I wish to move the following amendment—

The principal Act provides in Section 7 that where the Minister proposes to close down a Unit Trust Company, there shall be an appeal to the Courts of Law. It is provided in subsection (3) that—

The Minister made some effort to explain his attitude in regard to this matter. Clause 4 of this Bill provides that if the parties are dissatisfied with the ruling of the Registrar, they may appeal to the Minister and the Minister’s decision shall be final. The Minister indicated in the course of his second reading speech that the reason why he was not providing for an appeal to the Courts was that there was no deprivation of rights.

No deprivation of vested rights.

He pointed out in his second reading speech yesterday that there was no deprivation of vested rights. Sir, I submit that the ordinary individual company that wishes to embark on a venture such as this has the right to embark on a venture, and as it has a fundamental right to embark on this venture, to invest in a unit security trust because it regards it as a suitable form of business, it seems to us that it is just as important that there should be an appeal to the Courts in this case as it is in the case of Section 7. Surely if there is no appeal from the Minister’s decision, it is possible that the parties concerned may be deprived of a hearing because the Minister will generally support the view of the Registrar. But even if he does not, the Minister is in this position that he has the views of the various bodies who are interested in the argument that there shall be no extension of unit security companies. They are not anxious for the new companies to be registered and therefore it is possible that pressure groups may be built up which may demand from the Minister that there should be no new registrations, and it does seem to us that it would be better for a court, an impartial body, to hear all points of view. The Minister would not have the time in normal circumstances to hear evidence. The Minister would have the papers served on him; he would have submitted to him the arguments of, on the one hand, the parties who wish to register this new company and, on the other hand, the views of the parties who object to the registration, and the Minister would not be in the position of a court of law which could, if necessary, hear the arguments of both sides. I repeat that as far as possible there should be an appeal to the courts. We hope that the Minister, although he made it quite clear yesterday that he was against any appeal to the courts, will now that this amendment is specifically put before him, reconsider the matter and will appreciate that it is in his own interests that there should be an appeal to the courts, so that the Minister cannot be charged with bureaucracy or with failure to hear both points of view. It is quite impossible under ordinary circumstances for the Minister to hear the arguments of both sides and to have the advantage of hearing people being cross-examined and of hearing evidence in rebuttal. We think that as far as this clause is concerned, it is much better that there should be an appeal to the courts, and we hope that the Minister will accede to our request that there should be an appeal to the courts and will therefore accept this amendment.

I think there is another aspect to this matter. The provisions of the Bill are such that a mushroom-concern or a small concern wishing to enter into this type of business is automatically excluded. The requirements called for from a company wishing to undertake this kind of business are automatically such that anybody applying must be of pretty substantial financial standing. In this clause the Registrar and the Minister (if there is an appeal) if they are satisfied that the general financial and commercial standing and the nature of the business conducted by it are such as not to fit such company for assuming the duties and responsibilities of a management company, can refuse registration. Now it seems to me that may have very grave implications for the company concerned. If a company of the standing envisaged in this Bill, complying with the very substantial requirements called for before they can make application, is then told by the Minister that he does not consider that their general commercial and financial standing is such as to fit them for this kind of work, it is a very grave reflection on that company, and it seems to me that if the Minister has to take that step, the company should have the right to appeal to the court in order to have an opportunity of demonstrating that they are in fact (if the Minister permits to do this kind of business is another matter) fit and proper people to carry on such business and that they are not to be told that they are not of sufficient general financial and commercial standing to be fit to carry on this type of work. In addition to the arguments forwarded by my honourable friend, I think the Minister might consider that aspect of it and, in fairness to the companies in the cases of whom he may feel compelled to decline to allow them to do that kind of business, to allow them to have an appeal so that the whole case can be discussed publicly, and that they can vindicate themselves against the implied stigma that they are not fit and proper people to take part in that kind of business.

I do hope that the hon. the Minister will reconsider the matter. The point has been very fairly put both by the hon. member for Pinetown (Mr. Hopewell) and the hon. member for Constantia (Mr. Waterson), and there is very little more that one can add. But I just want to put this point: Any group which make an attempt to create a unit trust like this would, as the hon. member for Constantia said, have to be a very strong group. Now, as I see it, there are three groups which could want to start such a security trust and if one had started, it is quite possible, if they had a political pull or could bring pressure to bear, that the Registrar, possibly for very cogent reasons, would decide that a second group should not be allowed to compete against the first group. Now the hon. the Minister has not got the time to go into all the details of a case, but it might be a very important matter, not only in the interest of the groups, but in the interests of the public as such to have more competition. Therefore I think in a case such as that the only fair thing would be for the courts to be able to go into the whole matter and to be able to judge the case on its merits. To say that there is no deprivation of rights, is not quite correct. Obviously every individual in this country has the right, provided he complies with the law, to do certain business, and you are taking away that right from him simply by means of a bureaucratic move on the part of the Registrar. I repeat that the hon. the Minister has not got the time to deal with such a matter on its merits, and therefore I do hope, for the sake of all concerned, the public and such groups as may want to compete, to give them the opportunity of starting such an undertaking, and, if they are blocked by the Registrar, for good reasons, no doubt, let the courts then decide whether those reasons are sufficient to prevent them making an attempt to create such a trust, in the interests of all concerned.

I support the amendment moved by the hon. member for Pinetown (Mr. Hopewell). Yesterday, during the second reading of the Bill, the hon. the Minister was content to say that the powers granted here were administrative powers. I would submit that the powers given to the Registrar here are quasi-judicial and not administrative. But even if the hon. the Minister is correct when he says that in a decision under this new sub-section (4) the Registrar will be acting in an administrative capacity rather than in a judicial capacity, that in itself does not distinguish this instance, this power to refuse registration, from the power which is already contained in Section 7 of the Act, the power to cancel or suspend a registration. Sir, in both cases the functions imposed upon the Registrar call for the exercise of a decision which will affect the rights and interests of some other person, whether you classify that power as administrative or quasi-judicial or judicial. The fact remains that a decision is to be made which might be adverse to the person concerned. The hon. the Minister chose yesterday to overlook the fact that the courts have consistently pointed out that an official who is entrusted with powers to make decisions affecting the rights of others must act in a judicial way. It is trite law, but I would like to refer the hon. the Minister to the case of Hoek vs. Venterspost Municipality (1950, S.A.L. (1) at p. 172), in which the court points out this very fact and says—

What the Registrar is here empowered to do is twofold. He can act under Section 7, where there is recourse to the courts, or he can act under the new sub-section (4) to which the amendment refers. I hope the hon. the Minister will accept the logic and the need for preserving the principle of recourse to the courts. That is the principle involved here, namely that there should be recourse to the courts. Sir, it is perfectly true that in the case of Section 7, there is a statutory enumeration of the grounds which the official must take into account when making his decision, but in this case too there is an enumeration of the factors which he must take into account. He must satisfy himself that the general financial and commercial standing of and the nature of the business to be conducted by such company, is such as to fit it for assuming the duties and the responsibilities of a management company. So the position is much the same, and I do not think the distinction which the hon. the Minister tried to make yesterday in calling this an administrative Act, is really a valid argument. In both cases the Registrar fulfils exactly the same function. He has to examine the circumstances enumerated in the Act and he has to make a decision, and as the courts have so clearly indicated, in making that decision he may not act on an arbitrary basis but must act on a judicial basis.

The hon. the Minister made some play yesterday of a similar provision in the Banking Act. He indicated that if a Russian Bank wanted to set up here, there surely ought to be some sort of power not to allow it to do so. The answer to that, I think, is this: If a Russian bank were to try to set up business here, and if in fact it would be in the public interest that it should do so, then surely the will of Parliament should prevail; surely it should not be the arbitrary decision or whim of the official which should prevail. On the other hand, if a Russian bank wanted to set up here and it was not in the public interest—as may well be the case because it possibly would be as much a political as a financial organization—and it was refused, I have no fear that the court would not do exactly the same. I have complete faith in the courts. I feel sure that in circumstances such as that the courts would give a similar judgment. Sir, the judiciary is much more wise and experienced and certainly more discerning than any bureaucrat can ever be. As I say, I have great faith in the courts, a faith which the hon. the Minister seems to lack.

There is one other point I want to deal with. Although Section 7 talks of “an appeal”, we know and the courts know perfectly well that in substance it is not in fact a judicial form of appeal. The courts will therefore always look at the matter as if the law had conferred upon them powers of review. The standards on which the courts would deal with the matter, the standards of interpretation and of judicial decision, will be the same as they are in a question of review. I need not quote authority for that to the hon. the Minister. He knows very well that there is a long line of decisions to that effect and that the courts in those cases will only act where manifestly some injustice has been done. The courts will never substitute their own view for the view of the person delegated to make the decision, unless there is something manifestly wrong, and if there is something manifestly wrong, of course the hon. the Minister should be the first person to say that it has to be put right. I say that no argument raised by the hon. the Minister is really an answer to the proposition that has been put before the House. The number of instances that would go to the courts would, I presume, be very, very small, but the right of recourse is the important thing and it should be there. I would put it this way, Sir: If the hon. the Minister thinks that the existing legislation has gone too far in allowing “an appeal" and if he considers that “review” would be the better procedure, I can assure him that we on this side of the House would support that view completely. If the hon. the Minister is disposed to deal with the matter in that way, may I suggest that he should either let the clause stand over to give him an opportunity to look into that aspect of the matter, or he could report progress so that it can be discussed again. But I do not think that the principle of recourse to the courts in the present case should be lightly dispelled merely on the grounds which have been advanced thus far, namely that the decision is an administrative one. As I have said, it is trite law that even in those cases the official must act in a judicial way.

The hon. the Minister need not hesitate in accepting this amendment. Hon. members on this side have emphasized the rights of the individuals and the rights of their appeal, but I have been trying to conceive the circumstances in which a company would appeal to the courts, after the Registrar has refused and the appeal has come to the Minister and been refused. If the company then had an appeal to the courts, what would be the result? They would not appeal lightly because in the courts they would have to reveal their financial position and their actual hidden reserves. They would have to do what companies are not prepared to do nowadays, and if they were prepared to go to the courts in those circumstances, they would have to have a very strong case. I don’t think the hon. the Minister need hesitate for a moment. I do not think we would have more than one case in ten years, and if there were one case in ten years, some vital principle would probably be at stake.

I really cannot add much to what I said yesterday. I want to emphasize that there is a tremendous difference between interfering with a vested right and refusing such an application. Every person has the right to apply and if you refuse it, then you should exercise your right of refusal in a judicial manner. But that does not make it a judicial issue. I want to give hon. members just one example, because I am as jealous of seeing to it that the courts do not usurp administrative functions as I am that, within the limits that it is possible, administrative officers do not usurp the functions of a court of law. Now let me give you one example of what I mean when I say that the one is a vested right. Anybody has the right to apply for an import permit. Will hon. members say that because such a permit is refused, they must have recourse to a court of law? It is an administrative decision that has to be taken, and although it has to be taken judicially, it is still not a matter in which a court can interfere, unless—and that is possible in this case too—if either the Minister or the Registrar has acted mala fide, or when the Registrar or the Minister, as the case may be, has not applied his mind to the matter before him. In those cases they can always have recourse to the courts of law. I have given you the example of an import permit, but I want to say that what hon. members here are suggesting runs counter to the whole pattern of our legislation. I will give you another example in quite a different field. Everybody is entitled to apply for registration as a citizen or for naturalization, and if there is a refusal, there is no recourse. The right to apply is there. That right is not impaired. But there is no vested right to say that you must naturalize me. On the other hand, once a man is naturalized the Minister is not entitled to take away that vested right from him unless it goes through some judicial channel. I know there was one time, in 1944. when this safeguard was taken away. There was a court case in Johannesburg and the Minister was obliged to come to Parliament the next year to ask that this right should be put in an Act. We fought it and said that it was a wrong principle because here a man had already a vested right and he could not be deprived of that right unless he had some form of recourse to a court. In 1949, when the present Citizen Act was drafted, that one example where the Minister could deprive a man of his citizenship, without some legal channel intervening, either a special court appointed for that purpose in terms of the Citizenship Act, or an ordinary court of law, was eliminated. That is the principle which I mentioned yesterday, but it is also a principle which is very clearly entrenched in similar legislation to this. I want to mention a few Acts where the provisions are such that the registration of new institutions may be refused as in this case by the Registrar if it is not considered in the public interest. I mention the Banking Act, the Insurance Act, the Building Societies Act. This is the wording of the Building Societies Act—

Exactly what we have got here. There is an appeal to the Minister on this, but there is no further appeal. And quite rightly. What hon. gentlemen are asking me to do now is to introduce a principle which runs counter to all our legislation in this regard. The Registrar’s decision in all these cases is always subject to appeal to the Minister, but in no instance is there a further appeal in matters of this kind.

Section 7 of the existing Act makes it quite clear that where there is a registered company of which you want to cancel the registration, it is a matter which can properly go to a court of law. But if you refuse an application to start a new building society or a bank or an insurance company or a management company, it is entirely a wrong conception to expect an appeal in such a case.

Let me just say how the same principle which is entrenched in Section 7, where there is an appeal when you take away an existing right, also applies in the case of the Banking Act. Under the Banking Act an existing institution can be deregistered if necessary, but then it must be by an order of court. In the case of the Building Societies Act, the Registrar must decide whether any existing institution is a building society or not, and on that decision an appeal lies. But it is an existing society. In the case of the Insurance Act, the Registrar may apply to court for an order of winding up or judicial management of an existing company as an existing insurance company. That is the distinction. The one is the function of the administrative arm of our State, but it does not mean that administrative discretion must not be exercised judicially, and if it is not exercised judicially, if the Minister or whoever it is, has exercised that discretion mala fide, or if he has not applied his mind properly to the subject matter, then whether the law says there is an appeal, review or not, an appeal or a review (whatever you like to call it) lies. I want to remind hon. members of the case some years ago, a case that went to the Appeal Court, in which certain administrative decisions of the then Minister of Mines and Economic Affairs in regard to Iscor were questioned, and it was said by the Appeal Court that those decisions could only be questioned on one of those two grounds.

I want to say further that hon. members expressed the fear that a monopoly might be created and that there would be no competition. But I want to say that I made it very, very clear in my second reading speech that it is fundamental to the success of this scheme that there should be healthy competition. A monopoly would not be desirable, and I am quite sure that the Registrar will bear it in mind that we want competition, but it must be sound competition also in this sense that they must be people who are fit to exercise the tremendous responsibilities that rest on them. I am not prepared to say that is a decision which can be made by a court of law. I think that is an administrative decision which has to be taken, and the Minister, or whoever has to take it, must act judicially. If he does not, the matter can be taken to a court. It is of the very essence that we should have proper competition, and I am quite sure that is a consideration which the Registrar will always bear in mind.

In conclusion, I may just make one further point that in the original Act of 1947, provision is already made in regard to the trustee, and there is no provision in that case that it should go to a court of law. The whole principle of Section 7 of course does not apply there. For these reasons I regret that I cannot alter my views.

Amendment put and negatived.

Clause, as printed, put and agreed to.

On Clause 7,

This is one of the most important clauses in the Bill and we feel that in the interest of the safety of the public, we could also consider the question of the liquidity of the assets held by a unit trust. It provides two limits: Not in excess of 5 per cent of the total assets in any one security, unless that security is an investment company when that 5 per cent becomes 10 per cent. When I read this clause first, I envisaged that it was intended that the assets must be spread, quite correctly, over a large number of securities, 19 of which would be dealt with on the Stock Exchange. It is very difficult to get that number of first-class investments outside the mining industry. But it leaves one investment to the good sense and ability of the management company. But when we refer to sub-section (2). we find that forces the management company to dispose of that 5 per cent interest if it is not a quoted stock within 12 months, and I am wondering whether this is not being a little bit too rough with the management company. I can see no reason why 5 per cent of its assets should not be in a company that has not got a Stock Exchange quotation.

The hon. member has raised an important point, because it is more favourable than the British counterpart which demands 100 per cent in Stock Exchange quotations. But there are points here which could allow a good management realizing that stock is not yet quoted, but which will come onto the market perhaps in a year or two and which might have a very good chance of capital appreciation, in which case it might be in their interest and in the interest of the unit holders to have a 5 per cent of such stock in its portfolio. Therefore I agree with my honourable friend here. But whilst on my feet, I should like to raise one other point. Let me say at first that we very much appreciate the memorandum that was given to us and also the courtesy of the Registrar to send his representative to give us an hour’s explanation and to answer any questions. We should like to thank the Minister and the department. But here on page 6 of the memorandum, I find 1 (b) on page 6 which I think is very badly worded. It says “an investment shall not exceed 5 per cent of the total of a particular class of security issued”. For anybody who does not go into it carefully that would be misleading. Because as this indicates here, “5 per cent of any particular class of security issued”, it might easily create a wrong impression. Take the whole mining industry. That might be considered as one class. A building investment in a block of flats can be taken as one “class”. But I think the Bill itself makes it clear that is not intended. As long as it is not the same mine, even if it falls under the same group. If a group consisted of six mines and they all had the same directors but they were separate entities, it would be able to take 5 per cent in each one of those mines. In other words, it would have a unit which consisted entirely of a mining unit. I think that the memorandum does not make that point clear. I just wanted to point that out to the Minister because anybody else reading it might be misled by the memorandum.

As far as the non-Stock Exchange shares are concerned, it is quite true that we allow 5 per cent of such stock to be taken into a portfolio but it is really essential in order to price the value and ensure liquidity, that they should become Stock Exchange securities as soon as possible. Therefore, we say we give them a period of 12 months. But if the Registrar has reason to believe that a longer period is necessary and that they will become Stock Exchange securities, then we say in this Section “where he is satisfied that a security is likely to become a Stock Exchange security within a reasonable time, the management company concerned shall substitute …” So it is really a period of one year from the date or within a period which is reasonable.

My point was that he should have a discretion.

On the basis of what the position is in other countries, it is desirable that all of the securities should be Stock Exchange securities. Or at any rate that they should have a reasonable prospect of becoming Stock Exchange securities. We are now giving them an opportunity of becoming Stock Exchange securities, but it is not considered sound to have non-Stock Exchange securities—securities which never have a hope of becoming Stock Exchange securities- in the portfolio.

As far as the hon. member for Green Point (Maj. van der Byl) is concerned I must confess that when I read it for the first time it was also not quite clear to me what was meant by “class”, But if one looks at the definition of “securities” you see that “securities” mean “shares, stock, debentures, debenture stock, debenture bonds", What we say in this Clause is this—

That is securities of ordinary shares or of preferent shares or of debentures—

That is, if it is the same concern—

In other words, it is not 5 per cent of the total capital but it cannot be more than 5 per cent of their ordinary shares, 5 per cent of their debenture shares or 5 per cent of their preferent shares or whatever the case may be. I admit that I also questioned it when I read it the first time. But I cannot see how you can read it any other way; if you read it with the definition it becomes quite clear. I think the Afrikaans text makes it a little bit clearer “effekte van ’n besondere kategorie” instead of “class”. That makes it somewhat clearer. I do not think we need quarrel about that. I think it is clear if one reads it with the definition clause as key.

Clause put and agreed to.

On Clause 11,

I want to raise one point here. In the past some unit security organizations put old mines into a unit, which of course pay a very much higher dividend because they are nearing the end of their life. This brought up the whole dividend rate of that particular unit and gave it a misleading value. But as those mines will have to peter out in a few years the dividend was really misleading as regards the value of that unit. I am very glad to see that the amortization must be stated but I go further. Where a unit consists to a large extent of older mines, would it not be a good thing to lay down—I am only putting this forward as a suggestion—that amortization should be enforced. That will place the holder of that unit in a stronger position. There will not be high dividends over a few years and then the entire assets merely become a hole in the ground. I feel that might be necessary there. An ordinary individual buying a share which yields, say 12 per cent or 14 per cent due to the fact that the mine is nearing its end, knows he has to put a large amount aside for amortization because he is really paying income tax on capital—he is largely merely getting his capital back. But in an organization such as this where super tax is not paid, where if the yield is 6 per cent, it is a clear 6 per cent because normal tax has been paid at source, amortization would not be necessary. I think it is worth considering that it should be laid down that not only should they notify the unit holder of the amount put aside for amortization, but that a certain amount of amortization should be laid down by the Registrar for those ageing mines which will soon peter out.

I do not think we can take it much further. This clause refers to advertisements to get publicity to sell these units. It is only fair that in such an advertisement it should be made quite clear what we ask here: If you are going to amortize say so, but then you must also say how: if you do not want to amortize say so. The buyer must be able to buy with his eyes open. The hon. member will see later on, in the returns—the accounts and information—which must be submitted periodically to all members and to the Registrar, this is also very clearly set out. If they decide on amortization then that is a matter for the trust deed. It has to be stated on what principles they will do it. Before you buy a unit in any particular portfolio you will be able to see what the portfolio is and you will be able to see whether there are any of those wasting assets in that portfolio and. if so, whether any provision has been made for amortization. If you find that there is no provision for amortization, that they are all new mines or at any rate not mines that will require amortization for a certain period of time, then you will know what the position is. If, on the other hand, there are certain securities in this portfolio which are likely to be amortized, you can see when and on what basis. I think the whole idea is to make the buyer of these unit certificates acquainted with the risk that he is taking. You should not be enticed by a lovely advertisement telling you that you will be paid 10 per cent or 12 per cent. The advertisement must also say “no amortization” and the buyer will know what the position is. I think this is merely for the protection of the individual purchaser.

That is my whole argument. These unit securities are really for the smaller man who does not know very much about investments. If he were a man who invested on a large scale he would go into all these aspects with his stockbroker and he would know the whole background of the mine, whether it was a developer or a young producer or an old mine. The type of person who went in for unit securities (anyhow some years ago) was the type of person who did not understand that. Therefore the Minister was quite right when he said that he wanted to protect that type of small investor as far as possible. I think it is a very sound principle that they should be warned in advertisements that an old mine, nearing the end and, therefore, yielding (say) 12 per cent is not something that will last forever; he should not be misled by that. The fact is that the Minister wants to protect the buyer of a unit because he is the type who is not well versed in the dealings on the stock exchange or in the value or the age of mines. If he were, he would probably be buying shares on his own and not try to get a unit like this; he would have his own portfolio covering a very wide spread. But I am quite prepared to accept what the Minister has said.

On Clause 20,

It so happened that I met an old friend of mine, a constituent of my colleague, the hon. member for Kensington (Mr. Moore). We were discussing this Bill and he told me that last year a firm in which he is interested had gone into the question of forming a unit trust on the Bill as then before them. They went so far as to frame the Memorandum and Articles but then they decided, because of the provision that the company was formed to re-purchase the unit, not to proceed. That proposal was in regard to fixed properties, which, as the hon. the Minister told us yesterday, have certain different factors. However, I discussed with my friend what his attitude would be on the question of entering into a unit trust as set out here, a non-fixed property trust. He said his opinion would not be altered. Now that bore out my own feeling in the matter. This side of the House is all in favour of this Bill and hopes that the activities that it will bring about will be very varied. I feel again that this provision is far too stringent and that it is going to harass the formation of unit trust to a degree that is not appreciated. The liability thrown on to the management company is initially to take 10 per cent of the value of the securities held by the unit in question. It is envisaged that these units will grow to a considerable degree because the Bill provides that with the consent of the registrar the amount invested by the management company in a particular unit can be limited to R200,000, which envisages a unit in excess of R2,000,000. In addition subclause 22 (1) (f) says—

I have discussed this with one or two other people and we all feel that this then becomes a contingent liability of the company, that there is this liability on the company to repurchase the total portfolio. Whether that position will ever arise is another matter of course. But you are throwing the liability on the management company to provide 10 per cent and in my view—I might be wrong—it will have to advise the world that it has a contingent liability to repurchase all the units in that particular unit trust. It is true that, as the Minister pointed out yesterday, in sub-section (2) of this section provision is made for it to state in the trust deed—

It is perfectly true, Mr. Chairman, that you are dealing with reputable concerns. They must have a capital of R600,000 to start with. And if they undertake to repurchase the units there cannot be any trickery attached to it. What can they ask for? They have to set out how the price is to be valued, naturally; that price will have to be related to the market price of the stocks owned by the unit in question. What else can they set out? It is difficult to see what they can say except that they might ask for terms for repayment? But the amount of liability must surely remain in close correlation, in close juxta position, with the actual value of the securities held in the unit. I do not know whether the hon. the Minister can do anything this year, but I do suggest to him that he should keep a very close watch on the position. Because I think that this additional responsibility is going to kill this idea right at the outset. My own view is that he should investigate the question of some limitation of liability but to ask a company with a capital of R600,000 to put, say, R200,000 into the unit trust in question and to accept the full liability for the repayment of the whole amount, is something that will make the normal director of companies shudder and say “Well, this is one thing with which I personally want nothing to do”.

I want to support what the hon. member for Benoni (Mr. Ross) has said. I do not want to waste the time of the House, but I think it is putting too much responsibility on any company to expect it to redeem, when it already has 10 per cent of its own money in that unit, the other 90 per cent as well. They will have to keep a very large reserve in a comparatively liquid state to be able to raise the money that is required because, as I take it, the unit holder can demand payment practically any time. It might be a difficult time to raise money. As soon as you try to sell a big holding of, say, government stock—of course there you have the Reserve Bank to help—but, say, of Escom stock, an approved stock, and you wanted to raise money quickly, it will not be so easy to do so. I think this makes it very unattractive for anybody wanting to start such a concern as this because it is a very heavy liability and he would have to hold a very large amount of money in a comparatively liquid state. I know the Minister can do nothing at the moment but I hope he will think about it for the future. Because it might preclude suitable institutions from going into this type of business.

Mr. Chairman, I should like the hon. the Minister to tell us how he will make a market of this kind. I cannot understand a market that will say that the Trusts must be compelled to buy back units. I think it is quite impossible to place that onus upon a company. It has been suggested in the past. When companies have formed these fixed trusts people have been told that they need not worry about being able to realize because “it will be possible for us to buy them back.” Supposing they say “We are going to buy them back”, the point I made at the second reading is this: This Bill lays down nothing about the margin of buying. It does not say whether the margin between selling and buying is to be 20c or 50c or R1. It does not say what it is to be. Supposing a company comes along and says “We are prepared to sell these units to you now at 100 cents and we will buy them back now, today, at 50 cents”, does that satisfy the provisions of the Bill? That is not a market. What kind of a market is that? You need a margin that is fairly fine if it is going to be taken seriously. I am not saying that they should not buy them back, Sir. I want someone to tell me how the market is to be run, because I cannot imagine a market of this kind.

I think it is very rash to say at this stage that it is impossible. I will tell the hon. member why I think it is very rash. This principle of the repurchase of units by the management company is absolutely vital to a scheme of this nature. This is a principle which has been applied where the schemes have had very great success. It has been applied in the United Kingdom. I can read to the hon. member everything that a trust deed should contain in the United Kingdom. This is the first thing they mention—

Now comes the point—

This is the basis. If we did not have this then I would say these schemes would have very little chance of success. The price is calculated with due regard to the market price of the various securities in the unit portfolio plus certain other charges.

What must they use for money?

That is the basis on which it is done. You have to have the duty to repurchase and you can say on what terms and how you are going to calculate it in your trust deed. The position is the same in the United States, where the redemption of the shares of mutual funds is also compulsory. This is in regard to the United States as set out in the Investment Company Act of 1940. It is compulsory. If it were not compulsory, one of the main virtues of the unit trust scheme would disappear. It is an obligation, but one must also remember that those same units that have been bought in can be sold again, that there are always new funds flowing in looking for new units and if it is a sound business, as we hope all of them will be, it need not be necessary all the time to keep on tap sufficient funds to meet a run on the management company. As I said yesterday in regard to the section quoted by the hon. member for Benoni (Mr. Ross) you can say on which terms and conditions you will repurchase units and the manner in which the repurchase price is to be calculated. That was why I said during my second reading speech that, as far as I could see, it must be in very exceptional circumstances where the trust deed will provide for onerous conditions to apply to the owner who wants to sell units back. It must be very particular circumstances where they may, at the most perhaps, ask for a postponement of the payment for those shares. I want to assure hon. members that this principle of the compulsory repurchase under certain conditions is absolutely vital to the success of the whole scheme.

May I ask the hon. the Minister a question following upon what he has just said. Did I understand the Minister to say that a unit trust could repurchase its own units? Because the liquidity and the cash resources question surely applies to the management company …

Yes.

A unit trust cannot repurchase its own unit. And secondly, would it be acceptable to the Registrar for a management company to say in its trust deed that it always undertakes to repurchase units at a figure to be calculated on the market price of all the securities in the unit less, say 50 per cent. Would such a clause be acceptable?

The trust deed will also have to be approved by the Registrar.

That is the very point I am trying to get at. As I see it, if you put the management company in a position where it is forced to buy a lot of these units back it will not be able to do so unless the sellers of the units make some sacrifice. I still think this will create a position where people will not join a thing like that but run away from it. I do not know whether I have made myself quite clear, Sir. But I ask the Minister whether he would approve of a provision in the trust deed stating that the management company would repurchase units at the market value of the underlying security less a discount of anything from 35 per cent to 50 per cent or any figure you like, Sir. Would such a provision be acceptable.

The point raised by my hon. friend, the member for Benoni (Mr. Ross) is an important one. I realize the hon. the Minister’s difficulties. But if there were a run on such a concern, a heavy run, as there was on the building societies in Northern Rhodesia after the Congo affair—the Government was nearly forced to step in there—I doubt whether any concern would have sufficient liquidity to be able to meet that run and pay out even 80 per cent of the value. They would then have to sell the stock which they repurchased from the first unitholder who came in and said “I want you to take my stock over”. The moment they sell it they push down the market further. A year ago if one had thrown, say, 500 or 1,000 Free State Gedulds on the market, you would have pushed the market down a £ or more. When there is a run on a market the sale of any block of shares pushes it down to a large extent. Where will this company get the liquidity or the reserves to be able to buy if there were a run on it. Will you have to declare a moratorium or something like that?

The hon. member for Benoni wants to know whether I can tell him now. If I could tell him now, Sir, it would not be necessary to have any trust deeds; he could just ask me the question here and they would be applicable all over! Whether it is permissible or not will depend on the judgment of the Registrar in the first place to see that there is a fair repurchase. That is the main thing.

I want to say to the hon. member for Green Point (Maj. van der Byl) that it is a normal thing which we expect. We expect that from time to time these underlying securities will be realized and the proceeds of such realization will then be utilized either for buying other securties or reducing the number of units if there are applications for repurchase. Your assets will then be less but you will have so much less obligations. There will always be a certain amount of liquidity from new funds coming in and from the realization in the ordinary course of business of underlying securities and from the sale of the units in a unit portfolio. So I can only say that it is difficult for me to say that this or that will happen. All I can say is that in other countries this is the system, and let us go on that rather than venture onto unknown seas; and if experience teaches us that some changes have to be made, we can always come back. But I think this is the basis on which we have to start, because we have some firm ground for this basis, namely the experience of countries like the United States and the United Kingdom.

Clause put and agreed to.

On Clause 35,

I want to move the following amendments—

and to insert the following new sub-section to follow the proposed new sub-section (3):

I will just give a short explanation of their object. Firstly, the additional words in line 70: The object of this amendment is to exclude the operation of sub-clause (2) to participation mortgage schemes to which sub-clause (3) applies. That is done by necessary implication. Secondly, the addition of the words in line 45: In terms of sub-clause (3) the Registrar will be able to exempt participation mortgage schemes from the provisions of the Act. The effect of the exemption will be that such schemes will not be affected by the general prohibition contained in sub-section (1) of this clause and will therefore be able to continue. In exempting a scheme, the Registrar will have the power to impose conditions on schemes to ensure their proper operation. The object of this small amendment is now to make it quite clear that such conditions will not be of retrospective effect. My Department is aware that there are practical difficulties which will make it very difficult for schemes to comply as regards their past business with the conditions we are imposing now, and therefore we want to make it quite clear that they will not be required to do so.

The third is the addition of the new subclause (4). One of the conditions which will be imposed by the Registrar in exempting a participation mortgage scheme will be that every mortgage bond included in the scheme must be registered in favour of the nominee company approved by the Registrar, which will not be allowed to incur any liabilities. This is necessary for the protection of participants who will normally not be able to exercise the rights of the ordinary mortgagee. Schemes which have in the past not been operated in conjunction with the nominee company will not be obliged to transfer past bonds to a nominee company since the conditions imposed by the Registrar will not be of retrospective effect. However, since it is obviously desirable that such bonds be so transferred if possible, this provision is included to make such transfer possible without any additional expense being involved.

Do I understand from this that the Registrar has now agreed with the Association of Trust Companies that this question of nominee companies being prohibited from incurring liabilities is the only power that he will insist on in the regulations? I understood the position to be this, that he insisted and that they had more or less agreed that fidelity guarantees would have to be provided in regard to the nominee company’s bonds and that there would be a certain amount of restriction or regulation regulating the actual granting of the bond, which I think finally crystallized in the suggestion that the bonds must be limited to 75 per cent of the fair value. Has that fallen away, and has it just come down to the fact that the nominee company will be prohibited from incurring liabilities? If so, I have no more to say.

I can say at once that the nominee company will not be able to incur any obligations or liabilities. It is simply for this one purpose, and therefore we do not place an unnecessary burden on the scheme as a whole. I am instructed that there will be three conditions as far as we can see at the moment, firstly, in regard to nominee companies, secondly, a fidelity guarantee, and thirdly, that mortgages must not exceed 75 per cent of the valuation. That is as we see the position now.

I am very afraid of bureaucratic controls spreading and I must honestly say that this proposed provision about 75 per cent of the bond on a fair value has nothing to do with the Registrar. Boards of executors and trust companies mean a lot in this country and the public is entitled to protection, but to me this is meaningless. The men who grant the bonds have experts at their beck and call to tell them what the value is. They decide on the application. How can we take notice of the regulation by the Registrar that it should be 75 per cent of the fair value?

That is only for new applications.

There will still be applications for bonds and they will have to consider them. I cannot see any reason at all for such a clause. It is meaningless.

What? The 75 per cent?

75 per cent of the fair value. How does the Registrar know what is the fair value? You have sworn valuators giving the value.

But that is not the provision in the Act. It is very difficult to say what the position will be. I have tried to give the hon. member just an over-all impression, but it is a thing which will have to be tested. The Association of Trust Companies is, I understand, even in favour of 66⅔ per cent, instead of 75 per cent. They are in favour of this, but it is very difficult to say whether it will be 75 per cent or 66 per cent in all the circumstances. I take it that is a matter primarily for discussion when one knows the circumstances at the particular time. I do not even know whether many of these details can be put into the trust deed. They will have to be scrutinized by the Registrar in the light of the conditions obtaining at the time when an application of this nature is being considered. It is very difficult to say that it will be treated in this way. Where we have been able to, we have put the guiding considerations into the Act itself. For the rest, many of these things will be determined in the trust deed. It stands to reason that there are many things which will depend on circumstances which may change from day to day and which I cannot foretell at this stage.

I am not being difficult, but I am just afraid that the bureaucrats are taking powers they have no right to take and that are meaningless. There is no trust deed in such a company. There are the memorandum and articles of association. It is a nominee company of a board of executors and it is intended in the ordinary way to spread a particular mortgage bond over the funds contributed by several people. Really all I want the Minister to say is that he personally will see that not too much is made of this. The thing has run well for a long time and the less official interference there is the better for business and for the whole country.

The remarks of the hon. member have been noted.

Amendments put and agreed to.

Clause, as amended, put and agreed to.

Remaining Clauses and Title of the Bill put and agreed to.

I should like, in the first place, to make a short reference to the White Paper which the Minister has given us to this Bill. I would express the hope that when White Papers are issued, they should be issued in such a form that when one has read the White Paper one will in fact know what the Bill is about. I could spend a lot of time on this, but I think in all fairness I can say that one can read this White Paper without really appreciating what the object of some of these provisions is, and in some respects I think the persons who rely on the White Paper might very easily be misled. I will give just one example. In dealing with Clause 21, the White Paper says that the substitution of subsection (3) of Section 74 aims at the extension of the principles contained in the State Property (Immunity from Rating) Act, 1931. I think that is a correct statement, but it goes on, after a few more words and dealing with another section it says “and at the same time to serve as an inducement to local authorities to obtain and develop land owned by the Commission in their areas”. I suggest to the Minister that if he looks at that provision he will agree with me that it does not accurately describe what the purpose of the section is. The section itself provides that where the local authority has made an offer to acquire the property which has been refused by the Commission, in that particular case the. Commission is nevertheless liable for assessment rates on the property concerned. I appeal that steps should be taken to ensure that the White Paper should present the Bill in a simplified form and, above all, that it should be in an exact form, so that when reading it one knows what the purpose of the section is.

Mr. Speaker, I wish to deal with only three of the clauses of this Bill, and I hope you will allow me to do so, Sir, because it may facilitate the passing of the measure at a later stage. The first provision I want to refer to is the provision of paragraph 13, which deals with the acquisition of immovable property by the Commission. I should be very glad if the Minister could tell us why this provision is necessary at all. The provisions of Clause 13 add a proposed new sub-section. We have Section 30 in the existing Act, which deals with the acquisition of new property, and if one compares that with the proposed 30bis which follows it, there is a difference in wording, but the difference in respect of the method of acquisition appears to lie in this, that in Section 30 of the existing Act there is reference to purchase, expropriation or otherwise of any land, whereas in 30bis it refers to purchase or acquiring in any other manner certain land. I hope the Minister in his reply will tell us why it is necessary to include this particular provision. It would help if he could indicate to us why the reference to expropriation which appears in the existing Section 30 has not been included here; because I take it that if it is not an acquisition by agreement there is the power of expropriation by the State and obviously there a fair value will be fixed in terms of the usual provisions relating to expropriation.

Then I should like to refer to Clause 15, and I do hope that the Minister will be prepared to introduce amendments to this clause. I think in view of what we know of the work of the House for this week and next week, there will be sufficient time for its consideration. The provisions which appear to me to be objectionable are in the proposed new Section 43bis, which appear to me to take out of the hands of local authorities and the provinces powers which they have properly exercised in the past and to vest those in the Commission. A great deal will depend, I believe, on the particular cases in which they are applied. I do not know whether the statement in the White Paper in respect of this section is correct. I think I can say that as far as my province is concerned, it is not correct that the only way of changing the name of a township is the cancellation of the general plan and the substitution of a new general plan, which is an expensive and lengthy process. From the provisions of this clause one can accept that it is necessary that there should be in appropriate cases the right to change the name of the township and of the streets, but I submit that it is undesirable that more than one authority should deal with it. The proper body to deal with it. I submit, is the Townships Board of the province concerned. I think a case can certainly be made out for short-circuiting and speeding up the procedure.

Then I would ask that the hon. the Minister should have investigated, in regard to Section 43ter, whether this section does not interfere with private rights. Again I can only speak for my own province, but there is no question that there are certain of the old townships where, on land ceasing to be used for the purpose in the case of a park, for instance, it is clear that it could in certain circumstances vest in the original owner of the township, a private individual, who continues to hold that residual right. Here by a stroke of the pen this property would be vested in the Commission. I believe that in very many cases it would be the right thing which should happen to the land, but I should like to be sure that the rights of private persons are not being swept away by this provision.

The other provision to which I should like to refer is the provision of Section 22, which deals with the repeal of certain paragraphs in respect of which matters have to be determined by regulation. The explanation of the White Paper is that this will simplify the matter, but I would ask the Minister to investigate in the interim whether it will not be desirable that certain of these matters should continue to be determined by regulation. Some of the matters which are dealt with under this provision are, e.g., the question of giving time for payment to a borrower, or even waiving the payment of certain arrear instalments. I understand that the position in law as it now stands is this, that the local authority can deal with those matters in terms of regulations which prescribe certain criteria which must be complied with, and I submit that it will lead to a great deal of unnecessary reference to and fro from the Commission to do away with those provisions and to substitute in respect of those matters the new proposal, namely that they may act with the approval of the Commission. It appears to me that approval would have to be given in every individual case. If so, the matter can be covered by a general directive to local authorities. It seems to me that it would be very much better that should continue to be done by regulation and not ad hoc. as is suggested in the White Paper will be the new procedure. I submit that a lot of these matters—I do not wish to go into detail—will be far better and more efficiently dealt with by regulation, as is the position under the existing law, rather than that they should be left to be dealt with by the approval of the Commission, which presumably will be given ad hoc in particular cases. I raise those points and hope that the Minister will perhaps be able to allay my fears, and if not, that he will agree to investigate the matter so that when we come to a later stage of the Bill we will be able to discuss it further.

Finally, I should like to make just one general comment. This is the latest of a long line of legislation dealing with housing, of which I think we can all be justifiably proud. I think that since the passing of the original Housing Act in 1920, and the passing of the 1945 Act and subsequent legislation, great progress has been made in respect of housing. I must say that I should like to add my congratulations to the hon. the Minister and to say that I believe that the step of creating a Ministry of Housing is an important one and a step in the right direction. I must say that the Minister has on his shoulders a tremendous task. Just as at this moment I believe we have a lead over all the countries to the north of us in respect of the housing of all sections of the community, all the racial groups in South Africa, so a heavy responsibility rests upon us, and particularly on the shoulders of the Minister, to see that the lead which South Africa now enjoys in this matter is not only held but that we continue to advance further and further ahead of the peoples to the north of us. I believe that it can be done, and I hope that the Minister will be prepared to tell the House that will be his aim as long as he holds this portfolio.

I should like to associate myself with the concluding remarks of the hon. member who has just sat down and I even want to put it in stronger language. I think the time is long overdue for a Department of Housing to have been called into being. As far as I personally am concerned the establishment of this Department is an. indication of the tremendous development that has taken place in this field, the importance of this aspect of our national economy, and the light in which the Government regards it. There have been factors and circumstances in the past that have created housing conditions in South Africa that have been detrimental to the good name of the country and detrimental to the welfare of the population in more than one respect. Many of our social problems have emanated from poor housing conditions. One has in mind the fact that a large section of our nation is under-developed, the fast pace at which there has been industrialization over the past decades, industrialization which attracted many people to our cities and one has in mind the fact that private initiative and even local authorities have not been able to cope with the big demand for housing. As a matter of fact, Sir, you will admit, that in more than one respect self-interest has often stood in the way of the establishment of proper housing and it has even encouraged squatter towns and slum conditions. But you will also admit, Sir, that for a long period in the history of South Africa there has not been a clear insight into this problem and that there has not been proper planning either. Without patting ourselves on our backs, I think we on this side of the House can say that the present Government’s policy of separate development and race classification has given us a new vision and has provided us with the incentive to create and to establish proper housing facilities for the various sections and groups of our nation. As far as I am concerned, I look at it in this light that it was the very policy of apartheid that challenged us, which gave South Africa a new vision and, which encouraged us to see to it that not only the White people, the rich White people, but also the less privileged White people and the Coloureds and the Bantu were properly housed. That is why we are pleased now that we are dealing with the establishment of a new Department of Housing, that in so doing this facet of our national life and of the Government’s task, is being placed on a sound basis. That is why we welcome it. I want to express the hope—and here I associate myself particularly with the remarks of the hon. member for Springs (Mr. Tucker)—that the Minister of Housing and his Department will concentrate on it and that their ideal will consistently be to establish, within the foreseeable future, proper housing for every family within the Republic of South Africa. I regard that as a high ideal on which we can all agree and co-operate. A great deal has already been done but a great deal remains to be done. That being so I want to express the hope that the Government and the Department will, as far as this matter is concerned, receive the whole-hearted support of hon. members opposite so that the attainment of this ideal will not be unnecessarily delayed. I also wish to express the hope that local authorities will co-operate in this matter. I think everyone will admit that in the past all local authorities have not co-operated with equal enthusiasm as far as the realization of this ideal is concerned, perhaps because they did not agree with the policy of the present Government and its aim to classify the nation into groups. But I think we must admit that in more than one respect self-interest on the part of local authorities or on the part of members of local authorities has often caused delays. It was noticeable in the criticism that came from the other side of the House, that attention was particularly drawn to it that there was some indication in certain provisions of this Bill to push local authorities and provincial authorities aside. I think we can take it that experience over the past years has brought certain things to light, that it has revealed certain snags and defects and that this Department which is being established should have the backing of the necessary legislation and that those snags and defects in the existing legislation should be removed, so that the Department may function properly and continue to put those matters right that have to be put right. That is why I am not particularly worried about the position of local authorities. In passing I want to say that it is clear from the provisions of the Bill that those local authorities will be recognized and that they will remain in key positions but that they will not be allowed ceaselessly to thwart the endeavours of the Government to establish proper housing for the whole nation. I wholeheartedly support this Bill and I hope that this Bill will enable us to grow from strength to strength in the years that lie ahead and that our ideal, namely proper housing for the entire nation, will soon be realized.

I want to thank hon. members on both sides of the House for the spirit in which they welcomed this Bill. It is a measure which is calculated to enable a Government Department which has already done such yeoman service in the past to do that valuable work in a more efficient manner in future. Before I go further, I just want to correct a certain misunderstanding which has evidently crept in due to the way in which this Bill has been publicized outside—not by hon. members but by the Press—because it can lead to serious misunderstanding, namely that the relationship between the fully-fledged Department which has now been established and the Housing Commission remains the same as it was between the Housing Office and the Housing Commission. The impression created outside is that there will now be a drastic change in this respect. That is not the case. The status of the Housing Office has been raised. It has become a fully-fledged Department. The Commission remains in the same relationship to it as before. All we are doing is simply to effect the necessary administrative measures so as to give effect to the new situation.

Then I also feel convinced that the way in which the matter has been discussed here will be an encouragement to the National Housing Commission, to its members as well as to the officials concerned in this increased status of the Department, and that it will be an inspiration to all of them. I also want to thank hon. members on both sides of the House who extended their good wishes to me personally. I do not wish to give any undertaking; time alone will show whether I was able to make a contribution.

It seems that the objections to the Bill are chiefly in connection with Clauses 13 and 15. The hon. members for Simonstown (Mr. Gay), Zululand (Mr. Cadman), whom I wish to congratulate on his speech yesterday although I do not agree with him, and Germiston District (Mr. Tucker) apparently fear that we may use the suggested powers to destroy the rights of provincial and local authorities but they are totally wrong. Firstly, the necessity for Clause 15 arises when during the re-development of a registered township the change of the name becomes necessary because the cancellation of existing general plan and the substitution of a new general plan is a prerequisite under present conditions for the change of the name. That is the only reason why we are proposing this alteration. Furthermore, if we do not take the powers proposed in 43ter, the right of ownership falls back to the original owner who already received the compensation to which he was entitled for his property, and that is particularly the trouble, as far as I know, in the specific case in the Transvaal that we have to deal with now. That is the only reason. In any case a responsible body like the Housing Commission would not act in such an absurd way as was suggested. It is not the Minister who is going to act. Hon. members may accuse me of acting in an absurd way, but a body like the Housing Commission would not act in that way. I must point out that the necessary consultation with the Administrator concerned and with the local authorities is provided for in this section.

And agreement?

No, not agreement, because you cannot subordinate the Central Government and the institution of the Central Government to a local authority or to a provincial authority. I think the Housing Commission and the Department of Housing have shown in the past that they are prepared to go out of their way to get the necessary co-operation with provincial and local authorities.

In regard to Clause 13, this clause is necessary for the following reasons. After the matter had been thoroughly considered in consultation with the relevant Government Departments, it was decided that the Group Areas Development Board would not set up a building organization parallel to the Department of Housing, and I think all hon. members will agree with that. It is not necessary to have two teams of technical men; it is not necessary to have duplication of that kind. That is quite unnecessary and is unsound. The principle was then laid down that with the approval of the Group Areas Development Board and of the Housing Commission, there would not be two parallel organizations. It was also decided that the Group Areas Development Board would finance schemes only in special cases such as at Bosmont, Lenasia and Duinefontein. But in any case it was further decided that the Housing Commission would provide the housing. Even in those special cases where the Development Board finances it, the Housing Commission will provide the housing. Where it undertakes schemes such as those at Bosmont and Lenasia, where building takes place on a gigantic scale, it does so on behalf of the Development Board. But I think the time will arrive when it will be necessary for the sake of sound administration that the Housing Commission will have to take it over, otherwise there will be a duplication of administration.

The hon. member for Zululand asked yesterday whether our object is not perhaps to acquire many morgen of land and simply to leave it lying. I want of give him the assurance that is not the case. The housing need in South Africa is still too great for us to be able to afford to acquire large areas of land without developing it. There is a tremendous task resting upon us, and the Housing Commission is fully aware of the task awaiting it. Two years ago an inter-departmental committee was appointed to study the whole question of the shortage of housing for Coloureds and Indians and to make its report available to the Housing Commission and the Development Board and the Cabinet. We are fully aware of the task which still lies ahead in every town and city, and therefore the Commission which consists of such responsible people, and the Department, with that great sense of responsibility which the Department of Housing has always shown, will not simply want to acquire land without developing it. There is therefore no such intention. But there is still a further reason why the Commission will not want to do that. If it wanted to acquire land on a large scale just to leave it lying, it would mean that it was really adding an unnecessary burden of interest to its capital burden, and it certainly would not be prepared to do that in view of the magnitude of the task which awaits it.

Hon. members may now ask me what the Development Board will do if this task is being performed in this way. That is not relevant here, but I may just say in passing that it is primarily concerned with affected property.

I have now tried to give hon. members the reasons very frankly, but I want to say that, where housing and the development of residential areas are at stake and we find that antiquated methods are obstructing the work, we shall not hesitate to remove those things. We shall simply have to learn to evade the devious routes we sometimes took. We cannot wait for two or three years before commencing a scheme. We have not the time for that.

Now I come to the objection raised by the hon. member for Germiston (District) and I think also the hon. members for Simonstown (Mr. Gay) and Zululand, namely the question of regulations. I may say that I have repeatedly and again this morning, requested the Department to tell me whether regulations have been issued in terms of these clauses in which we are now proposing that the powers to pass regulations should be abolished, and the answer is no. In other words, we have hitherto worked without those regulations, and it has worked well.

Only just approved.

Only in terms of the commission’s powers as prescribed in these particular clauses. Hon. members may now perhaps ask me why we are taking away these powers. We are doing so for the simple reason, as I stated in my second-reading speech yesterday, that a legal doubt has arisen as to whether we are not compelled to issue those regulations, and whether, if we were to issue them, we would be obstructing the work which the commission has hitherto done without these regulations. I am assured that this is the position.

In this connection I just want to give one example. If hon. members look at Section 49 of the principal Act, they will see that it provides—

Then follows a long series of powers. Those regulations have never yet been issued. In other words, if we did good work we did so without the regulations, and now I just want to ensure that these regulations do not obstruct us. Let us look at Section 18 of the principal Act. Section 18 deals with “special powers of the commission in regarding to housing loans”, and it reads as follows—

And then follows another long description of the conditions under which the commission can do so. But doubt has now arisen in regard to the word “may”, and because the law advisers differ as to the meaning of that word, we want to make sure that we will not be prevented from carrying on in the manner in which we have carried on hitherto.

Did you not consult the Municipal Association?

No, I am coming to that. I want to give the hon. member the assurance that where we feel that the Municipal Association and even private initiative, which was referred to by the hon. member for Zululand yesterday, should be consulted, we shall not hesitate to do so.

The hon. member for Simonstown wanted to know whether we had consulted anybody. I am informed that the Johannesburg Municipality was consulted, because some of the difficulties that were encountered, were encountered in Johannesburg. We also consulted some of the Government Departments, the Surveyor-General and the Deeds Office, so there was consultation to a certain extent.

I may tell hon. members that at the moment we enjoy the best possible relations with the Municipal Associations. Within three weeks I shall again meet the members of that Association, together with the Housing Commission, in a joint conference. The relations are therefore excellent. In the second place, in so far as the Building Workers Association is concerned, I recently opened their congress and only the best relations exist between us and private initiative, which is as it ought to be. The Department of Housing and the Housing Commission cannot perform their duties unless that good relationship exists. But these things are necessary, without their rights being affected, but in performing this task we cannot allow the Department of Housing to be restricted by technicalities. There are unco-operative people and when they stand in the way the Housing Commission must be able to tackle the problem in a practical and speedy manner. That is the whole object of this Bill, to do everything as practically and as speedily as possible. I do not think that at this stage I can say more. I have tried to deal with the three main objections as clearly as possible.

Motion put and agreed to.

Bill read a second time.

I want to make one or two observations in regard to Clause 1 of this Bill and I hope the hon. the Minister will give consideration to these observations and possibly amend some of the definitions contained in this clause. You will see, Sir, that under this definition clause the term “Coloured area” has been assigned a specific meaning which is set out in Clause 1 (iii) (a), (b), and (c). Paragraph (a) says—

Paragraph (b) refers to any State land reserved for ownership or occupation by Coloureds, and (c) refers to any area proclaimed under the Group Areas Act as a group area for members of the Coloured group. Those constitute the Coloured areas for the purposes of this Act. The hon. the Minister will know that there are in existence in the Cape particularly, mixed areas where the Group Areas Board have not defined them as specific group areas for the Coloured community or as specific group areas for the Whites. They are mixed areas, and it looks as though it will be found when investigations are proceeded with that those mixed areas are likely to be even more than they are at the moment. The Minister, I submit, has overlooked the possibility of allowing this Corporation to make investments in respect of those mixed areas. I suggest that the Minister has not given any consideration at all to the possibility of investments being made by this Corporation in respect of those mixed areas. The Minister will see that the objects of the Corporation are set out in a later clause, Clause 3, but it is necessary for me to refer to that at this stage. In Clause 3 provision is made for the objects of the Corporation to be the encouragement and promotion of the advancement of Coloureds in Coloured and industrial areas. The Coloured areas are defined, as I have already mentioned, in Clause 1 (iii) (a), (b) and (c). I submit to the hon. the Minister that he has not given any protection at all to the mixed areas, and I therefore suggest to him that he should extend the definition of “Coloured area” by adding a further subclause. I shall be glad if at this stage the hon. the Minister will give consideration to the question of adding a further definition of the term “Coloured area”, by adding a subclause (d) reading as follows: “‘Coloured area”, shall mean in addition to the meaning assigned to them under (a), (b) and (c) above, “such other areas as the Corporation may determine.” The hon. the Minister will know that there can be no harm in his accepting an amendment of this sort. It will mean that the Corporation will have an unfettered discretion to give aid to Coloured persons in respect of such areas as they may determine. As it is at the moment, they will be completely circumscribed by the provisions of paragraphs (a), (b) and (c); in other words, they will be confined to areas to which the provisions of the Mission Stations and Communal Reserve Act apply, to State land reserved for ownership or occupation by Coloureds and to duly proclaimed group areas for the Coloured group. I am sure the Minister’s intention is that the Corporation should not have their hands tied in respect of areas to which they want to give this facility, and I suggest to the hon. the Minister that he should give consideration to accepting an amendment which I want to propose to widen the areas that the Corporation can deal with. I accordingly move—

I move that at this stage so that the hon. the Minister can give it further consideration.

I regret that I cannot accept the amendment proposed by the hon. member for Peninsula (Mr. Bloomberg) as it seeks to extend the scope of the Bill to areas not contemplated at the second reading.

I of course accept your ruling, but I do remember that in the Bill there is a provision that the hon. the Minister can go outside the particular areas to acquire property. I think it is in Clause 9. Therefore I would like you to reconsider the amendment

Not for the purposes you suggest.

With all due respect to your ruling, Mr. Chairman, there is a provision in the Bill dealing with areas outside these particular areas, and therefore to my mind it would not be inconsistent with the scope of the Bill if this definition were also brought in, because there is already a provision in the Bill for outside areas.

Order, the hon. member is now querying my ruling.

No, Sir, but I merely want to direct your attention to that fact.

I have carefully considered the matter and that is my ruling.

I accept your ruling, Sir, but then I should like to ask the hon. the Minister to tell this Committee how he proposes to deal in this Bill with areas which are mixed areas. Take an area like Woodstock. At the present moment it is a mixed area and it has not been proclaimed as a group area for the Coloured people or for the Whites. It is a mixed area in which there may very well arise Coloured companies or Coloured industries which may seek financial help from the corporation contemplated under this Bill. Will the hon. Minister tell us how he proposes to deal with such mixed areas in respect of applications from Coloured people? I think the hon. the Minister owes this Committee an explanation as to how he proposes to deal with Coloured people who come along for financial assistance in respect of such areas.

Had the hon. member listened to my second reading speech, he would have heard the reply to that question. The position is that there are declared urban areas. We have rural areas which are reserved for Coloureds or which are administered as though they have been reserved. This legislation is aimed at these areas. The areas to which the hon. member has referred are controlled areas. Those controlled areas still have to go through the processes of the Group Areas legislation and until such time as finality has been reached, this legislation cannot be applied to them. I distinctly said in my second reading speech that one of the objects of this legislation was to give character and personality to those towns or cities which were coming into existence for the Coloured people and to existing towns in the rural areas set aside for Coloureds. To achieve that, places a sufficiently great task on such a Corporation without our having to saddle ourselves with this additional and further burden.

Clause, as printed, put and agreed to.

On Clause 2,

I move the following amendment—

We are opposed to the establishment of this Development Corporation and will vote against this clause, but in any case if the clause goes through we do feel that the description of the corporation should follow that of other corporations. The Bantu Development Corporation has been described as the “Bantu Development Corporation of South Africa”, and there is also the “Industrial Development Corporation of South Africa”. I should like to know from the hon. the Minister whether there is any specific reason why the words “South Africa” were left out in this case.

There is no specific reason why it has been left out, but I do not think it is necessary to have such a long name. It is true that it applies to some of the corporations that have been established, but if you want to give it the right name, you cannot call it “Coloured Corporation of South Africa” but you will have to call it “Coloured Corporation of the Republic of South Africa.”

Fine.

Why such a long name? Everyone knows that this Coloured Corporation exists in the Republic of South Africa. If you want to give it an effective name, a name that will be descriptive of everything that the hon. member wants to have in it, it will have to be much longer even than the one suggested by the hon. member and surely that is unnecessary.

Amendment put and the Committee divided:

AYES—46: Barnett, C.; Basson, J. A. L.; Bloomberg, A.; Bowker, T. B.; Bronkhorst, H. J.; Cadman, R. M.; Connan, J. M.; Cronje, F. J. C.; de Kock, H. C.; Dodds, P. R.; Durrant, R. B.; Field, A. N.; Fisher, E. L.; Gay, L. C.; Graaff, de V.; Henwood, B. H.; Hickman, T.; Higgerty, J. W.; Holland, M. W.; le Roux, G. S. P.; Lewis, H.; Malan, E. G.; Mitchell, D. E.; Moore, P. A.; Odell, H. G. O.; Oldfield, G. N.; Plewman, R. P.; Radford, A.; Raw, W. V.; Ross, D. G.; Russell, J. H.; Steenkamp, L. S.; Steyn, S. J. M.; Streicher, D. M.; Taurog, L. B.; Thompson, J. O. N.; Timoney, H. M.; Tucker, H.; van der Byl, P.; van Niekerk, S. M.; Warren, C. M.; Waterson, S. F.; Weiss, U. M.; Wood, L. F.

Tellers: N. G. Eaton and A. Hopewell.

NOES—80: Badenhorst, F. H.; Bekker, G. F. H.; Bekker, M. J. H.; Bezuidenhout, G. P. C.; Bootha, L. J. C.; Botha, H. J.; Botha, M. C.; Botha, P. W.; Botha, S. P.; Coetzee, B.; Coetzee, P. J.; Cruywagen, W. A.; de Wet, C.; Diederichs, N.; Dönges, T. E.; du Plessis, H. R. H.; Fouché, J J. (Sr.); Frank, S.; Greyling, J. C.; Grobler, M. S. F.; Haak, J. F. W.; Hertzog, A.; Heystek, J.; Jonker, A. H.; Jurgens, J. C.; Keyter, H. C. A.; Knobel, G. J.; Kotzé, G. P.; Kotzé, S. F.; Labuschagne, J. S.; le Roux, P. M. K.; Loots, J. J.; Malan, W. C.; Marais, J. A.; Marais, P. S.; Maree, G. de K.; Martins, H. E.; Meyer, T.; Mostert, D. J. J.; Mulder, C. P.; Niemand, F. J.; Otto, J. C.; Potgieter, D. J.; Potgieter, J. E.; Rall, J. J.; Rall, J. W.; Sadie, N. C. van R.; Schlebusch, J. A.; Schoeman, B. J.; Schoonbee, J. F.; Serfontein, J. J.; Smit, H. H.; Stander, A. H.; Steyn, F. S.; Steyn, J. H.; Treur-nicht, N. F.; Uys, D. C. H.; van den Berg, M. J.; van den Heever, D. J. G.; van der Merwe, J. A.; van der Merwe, P. S.; van der Spuy, J. P.; van der Walt, B. J.; van der Wath, J. G. H.; van Eeden, F. J.; van Niekerk, G. L. H.; van Niekerk, M. C.; van Rensburg, M. C. G. J.; van Staden, J. W.; van Wyk, G. H.; van Wyk, H. J.; van Zyl, J. J. B.; Venter, W. L. D. M.; Verwoerd, H. F.; Viljoen, M.; Visse, J. H.; Vorster, B. J.; Vosloo A. H.

Tellers: W. H. Faurie and J. J. Fouché.

Amendment accordingly negatived.

Clause, as printed, put and the Committee divided:

AYES—85: Badenhorst, F. H.; Barnett, C.; Bekker, G. F. H.; Bekker, M. J. H.; Bezuidenhout, G. P. C.; Bloomberg, A.; Bootha, L. J. C.; Botha, H. J.; Botha, M. C.; Botha, P. W.; Botha, S. P.; Coetzee, B.; Coetzee, P. J.; Cruywagen, W. A.; de Wet, C.; Diederichs, N.; Dönges, T. E.; du Plessis, H. R. H.; Fouché, J. J. (Sr.); Frank, S.; Greyling, J. C.; Grobler, M. S. F.; Haak, J. F. W.; Hertzog, A.; Heystek, J.; Holland, M. W.; Jonker, A. H.; Jurgens, J. C.; Keyter, H. C. A.; Knobel, G. J.; Kotzé, G. P.; Kotzé, S. F.; Labus-chagne, J. S.; le Roux, G. S. P.; le Roux, P. M. K.; Loots, J. J.; Malan, W. C.; Marais, J. A.; Marais, P. S.; Maree, G. de K.; Martins, H. E.; Meyer, T.; Mostert, D. J. J.; Mulder, C. P.; Niemand, F. J.; Otto, J. C.; Potgieter, D. J.; Potgieter, J. E.; Rall, J. J.; Rall, J. W.; Sadie, N. C. van R.; Sauer, P. O.; Schlebusch, J. A.; Schoeman, B. J.; Schoonbee, J. F.; Serfontein, J. J.; Smit, H. H.; Stander, A. H.; Steyn, F. S.; Steyn, J. H.; Treurnicht, N. F.; Uys, D. C. H.; van den Berg, M. J.; van den Heever, D. J. G.; van der Merwe, J. A.; van der Merwe, P. S.; van der Spuy, J. P.; van der Walt, B. J.; van der Wath, J. G. H.; van Eeden, F. J.; van Niekerk, G. L. H.; van Niekerk, M. C.; van Rensburg, M. C. G. J.; van Staden, J. W.; van Wyk, G. H.; van Wyk, H. J.; van Zyl, J. J. B.; Venter, W. L. D. M.; Viljoen, M.; Visse, J. H.; Vorster, B. J.; Vosloo, A. H.; Waring, F. W.

Tellers: W. H. Faurie and J. J. Fouché.

NOES—42: Basson, J. A. L.; Bowker, T. B.; Bronkhorst, H. J.; Cadman, R. M.; Connan, J. M.; Cronje, F. J. C.; de Kock, H. C.; Dodds, P. R.; Durrant, R. B.; Field, A. N.; Fisher, E. L.; Gay, L. C.; Graaff, de V.; Henwood, B. H.; Hickman, T.; Higgerty, J. W.; Lewis, H.; Malan, E. G.; Mitchell, D. E.; Moore, P. A.; Odell, H. G. O.; Oldfield, G. N.; Plewman, R. P.; Radford, A.; Raw, W. V.; Ross, D. G.; Russell, J. H.; Steenkamp, L. S.; Steyn, S. J. M.; Streicher, D. M.; Taurog, L. B.; Thompson, J. O. N.; Timoney, H. M.; Tucker, H.; van der Byl, P.; van Niekerk, S. M.; Warren, C. M.; Waterson, S. F.; Weiss, U. M.; Wood, L. F.

Tellers: N. G. Eaton and A. Hopewell.

Clause, as printed, accordingly agreed to.

On Clause 3,

I wish to move the following amendment—

The reason why I move this amendment is because I think the clause as it stands, is the most unreasonable clause in the whole Bill. In connection with a previous clause the hon. the Minister tried to give us a reply as to what the position will be in mixed areas, but for all practical purposes it means that if Clause 3 is accepted as it stands at present, the aims of the Corporation, namely, the promotion of commercial and industrial development amongst the Coloured, will be limited to those people within their own areas. It places a damper on the person who has a business in that mixed area. It also limits the chances of the Corporation itself to promote industrial and commercial development amongst the Coloureds. What my amendment does is simply to bring the whole position into line with the heading of the Bill which reads “to encourage and promote the advancement of the Coloured population of the Republic in the field of industry, trade and finance …”

I am sorry but I cannot accept the amendment as it is destructive of the principles of the Bill as read a second time.

If the amendment cannot be put, what does the hon. the Minister think this Bill will mean in regard to industrial areas? If you read this clause, Mr. Chairman, it is clear that it does in fact go outside the areas defined by this Bill, because industrial areas are not confined to the areas defined in this Bill. Therefore I think it is not in conformity with the principle as the hon. the Minister has told us. What is the object of using the term “industrial areas”? As far as we know there are no industrial areas in the Coloured areas as defined. “Industrial areas” are specifically defined in terms of the Group Areas Act, and therefore we do not understand why this should have been introduced. May I at this stage apologize for the absence of the hon. member for Peninsula (Mr. Bloomberg) who had to leave for urgent reasons. He intended to ask the hon. the Minister this question: What is the position in regard to an area such as Sir Lowry’s Rd.? The Minister will remember that is a mixed area and has been declared as such. Does it mean then, Mr. Chairman, that in that area where Coloured people can trade—because we know they can—they will not receive assistance from the Corporation in that particular area? Is that what it means? I should like the hon. the Minister to make that clear to us. There is another point which I put to the Minister. I do not think he dealt with it in his second reading speech. What exactly is meant by “such other tasks”? I should like to have clarity on that.

Clause 3 reads—

Before I go any further I should like the Minister to tell us what he means by that? What does it include? What can it do apart from the specific duties which are laid down in the Bill? Does it mean that the Corporation can venture into other spheres of activities? Can it venture, for instance, on to the field of culture? I have a case in mind of a man who is an outstanding and brilliant pianist and he wants to proceed with his studies. Will assistance to this Coloured man fall within the purview of “other tasks”? I shall await the Minister’s reply before I go any further.

If an industrial area which is also a controlled area comes under discussion and the establishment of an industry is envisaged there, the Group Areas Board will have to issue a permit for it. Therefore the approval of the Group Areas Board is essential in such a case. It is therefore quite possible to attain the object of this Bill in industrial areas. I do not want to mention names, but we may have the position that a Coloured township lies in one spot and a White area lies there, and then there is often an industrial area zoned between the two. For that purpose one will then have to allow industries there and the Group Areas Board will have to grant a permit. Then the hon. member points to the words in Clause 3, “and in the performance of other matters which the State President may determine by proclamation in the Government Gazette”. The hon. member should read a little further than that. The objects of the Corporation are the encouragement and promotion of the development of the Coloureds. The Corporation will not only encourage people by giving them money, but also in other ways. All we are doing here is to make this clause so broad, on the advice of the experts, that matters which we cannot foresee to-day, but problems with which we may be faced and with which the directors of the Corporation will be faced, will be covered in this way, so that they can come to the Government and say that provision should be made for this or that method of encouragement. Then we have the power to do so. If we now limit it merely to certain functions, we cannot act when faced with new problems. Therefore we are just framing it widely in order to be able to cope with anything that might happen in future.

Mr. Chairman, I still do not understand the hon. the Minister clearly. Has he now referred to industrial areas which at the moment are controlled areas where the Group Areas Board will have to issue a permit for these people to go there? It has no reference to what we call the ordinary controlled areas.

No.

In terms of the principles contained in Clause 1, you will not allow it there. Then it is clear.

I should like to have more clarification on “other tasks”, I should like to ask the hon. the Minister whether he will, for instance, be able to help the Eoan Group to go on tour to make some money for themselves and for the advancement of the culture which they have undertaken. Could they for instance be assisted or is it only businesses in the sense that we know it.

The Eoan Group can get assistance from the Department of Coloured Affairs, as is the present practice. It is not necessary to establish a corporation for them. They will get the necessary help from the Department if they want to come to us.

Well, I hope you will give it to them without any conditions.

We stipulate our conditions.

One can quite understand that if industrial areas are set aside, they will be separate from the residential areas. That is the modern practice. We also know that if those areas are set aside for industries, a Coloured may perhaps have his factory there, but what about general businesses? Is the Coloured now to be limited to that area? We have asked the hon. the Minister: Give us the answer whether this Corporation will in any way assist that man who now has his business in a mixed area.

I have already replied to that. Why do you ask again?

What is the reply? The reply is that it is not the time now to say what will happen. When will the Group Areas Act be applied completely? When will these people know where their areas are? Are they to be kept in suspense without knowing what their position is? No, the hon. the Minister owes it to the Coloured and to this House to give a better reply than he has given us hitherto.

Order! The hon. member must discuss the objects of the legislation as contained in Clause 3.

Clause put and the Committee divided:

Ayes—82: Badenhorst, F. H.; Barnett, C.; Bekker, G. H. F.; Bekker, M. J. H.; Bezuidenhout, G. P. C.; Bootha, L. J. C.; Botha, H. J.; Botha, M. C.; Botha, P. W.; Botha, S. P.; Coetzee, B.; Coetzee, P. J.; Cruywagen, W. A.; de Wet, C.; Diederichs, N.; du Plessis, H. R. H.; Faurie, W. H.; Fouché, J. J. (Sr.); Fouché, J. J. (Jr.); Frank, S.; Greyling, J. C.; Grobler, M. S. F.; Haak, J. F. W.; Hertzog, A.; Heystek, J.; Holland, M. W.; Jonker, A. H.; Jurgens, J. C.; Keyter, H. C. A.; Knobel, G. J.; Kotzé, G. P.; Kotzé, S. F.; Labuschagne, J. S.; le Roux, G. S. P.; le Roux, P. M. K.; Loots, J. J.; Malan, W. C.; Marais, J. A.; Marais, P. S.; Maree, G. de K.; Martins, H. E.; Meyer, T.; Mostert, D. J. J.; Nel, J. A. F.; Niemand, F. J.; Otto, J. C.; Potgieter, J. E.; Rall, J. J.; Rall, J. W.; Sadie, N. C. van R.; Schlebusch, J. A.; Schoeman, B. J.; Schoonbee, J. F.; Serfontein, J. J.; Smit, H. H.; Stander, A. H.; Steyn, F. S.; Steyn, J. H.; Treurnicht, N. F.; Uys, D. C. H.; van den Berg, M. J.; van den Heever, D. J. G.; van der Merwe, J. A.; van der Spuy, J. P.; van der Walt, B. J.; van der Wath, J. G. H.; van Eeden, F. J.; van Niekerk, G. L. H.; van Niekerk, M. C.; van Rensburg, M. C. G. J.; van Staden, J. W.; van Wyk, G. H.; van Wyk, H. J.; van Zyl, J. J. B.; Venter, W. L. D. M.; Viljoen, M.; Visse, J. H.; Vorster, B. J.; Vosloo, A. H.; Waring, F. W.

Tellers: D. J. Potgieter and P. S. van der Merwe.

Noes—40: Basson, J. A. L.; Bowker, T. B.; Bronkhorst, H. J.; Cadman, R. M.; Connan, J. M.; Cronje, F. J. C.; de Kock, H. C.; Dodds, P. R.; Durrant, R. B.; Field. A. N.; Fisher, E. L.; Gay, L. C.; Graaff, de V.; Henwood, B. H.; Hickman, T.; Higgerty, J. W.; Lewis, H.; Malan, E. G.; Mitchell, D. E.; Moore, P. A.; Odell, H. G. O.; Oldfield, G. N.; Plewman, R. P.; Radford, A.; Raw, W. V.; Ross, D. G.; Russell, J. H.; Steenkamp, L. S.; Streicher, D. M.; Taurog, L. B.; Thompson, J. O. N.; Timoney, H. M.; Tucker, H.; van der Byl, P.; Warren, C. M.; Waterson, S. F.; Weiss, U. M.; Wood, L. F.

Tellers: N. G. Eaton and A. Hopewell.

Clause accordingly agreed to.

On Clause 6,

I move the amendment standing in my name—

Mr. Chairman, the clause reads at the moment—

I think it can be interpreted to mean that the Corporation is empowered, without going through the intermediate steps to have itself appointed as a director, manager or trustee or executor in terms of the company legislation or any other relevant legislation, just to walk in on a company and say “I am now the director” or “I am now the manager”. I am sure that could not have been the intention. The intention surely must have been that if the Corporation wishes to become a director of a company, for instance, it should go through the normal legal processes and get itself appointed as director. Or if it wants to become a manager or trustee in its capacity as a shareholder, it should go through the normal processes and get itself appointed to whatever function it wants to perform. It could never have been the intention of the Minister that the Corporation should have the power to walk in on any company and say “I am now the manager or the director”. That is the way I read it. The second part of my amendment is merely consequential upon the first.

I have discussed this matter with the law advisers and they assure me that the hon. member’s interpretation is wrong. It is not our aim that as the result of this clause the legal procedure should be abandoned. The law advisers assure me that the clause as drafted will not create that dangerous procedure the hon. member envisages. They are quite satisfied with the wording of the clause as it is here.

The hon. the Minister seems to admit that this clause requires interpretation. The interpretation which he says has been placed upon it by the law adviser may be correct. But will it do any harm to put the matter beyond any question of doubt? What is intended by Parliament here is to give this Corporation power to take the necessary steps to do these various things that are specified. If the Minister tells the House that my hon. friend is correct but claims that is what the law says, then I ask again: Will any harm be done by making the matter so explicit that not only the legally qualified but the ordinary individual will know precisely what Parliament is empowering the Corporation to do. Because you see, Sir, it is quite clear that very much will depend upon how these powers are going to be exercised. If they are to be exercised in the way suggested by my hon. friend, and apparently the hon. the Minister agrees with him, very good. But if they are to be used in a dictatorial way as being empowered to go into a business and to act in that manner, great harm will be done to the very Corporation which the Minister is now asking Parliament to create. I think therefore that I should ask him to reconsider the matter. There is no disagreement between himself and my hon. friend here. It is merely a question of whether the matter should not be so clarified that there will not be any doubt in anybody’s mind.

As I have said, I made a special point of ascertaining whether there is any danger inherent in this clause. I was given the assurance that is not the case. But I am prepared to go into the matter again, and if it is in any way necessary to comply with the request of the hon. member, the matter can be remedied in the Other Place.

I am very pleased that the hon. the Minister has agreed to do this Sir, because I have no doubt whatsoever that the law advisers could put it in very much happier terms. I think that the amendment moved by the hon. member for Jeppes (Dr. Cronje) will put it right. There is no question about it that in its present form it is capable of misinterpretation. I sincerely hope that even if the draftsmen think it is not necessary, the Minister will see to it that an attempt is made to put the clause in terms which will be beyond dispute.

With leave of the Committee, the amendment was withdrawn.

On Clause 8,

I move the amendment standing in my name—

This amendment is perfectly straightforward and really speaks for itself. The intention of the amendment, is that Parliament can be kept fully informed of what has been done under the authority which has been vested by it in the Executive Government, in this case in the Minister. Publicity is the very essence of parliamentary activity. It is fundamental to the proper functioning of Parliament. One of the conventional ways of keeping Parliament informed as to what the Executive has done under powers conferred by Parliament, is this procedure of laying the information on the Tables of this House and of the Other Place. This delegation of power to the Minister to vary the safeguarding provisions which have been introduced into this clause, are important. They are significant and important and they do call for the exercise of a great amount of care and discretion on the part of the Minister. I have no doubt that in exercising these powers the Minister will exercise discretion. My amendment is not for the purpose of checking up on the Minister necessarily to see whether he has exercised his powers with discretion. It is to ensure that Parliament is kept informed as to how powers which have been granted by it have been used and so that Parliament can be kept informed as to how the borrowing powers and the safeguards in regard to borrowing powers are being used. It is as I say a perfectly straightforward amendment and one which I think speaks for itself. It is to facilitate the work of Parliament.

The same provision has been made in the I.D.C. Act and the Fisheries Corporation Act with this difference that in the one it was three-quarter of the amount and one-quarter in the other. In this case it is half the amount. At that time no necessity was felt to make this provision which the hon. member is proposing now. I do not think it is right for him to ask me to deviate from that principle. That being the case I am not prepared to accept his amendment.

Surely it is no argument to say that because this procedure was not followed in previous Acts, it would not be correct to follow it now. The Minister has made no effort to repudiate any of the arguments advanced by the hon. member for Port Elizabeth (South) (Mr. Plewman). He simply argues that the same thing has been done in other legislation. Surely that is not the way to consider this matter.

Amendment put and the Committee divided:

Ayes—40: Basson, J. A. L.; Bowker, T. B.; Bronkhorst, H. J.; Cadman, R. M.; Connan, J. M.; Cronje, F. J. C.; de Kock, H. C.; Dodds, P. R.; Durrant, R. B.; Field, A. N.; Fisher, E. L.; Gay, L. C.; Graaff, de V.; Henwood, B. H.; Hickman, T.; Higgerty, J. W.; Lewis, H.; Malan, E. G.; Mitchell, D. E.; Moore, P. A.; Odell, H. G. O.; Oldfield, G. N.; Plewman, R. P.; Radford, A.; Raw, W. V.; Ross, D. G.; Russell, J. H.; Steenkamp, L. S.; Streicher, D. M.; Taurog, L. B.; Thompson, J. O. N.; Timoney, H. M.; Tucker, H.; van der Byl, P.; Warren, C. M.; Waterson, S. F.; Weiss, U. M.; Wood, L. F.

Tellers: N. G. Eaton and A. Hopewell.

Noes—81: Badenhorst, F. H.; Bekker, H. T. van G.; Bekker, M. J. H.; Bezuidenhout, G. P. C.; Bootha, L. J. C.; Botha, H. J.; Botha, M. C.; Botha, P. W.; Botha, S. P.; Coetzee, B.; Coetzee, P. J.; Cruywagen, W. A.; de Wet, C.; Diederichs, N.; Dönges, T. E.; du Plessis. H. R. H.; Faurie, W. H.; Fouché, J. J. (Sr.); Fouché, J. J. (Jr.); Frank, S.; Greyling, J. C.; Grobler, M. S. F.; Haak, J. F. W.; Hertzog, A.; Heystek, J.; Jonker, A. H.; Jurgens, J. C.; Knobel. G. J.; Kotzé, G. P.; Kotzé, S. F.; Labuschagne, J. S.; le Roux, P. M. K.; Loots, J. J.; Louw, E. H.; Malan, W. C.; Marais, J. A.; Marais, P. S.; Maree, G. de K.; Martins, H. E.; Meyer, T.; Mostert, D. J. J.; Nel, J. A. F.; Niemand, F. J.; Otto, J. C.; Potgieter, J. E.; Rall, J. J.; Rall, J. W.; Sadie, N. C. van R.; Sauer, P. O.; Schlebusch, J. A.; Schoeman, B. J.; Schoonbee, J. F.; Serfontein, J. J.; Smit, H. H.; Stander, A. H.; Steyn, F. S.; Steyn, J. H.; Treurnicht, N. F.; Uys, D. C. H.; van den Berg, M. J.; van den Heever, D. J. G.; van der Merwe, J. A.; van der Spuy, J. P.; van der Walt, B. J.; van der Wath, J. G. H.; van Eeden, F. J.; van Niekerk, G. L. H.; van Niekerk, M. C.; van Rensburg, M. C. G. J.; van Staden, J. W.; van Wyk, G. H.; van Wyk, H. J.; van Zyl, J. J. B.; Venter, W. L. D. M.; Viljoen, M.; Visse, J. H.; Vorster, B. J.; Vosloo, A. H.; Waring, F. W.

Tellers: D. J. Potgieter and P. S. van der Merwe.

Amendment accordingly negatived.

Clause, as printed, put and agreed to.

On Clause 9,

I should like the Minister to tell us what he has in mind in regard to the racial composition of his board of directors.

I have already replied to that.

That was during the second reading? I would like to appeal to him on these grounds: I presume that the ideal is that eventually the board of directors will consist of Coloured people. If I may give an analogy of what has happened in the past, I will take the case of the control of universities by university councils. There the Government were opposed to a mixed council and to get over the difficulty they agreed to have a White council for the university and an advisory council of Africans. Now in this case there cannot be an advisory council for the board, and therefore I suggest to the Minister that he should have a mixed board of directors, because only in that way will the Coloured people be able to learn how to run their own development corporation. I refer to sub-sec. (3); it says that the State President shall select all the directors appointed by him for their ability and experience in business or in administration or their knowledge of the requirements of the Coloureds and their suitability or otherwise for appointment as directors. Now there are many Coloured businessmen in this country who could serve on this board and do valuable work there. I would like the Minister to tell us whether he is opposed in principle to a board composed of Whites and Coloureds together? It is quite legal in South Africa. I know of boards of directors where there are Black and White people sitting together. They are generally companies which have been formed in the interest of the African people themselves. In order to give the guidance and training necessary, White directors assist them. My suggestion is that the Minister should accept this suggestion, to have one or two Coloured directors on the board, together with the White directors, and learning how the job should be done. If he objects to it on the principle of apartheid, there is nothing more to be said, but surely that is not what we want to do. If it is to be apartheid, there should be no Whites because this is a Coloured board. This is their own field, and if they are not going to be trained in this field apartheid does not mean anything. It would be hypocrisy.

If the hon. member for Kensington (Mr. Moore) had been present during the second reading he would have heard me reply specifically on this question to the hon. member for Peninsula (Mr. Bloomberg). Nobody objects to co-operating and consulting with Coloureds who have high qualifications and who are of good character. I do so every day. My officials are continually consulting with them on various matters. But I told the hon. member for Peninsula that this Corporation must be established under the leadership of people who are keen business men and who are able to say no at the correct time, because they will receive many applications where they cannot say yes. It will have to be a board of directors who can act firmly and who will allow themselves to be guided only by sound judgment and experience. The moment one puts one or two Coloured leaders there, pressure will be exerted on them by certain elements amongst the Coloureds who will try to play them off against directors who perhaps want to apply the brake, and that will lead to conflict. Therefore I think we must start on the correct footing, namely that this board of directors should firstly consist of White people who in fact have sympathy with the Coloureds, but if this Corporation wants to establish businesses with the savings of the Coloured, and wants to canalize his capital, this Corporation can do so, and Coloureds may be directors of such undertakings because Coloureds will be able to hold shares in it. But Coloureds cannot hold shares in this Corporation. The shares belong to the State. Coloureds will be able to serve as directors in any business established under the guidance of this Corporation, and the Corporation will have the right to appoint some of its members as chairmen there in a supervisory capacity and to give guidance.

Clause put and agreed to.

On Clause 20,

I move the amendment standing in my name—

I think it assists the Minister. At present, as the law stands, it says that the accounts of the corporation shall be audited by an accountant who will be appointed by the Minister. My amendment says that the accounts shall be audited by the Controller and Auditor-General, and I think that is in the interest of the Minister himself. What would be the ordinary procedure if the Auditor-General became the Auditor? Quite frequently, in the case of these development corporations, the Auditor-General does not carry out the details of the audit himself, but will appoint an auditor in professional practice outside to do so. Now it may be asked: Why should not the Minister appoint that outside auditor? For this reason: that if the Auditor-General appoints the auditor in private practice, these accounts come to the Auditor-General and come before our Public Accounts Committee. The Minister is relieved of all that responsibility. No one can say to him afterwards that he has not taken proper precautions. We know that auditors in their annual reports do not give great detail or criticism, but the Auditor-General does; and because auditors in private practice do not give this detail, we actually have legislation before the House to-day to insist upon auditors doing more in regard to the auditing of companies. I want to help the Minister. Any person in his position would certainly welcome the opportunity to have this responsibility placed upon the most senior official in the service, the Auditor-General. Of course the Auditor-General can appoint another auditor outside. If the Minister does that, he would be acting in his own interest and that of his Department, and certainly in the interest of the Corporation.

That an argument can be advanced, and has already repeatedly been advanced, why the accounts of such bodies should be audited by the Auditor-General, is not a matter which has been raised here to-day for the first time. In the thirteen years I have sat here I have heard that every year. But is this now the opportunity to rectify this matter? If Parliament feels that it wants to adopt a different procedure, it should do so not only in respect of the Coloured Corporation but in respect of all the other corporations on the pattern of which we are now building. Why make an exception of this Corporation? Hon. members opposite were also responsible in their time for the introduction of such principles, like e.g. the hon. member for Constantia (Mr. Waterson). In his day he was also responsible for the introduction of such a principle. So it is not a deadly s n. It was introduced in the Bantu Investment Corporation. All we are doing is to follow the same pattern. I admit that to some extent there may perhaps be stricter control in the sense that such a board of directors will feel more bound but that, on the other hand, is something which to my mind counts against the hon. member’s argument. Must one subject such a board of eminent people, whom one appoints to tackle this type of development, to continual interference in this way and to the danger that if it undertakes something that can be exploited by being dragged into politics? I do not think that is sound. As long as we know that no money is being stolen and there are no irregularities, and the obligation rests on the Minister to table the reports here, I think such a board should be allowed to carry on with its work. If Parliament is prepared to apply this principle throughout, I am prepared to agree to it, but at this stage I do not want to take the lead, seeing that hon. members opposite did the same kind of thing.

There is no intention in my proposal to criticize the board of directors. A good board of directors welcomes a thorough audit.

No one is denying that.

The hon. the Minister mentioned the high quality of the directors and asked why people should investigate what they are doing. But why not? Surely that is the reason why we have in South Africa to-day the Investors’ Protection Associations, groups of people who get together to protect the interests of investors against directors who do not give sufficient information. I think more information should be given. The case of the I.D.C. is a very good argument in my favour, because the I.D.C. will not tell this House how its money is invested, and it is only when we have an Amato failure that we find out what has been happening,—but then the money has gone. We have had that discussion in this House over and over again. I think it is the obvious thing in order to protect the Minister and his Department to say that we will put the audit through the ordinary channel of the Auditor-General. We should not follow the bad example of the I.D.C. This House should know more about what these corporations are doing because they are financed by public money. I think it is up to the Minister to accept my suggestion.

Question put,—That all the words after "by” in line 18, to the end of the clause proposed to be omitted, stand part of the clause,

Upon which the Committee divided:

AYES—79: Badenhorst, F. H.; Bekker, G. F. H.; Bekker, M. J. H.; Bezuidenhout, G. P. C.; Bootha, L. J. C.; Botha, H. J.; Botha, M. C.; Botha, P. W.; Botha, S. P.; Coetzee, B.; Coetzee, P. J.; Cruywagen, W. A.; de Wet. C.; Diederichs, N.; Dönges, T. E.; du Plessis, H. R. H.; Fouché, J. J. (Sr.); Frank, S.; Greyling, J. C.; Grobler, M. S. F.; Haak, J. F. W.; Hertzog, A.; Heystek, J.; Jonker, A. H; Jurgens, J. C.; Keyter, H. C. A.; Knobel, G. J.; Kotzé, G. P.; Kotzé, S. F.; Labuschagne, J. S.; le Roux, P. M. K.; Loots, J. J.; Malan, W. C.; Marais. J. A.; Marais, P. S.; Maree, G. de K.; Martins, H. E.; Meyer, T.; Mostert, D. J. J.; Nel, J. A. F.; Niemand, F. J.; Otto, I. C,; Potgieter, D. J.; Potgieter, J. E.; Rall, J. J.; Rall, J. W.; Sadie, N. C. van R.; Sauer, P. O.; Schlebusch, J. A.; Schoeman, B. J.; Schoonbee, J. F.; Smit, H. H.; Stander, A. H.; Steyn, F. S.; Steyn, J. H.; Treurnicht, N. F.; Uys, D. C. H.; van den Berg, M. J.; van den Heever, D. J. G.; van der Merwe, J. A.; van der Spuy, J. P.; van der Walt, B. J.; van Eeden, F. J.; van Niekerk, G. L. H.; van Niekerk, M. C.; van Rensburg, M. C. G. J.; van Staden, J. W.; van Wyk, G. H.; van Wyk, H. J.; van Zyl, J. J. B.; Venter, W. L. D. M.; Viljoen, M.; Visse, J. H.; Vorster, B. J.; Vosloo, A. H.; Waring, W. F.

Tellers: W. H. Faurie and J. J. Fouché.

NOES—41: Barnett, C.; Basson, J. A. L.; Bowker, T. B.; Bronkhorst, H. J.; Cadman, R. M.; Connan, J. M.; Cronje, F. J. C.; de Kock, H. C.; Dodds, P. R.; Durrant, R. B.; Field, A. N.; Fisher, E. L.; Gay, L. C.; Graaff, de V.; Henwood, B. H.; Hickman, T.; Higgerty, J. W.; I ewis, H.; Malan, E. G.; Mitchell, D. E.; Moore, P. A.; Odell, H. G. O.; Oldfield, G. N.; Plewman, R. P.; Radford, A.; Raw, W. V.; Ross, D. G.; Russell, J. H.; Steenkamp, L. S.; Streicher, D. M.; Taurog, L. B.; Thompson, J. O. N.; Timoney, H. M.; Tucker, H.; van der Byl, P.; Warren, C. M.; Waterson, S. F.; Weiss, U. M.; Wood, L. F.

Tellers: N. G. Eaton and A. Hopewell.

Question accordingly affirmed and the amendment dropped.

Clause, as printed, put and agreed to.

Remaining clauses and the Title of the Bill put and agreed to,