I would like to ask the Minister of Finance a question as to the Loan votes. He promised these would be ready by the end of the week, but it is now Friday and I should like to know if they are ready yet.

I regret they are not yet ready. They are now being printed, and it has not been possible to complete the Estimates by to-day as I had hoped.

I wish to move the amendment which I have upon the paper. It seems frequently to happen that this House is unable to pass the Income Tax Act, fixing the rate for the past tax year up to 30th June, and between that date and the end of July or the middle of August it may happen that the Commissioner would come to the conclusion that some particular taxpayer should be rated. He might be leaving the Union, and there might be no particular authority, short of this section, enabling the Commissioner to tax him, but, if he is so taxed he should be entitled to an adjustment either up or down. The Minister can understand that the rate might be less under the Act to be passed by Parliament, in which case the taxpayer would be entitled to a refund, and unless some actual provision is made to this effect, it would perhaps be beyond the power of the Commissioner to help such a taxpayer. The wording employed I have taken from a later section of the Act, where the Commissioner has to deal with payments that may be made to him pending an appeal. I move—

There is no substantial objection to the acceptance of the amendment, but it is doubtful whether it would be welcomed by taxpayers. As the clause stands, it would be a final assessment; but if the hon. member’s amendment is accepted, it would be provisional, and he would have to be re-assessed if there was any amendment of the rate. If the House thinks we should do this, I have no objection, but I do not think it will be in the interests of the taxpayers to do so.

Amendment put and agreed to.

Clause, as amended, put and agreed to.

On Clause 6,

I wish to move the amendment on the paper, which I may do a little prematurely, because this is an opportunity of raising now the question of the taxation on debenture interest, the payment of 12½ per cent., which was objected to so strongly. The amendment I have on the paper is designed to make it clear that an individual who may receive not more than £1.000 per annum in debenture interest, and who desires so to do, can have himself put on the same footing in respect of the tax as if he had been rated at the normal tax applicable to the whole of his income. I know what the objection of the Minister is. He says he does not desire to introduce any refund system in the administration of the Income Tax Act, and the argument he has used, which comes from the officers of the department, is that the refund system which obtains in the United Kingdom involves the employment of a staff, which, I have been told, is almost as large as the staff required for making assessments; but I gathered from the Minister, when he offered that objection, that he would see no objection to this principle of equity. It seems to me that the form in which the Act now stands makes it most difficult for him to defend assessments on small debenture holders. The Minister has stated that he has taken this over, in principle, from his predecessor. That may be so, although his predecessor was content with the rate of 7½ per cent., and I do appeal to him very much, on behalf of the small debenture holders, of whom there must be thousands throughout the country; people who are very largely dependent on their income, and who have not more than a few thousands invested, and who have been induced, owing to the state of the income tax law, and the conditions of investments generally, to put their money into investments of this kind, in the belief that so large a sum as 7½ per cent. would, in fact, be the limit of taxation that would be imposed on them. The Minister is framing a new Act, and laying down certain general principles, and surely it is reasonable, when a consolidating Act is being framed, that he should cure an anomaly if it exists. The facts do show that this tax is strikingly anomalous. I would like the Minister to approach the matter on the assumption that it is inequitable and unfair to impose this taxation. Why is it impossible to consider the system of making a refund, and why should it be considered difficult to do so? There would be two classes of taxpayer to whom the clause would apply —those who would be assessed on their incomes independent of debenture interest and those who would not be so assessed. It would be a simple thing to give the taxpayer a credit for the amount paid on account of debenture interest. In the case of a taxpayer with an income of £2,000, half of which was in respect of debenture interest, a return must be made showing that half of that amount was tax free so far as the normal tax was concerned, and in assessing the balance the Income Tax Commissioner would merely give a credit. The supposed difficulty disappears entirely when an assessment must be made on the balance of the income. In case the taxpayer has no other assessable income an application would become necessary for a refund, which could be made very simply.

Suppose the taxpayer is overseas?

The Minister is now going back to the original reason for taxing debentures. If the department does not know who is the owner of certain bearer debentures, the Treasury could make the company concerned pay on his behalf. Of course, the taxpayer would have to prove his title to a refund. If the Minister feels there is a difficulty in regard to bearer debentures, the number of the debenture certificates would, if disclosed, be a sufficient safeguard. I invite the Minister to state in what particular it is expected the scheme would be difficult to operate. If the making of a refund involved the department in additional expense that could be covered by a reduction of 5 per cent. of the amount refunded. I move—

I move—

I do not move this amendment in any antagonistic spirit to that of the hon. member for Cape Town (Gardens) (Mr. Coulter), but my idea is to do away with any trouble in regard to the making of refunds. I have on a previous occasion shown pretty conclusively that this heavy debenture tax of 12½ per cent. is going to hamper development. Debentures are a favourite form of raising money, and are better than a bond, because they can be sold. Debentures are also a favourite method of investment, and from every point of view it is a system of raising money which ought to be encouraged. Supposing a person who has £5,000 drawing an income of £300 a year. In the ordinary way, he would not pay 6d. in income tax, but if the capital sum is invested in debentures he would be mulcted to the extent of 2s. 6d. in the £. I am indifferent whether the Minister accepts my amendment or that of the hon. member for Cape Town (Gardens) (Mr. Coulter).

I appeal to the Minister, who is fond of a flat rate, to make the flat rate for companies the same, 2s. 6d. all round. There is no real reason for taxing an industrial company at 2s. 6d. and a mining company at 3s. in the £ on its profits. It is only fair and just 2s. 6d. should be imposed all round. The provisions of the new Bill are of such a nature that even with 2s. 6d. for the mining companies the State will derive as much in taxation as it does under the existing Act. With regard to debentures the companies which have raised money on debentures feel that it is their duty to keep faith with the people who lend money on debentures, and they pay them in full. It will be additional taxation now on the company if the State derives 3s. instead of 1s. 6d. You are bleeding these companies to such an extent that very shortly there will be little left for the shareholders. I would point out to the Minister the fairness of the suggestion of the hon. member for Cape Town (Central) (Mr. Jagger). When people lend money on debentures they get a fixed rate of interest. Why they should pay 3s. in the £, in common parlance, beats me altogether. I appeal to the Minister to make this 2s. 6d. all round. I do not want him to make it 3s. all round, because if you impose 3s: on the industrial companies it will not do the mining companies any good.

I do not suppose the hon. member for Beaconsfield (Col. Sir David Harris) is quite serious in suggesting that we remove the difference between diamond mining and gold mining companies and industrial companies. He asks why differentiate in principle. From the earliest times in this country that difference has existed. If you tax them all as companies you would have to devise some other means of getting more from the mining companies. We have agreed that the State should always have something from the mineral wealth of the country. That is a principle upon which taxation has been based in the past, and it would be impossible to put them on the same basis. I have carefully considered the whole question of debenture interest, and representations have been made to me by small investors, and I have given it serious consideration, but hon. members will see, in the first place, that it is not quite right to say that we are taxing debenture interests as such. If the investors have to pay taxation it is upon the companies to say they will not deduct the tax from the debenture interest. I have admitted it is an anomaly, and I would like to meet all reasonable complaints. What do hon. members suggest? The amendment of the hon. member for Gardens (Mr. Coulter) is an arbitrary one, and I could not accept that. The hon. member for Cape Town (Central) (Mr. Jagger) points out that in the case of the small investor 1s. 6d. would mean he is paying more than ordinarily if it was liable for the normal tax. But what about the case of the big investor? He would be in a privileged position if we adopted 1s. 6d. I meet the position in the following amendment—

I move that. It would still be inequitable as far as the smaller investor is concerned, but we meet him to a certain extent. By adopting 2s. we do not allow the big investor to escape, as he would if I accepted the 1s. 6d. It would still be open to companies, in the case of the small investors, not to deduct the portion of the tax, but to pay out the whole amount of interest to the debenture holder. That is as far as I can possibly go, and I hope members will agree it is a fair way to deal with it and accept it as a fair compromise.

I do not know whether the Minister is aware that this tax can be very easily evaded, and will be evaded before long. A company instead of issuing debentures has only to issue preference shares winch may be secured by ordinary mortgage bonds.

Very well, I do not object to that.

If the Minister does not object that will become the general practice. If he tries to rope in the companies that evade the tax he will have to include all bonds, farm bonds, and other sorts.

A case does not exist in regard to farm bonds.

The Minister must be consistent and tax all bonds, farm bonds included.

They are taxed, but I tax them in the hands of the recipient.

Let them be taxed in the normal way and not at the source.

We could not get hold of them then.

I do not think the argument can be used that way. The onus can be put upon the companies, it necessary, to furnish a return to the Treasury or upon those people who are drawing debenture interest, but I do think the instalment, though no doubt better than nothing, is very little better than nothing, and I am sure it will have the immediate effect of having this tax evaded in the way I have mentioned.

The Minister of Finance was not quite correct in stating that this taxation which is going to be imposed upon mining companies has been in existence for all time. I remember that when the Cape joined the Union of South Africa we were told that the Union would bring about decreased taxation, but, instead of that, the diamond mining companies have had their taxation increased by 250 per cent., and I would remind the Minister that, there is a special taxation upon diamond mining companies, as they pay 10 per cent. export duty on all diamonds and why, in addition to that, you should differentiate between other companies and mining companies I am at a loss to understand, and I have never heard—

That is only the uncut diamonds.

I wish the hon. member had his tongue cut a little bit.

I suggest to the Minister that he should insert his amendment at the end of sub-section (d).

There is one aspect of this matter which, so far as I have seen, has not been fully dealt with, and that is that the increase of taxation on income derived from debentures is going to make it more difficult for companies to find money to carry on their business.

Why?

Because the yield is less. At the present time if a debenture carries 8 per cent. interest the tax paid is 12s., but under the proposal as it was in the original Bill the tax would have come to £1. Now, under the compromise that the Minister has suggested it comes to 4s. less. It is perfectly obvious that, that being so, it is going to be more difficult for Companies to raise money. The business of companies is going to be hampered by the fact that they will have to be responsible for debentures carrying a higher rate of interest. That seems to be a policy which is creeping into legislation in this country, in spite of the fact that it was raised once before to my recollection, some years ago, when Mr. Hull was Minister of Finance. Mr. Hull brought in, I think about 1912, a proposal to put a special duty on companies in order to provide so as to get in death duties from debentures and shares held in London. That was based on more or less the same lines as this proposal, but the argument was found to be so much against the proposal that it was dropped. Now we have got the present proposal and I see that in the Miners’ Phthisis Bill now before the House the same idea is carried out, inasmuch as it is proposed in this Bill now to make the claims of the Miners’ Phthisis Board rank in preference to amounts secured by a bond or debentures. The effect is going to be to make it much more difficult for companies, whether they are mining or any other companies, to raise money, because they will have to offer greater inducements and it is going to hamper the business of the country. From the point of view of the individual it is unfair. Here in this country we have a certain rate of income tax. A man, instead of paying income tax at the ordinary rate is, if he derives his interest from debentures, going to pay 6s. more, without any reference whatever to the average rate of the income tax. Why on earth should one particular source of revenue be taxed further than another in that way? The person who receives it is no better off because he receives his interest from debentures. It seems to me that this legislation overlooks the fact that it is going to make it increasingly difficult for companies to raise money and carry on their business.

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

I understand that the Minister is willing to insert his amendment not after (c) but at the end of (d).

Where does the amendment come in?

After (d).

Because it applies to all the sections.

Amendment, proposed by the Minister of Finance, put and agreed to.

There will have to be a consequential amendment in the next proviso by inserting “further” after “provided

I move that.

Agreed to.

Amendment, proposed by Mr. Coulter, put and negatived.

Clause, as amended, put and agreed to.

On Clause 7,

I want to deal with Clause 7 (1) (c). This particular clause deals with such a case as this, where an employee may have arranged to leave the service of his employer when he had been employed under a contract for a number of years, and receives from him a fixed amount in the commutation of his remuneration for the unexpired term of service. In a case—which has actually occurred in practice—an employee became entitled under agreement to receive a sum which was equivalent to two or three years’ salary. Normally he would have paid the normal tax, and possibly super tax, for a single year. Under this clause he would be rated in a single year for the whole of the tax, normal tax or super tax, on the whole of that amount, although normally he would be rated year by year. That seems to be a great hardship. If a man gets £7,500 as a cash commutation for a three years’ salary of £2,500 a year, he will be taxed on the whole amount in a single year. I put it to the Minister that in a case like that it would be reasonable to divide the amount paid in that year by the number of unexpired years in the contract of service, and to assess the taxpayer accordingly. The only answer which I can conceive might be made to this is that the taxpayer might pay for the first year and then disappear beyond the reach of the department. I take it that is a risk the department would have to face. Merely because he might fail to pay in a future year hardly seems to me a reason why he should be taxed at this high rate. I put this point with some confidence to the Minister. I believe he will realize that this is a perfectly fair proposal. I, therefore, move—

I do not think my hon. friend is quite right when he says this is a reasonable amendment. We would be creating a dangerous precedent if we adopted it. The basic principle of the taxation is to tax accruals during the year, not to spread them over a number of years, if a certain payment is made in a particular year to pay the tax on that year. The result, as he has foreseen, might be that we might be able to collect the tax for one year, and then for the other four or five years the man might have disappeared. Is it not better to collect the money when the man gets the amount? He himself admits that it might be possible for the major part of the amount to escape taxation altogether. The State does not take risks like that where it can help it. This would not be a reasonable amendment.

I should like to put it this way. A man’s salary is £2.500 a year for three years, and he gets £7,500 in one lump payment. If he is taxed on the £2,500 a year he pays about 2s., but on £7,500 he pays at a much higher rate. It is that my hon. friend objects to, and I think with justice. Why could you not rate him on the basis of £2.500 and multiply it by three? I agree it would not do to give credit; a man might disappear; he might go overseas.

Why not apply it to a multitude of other cases then?

This, I think, is absolutely fair; it meets the case.

My answer to the Minister is this. He has enlarged the scope of this taxation. Were it not for this special addition he would not be able to tax it at all, because it is an accrual of a capital nature. That, I venture to say, is the legal position. As a matter of fact a very similar case is where a pension might be commuted. He would not pay income tax upon the sum given him in commutation, because it would a capital accrual. That, I think, is quite clear. The Minister seizes on a case where an employee ceases to remain in the service of his employer, and says it would be unfair to the revenue not to tax that employee immediately he receives that capital sum. But it was unfair to tax him at all. What should have been done as regards Clause (cl was to move it out altogether. The Minister is bringing within the reach of this net something that ordinarily will escape taxation. An employee earning £2,500 would probably pay normal tax of 1s. 4d. or 1s. 5d., and no super-tax. At £7,500 he would pay normal tax of something like 2s. and super tax of something like 1s. 6d. Why should that employee, because he has received the capital sum, be taxed at that higher rate, particularly when he might not get employment for the balance of the three years or might be suffering from some incapacity which might have prompted the employer to deal generously with him. The answer of the Minister is that the taxpayer may disappear. Many taxpayers may disappear. I suppose we all pay a little more because of the taxpayers who disappear; but why single this case out and impose a very heavy burden on the taxpayer because he is supposed to be likely to become an absconder or to lose his money and not be able to pay for the second or third year. I think it is a striking injustice as it stands; tax a man unfairly because you are afraid he will become a defaulter is not right.

The principle on which the tax is based is that it must be on the actual accruals of the year. Why does the hon. member take this particular case? What about the farmer who, for marketing reasons, sells two or three clips of wool in the year, and has perhaps twice his normal turnover. We do not tax capital.

That is what you are doing now.

It will be made income by law. The principle has been accepted by the special courts, but the hon. member is discussing what has been accepted by the courts in camera. You cannot escape these anomalies in every case. It would be a very novel and dangerous precedent, and I regret I cannot accept the hon. member’s amendment.

This definition of “gross income” is expanding year by year until it is practically an endeavour to rope in every threepenny piece that can be got from any source in the Union, and I would like to refer to one or two of these items in this particular chapter, sub-section (1) (e)—

A man has free quarters and has free occupation for six months.

It is in the old Act.

It is an anomaly.

But why does the hon. member say we are expanding the definition of gross income?

Because this clause does it. The value of the six months’ occupation would be, say, £50, but under this particular subclause the man is assessed of £100 as the annual value. Is that fair? Then in sub-section (f)—

I should really like the Minister to give some explanation of that particular clause. It is most obscure, and probably refers to some special case which has to be considered; but as it stands, no reasonable person is able to understand it. And then I wish to refer to the definition of “trade” in this Clause 7. Suppose a man buys a property for say £1,000. as a dwelling-house for himself, and sells it in a short time at a profit. He will be taxed on that, although it may be the only such transaction he ever had in his life. Is that a fair position? Because it says “property,” not even fixed property. A man dealing casually and perhaps once in shares and making a small profit comes into the net. There is no doubt that some of the definitions of gross income in this clause are extraordinary. I suggest that the word “annual” in sub-section 1 (e) might be removed.

I want to move an amendment to the amendment of the hon. member for Gardens—

That meets the Minister’s difficulty, and yet it is absolutely just. The tax is reckoned on the basis of one year, and multiplied by the number of years it has got to run. At the same time, it is payable at once. The Minister mentioned two cases which do not exist as a matter of fact. If a farmer holds back his wool—

It is taxable in one year.

But he does it of his own free will. He must be fairly well off to do it. As regards the merchants, if we have the good luck to double our income in one year, we are only too glad to pay on the whole amount.

I hope the Minister will acquit me of divulging anything confidential seeing that his own department publishes a report in which the very principles to which I have referred are set down. The amendment of the hon. member for Cape Town (Central) (Mr. Jagger) meets the sole objection made by the Minister. A reputable taxpayer will pay year by year, and if a vigilant tax-collector thinks he might abscond then the commissioner can demand security. Under these circumstances, I hope the Minister will feel thoroughly satisfied that he will get the tax in any case, and the vital point that the taxpayer should not be mulcted would be safeguarded.

Take the amendment of the hon. member for Cape Town (Central). How can you apportion this tax if you do not know a man’s income for subsequent years? And in the meantime he may have disappeared. How does the department know the other earnings of the man? If we once depart from the principle to collect the tax in the year in which it accrues we shall not know where we are, and other applications will be made for concessions and the position will become hopeless. The hon. member for Pietermaritzburg (South) (Mr. O’Brien) need not be afraid. Under the existing law amortization is provided for in the case of gold-mining companies. After a period of years a mine may close down, and although it has written off all its capital, it raises a certain amount by the sale of its machinery, stores and land, so that there may be a surplus, and we provide that the difference will be taxable. As to the ownership of property, that proviso is inserted to allow losses to be written off.

The Minister has said that the amendment would create an anomalous position, because he would not know where he was in subsequent years. As the amendment is drawn, the Minister is enabled to fix the rate for three years independently of whether there was a further profit or loss in the second year.

Suppose the taxpayer is dead, or overseas?

Under the amendment of the hon. member for Cape Town (Central) every penny of the normal rate will be in the possession of the commissioner. In the second year when the taxpayer sends in his return he may have made a loss, but he would not be allowed to set-off the loss and so in the case of the third year. Thus the Government would receive the full amount of the tax.

My objection is to the principle of the thing.

The points taken by the Minister have been fully met.

Do I understand that “trade” would cover the case of a person who buys a farm for £2,000 and sells it for £5,000? Is the £3,000 considered part of the man’s income? In the past the profit has been considered part of his capital, but when he invests it he has to pay income tax on the interest which accrues from his investment.

If an ordinary farmer buys a farm and sells it again, it would not be taxable. That would be capital, but there are people who carry on a business of buying and selling properties, and a man might sell farms as a business, and that would be taxable.

Would it come under the definition of “trade”?

Yes.

But take an isolated case.

An isolated case does not come in.

But it could be roped in under this definition.

No, it couldn’t.

Does it apply to the case I mentioned?

No, it does not.

I understand the Minister to say this definition of “trade” is put in for the purpose of section 11 (3). Then, if a man makes a loss in connection with other trading, that could be brought into consideration? The Minister’s last explanation gives apprehension as to the definition of “trade.” The phraseology is vague. The proper phrasing should be “including trading in property,” and I suggest the wording be amended to meet the case.

You may have a case of a man who buys property and sells it at a loss. He would have the right to set that off.

They would not allow that, would they?

Yes.

This is an important point, because it says “trade” includes the ownership of any property. If the Minister leaves it to the discretion of the income tax commissioners, and a man sells his property at a profit the commissioners are going to make a claim.

Not unless they make a business of it.

As it appears here, the commissioner will not construe it in that liberal form.

I suggest we pass this, and I will look into it later on. It is a question of draughtsmanship, and I will see the law advisers about it.

Amendment proposed by Mr. Tagger put and agreed to.

Amendment proposed by Mr. Coulter, as amended, put and negatived.

Clause, as printed, put and agreed to.

On Clause 9.

I would like to refer to the new section 3 which is an amendment of the previous Act. It reads—

This clause opens up a very wide field. It hits at a system well known throughout the country, the system of making donations to children and it is one which is going to create a great hardship. When this matter was referred to on the second reading the Minister said a large number of cases had occurred whereby parents, to evade their liability for tax, had settled property on their children and so reduced the aggregate sum they would be liable to pay. It is obvious if such could be done the liability for tax is diminished. The Minister seems to assume incomes of that kind received by trustees, whether the father is a trustee or not, is income he can have and dispose of as he thinks fit, but this is the money of a minor child and is money which the father cannot dispose of as he thinks fit. It is held in trust and in every single case there are trustees appointed independently of the father, or concurrently with him, who are under an obligation to receive the income, keep records of it, re-invest it or capitalize it and on the attainment of the majority of the child to account for every penny of it. The Minister will defeat his object by insisting on this amendment of the law. I know a case where by intelligent anticipation the trustees under a settlement believing something of this kind was coming, sent all the trust funds out of South Africa. The amount in that case was very large indeed. Let me point out how very easy it is to evade it. The trustees would realize all the money and buy consolidated debentures or send the money where the tax would be less. By overreaching, as I suggest he is, in order to obtain a little more taxation, the Minister is driving capital out of the country.

Capital is not taxed in other countries?

I can give you a territory very close to our own, where capital is not taxed. There is one case where securities of various kinds can be bought to-day either here or abroad, and held by trustees in South Africa. Whether it is possible to get a higher or lower rate of taxation elsewhere, I do put it to the Minister that that, in fact, is what has occurred. I do ask him to tell the House whether there has been really any substantial evasion. The suggestion that evasion has occurred is a mere matter of opinion. It is an opinion which must come from his administrative officers, and can be no more than a deduction by them from the fact that from time to time these agreements have been put before them. This is an unjustifiable interference with the legitimate exercise in the past by people of their right to make settlements. I ask the Minister specifically to tell the House what is the recorded opinion upon which he ventures to make the very wide and important statement that such an alteration of the law is necessary because of deliberate evasion on the part of donors.

The evidence is in the department, experience.

That is only a matter of opinion. I move the amendment standing in my name. I was only now speaking against the clause, and making a final protest, because I know the Minister will bring his big battalions to bear I move—

Amendment put and negatived.

I; move the alternate amendment standing in my name—

The hon. member will see on the Votes and Proceedings, that I have an amendment to Clause 63 which deals with that matter, and which, I think, is preferable to the hon. member’s amendment so far as the actual wording is concerned. I shall move that amendment later on.

Does the hon. member (Mr. Coulter) withdraw his amendment?

The amendment, I take it, must come in here.

Amendment proposed by Mr. Coulter put and negatived.

Clause, as printed, put and agreed to.

On Clause 11,

I have on the paper an amendment to this clause, which I have filed merely to draw attention to certain details in the draftsmanship of this clause. The Minister provides in this clause for cases where there is no taxable income, but an assessed loss. In the past losses have not been formally assessed. It would still be necessary in assessing a loss to provide for deductions year by year, and ascertain how far they were allowed. This is merely a question of draftsmanship, and I propose to leave the matter to the Minister and his advisers, now that I have brought it to his notice.

The department have gone into the position, and they are of opinion that the amendment suggested by the hon. member is unnecessary, and that the case is sufficiently provided for in the Bill. It would just make the thing cumbersome if we accepted the hon. member’s amendment.

I move the amendment standing in my name (V. and P., p. 922), viz.—

1. (i) Such sum not exceeding one hundred and twenty pounds as he shall have paid as rent for a dwelling house actually occupied by him or his family.

I mentioned on the second reading debate that I was about to move to add this to the deductions which are allowed under this section, a deduction of £120 which the taxpayer may have paid as rent for a dwelling house actually occupied by him or his family. This is an attempt on my part to try and rectify an anomaly which exists in the present law, and which has existed for many years past. If I am fortunate enough to own my own house and live in it, I do not bring up as part of my income the rental value of that house, but if I am not fortunate enough to own a house and live in it and I have to hire a house and pay rent, I am not allowed to deduct from my income the rent which I pay for that house, so that a man who owns his own house, however valuable that house may be, is put in an entirely favoured position as opposed to a man who does not own his house. Therefore, I have moved this amendment, an amendment which was discussed and debated at considerable length in 1919, and which found considerable support in the Nationalist and Labour parties at that time, in the form in which it was moved on that occasion. Of course it does not entirely remove the anomaly, I admit, because it only provides for a deduction up to £120. The reason of that is that we cannot expect the Minister to sacrifice a great deal of revenue. The idea is simply to protect the poorer man with a family. If he has not the money to buy a house of his own, if he has to hire a house, then he should be allowed to deduct up to £120 per annum for the rent he pays for that house. I hope the Minister will accept this amendment; I hope it will commend itself to him as a fair thing and something which does benefit the smaller man. I hope my hon. friends on the cross-benches will support me in this, and I hope my own party will support me too. This is an amendment which has the object of reducing the burden of taxation on the ordinary family man. Then there is also the especial advantage that it reduces taxation for the man who can least afford to pay.

Why make it on rent and not on food or clothing, or other items?

The reason is to remove the anomaly which exists in regard to houses. If I own £1,000 worth of stock and draw income from that, I bring it up as part of my income. If I own a house, and I let that house, I bring up the rent as part of my income, but if I own a house and live in that house, I do not bring up the rental value of the house as part of that income. The Minister asks why not bring up the other expenses? That is the reason, that is the difference, that whatever form my capital holdings take, they usually produce some form of income, and that I must bring up, but I may have a very valuable house, worth from £10,000 to £20,000, of which the rental value may be £1,000 a year, and I do not bring it up yet on the other hand, if I am unfortunate enough not to own a house and have to pay rent, I get no corresponding advantage. Another aspect is this. If I live in my own house, well and good, but if I leave that house, as we do who come to Parliament, and let the house to someone else, we must bring up that rental. If we hire a house down here we are not allowed to set that rental we pay down here as against the rent we get up there.

You are allowed £500 a year.

Yes, but that is an abatement which one has in common with everyone else in South Africa. I do not know whether the hon. member for Witbank realizes the hardship of this particular case.

This is one of the cases where we are all hunting to remove anomalies, but in trying to remove one you create much more serious ones. I can point out a number of situations that will arise in connection with the whole thing. I pointed out why not select food and clothing and other forms of maintenance. What about the man who lives in a boarding-house? He gets nothing; he is cut out. What about the man who is thrifty and buys his house on the instalment system, but gets no abatement? The man who is not thrifty, who prefers to pay rent, well, he gets the abatement. You would simply remove the incentive to even the small man to possess his own house. I think the hon. member, in trying to remove anomalies, would create others much more serious. I regret I cannot accept the amendment.

I am sorry to hear the statement by the Minister, especially when he talks about the incentive Ito buy a house. Surely he does not argue that the exemption of amounts paid in rent is not in itself going to be an incentive to buy a house? The question of exemption or non-exemption will not affect a man’s desire to own his own house. There are many thousands of men in this country who will never have the opportunity of buying houses because of the low wages they are paid.

The £300 exemption will probably take them out of the income tax.

I am only dealing with a man buying his own house, not in direct relationship with the question of exemption. This is the principle underlying our contention that the abatement should be £500. It has always struck me as very illogical that the man who pays rent has no exemption for it, and you make no differentiation as against the man who has not to pay rent. I want you to put the two things on the same plane by taking out of the purview of the income tax the amount a man has to pay in rent.

Amendment put and negatived.

Clause, as printed, put and agreed to.

On Clause 14,

I move—

Agreed to.

Clause, as amended, put and agreed to.

On Clause 15,

In regard to sub-section (12), I wish to thank the Minister for carrying out the promise he made to me last year, in making these exceptions; but having accepted this principle, I hope he will agree to a few more exceptions. I have an amendment on the paper which I wish to move—

I am sure if these amendments are agreed to, the effect on the revenue will be negligible. A veld dam costs from £25 to £30, and it would be a great incentive to the farmers to allow this exemption. In regard to troughs, the Minister allows for the water, the machinery to bore the hole and draw the water, but no expense in making troughs for keeping the water clear and pure. In regard to vermin-proof fencing, I feel that the Minister would be taking a progressive step if he accented the amendment. Under legislation which has been passed, the farmers have to erect vermin proof fencing, and the Land Bank is going to grant money and huge sums will be spent on this type of improvement on farms, and I think if the Minister would allow amounts spent on vermin-proof fencing, it would be an encouragement to the farmers to carry on this progressive work. There is also an important consideration that, when a farm is fenced for vermin, it has the effect of increasing the farmer’s income, and the Minister will ultimately derive increased tax.

I should like to ask the Minister to take the amendment into favourable consideration. It is very difficult for the farmers to understand why, if they make veld dams and fence enclosures, they may not deduct them from the revenue. What is the position now? If a farmer fences his farm, i.e., divides it into different enclosures, then it is necessary for him to also construct veld dams. He is not going to make any new enclosures without making veld dams as well, and the more enclosures he makes the better it is for the Government, because the position is that a man with say 3,000 or 4,000 sheep—I am speaking now of my own division—possibly employs four, five or six shepherds, each of whom costs about £100 a year, apart from free board, etc. But as soon as the farm is fenced and the dams in the enclosures are finished the farmer need no longer keep shepherds. The immediate consequence is that the farmer’s income—in the case of a big farmer—is immediately increased by £400 or £500 a year. The farmer pays his tax on the increase of his income, but now he has to pay tax in addition on the improvements that he makes. This is a point which raises much trouble with the farmers. It is just the same with wind pumps. I see that the Minister has made an exception for wind pumps and water pumps, but it is impossible to put up only a wind pump, he must also have drinking troughs or construct dams near the pump to make the water therefor available for drinking water for his family and his cattle. I think that the amendment is very fair, and I can assure the Minister that the people of the countryside will appreciate it very much if the Minister will accept the amendment. When we make a comparison between the farmer and other taxpayers we must not forget that the farmer has to struggle with more difficulties than other business people, and I hope that the Minister will favourably consider the amendment.

I hope that the hon. members will not insist on this point any further and will appreciate the concessions the Government has already made. We felt that something should be done in cases where farmers in dry areas had large farms to be fenced, and it was necessary to have water at as many places as is possible. Therefore the amendment was made to give relief where farmers were forced to provide a water supply for the enclosures or to make bore holes. But now hon. members want to extend this to veld dams and jackal wire fencing. If this is done, why not then for other fencing as well?

What about the drinking troughs?

I am coming to that. It is only a small point and it comes under pumping machinery and is excepted, but my objection is to the exception of veld dams and jackal wire fencing. Where must we draw the line then? What about the man who has already divided his farm into enclosures? You can surely not make it of retrospective force, we cannot possibly go so far. Veld dams are in most cases made by the farmers themselves, and how then will we calculate the cost? If they are big works they fall under agricultural purposes and do not come under this, but if it is a small dam which the farmer makes himself then it is practically impossible to fix the cost caused thereby. I hope the farmers will appreciate that we went so far as to make provision that expenditure on bore holes or on the erection of pumping machinery can be deducted. Drinking troughs mentioned by the hon. members also fall under pumping machinery, and to make it clearer I shall move an amendment.

The Minister by inserting the words “pumping plant” has left the door very wide open. I would suggest, in order to make it clear that the provision is meant to meet the urgent cases of men in the semi-arid regions, and will not be extended to include large irrigation pumping plants, that we insert—

We want to limit this to a specific class of persons whom we recognize as having an exceptionally uphill fight.

It is part of the pastoral operations. I don’t want to exclude a case where a farmer erects a windmill to obtain water for his stock and utilizes the surplus for irrigating a small lucerne plot. The commissioner will decide in which cases the allowance should be made. I move—

This is the first time that an attempt has been made to discriminate between one class of farming and another. Are pastoral pursuits of so much more value to the country than agricultural pursuits? Agriculturists spend an enormous amount in order to obtain an income, whereas very little is paid by those following pastoral pursuits, but I don’t wish to raise any distinction, although I do not see why the concession should be limited to one class of farming only. I move—

One is a gamble, the other is not.

I hope the hon. member will not press this amendment. I have introduced this as a result of representations made last year from all sides of this House, when it was asked that we should deal with some of the arid districts where farmers are obliged to sink bore-holes and erect pumping plant. If the amendment is adopted people with big irrigation plants would want to benefit under it. I am afraid that if we had to extend the principle the revenue could not afford it. There is a very great difference between the cases we want to meet and the case of an ordinary agricultural farmer who erects a large irrigation plant.

When are you a pastoral farmer, and when are you an agricultural farmer? You carry on both branches of farming together. If you run a few sheep in conjunction with some other branch of farming does that make you a pastoral farmer? You are going to find it difficult to discriminate between the two.

First part of the amendment proposed by Mr. G. C. van Heerden put and negatived.

Second part of the amendment proposed by Mr. G. C. van Heerden put, and Mr. G. C. van Heerden called for a division.

Upon which the Committee divided:

Ayes—27.

Anderson, H. E. K.

Blackwell, L.

Buirski, E.

Byron, J. J.

Chaplin, F. D. P.

Deane, W. A.

Duncan, P.

Geldenhuys, L.

Gilson, L. D.

Giovanetti, C. W.

Heatlie, C. B.

Jagger, J. W.

Krige, C. J.

Louw, J. P.

Marwick, J. S.

Miller, A. M.

Nel, O. R.

Nieuwenhuize, J.

O’Brien, W. J.

Payn, A. O. B.

Pretorius, N. J.

Reitz, D.

Rider, W. W.

Smartt, T. W.

Van Heerden, G. C.

Tellers: Collins, W. R., Robinson, C. P.

Noes—48.

Badenhorst, A. L.

Barlow, A. G.

Brink, G. F.

Brown, G.

Christie, J.

Cilliers, A. A.

Conradie, J. H.

Conroy, E. A.

De Villiers, A. I. E.

De Villiers, P. C.

De Wet, S. D.

Du Toit, F. J.

Fordham, A. C.

Fourie, A. P. J.

Hattingh, B. R.

Havenga, N. C.

Hay, G. A.

Hertzog, J. B. M.

Hugo, D.

Kentridge, M.

Keyter, J. G.

Le Roux, S. P.

Louw, G. A.

Malan, C. W.

Malan, M. L.

McMenamin, J. J.

Mostert, J. P.

Mullineux, J.

Naudé, A. S.

Naudé, J. F. (Tom)

Pienaar, J. J.

Pretorius, J. S. F.

Roos, T. J. de V.

Roux, J. W. J. W.

Sephton, C. A. A.

Snow, W. J.

Steyn, C. F.

Strachan, T. G.

Swart, C. R.

Te Water, C. T.

Van der Merwe, N. J,

Van Heerden, I. P.

Van Rensburg, J. J.

Van Zyl, J. J. M.

Wessels, J. B.

Wessels, J. H. B.

Tellers: Pienaar, B. J., Vermooten, O. S. Amendment accordingly negatived.

Amendment proposed by Mr. Heatlie put and negatived.

Amendment proposed by the Minister of Finance put and agreed to.

Before this clause is passed I should like to make a few remarks on it. It is regrettable the Minister should have seen fit to go back on the Act as it previously was. Under the profit and loss basis alone can we arrive at anything like a clear examination of what a man’s income or profit has been? Under the cash basis we have no guarantee that it represents a man’s income. I would like to ask the Minister pointedly whether he is in favour of deliberately taxing a man upon income.

We do not tax him.

I wish to know whether you would do it, because I am going to say that you are doing it under your scheme. I would like to know whether the Minister would deliberately—

I am not taxing him; he taxes himself if he chooses.

Does he tax himself?

Yes.

Are you prepared then to accept it under those conditions.

Yes.

I want to show farmers then, if not the Minister, that by adopting the cash system, they are imposing upon themselves a liability to be taxed without having made income. If a farmer, for instance, has sold a bull to the tune of £1,000 and he has lost £1,000 worth of stock, under the cash basis he has no right to set the one off against the other; he has to pay the full amount. The Minister says he is coming to the assistance of the farmers. He says he is making a concession to them.

They have asked for it.

The Minister has consented to this at your request, perhaps because the farmers cannot see far enough or have not thought sufficiently over the question, or because they have been urged under the previous Government to clamour against what was considered at that time to be an injustice. The farmers are now to be given the option of choosing whether they come on the cash basis or the other one. If they come on the cash basis they are going to be called upon to pay upon income which has not accrued to them. The Minister has said—I think he said only today—that there would be no loss to the revenue. I think the Minister is satisfied that, as far as the revenue is concerned, they are not going to lose. I wonder if the Minister is equally concerned that the farmer shall not be called upon to pay more than he should do, because he is certainly going to be called upon to pay more than he would under the profit and loss basis.

He has his own choice.

Why worry about it? Leave it alone. The farmer will look after himself.

The Minister admits the revenue is not going to suffer. If the revenue is not going to suffer, I certainly think that the farmer will suffer in respect of any losses of stock that he may sustain. Between the years 1918 and 1923, there was a diminution of no fewer than five million small stock in the Union. Under the profit and loss basis that loss will be brought up in the farmers’ income tax returns, and the farmer will be saved the expense of paying income tax upon that loss or upon such a portion of that stock as was lost. I say that where it can be shown that a farmer has made a profit according to his own showing, it is fit and proper that he should pay upon that, but when a farmer shows, as can often be done, that he has actually lost, although his sales may show a profit, I think it is unfair that the Government or anybody should come and lay a tax upon him. It was said that this change would simplify the making up of the returns which the farmers have to prepare. I would like to ask the Minister what difference there is between the forms which a man will have to make up who comes under the cash basis and the forms which he will have to fill up if he comes under the profit and loss basis.

A very big difference. In the one case he will have to take stock and fill in a return of his stock.

Let me just show the Minister that there is very little difference. Each man has to keep exactly the same books in respect of all his sales and purchases. The position is just this, that I think the Minister is quite wrong when he states that the one form is complicated and, the other is not, because they are identical. This cry about the intricacy and the difficulty of filling up these forms applies to both the profit and loss basis and the other. If we adopt this proposal I think we shall be departing from a very sound principle. I feel that the income tax should be the principal instrument in the Government’s hands for collecting revenue, and if it can be improved and means of leakage be expunged from it, I think we should be following a very wise course. [Time expired.]

I will admit that the hon. member for Aliwal (Mr. Sephton) is an experienced farmer, but I cannot understand his object when he says that the option is now given to the farmers. It will encroach on their interests, and it will be against their interests to choose on what basis they will pay income tax. His memory must be very short if he cannot remember that the previous Government took away the cash basis through the old Minister of Finance in order to get more revenue. He acknowledged that it would increase his revenue by £50,000 or £60,000. He will remember how we fought here in the House about the matter, and the hon. member himself supported us in his heart, although he had to vote with the previous Government, because we were opposed to the farmer paying on his capital which happens if the cash basis is taken away. I know well how he explained here that the cash basis was the best, because that thereby the actual income was cash. The new Government has said that the farmer shall have the right of choosing.

It was a point at the election.

Yes, my hon. friend is right. We said that the previous Government was taxing the farmer’s lands. I wish to remind the hon. member for Aliwal how the former Minister of Finance had to “lobby” to get hon. members opposite to vote for his Bill. We had the sympathy of the hon. member for Aliwal. There are farmers who chose the cattle basis, but there is not the least doubt that the tax was then imposed on their capital. I think that the hon. member for Aliwal in his innermost heart is thankful that the choice has been restored. I should not like to interfere in his private affairs, but I should very much like to see one of his forms to see whether he chooses the cattle basis.

I know cases under the old system of farmers who found themselves in a very invidious position. I do not know whether, under this clause, where farmers have the right of choice, whether my hon. friend has made any provision for cases that constantly occur in this country. We know what happened when the old regulations were in operation, and farmers had chosen to make up their returns on the basis of revenue and expenditure. I know the case of a farmer who was about to retire, and who sold, to his children, the whole of his stock. A claim was made upon him to pay income tax on that stock, and I think claims will be made now under these new conditions, if the farmers go in for them, unless some provision is made.

Provision is made for that case.

Where is the provision? Is it in the Bill?

Yes.

I know that before it became a very serious case. I know of the case of a farmer transferring something like £6,000 worth of stock to his children. He was told he would have to pay income tax on the sale of that stock. It became a very serious thing. This farmer carried out the provisions of the law and filed his return on the basis of receipts and expenditure, consequently, in that year, when he sold what was really his capital, retiring from farming, to his children, he had to include the sale of the whole of his stock in his ordinary return as revenue for that year. The Minister should make this very clear in the Act. I only mention this as a warning to farmers, especially elderly farmers, who may unthinkingly decide to come under this new basis, and may find themselves in the position in which my friend found himself. At that time, four or five years ago, I brought it up in the House, and I think the decision of the income tax commissioner was that, under the law, as he had decided to schedule his return on the basis of receipts and expenditure, these sheep, which were really his capital, came into that year as a receipt, and he had to pay income tax on it. It is very necessary this thing should be very fully considered, and we should know exactly where we are. We have had the unfortunate experience that many farmers paid enormous prices for stud stock, simply because they said—

They did not sell their stock, and droughts came, and the stock fell very largely in prices; and, by sending in their returns on that basis, the farmers have been greater losers than they would have been gainers if they had gone on the ordinary profit and loss system. What my hon. friend should do, if he wants to assist the farmers, is to make some improvements in connection with the difficulty they find in making out their returns. The majority of farmers have to go to an attorney or an agent, and very often have to pay a good deal of money to have their returns made out, because they are not of that simple character they ought to be.

Won’t you make a suggestion to simplify it?

I know it is a very difficult thing. If my hon. friend would meet a number of the farmers who are having such great difficulties, and if he would give the committee the assurance that he would try to simplify the form as much as possible, it would have a very beneficial effect. I know it is the experience of the majority of farmers to have this difficulty, and I have received many letters on that account. I hope the Minister will say he will be prepared to go into the question, and see that the farmers’ returns are of the simplest possible character. There is great difficulty in fixing definite prices for stock. Many farmers have stud stock for which they have paid a lot of money.

The question of a simplification of the returns has been very often raised. It has been a burning question in England also. They had a Royal Commission sitting on it, and they came to the conclusion that they could not suggest anything which would deal satisfactorily with the whole matter. The department has gone into this matter very often, and we have invited suggestions from individuals and farmers’ associations. There must be a certain amount of information available to the department before, they can assess. Under the changed system, the form for the cash basis is very simple. Great objection has been taken to the taking of stock at the end of the year, and filling in the various ages and classes of sheep, cattle and horses. This is especially difficult where a farmer farms with two or more of his sons, and the stock is all mixed up. They did not keep a separate account of the stock on the farm on the 30th of June, and the stock has to be separated between the farmer and the sons; but the department is always busy with this matter, and we are prepared to consider any suggestion that might be made to simplify matters. The right hon. gentleman will see also that we are altering the system in regard to prescribing the forms. It had to be done by the Governor-General-in-Council, but now the commissioner will prescribe the forms. The right hon. gentleman raised the important question of the farmer who ultimately retires and sells out his stock. That is a case that the department has provided for. In the first case we only tax income, and then we provide that income shall be treated on a certain basis. In sub-section (4) of Clause 15. that is provided for. The commissioner is empowered to obtain from a farmer a return of his capital when he started farming or when the original income tax came into operation. When a farmer sells out, we take from the proceeds of the sale the original capita] which the man had on hand when he started. The department at first thought it would be able to carry this out when this Act started; to get this return from every farmer. I pointed out that that would be casting an unnecessary burden on the farmer, and that it should only be necessary, when the case actually arises, to get this return. Under the present income tax Act, we provide for such a case, but we are not altering that, but so far as the definition of income is concerned, the farmer will have the option of taking into account the value of his stock or of not doing so. I can assure the right hon. gentleman that there will be no difficulty in regard to that.

I have a concrete case before me of Mr. Nyland, who retired from farming.

That we subsequently altered.

Say a farmer has five or six thousand sheep and, on retiring, has a general sale or transfers his stock to his children, and they give him notes or something of that sort for it, and he is living on the interest. If he has been running his business year after year on the basis of receipts and expenditure, he may be selling five or six thousand pounds worth of stock. The trouble was that, under the law, the income tax authorities called on him to pay income tax on that amount. Really, it was the whole of his capital. Do I understand from the Minister that when a farmer starts his returns on the basis of this receipts and expenditure schedule, he will be able to show to them when he started that his sheep were so many and worth so much money, and when he was going to go out of business and selling off his stock he would only have to pay income tax on the balance? The other would be deducted from it? It would be most difficult.

That is not quite the position. It would be unfair if the man elected now, because he might have had the advantage of all these years; but, when he sells out—no matter when—when he wants to claim the benefit of this, he must furnish a return showing the capital he had on hand on the 30th June, 1913, when the Act came in originally, or when he started farming on a later date. We cannot allow him now to change over after having had the benefit all along. No. His capital was the capital he had on hand on the 30th June, 1913, or on the date when he subsequently started farming, and instead of worrying the people now to get this return, we will now only ask them when they actually claim the benefit of being treated on this basis and when they claim a deduction on their capital.

It will be very difficult to do that. The value of the animals in 1913 was different from what it is now, and you are not going to get the ordinary farmer to tell you what he had in 1913 and what he has now.

I agree with the hon. member for Fort Beaufort (Sir Thomas Smartt). It is very difficult to say what the farmer possessed in 1913. I hope the Minister will make it clear.

The hon. member will see that we must know what the man’s capital was with which he commenced.

Twelve years ago?

Yes.

That no one knows.

If that is the case then he has no option.

Yes, but what difference can that make? The man was on the cash basis until the Act was altered and he also paid the tax according to the later amendment.

It makes a great difference.

I should like to approach this from a business point of view. I think, without intending it the Minister is not fair to the farmers. Let me put a case: A farmer starts with £1,000 capital, and during 20 years he does not make more than £300 a year income. He spends £100 and saves £200, and after these 20 years he hands over or sells that stock to his children. Although he has not paid income tax for the 20 years, still, on his savings, he will have to pay tax as between the capital when he went on to his farm and the capital he has saved over the 20 years, on no portion of which he would have ever paid income tax.

Under this cash basis system it was possible for a man to have an actual profit and to add it to his stock and not to pay one penny in income tax. You must catch him some time.

We have now heard here that the Minister has made a concession to the farmers. It appeared quite clear that the matter to which the hon. member for Graaff-Reinet (Mr. I. P. van Heerden) referred was a dangerous concession to the farmers to resort to the easy forms. It will cause great trouble, and I am not going to recommend my farmers to go in for the cash basis. It is much better for them to keep to the old forms.

They can surely choose.

Yes, but then we cannot call it a concession. We recommend him to push himself into the mud. We must understand the matter very clearly. It appears as if we were going to tax capital. If he disposes of his stock then he must pay on his capital if he is on the cash basis. If he is on the stock basis then he only pays on his profits. The difference is as night and day, and we must make it clear what the position is.

I can see that hon. members opposite are much upset about this provision in the Bill because it is one of the causes why there are so few of them on the opposite side. They know it. The hon. member for Witwatersberg (Lt.-Col. N. J. Pretorius) is now at once kicking up a row for the simple reason of trying in this way to justify the sins of the former Government. The position is that the farmers outside choose that cash basis and they are not stupid. Do hon. members opposite want to say that the farmers do not know what they are doing? The hon. member for Aliwal (Mr. Sephton) has talked about ignorance. Does he mean that? Does he wish to say that it is ignorance that makes the farmers choose the cash basis? Will the hon. member for Witwatersberg tell the farmer in the country that he is stupid? It is the farmer who must pay, and those who pay want to know what is the best. The position is that the farmers are left free to do as they wish. If he says: I will not pay before I have sold, before I have received the cash, then he can do so. If he wants to pay on the stock basis then he can do so. Eventually he must pay anyhow, and therefore it makes no difference. Let the hon. member for Witwatersberg tell his electors that they should pay on the stock basis and leave us free to recommend them to pay when they have received the money. The Minister has stated that if a man has commenced with 100 cattle and he goes in 1925 and sells what he owns, then the value of the 100 cattle with which he commenced will be deducted. That is the capital with which he commenced. Hon. members do not wish to understand this, that is what is at the back of it.

The hon. member for Somerset (Mr. Fourie) talked of making a noise. Who made the noise in the past?

We.

The farmers in the country.

I say that hon. members opposite, by their noise, incited the farmers against their own interests. The South African party took up the right basis when they said that the farmers should pay on the stock basis. I represent a large farmers’ constituency. There were some farmers on the cash basis and some on the stock basis. The farmers on the stock basis would never go over to the cash basis. We therefore had the position of two taxpayers living next each other who paid tax on a different basis. This caused friction, and it is surely a wrong system. Let any intelligent farmers get up here in the House and say that the cash basis is better than the stock basis.

Yes.

Under the stock basis the farmer fixes his capital. He determines according to his valuation the price of every sheep, every lamb, every bullock and every beast. When he sells them then he pays the tax on the profits and not on a penny more. He also pays on the increase of his capital, but that every other taxpayer does. But what are not the benefits to the farmer? They arise when he loses his stock. Say he loses a stud ram of £600, then this is deducted up to the full value. Under the cash basis he does not have that benent. My experience is that when farmers retire from business their property is sold at a sale, and if they are on the cash basis then the vendu roll is taken as showing the income of the person for the purposes of income. That is his full capital, and on that then he has to pay tax. How is it possible that a man who wants to look after the actual interests of the farmer can recommend them to adopt that tax? It is true that it is left to their option. If there were any advantages attached to it I would support the option. It is, however, in the farmers’ interest to keep the stock basis and we must not get our farmers into trouble by accepting another basis. I hope that the Minister will maintain the original system. Hon. members opposite made a great noise during the election, and to-day they must carry things out to cover themselves. They are what we call shamefacedly angry (“skaamkwaad”). For that reason they are still sticking to the cash basis. We stand for the stock basis. Do not now say that we are making party capital out of this matter. Let us stay where we are and give the farmers a chance of deducting their losses and do not make the farmer pay on his capital.

I cannot understand why members opposite are making so much noise. It is the very reason why there are so few farmers opposite. There are only a couple left. The hon. member for Caledon (Mr. Krige) especially makes a noise. It is entirely left to people themselves to say whether they wish to come under the cash basis or the stock basis. The farmers outside are not so stupid. They know what to do, and they are free to choose. Let every Sap advise his people to pay on the stock basis, but the farmer will know what to do. When ex-Minister Burton, who in their opinion was not a stupid man, altered the system, he told me that, we would get £75,000 more in that way. Did he then calculate so badly? It is best for hon. members there to sit perfectly quiet and that the section should now go through.

The hon. member for Graaff-Reinet (Mr. I. P. van Heerden) says the stock basis is the basis of taxing one’s capital. That is precisely what it does not do, and it is exactly what the cash basis does do and has done in the past. Under the old cash system take the farmer who sold 100 head of stock, he would have to pay on the full price he got for the cattle. If I sold mine under the profit and loss system I would only pay the difference between what my cattle had been valued at and what I got. The hon. member for Riversdale (Mr. Badenhorst) said the Minister was going to scoop in more revenue by that system, and the Minister himself told the House that you are not going to lose any revenue. I would mention another point to the hon. member for Graaff-Reinet, who has rather a short memory. Before the law required it of me I made an application to pass from the cash system on to the profit and loss system, because I thought it was a sound thing to do.

Not the profit and loss basis, but the stock basis.

Precisely, one is as good as the other.

Not a bit.

Very well", we will say the stock basis. When I made my application I was not permitted to do so. I welcomed the day when we were all grouped together under that system. I know there are many members who would prefer to remain on the cash basis, but they will be sorry they ever departed from the other system. I am very sorry that we have departed from a very sound system and divided our people. We have got to a system which is going to make one section dissatisfied with the other, and if one section thinks that the other is getting off more lightly it is an incentive to that section to say—

I do not wish to continue the discussion, because I think that the matter was already sufficiently discussed before. But I just want to rectify one of the statements of the hon. member for Caledon (Mr. Krige). He mentioned a case of a person who in the past was on the cash basis, and said that when that person gave up farming and sold his things at a sale the vendu roll was used for purposes of calculating the income tax, and that the person paid on the amount of the sale. That was not the position in the past. What happened was that just after the Act came into force such a case occurred. The attention of the department was called to it and the department decided that it would not be fair to make the person pay on the cash basis on the proceeds of the sale. What was then done was that the capital with which the person started was deducted from the amount, and the person only paid on the balance, that is on the profit. That is the position which was created a few years after the Act came into force. I want to clearly state that if a person on retiring from business sells all his stock, all the capital with which he began, or that he had when the income tax Act came into force, will be deducted from the sale price for taxing purposes.

May I point out to my hon. friend that under the law he cannot do that, unless he clearly provides for it in the Act.

It is provided for in the Act.

Sir THOMAS SMARTT. The Commissioner of Income Tax does not look to the Minister for instructions in administering the Act, he looks to the law. My hon. friend, as Minister of Finance, has just as little right to interfere with the authority of the Commissioner of Income Tax in that regard as I have or any other private citizen has. The assurance of my hon. friend, which I asked for, is not his personal assurance, but his assurance that he will see that legal authority is consulted and that the position is made perfectly plain before this Bill passes through its final stages.

I would like my hon. friend to point out where the statement which I have made is not in conformity with the Bill which is before the House now. What I say is that under the framework of the previous Act the practice which I now foreshadow was followed for a number of years. The only alteration which is made in regard to farmers’ incomes is that they may adopt either the one basis or the other. The commissioner may assess a farmer’s income without taking into consideration the stock which he has on hand at the beginning of each year. Capital is necessarily deducted in terms of the framework of the whole Bill. The assurance I have given the House is based on exact information which I have on the Bill as it is drafted.

I am very glad to hear that is the legal opinion, but sub-section (4) to the ordinary layman does not make that point perfectly clear, and if my hon. friend will, if necessary, consult the legal authorities and see that it is perfectly clear, I will be satisfied. The hon. member for Somerset East (Mr. Fourie) is rather wrong in the idea which he tried to impress upon the committee, that hon. members were discussing this question simply for the purpose of making political capital out of it.

Nonsense.

That is what the hon. member said, and he speaks with some authority in this House. That suggestion of his is not the case. I am very glad this discussion has come before the House, because this is the best possible way of bringing to the notice of the farmers what their position is going to be under the two systems. My hon. friend is old enough to know that it is not many years ago when farmers, in his own district, were heavy losers by having decided to schedule their income tax returns on the cash basis, and my hon. friend will remember that about 1920, when the price of cattle, and sheep also, became so extremely high that in many cases farmers, thinking they were going to evade paying super tax, paid as much as £2,000 to £3,000 for a bull. There was interchange of this stock between farmers. They overstocked their farms to an enormous extent.

A few isolated cases.

My hon. friend knows that what I say is perfectly genuine. Very many farmers were extremely heavy losers. They were overstocked; the drought came, and then the slump came, and cattle, which would ordinarily have brought £15 or £20, fell down to £5 or £6. The result was there were many farmers who were very heavy losers, whereas if they had paid income tax under the ordinary profit and loss account, they would have been exactly in the position that the hon. member for Aliwal (Mr. Sephton) has pointed out. Under the circumstances, I think the discussion has done good, and I hope the farmers will carefully weigh up the pros and cons before they embark on this, I would also suggest to my hon. friend that he should discuss with the Commissioner of Income Tax the question that farmers, preparing their returns on the basis of profit and loss account, should be free to put the value of their animals at what they consider is a fair market value.

We heard these speeches over and over again when the Act was altered. The Minister has now responded to a great demand. The people themselves can choose on what basis they wish to pay. They have now had experience. Many of them were on the cash basis, and were transferred to the stock basis. Now it is left to them to choose. But I have one difficulty, and that is how the people will to-day be able to revert even if they are very anxious to. If they still have the papers for 1913, then they can do so easily, but otherwise I do not see how it can be done. How can anyone, if he wishes to be honest, still say what he possessed then. If the Minister had added that they would go back to the time when the Act was altered, then there might still have been many who could go back so far, but I feel that, otherwise, it will be very difficult.

If I understood the Minister correctly, then he said that if a person is on the cash basis and sold his stock and property, then the value thereof in 1914 is taken and deducted from the amount realized by the sale. He pays tax on the balance. Take the case of the person who began with a capital of £5,000. After five years, he sells out, and the proceeds are possibly £20,000. The £5,000 is then deducted, and he pays on £15,000. This means that he must pay super tax. I do not know whether hon. members understand what that super tax means. If one had an income of six or seven thousand pounds a year, then it would almost double the normal tax. Instead of, say, £400, you must pay another £800. I mention this because I regard it as my duty to make it clear to hon. members and the country what the position is. People will get into trouble if they only wish to accumulate to escape the tax for five years.

Clause, as amended, put and agreed to.

On Clause 18,

A great complaint against this clause is the fact that you take the profits earned by these firms as being 5 per cent., but it has been represented to me, from many quarters, that there are heaps of concerns that do not make that profit. This morning I had a case pointed out where ¾ per cent. or 1 per cent. or 1½ per cent. is as much as they make. I want to provide for that in exactly the same manner as the Act of 1914 provided. I therefore move—

This will enable the concern to prove what its income was. If that cannot be proved, the commissioner can take 5 per cent., but if the concern can demonstrate clearly to the satisfaction of the officials that it is less than 5 per cent. the commissioner, as a matter of justice, takes it at such sum as it actually proved to be.

I suggest that it be worded in the same way as the proviso to Clause 16, assessment of shipowners whose principal office is outside the Union. That’ proviso reads—

If a firm can actually show us what their profits are, we do not wish to tax them at a higher figure. I think we had better amend it at a later stage.

I withdraw my amendment.

Will the Minister make his proviso applicable to Clause 17 also?

I will look into that.

I wish to move—

It deals with two classes of sale, one actually made in the Union and the other deemed to be made in the Union. In regard to the first-class of sale, there is no need to include it, because any sales made in the Union are taxable now. So far as the first portion of the clause is concerned, it was unnecessary because it is covered by the existing law. The Minister has now gone further, and has tried to deal with a large number of cases which relate to sales which are made outside the Union, the business done by agents, known as manufacturers’ agents, who tour the country and obtain orders, transmit those orders abroad, and if the principal confirms them the sale takes place outside the Union, and is followed up by the transit of goods to the Union. That is a bad principle indeed. The Minister has tried to obtain taxation from a source of income outside the Union. That is illogical. In the earlier portion of the Bill, incomes earned outside the Union are exempt and this is a sort of exception to that principle. The persons called upon to pay this taxation are persons who will be taxed in the country where the sale takes place. If it occurs in England the person making the profit from the sale of goods in the way I describe will pay 4s. in the £, and will then be called upon to pay a foreign tax, although in essence the transactions may have occurred outside the Union. The Minister may have to face the difficulty that the principal, being outside the Union, he has no means of collecting the tax from him. He is adopting the expedient of going to the agent who may have secured the order on a salary or commission basis and nominating him as taxpayer. He will call upon him to disclose his commission accounts, and that will give the Minister the requisite information. He would be able to know what the gross sales have been, and no doubt will be able to obtain information with regard to sales in which the agent has never been concerned, because his contract may entitle him to commission on direct sales. He calls upon the agent to pay on the assets in his possession. In point of practice it will create an unfair differentiation. In 80 per cent. of the cases there are no assets of the principal within the Union. The samples, as a rule, are paid for by the agent, and in cases where they do belong to the principal, they will resort to the practice of making the agent pay for the samples. As the agent only has to pay on the assets of his principal which are in his possession he will thus escape, and the Minister will lose many of these people out of his net. To the other man doing equally the same business in the Union by means of an agent who does not carry any samples of his principal, and has no assets of his principal in his possession, he is going to say: “You are exempt from that tax.” I don’t know what sum the Minister is going to expect from this, but I suggest the differentiation is unfair. The object the Minister has in view can be rendered futile, and so, why impose this unnecessary taxation? I pointed out the other day it might result in retaliation.

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

When the House adjourned I was dealing with Clause 18, and I had moved as an amendment that that clause be deleted. Without repeating what I said before, I would like to draw the Minister’s attention to the fact that the real differentiation that will occur in this clause is this, that a foreign principal who carries consignments of stocks here will be taxed and a foreign principal, who has no stocks here, will not be taxed. The liability for taxation will depend on whether or not a foreign principal has sent into the Union assets for the purposes of the business which he wants to do. Is that a right system, or one that can be justified on any logical system of taxation? This tax will lend itself to evasion. It is a tax that can be rendered quite nugatory, and it is one which will give rise to a degree of irritation which will make the tax not worth while considering. Without referring for the moment to the amendments which I have on the paper, and which are intended to deal with one or two specific instances that will arise in connection with this section, I would ask the Minister to agree to its deletion.

Does the hon. member (Mr. Coulter) move his amendment?

I move to delete the clause. I propose at a later stage, if that amendment is not carried, to move the other amendments standing in may name.

The hon. member cannot move the deletion of the clause; he may simply vote against it.

The first amendment I have on the paper is—

There must be many cases—

I may point out that the hon. member only has one minute more, when his time will have expired.

Very well, I will move my amendment and speak later on. I move the amendment standing on the Paper in my name (Votes and Proceedings, page 917), viz.—

I am prepared to accept the second verbal amendment. I do not think it is really necessary, but it can do no harm. The first amendment I cannot accept, because the hon. member knows that our taxation is derived primarily from sources within the Union.

Might I explain to the Minister that the object of the first amendment is to make it clear that South-West Africa shall not be affected by the clause. What I want provided is that where any principal in South-West Africa has an agent here, the agent shall not be liable to taxation for goods coming from there. Perhaps it would be more explicit if I put it—

I do not want to have any reference to South-West Africa. South-West Africa, to all intents and purposes, we generally regard as part of the Union. I do not want to apply this principle to South-West Africa if that is what the hon. member means.

It is very difficult to understand exactly what the Minister is wanting to do. If the words are to be taken at their face value, it seems as if some extraordinary cases are going to occur. It has been put to me in connection with the business of one particular agent for a firm outside the Union, that at present you are taxing on the income actually derived. If an agent sells goods free on board at £200,000 he gets various rates of commission, but taking an all-round commission of ½ per cent. after paying expenses, his net income would be £600; but under this clause his income is going to be calculated as £10,000.

The Minister has accepted an amendment.

I was not aware of that. That is how it reads according to the Bill.

Yes, it is better that I move it now. I have something here which will meet, the case. That is—

I do not quite understand—

I will accept both your amendments.

With leave of the committee, first and second amendments proposed by Mr. Coulter withdrawn.

I move—

I move, as an amendment to the amendment proposed by Mr. Coulter, in line 47—

Amendments put and agreed to.

Clause, as amended, put and agreed to.

On Clause 19,

An alteration has been introduced in the law in respect of this section which takes away from the taxpayer the option of paying on his actual income within the Union, and the Minister has in respect of wireless, shipping, and cable companies, accepted the position that where the actual income can be ascertained, the option will be given of paying on that income. Under the former law, section 14 of the Act of 1917, the taxpayer, as well as the commissioner, was given the right to claim assessment on the actual profit derived from sources within the Union. Under the section as now printed, the option is given to the commissioner only. It is contained in the proviso. The taxpayer should have the option, and I do not understand why the Minister has abandoned that. The hon. member for Maritzburg (South) (Mr. O’Brien) has asked me to move to restore that option. Unfortunately, that hon. member is unavoidably absent. I should be glad if the Minister would give me an assurance that this may be put in in the report stage.

The hon. member may move it at the report stage.

I would like the Minister to stand firm on this clause. I notice that in the past there was a great outcry from this section, asking the Government to make all its purchases in South Africa, and I think as the Government has conceded that point, and allowed firms which are not domiciled, and do not do all their business in South Africa, to have a share of the orders which are placed, by this Government, the Government should entrench itself as far as possible.

Clause put and agreed to.

On Clause 22,

I wish to move the amendment in Clause 22. of which I gave notice—

Agreed to.

Clause, as amended, put and agreed to.

On Clause 29,

I want to move a small amendment to prevent double taxation. In Clause 32, power is given to the commissioner in the case of a company which has not distributed its profits to the extent to which he thought it ought to have done, to allocate a share of the profits as a part of the income of the shareholder. So these profits will be taxed, although they have not been distributed. A year or two after that the company may divide its accumulated profit in the shape of bonus shares, and then the shareholders will be taxed again on those shares. I do not know, however, if it would happen in practice. I move—

I have no objection to the amendment which I think is necessary.

I move—

What the Minister proposes to do is to hit at a practice which has received the sanction of the highest court of the land—that is the right of a company which may not be able to distribute profits in cash, but which may place to the credit of its appropriation account profits which are later distributed in the shape of bonus shares. The Minister is really proposing to tax capital. This question has been fought out very strongly here in England and in Australia. A company may have its capital in shares to the nominal value of £1, and because of undistributed profits those shares may be worth £2. The company may then issue new bonus shares worth £1 each. But what the shareholder gets is a share certificate, so that, instead of having one share certificate worth £2 he has two certificates worth £1. Now the Minister proposes that such bonus shares should be counted for super-tax purposes. The iniquity of that is that a small shareholder, who has no voice at all in determining whether there should be such an issue, is compelled to find cash to pay super tax. In other words, the Minister compels him to realize some other asset in order to raise the money. The bonus share which the shareholder receives still continues to represent money in the hands of the company, and the shareholder has nothing, but a certificate representing money which the company retains. Why should we extend a law which is intended to tax incomes—to tax capital, because that is what this really means. The Minister is doing something which is entirely wrong, and which, in many cases, may’ work great hardship.

I may be a little dense on these points, but I would like to ask if this is not a question of the hon. member trying to evade the present law. Supposing a company made a profit of £20,000 the hon. member wants that to be distributed in the shape of bonus shares, and then, instead of the shareholders paying income tax on the £20,000 profit, that profit will be retained by the company.

They have paid 12½ per cent. already.

Not if the Government accepts the amendment of the hon. member for Yeoville. The Government should stand firm in this case, especially as in the case of those who tried to get an increased exemption for children; the Opposition gave no assistance.

Amendment, proposed by Mr. Coulter, put and negatived.

Amendment, proposed by Mr. Duncan, put and agreed to.

Clause, as amended, put and agreed to.

On Clause 59,

I have an amendment to go at the end of this section—

I have no objection, I accept that.

Amendment put and agreed to.

Clause, as amended, put and agreed to.

On Clause 62,

In sub-clause (2) of this section, it is desired to charge interest at the rate of 7 per cent. per annum on overdue assessments. I don’t see why the Government should be put in that privileged position. To-day, under the common law, 6 per cent. is the rate charged. I would like to draw the attention of the Minister to the fact that very often, after these assessments are made, disputes occur, and a long time elapses before payment is made, and there does not seem to be any reason why the taxpayers should pay more than 6 per cent. per annum. I ask the Minister to restore the old rate. I move—

No, I cannot agree to that. The Government do not want the interest, they want the tax. If you make it 6 per cent., it will be more profitable for the taxpayer to owe the money to the Government than to his banker.

Amendment put and negatived.

Clause, as printed, put and agreed to.

On Clause 63,

I move—

Agreed to.

Clause, as amended, put and agreed to.

On Clause 65,

I would like to ask the Minister whether he could not insert a small subsection in this clause, so as to allow money to be refunded to those who have paid the tax when it is afterwards proved illegal. At present only those who have paid under protest get a refund of the tax. In other words, the position is that those who are able to retain a smart legal adviser always pay anything doubtful under protest, and if, subsequently, any individual takes a test case to the court and he wins, all those who have paid under protest get the amount so paid refunded to them. Other persons who, unfortunately, have not had legal advice, have paid without any qualification and the result is that no money is refunded to them.

I do not think one can provide for the case mentioned by the hon. member (Mr. Pearce). He will see that it would be obviously impossible to reopen these assessments when payment has been made. Provision is made in another section if application is made within two years for refund of a tax which was not legally due, for a refund to be made by the department.

Clause put and agreed to.

On Clause 66,

I would like the Minister of Finance to give his attention to the wording of this clause. It seems to be to be very vague and uncertain.

It is rather vague.

I see it states—

What exactly does that mean? I would suggest that the Minister might look into this with a view of making it more definite before the next stage of the Bill. This clause can only have effect in the event of insolvency, or the liquidation of a company, because only when that comes about it must intend to say that the tax shall be a first charge upon the assets. The Minister will find, if he refers to the Insolvency Act, or the Transvaal Companies Act, it is laid down there definitely what charges shall be preferent over the ordinary debts in the estate, and where these preferent charges are meant to have effect prior to bonds, it is expressly laid down that they shall have priority over bonds. If the Minister means to make this tax a charge in insolvency or winding-up, prior to hypothecated assets, I think he will have to do so by express language. I do not think this clause, as it now stands, will do that.

The hon. member (Mr. Duncan) is quite right. I must say that the clause is rather vague. It is a reenactment of the existing clause. The department interprets it on legal advice to mean preferent ranking after a special bond, kustings brief, etc. It would only rank with the general bond really. That is all we intend to get by this preference. I admit that the clause is very vague, and, of course, it would only have effect in insolvency.

What the Minister has just said would make it easy for him to accept the amendment I have on the Paper. I propose—

I don’t want it to rank after a general bond, which may be given for a debt after the tax has become due.

If the Minister would make it rank after a special bond, I have no objection to that. I will move my amendment in this form—

Why should the Government be preferent over concurrent creditors? I am sure I cannot see any justification in the slightest degree.

I would also appeal to the Minister. My experience in practice is that after you have discharged your special mortgages and your general notarial bonds in the case of insolvency, what is over then has to go to the concurrent creditors. Now the Government comes along and creates another preferent charge. I see the Minister smiles. I think he has got a good deal of sympathy in this matter. I pointed out last time that the department, without negligence, allows, in the ordinary course of events, the tax to run over a certain period, and some times it is a very heavy charge against an estate. I know cases where the Government has chipped in and run away with about £300 or £400 of the estate in preference to concurrent creditors. I would like the Minister to say why the Government should be preferred in a case of this nature.

I rather have some sympathy with the taxpayer, and that is why I have put this clause in, because it will enable the department to give some extension of time to the unfortunate taxpayer in some cases if the department knows that it is protected to some extent. Otherwise the department will take good care that as soon as the tax is assessed the amount is paid.

I wish to move—

This is a very extraordinary position indeed. You are dealing with a case where a partner in his private estate shall be taxed. This lays it down that it shall be competent for the Government to attach the partnership assets and following sub-section (1) to claim that the Government has the prior charge upon the un mortgaged assets of the partnership. The Minister proposes to take power to issue a writ and there and then to attach the assets of the partnership. If you have two partners, one of whom may have discharged his obligation to the State and the other not, the Minister would be able to seize the assets of the partnership for the debt of the defaulting partner. It seems to be capable of creating an injustice to the other partners in the business. I would like to ask the Minister what grounds he has for altering so much the rights of partners in partnership. I would like the Minister to give us some explanation; maybe it is clearer than one can understand.

This case can only arise in a case of insolvency. In the case of insolvency the partnership assets are ordinarily swallowed up by the partnership liabilities. This means the tax will rank on partnership assets in a case of insolvency in so far as the tax has been levied on profits made out of the partnership. Surely there is nothing unreasonable in that. If the tax has accrued by reason of profits made out of the partnership there is nothing unreasonable in asking that the partnership assets shall be available for tax in case of insolvency.

Suppose the income derived from a partnership business by a partner is in the proportion of 5 to 10, then I take it that one half of the partnership assets are available to the State apart from the fact that the partner may not have any capital interest in the business at all. Such a case might well arise. If the income which is assessed by the commissioner in respect of the partner is one half of his total income then it is to be assumed that one half of the assets of the partnership are liable. It does not follow that he has any capital interest in the partnership whatever.

I will look into it further. We want to limit it to the extent of the assets he may have in the business. It may be necessary to remodel the section to make that clearer. We want to come down on the partnership assets to the extent that the partner has assets in that partnership.

Perhaps I should re mind the Minister that he has given notice of two amendments.

I move—

First amendment proposed by Mr. Coulter put and agreed to.

With leave of committee, second amendment withdrawn.

Amendments, proposed by the Minister of Finance, put and agreed to.

Clause, as amended, put and agreed to.

On Clause 68,

I would like to have a definite assurance from the Minister that persons who pay under protest shall not have an advantage over those who pay the tax quite innocently and who afterwards find out that the tax was illegal. I believe in the past a large amount of money has been repaid to wealthy institutions in this country who paid under protest: Naturally they are able to consult the cleverest lawyers and have been enabled to have a great advantage over those who have not been in that position.

The hon. member will see that in the first part of the section a certain discretion is given to the commissioner to make refund, but there is the proviso, which is to meet cases where both the taxpayer and the commissioner interpret the provisions in a certain way and the tax is paid without question. A few years after a court may decide that the tax was not payable. It will be impossible to re-open this question. It was paid bona fide. If it is the result of any interpretation of the court afterwards, and it is found that the tax was not properly paid, it would have a disastrous effect to re-open these cases, and you could not possibly have these cases always happening.

That is not the point. Would the institution or person who paid under protest have an advantage over those who did not stipulate that they paid under protest?

I do not know. What class of case the hon. member wants me to provide for. If no protest was made, the amount is not in dispute. I have extended the period within which refund can be made from two to three years, and general powers have been given to the commissioner under subsection (1) to make refunds where the amount paid is in excess of the amount actually due.

In giving evidence the head of the Minister’s department acknowledged that certain money was recovered by certain institutions owing to the fact that when they paid they paid under protest. I want all to be treated equally.

There is nothing about protest here.

I think the hon. member is referring to a general principle of cur law which applies all round. It has often happened, in the past that one man has tested a matter or paid under protest, and the law. Has eventually decided in his favour. All the other people who have not protested and paid have been unable to recover the money, which is regarded as money paid in ignorance of law. To get over that difficulty would require a general amendment of our laws. I do not know that you could meet it in this Bill. What the hon. member wants is an amendment to the general law by which money paid under a mistake of law should be recoverable.

Clause put and agreed to.

On Clause 72,

I wish to move an amendment to the definition of “dependant” in regard to which a question was raised yesterday. It was pointed out that there were many cases where persons, who had been maintained by taxpayers—who were dependants —but who did not come under the existing definition and, perhaps, would not come under the definition in this Act. I think there is some justice in this suggestion and, therefore, I move—

1. (a) any person incapacitated by old age, infirmity or any other reason satisfactory to the commissioner from maintaining himself, and
2. (b) any child (other than the child or step-child of such taxpayer) under the age of eighteen years on the last day of the year of assessment

to whose maintenance during the year of assessment the taxpayer has contributed whether in cash or otherwise to an amount of not less than thirty pounds.

I think it is reasonable that we should extend the principle in this way.

Agreed to.

Clause, as amended, put and agreed to.

Clause 74, the schedules and title put and agreed to.

House Resumed:

Bill reported with amendments; to be considered on Tuesday.

I move—

This amendment is to meet the objection raised at the committee stage by the hon. member for Dundee (Sir Thomas Watt), viz.: That, as a result of the provision regarding three months’ residence, a member or candidate may possibly’ be disqualified. I restore this, and, at the same time, remove an anomaly from the constitution. As it is required from a candidate for the House of Assembly that he should be entitled to registration it is stipulated that a candidate for the provincial council must be registered and able to vote. I bring both on the same footing, and provide that the clause about three months shall not apply to such a candidate.

seconded.

I suggest the insertion, before “by” in the first line of the word “merely”. That would make the meaning very much clearer.

Yes, I have no objection.

Amendment, as amended, put and agreed to.

Amendments in Clause 5 and the omission of paragraph (b) agreed to.

On Clause 7,

Substitution of a new paragraph (b) put and agreed to.

I move—

seconded.

Agreed to.

Omission of paragraph (d) put and agreed to

On new paragraph (d),

I move—

seconded.

Agreed to.

New paragraph (d), as amended, put and agreed to.

On Clause 10,

I move—

seconded.

Agreed to.

Amendments in Clauses 13, 17 and 18, the omission of Clause 24 and the substitution of a new Clause 24, amendments in Clauses 33, 34 and 36 and amendment in line 8, of Clause 39 put and agreed to.

On Clause 39,

I move—

seconded.

Agreed to.

Amendments in Clause 40 put and agreed to. On Clause 44,

I move—

My amendment has reference to the ambiguity that exists with regard to the words—

This might be construed to occur in the case of a newspaper where payment has been made for the preparation of a report. I think he wishes to make it clear that he means it where the insertion of a speech is paid for. That should be described with the head “advertisement, to make it clear that it is paid propaganda. It is a principle one does not agree with. There is another case—

It must frequently happen that a reporter is paid specially for touring the country and sending a report, or a country correspondent is paid for sending report. It might happen if a minister is touring the country, and the press thought it worth while, to send a reporter I want to make it quite clear that when the candidate or any other person delivers such a speech there should not be at the heading of that report the word “advertisement” My amendment would make it quite clear that the word “advertisement” must be inserted in respect of the report of a speech where such report is to be paid for by, or on behalf of the candidate, but it would not include—

I believe in principle that, if the Minister thought I was right in my interpretation of this he would be prepared to accept the amendment. The only question is whether he thinks I am right in the interpretation I place upon these words. I have another amendment which, I suppose, I can move now.

The hon. member (Mr. Coulter) must move it later.

seconded.

I will just say that I am able partly to meet the hon. gentleman (Mr. Coulter). I cannot agree with the first part of his amendment, which begins—

because we want to deal in this Bill not only with advertisements which are paid for by a candidate or on behalf of a candidate, but articles paid for by other people, by companies not by or on behalf of that candidate, but on behalf of the political party. We require under this Bill a return of election expenditure from the candidate and also from other persons and from political parties, even where expenditure is incurred by the political party not for a particular candidate, but for the party as a whole in connection with the election throughout the country. We want to cover that. The wording of the hon. gentleman’s amendment does not cover that case. As far as the second part of his amendment is concerned, I can accept that, because the intention very clearly is that the payment must be made for the insertion of the article, and not for the production of it, and not payment for reporting. I would ask the hon. gentleman whether it would not be Letter if we amend the clause in this way, after if in line 37, to insert “the insertion of”. This portion of the clause would then read—

I think that would make the case better than the hon. gentleman’s proposal. I accordingly move—

seconded.

With leave of the House, amendment proposed by Mr. Coulter withdrawn.

Amendment proposed by the Minister of the Interior put and agreed to.

Amendments in lines 44 and 51 put and agreed to.

I move—

This is to meet a case where the proprietor of printed matter may be a different person from the author. I am sure the Minister with his journalistic experience will know that some times articles are sold by the author. They may pass entirely out of his control by the copyright being disposed of. Then, at a subsequent date, the article or some portion thereof may be used by the proprietor of the copyright for election purposes. One can imagine a case where the views of the author of an article, and the views of the proprietor of the copyright may be wholly different as far as politics are concerned. Take a cartoon by “D.C.A.” It may be sold and appear in a newspaper for which the cartoonist never intended it, and his initials may appear under it. If the name of the proprietor of the copyright is disclosed it should sufficiently meet the object the Minister has in view.

seconded.

I have no objection against this amendment, although I think it is very unnecessary. We are concerned with a Bill dealing with elections, and I have never heard of any electoral matter which the party to which it belongs wishes to distribute as widely as possible being copyright. In the case of a cartoon that may be so. I think it is unnecessary, but it can do no harm.

Amendment put and agreed to.

Remaining amendments put and agreed to.

I move the deletion of Clause 44. My object really is to delete subsection (b); that is the sub-section particularly objected to. At the same time, sub-section (a) is really so very foolish that I feel we ought to delete the whole clause. I think the Minister has been exceedingly obstinate in his persistency to force this clause through. Not a word has been said in select committee, or during the several debates here, which could possibly be claimed, in any way, to support the Minister in his petty partizanship. On the last occasion the Minister gave us three main reasons for wishing to retain this clause. After several of us had referred him to the evidence given in select committee, and had shown that not a single person who appeared before the select committee had in any way supported that clause, he said he had only expected that kind of evidence. I do not know whether the Minister wished to infer from that that he thought the whole mass of evidence was valueless or wrong. I hope he does not intend to place himself so far above all these men of experience as to claim that nothing which they could say could prove to him the fallacy of his views. May I suggest that the Minister comes down to earth, and may I remind him that he is not now in a position where everything he says is taken for gospel. He is now in a position where hon. members in this House, residents of the country, and in fact everybody, has a right to criticize what he has got to say, and they certainly will criticize his action in regard to the press. He holds the press does not keep to fact. J would like to draw attention to what he said on the second reading. Does he hold to what he then said? He said he had never expected that that provision of the Bill would be popular with a certain section of the press, and that “Die Burger” supports it. We have not had support from any member of the staff of “Die Burger,” on the contrary, everyone from “Die Burger” condemned the clause, and yet the Minister said that “Die Burger” supported it. The second main reason he gave was that a correspondent would always be able to get somebody else to actually write the letter and sign his name. I ask the Minister whether he was serious about that? Is that in keeping with the very high sentiments expressed by him during the second reading debate? But of what value is this clause? What is the reason for all this unnecessary cause of bitterness and general upset, if this clause can, as he suggests, be so very easily evaded? If that is the Minister’s best reason for this clause being retained, then, remembering the sentiments of his colleague, the Minister of Posts and Telegraphs, I can only say he is delivering the goods, but in a very damaged condition. The third main reason the Minister gave was: “That pressmen adopted the attitude that they had never done any harm, and would not do harm, but with the experience one had of elections one would speak otherwise.” One feels tempted to say to the Minister: “Speak for yourself.” The Minister’s second reading speech showed very clearly that he had a very good insight into, and a very intimate knowledge of, every slim manoeuvre of the party political game, but there is no reason why he should thus judge all these men who hold important positions on newspapers, and who are honourable men in their profession, and there is no reason for him to hold that he has any right to criticize them as he did. Surely the Minister does not consider that every man who differs from him must have an ulterior motive. If he holds there can be no genuine error and that behind every error is an ulterior motive. Let me refer to a little incident which happened in this House. On page 18 of the evidence given before the select committee on the Bill, is recorded the evidence of Mr. J. F. L. Rompel of “Die Burger.” who said—

Was there any ulterior motive there? If there was, what was it and who was guilty? The witness went on to say—

The Minister apparently denies this, but throughout the long sittings in the select committee he did not examine one witness on this particular point, and we must therefore take it that he accepted the evidence. If he disputed the evidence it was his duty to cross-examine the witnesses. Let us presume, for one moment, that the Minister is correct and that reporters are unable to give accurate or true reports. In that case how is the writer’s name going to improve matters? How is this clause going to improve the position? There is not a word in the clause about requiring truth or accuracy. It must be presumed, therefore, that these minor details are of very little importance to the Minister. In his desire to get information he eliminates the public entirely. Does he believe that the public is entirely unable to decide what is true and what is false in a report, and does he believe that by this clause that the public are going to be cured of their stupidity, if he thinks they are so very stupid? There is not a single member of the public who is forced to purchase a newspaper. The purchaser cannot expect a reporter or editor to be so careful about satisfying his (the purchaser’s) stupidity, or that he will be able to do so merely by putting his name to a report. It seems to me that the position is quite untenable. According to the Minister you can ensure truth by signing your name! Strangely enough, the only papers which have had to apologize recently have been those in which the names of the writers were appended to the articles complained of. The Minister claims that his aim is to safeguard the public. Who can say as he apparently claims, that the compulsion to sign every article is a safeguard to the public? Surely he must know that the only method by which certain minorities can put their views before the public is by writing to the paper without disclosing their names, and that in certain cases certain men cannot make public their views on account of their particular occupation.

Are you going to repeat all those arguments?

One has to repeat an argument many times to get the Minister to appreciate it. If I do repeat arguments, which accusation I deny, the Minister should not complain, because he had 93 pages of evidence against this clause and he is not convinced yet. I do not know that any good reason has been placed before the House for this clause.

You cannot appreciate good reasons.

The Minister is no judge of good reasons, and I cannot agree with him that he gave any. The whole of the Nationalist Dress was against this clause, and since its introduction that section of the press has written article after article condemning it. The whole of the Opposition press is unanimously and emphatically against it, and a certain leading labour paper is against the clause. On page 12 of the evidence the “South African: Review” says—

It is not an official Labour organ.

The hon. member for Liesbeek should be more careful. I did not call it the official Labour organ. A few evenings ago he made a statement which I cannot faithfully describe here without using unparliamentary language; well I hope he does not give me an opportunity.

I will, outside.

That is the view of the chief Labour organ in Cape Town. Another matter of importance is the evidence given before the select committee in regard to the press in different parts of the world. If we consider the French press first, we know that the system of requiring everything to be signed gradually grew in France. At first the press were subjected to petty restrictions and then they found they were obliged, to carry on their work, to get men of straw to sign their articles. Then next we find that the publication of any news disagreeable to the Government was stooped. After that the French press was not allowed to report parliamentary debates and, as a natural consequence, the Government went a step further and said—

The result of that is that to-day the French press is really a corrupt press. It is in the pocket of the politicians, and as one witness very aptly put it, “it is venal right through.” Take the American press. There, of course, there is no compulsion, but we know from evidence that the more the press indulge in signed articles the less reliable and responsible those articles become.

Why?

The Minister accepted those statements. He had an opportunity of cross-examining the witnesses. Then we have the very noted case of Horatio Bottomley. We know that that person gradually got the public round to his views and he, by his constant signing of articles, got them to accept whatever he said as gospel. We know what the result was, and we know that that system which grew in England under Horatio Bottomley is growing in regard to a certain section of the press also in this country. In Australia, where this clause was taken from, we know from the evidence that the law is an absolute dead letter to-day. We had it that in Germany the system which grew under Bismarck was so bad that every editor had to engage somebody who would do the sitting in gaol for him. The position is simply this, that the Minister has been forced into this position by a certain section of the Pact party, otherwise why is it that there is not a single section of his own press supporting him in this matter? The Minister of Labour has taken command, and the Minister of the Interior must not think that we do not watch things from this side. Why is it that when this and a few other similar oppressive matters were before the House, the Minister of Labour never left the side of the Minister in charge of the particular measure? Why is it that he is not in the House on other occasions when there is no legislation with the object of oppressing those who dared to criticize him and his party’s shortcomings. The Minister of Labour, of course, to his own satisfaction, can always refute all evidence and prove that he and he alone is right. He told us the other day that the evidence given before the select committee is absolutely valueless. These gentlemen who have risen to honourable places in their profession can give no evidence of value where the Minister of Labour is concerned. The Minister has shown himself so touchy and irascible a martinet, that he simply hates criticism and loses all sense of proportion. With all his faults, he seems to have an enormous amount of power in the present cabinet, and he seems to be able to say to the Minister of the Interior—

Why is he not sitting next to the Minister now?

Because he has had two bad days in another place, but will be here if the Minister’ of the Interior weakens in his resolve. I think this is an absolutely futile clause. I do not see that it can do any good, and the most dangerous part of the whole matter is the suggestion by the Minister that we could avoid the clause by a subterfuge. I move—

I desire to second the motion for the deletion of this clause. I do so because, after all the discussion, and all the evidence before the select committee. I have tome to the conclusion that this clause is simply futile and ridiculous.

Why be so afraid of it then?

I do not mind hon. members opposite making themselves so ridiculous by pressing for this clause, but, unfortunately, they are in a majority, and by passing this, they are going to make, not only themselves, but the whole of this House and the country, ridiculous in the eyes of the world. My hon. friend quite rightly says that the more important part of the clause is sub-section (b), but it is quite right not to confine this motion to the deletion of one particular sub-section, because the whole thing is certainly futile and ridiculous. We have been told the only country where there is a clause like sub-section (a) is Australia, and there no one pays any attention to the law, and it has become a dead letter. I have never heard in this country of vast sums being paid to newspapers to publish articles and reports, and I believe this clause is entirely unnecessary. As regards sub-section (b), that is even more ridiculous than the other. I do not want to go in detail into all the absurdities which an attempt to enforce the provisions of this clause will produce; they have been shown up already by the newspapers. It is legitimate, when one sees Ministers pressing a clause of this kind in the face of the overwhelming evidence they have had against it—because there is no evidence before the select committee in favour of it—to begin to wonder what is the real object that underlies their action. I think if one studies the speeches Ministers have made, one can arrive pretty well at what is the object. When this matter was before this House last, we had a long tirade from the Minister of Labour, against the iniquities of the press in general, and in particular the press which supports the South African party. He treated us to a long harangue about the iniquities of the syndicated press, and so forth. He was reminded that that had very little to do with the clause under discussion, and the Minister responsible for the Bill, himself, when he was replying on the debate, said that the great majority of the speeches delivered had nothing much to do with the clause. So far as the Minister of Labour’s remarks were concerned, he was perfectly correct. But the Minister of Labour showed his hand. He said, in effect, that he wanted to bring to book anyone who sheltered himself behind anonymity, and he was convinced that the control of papers by syndicates and so forth was iniquitous. Incidentally, he mentioned that the evils of that system would be minimized if everyone concerned in every paper at election time had to sign his name. I am sorry the Minister of Labour is not here, because I would like to remind him of something which happened a good many years ago, and which is very good proof that the mere signing of names does not solve all these evils. I remember when the Chinese labour agitation was at its height, a notorious journalist in the Transvaal, representing a syndicate of the London papers—the advanced Radical papers—his name was Outhwaite. I think, and his telegrams were sent with extreme recklessness, dealing with all forms of the iniquities of Chinese labour and so forth, and the chief source of his inspiration, as was believed at that time, was the present Minister of Labour. But the mere fact that the gentleman signed his name to everything did not prevent that syndicate of papers from publishing the same things in London, and publishing things which; I think, the Minister himself would admit, if he could see, them to-day, and could remember them, were by no means consistent with the truth. The Minister himself, in summing up the debate on the last occasion on which this Bill was before this House, gave us his views, which boiled down, amount to this. He said that he wants to bring the freedom of the press into line with what we usually call the freedom of speech. At a public meeting you can say what you wish, and attack anyone as you wish, but because that is done openly at a public meeting, and the public knows who it is that says it, he must bear the responsibility for it, and is subject to a certain control, and does not go to such extremes as if he did it anonymously. That responsibility we wanted to have at election time for every person who writes as well as fur, every person who makes a speech. That was all that was wanted. But I would say, what possible good is that going to do? Let us take the Minister’s bete noir, the “Cape Times. What possible difference does it make whether the leading article is signed B. K. Long, or whether it is known that Mr. Long is the editor of the paper, and that he is responsible to the world legally for everything that appears in it? What possible good will it do to have his name signed at the bottom of the paper? So far as anonymous letters are concerned, no doubt a good deal of nonsense is written, but that is a, comparatively harmless amusement, and there is, I suppose, in certain quarters, amongst certain classes of people, a feeling that if they gave their names they might to a certain extent suffer. The Minister does not agree with that. He says that if it applies to members of trade unions, there is not the least reason for them to be afraid, and that they are not afraid, because they are sufficiently protected by their unions and nobody can touch them. That does not agree with what is frequently said by hon. members on the cross-benches, but I think there is a great deal of truth in it. There must be a certain number of people who think they may suffer in business, or in their relations with employers or friends, if they sign their name, and if any protection of that kind, is needed, surely it should be available to the small man. The hon. member for Pretoria (West) (Mr. Hay), who is always to the fore on these occasions and whose chief objection to the press which supports the South African party is that it is ultra-British—which I don’t suppose anyone would accuse him of being—was the first person to assume that it was impracticable. The only reason he supported it was that it was a protest against what he called the ultra-British papers which opposed him. That is another argument for showing that there is no responsible authority supporting the Minister in proving that it is workable or will do any good. People connected with the papers, who support hon. members opposite, are against the proposal. I think the editor of “Die Burger” suggested that if half-a-dozen people disagreed with a report they should make an affidavit to that effect, but that is a cumbersome and futile proposal. He made no sort of suggestion as to how the clause could be made workable, while his lieutenant frankly said that the whole thing was impracticable. The Minister can pass the clause if he wants to, for we are not going to sit here all night in order to amuse him, and he can call in his majority. It is bound, however, to come back on hon. members opposite, and will make them more ridiculous. In all these matters it is generally the press which has the last word.

I am a little amused at the line of argument taken up by the hon. member for Cape Town (Harbour) (Maj. G. B. van Zyl) and the hon. member for South Peninsula (Sir Drummond Chaplin). They go on the assumption that because there was no evidence given by newspaper men in favour of this measure therefore we should not have this clause in the Bill. It is perfectly ridiculous to suppose that newspaper men would give evidence supporting any measure limiting their activities. Let me state a parallel case. Law is very expensive, and absolutely unattainable by the poorer classes of the community. Supposing a proposal came forward to cheapen law and justice, could we expect lawyers to offer evidence in favour of a quicker and less expensive legal system? We don’t expect it at all. We don’t expect members to destroy their own profession, and therefore we don’t expect the newspaper men to come forward with evidence in favour of restricting their operations. Newspaper men, like others, want as much licence as they can get.

The speaker is proceeding and I don’t think there is a quorum.

Order. I am informed there is no quorum. I just want to ascertain if that is so.

House counted, and Mr. Speaker declared that a quorum was present.

Regarding the parallel case I put in regard to the law, let me put another case. Do you expect those who supply liquor to advocate local option, prohibition, or any restriction on the sale of liquor? It would be perfectly absurd. We did not expect there would be any such testimony as the Opposition ask for. No, our indictment in this clause of the ultra-British press is that there is no sense of fair play in the South African party press. It is racial, and plays up animosity on purpose to divide and conquer. It is owned by wealthy people who have only a remote interest in the welfare of the people of South Africa, but who have a big interest in extracting the wealth of South Africa to the detriment of this country. Their second object is to use their press in the cleverest possible way to build up this constant friction and drive a racial wedge in the community. They make a profession that is not their object, but you see it everywhere between the lines in their press.

What about “Ons Vaderland”?

Did you ever read of the British press here condemning the Jameson Raid or the consequent war?

Do you read the “Guardian”?

I have no interest in these papers, and when I owned a paper it was my own; I owed allegiance to nobody. My experience of this South African party press is that during election times they won’t even allow correction of a mistake. Again and again I have sent letters asking to allow me to state what I really said, but these representations have been pitched into the waste paper basket. It is impossible to get fair play from the ultra-British press in times of elections, and this clause will not operate. The wealthy owners of these ultra-British papers can put up their thousands at the time of an election and pay the penalty of defying the law. They will “chance their arm” because they have enough money to pay penalties, and that is why I said it would be a dead letter. But it remains for all time as our indictment of a public press that does not and will not give fair play to the people of this country. I trust that the Minister in charge of the Bill will see that this clause is retained and incorporated in it, so that gentlemen opposite whose withers are suffering from being wrung will have the satisfaction of knowing that they brought this about by the action of their own party press, and whatever there may be of irritation and trouble arising from it has been brought about by their own actions.

I want to say a few words without any party feeling. I think that the section is not a party matter. We are engaged here in reducing the rights of the press and in that way the rights of the citizens of the country, and before we consent to that encroachment it is right that we should freely express our opinion about the proposed reduction of the rights of the press and of the people of South Africa. What will be the position under the section? If a newspaper permits anything to be published without being signed with the name and address of the writer of the article, even if the article is in a moderate tone and expresses moderate views in political matters, then the publisher of the newspaper is liable to a fine of £100 and loses the franchise for two years, and is debarred for two years from filling any public or legal office. Not only is he fined, but he loses his citizen rights. Now I ask, where is the demand for that"? Have the public in the past asked for such a provision? After listening to the speech of the hon. member for Pretoria (West) (Mr. Hay) it is clear to me that the demand came from the Labour party. It is wonderful that that class of men, socialists who allege that they love freedom, act tyrannically and autocratically in insisting on such a thing. We have a clear proof of what they are doing in Russia. Is there freedom there for the citizens? The so-called working class, the socialists, are in power there. Does freedom exist there? In that manner the rights of the people are suppressed. The Minister of the Interior and the Nationalists allow themselves to be used in carrying out by this section the policy of the socialistic party. I am astonished at the Minister. This is the first decision. The next will be an attack on the secrecy of the ballot, that will be the next attack on the rights of the citizens of Souh Africa. It is our duty to protect the people by the press and the ballot box. But this section takes away the rights of the people so far as the press is concerned. Not alone are the rights of the press limited here, but if the rights of the press are attacked then the rights of the citizens also are injured and limited. And this is done by the hon. Minister and the party who are always talking about respect for all portions of the population! Is the press then not a part of the society of South Africa? Have the press as a whole, and the population that is behind the press and responsible for it, asked for such an alteration? All the evidence showed that the people are against it, that they feel that an injustice is being done. Does the Minister then respect the press and the people responsible for it? The section suppresses the rights of the people. Where have the people asked for it? Is there a sign in the country which shows that it is demanded? Was it ever brought before the public at the recent election? What becomes of the workmen under this section? He is in a factory under strict discipline and there are things which ought to be put right in the factory. Can he under this section go and say something in the newspaper about it and call attention thereto? The rights of the man are curtailed. He is continually asked to sign his name, and the result is that possibly legitimate grievances cannot be brought by him to the notice of the public. He cannot air his grievances and the difficulty under which his fellow citizens live cannot be published. The rights of the people are being taken away. At the present time the press and the public are on an equal footing. The citizens have the same rights as the press, and the press have the same rights as the citizens. The citizens and the press can say what they wish. The citizens and the press can write what they think fit. They are only limited by the common law of the land. The press and the citizens are responsible under the common law of the land and they cannot go too far. This section now says that the usual general protection under the law is not sufficient. We must step in and the citizens and the press of the country are robbed of their rights. It is said if the name is signed to articles things will not appear in the press which are untrue or a stain on another man’s character. On one occasion before the general election held last year a sworn declaration appeared in “Ons Vaderland” which was subsequently blazoned forth in the whole National press throughout the whole country to exercise influence on the election. Was that the truth?

Yes.

Why then did “Ons Vaderland” have to apologize?

Only with relation to Breytenbach.

The accusation of Breytenbach was not true. And the declaration that was sworn was not true. I ask: Where are we heading? The Minister has himself been an editor of a newspaper. Is it his view as editor, as a man who has to work for the development and education of the public? Is it his experience that the section is necessary?

The whole country welcomes it.

Does the whole country welcome the curtailment of the rights of the people? I am sorry that hon. members opposite are making a party matter of this. I think that we as Afrikanders with the love of liberty we have should not go to work in this way. Look at the past. See what the press has done in the past for the building up of civilization in South Africa, for the development of our constitutional privileges, and then we come to-day and slight everything that the press has done in the past. If we look at the history of the past then we see that we have practically to thank the freedom of the press for everything, and now we go and reduce that freedom. The day will come when we will very much regret what we are doing against the true interests of the people. I repeat my question as to where the demand comes from to encroach upon the freedom of the people.

I should have thought that the hon. member by this time would have begun to listen to reason and common sense and to recognize as has been pointed out that every newspaper of importance in this country has condemned the attitude of the hon. gentleman in putting this clause into the Bill and one would have thought the hon. gentleman would have experienced instantaneous conversion. I would ask him how he would carry the law through in a particular instance. The hon. member went to Malmesburg—I believe—in October, 1922, and made a great and historic speech. It made a great impression on me because the hon. gentleman enunciated the most beautiful principles. Referring to coalition he said it was wrong and demoralizing. That it was a traffic of principles, a violation of conference and an act of dishonesty on the part of political leaders. Supposing the hon. gentleman’s Bill goes through, and he desires on the eve of an election to give expression to those sentiments, what would his position be with his friends who sit there on the cross benches? He would be terrorized for expressing what I understand are very honourable and, I might almost say, holy sentiments. The hon. gentleman now that he has entered the house of bondage will prevent himself giving a lead to the country. I understand that the Minister before he left Cape Town left a typewritten copy of the speech here. When he delivered the speech at Malmesbury the reporter had to send a telegram to Cape Town stating that the report must be released. I want to ask the Minister if that had been done on the eve of an election, would he have had to sign the speech; would the reporter who wired instructions to have the speech released have to sign it? The English newspapers were so impressed with the importance of the speech that some of them had it translated. Would the translator have to sign it as well? My legal adviser says that he would. Or would it have been necessary for the signatures of all three persons to appear at the bottom of the report? I only mention these things to show how utterly ridiculous the Minister by his obstinacy is trying to make Parliament look. It is utterly impossible to carry out a law of this character, and one would like to know whether there has been some malign influence at the back of the mind of the Minister of Labour, who has jockeyed the Minister of the Interior into this extraordinary position. We all know it has not come from the Minister himself. The Minister was an editor and he knows how impossible it is to carry out this clause, and the hon. Minister knows that those with whom he was associated, and I am not talking about the ultra-British press which has made such an impression upon the hon. gentleman who sits over there, but the Minister knows that section of the newspaper press most intimately acquainted with himself, knows that it is impossible to carry out the clause and that it is ridiculous to try and do so. I am afraid the hon. gentlemen opposite had an idea the Minister was going to give way, and for the purpose of preventing him he has been flanked by those two stalwarts who have been responsible for placing the Minister in this position.

You said he was subservient to them.

No, the Minister is getting praise this evening. This is one of the hon. gentleman’s triumphs. The hon. gentleman has not graced the House with his presence this evening, but when he heard this clause was coming on, he and his colleague rushed into the House to see that there was no possible way of escape from the bondage the Hon. Minister is in.

It is unfortunate this question should come up for discussion always at a late hour in the evening. I wish the hon. Minister would agree to report progress.

No, no—Go on.

It is unfortunate the last time we debated this important question, we did so in a depleted House in the small hours of the morning, and we start again to-night on the same expedition.

We are not sitting tomorrow.

I for one would like to discuss this question in a better atmosphere.

Go ahead, there is plenty of time.

If I must go on, I would like to refer to the speech of the hon. member for Pretoria (West) (Mr. Hay). Whether there was justification for the attack he made on the British press of this country, I am not going to make any comment. I want to point out that the whole of his speech might have been a good argument for suppressing the press. I want to ask the hon. gentleman if he thinks this evil exists, how, by merely signing articles contributed to the press, the evil is going to be remedied. I ventured to suggest the other night there was a possibility where an article was signed, that a greater evil might be effected than where an article was anonymously written, and I illustrated the case of the “Guardian”. I think the “Guardian” is the only considerable paper in South Africa where the editor signs his name to the articles. Mr. George Reyburn is the editor and part proprietor of the “Guardian.”

Wrong.

Is the hon. Minister the editor?

No.

Then he is a contributor. I don’t want to refer to the number of times the hon. gentleman has had to apologize and pay damages for libel. I want to refer to the kind of articles I allude to. Recently in the columns of “The Guardian” they reported an interview in which a gentleman named George Hulett, the only English Nationalist in our part of the world, had made a suggestion that the proper thing for the future of South Africa, politically, was for gentlemen over there to join with us and to oppose labour. That was Mr. George Hulett’s suggestion as to how the politics of South Africa might advisably be run in future. That was not a suggestion that came from this side of the House, but from a prominent Nationalist in Natal. How is it reported by the “Guardian” under the signature of the hon. member for Durban (Umbilo) (Mr. Reyburn)? He says—

The suggestion there is that the South African party desire to join the Nationalists in order to scuttle the Labour ship across the way. I ask, in all fairness, I ask the Minister in charge of this Bill, is that article likely to effect more injury or articles of that description written during an election period, merely because it bears the signature of George Reyburn, or any other gentleman similarly circumstanced? On the contrary, I maintain that the signing of articles of that description does more wrong, does more evil than if the article were to appear before the world as an anonymous contribution to the press. I again say that very exaggerated articles and leaders have, from time to time, appeared in the columns of “Die Burger”. All the world knew who wrote those articles, and I say that their influence for good or for ill was contributed to by the circumstance that the hon. gentleman opposite wrote those articles. Would they have done more good or more harm if the hon. gentleman’s name were appended to them? The whole idea behind this clause is that you are not attempting to suppress the press; you are trying to cure an ill in your own imagination by asking merely that the article should be signed. This is not a new experiment. This idea has been taken over from the Australian legislation, and one can learn a very good lesson as to what has taken place in that country under similar legislation. It has been stated that this provision in the Australian law has, to a very large extent, fallen into desuetude, and I have been at some pains, since the last discussion was before this House, to find out what the position was in Australia. I find that the press of Australia has done what is likely to happen in this country. It has declined to report meetings, and it has even gone so far as to decline and to refuse to report the proceedings of the Parliament and the Senate of Australia. What has been the result? I would like to read to hon. members a motion that was tabled in the Australian Senate during last year, as indicating what is going to be the result of this particular class of legislation. In the Parliamentary debates of Australia, in the Senate House (page 3437), will be found a notice of motion. Notice of the following motion was given by Senator Lynch of Western Australia. This is the motion—

This is not a joke; this is a matter that was seriously debated in the Senate House in August of last year. I can picture to myself in years to come the Minister in charge rising up in this House and complaining that his speeches are not properly reported in the public press and introducing a motion in similar terms to this. But the Senate has gone further in Australia. I see on one occasion, again towards the end of last year, a question was put to the Postmaster-General in this form—

That is what it has come to in Australia. On the one hand to add further repression and suppression to the press; on the other hand that that press in its own protection having refused to report the proceedings of the Senate should be practically compelled to report them. I do at the last moment ask the hon. gentleman opposite to consider again before they force this question through the House in the manner they are doing. It is impossible in the present atmosphere of this House to deliberate and seriously consider this question. Why is the Minister always adopting these tactics of trying to force this measure through practically at midnight?

The bewitching hour of midnight!

We have never had an opportunity of considering the evidence given in this matter in committee. The last time this was up we debated it for four hours, and it was half-past three when we adjourned. I have done my best to point out where this type of legislation is leading. The Minister of Posts and Telegraphs sees the difficulty he may be put in, in years to come, and I say to the Minister of Defence, who I know has had a great hand in this legislation, that he is going the wrong way to remedy the evil to which he refers. If what he calls the “syndicalists press” is indulging in undue licence or the conduct of the press is not what it should be, there are other ways rather than the method adopted by the “Guardian” of signing articles.

I find it very difficult to accustom myself to the various roles that the right hon. member for Fort Beaufort attributes to me. One day I am a subservient miserable follower, without a word to say for myself—

It is like the Agricultural Department—one week English, one week Dutch.

It is a difficult attitude to maintain; because the next day he attributes to me a rather rigid domination of my colleague. If there is one thing upon which we on this side are entirely united, and I think our followers throughout the country are united, it is, I think, in realizing the meaning of all this lengthy discussion on this matter by hon. members opposite—the meaning of all these howls; because, without the daily press of this country, they would be an insignificant group in this House. Do they think, by mere laughing, they are going to convince anyone that they are not fully alive to the fact that upon this press they lean as upon the only staff they have in this country? And what is it? Every day, in the press, you will find something which it is impossible to conceive as inserted, except with the malicious aim of entirely misleading the public and of attributing to the party in power something which is not attributable; something to create prejudice.

Do you think that is confined to one section of the press?

I will be candid. I have little use for the press on any side; but I will say this: That, for real, consistent, malicious misrepresentations, every day, commend me to the South African party press. There is an instance in this evening’s “Argus,” on the cable page. We all know that the Wage Bill, which was discussed in this House, and is now being discussed in another place, has the inveterate opposition of hon. members opposite, and all their press, and if they can convince the people of this country that there is something very evil in the adoption of that, so much to them. The “Argus” says—

That was the Bill we passed ourselves.

That is exactly the point. In so far, if there is any truth in this, it is due to the operation of the Act the hon. members over there are responsible for.

Obviously, for your Bill is not passed yet.

Obviously to us in this House. Does any member suppose that those who conduct this newspaper do not know that the Wage Bill is not law today, and does anyone in his senses—

Are you basing this charge of misrepresentation on this silly thing?

Tell an obvious lie and it is innocent! It is merely a little thing, just to catch the eye of someone who will say—

Do you say that is a deliberate lie?

I certainly call that a deliberate lie, and the newspaper and the conductors of that newspaper knew that it was a deliberate misstatement.

Was it not your own regulation issued the other day fixing the rate of wages?

It is the work of the Industrial Council established under the Act which hon. members over there passed with our assistance.

As is perfectly obvious to anyone who reads it.

The hon. member attributes to the man in the street a more careful following of the actual position in Parliament than the man in the street usually indulges in. What is the impression desired to be conveyed by those who believe that the Opposition have been absolutely right in all their objections? It is that this Wage Bill, which is not yet law, is responsible for something which they allege has taken place.

The very same issue of the paper contains a report that the Senate is discussing the Wage Bill.

But the ordinary man reads the cable page. Hon. members over there would be very ungrateful if they did not, on every occasion, stand up for the press which makes it its business to support them, in the little ways in which they insinuate things, in the ways in which they report. I am very much obliged to the hon. member for leading out that resolution in the Australian Senate. I think it is an admirable resolution. Five years ago a newspaper, which was accommodated with a place for its representative in the House made a statement that in future it would not report a word said by the hon. member for Troyeville (Mr. Kentridge). I think if the House had studied its own dignity, it would have very promptly taken steps to notify any newspaper which dared to say that nothing an hon. member said would be reported, that in future it would not be accommodated with a place in the gallery. That is only an extreme case.

You want to go back to the middle ages.

Didn’t the hon. member for Troyeville (Mr. Kentridge) make himself—

The hon. Minister is discussing other matters than this clause.

With profound respect to your ruling, sir, the whole discussion has turned on the need to limit and curb the press in its licence, and I think I am quite entitled to make out a case that the press should be curbed, and should be subjected to restrictions, and I take every possible opportunity I have of exposing again and again that the press and the licence of the press is one of the greatest dangers to the healthy development of democracy, and something which deserves, which requires—

Why only at election times?

Oh yes, I would like to extend it, but I am not the author of it. Anything done to stop the licence of the press is helping to stop them from filching the judgment of the people.

We have heard a characteristic tirade from the Minister of Labour. It is his pet hobby. He has just said the liberty of the press was one of the gravest dangers to democracy.

I said licence.

They are very fond of mixing up liberty and licence. If it is a danger to democracy, the only country of the world where this sort of muzzling of the press is done is Russia.

And Australia.

No. In Australia it is a dead letter. I have an article by Lenin, written in 1917, in which he advocates muzzling the press, and in no other country in the world outside Moscow is the press muzzled. In France it was muzzled in its decadent age in the time of Napoleon III.

Mr. Pirow is flying to get some inspiration.

It has been the experience of history that when a country starts muzzling its press it is either a sign of despotism or weakness. The House can choose which it is at present. I notice a curious thing in the House: Nationalist members interject now and then, but we have been discussing this muzzling clause for seven hours, and not one Nationalist member has got up and defended it. We kept them here until 3 o’clock in the morning to give them a chance.

We are amused at your speeches.

Will the public be amused?

The public are satisfied.

Why is it the Nationalist members have not opened their mouths? The Minister of the Interior sits there with two Labour Ministers holding his hands. They sent an S.O.S. into the Lobbies, and two Labour Ministers rushed in and will not leave him. He was on the point of seeing reason, but the two Labour Ministers refuse to budge. Look at the Minister of the Interior now; he does not look like a man piloting through a successful Bill. The Minister of the Interior is taking refuse in silence. He dare not say a word with two Labour Ministers sitting next to him. Not a single Nationalist member has had the courage to say a single word. It is easy to make interjections, but will the hon. members get up and say what they think of the Bill.

What time do you wish to keep us here till?

How long do you wish to discuss it?

Until it has been long enough to elicit an expression of opinion from the Nationalist benches. I did the Minister an injustice the other night. I was under the impression that this was purely his vendetta against the S.A. party press. It has that element. But since then I have found that the deciding factor, the controlling factor, is the Labour party. Only the Labour party so far has had a word to say in favour of this clause. I sincerely hope that the Minister will withdraw this eminently stupid clause. He is making himself a laughing stock to every office boy and printer’s devil in the Union. Look at the clause itself, how badly it is worded. I cannot understand the Minister of the Interior. After seven hours’ debate, he is doing what he has done on a previous Bill—he has not answered one single question that has been put to him. I think in a House like this the Minister has no right to wrap himself up in silence and not give a reply to the questions put to him. We are supposed to be a democracy, a free people. I am sorry that the Minister looks so balefully. I do not like him to glare at me I believe that last night we had some theatricals from the Minister of Railways.

Will the hon. member kindly confine himself to the question?

I was going to suggest that it would better become the Minister of Railways if he would answer some of these questions which have been put regarding this clause, instead of indulging in interjections.

If you make attacks, it would be better if you would remain here and not run away.

The hon. member must not refer to a previous debate. He must confine himself to this clause.

The Minister accuses me of running away. I do not think I have ever run away from any debates. If there is one member who has sat in this House throughout the whole of these five months, it is myself. I did not run away. In five months I have only been absent on one solitary occasion, and the Minister of Railways and Harbours accuses me of running away. There is no cause to run away from anything he says. I hope the Minister will not run away from this Bill in the way the Minister of the Interior has run away.

You ran away from what you said yourself.

No, never in my life. I do implore the Minister to withdraw this clause. I do not want to see the Minister stultify himself, as he is going to do, by passing this. Why, in order to placate the Labour wing of the party, should he take such a step as this, a step abhorrent to our every instinct, abhorrent to the character of South African people to have this sort of thing hoisted upon them. I have looked through the Bill, and I have made a rough estimate that it introduces about. 50 new crimes, and penalties to the tune of £100,000. This is the sort of freedom we are getting under the present Government. It is not a laughing matter to bring in a restrictive clause like this, interfering with the liberty of the press, with the liberty of the subject. Above all, it is going to make a laughing stock of this House, and a laughing stock of the Government, although that is of less importance compared with the fact that it is going to make a laughing stock of the people of the Union. I implore the Minister once again to remove himself from the contagion or rather influence of the Labour wing of the Pact. Let him assert himself for once. The Government have not been able to assert themselves during the present session, but now let them show a spark of political manhood, rid themselves of this Labour incubus, and do the right thing.

I am very glad to see that hon. members are so anxious to hear me, because I speak here as a farmers’ representative. The hon. member for Port Elizabeth (Central) (Col. D. Reitz) says that this is labour legislation as he said at Swellendam. He also said that all our legislation is Labour legislation, but I want to tell the hon. member that he has got out of sympathy with the farmers since the time that he left Heilbron. He says that the farmers do not want this Bill. If he had listened carefully in the country, then he would know that the farmers welcome this Bill. They are not in the habit of reading much, and if they read anything they find that the hon. member for Caledon (Mr. Krige) has said that if a farmer has three calves under the tax he can keep one, give one to the State and the other to the Labour party. I do not believe that he said that, and I want to protect him against the accusation.

I did say so, because that is the case in Russia.

Yes, but we are here in South Africa. We want to protect him against such misrepresentation, so that he should not appear ridiculous with such writings in the eyes of the country. I come to the people who are a little bit backward, and they say to me: “Uncle Attie read us the bundle of literature we have received.” I then learn that it is a lot of stuff bearing no name, but which is only intended to frighten the people. In this Way one, Nel, of Stellenbosch, read out to the people from the “Mossel Bay Advertiser” that a man from Pretoria had written to the Paarl about a wagon. It used to cost £86 and now £130 is quoted, and this is attributed to the Wages Bill of the new Government. When I saw this, I asked at once who said so. It then appeared that it was mot stated who had said so. It says that a certain person had written to that effect. Our people are not told. The literature is not sent to us who are enlightened, and the people believe that what is written is written. Our farmers think that this section is the best in the Bill. I submitted it to them at the time, and they say that it is the best thing. I do not know whether the workmen want this Bill, but the farmers want it. Members, such as the hon. member for Caledon, must be protected. He now hears so much about the matter, and comes and preaches here just like a parson, and the hon. member for Fort Beaufort (Sir Thomas Smartt) has almost shed tears about the matter. When the hon. member for Cape Town (Harbour) (Maj. G. B. van Zyl) began to argue that a wrong was being done, then I knew that we were right, and that it would be beneficial to our farmers.

I have not yet had an opportunity of addressing the House on this clause. I feel that I should not allow this to pass into law without voicing my protest in regard to it. I listened with great interest to the speech of the hon. member for Pretoria (West) (Mr. Hay). That hon. gentleman is a very considerable asset to this party. We can always: rely on hearing from his lips truths that are inconvenient—inconvenient to his own side. I remember the hon. member telling us, on a historical occasion, in alluding to the position of his party in the Pact, that they were between the devil and the deep blue sea, the party on this side being the devil, and the deep blue sea being the Nationalists. To-night he has made a remarkable admission in regard to this clause. He says—

He wants us to pass a vote of censure. I do not think he even said on the South African party press, but on the English press, and that is what you are doing by passing this particular section. We know, from the indiscreet admission made by the hon. member for Pretoria (West), what the reason for this particular clause is, and we know something of the price the Labour party has paid to put this clause in the Bill. We know that this particular clause is, in the minds of the Labour party, the most important clause in the Bill, and we know that, for this Bill, they have sacrificed some, at any rate, of the ideals for which they have stood for many years. They have, for instance, thrown over women’s enfranchisement for it. Why have they done that? Because they reckoned they would get a sordid party advantage at the next election. They hope, by this means, to clip the wings of the press, or that Portion of it which is against the Labour party. They admit, and I hope the Minister heard that admission, that this clause is going to be a dead letter in the future. I am not prepared vote for this clause if only for the reason that it would mean an admission that the barges urged so recklessly by the hon. member for Pretoria (West) (Mr. Hay), and urged with equal recklessness by the Minister of Defence, are true. They are not true, and every hon. member in his heart knows they are not. Every newspaper makes mistakes, but I challenge any member to produce a real example of deliberate falsehood in our press. Does the Minister seriously hold that this item in to-night’s paper is deliberate falsity?

On a point of order; there is no quorum.

House counted, and Mr. Speaker declared that a quorum was present.

I fear there were certain hon. gentlemen who did not get the beginning of the point. I was making. It was a reply to the puerile suggestion made by the Minister of Defence that there was in to-night’s “Argus” an instance of the deliberate falsification of news. The charge is so puerile that one has only to look at the paper to see how warped the Minister’s mind is in regard to the press. He says that in to-night’s “Argus” there is a statement which refers to the new Wage Bill. It certainly does say—

and that the position has arisen as the result of the Wage Bill.

They knew it wasn’t true.

A very serious charge has been made against the newspaper. If hon. members will give me a chance instead of making a noise like a farmyard, I might get ahead.

Get on.

I will get on if hon. members will allow me to. The charge is that this item of news was deliberately falsified. I say that is a puerile charge to make, because in the very issue of the paper in which this report appears, you have in large headlines—

This showing that the Wage Bill is under discussion in another place at the present time. If the Minister’s charge was that this was an error I admit it, but if the charge is that it is a piece of deliberate falsification, it is a puerile one and unworthy of the Minister who made it. Does the hon. member for Heilbron (Mr. M. L. Malan) know the difference between a falsehood and what is incorrect. A falsehood is something deliberately said to he true when it is not. The hon. member himself is not always infallible and on many occasions has made a statement which has turned out to be untrue. He did not tell a falsehood he merely made a mistake. Now, does he know the difference? You can see from the paper itself a mistake has been made in the headline and to turn that into an accusation of telling a deliberate lie shows the insenate prejudice the Minister of Defence has against the press. I should have thought the Minister, in view of the remarks of the Minister of Railways against the hon. member for Port Elizabeth (Col. D. Reitz), would have stayed here and listened, but instead he has made a charge and run away..

On a point of order there is no quorum.

House counted, and Mr. Speaker declared that a quorum was present.

My hon. friends opposite seem concerned over the fact that hon. members on this side of the House are not here. I have not come to preach to the converted, but to call upon the sinners to repent and therefore I am pleased to see so many members on the opposite side. I hope the Minister of Labour will not go now because I want to refer to the charge he made against the press. He made what I characterize as a puerile charge of misrepresentation against this paper and it shows how blinded with prejudice he is against the press of this country that he should make a charge based on this evidence. I have listened to the hon. Minister of Labour for ten years in the House making charges of bias and misrepresentation against the press of the country. I never heard him come to earth and give a definite instance until to-night and if it is the best he can do in showing there has been deliberate misrepresentation on the part of the press. I am sorry because I admit at once this headline is a mistake. What follows has reference to the Wage Bill as a fait accompli and I admit is mistaken. I say the Minister’s charge that it is a deliberate falsehood intended to mislead the public—

Yes.

Then it is too childish for words to make that statement. The paper shows that the Wage Bill is now under discussion in the Senate and if this is the best the Minister of Labour can do in bringing home these charges of deliberate misconduct against the press of this country then I am sorry for him.

There are a lot more.

The Minister has a lot of good points.

Too many.

He sees red on too many occasions. Point No. 1 is the mining houses, point No. 2 is the press.

I was told I had only got one hobby—the press.

I am not talking of hobbies: I am talking of vices. I feel bound to protest against this clause being passed. My reading of history assures me that the surest sign of retrogression on the part of any country is when it starts to Curb and muzzle the press of the country. I was reading tonight again a portion of Milton’s Defence of the Press and there he points out in language which is probably the most eloquent prose which exists in English how it is the surest signs of a nation’s retrogression when it starts to muzzle or licence the press whether for printing books or newspapers or pamphlets or anything else. I say that what is being done in this section tonight is going to be a blot on the statute book. It certainly is not going to forward the cause of the Nationalist party and the Labour party one inch, and, even if it were, that is not a justification for putting such a law as this on the statute book of our country.

The hon. member who has just spoken—

I beg to call your attention, Mr. Speaker, to the fact that there is no quorum present.

House counted, and Mr. Speaker declared that a quorum was present.

The hon. member who has just addressed the House (Mr. Blackwell) proved to his own satisfaction, but not to anyone else’s that an incorrect statement made to mislead people is not a lie.

I did not say that; I said the converse.

The hon. member admitted that it was an incorrect statement. When a statement is published in a newspaper, which is circulated to disseminate news, it would lead one to believe that it was published to lead or mislead, and, being incorrect, it would mislead, therefore* being admittedly misleading it must have the value of an untruth. The Opposition seem to be very jealous of the reputation for mendacity of their press. That seems to be mainly what is at stake here. A press which publishes the truth or one proven untruthful is equally useless to them. The Minister of Labour quoted one instance of an incorrect statement. I will quote another, also in the press, which is not an incorrect statement directly, but which certainly conveys a very incorrect inference. I refer to this morning’s “Cape Times”.

The hon. member may not refer to that.

May I not quote something from a newspaper which is relevant to this?

The hon. member cannot quote from a newspaper referring to a debate in this House.

I may not?

No.

Oh.

The hon. member may refer to the question, but he may not quote from the paper.

The public generally look to the press for their information as to what transpires in this House, and naturally their views in politics must be proportionately influenced by what they read. When we have a certain discussion in this House, and a certain step taken by a party in this House is represented as having been taken by another party altogether, then we can see this party has some interest in seeing the press has unlimited liberty to mislead by influence facts which transpire in this House. When we find reports of speeches curtailed and others reported almost verbatim, then we must assume that this has been done with a view to misleading people as to who actually took the lead in directing the debate in this House. Those who are interested in the matter, if they will read this morning’s “Cape Times,” will see exactly how the press misrepresented what transpired in this House. On this occasion the vital interests of the native were championed by a party opposite to that which claims to be their only advocate. This would be embarrassing to the Opposition if it were broadcasted so it became necessary to misrepresent the facts. It is not a lie, but it is certainly a most misleading report of what transpired. If that sort of thing bore the signature of the person responsible for it, then people who read subsequent articles signed by the same individual would know what value to attach to them.

The hon. member for Springs (Mr. Allen) has coined for the occasion the phrase—

and I gather that he was referring to the S.A.P. press, and so was merely following that line of thought which has been conspicuous since this Bill has been before the House. That is part of the very hard bargain which hon. members on the other side have been compelled to submit to, by being parties to a Bill which will “clip the wings of the S.A.P. press,” and enable them to “deal faithfully” with contributors after making them disclose their names. It is interesting to look a little afield, and see what appears in other newspapers in this country. I have a most interesting article before me, which I think would appeal to the hon. member for Springs, with his high regard for truthfulness and his wish to destroy this mendacity to which he refers.

I referred to any press.

A few minutes ago the hon. member was appealing to the gods in regard to the iniquities of the S.A.P. press, which the Bill was introduced to deal with. The paper I referred to is a paper of recent date and it states—

What paper is it?

We will come to that presently. That was a very disgraceful, libellous, mendacious statement, and it was not uttered or published by any paper that might be described as belonging to the S.A.P. press. As a matter of fact, it was published in a paper which was afterwards compelled to apologize. The apologies which have appeared in the S.A. press since July or August, so far as I know, have all been in newspapers associated with the parties on the other side. I believe I see signs of conversion in the hon. member for Springs. I have sufficient belief in his fairness to imagine that, when I read this to him, and show him in what particular newspaper it is he will withdraw his remarks. If he does not do so, it will be an indication of the degree of fairness to be found on the other side of the House. Now I come to what the editor was subsequently compelled to publish.

(Midnight.)

Under the heading of—

a certain paper published the following—

This concludes that very excellent advice which I would like to tender to the hon. member for Springs (Mr. Allen) before he charges the South African party press exclusively with unfairness and that is to investigate whether his complaints are found on fact. It would be necessary then for him to admit that he owes an apology to the papers he maligned a little while ago. The extract I have just read is from “Ons Vaderland.” First you charge the press with mendacity, and then yon, as your interruption now shows, charge a senior official of the civil service—who has no opportunity of replying—with mendacity. This, I suppose, is the process of “dealing faithfully” with these people and with people with whom one does not agree. Coming to the Minister of the Interior, I feel I ought to join in asking him to moderate the clause. The Minister accused the hon. member for Cape Town (Harbour) (Maj. G. B. van Zyl) of repetition, but the Minister had very little justification for that. May I remind him that repetition has its value? Dr. Johnson, when interrogated by Boswell on the question of the futility or otherwise of repetition said—

We desire to pay a very special compliment to the Minister by saying what we think of the Bill six times in the hope that, if we do that, there will be some chance of convincing the Minister. I want to come back to the merits of the matter. The three classes of the publication which this section is designed to meet we may classify as the anonymous letter, reports of speeches and leading articles. When the hon. member for Pretoria (West) (Mr. Hay) was speaking I invited him to say on what grounds he suggested this particular clause was necessary and I asked him whence the demand came for legislation of this kind. I asked him to state, amid that flood of violent language in which he indulged, on what it was he based his suggestion that this particular clause was necessary, and he spoke of the hardship he had experienced because of the ultra-British press.” He indulged in broad statements without going into particulars. I am still waiting to learn—

Are you referring to what I said about the law courts?

No, I think you have very little knowledge of law courts.

He knows something about breach of promise.

Oh, yes, and about company liquidation. I was wrong when I said he didn’t know anything about the law courts.

You are not at your best to-night,

Dealing with these anonymous letters, we have heard from the hon. member for Liesbeek (Mr. Pearce) about “the mothers of 16,000,” and I think the hon. member for Umbilo (Mr. Reyburn) referred to the “ex-trade unionist” who did something, but apart from these isolated instances, we have had no information why it is hon. members consider this is a measure which will promote their interest, If we come to examine the result of the legislation and what will come from it we find in this country, so far as leading articles are concerned, that the rule likely to be adopted is the rule adopted in Australia to-day. They have legislation of this kind on their statute book, and every leading article is supposed to bear the name of the author at the bottom. These articles, as a rule, are written in consultation, and the practice in Australia is to print at the foot of a leading article words to this effect: “produced by some named person (probably a sub-editor) in consultation, to represent the policy, let us say, of the ‘Melbourne Age’.” So in South Africa, if it is desired by means of this particular clause to extract the name of the writer of a leading article, it will be found that in the last resort a name will be given, quite properly, which will not lead hon. members along the track that they desire to follow. Apart from its doing away with the distinction which now exists between signed and unsigned articles, it seems to me that those whose business it is to Write for the press are placed in a false position. To-day when an article appears in a newspaper and initials appear below, or it is signed, it is perfectly clear that the newspaper is not responsible for the views expressed in that article. When you come to consider the policy that underlies this particular section, one must come to the conclusion that it is part of the vendetta that my hon. friends on the left have against a particular section of the press. I do hope that, when the country comes to consider the measure and the manner in which it has been forced through this House, it will remember that we on this side of the House did enter our protest against it, and I also hope in the future, when the futility of the measure is exposed, that hon. members opposite will realize that the danger was pointed out to them.

The hon. member for Cape Town (Gardens) (Mr. Coulter) has, in my opinion, put up an excellent argument for the retention of this particular clause I cannot for the life of me understand what the real objection is on the part of our friends on, the Opposition side to this clause. If the hon. member for Gardens will refer to the first line of Clause 44 he will find that it reads:—

It is not only the “Argus” or the “Star” or the “Cape Times” or any other daily run in the interests of the South African Party, but every newspaper has to conform to visions of this clause. It is not, as the hon. member for Bezuidenhout (Mr. Blackwell) would lead the House to believe, intended to operate entirely against the South African party press. Of course that is not so. There is equality of treatment. The hon. member for Bezuidenhout asked the House to give him an instance of deliberate falsity of news. I have here a cutting from a South African newspaper which, if not deliberate falsity of news it is at all events a good example of the old newspaper dodge of not exactly telling a lie, but not telling all the truth. This comment is signed with the initials L. E. N. In the concluding paragraph of his article contributed to the local afternoon paper, and dealing with the debate which took place during one stage of the present Bill—

The hon. member may not quote from a newspaper something referring to debates of the House in the present session.

I am not going to quote from a members speech. I intend to read from a comment in a newspaper dealing with the debate.

The hon. member is not entitled even to read the comment.

Very well, I am sorry. It would have been a treat.

Hard luck.

I wish to refer to Standing Order No. 62 in order that hon. members may know what the position is in regard to this—

This comment would have shown how it is possible for the press to distort facts, and the journalist responsible for this, concluded by saying that notwithstanding the efforts on the part of the labour members of the House to show that they were not voting against the enfranchisement of women, many suffragettes who occupied the public galleries must have listened with amazement to the Labour party refusing to support the franchise to women. This had, of course, the effect of conveying to the public mind that the Labour members were voting against a principle always held by the Labour party. I am in entire agreement with sub-section (b) of this clause. The general public should be fully informed as to who is responsible for much of the electoral matter published at election times. There is a pamphlet headed—

The matter is set out in parallel columns. One is headed “General Smuts”—

Mr. Speaker, I draw your attention to the fact that there is no quorum.

House counted, and Mr. Speaker declared that a quorum was present.

If any excuse is needed for taking up the time of the House, it is because I know that what is contained in this pamphlet is a certain index of the necessity for a clause of this description. The opening paragraph in the first column reads—

No one will complain of that. I do not doubt that General Smuts is an acknowledged and admired world’s statesman, but a two-line paragraph opposite is headed with the name of the present Prime Minister, and reads—

The next paragraph under the heading of the last Prime Minister states—

The paragraph opposite reads—

The next statement referring to General Smuts is—

Opposite—

The following paragraph declares General Smuts to be—

Under the name of the present Prime Minister and directly opposite the last paragraph are the following words—

Under the heading of “General Smuts” the next paragraph reads—

The opposite column under the name of the present Prime Minister has the following—

The final paragraph on the virtues of General Smuts states—

The final paragraph referring to General Hertzog reads—

In view of publications of a nature such as this I consider sub-section (b) of Clause 44 of this Bill is very necessary, indeed.

No.

Would I be in order in pointing out to the Minister a discrepancy in the translation of Clause 44?

I am afraid nothing can be done now. The translation can be amended outside, unless it is a material alteration.

Before you put the new clause, would I be in order in asking the Minister, at this hour of the morning, if he would agree to the adjournment?

No.

Hon. gentlemen may howl as much as they like. I think I am perfectly in order in saying that I think the time has now come when the debate should be adjourned.

No.

The Minister will know that—

Does the right horn gentleman move the adjournment?

Yes. I move—

Hon. members will know that the clause we have been discussing has been one of para-mount importance. It is a clause on which a very strong opinion has been held, and, naturally, it was necessary that that opinion should be" ventilated here in the House, and under the circumstances I do not think it is right that at this hour on a Saturday morning the Minister should compel us—

Finish the railway estimates.

The railway estimates come on next.

The two Ministers are so pleased with their success in having pulverized the Minister of the Interior into complete obedience, as they have pulverized the members on the Nationalist side into obedience, that they are now beginning to think that they can pulverize the whole of this country. They have never made a greater mistake in their lives. I would appeal to the Minister to agree to the adjournment of the debate, and on Monday he will quickly get through the remaining clauses of this Bill.

seconded.

I am very sorry I cannot accept this motion. I think after these “hear, hears” from this side of the House, the right hon. gentleman will agree with me when I say that if I did accept it I would be pulverized by hon. members in this part of the House sitting behind me.

I want cordially to support the Minister in not agreeing to an adjournment. After a somewhat lengthy absence from this House it is amazing to listen to this adjournment motion by the right hon. member for Fort Beaufort (Sir Thomas Smartt), because I remember when I last regularly attended this House—

When was that?

We used to plead for an adjournment, but we were kept here until four o’clock in the morning.

You were never kept here until four o’clock.

Four in the afternoon is your mark.

I may say that although I did not see any reason in the right hon. member’s arguments in those days I see some reason in them now. Although in those days his remarks seemed very bitter, I must say they were not so bitter as I thought.

Motion put and negatived.

Omission of old Clause 45 and the substitution of new Clause 45, amendments in Clause 46, omission of old Clause 50 put and agreed to.

On new Clause 50,

I move—

This clause has to do with the filling of vacancies or the announcement of vacancies. There is one possibility of a vacancy arising under the South Africa Act when a member of the provincial council becomes a member of Parliament. This is simply to take account of that.

seconded.

Amendment put and agreed to.

New clause, as amended, put and agreed to.

On Clause 53,

I move, as an unopposed motion—

seconded.

Agreed to.

Amendments in Clause 53 put and agreed to.

New Clause 54,

I beg to move the deletion of this clause. I think this new clause was put into the Bill as the result of a misunderstanding. It was moved by the hon. member for Yeoville (Mr. Duncan) and the effect of it is to make it lawful for bars to be open when there is a by-election. I think that the House was definitely under the understanding that the amendment was not carried.

No, the chairman gave it clearly.

I think the general feeling of the House was against it, and I certainly did not accept it, and I was under the impression that it was not agreed to. I think, under the circumstances, it is quite right that at this stage I should move its deletion.

Mr. Speaker, can the Minister at the report stage move to delete a clause without giving notice?

It is a new clause put in by the Committee.

I have no intention of speaking on the merits of this clause, but I suggest that this action of the Minister at this stage is not fair to the hon. member for Yeoville, unless the Minister can tell us that he has mentioned to the hon. member his intention to delete this clause.

It is as much a surprise to him as to me. No division was added and it was put in by the Committee.

I suggest that if a matter of this sort is to be raised, the matter should stand over till Monday.

I hope the Minister will insist. Whose fault is it that the hon. member for Yeoville is not here? It is his own fault and that of those on the other side who have been obstructing this Bill.

The hon. member should not accuse other hon. members of obstructing.

I withdraw. Disraeli, on one occasion, referring to lawyers, said they “expounded the obvious, illustrated the self-evident, and expatiated on the commonplace.” That remark refers equally well to what has happened to-night. Many hon. members have gone home, but I hope that because of the voluntary absence of one member, the Minister will not hold up the business of the House.

I think the Minister ought to give some reasons for this clause. I understand the clause to mean that on the day of a by-election the bars can remain open.

The feeling of the House is against it. It is here through a misunderstanding.

I think it is a wise decision to have the bars open for a by-election, but there is something to be said for closing them when a general election is being held.

I do not see how the Minister tan change it now when it was previously agreed to.

Order. I do not think the hon. member can go into it now. The Minister says there was a misunderstanding.

Is it not the duty of the Minister to withdraw it?

No, it is a new clause.

New clause put and negatived.

The amendment in Clause 55 put and agreed to.

On Clause 57,

I move—

seconded.

One feels that if this Act is put into force before the new delimitation it is going to create trouble. Some constituencies will consist of from 6,000 to 10,000 voters, and others from 400 to 500 only. All these constituencies will be in a regular upset and we shall not know where we are. Is this Bill going to apply straight away.

I have explained to the House on a previous occasion that we shall have no new registration before January of 1927, and there will be no delimitation before the middle of that same year. There is no harm, therefore, in this Bill coming into operation now.

There is a supplementary registration going on all the time.

Yes, and they will be according to this Bill if it becomes law now. I will explain why I have moved this amendment. I would have had no objection, in the ordinary course of events, to let the clause stand as it was originally, but we have got a by-election one of these days. There is a vacancy in Pretoria (South) and it is impossible, before that time, to have all the forms, in connection with the voting by post, in order, and so we must have the by-election in Pretoria (South) under the old law, and let the new law come into operation after that.

Amendment put and agreed to.

Amendments in First Schedule, amendments in items (1) to (16) of Second Schedule, and omission of paragraph (a) of item (19) of Second Schedule put and agreed to.

On new paragraph (a) of item (19).

I move—

We do not take any exception to the other officers who are specified here, but we think that the notary public and a station master ought to be added to the list of officers competent to take the vote and hand the ballot paper to the voter. Both the station master and the notary public are people who are very accessible and it would add to the facilities of the voters if these two officers are added to this sub-paragraph. The Minister will know that in committee we discussed this question of the notary public and at first I rather agreed with the Minister, but I was then under a misapprehension. I was under the impression at that time that the voter had to make his cross in the presence of the notary public. The notary public is only here in the position of a returning officer. I think it would be a great slur cast upon the high office of the notary public if he should be eliminated from this sub-clause. I think that also applies in a certain sense to the station master, who is a trustworthy officer.

I would like to second that amendment, which seems to me to be a very reasonable one. I was very glad when the Government introduced this system of voting by post, because within my experience the people that will most benefit by this will be the railway workers. There are a number of them who are continually travelling about on the day of the election and I consider that it would be a great convenience to them if they are allowed to record their vote before the station master. With regard to the notary public, the Minister has already recognized the magistrate, the special justice of the peace and the ordinary justice of the peace. The commissioner of oaths is, however, excluded. The notary public is an officer of the supreme court and why should you put justices of the peace, many of whom are not officers of the court, into this position and not the notary public? It does seem to me that the object of this legislation is to extend the’ privilege of voting to those who cannot otherwise vote. Here are two classes which should be utilized. The railway station masters who can best act for the benefit of railwaymen, and the notary public who will be far more accessible than many of the men mentioned here. I do appeal to the Minister to accept the amendment which I think is a reasonable amendment. My idea is that if we want to extend the privileges of voting we should provide as many facilities for exercising the vote as possible.

I am very much opposed to this amendment. The matter has already been discussed in the committee stage, but to-night hon. members are using fresh arguments. Hon. members only regard the matter from the point of view of the notary public, and it is alleged that if we leave him out we are casting a reflection on him. That is not the proper way to regard this Bill. The Bill is not for the purpose of settling the status of notaries. In conclusion, there are quite a number of other people who just as well might be chief polling officers. We must just regard the matter from the point of view that we wish to try to give proper facilities to the people who are absent to be able to vote through the post. Now comes the matter of convenience. I said on a former occasion that we add this to the convenience by not including notaries public as well. They are usually attorneys, and where there, are attorneys there are always the other officials who are here named. The magistrate, justice of the peace, commissioner of oaths, etc., who can all be chief polling officer. Why should there be anyone else where these people can vote by post? The inclusion of notaries public represents no increase in the conveniences under which they can vote through the post. But, what I want to further point out is that I do not see why the people who are voting through the post should have more conveniences than the man who goes to the ballot box to vote. The man who goes to the ballot box has only one day and then only fixed hours for voting and he can only vote at a definite place, which is often far from his home. The man who votes through the post has, 14 days time and can vote every day and every night if necessary. Why then should he be given more facilities over the man who votes at the ballot-box? My chief objection is however that as soon as we include notaries public we shall introduce polities into the voting. The attorneys usually take a prominent part in politics. They are usually the leaders in party politics just as soon as we make those people Dolling officers all the people who vote about the matter who are Nationalists will vote for the Nationalist attorney and those who are S.A.P. will vote for the attorney of that persuasion. This immediately leads to all sorts of talk among the, public that things are not going right. We require the public confidence for the system of voting by post and therefore I hope that we will do the same thing as last time and reject the amendment.

I really cannot understand the Minister. I understood that the idea of voting by post was to make provision for people who were travelling about the country to vote in the ordinary way, and the Minister has made provision for a certain number of people already, such as magistrates, returning officers, special justices of the peace, ordinary justices of the peace, etc.—

Officials.

Why did the Minister make provision for all these people, except with the desire of giving people travelling about, the country an opportunity to cast their votes. Surely the Minister would not be doing too much if he allowed responsible people like notaries public and station masters also to be included in the schedule of officers before whom votes can be cast, because, what the hon. member for Hanover Street (Mr. Alexander), says is quite correct. The most convenient place for people travelling about would be the office of the station master. I cannot understand why the Minister will not accept a reasonable amendment like this. Surely the Minister will not harden his heart. He is qualifying to be a modern Pharoah, but under these circumstances he might soften his heart and let the children go.

I hope that the Minister will not give in on these two points. In the first place, the station masters have more than enough to do. When one goes to the stations one repeatedly sees that they have more to do than they are able. As regards notaries public I agree with the Minister that such persons are political agents from a to z, and they should not be appointed as persons who can be elected. There will be talk that things are not going as they ought to.

I also appeal to the Minister especially in regard to commissioners of oaths. I move—

seconded.

It is making the whole thing ridiculous.

Throughout the country the mayors are commissioners of oaths, and I think it is generally admitted that mayors are non-political while they occupy that position. I think it would certainly assist many people to be able to go to a mayor, although they might not like to go to an attorney.

Why not insert “postmasters”?

I am referring now to commissioners of oaths.

I hope that the Minister will not give in. I am opposed to voting by post on principle. I see clearly what is behind it and I hope the Minister will not widen the opportunity for voting so much.

I see that the member does not second the motion of the hon. member for Swellendam (Mr. Buirski). He must, therefore, wait a little.

I second.

My reason in short is the following. There is a polling officer in a ward where all the electors of the ward must vote on one day during stated hours. The voters, however, get 14 days time to vote by post under this Bill. Attorneys are leaders of political parties, and it will cause suspicion if we allow people to vote for them. I request the Minister not to open the door too wide. We must leave it under the control of responsible persons.

The Minister accused us of repeating arguments brought forward previously, but he immediately used the very arguments he used previously. I want to put this to the Minister; that he makes use of notaries public under this very amending Act, and he says they are competent witnesses. In this country notaries public are very frequently necessary to the public. They have to administer oaths and certify papers without any fee, all for the benefit of the public, but the first opportunity the Minister has of casting a slur on the profession he does so. The Minister casts a slur on the profession when he suggests that notaries are going to abuse their position by doing for political gain something which is not right. Does he consider a justice of the peace, which is a purely political appointment, is in a better position to undertake these duties than a notary public is? Magistrates and railway officials are officials of the Government in power, but notaries public are officials of the Supreme Court, and this fact is a tremendous deterrent against their going wrong. I do not see how it can be claimed that a station master is not in a more responsible position than a policeman who happens to have three stripes. I feel very strongly on the point, and the Minister ought to reconsider the position. At first I did not consider that railway station masters should be included, but I understand they are commissioners of oaths and are in a position to be of help to the public in this matter. I have no objection to them, nor to postmasters; I would not even object to the Minister signing as a minister of religion, but the Minister has no right to cast a slur on notaries.

Soon it will be a slur on anyone who is not included. I move—

Their services would be very useful and they are very get-atable.

seconded.

What about shopkeepers and auctioneers?

I move—

objected.

Bill to be a read a third time on Monday.

I move—

The Minister of Railways is very young, he may be very clever, but he has yet to learn a great deal by experience, and if he thinks that he is going to enhance his reputation or the reputation of this House by proposing at twenty minutes to two in the morning that we should deal with a vote of £20,000,000, I say that is making a farce of Parliament. I say that if a Minister in the position of my hon. friend proposes at this hour of the morning, after a long day and a long week, with the majority behind him to force this Committee to take a vote of £20,000,000, he will live to regret it. This House is not in a position to go on with a vote of this character at this stage, and I am perfectly certain that if the Government persists in this course they will find that they have not got the good sense of the country behind them. If an inexperienced Minister, the Prime Minister being absent—

Why don’t you move to report progress?

I have moved to report progress.

I am quite prepared to accept it.

That is better. I am glad that the few weak words of mine have been able to impress upon the Minister that the worst day’s work that he and his colleagues could have done would have been to force this House to proceed with these estimates at this hour of the morning.

Motion put and agreed to.

House Resumed:

Progress reported; House to resume in Committee on Monday.