Mr. Speaker, I hope you will not take it amiss if I also make some brief reference in the course of this debate to the Budget and to financial matters. [Laughter.] There has been even less financial criticism in this debate than we had in the past few years. In previous debates financial criticism was as scarce as roses in the month of July. This year, however, one has had the greatest difficulty in finding the needle in the haystack. But for the fact that we recently acquired an electronic microscope we would have had great difficulty in finding and dealing with points of financial criticism of this Budget. I imagine that hon. members on the other side must be very grateful for the diversion provided by the constitutional happenings of the past month. I daresay it was as welcome to them as rain in the Kalahari. However, there were a few points of financial criticism, or what was supposed to be criticism, with which I should like to deal.

Let me say first of all that in two respects this debate followed the old pattern as far as the Opposition is concerned; that is to say, it had two characteristics, to which we have become accustomed. The first is that hon. members on the other side represent our economy in as weak a light as possible this year and then come along next year and criticize the Minister for having been too pessimistic, for having underestimated, because, involuntarily perhaps, he heeded their pessimistic prognostications, and that is held against him then! We have heard here from the hon. member for Johannesburg (North) (Mr. Plewman) “ that the worst is still to come ”. He talked about South Africa as the “ sick man of Africa ”. He rolled his tongue around that phrase as though it was a sweet wine!

The second characteristic is that hon. members on the other side, as on previous occasions, again emphasized all the unfavourable factors as far as our economy is concerned and suppressed all those factors which give us reason for confidence and which give the outside world reason for confidence, and then went on to complain that we were not enjoying the confidence we ought to enjoy. But to a large extent they themselves are responsible for that state of affairs because they do not even try to mention the favourable factors in our economy and in our finances. As far as our economy is concerned, I know, as I stated in my main Budget speech, that there is no bed of roses ahead of us, but nor is there any reason for pessimism. Let us compare their attitude for a moment with the attitude that hon. members on the other side adopted in May last year when we dealt here with the Appropriation Bill. I introduced the Budget last year at the beginning of March, under circumstances which gave one cause for a good deal of optimism. We know what happened subsequently. We had the disturbances and the state of emergency. What did they have to say about our financial position in May when we dealt with the Budget introduced in March? Once again we had the prophets of doom and the pessimists on the other side, and they have been put to shame by the Budget which I have introduced this year and which is based on last year’s figures in particular. Let me quote a few of the statements made by hon. members on the other side in May last year. The hon. member for Green Point (Major van der Byl)—whom we always find very entertaining—said that that was the last opportunity to speak freely, the last opportunity to warn the people.

Where is he now?—in gaol, I suppose.

It almost reminds one of “ Vote for the right to vote again ”. And what did the hon. member for Constantia (Mr. Waterson) say on that occasion? He said that there was a widespread fear as far as our export trade was concerned; that orders were being cancelled. And how did our exports of 1960 compare with our exports the previous year? Our exports increased considerably. He said that local markets were collapsing. He said that there was a certain company which had been paying dividends for years and which was now unable to pay any dividend. He then proceeded to issue his warning about our gloomy prospects for the future. What happened? Recently a survey was made of the average profits of more than 200 companies listed on the Stock Exchange. It was found that the average profits were 10 per cent higher than during the previous year. But according to him our internal markets were collapsing. He stated that factories would be obliged to retrench employees. He painted this picture in May; and what is the actual position for the year in respect of which he painted such gloomy prospects for us in May? This is what the Reserve Bank says—

But in May last year we had these prophets of doom, as we have again had them this year and as we will always have them, I suppose.

I want to repeat what I said when I introduced my Budget. What has happened in the constitutional sphere does not affect my Budget. This great outflow of capital was taking place while we were a member of the Commonwealth. On the assumption that we would remain a member of the Commonwealth, I anticipated that the net outflow would still continue, and I said so in my Budget speech. We must not become alarmed therefore if there is a net outflow. It will have nothing to do with this subject. We anticipated it. There are other circumstances which are responsible for this. In the financial sphere there is no reason to make any change in my diagnosis of the position or in the prognosis given by me or in the remedies recommended by me. I said that we must remember that South Africa is the biggest gold producer in the world. As the hon. the Minister of Economic Affairs stated the other day, our gold production amounts to 62 per cent of the world production, and that fact alone makes South Africa a much desired partner or client. There are many people who would be only too glad, since we are in this position, to be linked up with us financially in some way or other. As far as boycotts are concerned, the position is that our goods were being boycotted while we were a member of the Commonwealth, and the lead was taken by fellow-members of the Commonwealth! In that respect the position is going to be no different. I doubt whether they can take more effective action than they have taken in the past. My Budget was designed to provide ways and means to encourage savings and investment, and those ways and means remain the same; the necessity for them still exists. There is no reason to meddle with them. As far as trade prospects are concerned, my colleagues have already dealt fully with this matter. I just want to emphasize, as far as the formal bilateral agreements are concerned, that those agreements are backed by the word of honour of the nations concerned. As far as our informal trade relations are concerned, these will be investigated. But let me assure the House that I am not spending sleepless nights about the outcome of those investigations because South Africa is in a particularly fortunate position. We possess those important strategic minerals which are so necessary in all parts of the world, in the West and in the East— very important strategic minerals which form a large part of our exports—and we have at our disposal a very ample import figure. Ours is one of the highest in the world. Our imports amount to about one-third of our gross national production. We have to import almost one-third from other countries, and those countries are all competitors for those orders which are so necessary for them. The hon. the Leader of the Opposition, in one of his processes of jumping from subject to subject, also dealt with the question as to what we are likely to lose in respect of the preferential tariffs that we are enjoying to-day in the Commonwealth for our fruit. I do not want to argue at length with him, but one can see why he mentioned it. In all probability he is fully aware of the fact that there is going to be a by-election at Swellendam.

And very worried.

Perhaps he is worried about it and now he wants to create a little uncertainty and suspicion in the minds of the wine- and fruit-growers. Let me deal with this just briefly. I want to say at the outset that the hon. member must remember that there is another de Villiers Graaff, and that other de Villiers Graaff is not only an economist but also a big fruit-grower. Not only is he a big fruit-grower but he also has interests in the canning industry.

Now you are slightly confused.

I am not referring to this de Villiers Graaff; I refer to somebody who is more qualified to talk about this because not only has he the training for it …

You have overlooked the fact that there is a third de Villiers Graaff, not only two.

In any event it is not this De Villiers Graaff! He lacks the economic knowledge and the practical experience of fruit-growing and of the canning industry.

There are just a few aspects which perhaps I should mention in passing. The preferences that we enjoy are undoubtedly of great value, particularly in respect of certain imported articles, but it must be remembered that that value is declining and has been declining for a considerable time. The increased prices and the increased tariffs have caused a great drop in the value of the specific preferences that we enjoyed, preferences which are expressed as a percentage of the value of the goods. It is estimated, for example, that the value of the preference on apples has dropped from 28 per cent in 1932 to 4½ per cent at the present time. In the case of wine, the import duties on our wines, both heavy and light, were only one-half of the import duties on foreign wines in 1932; to-day the import duty on our wine is 85 per cent of the duty on foreign light wines and 61 per cent of the duty on heavy wines. Expressed as a percentage of the f.o.b. value plus import duty, the preference on light wines was 60 per cent in 1934; at the present time it is only 13 per cent; the import duty on heavy wines was 62 per cent, to-day it is 40 per cent.

But we must also bear in mind that the percentage of our exports to the United Kingdom has declined, while the percentage to other parts of the world has increased considerably—without preferences. In 1934 our exports to Great Britain amounted to 75 per cent of our total exports; in 1960 it was only 29 per cent. In spite of the fact that we have enjoyed no preferences, our trade with countries outside of the United Kingdom has increased enormously because the value of the preferences has gradually diminished.

Many of the preferences that we enjoyed in 1932 have already been wiped out as a result of the negotiations that have taken place in terms of G.A.T.T. and the European Free Trade Association, and we must remember that this process of wiping out the value of preferences will continue as a result of the efforts to bring about closer economic integration in Europe. There is a notice on the Order Paper at the present moment in regard to one of the preferences that we are voluntarily wiping out in respect of our exports to Great Britain.

But now I come to an important aspect. The hon. member, in this brief excursion into what is unknown territory for him, referred to the value of the preferences enjoyed by the Union in the markets of Great Britain. But he said nothing about the preferences enjoyed by the United Kingdom in the markets of the Union. The latter preferences cover a very wide field and a great variety of goods, goods in which there is keen competition with other manufacturing countries and all of which are on an ad valorem basis, in some cases as high as 10 per cent. The preferences which Britain enjoys in respect of those goods are as high as 10 per cent. In 1960 our exports amounting to R101.6 million enjoyed preferences in the British market, but British exports to the Union to the value of R101.6 million similarly enjoyed preferences.

To a certain extent, however, this is an academic matter. I cannot understand why hon. members on the other side should still want to create any doubt about the continued existence of our preferences in the British market. The British Government has already stated very clearly in the House of Commons, through Mr. Erroll, Minister of State at the Board of Trade—

For how long?

It is a fixed contract.

I suppose subject to six months’ notice.

Does the hon. member want to suggest that this contract is going to be broken? If it is broken, does he want to suggest that the United Kingdom would be so stupid as to sacrifice the preferences which she enjoys in a competitive market in South Africa simply so as to be able to give members of the Opposition the satisfaction of being able to say, “I told you so! ”?

For a Minister you are being very childish.

Here I have another quotation—and this happened only the day before yesterday—

Like our membership of the Commonwealth.

Where could one get clearer language than that? The hon. the Leader of the Opposition dealt with this matter for a moment, with a certain object in mind, but I am afraid he will not succeed in that object.

I want to deal now with a few of the points which I did discover in the haystack of words built up by hon. members here. The hon. member for Constantia began by criticizing the reduction of expenditure on Loan Account; he said—

That is a strange argument coming from the hon. member! It is entirely in conflict with their criticism in the past that Government expenditure was too high. What did his colleague, the hon. member for Johannesburg (North), say? He criticized the expansion programme of Iscor and of Sasol and of the S.A.B.C. Let me explain this elementary economic principle to hon. members on the other side: The reduction in Government expenditure on Loan Account means that more money is left to the private sector for capital development—something for which they have always asked in the past.

The hon. member for Constantia also wants to know whether these foreign loans of R49,000,000 that we either have to repay or renew, are held in London; he wants to know what the position is of our stock over there; whether in the future it will still be regarded as “ trustee stock ”. I just want to give him the assurance that of these oversea loans amounting to R49,000,000 that we have to repay, nothing at all is held in London. The position with regard to “ trustee stock ” is being investigated at the present moment. The hon. member is also afraid of higher interest rates. He says—

It is quite true that certain financial magazines and institutions apparently expect a further increase in interest rates, but it is difficult to see on what grounds this expectation is based. In the past year the Reserve Bank’s rate of interest pattern has already been increased by ½ per cent in respect of medium-term and ⅜ per cent in respect of long-term loans. The supply of savings available for investment by financial institutions has not diminished. On the other hand the demand for loans by the Government and other public authorities and utility companies has not increased, particularly when it is borne in mind that the Government is not going to make a net withdrawal on the capital market in 1961-2. But it is true, as the hon. member says, that unduly high rates of interest may retard development and it is to be hoped—and I hope that in this respect the hon. member will help us—that the financial institutions will co-operate with the Government to make further increases in our rates of interest unnecessary. I want to express the hope that those financial institutions who have advocated this in the past will become the friend of the South African economy generally rather than the agent for money-lenders only.

I want to come to the hon. member for Johannesburg (North). He wants to know how the expansion programmes of State corporations like Iscor and Sasol are going to be financed. He said, “ Where is the money to come from for the expansion of these State enterprises?” I can re-assure him too. It is anticipated that Iscor itself will be able to a large extent to finance its own programme, that is to say, from accumulated reserves. No decision has been taken yet with regard to the final details, but Iscor itself will be able to do this from its own funds for a considerable time to come. Sasol will be able to finance its programme itself until 1963, and thereafter short-term loans will have to be negotiated up to a maximum of R21,000,000 in 1964, which ought to be paid back by 1967. In other words, it is anticipated at the present moment that no State funds will have to be used for these programmes of expansion.

The hon. member for Johannesburg (North) also raised the question of short-term debt. He has done so frequently in this House, and in the days when he was still Auditor-General he also did so, and I think he asked the Select Committee on Public Accounts to pass certain resolutions in that regard. But the point that escapes the hon. member is this: He talked about the danger of “borrowing short and spending long ”. The point which he overlooks is that in the modern economy the Government can always rely on the fact that a certain minimum amount of short-term debt will not be called up—just as the banks are able to rely on that fact—and this amount will increase, particularly now with the development of the money market. As a matter of fact there have been times when the money market institutions have had to ask that more Treasury bills be made available to the money market than it was necessary for us to give them. Treasury bills, expressed as a percentage of the total public debt, will amount to approximately 6.7 per cent as at 31 March, compared with 14 per cent in the United States of America in 1960, 16.6 per cent in the United Kingdom and 5.9 per cent in Australia, where the money market is much less developed than the money market in South Africa. In those days when the hon. member queried this before the Select Committee, the average figure was approximately 16 per cent, I think. It has now been brought down to 6.7 per cent which is a very safe figure, and in view of the fact that it is anticipated that during the present financial year the total amount of Treasury bills issued is going to be reduced by R60,000,000—an exceptionally big reduction—it is reasonable to expect that the money market will be able to absorb additional Treasury bills during the next financial year in the sum of at least R25,000,000.

The hon. member for Kensington (Mr. Moore) wants to know what dividends Iscor pays. He said—

Iscor is paying the State 6 per cent on its A shares and per cent on its B shares, a total of R3,762,000, over and above taxation. It is true that considerable amounts are being ploughed back, but that very fact ought to enable Iscor to finance its new programme of expansion without requiring much money from the State.

The hon. member asks why no concession has been given to the gold mines. He would like the formula to be changed; he would like it to come down gradually to the tax that ordinary companies pay. Sir, gold mines have received many concessions in past years—I mention just a few—in respect of deep-level mining, and even the formula rate—I do not know whether the hon. member knows this—is 5 per cent lower to-day than it was in 1948 under the United Party Government, whereas the rate of taxation on ordinary companies is 20 per cent higher to-day than it was in 1948. Furthermore, it must be remembered that the gold mines are going to score considerably as a result of the new staggered programme for uranium, and although these arrangements are also in the interests of the country as a whole, they are going to cause the State and the Treasury considerable problems in the shape of a reduction in income tax and a reduction in foreign exchange receipts over the next four years. I think in these circumstances one can scarcely regard this as an opportune time for a further concession to the gold mines. The hon. member has complained about the excessive ploughing back of profits. But in the case of public companies which have been exempted from the undistributed profits tax, the shareholders must decide for themselves what dividend should be declared and how much should be ploughed back into the company. I have already announced that I am considering an amendment and a tightening up of the definition of “ public company.

The hon. member for Kensington (Mr. Moore) has asked that the British system of company taxation should be introduced in this country. I do not want to go into details. This is a system which would cause us many administrative difficulties. It would create difficult problems in South Africa particularly, seeing that so many of her shareholders live abroad. But I want to tell the hon. member that neither the Steyn Committee nor the Diederichs Commission were in favour of this system nor was the Viljoen Commission prepared to make a definite recommendation in this regard.

This is the criticism which hon. members opposite have put forward. There have been one or two constructive proposals but may I say at once that the constructive financial proposals have come from the Government side. I want to refer to one or two. The hon. member for Pretoria (Central) (Mr. van den Heever) has asked whether the 5 per cent rate of interest on tax-free Treasury bonds is not too high. The interest rate is generous but the amount which each person may invest is limited, and in addition the rate is relatively less favourable than it was two years ago because in the meantime the ordinary rates of interest have risen. The hon. member asks whether the annual contribution to the Sinking Fund should not be increase. For many years past the amount has been R1,300,000. When large amounts were transferred annually from Revenue to Loan Account, this question was an academic one. But we can now reconsider the matter. When the contribution to the Sinking Fund was originally introduced in 1926, it was intended to eliminate the unproductive debt, that part of our public debt which was unproductive. The idea was that this regular annual contribution should wipe out our unproductive debt. That object has long since been achieved. We no longer have any unproductive public debt.

The hon. member for Standerton has also made certain representations. He wants a lower rate of tax to be levied on company income when it is ploughed back. Apparently there is a misunderstanding. The 3 per cent rebate does not mean the tax which was previously 30 per cent now becomes 27 per cent, but it is a discount on the 30 per cent on the tax. The hon. member has apparently mis understood the position. The hon. member’s proposal would mean, however, that the general rate of income tax on companies would be reduced but that dividends would have to carry additional taxation. Probably this latter taxation on dividends would have to be considerably increased to yield the same total revenue for the State. Under the circumstances I feel that the general shareholders would not take kindly to this suggestion and I am not considering it.

He has made a very important proposal that tax concessions should be made to exporters who increase their exports. I should very much like to do so, but there are practical difficulties. I see that the Australian Government has recently devised one or two methods whereby this can, in fact, be done, and that position is now being investigated. I think that that is all I can say about the purely financial aspect of the debate.

I now come to the other aspect. The hon. the Leader of the Opposition has covered a very wide field in his speech. He has used many words, but he has not uttered any great thoughts. He has fluttered from one branch to another like a bird. Just like a bird which is seeking a place to rest its feet, so he has fluttered from one point to another to find a resting place for the hollowness of his arguments. He mentions a point, he submits it to the House and, before one can become properly interested, away he goes! But there are two points in particular to which I want to reply, not so much because of what he has said, but because I consider them to be important because of the mentality they reveal, the state of mind which they expose. The hon. the Leader of the Opposition rejects what the Prime Minister says, and accepts what Mr. Sandys says. I say that this reveals a certain mentality. If the hon. the Leader of the Opposition should say something and Mr. Gaitskell should say something else, the reverse, then I would not even refer to the matter. But if I wished to do so, I would certainly, with all respect, accept the word of the hon. the Leader of our Opposition before that of the Leader of the Opposition in England. I therefore say that this reveals a state of mind which I simply cannot reconcile with what one expects, and with what one regards as a proper South African attitude. This is not a South African approach.

The other point which the hon. member has mentioned here also betrays an equally unfortunate attitude. I have already referred to it. He has been at pains to say what we are going to lose if the preference tariffs fall away. But not a word about what Great Britain will lose if this preference system falls away. He has spoken, and this is what I hold against him, as though the preference system is merely a question of favours being granted by the British Government to South Africa; as though we in this country have to live like a poor relative on the crumbs which fall from the table of Great Britain. He pays no regard to the simple truth that preference tariffs and trade agreements are bilateral and to the mutual advantage of both parties. They are not entered into because of any particular love, but because the parties concerned realize that they will be of some value to them. I must say that I am now sick and tired of this attitude which the Opposition always adopt, namely, of disparaging everything South African. Our achievements must be concealed, and they want to prove our almost total dependence on the outside world. Can they not take pride in what is their own? Can they not for one moment also emphasize the achievements of South Africa? I am sick and tired of these small South Africans. I am convinced that the people of South Africa are also becoming sick and tired of this un-South African attitude.

Just as sick and tired as we have become of the argument that we would not leave the Commonwealth.

During this whole debate we have had a flood of words. I do not want to discuss all the arguments, but I want to say that much has been said on this subject, and not only by the hon. the Leader of the Opposition. But amongst all this flood of words I consider that there has only been one issue, one crucial point which has stood out during all the discussions, namely, this crucial issue: must we allow the new Afro-Asian member states to prescribe our domestic policy to us, yes or no? That is the simple issue. The question is not whether that policy is right or wrong, but whether South Africa must decide whether it is right or wrong, or whether the other Afro-Asian countries must decide whether it is right or wrong.

We say no.

The hon. the Leader of the Opposition, who is now so courteously turning his back to me, says that all the Commonwealth countries condemn this policy of ours. The hon. member for South Coast (Mr. Mitchell) confirms that. Why is that the position? I shall discuss this question later, but I just want to say at this stage that they did not accept this policy, but condemned it while we were still a member of the Commonwealth, and the establishment of a republic has made no difference to that position. That is not the reason why we have been forced out of the Commonwealth. If we were to change our policy under this pressure which is being brought to bear on us, we would have to continue changing our policy until Ghana and company were satisfied, and fully satisfied. And that would only be when there was general political equality in this country. They would not make that demand at once, but gradually they would tighten the screw until there was full integration: one man one vote, and complete political equality in one parliament. Until the White man committed complete suicide in South Africa! Once we give way before this pressure, even if only to a very limited extent, the results would be the same as when one gives in for the first time to the demands of a blackmailer. Do not think that he is finished. He says this is the last demand that he will make on one. But do not believe it. The United Party, and perhaps the Progressive Party as well, are naïve enough to think that the position would be different if there was a change of government. The hon. the Leader of the Opposition has been to UNO and it seems to me that he heard the stories which were being spread in the lobbies to the effect that the expulsion of South Africa from the Commonwealth was only intended to shock the South African voters to such an extent that there would be a change of government! It was not really seriously meant! It was merely being done so that the United Party could come into power, and it seems to me that the hon. the Leader of the Opposition was naïve enough to believe these stories. But when he walked around in the lobbies and listened to the people who told these stories, he should also have heard these same people saying that they were not interested in concessions. They were not interested in that; they only wanted absolute equality! These are the same people who say that they only want to give the electorate in this country a slight shock. We therefore say that if it is correct that, once we give way before this pressure, it will be repeated again and again, then there is only one answer which this Government and any other government can give, namely, that we shall not tolerate interference, that we shall decide upon our policies ourselves, and that we shall not allow the Afro-Asian countries to do so for us.

Now you are saying exactly what I said.

I must say that the hon. member has a wonderful way of saying that if that is what he meant. Allow me just to dwell for a moment on the question of the future of the Commonwealth. I know that great politicians, men like Mr. Menzies and Sir Roy, have their doubts in this regard. Others again are more optimistic, such as Mr. Sandys and all the Afro-Asian countries. I do not know whether the optimists are correct. If I was certain that the Commonwealth would in future be what it was in the past, namely, a voice for peace in the world, a bulwark, a bastion of anti-Communism, I might be able to share in that hope. But I get rather strange ideas when I see that there are countries in the new Commonwealth which are flirting dangerously with Communism.

Are you implying that the Commonwealth is going communist?

Let us have clarity on this point. When we consider the future of the Commonwealth we must remember that the Afro-Asian countries have now tasted power, that they have, figuratively speaking, smelt blood. They will not easily be able to restrain themselves in future, now that they have become aware of their strength and their influence in the Commonwealth. Now that we have had a repetition at the Prime Ministers’ Conference of what has been going on for years already at UNO, we have been given confirmation of what Mr. Harry Oppenheimer said in this House in 1957, namely, that even if these people have adequate intellectual ability and the necessary educational qualifications, even when one has overcome those obstacles, there are still very good reasons why one cannot allow them to rule the country. I just want to quote Mr. Harry Oppenheimer’s words—

Which he says they do not yet have—

Why are you giving it to them in the Bantustans?

I have quoted the words of Mr. Harry Oppenheimer, and that is what will happen in this instance. Once they have gained a dominant position in the Commonwealth, then one must expect them not to use that dominant position to further the general interests of the Commonwealth as a whole, but to exploit it in their own interests. This is the warning for us in South Africa as well. Once the Bantu gain control, then it is idle saying that “ merit ” and “ merit alone ” should be the sole test. They will not look to merit and merit alone, because then they will be disqualifying 80 per cent of their own people. Once they have got the power into their hands, it will not be the interests of this multi-racial country which they will strive to further, but the satisfaction of their own Black nationalism. That is the danger facing us. That is the danger facing the Commonwealth—whatever other doubts there may be in this regard.

But I now want to come back to the question of why it is that the White Western countries are so opposed to our policies. I want to say at once that it is for the simple reason that under present circumstances South Africa is merely a pawn on the chessboard of the world, and in the international contest which is taking place, these Western nations feel obliged to follow these tactics. I want to say at once that it is not moral considerations which are forcing them to adopt this attitude towards our policy. And here I want to pay tribute to the Leader of the Opposition. When he was overseas he made it clear that whatever they might say about our policy, it was not immoral. I thank him for that. This was at least a sign of clear thinking on his part. I repeat that it is not moral considerations which are forcing them to do so. Then they would after all have acted quite differently in respect of the events in Hungary. They would after all not have sat back and allowed events to follow the course they did. They would furthermore have acted quite differently in respect of the murders and the raping of Whites which are taking place in the Congo. But because of this world struggle, their moral consciences were silenced in the case of Hungary by the fear of Russian reaction and, in the case of the atrocities in the Congo, by the possible effect on the Black States of Africa. These are the considerations that are stopping them. The same reasons do not exist in South Africa’s case. Hon. members will not claim for one moment that the United Kingdom and other democratic countries are satisfied with the domestic policies of Ghana. But there are other considerations which have nothing to do with moral considerations. Mr. Willem van Heerden recently said: “ The era in which we find ourselves is one of the great turning points of history.” This is what the hon. the Prime Minister has also said. There are many reasons for this position. It is the net result of a combination of a number of circumstances, all of them beyond our control. It is not necessary for me to refer to them. There is this subtle infiltration of the communistic concept which is aimed at destroying colonialism, at destroying the White man; there is this too rapid surrender of colonial authority in undeveloped countries which are not yet ready for it; there is this competition between the East and the West for control of Africa—these are all factors which have contributed to this position and the result is what Dr. A. J. van der Merwe has recently described as an “ almost pathological prejudice in favour of the Black man ”. That is the world position to-day. We know that years ago there was a French Revolution under the fine slogan: “ Liberty, equality, fraternity.” What crimes were committed in the name of that magnificent slogan! But this was a tide in world history. It too passed over. For that reason it is so important that we should stand firm here.

I now turn to a reproach which the Opposition have put forward, namely that we were so certain that we would retain our membership of the Commonwealth. If we were so certain on that point, then I just want to say that we were in very good company. At his Press conference Mr. Menzies expressed the same opinion. Think of the statement which Mr. Macmillan made. He thought “ it is in the bag”. Everything was ready. Think of all the expectations which were expressed in the Press. All the indications were that there was going to be no difficulty. Everyone who accepted that, did so because they believed, and sincerely believed, that the Commonwealth was still what it had been in the past and was still a responsible body with a sense of tradition, of precedent and of logic; that it had an unwritten constitution which would be honoured. We all believed that Britain’s leadership would still be accepted as it had been in the past. But we were all wrong. Tradition, precedents, logic were summarily thrown overboard. This is what Mr. Macmillan has said in his statement—

We expected that as in the past it would be regarded as a constitutional matter. We were all wrong. It is no longer Great Britain which provides the leadership. The Afro-Asian countries have taken over the leadership. The old Commonwealth as we knew it simply no longer exists. Sensible people accept this fact and are trying to adjust themselves to it. I know there are those who were very attached to the Commonwealth which we knew, with which we have grown up and as we have experienced it. But I ask to-day: Who is there, no matter how attached he may have been to the old Commonwealth, who wants South Africa to continue sitting in an intimate circle with members who are taking the lead in declaring economic war on South Africa, who are offering asylum to refugees from South Africa from whence they can launch attacks on South Africa, with member states who are waging an incessant vendetta against South Africa, who would interfere to an ever-increasing extent in our domestic affairs and who would want to prescribe what our policies should be, and with members who in one instance are already leaning over dangerously towards Communism? I ask the House: Who of us still wish to sit in an intimate circle with these fellow members? I do not believe that the greatest friend and admirer of the Commonwealth would have the same affection for the new Commonwealth under these conditions, an affection which if he should persist in it, would only entail humiliation for himself and his country. I do not believe, no matter what the feelings of hon. members opposite may be, that the proud, self-respecting South African citizens, whether they speak English or Afrikaans, feel that that want to associate on an intimate footing with such members under conditions of dishonour. Those who do wish to go on sitting with these people under these conditions, are people who are merely being guided by blind hatred or people who are prepared to place politics above their national pride.

When did the Commonwealth change?

Let us rather co-operate, let us rather stand together in strengthening relations with members of the old Commonwealth, countries with which we have ties of blood and with which we have been linked over the years. Let us rather stand together in retaining these members of the old Commonwealth as our friends, and do not let us do things which will cause them difficulties.

I now just want to say a few words about the mandate which the Prime Minister had. This was not a mandate to keep South Africa in the Commonwealth under all conditions, but it was a mandate to try to keep South Africa in the Commonwealth with honour. The two words “with honour” are words which were not present at all in any of the speeches of the Opposition to which I have listened over the past four days.

Nor were they in your speeches before the referendum.

He could have kept South Africa in the Commonwealth, but then it would have been with dishonour, humiliation and shame! It might have been a diplomatic victory, but under those circumstances it would have been a national defeat. For, Mr. Speaker, what will it profit South Africa if she gains the whole of world opinion and loses her own national soul and continued existence? The Prime Minister has made the only possible choice. So says Mr. Macmillan and so says Mr. Menzies. And whatever the Opposition might say, I am convinced that the great majority of self-respecting South Africans, no matter to which language group they may belong, will agree enthusiastically that the choice which the Prime Minister made under these circumstances was the correct one.

What must we now do? The hon. member for Springs (Mr. Tucker) has raised a very important point and has said that it is a question of sentiment. I agree with him—to a large extent it is a question of sentiment. We must bear in mind that for many of our fellow citizens this has been a tremendous shock. We must not under-estimate that. This is not the first shock which they have experienced. Their first tremendous shock was the Macmillan speech of last year when they discovered that the people who had always been the shield and buckler of the White man in Africa could no longer be relied on. In parts of this country and in parts of Africa there was a feeling of disillusionment and of disappointment. This was the first shock. It was only this shock which made it possible for them to accept the republic. For many of them it alleviated what would otherwise have been a second shock. Now they have had this third shock. We must not expect that it will immediately penetrate to their minds that the Commonwealth we have to-day is merely a shadow and a caricature of the old Commonwealth. We must be patient and we must accept that it will take time. We must approach this matter with understanding for the feelings of these people. That is the attitude which I ask my friends on this side of the House to adopt, an attitude of understanding for this mental struggle in which many members of the other language group are involved at the moment. Let us treat them with understanding.

Why then did you apply if it is such a bad thing?

And then, Mr. Speaker, I want to mention a second point, if the hon. member for Green Point will just forget about himself for a moment. It is that we should read and listen to the official British statements with a proper understanding. We must remember that in some countries the official statements of a government are conditioned to a large extent by its Opposition. We must remember that what is said in public is not the barometer of the feelings of the ordinary citizen in England. The hon. the Prime Minister has hundreds of letters, etc., proving that this is not how the ordinary man in the street feels. When we read what has happened in the House of Lords and the speeches which have been made there, we see that the private feelings of goodwill of the ordinary man in the street in England towards South Africa have never been warmer than they are to-day. Let us rather nourish this confidence and do not let us take too seriously the official statements which are being issued.

Britain has doubts about our policy. We too have doubts about Britain’s policy. There is no question about that. But if it is necessary—and it is sometimes necessary with a view to internal policies or to international developments—that we have to discuss these matters, then I say that such discussions should be held in restrained terms on both sides. If we feel that we are obliged to discuss Great Britain’s policy—and we do not agree with her Africa policy; we do not think that this is a policy which is calculated to promote the orderly development of Africa—and if we do not agree with her Protectorates policy, then we should say so in restrained terms. If Britain is not satisfied with our policy and she has her doubts in that regard, let her also express those doubts in restrained terms. And if we do not want to let the position deteriorate, let us also make certain of our facts. We should show a proper respect for accuracy. If people want to discuss what happened at the conference, they should in the first instance refresh their memories by studying the “ Summary of Record of the Conference ”. If they then want to speak, let them be correct in what they say. If we want to remain on a friendly footing and if we do not want to endanger existing relationships by possibly saying hurtful things to one another, we should take these elementary facts into account and we should try to do so, because it will be to our mutual disadvantage if we do not do so.

And now, Mr. Speaker, I want to conclude. I said at the outset that it is not an easy road that awaits us. If I may use another metaphor, then I want to say this. A ship is not built to remain moored peacefully on the calm waters of a harbour. Nor does it drop anchor at the first gale warning. It is in fact built to cross the restless seas; to weather the storms, great and small, which it may encounter. The same applies to the ship of State. It must also move across the restless seas which we see around us to-day. It must be prepared for storms, but it must also be able to weather these storms. Everywhere in the world to-day we see ships of State which are being threatened by political and financial storms, and even by storms of riots and wars. We see that all over in the world. This has happened repeatedly in bygone centuries. For that reason it is so essential that our ship of State should be seaworthy and sturdy. I say to-day that our ship of State is seaworthy and sturdy. Let us think for a moment of the strategic importance of our position and of our mineral wealth. Let us think of the natural resources which we have available to build a sturdy ship. Think for a moment of all our industrial, commercial and financial leaders. Think of our leaders in the intellectual, spiritual and cultural spheres. Think of our farmers and our workers who are after all the greatest asset of any country. Think of our technical and managerial resources. Think of our enterprise. That is the type of ship we have. These are also our crew. But besides the character of the crew, there is also the spirit which inspires them …

And the ship must have a good captain as well.

And I just want to say that the spirit which inspires the crew, is the spirit of the Border farmer, the spirit of the Voortrekker. These are people who have been toughened by the struggles of life and who are not easily frightened by every small danger which may arise. These are the people who have steel in their blood and marrow in their bones. These are the people who are descended from the Settlers, and the Voortrekkers. These are also people who love their ship of State and have faith in its stability. With such a ship and such a crew we can venture out on the restless seas! And if gale warnings come, whether they be great or small, we do not have to lie down in abject fear. We can then rather, conscious of the dangers facing us, accept the storms which may come as a challenge and then weather those storms.

Allow me to tell the hon. members opposite that our crew should rather present a united front to the world. But what is still more important—because I regard the Opposition as part of the government of a country—let us show the world that the helmsmen of this ship of State are free of mutiny and free of disloyalty. Then we can proceed. If we are determined to bring our ship of State safely and unharmed through all these violent seas, then we can hope to do so. And for that, Mr. Speaker, we now have the opportunity. We have more than an opportunity—we now also have the responsibility.

I now want to make an appeal over the heads of the Leader of the Opposition and of the Opposition itself. I want to make an appeal to the people of South Africa to grasp this opportunity which has now been presented to us with both hands and to live up to the responsibility which now rests on them in such a way that they can earn the gratitude of future generations.

I move—

That the Bill be now read a second time.

Mr. Speaker, this measure has already been approved of in the Other Place, with the exception of certain clauses which deal with financial matters. The Bill which is before the House does not deal with a contentious subject, but its object is merely to remove certain administrative difficulties. The Precious and Base Metals Act of the Transvaal of 1908, which is generally known as the Gold Act, is a most complicated Act. As a matter of fact, lawyers agree that it is one of the most complicated Acts on our Statute Book, if not the most complicated. That is probably true because it deals with a legion of divergent issues. The Gold Act can more or less be compared with an octopus with numerous tentacles. But nevertheless it is regarded as one of the best pieces of legislation of its kind in the whole world. At this stage I merely want to say that the Department has detailed three of its senior officials to revise the Gold Act and to re-draft it and to do it in such a way that in future it will be more understandable to those who are interested in it. You will, however, realize, Mr. Speaker, that the redrafting and revision of the Gold Act is a gigantic task which cannot be completed within a matter of months, it will take years to complete it. Fortunately it is not my duty to-day to explain the revised Gold Act to the House, but merely to explain a number of clauses, clauses which bring about certain essential and urgent changes.

In view of the fact that the nature of the amendments as contemplated in this Bill, is technical, I shall deal with the Bill clause by clause. As far as Clause 1 is concerned it is not necessary for me to explain that because it contains the usual definitions from which it will be clear that the Gold Act, as now amended, will also apply to the Orange Free State.

As far as Clause 2 is concerned, the importance of this clause lies in the section which deals with the voluntary termination of a mynpacht. This amendment will probably be best understood if I deal with it against the background of the problem which we are faced with to-day under the existing Gold Act. If I tell the House what inconvenience is experienced at the moment under the existing Act, I think the amendment which hon. members have before them will be clearer to them. In terms of the existing Gold Act, a person or a mining company who has been operating a mine under a mynpacht and which has reached a stage where it is worked out, cannot voluntarily terminate his mynpacht. He cannot do so, and, under the existing Act, such a person or group or company who has reached a stage where the mine is worked out, must first fall six months in arrear with his mynpacht moneys. The Mining Commissioner must then summons such a person or concern for those arrears. But that is not the end of the process of cancellation. The Mining Commissioner still has to advise the owner of the land and the owner of the mineral rights, as well as the mortgagee, if there is one, of the fact that such a person or mining company has fallen in arrear with his mynpacht moneys; and to aggravate the embarrassment of such a concern, the Mining Commissioner has to publish a notice in three consecutive issues of the Government Gazette to the effect that the person or company has fallen in arrear with the mynpacht moneys. In other words, Mr. Speaker, such a concern which is no longer interested in working a mine which is still held under a mynpacht-“ brief ”, must first receive publicity as a nonpayer before it is legally possible for him to get rid of the mynpacht in which he is, in any case, no longer interested, because it is only three months subsequent to the first publication in the Government Gazette that the Minister may cancel such a mynpacht. You can well understand, Sir, that mining companies of repute do not like this procedure as provided for in the Gold Act and, because of that, mining companies have for years been pleading with the Department to change this involved procedure which causes them embarrassment. Clause 2, therefore, complies with this reasonable request. According to this amendment, the holder of a mynpacht may in future, at any time, advise the Mining Commissioner in writing that he wishes to terminate the mynpacht or portion of it, so that it may be cancelled.

I now come to Clause 3. In the first instance there has been uncertainty as to what may be regarded as a “ public purpose ”—this is now being cleared up. As the Gold Act reads at the moment, the Governor-General may, subject to certain provisions, consent to proclaimed land being used for the erection of schools, churches, locations and similar public buildings. In the past there has been doubt as to whether the definition “ public purpose ”, or as the Afrikaans text reads “ openbare doeleinde ”, includes all the activities of the State, a provincial administration and other public bodies. The amendment contained in Clause 3 (1) (a) now places it beyond any doubt that “ public purpose ” includes all activities by the State or provincial administrations, with its municipal and suburban ramifications.

The second important matter which Clause 3 clears up is the matter of compensation payable to such a mining company or such an owner of proclaimed land. As the law stands at the moment, only the Railway Administration is legally compelled to pay compensation for the use of proclaimed land, but it was never the intention of the legislators that all concerns, because of the Governor-General’s consent to them to use such proclaimed land, should have the use of such land free of charge; and, because that was never the intention, the Department has hitherto always succeeded in persuading such concerns who have been granted permission to use proclaimed land, to pay the necessary compensation to the mining companies. Land-owners, however, now wish to have legal protection as far as compensation arrangements are concerned, arrangements which have in the past, to a large extent, always been concluded successfully, but which are not provided for in the Act. Land-owners now wish it to be clearly laid down in the law that they are entitled to compensation, and that protection is being granted in Clause 3 (1) (c).

Clause 3 applies to land which has a mine on it, and Clause 5 likewise makes provision for compensation in the case of vacant proclaimed land; that is to say, land that has been proclaimed for mining activities, but upon which no mining activities have been commenced, or upon which such activities are not taking place at the moment.

I now return to Clause 4. This clause simply removes one of the annoying and unnecessary obligations which the Gold Act places upon the Minister. Section 70 (1) (b) of the Gold Act provides that the Minister has to confirm the decision of the Mining Commissioner if the latter should decide that a piece of mining ground may be fenced in. The irony of the situation is that the Gold Act empowers the Mining Commissioner to give final approval for the erection on proclaimed land of production works and compounds, but when it comes to a lesser important matter such as the fencing of proclaimed land, the final decision does not rest with the Mining Commissioner. In that case the Minister has to confirm it, even if it is merely a matter of fencing off a dangerous hole on that mining land, or the fencing off of an open shaft which is a danger to life. As a result of this provision in the Act, the position in the past has been that thousands of files have had to travel between the office of the Mining Commissioner and the head office of the Department of Mines and Cape Town, when Parliament is in session, in connection with any such matter. The Department does not know of a single case during all these years where the Minister has refused permission to fence. The existing provision, therefore, only caused delay, something which this amendment puts right.

Whereas Clause 6 brings about a number of lesser important administrative improvements, Clause 7 provides for something to which I want to draw the attention of the House, namely, this, that in the past an appeal could be lodged to the Minister against the decision of the Mining Commissioner in regard to the granting of residential or business rights on vacant proclaimed land. In terms of Section 78 of the Gold Act the Mining Commissioner may grant a site to a White person for residential or business purposes on vacant proclaimed land. Business lots on such land are sometimes of considerable value, and it was felt, therefore, that an objector should have the right to appeal to the Minister if he is not satisfied with the grant. As hon. members know, this does not refer to concession shops, because they fall under Act 13 of 1910.

Clause 8 only deals with the conversion to the decimal system. Those in short, Sir, are the amendments.

This Bill has obviously been inspired by the necessity to make some technical amendments to this very complicated Act. It is the type of Act which, when it does come up for amendment, usually does so because of problems which over a period of time have become so evident to the Department that it has been found necessary to try to introduce the necessary amendments. It is difficult to discuss the second reading of this Bill because it hardly touches on the general principles of the Act, which I think are far too well entrenched for us to deal with in the form of an amending Bill. One appreciates what the hon. the Deputy Minister has said with regard to the revision of the Act which will in due course enable this House to consider the consolidation and possible amendment of the Act. But we do propose, however, to deal with the matter in more detail in the Committee Stage, because I think there are certain aspects of the amending clauses which possibly will require some further investigation and discussion and perhaps further information from the Minister who has, I think, endeavoured to cover all the relevant facts. I will not repeat some of the points he has made. They have been very evident to those of us who studied the Bill. But I trust that in the Committee Stage we will deal with it at greater leisure.

I just want to ask one or two questions in connection with Clause 2. In terms of Clause 2 it will in future be easier for a mining company or any individual to terminate his mynpacht and to close a mine that has become worked out. From the point of view of the other people concerned with that mine, the employees of the mine and the business people and other people who live in the vicinity of the mine, I want to ask whether the necessary precautionary measures have been taken and whether they will receive the necessary protection to ensure that such a mine is not closed at short notice. Is there a time limit after notification of the closing, and can the Minister investigate the position to ascertain whether it is necessary to close the mine or whether it is closing for a fictitious reason such as speculation, etc.? We know that once a mine has become worked-out, it can no longer be operated, but we are also aware of the fact that it sometimes happens that a mining group discovers metals somewhere else more profitable and that it is in its own interests therefore to close a mine temporarily, but in the meantime private people have invested huge sums of money in businesses. I just want to know whether the Department has made the necessary arrangements to prevent mines from closing unless the interests of the surrounding towns and individuals are protected.

The complicated nature of this Act has been further complicated by these amendments. There is no doubt that many aspects of the Act will have to be clarified and altered with the establishment of the new mines of the Free State and the new methods of mining, as opposed to the old type of mining on the Rand. However, I am sure that the Minister will in time get a Select Committee or a commission of inquiry to go into this new type of mining and see whether or not it is not advisable to re-write the whole of the Act. I think the time has come to revise the whole of the Act and to bring it up to date. These small amendments which have been before us to-day are not sufficient because they only touch on those problems which have cropped up from time to time during recent years.

In Clause 3, where proclaimed ground can now be used for public purposes there are one or two problems which we are not altogether satisfied about. If I understood the Minister correctly, the proclaimed ground can now be used for public purposes, and whether they be schools or markets or abattoirs or other types of buildings or institutions which may be built by public companies or municipalities or corporations, in such cases I would like to know from the Minister whether there are any regulations which will prohibit certain types of buildings from being built on proclaimed ground. The question will soon arise whether or not ground, e.g. in the City Deep area, is suitable for the erection of a market or an abattoir. There is at the moment a Select Committee sitting on air pollution. This Committee is busy investigating the possibility of the control of dust from slimes dumps on mine property and the disposal of certain water and gases which may come from the property. Until such time as these gases and waters and dust have been disposed of properly, I wonder whether it is a good time to allow institutions or public bodies to build on such ground. I am sure that the Minister will take these points into consideration, e.g. I do not think it is a good thing to build a school next to a slimes dump. On an August day on the Reef it is almost impossible to see 50 yards ahead of you, because of the dust coming from the dumps. If such places are going to be made available for the erection of markets or abattoirs or meat or vegetable disposal depots, I think the Minister must first make sure that such areas are suitable from the health point of view. Schools, e.g., should not be built there until dumps have been properly covered, because what is worse than to have a school on that type of property with the classrooms continually full of dust. I am also a little perturbed about what happens to caving ground on mine property which is left open. I have seen that there has lately been a tendency for dumps to be removed, to be levelled off, and I do not know whether caving ground is allowed to be covered and buildings are allowed to be erected on it. Perhaps the Minister may enlighten me on these points. Otherwise this side of the House has no objection to supporting this Bill. We hope that in the Committee Stage we will be able to discuss the various clauses at greater length, and we will wait with interest to see whether the Minister will introduce a Bill consolidating and amending the whole Act.

Mr. Speaker, I listened attentively to the matters which have been raised. I want to start by setting the mind of the hon. member for Randfontein (Dr. Mulder) at rest as regards the concern he has expressed. He is worried about mines which may perhaps close down for other reasons and that their employees will be thrown on to the street. This provision in regard to the voluntary termination of the mynpacht-“ brief ”, however, remains subject to another provision of one of the Gold Acts, viz. Act No. 52 of 1926. I want to read the relevant provision in Section 8—

In other words, the holder of a mynpacht-“ brief ” cannot terminate it for certain reasons, if he still has 500 people in his employ, because in that case he is subject to that provision and the Minister can give the matter his attention and inquire into his reasons.

As far as the matters raised by the hon. member for Rosettenville (Dr. Fisher) are concerned, I want to say in the first place, that the re-drafting of this Gold Act is a gigantic task. The three senior officials who are busy with it at the moment are not introducing any new principles, but because the Act has been amended and changed so often during the years, the work they are doing at the moment is really of a mechanical nature, of linking all the divergent points with one another. It is only when that task if finished that they can start considering the representations which have been made by the various interested bodies, such as the Chamber of Mines, etc. for certain amendments in principle. It is at that stage that the plea of the hon. member in connection with new mines and their problems, will receive serious consideration, but it cannot be done at this stage.

The hon. member was also concerned as to what could be regarded as “ public purpose ” and what control was exercised. As the law stands at the moment the Government mining Engineer can give his opinion in the case of an application involving a “ public purpose ”. The hon. member mentioned abattoirs and schools. Such cases will have to be considered thoroughly by the Government Mining Engineer and the law requires him to make a recommendation. Secondly, the law provides that land which is granted in such cases shall be granted in consultation with the owner and the holder of the mynpacht-“ brief ”. In the first instance there has to be an agreement between the applicant and the owner or the person who holds the land as to the purpose for which the land is to be used. In the second instance it is left to the discretion of the Government Mining Engineer. The matters raised by the hon. member will receive the serious consideration of the Government Mining Engineer together with any representations which may be made by the public in the area concerned. I think, therefore, that the hon. member may rest assured that proper control is being exercised in the granting of such land.

I move—

At the moment the Dairy Industry in South Africa is controlled under two different Acts. The first Act was placed on the Statute Book in 1918 and provided for the registration of premises where butter and cheese were manufactured and dealt with other matters appertaining to the industry. This Act, with subsequent amendments, was consolidated in Act No. 63 of 1957. In 1930 the Dairy Industry Control Act (Act No. 35 of 1930) was passed, which not only provided for the establishment of a Dairy Control Board but also contained further provisions for controlling the dairy industry. It also effected further amendments to Act No. 16 of 1918. There are two Acts to-day, therefore, which control matters relating to the dairy industry. With the lapse of time some of the measures have become redundant and obsolete and new developments demand new legislation. We are now availing ourselves of this opportunity of consolidating Act No. 63 of 1957 and that portion of Act No. 35 of 1930 which does not deal with the Dairy Control Board as such. The obsolete provisions are being omitted and new provisions inserted. Since 1930, this is the first time, as far as my Department is concerned, that the legal provisions relating to the dairy industry will be found in one volume.

The following is a résumé of the more important provisions which are being omitted and the new ones which are being inserted.

Within the framework of the accepted principles, this Bill has been further simplified in that certain matters which are more often subject to changes than others (as for example the composition of the products which are listed in the Act to-day) will in future be governed by regulations.

As the dairy industry has developed over the years, certain products are no longer used and certain matters are no longer of any concern; improvements have come about. All reference to farm dairy butter has been deleted from the legislation because that product is no longer manufactured. The standard in respect of ice cream, and the power to promulgate regulations in that respect have also been omitted from this Bill because local authorities and the Department of Health control these aspects. It is undesirable and would lead to confusion if a product like ice cream were to be subject to requirements as laid down by regulations promulgated in terms of two Acts of two different Departments. Furthermore it would lead to a duplication of work if the officials of the Department of Health and those of my own Department exercised control over ice cream. The quantity of butter fat used in the manufacture of ice cream is only in the region of 2,000,000 lb. per annum, whereas it is even much less in the case of the frozen products which is made without butter fat. The sale of such products, therefore, cannot be regarded as a serious threat to the dairy industry. In any case nothing will be achieved by placing ice cream under the Dairy Industry Act because that will not prevent any factory which manufactures a frozen product which does not contain butter fat, from operating.

Another legacy from the past is that it is permissible to add preservatives to cream and butter. Although this is no longer done in practice, the law still allows it, In view of the fact that South Africa is faced with surpluses in respect of some dairy products, my Department and the Dairy Control Board are trying to find bigger markets. The right to add preservatives to butter may very well influence buyers in a strong competitive market to buy their butter requirements elsewhere. A prohibition on the use of preservatives in respect of dairy products (except margarine) will give buyers greater confidence in the quality of the South African product. Whereas it is still permissible to add boracic acid and boracic binding material to margarine, the latest medical information is that these ingredients have an accumulative effect on the nervous system, kidneys and liver of the consumer. This Bill does not allow the addition of boracic acid and boracic binding material to margarine but the manufacturer of margarine is allowed, as in the case of West Germany, for example, to add benzoic acid or sodium benzoate to their product. A maximum concentration is, however, laid down.

Although whey is skimmed off in all cheese factories, no butter factory in South Africa makes whey butter. Whey cream is graded according to quality and used in the preparation of creamery butter of various grades. Whey butter as a separate product is therefore omitted from this Bill because it is not manufactured in this country. Any reference to distinctive markings has been omitted from this Bill. The Dairy Control Board registers butter wrappings according to the Marketing Act and the registration of distinctive markings by the Department has become redundant.

The wording in the Afrikaans text “ botter-surrogaat ” in the existing Act is very confusing seeing that it means “ substitute ” and refers more in particular to margarine. In actual fact it is butter which has been re-processed and for the sake of clarity the words “ process butter ” are used in the Bill instead of the words, butter substitutes, renovated butter, milled butter, milk blended butter and artificial butter. At the moment there is no factory which makes this “ process butter ” but with an eye to the future it may become necessary or advisable to manufacture process butter for special markets or for specific purposes. For this reason this Bill retains the provision for the registration of such factories.

Since 1940 the Dairy Control Board has been registering people who deal in milk, cream and skim milk and who manufacture cheese, butter and other dairy products. A new Clause 6 (2) has been inserted in this Bill which provides that skim milk power factories, butter factories, cheese factories, condensed milk factories, milk powder factories, milk depots, cream depots, process butter and process cheese factories, in other words, all the factories over which the Dairy Control Board has control, may only be registered by the Department provided the owners of the premises have also been registered by the Dairy Control Board. This provision has been inserted in conformity with the procedure which has been followed during recent years and in conformity with the rationalization policy of the Dairy Control Board. For the same reason sub-section 3 (4) of Act No. 63 of 1957 has been omitted because in terms of that section any person may apply for registration of premises (even if it is not demanded of him) provided such premises conform to the requirements. This section served a good purpose before 1930 when there was no Dairy Control Board as yet. When control was introduced and because of increased production, the Dairy Control Board had to ensure that the balance between the various manufactured products was maintained. Such balance can only be maintained if the Board can limit the erection of factories manufacturing certain products. In that way it cannot easily happen that there is a surplus in respect of the one dairy product and a shortage in respect of another. In terms of the existing law a farmer may register his premises if he processes more than 75 gallons of milk per day. Such registrations can upset the registration policy of the Board. The new legislation is more specific and provides that if a farmer makes cheese and processes more than 75 gallons of milk per day, he must apply to the Board for registration. The Department will then register the premises if the applicant has been issued with a licence by the Board. The provision which limits it to 75 gallons per day as contained in Section 2 (3) of Act 63 of 1957 has been transferred to the definition clause in this Bill. Provision is made for the registration of factories which manufacture skim milk powder, but according to legal advice this registration does not include factories which manufacture skim milk powder only. For this reason my Department has never been able to register factories which manufacture skim milk powder. In view of the fact that there is a surplus at the moment of skim milk powder, it has become necessary to give more attention to the quality of the product. A greater quantity of this powder is to-day being used for human consumption and it is necessary to promulgate regulations laying down the minimum requirements to which factories have to conform in order to produce a product of a good quality. Provision is now made for the registration of factories which manufacture skim milk powder. In the past milk depots have been registered as cream depots and seeing that milk and cream are handled differently, it caused a certain amount of confusion. It is also confusing to register a process cheese factory which does not our chase any milk, as a cheese factory. This Bill makes the position clearer and provides for the separate registration of milk depots, cream depots, cheese factories and process cheese factories. The Dairy Control Board has received complaints that conditions at some premises where farm cheese is manufactured are not always as hygienic as they should be. In order to protect the public, and to promote consumption, the Board requested my Department in 1956 to lay down certain minimum requirements in respect of equipment and buildings. Registration by the Board is subject to compliance with these requirements but it has been impossible hitherto to incorporate them in the regulations. This Bill now empowers the Governor-General to promulgate regulations laying down the minimum requirements to which a farm cheese factory has to comply. For the rest provision is made for two new types of registration, namely premises where milk is sterilized and farm casein factories. The necessity to register in these two cases does not come into immediate effect and adequate notice will be given to the people concerned, as soon as the necessary requirements have been compiled in co-operation with bodies such as organized agriculture and the casein trade.

The South African Agricultural Union took the lead and asked that control be exercised over the marketing of sterilized milk. It is desirable to build the sterilized milk industry on a sound foundation and all factories, whether they be situated in cities or on the platteland, will therefore have to be properly equipped before they will be registered. In this way the manufacture of a high quality product will be promoted.

Since the beginning of the Second World War casein has been manufactured in South Africa. Particularly those farmers who found it difficult to market their skim milk profitably concentrated on the manufacture of casein or powder when on their farms. A fairly large quantity of casein is to-day being manufactured in the Northern Cape but the supply is greater than the demand and the surplus has to be exported. Because the quality of the product varies greatly, South Africa does not obtain the best prices on the overseas market. The object of registering the factories which concentrate on the export market is to introduce a system of grading so that casein may be exported according to grade and quality, as is already being done in the case of South West Africa. The best prices can only be obtained if the buyer knows exactly what he is buying and if the product is graded according to quality. The registration of factories which manufacture and grade casein is the first step towards placing the trade and the exportation of the product on a sound basis.

The provision contained in the First Schedule to Act 63 of 1957 that no one may import margarine into the Union unless he has a permit from the Minister, has been transferred to this Bill and omitted from the regulations. The section has however been qualified to enable the Minister to grant or refuse the permit as he thinks fit. The Dairy Act has been further consolidated, broadly speaking, so that all legislation which relates to the control of the industry has been consolidated into one · Act. For the rest this is a simple piece of legislation and without affecting the broad principles, certain things which have to be changed and improved have been omitted from the Bill and transferred to the regulations. Sections which have become redundant with the lapse of time have been omitted and new sections added to keep pace with the development within the industry. The specific reference to the Superintendent of Dairying which appears in the previous legislation has been omitted from the Bill and the relevant powers have been conferred on the head of the Department.

I think the hon. the Minister has given us a fairly satisfactory and comprehensive explanation of the provisions of this Bill and I want to say at the outset that this side of the House does not intend opposing this Bill in principle. As the Minister has said this is mainly consolidating legislation which consolidates into one Act the Act of 1918, as amended by the Act of 1957 and the Act of 1930 in so far as the sections which do not deal with the establishment of the Dairy Control Board are concerned. I do not think anybody will object to that. I think the time is long overdue that the various laws dealing with the dairy industry, except the general legislation under the Marketing Act, be consolidated in one measure and for that reason I am somewhat sorry that the hon. the Minister and his Department have thought it fit at this stage to introduce a consolidating measure, and that they are not consolidating the 1930 Act, the 1918 Act and the 1957 Act into one measure, together with those measures which provide for the establishment of the Dairy Control Board; had they done that we would have had everything in one measure. However, I am not saying this in a spirit of criticism, but it is always so much easier when you look for anything in regard to a certain subject, if it is embodied in one measure. We will now still have to look under two Acts, the 1930 Act—the section which deals with the establishing of the Dairy Control Board—and under this 1961 Act which regulates all other aspects of the dairy industry.

It is not my intention to deal with this Bill clause by clause. I think it is a good piece of legislation, and although we do not want to say much about it, we will raise a number of objections in the Committee Stage, particularly as far as Clause 16 (3) is concerned, where we think the hon. the Minister ought to meet us. We will also ask him to explain Clause 4, particularly sub-sections (2) and (3).

At this stage I merely want to say that the dairy industry is going through a very difficult period in this country and I think it is just as well that the Minister and his Department attend to it and modernize legislation dealing with the dairy industry and bring it as up-to-date as possible. The position of the dairy industry, particularly from the point of view of the producer, is fairly disturbing. During the last two or three years there have been surpluses in respect of fresh milk, powder milk, butter and cheese. Large quantities of butter and cheese are being exported at a loss and it is being exported to countries such as Great Britain and Europe where, as I see the position, as a result of artificial insemination which is practised there on an increasing scale, particularly in Britain and in Europe, there will no longer be a market for our butter and cheese, because within the foreseeable future those countries themselves will be faced with surpluses. The big danger which I envisage for the dairy industry in this country is that there will not be a market for the surpluses which we have to export, as a result of artificial insemination practised in those other countries which produce dairy products, countries which offer a fair market to us to-day, and which will be faced with their own surpluses. That is something which I should like to bring to the notice of the Minister and his Department. I do not know whether the “ dairy ” division which used to be a section of the Department falls under this Minister. I presume that it falls under the hon. the Minister of Agricultural Technical Services. During the years that division has deteriorated. In the past that division has rendered valuable service in the shape of advice and research work, etc. as far as the dairy industry and milk producing industry are concerned, services which I have always appreciated, but the activities of the “ dairy ” division under the former Department of Agriculture has deteriorated through the years because of shortage of staff, with the result that I do not think sufficient attention is always given to research as far as the production side of the dairy industry is concerned. I want to ask the hon. the Minister please to convey my remarks in this connection to his colleague. I think most dairy farmers in the country will appreciate it if that division of the Department of Agricultural Technical Services could be strengthened. It rendered valuable service particularly during the time when the dairy industry of South Africa found itself in a predicament because of an over production of fresh milk, powder milk, butter and cheese. In these circumstances it is essential for the farmer to bring down his production costs, because the production costs connected with the dairy industry are fairly high. Dairy farming is a specialized type of farming. You have to be tidy in that type of farming. It is a branch of farming which requires some knowledge and brain—a fair amount as a matter of fact. It is a branch of farming that has to be conducted in the most hygienic manner. There are a number of diseases attached to it and it is essential that the “ dairy ” division of the Department is strengthened so that it will give the necessary advice and do the necessary research work in that respect. I do not think the solution of the problem lies in a decrease in production, because from the nature of things, particularly in the north, in the maize triangle of South Africa, the solution to the problem of mono-culture which has been practised there for years, lies in mixed farming. You, Mr. Speaker, know the parts of the Free State where the farms have been sub-divided into small holdings. There the obvious solution to the farmers’ problem lies in mixed farming in which dairy production should play the most important role. If they did that it should not be a question of producing less dairy products, it should rather be a question of producing more dairy products, and that is why it is so important that more research work should be undertaken than has been done hitherto as far as the dairy industry is concerned.

Then there is the question of artificial butter which falls under the jurisdiction of this hon. Minister, and I know the hon. the Minister is worried about this problem. Artificial butter, or margarine, is competing with butter, whether we want to admit it or not. Margarine is essential, I admit that, because it is a cheaper product, and the lower-paid sections of our population cannot afford the more expensive product, butter, and you will always have this clash of interests between the consumer and the producer as far as margarine is concerned. The Minister and his Department will have to attend to this and see to it that they do not benefit the one at the expense of the other, considering this problem of mono-culture which must be stopped in certain areas of the country where the farms have become smaller. Dairy farming should form an integral part of mixed farming.

Mr. Speaker, I have nothing further to say. We, on this side of the House, give our blessing to this Bill; when we come to the Committee Stage we will have something to say on certain of the clauses.

Mr. Speaker, we approve in principle of this Bill as a consolidating measure, but in the Committee Stage we will press the Minister for further information, and we may have to move some amendments. In a way we will question some of the powers which the Minister has provided for in this Bill for himself. We think that the Minister should not have complete discretion as regards the limitation of licences and the limiting of competition, and that powers of this nature should only be provided with the approval of the Dairy Control Board or the Marketing Council. We think it is dangerous for the Minister to have the power to limit licences for industry. We imagine, too, that if these powers are not exercised with discretion, it may lead to actions in our courts in which the exercise of the Minister’s discretion may be regarded as ultra vires. Sir, what disturbs me to-day as regards the limiting of competition in industry is that to-day we have competition, through permits given by the Transportation Board, from areas where there are surpluses in milk, for instance, in the manufacture of ice cream. Areas which have surpluses are given permits to transport their surplus products hundreds of miles, and they compete to their advantage with people in areas where surpluses are not available. When we go into the Committee Stage, therefore, I will have some further questions to put to the Minister, and, if necessary, we would want to have some safeguards as regards the powers which the Minister seeks in connection with the issue of permits to industry.

I am pleased that in general hon. members welcome this Bill subject to a few provisos. I want to say to the hon. member for Florida (Mr. H. G. Swart) that all the Acts dealing with the dairy industry have now been consolidated in one Act. Before the Marketing Act came into operation the Dairy Control Board operated under another Act. At the present moment the Dairy Control Board operates under a scheme which was established under the Marketing Act, with the result that it is not necessary to define the functions of the Dairy Control Board in this legislation.

At this stage I do not wish to reply to the other questions asked by the hon. member, questions which are not really connected with this measure. The object of this measure is more specifically to create hygienic conditions in the dairy industry and to establish certain standards in respect of quality and registration.

The hon. member for Albany (Mr. Bowker) objected to the powers which the Minister takes under this Bill. The only power which the Minister takes under this Bill is to register the premises. He has not got the power, for instance, to refuse to register premises because it would lead to over-trading. He only has these powers in order to give effect to the provisions of the law. If the premises comply with all the requirements of the law, the Minister has to register them, otherwise the person can bring in a court action against the Minister. When, however, application is made for the registration of premises and the Dairy Control Boards finds that, if a factory was erected, there would be over-trading, to the detriment of the industry, the Minister can refuse to register them provided the Dairy Control Board agrees. The Minister is not taking any additional powers. The powers to which the hon. member for Albany has referred, are more specifically powers which are conferred upon the Minister under the Marketing Act. If hon. members wish further details in this respect, I will give it to them when we come to the Committee Stage.