I give notice that on Monday, 31st October, 1927, I shall move that the agreement be ratified with Messrs. Rosenstrauch Brothers and Korbf in connection with diamond cutting in the Union.

I would like to ask the Minister for longer time; the contract is only just now placed on the Table.

This is only a notice of motion, and cannot be discussed.

Could the Minister give notice of motion for Tuesday or Wednesday so that we could consider this new contract? It is a very important matter to diamond cutters in the Union.

The matter cannot be discussed; it is merely a notice of motion.

I move—

Even at the risk of wearying the House I do not intend to see this Bill pass the third reading without registering a final protest against the arbitrary and confiscatory clauses which the Minister has introduced into the Bill. We seem rather like the young lady of Riga who went for a ride on a tiger. We can get no adequate explanation from the Minister of this confiscation of our mineral rights in the Cape. He sits there with “a smile on the face of the tiger,” a strong silent man, and gives us absolutely no valid reason. The only reason he advances is “uniformity.” I take it the Minister means uniformity of treatment, and never in the history of South Africa has a Parliament of the people ever confiscated rights in the manner proposed in this Bill. In the Transvaal I admit the landowners have not these mineral rights, but from the beginning of the Transvaal the Volksraad laid down the principle that every burgher should be entitled to a farm, but in the event of precious stones or minerals being found the Government should have the right to expropriate with compensation. The following year a resolution was passed in the Volksraad altering that expropriation clause to a clause which was practically the inauguration of the present gold law of the Transvaal. What of Natal? Natal from the very beginning sold its land subject to its mineral rights being the property of the State, a very different state of affairs from that which the Minister is trying to bring about to-day. Then you have the Free State. The Free State farmers had the sole mineral rights until 1904, when by an arbitrary act of Lord Milner those rights were confiscated. That was not a resolution passed by the Assembly of the people; it was an arbitrary act on the part of a despotic Governor, and I myself resent that act as much as anyone else. Surely the Minister is not going to make that act of spoliation a justification for a further act of confiscation in the Cape Province. I would like once more to go on record the fact that the Griqualand West titles received the endorsement of the British Government. The Cape Province endorsed those rights and this House has again endorsed those rights, and I do say at this last hour that no Government should be guilty of such an act an co deprive the owners of these farms of chose rights. That guarantee was given at the request of the then President of the Free State, President Brand. The whole history of this clause is a story of brigandage and nothing else. The committee which sat in 1923 and 1924 endorsed the Cape rights included the name of General Kemp and that same General Kemp who is now Minister of Agriculture sat on that committee and voted in favour of the retention of the Cape rights. That clause was unanimously passed and I would like the Minister to tell us why he has changed his views. I cannot understand a Minister holding that principle in 1923 and 1924 and in a few short years being converted to a principle of confiscation of this sort, and I think a responsible Minister in his position owes an explanation to the House. The same of Mr. Naude. He accepted that principle in 1923 and 1924 and it is only right he should, tell us why he is now supporting the principle which is going to deprive the Cape landowners of a right which has been theirs from time immemorial. There were other members on this committee, and in a somersault of this sort, an acrobatic feat, where these gentlemen have suddenly become advanced socialists, the country has a right to an explanation. The Minister has made it even worse. We had the right to dispose of mineral rights to anyone, but he now includes a clause to limit the disposal of those rights to a single digger, and precludes sale of the meagre rights he leaves us to a syndicate or company. I think this is treatment which we of the Cape have every right to resent. When we came into Union we considered we were dealing with honourable men who would uphold the rights of the Cape Province and would not attempt to confiscate them in the manner this Bill does. One word with regard to the retrospective clauses. I know that these sub divisions are being worked hard. I hope that the hon. members in another place will keep this in cold storage, and for the next few months this will enable the present owners of these sub-divisions to obtain most of the diamonds, as it seems to me that it is only by this means that many innocent parties will escape serious losses. I record a final protest against the passing of this Bill, and in this last hour I hope that the House will not adopt the principle of the expropriation of private rights.

Motion put and Col.-Cdt. Collins called for a division.

Upon which the House divided:

Ayes—65.

Allen, J.

Badenhorst, A. L.

Barlow. A. G.

Bergh, P. A.

Beyers, F. W.

Boshoff, L. J.

Boydell, T.

Brink, G. F.

Brown, G.

Christie, J.

Cilliers, A. A.

Conradie, D. G.

Conroy, E. A.

Creswell, F. H. P.

De Villiers, P. C.

De Villiers, W. B.

De Waal, J. H. H.

De Wet, S. D.

Du Toit, F. J.

Fick, M. L.

Fordham, A. C.

Grobler, P. G. W.

Hattingh, B. R.

Havenga, N. C.

Hertzog, J. B. M.

Hugo, D.

Kemp, J. C. G.

Kentridge, M.

Keyter, J. G.

Le Roux, S. P.

Malan, C. W.

Malan, M. L.

McMenamin, J. J.

Mostert, J. P.

Mullineux, J.

Munnik, J. H.

Naudé, A. S.

Naudé, J. F. T.

Oost, H.

Pearce, C.

Pienaar, J. J.

Pretorius, J. S. F.

Raubenheimer, I. van W.

Reyburn, G.

Rood, W. H.

Roos, T. J. de V.

Roux, J. W. J. W.

Snow, W. J.

Stals, A. J.

Steytler, L. J.

Strachan, T. G.

Swart, C. R.

Terreblanche, P. J.

Van der Merwe, N. J.

Van Heerden, I. P.

Van Hees, A. S.

Van Niekerk, P. W. le R.

Van Rensburg, J. J.

Van Zyl, J. J. M.

Visser, T. C.

Vosloo, L. J.

Waterston, R. B.

Wessels, J. B.

Tellers: Sampson, H. W.; Vermooten, O. S.

Noes—47.

Alexander, M.

Anderson, H. E. K.

Arnott, W.

Ballantine, R.

Bates, F. T.

Blackwell, L.

Brown, D. M.

Buirski, E.

Byron, J. J.

Chaplin, F. D. P.

Close, R. W.

Deane, W. A.

Duncan, P.

Gilson, L. D.

Giovanetti, C. W.

Grobler, H. S.

Harris, D.

Henderson, J.

Jagger, J. W.

Krige, C. J.

Louw, J. P.

Macintosh, W.

Marwick, J. S.

Moffat, L.

Nathan, E.

Nel, O. R.

Nieuwenhuize, J.

O’Brien, W. J.

Oppenheimer, E.

Papenfus, H. B.

Payn, A. O. B.

Pretorius, N. J.

Reitz, D.

Richards, G. R.

Rider, W. W.

Robinson, C. P.

Rockey, W.

Sephton, C. A. A.

Smartt, T. W.

Smuts, J. C.

Struben, R. H.

Stuttaford, R.

Van Heerden, G. C.

Van Zyl, G. B.

Watt, T.

Tellers: Collins, W. R.; de Jager, A. L.

Motion accordingly agreed to.

Bill read a third time.

I move—

Right throughout the debate the Minister drew a great distinction between Government control and Government management, and in another place that was the point of his appeal. In the select committee it was made clear that once the board was appointed it should select its own executive officers. The object of the second amendment is to ensure that the appointment of the managing director shall be in the hands of the board. It is essential that there shall be a managing director, for the chairman must be either a whole-time man or have the assistance of a managing director. The last amendment deletes sub-section (4), which, as it stands, really means that no one who is in the least degree qualified to run such an enterprise shall be entitled to be a director. It has been suggested that if this provision were not made some Machiavellian scheme might be worked out by which people would get control and: ruin the company. It is not thinkable that the Government, which has to find the money, will appoint anyone who is going to wreck the concern, nor will Government appoint anyone whose selection would ensure the loss of the Government’s money. Such a limitation as that contained in the Bill on the choice of selection cannot be in the best interests of the corporation. If the Government is sincere in wishing to establish a key industry, the Minister should accept the amendment.

I take it you do not object to the appointment of the four Government directors?

I object right enough, but when an amendment to that effect was moved last time, it was ruled out of order.

Since the Governor-General can appoint four directors, I do not see what difference there is in principle between their appointment and the appointment of the managing director. I can understand the hon. member objecting to the whole thing in toto, but what is the good of an amendment containing only a fraction of his objection?

I am quite sure the Minister has not grasped what I am aiming at. I did not raise the question whether Government should appoint three or four directors, as I did not wish to waste time. It was ruled last session that I could not move that the number be reduced. I did not move that again this session. I want to be helpful, and not waste time, or to suggest anything that is ridiculous. The Governor-General appoints four directors, one of whom he has the right to appoint as chairman.

That would apply to the managing director.

Not in the slightest, because the gentlemen appointed on the board will be ordinary South African citizens who cannot possibly possess technical knowledge of the subject. The ordinary shareholders should have a voice in the appointment of the chief executive officer. I cannot understand any self-respecting man joining the board if he has no say in the appointment of the chief executive officer. It is absolutely certain that if the Minister meant what he said in the other place as to the management by private persons, then he cannot possibly refuse to accept an amendment that the chief executive officer should be appointed by seven members of the board and not by four.

I should like to support the hon. member for Kimberley (Sir Ernest Oppenheimer). The managing director is the chief executive officer. The only chance of success for this undertaking, which will have to compete with the iron and steel industries of the world, is that it should be skilfully run, for the managing director will not be in the same position as the chief executive officer of, say, the Electricity Commission, which is a sheltered industry in this country. The only hope of success of this industry is that they get the best man as managing director. I pointed out that under the Minister’s suggestion that by the Governor-General appointing the managing director you may get a managing director who is repugnant to the general board of directors. Instead of selecting one of their number who, they feel, would be competent to make the industry a success, they will have a managing director foisted on them from above. That is one of the instances where political influences may have sway with this or any other Government. As a matter of principle, the Government ought to keep outside the detailed management of the industry, and the only way is to leave the board of directors complete freedom to appoint their own chief executive officers. I hope that if the Minister will not accept this in this House, he will consider it very seriously, and consider an amendment, which I hope will be moved by himself, in another place.

I am surprised the hon. member brought this question up at this late stage. We discussed the clause fully in select committee. Now he raises the point, but I find no record whatever of this suggestion being made in select committee last session. It was common cause between us that the chairman should be nominated by the Governor-General, and, if he remembers the discussion, it was at one time whether the chairman and managing director should be one and the same person, and in the Bill, as first introduced into the House, it made provision that either the chairman or any other member could be the managing director. This point is entirely a new one.

It is identical with the amendment before the committee of the whole House.

Very well, then we went over it all last session.

Perhaps the Minister will remember that the Bill, as it stood at first, gave the Governor-General the right to appoint all the officials. Then in select committee it was altered so that the board should appoint the officials of the company. They said, if you concede this, the managing director shall he appointed by the board.

I have the record of the select committee before me and there is no record of this.

It was argued strongly, but perhaps we did not press it.

Whether raised before or not, it is surely an important point. I understood it was one of the few points on which there was substantial agreement between the two sides in the select committee, and afterwards, in this House, it was thought, providing the Government were going on with the scheme, they should separate the control from the management. Whilst the general control must be directly in the hands of the Government, the management was to be separated entirely from the Government, and put in the hands of the board appointed to run the concern. They were to appoint the officials and the general manager and it should follow naturally the selection of one of their body would be appointed managing director, and that would have been a matter for the board and not for the Government. Whether raised before or not, the Minister should look upon it as carrying an important question of principle, and the Bill, in its present form does not carry out the principle we had agreed to that whilst control should be in the hands of the Government, the management should be in the hands of the board. If the appointment of the managing-director is kept in the hands of the Government, that principle is done away with, and the Government are taking in their own hands direct management and control. That is a point the Minister should consider with a view to an amendment somewhere else.

I think the point turns on the fallacy of the phrase “chief executive officer.” Hon. members seem to think the managing director can act without reference to the board, but the board of directors are the executive officers of the company or corporation. You cannot get away from that. The man you call the managing director is an active director of the board, and in all companies the managing director acts in all important matters which are not purely routine matters on instruction and with the approval of the board, as a board, and on lines and principles accepted and laid down by the board. As the Governor-General by common cause has the right to appoint four directors and one of them as the chairman, you might say he is also appointing the executive officers. But each one is an executive officer. What is more, the managing director can only be one appointed from amongst the members of the board. The board is first constituted and thereafter the managing director is appointed. It is not imperative that the Governor-General shall appoint the managing director. It is conceivable that the directors themselves, at their meeting for the first time, may recommend in their wisdom to the Government not to appoint a managing director, but a real manager, an officer of the board. Nothing I have said, or nothing that the hon. member contends, derogates from the position we have taken up that whilst the Government owing to its financial interests, wishes to retain control of the business it does not wish to interfere with the management, and although the Governor-General may appoint a managing director, it does not follow the Government is assuming the active control of the company. That holds good regarding the appointment of any director at all, or the appointment of a chairman, and that is why the hon. member is inconsistent. I can conceive it possible, and even probable, that in the appointment of a managing director once the four directors have been nominated by the Governor-General and the others have been nominated by the shareholders or stockholders, the board will be referred to for a recommendation for the appointment of a managing director. When I say we wish to retain control, and not assume the active management of the corporation, I mean the Governor-General will make the appointments necessary, and once we have appointed the directors, it will not be the policy of the Government, nor is it their intention, to interfere with the directors, either the managing director or chairman by trying to get them to do certain things. The active management of the corporation will be left to those gentlemen, whether Government “appointees” or members of the board elected or appointed by private persons.

I think there is some confusion of ideas when the Minister tells us that the managing director would not be the chief executive officer of this concern. I shall give him an example. He might just as well tell us that the Minister of Railways is the chief executive officer of the railways, instead of the general manager who has just been appointed. The Minister is not correct, as I read the Bill, in saying that the Government do not intend to interfere once a board is appointed, and the manager is appointed. If the board considers that the managing director is not capable of acting, then the right falls to the Governor-General to appoint someone else in his stead.

Supposing he died, would you call a new appointment interference?

I simply do not understand the position because surely the position is that the managing director is appointed by the Governor-General. He is undoubtedly the chief executive officer. We are told that once the chairman and managing director are appointed, they are left alone. That is not so in the Bill. They are not left alone. If the managing director goes away for a holiday the Minister has got the right to appoint someone in his stead.

Surely that does not fall under the category of the management of the company. Appointments are not part of the management of a company.

The appointment of the chief executive officer is the very crux of the management of any business. It is common cause that the gold mining industry is probably the most highly organized and efficiently run industry in the world. I say that once a general manager is appointed he has got full executive power. It is true that he reports to his board.

He is general manager, not a managing director.

No. If you go through all the big corporations you have got, you will find that they have got a managing director who runs the concern. He has got his board and he reports to the board.

And you have no general manager of the mine?

Yes, as well. If the Minister goes through the list of big corporations he will find that every one of them has got a managing director, and they may even have two managing directors.

Your managing director gets ill and you appoint someone in his place. Do you call that interfering with the management of a company?

I put it this way, you have got your board and your managing director, and the affairs of the company do not run smoothly or successfully and you change your managing director.

Who does?

The board.

Who has the control of the board?

The shareholders. You change the managing director. That is a deliberate interference with the management of the concern. I really think it is very important that the managing director of a concern should be appointed by the board.

The Minister’s attitude, it seems to me, is only to be explained by a desire that the directors who represent the shareholders should have no real voice in the management of the affairs of the company and that the Government should have the sole control in appointing the officials of the company and, in so doing, should not have the benefit of the assistance of their colleagues who have been appointed by the shareholders. After all, what does the Government risk? The Government has got four members on the board and the shareholders have got three representatives. Surely it would be to the advantage of the company that, in the appointment of one of their number to be managing director, the four, the majority, should have the benefit of the advice and assistance of the other three. Really as the Government has complete control, as I say, I, for the life of me, cannot see what they risk, and I think it would be highly desirable in the interests of the concern that the whole of the board should have a voice in the selection of the managing director.

It is difficult to see what the shareholders are risking.

The shareholders are risking this, that their business will be less efficiently managed. Although the shareholders subscribe this money, and although they have three-sevenths of the representatives on the board, their representatives are to have no voice whatever in the appointment of the chief executive officer of the concern. Surely that is a most absurd principle. It can only be explained by the Minister’s desire, I suppose, to have the complete measure of control in his own hands.

I would like to point out to the Minister that he rather confuses us on this side of the House. He made the remark that the active management of this corporation was to be left in the hands of the board. He then proceeded to say that in order to carry out that Government policy of leaving the active management in the hands of the board, he is himself going to appoint the managing director, who—

Who is already a director.

Who, under Section 5 (2) is to be the chief executive officer. How can the Minister possibly stand up and say that he is going to leave the active management of the industry in the hands of the board, and immediately the first act he is going to take is to appoint the chief executive officer? It is a contradiction. If the Minister had got up and said—

then it would be logical. But to say that he is going to leave the active management of the industry in the hands of the board, and then in the same breath, say that he is going to appoint the chief executive officer, seems to be simply a contradiction in terms.

This is one of the most important points. The success of this concern will depend very largely upon the executive. Anybody who knows anything about business knows that the personality of the manager is a very important factor in a business. I take it that in this case there will have to be a manager and a managing director. Then there is a board which will lay down the policy which has got to be pursued. It does seem to me absurd that the directors who are to lay down the policy should not have the appointment of the managing director. Supposing they differ as to policy, who is going to make the change? Have they to go to the Government and suggest that they shall make the change? This man has got to look more after the details of the business, and he may say that certain things shall be done.

He is in that way subject to the instructions of the board.

Oh, no. Even then, supposing he does not agree with them and does not carry out their instructions and thinks that things can be done in a better way, they have to go and appeal to the Government to appoint another director, whereas, if it were entirely under the control of and decided by the board of directors, as it should be, there would be no trouble at all. If he did not carry out what they required him to do, they would appoint another man, as is done frequently. The personality and the ability of the managing director especially will be the crux of this business as to whether it is going to be a success or not.

These provisions in regard to the appointment of directors are a fundamental departure from considerations which ordinarily obtain, namely, that those who put up the money shall appoint the directors. The Minister is proceeding as regards the number of directors the public may appoint on the assumption, I think, that the private shareholders will take up these shares. The nomination of three directors is, therefore, left to the private shareholders. These provisions are made on the assumption that the private individuals will take up 300,000 of the shares. Assuming that those shares are not all taken up, I would like to know whether those who take up shares will have the right to appoint three directors. Assuming that there is no rush to subscribe for the shares, which appears to me highly probable, and that only a few shares are subscribed for, will the subscribers of, say, 50 or 100 shares only have the right to appoint three directors? If so, they would clearly be over-represented. This is an important point.

“Three shall be appointed by the private shareholders in the manner prescribed by regulation.” Therefore, the regulation lays down that there must be a certain number in order to appoint the three directors.

In this proposal we are acting in direct conflict with the Companies Act. I would like to quote from the schedule of the Companies Act of last year—

Which clearly shows the intention to be that the whole board—not a section—should appoint the managing director.

Question put: That all the words after “chairman” in line 3, on page 6, to “corporation” in line 5, proposed to be omitted, stand part of the clause,

Upon which the committee divided:

Ayes—66.

Alexander, M.

Allen, J.

Badenhorst, A. L.

Barlow, A. G.

Bergh, P. A.

Beyers, F. W.

Boshoff, L. J.

Boydell, T.

Brink, G. F.

Brown, G.

Christie, J.

Cilliers, A. A.

Conradie, D. G.

Conroy, E. A.

Creswell, F. H. P.

De Villiers, P. C.

De Villiers, W. B.

De Wet, S. D.

Du Toit, F. J.

Fick, M. L.

Fordham, A. C.

Hattingh, B. R.

Havenga, N. C.

Hay, G. A.

Hertzog, J. B. M.

Heyns, J. D.

Hugo, D.

Kemp, J. C. G.

Kentridge, M.

Keyter, J. G.

Le Roux. S. P.

Malan, C. W.

Malan, M. L.

McMenamin, J. J.

Mostert, J. P.

Millineux, J.

Munnik, J. H.

Naudé, J. F. T.

Oost, H.

Pearce, C.

Pienaar, B. J.

Pienaar, J. J.

Pretorius, J. S. F.

Raubenheimer, I. van W.

Reyburn, G.

Rood, W. H.

Roux, J. W. J. W.

Snow, W. J.

Stals, A. J.

Steyn, C. F.

Steytler, L. J.

Strachan, T. G.

Swart, C. R.

Terreblanche, P. J.

Te Water, C. T.

Van der Merwe, N. J.

Van Heerden, I. P.

Van Hees, A. S.

Van Niekerk, P. W. le R.

Van Rensburg, J. J.

Visser, T. C.

Vosloo, L. J.

Waterston, R. B.

Wessels, J. B.

Tellers: Sampson, H. W.; Vermooten, O. S.

Noes—46.

Anderson, H. E. K.

Arnott, W.

Ballantine, R.

Bates, F. T.

Blackwell, L.

Brown, D. M.

Buirski, E.

Byron, J. J.

Chaplin, F. B. P.

Close, R. W.

Deane, W. A.

Duncan, P.

Gilson, L. B.

Giovanetti. C. W.

Grobler, H. S.

Harris, D.

Henderson, J.

Jagger, J. W.

Louw, J. P.

Macintosh, W.

Marwick, J. S.

Miller, A. M.

Moffat, L.

Nathan, E.

Nel, O. R.

Nicholls, G. H.

Nieuwenhuize, J.

O’Brien, W. J.

Oppenheimer, E.

Papenfus, H. B.

Payn, A. O. B.

Pretorius, N. J.

Reitz, D.

Richards, G. R.

Rider, W. W.

Robinson, C. P.

Rockey, W.

Sephton, C. A. A.

Smartt, T. W.

Smuts, J. C.

Struben, R. H.

Stuttaford, R.

Van Heerden, G. C.

Watt, T.

Tellers: Collins, W. R.; de Jager, A. L.

Question accordingly affirmed and the first part of the amendment, proposed by Sir Ernest Oppenheimer, dropped.

Remaining amendment proposed by Sir Ernest Oppenheimer put and negatived.

Clause, as printed, put and agreed to.

On Clause 4,

I move—

I would like the Minister to tell us whether since this matter was discussed the other afternoon he has had an opportunity of going into this question. The Minister then was in considerable doubt as to what the effect would be of the deletion of this word “not.” Would his precious Bill be jeopardised? Would it then become a different Bill, and would the Minister then lose his chance of convening a joint sitting of both Houses in the event of this Bill failing to pass another place? Before I say anything more, perhaps the Minister will tell us whether he has had an opportunity of going into the question.

If it is to be raised at all it will be raised in another place. I have not had an opportunity of consulting the persons I wish to consult, and it is a matter that, if it can be rectified at all, can also be rectified in another place and possibly can only be rectified in another place and not here. If it can be rectified I will keep it in mind in another place, and if it does not imperil the ultimate passage of the Bill, if a joint sitting becomes necessary, then I will certainly remove the “not”—the “not” that lived not, that died not, and that was not born.

That is a most unsatisfactory answer. [Interjection by Mr. Swart.] I am not concerned with the hon. member for Ladybrand or with whether he thinks I am wasting the time of the House, but I am concerned with the dignity of the House, and when I want to address myself to the dignity of the House the last member I would address myself to on that point is the hon. member for Lady-brand.

That is a bargee’s reply.

We are asked to pass through this House a Bill which contains a clause, the effect of which is expressly contrary to that intended by the Minister and intended by this House. We are asked to pass through this House a measure which contains a clause saying that the directors appointed by private shareholders shall not at the end of their time be eligible for re-election. The Minister told us the other day that that was due to some hypothetical printer’s devil. The hon. member for Rondebosch (Mr. Close) came to the rescue of the printer’s devil and pointed out that if any mistake had been made it was made by either the Minister or one of his officials. The Minister was in this position that this Bill, as it is now printed, and as the House is asked to pass it, is absolutely wrong, and as it was never the intention of the Minister or the House; yet we are asked to pass this. If the Minister had been in the least bit interested he would, in the interval, either through himself or through one of his officials, have ascertained what the position is; but he was so little interested in the matter and so anxious to pass the Bill with all its inaccuracies, that he treats the House as a mere rubber stamp and registering machine for his decrees. I should have thought that, in common courtesy to the House, he would have ascertained what the position is in the days that have elapsed since we last discussed this. But he tells us to sit down and be good boys, and to rest on his assurance that if and when he considers right he may set the error right in another place. Either this word can be deleted without jeopardizing the Bill, or it cannot. If it can be altered, this House should do so. I would ask the hon. member to stick to his amendment, and not to stultify this House.

I will try to reform myself after this little homily.

Question put: That the word “not”, proposed to be omitted, stand part of the clause,

Upon which the committee divided:

Ayes—62.

Alexander, M.

Allen, J.

Badenhorst, A. L.

Barlow, A. G.

Bergh, P. A.

Beyers, F. W.

Boshoff, L. J.

Boydell, T.

Brink, G. F.

Brown, G.

Christie, J.

Conradie, D. G.

Conroy, E. A.

Creswell, F. H. P.

De Villiers, P. C

Do Villiers, W. B.

De Wet, S. D.

Du Toit, F. J.

Fick, M. L.

Fordham, A. C.

Grobler, P. G. W.

Hattingh, B. R.

Hay, G. A.

Heyns, J. D.

Hugo, D.

Kentridge, M.

Keyter, J. G.

Le Roux, S. P.

Malan, M. L.

McMenamin, J. J.

Mostert, J. P.

Mullineux, J.

Munnik, J. H.

Naudé, A. S.

Naudé, J. F. T.

Oost, H.

Pearce, C.

Pienaar, B. J.

Pienaar, J. J.

Pretorius, J. S. F.

Raubenheimer, I. van W.

Reyburn, G.

Roos, T. J. de V.

Roux, J. W. J. W.

Snow, W. J.

Stals, A. J.

Steyn, C. F.

Strachan, T. G.

Swart, C. R.

Terreblanche, P. J.

Te Water, C. T.

Van der Merwe, N. J.

Van Heerden, I. P.

Van Hees, A. S.

Van Niekerk, P. W. le R.

Van Rensburg, J. J.

Visser, T. C.

Vosloo, L. J.

Waterston, R. B.

Wessels, J. B.

Tellers: Sampson, H. W.; Vermooten, O. S.

Noes—42.

Arnott, W.

Ballantine, R.

Bates, F. T.

Blackwell, L.

Brown, D. M.

Buirski, E.

Byron, J. J.

Close, R. W.

Duncan, P.

Gilson, L. D.

Giovanetti, C. W.

Harris, D.

Henderson, J.

Jagger, J. W.

Krige, C. J.

Louw, J. P.

Macintosh, W.

Marwick, J. S.

Miller, A. M.

Moffat, L.

Nathan, E.

Nel, O. R.

Nicholls, G. H.

Nieuwenhuize, J.

O’Brien, W. J.

Oppenheimer, E.

Papenfus, H. B.

Pretorius, N. J.

Reitz, D.

Richards, G. R.

Rider, W. W.

Robinson, C. P.

Rockey, W.

Sephton, C. A. A.

Smartt, T. W.

Smuts, J. C.

Struben, R. H.

Stuttaford, R.

Van Heerden, G. C.

Watt. T.

Tellers: Collins, W. R.; de Jager, A. L.

Question accordingly affirmed and the amendment, proposed by Sir Ernest Oppenheimer, negatived.

Clause, as printed, put and agreed to.

On Clause 8,

I move—

The last part of this clause gives the Government a majority vote, even if they hold only one share in the company, and that share happens to be an A share. I do think that here we can test the Government’s sincerity—I do not like to use the word, but it is the nearest one I can get—to make this a nationalized industry under a socialistic system, or whether they are prepared to allow some freedom to the individualistic principle. If this is deleted it means that so long as the public have not subscribed £1,750,000 to this company they will not have a majority vote. I suggest that as the clause reads now it prevents the ordinary private individual, who is prepared to put up his money, from going into this concern, because he is told before he goes into it that if he puts up £1,750,000 he will have no control over the actions of the company. I want to point out that this clause, as it stands, means that it is a purely nationalized industry of the same nature as an industry of the same kind operating in Russia. If the Minister says it is not a socialized industry, I would like him to define what a socialized industry is. If there is one section that is worse than another in all these very bad sections, this is one, which is absolutely going to prevent the public investing their money in this concern. I take it that hon. members on the other side, as business men, do want the public to come in and subscribe some of this money. By deleting these words the Government practically have control until a sum exceeding £1,750,000 has been subscribed by the public. Unless the public come in very liberally the Government will hold on to one-and-a-half millions of B shares.

Does my hon. friend really expect the public are going to subscribe for shares in this concern? I cannot conceive anyone putting a pound in such—well, I don’t want to use unparliamentary language, but I could do so easily on this subject. The public will not take up the ordinary shares, but they may apply for guaranteed shares. Evidently, however, my hon. friend thinks there are more fools in South Africa than I do.

I suggest that they should be given a fair chance.

I want the public to save their money and put it into a sounder concern than this, where they are bound to lose it—there is not the slightest shadow of doubt about that. This is a highly competitive business, and not a railway or a harbour, in regard to which there can be no competition. The Government will do its best to throttle competition with the new undertaking.

The question arises whether the amendment would not interfere with the controlling power of the Government. If it does, I cannot put it. I do not know what the Minister thinks about it.

I submit that the clause does not affect the power of the private shareholders to alter the number of directors. The amendment affects only the power of the ordinary shareholder in regard to other details of the management of the business.

I have no objection to the amendment being put.

Amendment put and negatived.

Clause, as printed, put and agreed to.

On Clause 9,

I move—In line 3, on page 10, to omit all the words after “any” to the end of paragraph (b).

As the clause stands the dividend on the ordinary shares will be limited to 12½ per cent. a year. The retention of such a limitation will make it still more difficult, in fact, almost impossible, to raise money for the ordinary shares. As the Government, at any rate, the Minister of Finance will be very sorry, I am sure, to have to subscribe the whole of the ordinary shares, the Government should agree to the deletion of the limitation of dividends. Another reason for my amendment is that the concern should produce at the cheapest possible price, and that should be the object of the corporation. Clearly, however, if the directors know that they cannot pay more than 12½ per cent. a year, when they arrive at that position, they will make no effort to reduce the price of their product. If the shareholders knew, although the dividends for the first few years would be small, that there was a prospect with an increased output of earning a rather bigger dividend, it might be possible to raise this money. On the previous occasion it was argued in favour of this limitation that the Reserve Bank, by Act of Parliament, is not permitted to pay more than 10 per cent. But it must not be forgotten that it was not intended that the Reserve Bank should compete with the ordinary commercial banks, but should be run on different lines, and be a bankers’ bank, therefore, a comparison with the Reserve Bank does not apply. It is a very bad principle to curb the energy of a board, and to say to it that you must never pay more than 12½ per cent.

It is very difficult to follow the hon. member. For the last seven minutes he has been telling us how bad it will be to limit the dividend, but for the rest of the afternoon we have been listening to sneers and jeers at the mere idea of the company ever paying any dividends at all. If the first premise is correct, then for the last six minutes the hon. member has been wasting the time of the House.

Very clever.

No. Not very clever, but possibly sufficiently simple to be adapted to the hon. member’s mind. If the undertaking is not going to earn any dividends at all, as hon. members have repeatedly stated, this limitation to 12½ per cent. will not cramp or hinder the board.

You voted that down, so we are going on.

The country is entitled to say, seeing the amount of public money invested in this concern and that its main object is the production of iron and steel at the lowest possible rate, that after 12½ per cent. have been paid the balance of profit should be utilized to cheapen the cost of the product.

This struck me in rather a different way. I always understood the Minister of Defence was a socialist, but now he is adopting the methods of a capitalist, and if he makes 12½ per cent., I should call him a profiteer. This concern has no more chance of making 12½ per cent. than it has of flying. I think the hon. member for Kimberley (Sir Ernest Oppenheimer) is wasting his breath talking about 12½ per cent., for the company will never pay it.

The company will only lose its capital.

Exactly! To hold out the bait that the company is ever going to make 12½ per cent.—well, I don’t want to use strong language.

Would you like to reduce it to 6 per cent.?

I will leave it in your hands. I am only denouncing the whole concern, because it is going to waste the taxpayers’ money.

Amendment put and negatived.

Clause, as printed, put and agreed to.

On Clause 15,

I move—

I want to point out that under the Act of Union the railways have to be run on business lines, and, secondly, I want to point out the Minister has stated that the existing industry is farcical. If so, he has nothing of which to be afraid. Under this amendment 50 per cent. is given to the corporation and 50 per cent. is left open to tender to other producers. That is a very fair amendment. If Pretoria is going to be a success and is going to produce cheaper and better than anybody else, what has the Minister to be afraid of? It is only fair to give the existing industry a chance to tender for railway requirements. The existing industry came into operation on the invitation of the Government of the country. If the Minister will not accept the amendment then the House and country is entitled to say that the Government have in their minds to destroy the existing industry, or if not, they must be afraid private enterprise will produce better and cheaper articles than the Government. Otherwise I cannot see any object in the Minister refusing to accept this very reasonable amendment. I have given to this corporation 50 per cent. of the railway requirements, and I have left the other 50 per cent. open to tender, and I think it will be found that this 50 per cent. will be cheaper than the products of this corporation. It does violence to our sense of justice to say that we cannot allow this industry to have any share in the railway requirements.

The Minister is very obdurate in this House, and I only hope it augurs well for the acceptance of amendments in the other place. I would like to point out, however, that although this Bill involves enormous expenditure of public moneys, yet we can find only five members on the other side of the House now present to listen to the debate.

I hope the Minister is going to take this extremely reasonable amendment, for it is extremely reasonable. I would have gone further. A more unjust thing has never been put on paper. There is already an existing industry in the country in which £1,000,000 has been invested, and you want to give this corporation the monopoly of the whole of the railway requirements and they are the biggest buying concern in the country. Besides, competition is always good, and how can you have competition in a thing of this kind? It is thoroughly unjust and actually proposes to confine trade to this particular concern and exclude others already in the country who are already making iron and steel. It is not fair play, and I do not think it is sound policy either. It is laid down in the Act of Union that the business of the railway department must be run on business lines. That was put into the constitution for the benefit of consumers in the Free State and the northern provinces. Now you bind them to buy from one concern only with no competition, and I say it is against the constitution. It is unreasonable and unjust to the consumers in the north as well as to the people who have put their money into a private concern. If he reflects he will see that.

The hon. member cannot have it both ways. He appeals to fairness and justice every time. Let me apply it to himself. He has condemned the scheme and points out there is no chance of making any dividend at all, and then argues that we should lose the only opportunity of making dividends.

The hon. Minister appears to have lost his balance this afternoon, and it is not the first time this session. I always understood the Government was out to encourage industrial development and to encourage people to put their money into this development. Is he going to do that by penalizing an industry, the promoters of which were encouraged by this House to put their money into this industry in South Africa? We encouraged them by agreeing to give them 50 per cent. of the iron and steel required by the Union if they were able to produce it at a reasonable price, yet for some reason or other, the Minister makes one of the most unfair proposals ever made in this House, a proposal to penalize the Union Steel Corporation, which is endeavouring to develop the iron and steel industry in this country at the request of the Parliament of this country and let me say Parliament went out of its way to make a solemn promise that as far as they could, as purchasers of iron and steel, they would encourage the establishment of the industry by allowing them to be sure of certainly 50 per cent. of the railway and other Government requirements. The Government now comes forward and says it is going to establish a new industry, and the Minister certainly cannot give the assurance that the industry is going to be established except on the money of the taxpayers of the country, and it has to be done by penalizing a private company. Members on the other side have made the welkin ring by asserting they were out to encourage industry, yet, how are you encouraging industries if you deliberately depart from a promise made to this corporation which has put a great deal of money into an iron and steel undertaking? I think the result of this extraordinary scheme of the Government will be that all producers in this country, whether farmers requiring ploughs or harrows or machines, or railways for the development of the country, if you have no competition, eventually you are going to pay a great deal more for the material, and you are going to put an embargo on the development of this country.

I should like to raise a point of order, that is whether it is competent for this House to pass sub-section 2, Clause 15, in view of Section 127 of the Act of Union which says that the railways and harbours shall be run on business principles. Apart from that, I should like to know from the Minister whether the Railway Board has made any report on this. Have they been consulted before the railways were bound in this way to take the whole of their requirements from the company? The essence of business principles is competition, and how can it be said that the railways are being administered on business principles when the Government has bound itself to take the whole of the requirements of the Railway Administration from this particular company? It seems to me the matter is not only grossly unfair to the company in existence already, but grossly unfair to the taxpayer. The Railway Administration will be saddled with the immense cost, the amount of which cannot be foreseen at the present time, and the House is entitled to know if the board has reported, and, if so, what their views are on this obligation giving this corporation an entire monopoly of the iron and steel requirements of the Administration. It does seem to me a monstrous thing that we should be asked, in view of the very definite provisions of our Act of Union, to saddle ourselves with an indefinite obligation to take all sorts of stuff, the relative value of which, as compared with articles from elsewhere, is entirely unknown to this House. We may be exposing the whole of the railway system and the users of the railway system to very serious dangers indeed if the Railway Administration is bound for ten years to take the whole of such requirements from this corporation. On the ground of the possible risks to the users of the railways and the risks to the taxpayers of the country and to those who have to use the railway for transport purposes, of having their rates increased on account of the high prices to be paid for these materials, I say, it is, to my mind, a monstrous thing to embody in this Bill. Certainly the House should not be asked to take upon itself this responsibility without at the least having the fullest investigation made by competent authorities in the railways itself, who would report to the Railway Board. I protest first of all against the whole of the clause, and secondly, if the House is determined to pass it, I support very strongly the amendment of the hon. member for Newcastle (Mr. Nel) on the ground that if we are going to be saddled with such an obligation as this we should not do the gross injustice of preventing other people who have a fair chance of competition from coming in to deal with the matter as a matter of business for their own benefit also. The little cat which the Minister let out of the bag just now is one of the most amusing things that has happened in the course of this debate. He has told us that the only way by which the corporation has a chance of earning a dividend is by this contract.

Don’t you feel that you are twisting my words?

I ask the Minister not to say that I am twisting his words. How dare he say that? We have had a sufficient exhibition of bad manners every now and again in the course of this debate.

I think I must ask the Minister to withdraw those words.

I withdraw the words.

I do say that for a Minister of the Crown to stand up and tell the House that the justification for this gross breach of an ordinary rule, that is the rule against monopolies, is to enable this corporation which is created or may be created to earn a dividend passes all comprehension as to the mentality and point of view of the particular Minister who put such a thing before this House.

I understood the Minister to say that the reason for putting in this particular clause giving the whole of the Railway requirements to this corporation was that otherwise there was no certainty that the thing would be a success.

Let me explain. I took the standpoint of the hon. member for Cape Town (Central) himself. If hon. members cannot make a palpable deduction I cannot help it. The hon. member for Cape Town (Central) was pooh-poohing the idea of there being dividends or profit out of which to pay dividends. I took this standpoint of his and asked why he should then, being of this opinion, interfere with the corporation getting as much business as possible. That is the only fair construction to put on my words.

I will leave it at that. What on earth can be the object of a clause such as this unless the Government are apprehensive that without some such clause the Corporation would not get the business? I do not know of any case where a similar proposal has been put before this House that a great Government department is limited to taking its supplies of steel and iron from one particular corporation. I can understand the Government saying that they will give a preference to South African industries as against foreign industries but to say that one company is to have a monopoly and that concerns which are already working here and other concerns which may try to work here in the future are to be shut out and have no part in supplying the Railway Department, is one of the most unprecedented things we have ever heard of. I cannot understand how any Government could expect the House to pass quietly a thing like this, which, not only kills similar industries but prevents other industries from arising in the future, for ten years anyhow. Let us look at the clause itself. I cannot make out exactly what it means. It begins by saying that as soon as practicable after this corporation is established there shall be entered into a contract between them and the administration. That is imperative. The administration are bound under this clause to enter into a contract with the corporation, subject to the provisions of this section and other conditions not inconsistent with such provisions. It then goes on to say in sub-section (3) that the contract shall contain provisions as to the standards of quality to be prescribed for any iron or steel articles to be supplied. It does not say that if the corporation cannot supply up to the standard required by the railway, that the railway can go elsewhere. The railway are required to enter into a contract. Here we have in clause (3) a provision which says that the contract which they must enter into has to contain provisions in regard to standards and in regard to prices. I want to know what this means. Can they say to the corporation “Your prices are not what we think they should be and, therefore, we are going to buy elsewhere”? If they cannot say that what is the use of putting into this clause 3 a provision in regard to prices?

Look at the proviso.

Yes, it is provided that such prices shall be based on the cost to the administration of any imported article. I wonder if the prices of the corporation are higher than that; the Administration would be free to say “We will not contract with you, we will go elsewhere.”

Certainly they can.

Then I do not see the meaning of clause 2, which says that a contract shall be entered into. What I want to know is that if these provisions as to prices, etc., are not carried out, the railway will be entitled not to enter into a contract.

Of course.

In that case I would suggest that the words require a little alteration. If the Administration are left with a free hand to say that they will contract with the corporation if their standards and prices are satisfactory and not otherwise, then I have nothing further to say.

I do not think there is really much good in appealing to the Minister because he seems almost more obstinate than the father of the Bill, the Minister of Defence.

Where is the obstinacy?

I say it is hardly much good appealing to the Minister because he appears to be more obstinate owing to the attitude he has adopted during the whole of the discussion on this Bill than I imagine the father of the Bill would be. There is the father of the Bill. As my hon. friend says, you can see the resemblance.

That is a very witty remark. Is that the best you can do?

I hope my hon. friend will bring this to a division, so that all members of the House may face their responsibility. I have devoted a certain amount of attention to the iron and steel industry in Australia. No doubt a great deal has been done at Newcastle and a great deal in Australia in the production of agricultural machinery, some of it of a very fine character. Australian people will tell you that it has raised by 35 per cent. the cost which the primary producers have to pay for machinery and implements. When you have a country like South Africa with its huge distances, and when you are going to put an embargo on the construction of railway requirements, then any benefit which you consider will be derived from this industry is going to be far outweighed by the embargo on the general progress of this country. Every farmer will have to pay 35 per cent. to 40 per cent. more for his machines than in the existing circumstances. He will have to sell his products in the markets of the world at world market prices, and you are going to have the position in which the primary producers of Australia find themselves; that is that the cost of producing their articles is so extreme that they are not able to compete at fair and reasonable prices in the markets of the world. Why, in these circumstances, my hon. friend should say that the price of the iron and steel of this industry should be made as high as possible by blotting out other people, and why he should put an embargo on the Newcastle industry which was encouraged by this House, for the life of me I cannot understand. I hope hon. members opposite will realise their responsibility.

The existing industry is not an iron and steel industry. It is a scrap industry. That is what, in substance, it amounts to. My answer to the hon. member for Rondebosch (Mr. Close) is that the Railway Board has made no report, for the simple reason that the construction of the clause is as adumbrated by the hon. member for Yeoville (Mr. Duncan). There is nothing that binds the Railway Board. Prices and qualities and other provisions of the agreement will have to be fixed. Therefore it is not, an infraction upon the provisions of the constitution relating to the railways being run on business lines. There was no necessity for referring to the board, nor was there any necessity for the board reporting upon it, nor has the Minister of Railways seen any reason for objecting to this clause. That is because he feels the Railway Department will be entirely untramelled and unhampered by this clause.

The most extraordinary feature of the discussion on this clause in this committee is the absence of the Minister of Railways. Here we are asked to pass a Bill containing a clause which either means something or does not. Either it means the railway department is bound to enter into a contract of a legal and binding nature, or it does not. If it simply means that it is open to the Minister of Railways at some future date, to enter into some contract or other, then why are we passing this clause? The Railway Administration has full power, at any time, to enter into contracts, even with the hon. member for Vrededorp (Dr. Visser). It can do what it likes. If it means something definite, what does it mean? It surely means the Administration is going to be bound to enter into a contract to take the future output of this company, insofar as it requires it, for railway purposes. As soon as this company is floated it can go along to the General Manager of Railways and say “Here is the law. You must enter into a contract with us and take our output.” The only limitation on prices is that contained practically in the proviso to Section 3 (b). I ask, where is the Minister of Railways? Why are we asked to enter into a provision of this extraordinary nature in the absence of the Minister? Why has he not told us his views? We know the views of the Minister of Mines. He is anxious to get the maximum of business for the proposed company. That is quite legitimate, but surely the other party to the bargain, who is also a Minister of State, should be here to tell us his views, especially as he is under a statutory obligation by the constitution of this country, to run his railways on business lines—

That is a fundamental laid down in our constitution. The hon. member for Germiston (Mr. G. Brown) says “hear, hear”, What would he say if he were the manager of a business and someone came along and said “You shall not have the right of competing in the open market for the goods you require, but you shall make a contract with another man to buy the whole of your requirements from him.” I ask the hon. member whether, in those circumstances, he would consider he was running his business on business lines? Either this clause means that, or it is a bit of waste paper. It is most unfortunate we should be asked to put this through in the absence of the other party to the bargain. Another extraordinary thing is this: it will be noticed that the existing contract with the South African Iron and Steel Corporation comes to an end in terms of sub-section (1) on the date determined in sub-section 1 of Section 1. That is to say, on the date when this new corporation comes into existence. That is a most extraordinary provision. At the moment we have a contract with the South African Steel Corporation giving them certain rights.

Equally vague.

That is not the point I am dealing with. Surely a period of several years will have to elapse before this corporation reaches the producing stage. You do not produce steel for railway purposes by the simple process of passing an Act of Parliament, which brings into being a corporation on a certain date, yet from the date this corporation comes into existence this prior contract is determined. One would have thought the Minister would have allowed a certain period to elapse before he inflicted this injustice. Yesterday afternoon we were busy discussing the clause of a Bill which retrospectively took away rights given by the law of the land of this country; this afternoon we are giving to a company to be formed a monopoly of rights absolutely in defiance of all moral or vested rights acquired by existing companies; and the Government which is doing this says it is doing so to attack a capitalist concern. Is this corporation to fix its prices at the rate of imported prices, and quite regardless of domestic competition? The prices contemplated under the agreement are the highest imported prices, making allowance for duties and so on. It is grossly unfair to the railways, to the taxpayer and to the existing industries which have been allowed to come into being under the Government’s shelter.

They have never been a genuine iron and steel industry.

They were in process of development.

They have had ample time.

What I feel is that we are perpetrating an act of gross injustice.

The Dutch version has the word “moet” which is even more compulsory and peremptory than the English version. If, in my innocence, I read the clause like this, what about the innocent investor, when he sees a clause which says that there shall be a contract and that they have a monopoly. That will tempt him to go in, because in that way alone does he see a prospect of making a dividend. Let us assume that the Minister fails to enter into a contract and the corporation has to depend upon the permissive nature of the clause. Will this corporation hope to pay one penny of dividend to a single investor? This corporation is going to be excluded from the Companies Act; if it were included in that Act, and if the Minister were an ordinary company promoter, issuing a prospectus, I would like to hear what the court would say of the way investors were tempted to put in their money—the wording of the clause is peremptory, and then it is interpreted as being permissive. On the point whether the Railway Board have reported or not, it is a very important admission by the Minister that the board has not—

As a matter of fact, they have drafted the clause.

The Minister said just now that the Railway Department had drafted it—a very different thing. Will the Minister kindly tell us, was it the Railway Board of the Railway Department?

I cannot say whether the clause was directly before the board, but I infer from a conversation I had with the Minister that the board were aware of the contents of the clause.

That is very unsatisfactory. He infers the clause was before the board. I say the clause should never have come before the House without a full report from the board, not only on the clause, but on the policy. If it is only permissive, of course, the fullest interests of the country may be protected, but look at the temptation. The Minister is so anxious as a matter of policy on the one hand to establish this corporation, and there is the temptation to come to a bargain to make this corporation a success. There are elements of very serious danger, and whether it is compulsory or whether it is permissive, the Minister has given rise to a considerable amount of justifiable alarm by the airy way in which he deals with the Railway Department.

I only understand plain English. What does any man who understands that language understand by—

except something compulsory and peremptory? Now my hon. friend wants to say this is permissive. The court will not hold this—they will read this as being compulsory. What the Minister says will not carry any weight with the courts which will read it as being compulsory.

Are you dogmatically laying down the law now?

No, but the court will not take the Minister’s reading of it.

That is very dogmatic.

I don’t care whether it is dogmatic or not, it is the truth.

Suppose the hon. member enters into a lease giving me the right over his store for five years on definite terms agreed upon and the lease states that at the expiry of the five years he shall enter into a renewal of the lease on terms then to be agreed upon. Could he compel me at the end of the five years to enter into a new lease; should I not be able to differ on the terms? That is the effect of this clause.

As the Minister is now in a more friendly mood—

And in a very accurate mood.

Am I to understand from the Minister that his department has framed a clause of this character without consulting the railway department and asking it for reports as to how this clause is going to affect the economical development of the railways? It is a very serious thing if there is no communication between the railway department and other departments, and that one department can tell the railway department to purchase all its supplies from the proposed new company without the matter being fully discussed by the railway administration, reported on by the technical officers of the railway department and the House having the report.

It seems to me that this discussion amply justifies the criticism we have made on the whole policy of the Bill. What protection are the taxpayers going to have? They are going to find the greater part, if not the whole, of the capital. What protection is there in the agreement for the Railway Department? The clause says the contract is to be made and certain conditions are to be prescribed, presumably, by the Railway Board. It has already been pointed out that the Railway Department is bound to look at these things from a business point of view, but the board is compelled to do things through pressure of the Government which are not on business lines. Last session some of us raised the question as to the cost of the Government’s policy of employing white labour on the railways. We said without expressing an opinion whether it was a good or a bad policy, that the taxpayers were entitled to know what the cost of that policy was. The Minister of Railways, however, emphatically declined to tell the House what the extra cost was of employing civilized labour. The expense of following this white labour policy is thrown on the users of the railways, and to that extent the railways are not conducted on business lines. We shall be told presently that a market must be found for the products of the company, and pressure will be put on the Railway Department to buy the products of the new undertaking. The Opposition will ask what is the cost, and the Minister will reply: “I am not going to tell you, but we have decided as a matter of policy to buy all our iron and steel in this country.” We have no security as regards foreign competition that if an attempt is made to see that the board buys its requirements from abroad if it could thereby effect an economy that the Minister will not increase the duties so that the cost of the overseas articles will become prohibitive. Under the clause the railways will be forced to buy the corporation’s product at whatever price it is thought fit to fix in the interests of the corporation. I hope when the Bill goes to another place steps will be taken to see that effect is given to these objections.

I want to come to the rescue of the Minister in this matter. To adopt the Minister’s suggestion, however, would not be very dignified, in fact, some of us would call it wriggling out of a bargain. I move—

thus making the matter permissive. If the clause is passed as it stands, the next demand the corporation will make is that it be given the right to supply all agricultural implements in the shape of ploughs, etc. If the Minister of Agriculture has charge of the farmers’ interests in the House, what has he got to say to that? Does he want the farmers locked up in the hands of a monopoly?

There is no danger about it.

Does this Bill provide for that?

No, but it will be the next demand. When you contract to bind the Railway Department against the law to buy all its requirements from the corporation the other will come. Supposing the price for overseas goods are less then they can make them for here? The Government can put on a duty to equalize things. You will find that in subsection 2. Supposing it is going to cost £25, and the same stuff from overseas cost £20, you can put on a £5 dumping duty to equal things. If it comes before the courts they will not worry about what the Minister says concerning this they will read the plain English or Dutch.

Read it again.

The more you read it, the less you like it.

Let us take it for granted the hon. member disapproves of the Bill, that he thinks it will be a fiasco, and that the experts do not know their job, and that he knows more about it than anyone else. Granting all that, everything they have said is fully justified. That is the difference of opinion. He comes along and says: “If you import for £20 you are going to stick on a dumping duty of £5.” You know according to the Act you cannot determine what dumping duty you put on. According to the provisions of the Dumping Act, you can put on the duty only on the selling price in the country where they are made.

It is very easy to get over that.

You mean, if you were in office, you would manipulate that? You would agree figures cannot lie, but, oh! heavens, how you can work them.

Question put: That the words “the Administration may from time to time require for any purposes”, proposed to be omitted, stand part of the clause,

Upon which the committee divided:

Ayes—66.

Alexander, M.

Allen, J.

Badenhorst, A. L.

Barlow, A. G.

Bergh, P. A.

Beyers, F. W.

Boshoff, L. J.

Brink, G. F.

Brown, G.

Christie, J.

Conradie, D. G.

Conradie, J. H.

Conroy, E. A.

Creswell, F. H. P

De Villiers, P. C.

De Villiers, W. B.

De Wet, S. D.

Du Toit, F. J.

Fick, M. L.

Fordham, A. C.

Giovanetti, C. W.

Grobler, P. G. W.

Hattingh, B. R.

Hay, G. A.

Heyns, J. D.

Hugo, D.

Kemp, J. C. G.

Kentridge, M.

Keyter, J. G.

Le Roux, S. P.

Malan, C. W.

Malan, M. L.

McMenamin, J. J.

Mostert, J. P.

Mullineux, J.

Munnik, J. H.

Naudé, A. S.

Naudé, J. F. T.

Oost, H.

Pearce, C.

Pienaar, J. J.

Pretorius, J. S. F.

Raubenheimer, I. van W.

Reyburn, G.

Roos, T. J. de V.

Roux, J. W. J. W.

Snow, W. J.

Steyn, C. F.

Steytler, L. J.

Strachan, T. G.

Swart, C. R.

Terreblanche, P. J.

Te Water, C. T.

Van der Merwe, N. J.

Van Heerden, I. P.

Van Hees, A. S.

Van Niekerk, P. W. le R.

Van Rensburg, J. J.

Van Zyl, J. J. M.

Vermooten, O. S.

Visser, T. C.

Vosloo, L. J.

Waterston, R. B.

Wessels, J. B.

Tellers: Pienaar, B. J.; Sampson, H. W.

Noes—35.

Anderson, H. E. K.

Arnott, W.

Ballantine, R.

Blackwell, L.

Brown, D. M.

Byron, J. J.

Chaplin. F. D. P.

Close, R. W.

Deane, W. A.

Duncan, P.

Gilson, L. D.

Harris, D.

Henderson, J.

Jagger, J. W.

Moffat, L.

Nathan, E.

Nel, O. R.

Nicholls, G. H.

Nieuwenhuize, J.

O’Brien. W. J.

Oppenheimer, E.

Papenfus, H. B.

Payn, A. O. B.

Reitz, D.

Rider, W. W.

Robinson, C. P.

Sephton, C. A. A.

Smartt, T. W.

Smuts, J. C.

Struben, R. H.

Stuttaford, R.

Van Heerden, G. C.

Van Zyl, G. B.

Tellers: Collins, W. R.; de Jager, A. L.

Question accordingly affirmed and the amendment, proposed by Mr. Nel, dropped.

Clause, as printed put.

I moved an amendment in line 15, page 12, to delete the word “shall” for the purpose of inserting “may

I am very sorry, the hon. member cannot go back. We have already decided upon an amendment later on. We cannot revert now.

Why?

According to the rules of the committee.

The hon. member for Cape Town (Central) (Mr. Jagger) moved an amendment before the one which you have just put, and I think, in courtesy to the hon. gentleman, the amendment should be allowed.

If the hon. member moved an amendment, then it was while I was not in the chair.

No, you were not in the chair.

The hon. member certainly moved an amendment, and, of course, it certainly should have been put first.

I think the Deputy-Chairman was in the chair at the time.

If that is so, I shall have to put it. I did not know anything about it.

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

I would like to ask the Minister whether this company, which, I see, is not to be liable to the company laws, is to be liable to taxation in the ordinary way.

Yes, certainly. There is nothing to exempt it. It will require a special clause to exempt the company from any taxation.

I am glad to hear that.

Clause put and agreed to.

On Clause 19,

I would like to ask a question here. What is the trouble about paying out the bounties which, I understand, have been earned by the company now in existence, under Act 41 of 1922? I understand that there is a considerable sum due, and that the company has not been paid.

The question raised by the hon. member (Mr. Jagger) is not really relevant under this clause, but I am quite ready to answer it. The matter is sub judice. It is the subject of a pending action, and, therefore, it would not be proper to discuss it. As regards the further bounty which is claimed, that claim has only just recently been filed, and we are going into it.

Clause put and agreed to.

Remaining clauses and the title having been agreed to,

House Resumed:

Bill reported without amendment; third reading on 31st October.