I felt it necessary yesterday to join in this debate because some of the speeches made by hon. members on this side were protectionist in sentiment, and there are a large number of us here who approve of the steps the Government are taking in the direction of more scientific protection of our industries. The hon. member for Cape Town (Central) (Mr. Jagger) vigorously attacked the whole principle of protection, and that, of course, we can understand, coming from him, because all his life he has given adherence to the principles of free trade. The hon. member for Yeoville (Mr. Duncan) though, announced himself as a moderate protectionist; and I must confess I cannot see how moderate protection is going to help the industries of this country very much. Either we are protectionists or we are free traders, and it seems wrong to give any particular industry just sufficient protection to enable it to languish for a period and then, in the full blast of adversity, allow it to die of starvation. The hon. member for Cape Town (Central) was perfectly logical, and we can admire, and I do admire sincerely, the strong argument he put up. The hon. member has spent his life seeking in the cheapest markets to buy and selling in the dearest, and necessarily his whole outlook is coloured by the avocation he has followed. I think he keeps his eyes too firmly fixed upon the goods themselves, and not upon the good of the country, perhaps. That natural instinct of the hon. member leads him to say, immediately he sees a little dumping likely to take place: “Why should it not?” If we follow out this policy to its fullest conclusion, the free trade policy enunciated by the hon. member—well, we shall extinguish every factory in the country, for, ultimately, no industry which is competing with the industries of the world could exist in this country unless it had a certain measure of protection. We are, therefore, on this assumption, to give up wheat growing in South Africa because we cannot produce at the same price or in the same manner as they do in Australia. We are also to give up sugar growing, because, forsooth, we cannot compete with the cheap production methods of Cuba, an island most favoured by fortune for sugar growing. We are to turn to our attention to what? We are to go back, the hon. member told us, to primary production. We are to produce only those commodities which we are able to produce in competition with the world, so we are reduced to this, that we are only going to produce wool, diamonds, gold, and maize. That appears to be the extent of our present capacity upon a large scale. That pretty well limits our output, and if we are going to concentrate on reducing these few primary products we get back to the old days, when my hon. friend started life in South Africa, when he could purchase these commodities from the producers, send them overseas, and obtain in return the cheapest goods from other parts of the world. We are back, at a stride, to those days, when South Africa was an importer’s paradise, and we were able to keep our merchant princes in clover in the towns. If we close down our industries by refusing them the necessary stimulus, what are we going to do with the 180,000 people employed in them, and their three-quarters of a million dependents. What are these people to turn their efforts to? They created, in 1922. thirty-six-and-a-half millions of new wealth in the process of manufacture, and the hon. members proposes to pension these people off. This wealth was added to the national pool in addition to the wealth from the mines and agriculture, for the whole of this country to enjoy. The hon. member says it would be cheaper to produce what is represented by this 36½ millions overseas. But if we did we should have to create more wealth in mining and agriculture than we are doing to obtain these manufactures. There is going to be some trouble about that. What are these 180,000 displaced people here going to produce? We cannot put them to sheep growing. We are carrying sheep almost up to our limit under present conditions. We cannot put them to diamond producing, because diamonds are already a drug in the market, and if we put them to gold producing we have first to find the gold. We might put them to growing maize, but America can produce maize cheaper than South Africa. So what is left, if we go on with this policy to the bitter end? That is, if South Africa is to be entirely free trade? We must pack them off to some other country and leave South Africa to produce its primary products, and the merchants to supply the primary producers with the merchandise of the world. The trouble in these matters is that the hon. member does not see the wood for the tree. He gets too far down to detail and loses sight of certain considerations. One central fact emerges, and should emerge from a discussion such as this, and that is, the sum total of the national production. What is that? The cost of living, whether it rises or falls, does not matter two pence, if the national production is all right. A country may have a high cost of living and a high standard of life, such as the United States; it may also have a low cost of living and a low standard of life such as India. The whole world teaches that. We confuse the issue when we limit it to the cost of living. What does matter is the volume of production. Suppose our agricultural production in this country amounts to a million units, and suppose our mining production amounts to a million units, the whole population has two million units to distribute amongst the whole people. But suppose the mining and agricultural sections join together, and say we will help some of the people to form an industrial section also to produce a million units: then, instead of two million units of wealth to divide among the population, you have 3 million units, and if there are a million workers, instead of two units each individual has a theoretical right to three units of wealth, and that, it seems to me, is the common-sense of the matter, If, by any method whatsoever we can stimulate the production of wealth in this country, there is undoubtedly more to go round. This is crudely put, but it is necessary to put it so in order that it may be understood. I do you mean that to refer to the House. I mean that in a matter like this one must express oneself crudely in order to express the matter simply, and in the shortest possible time. It is because of this significant fact that the whole world has gone protectionist, in spite of every free trade doctrine. I want to take one simple illustration, the sugar industry. Not because I am personally interested in it, but because my hon. friend referred to it. Sugar is protected. It started from nothing, and today it is producing 200,000 tons a year. What effect has that had on the whole of this country? The sugar industry, apart from its effect on the consumer, apart from the fact that had there been no industry in South Africa, the consumer would have paid more for his sugar, has brought work for thousands, who do not dream of attributing their work to the industry. Hundreds of mechanics, directly and indirectly, are working for the sugar industry, although far away from it, in factory and in foundry. Many hundreds of men are employed in the Railway and Harbours because of the sugar industry. It produces work in office and store and in many different ways and in many different places. The farmers supply the industry with a great quantity of maize, meat and dairy products. The mines supply the sugar industry with coal and lime, and the forests supply it with timber. So that the ramifications of an industry like this are widespread throughout the life of the community, and, therefore, if you touch the industry, you not only touch the persons in the industry, but hundreds and thousands of others who are engaged outside who owe their living to it. The arguments which the hon. member used are arguments in a vacuum, because they consider any particular industry as isolated altogether from the common relations of life; but key industries are so interwoven with the national life that if you touch them you touch some other industry. The Minister of Finance knows that when he proposes to put on a duty on a particular industry, many other industries spring up in protest and say you will harm us. This was the case some time ago in regard to the boot industry, and the same thing has happened with others. All that the sugar industry gets it spends in this country—practically all. Very little leaves this country, except for machinery which afterwards comes to this country to produce more, and this creates local markets. My hon. friend, in his argument, stated that we have not the population to support our industries. Well, the one creates the other. Industry brings population and populations brings local markets, and once a local market has sprung up it revives the whole countryside; it stimulates production all round. Agricultural produce, which previously had no market, immediately becomes saleable, and the production of farmers in all directions goes up, by stimulating industries in any particular locality. In a speech I made on the estimates, I spoke of the relatively small European population we have in this country, that is engaged oh productive work, and that is very germane to the discussion. I understand we are spending something like £5,000,000 of public funds in subsidizing unproductive work. I understand that if the railways could be run as a private firm would run them, we could save £2,000,000 a year, and, as a consequence, the cost of distribution by the railways would be so much cheaper. I understand that between the Government and the various functions of provincial councils and municipalities there is another £3,000,000. or a total of something like £5,000,000 which is spent unnecessarily on non-productive works. If that £5,000,000 were used to subsidize key industries, and other adult workers thus had an opportunity of becoming producers instead of being subsidized as non-producers, instead of the £5,000,000 being a burden on the community, our wealth would greatly be increased by its expenditure. The present policy of subsidizing non-productive works to this huge extent is in a great measure responsible for the impoverishment of this country. There is another reason, and here I charge the hon. member for Cape Town (Central) (Mr. Jagger) with enjoying the greatest protection possible of any portion of the community. I refer to the distributing class.

Hear, hear.

Better hear what he has got to say first.

In the recent currency report the wholesale index figures were given for South Africa and the rest of the world. Our index figures of wholesale prices have been the lowest in the world for many years and this is commented on by Dr. Kemmerer who said—

This is a standing monument to the sanity of the financial policy of the South African Party Government; that we should have been able to maintain our financial position in such a sane way is a magnificent monument to that Party. But whilst our wholesale index is the lowest in the world, our retail index is the highest of any country I know. The South African index has been challenged as not reflecting the true position. But upon this matter the report states—

One of the chief causes for this is that we have far “too big a distributing class for our population and it could very easily be reduced. It is not the whole cause. The length of our railway carriage has a good deal to do with it—but it is a very large cause. The farmers pay for this and the hon. member for Cape Town (Central) (Mr. Jagger) is getting protection from the farmer in this respect. He is enjoying protection because of our lack of industries, for if industries were here competing with one another this unhealthy state of things would not exist. My argument then is that the creation of large key industries would give us population, turn our present unproductive section into producers, and reduce the spread between the wholesale prices and the cost of living. I want to sum up that part of the argument by the following quotation by Mr. Hoover: who in an article in the Nation’s Business” (June, 1923), wrote—

This is the experience of America, the highest protectionist country in the world. I now want to come to the essential part of the hon. member’s speech. He argues that it is impossible to create industries in this country, because we have not the essential population. This seems to me to be perfectly clear. We cannot have manufactures without a large population, and we cannot have a large population without manufacture, and we cannot afford to go on as we are doing, unless we are prepared to see our population diminish. No agricultural population in the world maintaining a fairly high standard of living can support a large population. South Africa has not the agricultural wealth of other countries which can be mentioned. We have not a climate like New Zealand, which can produce almost anything; we have not the magnificent unpopulated spaces of Australia where they can raise wool with the least possible amount of human energy; we have not the fertile soil that Canada has—we have a soil which we have to struggle with very strenuously in order to win from it what we do. Then the best parts of South Africa are inhabited by the natives. The hon. member for Cape Town (Central) (Mr. Jagger) maintains that there can be no industries in South Africa, because there is no population, and that we cannot compete industrially with the rest of the world. Take the last argument put. I would like to refer him to the manner in which two or three countries have created industries and created markets in the teeth of the most obstinate opposition. I refer to the sugar industry again. Many years ago, when the West Indian Islands had a monopoly of sugar production, Germany and France stepped into the field, and, by means of bounty feeding, created their own sugar industries under the most difficult conditions, and they succeeded to such an extent that the West Indian industry began to languish. With this £5,000.000, of which I have been speaking—money that we are now spending on non-productive works—we could produce steel knives in. South Africa to sell in Sheffield if that were a wise policy in precisely the same way that France and Germany ousted the cane sugar industry by use of a bounty. I don’t say we should do that. I have never advocated looking to the whole of the world for our markets. Our markets lie in the developing of the north of Africa. There we have the finest markets it is possible for any nation of the world to wish for. There are 100.000.000 natives in Africa with the brawn and the muscle necessary to develop this country, and all that is required is that we have sufficient intelligence to guide in a sound measure the development going on, and take toll of the markets created. The demand for manufactured goods will increase with every year. I feel we are losing golden opportunities. We are allowing the world to come in where we should be installed. A good deal of the whole of Africa is free trade to us, and we should have no difficulty in competing with the world in getting our goods into those markets. Unless we are willing to look to the heart of Africa for the reception of our products, created down here, then I agree there is no chance of sending goods, in competition with industrial countries, overseas. Our future de pends first of all upon creating a population, and we cannot do that without creating industries. The markets for our industries lie at our doors ready to be created and constructed. And the creation of these industries, manufacturing goods suitable for the markets if the interior will raise the national dividend, and give a greater measure of wealth to be enjoyed by the whole community.

I only want to bring something to the notice of the hon. Minister. I see that the Minister still continues to levy 1s. 6d. in the £ upon mutual life assurance societies. I think this 1s. 6d. should be taken off. I will give him a very easy way of getting back the money that he will lose in that way namely, by adding 9s. to the excise on whisky coming into the country. I mention this because I think that we should encourage those mutual companies more and should encourage all people to insure. Any one that sits on the Pensions Committee and sees the misery into which many widows are thrown will feel with me that we should encourage more people to go in for life insurance. Then they will have a happy old age, and not have to come to the Government for assistance.

I only wish to say a few words about the estate duty which is known among farmers as the robbery and plunder Act, I am thankful that the Minister of Finance has as usual, explained the matter so clearly and nicely. I am glad that he is exempting estates up to £7.500 from the plunder Act.

The hon. member may not refer to an Act of the country as a plunder Act.

I am very glad that he has not alone exempted estates up to £7,500, but that he has also increased it to estates up to £15,000. If he had remained there, I should have had not a word more to say.

But I must have money.

I quite admit that. I am anxious that we should act honestly and honour ably towards the people. If we tell the people that we are reducing taxation, then we should actually do so. We are, however, not reducing the taxation, we are engaged in increasing it. All we do is to transfer it from one to the other section which is already bearing a heavy burden.

To the rich man.

We take away from one section with one hand, but with the other, we load it on to the other section, which has to pay double. It is, I think, a wrong principle. My hon. friend will have to agree with me that what he has already done in the past is quite wrong. I hope that the hon. Minister of Finance will go further, and will, in the future, cut his Coat according to his cloth. By economy we must so regulate matters that we are actually able to reduce taxation and not only to stuff it from one section to the other. I repeat that it is a wrong principle to only shift the taxation. I only wish to add that the old members who have sat here with me since the Union, and who have heard what has been said here, and all the arguments that have been used, will agree that these taxation proposals are the voice of Jacob, but the hand of Esau. I want to say another thing before I sit down. The hon. member for Bloemfontein (North) (Mr. Barlow) last night warned the Free State to keep an eye on the Government and the Board of Trade and Industries. I agree with him, but not only the Free State should do so, but the whole country should do so. But I also wish to warn him that we, in the Free State, must not only keep our eyes on the Government, but that there are still many other persons on whom we must keep our eyes open, especially on the hon. member himself. I hope that the hon. Minister of Finance will not find it necessary next year to say that we must have the money. There is a thrift commission, and I hope that every effort will be made so that the taxation can be reduced, and so that it is not only passed on.

My hon. friend who has just resumed his seat (Mr. Keyter) is a very great economist until it comes to the vote. I would not have intruded myself upon the House, and, in fact, I had intended to reserve myself until we went into committee, but I desire to bring a few matters to the notice of the Minister, because between now and the committee stage he may be able to frame his Bill in such a way that it will meet what I have to say. Under the present proposals of the Minister of Finance the per cent. normal profit tax and the 7½ per cent. dividend tax would be a lower impost on the companies than the 15 per cent. flat rate. I am speaking now on behalf of the diamond mining companies which are sufficiently taxed already. I may say that the are taxed up to the hilt. For example, under the existing law they pay 71 per cent normal tax. which on a profit of £1.000.000 would be £75.000. leaving a balance of £925.000. From that £925.000 you must deduct for reserves say. £125.000, thus leaving £800,000. When that £800,000 is distributed in dividends, on a tax of 7½ per cent. it pays £60.000.

Why should the reserves not be taxable?

I will tell you in a moment. Because you have not taxed it previously, that is no reason why you should tax it to-day.

The principle is a tax on profits.

I am coming to that. As I was saying, a 7½ per cent. tax on £800,000 amounts to *£60,000. So where the companies formerly paid £135,000 on a profit of £1,000,000, under the proposals of the Minister they will have to pay £150,000. It is all very well to do that if a company is not already taxed, but when that concern is more heavily taxed than any other industry in the country, I say that it is wrong to increase the taxation. An amount of £125,000 may seem a lot to put into reserves, but when you have big mining companies, with shafts of a depth of 3,600 ft., something may go wrong, you may have a fire in the shaft and the head-gears may be burnt out. Some years ago that very thing happened at De Beers and it required between £500,000 and £600,000 to put that shaft into order again. You must also have reserves, because in times of depression it is necessary to have something to fall back upon to keep the company going, and the Minister is now placing a tax upon what I may call the directors’ desire to keep the company in a position of safety. That, I think, is wrong. The people who have put their money into diamond mining companies are the heaviest taxed in the world. That is saying a great deal. Without going into details, I may tell this House that for every £ distributed each year by the De Beers’ Company to its shareholders the State gets 15s., that is to say, if we divide £1,000,000 in dividends amongst the ordinary shareholders of the company we have to pay in direct taxation £750.000. That is the correct figure, and it may be checked by the officers of the department. In addition, to-day the shareholders have to pay super-tax. I am not quite sure whether they will not also have to pay the ordinary income tax. Although the company has to pay 15 per cent. on its profits I am not at all sure, from what fell from the Tips of the Minister, that these shareholders, in addition to the super-tax, will not have to pay the ordinary income tax. I hope I am wrong; I sincerely hope I am wrong. I hope that is provided for in the Bill. These proposals mean additional taxation on the De Beers Company to the extent of £35,000 a year. These are not my figures, but figures I have got from the accountant of the company. The other diamond companies will be proportionately taxed. I don’t see why our taxation should be increased because a number of industrial companies have been dodging the present Income Tax Act. If they have been dodging it, get at them, but don’t punish me and the concerns I am interested in which are practically taxed up to the hilt, because they know industrialists and merchants have been clever enough to circumvent—I won’t say evade—the present Income Tax Act. Now I am quite positive that there is not a greater factor in causing unemployment than heavy taxation.

Hear, hear.

As far as I am concerned, the diamond industry in this country is not in the same position as it was a few years ago in consequence of these outside discoveries, which have greatly interfered with the quantity of diamonds that we are able to produce within the Union. We shall have to save this £35,000 a year. The shareholders who have put their money into diamond mining are just as much entitled to a return on their money as those who put their money into Government stocks and mortgages. As directors, we have a great responsibility. Although we want to behave justly and treat our men fairly well, we must take the shareholders’ interests into consideration. That £35,000 means £350 a year—£1 a day—to 100 men. I don’t say that we will dismiss those men and save the £35,000 in white wages at once—that we would not do—but in the natural wastage that takes place these men will not be replaced. That means less money being circulated in wages, and that, in turn, must affect the trade of Kimberley. When a man puts money into Government stock or mortgages, his capital is always intact and he gets interest regularly. When he puts his money in mining he should get a bigger return, because he has to provide for redemption over a period on the money he puts into mining. There are very many companies who have not paid any dividend at all, and the shareholders have lost every sixpence that they put in. There is an idea prevalent that because a company is a big one, that there are only big shareholders in it. That is not so, the larger the company the greater the number of small shareholders. It is the human being who pays. You are not taxing the inanimate; you are taxing the animate. I wish hon. members would realize that. I must say the Minister of Finance is very considerate and very courteous. I think that is acknowledged by all parties, and we are anxious to assist him in getting his measures through the House; but he must not take that as an indication that we approve of his policy, or that we are particularly delighted with all his increased taxation proposals. I strongly object to every item of increased taxation, and in my opinion there is no necessity for it. I may be able to give my reasons in detail when the House goes into committee. Although I am in favour of a decrease in taxation, why relieve the money lenders? I do not refer to banks or well-known institutions. Why make concessions to usurers, these blood suckers, who charge the working man at the rate of 120 per cent. per annum? The Minister said it was difficult to define the difference between a money-lender and a usurer. It is the easiest thing in the world, to my mind. Any man who charges more than 12 per cent. is a usurer. I met a man in an hotel this morning who could not understand why the Minister had made a concession to these usurers. He said—

I said—

But that is the impression the Minister is creating. I think this is about the only country where they impose additional taxation when the revenue has gone up and is sufficient to meet the expenditure of the country. I cannot understand any Government doing so. Instead of devoting their attention to new sources of taxation their best efforts should be directed towards relieving the burdens on the people who are groaning under existing taxation, and in many cases the taxation is unbearable. If I may paraphrase a poem by Hood, I would say—

I am afraid I shall not be able to throw any poetic light on this subject or emulate the flights of the last speaker, but I confess that, like 90 per cent. of the members of this House, I am a protectionist, but there are protectionists and protectionists; and what we need in this country is a sane policy of policy. There are certain essentials which are necessary if we are to establish our industries on a sound financial basis, and one of these is, that the articles you are going to produce must have a considerable local demand and have an overseas demand for its surplus supplies. There are not a great many such articles in this country, but there are some, and an outstanding one is leather, and cotton is another. There is no reason why cotton, in its coarser forms of manufacture, such as kaffir sheeting, and so forth, should not become one of our staple industries, because it is used by everyone from Cape Point to the Zambezi, every native being a user of cotton goods in one form or another. Coming to articles of consumption, butter, cheese, bacon, jams and cereal foodstuffs—all these have a local and an overseas demand, and there is no doubt that industries of that sort, including most articles of consumption, can be successfully established in South Africa. If these industries are to expand to anything like the scale which we hope for, they must be economically produced in this country. Unless you can produce them economically, you can be perfectly certain that other countries will not purchase your surplus supplies, particularly if they can produce these themselves at a cheaper rate than we can sell. The hon. member for Cape Town (Central) (Mr. Jagger) gave an instance of what I may regard as a father doubt fid form of protection. He mentioned the case of a tin works where they are turning out a limited number of pans and dairy utensils. I believe it is the only factory of its kind in South Africa. It is now to enjoy a very substantial protection. Well, as the hon. member for Zululand (Mr. Nicholls) pointed out, you may touch one industry, and unless you are very careful you may find that you are injuring half-a-dozen other allied industries. If you are going to place a high protective duty on tin ware, so as to keep imported articles out of the market, it is going to increase the working cost to the butter and cheese factories very considerably; it is going to add thousands of pounds per annum to the expenses. Where is that extra cost going to come from? Either the farmers will have to be prepared to take a smaller price for their cream or milk—and they are getting little enough as it is or the consumer will have to pay an increased price for his butter and cheese. I maintain that here we touch a very important factor; because if there is one thing we want to do in establishing industries it is to avoid forcing up the cost of living to an unreasonably high extent, and that is what is undoubtedly going on today. However, whatever the conditions are that justify the establishment of these industries in this country, you are not likely to get capital from overseas unless you can offer financial peace and security to the overseas investor; and further, there is this, that unless you secure the support of a united people in our Union. One frequently hears it said that if we do not go to England for our money we can get what we require from America or some other foreign country; but the mere fact that America is prepared to advance money to South Africa is based entirely on the fact that South Africa has behind it the stability and support of the British Empire, and we should do nothing that will in any way weaken our position and our credit in the Empire. The Government have hitherto followed an unfortunate policy, a narrow-minded policy, which has resulted in the people of South Africa being bitterly divided among themselves. I will say no more on that point, but that the time is coming when the Government will have to alter their attitude entirely towards the different sections of the peoples of South Africa. We will have to come together in a very much more friendly and harmonious attitude than we have since this Government has been in power. Well, this has been going on in South Africa, and the state of affairs is perfectly patent to all. The speeches made by the Government and their supporters have tended to aggravate the situation.

Order. I am afraid the hon. member is not speaking to the motion; he is departing somewhat from the subject-matter of this debate.

Well, Mr. Speaker, it is part of my argument, but I will leave it out if you think it is not quite in order. I think it is an unfortunate position; because, if our financial position is to be strong in the outside world we must be a united people. Turning to the question of the abandonment of imperial preference, I asked the Minister, a few days ago, if he would lay on the Table the correspondence which has passed between the Union Government and the other British dominions, in connection with the alteration of the fiscal policy of South Africa. The reply which I received from the Minister on that occasion was for him one of the most brusque replies we have had thrown across the floor of this House, so much so, that it created quite a ripple of applause from that corner of the House where the “soft answer that turneth away wrath” has no meaning. I think the Minister was under the impression that I knew what that correspondence contained and what was the tenor of the replies he had received from various dominions. If that is his impression it is only partly correct. I have only an idea, but I do know that if that correspondence could be laid on the Table, and if the people of this country were informed as to the attitude of the other dominions in respect of this new policy, it would create a profound impression, and I would go further and say that, as regards the other dominions, they are under no delusion as to the policy of this Government. Whether rightly or wrongly, they are satisfied that it is the policy of the present Government of South Africa to weaken the ties by every means that bind us to the Empire, and that this alteration of the tariff is a first step in the cut-the-painter policy. I think that it is greatly to be regretted that we have departed from the policy that has been adopted in this country from time immemorial. Let me take New Zealand as an illustration. It practically sells nothing to this country; but is a considerable purchaser of South African wines I believe it is the biggest customer we have, and yet we send them a letter telling them that this preferential tariff is a thing of the past. That has created an unfortunate feeling, and may quite conceivably lead to reprisals, which can easily follow. As regards the Government’s policy in established industries, I think we are on the right lines, provided the form of protection is a sane form and will justify the protection of that particular industry which it is intended to establish. I wish them every possible success in this direction.

I desire to raise a somewhat new point not yet dealt with. I wish to discuss the native taxation proposals of the Government. As the Minister has pointed out, we have four different systems of taxing the natives of the four provinces, and the administration of the natives in the four provinces, and the administration of the natives in the four provinces has been under entirely different conditions. We have to realize that in the Free State and Transvaal we have the relics of the old republican system. In the Cape we have what we consider a more progressive system, and Natal has a system of its own. Today the Government are bringing about uniformity of taxation. I think that is a step in the right direction. I realize that in a Union such as ours, with a huge native population, we must attempt to build up our native administration along uniform lines, and it is not in the interests of the country that each province should have a different form of administration. What I ask the Minister to realize, however, is that while we have had what I regard as an advanced policy in the Cape, in the Transvaal we have had, I won’t say a retrogressive policy—but that province has not developed to the same extent as the Cane, and uniformity can be made a fetish. Under the scheme placed before the House by the Minister to-day he is going to place the natives of the Cape Province, who have advanced very much further than the Zulus of Natal or the natives of the Transvaal, op the same level as the natives there, and I think that is a mistake. In the native territories in the Eastern Province we have developed a system of taxation which has appealed to the natives, and has not been opposed by them. They understand it and it is being developed to-day and instead of, with one sweep of the pen, knocking that system aside, the native taxation in the other-provinces should be gradually brought up to our level. In the native territories to-day we are trying to introduce taxation on a stock basis, and it seems to me that another than introduce a poll tax throughout the country, we should extend the stock basis system. The poll tax is not a scientific method of taxation, in fact this is what the Minister said yesterday on the subject—

I think the Minister will admit that the poll tax does not answer that theory. If there is one tax which is unfair in its incidence it is the poll tax. I won’t say it is wrong. In the native territories we are developing this taxation of stock, and, under it, the rich man will pay more than the poor man. I feel, in connection with this native problem that we have to face in this country, that it is unfortunate that we have never had a commission to sit, to go into the incidence of native taxation, and the different systems of owner ship of land in the different provinces, and to place something tangible before this House that we could criticize and discuss generally. So far as the taxation measures are concerned, we really do not know what has happened behind the scenes or upon what advice the Minister has acted. If a commission had gone into the matter and made a, report, it would have been the better way, for the information at our disposal at the present time is not adequate. Another point is the taxation of cotton blankets used by natives. We have had legislation this session prejudicially affecting the natives. We started with the civilized labour policy, and followed that up with the Wage Bill, which is admitted to be a sifting process to keep the native out of a sphere of labour he had been drifting into and then we had the colour bar Bill. This legislation is hitting the native, and now we have extra taxation—the poll and hut taxes, which will hit the native very hard. Yet, on top of that, we now have an increased duty on native cotton blankets. I followed the debate on protection and free trade, and am of opinion that the hon. member for Weenen (Maj. Richards) hit the nail on the head. He said: “We are building up a huge cotton industry—protect it as much as you like, because the cotton blanket is used by the huge native population from the Cape to the Zambezi.” But he added—

That seems to be the policy of the Government: Tax the native. In view of the fact that the Government has already introduced legislation which is not favourable to the native, the duty on cotton blankets should be withheld this session. It is not as if we had an industry making cotton blankets, and it is a wrong principle to attempt to protect an industry before there is even any thought of establishing it. Rather than have this duty on cotton blankets, I would have preferred the Minister to have retained the tobacco tax. That tax did not bit the native too hardly, but the blanket tax will hit the very poorest native. Perhaps the Minister may think the natives will cease to wear blankets and go in for European clothes instead, but if that happens they will have to be paid higher wages. It is proposed to place on the natives a poll tax of 20s. and a hut tax of 10s. Giving evidence at King William’s Town, before the Native Education Commission, Chief Zebi said that in the Ciskei the natives paid the following: quitrent 12s. 6d., road rate (average) 8s., dog tax 5s., and dipping tax 5s., and the average tax payable by a native householder was £2 12s. per annum. But in the Transvaal the average amount is £2. I am quite sure the natives would prefer to pay a tobacco tax than to pay a heavier tax on cotton blankets. I should also like to know if the amount to be advanced to the provincial councils for native education is to be funded, or is it to be repaid out of the first revenues obtained under this tax? The same principle should be applied to the revenue obtained from local development tax, as was applied to the deficit of the provincial council, so that the amount may be repaid in ten annual instalments. Unless this is done the revenue for the first year cannot be utilized for development purposes, so that the natives will be taxed without obtaining any direct return, and that will cause ill-feeling. How is the fund to be administered—it will be somewhere in the vicinity of half a million? Is the amount of revenue to be raised in each province to be ear-marked specifically for the benefit of that province, or is the money to be pooled and utilized for the general development of natives in the Union? If the money is to be ear marked for each province the Cane will suffer. In the Transkei we have local bodies, but the other provinces, where they have no local governing bodies, will be at a standstill for a considerable number of years, and the money will remain in the Government’s coffers until those areas have developed local councils. I would like to know when the development fund has been created how the Minister of Native Affairs proposes to deal with these local councils. Does he propose to establish them under the Act of 1920. which has not found favour in the country? It gives too much power to the native councils, and I think that is the opinion of the magistrates in the Eastern Province who have considered the question. I should like information from the Minister on a matter that is going to occasion a lot of trouble. What is going to happen with the de-tribalized natives who have left their areas where they were born and brought up, and thousands of them are working on the farms as servants from year to year. Are they to contribute to this taxation, because they will not get any benefit at all. The Hottentot is contributing nothing at all under our present system of taxation. Is a native, earning the same wages and living under the same conditions —because he is black—to be specially taxed? In many cases the pure natives have acquired the Afrikaans language and cannot even speak their own. This will occasion trouble in the administration of this Bill. In this taxation legislation, whilst the general principle may be correct, it seems to me that details will give a considerable amount of difficulty in working them out. We have to realize in this country that we have a population that is, to a large extent, disunited so far as the natives are concerned, and, in view of the fact that the taxation proposed is being brought forward at the same time as the other measures I mentioned, I think the Government will have to be very careful in its administration. I am not an alarmist, but I appeal to the Minister, particularly to the Minister of Native Affairs, whom it affects more, to withdraw this taxation on native cotton blankets. The native is having further direct taxation imposed now. Why then impose further indirect taxation at this particular juncture?

In connection with the taxation, the Minister in introducing this motion referred to the desirability of taxation being accommodated to the ability to pay of the taxpayer concerned. I would go further and contend that it must also be imposed with due regard to its reasonableness. That is an important factor where you are levying taxation on the native. One of the defects of the taxation is that the native has to pay the dual poll-tax and hut-tax. Hitherto one form of taxation or other has been understood by the native. In Natal, since 1875, the natives have paid the hut-tax and they have understood it, because it visualizes an ownership of the hut and occupation of the land. In 1906 an innovation was introduced in the form of a poll-tax. This innovation was resented and led to an outbreak which was so serious that it cost the country a million of money. It seems to me the Minister should be quite certain that this tax is going to prove a reasonable one so far as the native is concerned, because we know how unreasonable they can be, and we don’t want an innovation, just for the sake of uniformity, to cause friction and cause unnecessary feeling. I should like the Minister in the further stages to assure us that whatever misapprehension there may be in regard to this point, will be dissipated before we proceed to finally enact legislation of this kind. The Minister said it was not possible to reach the native in the same way in which you reach the whites, and, therefore, they should contribute in a special way. I don’t think I go all the way with the Minister in that view, but if it is correct I think the Minister should deal with another class which is not reached like the whites, and does not contribute as the natives do. This is a numerous class in Natal, the Asiatic, who lives on the same scale as the native and contributes nothing whatsoever in the way of direct taxation. In regard to the reasonableness of the tax I wish to suggest the difficulty he will have in reconciling the barbarian or backward native to this poll-tax. The Zulu is to pay £1 per head in addition to the 10s., and the excuse for the latter is that it goes for native development. A large proportion of these natives have no desire for education and very little wish for development. If you impose this dual taxation you will find these natives not favourably inclined towards it. The backward native in his blindness would look upon education as a means of throwing his daughters on the streets and turning their young men into vagabonds.

What is your alternative?

The tax of 10s. a head should only be imposed when the natives have manifested a desire for education and development themselves.

And in the meantime you would do nothing there?

I should, in the meantime, allow the 10s. tax to remain in abeyance.

And do nothing with regard to education?

Not in the meantime. I should leave it to missionary effort. We are running a danger in imposing a tax for a purpose which leaves the native entirely cold and provokes a certain amount of feeling against being taxed for an object for which he has no heart.

As I am anxious to hear the Minister reply, I do not propose to detain him, but there are a few points to which I would like to make a brief allusion. I have no intention whatever of entering into the controversy between the free traders and the protectionists. To my mind there is not such a thing in this country as an out-and-out protectionist or an out-and-out free trader. Each and all have lucid intervals when it affects their own particular business. The mistake made, even in this House, is that the free trader and the protectionist argue as if their respective tenets are the 11th and 12th commandments of life. They are not; they are not even principles. They are only temporary expedients to be adapted to the particular circumstances of the country at a particular time. The hon. member for Zululand (Mr. Nicholls), for instance, will remember that in Australia there were two adjoining states, and that at one period of their history one was intensely protectionist and the other was equally intensely free trade, and the truth is that they both were right at the time. Each state adapted its fiscal policy to its immediate requirements. For instance, the state of Victoria was protectionist because of its particular circumstances, having a small territory, with no vast rich hinterland. The state of New South Wales was free trade, because it had an enormous area available for development and production, and the free trade policy suited that state. When Union was accomplished the position had to be viewed, not from the standpoint of any particular state, but from the stand-point of the Union as a whole, and Australia is now frankly protectionist. I think we would be very wise indeed not to make this a political matter, but to rely, as far as possible, on the advice given us by the Board of Trade and Industries, assuming, as perhaps we are entitled to assume, that the board will be constituted of men capable of giving sound and unprejudiced advice. If they are not men of that sort, then it is quite right that their recommendations should be disputed and debated, and another decision, perhaps, come to in this House. But I do think it is a mistake for hon. members to try and give the country a definite lead either towards an out-and-out policy of free trade, or an out-and-out policy of protection. We have to adapt our tariffs according to the particular circumstances of the time. Discoveries in South Africa may, perhaps induce us to change our fiscal policy in this direction or not. However, I am not going to pursue that subject any further. I would like to call the Minister’s attention to some anomalies in his proposals, particularly in regard to licences. I do think that he will have the unanimous support of the House in any measure which he brings forward which is candidly and definitely designed to reduce the cost of living. If that be so, I fail to see why such traders as the baker, and the butcher and he boarding and lodging house-keeper, for instance, should be called upon to pay excessive licence fees. By all means let them pay a small tee for registration purposes. That is desirable and necessary. But as we know these institutions or these trades are patronized, certainly not by the richer portion of the population, but rather by the poorer sections. The same would apply to the eating house-keeper who is called upon to pay £5, and so on, and I would exempt the humble but useful pawnbroker also. It is well known that his clients are drawn chiefly from the poorest classes of the people, and if he could give them better terms, if he is called upon to pay a reduced licence, it would perhaps be all to their advantage. Hon. members may laugh but this is a serious matter. Those who have not had to seek the assistance of that very useful class of business man, may not sympathise very much with the suggestion. Similarly there should be a small fee payable by the pedlar sufficient for registration purposes only, and then again the restaurant, refreshment or tea room keeper might me let off very fairly according to the size of his establishment. Why I really got up was to urge upon: the Minister to make the fee for medical practitioners £1 and no more. Hon. members will agree with me that this is the one profession the members of which contribute from 25 per cent. to 10 per cent. of their nominal earnings to the public. They don’t collect it. No profession does so much Pro Deo as the medical profession, and; if they make substantial incomes, as many of them do and deserve to do, the Minister of Finance cap get at them in another way through the income tax, but I do think that, considering the special circumstances of that profession, their splendid record, on the whole, in dealing with the public, it might be appreciated in that way, and that the fee for medical practitioners’ licences should be reduced to the purely nominal one of £1. There are many matters of very great importance in connection with native taxation that it is not convenient to go into now, but I do hope that, as the Minister has had an indication of how many members view that from this side of the House, at all events, he will be prepared, in committee, to make some considerable concessions in those matters where the taxation can be shown to press with undue harshness on the natives.

I have a word of criticism in regard to the duties on cotton goods, which are used chiefly amongst natives in this country, and very largely on the Witwatersrand I notice by the scale that various articles, such as cotton blankets, cotton travelling rugs, kadungas, cotton table covers, etc., are subjected to very substantial percentages of increase on the duties. I have had a letter from the local Chamber of Commerce on this subject. It is not often that I stand up in this House as the spokesman of the Chamber of Commerce, but on this occasion I think the Chamber of Commerce have a great deal of justification for their criticism, and, therefore, I think it should be voiced here. I find that in regard to cotton blankets, which are not a luxury, and, I think, must be considered to be a necessity, the increase is from 3d. per lb. to 1s. per lb., an increase of 300 per cent. It may be claimed that this is not a very substantial amount, as the article sold is a low priced article, but still that is not a criterion, I think, by which to judge it. It is low priced, because its purchaser is potentially always a purchaser of low priced goods. The earnings of this class do not enable then, to go in for goods which cost them anymore. In regard to cotton travelling rugs, the increased duty is also very substantial, amounting to 175 per cent. I find that a cotton blanket of 3 lbs. weight, value 3s. which, under the old tax, was 3s. 9d. is now of the value of 6s., and travelling rugs which were previously 4s. 8½d. are now 6s. 3d. So it goes on right throughout the articles I have referred to. It may be claimed that the Government is making provision for the allocation of funds for the benefit of natives in other directions, particularly education. I do not think that that can possibly square with an imposition of this nature, because it seems to me unreasonable at any rate,; to provide for the education of people who cannot clothe themselves. We are progressing, of course; we are teaching them the necessity for civilized garb, but I think that the preparatory step towards education should be to bring them into line with the wants of civilized people. Instead of being a gain to the revenue this taxation would be a loss, for the simple reason that the turnover would drop, so that the additional duties would be more than counterbalanced by the loss of turnover. The matter of protection does not enter into this question because these things are made of cotton waste, a by-product, which is produced in factories where cotton goods are turned out in large quantities; and for a number of years we should never be able to produce this class of goods. While your budget has taken away from the provinces the power of drawing on the mining industry for their revenue, we are actually taxing the people who produce up there; and the industry itself, the main industry of the country, has got off very lightly throughout all the estimates. I do not think it is right that this kind of indirect taxation should be imposed on these people, because they certainly cannot afford to meet it. I am informed here in Johannesburg alone, that in consequence of the increased cost it will take many months or even years to work off the stock on hand in bond, on order or in transit on behalf of Johannesburg merchants and which amounts to at least £250,000. I think that whatever revenue is necessary could be obtained upon the basis of a reversion to the old scale of tariffs rather more certainly than by imposing a new scale. The natives during the war, who had no opportunity of pressing for increased wages, simply stopped purchasing; and I think there will be the same result in this instance. It will certainly seem to the natives to be a case of slogging the horse for the production of revenue without any regard for him whatever. The native’s wage-earning capacity is governed by supply and demand; so far there is no indication that legislation is contemplated with a view to securing minimum wages for this class of worker, so that he is entirely at the mercy of those who fix his wages and his living costs according to the exigencies of the industry he works at and the commercial expediency of those from whom he must buy his necessaries. I think that altogether, everything considered, sufficient case has been made out for relief for the native population in regard to cost of this class of goods; and it would obviate a good deal of discontent and possibly more serious consequences if this proposal was withdrawn.

I am certain that hon. members of the House and that the country will take to heart the feelings of protest of the hon. members for Beaconsfield (Sir David Harris) and Ficksburg (Mr. Keyter) in connection with the levying of taxes of any sort. I am certain that we will take to heart the warning to try and control our expenditure in such a way that it will not be necessary from time to time to come to the country for taxes. Unfortunately the Minister of Finance is in the position that when the House approves of certain expenditure he is entrusted with the unpleasant task of finding the necessary money. Well, I have come before the House with certain proposals which in my humble opinion are the best to find money for carrying on the services of the country. On the proposals there has been, in fact, very little criticism. With regard to the amendment of the tax on companies practically only the hon. members for Yeoville (Mr. Duncan) and for Newlands (Mr. Stuttaford) touched the question of the difference that is made in the tax between companies and individuals. Those hon. members have argued that it is unfair to tax companies higher than individuals. The hon. member for Beaconsfield has further mentioned the point that consolidation of the companies tax will press heavily on those companies, e.g., that build up their reserve and do not distribute the profits. That is another point of view that has been raised, and in connection with those observations I will say a few words later in my speech. But the greatest criticism was made generally in connection with the tariff. The criticism came practically solely from one hon. member, namely, the hon. member for Cape Town (Central) (Mr. Jagger). His plea only amounted actually to a defence of the principle of free trade. In other words a conflict has arisen between the protagonists of free trade and those of protection. The arguments of the hon. member for Cape Town (Central) have however been very effectively answered by hon. members on his own side. We remember the effective speech last night by the hon. member for Three Rivers (Mr. D. M. Brown) and the forceful speeches this afternoon from the hon. members for Zululand (Mr. Nicholls) and Newlands (Mr. Stuttaford). It must surely be very clear to the hon. member for Cape Town (Central) that on this point he is a voice crying in the wilderness. Even on his own side of the House he has very few friends. The matter of a forward industrial policy was moreover also the slogan of the Opposition. The leader of the Opposition himself during the election told the country that he is in favour of a policy of developing our industries. I always knew that the hon. members opposite were divided on this point but it never was so clear to me as this afternoon how many supporters the hon. member for Cape Town (Central) has.

There is division on your side also.

Yes, that may be true that there are on our side also a few members who do not want to go so far bur in general we stand together as regards the encouragement of industries that show possibilities of success. But in the short time that I now have at my disposal I cannot go into the merits of free trade and protection. Moreover it is clear that the country has come to a decision on this point. We have rightly or wrongly decided that we should make a serious attempt even by means of the tariffs to try to create or extend industries that show vitality with the most important object of giving work to our young men who are to-day being driven away from the country side. That is, as far as I am concerned, my greatest inducement to aim at the State doing its duty by giving the necessary protection by means of tariff to the industries that have a chance of being successful, and where the probability exists that they can furnish a field of occupation for our young men. We admit that there are dangers as regards this experiment. The hon. member for Cape Town (Central) has said that we can never become a great industrial country, but yet I believe that there are sufficient industries in our country which have a chance of operating successfully if the necessary protection is given, and that there are enough that will answer to our expectations that they will furnish the necessary field of occupation for the small population of our country. We do not intend to go in for a wild, extreme, ill-considered protection. The proposals before the House are not in that spirit. I think the tariff proposals speak for themselves. They all give evidence of a proper, thorough investigation of any case that may come for notice. The hon. member for Cape Town (Central) said that the Board of Trade and Industries did not have sufficient time to investigate all the matters. Well, I can assure the House that all the decisions were taken only after thorough consideration. The board and ray department have worked hard. I myself have always devoted much time to it to be able to lay the tariff before the House. If we had not done so then we should have had to wait another year, while in the meantime we might be giving valuable help to certain industries which can be created. I want to say that this is not the last word as regards tariffs. Amendments will have to be made from time to time, but we have here made a commencement, and if the recommendations are adopted, then I believe, in company with the industrialists who recently met in Cape Town, that we have an instrument in the tariffs which will enable them in the near future to establish industries here which otherwise would not be established. I just want to deal with a few of the points which have been raised in connection with the tariffs. The hon. member for Cape Town (Central) explained, inter alia, the position in connection with the suspended duties. We hope by applying the principle to be able to offer real and necessary help to certain industries during the time that Parliament is not sitting. It has been objected that the Government should impose these duties, but we shall be careful, and, of course, Parliament will ultimately have to approve and confirm such action. The hon. member further pointed out a difficulty that I think we can remove at a later stage, namely, the application of repealed duties on consignments which are already on the water and are on the point of being imported. I hope to make provision for that in the Bill to be introduced. Then it has been objected in connection with the difference in tariffs for goods that are intended for certain industries and goods which are intended for other purposes. Hon. members have said that this opens the way to fraud. I can give the House the assurance that although the principle has existed a considerable time the experience of the department is that sufficient control can be exercised to prevent fraud. In this way we can effectively give help to certain industries, and this has been done several times in the past. The Government is able under this provision to permit a certain article which is suitable for an industry to come in free, and experience has taught us that in this way we can give effective help where help is necessary. Various other members have mentioned other points with reference to specific industries (in connection with the tariff) which I think can be better dealt with when the particular industry is being discussed in Committee of the House. The hon. members for Springs (Mr. Alien) and Tembuland (Mr. Payn), for instance, have mentioned the increased tax on cotton blankets. I am willing to debate this point in committee, and the same applies with reference to a point mentioned by the hon. member for Cape Town (Hanover Street) (Mr. Alexander), namely, the matter of wire netting and films. Such and other isolated cases we can deal with better in committee. It is impossible for me now to go into all the cases. Then I want to say a few words more in connection with other proposals which two or three members have criticized. The first point which I shall discuss is that mentioned by the hon. member for Newlands (Mr. Stuttaford). The hon. member spoke about the various taxes on companies and individuals, but I want to point out to him that the principle has long existed in our taxation statutes by which companies are regarded as a legal entity and are taxed differently to individual persons. Just take the position of the gold mining companies. Is there a single hon. member in the House who will propose that we should depart from the difference in taxation and make the shareholders only pay as individuals and not to levy special taxes on the industry? The principle has existed a long time, and the taxation of companies has always differed from the taxation paid by individuals, and if it is good for gold mines, why should it not be good for other industries? The companies have certain privileges under the statutes which are given to them on incorporation. Certain special privileges are granted them to Help them on, and the tax which they have paid has always been different from that which individuals have paid. The difference has always existed in our legislation, and I cannot see why certain companies should be taxed and other companies should be favoured. Then the hon. member for Beaconsfield (Col. Sir David Harris) objected to my proposal to consolidate the old normal tax and the dividend tax, and he pointed out the difference that this would make for the persons who in the past had accumulated reserves. That is exactly my purpose by the change, to subject to the tax the reserves which have not been distributed—not alone in the gold and diamond industry, because they are not the worst sinners, but also other companies. Our system of taxation is a tax on profits, and every way in which individuals or companies can evade the tax is unsound. I am not against the creation of a reserve. It is a sound system, but I should like to know why it should be free from taxation. In many cases reserves are subsequently distributed. They are not only used for extending business. Why, if this is so, I repeat, should such amounts be free from taxation in the meantime? I think that the companies have been in a privileged position in the past, and it is time that a change was made. Individuals and partnerships that are not incorporated must pay taxation, but why must the companies escape? The hon. member for Newlands said that the tax is not increased but that I will still get a larger amount from the companies. I said that by that amendment I should get £200.000 more. The tax is not raised because it is actually an amalgamation of two amounts, but I shall get taxation from the amounts which have practically escaped the tax in the past.

The tax in the case of small companies is raised.

What is here done is that all companies are placed on an equal footing. The tax must be the same. To the smaller companies, indeed, a rebate of £2,500 was formerly given, while it is now only to be £300, but on what ground should small companies be treated differently to big companies? I said yesterday that very often rich people have shares in small companies, and poor people in large companies. Thus we cannot make a distinction on the basis of large companies and small companies. Small companies that make small profits will automatically get a rebate, but the position that previously existed was decidedly unfair. The distinction between individuals and companies already exists in our law. Then the hon. member for Newlands also brought up the question of interest on debentures. Now, as we know, this is a difficult matter which my predecessor also tried several times to deal with, and we have had in our legislation in the past, in various ways, the principle that the interest on debentures can be deducted. It soon appeared, however, that advantage was being taken of this to evade taxation. For the most part, oversea people were the debenture holders, and it is difficult to get hold of them, and so the tax is evaded. The alteration has now been made that companies may not deduct it. This may be stupid, but we lay it down here that the tax shall be paid by companies, and it is, I think, the best way. The companies are actually charged by the Government with the collection of the tax, and the companies have the right to demand repayment by their creditors. We give them that privilege. We leave it to the Company whether they will deduct it from their creditors, yes or no. I think that is fair, unless we are prepared to scrap the revenue which is obtained from oversea people. Then I come to the estate duty. The hon. member for Yeoville and other hon. members have said that the rebate which is now allowed namely, £7,500, is a little too high. Well, I think that it is in the interest of the country that we shall encourage people to accumulate money. We can, unfortunately, not do entirely without the cash, but I think that it is unfair to tax the small people heavily. In cases where large capital amounts are left, I think it is quite fair to demand taxation. Therefore, the limit of £7,500 has been fixed. The hon. member for Liesbeek (Mr. Pearce) rightly pointed out last night that on being capitalized, this actually means an amount of between £400 or £500 per annum. I do not think the amount is too large, and I think we should do everything possible to exempt small capitals. Then a few words in connection with licences. Just as on the Financial Relations Bill, hon. members have again tried to represent here that I am imposing a new tax. That is not the case. All that we are doing is to make the existing taxes in the provinces uniform. That principle has long since been adopted and it is always regarded as a fair source of taxation of the provinces, and they have drawn a fairly large amount in the various provinces from that source.

But it is being increased. It used to be only £5.

The hon. member for Yeoville (Mr. Duncan) has always had the good fortune of practising in the Transvaal, and there he only paid £5. On the contrary my whole life I have had to pay £15 or £20. We are now engaged here in obtaining uniformity as the provinces have asked. In various provinces it will not make any difference, but the Transvaal will, unfortunately, have to pay a little more. But what we are here doing is not to put on a union tax, but we are only engaged in bringing uniformity to a tax which is levied in the various provinces. Then the hon. member for East London (Brig.- Gen. Byron) mentioned the case of bakers, butchers and certain other persons who keep boarding houses and have to pay taxes. That is unfortunately a tax which exists in the province. We are not engaged here in deciding whether the tax shall be levied or not. The province has thought fit to keep the tax, and all we here propose is to create uniformity. Then the hon. member for East London asked me to exclude doctors. Well, there are people in other occupations who also do work pro deo, and I think that this small tax of £10 on medical professional men is quite fair. Then it is said that in the case of occupations and also in connection with other licences paid, we ought to graduate them in proportion to the income of people, or in proportion to the size of the business. Hon. members will see that we have tried to do so with reference to traders, but it is clear that it is impossible to extend it. How can the department find out with reference to all the smaller businesses and in any occupation what the income is? Therefore the only possible Way is to fix practically a fair and reasonable amount for all classes and persons who carry on a business Then the hon. member for Hopetown (Dr. Stals) and the hon. member for Ladysmith (Mr. J. J. M. van Zyl) have brought up for discussion the raising of the excise duty on imported liquor. One of the hon. members expressed his disappointment that the Government had done nothing in this direction. I should like to say that the Board of Trade and Industries have already investigated the matter to a certain extent, It is the view of the board and of the department that by raising the tax we shall render no service to the industry. It is still an open question whether persons will drink our wine if we prohibit the imported wine, or keep it out by taxation. The hon. member for Hopetown gave figures to prove that the importation had fallen after certain measures by my predecessor. The State lost a portion of the income, but the local industries were not advanced thereby. The Board of Trade and Industries will, however, again go into the matter to see whether, in this respect, we can do anything for the benefit of the said industry. Just a few words more in connection with the native taxation which was brought up by the hon. member for Tembuland (Mr. Payn) and the hon. member for Illovo (Mr. Marwick). The hon. member for Tembuland said that it would possibly have been desirable to appoint another commission to investigate the matter and to bring all the information before the House. The former Government have already discussed the matter minutely; the department did this, and also the Native Affairs Commission. The present Government has enquired into the matter. We wanted to introduce legislation last year, but we postponed it until this year. It was discussed in Pretoria by the native congress, and the result of all the deliberations is now before House. I am aware that there are certain difficulties, but I think that it is generally felt that we had to do something to get the necessary amount for the development of the natives Rightly or wrongly, it is clear that the white men do not want to pay any more taxes for the education and development of the natives, and it is to make that development possible that the increase of the tax is proposed. The hon. member for Illovo has said that the Natal natives do not want education and also will not pay the taxes. Ought we then to do nothing for those natives; must we do nothing for the natives in Natal, because they do not wish it? We cannot take up that attitude, and we must take the necessary steps to get funds for the advancement of the special interest of the native The hon. member for Tembuland asked the question about the distribution of the funds between the various provinces, I must point out to him that I have here only to do with the obtaining of the necessary funds. The administration thereof rests with the Department of Native Affairs, and, at a later stage, he will possibly be able to get the information from the Prime Minister. The hon. member has also asked what will be done in connection with the amount which has been advanced by the treasury to the development fund for natives And I have said £160,000 has already been advanced and I appreciate that it will be too hard on the fund to pay it all back in one year. The treasury thought of three years, but the hon. member need not fear that we will demand it all back in a specified year. The hon. member for Weenen (Maj. Richards) took exception to my giving him no reply to his request to lay on the Table the correspondence between the Government and the dominions about the customs tariff. I am sorry that he tried to insinuate that there is something in it that the Government wish to hide. He has tried to raise suspicion. I can tell the House that I refuse to do it, because it is not usual to lay such documents on the Table without the consent of the other parties being obtained. We have notified the other dominions what we propose doing, and have received their replies. Canada has asked whether the list cannot be extended, the Government is thus willing to immediately give access to the document to members so far as the Government is concerned. I have now answered all the questions, except that I have not dealt with those under the special proposals, because they can be better dealt with in committee.

Motion put and agreed to.

If there is no objection, I would move, as an unopposed motion—

seconded.

How far does the Minister want to go?

I would like to pass the first resolution in regard to income tax. As hon. members know, it is of the utmost importance that we should get this legislation through as soon as possible to enable the department to proceed with its work and we intend to bring up a Bill as soon as possible and get that passed. I would be glad if the House would take the first resolution regarding income tax.

Motion put and agreed to.

House in Committee:

Income Tax.

I move—

1. (a) a tax upon incomes, to be known as the normal tax, whereof the rates in respect of the year of assessment ended the 30th day of June, 1925, shall be—
   1. (i) in the case of companies, the sole or principal business of which is mining for gold or diamonds, for each pound of taxable amount, as defined in the said Act, three shillings;
   2. (ii) In the case of companies, the sole or principal business of which is life assurance (including the issue of annuities), for each pound of taxable amount, one shilling and sixpence;
   3. (iii) in the case of all other companies, for each pound of such taxable amount, two shillings and sixpence;
   4. (iv) in the case of persons other than companies, for each pound of such taxable amount, one shilling and as many two-thousandths of a penny as there are pounds in that amount, subject to a maximum rate of two shillings in every such pound;
2. (b) an additional tax upon the incomes of persons other than companies, to be known as the super tax, which shall be chargeable in respect of such incomes of persons other than companies as are in the aforesaid Act made subject to super tax. The rates of super tax in respect of the year of assessment ended the 30th day of June, 1925, shall be, for each pound of the amount subject to super tax, as defined in the said Act, one shilling and as many five-hundredths of one penny as there are pounds in that amount, subject to a maximum rate of five shillings in every such pound.

I would like to deal with the item 1 (a) (iii) of the resolution. I am very sorry that what we have said on this side of the House has had no effect upon the Minister of Finance as regards the injustice of the taxation that is being placed on limited liability companies. As I understood him to say in his reply on the debate this afternoon, he seems to be under the impression that a limited liability company has certain privileges, and that, therefore, this is a reason why they should be taxed very much more heavily than any other form of investment. I must say that I fail to know any privilege that a limited liability company has, in fact I may point out to the Minister that if there are more than 19 members of a company, that is, if there are 20 members in a private company, under the law they are bound to register as a limited liability company, and, therefore, it seems absurd to suggest that there are many privileges accorded to a limited liability company. It is an obligation in that case that they shall become a limited liability company. I cannot understand his theory that an aggregate of individuals exceeding seven, for instance, should be charged at a higher rate than those seven individuals taken separately. The Minister takes up the position that an aggregate of individuals shall be taxed at double the rate of those individuals taken separately. There does not seem any justification whatever for the position he takes up in that regard. He then went on to point out that companies under the old conditions did not pay income tax on the amounts they put to reserve. As far as I know no one on this side of the House suggested for one minute that companies should not be charged income tax on the whole of their profits. Our argument was not that they should be exempted from income lax on the whole of their profits. Our argument was that when you charge them on the whole of their profits then you have no justification for charging them more than the tax that is charged upon individuals. The Minister also brought up another point. I hope I am not misquoting him, but, in dealing with the question of debenture holders he pointed out that the big body of debenture holders are resident outside* the Union. We are obsessed in this House with the idea that the whole of this country is run on gold mines. I agree that a big body of the debenture holders in the gold mines probably are resident outside this country.

That is what I said.

But why should the debenture holders in all other classes of industry in the country all be mulcted in quite an unfair amount of tax because there are certain individuals interested in gold mines living outside the country? It seems to me quite inequitable and quite unjust. I would still urge on the Minister that we should make some allowance for debenture holders. The position taken up to-day is that the debenture holder has to pay 2s. 6d. in the £ on his income derived from that source, that is on a 6 per cent. debenture the debenture holder will only receive 5¼ per cent. on his money, and I suggest to the Minister that he is going to raise the price of capital at least 1 per cent., that is, that any industry that wants to find capital in the form of debentures will have to pay at least 1 per cent. more for that capital than it would have to pay if the Minister were, I was going to say, more reasonable in this matter. It is a very serious thing for this country if we are going to find money for all the industries we are going to develop, if the whole of the secured capital in an industry is to be paid for at a rate of 1 per cent. higher than it need be. I would still ask the Minister whether he could not see his way to allow rebates on moneys paid to debenture holders, if he likes, resident in this country, if he would allow rebates to those persons who, if the income were derived from any other source, would be free from tax. That provision should be made in the Bill. I would suggest another alternative, that is, that the Minister should only charge 1s. in the £ on that proportion of the profit which is paid as debenture interest, and he could then surcharge any debenture-holder who should pay more normal tax than 1s. in the £. As regards the balance of the tax, that is the tax on the ordinary shareholders, I still maintain that even if he charges the maximum normal tax of 2s. in the £ on individuals having incomes of £24,000 a year or over, I say that he is then charging a company an unjust amount, and I suggest that at any rate the maximum normal tax on a company should be 2s. in the £. There is one other point I should like to draw the attention of the Minister to. He has not mentioned it, but I take it he will make provision in the Bill. It is with regard to the dividends that have been paid during the currency of the year to the 30th of this month. Most companies have paid interim dividends, the fortunate ones at any rate, and there is no provision made under this resolution which will prevent these companies, after having paid dividend tax on a portion of their profits, from having to pay the full tax on the profits, that is they will have to pay the extra 1s. in the £ on the portion paid in dividends. The point is this. Under the provisions of this resolution companies are being taxed on the whole of their profits for the year ending 30th June, 1925. Some of these companies have already paid a portion of their profits in the form of dividend tax during the currency of the year; and it will be very unjust to them if they have to pay the whole of the tax on the 30th June, plus the dividend tax which they have already paid. The amount they have already paid should be taken as an amount paid on account. In order to put my amendment in proper form I move—

I would like to support my hon. friend and to second his proposal. It does appear to be a very strange thing that the Minister should differentiate between the ordinary private concern and the company. I can understand it as regards gold mines and so forth.

It has always been the case.

Not to the same extent.

The principle is the same.

I quite agree with what the hon. member for Newlands (Mr. Stuttaford) has said. The Minister has laid stress on the privileges to be gained by incorporation. I have never been able to discover them. I know firms which have gone back to private concerns, and, in fact, I think the tendency is rather that way on account of the extra taxes they have to pay. I agree that it is perfectly fair to tax all profits and to do away with the dividend tax. That I can understand, but why the Minister should differentiate between a private concern and a company, especially a small one. I must say beats me altogether. My hon. friend talks about small shareholders. Of course there are small shareholders in companies, probably more small men as shareholders than in private concerns, and yet he wants to tax them at a high rate. I have a letter here relating to a small concern in Cape Town, with three partners. Up to now they have just paid the 1s. normal tax. They have not even paid dividend tax, because the profits have not enabled them to do so. Now, of course, the tax payable by these same people is going to be increased from 1s. to 2s. 6d.

Their liability is limited.

That is not of so much account as all that.

Why did they not remain a partnership?

Well, I do not know the circumstances, but it is very often the case. A man may be willing to put money into a concern, and he wants a limited liability. That is one reason. Again, as pointed out by the hon. member for Newlands (Mr. Stuttaford) sometimes you want to define the exact position of each partner in the concern. No, I do not see much privilege. I do not think my hon. friend is justified in differentiating in this way, especially where small companies are concerned.

I feel aggrieved, and I think others must do so as well, that the Minister has not seen fit to give us this abatement on £500. We understood last year that he was going to do so, but like pharaoh, he seems to have hardened his heart, and we are only to get the abatement on £300.

The abatements are not before the committee at present.

Income tax is before the committee, Mr. Chairman.

As the hon. member will notice, in the second line “Subject to such amendments of Act … The abatements are still to come.

Do I understand you rule we cannot ask the Minister whether, in his Bill,—

Oh yes.

I want to ask the Minister whether he cannot still see his way clear to put in this abatement for the married man with a family. It is the married man with a family that I am anxious about. I would like to point out to the Minister that the majority of the people who are paying the tax to-day are the married men with the smaller incomes who have to bring up families, and if we assist them, it is going to be good for the country. I am referring to the man with from £500 to £1,000 a year. That man should be assisted as much as possible. The reversion to the penny post does not help the ordinary man, who only writes about once a week. The men who are assisted are the financial groups, and particularly the newspapers, who are getting the farthing off. That could easily have been left on the newspapers. The subscribers are not going to get the benefit. The newspapers will retain the farthing just the same and put up big buildings, as we were hearing yesterday. We were promised this abatement, and I hope the Minister will see his way to grant it. It will not only be a good thing, but a popular thing, and the reply of the Minister that it would cost £200,000 is not satisfactory. The reversion to the penny post could have been kept over for another year, notwithstanding what the Chamber of Commerce is saying. I hope the Minister will go into it and see whether he cannot give this £500 abatement. People who are the backbone of the country will be relieved if he does so. The bachelor, however, should be taxed, and the man who has no children is unlucky in both ways; because he has not got the greatest blessing in the world—that is children —and because he should rank with the bachelor as far as taxation is concerned. People with five, six or seven children should be assisted by the State, and this is one of the ways in which the State can do it.

I hope, the Minister will very seriously consider this debenture matter. It seems to me quite illogical that debenture interest should be taxed and yet interest on bonds is not. I believe, legally, there is no difference between the two, and surely if it is right to tax debenture interest, it would be right to tax the interest derived from ordinary bonds. If he did this, I am sure he would have the support of the hon. member for Ficksburg (Mr. Keyter). But this seems to me a very great anomaly. In the first place, there seems to be some confusion of thought. Debenture interests is not profit; it is a liability. A company cannot honestly declare a dividend until it has provided for debenture interest, and this anomaly results. Large companies may have directors who have a large number of debentures and have a controlling interest on shares. I do not think it is right that at their option they should be in a position not to declare a dividend on the ordinary shares at all; but simply receive their debenture interest, and the law permits them to have the option of making the company pay the tax on that interest. I do not think that is fair. The practice varies a good deal. I have a list here, which is open to the Minister’s inspection, of companies precisely on the same line of business, some of which deduct the tax from the debenture holders, and some of which do not. I do not think it is desirable that that state of affairs should continue. It leads to many grievances, and, perhaps, a good deal of suspicion in the financial world, if power is given, under the Act, to have the option. The Minister, I am sure, would be prepared to consider the small holder of debentures. There are a great many people who have a little money to invest. Very often they are old people, or widows, and so forth, and if they get advice from a financial agent of good standing and honest intent—as most of them are—he will advise them to put their money in debentures, rather than in shares. In debentures, they have some security. It is another form of lending money on mortgage; but if persons drawing a comparatively small income from debentures are to be taxed per cent. on whatever sum they receive from debenture interests—2s. 6d. in the £—it is too much for these people to pay. In a case of large debenture holders, they can be got at by means of the ordinary tax, or in the case of very large holders, through the super-tax, and the super-tax could be steepened, if necessary. But to allow a bond, if it is called a debenture, to be taxed, and if it is not called a debenture, to be free of tax, is absurd. I hope the Minister will give consideration to these representations and, at all events, grant some relief to those who are holders of comparatively small amounts of debentures.

I hope the Minister will stand firm and not give way either to the representations of the hon. member for Newlands (Mr. Stuttaford) or of the hon. member for Bloemfontein (North) (Mr. Barlow). I hope he will stand firm with regard to the companies tax also in regard to the £300 abatement. I believe it is quite fair to leave the abatement at £300, I should even have been satisfied if it had been left at £250. But I should like, if the Minister could manage it, the exemption for children to be made £100 for each child. I know the Minister has granted an additional £10 abatement for children, but if he is going to give way on anything, I would like him to give way to those who have children and raise the exemption to £100 per child.

I want in the first place to say a few words about private companies. It is being more and more felt that a private company is sometimes very necessary where a father has a business which he wants to leave to his five sons; such a father, e.g., has a general dealer’s business then it will be very difficult unless he has formed a private company. The object of the establishment of such companies is therefore very often to obviate difficulties when a father bequeaths his business to members of his family, and as such it is sometimes useful and deserving of encouragement. One deals then with shares which can be bequeathed to the children. The business goes on as usual and the children become the shareholders. In the past such companies paid a certain amount as normal tax and then the dividend tax. Now the Minister, however, says that the private companies must all pay 2s. 6d. in the £ on their revenue. I know of cases in my constituency where people have formed such private companies for family reasons and not for speculating in shares as the Minister stated here. All those people will the future have to pay 2s. 6d. in the £. It will press heavily on them and in the second place the Minister is interfering with a good principle. I also wish to say a few words about other companies such as boards of executors. In the past they paid 1s. 6d. in the £ and then 1s. 6d. as dividend tax but there was a rebate of £2,500. That is now taken away and the companies must pay 2s. 6d. in the £ on all profits. That may possibly be all right for large companies with strong reserves. It will, however, be very hard on young companies which still have to build up a reserve as security to the public who have to make use of the companies. I really think that this is a great jump that the Minister has taken. He met us with reference to the licences of such boards but the Minister should also take into consideration what the general result of the tax will be. The proposal of the Minister will again, by means of the income tax, hit the young boards hard who have already been hit hard by the licences. I was obliged to make a remark about this matter because there are quite a number of such boards of executors in my constituency.

We have listened to the heartrending case which has been mentioned here again by the hon. member for Caledon (Mr. Krige) of the father with five sons who forms a private company to facilitate the administration of the estate, that is for family reasons. It is just those people that I want to catch. I would like to tell the House what often happens. A man with five sons forms a trust; to each son a part of the business is transferred but the father retains control of all. Say that such a business makes a profit of £12,000 then it is divided amongst all and no one becomes liable for the super-tax. Another way in which it is done is that, a company is formed and a large salary is paid to the directors which would not be permitted in an ordinary business. In this way the company also escapes the super-tax. It is just to get hold of those people that this legislation has been introduced. There is undoubtedly a certain advantage in incorporation and it is no more than right that a tax should be paid in consideration thereof. The principle is not new, it already exists in the country and why are all the objections made to it. It is just on account of the cases mentioned by the hon. member for Caledon that this provision is being made. Then he mentions the case of the boards of executors. He says that some of these boards are weak. I will repeat that nobody wishes to prevent them from building up a reserve. That is very good but we want that the fair tax should be paid on it.. The general principle of our system of taxation is that the profits of persons and companies should be taxed and we must carry this out by preventing profits being exempted if they are put to the reserve fund.

With regard to the amendment of the hon. member for Newlands (Mr. Stuttaford), we have argued and discussed the thing on several occasions, and I regret that I cannot accept his amendment. I do not think any new arguments can be advanced. The principal thing is that our existing legislation considers a company as a legal entity by itself, and has always treated a company differently from an individual, and that is what we are retaining. The other point raised by the hon. member in regard to those companies which have been declaring interim dividends I shall provide for when the Bill is introduced. I regret that I cannot accede to the request of the hon. member for Bloemfontein (North) (Mr. Barlow) to increase the abatement from the payment of income tax from £300 to £500. As I have already explained, this matter will have to be considered when the finances of the country have been improved to such an extent that we can afford to give this increased abatement. We cannot do this unless we place an additional burden on those who can ill afford to bear it. As it is, a man with an income of £500, who has three children and pays £20 in insurance, will pay no income tax at all. We will consider a further abatement when the position has improved, but we cannot do so this year. Then the hon. member for East London (North) (Brig.-Gen. Byron) has asked why make a difference in regard to the disallowance of debenture interest and the interest on bonds. Because in the case of bonds, generally speaking, you can recover the tax from the bond-holder, but in the existing state of affairs, where you have debenture holders not resident in the country it is impossible to get hold of them unless you do it by this means. We must cast the burdens on the companies concerned to deduct it.

Why don’t you take mortgage bonds?

Because in the case of mortgage bonds you can get hold of a man. What other way can he devise for effectively securing the tax for the Government unless you do it in this way? A system of refunds is in force in England, but the cost of collection and the cost of administration is more than the whole thing is worth. I regret I cannot see my way clear to alter the existing practice in that regard.

I hope before long the Government will turn its attention to considering the advisability of adopting the attitude of Mr. Ramsay Macdonald.

Of resigning?

No, not of resigning. In the years of experience of some of us we have come to the conclusion that the House finds itself bound by a system of looking upon any amendment of the financial proposals of the Government as a vote of no confidence. It does not make for free discussion or free action. I suggest that it be not looked upon as a vote of no confidence if an opponent or a supporter moves it and the Government is defeated. Whilst agreeing in the main with the general policy of the Government, there are many important items we should like to have altered, but we find ourselves faced with the alternative of turning the Government out. They might not follow the example of the South African party on a similar occasion.

Don’t take any risks.

When my hon. friend was protesting against the raising of the limit of exemption from £300 to £500 it was as an alternative, because he wanted to see the children’s exemption raised. What an alarming prospect there was held out, what an inducement to over-populate the country if you pay £100 for every child. Just visualize the vista in view of the fact that we cannot find sufficient employment for the children to-day. I was sorry to hear the hon. Minister say he was going to be adamant on the raising of this exemption. There is one dangerous thing, and it is becoming stereotyped, that this House is beginning to look upon £300 as the limit of advancement for men in this country. They say if you get more than £300 we are going to tax you. I make bold to assert that £500 for a man in this country, married or single, and I think additional consideration should be given to the married man with a family, is by no means conducive to luxury. It takes a man who wants to live decently and well in this country all of £500, especially the married man. It is a consideration we have to think about. We are placing it on the statute book that we consider £300 sufficient for a man to live upon. I say it is not. The hon. Minister gives us a reason that we are not sufficiently prosperous from a State revenue earning point of view. I differ. He says we shall have to shift the burden on to somebody else as little able to bear it. That is not the only alternative. I remember when he was in leadership of the Opposition on this point. The present Government were just as keen on urging on the South African party that they should raise the limit of exemption from £300 to £500. What was the alternative in order to make it up. It was that you would have a steeper grade for those above. It is idle to talk about a man with £20.000 a year and that you live on the incidence of his income tax of 2s. in the £.

They pay 7s.

Oh, yes, with the super-tax. When a man’s income reaches £24,000 he does not earn it. You should have so steeply graded your income tax, whether normal or super, that his income becomes extinct. No man wants £24,000 to live. If you, by Act of Parliament, tell the whole of your community that £300 is enough for you, don’t talk about any individual having £24 000. As a final argument for the raising of the exemption I would ask does the Minister seriously argue a man with £300 per annum, whether married or single, can live decently and well on a scale of civilization we ought to lay down for him, and at the same time make provision for the future? It is a sheer impossibility. I think the Minister ought to take cognisance of the fact and that he should reconsider his proposals in the light of the point I have put before him namely, that he should off-load that shortfall on those who are enjoying higher incomes by taxing those incomes on a steeper grade.

I raised this point that was subsequently dealt with by the hon. member for Newlands (Mr. Stuttaford) and previously dealt with by the hon. member for Yeoville (Mr. Duncan) before we went into committee, and although I quite follow the Minister in regard to his trying to get at people who endeavour to cover up their profits in the form of companies and that a company must be treated as an individual, what I do not think does follow is that he should treat a company differently from other individuals. In other words let the company be an individual, let it pay on all its profits, let it not hide its profits in the form of reserve funds, but the point he has not answered is this, why should one individual pay tax at the rate of 1s. and why should another individual bear a tax of 2s. 6d. That is the point that the Minister has not met in his argument. The rest of his argument one agrees with. As regards the instance that he gave of a man with five sons and his putting money away in a trust, that may be dealt with by legislation. Some small companies put all their profits to reserve in order to be used in the business. I agree with the Minister that where profits are put away a company cannot get out of their taxation by calling them reserves. Profit remains profit, whether it is a company or an individual. So much profit is made and the tax on that profit should be at exactly the same rate whether it is a company or an individual. The same in regard to debentures. I cannot understand why £500 or £1,000 that is received by way of interest on money lent to a company should have to pay 2s. 6d. in the £, while the man who lends money on mortgage should only have to pay 1s. in the £ on the interest he receives. What explanation is there of this differentiation, except to enable the treasury to get a little more money from the pockets of the public? It seems to me perfectly unfair and illogical. I regret that the Minister should have taken up an unsympathetic attitude towards the appeal made for the raising of the exemption. I do not know what reason the hon. member for Liesbeek (Mr. Pearce) should have had for urging the Minister to stand firm on this question. He said he wanted to get something for the children. We will help him in that. The Minister referred to insurance in the case of a man who has got three children. I would ask any hon. member here, who is a married man, and knows what it costs to run an ordinary household to pay rent, and to feed, clothe and educate children, whether any man out of £500 a year, after he has paid all these expenses, is going to have any money left over for insurance. I should like to know such persons. People who after paying rent, feed, clothe, and educate their children properly on £500 a year will have no money left to insure themselves. I do think that with the cost of living as it is to-day, £500 does not go as far as it does in some other countries. £500 does seem to me the low-water mark for exemption; you ought not to go lower. I agree with the hon. member for Benoni (Mr. Madeley) that the public is looking for relief in this direction; they will not put up with it from year to year. The Minister will find that the cry will go up that the system of income-tax is excessive, and it will be demanded throughout the length and breadth of the country to know why relief is not given. It is not simply because they want relief from taxation; it is because the burden is intolerable and is likely to remain so unless some relief is given.

I fully agree with the hon. member for Hanover Street (Mr. Alexander) but I must remind him that the Minister did give a reason for the differentiation, and that was that the previous Government had done it. I should have thought he would not have taken a leaf out of the book of the previous Government. I would like the Minister to give us a reason for differentiating between companies. Some companies under this Bill will pay a flat rate of 2s. 6d. and others will pay 3s. Why differentiate between different companies? The mining companies who have vanishing assets pay more in taxation than all other companies whose assets do no vanish. I do not want those that are, paying 2s. 6d. to pay 3s., that will not do me and good; I want those Companies who are paying 3s. to pay 2s. 6d. I want to appeal on behalf of poor shareholders. Take the case of a shareholder, a married man with a wife and three children, we will say. I would not differentiate between a bachelor and a married man; some bachelors have greater responsibilities than married men. A man who derives an income of £500 from shares in a mining company pays £75 a year in taxation, because the company pays 15 per cent. Will the Minister tell me why be pays £75 a year, with a wife and three children, when a man who derives the same income from any other source pays nothing to the State? I would be very pleased to hear the explanation of the Minister on that point. I quite agree with the hon. member for Newlands (Mr. Stuttaford) who brought forward a very important matter to the notice of the Minister. Companies have already paid during the year very considerable sums in taxation. One company with which I am concerned will have paid right up to end of year the 7½ per cent. normal profit tax and 7½ per cent. dividend tax. IT I understood the Minister, that will be provided for in the Bill, namely, that the amount of money they have paid will be deducted from the 15 per cent. flat tax. That is only fair, and I gather from what the Minister has stated that he intends doing that. Otherwise the company will be paying twice over. If the Minister is making provision for that in his Bill. I have nothing more to say on this matter.

I think, from the Minister’s reply, that I must have failed to make my point clear. Say a man with £5,000 lends it on mortgage on a farm, or on a house. At 6 per cent., he receives £300 a year, and is free of tax, if that is his sole source of income. If the same may buys debentures in a company at 6 per cent., he has deducted from his interest, 300 half-crowns, which is £37 10s. If the debentures are in a mining company, it will be at the rate of 3s. in the £. The security is the same, and, legally, a debenture bond and a mortgage bond are the same. In both cases, the man lends money at a definite rate of interest, and with definite security. Why should there be this discrimination between a bond and debentures? I do not think it is quite satisfactory for the Minister to say that it is due to the difficulty of collecting money from debenture holders who happen to reside abroad. The ordinary bondholder, equally, may reside abroad, and I do not think that is a good argument for this discrimination. It is a very heavy rate of income tax, and a very large number of people, on the advice of their financial friends, would preferably, if they have a small, limited income, put it into debentures, rather than buy shares in a company, and these people are paying income tax at the rate of 2s. 6d. in the £, although their income may not come to £100.

Often debenture holders get privileges; calls on shares.

They may get greater privileges than the shareholders; but they do not get greater privileges than if they held an ordinary mortgage bond. I am trying to distinguish, not between the shareholder and the debenture holder; but between the man who lends money on mortgage bond, and if his total income is less than £300 he is free of tax. The debenture holder’s case is different. If the bond happens to be on a shop, and it calls itself a limited liability company, and the company borrows money by means of debentures, the debenture holder is taxed at the rate of 2s 6d. a £; whereas, in the case of the ordinary bond resulting in the same income he pays nothing. I say that is anomalous and it is not right or fair, more especially in the case of a very large number of people of limited means who buy debenture bonds rather than shares. The anomaly exists between the two classes of bonds which, I believe, are identical in law.

I should like to provide the Minister with another conundrum to take home to dinner. If a limited liability company makes £10,000 a year profit, and has paid £2,000 a year in debenture interest, the taxable income of that company is £12,000—£2,000 more than the profit they have made. The Minister of Finance says that he considers that the principle he is working on is that a company is a legal entity. Suppose we agree with him, for the sake of argument. I do not agree with him, but let us take his own case. That company pays an income tax of £1,500 on its profit of £10,000, whereas an individual doing exactly the same business and making exactly the same amount of profit would pay only £709. The Minister of Mines is very fond of interpolating a remark about the privileges limited liability companies are supposed to enjoy. Is it not a very long price to pay more than double the amount of income tax for this supposed privilege. I have worked under limited liability for 20 or 30 years, but I have never found any privileges, except the privileges of being taxed in all sorts of ways in a manner that the ordinary individual is not subject to, There is no “privilege” that can possibly compensate for the payment of double income tax on every penny made by a company. Limited liability companies also pay stamp duty on the transfer of shares, and 5s. per cent. on their capital on registration. I could go on quoting all kinds of “privileges.” I would like the Minister of Mines to tell us one solid privilege a company has got, and ask him to explain why a collection of individuals making £10,000 a year profit has to pay double the amount of income tax that a single individual would pay if he made the same profit. There is not a shred of justice in the whole thing. With the leave of the House I will withdraw the proviso to my amendment as the Minister says he will meet the point.

I will meet that and also the point mentioned by the hon. member for Beaconsfield (Col. Sir David Harris).

Amendment put and negatived.

Original motion put and agreed to.

House Resumed:

stated that the committee had agreed to a resolution on income tax and that he would bring up a report at the next sitting.

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

I move—

As I said the other evening, these people were brought over from Mauritius, they are a civilized people receiving a civilized wage, and living under civilized conditions, and I don’t see why they should be left out of the considerations of this Bill. They are a law-abiding, thrifty race, of French extraction, but British subjects, and are an asset to the country. I don’t see why the Bill should differentiate against them, and put them on a worse plane than other people in the country. There are also the St. Helena people who are in the same category, and who are also living under civilized conditions, and receiving civilized wages and doing work absolutely essential to the progress of the country. I don’t see why they should not come under the same category as the Cape coloured. The Mauritians object as being classed as Cape coloured, because they consider themselves superior to the Cape coloured, and I hope, therefore, that the Minister will agree to accept the amendment.

Business suspended at 6 p.m. and resumed at 8.5 p.m.

I move the motion standing in my name.

I second the amendment. I trust that the Minister will accept this amendment. It would be a most peculiar thing, to my way of thinking, to rule out the St. Helena. As the hon. member for Natal (Coast) (Brig.- Gen. Arnott) has said, these people are, if anything, a superior type of coloured people, and many of them are highly skilled, and I thought —and perhaps the wish was father to the thought—that they would be brought under sub-section (c) of Clause 1. I have been thinking that all along. I would be surprised to learn that the St. Helena people are to be refused certificates of competency if the Cape coloured people are to have that privilege. I await with a certain amount of interest the explanation the Minister will have to give if he does not accept the amendment of the hon. member for Natal (Coast) (Brig.-Gen. Arnott).

I do hope that the Minister will give consideration to this amendment. I do not know whether the Minister has ever been to Natal and is acquainted with this section of the South African public. The Mauritians, who have been living in Natal now for many years, are the experts of the sugar industry. These people have been trained in the schools at Mauritius, and they have come over to South Africa with that knowledge which we do not possess. Some of the most highly skilled men in the sugar industry are these Mauritians, and, if they were to be prevented from carrying out the work which they have been accustomed to perform for many years, then the sugar industry would feel it very badly. These people are Europeans to all intents and purposes; they live on the same standard as an ordinary white man, they draw white men’s wages, they are civilized in every way, they are descendants of French people living in Mauritius and, if any section of the public deserves the consideration of the Minister, it is these people in Natal. I know that the Minister is only asking for power to make regulations applying to these people, and I do not suppose that, when it came to making those regulations, he would put them into force. For that reason I do not see any reason why the Minister should not accept this amendment in the same way as he has done with the Cape coloured people, and thereby remove any misunderstanding which might arise from their not being excluded from this Bill.

My! difficulty is the word “Creole”, The word “Creole” does not necessarily imply that a person is coloured.

You can withdraw it if you like.

How would the hon. member define it? I understand that many of these people are not Creoles; they are really Indians.

Oh no.

On a point of explanation, Mr. Speaker, “Creole” really means French Colonial, but it has come to be understood as coloured descendants of French on the one side and black on the other, and it was usually accepted in Natal as defining the coloured people from the Mauritians. It might make the thing more definite to call them “Mauritian coloured”.

I am anxious to meet these people as far as possible, but as I say, the word “Creole” does not necessarily imply coloured, and I should regard these people as Europeans, as whites. I do not suppose anybody ever questioned that.

They are not whites at all.

On the other hand, if people who are really Indians masquerade as Creoles, then I should be admitting a certain class of Indian when I am excluding all others.

They are not Indians at all.

On a point of explanation, they are mostly descended from French people, imported into Mauritius from Madagascar.

A few years ago we had what was called the Malays Relief Act, to exempt from the application of the Act of 1885 of the Transvaal, and there relief was confined to Malays born in the Union. I do not know what was the reason; perhaps the right hon. the leader of the Opposition can tell us; but that is why, in this new clause, we have confined Cape coloured and Cape Malays to persons born in the Union. I think if the hon. member will leave this over and discuss it with me, I can put it right in another place later on. I will do my best to meet these people as far as possible. The case could, perhaps, be fully met by any regulations ultimately.

You cannot discriminate between classes of persons by regulations. That is the whole reason of this Bill.

I think it would be better if the House voted upon the matter now. There is a very important principle involved. I am sorry the hon. member for Germiston (Mr. G. Brown) is not here, because he could have told us that these Creoles are members of trade unions in Natal. They are coloured, but they are not Cape coloured; they are a mixture descended from French and Mauritian blood. Take a boilermaker. A number of these people belong to the boilermakers’ union, and draw the same rate of pay as white members. If they went to any other part, say, Johannesburg, they would still be looked upon as members of the boilermakers’ union. St. Helena people are in exactly the same position. I was in St. Helena recently, and I then had opportunity to see that the coloured people there live on a very high standard of civilization in regard to education, the way they bring up their children and so on. Unless we make some special provision in this Bill, we shall not have any further control over the matter. The Minister suggested that he would deal with it by regulations. Such regulations would be ultra vires. As this Act is now worded, if the Minister by regulations were to include Creoles or St. Helena people, then the regulations would be ultra vires. He is only entitled to include European persons, Cape coloured and Cape Malays. St. Helena people and Creoles do not come under any of these classes. It would be much better to accept this now, and then, if any slight alteration is required, the Minister could amend it in another place. If we do not do it now we may not have another opportunity.

I think the hon. member is right; that it would not be competent to exempt by regulation more than those indicated in the statute. Such exemption would very likely be ruled ultra vires. I think I will accept the amendment.

I merely wished to speak on the amendment, but as the Minister has accepted it, I am quite satisfied.

I sympathize with the members for Natal, but as the Bill reads I am already against it. Now, however, members come and introduce more people under the Bill to treat them on an equality with white men. In the Transvaal we are opposed to any equalizing of the coloured with the white man. The Minister now goes still further. I think that he has already gone as far as one can possibly go.

I am going to oppose this amendment. I do not think it is right that a cross between a Frenchman and a Malagasy slave should be placed in a higher position in this country than a pure-bred kaffir who has risen to the highest stage of civilization by reason of his own efforts, and by the encouragement that we, in our civilization, have offered him. To say that a man like Professor Jabavu of Lovedale who is a London B.A.; and has travelled through America, and raised himself to the topmost pinnacle to which a native Can rise, is in a lower scale of civilization, is an insult to the citizens of this country. If we are going to base our standards on European standards of civilization, we have a greater duty in this country to the people who have been born here and who are trying to raise themselves, than to the half-castes and outcasts of outlandish places like Mauritius and Madagascar. With the greatest strength I possibly can. I say, it is an insult to the natives in this country to place them in a lower position than those people.

I want to point out to my hon. friend that it is not a question of civilization. This Bill tries to draw a distinction between people who will be entitled to occupy certain expert grades and those who will not. As a matter of fact, these Mauritians are already expert technical workers in a number of industries. It is not a case of qualifying for future promotion into these trades; they are actually carrying on these trades. I remember, a year ago, I visited a number of industries in Durban, and I was very much struck by the number of coloured Creoles—I do not know if that is what they are called—Mauritians, who are doing the technical work, not only of the sugar industry, but in other industries where they were employed in considerable numbers in technically expert capacities. My hon. friend will see that unless these people are taken into this accepted class, they will be degraded and will not be able to exercise the right, which they at present have, to work in those industries, and the Minister will not be able to help them; because this is the only provision of the law under which he can help them, and we would therefore be in the position that we would now disqualify them by taking away their trade and would be inflicting a grave injustice on them. I do not think anybody in the House would like to be unjust or unfair, to these Mauritians: although I think there is a case for close scrutiny, which I hone the Minister will watch in another place. The Minister has asked why, when we passed the Malay Relief Act, in regard to land held in the Transvaal, we confined the operation to people born in the Union, did so because we did not want to open the door to Asiatics at large. And Malays of a certain class who have been in this country for many generations, as the Minister knows. They have been in this country at least for a century.

They have been here 230 years.

As a matter of fact, they are all born here, and in regard to Mauritians, one will have to watch and see that the door is not opened to Asiatics at large, which would be quite different. I am not arguing against the main contention which I have upheld in this Bill, but I am explaining this matter from the point of view of the Minister. To my mind, the principle of justice and fair play requires that these people should be taken into this Bill and it is not a question of civilization at all.

I would just like to say that the hon. member for Standerton (Gen. Smuts) has rightly stated that these men are entitled to be treated in this way on account of their technical knowledge of the work which they are actually doing, and it would be an act of injustice to debar them from doing the work they have been doing, and doing exceedingly well, for years. But they also come in under the standard of living. The hon. member for Standerton stated, in connection with the Mauritians and St. Helenas, that it was not so much the standard of civilization, but that they were actually performing this particular class of work which the Bill may debar them from performing; but they qualify in both classes; first, because they are competent to do this work, not only in the sugar industry, but in my own trade. They are members of my own union, and are engaged on equal terms with white workers in Natal. But apart from that, they are also qualified from the point of view of their standard of living. Many of them live on standards equal to a very large section of the European population. I have been in many of their homes and know how they live. So that they are entitled to be exempted under this Bill. I am glad that the hon. member has moved the amendment and that the Minister in charge has agreed to accept it, as not to have done so would have been an injustice to a worthy section of the community.

I hope, when the Minister is dealing with this amendment, he will be careful to’ see that the door is not opened to more of these people coming in. I sympathize with the hon. member for Tembuland (Mr. Payn) and I think that if you are going to bring these people under this Bill, and treat them the same as Europeans, you must be very careful in the wording of that amendment, as otherwise it may mean that more can come in.

You would not take any evidence in the select committee. That is why you are in difficulties.

As usual the hon. member comes in with his superior intelligence. May I say, for his information, that we dealt with this question and I think every member of the select committee will agree that we tried to meet the position of every section of the coloured community in every province. That is why we drew this Bill as it is. The select committee had quite enough evidence before it to deal with the matter. I am just raising this note of warning so that by specifying Mauritians in the Bill we may not open the door too wide and enable others to come in and receive the same benefits, who do not at present have any claim on South Africa, either by being born here or by a residential qualification.

I want to suggest, on behalf of my hon. friend the Minister of Mines to the hon. member for Natal Coast (Brig-Gen. Arnott) that he should amend his amendment to read by inserting after “persons” the words “born in Mauritius or St. Helena”.

It would be best for the Minister to put the matter right in another place. It requires careful consideration.

Amendment put and agreed to.

New Clause 1, as amended, put and agreed to.

On Clause 2,

The Minister has shown himself to be inclined to accept reasonable amendments, for which we are grateful, and I hope he will consider a further amendment reasonable. Every argument which has been advanced in this House for rejecting the Bill could be advanced for postponing it. To show my sweet reasonableness I have no intention of taking up the full space of time allotted to me under the rules of the House. I think by this time the Minister is really aware that many members on this side of the House, at all events, feel very deeply on this Bill—so deeply that I think that it is a good reason for postponing the operation of the measure until July 1, 1926, in order that we may get a better perspective of the whole matter. There is no doubt about it, we are about to pass a measure which is unparalleled in the history of any civilized country, and a great many of us think that this measure will not tend to promote the peace or progress of South Africa, but that it will have the very undesirable effect of seriously affecting out reputation as a nation. The reputation of a country is very much like a man’s credit—without it he is helpless and hopeless. We are no longer an isolated community. We boast of taking our place in the great confraternity of nations, and we are subject more or less to their opinion. Since the great war the ideas of the civilized world as to the duties of those entrusted with the care of inferior races has been laid down in unmistakeable terms. If we are not legally bound by this we are morally bound, and it is well for us to take heed of the fact. We are not called a mandatory power with regard to the black races of South Africa, but that is really our position. It has been laid down that—

No words could be stronger in laying down our duties to the races under our control. It may be a nice legal question whether the people in the South-West territory will come under the operation of this Bill; What are our duties to these people? We are bound “to promote to the utmost the moral well-being and social progress of the inhabitants of the territory subject to the present mandate.” I don’t think the most ardent admirer of this Bill will contend that it will promote the well-being of the native races of this country. That is one reason for delay. We want really to get our bearings and to see what the operation of the Bill will really j mean, not only to us, but to our reputation in the eyes of the civilized world. There is another very strong reason. I don’t think the Minister has ventured to state that he brought forward this Bill in response to any mandate from the country. We know that it has been debated at great length, but there has been no consultation with the people most intimately affected, namely, the natives themselves. We have no direct testimony by the examination of witnesses as to how they feel about it, our information being more or less second-hand. Surely that is a good reason why we should not be in a hurry to put this Bill into operation until the native races have had time to consider it. This Bill is viewed with great concern by the native population, and they state it will be a potent factor in arresting their progress—that progress which we are bound to advance and develop to the best of our power. If the measure is put into operation too soon, no doubt this feeling will be accentuated. If this Bill, which radically changes the policy of the country as a whole, is to be put into operation, it should only be done as the result of no uncertain voice from the whole of the country, both white and black. Again, when this Bill was introduced we had no idea of the scope it would eventually have. That portion of the Bill which applies to the agricultural community must have come as a surprise to the Prime Minister and the House. The agricultural community should have some time in order to take their bearings, and a reasonable time in which to make the great changes which will be necessary. One would feel almost ashamed to be a South African—either by birth or by adoption—when the peoples of the world can point a finger at us, and say that that individual comes from a country which denies the aboriginal natives the right to sell their labour in the best market. We have heard a great deal of the older population and their rights. What about the still older population that was in South Africa before any white man arrived here, the population we have pushed out from the territory they occupied and taken for ourselves? Surely they have rights that deserve serious consideration. Are we for ever to be subjected to the jibe that we took their land and gave them the Bible and the colour bar as recompense. That is not a pleasant thing for South Africans to hear from other parts of the world. I remind the hon. Minister of what Abraham Lincoln said—

and here we are putting a measure on the statute book making our country three-quarter slave and one-quarter free. I ask the Minister to postpone the operation of the Act until the 1st July, 1926, and if then the country is satisfied, and the native races agree it is for their well-being, then the Minister will have a stronger case for putting the Act into operation than he has at present. I move—

I beg to second it.

The ethics quoted by the hon. member for East London (Brig.-Gen. Byron) are very admirable. According to the circumstances which we know obtain, they have the appearance of having been brought here, together with the particular character of the amendment, with a view to opening up a debate on lines it has not before assumed. I don’t want to say anything which will resurrect that spirit. Although the professed faith of the mandatory powers is beautiful and the phraseology is touching yet we know in practice that no consummation has been reached where native territories are under the control of Europeans. I don’t want to cover the ground of the whole mandated territories of the British Empire, but if you cast your mind back a short time you see how hollow and how unreal these phrases are in intention. It has been in the power of those who framed them to see that they were carried out, but it has not been done. Take India for example. India is, to all intents, a mandated territory inhabited by aboriginals who are under the direct control of a European power. It is difficult to gather exactly what the wishes of the opposition are in this matter. We hear the hon. member for Tembuland (Mr. Payn) say that the inclusion of Mauritians and St. Helenas is a direct insult to the aboriginals of this country, and we hear the hon. member for Zululand (Mr. Nicholls) say it is an insult to pit their competition against the muscle of black Africa. I don’t see how you can reconcile the two points of view. It is an economic question and this measure deals with it on an economic basis and the test is an economic one.

The hon. member is discussing a matter that has been decided.

The mandatory spirit has not been in evidence in any other territory in the manner it is in this Bill. This Bill safeguards the rights of all sections of the community and it does not impose any hardship on the native or coloured population, and it extends the field of employment for civilized people in a way that has not been done before.

I am sorry to disappoint my hon. friend. He must realize I cannot accept this amendment. It would be to a certain extent incongruous if, after what has transpired here during the last few months, we were to allow the Act to operate from the 1st July, 1926, and moreover his own leader has agreed that the decision of the court has created a difficulty, and one that must be removed as promptly as possible. I want to make one more observation with reference to the farming community. There appears to be an entire misapprehension. I have here a list of regulations, which I cannot refer to or I shall be ruled out of order, showing how they are applied to-day and have been applied for years to farms, some of them creating a colour bar. I could give details, but I do not propose to resume the committee stage debate, or the second reading debate. I am sorry I cannot meet my hon. friend.

Amendment put and negatived, and the Bill as amended adopted; third reading to-morrow.

I move—

Before this Bill is read a third time I would like to say a few words about it, because the more I study this Bill the more I see how important it is and how far-reaching the consequences of it are going to be. To my mind it is a dangerous Bill, and, what makes it worse is this, that it has not been adequately discussed in this House. The most important, probably the most far-reaching Bill we have had before us this session, or are likely to have, has been closured through some of its main provisions in this House without a proper opportunity of discussion, and under those circumstances I would like to say a few words before it is read a third time. We have not been able to find out, during the discussion of this Bill at its various stages who really wants it. So far as we can gather from the evidence given before the select committee, certainly the workers of the country do not want it, as represented by their spokesmen in the gentlemen who gave evidence before the select committee, They want a different Bill; they want the sort of Bill which we, the late South African Party Government, introduced into the House in 1921. They don’t want this Bill, and I studied the attitude of hon. members opposite, hon. members who belong to the Nationalist party, and I did not gather from their attitude that they wanted this Bill. Their silence was ominous. I often noticed a look of disgust on the face of hon. members opposite while this Bill was being discussed. I am sure that many hon. members opposite had this feeling that they could not help themselves. The price had to be paid. They could not help themselves. They, as a party, would never have been responsible, not for a moment, for a measure like this. But there it was. They were in an alliance, the price had to be paid, and here is the Bill and they had to support it. I am profoundly sorry for this. I am not only sorry that we are passing through the legislature of this country a thoroughly dangerous measure, but I am also profoundly sorry that it should be the part of the Nationalist party to help in passing this measure. If it had come from the Labour party it would have been different. We would have looked upon that as in some sense in line with the policy of the Labour party. But here we have a Bill, far-reaching, revolutionary in its character, which is being put through this House by a party which professes to be conservative and to stand by the great conservative interests in South Africa.

You introduced a Bill like this.

I shall come to that just now. I am profoundly sorry, because I can see that the Nationalist party has put itself in a false position. The day will come when they will bitterly regret this Bill, when the Nationalist party, if it endures in this country, will bitterly regret that they ever took part in the passing of a measure of this kind. Then it will be too late. There are various methods of providing for a minimum wage in this country, and the Government have adopted, in my opinion, the worst possible way. I can only imagine that this is the creation of the Minister of Labour himself. His party, apparently, so far as we have evidence before us, does not want it. I am convinced in my own mind that the Nationalist party does not want it. But the Minister has evolved this scheme, an entirely new scheme, of providing for a minimum wage, and that scheme will be forced under the unnatural circumstances of politics in this country, under the unnatural political alliance which exists in this country—this measure will be forced through this House. I say it is the worst possible way in which the system of a minimum wage could be brought about in this country. This Bill means the maximum amount of Government interference in the industries and the business of the country. There is no doubt about it. Under this Bill wages for all the industries in this country, and not only the industries but practically for all the businesses in this country, minimum wages will be settled by a board or boards of Government officials, and when they have been settled they will be brought into operation by the fiat of the Minister. They will be Government wages. Every business in this country, when this law is in full operation, will have to pay Government wages. If you ask business men, not only in this country, but in any country in the world, what is worst for business, they will tell you at once Government interference. Government is the blight on business and on industry. We all remember that after the war, and when we had emerged from the war, the cry from every country arose—

But here we are now deliberately placing ourselves in this position, that we are going to adopt a system of settling minimum wages, which will mean the maximum amount of Government interference in the industries and the business of this country. I repeat here what I said before on the second reading, I am not here, nor is this party here behind us, with the exception of one or two individuals, against the principle of the minimum wage. It is the system of settling it that we are opposed to. Years ago, in 1921, I think even earlier, the then Minister of Industries, Mr. Malan, made an attempt to pass a Bill. In 1921 a Bill was actually passed through this House, and it was lost in another place, but the main principles of that Bill were adopted in the Conciliation Act which was passed last year, and under the Conciliation Act and the machinery of the Conciliation Act, it is possible to settle minimum wages for any industry in this country. But it will not be settled by the Government; it won’t be settled by bureaucratic machinery; it will be settled in a democratic way by each industry itself. Minimum wages under the Conciliation Act can be and have been settled for industries by boards—Conciliation Boards—which equally represent both sides of the industry. They understand the circumstances of the industry. Both employers and employees in an industry know what that industry can stand, what it can bear, what wages are reasonable, and it is for them to lay down such wages as should exist in an industry. This is the principle laid down in the Act which we passed, and it follows the lines laid down by many other countries, but the Minister was not satisfied with that. He wanted a different system, and we are asked to pass a system into law which works in no country on earth. We have asked him, but we have not been able to find out from him where else it works, and the result is this, that we are going to pass a law through our legislature which will establish an entirely new system of settling minimum wages. It will be done by Government boards and Government officials, and the result will be that the Government will be led into every sort of dispute which concerns industry. If the Minister had been reasonable he would have been satisfied with the Act which we passed last year, and he would have supplemented that Act in respect of those industries where the employers and the employees are not properly organized and, therefore, cannot constitute a board to settle wages. He would have confined his efforts and the Bill to cases like that, to what is called sweated industries. If a Bill had been brought forward for that purpose, nobody here would have objected.

That would not have been democratic.

Well, but then it is a case where ethical ends could only have been attained in that way. Where the workers themselves were in such an unorganized condition that they could not possibly speak for themselves, it would be fair on the part of the legislature to constitute some authority that could speak for them. The Minister, in the second reading speech, in which he introduced this Bill, spoke in that sense. I took him to speak in that sense that this was a Bill made to supplement the Conciliation Act in respect of those industries where conciliation boards could not meet, because the two sides were not properly organized. It is quite clear from the final form, in which the Bill is now before us, that that is not so; that this Bill, when it becomes law, will apply to every industry in the country. It is entirely within the discretion of the Minister to apply this Bill to any industry in this country, be it most highly organized or unorganized. It is entirely for the Minister, and within his power, to say to what the Bill shall apply. It seems to me that it is a most dangerous thing for us to pass a Bill of this kind. I have no doubt that what I have said before in select committee is going to eventuate, and that this Bill will, in the end, become the governing factor in our industries. This Bill will drive out the Conciliation Act, because conciliation is a much more difficult thing. Collective bargaining is a great power, but it is a cumbersome machine, and we know that to settle wages or any other industrial question takes time, trouble and infinite patience, and bargaining between the two sides to get any results. Here a party in a bad temper or claiming certain rights need not approach the other side at all, but may proceed at once to the Government tribunal or board. It would only be human, and it will certainly be so, that in every case you will ultimately find that the Conciliation Act will simply be scrapped, and the workers of this country and the employers will simply go to this Government board; and awards will be made, recommendations and reports will be made, upon which the Minister will be obliged to act. It will be impossible for the Minister once a report is made, not to act thereon. If he does not put in force the wages recommended, naturally you must expect a strike, which, in such a case, will not be against the employer, but against the Government. The inconveniences, difficulties and troubles of industrial disputes you will have accentuated, and in almost every case of real trouble you will have the Government of the country involved. I am very much afraid that this system is going to be a very bad system and it will be difficult to get rid of it. Do not let hon. members lay the flattering unction to their souls that once it proves difficult in operation it is going to be upset. The Minister must be given credit for having struck out a line which is going to have very far-reaching effects. The worse it is, the longer it must last, because you will have a large section of our people with great political power behind them defending this thing, because they will look upon it as their Magna Charta. I am afraid the departure we are making is going to be a fatal departure for the industry of this country. The day will come when the hon. members who sit opposite will find they have made an irretrievable blunder by giving their consent and support to the passing of a measure of this kind. I have said before that, to my mind, the system is bad, not only because it involves the Government at every stage of an industrial dispute, but also because it must tend towards uniformity, and in a country like South Africa, with the most diverse conditions existing in various parts, uniformity is highly undesirable. Even here in the Cape you have great differences from district to district. I remember some years ago, when I was going into the question of the boot and shoe industry with the various factories, it appeared that the circumstances at Brak River were entirely different from those not very far away at Port Elizabeth; and you have all over South Africa these varying conditions, varying cost of living, varying housing conditions, and all sorts of other variations. It needs no argument on my part to convince hon. members that where you have a board that is impartial, which is like a court of justice, the tendency will be towards uniformity, and the uniformity will approximate to the highest. Make no mistake about it. We found that was so in the matter of Government salaries. The approximation is always towards the highest paid in the service, Levelling up was always the process, and you may be sure that under this Government system there will not only be a tendency towards uniformity, but it will be on the upward grade always. The result will be that, instead of helping industries, you will bring many that are small and struggling—and most of them are that—into difficulties. We had the case of the alluvial diggers before us. They put forward a piteous plea as to what the dire consequences of this system would be to them. There was a great deal of force in it. If the Minister were to apply this system to them, there would be very grave difficulties. Not only the alluvial diamond diggings, but you will have every little industry in this country in that difficulty. We would have escaped all this trouble if the people concerned in each tittle industry could have settled their troubles themselves. I would rely on the sense of fairness and fair play on both sides of every industry.

And the weakest to the wall.

No; the hon. member has shown in his conduct in this House, and his attempt to dragoon us here with the closure that he is actuated by that spirit, but he must not think that everybody is actuated by that spirit. I believe, although human nature is what it is, that, fundamentally, there is a sense of fair play among all sections of our community, and if you can bring people together in an amicable spirit and make them sit round a table and discuss their troubles day after day, a way out will be found. It may not be the ideal way; but, at any rate, it will go a long way to satisfy their claims. But here all that is scrapped, and also the very basis of democracy, and the Government is going to settle the wages. I am afraid the Government settlement is going to be on such a basis that it will be difficult for struggling industries to continue. There will be this tendency to uniformity and the tendency will be towards the higher wage in every case. What will the result be? The Government has been introducing new tariffs, with the laudable object of fostering the industries in this country, and giving a distinct forward push to industrial development. I am very much afraid that this Bill is going, very largely, to neutralize the effects of that policy. The additional customs duty which is given to industry under the one Government policy, is going to be neutralized by the upward trend of wages which is bound to materialize under the provisions of this Bill, and the result will be that manufacturers will very soon find that, what with Government inspection and interference, and Government settlement of wages, the protection given them by the tariff will be taken away by the additional wages. The result will be no additional stimulus to industry and no advantage; but rather an upward tendency in the cost of living, and who is going to be benefited by that? Any rise in the cost of living in this country falls heaviest on the poor European. The poor white person, who has to maintain a higher standard, necessarily much higher than the native, feels the weight of any rise in the cost of living sooner than anybody else, and harder than anybody else, and you are handicapping civilization. This civilized standard, which the Government attempts to foster, is going to be handicapped by the system which they have laid down in this Bill. I am very much afraid that this Bill brings us on a wrong line to settle minimum wages. This Bill is going to be a drag on the industrial development of the country, and will introduce a system of Government control—state socialism—which is entirely alien to the fundamental ideas and interests of this country, I therefore regret, profoundly, that this Bill has ever been brought forward; that a party that professes to be conservative should be mainly responsible for furthering this Bill; and I can only say that, if the Minister had rested satisfied with the Act which he found on the statute book, and had, for some years, tried to work that, and where he could see difficulties in respect of sweated industries or similar industries, supplemented it, he would have done the country a service; whereas, in this Bill, he is doing the country a very great disservice. I must give my unhesitating opposition to this Bill.

I also feel that I cannot give a silent vote on the third reading of this Bill. I feel that the Bill is going to plunge us into uncertainty. There is no one to-day in the House who can say where the Act will lead us. Not one. We talked the other day about the constitution of the wages board and we then pointed out that by the appointment of the wages board an entirely new principle was being introduced into our industrial system. Can the hon. Minister to-day assure us, or can one of the hon. members of the House assure and explain to us how the application of the wages board will work in practice with regard to industries generally in South Africa? I feel that we are here passing a measure which far exceeds any measure in any part of the world which has a large industrial development. Take England, a country which is based on industry. What is its experience? That if you want as little dissatisfaction as possible in industries then in the first place in disputes between employers and employed it is the duty of the State and Parliament to see that the Government remains outside of all disputes in industrial matters. I have not the time to-day to explain to the House what the experience was of Lord Ask with, the great expert with reference to differences in industrial matters. His experience as one of the most competent men in the United Kingdom amounted to this, and his direct advice was, that if you wanted satisfaction at all, the Government as Government must remain outside. But here we go and lay down the great principle that in the future the Government with the hon. Minister as dictator behind the wages board shall declare what the wages in the future are to be. That I say is quite a wrong principle, a principle which is not only wrong in the interests of industries but which is radically wrong in the interests of the State. If this Bill is passed do we think that there ever will be an employer or more especially employees who will make use of the existing conciliation machinery? No, the conciliation machinery will be dead in the future. I repeat what I have already said on a former occasion because it is worth the trouble of repeating it that we must remember that the Minister is the leader of the Labour party and then I ask, if troubles arise in the industry whether we can then propose that the workers should make use of the existing conciliation machinery? No, the employees will immediately appeal to the wages board with the hon. Minister as the basis of the wages board. If some day there is another Minister who has some sympathy for the employer and who does not enjoy the full confidence of the workers are entitled to more payment for the Minister, with the best intentions in the world, gives a judgment against the decision of the wages board, do we think that the workers will be satisfied? They will immediately strike and the poor State will in the future be regarded as the scapegoat for all troubles which take place in the industries. There is another point. We are a young country. We must try to develop industries on a sound basis. I ask whether by passing this Bill we help in any way to create a sound basis? My view of the Bill is that in practice it will lead to fear in the future that people who thought to invest money in industries will be frightened to put their money into them because the industries will be subjected to a Government wages board, will, in other words, be subject to a political wages board. Can we get away from that? We create a political wages board and we must prepare ourselves to see the industries in the future established on a political basis. That is my view. If the Minister, after getting the advice of the wages board, gives a decision with the best intention in the world, it will always be regarded as a political decision and in this way we return to our point of departure and say that in large industrial countries such as England, experience has taught that it is unsound to mix up politics with the settlement of differences. The hon. Minister has asked: How otherwise are we to settle differences? He said: Put the conciliation machinery on one side and the employers on the other side, how then can the poor workers be satisfied? I have already said that in any civilized country public opinion plays the great part in solving difficulties and that it is always sufficiently courageous when the workers are entitled to more payment for different conditions to give its support to the workers and in this way the worker gets his due, even if the conciliation machinery is not quite perfect. I do not wish to go into the interests of the farmers further, no one can to-day say what agriculture includes under the law.

We feel quite safe.

The hon. member for Kroonstad is prepared to hand over his farmers’ interests to the Minister of Labour.

Nonsense.

I, as representative of a large farming district, am not prepared to hand over the interests of our farmers to the Minister of Labour and I openly state so here. We know what the policy of hon. members on the cross benches is with reference to wages and troubles in industries. No, knowing what the intention and tendency of this Bill is we have the fullest right to say that we are not prepared to entrust the interests that we represent, whether industrial interests or farmers’ interests, to the Minister of Labour or to the Government as it is constituted at present. That is my personal opinion, and I say that by passing this Bill we take a leap in the dark that no one can say where it will lead to, and what will become of the future development of industries and farming.

I notice that during the last ten days during which we have been discussing the three most important measures of the session—the colour bar Bill, the Wage Bill, and the tariff—not a single Nationalist member has opened his mouth on these three very important measures. It surely is unprecedented in the annals of this Parliament that on matters so deeply affecting the public and especially so deeply affecting the farming community, not one single member of the so-called farmers’ party has said a single word. I would repeat the question put by the right hon. member for Standerton (Gen. Smuts). Where does this Wage Bill emanate from, and who has asked for it? I would like to draw the attention of the Nationalist members to the fact that this Bill is very certainly not the work of the National party. I have the election manifesto of the Prime Minister upon which he went to the country, and there is certainly not a single word in it about the Wage Bill. His seven planks were (1) Agricultural development and great sympathy with the farmer. (2) A definite system of industrial protection. It seems a queer way of protecting industry by imposing this Wage Bill. (3) The solution of unemployment. I don’t think you can solve unemployment by these high wages. (4) Segregation. (5) Revision of fiscal system. (6) State Bank. Therefore we are justified in saying that the Wage Bill is not the creation of the National party. I am very sure that had the National party had a clear majority we would never have heard of this Bill. I think I can throw some more definite light on the origin of this Bill, and on the other labour legislation we have had before this House. I have read the Nationalist manifesto. Let me read, the Labour party manifesto. The hon. Minister of Labour issued a manifesto at Durban on the 1st May, before the election. It was not a mere chance speech made to a small Labour coterie, it was his programme of action, and I hope it will come home to the hon. member for Riversdale (Mr. Badenhorst) and other members of the National party. I have been about a good deal lately, and the Nationalist public, as well as the general public, are asking the meaning of all this socialistic legislation. This is the Labour party manifesto issued by the Minister of Labour—

He was kind enough to say if they would help him to carry out the Labour programme he would not kick them out. He is not kicking them out, because they are carrying out the behests, the ukase of the Labour party.

What are its programme and its convictions? I notice in a recent speech by the hon. member for Bloemfontein (North) (Mr. Barlow) he said I expressed my surprise that not a single Labour member had the moral or political courage to stand up before a rural audience in the country or in this House, and tell them what are the ideals and aims and ambitions of the Labour party.

You ace absolutely wrong.

I am not wrong. The hon. member for Bloemfontein (North) said—

I wish to draw the hon. member’s attention to the fact that we are discussing the third reading of the Wage Bill.

I want to prove to the House the motive and origin of the Wage Bill, and I want to prove that motive is the carrying out of the Labour party’s constitution. I repeat, this Wages Bill is part and parcel of the Labour party programme. I don’t blame them, but I blame the Nationalists for allowing themselves to be docilely dragooned by the Labour Minister. What are the objects of the Labour party? Clause 1 of the objects of the South African Labour party is the ultimate achievement of a socialistic commonwealth in South Africa. No Labour or Nationalist leader has had the courage to tell the hon. member for Riversdale, or the hon. member sitting next to him, that the aim of the Labour party is the achievement of a socialistic commonwealth in South Africa, and that the first step towards it is the Labour legislation we have had this session.

The Labour party are nearly Nationalists.

No, the Nationalists are nearly socialists.

What about the railways, the harbours and the post office?

That has nothing to do with the question. I challenge them to go to the country constituencies and tell them what I have told them here now.

I must ask the hon. member to come back to the subject of the debate.

I will challenge any Nationalist leader to go to any country constituency and tell them the true original scope and aim of the Wages Bill. Let them tell the public honestly that they never heard of the Wages Bill until it was forced upon them by the Labour wing of the party.

Oh, yes, we did.

The hon. member never heard of this Bill with its drastic provisions, so drastic that they have never been equalled by any other civilized country in the world. There is no other country where a Minister has the power to interfere with private enterprise as the Labour Minister is arrogating to himself. Read them at the same time, clause 1 of the Labour party manifesto, which is the genesis of this Bill. The two are closely interlocked. The manifesto shows the platform on which they went to the country, and this Wages Bill, and other Labour legislation, are closely co-related, and it is high time the public realized where we are drifting to. The Nationalist party said they were the party of the country element. They stood for the protection of the farmer. I hear an hon. member opposite interject a remark about “die boere.” We have pointed out during the second reading that, however much you may exclude the farmer by name in this Bill, you cannot do it in practice. We have pointed out that every penny of these increased wages is going to come out of the farmers’ pockets. Recently a Nationalist provincial council member said to me—

Is that wrong?

Of course it is wrong. It is making a living by taking in each other’s washing. I am surprised to hear the Administrator-elect of the Cape Province expounding that economic theory, that the farmer can pay higher wages to industries and that the industries will pay it back to him in the shape of higher prices for his produce. I have taken this opportunity of driving home to the Nationalist members the true inwardness of this Bill, and I do hope that it will sink in. They do not seem to realize the trend in which they are being dragged at the tail of the Labour chariot.

This is an interesting final discussion on this Bill. May I, in the first place, say that the right hon. gentleman who leads the Opposition is somewhat unfortunate in his phrases and somewhat unfortunate in his opening remarks in opposing this third reading. He said that one of the reasons why he took the comparatively unusual course of raising a debate on the third reading—

Have you never done that?

I say taking the somewhat unusual course. I did not say it was never done. He said that the reason was that there were many clauses which were not adequately discussed in the committee stage. There was one clause which the right hon. gentleman did not think adequately discussed from his point of view, but they might have had more discussion on the remaining 13 clauses. If they did not receive the discussion which he thinks they should have had, it was merely due to the Opposition preferring to maintain an attitude of somewhat injured dignity and sulking. There was ample opportunity for them to discuss those clauses if they had wished, but when they took the view that if their opinion differs from ours they must abstain from further discussion, that is their own business, but they must not complain that there has not been adequate discussion. They discussed the first three clauses, and even one they said was the kernel of the matter and must be discussed at great length. There was one clause, and they discussed that at pretty good length.

The closure was applied after an hour’s discussion.

No, more than that. Over here on this side of the House when we were in that position, we did not go on whining; we took our medicine. The rest of the right hon. gentleman’s speech—and I think we may well ignore the last speaker’s remarks —was mainly composed of epithets such as “far-reaching”, “revolutionary”, “impossible”, “unlike anything else on earth”. But there was very little argument in it—merely epithets. It is “far-reaching.” I hope it may be far-reaching in its effects, and far-reaching in most beneficial effects to the people of South Africa. Then we are told it is “impossible.” The right hon. gentleman’s own legislation has been marked by singular ill-success in the objects for which that legislation was undertaken—

Surely he must admit that in South Africa we have many peculiarities in our national make-up, which possibly may make it necessary for us not slavishly to follow all other people all over the world, but to try and use our own brains to settle our own problems. I do not think he will agree that any conspicuous degree of success attended his first attempt at legislation, which he told us the other night was taken word for word from the Canadian Act, without any consideration on his part of the industrial circumstances of the country, and any real searching consideration whether that Act, taken clause for clause from the Canadian Act, would possibly not suit this country in its operation. Then he went on to say that nobody wants this Bill, that the employers did not want it and that the workers did not want it; and then for about ten minutes he was at great pains to show that inevitably the operation of this Bill was to establish a uniformly higher rate of wages. If he is right in that particular, it will be difficult for him to persuade the workers that they do not want the Bill. The two propositions seem very difficult to reconcile. I do not agree with him. I suppose I have as much right to form my own opinion as to the probable effect of this measure as the right hon. gentleman has. I do not think he has shown any reason in support of his asseveration that it must lead to uniformity, that the different circumstances in different areas will be entirely disregarded, that the board will take no account of the terms of this Act and no account of the different conditions in different areas. Then there is his further contention that “the State is interfering here.” Now this wicked Minister that he holds up to the obloquy of the country is represented to the ordinary man as being likely merely at his own discretion to jump in and fix wages just wherever he likes at any figure. Is that anything but a caricature of what is proposed to lie done? The Bill proposes to set up a board over whose determinations and recommendations the Minister will have no influence, a board which will go carefully into the circumstances in each particular investigation, and which will fix according to the evidence brought before it, the minimum wage to be applied in that particular trade or industry; and the right hon. gentleman himself said he would not have had the least, objection if this had been confined to sweated Industry. All the Minister has to do after that is to gazette the recommendation of the board without any variation according to his own intelligence, having no power to discriminate by varying it. Let us take the right hon. gentleman’s point. If it is legitimate to interfere in sweated industry, is it not legitimate for the board to operate in particular cases in industries where an agreement has not been reached through the entire obstinacy of one side or the other, in those cases, is it immoral for that board to investigate and try and decide in accordance with equitable considerations what ought to be the agreement these people should arrive at? I can see no immorality in that, nothing against public policy, although the right hon. gentleman may see grave ground for apprehension. I do not think the people in this country will place this Bill, when they come to work under it, by any means second to the legislation the right hon. gentleman was responsible for putting on the statute book. After all, in this matter I may claim that my judgment is nearly as good as that of the right hon. gentleman, because I have not been proved wrong, and the right hon. gentleman has, and that is rather against him. The right hon. gentleman, in his first year, introduced an Act dealing with this industrial question, an Act copied from the Canadian Act, and it was not many years before it was shown that that Act was purely a piece of waste paper. The very first time it was tried it was found wanting, in that 1913 case. I agree with the difficulties of enforcing that Act, of prosecuting persons; but as soon as it was found that the first time it might have been invoked it entirely failed as against the more powerful employers, it absolutely lost all respect in the eyes of working people. So that, when it comes to authority, the right hon. gentleman must not put on airs of a great authority; because his attempts, although they have been ingenious—I think he will be the first to admit—have been singularly unsuccessful. Then we come to another argument, that the State is interfering, from the beginning, in this thing. Why? Because the Minister gazettes the finding of a wages board, and, under the legislation of the South African party—under the Conciliation Act—not one of these agreements has any binding force until the Minister gazettes it. It is true that these agreements, when they are arrived at by the two parties, will settle the matter, but what about the case where they are not arrived at? Where one party says I do not care a button if you have got right on your side, and you have got the opinion of the finest mediator that does not suit me, and I am not going to agree. Where is your conciliation going to come from then? Are you going to leave it there?

What about public opinion?

Public opinion is a very powerful factor against the employee. Strong, well-organized employers entirely disregard public opinion.

You are entirely wrong.

I will not abide by the judgment of the hon. member. I am quite willing that he should have that point of view. But judging from experience, if you candidly examine the position, you will find that the more closely knit organization, with the command of the greatest material resources, are always the people best able to withstand the pressure of public opinion. What happens, in the ultimate result, on any consideration? The problem is not to abolish strikes. I wish we could abolish them. I wish to abolish them as much as you do; but we shall have gone near to it when, as far as possible, we remove all unnecessary causes of strikes.

What are you going to do, suppose the employees decline to accept the award?

I suppose you will have a strike. You will try to get them together again, to work. The right hon. gentleman made a tremendous point, that the great advantage of his policy was that the State, from the beginning, remained quite outside these disputes and, as an entirely impartial person, could come in and try to settle a big dispute. Will he recall 1913, 1914, 1922? Did he convey, really, the impression, to the general public of South Africa, of a Government that stood entirely outside, and came in merely for the purpose of arriving at an equitable decision? In every one of those positions the State stepped in as the antagonist of the men and the protagonist of the other side.

You are entirely wrong. You spread that idea.

Your actions spread that idea. One is always delighted to listen to the speeches of the hon. member for Cape Town (Central) (Mr. Jagger), but he had an opportunity of speaking a few minutes ago, and, while interjections are quite reasonable, when they go into five or six sentences they almost achieve the distinction of being a speech. I know these reminiscences are unpleasant to hon. members opposite, and I am not speaking in any accusative sense, but simply mentioning what I believe to be the profound conviction, certainly of nine-tenths of the wage earners of South Africa, and a very big proportion of the rest of the population, that on these occasions the Government, when it stepped in, only did so really in the interests of bringing the thing to a conclusion on the terms of one side.

When revolution was threatened in each case.

The Government’s whole attitude throughout was one which gave no confidence to the men that they had in the Government someone who was trying to hold the balance.

Thanks to the agitation carried on against the Government.

Before the Government had a chance.

I am afraid I cannot agree with the hon. member there. I am thinking of the impression his own remarks made on me when that coal strike v. as going to begin. The men offered to arbitrate, and the hon. member for Yeoville (Mr. Duncan) who was an intermediary, could not get any budge from the other side, but he publicly appealed to the men’s patriotism not to strike. Why did he not appeal to the patriotism of the other side to go to arbitration?

I did so.

The country has clearly decided. Undoubtedly the hon. member may be a much wronged and ill-used man in public repute, but I do not think he will deny that as far as the strike of 1922 is concerned the verdict of the working classes was that the Government did not play the game by them, and hold the balance evenly against those who were on strike. I mention this to show how little there is in this argument of the right hon. member for Standerton (Gen. Smuts) that this Bill differs widely from any other Bill, and that the Government will be implicated in any dispute from the start. It will not, but it will have the power, if a dispute is in existence, and cannot be brought to a satisfactory conclusion through the Conciliation Act the Government will still have the power to investigate and determine, irrespective of the contending parties.

Supposing they do not take notice of the recommendation?

Supposing they do take notice? Does the hon. member always assume that everyone who is dissatisfied with the verdict of an impartial board is always going to be the workers? Has he heard of no instance where people have submitted their case to a constituted judicial authority, and when that authority has pronounced in their favour that the other side have never repudiated it? I am not surprised at the hon. member or the right hon. gentleman objecting to this legislation. I was attempting to point out some points on which we differ and to explain why I am not impressed. Our withers are entirely unwrung by the alarms to which the leader of the Opposition has given expression. I would just like to take the hon. gentleman through his own industrial legislation so as to show him and the House and the country too, that when the right hon. gentleman speaks in these tones of grave and serious warnings in these matters, we must judge the value of his warnings by the success or otherwise of his own legislation. I have quoted the 1908 Act. At the first time it was tried it became a piece of waste paper. The next effort was the Wage Act of 1918, which it was hoped would protect women and juveniles in sweated trades. It has fallen into a dead letter owing to the fact of which the right hon. gentleman did not think it worth while taking notice that in such industries it was impossible to get people to come forward to represent and do the work of representing those sweated in those industries. A brilliant monument. Then we come to the 1924 Act. As introduced into the House it was a miserable piece of legislation, but as transformed through the efforts of the hon. member for Jeppes, and the hon. member for Pietermaritzburg (South) it came into the House as the present Conciliation Act, which has been on trial now for only a year. Already that Act, admirable as it is,—it is one I want to keep and develop—undoubtedly does not fill the Bill if in a last resort one side says—

There must be some alternative course and the idea is to keep these two things separate, so that one does not interfere with the other. The hon. gentleman’s record is not one to make him an authority to whose warnings we need pay serious attention. He says—

I entirely agree and if he is correct in saying that both workers and employers prefer to be allowed to settle these things themselves, and that they don’t want outside interference of the board, then the introduction of this Act is one of the greatest stimulants you can imagine to make the Industrial Conciliation Act more effective. If they don’t want this Bill they have only, to enter into an agreement under the Conciliation Act or form an industrial council of their own, from that moment this board is entirely forbidden to operate at all with regard to that industry. I don’t know whether there is any other point I have not disposed of, but if he calmly reflects on the contradictions of his own argument, if he is right in saying both employers and employees object to this wage board machinery, and that they prefer settling their own affairs, then it is incontrovertible. They have only to take advantage of the Conciliation Act, enter into these temporary agreements or enter into an industrial council, and they are excluded from the purview of this Act. He makes various other contradictions, but if he will ponder over these, he will see the alarms he has given expression to are not the alarms we need really feel. He will forgive me if, in a Parliamentary sense, I say he is not so alarmed as he appears, but is more intent on giving alarm to the country than of expressing his own alarm.

I move—

Agreed to.

On Vote 37, “Public Service Commission”, £27,947.

Earlier in the session hon. members on this side were very much disquieted to hear certain references by one of the most important members of the cabinet to the Public Service Commission. Hon. members will remember that the Minister of Justice stated publicly in the House that he had no use at all for this commission, and that he would like to see it abolished.

Hear, hear.

The Minister of Justice will be gratified in the knowledge that he has a colleague in the hon. member for Roodepoort (Mr. Mullineux). That only justifies me in asking from the Minister for the Interior a plain and unequivocal statement as to what the Government’s policy is in regard to the Public Service Commission.

The hon. member cannot now discuss policy. He can ask a question.

My question is that this is a vote covering the whole of the Public Service Commission and their salaries—

It does not cover the Minister’s salary.

No; but a statement has been made that it is proposed to abolish the Public Service Commission.

I am very sorry; but the hon. member will have to adhere to the details of this vote.

Exactly; one of the details of the vote, under sub head (a), is the salaries of these gentlemen.

It has nothing to do with the Minister of Justice.

I am asking for a statement of policy as to what their views are in regard to continuance, in future, of the Public Service Commission.

A statement of policy is not competent under this vote.

We are asked here to vote the salaries of the Public Service Commission, and the Minister has stood up this session and told us that he wants that commission abolished.

Is the hon. member prepared to accept my ruling?

I do not understand what I may and may not do under the ruling.

The hon. member may discuss the details, but not the policy of the Government on this point.

I understand the hon. member is only asking what the policy of the Government is.

The hon. member for Caledon (Mr. Krige) need not tell me what is going on. I know it.

I rise on a point of order, Mr. Chairman. I would like your ruling, and I hope you will give it in such a manner as will not make me fear to ask again. I do not want to be placed in the same position as the hon. member for Caledon (Mr. Krige), and I am within my rights in stating that in this House. Hon. members desire to pay respect to the Chairman, but they have a right, a privilege, to have courteous replies when they ask questions. I claim my right as a member of this House to have your ruling, and to have it in a manner that will be becoming to my dignity as a member of this House.

Order.

I would not take up this position did I not feel it my duty, as a member of this House to do so. I am asked to vote £23,000. Before we agree to vote that, am I within my rights and privileges, as a member of this House, in asking the Minister of Finance whether, if we vote this money, it is his intention, in the future, to continue the Public Service Commission?

The hon. member may ask that question.

I would like to ask the Minister of Finance, before we vote this sum, whether it is his intention, as controlling this department, to continue the employment of the Public Service Commission, or whether he is going to place himself in opposition to what the Prime Minister said the other day, in accepting the statement by the Minister of Justice, that he desires this commission abolished. I would like the Minister to give the committee a statement as to what the policy of the Government is, and which I believe the committee has a perfect right to ask.

I am not responsible for this vote. I would be very glad if the right hon. gentleman would address his question to the Minister of the Interior. If we did not intend continuing the commission we would not have put the vote forward.

My hon. friend must excuse me—I am sorry I put the question to him, instead of to the Minister opposite. A very important Minister—I believe the deputy leader of the House—has said that he desires the abolition of the Public Service Commission, and he spoke as a Minister.

Is the Minister of the Interior going to give us a statement on this, or is he going to play the part of a silent Minister this evening? Are we to take the reply of the Minister of Finance as the official reply to the question? Who is the Minister in charge to-night? If I start addressing the Minister of Finance he waves me aside to the Minister of the Interior. Surely we have the right to ask the Minister of the Interior to reply.

Is the Minister not going to reply?

I really do not see why I should reply to the question at all. The Public Service Commission exists by virtue of law—the Public Service Act of 1923—and it is not within the power of any Minister to abolish that commission.

You could bring in a Bill.

The commission cannot be abolished without an Act of Parliament. When the Government comes forward with any Public Service Bill, or measure amending the Public Service Act, then it will be quite time enough to tell the House what the policy of the Government is. In the meantime we have to do with the administration of the law as it is, and with that the vote has to do.

Surely we are entitled to a statement of opinion from the Minister. We have it on record that the deputy-leader has stated that he wanted to abolish the Public Service Commission. Surely the Minister of the Interior should tell us whether he agrees with his colleague, or whether the Government has any intention of introducing legislation, in regard to the commission.

Wait and see.

To tell us to wait and see would be trifling with the House. I think in all fairness to the public, the civil service and the members of the commission themselves, we should have a statement from the Minister on the subject. We remember the remarks which fell from him on the Public Service Commission visiting Irene and, having heard that statement, we are entitled to know how the Minister looks upon the public servants.

Before you put the question, I would like to say I am pleased at the answer of the Minister of the Interior, because it gives me the assurance that the Minister of the Interior is supporting the Prime Minister and that the Minister in charge of this vote, and who administers this department, agrees with the Prime Minister.

The hon. member is not allowed to discuss this point now.

I am not discussing it. I am getting from him the assurance that so far as this vote is concerned he does not agree with the Minister of Justice, who evidently spoke irresponsibly, but he agrees with the Prime Minister.

On (e) Advisory Council, expenses £600. What is the meaning of that? What are their functions, and why do we have to vote £600?

It is laid down in the Public. Service Act that there should be continual consultation between the Government and the public service, and that consultation takes place in meetings held from time to time between representatives of the service on this advisory council and the Public Service Commission. If the hon. member will refer to the Public Service Act he will see, in one of the clauses, it is laid down that one of the functions of the Public Service Commission is to make regulations with regard to the advisory council.

Where does the £600 go?

It is a reduction of £200 on the previous year and goes in expenses in connection with the ordinary meetings.

I understand that the Minister on one occasion quite recently made a statement at a public meeting that he was in favour of the principle being acted on in the public service of giving preference in appointments or promotion to Nationalists, all things being equal.

The hon. member is not allowed to discuss the policy of the Government on this vote.

It is a matter of administration.

I want to ask another question. I ask the Minister whether that statement is correct. It has been reported in the public press, and I want to know if it is correct.

Let me say that the functions of the Government with regard to appointments are laid down in the Public Service Act and generally they are: No appointment can be made by a Minister unless a recommendation has been made by the Public Service Commission. It is laid down in the Act. With regard to the statements I made on some particular occasion, I did say, and I repeat it, that all things being equal, I would prefer to appoint a Nationalist. I can quite well understand the hon. gentleman, from his point of view, would like me, all things being equal, to appoint South African party men, but I will not do that.

The hon. member is also going into the merits.

The Minister has completely, and perhaps wilfully, misunderstood me, as he often does. I should not like to show any political preference at all. As a Minister of the Crown, it is an astounding thing that he should express an opinion of that sort. The Public Service Act makes it an offence for a public servant to belong to a political organization or take a prominent part in political matters. The Minister proposes to make the public servants’ support of the Nationalist party a deciding factor in his promotion in certain given circumstances.

The hon. member cannot go into the question of appointments in the public service.

I am rather surprised at the last answer of the Minister. I should have thought that his principle would have been to appoint the best man for the job, irrespective of his politics, and not ask any question as to whether he is a Nationalist or not.

Order, I have already said that the policy of the Government cannot be discussed.

It is a matter of administrative control.

The Minister has given an answer in the matter raised, but I stopped him.

I see that the hon. member for Pretoria (North) (Mr. Oost) was given a billet the other day to travel round the country.

Not in the public service.

He has got a billet, and we shall have to find the money for it.

Out of what vote is the money coming?

Exactly; I would like to know where the money is coming from.

I would like to ask the Minister a question arising out of the remarkable statement which he has just made to the committee, and that is whether, when the Public Service Commission make their recommendation in regard to appointing to a post which happens to become vacant, he asks them whether the candidate happens to be a Nationalist and, if not, where he gets, his information from as to whether they are Nationalists or not.

I would like to follow up the question put by the hon. member for Yeoville (Mr. Duncan) arising out of the answer that the Minister has just given, and that is whether he has decided to follow the example set in Italy by the Fascisti.

I have already pointed out that it is not proper to discuss policy on this vote.

I would ask the Minister of the Interior from what vote the increments are being paid to the hon. member for Pretoria (North) (Mr. Oost) for this job that he is going on to England and the Continent, this grand tour.

I am afraid that it does not fall under the vote of the Minister of the Interior.

Could any Minister advise me under what vote this expenditure comes? Perhaps the Minister will be kind enough and courteous enough to tell me whether it falls under his department, because it is quite possible that it does not fall under his department.

I have already pointed out that it is not pertinent.

Am I out of order in asking a question? It seems to me that the Minister’s department is the only one under which it could fall. I would ask him to be courteous enough to state whether it does fall under his department.

May I ask the Minister whether he can give us any information with reference to the retirement of Sheep-Inspector Froneman, who was a public servant of the Free State, and was recently retired on a pension of £52 10s. 0d. a year.

That has nothing to do with the public service commission, as far as the Minister is concerned.

You will pardon my explaining. The public service commission has got to recommend the retirement of this officer and I am asking if the commission was duly consulted about his retirement when he was recently retired from the Agricultural Department.

It seems as if hon. members on the other side, to a large extent, have not read the Public Service Act of 1913.

But I have read it.

Otherwise they would know that in every appointment the Minister of the particular department in which that appointment is made is responsible. It is not the Minister who is responsible for the public service commission. Every Minister is responsible for appointments in his own department. Now, if that official to whom the hon. gentleman has referred was under the lands department or the agricultural department, then the Minister of Lands, or the Minister of Agriculture, as the case may be, would be responsible to the House.

I merely wanted to know whether the commission were consulted.

That question must be addressed to the Minister concerned. It cannot be asked me, because I have absolutely nothing to do with the appointment of any departments except my own. This vote is made to cover a small department in connection with the work of the public service commission; it is nothing more. If the hon. member will refer to the estimates, he will see it is just the salaries of the public service commissioners and the small department connected with the work of that commission.

I wish to know whether the commission is doing the work it was appointed to do. I am not enquiring whether certain expenditure was properly applied; but I am surely entitled to know whether the public service commission was given an opportunity of reporting upon the retirement of this particular officer, and if the records in regard to that matter are in the possession of the public service commission.

The Minister has already pointed out that this inspector does not fall under the public service commission vote. He falls under the agricultural department; and the Minister has correctly stated that questions concerning the inspector should be put to the Minister of Agriculture.

On a point of order, Mr. Chairman, the question which the hon. member put was as to whether the public service commission had been consulted, and if they made any report on the matter. Surely that is a question germane to this vote?

It has nothing to do with the vote at all. Whether the Minister of Agriculture in making an appointment has consulted, in that particular instance, the Public Service Commission, is something for the Minister himself to say. Say, for instance, a Minister makes an appointment without consulting the commission, then the law lays down what procedure has to be followed. The procedure is that the commission must report the matter to the House, so that in that way it will come before the House. This vote has nothing whatever to do with it.

The only authority I can accept as final on this matter is the Public Service Commission.

Is the hon. member going to discuss that point further?

May I hear what your ruling was, sir? I did not hear a word.

I ruled that the person, about whose appointment the hon. member wished to get information, was a person in the employment of the Minister of Agriculture.

I was not dealing with an appointment; but the retirement, which is entirely within the competence—

Or the retirement; it is the same thing.

Vote put and agreed to.

On Vote 38, “Labour,” £362,656,

I must confess, I am rather at sea as to what we may or may not ask under these votes. But a few days ago, I was in the Caledon district, and I saw a great deal of activity towards Grabouw, and I was told a road was being cut up the mountain and that 200 or 300 cottages had to be built, above the snow line, and that the Minister of Labour had some intention of putting a settlement there. I should like to know exactly what is happening at Grabouw; because if the Minister seriously intends to put a number of unfortunate Europeans up there, above the snow line in the winter, I can only prophesy dire calamity to these unfortunate men. Is the Minister putting these men there, if so, how many, how long have they to be there, and what does he intend doing?

This is one of the most important votes we have. Last year we granted £300,000 on this vote for unemployment expenditure and advances. Then we also made a certain grant from the Loan Vote, as well. I should like to ask, and I think the House and the country would like to have a statement from the Minister, to say exactly what he is doing in regard to this question of unemployment. It was one of the great features of the election campaign that unemployment was almost going to disappear as soon as my hon. friends came into office: but unfortunately it has not disappeared yet. I suppose I must not use the word “policy”, but what we want to know is, what is being done to do away with unemployment at the present moment?

The hon. member may discuss policy under the vote, “Labour”, because the Minister’s salary falls under it.

I would like to know what was done with that £300,000 voted last year, and the money granted under the Loan Vote. Perhaps to-night, or to-morrow, the Minister will give us a full statement as to what is being done to do away with unemployment in this country.

I also wish to ask the Minister what he is doing at Hartebeestepoort. I think in February, either he or his colleague, the Minister of Posts and Telegraphs, stated, at a meeting, that they had already put about 300 people there. I motored out and looked, but could not find a single settler there. As something like £1,500,000 of public money was put into this, I should like to know the position?

Was that so?

I think it was the Minister of Posts and Telegraphs who stated that 300 settlers had been placed at Hartebeestepoort already. There is a great deal of public money invested in Hartebeestepoort, and I hope the Minister will take advantage of this opportunity to tell us exactly what has been done already and if, as I fear, nothing has been done, will he tell us what he proposes doing there; what lines he intends to adopt? Since Hartebeestepoort has been taken away from the jurisdiction of the Minister of Lands, no one seems to know exactly what is going on there.

The hon. member for Port Elizabeth (Col. D. Reitz) has raised the question of the proposed settlement at the top of Viljoen’s Pass, between Elgin and Villiersdorp. On Thursday, June 11th, I asked the Minister of Agriculture a question in regard to this proposed settlement and I pointed out to him the unsuitability of that place. The Minister of Agriculture replied that—

The next day I proceeded to Caledon, and I made inquiries on the way and found that the wood and iron and other material for structures had actually been carted to the spot, a surveyor was busy laying out the plots and the whole scheme was in full swing, although the Minister the previous day stated that the matter was entirely undecided. I am in great sympathy with these poor people and if the Minister can help them to get on to the land, he will always find a supporter in me. I appealed to the Minister of Lands on this very important matter and having known the locality for 30 years I gave him some advice. Now, however, the Minister has settled these people there. I predict this, that in the first place the soil may be suitable for tree growing and only pick-axe work can be done there. What means would these poor people have of bettering themselves? They could not even have gardens. The rainfall there is 55 inches per year. The place is seven miles from the nearest railway station and is located on the top of a mountain. In my opinion, whatever stock is left of these poor people after the winter is over will be consumed in the summer by horse-flies and bush ticks. After the trouble I took to write to the Minister of Lands on the subject I thought, being the representative of Caledon, the least the Minister might have done was to consult me because it is not a party question but one which we should all help to settle in order to help these poor people. This type of poor white is entirely unknown in my constituency, but I am not opposed to the scheme if we can help these people in a suitable locality. My suggestion was to try and get land adjoining the forest. The Forest land is unequalled in any part of the world. I went so far as to get options for the Minister of Lands and asked him to co-operate with the Minister of Labour and the Minister of Agriculture. At present forestry is under the Minister of Agriculture and lands under the Minister of Lands and there appears to be no co-ordination between these departments. The Minister of Labour has been called in and there are three ministers now dealing with this subject. I maintain that you have to do pick axe work and there is no opportunity for these people to gain ambition, and to establish them eventually as farmers, because the land is entirely unsuitable for that purpose. They are stored away up in the skies. I warn the Minister now, and I deeply regret that the Minister did not consult me as the member for the constituency. Let me tell the Minister the five or ten thousand morgen which the Forestry Department own in that area were bought by me, every morsel of it, for the Government. I have known the agent in the Afforestation Department there for the last twenty years, before the Jameson Government was in operation, and I acted for them and bought the land. I know the history of it and I am sorry the Minister did not take me into his confidence to advise him. Now the scheme has been worked out there and the cottages are being put up, and I regret it, that these poor people have to go up there without any prospect of bettering themselves. The Minister will find that these people are going to be a burden to the State, and what is going to happen is they are going to leave within a short period of being placed there and will become a burden on the State and the local community. [Time expired.]

As the hon. member for Caledon (Mr. Krige) has mentioned that he wrote to me, I should like to make the position plain. I have nothing to do with the settlement referred to there. While the people are busy there planting trees, houses are made for them, but it is not actually a settlement, nor is it a settlement of the Minister of Labour. I am glad that the hon. member wrote to me, I asked him for further information and submitted it all to the Minister of Agriculture, but the latter said that unfortunately he was not in a position to buy ground there for afforestation. I admit that ground there is very suitable for settlement, but in consequence of the policy of the Government to enable people to buy ground if they can pay one-tenth of the purchase price, we have decided, at any rate provisionally, not to buy any more ground.

I have consulted the hon. member on various occasions, and I can assure him that it was not through any feeling that he happened to belong to the other party that I did not take his advice on this point, but on this matter I had very conflicting advice before we started it. However, I will explain this to-morrow. I now move—

Agreed to.

House Resumed:

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