No, surely it is a Bill we should study.

The Bill is the same as was passed by the select committee last year. I am quite prepared to take a date to suit hon. members opposite.

Second reading on 9th August.

The debate to which we have listened during the past week has not been at all uninteresting, because quite a number of important matters were debated by new hon. members on both sides of the House to which it is impossible for me to refer on this occasion and which I cannot now reply to, but which so far as possible will receive the attention of the Government. Moreover, there were quite a number of old familiar matters which have again come up—matters which for the most part were decided during the recent election and about which I do not intend this afternoon to say much. Nothing much came up during the debate especially as far as the financial administration of the country is concerned about which it will be necessary for me to detain the House at length. As usual there were various conflicting views during the debate, about important national and economic matters—conflicting views in the ranks of the Opposition—and when as usual this was pointed out from this side of the House, we heard from a prominent member opposite, for whom we have a great respect, that hon. members opposite were not a flock of sheep, and not gramophones, and that of course they do not hold the same views about all matters. Well, I never expected that that would be the case, but what we in the country have a right to expect is that the party opposite—the Opposition which had a duty-to fulfil towards the country—should have a fixed policy on great important national and economic matters. I think the country is entitled to expect that from them. The Government brings forward its policy from time to time and asks the House to approve of certain schemes. The Opposition of the country has the duty either of approving those schemes or of telling the country what its policy is. Unfortunately I must say the Opposition has shown on most of these questions that our experience during our next, term of office is going to be just the same as in the past, namely, that we will never get any definite opinion from them about important problems. During the debate prominent hon. members opposite earnestly advocated matters like the minimum wage of 10s. a day as well as increased salaries to Government officials. The Government had a fixed policy with regard to them at the election and they are matters which will be brought up again from time to time and we are entitled to a definite statement from hon. members opposite. There are, however, so many views that it is difficult for us to know what to think. There are also some of them who earnestly pleaded for the increase of the Old Age Pension grants. Do they know that the amount which we originally estimated at £800,000, this year is £1,250,000? Then there is also a number of other things which they have asked for and which will necessarily involve increased expenditure. We should like to know what the view of the party is. Then at the same time we hear the argument which we expected on this occasion, as to how necessary it is for us not only to restrict expenditure but to economize. I have already previously said that I do not blame responsible critics for calling the attention of the House to the expenditure of the country and saying that we must see to it that the services involved in the expenditure are justifiable. I have no fault to find with that, but then it certainly is absurd to hear from hon. members opposite that we should increase the expenditure on this and the other service. I pointed out that it is very easy to say from time to time: “Restrict the expenditure and economize.” Yet it appears from time to time that the country is growing and that provision must be made for necessary services. There is always a strong body of public opinion in the country which is prepared to make out a strong case for expenditure. As for the Estimates of Expenditure now before the House, we have not heard much about them from the hon. members opposite indicating that they are opposed to them. Two things indeed were selected by the hon. member for Yeoville (Mr. Duncan) as being examples of extravagance—undesirable expenditure which could not be justified in the circumstances of the country. Well, if you take the whole expenditure account, it is really a very small amount, and even if we were to agree with our friends opposite about it would not really contribute towards decreasing the annual expenditure. What are the merits of the case? When anything specific is quoted we must be prepared to justify our policy. The hon. member for Yeoville mentioned the salaries paid to the officials on the State diggings especially the salary of the general manager. We did not hear much more about it after it was pointed out that the salaries compared very favourably with those paid by private undertakings. I should be the last to use the argument that we can anyhow pay high salaries because the profits are large, but it is a fact that the Government to-day does not pay the salaries which are paid by private undertakings for similar services. We must remember that these are people in unfavourable circumstances and in desert-like surroundings and that you cannot expect them to take small salaries. The Prime Minister dealt last night with the expenditure we are going to incur for representatives abroad. Here again I think we no doubt have an instance—even if it is not so with all—where a very strong section of hon. members opposite are not exactly against the expenditure but are actually opposed to the principle. Here we are directly and diametrically opposed to our hon. friends opposite. Were we not entitled to interpret the attitude of the hon. member for Yeoville as the Prime Minister has done—when the hon. member says, “What is the reason for the appointment, what are they to do?” Were we not entitled to do that when we read a few days before in their press that the whole matter was being fought, when it was pointed out that the Union was going to play the big man and imitate other countries, such a small country which indeed had a status but no stature. According to the newspapers a country which cannot add any great force to the discussion cannot look after the interests of its inhabitants if it has not a great fleet behind it. That is what we read in the English press as the reason why no appointment ought to be made. Little South Africa! Free, yes—they make fun of the status. We know that when they speak of the status it is often done contemptuously. The hon. member for Yeoville is possibly not one of these, but he has selected his words unfortunately. When we see that the State appointments are met with the argument, “We are small and do not amount to much,” we say that may be so, but if we are free we have the same self-respect as other countries. When the hon. member asks what the ambassadors are to do then I say they will do the same as the representatives of England or any other country. Their duties may not possibly be so many but they are just as important to the inhabitants of the Union. We say that our self-respect demands that we should do it.

But the ambassadors will do nothing.

No, they are going to do something—possibly not so much as the representatives of a large country like Great Britain, because we have not such a large population, but the necessity in our case is just as great.

Tell us one thing they are going to do.

What are the duties of ambassadors of any other country?

They have subjects there.

If we have subjects there then we are just as much entitled to representation.

We have no South African citizens in Italy.

My hon. friend in debating the advisability of restricting the expenditure pointed out that it was increasing and he said that we should adopt some method in order that Parliament could have more say. On a previous occasion I pointed out that no method could be found. The hon. member suggested a sort of Parliamentary Estimates Committee, but this would actually lay the axe at the root of the principle of constitutional Cabinet responsibility as it exists in Great Britain, in other dominions and in our own country. If the hon. member discussed the matter with other leaders in his party he will see that they also are not prepared to give up the principle embodied in our constitution and form of government. There is only one way. The Government must accept the responsibility, and if the public find that the expenditure is far too high, then the Government will have to give an account to the people. Hon. members opposite advocated all kinds of things—some, increased expenditure and some economies—but once more, as usual, the Government will have to take the responsibility upon itself and will have to decide, as in the case of foreign appointments, that the expenditure is in the interests of the country. That is the only way. In the long run it amounts to this, that during the last five years, notwithstanding the increase in our expenditure, we have succeeded in reducing the burden of taxation on the people. At the same time, during that time we have performed the great task of providing for our old people, which costs us more than £1,000,000 a year. In this respect we have effected a great social reformation. We have put education on a proper basis and done all necessary services, and yet we have reduced the burden. During the debate hon. members opposite referred once more to the surpluses. I thought we had heard the last of that, because if the country decided one thing during the election it was about that. I may say that that purposeful policy which I have tried to follow during the last five years will be the policy in future. I think that the people can look back with satisfaction to-day on all we have been able to do with the surpluses. Moreover, we have strengthened our debt position, increased our credit and built up a position during the last five years, which hon. members admit was so prosperous, that if a reaction comes—which is not impossible, I admit—South Africa will be able to stand up against it better than ever before. We hear of the building up of a reserve. Well, I want to point out that the burden of taxation is less, the income tax is reduced, the customs duties have been diminished and that we have not neglected the necessary services, so that if a reaction comes we shall have greater powers of resistance. Is that not a thing about which we patriotic South Africans can feel proud? Let us differ in political matters, yet I think that even hon. members opposite and their followers ought to be sufficiently good South Africans to be glad, thankful and proud about our strong economic position. The hon. member mentioned another important point which I want to refer to, namely, the British preferences. I am glad to learn from the hon. member and also from other hon. members that they now agree with us and that it is not a matter which can be settled by sentiment, but must be dealt with on business principles. That is the policy this Government has followed and is going to follow in the future, and I am glad the Opposition approves of it. We always admitted that the British preferences benefited certain producers in our country. We get the preference and it is valuable to us, so we should like to retain it. It is, however, strange, I think, that we hear so little of what South Africa itself has done. That we never hear from my hon. friends opposite. Have we then no trade with Great Britain and the other dominions of value to them and in connection with which we give valuable rebates. We never got our preferences one sidedly, but considered them as a business matter, and if hon. members opposite and our friends overseas would so regard them, then there ought not to be the least difficulty, then there is no difference of opinion. I also told the unofficial representative of the British Government who had a discussion with me, as well as with other Ministers of other dominions, that I thought the time had come to put the matter on a business footing so that we all knew where we were and there is a probability that in the future a satisfactory settlement will be arrived at. I do not think that South Africa need be frightened about the statement of the British Chancellor of the Exchequer. It is only an expression of opinion and we have heard nothing officially about his intentions. Nor do I think that anything will actually be done which will damage South Africa before there, in any case, is a full discussion about the matter and we are given an opportunity of defending the interests of our producers. I think that these matters will certainly be discussed at the Imperial Conference in a year or two.

Can nothing be done in the meantime?

It was only a remark and I do not think there is any intention to take action at the moment, and my hon. friend will appreciate that we cannot take much notice of newspapers, and that such a statement must actually be considered more as an internal matter.

Will there be no Economic Conference before the Imperial Conference?

The intention was to discuss economic matters before the Imperial Conference, but I think that they will be dealt with at the Imperial Conference.

Not before?

I do not think it is possible. It was suggested that there should be a discussion but I do not think it possible to get the representatives of the various parts of the empire together so quickly. Much was said during the debate about our agricultural conditions and our mining industry. Hon. members opposite spoke in different respects on behalf of our farmers. I want to point out that South Africa is a difficult country for farming and has constantly to battle with all sorts of difficulties but we shall nevertheless have to acknowledge that farming in our country during the last few years has made tremendous progress, and we have now an agricultural department which is better equipped than ever before in its history and is at the disposal of the farmers and ready to help them in connection with the various problems. There is nothing else raised on the other side which has not already received the attention of the Government from time to time and been debated in this House. The Minister of Agriculture has announced his policy in connection with them; I can only say that I think that our farming in general has made rapid progress and that we need not worry much about agriculture. There is the wool question. I hope the prices will improve but perhaps the farmers will have to be satisfied with a lower price for their wood but of course the Government will assist as much as possible if anything can be done. Other hon. members have spoken about the great question of water supply which is of so great importance to make our agriculture more stable. Hon. members know what the stated policy of the Government is. We intend notwithstanding the fact that irrigation works in the past were not the success, and were more expensive than was estimated, to go on with them and to tackle suitable schemes in order to be able to conserve more water. But what we attach still more importance to is that the State by means of big loans on very easy conditions to the farmers, must provide the farmers with means to make boreholes and small irrigation works? With this object more provision is being made for bores on very easy and long terms whereby the farmers with the assistance of the land bank will be enabled to have boreholes sunk still more easily than in the past. A great deal was also said about the mining industry, our other primary industry. We have heard more about it than ever before in debate in this House. I want to point out that the mining industry during the past five years has been treated just as fairly as any other important industry has been treated by the Government and the burdens have been reduced where possible. There are various respects in which the mines have shared in the reduction in taxation. About that we hear little. All things considered my hon. friends there must admit that if everything they asked for were conceded to the mines the burdens which were taken off would have to be put on elsewhere. On what? Can we make out a fair case for putting the burden on our other important primary industry? Agriculture? I do not think that hon. members opposite will argue that. Since we adopted the fixed principle of protection it was always the policy to tax articles relating to our agricultural and mining industries as little as possible and only in a few exceptional cases affecting the mining industry has there been an increase. We have no other way of reducing the burden. If we are able to reduce taxation for the whole country then it is not good policy to increase the taxation on one industry. That cannot be done and we have not done it. The mines have thus shared in the reduction of taxation which has been effected in the past five years. Regarding the trouble about labourers the Government went out of its way to supply labour for the Witwatersrand. We said that we must do this intentionally because we are convinced that the mines needed the labour and so badly that if it was not done there might be serious economic results for the country. We therefore secured the labour supply for them and I am very sorry that the spokesman of the mining industry attacked the compromise last year and said that it was practically of no value. The chairman of the chamber of commerce unfortunately said something similar. It is true that the hon. member for Kimberley (Sir Ernest Oppenheimer) has now said in this debate that the position is better that it might have been but yet he expressed no appreciation. I commenced to wonder that if it is the case that the people on whose behalf we took steps are so dissatisfied with this solution whether it would not be the correct policy for the country for the Government in power when the convention again comes up for conclusion, should not move a finger with regard to the supply of labour for the country. Hon. members say that the mines are dissatisfied, that the traders are dissatisfied, that the harbours are dissatisfied, etc. I think we should seriously ask ourselves if we ought not rather to have allowed the decree to go through and not made any arrangements because we hear nothing but complaint from hon. members. During the debate special emphasis was laid on the condition of the poor man; strong advocates got up opposite and would say that in the past we had never appreciated what was necessary for the country as regards the interests of the poor man. But what is strangest of all was that in this case where we heard so much about the increase in the cost of living by customs duty it came from the representatives of the chamber of commerce. They pleaded for the poor man and laid special emphasis on the policy of the Government in connection with protection tariffs sending up the cost of living and injuring the interests of the poor man. Let us in this connection just examine for a moment the condition of the country. It has always been the policy of South Africa to get a large share of the revenue out of the customs duties. It has become a fixed policy. It was also the policy of the last Government and no Government will be able to provide a system of direct taxation to get all the revenue from it. The customs duty will always have to contribute to the direct taxes to provide sufficient revenue. We can never make direct taxes so high as to allow the customs duties to be dispensed with. That is once and for all established. The population of any country is moreover not so very anxious about the adding to the direct taxation by the State. Our policy is to tax the goods for the making of which there are industries in our country, with a chance of success, secondly to tax luxuries—luxuries are most suitable for taxation and they must contribute a large amount to the revenue of the State, and thirdly to reduce the taxation on articles in general use, articles which may influence the cost of living. Those are the principles we have constantly applied. Hon. members opposite are always ready to subscribe to the general policy of protection. I do not believe that there is any national principle, if it is generally stated, that will not be subscribed to by them but when it comes to practising the principles they attack them. And here I think I am entitled to draw the conclusion that concern over the high cost of living did not weigh so much during the debate with hon. members opposite as that it was a covert attack on the protection policy. Let us look into the matter more clearly. Hon. members have often quoted the example of Australia and let me say at once that it is quite unnecessary as far as the Government and I are concerned. We know the conditions in Australia and what evils the application of the policy has brought with it there. Our position in South Africa is however quite different. We have not got the high amount of protection there is in Australia and we have hot the vicious circle of high wages and high customs duties. Our protection tariff is comparatively low today in comparison with that of Australia. Let me just go into the matter. We have adopted a protection policy and primarily it is the articles and produce of the farmers which today are protected by us. Are my hon. friends opposite prepared to give up that protection to reduce the cost of living? They consist of wheat, flour, barley, bacon, ham, butter, cheese, sugar, jam, canned fruit, dried fruits, condensed milk, etc. These are all things affecting the cost of living. Are hon. members opposite agreeable to our removing the protection? And if we remove it will it be in the interests of the consumer if those articles are not produced locally? Will those articles then be cheaper? No, here you have to do with a whole series of agricultural products and if you take away their protection you will make farming unpayable and do more damage to an important part of the population than benefit to the other section owing to the reduction of the cost of living. I do not think that there is one hon. member opposite who will be prepared to advocate it. What else was done? During the past five years reductions of customs duties have actually been passed by the House. In 1927, £125,000 was remitted; in 1928, £500,000, and in this budget provision is made for a further surrender of £162,000. There were reductions and what happened? When I decided to sacrifice those amounts I instructed the board of trade and industries to select articles which would bring about two things. These were that the articles should considerably reduce the cost of living and secondly should not damage existing industries in the country. Those were the two requirements and on any occasion that you apply those principles you find we have come to a stage in our customs tariff when it is very difficult to find articles which comply with them as well as to a third requirement that the reduction must be large enough to be passed on to the consumers. This third requisite possibly gives the most difficulty. Let me examine it. In that £625,000 which has already been surrendered and in this £162,000 now proposed to be you find such articles as: articles of fashion, eatables, underclothing, wire, floorcloths, slaughtering instruments, brushware, mechanical tools, children’s requirements, tea, etc. These are all articles which if they do not affect the poorest class affect the middle class man with a small salary. Then there is another article like cotton piece goods, of which a quantity valued at from £500.000 to £600,000 has been imported, on which the customs duty has been reduced. What, however, are we now getting? The hon. member for Pretoria (Central) (Mr. Pocock) told us that the customs duties were much higher to-day than in 1924. Yet since that time we have sacrificed £625,000 in customs duties and apparently the consumers have not got the benefit of it. I want to mention a few examples to show that I was quite right in stating the other day that the reduction I am proposing will go into the pockets of the merchants. It is not because I want to suggest that the people intentionally do not want to give the benefit of the concessions but simply because the tax is so small that it is not possible to do so. Let me take an example mentioned by the hon. member. In the case of tea I have reduced the duty by 2d. a 1b. and I thought this ought to he passed on. I understand that this is being done —

Take the case I mentioned.

Very well, but I want to say that I think tea is a thing which ought to contribute if we are to have customs duties. The hon. member for Newlands (Mr. Stuttaford) mentioned coffee. The duty is ¾d. a pound and not 3d. as stated curing the election. This produces £90,000 a year, and if I took off the ¾d. and completely exempted coffee, will the consumers get the benefit?

Never!

Then the hon. member mentioned rice. The duty on this is 1s. per 100 pounds. Is the poor man who buys a pound of rice going to get any benefit from a reduction? Take paraffin, which produces £50,000 a year. The tax on this is only 1d. a gallon. Is the poor man who buys a bottle going to get any benefit out of a reduction? My hon. friend also mentioned building materials. If you take building materials on which there is a duty in a few cases, then you will find that it is done for the purpose of protecting existing factories. If it is removed then it will not affect the cost of building. Take, for instance, wood; on this the duty is 3 per cent., and yet it is a protection article. Wood comes in free from England. Will a reduction here affect building costs? The hon. member took it amiss, and actually abused me when I said that they would put it in their pockets. It is, however, natural, because, however sharp competition is, you are not, in most cases, going to effect your purpose that the reduction should benefit the consumer. It will remain in the pockets of the merchants. The hon. member says that if we remit £600,000 on the articles he mentioned, the cost of living will come down. The hon. member for Pretoria (Central) (Mr. Pocock) has, however, pointed out how the customs duties, which we have got on certain articles are much more than what they were in 1923-’24. If the £600,000 which we have already surrendered did not reduce the cost of living, how will the additional £600,000 do so? We have remitted £600,000 where it was possible for the merchants to pass on the reduction to the consumer, but the hon. member for Pretoria (Central) says that we have done nothing, and that the cost of living is being increased. If we were now to reduce the customs according to the list of the hon. member for Newlands, would that reduce the cost of living? The hon. member for Pretoria (Central) has pointed out that the revenue from customs duty in 1927-’28 was larger than in 1923-’24, but he surely knows that the full effect of the reduction we made has not yet been experienced. The full effect will only be experienced next year, and it is unfair to make that comparison. Take, e.g., Class 4 mentioned by him, woven goods and clothing. The hon. member said that the customs duty in 1927 was £14 11s. per £100 and £12 8s. in 1928. He therefore sees how the duty has come down on one class of article, and in a few years that effect will be much greater. Take the fact that the customs duty on flour, sifted flour, and sugar was £234,000 more in 1928 than in 1924. Yet we all know that the price of bread has not gone up. It is still the same, therefore, that increase has not affected the cost of living. I said just now that during the five years we have been making reductions we were thinking chiefly about the requirements of our primary industries. I could quote a long list of them, and just want to mention a number of articles of that kind which we have entirely exempted from duty. They are machinery and plant for agricultural purposes, fencing materials, dips, water pumps and apparatus for water boring. Corrugated iron dippers (for the mines), crucibles for minerals, sodium, battery-bins, etc. Only in a few cases of articles used by the mines has there been an increase in duty in the interests of local industries. Then I want to add something about the remarks of the hon. member for Kimberley in regard to the diamond position. We learn from the hon. member that there is reason for considering the position less satisfactory, that prices have dropped during the last few months. As far as we can ascertain, however, it is not yet particularly serious, but I think it will possibly be a good thing to give effect to the hon. member’s hint to have a conference between the Government and the producers—probably also the diamond cutting establishments—to see whether the various interests cannot be brought into harmony with each other and whether a more sound basis cannot be attained. The hon. member has suggested, and I think that it possibly may do no harm to have the proposal investigated by the Mines Department to see if it is possible to attain anything of importance. We must particularly think of the diamond cutting establishments. I am glad that the hon. member for Kimberley and the interests which he represents are no longer hostile towards these establishments. I hope that those interests will also be prepared to co-operate, so that we—as we have the control of the greatest part of the diamond production of the world—can place and maintain those establishments on a satisfactory footing here. The hon. member said that they were now co-operating, but, unfortunately, this was not always so. I think, however, that we heartily welcome the co-operation. If the powerful interests which he represents co-operate we shall establish a sound and fixed industry here. Then I want to say a few words more about the dumping duty on sugar. Two hon. members on the cross-benches mentioned the matter. I am glad to see that there was not as usual a certain amount of opposition. I may just say that it is, unfortunately, a fact that there are a number of erroneous statements in circulation in connection with the position of the sugar industry. Certain things were broadcast in the press about remarkably big profits and the amazing welfare of the sugar industry, and that consumers were being impoverished. The Government has instituted a very thorough enquiry, and we are convinced that under present circumstances the industry is entitled to the dumping duty we intend to give it. This will not make the price of sugar rise in the least. On the contrary the price of sugar will be lower for the factories which make jam and canned fruits. As for the public, we must not forget that in accordance with the agreement in the Act on the price of sugar, the industries have undertaken not to let the price of sugar go higher than the fixed price, whatever the rise in the world market may be. It is a fact that Czecho-Slovakia, Germany and Cuba are at the moment trying to dump their over-production in various parts of the world, and I think the sugar industry is entitled to claim the protection we propose giving them.

The debate which took place during the last five days covered a very wide field, and I would say to hon. members who raised a number of very important subjects that if I do not deal with them this afternoon they will appreciate, I hope, that all these matters which they raised have been duly noted. I propose now to deal with the outstanding points which have been dealt with during the course of this debate, and the first matter I would like to address the House upon is the question of our expenditure. The hon. member for Sea Point (Maj. G. B. van Zyl) raised again the question of the growth of our expenditure. I can only say that railway expenditure is bound to increase, and to say that our expenditure has increased by millions during the last five years is simply to state a fact which I do not dispute. But surely the mere fact that our expenditure has gone up is no proof of inefficiency on the part of our railway employees or our officials. The only fair way is to take the other factors into account as compared with what they were five years ago. The outstanding fact with regard to the budget is this—that our expenditure during the last financial year—I am referring now to working expenditure—increased by only £98,000, and our revenue during the same period increased by £785,000. That is the outstanding fact. The comment of my hon. friend on that was that I have not taken other factors into consideration. He did not indicate what they were, but I take it that they were interest on capital, betterment and things of that sort,

Management.

That is included under working expenditure, and the increase of working expenditure by only £98,000 is a satisfactory feature in connection with the working of our railways. He has referred to the ratio of expenditure, and has said that we are not as low as we were in 1924, but the hon. member has evidently forgotten that since that year we have lowered our rates by over £1.500,000.

The rates went down by over £3,000,000.

No. The fact of our rates having been reduced by £1,500,000 accounts for the fact that the ratio of expenditure has not fallen to a greater extent. I want to say a few words with regard to the remarks made by the hon. member for Kimberley (Sir Ernest Oppenheimer), respecting our financial position. The hon. member for Kimberley said that as a business man he would make a few simple calculations, and in making them he satisfied himself—I do not know whether he satisfied the House—that there was a decrease in efficiency. What did the hon. member do? He took our train mileage for the year 1927-’28, which amounted to 60,850,649 miles, and by what he called a simple calculation, he determined for himself that our train and engine mileage for 1929-’30 would be 59,000,000; but the hon. member in making that simple calculation, forgot that in my budget statement I had stated that we expected to run over 2,000,000 extra miles, as compared with the previous year, which means that there will be an actual increase of 2,072,653 miles, or 3.47 per cent. In accordance with the custom not to give the units tens and the hundreds, I quoted a 2,000,000 increase in the mileage. If he takes the figures 60,850,649 for the year 1927-’28, and the 3.47 per cent. increased mileage, he will find that our estimate for 1928-’29 is 61,832,147 miles, or an actual increased mileage of 981,498 during the current financial year, so that the so-called simple calculation of the hon. member has led him astray. But the hon. member further missed a very important fact.

He based his statement on your figures.

He based his statement on my figures incorrectly. I said it would be over 2,000, 000 extra miles. If the hon. member will read my statement he cannot miss the facts. There can be no question at all as to what I did actually say. There is a further fact which the hon. member evidently is not aware of, and that is that since 1927-’28 we have introduced far more powerful locomotives. That means that our hauling loads are increased. More revenue has been earned. It also means that our working expenses on those particular engines are higher. The bigger engine hauling more goods and earning more revenue also burns more coal, and uses more water and oil, so that the cost per engine mile and expenditure will increase when we use the bigger locomotives. As our locomotive haulage power increases, you will possibly have a decrease in our engine mileage, and at the same time more efficient service. The hon. member for Kimberley (Sir E. Oppenheimer) went hopelessly wrong in the figures he put before the House. I want to give a hint to the hon. member for Kimberley (Sir Ernest Oppenheimer). When he deals with matters which are involved, I hope he will make sure of his facts before he comes to conclusions. With regard to the Sea Point line raised by the hon. members for Yeoville (Mr. Duncan) and Sea Point, I was surprised at the remarks of the former, but I was not surprised so far as the hon. member for Sea Point was concerned. What are the facts? I gave them last year in the House. In 1919 the consulting engineers recommended the electrification of the Sea Point line; in 1922 the then Minister of Railways, the Hon. J. W. Jagger, took power from this House to electrify railways. It was a general power. On September 23rd, at a board meeting attended by the hon. J. W. Jagger, the then Minister of Railways, and members of the board, it was decided to electrify the Sea Point line. In April, 1924, the Minister and the board instructed that a memorandum should be laid on the Table of the House giving particulars of the work of electrification, and decided that tenders should be asked. This was done, and the electrification was undertaken later. In other words, the electrification of the Sea Point line was a legacy which we took over from the previous Government.

You can always renounce a legacy.

Yes, I have no hesitation in saying that it was a mistake to electrify that line. I come now to the proposal made by Dr. van der Byl for a speedway. When he made that proposal, I put it before the railway officers. Their recommendation was that it was not a practical scheme and should be rejected, and I have no doubt that the officers were right in their rejection of the scheme. Dr. van der Byl’s scheme was that we should spend a large sum per mile in making a speedway. We would have had the speedway near to the beach, which is an unsatisfactory position. We did not undertake it because it would have been bad business.

You are blaming this Government.

The hon. member for Sea Point is so anxious to blame this side of the House that he forgets the responsibility of the previous Government. On the 4th March, 1926, according to a report published in the “Cape Times,” the hon. member said at a public meeting—

My hon. friend did express his views, and now he criticizes the Government. I want to deal with another very important matter, the subject of housing. The policy which we follow in the department is that in the outside districts, where there is no local body, the duty of the department is to spend as much as possible in housing the people. Under the Jagger regime there was a period of stagnation with regard to the whole question of housing. There was the definite policy on the part of Mr. Jagger to break down the houses on the branch lines, and to curtail expenditure on further housing. During the Jagger regime there was practically no progress in providing housing accommodation for our railway employees. We, however, have made tremendous strides in the last five, years, and are continuing the policy of providing houses in outside districts as our funds permit.

The cost of building was very high during the time Mr. Jagger was Minister of Railways.

I do not think that they were very much higher then than they are now. The action of Mr. Jagger was indefensible. Secondly, we say that in areas where there are local bodies it is the duty of those local bodies to provide houses for our railway employees. The state has recognized its responsibility in providing money for the building of houses by granting housing loans. We have the most extraordinary position in South Africa. From all sides of the House and from all parts of the country there are cries for railway extensions, new stations and harbour development. When these works are constructed it means that temporary and permanent staffs have to be sent to the localities concerned. Surely it is not unreasonable for the state to say that if local areas desire that we should send hundreds of thousands of pounds, millions of pounds in fact, m a particular city or town, that the local authorities should shoulder their responsibilities and provide housing.

Why do you not pay the railway men better wages?

What has that to do with housing? It is the duty of local bodies, when they press for all this capital expenditure, to provide housing for the necessary stuff. Local bodies must recognize their responsibilities. I am glad to be able to pay testimony to two towns in particular—the one is the city of Bloemfontein, which has always adopted a forward policy in this matter. When they asked us to extend our workshops at Bloemfontein they have always said that they would be prepared to provide the necessary housing. Germiston has also been prepared to shoulder its responsibilities. I prefer not to mention particular towns which take up quite a different attitude, but there are some towns which are not prepared to move a single step; they cry out for capital expenditure by the railways, hut they are not prepared to provide the necessary accommodation for our staff.

Is Durban amongst them?

There are many of them, and Durban is one. The Government’s policy is that where an area asks for large capital expenditure we will very carefully ascertain what the municipality concerned is prepared to do in regard to housing. That is only fair.

Will the department guarantee the rents?

No, sir. Our railway men receive salaries which make it quite possible for them to pay their rent.

Six shillings a day!

Either the municipalities must shoulder the responsibility or we shall have to provide the necessary money. Our capital expenditure has been rising to such an extent as to give us all food for thought. With regard to the remarks of the hon. member for Greyville (Maj. Richards), we recognized that housing conditions at Durban were so alarming that it was necessary for us to step in. Therefore, we provided £50,000, but very much against our will. The fact that we granted that sum is proof of our sympathy with the dire conditions under which these unfortunate people had to live.

Was the money granted on an economic basis?

Certainly. The hon. member in his new-found love for the railway men imagines that all our railway men are underpaid. Does he think so?

There are 16,000 of them under-paid.

It is very interesting to find that our friends opposite have now suddenly developed this wonderful love for the railway men.

You cannot get away with it like that.

I welcome this sudden interest in the railway men by the Opposition; it is now even extended to civilized labourers. This is, indeed, very pleasant hearing. Does it indicate a change of heart? Or is it merely vote catching? I hope not. I hope it means that in future when responsible newspapers which support the South African party describe our white labour policy as a white kaffir labour policy, hon. members opposite will express their disapproval of such remarks. I have never, either inside or outside this House, heard any member of the Opposition raise one word of protest in regard to the misleading language which has been used in regard to this policy.

You are wrong there—I did.

I now have a few questions to put to the leader of the Opposition. During the debate the hon. member for Ladybrand (Mr. Swart) read from the “Union Railways and Harbours Journal” of June 29th, which was issued just before the general election, in which the secretary of the organization, Mr. Moore, had issued a stop press announcement wherein he stated that he was making an authoritative statement. He said in these statements that he had got into touch with the headquarters of the South African party in Cape Town, and that as a result of the consultations with the leaders of the South African party, the following statement was made. I will read that statement again, because it is of great importance. This is what he said—

And so on. I want to ask the Leader of the Opposition whether this is correct? Does this really represent the views of the leaders of the South African party? Did the headquarters of the South African party authorize Mr. Moore to make this statement? If the leaders of the South African party repudiate this statement, then I say it is essential that the members of Nurahs should know that the secretary has deliberately misled them. The hon. member for Ladybrand (Mr. Swart) at an early stage of this debate gave hon. members opposite the opportunity to reply. They have not done so. There will be other opportunities for members opposite to say whether they are responsible for this statement. If they are not, then I say this was a deliberate attempt to mislead the railwaymen with regard to these important matters. We have never made any secret of our views with regard to these matters. The hon. member for Yeoville (Mr. Duncan) may again say, “Well, it was not our business to repudiate it.” But I know one prominent member of the South African party, not a member of this House, who saw this and at once took steps to find out whether it was correct. I saw this statement in Natal before the elections. It was telegraphed all over the country. Not all the members opposite can say they did not see it. Members were quite prepared to take all the benefit they could, but fortunately, the railwaymen were not misled or, at any rate, not a sufficient number for them to send members here, and then to find out that this was so much eye-wash. Will members opposite now say what their policy is with regard to the eight-hour day, the differential rates of pay and the long service increment to post-Union men? I want to say a few words with regard to our capital expenditure. Pressure has been brought from all sides of the House. The hon. member for Port Elizabeth (South) (Sir William Macintosh) and Port Elizabeth (North) (Mr. Kayser), the hon. member for East London (North) (Brig.-Gen. Byron), the members for Durban and other centres have pressed strongly that we should embark upon capital expenditure at our stations and harbours. At Port Elizabeth and at Durban, it would run into millions. For most of these schemes a strong case has been made out, no doubt, but I would ask members whether they are prepared to say to the responsible Minister that we are to continue piling up our capital expenditure on railways and harbours? Do they realize that our capital expenditure at the present day amounts to over £149,000,000? Do they realize that our interest bill is about £6,000,000 per annum? Do they realize what is perhaps most important of all, that the idea that all our assets are 100 per cent. interest paying is not correct? Let me give a few figures. Let me take the grain elevators. We have spent on our grain elevators £2,567,668. We had a loss last year of £25,386. Take the dry dock at Durban. We have spent £1,299,301 and it gave us a loss last year of £74,093. Take our branch lines:—There is nobody opposite, I suppose, who will say we ought to pull them up because they do not pay. We have invested in our branch lines £18,682,003, and they gave us a loss last year, according to the estimate in the return laid before the House, of £589,437. Take the Simonstown line, which we have just electrified at great cost. We have spent on that line £2,672,785. That is the whole cost. It gave a loss last year of £201,270. My colleague here says we must scrap that line. I will say this: —If the people of the Peninsula are not prepared to support the Cape Town-Simonstown line in a greater manner than they are doing now, we may ultimately be faced with that position. Either the people want it, or they do not.

Are you trying to frighten us?

No, I am only stating the facts. As a business man my hon. friend would be the first to scrap an aset in his business which gave him such a big loss. I want to come back to the pressure by hon. members opposite for the expenditure of all these millions on what they say is so very necessary.

I have shown you how to recover some of these losses.

Yes, I know that the hon. member put up a very elaborate plea, but I do not propose to enter into it at this stage.

Or at any other stage either.

I have met the hon. member privately about this and I am prepared to meet him here. The facts are that with regard to our capital expenditure, there are large amounts which do not give us a return of 100 per cent. interest. But that is not all. We also have the factor of motor competition. I hope the House will be prepared to deal with that question in a comprehensive manner next year after the report of the commission will have been received. I hope we shall be able to deal with it in a national manner, and that we shall look at the whole problem as it affects South Africa. Motor competition has come to stay, and our railways will continue to feel the effect of motor competition as every railway system in the world has felt it. Then there is air development. If one sees what is occurring in regard to developments in the air, one feels that we must look to the future with the very greatest care. We do not desire to stifle this development; we want to keep pace with our growth and with our needs, but I do say that when the hon. member for Kimberley (Sir Ernest Oppenheimer) deals with the matter in the way in which he did, I deeply deplore it. The fact that he dealt with it I welcome most heartily. The hon. member for Hopetown (Dr. Stals) also dealt with it in another spirit. We have too few hon. members who take an interest in this subject, and I very much appreciate the fact when they do deal with it. The hon. member quoted a report by certain departmental officers—most capable officers, for whom I have the highest respect, one of whom, the chief accountant, is an outstanding officer. These problems are such, however, that we must face them. In our Act of Union no provision is made for a sinking fund. In 1922-’23 the House took just the opposite view in passing the Electricity Supply Commission Act, and laid down that the capital should be redeemed over a period of years —

It is too much.

I agree with the hon. member, and I hope the position will be reviewed. For capital railway redemption there is no provision whatever. When I began five years ago to make provision for placing aside a quarter of a million from revenue towards non-interest bearing capital, I was doing something in the interests of our railway administration which has strengthened our internal financial position to a great extent, and surely there is no hon. member who will not agree that this has tremendously strengthened the internal position of our railways.

It is a burden on the users of the railways.

I admit that, but I would ask my hon. friend, who has given the matter careful thought, whether, in view of the large amount invested in our railways and harbours assets which is not giving ns the full 100 per cent. interest, he suggests that we must continue as under the South African party Government with strong motor competition with us already, and air competition in the offing. Is this House going to allow the position so to develop, forcing us ultimately to lower the wages of our staff or to raise the rates on our agricultural produce and low grade minerals? Those are the only alternatives. I think hon. members must agree that the action I have taken and continued over the last five years has tremendously strengthened the financial position of the railways, and when hon. members say that the burden on users of the railways is too great, I ask them what we are to do? We must provide a sinking fund or deal with the position in another way. Take the graving dock in Durban. While I was not responsible for it, I do not blame the previous Government. They said we must have a graving dock second to none in the world, and it is not paying its way. If we do not provide a sinking fund, the time has come for us to face the position, and these assets which are not paying must be written down; and that can only be done out of profits. I hope hon. members will give it further consideration.

[inaudible],

Out of profits we wrote down the value of the Sea Point line, and over £100.000 on dead harbour assets. We still have about £300,000 of dead harbour assets. I now want to detain the House for a few minutes longer on the question of our rate policy. Let me in a few words indicate the policy which has underlain the whole rate policy of the past. It has been for many years now the policy to grant low export rates, both for our base mineral and agricultural produce, in order to enable them to compete in oversea markets, and levying higher rates on goods capable of carrying the burden. Let me give some figures. In 1909 we handled on our railways 9,000,000 tons of goods, in 1919, 14,000,000; and in 1929, 22,000, 000 which shows a very big increase over the last 20 years. That indicates that there cannot be something very seriously wrong with our railway rating system, if during 20 years we have been able to make such tremendous progress. But I now come to the more detailed criticisms of the hon. member for Roodepoort (Col. Stallard) and the hon. member for Springs (Sir Robert Kotzé). They have made strong attacks on our coal rates, more especially the rates between Witbank and the Rand. They have made wild allegations, namely, that we earn a profit of £510,000 per annum on our coal traffic to the Rand. That is not correct. The hon. members went on further and said that we are imposing an extra cost of between 3½d. and 4d. per ton on the whole output milled on the Rand. The hon. member for Boksburg (Mr. McMenamin), who also dealt with the matter and did so far more correctly than the other hon. members referred to, as I shall show, asked my hon. friend opposite, “What is your authority for making that statement?” The hon. member gave a very vague reply. I do not think the House can be satisfied. He said he got the information from the report of the general manager, from documents and the statements of public men. Well, I ask him again, what is his authority for making that extraordinary statement? It is not only irresponsible, but wholly incorrect. I will tell the hon. member where he gets it. He got it from the economic railway bible of my hon. friends opposite, Dr. Frankel’s book. That is his only authority. Let me examine this new found authority of hon. members. My hon. friends have attached a tremendous amount of importance to this authority, and I shall show them that this authority is not a reliable authority. Let me point out that Dr. Frankel approaches this matter as a professor, and professors, as the Prime Minister has stated, are not always reliable guides in matters of this kind. He has no knowledge of the actual working conditions and has written a book which has misled members opposite. In this particular case Dr. Frankel was asked by the Gold Producers’ Committee of the Chamber of Mines to deal with the railway position. He entered on the whole matter with preconceived ideas, namely, that the farmers were being spoon-fed by the railways, and the poor unfortunate gold mines were being made to suffer under the burden of high rates. Let me say that that book, which I have carefully read, contains many inaccuracies and many weaknesses. I am going to give the House only one of them to indicate how Dr. Frankel has led hon. members astray. On page 183—the hon. member for Roodepoort (Col. Stallard) will at once recognize that page—I find that in order to bolster up his case that the agricultural community has been spoon-fed and the coal and gold mines subjected to heavy rates, he says—

But unfortunately for our professor, he has mistaken the bunker coal rate for the export coal rate. The export coal rate for the 332 miles is only 5s. 8½d. per ton, so that the comparison between the export coal rates and maize is very much in favour of the coal mines. Hon. members opposite have got themselves into difficulties by following a blind leader of the blind. Again export coal is conveyed to Cape Town, 1,347-1,100 miles from Natal and the Transvaal for about 14s. 5d. per ton as against the export maize rate of 15s. per ton over the same distance. The whole case put up falls away. The hon. member has repeated the statement made by Dr. Frankel that we earn a profit of £510,000 on the carriage of coal to the Witwatersrand. Does the hon. member know that since 1922 we have not kept sectional statistics of earnings on the main line or on sections of the main line?

I said that was a calculation.

But the hon. member is quite wrong. I notice that the Rand newspapers have particularly boomed this attack on the administration. I hope they will now give the facts. Since 1922 we have had no sectional statistics of main line working, or branches of the main line, so that it is absolutely impossible for any man to say what the profit is. The figures are not available.

What are the profits?

It may be said perhaps that Dr. Frankel made his own calculations. But even if sectional statistics had been taken out of the working results of that particular section of line, it would still be quite impossible to say what our profit or loss is on coal traffic. We do not keep a special account of what our expenditure is on carrying coal, so that even if we had taken out sectional statistics it would still be absolutely impossible to say what our profit or loss is in carrying coal from Witbank to the Rand. The remarks of hon. members in this connection have been irresponsible and incorrect, and can only be described as pure guess work.

What is the correct figure?

I have just indicated that it is impossible to ascertain.

Then how can you say that our calculation is wrong?

I know what a judge would say to a remark of that kind in view of the statement just made by me. The hon. member for Springs came forward with another argument that coal rates should be reduced in favour of the low grade mines. The same proposal was made to my predecessor, and Mr. Jagger replied that it was quite impossible to give lower rates in favour of the low grade mines. Section 40 of our Act of 1916 makes it impossible. My hon. friend, the member for Roodepoort, and the hon. member for Springs (Sir Robert Kotzé) who are so interested in mining development, might, I suggest, approach the Victoria Falls Power Company, who are making enormous profits, for assistance. May I suggest that their next appeal be addressed to the Victoria Falls Power Company for a reduction in charges. I understand the gold mining companies are interested in the Victoria Falls Power Company, so why not approach them for assistance?

The Electricity Board governs their rates.

I know all about that, but the profits of the Victoria Falls Power Company are very considerable indeed. The House, however, may ask whether our coal rates are not too high. I want, in that regard, to quote British rates. Coal is one of the chief products of Great Britain, it forms her life blood, and the railway companies are privately owned and managed. The coal there is largely carried in waggons belonging to the collieries themselves. The rates from the terminal coal depots to London in collieries’ waggons, a distance of 98 miles, is 5d. per ton in favour of the South African rates. For 109 miles the difference is 7d. in favour of the South African rates; for 130 miles 1s. 1d.; for 149 miles, 1s. 7d.; 163 miles, 1s. 7d., and so on. To convey coal to Glasgow, conveyed in the waggons of the railway company, the rates for 20 miles is 1d. in favour of South Africa; at 30 miles, 2d.; and so on. Our coal rates are very reasonable, and the charge made against the administration falls to the ground.

Motion put and agreed to; House to go into committee now.

House in Committee:

Main Estimates [U.G. 20—’29].

On Vote 1, “H.E. the Governor-General,” £24,247,

On the motion of the Minister of Finance it was agreed to report progress and ask leave to sit again.

House Resumed:

Progress reported; House to resume in committee to-morrow.