complained that the Dutch copy did not agree with the English, and he did not think that that was fair to the Dutch-speaking hon. members of the House, especially since Mr. Speaker read all amendments in English only. He protested against the rights of either of the two official languages being ignored.

said that even in the English copies these amendments were not set forth.

I shall have that inquired into. I have a copy before me with the amendments.

moved that the consideration stand over until Wednesday.

seconded.

Agreed to.

And in the meantime it will be inquired into why hon. members have not got copies—both English and Dutch—of these amendments. (Hear, hear.)

said that the Dutch translation of the Bill was not a true translation. There was clause 2. he had called attention to it before, and it had not been altered.

I think the hon. member will find that it is perfectly correct. They did not profess to be translations of each other; both are originals.

If both are originals, and one Act differs from another, which is the Act?

They do not differ.

If they are both originals, must they not be identical?

The meaning is identical.

How is this House to know, if the Bills are not identical, which is the law of the land? Suppose, he continued, they went to law, which was the Act upon which the Court was to decide, supposing they were not identical? The Act of Union said that the Bill whose language was signed by His Excellency the Governor-General was the one upon which the Court would decide.

said both the Dutch and English Bills were the originals.

wished to know if a member of Parliament could be called up for words used in Parliament. By inference the English copy of the Bill said that a member’s language could be called in question in Parliament. On the other hand, the Dutch copy of the Bad said a member’s utterances could not be called in question in any place.

explained that the Dutch word meant not in Parliament. Parliament had the right to do whatever it liked to its members.

Who is the authority to decide which is the correct translation and which is not? (Laughter.)

The Minister of the Interior.

said only one copy of a Bill was signed by the Governor-General.

What is the point of order?

I have not risen to a point of order. (Laughter.)

rising as the Speaker was putting the question that the Bill be now passed, said: Are we allowed to speak?

The Ayes have it.

Are we not allowed to speak on the third reading?

The third reading was passed a long time ago. (Laughter.)

The Bill was then passed.

was cheered when he rose to propose: “That the House go into Committee of Supply on the Estimates of Expenditure of the South African Railways and Harbours for the 10 months ending March 31, 1911.” The mover said he noticed, when the Treasurer made his Budget speech the other day, that when his hon. friends came to the question whether there would be additional taxation or not, there was an eager, almost an anxious, attitude in certain quarters of that House. There was no such piquant element to deal with in what he (Mr. Sauer) had to say. The railways might almost be said to be offensive in their prosperity. The Estimates he was about to submit were for the 10 months beginning from the date of the Union to March 31. The Estimates had been framed with a view to making them simple and easily intelligible, not only to the financial pundit, but to the ordinary man. (Hear, hear.) The Estimates would not show the whole position of the railways. They would not deal with expenditure, capital account, or the unexpended balances on capital account, or with the large amounts on fixed deposit. On May 31 there was on deposit from railway funds and from balances of loans £3,836,934. On October 31 the amount on fixed deposit and other securities was £4,535,000. This amount was made up of balances of loans and amounts set aside from railway revenue for specific purposes, such as construction, maintenance, and depreciation. But of this amount £2,020,000 would be required almost immediately for railway construction. (Hear, hear.) He therefore proposed, after the Estimates of Revenue and Expenditure now before the House had been disposed of, to submit— early next year—Estimates of Expenditure on capital account, when he could gave a full statement of the railway position. (Hear, hear.) We had at present 7,046 miles of railway, which cost—not including rolling-stock—£63,116,000. On June 30, 1909, the approximate capital expenditure was £60,201,627, so that there had been an increase of £2,914,373. The quantity of rolling-stock up to date was: Locomotives, 1,380; coaches, 1,950; and goods vehicles, 22,879. The approximate capital expenditure—that was, expenditure from borrowed money and money obtained from revenue which bad been brought into capital account for rolling-stock, was £13,664,000. On June 30, 1909, the expenditure on rolling stock was £12,992,961, since when there had been an increase of £1971,039. Shortly prior to Union a Conference, representing the four colonies, met at Bloemfontein, when rolling-stock to the value of £700,000 was ordered, and had been paid for. This had all been received. Since the establishment of Union further rolling-stock had been ordered to the value of £787,110. None of that had been received yet, but they hoped before long to have some of it. The cost of rolling-stock was defrayed partly out of the depreciation fund and partly out of the betterment fund. (The value of the stores on hand, or in transit on May 30 last, in the several Provinces, was £1,458,910, as compared with £1,313,365 on December 31 last. However, one concern would not require the same quantity of stores as three, and they would bring about a substantial reduction.

said he thought the Minister of Railways was not only a disciple of business principles, but a disciple also of Transvaal lines, because there was no doubt, as far as the Transvaal was concerned, the prosperous picture which had been drawn was a good deal due to the railways in the North. He (Sir G. FARRAR) was glad the position in regard to the branch lines had improved. He saw from the General Manager’s report that the loss on branch lines had been some £512,000.

They have improved very much since then.

I am very glad to hear it. We all want to develop the country and provide better means of communication, which is essential to the progress of the country; but we have had lessons in the past that there has been indiscriminate building of branch lines, that is, without proper inquiry. Continuing, the hon. member said that if branch lines were built they gave considerable benefit to the community, because markets were opened, which added to the production; but he must say that branch lines must be built with great care, great caution, and after careful inquiry. With regard to revenue, the Minister reckoned £253,000 per week, or roughly a million a month, so that without prophesying what surplus there would be on those figures, there was no doubt, he thought, that there would be a surplus. With regard to the provision for depreciation and betterment, he was glad that the Minister was a disciple of the Transvaal, because he thoroughly endorsed the policy of the late C.S.A.R. with regard to depreciation. He thought that that allowance was only necessary, because if they came to take the life of rolling stock, according to the figures for depreciation laid down by the late C.S.A.R., they put the average life of rolling-stock at from 15 to 20 years, so that showed that that 30 millions of money had got to be renewed every 15 years. In regard to the harbours, he saw there was a loss of £194,000.

Which includes depreciation.

said that he was surprised that the Minister had not delivered another lecture to the hon. member for Cape Town (Mr. Jagger), because he could have pointed out that the people who did not live along the coast had also to provide that out of railway revenue. He was glad to notice the improvement which had taken place. He thought it would be the policy of the Administration that every service under that Administration paid that service. As to the question of the amount set aside for the equalisation of rates, he found that it seemed to be the general policy of the Government when there was the word “shall” to make it “may,” and when there was “may,” to make it “shall.” Candidly, he was one of those who did not think there was any need at present to provide for that equalisation. Under the Act of Union the word was “may.” He thought it had been put in the Act of Union because when a railway did not pay a fair rate of interest there was naturally need to have equalisation of rates, but when they had such a surplus as they had there was no need to provide for an equalisation of rates. He found that the whole of the reduction in railway rates was to come into operation in the Cape Province, and he congratulated those living there. He was glad to see a movement in the right direction, but he did say that the people of the Orange Free State and the North wore also entitled to some consideration, because there was not the slightest doubt that, if they considered the railway position, those who used the C.S.A.R. had provided that enormous surplus; and he thought that a greater reduction of railway rates could have been given them. There was another thing—a portion of that reduction of £465,000 had been taken away already, as it was not to come into operation until February 1, a month having been taken off. He did not see any necessity for that, as the Minister of Railways reckoned there was to be a surplus. He (Sir George) thought the people in the North were entitled to a further reduction, and they would be disappointed When the railway rates were reduced in many cases there was an increase of traffic, so that the loss of revenue was not so great. He (Sir George) had hoped that the Minister would have given the House some idea of his opinion on the transportation system. Early in the session the Minister stated that the transportation system did not exist here, but afterwards he corrected himself, for in the Estimates it would be found that the system was introduced since the railways came under the hon. member’s (Mr. Sauer’s) charge. The transportation system was an innovation that was introduced on the advice of the General Manager of the C.S.A.R. against expert advice. It was an open question whether the system was a success. The only expert advice taken on the matter was from Mr. Brounger, who reported very much against it. He (Sir George) thought a good deal of unrest, especially amongst enginemen and drivers, had arisen from the adoption of the transportation system. That system was in force in America, but American systems were not always perfect, especially from the point of view of accidents. He was glad to see that they were going to have a separate control of the finances of the railways. He considered that the system of audit and control which was in force in the Transvaal at the date of Union was much better than that in the Cape. There was one other point. He had hoped that the Hon. the Minister of Railways would have given the House some information in regard to the Railway Board. He had asked the Hon. the Minister a short time ago to lay on the table the regulations that governed the appointment of the Board, but up to the present those regulations had not been forthcoming. He was not prepared at present to say anything about the constitution of the Railway Board, as he considered that every opportunity should be given to see how the Board worked and how the Commissioners carried out the duties entrusted to them The placing of the railways under a Board, subject to the control of the Governor-in-Council, was a very important innovation, and it was an innovation which he thought desirable, and one which he believed would have good effects on the administration of the railway system. So far they had only had one-half of the railway draft laid before the House. The statement made by the Minister that day had contained a certain amount of information, but they would have to wait till they got a detailed statement before they would be in a position to understand the expenditure of loan funds and the state of affairs in that respect. The Hon. the Minister had made a very clear statement, but he thought a greater reduction in railway rates could have been made than was foreshadowed in that statement.

said that with regard to the item of £791,000 for depreciation, it was a point which did not commend itself to him, because it seemed to be a new departure in railway practice, and it certainly was a departure from the practice of railways, which worked on business principles. Included in that amount was a sum of £248,000 for expenditure on permanent way works and £143,000 for rolling stock. Permanent way work on railways did not properly speaking come under the heading of depreciation. In the majority of cases permanent way works appreciated, and did not depreciate. The sum of £791,000 was really a renewal fund, and was apparently, roughly speaking, 1 per cent. of the entire capital of the railways. About three years ago he was asked by the Government of Mauritius to inspect the railways of that colony, and he was surprised to find that the rolling stock supplied 45 years previously was still running. He had to make a recommendation that that rolling stock be put out of commission and replaced. Still it was remarkable the length of service it had stood. Then there was an item called betterment, £750,000. That was one of those items which required to be very carefully watched. There was at present no information before the House as to how that £750,000 was to be applied. The principle of debiting the railways with a certain amount for betterment was a principle he approved of, and therefore he did not quarrel with the item; but as the amount proposed was a very large one, he hoped a very strict watch would be kept on that expenditure. Proceeding, he said that, considering three systems had been amalgamated, they could not have expected any particular reduction in the expenditure, but the increase had been exceedingly large. He went on to say that the English system of working the railways had been proved up to the hilt. He could not understand why they had gone in for this new system. He dealt with the transportation system, pointing out that in Great Britain it was only used toy one company out of many. The speaker was then understood to refer to the composition of the railway staffs, considering that more consideration should have been shown men who had served their country so long and so well. The results from the branch lines was a matter for congratulation, and as regards the construction of these lines in the future, he hoped that the Railway Board would gave these careful consideration, and lay full facts before Parliament. He thought it was a tribute to the work that had been done by the general managers of the system that £12,000,000 which had been spent on the railways had been used out of current revenue. The Minister had referred with gratification to one item. He laid great stress upon the reduction in the cast per mile. Now, the train mile was a very excellent index to a certain extent, but it was a very misleading index also, for this reason, that a railway manager who listened to the public, and ran any number of unnecessary trains, would soon increase the cost per train mile; but that was altogether against the interests of the country. He was quite sure they would all be ready to join with the Minister of Railways in congratulations on the very sound position in which they stood to-day as regarded the railways of South Africa. (Hear, hear.)

said that he would like to add his small tribute to those who had congratulated the Minister on his address and on the position of the railways. He had been working with his hon. friend (Mr. Sauer) for many years, and he took this opportunity of expressing the debt of gratitude which this colony owed to the Minister of Railways for the way in which he had administered the railways during the last two and a half years in the Cape Colony. It was mainly owing to him that they were able to present a fairly satisfactory position when they ended their career as a separate colony. He would like briefly to address his hon. friend the member for Georgetown (Sir George Farrar), who had referred to the position of the railways in the inland colonies. What had they done? They accumulated a very large sum, of which they were justly proud. How did they do it? By treating the coast colonies in what he (Mr. Merriman) said was a very unfair manner. (Hear, hear.) Playing off the rivalries of the two coast colonies, they were able to take a very large proportion of the share of the through rate, although the two coast colonies had to haul the goods up to the plateau. They took the lion’s share of the through rate— (hear, hear)—and, more than that they acted on “pure business principles.” They screwed the agriculturist to the utmost extent. They charged, and boasted that they charged much higher rates than they were warranted in doing. Those were the “business principles” which his Hon. friend (Sir George Farrar) had no doubt found eminently successful in a career which: they all admired. He did not think that the position in the Cape ought to be thrown in their teeth when they remembered that they had gigantic intellects like his hon. friend, working a rival concern upon “pure business principles,” that was screwing the utmost they could out of the rivalries of the two peoples with whom he had to dead. Now, it was a great thing, no doubt, for the railways to have four and a half millions, of which he believed at the present moment two millions was on deposit in the National Bank, Transvaal—very nearly two millions. Then they were to go on still building up this fund. What for? To put more of it on deposit? No, he did not think that was sound policy at all. They, of course, in the Cape had had a depreciation fund. In this country they had paid something like five millions from the debt during the past twenty years. That was adding to the assets, but at the same time they were increasing the burdens of the people of this country for the purpose of piling up a fund of money which they were going to put away in a bank. It was not sound policy, in his opinion. There was a golden mean that they would work it upon. They should not forget that they were still going on and paying the sinking fund. They contributed something like £1600,000 or £700,000 to sinking fund every year, to which the railway did not contribute—“ on business principles.” Let him tell his hon. friend (Mr. Sauer) that these transportation people, or whatever they called themselves now—they used to be general managers—if they found that there was a large sum in his pocket they would immediately want a nice class of rolling-stock. Then, it was said, what was to be done with the old rolling-stock? Scrap it? Laughter.) Now, scrapping was an expensive thing, and scrapping meant high rates, and high rates meant a lack of development in the country. His hon. friend had spoken recently about the development of the country, but how could they talk about the development of the country when the railway rates were being kept up in order to accumulate a large fund to keep in a bank. The true development of the country was to keep their railway rates down as far as possible. (Hear, hear.) Now that this was one country they could get to work on something like proper principles. They should not be cutting each other’s throats for the purpose of enabling his astute friend (Mr. Sauer) to keep up his rates when he got up to the Hat country. There his hon. friend sat with four and a half millions—a fair mark at which they would all have a shot in the future. His hon. friend held the soundest doctrines: he knew that if they ran a mile of railway into the country, unprofitable as it seemed to be at first, they were bringing the means of development over a larger area. There was another thing he wished to point out. He was sure his hon. friend would not keep up the agricultural rates in the Transvaal higher than they were in the Gape. Then it seemed absurd that while they had in this country a great abhorrence of dumping, while they were shouting against dumping, they were doing all they could to dump the produce over the sea, at such rates that it positively almost paid to buy the produce needed here for consumption in a foreign country and bring it back here, because they could not buy it at their own doors. There were me allies, for instance: it did seem absurd to have mealies going past their own door while they had to import mealies. Another thing which he had been asked to bring before the Minister was as to the rates upon Transvaal coa1. Now, they could put out coal as cheaply as it could be done anywhere in the world—for 3s., he believed, it was put out at the pit side. Yet all down in the Midlands and wherever there were big irrigation works and big pumping plants they had to pay extremely high rates for coal. For domestic purposes they had also to pay heavily, and they could not get coal down here at mineral rates. If the Minister would gave his attention to this, he would open up a very large trade indeed. Proceeding, Mr. Merriman said he did not want to go into all sorts of little details; he simply rose for the purpose of congratulating his hon. friend, and at the same time to put a little strength into those excellent principles which he knew his hon. friend possessed on the subject. If was to him (Mr. Merriman) a very gratifying thing to be able to congratulate the Minister of Railways upon having a concern which, as he had said, was worth a hundred millions, and which produced a revenue of twelve millions per annum. It was a sound thing to have built that up. Thirty-five years ago, he (Mr. Merriman) assisted in the Parliament of the Cape in passing the first Railway Bill, which gave expansion and the possibilities of expansion to the country; and he remembered nothing which more marked the change that had passed over this country. It was a great change indeed from the tiny little railway which ran to Wellington. He remembered the enormous fuss that was made when Mr. Molteno, owing to the influence he had over the people of the country, induced them to consent to a loan of four millions, which was considered to be a gigantic revolution. That was a great change, but there was a much greater change still, and that was over the spirit of the people. At that time the Boer was a cautious man, the landowner seemed to have some idea that when there was borrowing of money he was putting a mortgage on his own country. At present that was entirely changed. And who caused the Government to borrow money now? Who regarded millions as if they were dust under his feet? It was the landowner of this country. (He was the man who was always inciting the Government to barrow, little recking of the future, Well, he (Mr. Merriman) did hope that that spirit would be held somewhat within bounds, because it was a dangerous spirit, and although they had got this large asset, at the same time they must remember that they had very great responsibilities in this country, and that the country was not altogether in all respects a rich one; and to go on borrowing money in the way same people proposed would be an unwise thing.

said that, for two reasons, he would not follow his hon. friend (Mr. Merriman) in congratulating the Minister of Railways upon having made admirable and lucid statements. In the first place, he would be laying himself open to the charge that it would be afterwards impossible to criticise any statement when they got into committee, and, secondly, he did not consider the Green-book supplied to hon. members gave them the most lucid and clear statements. He had been amused at the speech of his right hon. friend, who had spoken of agricultural development and the construction of more railways, but how had he finished up? “Beware of the danger of borrowing money and placing the bonds on the farming community who had to foot the bill.” Well, railways could not be built without borrowing money or without a surplus of revenue over expenditure. So his right hon. friend had been opposed to both principles.

No, he has not.

He advised the building of as many railways as possible, and cavilled at the C.S.A.R. for laying out this large fund.

I did not cavil at them for that, but for accumulating it and putting it into the bank.

said that the right hon. gentleman had also claimed for a reduction of rates. They were not to borrow, and he would like to ask where was the money to come from with which to build these interesting railways? He had also been pleased to hear that the right hon. gentleman, in complimenting the Minister of Railways on the reduction of the rates, had come back to the old faith, for he had once raised the rates. The right hon. gentleman had referred to the C.S.A.R. bleeding the coastal colonies, but did he remember the time when the coastal colonies kept the Customs dues, and when there was the in-transit rate, which he (Dr. Smartt) when in office had reduced from 3 to 1 per cent.?

What about Kimberley?

replied that that was within the Colony, and was competition of quite a different character. As to the Green-book, he wanted a clear and simple statement of the position of the railways on May 31, showing how much was revenue balance and how much loan balance; how much had been appropriated and the items for which it had been appropriated, how much had been expended, and the position when the Minister of Finance had made his Budget statement. Then they wanted to know how it was proposed to allocate these moneys, and the views of the Railway Board on that allocation. Then as to the balances, the cash and loan balances in the possession of the various railway administrations should be placed in the hands of the Railway Board of their administration—whether it was right or wrong to do so he was not now arguing—but on that basis they had come into Union, and it had been provided for in the Union Act. He hoped that the Minister of Railways would lay the resolutions of the Railway Board on these matters before the committee. As to the transportation system, had that question been fully discussed by the Railway Board? He asked whether that principle of transportation for the amalgamated railways was the recognised policy of the Board, after the fullest discussion and fullest consideration of the question? That should be laid before the committee, too. On page 28 he found a statement as to a balance of £39,000 of revenue over expenditure in regard to real estate. They wanted to know what that real estate really was. Another point he would like to know was whether, in the appointment of the Acting General Manager of Railways, that had been made by the Railway Board or by the Government? He did not wish to be understood to reflect in the slightest on the General Manager of the S.A.R., because he considered him an admirable officer; but, as far as his memory carried him back, in the same “Gazette” in which he had seen the appointment of the Railway Board, he had also seen the appointment of the Acting General Manager. If that were the case, it was unfair to put the responsibility on the Railway Board, when they had not selected the General Manager. He thought that these were facts which the Minister of Railways ought to place the House in possession of before it went into committee. He was glad to hear of these rates being reduced; but he hoped that the Minister of Railways would tell them on what basis they had been reduced, and whether it was on the basis of mileage or a sliding scale for distance. Before very long the whole question of railway rates throughout the Union would have to be gone into. A sliding scale should be introduced, and the old mileage system—which had done much to prevent development in the Cape Colony—should be done away with. When he was Commissioner he approached the right hon. member for Victoria West (Mr. Merriman) who was the leader of the Opposition, with the suggestion that there should be a Commission, on which both sides should be represented, to go into the question of railway rates; but his right hon. friend did not see his way clear, either to sit on the Commission himself or to allow any of his followers to do so. Thus, the right hon. gentleman allowed political considerations to dwarf the general considerations of the wellbeing of the whole of the Colony. (Hear, hear.) He (Dr. Smartt) would like to know what the Minister of Railways was going to do with some £500,000 worth of debentures which fell due shortly. Would be pay for them out of revenue or out of the balances in his possession? There had been a good deal of discussion prior to the meeting of Parliament as to the economies which ware to be effected when the railways came under Union. Perhaps the figures in the Estimates could be explained, but they did not point towards economies. For instance, the administration of the Stores Department under Union was to cost £132,000 for 10 months, against £115,000 for the administration of the three different systems for the preceding 12 months. There was another very interesting item, which he had no doubt his hon. friend would explain. They had heard a great deal about Asiatic immigration, and he (Dr. Smartt) was surprised to find in the Railway Estimates that a large amount was put down for Indian recruiting. There was another point of great importance to the men which his hon. friend had not dealt with—that was equalisation of salaries. Salaries were paid on an entirely different basis on the three old systems. They would never have a contented service if salaries were not paid on a fair and reasonable basis. Next, as to the accounting department; the expense for this for the amalgamated service was to be higher than that of the whole three different systems. It seemed to be an anomaly that the railway auditor was to be paid £100 a year less than the chief railway accountant. Then his hon. friend had said that since amalgamation the staff had been increased by 1,100 men, and he also stated that if they had economy they could reduce the expenditure by £250,000. These two statements did not balance. Dr. Smartt went on to say that he did not agree with his right hon. friend (Mr. Merriman) that they should not make fair provision for charges such as betterment, contributions to capital, and renewal. It would be an ill day for the State if they had nothing put by with which to deal with periods of depression. As to the reduced railway rates, the House should get some statement as to the reasons why the Railway Board had decided that the reduced rates should come into force on February 1 instead of January 1. With regard to the depreciation on rolling stock, the amount set aside for that purpose might or might not be enough. There must be an enormous obsolete stock in the three Administrations, and what he wanted to know was whether there had been a thorough valuation of railway stock since May 31. Otherwise, how were hon. numbers to know that the charge for depreciation of £534,000 was sufficient? For years and years, save the period 1899-1900, the old Cape Government Railways had brought a charge against depreciation of railway stock and permanent way.

Totally inadequate.

Would my hon. friend direct his remarks to the Minister of Railways, because although inadequate, we recognised the system. But when my friend (Mr. Sauer) took office he drew his pen through it, and it disappeared from the Estimates altogether. Proceeding, he said there was another question he wished to deal with, and that was the question of railway sleeper plantations He referred to what had been done in the Cape in this matter, and said that it was the duty of he railway authorities to lay down plantations in the vicinity of the lines for the purpose of growing timber for sleepers. He could not find a vote for that purpose in the Estimates. He found, however, a vote for the sleeper factory at Knysna. Now, he thought it would be far better to utilise the money for the replanting of trees. It would gave the poor white woodcutters permanent employment, whereas their employment at the present time was of the most casual character. He would like to see a far larger amount placed on the Estimates for that purpose. Another question he wished to raise was that of reducing gradients. He would like to know, for instance, whether it was the intention of the Government to carry out a reduction of the gradients on the Western system so as to facilitate considerably travelling between Cape Town and Pretoria; and whether it was their intention to reduce the gradients on the Klerhsdorp-Fourteen Streams and Fourteen Streams-Johannesburg lines. These were facts which the House should have in its possession. He only hoped that a policy of opening up the agricultural resources of the country would be adopted by the Government and the Railway Board, but in that connection he must say that he received with a certain amount of misgiving the statement of the Minister as laid on the table and the reasons which he gave for not carrying out the lines already authorised by the various Parliaments. He understood the Riversdale-Llewellyn line had had to stand over on account of tick fever. Surely, however, Cathcart-Clifton was a line which should have been proceeded with; surely the Belmont-Douglas line would be a line which would open up an irrigation district with great possibilities; surely the Queen’s Town-Whittle-sea line would develop as good an agricultural district as any of the lines already opened up; surely the Butter worth Idutywa line was a line absolutely necessary, especially in view of the inroads of East Coast fever and the suspension of ox-wagon traffic; and surely the extension from Alexandria to a point on the Victoria railway, with a view to eventually opening up the district of Peddie was a consideration which influenced the Cape House when voting money to build the line from Barkly Bridge to Alexandria. When Union took place on May 31 several railways had been authorised by the various Legislatures of the Union, and he wanted to know who had subsequently decided which of those lines should be built and which should not be built. The House was entitled to know the reasons which actuated the Government in undertaking certain lines and not undertaking certain other lines. When the House went into committee on the question it would facilitate the passing of the Estimates if that information were given. It was never the intention of the Act of Union that the Minister for Railways, perhaps for political purposes, should commence the construction of some lines of railway, and should leave alone the construction of other lines. He would like to have in writing the reasons of the Railway Board for earmarking certain sums for certain particular lines, and he would like to have the minutes of the Railway Board laid on the table of the House. He considered that year by year within fourteen days of the meeting of Parliament the minutes of the Board should be laid on the table of the House, so that the House could judge how the Board were going into the various questions left to their administration, and how the railways were being controlled. He hoped when the House went into committee they would have a free and full discussion, but he trusted, with a view to making that discussion as short as possible, the Minister for Railways would place the House in possession of all the facts in connection with that matter.

said the Minister for Railways had referred to the increased efficiency of the railways. He would like to know if the Hon. Minister did not attribute a good deal of the efficiency that had taken place of late years to the encouragement of white labour, and if that was the case, would the Hon. Minister not consider how he could still further use white labour in the future. The Transvaal railways in late years had been almost entirely constructed by white labour, and it would be interesting to know whether the wear and tear in connection with the lines laid by such labour was not less than on lines which had been laid by native labour. The Minister had referred to future retrenchment. He (Mr. Sampson) considered that the lines on which any further retrenchment should take place should be in connection with the coolies employed in Natal. Coolie labour might be found cheap, so far as salaries were concerned, but in the long run it would be found that it would have been better had the work been done by white labour. There seemed to him to be a danger that in framing his next Budget the Minister for Railways would allow a very small margin for the betterment of the workers on the railway. He hoped, however, better counsels would prevail, and that the Minister would allow as generously for the betterment of his workers as he allowed for the betterment of his rolling-stock. In conclusion, he said that in view of the doubtful benefit of the continued use of native labour at the present rate of wage and under present conditions, the Minister should at least decrease the facilities for bringing natives from outside the country into the country, so that they might compete with white men.

said he would like to dispel the idea that had somehow got abroad in connection with the transportation of goods from the coast, and the fact that the Central South African Railways got the lion’s share of the through traffic. He admitted that they did get the lion’s share of this, but he would like hon. members to ask themselves who paid these rates. The people who paid these rates were people in the Northern colonies, by whom these railways were served. Then it had been said and had been insinuated, that the Transvaal had played the coast ports against each other, and had got better terms from a foreign State. He pointed out that the Northern colonies were under a treaty with Portugal, and that if the Transvaal had used the Delagoa line on strictly business principles, and had cut the rates, the greater share of the traffic would have come through Delagoa Bay. With regard to the accumulation of railway funds and the suggestion that the Finance Minister should make use of this money, he pointed out how careful the Convention had been on this point, and maintained that South Africa should be guided by the experience of other countries. In other countries it had been found a very easy matter to make use of money of this kind; but seldom or ever had these amounts been placed back. He thought that if such a policy were adopted, those who acted in that way would be ill advised. He proceeded to deal with the amounts set down for betterment and depreciation, and said that he was in agreement with what had been said by the hon. member for Fort Beaufort (Dr. Smartt) in regard to the rolling-stock of the country. He thought that, to be on the safe side, the best policy they could pursue would be to have a thorough investigation of the value of the rolling-stock at present in use. He went on to refer to what his right hon. friend had said with regard to landowners borrowing money. In the past the landowners had been wary of such a policy, but of late years his right hon. friend had said that there had been a complete change. If they examined the matter he thought they would come to the conclusion that the present-day willingness of landowners in regard to the borrowing of public money was due to a shifting of the incidence of taxation. He did not say that there should be wholesale taxation on the land, but what he did say was that when railways were laid down, and the value of land enhanced, these owners should contribute something more than they were doing at the present time. He congratulated the Minister upon the reductions in local matters which he had been able to effect in the Cape Colony, and said he thought those reductions ought to have been effected long ago. He hoped that when the Railway Budget came in they would be able to see a general reduction all round, as, indeed, they must if the present conditions continued. Mr. Duncan went on to urge upon the Minister the need of going carefully into the coal rates, and he submitted that the Railway Department were justified in charging the lowest possible rate for the carriage of coal. He pointed out that there was a danger that the large power companies on the Rand might, if the rates were not reduced, remove their stations to the pit, where the coal was produced, and thus the railways would lose a large amount of the present coal traffic. Mr. Duncan also drew attention to the need of (improved housing of the employees on the railways, and the provision of better coaching accommodation for the native traffic in the Transvaal, and, in closing, he remarked that he thought the Minister was to be congratulated on being able to produce a Railway Budget of that kind. What they had got to see now was that the provisions of the Constitution were carried out, and that these enormous revenues, which they were earning from the railways, were to promote railway communication throughout the country, and to gave the employees on the line as reasonably good conditions as possible. (Cheers.)

said that he thought it was decidedly wrong that these reductions in the Cape Colony should be made without reductions being made in the Transvaal. He also urged that a revision of the coal rates was necessary, and said that in an area of between 50 or 100 miles in the Transvaal the profit on the carriage of coal was 60 per cent. The railway charges for the huge machinery used on the gold mines had to be paid by the mines as well as these charges on the carriage of coal, so that the gold mines had to pay much more to the revenue than was fair. The same thing applied to some other industries there. It was true, as the hon. member for Fordsburg (Mr. Duncan) had said, that power stations were being erected at the coal mines, so that the railways would lose the revenue which accrued from the carriage of the coal. That meant that the railway rates on other goods would have to go up through the loss of this traffic. By lowering the rates, they would increase the traffic; by keeping the rates up, they would be giving another power the chance of coming in and competing. The Transvaal surplus should have been applied to the reduction of the railway rates. The people of the Transvaal had expected that, for they were told that the railways were to be run on business principles. In the Transvaal they had been paying toll ever since they had a railway there; they had been paying huge sums to the revenue of the coast colonies. Proceeding, the hon. member said they had to consider seriously in regard to the railway policy whether the railways to be built would open up the country, irrespective of whether they were going to pay. In countries where they had rivers even, they found that the railways had taken away the traffic from the rivers, and thus they found it to be universally the case that the railways were the greatest instruments in the opening up and development of a country. If they built a line between Zeerust and the main line, a distance of about 40 miles, they would save 300 miles, and he hoped that the Minister of Railways would see that that railway was built. They did not get trade for the Union to-day which they could if that line were there. They might say that Natal would benefit, but they must not go in for that dog-in-the-manger policy.

said that his hon. friend (Mr. Sauer) had accused him of wishing to raise railway rates on natural produce. So far as he knew, he had never done so, but he would say this: that he had opposed the making of branch lines from time to time. If he had sinned in that respect he had sinned with his hon. friend (Mr. Sauer), who had also opposed these lines; in fact, he had done much more, he had absolutely refused to make them. They had heard much from the Minister about developing the country, but here were these four lines referred to by the hon. member for Fort Beaufort (Dr. Smartt), which were for no other purpose than developing the country, to which not a spade had been turned. The whole of the money for these lines—which had been authorised by Act 34 of 1906—had been raised, and of the £2,026,000, £2,000,000 had been raised on permanent loan, not on Treasury Bills, leaving £26,000 still to be raised. His hon. friend had that money, and yet he had said that certain lines were again to be brought before Parliament.

said that he had not said that.

thought that it was a fair inference to make from the Minister’s speech that some of these railways were again to be brought before Parliament. The hon. member accused him (Mr. Jagger) of not wishing to push the country along, and being in favour of raising the rates; and here was the opportunity of developing the country by building these lines; the Minister had the money in his pocket, or it had been devoted to some other purpose. As to the point raised by the right hon. member for Victoria West (Mr. Merriman) and the hon. member for Uitenhage (Mr. Fremantle), that no contribution was made to the Sinking Fund out of railway revenue, he need hardly say that that matter had been a good bit debated in the Convention, and also in Parliament. There had been a good deal of division on that matter. He held that under the agreement they had made they were bound to stick to it—it was part of the agreement under which the Northern colonies had entered Union. It was always contended that if they kept the rolling-stock and the line up to standard, they did as much. Of course, that meant what had been done by the Railway Board—providing a liberal allowance for depreciation, betterment, and so forth.

Business was suspended at 6 p.m.

continuing this speech, said that the amount contributed out of the general revenue of the country by way of railway revenue and capital expenditure amounted to £7,419,000. The railways paid interest on this. The Minister of Railways had made fairly liberal provision for both betterment, and depreciation. He (Mr. Jagger) was rather surprised at what the right hon. member for Victoria West (Mr. Merriman) had said in reference to this matter. He (Mr. Jagger) thought it should not be piled up, and the sooner it was used the better, because it did not pay the country to have money in the bank earning 3½ per cent. interest. Better use could be made of this money in relaying and regrading the railway. It would pay to regrade the line from Touws River to Dwyka. The Cape Colony had had no fixed policy in reference to railway sinking fund and depreciation. The railway interest had been counted at £3 14s., and the sinking fund had not been kept distinct. He thought it was an extremely sound policy to make liberal provision for betterment and depreciation, because it kept up the earning capacity of the railways. Referring to the item of £25,000 for railway sleepers from Knysna and Storms River, Mr. Jagger said he could not understand how the Minister of Railways could have agreed to this, seeing that the railways were supposed to be run on business principles. The purchase of these sleepers was condemned both by the railway authorities and the forest officers, and also by everyone who had the interest of the woodcutters at heart. The Cape sleepers cost more than the imported, but the life of the former was not so long as that of the latter. Then the wood was far too good to be used for the purpose of making sleepers from. These facts had been known by the Minister of Railways for years past.

It is the short wood they use.

I prefer to take the Forest Officer’s authority. Proceeding, Mr. Jagger said that the life of the woodcutters was both demoralising and precarious. The woodcutters could better be employed on reafforestation work. Continuing, Mr. Jagger said that he noticed that the Minister of Railways and Harbours had estimated a revenue of £16,000. Now, he wished to know how he was going to get that amount, because he did not see how he could get revenue from lighthouses. One matter which he particularly desired to bring to the notice of the Minister was the necessity of a lighthouse at Slangkop. He hoped he was going to make some provision for such a lighthouse. The question of lighting the coast had come before a Lighthouse Commission, which reported that three things were badly required. The first was the improvement of the Agulhas light, the lowering of the Cape point light, and the construction of a lighthouse at Slangkop. The Agulhas light had been improved, but the lowering of the Cape Point light and the Slangkop light had never been attended to, and since the report of the Commission two ships had gone ashore, the Maori and Umhlali. Now, he did not say that if the Slangkop light had been there these wrecks would have been prevented, but he certainly thought that the Slangkop light was very badly needed, and he hoped the Minister would see his way clear in the near future to put up that light. (Hear, hear.) If the lowering of the Cape Point light and the construction of the Slangkop lighthouse were attended to, then he thought the South African coast would be very fairly provided for in the matter of lights. Another matter upon which he desired some information was that of Indian recruitment. He agreed with what his hon. friend had said in regard to the railways being a very large and valuable property, bringing in a revenue of something like £12,000,000, pretty well as large as the general revenue of the country, but, to his mind, it was necessary that there should be very careful handling, otherwise they might easily get into a mess. The present prosperity was, to his mind, a source of temptation to go in for extravagant management. The Minister would have to be very firm, because political influence would be brought to bear upon the railway management. It was to guard against such dangers that the Convention created the Railway Board. There could be no question about that—(Opposition cheers)—but he thought that the House was inclined to ignore or forget the existence of the Board, as was shown by the appointment of the Commission to inquire into the grievances of the railwaymen, quite independent of the Board. To his mind, the best policy the House could pursue was to trust the Board, and leave them a reasonably free hand. (Opposition cheers.)

after regretting that more details had not been given in regard to stores, said that he wished to enter his protest against certain acts of petty tyranny which were going on, one of the most recent of which was in connection with the elections. In various parts of the Union Government employees were told that if they stood as candidates they must resign. He knew that these men had to resign. In some cases the unsuccessful were offered their positions back again, but others were refused. Proceeding, he said that he noticed that there was a sum for wages for Indian coolies on the railways in Natal, and he wished to point out that, whereas the Transvaal was spending thousands of pounds sterling to keep the coolies out, in Natal they were spending thousands and thousands of pounds sterling to bring them in. He mentioned the fact that the heads of departments of the Natal Government Railways told a Commission which considered the matter that they could do without coolies. There were about 4,000 coolies employed, but he was glad to say that since the sittings of that Commission there had been an improvement. The Commission were also told that down at the Point, Durban, they could do without coolies. Now, if they could do without them, why should they increase the number?

No.

said that, nevertheless, a very bad policy had been introduced within the last two years. Coolies had displaced the natives. Now, to his mind, the work of this country should be done by the people of the country, whether they be whites, native, or coloured, as far as possible. Another point he wished to mention was that elderly men had been discharged, simply because they were born a bit too soon. (Laughter.) When the next Estimates came up, he would tell them the truth in all its hideous reality, and then hon. members would see that it was a necessity that something should be done.

moved the adjournment of the debate.

seconded.

communicated a message from the Senate, in which the Senate had made certain amendments.

moved, seconded by Mr. LOUW: That the amendments be considered on Wednesday.

Agreed to.

moved that the House go into Committee of Ways and Means to consider the following: “(1) That there shall be assessed, levied, collected, and paid to the revenue of the Union under the provisions of, and subject to the conditions enacted by, any Act which may be passed in the present session of Parliament, a tax on the profits of mining as follows: (a) On the profits from mining or winning of gold, 10 per cent. (b) On the profits from mining or winning of precious stones, 10 per cent. (c) On the profits from mining or winning of other minerals, according to the following scale: Where the amount of profit does not exceed 5 per cent. of the gross revenue, 2½ per cent.; exceeds 5 per cent., but does not exceed 10 per cent., 3 per cent.; exceeds 10 per cent., but does not exceed 16 per cent., 3½ per cent.; exceeds 15 per cent., but does not exceed 20 per cent., 4 per cent.; exceeds 20 per cent., but does not exceed 30 per cent., 5 per cent.; exceeds 30 per cent., but does not exceed 40 per cent., 6 per cent.; and thereafter for every additional unit per cent. of profit an addition of 0.1 (decimal 1) per cent. to the rate of tax. (2) That the profits for taxation shall include profits derived from the mining or winning aforesaid, and from any product or undertaking in connection therewith. (3) That in assessing the profits of gold mines there shall be deducted an allowance for the amortisation of capital actually expended. (4) That in assessing the profits from the mining or winning of any of the minerals mentioned in the sub-section (c) of the first paragraph, the rate of profit shall be taken to be the percentage of the amount of profit to the amount of gross revenue. (5) That the taxation in respect of diamond and copper mining companies in the Cape Province be levied as from the date to which the profits of the respective companies have been charged to, and have borne and paid income tax under the Cape Income Tax Act, 1909; and in respect of the diamond mining companies in the Orange Free State Province, that the said taxation shall be levied as from: the date to which the profits of the respective companies have been charged to, and have borne and paid profits tax as imposed by the Orange River Colony Ordinance No. 24 of 1907. (6) That the said taxation shall not be levied on any profits derived as aforesaid in which the Crown is entitled to share by virtue of any law, grant, lease, or agreement. (7) That whenever the profits derived as aforesaid do not exceed £1,000 sterling in any one year an exemption from the said taxation shall be allowed in respect of those profits for that year.” In moving the motion, the speaker said that before he went on with the observations he wished to make, he would like to amend the motion by expunging the words “or undertaking” from the second section. Continuing, he said that hon. members would recollect that when he made his Budget statement he intimated that he intended to make good the difference between revenue and expenditure by appropriating a sum of £1,200,000 from the railway surplus; and also intimated that he intended to apply the provisions of the gold profits tax of the Transvaal to those diamond mines in the Cape Province and in the Free State, which at present paid no tax: and he further indicated that he proposed to pass a uniform law of taxation dealing with base-metal mining, and in the case of the copper mines that he intended it should be paid from the time the copper mines paid income tax in the Cape Province. He also said he would take advantage of that opportunity of proposing uniform mining taxation right throughout the Union, uniform taxation not only in respect of base-metal mining, but in respect of diamond mining, of gold mining, and of other mining.

interpolated a remark which was inaudible in the Gallery, whereupon

proceeded to say that in the case of gold the owner got rights which he was not entitled to under his title. Let him remind hon. members how the Legislatures had incroached in the Northern Provinces of the Transvaal and the Free State upon the rights of the private owners.

said that he was rather afraid to pay his hon. friend a compliment—

I don’t want them any more. (Laughter.)

Well, at the same time I will risk it again. He has made the House a very interesting and lucid—

No, no, no, no. (Laughter.)

explanation of the principles underlying his proposals, which all sides of the House will support. Continuing, the hon. member said that the hon. member for Uitenhage (Mr. Fremantle) had intimated on a previous occasion that there was something behind the action of the Opposition with regard to the profits tax. The hon. member would realise something more when they reached to-morrow’s paper. As a general principle, they in the Cape Province already had what the Transvaal had adapted as a principle, that these mines— at any rate, precious minerals and precious stones—should make a contribution to the revenue.

No; you have not.

Yes; income tax.

went on to say that when they had come into office in 1904, one of the principles of the Government was that the diamond mines in the Cape Colony should make a substantial contribution to the revenue of the State. During the time they were in office they had gradually increased that contribution until it had come to 10 per cent. of the gross profits There was another principle, one he was sorry that the Minister of Finance had not paid more attention to-— which was, what proportion of that contribution was he going to take for ordinary revenue, and what proportion was he going to set aside for the permanent improvement of the country? (Hear, hear.) They were not dealing with agricultural products, where the value of the soil was increased as the production was increased, but with mining, where they were impoverishing the soil, and it was an ordinary economic proposition that for what they took out they must put something back. So that he hoped that a certain portion of that revenue would be devoted to what would be of permanent benefit to the country. They on the Opposition were prepared to support a policy which would ensure the investment in the permanent interests of the country of a portion of the revenue derived from mineral wealth. He hoped that the Minister might be converted to take a more South African, a more national view of that principle than he had apparently done so far. (Cheers.) He thought that his hon. friend was wise in the taxes which he proposed to impose on base minerals. He thought that they should be graduated, and that they should do their utmost to encourage the working of base minerals. He thought in the first place that the Minister of Finance was going to let some of them off lightly, especially as regarded copper; but there were special circumstances in that case, and they wanted to encourage copper mining.

said that he entirely agreed with the hon. member for Port Elizabeth as to the attitude of that side of the House as to the principles of the motion. So far as the gold mining of the Transvaal was concerned, which was responsible for the greater part of the direct revenue received from mining, he thought there was no objection at all to the principles embodied in that resolution. They might have some little discussion on some of the details involved, especially as regards calculation and amortisation allowance. He thought that the Minister of Finance had been well advised to leave the words “or undertaking” out, because if they had been left in they would have been forced to levy the tax on all sorts of industries. If they were going to have a general income tax, such wording would be quite in order, but as that was not the intention, he thought they would have been put to a great deal of trouble. He did not see that there was much reason to object to the inclusion of water, although it might be possible to speak against it. As regards base metals, he was inclined to think that the tax might press somewhat hardly on industries for which there were, as a general rule, comparatively small profits. Base-metal mining was a chance to the small man or the small syndicate. In some cases the rate of taxation would constitute a very considerable burden. He had some figures there; and the point made by the people concerned was that they said that no provision was made for depreciation or the amortisation of capital. Whether it was right to go so far as was now done in this direction was worthy of consideration. He hoped, if the present scale of taxation were adhered to, the Minister might find it possible to do something more to alleviate the position of the small miners. With regard to the general policy of levying taxes on mines, there was no division in that House. They who ware connected with the mining industry had said over and over again that they recognised that the mines were a perishing asset, that it was reasonable that a fair amount should be set aside from their profits in order to build up the country, so that there might be something to replace the mines when they were worked out. (Hear, hear.) They could not, however, indefinitely go on taxing an industry and at the same time getting the capital required to keep that industry in a perpetual state of progress. He did not think the tax now proposed would have any materially bad effect on either the diamond or gold mines, but there was something to be said in the direction of modifying the proposals so far as the base-metal mines were concerned. The hon. member for Port Elizabeth (Mr. Walton) had overlooked the fact that in the existing laws in the Transvaal provision was made for dealing with the profits that accrued to the State in respect of the State holdings in the mines. He (Mr. Chaplin) supposed that when the mining laws were consolidated, the principle which was embodied in the Transvaal legislation would be extended to other parts of South Africa.

said the fact that the Treasurer’s proposals in levying a tax on profits alone, and then only on profits which exceeded certain limited dimensions, removed the objections which otherwise might obtain to the proposals. He thought the small, struggling miners need have no very great apprehension. Whilst congratulating the Treasurer on that point, he would like to draw his attention to his reference to a mining industry which was not too flourishing at the present time. He was exceedingly gratified to have elicited from the Treasurer the fact that he was prepared to deal with the question.

What question is that?

That of the royalty on coal mining in Natal. In conclusion, Mr. Maydon said a differentiation had been made between coal mines on private ground and those on Crown lands.

quoted from the report of the Inspector of Claims at Barkly to show that there were digging on the river diggings, which extended from 60 to 80 miles along the Vaal River, 1,455 licensed diggers; that the revenue collected during the year from these diggers by the Government amounted to £14,476 Os. 6d.; that from that amount was to be deducted £4,641 7s., which was payable to the owners of the land over which the claims were situated; that there was a net revenue of £9,834; that the 1,456 diggers found diamonds valued at £290,633, or an average of £190 12s. per digger per annum; that the average cost of labour amounted to £116 per annum; and that the net result therefore was £83 12s. per head per licensed digger, from which he had to pay other expenses. Proceeding, Dr. Watkins said that he wrote to the Inspector of Claims to find out what the other expenses would amount to, and received the reply that these would amount to £40 12s. That declared the speaker, left the digger a pittance of £43 per annum with which to pay living expenses.

I make it £750.

said these men could not grow fat on £43 per annum, which was the average. Now, out of the total of £290,000 odd which was the total value of the diamonds sold by the whole of the river diggers, the Government received a direct revenue of £9,834 in claim licences and so forth. That meant 3½ per cent. on the total sales made by the river diggers, and if they deducted from the sales working expenses it meant that these diggers were paying something like 15 per cent. to the State. That seemed to him to be a very fair contribution from these men towards the revenue of the State. They must remember that they were not in the position of shareholders of a mining company, who sent the profits to be distributed in lands across the sea. The Government in a way had been very generous, but he thought it could go further—seeing these men were taxed in many ways— and exempt the alluvial diamond diggings altogether.

said he would like to refer to a class of mining that was of more interest to him, and that was coal mining in Natal. Under this new basis of taxation the mines would have a greater impost put upon them than in the past, and it would be a greater tax upon their mines than in other parts of the Union where the base minerals tax would be reduced. It was a struggling industry. There were only 14 collieries that were putting out coal. The capital of the producing collieries was £2,206,000. The total dividends in 1909 amounted to £58,962; the average dividend on the paid-up capital of the mines actually producing, to say nothing of those already dead, was only 2.67 per cent. The amount of royalty the Government received in 1909 amounted to £974 18s. 1d. The taxable profits in 1909—as far as he had been able to work out—would amount to £188,000; if they took into consideration the new colliery the amount of profits taxable would be £200,000. The lowest rate of the tax was 2½ per cent.; the highest 6 per cent. Working it out on a conservative basis of 3 per cent., it would gave the Government an amount of £6,000, as against the £974 which it received in 1909; it meant that the coal mines would pay six times as much in taxation as they did under the royalty system. He would not grumble about this—practically speaking, it was a small amount—were it not for the fact that Natal was already overburdened with taxation in one form or another. He touched upon the transportation of mealies, and said that while Natal mealies were carried at a profit to the railways, the mealies of farmers in more inland ports were carried at a loss. He trusted that the Treasurer would look into this matter of a six-fold increase of taxation upon the mineral products of Natal.

opened by commenting upon the thinness of the Ministerial benches, as reflecting the amount which members on that side were called upon to contribute to this tax. Proceeding, he said he admitted that the proposals of the Treasurer did not impose an increase, as far as the taxation of diamond mines in the Colony was concerned; he admitted that those proposals were not unfair—(hear, hear)—and they were prepared, he added, to pay their share of the taxation. He only wished that other industries and individuals who were making large profits were equally prepared with those who were making profits out of mining to bear their share of the taxation. He should like to see the patriotic farmer also pay his share when he made good profits. He was afraid that in many cases it was what might be termed “parsimonious patriotism.” He entirely disagreed with the hon. member for Port Elizabeth (Mr. Walton), who had never been a friend of the mining industry. He (Mr. Walton) said that, unless the Treasurer earmarked a considerable amount of the tax that was derived from the mines, this country would, when those mines were worked out, be no better off than before. As far as the diamond mines of Cape Colony were concerned, he thought he was correct in stating that they had produced diamonds in amount of 140 millions 100 millions of which had been spent in the Cape Colony. If the Colony were no better off by the circulation during the last forty years of 100 millions of money spent in every possible direction within that territory, then the people who resided in South Africa would not be prosperous under any circumstances whatever. In Cape Town about fifty years ago the total income of the Municipality was about £20,000 a year. To-day he believed the income of the Municipality amounted to £300,000. Evidence was afforded of other Municipalities and towns in this colony that had been lifted from poverty into afluence by the working of those mines. Colonel Harris, proceeding, put in an earnest plea on behalf of the exemption of the river digger from the operation of the tax. As far as amortisation was concerned, in regard to Colonial companies, he had no fault to find with those proposals of the Treasurer, but, as far as the Free State companies were concerned, he thought they were entitled to same preferential treatment. There they had the low grade mines. The Free State companies were paying a 7 per cent. dividend tax. Now, the Treasurer had an overflowing Treasury chest, and in that pleasant condition of affairs he raised the taxation from those low grade mines. He thought the Treascurer would be well advised if he would allow the tax, as far as those companies that were paying their tax in the Free State were concerned, to remain as lit was now. He specially instanced the case of the Koffyfontein Mine, which, he submitted, was entitled to breathing time, and ought not to be taxed for the next three years. Then there was another point. It appeared to him (Colonel Harris) that the Minister of Finance was under the impression that he was entitled to a year’s income from the Cape mining companies. Now he (Colonel Harris) submitted that the Minister was only entitled to a tax on three-quarters of the profit made by the Colonial company, based upon the profit up to June 30, 1910. The Cape income tax, under which these companies were taxed, was based upon their profits up to June 30, 1910, for the service of the colony for the year ended June 30, 1910, so that, as far as the companies were concerned, they had paid the taxation up to June 30, 1910. The Cape Colony income tax did not expire until June 30, 1910. The Minister of Finance intended to tax these companies for the whole year. That would be an overlapping tax, because the companies would be paying twelve months’ taxation for nine months. The Colonial companies paid their tax in advance, just as a tenant paid his house rent in advance, and the Minister should make them an allowance accordingly. If the Minister was right in his idea that he would get twelve months’ taxation, then it was only necessary for him to alter the financial year four times and he would get five years’ taxation in four years. There was the constitutional aspect of the question, too. The Constitution was established on May 31, 1910, and he (Colonel Harris) thought that any Act that House passed, especially in regard to taxation, that was intended to operate anterior to the establishment of the Union would be illegal. He admitted the House could pass a law that the companies should pay this taxation for ten months, i.e., from the date of Union. That could be done constitutionally, but he contended it would be inequitable. He knew the Minister did not mean to be hostile towards these companies, and he hoped that after consideration the Minister would be satisfied to receive the taxation for three-quarters of the year. He (Colonel Harris) thought that even then the tax would gave as much as the Minister had budgeted for.

said that if the hon. member who had just spoken claimed a remission of taxation for the low grade diamond mines of the Orange Free State, he thought the Transvaal could also ask for a remission. About a year after the Premier Diamond Mine had been discovered the law was passed in the Transvaal that a 60 per cent. tax should be levied. After that the law in the Orange Free State, which imposed a tax of 40 per cent., had been passed. He wanted to know why it should be 60 per cent. in one colony and 40 per cent. in the other. It was said that in the Premier Mine every load was worth 25s.; but in the Premier Mine they were working ground which was only worth 3s. a load. As to coal, he thought that the Treasurer would do well not to tax it, as he had proposed to do. It should be absolutely free of taxation, as it was a product which was so much required in the country. (Cheers.)

commented on the importance of two diamond mines in his constituency, viz., the Jagersfontein and Koffyfontein Mines, which employed a large number of people, and constituted a good market for the district. They were, however, low grade mines, and should, on that account, be treated on a basis different from that which they might be prepared to apply to the rich mines in Cape Colony. The latter went from 55 to 150 carats per hundred loads. The Koffyfontein, however, only yielded 5 carats per 100 loads. Other Free State mines had a yield of from 10 to 12 carats, and it would be only fair to discriminate when it came to taxation.

said that in the Transvaal the policy had always been not to tax the mines unduly, but rather to encourage anything in the mature of local industry, so as not to frighten away foreign capital. In view of that fact he could not understand why in 1902 Transvaal diamond mines had been obliged to disgorge 60 per cent. of their revenue as against the 40 per cent. in the Free State. The explanation probably was that, at that time, owners’ rights were not greatly respected. He trusted that the Transvaal and Free State diamond mines would now obtain relief, and be placed on the same footing with similar mines in other provinces. The hon. member for Beaconsfield had suggested the fitness of a tax on farming profits, but he (Mr. Geldenhuys) considered that there was no comparison between agriculture and mining.

referred to the coal industry in Natal, and suggested that the Natal coa1 mines should not be taxed.

said there was an entire lack of any intelligible principle on which taxation of base minerals was based. Why should the profits on these be taxed to a less degree than those accruing from gold? It was indisputable that £190,000, whether made from the profits of mining gold or other mineral, was equally valuable to the owner. The proposed scale arose from following broadly the basis adopted in royalty. He strongly differed from the hon. member far Pretoria North (Sir T. Cullinan) when that gentleman said that the Premier Mine was paying 60 par cent. taxes. (Cheers.) It was paying nothing of the sort. In fact, it was paying no taxation whatever, whereas the Cape companies paid a tax of 10 per cent. (Hear, hear.) In regard to the small owners’ propositions, he said that the royalty basis was not a real basis, and recommended the Treasurer to study the Rhodesian law and practice, which were fairer and more encouraging to enterprise. There was another point, and that was the necessity of having all returns published, because in the method by which they assessed the profits tax, and allowed remissions, there was a continual temptation to under-estimate the life of a mine, and a very good check upon such a tendency would be the publication of the returns. He could not understand, and he hoped the Minister of Finance would explain, why the word “undertaking” should be taken out.

in reply, said he hoped that the tone of the Opposition’s criticism indicated a new feeling towards taxation and Treasury proposals, from that side of the House. He would refer to what had been said by his hon. friend the member far Jeppes (Mr. Creswell), who was alarmed, because he thought by expunging the two words “or undertaking,” the Government would lose money. He had only agreed to their deletion after the very fullest consideration. If any company decreased its profits, in the way the hon. member for Jeppes had suggested, he thought that the assessor would be able to know how to deal with that company. Take the gold mines on the Rand. If the directors’ fees were unreasonably large, the assessor would object.

What did you contemplate?

said he took it that if the words were left, it might be argued that the profits of De Beers dynamite factory should be taken with the profits of the diamond mine. That would be unfair. The object of the tax was to tax mining, and mining alone, and not subsidiary undertakings. The Government was concerned with mining alone. Strong appeals had been made to him to make a differentiation in the proposed taxation in regard to diamond mines in the Free State as compared with diamond mines in the Cape Colony or elsewhere. All he could say was that, in the case of the Jagersfontein mine, he understood that they made a profit last year of over £600,000. That did not appeal to him at all; he thought a company that made a profit of that amount could well afford to pay the tax. A very strong appeal had also been made to him to exempt river diggers from this tax altogether. He had already sketched the very generous provision which he had made in regard to the river digger, or the individual who worked a mine himself. He did not think any reasonable man could fairly object to the taxation proposals which were embodied in the resolution he had made.

You have not dealt with coal mines.

said that what he had said in regard to river diggers applied to coal mines. If they saw what the coal-mining profits were, he did not think they would make any fuss about that matter. He did not think the revenue from the profits on the coal mines would exceed £15,000 or £20,000 a year. No reasonable exception, he considered, could be taken to the proposal that coal-mining profits should be taxed.

The motion was agreed to.

moved to go into Committee of Ways and Means upon the resolutions to-morrow (Tuesday).

seconded.

The motion was agreed to.