist refers to a “standard of luxury living”, and that later in the article they refer to the highest standard of living in the world. Our capital formation must take place through work. We need only look back 15 years over the history of Germany. It is true that to a certain extent Germany had the assistance of outside capital, but the primary instrument, the primary raw material which made Germany the richest country in the Western world to-day, was work, They started with half bricks and worked. South Africa must also achieve wealth through the formation of capital by means of work—technical knowledge and work.

A final aspect which I want to mention is something in respect of which the hon. member for Constantia and his comrades-in-arms could certainly do a great deal, namely, the fact that there must be co-operation between the State and the business man. The State can give guidance. The State can provide a measure of inspiration. Through the development of its technical resources the State can make a great contribution. But eventually if the mutually enriching processes of brain-power, labour and capital are to be combined in order to produce new products or to produce our own products more rapidly and more cheaply so as to create wealth through the production achieved by our labour so that the surplus can remain for the formation of capital, it is the private industrialist, the private entrepreneur, who must co-operate. And far too often we find the attitude in South Africa that the private industrialist and entrepreneur does not want to use the given facts which are at his disposal. He wants to undo this basic socio-political given fact, namely, our policy for separating the races and their separate development. Let them once and for all accept this given socio-political fact, and within the framework of that policy let them show their undeniable ingenuity. Within that framework they can ask this Government for help and concessions where necessary. This Government cannot really be reproached for ever having refused any reasonable representations from the business world or from industry during the 13 years of its régime. I believe that if our industrialists and our business men will cooperate closely with the State instead of adopting an attitude of hostile opposition, we shall be able to set in motion this process of creating wealth by which we shall not only be able to improve to an ever-increasing extent our current international balance of payments, but by which we shall be able to provide our total capital requirements of £300,000,000 per annum plus the amounts required for investment in the private sector in order to maintain our expanding economy. Then we shall also have the production required to repatriate further foreign investments and we shall then be able to withdraw these present restrictions which we must regretfully accept but to which we must give our full support as an indication of realistic political action. But as long as the United Party acts as the godfather to this critical and unco-operative attitude of the business world, for so long as the whole Opposition tries to disparage every attempt by this Government, for so long as this Opposition continually casts the spotlight on just one aspect, namely, our declared basic racial policy, for so long will they help to hamper us in our attempts to achieve prosperity and to regain foreign goodwill, goodwill which we can regain to a certain extent as well.

But we shall only regain the goodwill of the outside world and of the foreign investor in one way and with this I want to conclude: Not by making concessions in respect of our colour policy; nor shall we regain it by any international reorientation. We shall only gain foreign goodwill and investment in one way, namely, by making a success of our own productive economic system.

The hon. member for Kempton Park (Mr. F. S. Steyn) has given us his reasoned approach to the new, modern siege economy in South Africa. He accepts the present situation and he has given us his approach. He has given it sincerely, and I think he has given us something constructive to think about to-day. I am sorry that he did not like the approach of the hon. member for Constantia (Mr. Waterson). What has impressed me in this debate is that hon. members on the Opposition side who have spoken have tried to assist the hon. the Minister of Finance. With the change in the Minister’s statements since the Budget statement three months ago, the Opposition could have flayed the Minister and the Government but they have not done so.

They could not do it.

The Government is more to be pitied than blamed—that is the attitude adopted by the hon. member for Constantia in his approach. I am sorry that the hon. member for Kempton Park did not appreciate that. However, I do thank him for his kind words about South African gold production and what the gold mines have done. I shall come back to that and I shall have a word to say which will reinforce his views on this matter. I do not know why the hon. member does not like the Economist. For many years now we have had hon. members from the Government side, such as the hon. member for Bellville (Mr. Haak) and many hon. Ministers, quoting gaily from the London Economist. I have never quoted the London Economist but they have done so. It does not help to quote from a paper only when it agrees with you; the time to quote it is when it gives an independent opinion.

I should now like to deal with this question of capital. Our greatest asset in South Africa, if we had sufficient capital to develop it—and we do not require a great deal—is the human resources that we have in this country. The hon. member for Durban (Musgrave) (Mr. Williams) spoke about it this afternoon. That is why I agree so far with the hon. member for Kempton Park, who says that we must develop the reserves with the human capital that is there available. I should like to ask him: “Is he prepared to accept White capital for machines and equipment and technical services from the Whites?” I do not ask for an immediate reply because I do not wish to embarrass the hon. member. This is a question I should like to put to the Government side: are you prepared to accept our policy or do you want the policy of the hon. the Prime Minister who says that the Africans must provide that capital themselves, from their own resources? We say it is impossible and it cannot be done. Therefore I should like the hon. member for Kempton Park to try to meet us as we are trying to meet him.

The hon. member spoke about Rhodesia. We know about the remarkable development that has taken place in Rhodesia since the Second World War. Both Southern Rhodesia and Northern Rhodesia have developed tremendously. There are the copper mines in Northern Rhodesia. The wealth of the Federation comes from the copper mines. There is the great development of those wonderful citites and the great development in agriculture in Southern Rhodesia. Where did that come from? Surely not from the inhabitants of Rhodesia, at the beginning? It was capital from abroad. They used that capital, and they are using it to-day. Why should we say we do not need capital of that kind? We do need it; we need capital from outside and from inside. The hon. member predicts a long siege. There he is probably right. We shall have to tighten our belts—”fasten your seat belts” will perhaps be our order later, for we are going into heavy weather. I do not think it helps for the hon. member for Kempton Park to tell us that the demise, the death of the United Party is approaching, because at the moment we are not discussing the future of the United Party but something much more important, the future of South Africa. That is what is at stake to-day.

I should now like to say a word about this Appropriation. Three months ago the hon. the Minister of Finance gave us his Budget speech. In introducing that Budget he used those medical metaphors that the hon. member for Constantia has referred to. He spoke about our economy being in sparkling health and of its exceptional vitality. He went further. he said this—

Was the announcement on Friday the financial thrombosis? The hon. member for Pretoria (Central) (Mr. van den Heever) says the treatment for a financial thrombosis is to get the patient to run a hundred yards sprint! That is not the treatment for a thrombosis. The treatment for a thrombosis is what the hon. the Minister himself indicated in his speech to-day. I jotted down what he said: The Treasury will have to be strict and careful. That is quite correct, quiet for the patient. The other thing he said was this: “As President Kruger said, we will wait for the tortoise to put out its head, wait for what is coming.” But we do not do that in finance. We do that in politics, but in finance you do not wait for the tortoise, you take action well in advance. I am afraid that that policy will not do.

Now I want to come to the first point of the hon. the Minister of Finance, because I think it is a good one. How is he going to be strict and careful? He, as Minister of Finance, has a very important duty to perform. He has to see that there will be savings in his own Government departments, to set an example to the country. I will indicate one or two savings—not many. There are many, and the hon. the Minister knows better than I what they are. I should like to suggest, first of all, this: There is a Press Commission sitting in South Africa. I do not know whether hon. members in this House know there is a Press Commission…

It is a national monument.

… but that Press Commission has been there much longer than many hon. members in this House. I am now in the company of the leading Nationalist newspaper in the Transvaal, the Transvaler, and they say “scrap it, finish it off”.

Start a new one.

No, we do not want a new one. When the hon. the Minister of Finance has dealt with the Press Commission, he should deal with all the budding commissions he sees in this country that will never achieve anything, excepting the re-statement of Government policy. Scrap them as well. There is no future for them in South Africa. We do not need them.

The next thing I would suggest is this: Speaking of these commissions, we had a Select Committee on an advisory council in education. We shall need an advisory council, perhaps in the dim and distant future, but we do not need an advisory council on education when we are in a siege economy. Scrap that too. The next I should like to mention is that we have created in South Africa Native Commissioners for the Native Reserves—I am sorry, what are they called? High Commissioners?

Their Excellencies.

Their Excellencies—these gentlemen who have been sent to the Native Reserves.

Commissioners-General.

Thank you. Commissioners-General! We do not need them in this siege economy. We might have needed them as a luxury. We might have needed them when there were gentlemen asking for jobs, but we do not need them now. I would suggest he should scrap those as well. I have mentioned these three only, and I suggest that that is a satisfactory number. Having done that, I would suggest that a departmental committee should be appointed by the Minister of Finance to go through this book of Estimates and decide what is really superfluous and unnecessary for the development of our country and the government of South Africa. I would do that first.

The next point I should like to make is that the hon. the Minister has told us that in this siege economy the development that will take place will be in the next ten years—I gather from the hon. the Minister of Finance that the siege is going to last as long as that at at least.

In the next 12 years there will be development to the value of R1,000,000,000 in those four utility corporations, Sasol, Escom, Iscor and Foscor.

R2,000,000,000.

May I ask the hon. the Minister, was it R1,000,000,000 or £1,000,000,000?

R2,000,000,000.

I am referring to the hon. the Minister’s Budget speech. I do not know whether this is a misprint, but it says R1,000,000,000 will be spent on those four utility corporations.

By the time it got to the State President’s speech it was up to R2,000,000,000.

Perhaps I had better read it from the Budget speech—

And so on.

I think it should be pounds.

That is R2,000,000,000. Now I would like to know, in our siege economy, where we are going to get R2,000,000,000 in the next 12 years? The hon. member for Kempton Park says we must produce it out of our own savings and so on. We must work harder. But that is a lot to ask for. R160,000.000 per annum for that alone! The hon. the Minister has told us that it will come out of savings. Well let us take the first of these, Sasol. There have never been any savings in Sasol. Sasol is a company that owed £12,000,000 to the Government, and m order to show that they could break square they asked the Government and this House to convert the £12,000,000 loan into 12,000,000 £1 shares. And we agreed to do it. And with money at 6 per cent, that is £720,000 a year—R1,440,000 a year. That is what we handed to Sasol. The shares were not worth £1 with a capital of £48,000,000 for their development. Everybody knows Sasol was not worth £48,000,000. The hon. the Minister of Economic Affairs of those days, Dr. van Rhijn, told us that part of it was experimental, that it was not only for the production of oil. However, I would like to know where that money is going to come from.

We come next to Escom. Escom is a utility corporation which has developed on loan capital. That is a modern way and a good way, and Escom has done extraordinarily well. But it is going to be very difficult now to maintain the loan capital policy.

Foscor: I cannot see Foscor providing this money. It cannot provide it in the next four or five years, that is definite. We all know that.

The only really good producer will be Iscor. Is it suggested that Iscor will be loaded with this amount? I ask the hon. member for Pretoria (West) (Mr. van der Walt)—surely that is not the intention of the Government? I should like that explained because it is no good boasting of what we are going to do. We want to know what this siege economy is going to bring us to.

I should like to refer again, if I may, to the hon. the Minister. I am not going to repeat an appeal, but during the Budget debate I asked the hon. the Minister why he had discriminated against the gold-mining industry when he reduced company income tax by 3 per cent of the 30 per cent—in other words 10 per cent reduction? And he gave his reasons.

May I just make a correction, please. For the four items mentioned in the Budget speech, it is as stated there. More than R1,000,000,000 is the figure. The R2,000,000,000 was the figure given in the State President’s speech, and that refers to those items plus the Railways and other items such as private industry. It was the total of incentives that would now be introduced. But for the four items in the Budget speech it is more than R1,000,000,000, not pounds.

I am very grateful to the hon. Minister for his explanation.

But he is wrong again.

It has just been pointed out to me, Sir, that that is not correct. The President’s speech says—

Just double the Budget speech figure.

Nothing about private enterprise.

However, there is some misunderstanding, I am not going to press the point.

After all, what is R1,000,000,000?

Yes, what is R1,000,000,000 between friends?

Well, hand it over between friends.

The hon. the Minister of Finance will remember that I raised this question of gold-mining taxation and the discrimination against the industry. What was the attitude of the gold-mining industry to this discrimination? They rendered good for evil; they turned the other cheek. I suppose the hon. the Minister has noted this offer of extra shares for the Western Deep Levels. I suppose he has seen what has happened there. The Anglo American Corporation and its associated companies, and other South African finance companies had to raise money for the second stage of development of the Western Deep Level Mine, which is the deep level of two of the richest mines the world has ever known—two of the biggest and richest, West Driefontein and Blyvooruitzicht. And the hon. the Minister is more interested than anybody else in the profit of those mines because he takes the lease profits and the taxation. In trying to raise this money the finance groups hesitated because of the serious financial situation in South Africa. This is what they were confronted with. Up to March this year, to bring the mines to the present state of development has cost R32,400,000. For the next stage of development which will bring the mine up to production in the Ventersdorp Contact Reef, they will require another R16,800,000. The question was: Were there finance groups in South Africa that would underwrite it? They hesitated. They said they would not give a decision until fairly late in April. The economic position was deteriorating in South Africa. Then they decided they would underwrite. If they had not underwritten, what would have been the position? Hundreds of men would have been out of work, unemployed, and one knows what that means for these people. However, the financial groups decided they would go on with this development, and they did so.

Mr. Speaker, the ordinary shareholder took up only 4 per cent of those shares and the Anglo American Corporation with associated companies took up 79 per cent, the remaining 17 per cent being divided amongst other finance companies. I should have thought the hon. the Minister would have made a statement in this House expressing his appreciation of the manner in which the gold-mining industry had come to our assistance in this manner. I think it is a splendid thing. But instead of that the gold-mining industry gets criticism. I think it was a very great gesture, and all we get here is that the hon. member for Mayfair (Dr. H. G. Luttig) says that the chairmen of these finance companies at their annual meetings should not talk politics, should not talk about the economic situation in South Africa. But that is their job. If a man is a shareholder in a finance company he expects the chairman of that company to survey the position as the hon. the Minister of Finance does in his Budget speech.

Only more accurately.

Well, perhaps so.

They do not make mistakes of R1,000,000,000.

It is his function to be objective and explain what the prospects of the country are. And these chairmen have done that. The chairman of the Anglo American Corporation, the chairman of General Mining, the chairman of the Union Corporation have all done that—but not the chairman of Lange-berg. The auditors spoke in the case of Lange-berg. They did not have the chairman there; it was the auditor who said what he thought about the prospects. I do not know what the chairman is going to do. That is the position.

The hon. member for Pretoria (Central) spoke about what had happened in 1947 and 1948. Well, I think the hon. the Minister of Finance must have a nostalgic feeling when he thinks back to the great days of 1948 when this Government first came into office, and when he thinks of the financial chaos they have created in this country. The first Budget introduced by Mr. Havenga in those days was a United Party Budget, which was not presented before the election. To-day we are scrounging around for a few pounds in order to build up our reserves. We tried to hold them round R150,000,000. What was the position in those days with the reserves? The election was on 26 May—which is a national day in the Nationalist Party calendar. On the previous Friday this was the position: There was in the Reserve Bank £101,000,000 of gold—R202,000,000. This country was so rich and flourishing, the finest young nation in the world in those days, that they had lent Britain £80,000,000 in gold—R160,000,000. At the same time the hon. member for Pretoria (Central) spoke about …

And a deficit on current account of £162,000,000.

I think the hon. the Minister had better wait until he gives his reply, when he can give those figures, and explain the R2,000,000,000.

The next point is this: we will stick to Mr. Havenga’s pounds of those days. That was the position of the reserves’ £181,000,000 in gold, and in addition to that £77,000,000 in Foreign Bills. Let us work that out. That is £258,000,000—R516,000,000 in our money today—and really more in our money to-day. because the price of gold then was 172s. an ounce. If they had held on it would have been 248s. an ounce. Then it would have been almost R700,000,000. What a country we had! And they called it a “Bankrot Boedel”. Well, let us all go bankrupt in South Africa if that is a bankrupt “boedel”.

We have had the Budget this year and we have had the Appropriation. Now, with this feeling of nostalgia let us see what Mr. Havenga thought about the situation in 1948 in that wonderful speech he delivered. Here are a few short extracts. It will do us good. I think, to look back to the good old days. He said—

And the next one—

But this is the peach, listen to number three—

Number four—

The hon. member for Kempton Park is not here at the moment, which is a pity. Here is the next remark—

Then he proposed to distribute largesse to all the interests of South Africa: Income Tax surcharges £3,000,000 reduction: Increased rebates on Income Tax £1,290,000: Minor concessions on Income Tax £180,000: Abolition of wartime surcharge on Transfer Duty £400,000: Reduction of Tax on gold mines £900,000. And then he said this—

Mr. Speaker, this is the future. We are in the future now. They were ringing the bells in 1948, they will soon be ringing their hands. That is what we have come to in South Africa. And why have we come to this? Why has this great country with such wonderful assets, with its great opportunities, and its great people come to this sorry pass? Because the Government has taken the wrong road. The answer for South Africa is to go back and to get on to the right road. They are lost in the bush. Go back and get on the right road.

What is the right road?

The right road is the policy of the United Party as adumbrated by my hon. leader. But what is the Government’s remedy for this situation, Mr. Speaker? They say “Let us have a general election”. But there is no money in the house and we have nothing to live on. They say “If there is nothing to live on and you have no money in the house, let us play the gramophone”. That is their remedy. Nothing in this country will be put right by having a general election. I think if we have a general election we shall probably be in a worse state that we are to-day.

I say in conclusion? Mr. Speaker, as I said a moment or two ago, let us get back to the right road, back to “die pad van Suid-Afrika”.

I do not think the effect of this statement of the hon. the Minister of Finance has reached the country yet. We all know that vast sums are needed for our reserves, the Native reserves, and for other things. And I must admit to a considerable amount of surprise at the carefree acceptance by the Government side of the position that has now arisen.

Overseas confidence, as my hon. colleague has said, has disappeared entirely and it will be a long time returning. If ever there was a time for a change of Government, if ever there was a time when a Government should resign, it is now. And if the Government will not this hon. Minister should. Confidence in this country will be a long time returning. Wild dreams of cures for our difficulties have brought us to this financial position. All funds are now frozen. What is going to be the Government’s next step? It looks as if the next step will be devaluation. I think that that would draw them on to temporary advancement, dishonest though its implications are. What will devaluation mean? As usual, the watering down of the people’s savings, the erosion of their pensions, and businesses with liabilities overseas and assets here will be ruined by a stroke of the pen. That is what will happen when the next step is taken.

Sir, I am not exaggerating, because the way in which the country’s finances have been handled in the last few years makes it quite clear that anything can happen. It was a sorry picture indeed that the hon. the Minister of Finance gave us. Even if our reserves improve, as I think they will under the steps he has taken, he will not dare to relax the chains in regard to foreign investors taking their money out. He knows the moment he does, there will be such a flood that he will be forced to clamp down again. Our credit has gone, and it has gone for so long that my colleague was right when he said there will be a wringing of hands in the years to come, and not so far in the future.

When I look back on the Minister’s Budget Speech I cannot help being reminded of the old nursery rhyme of “Humpty Dumpty”. You will remember it went this way—

Of course we should use the term State President in place of king here. But a large amount of our difficulties have been brought about by the coming of this State President of ours and the leaving of the Commonwealth of Nations, added to the policy of this Government. That is what has brought us to this present stage.

I really want to expand on the question of the encouragement and the establishment of industries on the borders of the reserves. We all know how Government actions can affect jobs. As a Transvaler I have seen the effect of Government policy on the jobs of the garment workers in Germiston. I have seen Germiston slowly die. We all realize that there are consequences still to come. This was all caused by Government encouragement and the unfair encouragement of industries in Native areas. We are therefore entitled to demand that Ministers of the Government should have some understanding of economic laws and their effect. They should understand that if wages are lowered in one area, other things being equal, the product of that area will be cheaper, and that cheapness will bring unemployment in the first area, and not only wages but railway rates, electricity and water supplies, all those items subsidized by the Government, if they bring unfair competition they also bring unemployment elsewhere. Unfortunately the Government replies to questions of this sort in recent years show no sign that they appreciate this elementary proposition. In fact, their replies indicate that they have given very little thought to the possibility of unemployment in the established areas. I ask them, however difficult it is for them, please to try to understand that there are economic laws which, if disobeyed, bring unemployment and loss in their wake. They must understand that they can create conditions which put businesses out of business and men out of work. It is not only Black men they put out of work, by job reservation, but White men. I also want the Government to stop talking with two voices. I want to know what the real policy is in regard to these industries on the borders of the reserves. Is it the policy enunciated by the experts of the Economic Advisory Council, or that enunciated by the Minister and other Government spokesmen, because the two are obviously in conflict with each other? In November 1960, Dr. S. P. du Toit Viljoen, vice-president of the Board of Trade, assured the Executive Council of the Federated Chamber of Industries that the border areas’ plans were in no way aimed at forcing any established industries in White urban areas to the verges of the Black reserves. These areas, he said, had to be developed on economic grounds and not purely for the sake of an ideology. He said, further, that there was no intention of depressing the wages of non-Whites working in border factories. All incomes would be fixed by the Wage Board and not by industrial council agreements between the employers and their Black workers. That statement was like a breath of fresh air to the industrialists of the country. He went on to say, further, that railway freight rates serving the border areas would also have to be neutralized so that they would not provide established factories elsewhere with unfair competition. That was common sense, and now I would like to tell you what Dr. D. H. Steyn, the chairman of the Economic Advisory Council, said last November to Assocom—

Mr. Speaker. that is cold economic common sense. He went on to say—

Again, that is cold economic common sense. These statements agree completely, or largely, with the views of labour and organized commerce and industry. Fair competition is necessary, advisable and acceptable. Any attempt to subsidize factories in the border areas to compete with established factories in other areas would mean putting one man out of work to give another man a job, and if that is not crazy nothing ever was. Government advisers and Commerce and Industry are all agreed about the possibility of encouraging industry in the border areas, but these must not be subsidized at the expense of existing industries, nor must new jobs be provided at the expense of existing jobs. They must not pay preferential wages or receive preferential railway rates. Everything must be supplied at economic rates to eliminate unfair competition, which has set industry in this country by the ears. I repeat again that the same people approve of assistance to new industries, provided it is done fairly. It must never be forgotten that in economic rules the prices of products will rise under this scheme and it must never be forgotten that the gold-mining industry is the backbone of this country, particularly now. Any increase in costs will cost us dearly indeed. If anything happens to our gold-mining industry, it will cause our whole economy to wither and die. There is no question about it that unfair subsidization of industries in the border areas will bring about this result. I repeat that these economic facts were forgotten in regard to the clothing industry. Now, in contrast with the words of Dr. Viljoen and Dr. Steyn, I want to quote the hon. the Minister of Economic Affairs and his under-study, the hon. member for Bellville (Mr. Haak). This is what they said last year and I would like to compare this with the words of the economic advisers. This is what the Minister of Economic Affairs said in 1959—

And the hon. member for Bellville said in 1960—

And what did the Prime Minister say in the Budget debate last year? We had been battling to get some idea of the cost involved, and the Prime Minister was dealing with the development of the Union from 1910 to 1960 and he said—

Shortly afterwards, he said in the same speech that “this development will be achieved without complying with the nonsensical request to provide replies to these questions in advance”. Of course I have to admit that the Prime Minister said different things after that speech. He even agreed with his economic advisers recently, but he so frequently changes his ground. In plain language, it is astonishing what incoherent balderdash is being spoken by Government supporters about this border industries scheme. Of course I realize, in fairness to the Minister of Economic Affairs and the hon. member for Bellville, that they were speaking with their tongues in their cheeks at the time. I know they share the views of the financial experts but they were frightened of the Prime Minister. You cannot run a country when everybody is afraid of one man. This border industries pipe-dream of the Prime Minister is another dream which will cost us dear. Industry is being held up to a great degree and it is very difficult to realize that confidence has been lost completely. When the Minister of Economic Affairs said that a country with its back to the wall breaks economic laws, I know he was perhaps thinking of Afrikaner Nationalism, but perhaps he has now come round to the views of the Economic Advisory Council. I wonder whether the Minister and the hon. member for Bellville will now admit that this was a pipe-dream of the Prime Minister and that these border factories will never develop. That is what their own experts say and I wonder whether they will admit it. Surely everybody ought to know it. As the months are passing, conditions are changing rapidly and not for the better. We on this side of the House pointed out that independent Bantustans would put industrialists in the position that factories on the borders of the reserves would be entirely dependent for their labour from foreign and possibly hostile states. What a picture, and what an inducement to any industrialist who wishes to open a factory there! It is not logical to argue, as Government supporters argue, that Africans will be forced to work there or else they will starve. Surely we are pledged to see that these reserves are developed so as to be capable of maintaining not only their present populations, but they must even be enabled to maintain the urban Native who has to remember that that is his homeland. I have never heard such rubbish in my life! That is the picture the industrialist has to consider when he thinks of opening factories in the border areas. The Minister says he will have preferential railway rates, low wages and cheap water and power and the Economic Advisory Council says that is not so. It is only fair that they should tell industry which is right. The industrialists know that there is a great reservoir of Black labour, but if through Government action it is cut off it will not be a great inducement to them. They also know that if this ridiculous suggestion of getting special help from the Government comes into being there will also be other interests which will try to deprive them of it later. We on this side have pointed out repeatedly that in Britain it cost £1,200 per worker to decentralize industry. They spent £500,000,000 to find jobs for 400,000 workers in the new towns. So here we will need to find another couple of thousand million pounds which will be needed for this pipe-dream. The final cost of this fantastic proposal of the Prime Minister will be astronomical, but the Government goes on flogging this horse that can never run. It is stone dead; why do they not admit it and let people who have industries at the moment get on with the job without the fear of having to face unfair competition? Fortunately, although much harm has been done and much confidence has been lost, there seems to be a change of views and I only hope that someone on that side will see to it that in encouraging these new industries economic laws will apply. This scheme will remain a pipe-dream unless it is properly developed. Thirdly, care should be taken that no Hong Kong industries which are subsidized are started on the borders of the reserves to compete unfairly with established concerns elsewhere and throw people out of their jobs. Mr. Speaker, this is so important. It can possibly affect the workers on the mines and the factory workers and they want to know whether this thing will be done in this ridiculous manner or not. What worries me about it is the question of the lack of trust, which has arisen for very good reasons. The Income Tax Bill was put before us right in the very last days of the Session, and in it is provided that special allowances for depreciation of machinery and buildings can be granted on the recommendation of the Departments of Bantu Administration and of Commerce and Industries. This is one of the best-known ways of subsidization and it can be one of the most unfair ways of subsidization. I think they had better drop this, in spite of what the Prime Minister says. We are now financially imprisoned in this Republic, I expect that within a very few years there will be many people looking back with longing to the happy days when we were a Monarchy. Money cannot be got out of the country. Our reserves are dwindling. Foreign confidence has been lost, and where are the new industries? I said in the beginning that it would take many years for this confidence to be restored, and I repeat it. We need money for the new industries and for the services to give to these new industries, and where is that money going to come from? Sir, I wish they had handed the whole scheme over to Dr. Steyn and Dr. Viljoen. Then we might get somewhere. I suggest that the Government ought to resign.

The Minister of Finance probably feels as old Shakespeare felt when he made Hamlet say: “The time is out of joint; Oh, cursed spite that ever I was born to set it right.”Only the other day we had a beautiful and rosy picture, and a few days later “everything is out of joint”. Where does the trouble lie? Here we have a country that is unequalled throughout the world. There is not another country like South Africa. It seems as if Providence put us here for a really great task and a great challenge. Here you have a White nation that I can regard, without being vain, as the equal of the best among the nations, and here you have a non-White population which we must admit, if only we were to try to gauge their qualities, are really wonderful people. Yet we find that during the past few years this nation and this country has gone deeper and deeper into a maze, and it sometimes seems as if we shall not be able to get out of it easily. We are a nation of ideas. My Nationalist friends also are people with thoughts. On this side we also have thoughts, as we heard from the hon. member for Benoni, who still hankers after the days of yore. I believe in the might and the power of the idea, of thoughts. We the Afrikaner nation had ideas in the past that led them through deep waters, but always to something positive and something great. An idea can fortify and elevate a nation, but an idea that has no foundation can destroy a nation in spite of its good motives, and no nation has the right to accept an idea that has no foundation, and still less has any nation the right to sacrifice the future and the existence of the nation to an idea, and that is what is happening in this country of ours to-day. With the background of the Afrikaner nation—I am talking to my fellow South Africans, possibly my last speech in this House. There sits the hon. member for Vanderbijl-park. He has told me repeatedly that I do not have sufficient faith. I have as great faith and perhaps greater faith than he has, but with the best will in the world I cannot attach belief to an idea that is defective and not on a firm basis. I say again the Afrikaner nation must bethink itself to-day. Do not go back to the past and think that because it was thus in the past, in the future it will be thus too. There is a challenge to this nation of South Africa that is greater than we will accept thus far. During the past months I tried to understand every direction of thought that has found expression here and outside among the people. At one time I found myself in harmony with my hon. friends opposite when they were talking about the republican idea. I was with them and sympathized with them, for I felt in the past, more than the majority of them felt—I went through the fire for that idea, but that was the right idea on the right road of Afrikanerdom, and that is why I stood by it. But I regret to say that my fellow-Afrikaners did things and passed legislation in this House that have sullied that beautiful idea which was the greatest aspiration of the Afrikaner.

Order! The hon. member may not say that legislation sullied.

I withdraw that. What I mean is that my hon. friends adopted a course which polluted that ideal, and to-day we are paying a price for it, for those polluting factors. I shall tell you what price we are paying. It is very difficult for the English-speaking South Africans really to take the world of my fellow-South Africans. I am jealous of my own people. Once before I said here, in connection with the Coloured Persons Act, that I would not blame my friends if henceforth they were to doubt the word of the Afrikaner. I am mentioning it here, and I must be forgiven for it, that things have had a polluting effect on the magnificent idea of the republican aspirations of the Afrikanerdom. [Interjection.] The hon. member does not know what he is talking about. I do not mind if the Afrikaners will not forgive me when I speak the truth. [Interjections.]

Order! These interjections must now cease.

Frequently along the way we adopted a course where the end began to justify the means. I have pointed out before that when a nation adopts methods that are not in harmony with its highest aspirations, it pollutes those aspirations. When the end must justify the means, I want to warn my people. We have another idea which according to the hon. member for Ventersdorp has become virtually the religion of the Afrikanerdom, namely apartheid and Nationalism. These are some of the ideas polluting the highest aspirations of the Afrikanerdom when we do not stay within bounds with it. National pride, that feeling of pride in your own people, is good and any nation should have it. But when a nation begins to make an idol of those things, and they become their goal in themselves, and when they begin to adapt themselves to that goal, then I say to my people: Watch out, you are on the wrong course. Another of those ideas that gripped my nation originally was a hollow word, an election winner, the word “apartheid”, which now becomes separate development. There is much to be said for the idea of separate development, but to go and regard it as a solution for our racial problems now and in the future, look out. The development of our Bantu areas is a good thing, and I wholeheartedly support it. I am surprised the Government does not have the courage really to get on with it, but the “good” frequently is the greatest enemy of the “best”. To use that idea of the development of the Native reserves to evade the the substantial and inevitable problems here in what we call White South Africa, will ere long lead us to the road of death. My hon. friends must realize that. You come into conflict with the entire world revolution that is now in progress. There has never in all the history of mankind been such a human revolution as that which we are now experiencing. During the past 30/40 years new revolutionary dynamic forces have been unleashed to which regard should be had also by this small nation on the southern corner of Africa, and if we disregard it, if we go and stand in a spirit of reaction and like granite, we shall as sure as we are alive—optimist though I am—be destroyed on the present course followed by the Government.

Oh. no, man.

My hon. friend may say “oh. no, man”. If I had the time I would tell them in advance what steps they will have to take during the next few years.

You are too pessimistic.

They have already taken, one after another, the steps I predicted seven years ago, and there are unavoidable steps that will still have to be taken. The hon. member for Kempton Park (Mr. F. S. Steyn) to-night already gave an indication of it. He says the racial question is settled. Mr. Speaker, the Lord help us if we think it is settled. If the hon. member for Kempton Park or any other member says it is settled, I can only say that I am most profoundly amazed that they think so. These problems of the Minister of Finance are only a few of the small problems. It is not comparable to what is still going to come. Let us stop all this big talk. We have a wonderful country, but on the wrong course you can destroy a wonderful country. It will not be the first time. Most of my hon. friends sitting here are still young but you, Mr. Speaker, will remember the dark days of 1929 to 1932. There also you had a national government, stubborn in outlook, granite-like and unyielding, and at that time my hon. friends also told me that I spoke like a jingo, not like a true Afrikaner and as an Imperialist…

Quite right.

I told them then that there was only one salvation, and that was that they would have to go off the gold standard. They then said we should put South Africa first. What does it mean to put South Africa first? All of us can use “South Africa first” as a hollow cry, but when I see that in a discussion of the most important national problem my hon. friends opposite had been silenced, that they sit there like a lot of will-less sheep that may not open their mouths, for days and hours on end, and that in connection with the greatest question which is going to affect the future of the counter most profoundly, then I ask: Are they putting South Africa first? I doubt it. You should not put South Africa first in the warm weather and in the sunshine; you have to go through the melting-pot with your people. You must be prepared to fall for your people. There is not one of the hon. members opposite who is prepared to fall. They all want to stand within the bond of the National Party. But when they come into the lobby outside, they say things that are entirely different.

Who says so?

I am saying so, and if the hon. member will not believe me, I could mention names, but I do not wish to do so. I have spoken to hon. members, and I can affirm that. I am not saying this from hearsay. The time has arrived for Afrikanerdom to break away from parties, and to be true to themselves and to their consciences. Let them truly begin to put South Africa first, and not the National Party and self-interest.

Order! The hon. member is now reflecting on hon. members when he says they put self-interest first.

I am not referring to financial interest. I mean politically, but I withdraw it with great pleasure. The time has arrived for us in South Africa to really examine our thoughts. If the hon. member for Kempton Park has examined his thoughts so that he could come along here and say that the racial question is settled in South Africa, and that anybody who suggests anything or talks, should talk within the framework of the National Party’s policy of apartheid, and that if they do not speak within the framework of that idea, then they really are odious…

You do not know your history.

No, I know my history and if my hon. friend knew his history, he would know that throughout the history of the world that kind of thing has led nations to self-destruction. Mr. Speaker, I have myself examined the ideas, and there have been times that I have asked myself whether my faith was too weak, as the hon. member for Vanderbijlpark (Dr. de Wet) told me. I took it seriously. I should like to say this, that his faith is very superficial, and I shall not exchange my faith for that of my hon. friend. There are deeper factors.

You do not have any faith in your people.

My children and my grandchildren are in the country. I believe they love South Africa, and I also love South Africa, but what is going to happen if we continue along the course we are now following? I am not a pessimist. South Africa cannot be broken by this Government; it is too tough. South Africa cannot be broken easily. We shall temporarily overcome the difficulties there are now, but if we do not change our course, if we do not face the actual realities in South Africa, also as regards our economy, if we proceed on this false foundation of White domination and racial discrimination, where will we end up? All my hon. friends could try to bluff the world, that they are not standing for White domination…

Order! The hon. member is again offending hon. members by suggesting that they are trying to bluff.

I might have put it differently in parliamentary language if that is not permissible then.

The hon. member should not use other words to evade a ruling of the Chair.

I shall not evade your ruling.

The hon. member must withdraw the word “bluff”.

I withdraw it if one may not use the word “bluff”. I say hon. friends cannot give me the false impression that I do not understand the meaning of their policy. I am glad the hon. the Prime Minister is here now, for it struck me when he said in London that his policy steers away from racial discrimination. That struck me, but the best construction I could place on that is that at its best it is only a partial steering away from racial discrimination as regards the Native areas. As regards the Coloureds, the Indian, it is not even a partial steering away from discrimination. No. The policy of the White man in South Africa has been and is White supremacy, White domination based on racial discrimination.

Do you want Black domination?

The hon. member talks about Black domination.

That is the alternative.

Any form of domination is repulsive to me, whether it is White domination or Coloured domination. Any kind of domination is repulsive to me, and until such time as we realize that this policy of domination of the hon. the Prime Minister stands on a false foundation, and that that edifice assuredly will fall down on that foundation…

Is the right of self-determination domination?

Right of self-determination for whom?

Of the Whites for the Whites.

Yes, the right of self-determination of Whites for Whites, but also give the right of self-determination to the people who for 300 years have built up South Africa with us to where it is to-day.

In their areas.

And where are the areas for the Coloureds?

I should like to make one further point here. We started here in the southern corner of Africa with a system of slavery, and for more than 200 years we proceeded with the contradiction that we Whites here as it were were sent by the Almighty to do wonderful missionary work here in dark Africa, and yet for more than 200 years we maintained slavery here, and we were quite satisfied with that.

That is not true.

That slavery was subsequently abolished as a result of pressure from outside, and not on the initiative of the White Chirstians here. Unless the hon. the Prime Minister can tell me and the people that he stands for total territorial separation—not the sort of separation where 6,000,000 or 10,000,000 non-Whites still remain in the so-called White area to live under White domination—then his whole policy and his whole idea is built on sand and on an un-Christian foundation. If he cannot say that—and this is as I understand the policy of the National Party Government as it is developing at present—then the policy really is a future together for White and non-White within what we call White South Africa. The hon. the Prime Minister will still have to proceed with his policy of White domination and my hon. friends of the United Party will continue their policy of White leadership with discrimination. That is diametrically opposed to the great revolutionary forces that have been unleashed in the world at present and we, with our domination and racial discrimination, will simply be crushed and pushed out of the way of the world revolution that is going on at present. I tested the ideas in all sincerity. There was a time when I thought I could go along with my hon. friends opposite and that I could help. But I came to the conclusion that I am unable to help because their basis is completely unacceptable to me. Mr. Speaker, it is a crisis in my own personal life for me. I have never yet been afraid to commit political or any other kind of figurative suicide. It does not make very much difference to me whether I am here or elsewhere. I am not prepared to abandon what to me is the truth for what I know in my heart to be an untruth.

Who expects it of you?

If I were to join that party on the present basis, I would be proclaiming to the world that I believe in something in which I really cannot believe. To my hon. friends here (the United Party) I should like to say this. They are failing South Africa in its greatest crisis with the policy they are propounding—to-day this and the next day that—without a definite policy, without a goal and without a basis.

You are still more of a whirligig.

There is only one more thought in this House that I can accept in these times—it is the greatest challenge that South Africa has ever been faced with—that we should progressively steer away from racial discrimination, at a time when my hon. friends over there want to go progressively far in the direction of racial discrimination.

Won’t Jannie go far enough to your liking?

The hon. the Prime Minister laughs.

No, I am merely thinking that Dr. Steytler is now getting a new member.

No, he has not got a new member. I have supported that idea. I do not wish to offend the hon. the Leader of the Progressive Party now, but I supported that idea many years before I knew that the idea had taken root with him, and I am proud of that. Where I am committing political suicide if the Prime Minister were to hold an election, he will not be able to destroy that idea. Neither the Prime Minister nor anybody else will be able to destroy that unassailable idea in these times. On the contrary, I believe in this idea that you should recognize a human being as a human being.

One man one vote.

That indeed is the fundamental principle of the Calvinistic doctrine. We must not think that we can carry on and rely on our white skin and one by one throw overboard all the values that have brought us to where we are to-day. We must not think that we can save ourselves on the basis of colour, without the standards of civilization. We should not be afraid of the product of our own civilization, like the hon. the Prime Minister. It is not the barbarian the hon. the Prime Minister or the hon. the Minister of Bantu Administration is scared of. For that very reason they are so very much in love with the Bantu in the reserves—the relatively primitive people. They are afraid, and the National Party is afraid, of the products of their own civilization and it is a tragedy to me that we are scared of that, that we are regarding all of them as agitators, for they are saying the same things my own little nation said in 1902, in 1906 and in 1910 and until quite recently. They are saying precisely the same things. The leaders of that little nation of mine were similarly denounced as agitators in their day, and history will show that many of the non-Whites who are now denounced by us as agitators will in reality be regarded as the people who gave expression to those profoundest sentiments—sometimes wrongly—which neither this Prime Minister nor anybody else will be able to suppress in the long run. It is that “divine discontent” which is innate to every human being and nothing will be able to stop it in the long run.

I am concluding and I wish to say openly here to-night, although it means political suicide, that I stand by the idea which I believe should be accepted as a challenge by us and by every nation in the world, otherwise we shall be destroyed. I say I accept the idea on this side, with the small Gideon’s band sitting here (the Progressive Party). I bow to them.

Why did you wait 18 months before you came to that decision?

South Africa and this Parliament will miss them when they are no longer sitting here. I still believe, in spite of what we are doing and of what we are saying, that there is a divinity which shapes our end, “rough-hew it as we may”. The National Party most certainly has done a little rough-hewing to our South Africa, and to the economy of South Africa, and we are now beginning to see the first results. These things that are happening to-day, that for the first time in its history South Africa virtually has to repudiate indebtedness to overseas countries financially—temporarily at least, for that is what it means—is one of the consequences. It is the first time in our history that we have to tell a creditor of ours: Look, old chap, we owe you the money, but you cannot have it now; you will have to leave it here with us.

You have also asked people for an extension of time in which to pay already.

Of course, one can ask for deferment, but the Government is not asking for deferment. It simply tells the creditor what it is going to do. This is the first time in the history of South Africa that a government has to go so far that it has to partially repudiate its debts in respect of countries overseas.

It is not debt.

It is the first time in our history that it cannot or will not pay, and it is a tragedy to me. The indications are very clear that we shall have to go further and further to begin a lager-economy here, and I shall be able to give the Minister of Finance a number of positive hints to save things in that lager-economy. I know the economy of the lager just as well as the hon. the Prime Minister who is sitting laughing over there.

I think your suggestions will be dangerous.

Yes, it will be very dangerous, for the lager to-day is the most dangerous place in the whole world to be in economically or in any other respect. I want to say this to the hon. the Minister in the short time at my disposal: Stop import control. It is a senseless negative measure you are imposing temporarily. It cannot help anybody to do anything constructive behind that temporary little wall he is putting up. If he wants to go into the lager, like the hon. members for Kempton Park and Pretoria (Central) (Mr. van den Heever), then build a tariff wall behind which you can safeguard your economy. Openly consider the increase of tariffs then, and build your economy behind that, for in the future South Africa will have to resort to an ever-increasing extent to its kraal-economy, within South Africa. So go in for a policy of protection; protect that kraal and rely on your own strength. Isolate yourself more and more, for that apparently is what the hon. the Minister and his Government believe in.

And what further?

There are many others I could mention but my time has expired. I say let us stop these temporary remedies of import control that have been used during the past 10-12 years. It is a useless negative measure which does not bring anybody anywhere. I say to the Minister of Finance: Take your courage in your hands and start with a policy that really protects, so that we can build up our industries here. I want to warn him that every time he comes along with temporary import control, as he is doing now again also, it means that he is increasing the cost of agricultural and other primary industries such as the mining industry, and eventually that goose that lays the golden egg will have a progressively harder time until the Minister of Finance will be obliged later on to face the facts. The farmers will not be able to hold out, even if he were to pump another R40,000,000 or R50,000,000 into agriculture. Within a short while more and more of them will become insolvent, and the worst will be that he will be compelled once again to devalue the South African pound, in spite of all his assurances. That is the tragedy. South Africa is being destroyed step by step along this course of the Prime Minister. What is going on to-day is a kind of paralysing process, but he believes that it is the salvation of the White man in South Africa. Mr. Speaker, he has a wonderful brain, but there have been other people in the past who have had an equally wonderful brain, but they led their people onto the rocks. I say to the hon. the Prime Minister, with a full sense of responsibility, that he is engaged on a policy that is going to destroy South Africa and the White man and Afrikanerdom and I hope he will consider it worth while to go and reconsider once again whether he really is right. I do not wish to repeat what the hon. member for Musgrave (Mr. Williams) said here, but the hon. the Prime Minister should consider once again whether he is not on the wrong track, possibly.

I am glad the hon. member for Germiston (District) (Prof. Fourie) is present because I just want to tell him that in the case of the human being there is such a thing as national pride and racial pride. I can still remember that when I was a little boy we had an orphaned donkey. We put him in a cattle camp but he was very unhappy and went through the first gate which was left open to look for his own kind, even though he had to roll on an ash heap. All the hon. member has done this afternoon is to vilify the Afrikaner people, and I can tell him that if we are to save South Africa and the White people of South Africa with people who have so little courage and so little faith in the future as the hon. member for Germiston (District), then I agree with him that South Africa is lost.

Big talk!

It is not a question of talking big. We are fully aware of the difficulties awaiting South Africa. We know that there is a sickly post-war psychosis which regards the Black skin as the only passport to salvation. We know that. And we know what dangers await South Africa. We are not indulging in ostrich politics. We are realistic. But we do at least know that despite all the dangers, despite the misapprehension under which the West is labouring, we still have courage and faith and we still have confidence in the inner strength of our own people. This, and I am very sorry to say it, the hon. member has quite lost.

He only thinks internationally.

With such pessimists we cannot build a future for our people. We need men with courage.

Big talk!

The hon. member has condemned the Afrikaner people from the earlier times onwards. He has said that for 300 years we have been nothing but oppressors, and that outside forces have had to come to release us from slavery.

That is true.

The hon. member does not know his history. Does he not know that those who wanted to free us from slavery controlled the biggest slave traffic in the world? Only when America had a bigger slave trade than Britain did the philanthropists rise and urge that it should be abolished. It was a question of £ s. d.

You do not know your history.

I have never heard such a Jeremiad as I have heard from the hon. member this afternoon. I have never heard such vilification of the South African people as we have heard from the hon. member today. The hon. member always poses here as the member who is upright and sincere in politics, but I have never heard such a turnabout speech as the one he made to-day. A little while ago he said: “I see a future for apartheid in South Africa.”

I was referring to positive apartheid.

Will the hon. member tell me what is positive apartheid and what is negative apartheid? The hon. member is after all opposed to the positive steps which this Government is taking. He has said for example that we are in a groove, that we on this side of the House may not speak, that we must think what we are told to think. But in the same breath he says that members speak freely here in the lobby. I now ask the House: If one is ruled with an iron hand, how can one say what one likes in the lobby? I just want to tell the hon. member this: There has never been a party in South Africa in which one could speak more freely than precisely the National Party. I take myself as an example. Not one of the Nationalists sitting on this side of the House is afraid to say what his policy is, and not one is afraid to differ from the others. Precisely because we differ and can speak freely, we have been able to draw up a fruitful policy for the nation. The hon. member has had a great deal to say about the fact that we believe that the end justifies the means. He has said that we have polluted the republican struggle. I ask him where we have done so. Did this party not submit the question of the Republic to the people by way of a referendum and a free vote? Is that pollution?

Look back a little.

No, the hon. member also voted for a Republic. Is he then so weak that the National Party which he has condemned here to-day was able to pollute him so that he voted for a Republic?

You are missing the point.

No, the hon. member is seeking a bridge so that he can cross over to the Progressive Party. From the start his whole speech showed clearly that he wanted to go over to the Progressive Party. Those hon. members have had the courage of their convictions and this hon. member has sat on two stools and has not supported them for 18 months. He has criticized one side and then the other side, and at long last, now that he wants to seek a bridge, he has made these libellous statements about the Afrikaner and the National Party. He has said that we are making a god of the object we are seeking to achieve. I never expected a man who boasts that he is honest, that he holds honest opinions in politics, to level this accusation at the National Party and the Afrikaners, as he has done. Did he attend the inauguration at Pretoria? There the people bowed humbly before the Almighty and thanked Him for what He had given us. We do not boast of our own strength.

You are completely off the point.

No, you do not want to take your punishment. We humbly thanked the Almighty for what He had given us, and now the hon. member accuses the Afrikaner and the National Party of making a god of an object. I say that is a slanderous accusation.

You are quite wrong. He did not say that.

He said that apartheid was of the devil. I have told the hon. member that racial pride is not only to be found amongst human beings, but he has come here to-night and by implication he has paid tribute to the Black nationalism which is being artificially awakened in Africa.

Nonsense!

He has said: forces have been let loose which must be taken into account, and that is Black nationalism and we must take it into account.

Of course. Do you not want to take it into account?

He rejects national pride. The hon. member for Maitland (Dr. de Beer) must keep quite. He said something this afternoon which was contradictory to what the hon. member for Germiston (District) has said; now he is praising him. He has said that forces have been let loose in Africa which we must take into account.

Quite correct.

But we must not take into account the forces which have been let loose in the White man. That is something of the devil. It cannot be allowed. I want to tell the hon. member this—I take one case—that the Congo is enjoying the sympathy of the sickly psychotic movement in the West. And what is the position in the Congo? There is murder and carnage. And that is what the hon. member wants here in South Africa, in the Republic. He does not want national pride here. He wants a Congo here and then the hon. member says it is the policy of this Government which has got us into such a bad economic position. I want to make the accusation to-night that it is not the policy of the National Party which has created economic difficulties, but it is the deliberate sabotage, the deliberate subversion of the Opposition.

On a point of order…

Order! The hon. member may not accuse the Opposition of sabotage.

Then I withdraw it and I say that it was deliberate sabotage on the part of the United Party.

Order! No, the hon. member may not say that either.

May I then put it in this way…

I ask that the hon. member must withdraw that.

I withdraw. Allow me to put it in this way: When the National Party came into power in 1948, none other than the United Party’s main financial speaker, the hon. member for Constantia (Mr. Waterson), and none other than the hon. member for South Coast (Mr. Mitchell), the leader of the United Party in Natal, and none other than the hon. member for Hillbrow (Dr. Steenkamp) travelled throughout the country telling the people that because this Government was in power, industry would be destroyed, the banks would close and they could give the people the assurance that South Africa would not get one single penny from Europe or America.

It seems to me we were right.

They are still making such speeches. I hold the United Party and the Opposition in general responsible. The only salvation which they see is to bring South Africa to her knees financially. The only possibility which they see of ever returning to power is if South Africa can be brought to her knees financially and they do not care what disasters, what misery and what dangers they might bring upon the South African nation and the Republic by these tactics. They will do everything in their power to create misconceptions abroad in order to do South Africa financial harm. I say it is a scandalous method which they are using and they now say that it is the policy of this Government which is to blame for the fact that South Africa is not in such a favourable financial position to-day.

Will the hon. member answer a question?

No, I just want to conclude. I want to tell the Opposition this: Whatever they may do, they will not succeed in bringing South Africa under this Government to her knees. The people of South Africa and the Nationalists and thousands and thousands of their supporters are prepared rather to have a poor White Republic than a rich Black monarchy in South Africa.

Generally Parliament views the occasion of the Appropriation Bill as an occasion to conduct an audit of the Government’s administration and policies, an audit to search for positive results of the expenditure of the very large amounts that we are asked to approve of in the Appropriation, an appropriation in this particular one before us now of just below the R1,000,000,000 mark. What we want in that audit is to try and ascertain just what positive results the country is getting in administration, in development, in security, in racial harmony as a result of that expenditure, things that flow from it.

Never in the history of this country, I should say, has it been necessary for a more searching examination to be made than at the present moment, because when you start to look at the ledger on the credit and debit side, it does present a pretty sorry picture. There are far too many entries which in a bookkeeping term would be classified “as being in the red”, and that is not a healthy state for a country to be in.

The country is in a suspense account.

Yes, the hon. member has put his finger on it. The public of this country are certainly in suspense, wondering what is going to happen next. The finances of the country are certainly in a state of suspense after the hon. the Minister to-day told us that under existing conditions there was a possibility, a probability that he would not be able to meet certain loan repayments falling due shortly. One only needs to look at the first results of the Minister of Finance’s control on the movement of capital and finance, only look at the first results which are flowing in from the second statement made last Friday, the hon. Minister’s second financial control statement. Both the statements made by the hon. the Minister of Finance are supposed to provide a remedy, and each one failing in its aim mainly because despite the power of hard cash and finance, they find that they are unable to surmount the granite wall which is being imposed by the Government’s own internal policy. That is where they fall down. One has not got to go any further than to look at to-night’s paper, and I am sure that there is no member in this House, on whichever side he is sitting, who is not concerned and perturbed at seeing the financial turn things are taking against us in the Republic. Because we are all in the Republic, it is not an Afrikaner Republic, it is not an English-speaking Republic, it is a South African Republic…

Hear, hear!

It is very nice to hear the “hear, hears”, but they do not cut any ice, unless the members who say “hear, hear” are also prepared to put their shoulders to the wheel to help South Africa out of the mess we are in. Their applause for the sentiment does not cut any ice with the bank managers, Sir. That won’t cut any ice with the Reserve Bank. We are all in the cart together.

What do you suggest should be done?

I always understood that it was the Government which told the country what to do. It is a sorry state of affairs when in a financial crisis such as we are in to-day, we have members on the Government side in this Parliament appealing to the Opposition to tell them what to do. It reveals a bankruptcy of control and a bankruptcy of ideas as how to get out of the mess they have got themselves into! Let us carry that a little bit further: We have pledged, all of us our loyalty to the Republic that we now belong to. It is our Republic. You can’t be loyal to the Republic by sitting on your seat and declining to take an active part as a Member of Parliament representing your constituents in respect of matters of moment dealt with by this Parliament. You can’t represent your country if you permit yourself to be muzzled and told to be silent so that party policies can take precedence over national interests! That is not loyalty to the Republic. We had matters dealt with yesterday of the greatest moment to this country, and for four hours there was not a single Government member allowed to speak. Is that loyalty to the Republic? We had the position this afternoon again, dealing with this Bill before us, when for a period of well over 2½ hours not a single Government member was allowed to take part in this debate. The Opposition had to carry on the debate. Is that loyalty to the Republic? Are those hon. members doing all they can to help to promote the interests of the Republic? That is not the path of loyalty as I understand it, and I doubt whether it is the type of loyalty the country understands. I don’t believe it is the type of loyalty that the general run of Afrikaners in this country will understand. I would like to put that thought to hon. members on the Government side that they are here to represent their own constituents who are likely to suffer just as badly by any calamity which may befall us, as anybody else is likely to suffer. It is their duty as the representatives of their constituents and as representatives of this Parliament of our country to put country before party on an occasion like this.

Did the Cape Times not admit that it is a sign of good discipline?

What an admission to make! Disciplined by their own party into silence. A Government party which has lost its voice owing to good discipline! Surely the people of South Africa should take notice of an admission like that! Disciplined into silence by their own party in order not to embarrass the party and to help maintain them in office! That is what I would term a magnificent example of Parliamentary democracy!

Coming back to the financial position, what is the position as revealed in to-night’s advices from London as a result of the hon. the Minister’s latest control measures? It amounts really in effect to an unofficial depreciation of the Republic’s currency by 25 per cent. Holders of stock in London are prepared to throw their stock onto the market and accept 25 per cent below their value in order to get out of sound stock of this country. They throw sound stock on the market, being prepared to accept such discount because of their fear of the financial security of this country. What a state to be in within a month after our declaration of a republic! Where do we hope to carry the Republic if that is the pattern? Those shares which are being thrown away in London are as good as ever they were. They are sound shares. They are not accessible to the public in South Africa, but foreigners in England to-day can reap the benefit of the cheap sale of these shares under this Government’s policy.

I want to come back to the origin of the shares themselves, in respect of which an eloquent plea was made this afternoon by the hon. member for Kensington (Mr. Moore), viz. the goldmining industry itself. You see, Sir, under the conditions which we are now running into, the goldmining industry has once again moved into its traditional position as the sheet-anchor of the financial security of South Africa. It is the sheet-anchor on which this Government will have to exist for a number of months to come, and I want to make an appeal to this Government that knowing that (and the hon. the Minister of Finance must know it as well as anybody in South Africa), knowing that fact he will see that the Government’s policy towards the gold-producing mines of this country is tempered with that caution, is tempered with that justice to that industry as to help it to carry on and to render the service they will have to render to South Africa under very difficult conditions. Because don’t forget that their capital on which they have to exist, to expand and develop, and to carry on their activities, must also to a very large extent depend no longer on external confidence, but on internal confidence, internal South African confidence in them, operating under the system of taxation to which they are subject under the Government’s control, under the system of taxation now applicable to them. It is going to be a very difficult job for them to retain the confidence of the people who support them, unless the Government itself adopts a much wiser and much saner policy towards the goldmining industry. I want to make that appeal to the hon. the Minister to-day. It is a 100 per cent financial matter that in a time of crisis like the one we are in to-day and in which we will exist for some time—rightly or wrongly we are in it—that the Government must recognize that the financial security of this country depends on the goldmining industry, because every other industry, from agriculture upward (or downward, whichever way you like to take it) depends on the security and the soundness of the goldmining industry. I want to leave that thought with the hon. the Minister of Finance. It does not stop with the Government’s policy, it does not stop with national security—it affects the security of every man, woman and child in South Africa—the small man with his life’s savings, the small man with his small investments on which he depends for his old age, and on which he has to depend for his children’s education, the big man who is in big business for his developments, the big industry which gives employment to thousands of people—everyone of them in some form or other comes back now to the financial stability of this country and they in turn are linked for better or for worse, whether we like it or don’t like it, they are linked with the goldmining industry. Therefore the Minister of Finance and his colleagues will have to think very hard and very clearly to see that nothing happens to handicap, but that everything possible is done to lessen the burden on these mines so that they are not choked out of existence by over-taxation, in the situation that we are now heading into.

I want to turn to another aspect of the Appropriation Bill. I want to deal with the matter of the hon. the Prime Minister’s appeal for unity, unity between the White races in South Africa. I am sorry that the hon. the Prime Minister is not present, but I trust that my comments will be conveyed to him in due course by the hon. Minister of Finance, and also to the hon. the Minister of Transport to whom I wish to refer. You see, Sir, the hon. the Prime Minister on a number of occasions, and in this House recently, during the course of the debate on the State President’s address to the Joint Session of Parliament, appealed again in the best interests of South Africa, in the best interests of the Republic, for unity, for a spirit of unity between the White races. The hon. the Prime Minister’s words were—

That was the Prime Minister’s appeal, a very strong and sound appeal and it has been made on a number of occasions, but this time on 8 June (Col. 7576, Hansard). One would have expected that an appeal like that…

… would be appreciated by all.

I can heartily endorse the hon. Chief Whip’s sentiments. One would have expected that an appeal so sincere, made by the Prime Minister of this country, would have been appreciated by all. There are bound to be some in a nation—you will always get the odd one who will kick over the traces—but by and large, I cannot echo too strongly the sentiments expressed by the Chief Whip. A sincere appeal, appreciated by all! And that is why it is all the more a damning indictment against the hon. the Minister of Transport for his reactions to that appeal in the same debate, almost within an hour of his own Prime Minister speaking. I quote again from Hansard from the speech of the hon. Minister of Transport, also on 8 June (Col. 7594 of the same Hansard), and the Minister of Transport, dealing at that stage with the hon. Leader of the Opposition’s speech and referring to his Prime Minister’s appeal for unity, in a reply to an interjection by the hon. member for Drakensberg (Mrs. S. M. van Niekerk) who had said “a real unity speech”, the Minister of Transport said—

Now the hon. Chief Whip of the Nationalist Party earlier in an interjection referred to the sincerity of the Prime Minister’s appeal.

Will the hon. member allow me to put a question to him?

As the Chief Whip said, it was an appeal which would have been respected by all, but what a shocking indictment it is then, that the first man to repudiate the hon. Prime Minister’s appeal for unity, was a Minister of his own Cabinet, namely the hon. Minister of Transport.

That is a false interpretation.

No, it is not a false interpretation and I will show the hon. member why it is not a false interpretation. You see, the hon. Minister of Transport referred, as I have quoted earlier, to the fact that it was not meant to have unity with the Opposition. Who is the Opposition in this House, Sir? What are they? What do they comprise, and who do they represent?

Nothing!

Order! I appeal to hon. members to give the hon. member a chance to deliver his speech.

I must say, Mr. Speaker, that the type of interjections we are getting is most enlightening of the spirit of unity which is abroad in the Prime Minister’s own Party. I must admit that, in the point of view of this side of the House, it is a shocking reflection on their loyalty to their own Prime Minister, because what is the Opposition? Let us examine the point for a moment and let us see what Opposition the hon. Minister of Transport is referring to. That hon. Minister, Sir, repudiated unity with the Opposition. In reality the Opposition on this side of the House is the official representation in this Parliament of English-speaking South Africans working in the closest co-operation with tens of thousands of Afrikaans-speaking South Africans who refuse to accept the dangerous policies of this Government and are working together in unity, the unity asked for by the Prime Minister, in order to re-establish South Africa to its rightfull place from which this Government has taken it. That is the Opposition with whom the hon. Minister of Transport refuses to have any dealings, an Opposition, Sir, which represents by and large, roughly one half of the White population of South Africa, people who have given evidence of their desire to help to rebuild this country as was their record right down in the history of the country long before it became a Republic and also in the Republic now and to be. They are part of the warp and the woof of this country and without them this country could never have prospered. Is there anybody on any side of this House, who dare get up in this House and say that he feels that the Republic can prosper and advance in future without us all working together? The hon. Prime Minister does not say that, but he took the other course, the correct course, and appealed for unity. He realized that without that unity the Republic was doomed before it started because you could not have a country divided against itself. The hon. Prime Minister realized that, but now he is being repudiated by his own Minister of Transport. I want to ask the hon. Prime Minister to tell us in the course of this debate—because this is one of the most important statements that has ever been made from Cabinet rank during the closing stages of this Session—whether he subscribes to the doctrine enunciated by his Minister of Transport or whether he will repudiate him. Whether the appeal which he made for unity was addressed also to those people in South Africa who are represented in this House by the Opposition and its supporters. Does he accept the definition of unity given now by the hon. Minister of Transport? Sir, he owes that to the country, because in accepting the hon. Prime Minister’s appeal as a fair and honest request from a Prime Minister of the whole of the Republic—which the Chief Whip of the Nationalist Party agreed it was—the question arises as to how that can be reconciled when taken side by side with the statement made by the hon. Minister of Transport? These two statements just do not go together, because here we find that—to use his own words—oil and water do not mix—the oil of the hon. Prime Minister’s appeal and the water of the statement of the hon. Minister of Transport do not mix and cannot mix and it is for the Prime Minister to tell us now who was right. The country wants to know that.

Cannot you have national unity without political unity?

Again I want to refer the hon. Chief Whip to the expression of the hon. Minister of Transport about oil and water. The Chief Whip wants to know whether we cannot have national unity without political unity. You can have national unity, but you cannot gain it by attempting to sabotage one half of the population and the people in this House who represent them as was done by the hon. Minister of Transport. [Interjections.]

Order! The hon. member cannot use the word “sabotage” and must withdraw it.

I withdraw that, Sir, and I substitute for it the word “destroy” because that is what it means in the long run—it destroys one half of the people of this country. Unless we can together make a success of this Republic, it will destroy the Afrikaner people equally as it will destroy us. It will destroy White South Africa. So there is no question of any half measures in it. I want to repeat my request to the hon. Prime Minister to make it clear to Parliament before this debate closes, and to make it clear to the country and to those people who were repudiated by his Minister of Transport, that the latter was not expressing his (the Prime Minister’s) views and that he, accordingly, repudiates the statement which the hon. Minister of Transport made.

I now want to go a little further into this question of unity and deal with a couple of matters which have arisen in connection with defence. I told the hon. Minister of Defence that I intended to raise these matters here but unfortunately he could not be present to-night. I also supplied him with copies of the correspondence, because these are most important matters particularly with regard to the defence forces of our country, where above all things, above everything in this Parliament, it is essential that we work together for the defence of our country, more so at this juncture than probably ever before. The first of these matters is the re-instatement of the Officer Commanding the Kimberley Regiment. Hon. members would have learned from the Press that the commandant of this regiment, Commandant Souderland, was removed from his command at short notice. This officer holds a very distinguished military record. He has been highly commended by the Defence Department for his service to Defence. Since he took over the Kimberley Regiment, he has, by his own effort and personal leadership, converted that unit—which prior to his taking over was primarily an English-speaking unit—into a fully bilingual unit and for this he has been highly commended. He has gone further than that and has helped in the building up of a magnificent spirit of co-operation between the Kimberley Regiment and the other forces in his area—again a very worthy ideal because these forces must work together. For this he has received a letter of appreciation. But when the Regiment was called up to deal with the last undeclared emergency and while he was in his office with his Second-in Command, he was rung up and told there and then to hand over his command to his Second-in-Command by four o’clock that afternoon and to proceed on indefinite leave. Representations have already been made in connection with this matter to the hon. Minister of Defence. The City Council of Kimberley takes a grim view of the matter because it is more aware of the reputation of the officer concerned, and concern has been caused in the district as a whole. They also sent a message to the Prime Minister as well as to the Minister of Defence asking that the decision in this matter be examined and that the officer, in view of his integrity and his record, should be reinstated. Up to late last night, they have neither received a reply, nor has anything been done to reinstate the commandant or to inform him why he was removed from his command. I met this man, Sir. The only reason for the action that one can deduce for dismissing him, is that in the days when Unessa was formed this commandant joined it. Now, like any other movement of that nature, it started off as a cultural movement for educational purposes with the object of protecting and promoting the English language in the schools—that was its charter. Commandant Souderland, like many other English-speaking persons at that time, gave that object his support but when he found later that it was deviating from the policy originally laid down, he in writing officially resigned from the organization and since he has taken over command of the Kimberley regiment he has disassociated himself entirely from that organization’s activities. This is the only flaw which one can find in the whole train of circumstances and which maybe could have given rise to a security report resulting in the commandant being dismissed from his post. This, Sir, is not an example of the building up of unity between the two races. Here we have an officer who has won the highest commendation and we assume—we can only assume because nobody will ever know—that because someone had received a security report, his military career has been closed and all the work and effort he has given to build up South Africa as far as defence is concerned, has been thrown to the winds.

But that is not the only case I want to refer to. There is another case where there has been to my mind an even more blatant betrayal of military interests in favour of party political affiliations. I have here a letter, a copy of which has also been sent to the hon. the Minister of Defence and to the member of Parliament representing the constituency concerned, which deals with the state of affairs prevailing in the Hartebeesfontein Skiet-kommando. The letter reads as follows—

The writer is a member of the United Party and has been an active member of the branch of that party in his areas, for which he deserves full credit.

A copy of this letter was, as I have said, handed to the hon. Minister of Defence and as he is shortly going overseas and is going to investigate the matter, I leave it there. But in the interests of unity in this country, and in the interests of unity in the defence forces, and in the interests of unity in this Parliament when we deal with defence matters I bring these matters to the notice of Parliament because they are a direct refutation of the…

May I ask the hon. member a question?

I am not prepared to answer any more questions. The hon. member could have stood up and made his speech if he was not muzzled by his own party. Now, I have referred to these two cases because it is essential that that sort of thing should be stopped. I do not for a moment accept that the hon. the Minister of Defence and his high level officers had anything to do with the action taken. I have enough confidence in the hon. Minister not to accept that. The trouble is being caused by those lower down the scale who cannot forget their party affiliations in preference to being good soldiers. If the hon. Prime Minister wants the country to combine, and if he wants co-operation, and if he wants us to unite as one republican people, then he has got to help to stamp this sort of thing out, otherwise the Republic is doomed before it has got very far. If we hope to make it run smoothly, we would have to get together to do it. You see, Sir, this Appropriation Bill deals not only with the bigger things in life, not only with the bigger things in the national life of the country, but also with small things, which although small in themselves represent the greatest unit of strength in this country—the family life of the people of South Africa, and what we are going through to-day must have its inevitable repercussions on that family life and on the cost of living of those families, on the security of the people of this country, and on their standard of living. We cannot live in isolation. How many more times does the Government need to have that drummed into them before accepting that as a fact? [Time limit.]

We have listened attentively to what the hon. member for Simonstown (Mr. Gay) said, particularly that we should build up national unity and cultivate a feeling of loyalty towards the Republic, and that we must all stand together to obtain that unity and to foster a national pride. As the result of previous speeches made by the hon. member in this House, we are aware of the strong sentiments he had in respect of our Queen at the time and the connection of South Africa with Britain. Therefore, where he said that we were all in the same situation, that we were all members of a Republic outside the Commonwealth, that we were all bound to this one State and that we would all as White people remain here or go under, English as well as Afrikaans-speaking people and whatever our political sentiments might be, we felt that we could all agree with that statement. But to-night was the first occasion the hon. member spoke about our becoming a Republic, now that we have the opportunity to build up that loyalty towards South Africa and to foster this feeling that we should all stand and fight together here; and I want to ask the hon. member now what really his contribution was towards obtaining that greater national unity. [Interjections.]

Order!

The hon. member for Simonstown referred to the skietcommandos. We know that our skietcommandos and our military forces are matters which should be outside of politics. Here the hon. member quoted from a letter in which the statement was made that it was impossible for any man to become an officer in a skietcommando unless he was a member of the National Party.

That is true.

The hon. member for Simonstown quoted from a letter, and I am able to say that the statement in that letter is an untruth. The hon. member already takes such an interest in defence matters that he ought to know it.

On a point of order, what right has that hon. member, and is he in order when he says that the quotation read here by the hon. member for Simonstown is an untruth?

The hon. member for Bellville may proceed.

I say what is contained in that letter is an untruth, and not what the hon. member for Simonstown himself said. I say that the statement contained in that letter is an untruth, and that the hon. member should have known that that is the case.

On a point of order, Mr. Speaker, did you not ask the hon. member to withdraw it?

I said that the hon. member for Bellville (Mr. Haak) may proceed.

The hon. member for Simonstown knows that the position is not as stated in that letter. He is not a newcomer in this sphere. He knows what the position is, and what unity has he promoted by quoting a thing like that, which he himself ought to know is not correct?

How do you know that it is not correct?

Order! The hon. member has now repeatedly raised that point.

Sir, on a point of order, is the hon. member in order to tell a member of the public here that he is telling an untruth?

The hon. member for Bellville may continue.

Mr. Speaker, I am surprised that that hon. member wants to protect members of the public in this House. I want to continue and say that when we talk here about loyalty to South Africa we are not dealing only with a feeling of loyalty towards South Africa, but also with loyalty towards South Africa in the economic sphere. We are dealing here with a situation which arose as the result of conditions in the world, and as the result of our policy, and then one at least expects that when we find ourselves in this position we will make South Africa economically strong, not for the sake of the Government or of the Opposition, but for the sake of all persons living in South Africa. That being the position, we ask ourselves, when dealing with these matters, whether we should not reveal loyalty in this respect also. We should not see only the bad things, but also the good ones.

The hon. member referred to a depreciation of our currency, as he said, of 25 per cent. But, Mr. Speaker, surely that is not the only thing which is a barometer or an indication of our economy. Let us look at to-day’s newspaper. It appeared in the Burger this morning and also in to-night’s Argus, if the hon. member prefers to read that paper, and in this morning’s Cape Times. There we see that although we find matters difficult in so far as our economy is concerned, in so far as our internal economy is concerned, there are also signs other than those which indicate that things are difficult, and that there is 25 per cent depreciation, as the hon. member said. We see in this morning’s paper that our imports are beginning to decrease, but that our exports are increasing. Then we also see that when the exports of the past five months are compared with those of last year, there was an increase in our exports of almost R10,000,000. We see that a comparison of our exports shows a small decrease. It was a small decrease, but we took steps to achieve it. I also see in this morning’s newspaper that our building plans are increasing. I also see in the Bulletin of Statistics that in regard to our employment there was a considerable increase. In mining, where the average figures of employment last year were 593,000, it rose in January to 613,000. That is an increase of almost 20,000 above the average for last year. If we look at the opportunities for employment in our factories, then we see that the average last year was 692,000. In January this year it was 696,000. There also we had an increase. Although last year there was also an outflow of capital, and there was a sale of South African shares, it had no effect on these aspects of our economy so that we can say there was depreciation or a diminution. But I also want to ask the hon. member this. He belongs to a party, one of the front-benchers of which is a certain Mr. Russell of Wynberg. Now I want to ask him what the effect of it is when an hon. member makes a speech here and says “South Africa has reached a stage of naked Nazism and rule by force”. That is a statement made by the hon. member for Wynberg when we were expecting possible difficulties and when the Government was taking steps to ensure that good order would be maintained and that there would not be lawlessness. When these essential steps were being taken the hon. member made that statement about it. Mr. Speaker, is that not enough to sabotage South Africa in the economic sphere? It will not promote unity. It will not make South Africa strong when we make this type of statement.

But in fact we know that it is these precautionary measures adopted by the Government which again to a large extent restored confidence overseas, after an atmosphere had been built up here as well as overseas that South Africa was coming to a downfall and that we were standing on the eve of a revolution. It is no wonder that immediately thereafter, after the riots for which an atmosphere had been created did not break out, after that reassuring statement was made by the Prime Minister in this House, in reply to a question by the Leader of the Opposition, a measure of confidence was regained. Small wonder that the correspondent of the Cape Times had to write from London—

Then he proceeded to say the following about South African shares—

There we see that these steps taken by the Government created confidence there, but these same steps taken by the Government are described by the hon. member for Wynberg as “naked Nazism”. When we take steps to restore confidence, which has an effect overseas, we find this subversive statement being made by the opposite side of the House against our economy in South Africa.

The hon. member for Kensington (Mr. Moore) referred to what he called the “good old days of 1948”. He said there were large balances and our reserves were great. There was plenty of money and we could even lend Britain £80,000,000. But, Mr. Speaker, is that really the correct picture? If that were true, and if things went so smoothly here, I am convinced that the National Party would not have come into power in 1948 instead of that party. We know what conditions were then. They were not as rosy as is pretended here. It is true that there were reserves, that the money was there, but we all know that it was flight capital. We know it was capital which fled from Britain because the people there were afraid of the Labour Party coming into power. They were afraid of nationalization. That is why the money came here. It came here in bigger amounts than ever before, but it was not effectively invested in our economy and according to the then president of the South African Reserve Bank it created inflationary conditions for us and made shares on the Stock Exchange rise out of all proportion to their actual value. But if the hon. member wants to glory in that so-called prosperity of 1948, and if he says that we are now where we are because we took the wrong road, let us see where we landed whilst we were taking this so-called wrong road.

At that time we were not even importing £300,000,000 worth of goods, whereas now we are importing to the extent of over £600,000,000. Our exports in those years amounted to only £85,000,000, whereas now it is £353,000,000. There is progress. There was activity, in spite of the wrong road we followed, according to the hon. member for Kensington. The income of our Railways at that time was £74,000,000, and it has now increased to £180,000,000. Our national income in that year in which everything was flourishing in South Africa was only £850,000,000. Now that we have followed the wrong road it has increased to over £2,000,000,000. That is what happened. At that time we had an inflow of capital which was not investment capital, which was not development capital. Then our internal capital formation was only £256,000,000. In 1958 it was £565,000,000—more than double. Whereas in those years we were to a large extent dependent on foreign capital for our development, we are now in the position that we can provide almost 90 per cent of our capital requirements from our own internal sources. No, Mr. Speaker, I think those few data in which the hon. member gloried are not a true reflection of what the economic position was at the time. I am convinced that no voter in South Africa would prefer the position in which we were then to the one in which we are now.

But we know we have problems. Those problems are mainly problems which arose as the result of our balance of payments position. They are due to two things. It is due to our heavy imports and the outflow of capital, mainly because we bought shares bought abroad, as a result of which capital flowed out. But corrective steps were taken by the Government. Only to-day the hon. the Minister of Finance said that we should be cautious in regard to our expenditure and our Loan Account. The impression has been created that South Africans cannot obtain capital abroad because of the policy we follow. [Interjections.] The hon. member over there says that is correct, but now I would like to ask the hon. member for Houghton (Mrs. Suzman) what is wrong with the Australian economy which makes it impossible for Australia to float loans on the London market. Is it due to apartheid or to the policy of the Government? I read in the Statist of February 1961: “Australian loan’s mixed reception”. They floated a loan on the London market of £10,000,000 and “some 82 per cent was left with the underwriters”. If Australia cannot get capital, it is due to a lack of capital. Then other reasons are to be found for it, but when South African cannot raise loans it is due to the policy of the Nationalist Government. There is also New Zealand. In the Argus of 27 May the political correspondent wrote the following—

That being the position, we must accept that there is a world shortage of capital for this type of investment purpose, and it is not only due to the policy of the Government, as the hon. member for Kensington wishes to intimate.

But the Government has also taken other steps to draw upon the International Monetary Fund. Members of the Fund were here recently and negotiations took place for the borrowing of R27,000,000. The fact of the matter is that South Africa, on complying with certain requirements, has the right to draw another £54,000,000 from the Fund in the course of time. But I would point out that the Monetary Fund was established specifically to assist countries to overcome their problems. Britain made arrangements to borrow approximately £600,000,000 from the Fund and she also made arrangements to borrow £400,000,000 from the Imports and Exports Bank of America and this was not regarded as a reflection upon Britain. The Fund is there to assist countries. Let us look at the other countries. At the moment Australia has already made arrangements. I do not know what our first withdrawal was, but it was not a large amount, and negotiations are now taking place for a loan of R27,000,000. According to the report of the Australian National Bank, Australia drew £78,000,000 from the Fund, and in addition to that she made arrangements for an assistance loan of £45,000,000. In other words, Australia has now drawn approximately £120,000,000 from the Fund, much more than South Africa. New Zealand, which has a large deficit of £70,000,000 on her trade balance, has now joined the Fund and the World Bank so that she can make use of the facilities available there. The fact therefore that a country makes use of these facilities is not necessarily a reflection on the solvency of the economy of that country. The fact that the Government has taken steps to keep within South Africa the short-term funds which are invested outside South Africa is welcomed here, because it is estimated that the South African capital invested abroad on short-term amounts to R146,000,000, and it is high time that gap was effectively blocked so as to bring that capital back to this country. The Minister of Finance recently raised our bank rate from 4½ per cent to 5 per cent. Britain also raised her bank rates and then lowered them again. We had to raise ours mainly so as to rectify our position vis-à-vis Britain because we found that there was an outflow of South African capital to Britain. Sir, it is with a certain amount of concern that we read in the newspapers that Britain is considering the question of again raising her bank rate next Thursday so as to adapt the rate to her own internal economy. We have often had to follow suit when it has not suited us to do so. I want to express the hope that if Britain again raises her bank rate, it will not be necessary for South Africa to raise bank rates further because we feel that at this stage it may retard internal development and that there are other measures that can be applied so as to make it unnecessary for South Africa to follow Britain’s lead. I want to go so far as to express the hope that the steps which have already been taken will be so effective that it will be possible to lower our bank rates. These bank rates were raised so as to curb imports into this country. Since other remedies have now been applied, this may not be necessary perhaps. What is needed at the same time is a greater relaxation of credit restrictions to strengthen and to stimulate our own economy. I also hope that as far as the banks are concerned it will not be necessary to increase their reserves, thus curtailing credit.

In the last instance I also want to refer to another aspect to which reference has already been made to-day. Various attempts have been made in recent times to sabotage South Africa’s economy. One of the methods that has been used to achieve this has been to spread rumours that South Africa is going to devalue. It is interesting to note what deliberate attempts have been made to spread those rumours. I refer to the attempt by Prof. Hutt of the University of Cape Town. In a letter which he wrote to the Argus and which appeared on 26 May, he said this—

He has supposedly been informed that devaluation is “pending”—

He then goes on to say that it is high time the Minister of Finance took steps to kill that rumour, but he himself spread this rumour; he started it. On the 29th the Minister of Finance is reported to have said—

He put it very strongly. He said that the rumour was “unfounded” and that he was deliberately making this statement because there were people who, having regard to the possibility of devaluation, were being hoaxed into buying shares in the hope of an appreciation of share values. He issued that warning. Immediately after the Minister’s denial, Prof. Hutt wrote another letter in which he said—

The Minister says that it is untrue, but Prof. Hutt says “Dr. Dönges’ assertion that a devaluation of the rand is not intended…”. He himself starts the rumour and when it is killed he comes along with a different excuse. He sticks to his story because he knows that the effect of it will be that people will buy shares and that more capital will flow out of this country, and he also knows that if we allow devaluation to take place people will immediately use their import quotas to buy goods before devaluation takes place, and that in turn will also have its effect on the situation. This is one example of what has been done to sabotage our economy.

But I want to come to another aspect, and this is something to which reference has already been made and which rather upset hon. members on the other side. I refer to the latest report of the chairmen of Anglo-American and General Mining and a few other companies, reports which one can hardly call anything but political reports. Hon. members did not like these references to the speeches of Mr. Harry Oppenheimer, Sir George Albu and John Schlesinger. We know that these chairmen also have a duty towards their investors and shareholders and that they have to keep them informed about economic conditions, but they went a good deal further than was necessary to enlighten their shareholders. We know that they have to try to create confidence in the minds of their own people, but we also know that Mr. Oppenheimer resigned from the United Party and now supports the Progressives, and he ought to know that his political views are subscribed to by a very small minority of the Whites in this country, Whites who are afraid, now that there are rumours of an election, because they know that not one of them will be returned to this House. Here we find that in his addresses as the chairman of big companies he puts forward propositions which are in conflict with the views of the vast majority of the voters of this country, and since he is closely associated with the political stand that is taken by a minority party, I want to ask whether it is wise on his part to associate himself to that extent with that political trend in a chairman’s speech. Mr. Oppenheimer and these other chairmen are entitled to their political views and to state their attitude, but let them do so on he ordinary platform, and then nobody will hold it against them. But I doubt the wisdom of their making use of these platforms to promote the interests of a particular group. It has been stated here that he did this in an attempt to instil confidence in his companies, but did he really instil confidence? The very next day after he had made this speech about Anglo-American I noticed the following headlines: “Oppenheimer causes weakening of share prices.” In making that speech he did not instil confidence; he caused share prices to drop. The chairmen of these corporations said: “Let us have development.”They advocated a multi-racial State; that is the direction in which they want us to develop. But Anglo-American’s interests are not confined to South Africa only; they have very big interests in the Federation and in Tanganyika and in the Congo, and Mr. Oppenheimer ought to know that. [Interjections.] The point is not that he has interests there, but he makes the statement here that there is a shortage of capital in South Africa, and that if we change our policy in the direction of equality and partnership and bring about a constitutional change under which the Black man will have a greater say, everything in the garden will be lovely. But Mr. Oppenheimer ought to know better. They have interests there and yet in the Federation, where there is partnership, we notice that Sir Roy Welensky says—

He makes the statement that Africa as a whole is regarded by the private investor as untouchable, but he also says that even if the Federation’s constitutional problems are resolved and if a greater measure of control is given to the non-Whites, it will not solve the capital problem.

But we can also go further. In Kenya the position is the same. We read in the Statist of 29 April of this year—

We also notice that—

Here we find that there is constitutional progress, but it has brought no economic and financial security. It has not made these countries more attractive. The fact of the matter is that the greater the share of the Black man in the government of a country, the less confidence the investors have in that country. I notice that the financial editor of the Cape Times wrote—

There we have the crux of the matter. It is being said to-day: “Change the policy and put the United Party into power; then there will be confidence and an inflow of capital.”But hon. members who believe that are labouring under an illusion, firstly because the outside world does not even know what the policy of the United Party is with regard to these matters. They themselves do not know it. How could they create confidence with their policy? Then there is the policy of the Progressives, which goes in the other direction, and even that policy does not create confidence. The hon. member for Kensington (Mr. Moore) says that I often quote from the Economist. Let me quote now from the Statist of 30 May 1961. As far as this specific aspect of our policy is concerned, they make this important statement, if we should change our policy; they say that they expected South Africa to take the steps that we have just taken to prevent an outflow of capital because that is the one problem that we have to face—

They expected us to take the steps that we have just taken, and they support the wisdom of those steps. We are being told to-day that we ought to change our policy and work in the direction of integration and that then there will be an inflow of capital. But listen what the Statist says—

Then it goes on to make this statement (and this refers particularly to the policy of the Progressives)—

In Africa we have the position that this policy of partnership has not attracted more capital. The fact that a Black Government is going to take over in Tanganyika or Kenya or in the Congo is not going to mean that more capital will be attracted to those countries. No wonder, therefore, that we read in the Investor’s Guide of 7 June (after we had become a Republic)—

And then they come to this conclusion—

With regard to this reference to what happened on the exchange, there are certain things which do affect us adversely, but I have tried to indicate here that South Africa’s economy is basically sound. We have the resources and the power and the will to do this, and once we have reduced our imports and got rid of luxury items, so that capital will not go abroad unnecessarily, then if we canalize our capital in the right channels, and if we plan properly, as this Government has done and can do in the future, then I believe that we can overcome the problems facing us today, and that we have the means and the will to rectify matters. There is no alternative for us but to go on, because even if a different policy is followed it will weaken South Africa’s financial position and economic future.

The hon. member for Bellville (Mr. Haak) is acknowledged as one of the principal speakers on financial and economic matters on the Government side of the House. That being the case, I was rather hoping that that hon. member would have given a greater and fuller exposition as to how South Africa is going to tackle the present financial crisis. Instead of that, we have a large number of quotations from all over the world telling us what difficulties are occuring in those countries. We also had other exhibitions which are consistent with speakers on that side of the House, to find a scapegoat for the problems facing South Africa to-day. It is consistent with Government members to try to find a scapegoat, and that scapegoat is anyone who criticizes the Government, whether it be the Opposition or persons in industry or commerce, and more particularly if it is the Press. I must say that I am disappointed that the hon. member for Bellville did not give us a comprehensive and more thorough exposition of the policy of the Nationalist Party in regard to solving the problems facing South Africa. He dealt with the question of national unity, and here is something which this side of the House has always propounded, the policy of national unity. Therefore it comes as a shock when we have interjections and statements from the hon. the Minister of Transport, a responsible member of the Cabinet, and also the question which was put by the Chief Whip of the Nationalist Party, the hon. member for Brits (Mr. J. E. Potgieter), when he mentioned the question of national unity without political unity and then went on to say that oil and water cannot mix. There is a vast difference between national unity and political unity, but he said that oil and water cannot mix. It means that if oil and water cannot mix, those of us who are divided politically can never have national unity because oil and water cannot mix. That is an unfortunate simile for a responsible member of that side of the House to make in regard to national unity. We of the United Party practise national unity. We have on these benches people from the English-speaking as well as the Afrikaans-speaking sections. We are a party which places South Africa first. Criticisms which we make are in the interest of South Africa, because we believe that those criticisms are justified and that there is a saner path to be followed in the government of this country than that at present being followed by the Nationalist Party.

Did you say increased taxation?

No, I was dealing with the number of taxpayers. I do not want the Minister to answer this question by saying that this is not a country that is over-taxed in regard to the question of the taxpayer. I want to make the point that South Africa is heavily taxed in regard to indirect taxation. There was an interesting article in the Sunday Tribune of 31 May 1961 in regard to these items on which we pay indirect taxation—items that we use every day of our lives. They made a thorough investigation into the indirect taxes that are paid by the average man. It works out that the Government collects about R360 a year or £30 per month on the simple every-day pleasures of each of these average people. It gives a list of the various items that are taxed. Of the 20 cents that he pays for a packet of cigarettes the Government gets 9¼ cents. The Government gets 12 cents on every gallon of petrol that is bought. There is taxation on motor-cars, tyres, even on long-playing gramophone records and numerous others. So indirect taxation is another burden that is being placed on the ordinary man in the street. There are other matters that are being passed over and in this regard I want to refer in particular to this Session of Parliament when the hon. the Minister of Labour intimated that an important Bill would be introduced to amend the Apprenticeship Act and the apprenticeship system. We find that the apprenticeship system is one that requires urgent overhauling. Some three or four years ago the Minister appointed a committee to inquire into and to report on and to make recommendations concerning the administration of the Apprenticeship Act and possible amendments and improvements to be introduced in regard to the apprenticeship system, with special reference to (1) the periods of apprenticeship including remissions (2) the adequate training of apprentices in workshops; (3) technical instructions and attendance at classes (including mentally retarded persons); (4) the advisability of artisan status being attained purely by effluxion of time or only on production of proof of proficiency by, e.g. passing any prescribed test or examination; (5) the recruitment and selective placement of apprentices; (6) educational qualifications for commencing apprenticeship; (7) combating lack of interest amongst employers, apprentices and parents/guardians; supervision and after-care; (8) the introduction of courses for the training of technicians and adaptation to the apprenticeship system; (9) administrative difficulties experienced in regard to the Apprenticeship Act, 1944, as amended; (10) the admission of apprentices to the various industries, having regard to the ratio of apprentices to journeymen, or a quota system; and (11) the adequacy of wages, especially with a view to the prescription of an additional reward in the nature of a bonus based on merit, or other financial assistance, by employers. We can see from the terms of reference that this was indeed a very important committee of inquiry that was set up and delegated to the National Apprenticeship Board. That board has reported to the House and the hon. the Minister of Labour intimated earlier this Session that this important amending Bill would be introduced. We find, however, that that is one of the Bills that is not going to be proceeded with. I feel it is a great pity that where we have certain real problems affecting the man in the street that these matters are passed over and carried over to some possible future session of Parliament. This is an important matter. Sir, because as I said earlier our whole apprenticeship system requires overhauling. We find that there has been a decline in the number of apprentices entering the various trades. We find that there is an increasing shortage of technicians in certain fields. The country is looking for technicians overseas but those people are not forthcoming from overseas and we have to take adequate steps in this country to ensure that our own sons are trained to fill those posts. They play a very important part in the development of South Africa. To substantiate what I have said in respect of the declining number of apprentices we find that each year the intake of apprentices decreases. In the building industry, for instance, the number of contracts in operation totalled 5.200 in 1955; in 1956, 4,420; in 1957, 3,801; 1958, 3,468; in 1959, 3,331. There has been a continual decline in that particular industry. While dealing with the question of industries the whole question of present-day Government policy and the uncertainty that is being created in regard to border industries are other factors that have brought about a lack of confidence on the part of industrialists. I think the Government would do well to take cognizance of the comments of the Chamber of Industries. In the past certain members on the Government side seemed to have ignored important comments made by these people. These people play a very important part in the economy of South Africa and therefore I think that comments by a retiring president of the Natal Chamber of Industries should not be overlooked. He said this—

So here, Sir, we have a position which has been created through trying to put into practice an ideology which is not practical, a position which has created uncertainty in the minds of industrialists, industrialists who are called upon to provide openings for employment for South Africans and for others who come to this country. This uncertainty that has been created is doing untold harm to the development of South Africa.

My appeal to the Government is to concentrate on and to exploit the economic resources of South Africa—the natural resources—that are awaiting that exploitation, that vast potential that is awaiting development to bring about that expanding economy whereby everybody in South Africa will prosper and whereby we can attract overseas immigrants to come to South Africa. We must attract them here so that they can play their part in developing this country that is so full of promise. I do hope that the Government and the Minister of Finance who does, I know, want to see an expanding economy—it is the wish of all true South Africans to see our country prosper—will give some thought to these practical problems. It is a great disappointment to me that the Government has in the past concentrated on apartheid ideology and legislation of that nature, rather than concentrating on the development of our country which is awaiting that development. I do hope and I do believe that South Africa has a great future. I do hope that with this development South Africa will go from strength to strength and that it will become the great country it deserves to be.

It seems to me that this is an early night for Ministers. I cannot understand that the Cabinet should be so unconcerned about what is happening in this House and whether or not this side of the House has any advice to give and whether or not the country can depend on them for future development. We find one Minister in this House to-night.

There were five earlier on.

One is more than enough for you.

Sir, one may be more than enough for me, but what about the people outside? Is one Minister enough for them? I would suggest to the hon. the Chief Whip that he asks the Ministers to come in and show some interest in this debate. If they are not interested they must tell us so and we will not expect them to be here.

The question that everybody outside this House asks and a question to which we hope the Cabinet will reply is: What about our future? Where are we going and what security have we for the future? What hope is there for a permanent home for us in this country?

We are isolated!

Without any friends!

I want to say to that hon. member across the floor that he will get an opportunity of getting up and making his speech. I am sure that if he persuades the Whip on his side he will be allowed some short period of time to say something in this debate. It is strange, Sir, that for the last two days there has not been one sheep bleating.

Why do people ask these questions? Is it because they are satisfied with the Government that we have to-day? Are they satisfied that the picture which the Minister of Finance has painted for us is the best for this country? How is it possible that in three short months the rosy picture that was painted for us by the Minister, a picture of a South Africa full of vigour and health, full of enthusiasm, bursting at its seams, has turned into a picture of a decrepit country looking for a crutch to support itself, a country full of ailments looking for support outside and not getting it. I would like to tell the hon. member for Rustenburg (Mr. Bootha) that if we did have friends in the outside world we would not have to look so pitifully for support. Now what has brought us into this state? What has brought us, within a short period of three months, from a position of prosperity to a position where we find ourselves in great financial difficulties? What has brought us into conflict with the opinions of almost every other country in the world?

You tell us.

I will tell the hon. member. It is the policy of the Prime Minister, the policy of the Cabinet and the policy of the Nationalist Party. Mr. Speaker, the red light blinked before we became a republic. We told the Nationalist Party that this was not the right time to bring in that legislation, but they went on with it. They did not heed our warning and to-day they are surprised that they find themselves in difficulties. Members can laugh and joke about this but the country is waiting patiently and is hoping against hope that things will come right in the long run.

We are going from strength to strength.

To go from strength to strength in the eyes of the Nationalist Party is to get more votes and to get a few more seats in this House. That is not strength, Sir.

If we were going from strength to strength the Minister of Finance would not have found it necessary to look for assistance outside. There is not a country in the world that has the resources that we have. There is not a country in the world that has the security to offer that South Africa can offer and yet in spite of all our security, in spite of all our resources, we cannot borrow. I see hope, but I do not see any hope while these people are running our country. When we left the Commonwealth we were told that there would not be any repercussions; things were going to be better for us. How have they become better? What benefit has accrued to our country since we left the Commonwealth of Nations? Can the hon. the Minister of Finance tell this House of one single instance in which our country has benefited?

We have a better spirit.

A better spirit! A better spirit of what? A better spirit of unity as expressed by the Minister of Transport? Is that the spirit? The only spirit that you gave us was the spirit of getting away from discrimination in yesterday’s Liquor Bill. This country is facing a crisis and if the hon. member for Bellville (Mr. Haak) would be a little more realistic, he would know that the hon. the Minister of Finance did not look so very pleased when he spoke about the devaluation of our Rand. He looked a bit sour. I wonder what he has in store for us in that regard. Is he going to paint another rosy picture for us to-day, as far as that is concerned, and when we come back to this House next session tell us that he has no alternative and that we must devalue? Is that what he is going to tell us?

He should place a rubber stamp “Cancelled” over all his fine promises.

The tragedy is this, Sir, that while we are dealing with these rosy ideological pictures which the other side of the House are painting for us, this country of ours is suffering, firstly by loss of income, unemployment, and the mass of people who are leaving this country, people whom we can ill afford to lose. We have been told how short we are of personnel in this country; we have been told over and over again by experts how short we are of professional people. What does the Government do to ensure that every available person is given an opportunity of filling the ranks that are so depleted in this country to-day? The only thing that happened was that our leading universities were prevented from training more people. [Interjections.] The hon. member says that they were prevented from training more Natives. I say that it is a tragedy because it is you who want Bantustans; it is you who want to run

You give me toothache.

It is a pity that there are members in this House to-day who joke about matters like that. Is the hon. member not ashamed of himself? Surely we should do something to counter this tragedy that is bound to overcome this country in the very near future. The Government has a great opportunity of doing something about it. Irrespective of what the Government’s attitude is, the Medical Association of our country is taking it upon themselves to foster some sort of scheme whereby the health of the people can at least be assured for the near future.

I want to come to the question of medical aid schemes. I think all of us ought to know something about this and all of us ought to encourage them. For many years now, Sir, it has been the declared policy of the Medical Association of South Africa to foster and encourage medical aid schemes. They have grown from a small handful of medical aid societies into a vast organization in which there are probably 200 or 300 medical aid benefit societies. These medical aid schemes look after over a million people. As well as the medical aid schemes there are also benefit societies and insurance companies that go in for insuring people against illness. The medical aid schemes are those that are fostered and encouraged by the employers of labour. They themselves, not the Government, have gone out of their way to ensure that the health of the population is kept at such a level that they can be assured at all times of a reasonable healthy group of people working for them with a minimum loss of manpower and man-hours. Many of these employers assist the medical aid societies by paying some of the fees and other expenses of those societies. But in all cases the person who is insured is the one who contributes towards his own welfare. Every month a subscription is taken from his wages and is put into the medical aid scheme. For that he gets help in the case of illness. These medical aids vary in the benefits that they give to the employee; they vary greatly. The contributions vary greatly; their terms of joining vary greatly; very few of them are alike. On top of that we find that several large insurance companies have come into the field and have taken upon themselves the insuring of people against illness and in some cases they came in conflict with the medical association. The mines benefits societies and other benefit societies work on different bases. So we have a picture in South Africa to-day where we have medical aid schemes, benefit societies and insurance companies all trying to do the same thing. Some do it well and others do it very badly. I feel that the time has come for all these efforts to be correlated and brought together so that the people who contribute will at least derive the benefit to which they are entitled. One of the insurance companies in this country has taken upon itself to lay down what doctors should charge…

Hear, hear!

… and I think that must be the company with which the hon. the Minister of Lands is associated, otherwise he would not have given us this big “hear, hear”. I sincerely hope that it is not, because a very serious position is arising between the medical profession and the insurance companies.

Hear, hear!

I just cannot understand a responsible person like the Minister of Lands, being facetious in the matter.

I am not facetious. I am very serious. It is high time it was laid down what doctors should charge.

Sir, I can only come to the conclusion that what the Minister of Lands says to-night must not be taken seriously.

At 10.25 p.m. the business under consideration was interrupted by Mr. Speaker in accordance with Standing Order No. 26 (1), and the debate was adjourned until 21 June.