Mr. Speaker, today we shall follow the sequence of business on the Order Paper.

†On Monday the House will adjourn at 16h45 to enable hon. members to attend the provincial banquet in honour of the State President.

*On Monday we shall proceed with the National Education Vote. This will most probably continue until Tuesday. After this Vote has been disposed of, precedence will be given to the Bill relating to pensions, which appears on the Order Paper. On Wednesday and Thursday precedence will be given to legislation, namely the legislation dealing with the Land Bank and with financial institutions. After that the Planning Vote, as well as the relevant legislation of the hon. Minister, will be dealt with.

Mr. Speaker, before I arrived in this Chamber this morning, my colleague, Deputy Minister Cruywagen, asked me a very natural question with reference to this debate, which has lasted for two days. The question he asked me was: “How do you feel about the debate?” I experienced two spontaneous reactions, which I want to tell you about, Sir, with, gratitude for the impulse of the hon. the Deputy Minister who put the question to me. The first feeling which I expressed was that I, who have been so intimately connected with these matters for so many years, could today feel like a farmer who works in his fields in a thunderstorm every day and eventually does not even hear the crashing of the thunderbolts any more. That was the one feeling I experienced.

You are shell-shocked.

The other feeling that came to me during the debate was an unhappy feeling that the members of the Opposition really do not realize the importance of the extremely important milestone which we have arrived at with this stage of our consolidation work, as we happen to call it. We must simply hope that the Opposition will gradually realize its importance.

Since I am speaking now at this early stage of the day’s sitting and this hon. House is in such a genial and calm mood, I feel that it might meet with greater acceptance if I expressed my appreciation to hon. members, on both sides, now for the way in which they were able to conduct this debate. Similar debates have already been held in the past and in the distant past, and I think it speaks volumes for the attitude of our members on both sides, and particularly on the Opposition side, that they were able to conduct this debate with such a great measure of calm and control. This is consistent with what I said previously, a few weeks ago, in regard to the debate on Bantu Affairs under the two Bantu Votes, and I hope that it is a promising sign on the political horizon.

Since I have to reply to this debate now, it is of course necessary for one to choose a pattern according to which one is able to deliver one’s reply. I felt that it would not be a good thing if I were to take hon. members one by one and deal with each point of importance which they mentioned. Consequently I devoted the whole of yesterday evening to going through all the notes on the speeches at my leisure and looking for themes which were raised in this debate, for many themes were dealt with by various members on the opposite side and on this side during this debate. I am therefore going to reply to this debate thematically. In this way I shall not leave out a single hon. member who spoke, although I shall not necessarily reply to every line of thought which was raised. With the greatest respect I want to point out that some of the lines of thought were not really relevant here.

I want to begin by explaining certain words in my introductory speech a little more fully, for it seems to me there was a misunderstanding concerning it among several hon. members. I must say that I came across quite a sound interpretation of it in the Press, a correct interpretation. I stated in my speech that with these proposals which we were now considering we had reached the last round of the parliamentary work. I very definitely did not say that we had reached the end of the last round. I said that we had reached the last round. In other words, we have reached the beginning of the last round of the parliamentary work, and it is important that I say “parliamentary work” for there is a great deal of parliamentary work attached to this kind of work, apart, of course, from the preliminary planning and the ensuing implementation which the department has to do. In past years we have had many lesser rounds of parliamentary work in regard to consolidation. I am simply calling it consolidation. I myself pointed out in my speech that the word “consolidation” which we are using for this work in which we are engaged, is not really a precise description of the work and that it is in fact the fourth aspect of the four aspects involved in this work. In metaphorical language they call it synecdoche, when one calls the whole by the name of a part. That is what we are doing at the moment. Some hon. members on the opposite side of the House went and condemned it as a misrepresentation, but I do not think we should refer to it in this way. We simply call our work by certain names, although these names are not always perfect.

As far as this consolidation work is concerned, we had lesser rounds in the past, when areas were declared to be released areas, but the major rounds of this work actually began after the decision—to which I have already referred—which was taken by the Cabinet in 1971 at my request. In 1972 we had the first of the major rounds when we dealt with the first proposals on the Ciskei. In 1973 we had another major round when we adopted resolutions in this House in regard to the north-eastern parts of the Transvaal and parts of Natal. Last year we had no round, and this year we are now dealing with the round in which we take the remaining portion of our country into consideration, and in which all four provinces of our country are involved, in order to indicate the remaining number of hectares which is due. As I have said, this is only the beginning of the last round, for there are still all kinds of matters which will have to come back to Parliament by way of submissions. All kinds of excisions have to follow, as hon. member ought to know, excisions of land in terms of the 1913 Act, i.e. scheduled areas. These will have to be authorized by Parliament. Therefore there is consequential work which will still have to be done. Here and there it may perhaps be necessary to make corrections where small released areas may have to be declared, and for that purpose I have, as hon. members already know, kept a reserve per province. There might be exchanges on a rather considerable scale. But we shall still have to see what happens in that regard. As far as these exchanges are concerned, we could perhaps even deal with some of the ideals again to which the hon. member for Rondebosch referred. Therefore we shall still have to come to this Parliament with these matters frequently. If I, or someone else, comes to this Parliament next year or the year after with such work, hon. members must not say that the Minister stated in 1975 that this was the end of the last round. In fact, let me say again that this is the beginning of the last round. Other consolidation proposals may even be submitted, and some of the more idealistic work might still be tackled in future.

As I have already said, I am going to deal with the most important themes which were raised in this debate. Some of the hon. members were of course very digressive in their speeches, so digressive that several of them had in fact to be admonished and corrected by the Chair. In this way, for example, the hon. member for Rondebosch and the hon. member for Bryanston came forward with great, philosophical, theoretical, political ideas. The hon. member for Bryanston even discussed some of his theories for the new South Africa. I do not think that this debate was the correct mould in which to cast those philosophies of his. The same applies to the hon. member for Rondebosch. What upset me about the hon. member for Rondebosch, who is a young man and who, humanly speaking, still has a long future in South Africa—I do not know whether he has a very long political future, but that is another question entirely—was the outrageous cynicism which resounded from his speech.

Pessimism.

An hon. friend of mine is saying it was pessimism. In any case, he displayed a surrender mentality, and that is the basis of his cynicism. I concede that he may have done this unconsciously. I think, however, that he has a sufficient knowledge of psychology to take an introspective look at himself and then work at a course of treatment for himself. I do not think he need go to a Psychopath; I think he can do it himself. [Interjections.] Oh of course, yes, a psychopath and a psychiatrist are two different things. The hon. member can take a look at himself. He will then perhaps discover that unconsciously he has already begun to abdicate as a White man in South Africa. That is a great pity; it is a pity in particular because the work which we are envisaging with these proposals, work winch makes such a wonderful vision possible, and in which members on this side are sharing, is causing great new horizons to beckon to us. We should rather speak along these lines, as I set out in my speech. I have said that with this work we are doing something with which we are ushering in a new period for the peaceful and beneficial co-existence of the various peoples in South Africa—Whites and Bantu. I should have liked to have heard more of this from that side of the House, but unfortunately that was not the case. As I said at the outset, I do not think hon. members on the opposite side realize the true significance of the milestones we have achieved with this work. I am very grateful that the work is so well understood on our side, for the future well-being of South Africa does after all lie in the lap of the National Party. I am therefore going to confine myself in the narrower sense to the actual matter before us here, i.e. to these proposals, and I am not going to lapse into theoretical and philosophical views on these matters. There will, in the course of time, be sufficient opportunities for that.

The first theme I want to deal with and which cropped up quite frequently, was the vehement attacks on the procedures of the Select Committee and the attitude of the Government members on the Select Committee. All kinds of things were said about the procedure of the Select Committee. But hon. members ought to know that Select Committees all have the inherent right in terms of the rules of this House to decide how they wish to manage their affairs. Apart from that, this Select Committee on Bantu Affairs, which is a very old institution, a standing committee which meets every year, has a very long tradition. By means of its actions over many years in regard to matters such as these it has formulated established practices for itself. This is not the first time this year that the Select Committee on Bantu Affairs is discussing the declaration of released areas, and so on. This has been done times without number in the past, and in the past the Committee has always followed the same procedure. The department’s evidence is heard and the Committee then deliberates. It does not hear outside witnesses, nor does it pay visits in loco. On this occasion, therefore, the Select Committee adopted its old established methods, and I can see nothing wrong with that.

There is another very important consideration which, in my opinion, ought to be taken into account, and I know straight away that hon. members of the Opposition are not going to accept this from me. That still does not mean though that what I am making is an untrue allegation. In the case of work of this kind there is in addition a statutory body, which was established as long ago as 1920, namely the Bantu Affairs Commission, which takes evidence on these matters. This year all the members of the Bantu Affairs Commission had representation on the Select Committee. [Interjections.] I shall reply to that minor point; just wait a minute. The members of the Bantu Affairs Commission have served on the Select Committee every time, except last year in the case of Dr. Lombard, who was of course an outside member as far as the Select Committee was concerned. Last year new members were appointed to the commission, and since last year these members have made it their business to visit all these places themselves and to go into all the memoranda and representations from those places at which the previous Bantu Affairs Commission had held meetings and called for memoranda, subsequently submitting the reports to me. In other words, the work of this commission, which is a statutory body and which may be called to account in this House if it were to proceed with its task in a superficial or inadequate manner, is at the disposal of the Select Committee. There is no other Select Committee of this House which has such a statutory body at its service. The Bantu Affairs Commission, the chairman of whom is also the chairman of the Select Committee, went out and heard members of the public, individuals and bodies of all kinds, and was also available within the Select Committe. I think this is an extremely important reason for it not having been necessary for the Select Committee itself to have heard outside evidence.

May I ask a question?

No, wait a minute. I would appreciate if if the hon. members would quietly give me a chance to reply. If the hon. member wants to ask something about the Select Committee, I shall give him a chance to do so a little later on, as soon as I have disposed of this theme. The Ministers, i.e. myself, the hon. the Deputy Minister and even in certain cases the Prime Minister—I shall come to this again in a moment—also gave people a hearing. We accepted the responsibility of giving the Black people in particular a hearing. We did not close our doors to organizations from the White sector, but we made it our task—the Minister, the Deputy Minister and the department—to give a hearing to and to consult with the Bantu bodies in regard to these proposals. I want to emphasize that the Select Committee therefore did not deprive these people of their right to express their opinions fully in regard to this matter. The hon. member may now ask his question.

Mr. Speaker, are we to understand that the present chairman of the Bantu Affairs Commission, who is also chairman of the Select Committee, with other members of the Select Committee who are members of the Bantu Affairs Commission, went around to these areas after their appointment to get evidence?

No, I did not say to get evidence. I said very clearly—and the hon. member can look up my Hansard on what I had said just now—after their appointment they went round to all the areas to inspect the areas and to get acquainted with the particulars about those areas. I also said that they studied all the reports and memoranda that were handed into their predecessors. They even had the opportunity to study the reports which their predecessors sent in to me on those areas. That is what I said.

*I think that I have replied fairly to the hon. member’s question.

Does the hon. the Minister accept that no record of the evidence was kept by the previous commission?

The previous commission received numerous memoranda, which are all in our possession, as well as the signed reports which they submitted. I really think I should explain this briefly to this hon. member, who has no knowledge of how the commission works. I cannot take it amiss of the hon. member for not knowing about this, for he has never been near a department to inquire about such administrative responsibilities, and he knows nothing about the commission either. Therefore, I cannot take it amiss of the hon. member. When the Bantu Affairs Commission goes to an area, they receive memoranda in advance. Sometimes they receive the memoranda at the meeting, and they also hear oral representations. They are accompanied by a secretariat which takes notes. All these memoranda come to us, and on the basis of these memoranda they formulate a proper report which covers a great many pages and in which reference is made to all the memoranda. That report comes to me and to the hon. the Deputy Minister. All those memoranda are available to me and to the hon. Deputy Minister to read. We have them. In the meantime the new commission had gone into all those matters. That is what I said.

Why did you not refer those memoranda to the Select Committee?

There was no need at all to submit all those memoranda to the Select Committee. In fact, it was one of the established procedures of the past that these were never submitted to the Select Committee.

The next theme which was brought to the fore very prominently, and this was done very unfairly and with unnecessary prominence, since I had dealt with it in my introductory speech, was that there had not been any consultation with the Bantu leaders. This theme was presented in a large number of variations, for some hon. members went so far as to say that there had never been any consultation, while other hon. members said that there had been insufficient consultation. Some hon. members even alleged that it had not been good consultation. I repeat—I am going into this in far greater detail now than I did in my previous speech—that there were talks with all the Bantu peoples through their leaders and Cabinets or executive councils, talks on an extensive scale and on various levels. Firstly, these were on the level of officials of my department who spoke to groups of leaders. Secondly it was on the level of Commissioners-General, who negotiated with the Bantu on my behalf and as the representatives of the Government among the Bantu. Thirdly this was done on the level of the hon. the Deputy Minister who on his own or accompanied by officials negotiated with the Cabinets or executive councils, and fourthly, on my level. I, as Minister, alone or accompanied by officials, negotiated with the Cabinets or executive councils. Sometimes I was also accompanied by the Deputy Minister. In certain cases negotiations were also held on the level of the hon. the Prime Minister. In certain cases the homeland leaders even contacted the Prime Minister in regard to this work. In certain cases representations were also made to the Prime Minister on the part of Whites as well—not on the part of Bantu—to speak to him and the hon. the Prime Minister even designated a group of Ministers to speak to people on his behalf. I should like to see the Opposition listening so democratically to people who opposed it with regard to work that had to be done! I am going to provide fuller details in this regard; I do not wish merely to speak in general. Yesterday afternoon I had a table drawn up, but I shall not read it out in full, for if I were to do so it would take up more than half an hour. I shall therefore merely furnish a summary of the tables. I notice that the hon. member for Edenvale is already looking at his watch; I hope he does not look at the calendar. [Interjections.]

You know why I am doing so.

Yes, I know the hon. member has an appointment for which he will have to leave the Chamber and I shall therefore excuse him. The hon. member and I are reaching a better understanding all the time; I do not know why. But you should not draw any conclusions from that now, Mr. Speaker!

I said previously that there had been various rounds—lesser rounds and major rounds—which had led up to the present one. We are now dealing with these specific proposals, but before these proposals were formulated, there were talks in regard to other proposals, and in paticular in regard to the areas in the Western Transvaal and the Northern Cape which had to be transferred to Bophuthatswana. The proposals which we are now discussing here, were at that time already receiving attention, with a view to the 1973 session, and had even reached the level of this House. However, it was not then possible to make any further progress with them. In compiling the table I did not go back to the previous consultations relating to the work done in 1972-’73. In regard to the work which was to have been disposed of in 1973, and which did not progress further than this House, and the proposals which are now being submitted, there were 61 meetings on the various levels I have just mentioned, namely that of the Minister, the Deputy Ministers, the Commissioners-General and the officials of the department. There were 61 meetings with the cabinet or executive councils of the homelands. There were ten groups with which meetings were held in this way. If one divides 61 by ten, one gets six, and it can therefore be said that there was an average of six meetings per group, but it did not work out in this way because in the case of some groups there were more and in the case of others fewer meetings. Specifically with a view to this year’s proposals, there were 14 meetings with these ten groups. As I have said, there were 61 meetings, and in regard to 23 of these I spoke alone to the cabinets. When I say “alone” then I mean that I did so without the Deputy Minister, but accompanied by a number of officials. I was responsible for more meetings than anyone else concerned. The Deputy Minister, in turn, spoke to them alone in 15 cases, when I did not go along. Then there was the Commissioners-General, who spoke to them in six cases, more specifically in regard to this year’s work. Then there were top departmental officials, mostly the Secretary, accompanied by the officials whom I mentioned the other day —Messrs. Pienaar and Van Wyk, who are now sitting here listening to me—who spoke to the cabinets on departmental level. Sixteen of these meetings took place between the department and the cabinets. All these meetings together therefore give us a total of 61. Sir, I can also give you the dates. I have the dates here when I, alone, and the Deputy Minister, made contact with Bophuthatswana. I can give you the dates on which we made contact with Ciskei. Between the two of us, the hon. the Deputy Minister and I, alone, made contact with the Ciskei on eight occasions. We made contact with Bophuthatswana, the hon. the Deputy Minister and I, on six occasions. There were a number of these meetings with Gazankulu and KwaZulu. The most recent contact which I myself had with the KwaZulu cabinet was on 14 March of this year in Pietermaritzburg. And that, Sir, was not in secret. We subsequently issued a statement. The Press knew about our being there, and they published this information. The last meeting with the Ciskei was held by the Deputy Minister Raubenheimer, and took place on 20 March of this year. So I can furnish hon. members with the particulars of all the other meetings which were held with Gazankulu, Lebowa, Qwa-Qwa, the South Ndebeles, the Swazis, the Transkeians and the Venda. In the case of the Transkei the Deputy Minister, the Commissioner-General and I made contact with them on six occasions. If hon. members are more interested in this, they can look at this table. I shall even give them the dates, together with the duration of the talks, and where they were held.

Sir, it was said that no contact was made with the tribes either. Our attitude was that we negotiate with the Government, and that the Governments in turn make contact with their tribes, but discussions were also held with the tribes, more on the level of the Commissioners-General and the officials. Here I want to pay Commissioner-General Bezuidenhout of Lebowa a well-deserved compliment for travelling throughout his entire territory in 1973 and meeting eleven regional authorities. He submitted the consolidation plans to them and discussed the plans with them. Others did this too. I even have the minutes of such talks which were held in Nongoma. I think it is a very unfair allegation to say that we did not do so.

The hon. member for Houghton made the scandalous allegation that she quizzed the leaders after the consultations I had allegedly had with them. Now I want to ask the hon. member this: Who appointed her as a secret policeman over me? [Interjections.] I want to tell you, Sir, that it was definitely not the voters of Houghton. It was definitely not the voters of Houghton who appointed her … [Interjections.]

Order! Let us please reserve the atmosphere of peace and quiet which has prevailed up to now. The hon. the Minister may proceed.

Mr. Speaker, I thank you for the compliment which I am now being paid, i.e. that we have such an atmosphere of peace and quiet here. We have all played a part in this. I just want to reiterate—and I hope I am not disturbing the peace and quiet—that I do not accept this at all nor do I approve of the hon. member appointing herself as a policeman to scavenge behind my back and to investigate the talks I had had with Bantu leaders.

I do not need your approval to talk to these people.

Sir, I say it is a very underhand and a very reprehensible method which the hon. member displayed.

Hon. members asked here which of these Bantu peoples and their governments gave their consent and approval to these consolidation proposals. I can give an honest summary in regard to each. This I shall do briefly in a few sentences. The Transkei gave us a full “yes”, but they stated a proviso which amounted to their having their eye on that part of KwaZulu which falls in the Harding area. It is that strip in which the Zulu and the Pondo live intermingled. Therefore it does not fall under consolidation in this sense of the word. It is not White land which they are asking for; they are asking for Black land. I told the Chief Minister that this was a matter between him and the Zulu Government. We know that there have already been reactions to that on the part of the Zulu Government. Be that as it may, the Transkei stated that proviso, and apart from that said “ves” to us. The same applies to the Ciskei. The Ciskei said to the hon. the Prime Minister, through the agency of its Chief Minister when he came here, that they accept these consolidation proposals in full. In the case of Qwa-Qwa, they also conveyed their consent to the hon. the Prime Minister. In the case of the Venda they conveyed their consent to me in January when I made contact with them personally in regard to these specific proposals. In the case of Gazankulu, they agreed in general although they had certain minor misgivings here and there. These misgivings we shall subsequently, by means of more detailed information, be able to satisfy, or otherwise we will make adjustments. In general, however, they agreed with this. Lebowa did not express its approval in this regard because, said with all due respect. Lebowa is still indulging in its great dream. It is indulging in the great dream that if not the entire Transvaal, then approximately two-thirds of the Transvaal is their territory. Recently I read a statement by one of their councillors. I see the hon. member for Edenvale is laughing in agreement. I just want to tell him that one may not laugh at the statements of a Bantu homeland government. I just want to remind the hon. member of that. [Interjections.] I said that I read recently how one of the councillors of Lebowa had stated that their territory extended up to the Vaal River. Oh well, he is one of those who wants to appropriate the entire Transvaal. Lebowa, therefore, is still indulging a little in this great dream, but we shall see that each of those areas we are allocating to it, will be accepted. Bophuthatswana was very sceptical in the beginning. That was until some time ago. However, I have every indication that an entirely different approach is on the way in Bophuthatswana, for which I am grateful and with which I shall even help them. In the case of KwaZulu the spirit of our talks, the talks between my secretary and I, and KwaZulu, has never been better. Nor need it be any better than it was during the latest talks, to which I referred a moment ago, which took place on 14 March of this year. The talks were conducted in a very good spirit. There were constructive questions and ideas on their part, but they said they were not satisfied with the proposals. I said I would reply honestly to this.

The wild allegation was made on the opposite side that the circumstances of the Bantu had never been taken into consideration, even if we had conducted a dialogue with them. I say that is completely untrue. Sir, when I look at this map with its scores of territorial excisions and additions, then I could enumerate many places for you, but I am only going to mention three, two of which are probably among the most important things we could do for any Bantu nation in South Africa. The one is in respect of the Shangaans as far as Elim is concerned, which was historically a place where they were rendered major educational services and health and which they very much wanted to retain. Although in earlier years we said that Elim would not be transferred to them, we acceded to their request, after all the consultations and after we had heard them, that we should include Elim in Gazankulu. In the other case, one has the same type of thing. As regards Tshakuma on the farm Goedverwachting of the Venda, 20 km or perhaps more from Elim, to the north of Levubu, the 1973 decision of this Parliament was that those few hundred morgen to the south of the road should be excised. There are no people living there and Parliament decided that it should be excised. They also pleaded with us repeatedly. In fact, they submitted an enormous memorandum to us. This is the only Bantu nation who made its submissions to the hon. the Deputy Minister and myself in such a properly documented manner, after Parliament had taken the decision. We listened to them and I went there personally—I had been there before— to investigate. We returned and we granted their request, namely that we should not take that piece of land for the Whites; that we should restore it, as is being done in this session, and we decided that we would also excise and include a piece of the farm Barotta, for which they also asked, which is situated to the west of Tshakuma, so that better township development could take place there. Sir, these are two extremely important portions. Strangely enough both those Bantu peoples spoke very, very feelingly about those areas of theirs. Sir, I am mentioning a third example to you of where we did in fact take the Bantu circumstances into consideration. The hon. member for Pietersburg knows a lot about this. I am mentioning the example of the farm Klipspruit to the east of Pietersburg, adjoining which is a very densely populated Bantu area, and in regard to which we deemed it necessary to afford them a little more living space by excising and including this additional farm so that those Bantu may arrange matters more favourably for themselves there. In this way, Sir, I could mention many other examples to you. I have taken only three from the North-Eastern Transvaal on one map at which I was looking, without having taken the trouble to consider many other places. Therefore, this is also a very undeserved reproach which is being levelled at us, one could almost say maliciously.

Sir, we come then to the other theme of Bantu homelands, which will consist of various parts. On this aspect divergent ideas were expressed on the opposite side. It was said here that these areas cannot become sovereign States. It was said here that they cannot be viable. All kinds of other things were said about this aspect here. It was also said that the economy of the areas could not develop well. Sir, firstly I come to the allegation that homelands consisting of non-contiguous parts, cannot become sovereign States. Examples were mentioned on this side, and the only way in which hon. members on that side reacted to those examples, which I myself have already mentioned previously and which others have mentioned previously and which we have written about in publications, was to scorn them. Sir, ridicule is not an argument. Ridicule is as much of an argument as vituperation is. Facts, cold analysis of facts, are all that go to make up arguments. Sir, what was the reaction of hon. members on that side when hon. members on this side mentioned an example, which I have also mentioned previously, namely the example of Denmark, which consists of quite a number of islands—an extremely difficult territory in which many nations are involved? We know what happened during the First and Second World Wars among the islands of Denmark. When we mention this example, hon. members on that side say scornfully that a country which consists of many islands, is something entirely different to a country whose component parts are separated by the territory of another country.

Probably like Robben Island.

Sir, I sat listening to hon. members on that side for two days, but now the hon. member for Durban Central does not want to listen to me for half an hour. The hon. member must contain himself; he will explode in a minute if he carries on like that.

I am calm and quiet.

I shall tell the hon. member what I think of him again in a moment. He knows what I think of him. Sir, Let us be very realistic now. Denmark was mentioned in this connection; there is Japan which consists of various islands; there is New Zealand which consists of various island territories; and many other such countries. There is America which has island territories, as well as the State of Alaska to the north of Canada, which is separated from its homeland by the ocean as well as another country. Compare with this now a territory such as Bophuthatswana, which is being emancipated from subordination to South Africa, its tutelary country, which will co-exist with South Africa into the most distant future under the most intimate circumstances, which will receive money from South Africa into the most distant future, money which we do not owe to it but which we feel morally obliged to give to it. It is South Africa which has railway lines and national roads leading to and through its territories, South Africa which provides it with markets where it can sell its goods and South Africa which is in turn provided with markets by it, markets at which to sell South African goods, South Africa which is its best friend, which is leading it out of subordination to, if it is able, absolute independent autonomy, Is it not better to have the territory of such a State between one’s own areas, knowing that over the years we have allowed them to pass through our territory to their various areas? Is it not better to have such a friend between one’s two areas than to be like Denmark, where all the countries of the world can carry on as will against one, both below and above sea level? What is better, if one’s areas are not contiguous, to have between one’s two territories the land of one’s best friend, one’s historic friend, one’s well-wisher, or to have completely foreign people in the ocean, which is everyone’s property, below and on the surface of the water? What is the safest for them, if their land cannot be contiguous? I think a little child could understand this logic.

May I put a question?

I shall allow the question in a moment. I first want to develop my point. I want to mention a second example. These people have to travel from their one area to another. This has been the case for years, when they were even further apart. This was allow?d on our roads and on our railways, and we know that when any of these countries become independent we will allow them, in legislation if necessary and in treaties which will be concluded, to have access over our land to their territories. And this is not a unique phenomenon. This is a universal phenomenon.

Where?

My goodness me, how does a country in the middle of Africa, countries such as Chad or the Sudan, obtain access to the sea? How does Czechoslovakia, how does Switzerland, how does Lesotho obtain access to the sea? Sir, Lesotho obtains access to the sea across our territory, and what is more, Lesotho also obtains a large amount of the customs duties on the goods allowed from the sea across our territory to theirs as a gift. Sir, if this can be done with Lesotho, which is a landlocked territory, why will we not be able to do the same with the others? No, I maintain that it is false propaganda the hon. members are making. It is a false bugbear they are constructing; it is a scarecrow, but it will not deter sensible people. Now the hon. member may ask his question.

The question I want to put to the hon. the Minister is whether in fact this right of access from piece of land to piece of land which he will give will be subject to control by the South African Government as to what may be moved and who may move, or whether there will be completely free movement of goods and people.

The hon. member is struggling with his question now, for I have actually replied to him in advance, but the hon. member will within a year or two find the very best example and proof of this in this Parliament with reference to the Transkei which wants to become independent; for this is the kind of thing we are now negotiating on with the Transkei, and it will be laid down here. The hon. member should simply accept in general outline my reply which I furnished a moment ago, that this kind of movement will be properly determined by way of agreement or treaties between States.

That is the problem.

The entire world exists in this manner, and I do not know what the problem attached to it is.

[Inaudible.]

The hon. member is wasting the time of this House. [Interjections.]

Order!

What it amounts to in a nutshell is that the functioning of such a homeland which consists of various parts will depend on and be based on the goodwill between it and the Republic of South Africa, in other words goodwill between friends. The hon. member must realize— and I have said this so frequently here before—that inherent in such a position is a very great security value for both the Black State as well for us as a White State, for what it amounts to is that both they as well as us—whether we want to or not— have to accept and tolerate co-operating in regard to such matters. It entails security for them as well as for us.

Now people tell us that we cannot expect those States to be viable. They say that the States, which consist of various parts, cannot be viable. Now I am asking in what respect it could affect the economic productivity of two areas if those two areas are removed from one another by a piece of Republican land in between. I still want to hear which of the cleverest economists on the opposite side and which of the profoundest philosophers—I am including here the hon. member for Rondebosch—can explain to me how, if two areas are non-contiguous, that State would not be as viable as it could be if it consisted of one piece. Do hon. members now want to tell me that because Alaska is situated on the other side of Canada, that Canada and the various States of the U.S.A. are worse off? Surely the degree of productivity is not inherent in the contiguity, but in the internal ability of that State to produce and to make use of its people. Do hon. members now want to tell me that when two areas are situated at some distance from each other, they will be able to accommodate fewer people than when they are adjoining? Surely we ought not to devise absurd arguments of this kind to support our case. That is what the Opposition is doing. Is Japan, which is economically speaking one of the most powerful countries in the world, and which is relatively small and divided into various island territories, not economically viable simply because its territory consists of a number of separate islands? Surely this kind of idea is too absurd to be freely circulated. How did Japan not arise and rebuild itself after it had been destroyed during the Second World War. What viability did it not manifest, and it is after all a country which consists of various territories, with freely navigable stretches of ocean in between.

They do not need passports to move from one island to another.

That hon. friend is still living in an old-fashioned, musty era.

I do not know of any of the major countries of the world, or even of small countries such as New Zealand, which consist of various parts, which are struggling countries in respect of their viability. On the contrary. One finds instead that the opposite is true, namely that the large contiguous countries are struggling.

I pointed out a moment ago that the administration of those countries need not suffer as a result, for South Africa will help them to pass freely from the one territory to another when the areas are not contiguous. We could also make some of these territories contiguous, in a unique manner. Here and there were people who advanced as an idea that a strip of land, almost like a long umbilical cord, should be established between two non-contiguous areas, and that it should be said that the areas are contiguous, for that is how they argue. But surely no country will construct a road or a railway line through that thin strip! On paper one could imagine that the two territories have been merged. But it is absurd to think of such things. We are not standing here, as the hon. member for Edenvale said—who unfortunately has had to leave—at the burial of an illusion simply because the various areas consist of various pieces. We are standing here at the birth of a new practical possibility, which is that neighbouring peoples have to accept and understand one another, that they have to be tolerant neighbours. They have to be tolerant of us when they cross our territory and we theirs, and conversely we also have to be tolerant of them. We are entering a period here, a new period of, if one wishes to describe it in idyllic language, the birth of a new day of co-operation between peoples.

The hon. member for Sea Point mentioned quite a number of economic considerations here that could be classed among the aberrant allegations, those which in my opinion were not very strictly relevant to this debate. I do nevertheless, want to say that he should please look up in Hansard what I said last year. It is stated in column 3149 of the English Hansard of 1974. There I dealt with the economic aspect of the Bantu homelands, on the basis of many statistics. The hon. member will then see that what he said was not correct. He said: “Income per capita over the last 20 years has dropped in the homelands.” I maintain that this is not the case. It depends on what source he obtained his information from. I do not know where he obtained his data. However, the facts prove that it is not as the hon. member said it was. Last year I furnished the statistics in this regard. The hon. member may go into this again if he wishes. The hon. member made another allegation, namely: “The gross domestic product gap is widening between the homelands and the rest of South Africa.” That is not true either; it is a blatant untruth. I had the data checked after his speech. If the hon. member were to glance at the statistics he would see that during the past few years the old position has been maintained exactly as it was i.e. in respect of the percentage which the gross domestic product comprises of the total product of South Africa.

In money terms the gap was widening.

The hon. member should go back and read about it some more. I want to tell him that the reminds me of the turtle dove in the poem by Totius. Totius said the turtle dove does not drink water until he has made it murky. The same applies to the hon. member. He will not accept any facts about Bantu development in the homelands until he has made them murky, until he has first made them unpleasant. Their endeavour is not to discover the good in what we are doing and to encourage it, but to find the bad things, even where these do not exist, and also to wish bad things upon us.

A real polluter.

Order! Who spoke of a “polluter”?

I did, Mr. Speaker. I withdraw it.

A further theme which we heard about here was that the 1936 Act could not be connected with political considerations, least of all with independence. It is said that it had had nothing to do with that. Various hon. members on this side have pointed out that there was in fact a connection. The most striking example was perhaps the speech made by the hon. member for Schweizer Reneke, who in his very well conceived speech made yesterday evening pointed out how that trilogy of acts, namely the franchise legislation in 1936, the Land and Trust Act of 1936 and the Urban Areas Act, further supplemented only in 1945, were related to one another. I now want to quote something here which was not quoted yesterday evening. This was said in 1936 by the highest authority of that time, the Prime Minister, Gen. Hertzog himself. During the Second Reading of the legislation in regard to the Bantu Trust lands, Gen. Hertzog said the following about this very question of political context—

I cannot find a clearer exposition for the hon. members than the words of Gen. Hertzog, the Prime Minister of that time, and the father of that legislation. I cannot find clearer words to say that this Act, with regard to the released areas which may be declared and the 7¼ million morgen which may be added, should also be seen in the context of the politics of the Natives. I would urge hon. members to look it up; it is stated in column 2829 of the English Hansard of the House of Assembly.

It stands under an umbrella.

It makes no difference whether it stands under an umbrella which Gen. Hertzog held over it. It was Gen. Smuts who spoke of the umbrella. The words of Gen. Hertzog were quoted here yesterday evening, when he said that they could even obtain self-government. These were quoted here.

It is an umbrella.

I know that the hon. member is very fond of an umbrella and a blanket, but this is not at issue now. Whether it is under or on top of the umbrella now, the point is that the hon. member said that no political significance could be attributed to this Act. I am saying that Gen. Hertzog did so, that this Parliament did so in 1936. [Interjections.] The hon. member for Bezuidenhout also had a lot to say in this regard. He said, for example, that from 1948 to 1958 the National Party accepted the 1936 Act in respect of Native franchise. That was the Act which made the election of a few Senators and a few M.P.s for the Natives possible, after they had been removed from the common voters’ roll. The hon. member presented himself here today as the great expert on the policy of the National Party from 1948 to 1958. With all his antics I am not quite certain of what party he was a member at the time. The National Party published a document in 1948, its manifesto. As far as colour matters were concerned, that manifesto of the National Party was based on the Sauer Commission’s recommendations which were drawn up in the years prior to 1948. I am quoting to you this brief and very excellent sentence from that manifesto of the National Party, which was published by Dr. Malan (translation)—

That was the manifesto the National Party pledged itself to in 1948. We know the history of this matter. The hon. member for Griqualand East has been in this Parliament since 1948. I and others have been here since 1953. Does the hon. member remember the history of the Joint Session?

Yes.

Do you remember, Mr. Speaker … Mr. Speaker, you were not here at the time. [Interjections.] But I know that you, as a very intelligent man, know all about it. We still remember the battle our beloved Dr. Malan had to get a two-thirds majority at the Joint Sessions, for at the time the entrenched clauses were still there.

That involved the Coloureds.

Yes, that involved the Coloureds at the time. The hon. member, who is sitting so comfortably stretched out there, will know that even had we wanted to change the Native position in 1953, or in 1949, we would not have been able to succeed, owing to the entrenched clauses. Is that correct? Yes, that is correct, and the hon. member knows it. [Interjection.] The 1948 pledge given in the manifesto could not be realized until the dilemma of the two-thirds majority had been solved. The dilemma of the two-thirds majority was brought to a head by the Coloured franchise position. Hon. members know the history of this matter, and I am not going to digress by going into it now. It only became possible later on, in the new situation after the Senate had been reformed, and all the other steps had been taken.

That was a disgrace.

Yes, what is wrong with that? The hon. member should not sit there giggling now. The hon. member’s party participated in the enlargement of the Senate; they sent their people here. They did not withhold them, but participated.

[Inaudible.]

Yes, “having both sides of one world”. They voted against it, yes, but nevertheless participated in it. They elected their people to the Senate, and if I am not mistaken, the hon. member for Umhlatuzana or the hon. member for Durban Point was a member of the enlarged Senate. [Interjections.] Was the hon. member for Durban Point not a member?

He was a member of the Senate, but not of that Senate.

I cannot remember the date on which the hon. member for Durban Point was elected a member of the Senate, but the hon. member for Griquland East cannot deny that his party, after the enlargement of the Senate, also designated more Senators. The fact of the matter is that they participated in the proceedings of that Senate, and whether or not they voted against the enlargement makes no difference. After the question of the entrenched clauses had been solved, we carried out the 1948 manifesto and abolished that representation in the House of Assembly and the Provincial Council. However, as was perfectly logical, we went further and abolished the representation in the Senate as well. That little sentence does not mention it, but in another sentence it is in fact stated that the representation in the Senate could remain. It is stated in the manifesto. In 1959 it was then removed, as hon. members ought to know. The hon. member for Bezuidenhout should not therefore come forward with such misrepresentations; there are people who know a little more about it than he does.

In this way he also gave an incorrect interpretation of the essential significance of the 1936 Act. He said it was introduced to protect the rural Bantu. The 1936 Act stresses a few major aspects in several chapters. It created the position of new released areas, and it also created the quotas in terms of which land was to be donated to the Bantu. It also made provision for possible excisions. It also created the Bantu Trust, and combined the old trusts which existed at the time. Chapter IV of the 1936 Act contained provisions relating to the squatter system in the White rural areas. These are the chief features of the 1936 Act, and not the features which the hon. member for Bezuidenhout tried to sketch.

Another theme we heard about here related to the removal of Bantu persons where necessary. This is a matter which has been discussed in this House of Assembly year in and year out, and from one debate to another. Consequently I am not going to say very much about it. However, I do want to set the hon. member for Pietermaritzburg South, who could not be here, straight. I know why he could not be here. One does not go far nor does one enhance one’s own prestige in this Parliament by presenting things incorrectly. The hon. member said that when I delivered my introductory speech it was outrageously unfair of me to have discussed only four of the aspects of the work which we are now considering. One aspect which I had allegedly omitted, or forgotten, was the question of the removal of the Black people. I was unable to make myself heard by way of an interjection while the hon. member was speaking, but I said that I would reply to his allegations. I did not omit, forget or pass over this aspect. Included ipso facto as an inherent factor in the second and third aspects which I mentioned, i.e. the clearing, removal or elimination of Black spots, was the removal of Black people. A Black spot cannot be deproclaimed before the Black people have left it. Nor can excision from released areas be undone by way of proclamation if the Black people have not even been taken from those areas yet. The removal of people is therefore included intrinsically in those two aspects. In addition I referred to these cases in my speech and indicated how we were going to deal with them. I pointed out how we would continue to display a sympathetic attitude in that regard. The hon. member will simply have to read up in my speech now how I admonished him to adhere more strictly to the facts and not to put words in a person’s mouth which he had never uttered.

The question was asked what we do with groups that refuse to move. I think this question was put to me by the new little Opposition party. We have had many such cases. This is not the first time we hear about something of this nature now. In many cases in the past there were groups that refused to move, but we did not do what has been written so erroneously in newspapers and preached overseas, namely that we resort to violence. We discussed these matters with the Bantu using persuasion and patient negotiation, by informing them about their relevant properties, about the areas to which they had to go, about the amenities which they were going to receive there, amenities which had either been provided already or which still had to be provided, and about the compensation which they would receive. In all kinds of ways we negotiated patiently with the people concerned. There are, of course, legal instruments which one could use. There have to be such instruments. After all, an official cannot simply jump into his jalopy, race off to a reserve and tell the people there: “The Minister is letting you know, through me, that you have to move.” That is not how we do things. There has to be a legal instrument, such as a State President’s order, resolutions of this Parliament such as those which we are going to adopt, and so on. These have to be there, but the method we have adopted with these people has been one of persuasion. The most striking example of this was the most recent example, about which the hon. member for Houghton has also had a great deal to say, namely Mayen. I wonder whether Mayen has not already been moved. My officials over there are nodding their heads to indicate that this is so. What happened there? They were removed with persuasion and co-operation. We have to display a great deal of patience, and by this time we know how to do this. As I said a moment ago, we are like a farmer who ploughs so often in a thunderstorm that he no longer hears the crashing of the thunderbolts.

The other theme which was raised here was of course that of the mountain reserves, as we may call them, namely Reserves Nos. 1 and 2, near Estcourt, and those of the Upper Tugela near Bergville. Many divergent contentions were made in this regard, as well as contradictory contentions such as those made by the hon. member for Mooi River. I always have a little difficulty with that hon. member. When one sits talking to him in one’s office, or if one talks to him in the Lobby …

Then he is very decent.

Yes, thank you. Then he is very decent, as the hon. the Deputy Minister has said. He is an excellent person to get along with, but when he rises in his bench, he is a striking mamba.

Order!

Is that too strong, Mr. Speaker?

Yes. The hon. the Minister must withdraw the words “striking mamba”.

Then I withdraw it. In any case, when the hon. member rises in his bench, he is very carping and acrimonious. May I say that. Sir?

Yes.

Thank you, Sir. I am very sorry for the hon. member. I do not know from what that attitude originates. I do not think that he wants to believe this, but in any case that is the impression which he creates. We are all human. Perhaps I, who am so amiable outside this House, am sometimes a little offensive to those hon. members here in this House. Perhaps it is due to provocation, perhaps it is simply one’s nature; I do not know. But that is the only problem I have with the hon. member. Perhaps he has the same problem with me; I concede that. But that hon. member did utter somewhat of a contradiction. He contended that I had allegedly said that I did not want to have the people of those three reserves move because they themselves did not want to do so. Surely that is not correct. Our proposals entail in fact that the people of the Upper Tugela Reserve will have to move to nearby land. What I did in fact say was that not all those people would have to move far. We know the history and the philosophy of those people. That is why we adopted the standpoint that it would be best to try to reorganize those reserves, with the problems they caused there in the mountains, locally. I shall return to this idea in a moment.

The hon. member for Umhlatuzana asked me—he also moved it as an amendment—that we should rather accept the 1973 proposals. For the purposes of this discussion we shall call it the “Cadman plan”. I know that he does not want to accept responsibility for it, but for the purposes of this discussion we shall simply call it the “Cadman plan”. He asked us to accept the 1973 proposals, which would entail that we would have to declare the land between the Upper Tugela and Reserve No. 2, to be released area. The hon. member also proposed that these proposals before us should stand over and be referred back, so that we could first deal with his motion. I do not quite know what to make of the hon. member now. I do not understand him. He is playing see-saw. We did in fact allow that territory to stand over for re-investigation in 1973, and now we have produced these new proposals as being better proposals. Now the hon. member is saying that we should refer these improved proposals back as well, and that we should reinvestigate the other proposals. The hon. member is playing see-saw between the two. It is up with the one and down with the other, then down with the one and up with the other. I think the motion moved by the hon. member was a very ridiculous one. It is a ridiculous motion. The intention with it is of course to help them out of a dilemma so that the hon. member for Edenvale could vote for this smokescreen. They want to try in that way to get away from the attitude of the hon. member for Edenvale not only in regard to Port St. Johns, but also in regard to a whole series of other places in the Eastern Cape. The hon. member wants us to return to those things in regard to which we had doubts. I want to ask the hon. member for Umhlatuzana why he did not propose here in 1973 that we refer back that piece of land for reconsideration by the Minister. Why did he not say in 1973 that we should accept it, if he is now so convinced that it is the right thing?

I was not on the Select Committee.

No, he could have moved it in this House. The hon. member could have moved as an amendment in this House that we pass those proposals, and do not let them stand over. Why did he not do so at the time? Was it because there was at that time no hon. member for Edenvale whom he had to rescue. That is the answer.

Rubbish!

When we reconsidered those areas after they had been allowed to stand over in the 1973 session, we found, as a motive for ourselves after a proper investigation, that a rearrangement of the people in that vicinity would be the best under these difficult circumstances, even if it were not, as many hon. members thought —I said this in my introductory speech— quite the best solution. In any case, the Natal Agricultural Union said that it was a better solution than the present one. That is what they told me. They said it was a better solution that the present one.

These proposals of ours to rearrange the people there locally, came from us and from no one else. The hon. member for Mooi River asked me what dark forces were behind this. There are no dark forces behind this. The hon. the Deputy Minister and I were both there, at the same time and also individually. After careful consideration and after a long investigation, even though there were other ideas in regard to these matters as well, it was decided to keep those people in that area and to find other land for them in the same area. That is the motive for this. That is why, when we became convinced that the land between No. 2 and Upper Tugela should rather not be taken, we decided to leave the Helpmekaar area, the little triangle which was in fact under consideration in 1973 and which was some distance away, and to take that part south of Estcourt and between location No. 1 and the Mooi River district boundary instead. This is the South Downs area. As I have said, the Natal Agricultural Union admitted that this was a better proposal and we know that we have in this way completely released the largest practicable area of the Upper Tugela as a water catchment area of the Tugela river. This would not have been the case with the proposals of the hon. member for Umhlatuzana, for we would then have had to add that land, with a piece of the Upper Tugela as well. We would then have been even further into the catchment area than when these proposals of ours are applied. Sir, we know what the nature of the land in that vicinity is—the land which is being proposed here. It will be our task, as long as we have a say there, to approach and to deal with that land with the utmost circumspection, and we shall try to influence the Zulu Government, as soon as they have sole control there, to do the same. Sir, you can go and see what is being done in that very area, in Reserve No. 1. Hon. members who have already been to Reserve No. 1, near Estcourt, will know that excellent rehabilitation and soil conservation work has been done, and that sound agricultural planning has been applied. This is the kind of thing which is extremely essential in that entire area in so far as there will be agricultural settlements, and in so far as there will be township development, and there will have to be township development as well. Similar control measures will also have to be applied, as we have throughout the entire country when we have to establish towns in areas in close proximity to rivers, or which might even be situated in their catchment areas.

I come now to another idea which I called a dream a moment ago, and this is the theme that the consolidation could be effected without purchasing so much land. The idea was raised here—it was in fact carried to extremes—that we should simply draw a line, in accordance with, their proposals, in the Northern Transvaal. I think that I have, in this debate, discovered the father of that idea. Sir, many objections can be raised against this proposal, which Chief Minister Phatudi also had a great deal to say about, namely that Transvaal areas could simply be made contiguous, and then one would have the entire Greater Lebowa, that the farms and the towns, etc., of all the Whites could be included in it and that it would happily continue to exist just as it was. The hon. member for Yeoville also waxed lyrical about this the other day. The first objection which could be raised in this regard is the egoism of the individuals who are not prepared to relinquish that land in the national interest and for the development of a proper homeland, in which, the citizens, the Black people, of the homelands will be the land owners, either on a communal basis according to their traditions, or individually. One is dealing with the egoism of certain people who wish to retain that land even within a Bantu area. That is the first idea which I am raising in objection to this. Sir, I also want to tell you that such a system offers no assurance whatsoever, which is intrinsic in our policy, that the Bantu homelands, as we stated in our 1948 manifesto, will become the father-lands of these peoples. It offers no security that that territory will consist entirely of land belonging to the Black people. Of what avail is it to establish Bantu homelands, which might even become independent, if more and more of the land belongs not to the people of that homeland, but to foreigners of another nation? Sir, this would even affect the national character of the Bantu peoples, for we know how the national character of each of these Bantu peoples, with their tribal system and their administrative systems, is linked almost religiously to land and land tenure. We know this very well. The hon. member for Edenvale knows it well; perhaps he knows it better than I do. Sir, the system which, is being proposed here, namely that Whites should own land on a large scale there, is in conflict with that traditional development and the views of the Bantu. It is only people who have no feeling for, who have no concept and no knowledge of this intrinsic feature and characteristic of the Bantu nature, who come forward with absurdities of this kind. But what is more, Sir, to do a thing like this would mean that we would be exceeding the 1936 quotas considerably, for what do you think, Sir, is going to happen if all that White-owned land is included in those Bantu homeland areas and is then perhaps transferred subsequently from White to Black people? Perhaps this will not happen straight away, but potentially one is exceeding the 1936 quotas considerably. In this regard I want to repeat, for the edification of those Whites outside who do not perhaps realize this, what we have stated previously, namely that it is the standpoint of this Government that Whites who wish to live within a Bantu homeland in this way, and who think that they can accept citizenship of a Bantu homeland and then have their cake and eat it should take warning that they will not be able to have their cake and eat it, for as is already stated in the Act relating to South African citizenship, a White person who, of his own free will, accepts the citizenship of another country—in this case of a homeland—automatically loses his Republican citizenship, and when he loses this, he loses all guarantees on the part of this White Government of the Republic to help him out when things may perhaps go wrong for him there.

Do you expect that?

I do not expect it. I am stating the facts.

Is there any danger?

No, there is no danger if you do the right and the logical thing, namely not to want your cake and eat it, but to allow the White land to be transferred to the Black man, as is our procedure. Then there is no danger for anyone, but then there is justice and fairness to the Black man, and no room for egoism on the part of refractory Whites.

May I ask a question? In regard to the question of citizenship, are you now referring to the homelands in their present form, or to the homelands when they become independent?

It goes without saying —when they became independent. Sir, I described this a moment ago as a dream. We hear so much in this House about “Alice in Wonderland”. If there was ever an Alice in Wonderland concept, then it is the one I have just been referring to, this kind of declaration of released areas. Yes, it is a true fairy tale. It is a kind of political wishful thinking.

Then, a great deal was said about purchases, valuations and compensations. The hon. member for Griqualand East, for example, asked for all kinds of details in regard to purchases, valuations and compensation. It was quite unnecessary for the hon. member to have asked that, but he did so because he had no other points with which to fill his half hour. I sympathize with the hon. member. He did so for lack of anything else to say. After all, the hon. member is a member for those areas, and he knows what procedure we adopt with land which is being purchased. Surely he knows that the valuators of the Department of Agricultural Credit and Land Tenure make our valuations for us. He knows how it is considered. He knows how it may be reconsidered and has to be revalued if necessary, and he knows how the offers are made. He knows how compensation is determined, how the people are paid out, how Bantu persons are paid out. We have discussed this on hundreds of occasions in this House. They are even paid out for their movable property, and in addition they may still take the movable property with them, and even their immovable property. They may, for example, dismantle their houses and take these with them to the new areas. And the Whites whose land is bought out, are compensated even to a tree or a borehole which has been cemented up. These are assessed and they are paid out. Nothing is omitted. The hon. member knows that. I do not think it is necessary to elaborate on this any further. Then the hon. member complained here, as he has done previously, about what he called the mixed living conditions in terms of the zoning system. Sir, that the hon. member for Griqualand East, a member of the United Party, as well as members of the other two little parties, can now complain about people having to live together with Black people in a transitional stage, which need not last long, in areas which the Blacks may now enter and the Whites are leaving—they who take such great pains, on such a large scale, for mixed co-existence between White and Black in South Africa, that he should complain about this now! When I heard that it reminded me so much of the anecdote I heard of the boy who murdered his father. When he was found guilty of murder by the judge, and was asked whether he had anything to say, he said: “Yes, Your Worship, please have mercy on me for I am an orphan”. That is the kind of argument the hon. member advanced.

They have no choice.

We are trying to prolong the zonings indefinitely and if such problems do crop up with mixed residential areas, we could always expedite the purchases if that could be justified. We have already done this in the past and we could do so to an increasing extent in future.

I now want to refer to Port St. Johns. The hon. member had a great deal to say about Port St. Johns. I do not consider it necessary to say anything further in justification of our attitude in regard to Port St. Johns’ because I dealt with it fully in my speech. I am going to adhere to every syllable of what I said. As far as Port St. Johns is concerned, I, the hon. the Deputy Minister and the Government, are, in the process, going to come out of it very well indeed, but not the hon. member for Griqualand East. Here in my hand I have 35 telegrams which I received during the past few days, and which are all opposed to the memorandum submitted by the hon. member.

Read the telegrams.

Yes, I am going to read a few. Thank you very much for the invitation. I shall comply with it gladly. I am going to quote a few of the telegrams. These are typical of all of them, and it is therefore not necessary to quote all 35. The few telegrams I am going to quote, are a precise reflection of the tendency which emerged from all these telegrams. In all fairness I am not going to mention the names of the senders, because I do not have their permission to do so. Consequently I shall use substitute letters or something similar. The letters will not necessarily stand for the correct initials. Here is one which comes from Port St Johns. I quote—

I said in my speech that more and more people are supporting the purchase of Port St. Johns and its becoming a Black area. This telegram was one example of this. Here is another telegram, also from Port St. Johns. I quote—

Signed “M. C. Botha.”

No, “signed so and so.” The name is given here, but I am not going to disclose it because I know what thunderous recriminations will come down on the heads of those people if I were to mention their names.

Who is going to thunder at them?

My, the hon. member should not use such nasty language. I shall quote another telegram, also from Port St. Johns—

Here we therefore have quite a number, first a majority at the meeting and then the 53 property owners, who all want to roast Mr. Gray Hughes. Here I have another telegram from Port St. Johns (translation)—

If the hon. member wishes to know who it is—there are his initials.

Whose memorandum was it?

The memorandum of the local authority. The hon. member dealt with it.

I submitted it.

May I ask the hon. member whether he agrees with the memorandum? [Interjections.] I should like to reply to the hon. member, but then I want to know whether he agrees with that memorandum.

Yes, I agree.

But what is the hon. member complaining about now?

But I was not originally involved in it.

Yes, that is completely correct; the hon. member was not original. Sir, this is such an enjoyable business; I feel like reading all the telegrams.

Read all 35 of them.

Here is another telegram. Listen to this (translation)—

It is Gray Hughes.

The hon. Minister is guessing that it is Gray Hughes. May I read another.

Yes, do.

Are you certain that it is “I” and not “you”? Does he not mean that you are old an infirm?

Strangely enough, one of these people spelt Gray Hughes incorrectly as Grey Hughes. We shall simply say the grey-haired Hughes. I am quoting another telegram set on behalf of two people, who give their names. I shall call them Messrs. A. and B. It reads—

This is clear, because this is what they say here.

Mr. Speaker, may I put a question to the hon. the Minister? Would the hon. the Minister be prepared to give the hon. member for Griqualand East copies of all those telegrams, without the name of the senders?

Without the names of the senders? Gladly! I shall give them all to the hon. member for Griqualand East, and photostat copies to the hon. member for Umhlatuzana if he wants them.

Mr. Speaker, may I also put a question? Having read all those telegrams, does the hon. the Minister now assume that those senders are in favour of the same system being applied to Port St. Johns as was applied to the towns of the Transkei?

I quoted one or two telegrams in which the people stated that they did not like the zoning. There are some of the people who said they did not like the zoning.

But that is my whole point.

Oh well, surely I did not conceal that I quoted one or two telegrams in which reference was made to that.

May I ask the hon. the Minister another question? Will the hon. the Minister give all those people who sent a telegram the assurance that he will buy them out immediately they ask to be bought out.

No, we cannot buy out all of them immediately. Nor is it necessary. Nor are all of them asking for this. The premises which are considered to be the most necessary, will be bought out first.

A question was put to me in regard to what I said in my introductory speech when I referred to interest-bearing Government stock. Now that the hon. member is perhaps a little less excited, I should like to quote the relevant passage again. The questions which have been put to me are in fact all covered by what I had to say about this matter. The hon. member for Umhlatuzana should listen carefully now, for the questions came from him in particular. I was referring to the Cabinet which had decided that, firstly, more money per annum would be appropriated; and, secondly, that if it was insufficient the Treasury would be prepared to supplement the amount, as has been done in the past year, when they had to supplement our appropriation by more than R15 million. I then said—

I emphasize “if it were to be necessary”—

I made it very clear. I think that with those words all the questions the hon. member put to me have been repied to. It is very clear that the State prefers to appropriate the money which is required every year, and if it is insufficient, to add money in order to make further purchases, and then to do the same the next year, until the work has been completed. The State prefers that procedure. But nor is the State a prophet. It does not know whether there might not, in four or five years’ time, perhaps be a shortage of money, or some other problem in regard to money. However, land must be purchased, and in urgent cases, and if it were to be necessary, the State will, as I have said, be prepared to make supplementary use of the stock system. However, the State does not want to introduce the stock system in the place of the ordinary appropriation system, where money is placed on the estimates every year. That is the attitude. It has to be understood that persons’ land will be purchased and that they will receive the stock for it. There it is not a question here of the escalation of land value and that kind of thing. Those matters are being settled The stock will be interest-bearing and a person will be able to use the stock for other purposes. A person could, for example, purchase other land for himself and use the stock for the acquisition of money, for hypothecation, and so on. The hon. member must realize that the system is based on the purchase, and not on the deferment of purchase.

I come now, finally—in order to please the Whip and the Opposition, for they have had enough of a hiding—to the two amendments which were moved, and I want to discuss these briefly. The hon. members, will know, from what I have said up to now, that there is not the slightest possibility that we might accept the amendment. Actually, I have dealt with the contents of the amendment in what I have said so far. We of course say “no” to both amendments. The amendments are primarily the same—not quite, but essentially, to a large extent, the same. It is not necessary to have a re-examination or to have this referred back, for we have investigated and debated these matters fully enough. This applies to the additions, and precisely the same applies as far as the excisions are concerned.

As far as the second part of the amendment is concerned, requesting that consideration should rather be given to the 1973 proposals, I replied fully a moment ago when I replied to the hon. member’s speech, and I therefore need not motivate this again. We come to the third part of the amendment moved by the hon. member for Umhlatuzana, in which he states that the remaining land should be purchased as released areas, without further delay. I have replied to this too, particularly with reference to the questions which were put to me. For technical reasons as well we are not able to purchase this immediately, for then one would be exceeding the quota, and if one exceeds the quota, further excisions would have to be made. For that reason the releasing of areas, the excision of areas and the purchase of land after releasing, have to be dealt with simultaneously. The Government has already accepted the principle of appropriating more money, as I have now explained here. Therefore I do not think it is necessary to purchase everything precipitately, for the land will also have to be re-utilized and disposed of. To obtain all that land simultaneously will not only be a disruption for all these farmers who have to leave, it would also place a burden on my department which would be extremely difficult to handle, as well on the departments of the homelands governments that have to work with the land on the large scale on which it is acquired. There is of course the financial argument, namely that one cannot in one year simply vote a few hundred million rands for these matters.

May I ask the hon. the Minister a question?

No, I should like to finish up now. I should like to discuss the amendment moved by the hon. member for Houghton, which is for the most part the same as that of the United Party. Their amendment implied a deferment in regard to a few areas and a refusal in regard to and other areas, but in essence it was the same as that of the United Party, including paragraph 3(b) which reads—“without further delay”. The fourth part of their amendment read as follows—

†We have consulted properly and sufficiently with them. With regard to all further work that will be necessary, we will have continual consultation with them in future. In paragraph 4(b) they say—

I think that that is an unheard of request, namely to make it conditional. The hon. member and her party know that this is an unheard of proposal, because in the next paragraph the hon. member comes with a modification of this by saying that if they do not approve of it, then it must be referred back to this House for consideration together with any alternative proposals which may be made. That is exactly what we are doing now, in so far as we have had consultations with these Bantu governments and they did not concur with us. We do have discussions here in this House and it is for this House to decide what we have to do in these matters.

*In this regard I have to remind hon. members of one matter, which is that they must realize that in these consultations the Bantu Governments do not have the right to say what White land we should give them. The Bantu Governments do not have the right to designate the presents they are receiving. They do, however, have the right to be consulted on what land we wish to take away from them. This we have done and we shall have a great deal more to say about this in future.

Mr. Speaker, my reply was easier and took place in a far better spirit than I had ever expected. This, too, is a fine testimonial from my hon. friends, the Opposition, over there.

Amendment proposed by Mr. R. M. Cadman put,

Upon which the House divided:

Tellers: E. L. Fisher and W. G. Kingwill.

Tellers: J. M. Henning, J. P. C. le Roux, A. van Breda and C. V. van der Merwe.

Amendment negatived.

Amendment proposed by Mrs. H. Suzman put,

Upon which the House divided:

Tellers: E. L. Fisher and R, J. Lorimer.

Tellers: J. M. Henning, J. P. C. le Roux, A. van Breda and C. V. van der Merwe,

Amendment negatived.

Main question put,

Upon which the House divided:

Tellers: J. M. Henning, J. P. C. le Roux, A. van Breda and C. V. van der Merwe.

Tellers: E. L. Fisher and W. G. Kingwill.

Main question agreed to.

Afternoon Sitting

Mr. Chairman, the hon. member for East London City should really withdraw his amendments in view of the speech he made on this clause on Tuesday. He is satisfied that, as it says in the clause, the hon. the Minister will determine the rate of interest. He said—I quote from his unrevised Hansard—

According to what he said, his amendment is actually aimed at something else. His amendment is actually aimed at reaching a position where the interest is fixed at a certain rate for the full duration of the contract.

Mr. Chairman, with respect, his first amendment, in terms of which he wants the word “prevailing” to be inserted, is something he does not really want. One cannot read into it the meaning which he explained to the House. The present section only prescribes a maximum rate of interest. A seller may even ask less. I believe that, as far as interpretation is concerned, the present section has actually created very few problems in the past. The clause is intended only to determine a uniform interest. The purpose if precisely not that a fixed interest rate should be established for the duration of the contract. In fact, it is important that rates of interest should be able to fluctuate. A long-term contract in terms of which the rate of interest is unable to fluctuate is undesirable from the point of view of the seller as well as that of the buyer. It can be a disadvantage to both. The only intention of this clause is that the Minister should be able to fix a maximum rate of interest. This would ease the position considerably. In fact, the hon. member for East London City even admitted it in the quotation I made. In terms of this clause, the hon. the Minister will only determine the maximum rate of interest for contracts in terms of this Act. We have the position that there are various rates of interest at building societies. As a matter of fact, there are often different rates of interest for different loans at the same building society. It is logical that rates of interest will not be determined arbitrarily, but that they will only be determined after thorough investigation. It is logical that the interest which is prescribed will be related to the average interest rates on money loans made on mortgage bonds which are intended mainly for housing purposes. After all, the building society rates of interest are not arbitrarily determined either. On the contrary, many factors are taken into account in doing that. One moment the Opposition members are worried about the position of the township developer, but then again they are not worried. When the rate of interest has to be fixed, they wish to do so to the advantage of the developer, but on the other hand they want to have a fixed rate of interest for the full duration of the contract, which is not really in the interests of the township developer.

Finally I want to say that there is no obligation to charge interest, or to fix interest at the maximum rates of interest. Nor will interest rates automatically fluctuate in the contract, unless it is specifically contracted for between the parties. The only prohibition imposed by this clause is that the rate of interest may not exceed the maximum. In addition, it will always be known, when the agreement is entered into, what the rates of interest are at that stage. The seller will take the rates of interest into account in fixing his price.

The second amendment brings us back again to the question that maximum rates of interest, as fixed by the hon. the Minister, can be exceeded. Therefore I believe that there is no sense in that either.

Mr. Chairman, when the debate was adjourned on the last occasion, we were still not entirely satisfied with the hon. the Minister’s reply.

I should like to raise two points in regard to this matter. The first one is in regard to the rate of interest which the hon. the Minister can prescribe. In so far as rates of interest generally are governed by this Parliament, the hon. the Minister of Finance stipulates a maximum beyond which people who lend money cannot go. I want to ask the hon. the Minister if what he is asking for is in effect the same permission that is given to the hon. the Minister of Finance to stipulate a maximum rate of interest. This we could understand. Alternatively if he does not intend to stipulate a maximum rate of interest could he enlighten us as to why there is the necessity to differ from the rate which would normally be prescribed as the rate prevailing at the time and which would be laid down in all normal circumstances in regard to other businesses generally by the hon. the Minister of Finance? If the hon. the Minister is not prepared to fall into line and to move in step with the hon. the Minister of Finance, clearly there must be some element of subsidy. If there is this element of subsidy, perhaps the hon. the Minister would tell us what justification there is for it. Up to now, the justification for it has escaped those of us in these benches.

I should like to put one further question to the hon. the Minister. Is it the hon. the Minister’s intention at any particular point in time to prevent a seller and purchaser of land from entering into a contract which may extend over a number of years and where the rate of interest is fixed? The seller is in effect selling an asset and of course there is the possibility that the value of that asset may appreciate or depreciate. It seems to me therefore that he should have the right, providing the buyer of the asset agrees, to fix the rate of interest at the rate laid down by the hon. the Minister at that particular point in time for the full period until the debt has been repaid. I think that if the buyer and seller agree and the hon. the Minister were today to say that the rate was 14%, that 14% should be allowed to apply to the full amount of the outstanding balance until the total sum has been repaid. It also seems to me that, if they wish to do so, the buyer and the seller should also be allowed to agree—in terms of the provisions as now drafted— that the rate of interest will rise and fall as the hon. the Minister causes it to rise and fall.

Mr. Chairman, I think we should return very briefly to the existing Act, to the amendment which appears in the amending Bill and to the amendment moved by the hon. member for East London City.

Order! I just want to point out that the hon. the Minister may not discuss the existing Act. I shall give him the opportunity, however, of stating his perspective.

Yes, Sir. The amendment in the amending Bill is aimed at removing the uncertainty which exists in the existing Act. The amendment which the hon. member for East London City put on the Order Paper has two legs. In the first place he wants a fixed rate for the full term of the contract. The same argument has just been used by the hon. member for Johannesburg North. He asked me why it was not permissible, subject to the fixing of the rate of interest by the Minister at a certain stage, to stipulate that that rate of interest will be valid for the whole term of the contract. In the first place I want to say that the amendment of the hon. member for East London City will not achieve that purpose; it will not have the effect he wants it to have. In the second place, the amendment creates uncertainty which we would like to remove. Let me mention an example. There is no such thing as a fixed building society rate. There is not even a fixed rate for the same building society depending on the amounts of the loan.

But it is a registered bond.

The bond which has already been registered in favour of the building society contains a provision that the rate of interest may be changed.

But it is still a registered bond.

Sir, you then have a fluctuating rate of interest in any case. All I am arguing now is that he has not fixed a maximum rate of interest. I understand the argument of the hon. member. All I am saying is that the wording of his amendment does not have the effect he wants it to have. All I asked him at this stage and last time was that we should pass the clause as printed. I shall then see whether we can improve the wording, for I do understand the problem which the hon. member mentioned.

Good.

Sir, I now come back to the hon. member for Johannesburg North, who put various questions to me.

†If he refers to the section proposed to be amended, he will find that in terms of the Act as it stands, and also in terms of the Act as it is proposed to be amended, the rate of interest that we determine is a maximum rate. The section reads—

The reply to the first question, therefore, is that it is the maximum rate. In other words, as far as this particular Bill is concerned, it is on a par with the Financial Institutions Bill.

It will be.

Yes, it will be in this sense only that maximum rates are determined. I shall come to the point as to how that rate is to be determined. I just want to make it clear that the rate is a maximum rate. As the Act reads now, there is clearly an indication that the rates which are applicable at the moment are building society rates. The hon. member will also know that the rates of building societies at the moment are determined by the Minister of Finance in terms of the powers conferred upon him under the Financial Institutions Act.

The Currency Act.

That is quite right, but there were amendments to that Act last year. When I said that the rate of interest which would be determined by the Minister of Economic Affairs would have regard to the conditions prevailing at a particular time, I had in mind that the same considerations which apply for the purpose of determining the rate of interest by the Minister of Finance would normally also apply in the determination of the rates of interest in this particular case. Sir, I hope I have answered all the hon. members’ questions.

In conclusion, Sir, I should like to say that this is a technical Bill. I am quite prepared to listen to arguments and to give them due consideration, but I think it is unwise to accept amendments here without proper consideration. I would therefore ask the hon. member to withdraw his amendment. I give him my undertaking that I will look into this again.

Mr. Chairman, I welcome the statement by the hon. the Minister that he is going to look into this during the recess. I concede that this is a technical matter. I concede also that it is an intricate matter, and I think it is very difficult to amend this across the floor. Sir, may I just ask him to give consideration to, inter alia, the following points when he considers this during the recess: Firstly, it may be desirable to permit people to agree to a fixed rate for the duration of the period of the deed of sale. Just as it may be desirable to permit them to agree to a fixed rate, it might well be desirable to permit them also to agree to an escalating rate, in other words, to have the alternative to decide this for themselves by way of contract. The reason for it is that in the one case it may well be that the seller wants to fix a particular rate of interest for the entire period. On the other hand, another seller and another purchaser may wish to have an escalating rate because it may well be that the seller himself during that period will be subject to an escalating bond. So in order to allow this type of commercial practice, which is not a form of exploitation at all, to exist, think the hon. the Minister, with respect, should give consideration to that during the recess. I am concerned that if you create a position which results in the seller building in interest into the purchase price in order to cover himself against contingencies, you may well be pushing up land prices unnecessarily, and this, too, I am sure the hon. the Minister would like to avoid. Whereas I do not want to pursue this by way of an amendment for the reasons on which I agree with the Minister, I would ask him to give consideration to these matters during the recess.

In view of the fact that the hon. the Minister has indicated that he is going to review his decision about these particular sections, with the leave of the House I would like to withdraw my amendments.

Amendments, with leave, withdrawn.

Clause agreed to.

Clause 6:

Mr. Chairman, I move the following amendments standing in my name—

1. (1) On page 8, to omit all the words after “terms” in line 18 up to and including “land” in line 20 and to substitute:

which at the time when transfer is to be taken, apply in respect of a loan, secured by a first mortgage bond over land, which

1. (2) on page 8, to omit all the words after “terms” in line 26 up to and including “land” in line 28 and to substitute:

I am not going to explain this amendment, because I think it is self-explanatory. This is really a reaction to a point raised by the hon. member for Johannesburg North during the Second Reading, in respect of which I should like to accommodate him.

I obviously support the amendment put forward by the hon. the Minister, but I would also like to move the amendment which stands in my name on the Order Paper. May I just briefly motivate that amendment. It is not in every case that a sale of this nature takes place, where the purchaser is a person who is buying purely in order to build a house on a stand. He may himself be a speculator who is buying more than one stand, and he may in that sense be a developer. For that reason, it seems proper that people should be able to agree on a rate of interest in an agreement in respect of which a bond should be accepted. Secondly, it is also fairly clear that whereas a particular building society rate may be the prevailing rate at the time, it may be utterly impossible to get a bond at that rate. For that reason I have drafted an amendment which is intended to cover these contingencies so that in fact you can cover them When you contract. It is not as if anybody is pulling a fast one over anyone; it is a question of putting it in a deed of sale to enable a situation, which is a commercial situation, to be implemented. I move—

I should like to deal first of all with the amendment moved by the hon. the Minister. I would like to say that in the first instance I do not believe that the amendment, read with the existing printed amendment in the Bill, makes sense. If one reads the whole sentence, one finds that it reads as follows, and I am only quoting from line 16—

To my way of thinking, the words “which is granted by a building society” mean nothing at all on the clear reading of this amendment. I am afraid that we on this side of the House cannot agree with the amendment moved by the hon. the Minister.

In regard to the amendment moved by the hon. member for Yeoville, we also do not believe that the inclusion of the words “specifically stated in the contract” are necessary, or will make for good law, because we believe that what is contained in that amendment is a repetition of what it is specifically designed by the amending Bill to obviate, and that is that there may be included a clause in the deed of sale which is in fact onerous upon the purchaser, an unwitting purchaser. That is the whole purpose of section 7(1)(e) as substituted by clause 6, viz. to obviate the purchaser being involved in a situation where he finds that he is going to pay excessive interest. If the hon. member for Yeoville’s amendment is accepted it is going to completely negate what the clause is setting out to do.

Unfortunately I cannot accept the amendment of the hon. member for Yeoville and I shall tell him why not in my reply.

I am just motivating my argument for moving a further amendment. If one reads the amendment moved by the hon. member for Yeoville, one will find that it is not really consistent because he does not follow it up by moving the same amendment to subsection (2). If he had put in an amendment which also had altered subsection (2) to the same effect it would have been consequent. As it stands at the moment it cannot be acceptable to this House.

I have prepared a further amendment to this particular clause and it reads as follows:

1. (1) On page 8, to omit all the words after “terms” in line 18 up to and including “society” in line 21 and to substitute:

I have furnished the hon. the Minister, the hon. member for Yeoville and the hon. member for Johannesburg North, who have all taken part in this debate, with copies of the amendment. Where the hon. the Minister says “bond over land” we say “bond over the land”. It refers to the specific land included in the contract whereas in terms of the hon. the Minister’s amendment the word “the” is not used. I believe that the use of the word “the” will clarify the issue. Furthermore, it does not refer in any way to the contractual agreement in the deed of sale itself. It simply refers to what I believe is the correct position, viz. to see to it that if the conditions for the bond which are going to be taken over are included in the contract, those conditions must not be more onerous than the conditions of a building society bond at that particular time. The second part of my amendment is also consequent. I move—

1. (2) On page 8, to omit all the words after “terms” in line 26 up to and including “society” in line 29 and to substitute:

Mr. Chairman, I want to react immediately by saying that I have considered the amendment moved by the hon. member for Yeoville. Let me say straight away that there is some merit in his amendment, but I am unable to accept it because it clashes with the second amendment standing in my name. In the second place, it does not go far enough, because it also has to be made applicable to subsection (2), as has quite rightly been said by the hon. member for East London City. We are trying to achieve one thing with this clause as it appears in the Bill at the moment, and that is to ensure that a purchaser should not take a bond, the conditions of which are more onerous. I think all of us are ad idem as far as this principle is concerned. I am not trying to evade the argument, but I want to say that if all of us are satisfied that we want to achieve the same thing, I believe it is wrong that we, as lawyers, should try to make an analysis of the implication of every word. I shall try and explain. With his amendment, by the insertion of, inter alia, the word “the”, the hon. member for East London City tries to identify the land in respect of which the bond is registered. I want to reply to that. It flows from the legislation itself that the land in respect of which the bond is registered, is the land which forms the subject of the transaction. In the first place, there is the definition of “land” in the legislation and, in the second place, reference is made in the clauses to seller and purchaser in respect of the land. Be that as it may, I think both these amendments are trying to improve the legislation. Let me also concede straight away that both these amendments contain an element of merit. I want to give the undertaking that, before the Bill goes to the Senate, I shall see whether I am able to prepare an amendment from these two amendments which, in my opinion, will improve the legislation. I undertake to effect this amendment in the Senate if I can possibly do so.

Mr. Chairman, I welcome the undertaking by the hon. the Minister because I do not think that we are trying to score debating points. We are involved here with trying to improve the legislation. I would just like to present two points for the hon. the Minister’s consideration in the interim. The amendment to subsection (1)(e) does not necessarily have to go with subsection (2) because subsection (1)(e) provides what may be in the deed of sale, whereas subsection (2) provides that subsection (1)(d) shall not apply if certain things happen. Therefore the two subsections can be dealt with separately. I think the amendment of the hon. member for East London City is substantially the same as mine except that in mine provision can be made for specifically stating the rate of interest. I therefore have no problem with his amendment from that point of view, except that in my view it does not go far enough.

Mr. Chairman, I do not know whether the hon. member for Yeoville has withdrawn his amendment. Under the circumstances I also welcome the hon. the Minister’s attitude here. Although I must tell him that the next amendment I am going to move I certainly will not withdraw under any circumstances, I do ask, with the leave of the House, that this amendment be withdrawn.

Mr. Chairman, may I also withdraw my amendment?

Amendments moved by Mr. H. G. H. Bell and Mr. H. H. Schwarz, with leave, withdrawn.

Amendments moved by the Minister of Economic Affairs agreed to.

Clause, as amended, agreed to.

Clause 7:

Mr. Chairman, I move the amendment as printed in my name—

I think the aim of the amendment is acceptable to everyone. The aim is merely to regard a guarantee as payment for the purposes of payment of the purchase price and not for interest.

Mr. Chairman, I move the amendment standing in my name as follows—

My reason for asking for the inclusion of these words is that it is a question of commercial practice.

Mr. Chairman, I move the three amendments standing in my name, as follows—

1. (1) On page 8, in line 48, after “guarantee”, to insert:

1. (2) on page 8, in line 50, after “amounts”, to add the following proviso:

1. (3) on page 8, to add the following subsection at the end of the proposed section 10:
   1. (3) If the seller is unable or fails or refuses to give transfer of the land—
      1. (a) after five years have elapsed since the conclusion of the contract, against or after payment of the purchase price; or
      2. (b) by the date or event stated in the contract in terms of section 4(1)(p),

After giving the hon. the Minister’s amendment serious consideration, the Opposition has decided to accept it. I know that with his legal background he will see the strong foundations of the amendments I have moved and I hope he will accept them. There is a great deal of merit in the amendment moved by the hon. member for Yeoville to include insurance companies, but I must tell the hon. member for Yeoville that I have certain difficulties in this regard. There are various kinds of insurance companies. There are companies which undertake long-term insurance, for example life insurance, and there are other insurance companies which undertake short-term insurance. As the hon. member for Yeoville knows, there are many foreign insurance companies which are not domiciled in South Africa, and as such they do not have to furnish the Registrar of Financial Institutions with all the necessary information that would be required of insurance companies domiciled in South Africa.

That is not so; that is nonsense.

I am certainly in favour of accepting guarantees. The hon. member for Yeoville says it is nonsense, but the hon. member always says it is nonsense when somebody disagrees with him. Well, most people disagree with him most of the time.

No, please do not start an argument.

There are many insurance companies in South Africa that are strong financial institutions and there are many of them whose guarantees any one of us would gladly accept. In respect of this particular type of deed of sale those of us who have dealt with this matter in practice—the hon. the Minister too has dealt with, these matters in practice —find that very seldom do we get insurance companies’ guarantees; it is always a building society guarantee or a bank guarantee. We know that there have been several insurance company failures in the past years and I should like to appeal to the hon. the Minister rather to accept my amendment in this regard.

As regards the amendment moved by the hon. member for Yeoville to include insurance companies, I should like the hon. the Minister to instruct the Registrar of Financial Institutions to go into this matter carefully. I think after we have passed the Financial Institutions Amendment Bill sometime next week or the week after to ensure that all these foreign based insurance companies will then be domiciled in South Africa and will then have to furnish all information regarding their assets and liabilities to the registrar, the registrar will be in a far better position to give us an assessment of which insurance companies should be approved as insurance companies whose guarantees will be acceptable. I should like to ask the hon. the Minister whether, in view of the fact that building societies play a very major role in this type of transaction and he has now made provision in the Bill for a banker’s guarantee to be acceptable, he is prepared to allow building society guarantees also to be acceptable.

I am.

The hon. the Minister has indicated that he is prepared to accept that amendment and I should now like to deal with the next amendment which stands in my name. I should like the hon. the Minister to have a look at this amendment.

I am prepared to accept that one too.

The hon. the Minister seems to be in a very free and easy mood this afternoon. He has indicated that he will accept this amendment and therefore I merely want to say that this amendment gives clarity whereas the Bill as presently worded does not give clarity. The Bill as presently worded does not provide for interest to be paid from the time the guarantee is to be furnished until date of payment. As the hon. the Minister knows, there is often a long delay between the time the guarantee is furnished and the date of implementation of the guarantee. One can get delays in the Deeds Office of six or seven weeks and there are also delays in connection with estates. In view of the fact that the hon. the Minister is going to accept the amendment, I do not think it is necessary to motivate it any further.

I should now like to deal with the third amendment standing in my name. I can see that the hon. the Minister is shaking his head, but I should like to speak to him seriously about this amendment.

We can do it privately.

We can do it privately, but I should like some public assurances first and then we can have private discussions. To accommodate the hon. the Minister I am going to be very brief on this particular point. I had intended elaborating, but seeing that we are going to speak about it privately if I can get a public assurance from him, I shall only refer to it briefly and then the rest of the conversation can take place privately. As the hon. the Minister knows, when township developers apply, all the provinces implement systems of phase development. The hon. the Minister was a member of the Cape Executive Committee and therefore he will know that phase development means that you allow township developers to cut up their raw land, and then subdivide it into plots and provide the necessary services. When such a developer has built 30% to 40% of the houses on the plots, he is permitted to tackle the next phase of development. That is known as phase development. A developer is encouraged to undertake that sort of development because he spends hundreds of thousands of rand on services and once he has built 30% to 40% of the houses on that particular land and the municipality has a sufficient income from that property in the form of rates, the developer is given a refund. That sort of developer is a bona fide township developer and I have no complaint against him. My particular objection applies to the man who gets the right to sell plots on the basis of phase transfers. I explained that term during the Second Reading debate and as the hon. the Minister knows, the right to sell plots under phase transfers may have the result that if a man buys a plot, for example, in phase 8, he may have to wait a lifetime or longer to get transfer and it is therefore a contract which is virtually impossible to fulfil. I should like to ask the hon. the Minister whether he is prepared to give an unequivocal assurance today that he will speak to the provincial administrations and insist that phase transfers are not granted on conditions of establishment. I know that the hon. the Minister was a member of the Executive Committee. All the years he was in the provincial council he had never heard of phase transfers and this applies to the rest of us. This is a new innovation. I would like the hon. the Minister to give us the assurance that if the provincial administrations do not agree to eliminate phase transfers, he will allow the matter to come back to this House at a later stage, perhaps next year, so that we can debate this amendment in full. If I could get that assurance from the hon. the Minister, i.e. that he will negotiate with the provinces and that he will tell us what the outcome of these negotiations is and the provinces are happy to exclude phase transfers, I am prepared to withdraw my amendment at this stage.

Mr. Chairman, I wish to move the following amendment—

I move this amendment merely to point out to the hon. the Minister that section 4(1)(g) refers to all the money payable in terms of the contract. It says that all other charges shall be effected in full. This means that when a person gives a guarantee for payment of the amount referred to in 4(1) (g), the guarantee should virtually include “all the charges in terms of the contract”. One section of the charges refers to the costs of transfer, which means that transfer duty, stamp duty as well as other disbursements should be provided for so that transfer can be effected, against which the guarantee will be paid, and this involves the conveyancer in considerable amounts of expenditure. I think he is entitled to be protected in that sense. There is a provision which excludes those specific items, i.e. cost of transfer and other disbursement which, as the hon. the Minister knows, has always been payable in any event before the conveyancer proceeds with the transfer of the transaction. If the amendment could be brought in, I think it would clarify the purpose of the guarantee.

Mr. Chairman, I should like to thank the hon. members for their co-operation and it is important for us to understand that it is not easy to amend technical legislation. I want to intimate at once that I am prepared to accept the first amendment moved by the hon. member for Walmer, and that I am unable to accept the amendment of the hon. member for Yeoville at this stage for reasons which I explained to him in private, although I agree with the principle that insurance companies ought to be included. However, as matters stand now, I am unfortunately unable to include everyone. I have to find a method to identify and define properly what both the hon. member and I had in mind. I hope the hon. member will accept that.

I am prepared to accept the second amendment moved by the hon. member for Walmer, too, as I have already stated. The third, however, I am unable to accept for two reasons. The first is that if what the hon. member says about phased development is in fact an evil, then the solution is that the various provincial authorities must reconsider whether a specific type of development of this kind ought to be allowed. If this is a problem—I am not prepared to give an opinion on that now, nor do I think that the hon. member expects it of me—then it must be rectified there. I must not use this Act to rectify a problem that has occurred elsewhere in the legislation of a different body.

However, I am prepared to give the hon. member the assurance that I shall undertake, as I indicated in the Second Reading, to discuss the matter with the provinces, and put the stand oint to them. I am prepared, too, to make my own evaluation of the problem raised by the hon. member. If, after investigation, I share his view, then I shall ask the provinces whether they do not want to consider adjusting their legislation to provide for these circumstances. I hope that that is clear. As far as the last amendment, that moved by the hon. member for Jeppe, is concerned, I want to explain at once that he is quite correct, particularly in that transfer duties are traditionally payable to the attorney before the purchase price is payable, because there are expenses to be paid before one can exchange for cash the guarantee which goes with the registration. I asked the legal advisers to go into this for me, and they gave me the assurance that the legal costs, transfer costs, transfer duties and stamp duties are not included in the amounts under section 4(1)(g) and that they had no effect on the right of the attorney to recover those moneys by way of a deposit. I want to ask that the hon. member withdraw this amendment and I want to give the undertaking again, since we are concerned with interpretation rather than anything else, that I shall amend it if necessary. Is the hon. member satisfied?

In the light of that I am prepared to withdraw the amendment.

Amendment moved by Mr. H. Miller, with leave, withdrawn.

Mr. Speaker, I have two problems. The one is that the hon. member for Jeppe has withdrawn the amendment, but if the advice given to the hon. the Minister is correct, one must think whether the meaning which is to be attached to the words “and all other charges” in section 4(1)(g), is correct. It has other implications which, I think, could have quite serious implications for the legislation. So, when the hon. the Minister looks at that question, I think that he should look at it as to what the consequences would be if that interpretation is correct. Because then there are problems in regard to what may be recovered. That I think creates a different problem altogether in the Act.

The second point that I want to make, is that I am prepared to withdraw the amendment which stands in my name. I do so not for the reason that foreign insurance companies are excluded, because foreign insurers have to make returns and have to have solvency levels. All that has happened in the legislation that is pending, is that in the main they now have to fulfil certain obligations in respect of domestication. This is the point. I think it is important that it should be considered, as the hon. the Minister has said, because, for instance, one of the biggest insurers in the country is a tremendous lender on all mortgage. I think it would be unfortunate if every time that they have to furnish a guarantee, they have to go to a bank or a building society to do so, when they are probably financially five, six or seven times stronger than the bank. But in the light of that, I am quite happy to withdraw the amendment.

Amendment moved by Mr. H. H. Schwarz, with leave, withdrawn.

Mr. Chairman, I do not want that there is any misunderstanding between the hon. the Minister and myself on this particular score. I am happy with phased development. What we are opposed to, is phased transfers. The hon. the Minister has undertaken to investigate the matter, and if the hon. the Minister comes to a conclusion, as I know he will with his background of service on the Executive Committee and his legal background, he will also be opposed to phased transfers. If the hon. the Minister comes to the conclusion that he is against phased transfers, and he consults with the various provinces, the only way that the hon. the Minister can implement it, is actually by legislating in this particular legislation. What I would like from the hon. the Minister is an assurance that if he agrees with me that phased transfers are wrong and he cannot get the necessary assurances from the provinces, would the hon. the Minister undertake to come back to this House with this matter so that we can debate the matter again, perhaps next year or in another session?

Mr. Chairman, I just want to say generally with regard to the undertakings of the hon. the Minister, which we of course appreciate because we realize the difficulties of dealing with the interpretation of various amendments to a clause across the floor, that the hon. member for Yeoville did mention the possibility of perhaps wider ramifications to the matter which was discussed a little earlier. I would very much like the hon. the Minister, if possible, before the matter reaches the Other Place, to reconsider the whole thing very fully.

Mr. Chairman, my reply will be short. I have already indicated that as far as the definition of amounts for the provision of section 4(1)(g) is concerned, it does not include these costs. As regards the remark made by the hon. member for Yeoville as to whether this might not have other consequences, I want to say at once that according to my information, this will not be the case. All that can happen now is that it must be proved in practice that I am wrong and the hon. member is right; if that occurs, then we may rectify the matter. I undertake to do so. I must first give the legislation a chance to work. Similarly, as regards phased development and phased transfer, I do not want there to be a lack of clarity. If this is a problem that needs to be prevented, a problem arises in terms of the provincial ordinances that make this kind of development and transfer possible. When I am convinced that this should be rectified, I shall ask the provinces whether they are prepared to rectify it, because, as the hon. member knows, this is the custom when we negotiate with the provinces. He should therefore leave the matter in my hands. That will be my approach to the matter.

Mr. Chairman, in the circumstances and in view of the assurances of the hon. the Minister, I ask leave to withdraw the third amendment.

Amendment (3) moved by Mr. T. Aronson, with leave, withdrawn.

Amendments (1) and (2) moved by Mr. T. Aronson agreed to.

Amendment moved by the Minister of Economic Affairs agreed to.

Clause, as amended, agreed to.

Clause 8:

Mr. Chairman, I move the amendment as printed in my name on the Order Paper, as follows—

Mr. Chairman, I move the amendments as printed in my name on the Order Paper, as follows—

1. (1) On page 10, lines 5 to 10, to omit paragraph (b);
2. (2) on page 10, in line 13, to omit:

1. (3) on page 12, in line 6, to omit “which is” and to substitute:

1. (4) on page 12, in line 12, to omit “amount” and to substitute “amounts”.

I should like to point out to the hon. the Minister that these amendments arise mainly out of my Second Reading speech. He probably knows what I am getting at with these amendments. The existing Act provides for direct transfer with no conditions attached. The hon. the Minister indicated in his introductory Second Reading speech that the difficulties that were being experienced in regard to the existing Act, arose from the fact that it appeared that the wording was peremptory and not directory although it was intended that the wording should be directory. This is the impression we gained from the hon. the Minister’s introductory Second Reading speech. However, in his reply to the Second Reading debate, the hon. the Minister raised another issue. Because I should like that issue to be clearly before the House when dealing with my amendment, I just want to quote what the hon. the Minister said. He said (Hansard, 23 April 1975, col. 4694-5)—

I presume that, as the hon. the Minister is nodding his head, he still stands by that statement.

Yes.

At that point in the hon. the Minister’s reply, he was asked the following question by the hon. member for Wynberg—

The hon. the Minister’s answer was—

The hon. the Minister also made an interjection when I spoke in the Second Reading debate. He indicated that my arguments in favour of direct transfers under this specific section, were irrelevant. I am quite sure that he does not really abide any more, by what he said then, because the argument in relation to my amendments are most certainly relevant. What the hon. the Minister is doing in his amending Bill, is to remove the provision relating to direct transfers, and I am certainly entitled to talk about the retention of direct transfers.

I did not mean it in that sense.

I now want to come to the Deeds Registries Act itself. I do not know whether the hon. the Minister is a conveyancer …

Yes—at least, I was.

The hon. the Minister says he was a conveyancer, so he should know the provisions of Section 14 of the Deeds Registries Act. The provisions of section 14 do not specifically exclude the possibility of direct transfers as far as any other legislation is concerned. The preamble to section 14 states—

transfer shall follow the sequence of transaction. In other words, what the legislature intended or anticipated when the Deeds Registries Act was passed, was that the situation would arise in respect of which other laws could provide that the natural sequence of transfer would not be followed and that direct transfer could take place. In fact, the exceptions which are given in the Deeds Registries Act itself to this rule are seven in number. There are seven exceptions that are given there. They are all reasonable exceptions because they provide for practicalities, the practical effect of what happens in various transactions. It is quite interesting to note that in all these cases exactly the same provisions apply as apply in the Bill before us where transfer duty has to be paid. If the hon. the Minister accepts my amendment this situation is going to be perpetuated. In other words, transfer duty will be paid but direct transfer can also eventuate. There are two other Acts in terms of which direct transfers do in fact take place. The one is the Bantu Administration Act and the other is the Derelict Lands Act, which has now been amended.

I just want to give the hon. the Minister an example of what can take place in regard to some of these exceptions. Let us say that the property is registered in the name of a partnership consisting of partners A, B and C, and that a decision is arrived at to dissolve that partnership. It is also decided that B and C shall take transfer of the immovable property and that A will be compensated by means of a financial arrangement of some sort. In terms of the Act, the normal sequence of transfer would be a transfer from the partnership to the three individual partners and then a transfer of his one-third share from A to B and C.

However, the exception in the Act stipulates that this can be obviated and that a direct transfer can be passed from the partnership to the two partners B and C. If that is the case, then I maintain that in a sale of land by instalments one has what is almost a sui generis contract. It is a contract which is really quite different from any other contract dealing with the sale of land. Normaly, when land is sold, it is transferred as soon as possible and as soon as convenient to the parties concerned, and a period of time of from two to three years does not usually elapse.

However, in these sale of land by instalment contracts that sort of period does elapse and during the interim one finds that there are intermediaries who take over the rights and duties of a purchaser and so forth. I think we can safely say that this is a peculiar contract as opposed to the normal run of contracts. I have already mentioned the advantages of direct transfer. This does happen to save transfer costs.

It may be that I will not be too popular in legal circles for suggesting direct transfer but this will certainly save legal expenses. In the precarious economic climate in which, we find ourselves today, brought about by the Government of course, I think that the desire of the Government to protect people against unnecessary expenditure will be acceptable to everybody.

The second reason for the direct transfer is that it is a speedy transfer. It deals with two people only in relation to all the documentation which is required for transfer. Thirdly, it also, I would suggest, eliminates, the difficulties which, as I have pointed out, arise in terms of subclause (9), to which I have also moved an amendment, and which says “the purchaser who, in order to obtain transfer of the land, pays the transfer duty which is payable by the intermediary or any predecessor of an intermediary, shall be entitled to sign on behalf of such intermediary or such predecessor all the documents required in connection with the payment of the transfer duty or the transfer”, which means that the final purchaser will be obligated to sign documents in relation to the transfer as well as in relation to transfer duty, and if there are two or three intermediaries, then he can more easily sign documents enabling him to give transfer if there is only one seller as I have suggested. As it stands at the moment if there are two or three intermediaries, the ultimate purchaser has to sign documents on behalf of those intermediaries as well, and I can see some serious difficulties arising there in regard to Group Areas Act affidavits.

In any event, Sir, I find some difficulty in accepting the fact that a purchaser under subclause (9) signs a declaration by a purchaser for transfer duty purposes where he states that he is not related by blood or marriage to the seller. He is going to sign on behalf of an intermediary. Does he know that the intermediary is not related by blood or marriage to the seller? So there are some difficulties there. One of the results of this amendment will be that those difficulties will be obviated. I believe, Sir, that if the hon. the Minister gives the same attention to the amendment which I am moving now as he has promised to give to the others, we will have a better Act. [Time expired.]

Sir, I want to say immediately that I accept the third and the fourth amendments of the hon. member. I would most probably have supported the hon. member for East London City had he made this speech at the consideration of other legislation. But I cannot agree with his argument, for two reasons which I am going to state very briefly. There are various exceptions to the rule that registration of transport should follow upon the transactions. All the exceptions to section 14 exist for particular reasons. Since the scope of the section we are amending now was wider than it should, in my opinion, have been under the circumstances which I want to deal with in terms of the Act, I want to limit the scope of the section whereas the amendment of the hon. member wants to extend its scope.

The same reasons apply.

No. Sir, one cannot accept as a general statement that the fact that a property is purchased by way of instalments under a deed of sale makes that contract a sui generis contract. It does not. I think the hon. member will be the first to concede that his argument does not hold water in this particular regard.

It is a sui generis Bill.

I concede that it is a sui generis Bill, but it affects particular deeds of sale and it affects them only in terms of the method of payment of the purchase price. It does not affect the mere fact that this is an ordinary contract of sale and purchase. So it is not sui generis.

Whether it is a justifiable argument that the intervening registrations of transfer could be disposed of so that there could be direct transfer is a matter which I agree merits serious attention. All I am trying to say in regard to the amendment is that I do not think it would be fair for me to accept an amendment to this Bill which should really be an amendment to the Deeds Registries Act.

It cannot be.

I submit that there are many other circumstances where it may also be argued that you can eliminate intermediate transfer and not only here, and therefore I suggest that we have a discussion. I am quite prepared to discuss that with my colleague. However, I think the amendment should be to that Act and not to this Bill. Therefore I cannot accept the first two amendments but I am prepared to accept the other two.

Mr. Chairman, I wish to move the first amendment standing in my name on the Order Paper, as follows—

1. (1) On page 10, in lines 11 and 12, to omit “specification in the deed of transfer concerned of” and to substitute:

The first amendment applies only to the English text and refer to the specification in the deed of transfer concerned. Sir, that is foreign terminology as far as deed registration is concerned, although I realize that we are not dealing with the Deeds Registries Act here. If it is possible to put in the correct terminology I think it is advisable to do so. That is all I want to draw attention to. I hope the hon. the Minister will accept this small amendment “Specification” is certainly not a term used in deeds registration. “Specification” is used, as far as I know, in regard to the building trade generally, but certainly not in connection with deeds registration. When we refer to the matters which are covered by this clause, we do not refer to them as “specifications” in a deed of transfer. A deed of transfer either contains conditions which are set out in full or there is a reference to conditions or a reference to other disabilities or other Acts.

Therefore I suggest that the hon. the Ministe should accept my first amendment.

My second amendment, which I now move, is in connection with the re-wording of subsection (8), viz.—

1. (2) On pages 10 and 12, to omit subsection (8) of the proposed section 11 and to substitute:

1. (8) If an intermediary fails to comply with the provisions of subsection (7) and if, after the purchaser has requested him in writing to furnish the purchaser with the said receipts for transfer duty, he remains in default to do so for more than fourteen days, the purchaser shall, in respect of the period from the conclusion of the intermediate transaction under which he acquired the right to claim transfer of the land from the intermediary, to the date of the receipt of the transfer duty receipts by the purchaser, not be liable for payment of interest in terms of such intermediate transaction.

As I read it, I find it very clumsy indeed. I do not blame whoever drafted it for the present clumsy way in which it has been drafted, because I can quite understand that whoever had to draft it was under pressure at the time and was probably asked to add a number of things. I believe the way in which I have now set it out is a far better interpretation as far as the English version is concerned. As far as the Afrikaans text is concerned, Sir, you will note that there is a different amendment in the Afrikaans text from that in the English text.

Mr. Chairman, I rise to ask the hon. the Minister to clarify two points in regard to clause 8. If he looks at subsection (6)(a), he will see that it states that the purchaser may as from the date of the intermediate transaction or the commencement of the Sale of Land on Instalments Amendment Bill, 1975, as the case may be—I stress the words “as the case may be”—do certain things. I would like to ask the hon. the Minister what the meaning of those particular words is. I would have thought it should either mean whichever occurs last or whichever occurs first, or one or the other. I simply do not understand why the words “as the case may be” are put in that opening sentence of clause 8(6)(a). I hope the Minister can explain to me whether one or the other of those events is supposed to take precedence. In the second place I should like to ask the hon. the Minister to look at the third and the fourth lines of subsection (6)(b) which read:

What I should like to ask the hon. the Minister is whether his legal advice was that it means that he has the right to set off any payments which have already been made against any amounts which are still due. The words “any payment made in good faith” create an element of confusion on what the rights of the parties will be at that particular time.

I am prepared to accept the second amendment of the hon. member for Wynberg. It does not alter the meaning, but merely the wording. If he believes that this wording is better than the wording we have proposed, I am quite prepared to give him credit for it.

When I saw the translation of the word “specification” for the first time, I reacted exactly as he did, because it is practice to say in legal terms “with reference to the conditions contained in or referred to in the deed of transfer”. The translation of the Afrikaans text does not read “met verwysing na …” as we normally say in Afrikaans. “Met verwysing na” is normally translated from Afrikaans into English as “with reference to”. It is more than merely a reference; it is a question of its being specified. A specification thereof is a wider concept than a reference to it. We cannot translate the Afrikaans word, “mention” into English using the English meaning of “verwysing”. I want to say immediately that I am not a language expert to the extent that I can be the best judge of this matter. My legal advisers consulted the dictionary, but at the moment the present translation is the best translation of “ver-melding” I can find. The word “vermeldins” in Afrikaans is more than merely a reference. I wonder whether the hon. member is not prepared to withdraw the amendment. It seems to me as if the mistake which has to be rectified appears in the Afrikaans text because it could then be translatable into “reference” as the correct English version of “verwysing”. We cannot translate the Afrikaans word “vermelding” with the English translation of “verwysing”. I hope the hon. member will accept it in this way.

Mr. Chairman, while the hon. the Minister was speaking, I tried to think whether one could translate the word “vermelding” with another word. It seems to me the only way one can do this, i.e. if it has to be “vermelding”, is to use the word “citation” or the word “notation”. The wording of subsection (3) could also be changed to read: “Die voorwaardes uiteengesit in die akte …”. I think this is what “vermelding” really refers to. I think “vermelding” is really the setting out of conditions in the deed of transfer. It is also the practice to refer to the conditions where such conditions are contained in a deed of transfer. I am not quite sure what is really the intention in this case, but my interpretation of this subsection is that reference is being made to conditions, including the setting out of the conditions if it is necessary. In other words, there could either be a reference to conditions in another document or a setting out of the real conditions in the deed of transfer. I think it is for that reason that the word “vermelding” is being used in the Afrikaans text. If this is the case. I can agree with the hon. the Minister that it is very difficult to translate it into English. If the hon. the Minister is prepared to go into the matter, the conveyancers dealing with this subsection will at least know what they are dealing with here. In that case I am quite prepared to withdraw my amendment with leave of the Committee.

Mr. Chairman. I just want to reply to the hon. the Minister. I believe he is going to have some serious difficulty in bringing in direct transfers through an amendment to the Deeds Registries Act or in redrafting the entire Deeds Registries Act. I still maintain very strongly that in terms of the Deeds Registries Act it is understood that other Acts may well have provisions which conflict with the Deeds Registries Act.

I have conceded that.

I therefore believe that is now the time to do this. In view of the fact that the hon. the Minister is being so helpful, however, perhaps he may find the opportunity, in broad principle of actually including some form of legislation whereby there will be an opportunity given to purchasers to take direct transfer in the event of there being intermediate transfers. I feel that he could perhaps discuss the matter with the hon. the Minister of Finance who I see is sitting over there. Perhaps he should discuss it with the hon. the Minister of Justice. I am not sure whether the Minister of Finance knows very much about this Bill. I know he will be interested in transfer duty. We have protected him in regard to transfer duty.

I am watching that.

I really feel that we should consider this again and that the Minister should take another look at the matter. Perhaps he can tell me now whether he feels that possibly it is in order to go back, in fact, to what we had before this Bill came about because truly the difficulty sustained by conveyancers and attorneys was because of the peremptory nature of these stipulations. The existing provisions place a very heavy onus on the seller to make sure that the transfer should be made direct and not to the next person. I believe that that difficulty has been overcome by the amending Bill and that we should now go back to the question of direct transfers.

Mr. Chairman, I have explained to the hon. member why I cannot accept the amendment. I do not think there is any point in taking that matter further. I would, however, just like to reply to the hon. member for Johannesburg North. I cannot see his difficulty. Let me refer him to the proposed section 11 (6)(a). A new right is being created in terms of this section. That right can be exercised either from the commencement of this Act, if the deed of sale has already been entered into, if I may quote an example, or from the date of the transaction itself if the transaction is entered into after the commencement of this Act. I hope he follows my reasoning.

[Inaudible.]

It does not make any difference. All that is stated here is—

It goes further. I hope the hon. member follows now. It is either one or the other. It is either the date of commencement of this Act which applies or any subsequent date when the intermediate transaction takes place. One can say whichever date comes first. It does not change the context of the section at all. It does not affect the matter at all. I think we should just leave it at that. As far as the second point is concerned, I have not quite followed his argument. I think we should read the Bill together in order to see if we can pinpoint the problem. The proposed new section 11(6)(b) reads as follows—

who has died or is insolvent—

of the land. In other words, all this in fact means is that the person concerned shall not be required to pay an amount twice.

Mr. Chairman, I should like to ask the hon. the Minister a question. I accept his explanation in regard to the first amendment, but does his explanation in regard to the second amendment mean that if a purchaser has paid certain moneys after the conclusion of an intermediate transaction—say the amount was R10 000 and that he has paid R5 000 …

In good faith?

Yes, in good faith. Does it then mean that the inter-mediatory or the estate is still entitled to claim the residual R5 000 which, will then still be due? If that is the position, then we in these benches will be happy.

Yes, that is the position, because it does not refer to the unpaid portion but to any payments which have been made. It does not affect the other position.

Amendment (1) moved by Mr. J. I. de Villiers, with leave, withdrawn.

Amendments (1) and (2) moved by Mr. H. G. H. Bell negatived (Official Opposition dissenting).

Amendment moved by the Minister of Economic Affairs agreed to.

Amendment (2) moved by Mr. J. I. de Villiers agreed to.

Amendments (3) and (4) moved by Mr. H. G. H. Bell agreed to.

Clause, as amended, agreed to.

Clause 9:

Mr. Chairman, I move the amendment standing in my name on the Order Paper, as follows—

I just want to motivate it briefly. It does happen that consent is withheld unreasonably and this is a customary way of dealing with, that situation. I do not think it prejudices a purchaser but I think it is of considerable commercial consequence. For that reason I ask the hon. the Minister to accept the amendment.

Mr. Chairman, I am prepared to accept the amendment.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 10:

Mr. Chairman, I merely want to refer to this clause in passing. There is no notice of an amendment on the Order Paper in connection with this clause, but I should like a little clarification. I think mention has been made to the hon. the Minister of the position existing at the moment where one finds that a defaulting party actually goes on defaulting. The result is that the seller has to put up with a repeating situation as regards the 30 days’ provision and that makes it most difficult. I should like to suggest that when the hon. the Minister goes through this legislation again, because it appears that the legislation may well be amended again next year, he considers adding after the word “demand” the words “or seven days in the event of a default on more than two occasions in any one calendar year”. This will mean that it will be possible to bring a consistently defaulting defaulter to book.

Clause agreed to.

Clause 11:

Mr. Chairman, I move the amendment standing in my name on the Order Paper, as follows—

I want to indicate at once that I am prepared to accept the amendment standing on the Order Paper in the name of the hon. member for East London City.

Mr. Chairman, under the circumstances I formally move the amendment to the amendment by the Minister of Economic Affairs standing in my name on the Order Paper, as follows—

Mr. Chairman, I move the amendment standing in my name on the Order Paper, as follows—

Mr. Chairman, the hon. the Minister will remember that in my Second Reading speech I put forward one interpretation of this clause. Unfortunately my time then expired and I could not put any other interpretations. In his reply the hon. the Minister said that I should remember that this was a provision similar to that applying to revolving funds of municipalities and that an amount of interest is added in order to keep the value of the fund at an even keel. That is very difficult today with a rate of inflation of something like 11,5%. It is extremely difficult to do that in a revolving fund where a mere 3% is added per annum. The hon. the Minister says he is adding 5% here. I want to make it quite clear to the hon. the Minister that I am by no means satisfied that his interpretation is correct because I believe there is another interpretation of this clause, namely that interest is payable and calculated from the date upon which each payment is made.

No, you are wrong.

If I am wrong, the hon. the Minister should explain why. As I read this clause now, it is quite capable of the interpretation that I am now going to put to the hon. the Minister. This is what it says on page 14 (line 2)—

The other interpretation is the following: My client is paying off at a rate of R25 per month. The amount he has to pay is R5 000. For the first month he is levied with 5 % on R5 000. For the second month he is charged interest on R5 000 less R25, for the third month on R5 000 less R50, and so on. If that is so, I believe that the hon. the Minister must give serious consideration to amending this.

That is not so.

Yes, but why is it not so? Here it says very dearly “plus interest calculated at 5% per annum on the said portion in respect of the period from the conclusion of the agreement to the date upon which the land is sold”. Does the hon. the Minister mean that because he has the words “conclusion of the agreement” in the law that it means that notwithstanding the fact that R4 500 is paid on the date of conclusion of the agreement and R500 thereafter on instalments, the interest runs at 5% on the total amount paid from the date of conclusion of the agreement to the date of the sale? Is that the hon. the Minister’s interpretation?

Yes.

If that is the interpretation, and the hon. the Minister is satisfied that it is correct, I withdraw my amendment.

Amendment, with leave, withdrawn.

Mr. Chairman, I would like to have some clarification from the hon. the Minister in regard to clause 11 of the Bill. The new section 14(2), as the hon. the Minister is well aware, deals with enabling a trustee or liquidator of an insolvent estate to call upon a purchaser or his successor to take transfer, and, only in the event of his default, to sell the property in liquidation, in which case the person is of course entitled to what is stipulated under subsection (1). What I would like to ask the hon. the Minister is whether it would not make his intention clearer and give effect to what I assume the purpose of this particular clause is, if he would look into what I am going to point out. I will read from line 21 under subsection (2) on page 14—

I realize it is late in the day to suggest an amendment, but I should nevertheless like the hon. the Minister to consider whether it would not make his intention here clearer if he inserted the words “against payment of the balance of the amount due under the contract” or words to that effect. If this is not done, I feel there is a certain amount of room for varying interpretations.

Mr. Chairman, it is not necessary to include words like these in this subsection because that right already exists. The only circumstances in which a person can take transfer is if the outstanding balance of the purchase has been paid. If not he may resile from the contract as indicated here. The position then arising, is dealt with in subsection (1).

Amendments agreed to.

Clause, as amended, agreed to.

Clause 13:

Mr. Chairman, I have problems with this clause even though I am not going to move any amendments because I think these problems are of a technical nature. Let me briefly outline my difficulties. The provision as it is put forward here, gives a court the power to do certain things. The court will be competent to reduce the rate of interest payable, to have the contract rectified, to declare the contract null and void and to grant alternative relief. If we look at the things for which such relief can be granted, we see that section 3 of the Act provides that the purchaser is entitled to choose the language in which a contract to which he is party shall be drawn up. Let us assume for a moment that that is not complied with. I have some difficulty in understanding what remedies are then available. If as a result of that provision not being complied with, a purchaser has perhaps been mislead, I can understand that under those circumstances the contract might be declared null and void. However, if he has not been misled and it concerns a technical contravention, I have some difficulty in understanding why the court should then be competent to reduce the rate of interest payable, to grant rectification of the contract, to grant that the contract should be null and void or to grant alternative relief. I have grave difficulties with this.

In the same way I can go through the other clauses. In many cases these are of a technical nature and do not always go to the substance of the matter. As an example, I can refer to the question of the rate of interest or the invalidity of certain provisions, matters which are all dealt with in clauses we have already discussed. If a provision is invalid, there is no need for anyone to declare the whole contract null and void just because the provision is then not enforceable. Certainly, it would have no reference to any of these other matters. I appreciate that, as the hon. the Minister said in his Second Reading speech, we should do something to make sure that in the present circumstances people do not ignore these provisions. Nevertheless, I have grave difficulties with this and I would appreciate it if at some stage—not necessarily between now and the time when the Bill is discussed in the Other Place, but perhaps during the recess—the department and the hon. the Minister could look at this again in order to provide for more equitable situations.

Mr. Chairman, I shall not dwell on this at any length. I must just point out that although the hon. member argues that section 3 of the Act is of a technical nature in regard to the language medium in which the contract is drafted, the whole consideration and motivation behind the investing of magistrates with additional power, which is really intended as a penalty for a specific omission, concerns the fact that it is often the less sophisticated people who purchase land in this way, as has been argued throughout the debate. If one does not serve that person in the language he prefers as far as the contract is concerned, then the danger—a real one in any event— that he will enter into a contract the meaning of which he does not understand, will be even greater. In the second instance I want to say that the powers with which this provision invests our courts, are discretionary powers. They will only be applied when it is proved that the omission to comply with the provisions to which reference is made here, constituted a mala fide and not a fortuitous omission.

Mr. Chairman, I just want to say that we on this side believe that this clause is perfectly correct. We have always fought for and we have always believed in granting to magistrates discretionary powers. We do not want to bind them more and more. We believe that this clause as it stands here gives magistrates those discretionary powers in terms of subsection (2) which states—

This means that the magistrate is being given the opportunity of deciding on the form of the penalty which he is going to impose. We believe that this is a good clause.

Clause agreed to.

House Resumed:

Bill reported with amendments.

Report Stage taken without debate.

Third Reading

Mr. Speaker, I move—

Mr. Speaker. I propose to be very brief. I believe that this piece of legislation taken as a whole is going to improve the position. I think it is part of what has been a trend during this session to give consumers greater protection, to give the ordinary man in the street greater protection. Even though this Bill may contain details in regard to which one may experience a problem of a technical nature, this legislation is. I believe, welcomed by all who have the interests of the consumer at heart. I also want to say that despite the little flurries of excitement we have had now and again. I appreciate the attitude of the hon. the Minister throughout the debate as well as his approach to this type of legislation. I think this has made the task not only of those of us in the Opposition benches but if members generally an easier one, and I think the hon. the Minister’s approach as far as technical legislation of this kind is concerned is to be welcomed.

For these reasons we support the Third Reading and we welcome this piece of legislation.

Mr. Speaker, this is non-contentious legislation and, as the hon. the Minister has given us certain assurances in regard to certain difficulties we have experienced, I have no doubt, as we that know him, he will implement those assurances. I also want to say that this is highly technical legislation and I have no doubt whatsoever that next year we will have another amending Bill before us to deal with the matters which give rise to problems during the next six months. I believe that this legislation will make buying and selling easier for all concerned in such negotiations.

This legislation is one of the forms of consumer protection and that is why hon. members on both sides of the House have been so anxious to get the best legislation possible on the Statute Book. I believe that this legislation will have the effect of encouraging people to bank very effectively in land. I think the hon. the Minister will agree that it is a form of forced saving which can have enormous benefits for all participants provided the necessary safeguards are taken when embarking on a property venture. I also want to say that I am pleased with the spirit in which this debate has been conducted generally. I should like to tell the hon. the Minister that if some of his Cabinet colleagues were to conduct their debates in the same spirit as that in which the hon. the Minister conducted this debate, they would enjoy the same measure of co-operation as the hon. the Minister has enjoyed today.

I just want to thank hon. members on both sides of the House briefly for their co-operation in regard to legislation which is, for the most part, of a technical legal nature, but which affects people who do not always possess technical legal knowledge themselves. Sir, I just want to make this one remark before resuming my seat: In my opinion, it is necessary for people in commerce whether engaged in the purchase and sale of land or of other commodities, to realize that all of us in this House are ad idem that unless the private sector in the commercial world is prepared to discipline itself in regard to the codes that ought to apply to its activities, we as Parliament will have to take steps to compel them to discipline themselves.

Motion agreed to.

Bill read a Third Time.

Mr. Speaker, I move—

Sir, we on this side of the House will support the report of the Select Committee on Public Accounts. In doing so, I would like to say that I find it rather poetic justice that the Auditor-General should have to report excess expenditure on his own department’s account. I must say that I sympathize with the Auditor-General’s embarrassment in this situation. I think the mere fact that he has had to report this excess expenditure on his own account is a reflection of the thoroughness of the work which his department does. Since I have been a member of the Select Committee on Public Accounts, I have been more than impressed by the thoroughness and the conscientiousness of the work done by the Auditor-General.

Sir, I do not think the same can be said of the other item of unauthorized expenditure of which this House is being asked to approve, I refer to the unauthorized expenditure of R59 000 in the South West Africa account, which results from lack of communication between the South West African authorities and the Department of Health and which I find rather difficult to excuse. I only hope that the red faces that were caused by this misunderstanding between these two departments, resulting in an unauthorized expenditure of this large sum of R59 000, will mean that similar occurrences will be avoided in future.

Mr. Speaker, I will be very brief. Matters of unauthorized expenditure, even if they are of a technical nature, are obviously serious and need to be looked at, and it is correct therefore that the House as a whole should consider them and ratify the expenditure. As far as the first item is concerned, despite the fact that it concerns the Auditor-General’s department, I do not regard this unauthorized expenditure as being of a serious nature at all. I think it can readily be condoned without debate at all.

In so far as the second matter is concerned, we have been given certain assurances. I think the doubt some of us had on the Committee is whether in fact the parties concerned, despite their goodwill in the matter, will be able to implement these assurances and whether it will not happen again. It is a matter which is perhaps of a more serious nature even though I must say immediately that it has no element of irregularity about it in the sense that one should have enquiries, or that somebody has benefited. There is nothing of that kind. It is merely a technical unauthorized expenditure which is undesirable from an accounting and auditing point of view.

Mr. Speaker, I should like to thank my colleagues on the opposite side for their support of this report. I take the point which has been made about the unauthorized expenditure on the South West Africa Account. It is something which has already had our attention and we shall certainly, of course, from our side do everything possible to avoid any recurrence. I think that is all I can say.

Report adopted.

Mr. Speaker, I move—

Mr. Speaker, the agricultural sector, like other sectors of the economy, has experienced major developments over the past number of years, but these have also crated new needs. One of the principal needs in the agricultural industry, one which has grown in importance in the course of time, is a need for better credit facilities adjusted to the distinctive circumstances of farming in our country.

It is one of the functions of the Land Bank, as the principal provider of financing to the agricultural industry, to take into consideration developments in farming and to see to it not only that it has adequate means to meet the essential credit needs of the agricultural industry, but also that it is statutorily equipped with the necessary powers enabling it to provide financing in the most effective way. In the light of developments and changes which have occurred in recent years in the field of agriculture, and the experience which the Land Bank has gained in respect of agricultural financing, the legislation under consideration now seeks to substitute a more effective scheme for the present systems employed by the Bank for providing short and medium-term credit to farmers.

At the moment, the statutory powers of the Land Bank for the provision of short and medium-term credit to farmers are contained in sections 34 and 34bis of the Land Bank Act.

As far as short-term financing is concerned, the Land Bank Board may make an advance in terms of section 34 of the Act in the form of a cash credit account to any owner of land who is a farmer, to enable him to defray any costs which in the opinion of the board, are incidental to the production, cultivation, gathering, processing or marketing of any crops growing or to be grown on any land cultivated by such owner, or to pay debts incurred by him for any such purpose.

A cash credit account is defined in the Act as an account through which moneys may, from time to time, during its currency as fixed by the board, be drawn from or repaid to the bank, so that the total amount owing to the bank under such account shall not at any time exceed a maximum amount to be fixed by the board.

This type of loan is usually repaid by farmers annually on a seasonal basis.

As security for such a cash credit account, a note of the advance is made in the Deeds Office, the effect of which is that the Bank acquires a lien over all crops growing or gathered on the land concerned on or after the date of the note. In addition to this, the section contains a prohibition providing that no land on which crops are grown or to be grown and which has been pledged to the bank in this way, may be alienated, partitioned, leased or sub-leased without the consent of the board.

Originally this type of loan was made only to sugar farmers to defray seasonal costs, but in due course the scheme was extended so as to include fruit farmers in the recognized fruit and wine producing areas of the Cape Province as well as wattle farmers, while it has also been made available to citrus farmers for the purchase of packing material and bulk handling equipment. Because of the lien which the bank acquires over all existing and future crops, until such, time as the cash credit account has been repaid, and the prohibition on the alienation of the farmers’ land, existing mortgagees have refused their consent for making this kind of loan in so many cases that farmers have in practice been able to make little use of this form of short-term credit, the very form of credit for which there is such a great need.

As far as medium-term credit is concerned, the Land Bank board may make an advance to a farmer in terms of section 34bis of the Act on hypothec of his movable property, and although the section itself imposes no restriction on the purposes for which such an advance may lie made, it is the policy of the board to make this form of credit available to farmers for the purchase of farming requisites such as livestock, farming machinery and implements. As security for these loans, the bank legally acquires a lien of over as many of the farmers’ movable assets as the board, in its exclusive discretion, may decide to hypothecate. In addition to this, the board has the legal power, to attach hypothecated assets in the event of non-payment of the instalments or in the event of the conditions of the loan being broken, without recourse to a court of law, and to sell these in order to recover the debt. If it becomes necessary for the bank to attach, the hypothecated assets and sell them, without other creditors being able to interfere with the sale, the bank must be able to identify the relevant assets over which it has lien, and such identification, in terms of common law and the regulations made for this type of loan, is to be made on the basis of a brand or other clear identification mark. In practice, however, this method of identification has become obsolete in the course of time and no longer fits in with modern farming setups.

Although this form of medium-term financing has become extremely essential in present-day circumstances, many farmers have made use of the bank’s loans on hypothec only because they have been forced to do so by the circumstances prevailing in their farming operations, and have agreed to the marking of their movable assets for identification purposes with great reluctance. A considerable number of other farmers again, who have an equally great need for medium-term credit, have not yet been able to see their way clear to making use of the Bank’s hypothec scheme at all, because they would not like to have their live-stock branded as security for a debt, because of the magnitude of their farming operations and the public esteem which they enjoy. Therefore, what is actually needed to make the bank’s medium-term financing more effective and acceptable, is a scheme in terms of which the bank may make advances of this nature available to farmers on such conditions as the Land Bank Board deems fit, without the present legal requirement of a lien over the farmers’ movable assets as security for the loan. If the debtor does not fulfil his obligations under such a scheme or fails to comply with any condition of the loan, the board must have the legal power, as it has in the present dispensation, to attach and to sell so much of the debtor’s movable assets, without recourse to a court of law, as the board deems necessary for the recovery of the debt with the further power, if necessary, to attach the debtor’s immovable assets as well and to sell these in the same way to recover the debt, due regard being had to the rights of existing mortgagees. The board already has this legal right of recovery against immovable property in respect of long-term loans made by mortgage bond on land. These proposed powers will eliminate altogether the lien over the farmer’s movable assets and the necessity of branding or marking such assets for identification purposes.

What strikes one about a scheme of this nature, is that it lends itself equally well to the provision of short-term credit instead of the existing cash credit advances which I have already mentioned, free of the legal lien over the farmer’s crops and the prohibition on the alienation of his immovable assets which have led to the refusal of the granting of permission by so many farmers’ mortgagees in respect of the advances.

With, a view to enabling the Land Bank to meet the increasing need of the farmers for short and medium-term credit, free of the brands and liens and other hindrances attached to the present sytem of this kind of financing in the agricultural industry, it is necessary that the present sections 34 and 34bis be repealed and that a new section 34 be inserted in the Land Bank Act, empowering the Land Bank Board to make an advance to a farmer, on completion by him of a promissory note, to enable him to defray any costs which, in the opinion of the board, are connected with the production, cultivation, gathering, processing or marketing of any crops by him, or to pay any debts incurred by the farmer for any such purpose, or to purchase live-stock or farming machinery or other implements or equipment and to install such machinery or equipment.

As security in respect of such a loan, a promissory note is obtained from the farmer, but as I have already mentioned, the Act empowers the Land Bank Board, should it be necessary for the recovery of the debt, to attach as many of the assets of the debtor and to sell them as are sufficient to cover the amount owing without employing the usual judicial procedure.

Mr. Speaker, we on this side of the House believe that the hon. the Minister of Finance has taken an important step with this legislation towards placing the financing of agriculture on a much sturdier basis than has been the case in the past. Because that is the intention of the hon. gentleman and his department, and because this is in accordance with the attitude which this side of the House has adopted over a number of years, we want to tell him that we are going to support the Second Reading of this Bill. Perhaps it is necessary for me to tell this House what the attitude of this side of the House has been over a long period. In the first place, the Land Bank, which was founded in 1912 to assist to the farming community of South Africa, has had the strongest possible support from this side of the House on repeated occasions since that time. It has always been felt that the Land Bank would have to enlarge the role it played in the past and make it more effective in the future. It is not necessary that I take up the time of this House by motivating that standpoint for the simple reason that all of us who are acquainted with the agricultural industry, know what a tremendous increase there has been over the past 50 years and more, since the Land Bank was founded, in the value of land and what it costs today to buy additional land or to begin a new farm. Anyone who wants to acquire land, must compete at great expense with many financial institutions. When all farmers are expected to compete with such bodies, it will be simply impossible for them to obtain land for expansions, unless there is an institution such as the Land Bank. The Land Bank has put a number of farmers in this country on their feet by means of its mortgage conditions, rates of interest and insurance schemes, and, in fact, is still putting farmers on their feet.

If the process of inflation continues and assumes ever increasing proportions— there is no reason to believe that this will not be the case—it is clear that the needs of the farmers of South Africa for capital will grow bigger and bigger in the future. Since agriculture is a long-term investment, it has been found that most financial institutions can do far better than to make money available to the agricultural industry. It is a generally known fact that some of these financial institutions have become less interested in our agricultural industry over the past few years. Therefore, there must be an organization of this nature, as well as an organization of the nature of the Department of Agricultural Credit and Land Tenure to help certain farmers.

Today we are faced with more expensive machinery, more expensive land, more expensive implements and more expensive means of production in general and the more expensive these items become, the more difficult the fanner will find it to keep his production costs as low as possible and his production capacity as high as possible, and for that reason he will obviously welcome steps which will enable him to produce more Cheaply than would have been the case if he had had to borrow money from the ordinary financial institutions. It is for this reason that I said on another occasion that I foresaw the day—in fact, I hone that day will come soon—when the Land Bank would be able to spread its wings far wider. I believe that the Land Bank should be placed in that position. In 1959, when this House was approached for approval for the introduction of loans on hypothec, this side of the House gave that its support, because we realized that this would afford some farmers a better chance of acquiring live-stock and implements. If one pages through the report of the Land Bank, one sees that the scope of the system of loans on hypothec has been extended considerably since that time. Originally, these loans were intended for the purchase of tractors and certain basic implements. In recent times the Land Bank has gone much further in that respect, even so far as to help farmers acquire milking machines, which are expensive items, and even to buy tobacco drying ovens and that type of thing. The system of loans on hypothec was welcomed by this side of the House at the time, but we had to say on occasion that many of the farmers were not pleased with live-stock and implements which they purchased by means of loans on hypothec, being marked with the mark of the Land Bank, because, to a large extent, a stigma would attack to that and that was in fact the case. That is why we found that many farmers who could have made use of these facilities, did not do so. Where, when one borrows money from anyone or any financial institution, is it necessary for one to mark one’s tractor, one’s pick-up van, one’s live-stock, or whatever, with the mark of that person or institution from whom one has obtained the money in order to increase one’s production? It was necessary at that time in those circumstances—so I believe—to launch that system and to protect the Land Bank in that respect by making provision for that. Therefore, it is to be welcomed today that that system is to be abandoned. If one looks at the number of farmers who have applied for loans on hypothec, one sees that there are not many and that the average loan is not terribly high either. I want to predict that we shall find that more and more farmers are going to make use of these facilities now that loans on hypothec and the marking of implements and animals are to be abandoned. One can only express the hope that the Land Bank will be in a position to obtain sufficient funds to be able to meet these reasonable needs of the farmers. If it is necessary for us—and I know that this Parliament can vote money for the Land Bank—to vote money, then I want to tell the hon. the Minister in advance that he can do so and that he will not find opposition on the part of the official Opposition, because it is in accordance with our own point of view. We are not in favour of a form of Socialism nor are we in favour of the State taking a big hand in the economy. But we realize that a special situation is prevailing in respect of the agricultural industry. I think the Government also realizes that if we want to increase our agricultural production—and we must increase it—and keep it on a stable price basis, then it is necessary for the Government and the State to take a hand in this type of thing. I do not think that the Government, nor we on this side of the House, will be out of step, because, this, after all, is what is being done in the rest of the world as well. This is being done in the free world and elsewhere, i.e. agricultural production is being stimulated in this way to try to keep production costs on the most stable basis possible.

The farmers in a stronger position, too.

Yes, of course. I want to tell the hon. the Deputy Minister that I am convinced that the farmers who are in a stronger position will also ask for this. And there will not be anything wrong with that either.

Then you would gossip again.

I do not know what the hon. member for Graaff-Reinet means. If the hon. member wants me to repeat the arguments of four years ago, I am quite prepared to do so. The argument which I advanced at that time, and I still stand by that, was that all the Government should have told us, was what its policy was in respect of this matter. That is what we wanted to know, nothing else. One of the steps which we proposed, was that if we were to assist strong farmers and large agricultural companies, we should tell the world, so that people could make use of these facilities. What happened, was that we on this side of the House were not certain from time to time what the policy was which had to be followed and was being followed.

That is very weak.

If the hon. member for Graaff-Reinet goes through the newspaper reports of that time, he will find that that was our standpoint. If strong farmers and average farmers want to make use of these facilities, we shall find that, as I have already predicted, more and more farmers will want to make use of these facilities. I cannot blame the farmers for that either. In fact, we on this side of the House will encourage them to do so, because I think that in that way active steps can be taken by them to keep the production costs in South Africa as low as possible.

I should like to say that we on this side of the House do have a problem with this legislation. When loans on the basis of liens on the cash credit account disappear, the farmer can obtain the money which he needs from the Land Bank by means of a promissory note. If it happens that, as provided in clause 3, a person fails to meet his obligations or uses the money which he has borrowed for another purpose as that for which he requested it, the Land Bank may act against him without having to take him to court. This is where our problem lies. One can well understand the normal court procedure not being followed in the case of loans on hypothec, because where a person fails to meet his obligations in this respect, the State may sell that person’s movable property so that the Land Bank may recover its money. But here this is taken much further. When a person fails to pay, not only the movable property, but also the immovable property of the person concerned may be attached. These may then be sold in order to liquidate his debt with the Land Bank. I want to concede that here we are taking a major step forward and that the Land Bank must protect itself. That is correct. We accept that approach, but I think that the way in which they want to do it, as proposed in the new section 34(3), goes a little too far. That is why we on this side, to be specific, the hon. member for Green Point, will raise this matter during the Second Reading debate. There are certain precedents in terms of which the hon. the Minister and the Land Bank may act. There is the precedent of what can be done when a man fails to pay his income tax or when large sums of money are owing to the State. There are certain steps which may be taken which will not eliminate the courts altogether in this respect. I thinks there are many hon. members on this side who will regard this point in a very serious light, but not in such a serious light that they will want to weaken this legislation, which is an exceptional step forward, in any way. We want this legislation to be passed by this House.

On behalf of hon. members on this side of the House, I want to express the hope that this legislation will lead to increased and more effective agricultural production. I also want to express the hope that we shall have in future what we have asked for so many times, viz. a full-fledged division or department of agricultural financing. The Land Bank can play the major role in this in co-operation with the Department of Agricultural Credit and Land Tenure. I know that this is perhaps not the proper occasion for raising this matter. Nor do I want to raise it now, because the hon. the Minister of Finance is a new Minister and not because I have no confidence in him. I just want to say that I think the question of the Land Bank should fall under the hon. the Minister of Agriculture. That is where it belongs, because it plays a specific role in South African agriculture. That is pre-eminently the function of the Land Bank. The Land Bank will be like a fish out of water under the hon. the Minister of Finance. If this legislation is one of the steps which will bring about a division or a department of agricultural financing under the hon. the Minister of Agriculture in the course of time, the Land Bank will be able to play a greater role in our agricultural industry in South Africa. We on this side will welcome it when such a step is taken in our country.

Mr. Speaker, in the first place, I want to convey the sincere thanks and appreciation of our farming community to the hon. the Minister for this amending Bill which is before us today. This Bill provides for a long and deeply felt need in the agricultural sector, and I think that there will be great appreciation on the part of the farming community when this Bill is passed.

The hon. member for Newton Park raised the question of the elimination of the identification of stock and machinery financed by the Land Bank. The hon. member alleged that they were the ones who asked for that. I do not dispute this at all; I know that they asked for it. However, I want to assure him that this side of the House has also been asking for that for a very long time. In fact, we asked for that before they did. The only difference was that it was not necessary for us to announce this outside in the Press and in public, because it was not necessary for us to try to make political capital of the situation. The hon. member also raised the argument that although they support the Second Reading, they are against the amendment and that they will oppose it in the Committee Stage. I think the point which the hon. member for Newton Park is over-looking is this: Somebody must bear responsibility for the money which is lent out. Sir, one can surely not expect to get money on such favourable conditions and at such a low rate of interest if one is not prepared to give certain privileges to the lender to enable him to recover that money more easily. If we were to prescribe the normal court procedure, it would simply mean that the bank would have so many expenses that it would be obliged to push up the rates of interest tremendously. Sir, the fact of the matter is that there is no body in this country which lends money on short or medium term for the purchase of machinery and implements at an interest rate of 8%; such a body simply does not exist, and those are the rates of interest at which the Land Bank lends out this money. If we are going to make matters difficult for the Land Bank, with the result that the Bank loses a great deal of money, then the result will be that the rates of interest will eventually have to be pushed up to 12%, 15% and more, which will then be reflected in the farmer’s production costs, which we can definitely not afford. If there are objections to the so-called wide powers which the Land Bank will have and if this, as I understood the hon. member, can be to the detriment of the farmer, then I want to say that what is important to me in this connection is from whom one borrows money. The aim of the Land Bank is not to ruin farmers. The Land Bank is the friend of the farmer. The Land Bank is not a body which will proceed to levy execution against the farmer out if the farmer does not pay on the date on which he should pay. I do know of certain banking institutions which do that, but I do not want to go into that in any more detail. I do not know whether the hon. member for Yeovilie can perhaps tell us more about that. Sir, we have learned to know the Land Bank as an institution which is very merciful and very helpful towards the farming community of South Africa and which has made a tremendous contribution to putting agriculture in South Africa on a sound basis. Sir, I want to go further: If someone does not like the conditions of the Land Bank, if the argument of the hon. member for Newton Park is valid, then nobody obliges him to borrow money from the Land Bank; he does it of his own free will, and in that case he can try to gain assistance elsewhere.

Sir, if one looks at this Bill, then one asks oneself what one is dealing with here. We are dealing here with a measure which gives short-term and medium-term credit to agriculture. The short-term credit is given in the form of a cash credit account. But the problem which has been experienced with that is that a note of the advance is made in the Deeds Office as security for the cash credit account, and the effect of this is that the bank has a lien over that year’s crop and over all future crops until such time as that loan has been repaid. As a result of this note, which is made in the Deeds Office, the owner cannot partition, alienate, lease or sublease his land, unless he has the consent of the Land Bank board. This has given rise to considerable problems in practice, because in cases where there were existing mortgages on land and property, mortgagees were not prepared to allow the farmers to contract a cash credit loan.

Sir, the second measure with which we are dealing here, is medium-term credit in the form of an advance on a hypothec of a farmer’s movable property. The problem which arises here as has already been mentioned, is that if the bank wants to exercise its lien, it must be able to identify these assets, and for that purpose, the cattle are marked and the tractors and implements are all punched with a clear mark of identification. Now the fact is that a stigma attaches to so-called Land Bank cattle, cattle which walk along the road with a very clear mark on their necks and thereby advertise to everyone that the farmer concerned has borrowed money from the Land Bank to buy those cattle or sheep. But a man’s finances and the loans which he contracts are surely his private affairs which should not be made known to the general public or advertised. Now one asks oneself whether the people who buy motor cars—and everybody buys motor cars on hire purchase today—or who buy radiograms and now probably television sets as well, would put up with that kind of thing and whether the general public would make use of financing, specifically of hire-purchase financing, if the Trust Bank or any other bank were to put its mark on that article, so that everybody could see that these were articles which had been bought on hire purchase and that the buyer had obtained the funds from this or that company. Therefore I think it is very reasonable to ask that we no longer put these identification marks on the stock or on the tractors. The solution to this whole matter is the new section 34 which we have before us today. I just want to say that I support and welcome this amendment sincerely.

In passing I just want to refer to the fact that the Land Bank lent R9 million to the agricultural sector last year in terms of medium-term loans, and R2 million in the form of short-term loans. The total amount which the Land Bank lent to the agricultural sector last year amounted to as much as R1 392 million. But, as has already been mentioned here, there is a growing need particularly for medium-term and short-term credit in agriculture. One of the characteristics of agriculture today is the considerable increase in mechanization in the agricultural industry, especially as a result of labour problems and of the intensification of agriculture. In the ten years from 1962 to 1972, the number of tractors imported rose from 9 461 to 19 883, i.e. it more than doubled. Those tractors have to be financed, and therefore we welcome the streamlining and modernization of the financing of tractors and implements because there is an increasing need in the industry for this sort of financing. If one just looks very briefly at the value of machinery, vehicles and equipment and tractors, we see that agriculture is now becoming very capital intensive. From 1962 to 1972, the value of machinery, equipment, vehicles and tractors in agriculture rose from R482 million to R865 million, an increase therefore of 207%. Everything indicates that a much higher capital investment is necessary in agriculture, especially in machinery. If one now looks at the favourable conditions of financing which are given, I think it is worth mentioning that tractors, spray pumps, feed granulation machines, pickup trucks, scales, etc., are sold over a period of four years, while the farmer needs to nay a deposit of only 25%, and a rate of interest of 8% on the outstanding balance. We see that provision has also been made for sprinkle irrigation apparatus. The term here depends on the period which the board deems fit. We see that it has been made very easy to buy stock. Loans for cattle range from five to ten years, depending on the purpose for which they are needed, and the contribution of the farmer himself ranges only from 20% to 25%. On the balance of the money, as already mentioned, the interest rate is only 8 % per annum.

Sir, it is a great pleasure to me to give this Bill my whole-hearted support.

Mr. Speaker, as you are aware, it is unlikely that I would ever be approaching the Land Bank with a personal farming proposition in Green Point unless on some occasion I can persuade the hon. the Minister to rent out some portion of Robben Island for purposes of farming operations. But after the hon. member for Lydenburg spoke, I want to raise a particular matter and say that it is quite clear from what the hon. member for Newton Park has said that we on this side of the House have no objection whatsoever to the arrangements arrived at between the Land Bank and the farming community in so far as arranging loans is concerned. But what I rise to mention this afternoon, is that I believe it is not appreciated to what extent the provisions for levying execution under the proposed new section 34 of this Bill will adversely affect the credit rating of the whole farming community. It is in that regard that I wish to raise certain matters of principle for consideration at this stage and deal with them more fully when we come to the Committee Stage.

The Bill which is before us introduces a new debtor-creditor relationship in regard to a particular type of loan. In the nature of that creditor-debtor relationship, it is primarily the concern of the Land Bank and the borrower, i.e. the farmer. Differences, however, are now introduced and I do not wish to elaborate on them because I think that they are clear to all of us. The previous system of a hypothec loan gave the bank the added security in that certain identifiable assets were at the disposal of the bank exclusively for the recovery of the loan from the defaulting debtor. Movables and livestock were branded or marked for that purpose. That precaution had as an effect on the credit rating of the farmer that any individual who wished to grant credit facilities to the farmer had a warning or a caveat that he himself could see with his own eyes what assets of the farmer were tied up in this way. That was a visible caveat and a man or a commercial bank who granted facilities to the farmer without checking on that aspect, did so at his own risk. When it came to immovable property, the registration in the Deeds Office will indicate whether there are any hypothecs. The Bill which we have before us, however, will create a different debtor-creditor relationship because it is based upon a promissory note and not upon any identifiable security set aside by that farmer to meet that liability. The effect of this will, therefore, be to create a different form of contractual relationship between the Land Bank and the farmer and to overcome the fact that there is no hypothec, the Bill gives the Land Bank the arbitrary right of execution against the assets of the farmer. If a farmer enters into an agreement of that nature with the Land Bank, it is his own concern and if he is prepared to have actions of that sort against his own assets, it is his own concern. We have no objection except that the rights of execution, as I say, affect the rights of any other creditor of that farmer radically. Whether it is his commercial bank, whether it is his supplier or whether it is the shop in the nearby town, the rights of that person are radically affected by this means of execution. I shall give some indication of what I mean, although I am sure that the hon. the Minister understands what I mean. I am sure that you, Mr. Speaker, with your long experience in the legal profession will appreciate that there are certain rights of unsecured creditors of any debtor which are protected by the courts by way of participation in the proceeds of execution levied against the assets of that debtor.

Between the Land Bank and the farmer the first question is whether the borrower can dispute his liability at any time. The Bill says quite clearly that action can be taken without recourse to the Courts. In other words, once the borrower has signed a promissory note, he is committed to the indebtedness as certified by the Land Bank and he has no right to go to a court of law to dispute his liability. I can understand that procedure. If a man borrows on those terms, it is his undertaking and agreement. I can understand that it is perhaps necessary to avoid undue delays by dilatory litigation and contesting of liability by a borrower. We have no difficulty with that. If a man wants to borrow on those terms, well and good; let him do so. He places himself in the hands of the Land Bank.

When we come to the next stage, however, i.e. how the Land Bank is to act to recover that liability, we feel that the provision of this Bill is unacceptable. Acts have been passed in this House over the years dealing with all aspects of legal procedure, and honourable and learned members of the legal profession in this House will know that over the years the procedures to be adopted in levying execution have been and are altered or adjusted to ensure that a debtor cannot escape his obligations in so far as there are assets available for execution, that the creditor’s rights to recover the amount due to him are not impeded by actions on the part of the debtor, that competing claims against the debtor participate, in accordance with their priority, in the proceeds of any execution levied against the debtor’s assets and, what is more important, that certain standard formalities are adopted by the messenger of the court in levying execution. He has to take certain steps, there are certain rules in connection with advertising, the method of sale, etc., which are laid down by law and which the messenger of the court must adopt. I do not intend, at this stage, to elaborate further. I think that the details are more a matter for the Committee Stage.

I want to make it quite clear, however, that we on this side of the House will support a provision whereby a loan-debtor can enter into terms and commit himself as to how he shall be liable for repayment to the loan-creditor. One often encounters cases of guarantees where there are waivers of certain exceptions which can be taken by debtors. However, when it comes to the procedure for the recovery of the debt through a process of execution—whether it be said to be without recourse to the courts or not, it is still a process of execution because the Bill provides for the use of the messenger of the court and, in fact, gives certain directions to the messenger of the court—we will suggest in the Committee Stage, and I shall move an amendment to that effect, that the procedure of the Income Tax Act be adopted.

I do not need to go into the matter in detail. In terms of the Income Tax Act, if the taxpayer is in default, the Receiver of Revenue lodges a statement with the Clerk of the Court. That statement has the force of a judgment. A writ of execution is then issued and the normal procedure is followed. We will suggest in an amendment that that is the procedure that should be adopted in this matter. We shall suggest that the board lodge a certificate, through its secretary, with the Clerk of the Court, a certificate which will have the effect of a civil judgment. There is no difficulty whatsoever, as any legal practitioner will know, in that document being accompanied by a writ issued by an official of the bank itself, after which execution is levied. That will mean that other concurrent creditors, i.e. other persons who have been prepared to accept the credit-worthiness of a farmer, will, if there is any question of the farmer being in default as far as his indebtedness to some other unsecured creditor is concerned, know that they will participate in the distribution of his funds. I believe that this is a procedure which will meet the farmer’s present requirements, i.e. not to have his assets marked or identified in any way as subject to a hypothec. At the same time it will protect the rights of third-parties, though not unduly. It is a right any third-party is entitled to under the law as it stands today. I think this procedure should be entrenched in this Bill on the same basis as I have said, as applies to the recovery of income tax.

Mr. Speaker, I have great respect for the legal knowledge of the hon. member for Green Point. He said that he did not really represent agricultural interests in the House, and that he was not very well acquainted with farming, either, because farming was not practiced in his constituency although it was called Green Point. However, I do want to point out, too, that being a good lawyer does not necessarily make one a good financier, and I therefore want to tell the hon. member for Green Point, in all modesty, that I think that I, perhaps, know a little more about the financing of agriculture than he does. Of course, I can only talk to the hon. member as an ordinary practical person and I want to tell him at once that although the Bill will be discussed in more detail at the Committee Stage, it already seems to me that he and the hon. member for Newton Park—evidently the hon. member for Green Point has influenced the hon. member for Newton Park—are not going to assist the Land Bank with the kind of amendment they are going to propose.

What we will have to take into account when discussing this Bill is the fact that apart from the low cost at which the Land Bank has been able to finance agriculture in past years, there is the question of risks as well. The hon. member for Newton Park advanced the argument that the ordinary financial institutions were not greatly interested in the investment of capital in agriculture—that is something I want to come back to later—owing to the same high risk factor. I want to regard this as a motivation for the rights vested in the Land Bank.

We must note that these are existing rights vested in the Land Bank and that we are not dealing with a new principle here. The Land Bank is invested with those rights as compensation for the fact that it provides agricultural finance at a low interest rate and in so doing, incurs major risks. If one wants to establish all kinds of procedures—I have great respect for court procedure—to be able to compensate, one of the methods that could be adopted would be to make it possible for the Land Bank to effect attachment with as little waste of time and administration as possible, as has been the practice for 63 years. We are therefore not dealing with a new principle.

I should like to refer to a few other aspects as well. The Land Bank has been implementing the principles as laid down in the Act for 63 years now without any difficulties and I am unaware of any court cases concerning attachments and so on in which the Land Bank has been involved. It has been the function of the Land Bank for all these years to provide agricultural financing and to have the necessary funds for agricultural financing regularly available to the farmer and at a reasonable cost. When an organization such as the Land Bank provides financing, there are a few other aspects it has to examine rigorously, because short-and medium-term financing give rise to specific problems in agriculture. When the Land Bank provides agricultural financing, the bank has to give very careful consideration to the matter of risks. For example, we have the situation that when the income from crops dwindles, credit requirements in agriculture necessarily increase and consequently the nature of short-and medium-term financing changes.

Short-term financing can then become medium-term financing, and whereas a short-term loan was previously payable within a shorter period, it may then be made payable over a period of three to five years. A sudden demand for short-and medium-term financing with its attendant risks can develop as a result of poor harvests. It can therefore not be expected of the ordinary financial institutions to have sufficient capital available rapidly enough under such circumstances, and still less can it be expected of such financial institutions to charge low interest rates while incurring greater risks.

After all, all such financial institutions are profit-orientated and are not aid organizations. They owe it to their shareholders to make profits. We have had the experience in the past that whereas we have had poor crops owing to major droughts, there has been tremendous growth in the other sectors of the economy, giving rise to inflationary conditions. At the time the authorities had, in their wisdom, to take certain monetary steps— we had experience of this in the early seventies—such as credit restrictions, a development which hit agriculture very hard at that stage, because at the time it had to wrest itself from drought conditions. That is why we say that the economic and financial conditions of agriculture do not always necessarily correspond with those of other sectors.

For this reason it is necessary for the Land Bank, which is a semi-State undertaking, to be an agricultural financial aid organization as well, legally equipped to make use of the special powers invested in it, also in regard to the attachment of securities. In this way expense, time, etc., one saved and the Land Bank is compensated for the risk it has to incur. Since 1912 these powers have been embodied in the Act, and this is now being re-introduced in the new section 34 with the necessary adjustment. As I have said, therefore, the principle remains precisely the same.

To expect of a farmer today that he should purchase cattle under the hypothec system with all the procedures which that involves—something that has already been mentioned by the hon. member for Lydenburg—is most decidedly unrealistic under modern circumstances. I should like to add to what the hon. member for Lydenburg had to say by mentioning the matter of a cattle hypothec on, for example, the purchase of milch cows. It is difficult for the farmer, when he purchases the cattle, to determine the inherent weaknesses in certain of those cattle. He may perhaps milk the cows for up to three months while a number of them may be developing mastitis. In order to get rid of these cows it may mean that the farmer will have to follow a long procedure to have the brand cancelled. When, after a long time, he eventually has it cancelled, the farmer has to take the cows to an auction sale. You know how our farmers are. If such a cow is herded in with those cancelled brands on her neck, she does not usually fetch a good price. I take it that all of us have had experience of that. This kind of thing, therefore, is simply no longer applicable.

I want to give you an example of the problems that occur in regard to the financing of agricultural machinery. Owing to new developments in agricultural engineering, methods of cultivation and cultivating machinery change from time to time. It may occur that a farmer obtains finance for the purchase of a specific implement by means of a hypothec scheme. However, within one to three years that implement is obsolete and is no longer adequate for the new methods of cultivation. As a result the farmer has to dispose of the implement but he cannot simply go ahead with this because there has first to be a cancellation of the registration of the hypothec. My experience is that before a farmer does that, he puts the implement under a blue-gum tree and makes a chicken run out of it. The envisaged amendment would make it easier for the farmer to recover that capital which now, in fact, becomes unutilized capital, by getting rid of the implement immediately and selling it as soon as possible. The new section 34 eliminates the cumbersome procedure in regard to brands on cattle and punch marks on implements. After determining the overall financial position of the farmer and his balance sheet and the signing of a promissory note, the Land Bank advances him the necessary sum enabling him to meet the requirements of his financing. All that this system means is that the capital required becomes an integrated part of the rest of the capital structure of the farm. It is not special capital which has to be dealt with in a special way; it is less restrictive. The utilization of the capital for the purchase of cattle or an implement is capable of alteration, of change and there is a greater degree of elasticity in the farmer’s capital structure. This change will definitely bring Land bank financing into line with the modern farming of today.

In conclusion, this amendment will stimulate farmers to make greater use of cheaper financing and of financing that will be more freely available. This must necessarily give rise to greater stability and—I want to emphasize this—this will keep farmers away from the grey market in which they have to pay unduly high interest. Furthermore, this will have a beneficial effect on the private sector because, as we know, more ample financing of agriculture must necessarily stimulate agricultural production. It is on the platteland in particular, since platteland, towns and traders are largely dependent on the buying power of agriculture, that the benefit of the amendment would be felt the most. Interim and medium-term credit will then be more freely available and this will mean that additional capital from the commercial banks, which used to provide much of this credit in the normal course, will be freed for investment in other more lucrative sectors. I believe that this amendment is in the interests, not only of agriculture, but of our economy in general as well.

Mr. Speaker, the hon. member for Bethal has pointed out that the agricultural industry and the farmers of this country are in a very different position from those found in other walks of life such as industry or commerce, and the hon. member has said that in those circumstances special measures have to be taken in order to help them to cope with the circumstances in which they find themselves. We in these benches, before stating our position in regard to this Bill, would agree with the hon. member that there is a great deal in what he said. There is indeed evidence of this as the hon. member will know. He only has to look at the annual report of the Land and Agricultural Bank of South Africa for 1974, to see that in effect the Land Bank has—to use a round figure—lent the farmers of this country approximately a billion rand. Furthermore, if he turns back to page 13, the hon. member will see that this has been done at a greatly subsidized rate of interest and that the current rate at time of publication was 8%. One can say then that there was an interest rate subsidy of the order of 6%, which would amount to about R60 million in a given year. I simply want to point this out to the hon. member for Bethal because I want him to understand that our objection to this Bill—and we are certainly going to oppose it—does not rest on the grounds on which he was arguing.

Our opposition to this Bill rests mainly on four major grounds. Firstly, it confuses criminal and civil law; secondly, it exposes third parties and a number of other people aside from farmers and the Land Bank to risk in the sense that it takes away a protection which they previously had or had extended to them; thirdly, it infringes normal legal principles and practice; and fourthly, in the most direct way and without trying to hide the fact, it infringes on the rule of law. I want to agree with the hon. member for Green Point in the sense that when one looks at this Bill one realises that it simply repeals existing provisions which used to stand in the law in relation to cash credit accounts. These used to represent advances to an owner or lessee for specified purposes which were reasonably restricted. This has now been changed to a promissory note. The purposes have been extended as well but we have no major objection to that. Where we do agree with the hon. member for Green Point— and we agree most strongly with him in his opposition to this Bill—is that the former procedure used to require notification to the Registrar of Deeds as well as endorsement against the title deeds. Therefore any other person who was considering entering into a loan agreement with a farmer or making money available to a farmer, be it a bank, a financial institution, a company or an individual person, could see, simply by looking at the particular title deeds, what, if any, money had been loaned by the Land Bank and on what terms. This is now being done away with. There is no question of notification and there is no evidence, if a farmer approaches a financial institution or a bank or any company or any individual for a loan, as to whether he has borrowed money from the Land Bank. Obviously, Sir, some of the loans from the Land Bank become quite considerable sums of money and this would clearly be of interest to any person who was considering the question of lending money to a farmer. He would wish to know how much had been lent to the farmer by other parties and on what terms.

Sir, the other difficulty that we have with this new provision is that as we understand it, it stipulates for an absolute preference in favour of the Land Bank over movable assets and a qualified preference over immovable assets held by a farmer who is in debt to the Land Bank, and again without any registration or notification of that debt to the general public. To put it mildly, Mr. Speaker, this is grossly inequitable to third parties dealing with a farmer because, as we have said, they have no means of ascertaining the existence or the size of any particular debt and therefore under the sort of circumstances visualized under this Bill they are clearly prejudiced by that ignorance. Sir, we would have thought that the nature and the purpose of the Land Bank was certainly to be of assistance to farmers and we would go along with that, but such assistance should not jeopardize or worsen the position of third parties who deal with the farming community. This is what this Bill does in a number of ways.

In the first instance it discourages third parties from lending money to farmers, for the reasons we have already stated. Secondly, it will tend to militate against the farming community, a proposal with which we would certainly have no truck, and thirdly, it seeks to create an undue preference for the Land Bank. I would like to ask the hon. the Minister whether he would not reconsider this matter and step back. We all know that the Land Bank advances low-interest money to farmers. We are not arguing with that. However, this Bill now introduces a new factor, as the hon. the Minister of Finance will be aware. Not only does the Land Bank advance low-interest money but as far as the Land Bank is concerned it will now become low-risk money. We would have thought that the Land Bank’s job, while helping the farming community, was also to encourage third parties to help the farming community and that therefore it should be prepared to bend over backwards to waive any preference for itself in favour of other people instead of trying to place itself in a preferential position.

Mr. Speaker, I want to turn now to the particular clauses of the Bill and try to outline our major objections.

Clause 3 substitutes a new section for section 34 of the principal Act. I should like to ask the hon. the Minister of Finance this. In subsection (2) there are a number of items from (a) to (i) setting out different categories. It is one or the other. We simply cannot understand the drafting of these particular provisions and, as a result, this is one of the reasons why we are going to oppose the Bill. It confuses criminal law and the criminal offences with civil offences. If one looks at item (d) on page 4, one sees “the debtor becomes insolvent or is sentenced to imprisonment without the option of a fine.” This refers to part of the process whereby the Land Bank is going to try to recover a loan which it has made to a farmer. There are a great number of offences for which people can be sent to gaol without the option of a fine and which have nothing to do with their financial position. For instance, a person can be sent to gaol for drunken driving. It matters not in terms of this provision. If this becomes law and if any one of the farmers sitting on the opposite side of the House is sent to gaol, or any one of their relatives is sent to gaol, for such an offence without the option of a fine, then his Land Bank loan is recalled. [Interjections.] No. It is not maybe.

Let us look at paragraph (h). When one looks at that, on the very same list, one reads “the debtor is a company and any director or shareholder thereof is sentenced to imprisonment without the option of a fine”. Now, Sir, I am associated with one of the medium-sized public companies of South Africa. How can I deal with the shareholders of the Anglo-American Corporation in terms of this provision? There is no way I can get an indemnity from the shareholders of Anglo-American which can cover a company against this kind of liability. I assume that this was drafted or designed to deal with a private company with a small number of individuals, but take the way it is drafted. Will the hon. the Minister of Finance tell me that if General Mining or any other public company he cares to name gets a loan from the Land Bank in connection with farming activities and one of the shareholders of that company is found guilty of an offence for which he has to go to gaol without the option of a fine, this process will not start? I simply do not understand the references here. I can perhaps possibly understand why the hon. the Minister included the director of a company but a shareholder is a quite different animal from a director. Indeed, they are normally found in much larger numbers.

Then, if we turn to subsection (3) of this clause, we read—

Order! The hon. member for Lydenburg should not converse so much.

The hon. member for Green Point is indeed correct in saying that the word “may” is there. I stand corrected but if one considers paragraph (b) of subsection (3) one sees that it states—

I hope that the hon. the Minister will remember in his reply—this of course applies to movables—to tell us why it is necessary for the Land Bank to go beyond the normal procedure, because in the normal procedure the auction is conducted by a licensed auctioneer or by an officer of the court. This is the case with most normal sales. As we understand it, the Land Bank itself may conduct the sale. I hope that the hon. the Minister will give some explanation of this, because compared with normal legal practice, this means that an assurance of independence is taken away and that it is done outside the normal laws and procedures.

I want to refer to section 34(3)(c) as it is proposed to be amended by clause 3. It reads—

I want to ask the hon. the Minister what this “due notice” consists of in the context of this particular paragraph. This is establishing a limited preference in favour of the Land Bank to the detriment of any other third party. What is even worse, and this reinforces our opposition to this Bill at Second Reading, is that the same clause also makes the following provision—

That is the board—

That is simply saying that the Land Bank takes unto itself the right to determine the conditions of sale and overlooks completely the fact that there may be other interested parties, creditors or bondholders. This is one of the grounds on which we find it impossible to support this Bill.

The very next paragraph takes away another right which is normally enjoyed by people. Paragraph (d) reads—

This is simply putting the Land Bank in a position where it can ride roughshod over the rights of third parties and where it, as is stated by the Bill, is not only an interested party, but also in fact the judge of any dispute.

I hope the hon. the Minister will also give us an explanation of paragraph (e), which reads—

Therefore, what one is saying is that although the original advance was only made for a highly restricted purpose, it may after a sale or execution be increased or may be applied for the purpose of defraying the purchase price in terms of this Bill. The normal criteria which are applicable in terms of security and which are used by any individual or by any company, are absent in this Bill.

Then we come to subsection (4). I want to ask the hon. the Minister a question on the last few lines of the subsection, the lines! reading—

I understand this to mean a moratorium of three months. The confusion and difficulty we have on these benches relate to how the hon. the Minister views the position of the other creditors who may have money owed to them by a farmer at any specific time. Are they subject to a similar stay or can they institute an action before these three months have elapsed?

I now want to refer to subsection (5) which states—

If there were a notarial general bond over the debtor’s movable assets, how does the hon. the Minister intend to deal with the matter without prejudice to the holders of that notarial general bond? This is a very striking omission in the legislation.

Now we come to the very extraordinary subsection (7), and I hope the hon. the Minister will give us a full explanation as to why such an extraordinary power is being sought in terms of this particular legislation. I quote—

Then comes the absolutely extraordinary statement, without any explanation, that—

We have no problem with the Land Bank and the functions it fulfils in regard to the farming community but I do not think that even the hon. member for Newton Park would regard the Land Bank as a court of law. What is more, the Land Bank is one of the interested parties, so one actually has an interested party acting simultaneously as its own judge and in its own favour. This therefore is another absolute fundamental ground …

Mr. Speaker, may I just draw the hon. member’s attention to the fact that the right already exists in the old Act…

Order! The hon. member may not interrupt. He is only permitted to put a question.

In that case, Mr. Speaker, may I put a question to the hon. member?

No. This is another absolutely fundamental ground on which we object to the Bill.

Finally, could I ask the hon. the Minister to tell us one last thing which has an important bearing on the farming community. What is the underlying rationale and necessity for making this legislation retrospective? I say this because obviously this legislation is going to affect a large number of farmers throughout South Africa. These are the four grounds. As I say, we have no objection to the Land Bank as such. We are all in favour of its extending assistance to the farming community, but we do not think it should do so in such a manner as is proposed in this Bill, a manner which, to our minds, will merely discourage a great number of third parties from dealing with the farming community. Furthermore, we do not think the Land Bank itself should be given the powers visualized here in relation to the farming community. Therefore, as I have said, we on these benches are unable to support this Bill.

Mr. Speaker, we in these benches, naturally, support the principle of giving the Land Bank the authority to extend loans by way of promissory notes, but we share the tremendous reservations expressed by the hon. member for Green Point and by the hon. member for Johannesburg North about the way in which this Bill sets about it. From these benches, we shall be moving amendments which will set out our position clearly in this respect. The hon. member for Lydenburg, I think it was he, said that the Land Bank was not a normal commercial bank and pointed out that it supported the farming community by lending money at a very reasonable rate of interest. We accept, of course, that that is its duty. It is true that it is not a normal commercial bank and cannot protect itself by way of increased interest rate. Therefore its has different considerations. The Industrial Development Corporation is also a Government lender which does not lend money at enormous rates of interest and does not try and cover its bad debts by way of interest. If one goes through the Industrial Development Act, one finds that the Industrial Development Corporation is in a position to carry out its business without having any of the Draconian measures which have been mentioned by the hon. member for Johannesburg North. We also heard the hon. member for Bethal. He gave the impression—I do not know whether he meant it; perhaps I am mis-intepreting him—that the farming industry makes farmers worse risks than businessmen. Is this perhaps the reason why a bank that lends Government money to the farming industry must take more precaution in respect of its loans than a Government bank that lends money to businessmen? If this is his attitude, I honestly cannot understand it.

There is a big difference.

We in these benches have great faith in the farming community and we believe that they are as good a risk as anybody else.

The hon. the Minister referred to the experience the Land Bank has had with short-term loans and that, because of this experience, they felt that these Draconian measures were necessary in extending this new facilities. However, if one actually looks at the Land Bank’s report for the year ending 1974, one sees that, as regards bad debts, out of 25 487 lenders last year there were only five cases in which statutory measures had to be used for the Land Bank to get its money back, and that in all five cases sufficient was realized to cover the amount owing to the bank. Quite clearly, in this respect the experience of the bank is not that this kind of Draconian measures is necessary. Let us look at what the short-term commitments have been and who in fact borrowed money. In case of sugar-cane growers, the balance outstanding at the end of 1974 was R297 488. Perhaps the hon. the Minister feels that the sugar-cane growers are a bad risk and that they are the people we must be protected against. However, I cannot see that an amount of R297 488 warrants completely changing the law as to what kind of measures Government institutions can utilize to recover their debts. In the case of the fruitgrowers, the balance outstanding was R33 296. Perhaps the hon. the Minister feels that they are a bad risk, or the winefarmers or citrusgrowers, in respect of whom there were outstanding amounts of R286 016 and R124 816 respectively. The wattlegrowers did not have any short-term loans. Perhaps the hon. the Minister can tell us what section of the farming community he feels is such a bad risk, morally and financially, that we have to take all these Draconian measures mentioned by the hon. member for Johannesburg North. Perhaps he can tell us what section of the farming community requires a statute being enacted to give the Land Bank powers to act against farmers in a way in which the Industrial Development Corporation does not have to act against businessmen.