House of Assembly: Vol106 - MONDAY 13 FEBRUARY 1961


Mr. SPEAKER took the Chair at 2.20 p.m.


First Order read: Second reading,—Part Appropriation Bill.


I move—

That the Bill be now read a second time.

Mr. Speaker, it is customary for a Minister of Finance to ask the House at this time of the year for an advance to cover state expenditure during the new financial year, pending the passing of the ordinary Appropriation Act for the year, and that is the object of the Bill now before the House.

Hon. members will notice that an amount of 300,000,000 is being requested. At first sight the amount may seem somewhat exorbitant, but I hasten to assure hon. members that it is R300,000,000 and not £300,000,000. Since this Bill will not become law until after D-Day, the amounts are expressed in Rand. It is, however, not yet D-Day and King Rand has not yet ascended the throne. I think out of respect for the last moments of the old King Pound, who has reigned in South Africa for 135 years, I should use the pound as the monetary unit in my remarks this afternoon and in the course of the debate. To-morrow it will be a case of “Le roi est mort, vive le roi”.


“Honi soit qui mal y pense.”


I think as an act of piety to acknowledge the old king as such, even though it be for the last time, I think hon. members who take part in this debate should show an equal sense of propriety and piety by acknowledging the £ to-day and in the course of this debate. Even though we are moving over to the new order to-morrow, I think it will avoid a lot of confusion if during this debate, at any rate, we will all speak in the same language, and do it as a parting tribute to the old king.

I may just for a moment pause here and remind hon. members of what is obvious, and that is that to-morrow we are moving on to a new era when the new bank notes and coins will come into operation and when as a nation we will begin to calculate only in terms of tens instead of twelves and twenties. When that takes place, we shall be seeing the fruits of a very considerable task which first came to the notice of Parliament by way of a Bill introduced by one of my predecessors, the late Mr. N. C. Havenga, in 1932. In the years that followed, the matter was considered in turn by the so-called Becklake Committee, by the Bureau of Standards and finally by the Diederichs Committee which was ‘appointed as a result of discussions on a private Bill introduced in this House in 1956. Hon. members will therefore realize that the decision taken was not a decision taken lightly, but only after many years of investigation and of careful consideration. The immense task of organizing this change-over was entrusted to the Decimalization Board, whose members, hon. members will no doubt know, represent between them a very wide diversity of banking, commercial, industrial and public interests. Let me say at once, Sir, that the committee spared no efforts to make the public fully aware of the implications of decimalization, and its educational programme has probably been the most ambitious ever to have been undertaken in the Union and South West Africa. Its major concern naturally has been to educate our vast and diversified non-European population so as to ensure that there would be no hardship as a result of a lack of understanding of the monetary change-over. But let me add this too, that the task of this Board would have been far more difficult than it actually was, had it not been for the whole-hearted co-operation of all sections of the community and all the newspapers and all the organizations and Government Departments. They have co-operated wonderfully and made a most difficult task less difficult for the Board. As you know, Mr. Speaker, South Africa is the first of the highly mechanized countries of the world to undertake decimalization of its monetary system and, as can be expected, the eyes of the world are focused on us and what happens to-morrow and following days. The change-over has become a matter of national importance and also, I would almost say, a matter of national responsibility. I do not want to make any comparisons, but it is almost as important as winning a very vital test match in rugby football. We have to see to it that our honour is not sullied in the process. I think that I can, with justice, pay tribute to the work of the Board and to all those who have co-operated in this great task. And let me say at once that the task is not over after to-morrow and I must ask all those who are concerned with this matter to continue this co-operation in the very difficult time which will ensue, the period when we will have the dual system in play. I hope that all hon. members in this House and of the public will co-operate in making the switch-over as easy as possible and with the least dislocation of our ordinary business.

The amount of £150,000,000 should be sufficient to cover the expected expenditure over a period of four months, that is, April to July. In view of the uncertainty in regard to the duration of the Session, provision is being requested for a period of four months instead of the usual three months. I hope—and I am sure all hon. members of this House will share my sincere hope—that I have made too wide a provision in four months and that we will still be able to finish within three months. But owing to the fact that there will be an extraordinary recess I think it is as well that we should be on the safe side and provide for four months. Nevertheless, it is still my sincere hope, which I am sure is shared by all of us, that we will be able to get the Estimates through in the customary three months.

Of this amount of £150,000,000, £121,000,000 is requested on Revenue Account; £25,250,000 on Loan Account, and £3,750,000 on Bantu Education Account.

From Clause 2 it is evident that only those services which bear the approval of Parliament are covered by this measure. Any new services are not covered by any provision we make in this Bill, and they will have to await the passing of the main Estimates. Possible budgetary proposals are not affected and hon. members on both sides of the House are asked to be patient and to await my Budget statement for a review of the financial position for the current financial year, as well as the prospects for the coming year. It has already been announced that I propose delivering my Budget statement on Wednesday, 15 March.

There are, however, one or two financial matters which I should like to deal with now. Firstly, I wish to give the House some particulars of the various loans which the Government has raised since the last session of Parliament. Last August the Government received a loan of 30,000,000 Swiss francs (about £2,500,000) from a consortium of Swiss banks —the same group from whom we have obtained several loans in the past. The loan is for two years, but may be renewed for a third, and the rate of interest is fixed at 31 per cent above the Swiss bank rate, which is at present 2 per cent, giving a total of 51 per cent.

Over a year ago we arranged a loan of $16,000,000 (about £5.7 million) from the Export-Import Bank of America in order to finance the purchase of the three Boeings by South African Airways. Owing to some delay in completing all the necessary formalities we have so far only drawn £3.7 million, leaving a balance of £2,000,000 still to be drawn.

We have also arranged to draw from the International Monetary Fund an amount of foreign currency equivalent to about £13,500,000, which is equal to the value of our gold subscription to the Fund. Of this amount we have already drawn £9,000,000 and we may take the balance at the end of this month. These drawings increase the Reserve Bank’s foreign exchange holdings but are not reflected in the Exchequer Account. If it should be necessary, we can ask the Fund for further facilities. In theory our total drawings could go up to our quota of £45,000,000, but naturally the Fund is not over-anxious to lend up to the limit. In this connection I think it is probably wise to quote from a recent speech by the Governor of the Bank of England who said—

I hope that we shall all get more used to regarding the International Monetary Fund as a second line of reserve for this sort of purpose. I should like to see countries draw on these facilities as a matter of ordinary business when they need to reinforce reserves, and repay them when reserves are rising. If drawing on the Monetary Fund is regarded as only a last resort, then half its utility is lost because it will come to be seen as a crisis measure which may cause as much nervousness as it allays.

We must realize, in other words, that our reserves in the International Monetary Fund are there to be used and must not be regarded as something which we only do in extremis.

As regards internal loans, two loans totalling £18,750,000 fell due in December and January last, and we issued two new loans, one for five years at 4¾ per cent and for 15 years at 5⅜ per cent, for conversion and new subscriptions. Conversions from the maturing loans amounted to £10.3 million and cash subscriptions to about £8,500,000, so that the total amount raised was slightly more than was necessary to retire the maturing loans. We made it clear when the loans were issued that we were not seeking additional money, as the indications were that we would have adequate funds in hand to finance the Loan Account for the balance of the financial year.

A great deal has been written recently about the upward pressure on interest rates, and most of it is greatly exaggerated. So far as long-term rates are concerned, however, there has undoubtedly been a tendency for rates to rise. When buying Government stock offered to it for sale the Reserve Bank may, if it considers that the circumstances require it, apply a penalty rate of ¼ per cent above the official pattern of rates, that is, it agrees to buy only at a lower price which will give an effective yield of ¼ per cent above the ruling pattern. On several occasions recently it has applied the penalty rate and the sellers have been prepared to accept the lower price, for stock offered to the Reserve Bank. This indicates that the supply and demand in the market demand a revision of the pattern of rates, and, as was announced on Friday, the Reserve Bank has, after the customary consultation with the Treasury and the National Finance Corporation, decided to raise its pattern of rates by ¼ per cent, that is, for Government stock with a maturity exceeding three years. The result is, Sir, that for long-term stock, that is over 11 years, the rate is now 5⅜ per cent instead of the old pattern of 5⅜ per cent.

I want to emphasize, Mr. Speaker, that in deciding upon this increase in the pattern of long-term rates the monetary authorities had very much in mind the possible broader effects on the economy of the country as a whole of higher interest rates, particularly at a time when it is so desirable to stimulate industrial development and encourage exports. Although, as explained above, the new pattern is in a sense merely a recognition of existing circumstances—since the penalty rate was already being applied we first satisfied ourselves that the trend was a genuine one and not a short-term fluctuation, possibly affected by artificial manipulation. It is our policy to lean against the wind, to test its force, direction and duration, and not to run before the wind regardless of the circumstances and the effects on the economy of the country as a whole. After careful consideration of the present position of the capital market, I am hopeful that it will be possible to stabilize interest rates at the new pattern. In view of the wider implications for the economy as a whole I hope that the monetary authorities will be supported in their endeavours to achieve stability.

Short-term rates have also risen recently, but they are only now coming into approximately their normal relationship with the Reserve Bank’s discount rate. When this rate was raised from 4 to 4½ per cent last August, the tender rate for Treasury bills had been rising for some time and it was thought that the rate for such bills would continue to rise to around about their present level. Instead, however, the tender rate then fell, and only recently has it risen again to a level of about 4⅛ per cent. There is therefore no reason to raise the bank rate at the present time. Moreover, the present level of short-term interest rates is not such as to encourage any outflow of capital in order to take advantage of small interest differentials, and there is no indication that any outflow is taking place for this reason. Thus, although the United Kingdom bank rate is still ½ per cent higher than ours, the commercial banks’ prime rate for overdrafts is only 6 per cent in the United Kingdom as against 6½ per cent here. There is a possibility that the bank rate will also be decreased further in the United Kingdom and in other of the Western European countries.

Mr. Speaker, there is one other Budget matter which I would like to mention now. In my Budget speech last year I mentioned that the rates of investment allowances on new factory and hotel buildings and machinery would remain in force until 30 June 1961. The need for stimulating investment in industry is still present, and it would be of assistance to industrialists and hoteliers to know as soon as possible whether the allowances will continue after 30 June of this year. I therefore propose taking the somewhat unusual step of giving way one of my Budget secrets a month in advance. I shall, at the proper time, ask Parliament to agree that the investment allowances which were granted last year should be extended on a basis not less favourable than the present, until 30 June 1962. I hope that this will remove certain doubts and will give the green light to those people who propose making use of this concession within the next 12 months.


Mr. Speaker, the hon. the Minister of Finance, in his speech made clear what we all knew, that his main object was to ask for money. He then proceeded to bid a not undignified farewell to what he called the “King £”. I notice he did not welcome the President Rand. He asked us to agree with him that the change-over which was due to start to-morrow was one which, in the interests of the country, everybody should do their best to make work smoothly. I am sure that from this side of the House he has our assurance that, being realists, we shall not fall behind in our endeavour to make the unfortunate people of this country understand the new system under which they have to work.


But he has not yet told you where he is going to get another doubleheaded coin.


I have not seen any of the new coins. Whether they are to be doubleheaded or not I cannot tell the hon. member for Salt River (Mr. Lawrence). The double head may not be the only thing they have on them.

The main point is that the hon. the Minister is asking us for a large sum of money, and it does not really matter to the people who are going to find that money whether they are going to pay it in pounds or in rand. I would have wished that the hon. the Minister, in view of the present state of the country, could have spent a little less time on the question of the decimalization change-over and a little more time enlightening us on matters which are worrying all sections of the community. The Minister told us that he was going to extend the depreciation allowances for another year. Thereby he is belatedly taking the advice of the Opposition who told him when he introduced the measure that simply introducing it for one year was quite useless.

I do not think that the hon. the Minister could expect us simply to agree, tamely, to vote this very large sum of money without raising certain matters which are worrying the rest of the country. I think it is high time that our attention was devoted to the financial and economic problems of the country, and I think it is especially necessary in view of the unbridled optimism which is voiced by Government spokesmen led with great eloquence by the hon. the Prime Minister, on this subject. Moreover, it is difficult for the average citizen to gauge what the financial and economic state of the country is. At the beginning of the year he knows that he has not much over from what he has earned during the year. He grumbles at any new taxation. At the end of the year he sees the Government with a grossly swollen surplus on current account—which, of course, he is going to see again this year —and he just says “Oh well, I must be unlucky myself, the country as a whole must be doing pretty well.” He quite forgets that this enormous surplus is coming out of his pocket. Had it been left in his pocket he would have been considerably better off than he actually is.

A glance at the Order Paper will show that there are motions from all sides of the House indicating urgent concern at the various facets of the country’s life. Most of them, of course, will not be debated, but the fact that they are on the Order Paper will undoubtedly prevent some of them from being dealt with in this particular debate. However, in order to initiate the discussion which I think is highly necessary I should like to move the following amendment—

To omit all the words after “That” and to substitute “this House, alarmed at—
  1. (a) the continued outflow of private investment capital from the Union;
  2. (b) the steady loss of skilled and useful citizens;
  3. (c) the general retardation of the country’s economic development; and
  4. (d) its resultant depressing effect on agriculture and commerce and industry,
declines to pass the second reading of the Part Appropriation Bill unless the Government gives satisfactory assurances that adequate steps will be taken to rectify the manifest faults in its present policies”.

I would like, if I may, to refer as briefly as I can to the four points in this amendment. Other speakers are waiting to deal with the points in greater detail and to combine in building up an indictment against this Government such as has seldom been done before. I refer, first of all, to the question of the continued outflow of private investment capital from the Union. The Federated Chamber of Industries stated categorically a few months ago that there is no real substitute for overseas capital. Overseas visitors, financiers, bankers, business men, all comment favourably on our economic possibilities, on the economic potentialities of the Union. But they qualify it, almost without exception, by saying that the policies of the present Government and the political climate are making overseas investors reluctant to come in on a large scale and to participate in what, potentially, is a most promising market for investment. At the present moment, as you know, that reluctance has reached a stage of a large-scale withdrawal of capital. In the first nine months of last year, as we know, the net outflow of private investment capital amounted to some £79,000,000. I do not know what the last quarter showed, but the two years previously witnessed a substantial outflow of capital from this country, and I believe it is estimated at the present moment that the net outflow is still in the vicinity of between £2,000,000 and £3,000,000 per month. Now I know that the hon. the Prime Minister and the Minister of Finance have both made the point that this is a blessing in disguise, that the repatriation of overseas holdings places the shares in the hands of the South African people who will get the benefit of the dividends and so on. That may be so, but you can have too much of a good thing. I do not think there is any doubt that when the limited domestic capital market is called upon to repatriate overseas investments on a substantial scale on the one hand, and, on the other hand, is squeezed mercilessly in the Budget to provide capital for the public sector—capital which the Government cannot get anywhere else—then there is no doubt that it leads to the present state of affairs, namely, to an acute shortage of capital and of credit. And, of course, this in turn has affected the general exchange reserve position. The hon. the Minister gave us figures of his borrowings, and the exchange position at the moment is that our reserves stand at somewhere in the neighbourhood of £90,000,000. If conditions were perfectly normal and there was no undue strain on those reserves, that would not be anything to worry about. But the fact is that these reserves are being bolstered up by borrowings from the International Monetary Fund and from the Import-Export Bank, as the Minister has told us.

Three weeks ago the hon. the Minister told us that he had borrowed £4,500,000 from the International Monetary Fund. Since then he has drawn another £4,500,000. That means that he still has another £4,500,000 available to draw, and he tells us he may draw that before the end of the month. But in replying to a question from me the other day the hon. the Minister said, rather ominously, that it might be possible—and he repeated this in other terms this afternoon—it might be possible, if necessary, to arrange to borrow another £40,000,000 from the International Monetary Fund. That seems to me an alarming possibility. If I thought that the hon. the Minister really considered it likely that he would have to draw on that money I would say that the country was heading for a first-class financial crisis, for this reason Mr. Speaker …


You should listen to what the Governor of the Bank of England says.


The hon. the Minister quoted the Governor of the Bank of England. But, Sir, the Governor of the Bank of England said that the International Monetary Fund was there to be drawn upon in times of difficulties. That is what it boils down to. If we have to borrow £40,000,000 from the International Monetary Fund, that is not a temporary overdraft. That means that we are in very grave financial straits in regard to our foreign exchange reserves. I am not at all satisfied that the hon. the Minister’s quoting of the Governor of the Bank of Englandmeets the point. I think what the Governor of the Bank of England said was not at all germane to the position in which we find ourselves to-day if we have to go to the extreme of trying to borrow another £40,000,000 from the International Monetary Fund. The International Monetary Fund is intended as a short-term lending organization. We have borrowed from it before and we have repaid in a very few months. It is in the nature of an accommodation, of a temporary overdraft. If you are a member of the Fund you have that facility to tide you over any temporary difficulties which may arise. But I think the hon. the Minister should tell us how much he thinks he will have to borrow from the International Monetary Fund, and I think he should tell us how long he thinks he will have to have that loan before he repays it.

There are other symptoms which are causing concern. We agreed to a Bill here last week reducing the Reserve Bank ratio in regard to what the commercial banks have to hold with the Reserve Bank. That was reduced from 10 per cent to 6 per cent. Mr. Speaker, that can only mean that the commercial banks very short indeed of liquid funds. It is common talk that one particular bank has had the greatest possible difficulty in recent months in maintaining its 10 per cent. In other words, this reduction from 10 per cent to 6 per cent is intended as a shot in the arm for the commercial banks to enable them to release a little more credit to the country. But it is only a shot in the arm and by itself it can be nothing else but a temporary expedient. We heard last year that the Land Bank was going to the public for a large loan. They withdrew that proposal, but I understand they are going on with it later on. The hon. the Minister referred to the recent Government issue. He made it clear that he was not trying to raise more new money because he thought he had enough to carry on for the financial year. I wonder, if the hon. the Minister has really had large applications and these issues were over-subscribed, whether he would have refused to accept the money. At it is, he only raised about £3,500,000 of fresh money from private sources, and that is a very small amount compared with what generally happens on these occasions. He got £5,000,000 from the public debt commissioners, a good deal of which I have no doubt was already conversion money. As a result of that, flowing from the comparative failure of those loans, the Minister has repeated this afternoon that the Reserve Bank has seen fit to grant a slight increase in the interest rates on long-term Government loans. Personally, I do not think that will really help very much. I think it is too little to do much good, and I think it is too late. However, we shall see when the market is tested, as I think it will be in the near future, by the I.D.C. loan which will be floated, what the position is. But the point I wish to make is that all these things are basically due to the outflow of private investment capital in recent years. I would remind the hon. the Minister of the statement made by the Viljoen Commission, which said that all Government policies should be tested by the effect they have on the economy of the country. I think that in a nutshell sums up our difficulties to-day. I am forced to the conclusion that until that is done, until the Government tests its policies by what effect they have on the economy of the country, I can foresee no permanent improvement in the position in which we find ourselves to-day.

But there are other things contributing to the problem. There is, for instance, the alteration in the uranium agreement. We have not got any details, but I understand it will mean a loss of £10,000,000 to £12,000,000 a year to the revenue and the reserves of the country. There is the question of the export market. There are indications that Africa, which is likely to be the most forward-moving continent in the whole world for the next century in the way of economic development, is showing ominous signs of closing their market to us.

I come to the second point, the steady loss of the skills of useful citizens. There is a motion on the Order Paper dealing with immigration, which precludes me from discussing that question in any detail, but I would say that the first thing we have to do is to reverse the present flow of migration because, at present, the tide is flowing not in but out. Let me give just one example. At one university in South Africa a year ago 17 students graduated in engineering. At present only two of them are left in the country, and the other 15 have all gone. If you multiply that, it is really a very important development. Why is it happening? It is perfectly competent for the Government to keep a careful check on the outflow of skilled and technical people who are leaving the country continuously and to assess for itself what it amounts to and what the consequences are. As far as paragraphs (c) and (d) of the amendment are concerned, the general retardation of the country’s economic development and its resulting depressing effect on commerce, agriculture and industry, those are obvious and apparent to everybody in the country except the Government. We have had a statement from the hon. the Prime Minister this Session where he admitted that there had been certain problems in the past year, but he brushed them aside and declared that he found prosperity in every field. He said he had looked into statistics and into trends and throughout, without one single exception, he found prosperity in every field. He said it was a basic fact that South Africa is a fortunate and a prosperous country. Of course, when the Prime Minister announces that we are a fortunate and a prosperous country, it is almost high treason to question his statement, I suppose, but I am going to venture to do so. Surely when the Prime Minister said that we were a fortunate and prosperous country and that, without one single exception, he found prosperity in every field, does he not overlook the fact that 70 per cent of our people live in extreme poverty? He quoted Iscor and Sasol as examples of expansion and development. I do not think that was a very happy example to quote, because Iscor and Sasol, in the first place, have no shareholders to worry about, and, in the second place, they are Government-controlled, and it is their duty to assume that the Government of the day will so conduct the affairs of the country that economic progress will be satisfactory. It is, therefore, their duty to plan five or six or seven years ahead to meet the needs of the country which will require expansion, if it is properly governed. Why I do not think this is a very happy analogy is that if this Government had over the past ten years shown the same wisdom and foresight in planning as Iscor has done, the country would not be in the position it is in to-day. I say that statement by the Prime Minister was superficial and irresponsible to a degree. What authority is there for the Government to make such a statement? What basic ground is there for this lyrical optimism, which, so far, we have only been used to hearing from the hon. the Minister of Bantu Administration and Development? Take agriculture. Has the Government the right to say that agriculture is prosperous? If so, why did we have to find £56,000,000 in the last two years, not to provide for the expansion and the prosperity of agriculture, but to keep them out of the insolvency court? Has commerce given the green light to this statement? Commerce has made request after request and has handed plan after plan to the Government, but they have all been ignored. The chairman of the Chamber of Commerce in Johannesburg last October made a statement saying that the rate of capital formation in industry had not risen for six years and, during the last three years, it had actually declined. Is industry satisfied? Industry has declared that the industrial capacity is nowhere near fully employed. They produced a 25-point programme for the Government to consider. They said that what is badly needed is a three-pronged attack on stagnation and complacency. If any of the members of the Chambers of Industry were sitting on the gallery whilst the Prime Minister was talking, they would realize how right they were in talking about complacency. They have called for an increase in the national net income per head. They indicated that that could be brought about by creating greater spending power, by an infusion of capital and by an increase in skills, and they repeated that there was no real substitute for overseas capital, and that there was no stimulant as warming as immigration. What is the Government doing about that? Who is revelling in prosperity, and where is it? I say that the Government is treating the whole question of the economic affairs of the country with a levity which can be disastrous to the country. The fact is that, stimulated by the remarkable progress and expansion in the gold-mining industry, and assisted to a degree by the uranium windfall, there has been in the post-war years remarkable expansion in the economic life of the country, but for the last four years that rate of development has slowed down to the pace of the ox, and in the near future it will go at the pace of an untrained republican ox. Take one figure. The increase in the net income of individuals last year was 1.9 per cent. Any economist will tell you that that is well below the figure required for maintaining and expanding our economy.


Is that the last figure you have, June 1960? Do you make that statement?


[Inaudible.] Mr. Speaker, everybody at home and abroad agrees, and one cannot repeat this too often, that the development potential of our country is vast. But everybody complains that that development is frustrated by Government policy. If the present trend continues, it simply means that we have to look forward to increasing control and restrictions and higher taxation, and, before long, I am afraid, to a recession. We have to remember that our whole economy rests on twin pillars, capital and labour, and both these pillars to-day are developing obvious and ominous weaknesses, which are apparent to everyone. The question is, therefore, what the Government should do. Every authority here and abroad places the root causes of our economic climate as being due to Government policy. Can everybody in the world, except the Prime Minister, be wrong? Is he the only one who is in step?




I say that in view of the overwhelming volume of opinion expressed everywhere, there is one thing which the Government must do. They must face facts as to why we are so short of capital and credit and skilled labour. Unless the whole of the world is wrong, which I do not believe —and when I say the world I include all the authorities in this country as well—this Government cannot have its cake and eat it too. They can stick to their present policies, or they can amend their policies and have prosperity, but they cannot have both. Therefore the first thing the Government has to do is to face facts, if they have not done so yet. Having faced the facts, what are they to do next? What they will have to do falls into two phases. They will have to take the short-term phase first and take active steps to stimulate consumption, to increase purchasing power and to increase employment. It is not for me to point out in detail exactly what they must do, but let me give some examples. They might, e.g., initiate a much more vigorous public works programme, and when I talk about public works I am not talking about farm gaols or Government houses in Bantustan but about things like water conservation. The Government has been handed a number of most valuable reports by the Natural Resources Development Council. Have they given effect to any of these reports? The Government has in its possession a painstaking report on the depopulation of the platteland, which makes some very important recommendations. Has anything been done about that? Having regard to the state of affairs in the country, surely things must be done at once and the Government has recommendations and advice but nothing seems to be done. I suggest that there should be a great intensification of our road-building programme. The Chairman of the Viljoen Commission pointed out that in many ways the development of our roads was more important even than the development of the Railways. The Government is taking no steps. I think that the Government should have taken steps to replace by other activities the Railway capital programme which has now just about come to an end, and there is no doubt that the cessation of the Railway construction programme plus the vast economies which, about ten years too late, the Minister introduced on the Railways had an effect on the purchasing power and the slowing down of our economy. The Government might consider increasing the food subsidies for the lower-income groups to reduce the cost of living for them and to increase consumption. They might consider increasing Government wages amongst the lower-paid workers. They have been exhorting evrybody else to do it, and everybody else has done so, but we have yet to hear of the Railways increasing the wages of the lower-paid workers. They might try to evolve means to stimulate consumption. They might even consider examining again the large body of pensioners in this country who as the result of the increasing depreciation in the value of their pensions are finding things very difficult. All these suggestions may be called artificial, but the fact remains that if we are to resume our forward march you have got to have some important stimulus to get the wheels moving again and the Government is the only body that can do this.

Then of course there is the long-term planning which we cannot discuss in detail this afternoon, but it is quite clear that the Government should get down to some serious long-term planning, as Iscor has done. The Chamber of Industries suggested a five-year plan. I suppose that has landed in the wastepaper basket also. But there should be some kind of clear-cut target for the country and for all sections of our economy. Of course, a major aspect of our long-term planning is our poor Black problem. It is claimed—I do not know how true it is—that we have solved the poor White problem, but the poor Black problem is numerically much greater. I have seen no proposals on the part of the Government to increase the skills and the wages earned by the Native people. Sir, there are a number of speakers on this side who are straining at the leash to tell this Government how far it is falling short of the elementary duties of a civilized Government. I think I have said enough … [Interjection.] … to show how we on this side of the House view the position and how every responsible authority sees our economy. Whilst it is basically strong and potentially very great, it is beginning to suffer very badly from financial anaemia, from uncertainty as to the future and a feeling of frustration at the refusal or inability of the Government to get down to the root of the problem and to take active steps in collaboration with responsible bodies to find the answer to our problems and to act accordingly.


I second the amendment. The hon. member for Constantia (Mr. Waterson) has drawn the attention of the House to the fact that almost every economic specialist from overseas has pointed to the tremendous economic potential that this country really possesses. There is no doubt that if we follow proper economic and other policies, we can wipe out the poverty that affects such a vast percentage of our non-White population in a comparatively short period of time, and I make bold to say in a period which many of us in this House will still see in our lifetime. Just imagine what it would mean to South Africa if we can claim that we are the first country on the continent of Africa to wipe out poverty in the sense that all our own workers enjoy at least minimum Western standards of living. That would be worth more than all the propaganda we could pay for if we can prove that we have wiped out poverty for the first time in the history of Africa and have ensured to all our urban workers minimum standards of living. That would do more to safeguard all the institutions we hold dear than anything else could do. This is possible because, apart from the fact that we have this vast potential and that we are blessed with so many raw materials and resources, we also happen to be a country with a very high savings rate. Our savings rate and, consequently our investment rate, which, after all, is the mainspring of all economic progress, are amongst the highest in the world. For the last ten years it has averaged more than 20 per cent, and in certain years it was higher than 20 per cent, and only in recent years has it fallen to 15 per cent, but even a net investment rate of 15 per cent is one of the highest in the Western world. At this rate of investment certain European countries and others have managed to increase their real income, after making allowances for price increases, at the rate of 6 to 7 per cent per annum, and the real income per individual has been increased by over 5 per cent in many countries in the last ten years.

Now, how does that compare with what has happened here? Despite the fact that we have this high rate of savings and investment, our real national income, according to the calculations made by the Bureau of Economic Research at Stellenbosch between 1951 and 1959 averaged 3.5 per cent. If we allow for the population increase, the increase in the real income per head, which really measures the advancement made better than any other figure can do, is only 1.7 per cent. It is this figure, the average national income per person which measures the real welfare of your society, and not how much electricity you can produce, or how much petrol you can sell. It is this figure which shows whether your society is increasing its welfare or not. That is the figure of real income per head, which has been at the rate of 1.7 per cent from 1951 to 1959. I say that for the high rate of investment this has been a comparatively low figure compared with other economies. A rate of increase of 1.7 per cent is not high. Putting it another way, most authorities are agreed that the average standards of living of the mas of our urban workers must be increased at least 50 per cent to bring them up to what is regarded as minimum Western standards. At this rate of growth we have had over the last ten years that will take us 30 years, whereas if we had a higher rate of investment we could do it in ten years, if we achieved the same rate of growth that other economies have achieved. For the last four or five years this figure has not increased at all. If we again look at the calculations made by the Bureau of Economic Research at Stellenbosch, at page 3, we find that in South Africa the average figure of income per head calculated on 1948 prices reached a figure of £86.6 in the year 1956-7. It then dropped in 1957-8 to £83.5 and it dropped further in 1958-9 to £82. There was a revival in 1959-60 of about 3.5 per cent in this figure, which brought it back to £84.5. If the forecast of this Institute is correct the figure for this year will be no higher than last year and the economic indications are that in this year we will see no increased welfare compared with last year. This will mean that in 1960-1 we will still have an average income which is below that which we attained in 1956-7. Sir, if there is one thing that we cannot afford in this country it is economic stagnation, because we also have a very rapidly increasing population. Our population increases at the rate of nearly a quarter of a million per annum, and for at least half those people extra jobs must be found annually in our economy. Most people are agreed to-day— and I think hon. members on the other side will also agree—that only manufacturing industries can in the long run create sufficient job opportunities and give sufficient stimulus to the economy of the country to absorb the rapidly growing population. What has happened in industry in the last three years? If we look at industry for the last three years we find that whereas in 1957 there were on an average 689,800 workers, in September of last year, there were only 690,700 workers employed in private manufacturing industries. It is quite clear therefore that we are not creating sufficient job opportunities for our rapidly growing population. Hon. members opposite will no doubt quote this 1.9 per cent unemployment figure. Sir, that is a very artificial figure except as regards the European section of the population. Everyone who is aware of how this figure is constructed realizes that it does not really reflect the actual unemployment position amongst the Coloureds and the Indians and of course it does not even attempt to reflect the unemployment position amongst the Natives. There is a vast disguised unemployment amongst the Natives. I think that is generally accepted to-day. In fact, the Prime Minister’s statement of September last year acknowledged this fact. On page 5 we read—

In South Africa the increasing unemployment and the urge on the part of the population to move to the cities occurs for the most part in the Bantu areas.

Here is an acknowledgment by the Prime Minister, on the advice of his council no doubt, that there is unemployment amongst the Natives, and anyone who is acquainted with the system must realize that that must necessarily be so. If we look at all the other employment figures in our economy, we find that only mining has shown considerable expansion. The rate at which new jobs has been created has been far too slow for the rate at which the population has been growing in the last four or five years. As I have said before, we dare not allow our economy to become stagnant in this country, with our vast social and political problems. The only context in which we can solve our problems is one of rapidly increasing welfare. Even the Prime Minister’s policy of border development, a sort of policy of half apartheid, requires this. The Prime Minister’s new policy of half apartheid can never be implemented unless we have rapid industrial growth, and that is also acknowledged by the Prime Minister in the statement which he issued on 14 November, in which he said—

Moreover an acceleration of development is indeed essential for the implementation of the Government’s policy to increase the standard of living of the lower income groups of the population as rapidly as possible.

Whichever way one wants to attempt to solve the problems facing us in this country, it can only be done in a context of rapid economic development, of rapid industrial development. We must ask ourselves: Why despite this comparatively high rate of investment in the past, have we had such a comparatively low rate of economic growth, and why has the economy failed to supply sufficient jobs for our rapidly growing population? Sir, there are many reasons and I do not intend to go into all of them, but I would like to mention what I regard as some of the main reasons and what policy should be followed to counter them. In the first place, there is no doubt at all that consumption has not expanded rapidly enough; consumption has not kept pace to absorb the new products that can be manufactured in our newly established factories. This has led to over-capacity in industry. That is also accepted by the Prime Minister in his own statement, and it is also expressed by the Federated Chamber of Industries in their programme for economic development that there is at present over-capacity in industry. It has also led to a semi-depressed state in agriculture. I think everyone in this House will agree that agriculture is not in a healthy state at the moment, and it is entirely due to the fact that purchasing power in this country has not developed rapidly enough to absorb the slowly and steadily increasing production of agriculture. That is why we see signs of new surpluses arising and that is why despite the Marketing Act and the control boards, it is impossible to fix prices for farmers that enable them to make a proper living in this country. The fact that agriculture is stagnating becomes manifest when you look at the official national income figures. We find that in 1952-3 agriculture’s contribution to the national income was already £221,000,000. Now, six years later, to take the latest figures available, that is to say for 1958-9, agriculture’s contribution is £236,000,000, an increase of only £15,000,000. But, Sir, over that period of six years the cost of living increased for the farmer as much as for everybody else in this country; it increased by 20 per cent, so the real income of the agricultural industry to-day is probably below what it was six years ago. The only policy that the Government seems to have in mind is to lend the farmers more money. They seem to have no other constructive solution for the impasse in which agriculture finds itself that the markets are not developing rapidly enough to absorb these products at economic prices, at prices which are high enough to keep agriculture in a healthy state. We do not decry the necessary creation of credit. In this particular situation it is necessary, but that is not a remedy, it is a palliative. It is only a short-term measure. The thing to to do is somewhere or other to stimulate the consumption of agricultural praducts as rapidly as possible in the immediate future. The only possible way to do that would be to increase food subsidies very considerably, as far as I can see. If one did that, one would not only give relief to agriculture by increasing their markets, but to a large extent one would also move in the direction of raising the standard of living of the lowest income groups in the country who, by all objective tests, are not adequately fed to-day and who are under-nourished to-day. It is true that the Government itself is becoming aware of the need to expand the domestic market, but again, if we return to the economic statement by the Prime Minister on 14 November, we read the following—

It is felt that local industries should increasingly enhance their propulsive force mainly through the expansion of the domestic market, which would assist in the reduction of production costs following upon larger turnovers and higher productivity and enable them to find further markets outside the Union’s borders. In this endeavour the raising of the purchasing power of lesser paid employees and the effective protection of local industries would necessarily take an important place. The Government’s view with regard to higher wages and productivity has already been announced by the Minister of Labour in a recent statement, and the hope was expressed that private enterprise, upon whom the success of this endeavour depends, will attend to this matter on a national basis.

Sir, I think in that statement the Government is really trying to rid themselves of a responsibility which is primarily that of the Government, namely to see that the national income is fairly distributed and that the lower income groups are paid adequately, because it is not easy for private industry at a stage like this to do the work for the Government. In most other countries it is accepted policy that it is the prime responsibility of the Government to see that all sections get a fair share of the national income. I take it that private industry would be only too willing to increase the wages and the standard of living of the lower paid people, but in the present context where markets are not too buoyant, what happens if one private manufacturer puts up his wages? He prices himself out of the market. Or let us assume that he can, despite his higher wages, so increase the productivity of his labour that his costs do not increase, what happens then? It simply means that he sacks a percentage of his staff and he is no better off at all. Sir, in a context like this the first step should be taken by the Government itself. They should not try to rid themselves of their responsibility by trying to load it on to the shoulders of private industry. The hon. member for Constantia (Mr. Waterson) has already mentioned certain steps that they can take. They themselves are large employers of labour in non-competitive industries. They have not got the same problems that the private manufacturer has that if he pushes up his wages, he prices himself out of the market. The hon. member for Constantia has also mentioned that this is probably the time to review the pensions of so many people who draw Government pensions. We know that the last 10 or 12 inflationary years have eroded the value of these pensions very considerably. Surely now is the time, when the Government itself is aware of the fact that they must stimulate consumption, to improve the pensions of those people who have served the State in the past. The hon. member for Constantia has mentioned public works. I think there are certain aspects of public works that have been sadly neglected by the Government. If we look at their performance in regard to irrigation works, for example, it compares very poorly with that of a much smaller country like Rhodesia. The question of roads has also been mentioned. The Government has done a lot in housing and there is no reason why they should not perhaps expedite that too. I notice that the Minister of Finance is smiling; he is probably going to say to me that all these measures will be inflationary; that they will give him trouble with his balance of payments and necessitate increased taxation. I would like to anticipate some of his criticism. In the first place, in a context like this where there is clearly over-capacity, if one stimulates the demand one does not push up prices. The Chamber of Industries makes that point very clearly in a memorandum which they no doubt presented to the Minister of Finance. In fact, at this stage, if you can increase the demand for the products of industry, where you have over-capacity, you will probably have the very reverse effect and enable them to produce more cheaply because of the expanding market. The same point was made in the Prime Minister’s statement, so in this context I think the stimulation of consumption will in no way be of a highly inflationary nature. As far as the balance of payments position is concerned, in the first place our balance of payments problem at the moment is not really a classical balance of payments problem; it is not because our trade does not balance; we have a very favourable trade balance; the difficulty arises from the vast outflow of capital from this country, thanks to this Government’s policy and thanks to various acts of this Government. I notice in the Burger that Dawie estimates that one stupid act on the part of this Government may cost the country £5,000,000. That is quite apart from their general policy. One could make a long list of specific instances of stupid policies, and if I had more time I would do so.


That applies a fortiori to the mistakes of the Opposition.

Mr. RAW:

You are supposed to be governing this country.


Assuming for the sake of argument that that is so, surely that is no excuse for the Government to go and add to that burden by making more stupid mistakes? After all, they are the governing party. Our balance of payments problem is basically one of lack of confidence. You cannot really go and adjust your economic policies for growth because there is no confidence in the country, because there is an outflow of money. For that purpose the Government must take steps to restore confidence. But in any event, getting rid of surplus food does not cause an extra drain on your foreign exchange reserves. Most of the public works that we have suggested would not require large-scale imports. Most of the raw materials could be supplied from industries which are in existence already, so these measures that we have suggested should not lead to a great demand for imported products. Furthermore, as far as taxation is concerned, and in so far as we may have balance of payments problems, the Government will, of course, have to take steps and has already taken steps through import control. They might even consider increasing the import duties on luxury goods at this stage of our development rather than, for the sake of the balance of payments, restrict the growth of our economic development. They should rather take other steps at this time. As far as taxation is concerned, I believe that our economy at this stage is rather like grass in spring —it is bursting to grow. Your capacity is there and the people are there; it is simply a question of setting them off, just as rain in the spring makes the grass rush out and grow quickly, because the momentum is there to grow it. I think that is the stage that we have reached, so if the Minister can take steps to get our economy moving, to increase the demand for our products, to get confidence restored, we will have a very rapid growth in a very short period of time, and taxation will then look after itself. In any event the Minister has a vast surplus of taxation to play with, because people have been over-taxed in the past, so without increasing taxation he can carry out these remedies I have suggested, provided, of course, the extent to which people are over-taxed is reduced. Sir, these are all short-term remedies. Over a longer period one would have to make more fundamental changes to get our economy growing at the rate suggested by me, namely 5 per cent per annum, which I think is not an impossible and unreasonable rate. But in order to achieve that rate it is not enough just to make investments in machinery and in buildings. It is not enough just to make capital investments. One must also make investments in human material, in the people who are going to work in those factories. This is where we come up against the fundamental difficulty connected with the policy of this Government. Their policy is supposed to be one of separating the people. In fact, it is nothing of the sort. Our people are less separated to-day than they were 10 or 12 years ago. What the policy boils down to really is to put certain brakes upon the advancement of 80 per cent of the people of this country, the non-Europeans. We are putting bars to the acquisition of skills which are necessary for a modern industrial economy. In a modern industrial economy one needs vast numbers of administrative workers, of technicians and technological workers; one needs vast numbers of skilled workers. All those skills and abilities which are required in a modern economy are denied in some degree to 80 per cent of our people. The White people have to provide all those skills and abilities, which sets a bar to our rate of development, because I believe that to a great extent we have exhausted the ranks of our White population for those particular skills. The obvious thing to do, of course, would have been to have brought in immigrants, if this Government is determined to place a bar beyond which the non-White cannot advance, a policy which is based perhaps on the theory that if you do skilled work you are more integrated than when you do unskilled work in industry. Surely then the obvious thing would have been to have brought in immigrants, but the Government has not done that either. We cannot discuss the question of immigration here fully, as the hon. member for Constantia pointed out, because there is a motion dealing with that subject on the Order Paper. I would like to say, however, that I am very pleased that the Government has at last realized, after 13 years, the urgency and the necessity to bring in immigrants. But, Sir, over a longer period we cannot advance our investment—it will not be productive—if we do not also afford opportunities to 80 per cent of the people to develop these skills required for a modern economy. As long as that bar is there our investments will never show the return in this country that they have shown in other countries. Because, Sir, one cannot advance with only 20 per cent of the population; one must advance with the whole of the population. I know that it will be a slow process, that it will not be an easy thing to teach the large bulk of non-Europeans these skills, but unless we do so we ourselves really set a limit to the rate of our progress. I suppose that is something which the Minister of Finance can really do nothing about, because it is the policy of the whole Cabinet, but I would like him to realize that that is one of the facts that makes for slower economic growth than we would have otherwise. You set an arbitrary bar to the social development of the great bulk of the people in this country. Therefore if we are to achieve a desirable rate of increase of 5 per cent then this Government will have to change its racial policies radically. If we do achieve a rate of 5 per cent we can wipe out poor Blackism in a comparatively short period of 10 to 15 years if in addition to that we follow these other policies. The irony is that this process of rapid development; whereby you raise the standard of living of all your people, is really the only safe way in which we will maintain our institutions and our civilization here in South Africa. The very policy which the Government says they are following to maintain Western civilization must, in the end, be slowing down our rate of birth, put up so far behind other countries, that our society will be destroyed. Sir, just one last demonstration of what I mean. Surely we cannot afford in this country to increase our welfare and our wealth at a rate as low as 1.7 per cent when incomes are increasing in most European countries at the rate of 5 per cent? Incomes and standards will be so high in Europe that people will simply refuse to emigrate from Europe to South Africa if this process continues. In the long run there is only one way to safeguard the White man in South Africa and that is by not trying to keep down all the non-Europeans by refusing them entry into the skilled occupations which are required in a modern society like ours.


The approach of the hon. member who has just sat down, is so far removed from the real policy which South Africa has adopted and from which the nation will never depart, that he could just as well have made that speech of his at a debating society; it has no practical value in practical politics in South Africa. The hon. member’s approach is this: Let us see what we can do in the country over the next 50 years and then we will simply have to get out and leave it to the non-Whites. That must be his approach otherwise he could not have said the things which he said here to-day. As far as the figures mentioned by the hon. member are concerned, I should like to check quite a number of them before I say anything further about them. Another hon. member will at a later stage deal more fully with those, but I just want to say to the hon. member that he should at least try to be logical. He says that consumption has not kept pace with the development in agricultural production; that agricultural production is developing faster than the consumption of agricultural products and that is the reason why agriculture is in such a weak position. But in the next breath he says that over a period of six years there has been an increase in agricutural production from £221,000,000 to £236,000,000; that is negligible, Sir. Surely, he is contradicting himself there, Sir. No, Mr. Speaker, the hon. member should not come to this House and use that kind of argument in a debate.


What about the price? The volume has increased and the price has decreased.


I do not know how the hon. member can make such allegations. She will have an opportunity to make a speech under the Agriculture Vote—as usual it will be a lot of rubbish—but she should leave this debate in our hands. The hon. member made a second point to which I should like to reply. He said that over the past nine years the standard of living had risen by only 1.7 per cent per annum per individual in South Africa. Well, I am not going to quarrel with him about that figure but I think his figure is totally wrong. I say that on the strength of the last Budget which Mr. Tom Naudé introduced in this House in 1958 in which he gave figures which showed that there had been an average increase in the standard of living of over 3 per cent. Does the hon. member want us to believe that it has dropped to such an extent over the past two years that the average is no more than 1.7 per cent to-day?

Now I want to deal with the amendment of the hon. member for Constantia (Mr. Waterson). Here we have a case, Sir, of a person who tried to make a mountain out of a mole-hill, but he did not succeed in doing so. I just want to say a few words on each of the points which disturb my hon. friend so much. The first point is the continuous outflow of private investment capital from the Union. Nobody will deny that £80,000,000 has left the country, but there are very sound reasons for that; and the one reason is this campaign of 13 years’ duration which the Opposition and their Press have conducted to incite the public in this country and the outside world against South Africa and against the Government. They are the people who are continually telling the world outside what a rotten country South Africa is. Consequently when we have a disturbance here such as the one at Sharpeville the people immediately say: “The United Party was right” and then they take their money and run away from the country. However, that £80,000,000 which flowed out of the country is no loss to us. No, we spent approximately £80,000,000 on purchasing South African securities abroad and those securities have an inherent value of approximately £120,000,000; in other words, we made a bargain and the dividends on the investments concerned will accrue to the South African citizens in the future. I am not saying that it has not made our exchange position appear somewhat weaker but that is another matter. But how many members opposite did not avail themselves of that? I am convinced that numbers of United Party members bought some of those securities which were offered abroad at a low price, and had they not done so, they would have been downright bad businessmen.

The second point which is disturbing the hon. member for Constantia is the loss of skilled and useful citizens. He has in mind, of course, the people who, after the episodes which we had in this country last year, left this country so hurriedly. We are all sorry to see people leaving South Africa, but I should like to remind the hon. member that those people are returning on a large scale. Only the other day we read in the newspaper that a whole crowd was returning to the Union from Australia. They say that an Afrikaner and a South African cannot live in that country. Nor does the hon. member say a word about the fact that the hon. the Prime Minister announced that he was going to establish a full Deparmtent of Immigration in order to try to strengthen the White population. No, he says nothing about that.

The third point to which he referred was the general slowing down of the country’s economic development. Subsequently he himself said that great development had taken place, development which had been brought about by utility companies for the future, but then he asked this: “Where then is all this prosperity?” I want to ask the hon. member this: Where then is this depression which he is talking about? The mere fact that the Revenue Account reflects far greater revenue than the amount budgeted for by the Minister, shows us that the position in this country is better than we thought a year ago. Financially we are in a much better position. Of course no one will deny that we in South Africa are faced with certain problems which affect the country adversely. There is not a country in the world which is not faced with similar problems. But it does not behove a person who should be giving a lead to the country to panic over things like that. I want to mention a few of those things.

The first is that Africa is regarded as one unit by the world outside; when anything goes wrong in Central Africa, in the Congo or those areas, the world outside thinks there is also something wrong in the Union of South Africa. That had a great deal to do with the outflow of capital to which reference has been made here. Because Africa is being regarded as one unit we find ourselves in this position that many of the sins of Central Africa and of North Africa are visited upon our heads and we have to account for them. Despite that position, we find that the hon. the Minister of Finance analysed the position, when he was in Johannesburg last week, and showed how South Africa differed from the rest of Africa and if you read that speech of the hon. the Minister of Finance, Sir, you will see clearly that the difference is as great as between night and day. You might just as well compare Siberia with England and say that the same things are happening in those two countries, as to compare Central Africa with the Union of South Africa. Here I have a statement made by Mr. T. Rees, export manager in Africa for the English Electric Company. Mr. Rees is in South Africa at the moment and on the 4th of this month he granted an interview to the Transvaler in which he said the following—

The South African economy is basically sound enough to meet fortuitous setbacks and he expects sustained agricultural development in the future.

This gentleman who views South Africa’s position more objectively than the hon. member for Contantia has done this afternoon, is not as pessimistic about our future as that hon. member.

A second point, which I have already mentioned. is that for the past 13 years the United Party has been busy telling the world how the National Party Government was ruining South Africa.

*Mr. E. G. MALAN:

Hear, hear!


The hon. member says “hear, hear!” If he tells people that, and those people withdraw capital from the country and he suffers as a result, he comes and blames the Government. The only thing that that hon. member thinks about is the small measure of sickly party political advantage that he can gain, the few votes he may gain by saying such irresponsible things. That is the only thing that is of any importance to him. The real interests of the country are of lesser importance to him. But in spite of these things which are said South Africa still remains one of the best fields of investment in the whole world and one of the safest. At the current market prices, Sir, investors receive 7½ per cent in the form of dividends on their industrial shares in South Africa to-day, whereas in America they only get a little over 3 per cent. I explained a few minutes ago how people in South Africa had bought up those shares which overseas investors had clumped on our market because they had lost faith in this country after Sharpeville. To-day those people receive from 10 per cent to 12 per cent on their investment, at the price they had paid for those shares. And those sellers would not have taken fright had it not been for the propaganda on the part of the Opposition Press and the Opposition in connection with what had happened at Sharpeville and other places. For 13 years the United Party has consistently indulged in this campaign of intimidation, and you actually find people who believe what the United Party says and that is why you have these phenomena, Sir. I can only say this to the United Party that where their arguments are always directed at apartheid, it will not avail them in the least to argue about it. We prefer apartheid and a White civilization in South Africa to hard cash. If hon. members on the other side of the House want it the other way about, they should clearly say to the public: Look, we only want a White civilization temporarily. Last year a prominent industrialist told me that he realized that the tide must turn against the White man in South Africa unless we carried on with apartheid. But he added this however: Just give us time for 25 years so that we can make money, then we will go and live somewhere else. That is the attitude of the United Party and the attitude of the Progressive Party. That is the attitude that will lead to a rich South Africa but a Black Government. We cannot support that.

A third factor that frightens people is the doubt about our continued membership of the Commonwealth. Hon. members opposite tell the world outside that if we were to leave the Commonwealth, or if we are forced to leave it, we shall suffer tremendously in the economic sphere. They say that we shall lose our trade preferences. I do not believe we shall leave the Commonwealth. I should like to know this from the members of the Opposition: Assuming they had been in power and had asked for a republic within the Commonwealth at the Commonwealth Conference, would their request have been granted? And will it be refused if we ask for it?

*Mr. E. G. MALAN:

We would not have asked for it because we do not want the republic.


That is what I expected. I have always known that they do not want a republic, in spite of certain statements which were made during the past few weeks. Let me tell the hon. member this, that membership of the Commonwealth as such is of no financial benefit to us whatsoever. I want to repeat that, because it is important: Commonwealth membership as such is of no financial benefit to us as far as trade preferences are concerned. I say that because nowhere in the agreements which provide for trade preferences does the word “Commonwealth” appear, and those contracts are not subject to cancellation on discontinuation of membership of the Commonwealth. In other words, assume we are forced out of the Commonwealth, it still does not mean that the Ottawa Agreement with its amendments will lapse. No, it can only lapse when the British Government specifically cancels that trade agreement. Nobody will tell me that the British Government will do that. The reason why they will not do so is that they are good business people. Because as far as ordinary trade is concerned, ordinary import and export, England exports more or less £80,000,000 per year more to South Africa than South Africa exports to her. Apart from that she conducts a lucrative shipping traffic round South Africa which yields her something in the region of £50,000,000 per annum. In the form of interest and dividends on investments in the Union England makes more than £100,000,000 per annum. That gives a total of £230,000,000 which she makes more than we do and does anybody want to tell me that England will try to wring the neck of the goose that lays the golden egg? No, Mr. Speaker, England is far too fond of gold to do that. I do not believe that.

Now I want to deal with something else that is causing trouble, another factor which is chasing money out of this country, and one of the factors which is advanced as a reason for the drop on the Stock Exchange over the past ten days or so, and that is the extremely irresponsible statements which the hon. member for South Coast (Mr. Mitchell) has made.

I think the hon. member for Natal South Coast has developed into a person who does not care one iota what happens to South Africa, as long as he can make a big fuss. He reminds me very much of a person 20 years ago who promoted himself from the rank of corporal to that of field-marshal. The other day when he got annoyed in this House and his hair became disarranged, I noticed that he flaunted a fore-lock very similar to that of Hitler’s.

There is an important matter in respect of which the United Party should tell us clearly what their policy is. We have just heard from the hon. member for Orange Grove (Mr. E. G. Malan) that they are not in favour of a republic. In the course of the debates which we have had in this House over the past few weeks, the hon. member for Sunnyside (Mr. Horak) said that our majority was too small for us to call out a republic and to maintain it. What does that mean? Surely it means that if they come into power they will not maintain the republic? The hon. member for Durban (Point) (Mr. Raw) said that the statement made by the hon. the Leader of the Opposition that they accepted the republic merely meant that they admitted that the National Party was governing the country and they did not want to break the law and for that reason they would accept it for as long as we governed the country. If we couple that with what the hon. member for Natal South Coast said at Durban last week-end, it amounts to one thing only and that is that when the United Party comes into power they will revert to our present status and they will disestablish the republic. The time has arrived that we get a clear reply on this question.


There are only three members of the United Party present at the moment: they are holding another caucus.


I notice at least that two of the provincial leaders of the United Party have just entered. I should like to learn from the hon. member for Florida (Mr. H. G. Swart) what his party intends doing with the republic when they come into power? Are they going to revert to our present status or are they going to maintain the republic?

*Mr. H. G. SWART:

That has already been answered.


That is the sort of prevarication that we get right through, Sir. But the constitution of the United Party says that they are in favour of our present relationship with the Crown.


Order! The hon. member must come back to the Bill. That aspect was disposed of last week.


I am referring to this question, Sir, as far as it affects the financial disadvantages which the country will suffer. I mention merely in passing that the United Party’s constitution says that they want to maintain the existing British connections. Are they going to change that now?


That is not relevant at the moment.


Very well, Mr. Speaker, then I will leave that subject. But the United Party will very soon have to pull the reins tight as far as the hon. member for South Coast is concerned or else that party must tell us finally that they support him and that they will wreck the new status which South Africa will assume on 31 May. I want to raise one other matter, namely another statement which has lately had some adverse effect on the Stock Exchange in South Africa and that is the statement made by the new President of the United States, Mr. Kennedy, in connection with the price of gold. I am raising this matter because I think the price of gold is a matter of the utmost importance not only to South Africa, but to the whole world, and in the second place I think that existing conditions in America are such to-day that if something is not done to alleviate the position, a world-wide depression may develop to the detriment of the entire Western world and to the detriment of our own country. For that reason I feel I am at liberty to say a few words in that connection. I want to point out that Mr Kennedy had no option in the matter. He had to say that he would maintain the existing gold price of the dollar because had he said anything else there would immediately have been speculation and gold would have left America on such a large scale that it would have created the biggest chaos imaginable. Any announcement on the part of America that it intends changing the price of gold will be made after the price has already been changed. There is no other way of doing it. For that reason I hope the public will not take that statement of the American President as seriously as the Stock Exchange has in fact taken it. When we study the position, it seems to me that it is no longer a question of policy whether America will change the price of gold. It seems to me that it has become a matter of political expediency. For that reason I hope people will not allow themselves to become too scared to buy gold shares because of what Mr. Kennedy had said. You will remember, Sir, that in 1957 we discussed a motion in connection with the price of gold. It was introduced by the hon. the Minister of Economic Affairs (Dr. Diederichs) who was the member for Randfontein at the time. Nobody envisaged at that time that America too would experience foreign currency problems. but the position is nevertheless that she has foreign currency problems to-day. America is in the process of losing her gold reserves on a large scale and all sorts of artificial measures are being adopted in an attempt to put a stop to it. In view of these measures which are being taken and in view of the fact that the whole world is left guessing as far as this matter is concerned, I trust that action will be taken in the most orderly manner to solve this problem on a reasonable basis. The real position is, of course, that the dollar has been valued too high. Its purchasing power is less to-day than it was during any time since 1794 and for that reason America can no longer compete with the outside world, particularly not with factories in Europe, factories which came into existence after the last world war, the most up-to-date factories which can consequently produce at the lowest prices possible. That has resulted in America losing overseas markets. On the contrary countries abroad are to-day marketing articles in America which compete on the American market. The confidence of the world in the dollar has been shocked and there is an outflow of gold as a result, and America finds herself in an unfavourable foreign exchange position. Then there is another phenomenon (and that brings me onto the subject of a depression) and it is this: According to the latest newspaper reports there is large-scale unemployment in America to-day. During the past three months unemployment has increased by 50 per cent and 76 of the 150 industrial areas have been proclaimed areas where there is acute unemployment (where unemployment is over 6 per cent). I am merely mentioning this in order to give hon. members an idea of what is happening. The gold reserves of America have dropped from more than $22,000,000,000 a few years ago to $17,415,000,000 last week. Against that America has heavy commitments abroad. President Kennedy himself announced the other day that there were $15,000,000,000 invested in the U.S.A. from abroad and that those investments had to be protected. They are long-term investments or reasonably save investments. In addition there are short-term trade investments which brings the total to over $22,000,000,000. The position of the dollar, therefore, is weak, Sir. Then you have the phenomenon in the other direction, viz. that the money of Germany and of Switzerland has been valued too low. They are too strong. As a result there is a lack of parity between the various monetary units in the world, and while the United States of America are trying all sorts of measures to get out of her difficulties, I want to bring an important report by their special financial correspondent in London to the notice of the Minister, a report which appeared in the Sunday Times of yesterday’s date. The report says this in connection with President Kennedy’s message to Congress—

There is no mistaking the vigorous expansionist theme in his domestic proposals …. The President re-affirmed the decision to have no truck with the devaluation of the dollar. How the two can be reconciled will be the main problem of international discussions which are to begin next week in Washington with a view to strengthening and amending the International Monetary Fund.

And then further on—

What is at stake may be a complete recasting of the system of international repayments. The objective is an attempt to make good the shortcomings of gold and the present price of the metal in providing a sufficient volume of international liquidity and reserves.

It seems that this coming conference will be of the utmost importance and I want to ask the hon. the Minister and his financial experts whether they are well informed as regards this coming conference which intends converting the International Monetary Fund into another body, a body which will control the reserves of the various countries throughout the world that belong to it. Because that is what this report amounts to. If that is the position I want to know whether this is not something which affects the sovereignty of other countries. At this stage I do not want to say anything more about the price of gold except to say that you need liquidity, a great amount of liquidity, much more than we have to-day, if you want a free flow of international trade in the world; and I think every member in this House is more in favour of the idea that the price of gold should be increased than they were in 1957. To judge from information from abroad it appears that that is the general feeling to-day, except in the United States. There is one thing, however, which worries me and that is the policy which America follows in a certain respect. The policy in America to-day is to give money to those countries which are short of the necessary foreign currency so as to enable them to buy from America. That is done under the “lend-lease” system and similar arrangements. When you go into this question, Sir, you can come to only one conclusion, namely, that where the United States give money away, or partly give it away and partly lend it, to countries which are not gold-producing countries, with the object of providing them with more foreign currency so that they can buy from America, the United States are increasing the price of gold to those particular countries but not to the gold-producing countries. Is that not discrimination against the gold-producing countries and against countries which have sufficient foreign currency? And is that not a way of circumventing this desire for an increase in the price of gold, something which is essential to the whole world and this desire for greater liquidity which is also as essential? I want to ask the hon. the Minister whether this is not a matter which should be raised on international level so as to ensure that it goes no further. Because I think it is unreasonable on the part of America to say that the price of gold must remain at a certain figure, if she gives certain countries special benefits, benefits which amount to nothing less than an increase in the price of gold as far as those countries alone are concerned.

*Mr. M. J. H. BEKKER:

I rise to participate in this debate, in the first place in the knowledge that with two exceptions the agricultural industry is our greatest asset and makes the greatest contribution to our national income, and in the second place because it is accepted by all that the agricultural industry determines the balance between the platteland and urban population groups in both the social and economic spheres. But we are now faced with this problem: What are we to do to place the agricultural industry on a stronger and firmer basis than was the position in the past, so that the industry can maintain its rightful place? In this regard I want to quote from para. 417 of the report of the commission of inquiry into European occupancy of the rural areas in order to impress on the House the importance of this aspect—

The commission, after a profound and searching investigation into all the aspects of the White occupancy of the platteland, and after a thorough study of all the problems relating thereto, came to the firm conviction that it is in the best future interests of South Africa to maintain on the platteland the maximum number of Whites, who are assured of a worthy and safe existence. There is definitely no way of arresting the exodus from the platteland, unless those engaged in agriculture are ensured of a sound economic existence. Only a prosperous, well-established and vocation-conscious farming population can make a positive and essential contribution to the continued existence and security of White civilization. The recommendations which follow are based on this fundamental conclusion.

Consequently, when we think of the platteland, we are thinking of the soil of our father-land which is our nation’s most valuable asset, because it is the resources which our soil contains that must feed our people. To neglect this asset is to endanger the future existence of any nation. Although a certain section of our people are known as the farmers who have been entrusted with the right to own that land, they form part of the great whole of our national economy together with so many others in other industries and occupations. In this way all of us are working separately and together to assure each citizen a place in the sun, to the honour of our nation and fatherland.

When we emphasize the weal and the woe of the farmer, we do so in a spirit of deep gratitude towards all the other groups and industries within the framework of our national economy, and in the full realization of the equal rights of others to assistance by the State. However, I maintain that the agricultural industry is one of the oldest in our country, and is also the industry which is the most subject to influences beyond its control. The unfavourable climatic conditions of our country are such that by international standards our country can really not be regarded as an agricultural country.

We can now proceed to examine the position of our agricultural industry more closely, and we find that here we have an industry which after approximately 300 years—in the northern provinces it is hardly 100 years old—has been developed to such an extent that our agricultural industry already holds a place of honour amongst the nations of the world. I want to show the House how in this country the agricultural industry has also shown itself to be a very stable factor as far as our national income is concerned. In 1938—and I am now quoting from the Finance and Trade Review of Volkskas for December 1959—agriculture contributed £49.8 million. This represented 12.6 per cent of our national income as compared with the contributions of other industries. By the year 1957-8 we were already contributing £244.3 million, that is to say, 12.3 per cent of the national income. In the light of these figures we have the right to say that our agricultural industry is a stable industry. Seen then from the point of view of the country’s economy, the Government has a certain responsibility towards agriculture as an industry. Mr. Speaker, it has been the experience in all other industries, and the same of necessity applies to agriculture, that there are certain growing pains and problems which make themselves evident over the years. Thus as long ago as 1934 a commission of inquiry was appointed to investigate the basic problems of the agricultural industry. I now read from para. 935 of the report of the commission which was appointed to inquire into co-operation and agricultural credit—

The Union farmer has reached the stage of development where production credit is an essential requirement to enable him to conduct his farming operations economically and successfully. In the more developed areas this need has long been felt. Other countries have recognized the need in providing special short-term facilities to farmers in addition to the long-term Land Bank systems and the need for such short-term facilities is becoming extremely pressing in South Africa.

This report was submitted as long ago as 1934. But the report goes further, and I want to read to the House one of its recommendations, as contained in para. 11—

That the existing agricultural credit system should be revised with a view to transforming the present Land Bank into an independent mortgage bank obtaining its funds from the public by means of farm mortgage debentures, co-ordinating the disbursement and collection of State funds to agriculture and introducing a system of chattel mortgage which will enable producers to pledge their movable assets as security for short-term loans and further, that a technical committee be appointed to inquire into the financial and banking aspects of these proposals and to advise as to the form of credit machinery ultimately to be adopted.

Mr. Speaker, as I have shown, as long ago as 1934 we already found that this urgent need had arisen amongst the farmers. I must say that the then government lent a sympathetic ear, because as an immediate result of this report the State Advances Recoveries Act and the Farmers’ Assistance Act were adopted in 1935. When these Acts were implemented, we found that an amount of approximately £7,000,000 was ploughed back into the agricultural industry. This enabled our farmers for a number of years to combat the problems with which they were faced from time to time. They were sufficiently strong financially to be able to meet these problems on their own. In 1956-7 further problems arose. But, Mr. Speaker, I want to show that during this period from 1935 to 1956 there was not any urgent necessity for putting the Acts I have just mentioned into full operation. The need was not present. During 1957-8 it once again became necessary to plough back an amount of approximately £14,000,000 into the agricultural industry through the medium of the machinery under the Farmers’ Assistance Act and the State Advances Recoveries Act. But no matter how grateful we are for that assistance and no matter how much we may appreciate it, there are nevertheless indications that this is not a permanent solution which will safeguard the future of our White farming community on the platteland. I therefore ask the House to consider briefly and to make a superficial analysis of our agricultural economy.

On the one hand we have the available financial resources, that is to say the private investment sector, to which we owe a great debt of thanks. The private sector is based more specifically on the profit motive. These are business and financial institutions which lend money, and it is their responsibility to obtain the highest possible dividends for their shareholders. That is the first aspect which I should like to mention. Then we have the Land Bank which is a very powerful financial institution, from which the farmer can obtain funds. This is also a completely independent financial body under the present set-up. Then we have the Farmers’ Assistance Act, the State Advances Recoveries Act, and in addition the various State Departments which provide credit to the farmers from time to time on the basis of merit and in accordance with the circumstances.

When on the other hand we consider the requirements of the farmers, I should like to classify the farmers into five different groups: (a) We have the financially strong and self-supporting farmers who are prosperous and, who do not need any assistance from anyone including the State, (b) Then we have the following categories of farmers with sufficient assets which can be used for security. This is the farmer who due to his creditworthiness can normally look after himself when unfavourable conditions arise, (c) In the third place we have the less well-to-do farmers, and it is these people who experience a shortage of working as well as development capital from time to time, (d) Then we have the young farmer, the youth who is starting out, as well as the man who had previously followed some other occupation, who has found it impossible through circumstances to realize his desire also to own a little piece of his fatherland, and who may start farming when he is middle-aged, (e) Then finally we have the farmers on our settlements.

Mr. Speaker, under normal circumstances these various types of farmer whom I have mentioned are financially self-supporting, i.e. when there are no special problems. But let us now make a brief analysis of what the position of these various groups will be if a state of emergency should arise.

We immediately find in the first place that the capital which normally flows from the private sector to the agricultural sector, dries up and is then gradually withdrawn because, as I have shown, these people are normally motivated by the profit motive. It is their duty and their task to ensure that the money which they invest earns profits for their shareholders. For that reason it is a quite natural tendency which we do not have the right to condemn, that that money dries up and is gradually withdrawn. As a result of the favourable position which groups (a) and (b) find themselves owing to their creditworthiness and asets which they can use as security, it is not essential for them to seek help elsewhere. They still offer a safe investment to these financiers in the private sector, and for that reason these investments are left untouched. But when these farmers also need the assistance of the Land Bank and other institutions, they have sufficient assets to use as security so that they need not suffer any financial inconvenience whatsoever. But then we turn to these groups (c), (d) and (e). These are the people who are not as creditworthy. From time to time, even under normal conditions, they are faced with this shortage of working and development capital. In addition, we have the farmer who is starting out and who to-day has to buy land at the highest prices. When he starts farming, he is immediately faced with a shortage of capital, and this is even more so when a state of emergency arises. The settler is exclusively dependent on the Department of Lands for assistance. Mr. Speaker, I want to show further that if the State did not periodically and in times of emergency accept the responsibility for providing the necessary financial aid to these groups, there would be only one course open to them, namely to cease farming. They cannot remain suspended in the air for an indeterminate period. They must obtain assistance somewhere. The next thing that happens is that such a person has to disappear from the scene as a farmer; he has to offer himself on the labour market, and this usually means that he must work as an unskilled labourer, probably in our cities.

Mr. Speaker, I want to go on to indicate what the report of the commission of inquiry into the European occupancy of the rural areas has said on this point. I am reading from para. 428 of its report—

The Commission agrees that the land will eventually be owned by him that cultivates it in the sweat of his brow; and the Commission is convinced, that if the tide does not turn and the growth of non-White preponderance on the White platteland continues, this state of affairs will in the end hold out a serious threat to White civilization in this country.

And then there is para. 430—

  1. (1) Economic:
From personal observation and after weighing all the evidence at its disposal the Commission has come to the conclusion that the main reasons for rural depopulation and exodus from the farms are of economic origin.

As I have already shown in my classification of our farmers, the last three groups are exclusively dependent on State aid in times of need. This is also the finding of this Commission which did very thorough work. Let us also analyse briefly what State aid our farmers receive at present. Prior to 1935 special legislation had to be introduced whenever a state of emergency arose. Without such legislation State aid could not be made available. But because, as I maintain, our Government keeps its finger on the pulse of the farmer, the law has since been so amended that certain State aid can be advanced to the farmers merely with Cabinet approval. We feel that this too does not yet go far enough. In cases of emergency the time factor is of the utmost importance. I believe that hon. members will agree with me that when a state of emergency arises in a certain area, and emergency aid schemes have to be worked out from scratch, the matter has to be taken through the various channels via the different departments right up to the responsible Minister, and it must then go before the Cabinet, ten to 14 days can easily elapse. I therefore feel, Mr. Speaker, you will also concede, that during these 14 days during which these people are in distress, a great deal could be done. You and I believe the the Cabinet will give the necessary approval, but the man who must assist one, the shopkeeper or the bank, the man from whom one must buy the necessities of life after one’s crop is ruined, does not believe it. He says he wants proof. We even find this to a lesser extent in the case of our co-operative societies. But that is the bitter truth. We then go further and we also find differences in the approach to, or in the interpretation or application of, that policy by the various State Departments. We find that when three farmers live next to one another, their economic position and their social position are in general more or less the same. They are neighbours and they are acquainted with one another’s affairs. The one farmer’s position is exactly the same as that of the others. If a disaster strikes them or the army worm, for example, destroys their crops, they approach the State for assistance. But. the one man falls into the category which the Land Bank must assist. The other man falls into the category which must be assisted by the Land Board or the Farmers’ Assistance Board; while the other perhaps has to be assisted by the Department of Lands. I firmly believe that all three organizations are sincere in their intentions. They want to give every assistance to these people who are farming under their guardianship. That is the basic principle. But the various schemes under the various Acts are implemented and applied in such a way that the amounts granted differ vastly as do the methods of collection. Now in practice we have the position that these three farmers compare notes. One says that he has received £100 and the other says he has received £200, and they simply cannot understand it. The first person the farmer blames is his Member of Parliament and the second is the Government. The position is in brief that these farmers do not believe one when one tells them that is in accordance with the provisions of the different Acts. They cannot accept it. As a matter of fact, nor can we expect them to accept it. If they accept it, they say: But can you not rectify the position; can you govern the country in this way? This is something which definitely emphasizes the importance of this matter. The solution is that the various schemes for helping the farmers should be consolidated so that we can expect uniform action by the State.

Mr. Speaker, as the representative of a constituency which consists of voters who come from the four corners of our land, I can be expected to give a reasonably representative opinion. Some of the most prosperous farmers of our country live in this constituency. In addition products of practically every variety are cultivated and under all possible climatic and other conditions. Every possible plague known to agriculture is found in that constituency; it is also very much subject to the ravages of nature. Yes, Mr. Speaker, this is in truth a constituency which many hon. members will envy me. Against this background of experience and of deep study, I once again want to confirm the statement I made just after my election, as reported in the Transvaler of 29 July 1960. At that time I said—

The necessity exists for the establishment of a full-fledged State department with its own Minister, under which all the existing State schemes for assisting the farmers as well as the settlers will be consolidated.

Let us now examine the future of our agricultural industry. I maintain that after 25 years—I am now referring to the year 1934 when the Viljoen Commission sat—we now have reason to review the position once again. In saying that I am not alleging in any way that the Government has not kept pace with the needs of our farmers. But I do feel that such tremendous development has taken place in our agricultural industry since 1934, that we should consolidate the laws, which have been amended from time to time, the application of those laws and the various departmental policies.

Mr. Speaker, I now want to tell the House that at present we are experiencing an unprecedented land hunger in our country. I quote from the consolidated figures for the past 11 years which I have obtained from the hon. the Minister of Lands. In 1948-9—this was immediately after the war and I contend that at that stage we could have expected a tremendous demand for land from the soldiers who had returned from the war and who had perhaps been uprooted, etc.—there were only 408 applications, of which 192 were approved. These applications were under Section 20, that is to say, the old one-tenth system, as the farmers called it. But these numbers have increased and we find that by 1947-8 applications had more than doubled, namely to 1,017, and of those we were able to assist 313. In the following year there were 777 applications of which the Department of Lands could grant 228. We then go further and analyse the position on our settlements. In the year 1949-50, 4,644 applications were made to the Department for State-owned land on closer settlements. Unfortunately as a result of circumstances, we were only able to place 150 of the applicants. In 1957-8 there were 3,755 applications and of those applicants 87 were placed on settlements. I now want to give the House the number of applications which the Department of Lands alone has received. I am not even referring to private purchases. Over the past 11 years the Department of Lands alone has received a total of 26,957 applications. Of these applications the Department was fortunately able to give favourable consideration to a total of 3,371. This gives us the position that over a period of 11 years there were 23,586 people whom the State could not assist and who therefore were unable to acquire land because they were not financially able to buy land themselves. We concede that many of these people may since have been transferred to another field of activity or industry in which they are contented. I am merely mentioning these figures to show the House how great a demand for land exists in our country.

To support these figures I must also show how land prices have risen. This is proof of the truth of my submission. I am quoting from the Finance and Trade Review of Volkskas for December 1959. which shows that during the period 1938-41 the average price of land was £2.4 per morgen. During the period 1946-52 it was £6 per morgen, and during the period 1953-8 it was £9.8 per morgen. This is an indication of the tremendous demand for land, and it should also indicate to us the potential development which we can expect in the agricultural industry.

Mr. Speaker, it will become necessary for us to help many of the farmers who in the meantime have had to farm under difficult conditions and who may have left the industry temporarily, to re-establish themselves. We must establish the majority of the people to whom these figures refer on land. Furthermore greater demands will be made of the agricultural industry as a result of our rapid industrial development. We shall be faced with competition and we cannot escape that fact. But we also have the position that industry offers the private sector an attractive investment field. Private capital earns a far better return in industry than in agriculture. Hence the necessity for the State as such to keep a watchful eye on the position in order to see what development is taking place in agriculture.

There is another factor, namely that our farmers will have to realize that we shall have to farm on a more scientific basis. For this purpose financial aid is also required. Capital is required and if the farmer does not have the capital, how is he is use more scientific methods? After all he needs the necessary implements. There is the essential investment in mechanization. We are living in an era during which manual labour is scarce and expensive, and in most instances unobtainable. This has caused an unfortunate state of affairs for many people, namely that we have to mechanise at a rate which may not be a sound relationship to our farming units, but we are obliged to do so by circumstances.

The basic principles which are envisaged under this new policy are the following: By taking this step the State will accept the financial responsibility for assisting certain farmers under certain circumstances. Hon. members must understand me correctly: The gates must not be thrown open so that anyone can simply ask for as much as he wants. That would be an impossible task and it would be foolish to ask the Government to do any such thing. But it will be necessary to assist and to look after these persons whom I have classified into groups (c), (d) and (e) and who cannot obtain assistance from any other source. As a matter of fact the position is also that wherever the need arrives such State aid must be made available to the farmer at any time and in any area. I want to give a practical example. In the past the policy was that the State aid to which I am referring in this particular argument, was applied on a regional basis. If there was a severe drought in district (a) or in certain districts, all the bona fide farmers in that area were regarded as qualifying for assistance. That is not what we want. We ask that a slight amendment should be introduced. We may have a district which is particularly prosperous, and in such a district which cultivates tobacco for example, there may be a hailstorm. While there may be a thousand prosperous farmers, 50 of those farmers may not have a crop. In taking this proposed step, it must be possible for those five or ten farmers who are affected in this way, to qualify for State aid. That is why I submit that this aid should be made available at any time and in any area, and not necessarily on a regional basis. In cases of essential development where the productivity of the unit is being increased, consideration must also be given to making long-term capital loans available with the main object of increasing the productive capacity of the unit.

There is also the collection policy of these organizations. We feel that in its collection policy the State, if it accepts the role of financier, must reveal the necessary flexibility—and this can only be done by the State; we cannot expect the private sector to reveal such flexibility in collecting debts because as I have said they are mainly concerned with the profit motive and this money is advanced so as to earn profits. And it is for this reason that since 1935, it has only been necessary to write off 4 per cent of the debts owed to the State as bad debts. This is proof of the following great truth: Help the farmer and even if he takes ten years, he will pay back his loan. If there are two, three, four or more crop failures in succession, we must show this necessary flexibility because at suchm times the borrower may not be able to meet his obligations to the Department. We urge that the necessary flexibility should be shown.

Mr. Speaker, I ask the House in considering this matter, to do so on a national basis; we must realize that there is one section of our people, of the White population, who are going through difficult times, who may be going under; and this timeous State aid will mean that we can save some of them and by so doing further protect and develop our agricultural industry as an industry which, as I showed at the beginning, produces a stable revenue for the State.

In conclusion I should like to convey my thanks to the Government for what it has already done for the farmer an individual and for the agricultural industry as a whole. Mr. Speaker, there is just one final thought I want to express. During previous debates it has been suggested that when such aid is advanced to the farmers, it should be given on a conditional basis. Such farmers should be prepared to obtain this financial aid from one source alone, and this aid will be accompanied by the necessary technical guidance with a view to permanently rehabilitating such farmers. This is a very sound idea and not one of us would dare to belittle and under-emphasize the importance of technical guidance for our farmers. But we must nevertheless guard against advancing this financial aid to capable, adult, experienced and self-respecting farmers on a conditional basis; we must guard against branding these farmers in giving them State aid, as people who are bywoners of the State. In taking these steps, we must do so with the utmost caution and discretion.


I have great pleasure in congratulating the hon. member for Groblersdal (Mr. M. J. H. Bekker) on his very able maiden speech. I must specially congratulate him as he has made such a perfect study of credit facilities that are necessary for the farmer, and I can see that the hon. gentleman is going to be a great asset to this House, particularly as he speaks with such assurance and with such knowledge.

The hon. the Prime Minister in his speech in reply to the no-confidence debate, made the following remark—

I want to say with the utmost certainty that South Africa has had a good year. South Africa has undoubtedly enjoyed a reasonably prosperous year. When we study all the statistics which can be regarded as a barometer of prosperity or recession, we find prosperity in every field.

The hon. the Prime Minister speaks about the steady rise of the national income, and he says “throughout, without one single exception, progress is evident. South Africa is experiencing a period of prosperity”. Sir, I want to know who did the Prime Minister consult when he said these things? Who were his advisers when he made a statement like that? Did he think at all of the farmers of this country when he made that statement? Because he says very clearly “without one single exception progress is evident”. Did he ask the farmers of this country what their position was? Has he asked the citrus farmers, the wattle farmers, the dairy industry, the pineapple producers, the maize farmers, the meat producers, the sugar farmers, the poultry farmers, the onion producers? Has he asked any of them whether they are in this state of prosperity that he talks about? Have they enjoyed this undoubtedly prosperous year when the national income is steadily rising? Has he asked the farmers what their economic position is? Did he ask producers of fresh fruit and vegetables whether they find it an economic proposition to produce fresh fruit and vegetables?

In regard to the citrus farmer, is it not true that the citrus farming industry brought in £18,000,000 last year and that this year they exported 2,000,000 more boxes but that they will be pleased if their return is £9,000,000? That is exactly half of what their income was last year.


Whose fault is that?


That is the fault of your policy.


I am asking who the Prime Minister consulted when he said that South Africa had had a prosperous year. I ask the wattle farmer, is it not true that the price of wattle is so uneconomic that farmers do not know what to do? Is it not true that after 1955 the price of this commodity took a steep downward trend? Is it not true that the price of dried bark fell from £31 per ton in 1954 to £21 per ton 1961? The price of wattle extract fell from £70 to £53 a ton in five years. Is it not true that bag-worm is now the worst ever and that the farmers find it absolutely impossible to spray because it is too expensive and uneconomic at the present price, and that trees are becoming denuded of leaves? I ask again whom did the Prime Minister ask? Did he ask the dairy industry? There has been an increase in milk production because of better farming methods. The amount of cheese and butter made has increased, but it is also true that consumption has remained static. There have been increased production costs and losses on exports. In this country the consumption of milk per capita is amongst the lowest in the world and there is an extra reason for this increase in production. Under the soil conservation scheme this Government advised the maize and wheat farmers to plant grass to restore their soil. The farmers at that time warned them that it would bring about increased production, but they took the advice of the Government and produced more milk and cheese and butter, but now they find that there is no market for their products. I find that Organized Agriculture says the following—

Twee jaar gelede het melkproduksie geweldig gestyg. Daar was destyds voorspellings dat die algemene aanvaarding van ’n grasrusoesskema as middel vir die herstel van uitgeputte grond, ’n oorvloed melk sou lewer wat met die huidige produksiekoste in ag genome nie ’n mark sou vind nie. Grondbewaring kan nie by die mark aangepas word nie, en die verwarring wat nou in die suiwelbedryf heers bevestig hierdie woorde … Geen boer sal homself bankrot maak om sy grond te bewaar nie. As die gemeenskap dit van die boer vereis dat hy die bodem vir toekomstige geslagte moet bewaar, dan moet die gemeenskap ook sorg dat die boer in staat is om dit te doen.

But the hon. the Prime Minister says: “I want to say with the utmost clarity that South Africa has had a good year.” Has he asked the pineapple farmers? Are they having a part in the steady rise in the national income, or are they suffering from over-production and from loss of markets? Why are the farmers from East London to Bathurst and portions of Alexandria leaving their farms forlorn and deserted? Why are the farmers in Natal around St. Lucia Lake deserting their farms? These farms, and especially the ones around St. Lucia Lake, were bought with the savings of many people who had what the hon. member for Groblersdal (Mr. M. J. H. Bekker) called a “grondhonger”. They bought these farms with the savings of a lifetime and cultivated their lands very well and built houses, but they had to desert these farms and go back to take jobs again.

Did the hon. the Prime Minister consult the maize farmer? What is his position? The Prime Minister says that throughout, without one single exception, progress is evidenced, and South Africa is experiencing a period of prosperity. It is true that in the past the maize farmer had 15 years of prosperity, but because the margin of profit to the maize farmer on the present determination of the cost structure was so low he is now in trouble after three years of drought and difficulty. I want to take just one case. The price of maize is calculated on the basis of two-thirds being production costs and one-third being profit, the sum from which the farmer has to live, educate his children and improve his farm. That is more or less 20s. for production costs and 10s. profit. Let us take it that this farmer has one year of drought, then he has lost plus minus 16s. per bag because that is the sum that he has spent on fertilizer, ploughing and cultivating his land and on fuel. That is the sum he has spent before reaping time comes. Let us take it that the year after that is a normal year and he gets the maximum profit of 10s. a bag, but last year he was 16s. down, so he still owes 6s. a bag. The third year is also a normal year. I said that the maize farmers have had three bad years, but I am now taking a case where he only has one bad year. The third year is normal and again he has a profit of 10s. a bag. He now has an over-all profit of 4s. a bag if I deduct the 6s. he was still owing from the previous year. This means that taking an average over three years he has a profit margin of Is. 8d. a bag. On this he has to live, educate his children, pay his interest and improve his farm. I ask whether this is humanly possible when the price of his product is calculated without taking into consideration the ordinary risk he has to run from the elements.

Did the hon. the Prime Minister consult the onion producer? What is his position? Or is there chaos in his marketing, as is the case with meat producers? The meat producer is back where he was 20 years ago.


That is not true.


The permit system has been cancelled, and although that system was never perfect, instead of improving it this Minister has thrown it overboard without consulting the farmers, and what do we find? We find that on one day in one place there is a fluctuation of as much as 6d. per lb. in the price of meat. As a matter of fact, the farmers of this country are beginning to wonder whether this Minister is at all in favour of controlled marketing.

What about the sugar industry? That industry has been prosperous all along because it was a tightly controlled industry, but now we find more and more ministerial interference. We find that where the sugar people themselves put a moratorium on quotas, the Minister came and granted extra quotas, with the result that the farmer is facing cut quotas. We find in the dairy industry that local consumption has been stagnant, and as the result of these factors there has been a 23 per cent cut in production last year. We find that in his annual general report the Chairman of the Sugar Association said that the industry had faced a loss of £6,000,000 last year. This is a £35,000,000 industry and in one year it has to bear a loss of £6,000,000. This is the prosperity. Again, I ask who did the Prime Minister consult? Did he ask the Minister of Finance who told me on 10 February that £32,590,000 had been spent by the Land Bank in one year, in 1959, to help the farmers, and that in 1960 £22,000,000 had been spent. When you take into consideration the amount spent by the Farmers’ Assistance Board, you have about £62,000,000 spent on the farmers in two years. For what? Just to keep them out of the insolvency court. It is only a changeover of creditors. They still owe the same amount of money and they still are faced with the same narrow margin of profit which has brought them to this state. They are still faced with stagnant or shrinking markets and falling prices and losses on products sold overseas. I have said that in two years £62,000,000 was spent just for a changeover of creditors. Is this the prosperous state the farmers find themselves in? Now the hon. member for Groblersdal, whom I congratulated on his maiden speech, based his whole speech on credit and credit facilities for the farmer. In this time when all the experts on all sides say that there should be an extension of Land Bank funds just to give the ordinary credit facilities, the Land Bank curtails its credit, and why? Because in this prosperous time the Land Bank has more money than it can use. Is that it? Or is the Land Bank short of funds? Did the Prime Minister ask the Land Bank officials who tried to float a loan a little while ago? Did he ask them what their success was? I would be glad if the Minister of Finance would tell us what success they had in floating that loan, or the failure of it, or whether it was held back. I would like some information on that point, and if he did not succeed, why not? Because in a prosperous country surely that loan would have been granted. I ask again whether the Minister of Finance will tell us what the Land Bank says about the shortage of money? The Nationalist Party has constantly told the country, as the Prime Minister is telling the country now, that the country is flourishing. In debate after debate in this House hon. members on this side have pointed out that the farmers were getting more deeply into difficulty. In 1958 the then Minister of Agriculture said that the position was being exaggerated. In regard to the country’s general economy, I hope the hon. member for Pretoria (Central) will say the same thing, that the position is being exaggerated. The present Minister of Agricultural Economics and Marketing, whilst launching a personal attack on me, said that one would think that the agricultural industry was on the brink of insolvency. He went on with the same arguments which we who listen to the various debates on agriculture heard him using during the last week and the week before. It is tremendously interesting to note that there are five motions on the Order Paper all relating to agriculture, one in regard to economic planning, the others in regard to credit facilities, land prices and production costs, drought, etc. These motions are all drawing attention to the plight in which the farmers find themselves. I ask who did the Prime Minister consult, and where I reply to my own question I must say he consulted the Minister of Agricultural Economics and Marketing because he must have believed him when he made this statement, and as a reward for his lack of knowledge and for the misstatement that all is well with the farming industry he has made him a Minister. Because there are now two Ministers of Agriculture, and therefore I suppose the Prime Minister thinks we are now better off. I heard a suggestion made in the House this afternoon that we should have a third Minister, but heaven help the farming industry if that should come about. We have our Marketing Act, but the Act has not been able to prevent the steady narrowing of farmers’ margins as production begins to exceed the demand for many agricultural products. The Marketing Act has not been able to prevent the steady narrowing down of the profit margins. If the farmer cannot get a fair price for his products he cannot even conserve the existing productivity of his soil. We are still unable to distribute the abundance that we have. Let us take oranges. The White people eat a fair amount of oranges, but what about the Bantu and the Coloureds? Their consumption is negligible. If they eat one orange a week more, it would mean 5,500,000 cases of 100 oranges each to meet their requirements. It sounds almost impossible, but it happens to be true.


That is right through the year. There are no oranges in December.


That hon. member has never heard of cold storage, it seems to me. If the Coloureds and the Bantu increase their consumption of meat by ½ lb. a week it would mean 9,500,000 more sheep carcases or 712,000 carcases of beef. So I can go through the lot. I just want to name one more. The present production of butter is 1,750,000 lbs. If each of our Coloured and Bantu eat 2 ozs. more, i.e. 2 tablespoons a week, the production would have to be increased by 1,000,000 lbs. a week. In this fantasy of prosperity where farmers would not be faced with surpluses and falling markets, at the moment we are exporting at a loss because our own people cannot afford to buy these products. We are subsidizing the production of food for the benefit of people beyond our borders. There is neglect on every side by the Government, as the motions on the Order Paper prove, and they do not come from this side of the House. I want it to go on record that the facade of prosperity which the Prime Minister has built up is a false one as far as the farmers are concerned. The Government is sacrificing the prosperity of the farmer on the altar of their ideology. Because of their ideologies they have created economic stagnation which has restricted the inflow of capital and stopped the expansion of industry, with a resultant cut in wages for the employee and the loss of increased employment. Their attention has been fixed on the racial ideology and on apartheid, but they have left the farmer at the mercy of all and sundry. There has been no planning in this country for the farmer. I want to come back to something else. In other countries subsidies of from one-quarter to one-third of the cost of fertilizer is paid by the Government. This Government still pays the original £1 a ton introduced by the United Party Government and there has been no increase whatever. The cost of fertilizer has gone up, but the Minister does not seem to know that. As regards phosphates, the Government is forcing the fertilizer firms to use a certain percentage of local phosphates, and the farmers have to subsidize Foscor. Every year £20,000,000 is spent on fertilizers. The South African farmer is also subsidizing Sasol because he has to buy ammonium sulphate from them at a more expensive price than the one he can import it at. If these industries must be subsidized, let the country as a whole do it, but do not penalize the farmer. I say that there is a stampede on the part of the farming community to get themselves back on an economic footing. I say that in the farming industry there is confusion worse confounded, and it is going to become worse as long as this Government sticks to its policies, as long as we do not get in capital from overseas and our industries cannot expand and we cannot sell our products to our own people because they do not have a better income.


Mr. Speaker, the hon. member who has just sat down has made me so sad that I was reminded of Gray’s “Elegy”, where he said—

  • Where palsy shakes a few last sad grey hairs,
  • Where youth grows pale and spectre-thin and dies,
  • Where but to think is to be full of sorrow and leaden-eyed despair!

I have quoted it, but it was not meant personally. We have again heard the old story about how difficult the farmers are finding things. That makes me think that the hon. member who has just sat down is remembering the old United Party days when there were shortages of all kinds and people had to queue up for everything. We cannot talk in the same breath of all the bad years and also of under-consumption. We cannot talk about record crops and then say that too little of our agricultural products are being consumed and therefore there is a surplus. Surely it is not the fault of the Minister of Agriculture if people are drinking too little milk, or if too little of our other products is being consumed in the country. The fact that the hon. member speaks about the “abundance that we have” is something of which the Minister of Agricultural Economics and Marketing can be proud, knowing that there is nothing wrong at least with the production side of our agriculture. The hon. member referred to the onion growers. It so happens that there are many of them in my constituency, but what was her contribution when a few years ago attempts were made to establish orderly marketing for that product, and when we tried to get the districts right throughout the country to allow themselves to be proclaimed so that there could be orderly marketing for that product? That is one of the reasons why it failed, because she did not do her share.

But I want to discuss a different aspect, not so much the production pattern or the consumption pattern of the platteland, as the population pattern. I have noticed in this debate that various speakers on both sides of the House referred to the depopulation of the platteland. I also want to refer to it, but in a particular sense. The fact that various hon. members mention it indicates to me that it is something which is foremost in our minds, and it is a good thing that that is so. Let me say immediately that I am not one of those who thinks that the depopulation of the platteland is always a bad thing. There was a time years ago when the poor White problem was very serious and when the process of depopulation and the migration to the cities helped us to solve that problem. In those days there was prejudice in the mind of the plattelander against the migration to the cities, and there were many sound reasons for it. The unskilled plattelander who was squeezed out and could not make a living at that time came to the cities and there he created a problem. There was no social pattern into which he fitted, and no educational pattern into which he fitted, or even an industrial pattern. There were not the educational and church connections to which he had been accustomed, and then he became an outcast as a misfit in the city to which he had gone. To-day the pattern is quite different; to-day there is security in regard to employment; there is housing and there is employment and a social pattern into which this person fits and in which he feels happy, and this process made its contribution not only to the solution of the poor White problem, but it also contributed towards enlarging the farms, by again making economic units of those agricultural units which had become too small due to subdivision. It can therefore be a healthy thing if it is a natural thing, but the depopulation of the platteland is not a healthy phenomenon when it is unnatural, when it takes place as the result of economic pressure.

I would like to direct the attention of hon. members to the changes which are busy taking place in the population pattern on the platteland. I have here the figures of 1921 and 1951. In those 30 years the number of White male farmers and farm workers in the Union decreased from 163,000 to 137,000, but the number of Coloured farm labourers and farmers increased from 71,000 to 89,000—a decrease in the number of Whites of 26,000 and an increase in the number of Coloureds of 18,000 between 1921 and 1951. That is the pattern in the Union, but let us take the Cape Province.

We then come to the conclusion that the Cape Province, more so than the Union as a whole, is becoming depopulated by the Whites. I have here comparative figures of the Union’s population for the first half of this century, from 1900 to 1951. All races increased from approximately 5,000,000 to 12,000,000. The Whites in the Union increased from 1,117,000 to 2,641,000. But the number of Whites in the Cape Province increased only from 580,000 to 935,000 whilst the number of Coloureds in the Union increased from 445,000 to 1,103,000, and the number of Coloureds in the Cape Province increased from 394,000 to 981,000. If we analyse these figures further we find that the percentage of increase during the first 50 years of this century taken right throughout the Union, in the case of Whites, was from 1.93 to 2.18, i.e. an increase of 25 per cent, but that in the Cape Province it increased from 2.41 per cent to 3.51 per cent, i.e. by 1.1 per cent. But now some people might perhaps argue that the Cape Province is becoming depopulated as the result of the fact that in recent times we have had very severe droughts. I now want to quote figures for the last ten years, from 1950 to 1960. During the last ten years the number of Whites in the Cape Province increased by only 62,000 whilst the number of Coloureds increased by 332,500, i.e. an increase for the whole of the Union, as I have already indicated, of 16 per cent in the case of the Whites and 35 per cent in the case of the Coloureds, but an increase during the same period in the Cape Province of only 7 per cent in the number of Whites as against 34 per cent in the number of non-Whites. In the past there were certain factors which to some extent restricted this increase, which exercised a strong influence on it. The Coloureds had a low standard of living. They had a high death rate, and a high infant mortality rate. There was malnutrition amongst them, bad housing and limited opportunities for employment. But to-day—we all talk about it lately and it is a good thing that it is so—we stand on the threshold of a new socio-economic pattern for the Coloured. The implementation of that pattern will make the pendulum of ratio between the two sections swing still further in favour of the Coloured in the Cape Province. With better housing, a higher standard of living, more opportunities for employment and improved health services, the tempo of population growth of the Coloureds will increase even more in future. During the past ten years we have had unprecedented droughts in certain areas of the Cape Province, and we still have droughts in certain parts. Consequently I feel that it would not be fair to quote the figures for those districts here, because there would in any case be a migration of all races from those drought-stricken districts. But now I want to take an area of the Cape Province, viz. the South-Western Districts, which is a fair area to take as an example because there was no drought there—in any case, not to such a large extent—and because there is a settled climate, a consistent rainfall and also reasonably stable people. In the seven magisterial districts which I took, from Caledon to Humansdorp, the following happened during the last ten years.

In the magisterial district of Caledon there was a decrease of 2,000 in the number of Whites between 1951 and 1960, and an increase of 5,000 in the number of Coloureds. In the district of Bredasdorp there was an increase of 2,000 in the Coloured population and a decrease of 800 in the White population. In the district of Swellendam there was a total increase of 33,000, but there was a decrease of 1,000 in the number of Whites, and an increase of 3,000 in the number of non-Whites. In Mossel Bay there was a decrease of 1,000 in the number of Whites and an increase of 3,000 in the number of non-Whites. I am referring to Coloureds now, and not to Asiatics and Bantu. In George there was a decrease of 2,000 in the number of Whites and an increase of 4,000 Coloureds. In Humansdorp there was a decrease of 900 Whites and an increase of 3,000 non-Whites. Mr. Speaker, this is a serious matter to me. I have been referring to one of the most well-established areas of the Cape Province. People do not normally migrate to any great extent. I know how attached those people are to their own areas. There have been no droughts. It is a stable part of the country. When I look at this pattern I described I cannot say anything else, if I take into consideration the tempo during the first 50 years of this century and the increased tempo of the last ten years, than that part of the Cape Province is becoming a Coloured province and the other part a desert. Mr. Speaker, the whole of the country belongs to all of us, and I am not pleading here because I want to be provincial, but it remains an economic fact that people go to where the money is; and where the people are, we find the markets and the industries and the opportunities for employment. That is where the markets are created for our agricultural products and that is where the political power will also be. In the Coloured townships which we envisage for the future, the opportunities for employment for Whites will become increasingly fewer. There they will in time, under the guidance of the Whites, enter the building industry, the transport services, the retail trade, the administrative channels of employment, become the owners of places of entertainment. and there they will in time fill the professional posts. How will this picture look in 50 or 100 years? To me it seems that the White man will increasingly leave this province and go to the provinces where the natural resources, the mines and the money are.

Now there is an anomaly which I would like to bring to the notice of the Minister. There are many things which are more expensive in the Cape Province than in any other province. It costs more to be the owner of a piece of land here, due to the system of taxation in the Cape Province. Education costs more in the Cape because a small number of Whites have to pay for the education of a large number of non-Whites. Because of its size the Cape Province has four times the number of roads as compared with the province which must closely approximate to it in size.

Mr. Speaker, I just want to make this point and then I will conclude. I listened the other day when the hon. the Prime Minister referred to the vulnerability of Natal, and I listened with appreciation whilst he sketched Natal’s problems and said that they were also the problems of the rest of the Union. There is an old adage which says that a chain is only as strong as its weakest link. This province, with all the problems for the future which I have depicted—is a member of the same body; it is part of our beloved land, and I would like to bring this fact to the notice of the Government, pursuant to the significant words of the hon. the Prime Minister, that the problem of every section of the population is our joint problem, and that the vulnerability of every part of the country is the responsibility of the whole of the population. Without derogating in any way from the achievements and the contributions made towards the riches of our history and culture by any other part of our country, I want to bring this thought home to the Cabinet and the Minister of Finance that unless something drastic is done for the Cape Province it will lose its greatest asset, viz. its White people. There are riches here, Mr. Speaker. One does not need mines alone, although we have those here also. We must just develop them; we have mines in Namaqualand. We have a mass of water running into the sea; we must start thinking in terms of greater things than farm planning and soil conservation. We must begin to think of the tremendous revenue we can derive from tourists because of our beautiful scenery and our long coast-line. We must start thinking of the riches in the sea around our southern coast, where the warm current stops just on the other side of Cape Point and which is lying fallow and undeveloped. And as my hon. friend next to me correctly remarks, there are not even sharks there. I therefore want to make this plea. Without talking now about the “Cape tradition” about which I know too little—I will leave it to the hon. member for Peninsula (Mr. Bloomberg) to talk about that—I merely want to say that those treasures will become lost to us which can not be restored with money.

*Mr. RALL:

I am grateful to have the privilege of being included in the team which is running on to the field where South Africa’s goal line is to be defended. This goal line symbolizes the interests of the Afrikaans- and English-speaking sections of South Africa. After 1910, after the establishment of Union, a small minority, men of Gideon, went on to the field cherishing certain big ideals. They fought the battle, they played the game and under the leadership of the late Gen. Hertzog they pressed on in order to make those ideals of their reality. Subsequently, under the leadership of the late Dr. Malan and the late Adv. Strydom they continued as a team to fight on that field and I have accepted for myself those ideals which those deceased leaders and that team had cherished as the ideals to strive for, and for that reason I am happy and grateful that I can go with this team on to the field to turn those ideals into reality. Through the years our line of defence has been broken through. Attacks have been launched on that goal line and they have often succeeded in breaking through. But since 1948 we have received reinforcements in the form of the support of the electorate, whom I will call the referee, and that electorate placed our team in a strong offensive position. The 1948 decision took us right up to the goal line of our opponents and in spite of the fact that attacks were often made on our goal line, in spite of the fact that strenuous attempts were made to discourage us, the leaders of our team succeeded on every occasion to beat back our opponents so that we were often in a position to score a try, a try which enabled us to expand the industrial development in South Africa. Our opponents also opposed that industrial development. We carried on, however, and the team carried on with the fight with all the force at its command until we attained complete independence here in South Africa. There was development in the technical and scientific fields—another try! Our farmers received financial assistance and guidance; we introduced measures which resulted in a satisfied labour corps in South Africa, and we achieved much more as a result of the team work of that team to which I have referred, a team which was under the leadership of those leaders whose names I have mentioned and whose memory we are honouring to-day. In all spheres the interests of South Africa were maintained, so much so that it would take up too much time of the House at this stage to enumerate them all. Under the leadership of our present Prime Minister we are continuing to score one try after the other along this road of our fatherland’s development and of our economy. May I express the hope, Sir, that he will be spared for a long time to lead this team that is working so hard on the field in the interests of South Africa. During this hard game that we have played over the years many members of the opposing team have come across and joined us. The result has been that we have become stronger to defend the goal line of South Africa. I want to say that they were very welcome because we were in need of reinforcements. So we had the position that, after our team had been strengthened and after some of our former opponents had joined our team, we were able to score the most important try on 5 October, and on 10 February 1961 that try was converted. That was the inauguration of a new era which marked the end of racial disunity and to my mind the beginning of racial harmony and common allegiance to the head of our South African State and father-land. I trust it also indicated the end of the sabotage which is taking place in the economic field to-day. Mr. Speaker, it was and still is the ideal of that team that with the re-establishment of a republic, a new day will dawn in South Africa and that we will be able to look forward to a new day in which we will work together and co-operate in the interests of our common fatherland. I want to ask this question: In view of the fact that our fatherland needs us, can we afford to continue to quarrel amongst ourselves? Can we afford to waste time by raising minor matters here and can we continue to hamper our country’s development by defiling the good name of South Africa abroad? No, I believe it is the wish and desire of every right-thinking South African that we should avail ourselves of this golden opportunity so that in future the Republic of South Africa which is to be established we will charge that goal line and score tries, tries which will unite us. In spite of the off-sides game which the opposing team has played, in spite of their attempts to frustrate us, we remain on the goal line of our opponents, thanks to the growing support we are receiving from the voters of South Africa. Can we be anything else but grateful, Sir? Is it surprising then, Sir, that I, as a young member of the House, am grateful for the opportunity of making my small contribution towards strengthening this team?

Mr. Speaker, in spite of what I have just said about the phenomenal growth which has taken place and the achievements we have attained, it is clear to me that a difficult time awaits our team which is on the field to-day. No one will deny that certain of our farmers carry a heavy burden. The reason for that is generally known. In my province we are experiencing droughts, floods and various kinds of pests. Various factors are causing this. On the other hand there are farmers in the Free State, established farmers, who are flourishing. You need only look at the number of transfers that are registered, Mr. Speaker, to realize how often those farmers purchase land. That shows that some of the farmers are flourishing.

But now I want to deal with the question of Land Bank loans and in this connection I want to express my personal thanks to the Government for the generous assistance which they give to the farmers in times of hardship, because if that assistance which amounted to £32,000,000 in 1959, had not been given to the farmers, and if the Government had not made that £22,000,000 available to the farmers in 1960 through the Land Bank, and if the farmers did not receive £3,728,000 in 1958 through State Advances, £5,753,000 in 1959 and £10,206,000 in 1960, if that capital had not been made available to the farmers, would there not have been cases of insolvency? Furthermore, not only would there have been insolvencies but that colossal amount would have been lost to the trade. That capital would not have been available to the trade; it would not have been in circulation and would not have stimulated trade in South Africa; it would have been frozen in the form of bad debts. Mr. Speaker, we want to say thank you to the National Party Government for having been so quick in coming to the assistance of the farmers in that emergency. It is estimated that every £1 that goes into circulation per month, increases in purchasing power to an amount of £16/£17, because the one pays the other and so it circulates from one person to the other. We can, therefore, make a rough estimate of the value of those loans which the Land Bank and State Advances made to the trade and farming industries in South Africa. We want to express our sincere gratitude to the Government for that assistance. But, apart from that, we are confronted with this problem that the farmers who received these loans were only assisted temporarily and perhaps an opportunity to rehabilitate themselves. But we must accept the fact that if agricultural prices are not fixed at such a level that that group of farmers can make a profit from agriculture, those farmers will never be in a position to meet their obligations. It is obvious that farmers should make a reasonable profit in order to be able to carry these burdens and in order to become financially sound. Some people reckon that the average profit on certain farming activities is no more than 2½ per cent in a normal year. That is not my personal opinion. If the interest he has to pay is higher than 2½ per cent and he still has to pay off on capital over and above that, you will reaslize, Sir, that the farmers who have been assisted, those farmers who carry a heavy financial burden, will find it difficult to meet their obligations. It is necessary therefore that some solution or other be found to the problem. We know that this statement that farming yields a profit of only 2½ per cent is certainly not altogether acceptable, because in my opinion it varies from farmer to farmer and from farm to farm. I have said that one or other arrangement should be made. It is obvious that there should be an increase in the price of primary products but I agree with the hon. the Minister of Agricultural Economics and Marketing that as soon as the Government increases the agricultural price for agricultural produce it is inevitable that land prices will rocket sky high. That is obvious. Now we are confronted with the porblem of what to do in this particular instance. We know that there has been a decline in the fertility of the soil. We are aware of all the poblems; that there are more diseases, more pests, that the farmer has to contend with. We also know that their production costs increase from year to year, but we have to find a solution, and in my opinion the first requirement is to stimulate consumption. That is a very difficult problem, and it is obvious that if the consumer has to pay high prices for primary products and the producer has to be satisfied with a much lower price, the position becomes absurd, and the higher the selling price of primary products the smaller is the consumption because the lower income groups and the under-privileged classes cannot afford those expensive items. I have said that I fully agree with the hon. the Minister of Agricultural Economics that if we merely increase the price of primary products chaos will follow also as regards the inflationary position which will result. I want to point out, however, that the average family, which eats meat only once a day, spends about £8 a month on meat, and a much larger family spends £10 or £12 per month. If you relate the quantity of meat consumed with the price which the primary producer receives for it, you find a very big gap between the selling price and the price which the primary producer receives. Let me give a few examples. During the past year pigs were sent to a ham factory and the farmer was present when the pigs were graded. They were all graded second grade at 1s. 7d. per lb. That was what the farmer received. The next day the same farmer went to the section of that factory where they sell their products and asked for second grade ham. He was informed that they did not stock second grade products and he had no option but to purchase first grade ham at 3s. 6d. per lb. Do you see the incongruity, Sir? I know of a case where a producer sent first grade wethers to the controlled market at Durban and they were sold at 1s. 8d. per lb. The following day a consumer bought mutton there at retail price and he had to pay 3s. 8d. per lb. The position cannot go on like this. We must find ways and means of bringing the primary products within the reach of the consumer so that the lower income groups can also afford those primary products. Furthermore not only will that be in the interest of trade, of the consumer and of the producer, but it will be in the interests of the nation as a whole because the nation must be fed properly and must be in a position to buy the product which we as farmers produce. I say that the only solution is 100 per cent control over the meat market. The meat will then be arranged under supervision, the strict supervision, of inspectors according to their grade, and that meat must be subsidized, and the amount of the subsidy should also be shown on the price tag attached to that meat. We must subsidize only for the sake of the producer and the consumer and that can only be done if the entire market is controlled. I am convinced that if we can stimulate consumption it will ultimately benefit the producer as well, because a good demand will definitely affect the price offered. It will also put a stop to the present position where we suffer losses on the export market. Has it not become necessary to review the whole question of total control?

Now I come to something else namely the subsidization of agricultural products, the fixing of prices for the primary producers at a higher level. As far as that is concerned I agree with the hon. the Minister, but steps should also be taken in that regard and I want to suggest something to the House for consideration. I am not saying that this is a thoroughly worked-out and water-tight plan. But if we change our income tax system, if the method of assessment is changed, we shall also be able to combat the inflationary land prices. For example, a taxpayer should be taxed on his net income with due consideration of his capital strength. I want to make it quite clear that I am not at all pleading for taxation on land or taxation on capital. On the contrary I am against it that capital and land should be taxed, but the capital strength of the taxpayer may serve as a yardstick in order to determine what amount the taxpayer should pay on his net income. I want to suggest that there should be a uniform system of taxation on farmers, on companies, on salaried persons and on employees in general, and if we can suceed in taking the capital strength of a taxpayer in consideration in determining the basis on which he should pay tax on his net income, we shall be combating this position which has arisen in which land is acquired uneconomically, if we do not succeed in putting a complete stop to it. Because nobody who has capital will pay an uneconomic price for anything if he knows that the higher the price he pays for that asset, the higher will be the basis on which he will be assessed and the higher the tax will be on his net income. Let me give you a simple example, Mr. Speaker. If a farmer or a businessman, or whoever it may be, has £50,000 capital and he has to pay 5s. tax on every £ of his net income (not his capital) and his capital assets increase by £20,000 or £30,000 which takes him into the next bracket where he possibly has to pay 6s. or 7s. in the £, then anybody who has capital to invest will ensure that he makes such capital investments that will not unnecessarily take him into a higher bracket of taxation. I think it is worth while considering this matter. It has many advantages. In the first place it will put an end to the purchase of land at exorbitant prices and it will also prevent people who do not need it from purchasing land. Bearing in mind how the platteland is becoming depopulated, I think what I have just said is one of the reasons for that depopulation and that is why I think my suggestion deserves consideration. It is absolutely essential that we do everything in our power to solve this problem. Otherwise we will have what none of us would like to have, namely, the further deterioration and impoverishment of our agricultural land and a further deterioration in the financial position of our primary producers. I have shown that had the Government not made those large amounts available to the farmers, many of them would ultimately have gone bankrupt, and had that happened they would have been unable to make a decent living anywhere. There is only one thing left for them to do and that is to go and work as unskilled labourers, and become a liability on the municipalities and on the Government, in order to make a living. We must avoid that.

I have raised these few points and I want to make the earnest appeal that we direct our thoughts in that direction. We should do everything in our power to compensate the primary producer for the risks he takes, to compensate him for the work he does, to compensate him also for his contribution because his contribution is the axle round which the economy of the country revolves. There is no industry in South Africa which can flourish, or even carry on, if it has not got the primary products of the farmer at its disposal in order to feed its workers. It is absolutely essential that we give attention to this matter. Not only will it mean that we will restore the fertility of our soil, but it will be possible to go in for water conservation and scientific farming methods. Farming must be made profitable and I want to conclude by saying this: We must buy South Africa, we must live South Africa and we must act in the South African spirit.


It is my privilege and duty to express the congratulations of members of this House to the hon. member for Harrismith (Mr. Rall) on his maiden speech. The hon. gentleman spoke with knowledge and conviction on the subject that he has chosen to address this House as a new member, namely the problems of the farmer under prevailing conditions. I am sure that he has demonstrated that his contributions to the debates can be of value.

I wish, however, to direct my remarks mainly to the hon. Minister of Finance. And in supporting the case made by the hon. member for Constantia (Mr. Waterson) in regard to the consequences that are flowing from the manifest faults in the Government’s present policies, let me commence by saying that the year 1961 seems to have opened rather ominously for the hon. Minister of Finance as the procurer of capital supplies for the public sector of the economy and as the custodian of the Government’s Capital Account. The hon. Minister’s inability to inspire confidence in the external markets in regard to the Union’s financial and economic potential because of the bad risk for capital investment which the Government’s racial policy has created, was demonstrated very clearly last year. This year that want of confidence has also entered the local money market.

The House will remember, Sir, the Government’s failure to borrow £5,000,000 on the London market last year (1959-60), when 78 per cent of the stock issued was left in the hands of the underwriters who had to subscribe and finance the 78 per cent. That indeed was startling evidence of the want of confidence that prevailed in the mind of the external investor. But almost more startling in that regard is the Government’s inability during the current year to raise sufficient money on the local money market to meet new capital outlay and to provide for the conversion of £18.7 million in respect of two maturing loans. There was so little enthusiasm in December 1960 that no more than £18.8 million could be raised. Now it is true that the hon. Minister told us to-day that the Government did not expect to get any new money. I accept that that might have been the position in the mind of the hon. the Minister, but that is not what he told the investing public. The prospectus issued in regard to the two loans which were raised in December said this: The purpose of the loans is to cover capital expenditure on the Railways and Harbours and other public works in the Union, as well as the conversion of two maturing loans. That puts an entirely different complexion on the result. But what is even more startling in regard to the matter of this stock issue in terms of ready cash (that is in terms of new money found), something the hon. the Minister did not tell us this afternoon, is that holders of some £8.4 million of the maturing loans declined to convert into the new loans. I believe that is correct. They therefore had to be paid in cash. But as the hon. the Minister has admitted, the amount of actual cash raised was only £8.5 million, so that really no new money became available, no money was provided in the form of new investment. What makes the position much worse, however, is that out of that £8.5 million in cash no less than £5,000,000 came from trust funds in the hands of the Government and held in trust by the Public Debt Commissioners. The hon. member for Constantia indicated that some of that money might have been partly conversion. On the figures given to us, however, that clearly is not so. That £5,000,000 was cash. The amount of cash received was £8.5 million and as only £3.5 million came from the investing public, therefore, the other £5,000,000 must have come from the Public Debt Commissioners. Now that money is trust money, held by the Public Debt Commissioners on behalf of beneficiaries and other financial interests. It is quite clear, therefore, and I think my premises are correct, that the £5,000,000 trust funds in the safe keeping of the Government, had to be used to redeem the maturing loans fully. What would have happened if there had not been that injection of cash into the loan, I leave to the hon. Minister to explain to us. But I say that it is a very sorry and very serious testimony of the want of confidence of the local investing public in the way in which the affairs of state are being conducted by this Government. I consider it a very serious matter, an indictment against this Government, that trust funds should have been applied, not to new capital expenditure, not to some new capital works, but simply to repay private investors who had made loans to the Government on some previous occasion. It will be interesting to know how much of that £8.4 million of private investment money has actually remained in the country. The hon. member for Constantia has dealt with the question of the outflow of capital funds from the Union. I do not want to go into that any further, but if any portion of that £8.4 million has in fact been drained off, it is quite clear where much of the ready cash came from to finance that capital outflow.

That brings me to another important matter in which in the final result it may also be a case where public funds are being put to a use in such a way that it may help the outflow of private investment capital from the Union. The matter I want to deal with in that regard relates to the Industrial Development Corporation. In this regard I am addressing my remarks to the hon. Minister of Economic Affairs. I want to indicate straight away that the matter I am concerned about arises primarily from the Industrial Development Corporations recent decision to participate with two other companies in the take-over by a new company called Bonofel Ltd. of an old established footwear business which operates, as far as I know, not only in South Africa, but beyond its borders in the Federation of Rhodesia and Nyasaland. I am referring, of course, to the proposed take-over of W. M. Cuthbert & Co., Ltd., a firm which has always been recognized to be a prosperous type of family business and the shareholding of which is held substantially, if not mainly, abroad. Cuthberts is reported to own about 150 shoe shops in Southern Africa. In the Union’s main centres at least the type of business carried on is known as “fashion wear I am well aware that this take-over transaction has not yet been completely finalized. There is also an understandable reluctance by the parties concerned to disclose what their interests really are, but the hon. the Minister of Economic Affairs, in reply to a question raised by me on 27 January, confirmed that the Industrial Development Corporation is in fact participating in the take-over and that the capital to be provided by that corporation will be something less than one-third of the total sum needed to finance the deal. Sir, the report is that the capital outlay involved is likely to be of the order of nearly £4,000,000. But I am here dealing not with the detail; I am concerned with the principle and the policy involved. I am also fully aware that technically and legally the Corporation may be acting within the scope of its powers in participating in a deal of this nature. I have not got the time to read the full text of the authority, but Section 3 (b) (ii) of the governing Act, No. 22 of 1940, empowers the Corporation to “facilitate, promote, guide and assist in the financing of schemes for the expansion, better organization and modernization of and the more efficient carrying out of operations in existing industries and industrial undertakings”. It then goes on to say that those powers can be exercised “to the end that the economic requirements of the Union may be met and industrial development within the Union may be planned, expedited and conducted on sound business principles”. I want to draw attention to the emphasis laid by the law on these words “industries, industrial undertakings and industrial development”. Now whether in practice there can be expansion, modernization and better organization in regard to the concern in question as a result of the take-over obviously remains to be seen. But it is certainly not clear to me how well equipped the I.D.C. is “to guide, promote and assist in” a retail commercial business of this kind. To participate to such a substantial degree in a business undertaking of this kind seems to be a new venture on the part of the I.D.C. It is true that the Corporation has other interests in footwear manufacture, but my concern, and I think the concern of the business public, is not only in regard to the ability of the I.D.C. to carry on this type of business but also about the justification of public funds being used in this way to finance the take-over of an old established fashion footwear business of this kind. As I understand it, it is a family type of business.

Mr. G. F. H. BEKKER:

What is the point?


If the hon. member has not yet seen the point, he never will. This honourable House is naturally not concerned with the two private companies, Bonuskor and Sanlam, which are reported to be participating in this take-over. But as far as I know they too are essentially finance houses, and again it is not clear to me what skill or experience those two financial houses have of the conduct of a retail shoe business of this nature. What the business is, is really a chain of retail shops.


They are trying to get in a foot somewhere.


The hon. member is obviously correct. I raise this matter because I believe there is very genuine concern in financial circles about this new venture by the I.D.C. and about this new trend of activity by a corporate body which is wholly Government owned. As everybody knows, the share capital of the I.D.C. has come entirely from public funds through appropriations made by this House.

Now it so happens that the State Information Office saw fit last month in a supplement to the “Digest of South African Affairs” to draw attention to a policy statement which was issued by the Industrial Development Corporation.

Business suspended at 6.30 p.m. and returned at 8.5 p.m.

Evening Sitting


Mr. Speaker, when the House adjourned I had mentioned that the State Information Office had seen fit to remind the country and this House of a policy statement which had been issued by the Industrial Development Corporation, in the following terms—

The function of the Corporation is not to find investments for its capital but to utilize its funds for the purpose of assisting industrial ventures in South Africa to become successfully established or extended. Once the Corporation has satisfied itself on this score it must, in order to fulfil its functions, make its holdings available for public investment thus releasing its own resources for further assistance to other industries.

I underline the words “successfully established or extended”. This is a very admirable policy statement, and obviously I have no criticism against it because it complies with the law and does what I think the Corporation was established for. The question, however, is whether that policy statement is now being adhered to in all respects. I raise the question because what is particularly disturbing to business and financial circles in regard to this take-over venture, is that it would appear that the Industrial Development Corporation, in doing so, is seeking investments for its unused capital in a business undertaking that is already successfully established and widely extended throughout the Union and beyond its borders.

One wonders what, for instance, the view of the Reserve Bank is in regard to this extension of operations. I hope that the hon. the Minister will not fall back on the old argument or excuse that the I.D.C. is a statutory corporation with autonomous financial authority and that the Government is powerless to intervene in its operations. In my view, circumstances have now arisen which make it imperative that the hon. the Minister should tell this House and the public in how far the Government, as the sole shareholder in I.D.C., agrees with and supports this apparent new development in investment policy. I want to make it perfectly clear that I am not criticizing what has happened in the past. My concern and, I believe, the concern of financial and business circles, is this change in policy. And the need for the Minister to make a clear public announcement on this matter becomes all the more important because report has it that this Corporation is about to go to the investing public in order to raise its first public loan. The Corporation is reported to be looking for about £3 million on an unsecured loan stock, which will presumably go into the market in the near future. It can, of course, succeed in borrowing from the public only if the public can be assured that it shall have confidence in the financial policy and in the financial enterprise which I.D.C. is entering into.

Let me now quote some of the comment that has been made publicly in regard to the present suggested take-over. I will not bore the House with much. The Rand Daily Mail, for instance, says this—

Some criticism has been levelled against the Industrial Development Corporation for its participation in the syndicate which is currently making a bid for the ordinary issued share capital of Cuthberts. This school of thought considers that the I.D.C. is stepping out of its role of being a fairy godmother to industry by embarking on enterprises which, on the face of it, appear to be somewhat remote from its charter objectives.

The article then goes on to point out that the I.D.C. has become—

… manager, underwriter, technician, banker, shipper and a general factotum to industry. Its participation in many fields has been criticized, but very often the I.D.C. has had to step in to provide facilities that were previously lacking or that had previously been inadequate to meet the demands of expanding industry. By building up a complex of service companies, associated with the industries which it has been weaning, the I.D.C. appears to be showing grave signs of becoming a massive empire—which certainly is not a charter objective.

Then there is also the criticism in the Financial Mail of 27 January. I will be very brief with this quotation which is as follows—

The participation of the I.D.C. in Bonofel, a company formed to acquire control of W. M. Cuthbert, an old-established footwear manufacturing and retail firm, has focused attention on I.D.C.’s interest in the footwear industry and canalized growing concern over the trend of activities of this organization.

Then it goes on to indicate that the reasonable assumption is—

that its venture into the attempted … of one of the most extensive shoe chains in South Africa is to secure sales outlets of its factories.

Then it says—

This has caused understandable anxiety among retail shoe stores.

But that is not entirely the end of the matter, because the I.D.C. is also reported to be extending its empire beyond the borders of the Union in a different direction. The proposal apparently is to extend its interests into the Federation of the Rhodesias and Nyasaland through one of its subsidiaries, Fine Wool Products. Sir, this Fine Wool Products is not an ordinary company, because being largely owned by I.D.C. it is really under Government control. Here again I am not concerned with the merits of the matter nor with the details; I am concerned with the question of whether this appears to be another instance where the Industrial Development Corporation is departing from its declared policy which I read out a moment ago; and that it is seeking investments for its surplus funds no longer just inside South Africa, but also outside South Africa. I think, therefore, the hon. the Minister owes this House and the country an explanation of how the Government views this expansion of I.D.C. interests.

I do not want to go into financial detail, but according to the latest accounts, the Corporation borrowed some £13.7 million from the Government and other sources as at 30 June 1960. Included in that £13.7 million is a loan of 8.5 million dollars from the Chase Manhattan Bank. That is quite apart from the ordinary share capital and from capital reserves. But of that £13.7 million, no less than about £9,000,000 appears to have been invested in Government and other gilt-edged securities. I pose the question: why borrow from the Chase Manhattan Bank if you are going to lend the money to the Government? That, again, does not appear to fall within the charter objectives of this Corporation. What the figures do show quite conclusively, however, is that there are, in fact, surplus funds available for investment. That lends support, therefore, to the concern of financial and business circles that the Corporation is now intent on seeking investments for its surplus funds and that it is no longer content to foster sound industrial development which is so essential in South Africa for the reasons set out in the amendment of the hon. member for Constantia (Mr. Waterson).

I therefore make the appeal to the hon. the Minister to take the House and the public into his confidence about this matter. The time has obviously come when there must be clarity about the position, and I hope the hon. the Minister will make it perfectly clear.

*Mr. HAAK:

The hon. member for Johannesburg (North) (Mr. Plewman) put quite a number of questions of a rather technical and specific nature to both the hon. the Minister of Finance and the hon. the Minister of Economic Affairs. I take it that they will reply to those questions at the appropriate time. The hon. member went on, however, to try to support the amendment moved by the hon. member for Constantia (Mr. Waterson) in an attempt to prove that there is no confidence in South Africa. The two examples which he mentioned were in the first instance that a loan which was floated in London about two years ago, I think, was not fully subscribed.


That was for the last financial year.

*Mr. HAAK:

It was not fully subscribed in the last financial year. But, Mr. Speaker, it was not only South African loans which were not fully subscribed in London at the time. Australia also floated loans there and the underwriters were left with 85 per cent. The Federation also floated a loan there, with which the underwriters were also saddled. I can only say that the example quoted by the hon. member for Johannesburg (North) as proof that there is lack of confidence in South Africa as a result of this Government’s policy, as stated in the amendment, is a very poor example and not one which proves his case in any way. But apart from that, when this particular loan to which the hon. member referred was floated, there were other loans on the London market which also failed, and amongst them there were loans by British corporations. The reason which was given at that time was that this was a bad time to float loans in Britain. Even the London Times, when that loan, which the hon. member says partially failed, was floated, said that the failure of that loan cast no reflection on South Africa. But if the hon. member says that that is an example of lack of confidence in South Africa, I can only say that it does not support his statement at all, because we find that other loans, which were floated at more or less the same time, also failed, as well as domestic loans in Britain —to which the hon. member’s statement could not have applied. Even the argument which he has advanced here now made no impression on a newspaper like the London Times because that paper stated that this was no reflection on the internal capacity of South Africa. But the hon. member mentioned a second reason. He says that the loan which was recently floated, was just about fully subscribed, and that it was not strongly supported by the public of South Africa. When we think of the stocks held by South African investors, it is certainly not necessary to refer to this loan which has now been fully subscribed or to refer to the way in which the public subscribed. We need only recall the confidence displayed by South African investors when they took up nearly £60,000,000 or £70,000,000 worth of foreign shares offered for sale on the Stock Exchange. There we have the finest example of their confidence. Those shares that were offered were all taken up here. There was no sellers’ pressure behind it. Nobody expected that such huge sums would be available here. Even the British and other newspapers aboard pointed out that the fact that these shares were being bought on such a large scale by investors in South Africa at least proved that they had confidence in the policy of this Government.

But, Mr. Speaker, I want to confine myself mainly to the hon. member for Jeppes (Dr. Cronje). Before doing so, however, I want to congratulate him on his promotion and the honour bestowed upon him. Since the last session he has become chairman of one of our banks in South Africa. I want to congratulate him on that achievement. I am convinced that he will be able to make a positive contribution. But I want to say that we expect the greatest degree of responsibility from the chairman of a bank, which is one of our strong financial institutions, and I hope that while he sits in this House he will succeed in reconciling that sense of responsibility which he has to display as chairman of such a bank with his actions in this House when he tries to attack the Government’s policy.

The hon. member said this afternoon that the economy of South Africa was retrogressing, and he referred in particular to agriculture because that is one of the four points in their amendment. He referred to 1956-7 and compared it with 1958-9, and he then stated that the national income derived from agriculture had dropped from £247,000,000 to £236,000,000. The year which he selected was a particularly good year for the purposes of his argument because during that year the price of wool was very high and it was low in the second year that he mentioned. We know that as far as wool is concerned there was that fluctuation.


The figures that you mention are entirely wrong. I said that it was £221,000,000 and that the figure in the last year was £236,000,000.

*Mr. HAAK:

What was the first figure?



*Mr. HAAK:

I am quoting these figures from the Bulletin of the Reserve Bank. I do not know where the hon. member obtained his figures. But that does not detract in any way from my statement that that was a year which suited the hon. member. Let us go further and take the same year. The hon. member talked about stagnation in industry. When we take the same year that he took, we find that industrial production rose from £477,000,000 to £498,000,000. There was an increase therefore. But the hon. member says that there was stagnation in industry. When we look at employment opportunities, however, when we look at the increased employment in private industry at that time, as well as in the mining and other industries, we find that there was an enormous increase in those years which he mentioned as years during which there had been stagnation. I do not want to weary the House with those figures but they are obtainable in the Reserve Bank’s statistics.

The hon. member went on to say that the progress in South Africa was too slow, that the standard of living should be raised more rapidly and that the tempo of development should be accelerated. I think basically we all agree with that. It is the policy of the Government to try to do this, and that is why the Government has taken all these steps which it has taken during the past twelve years to accelerate the rate of development and in an attempt to raise the standard of living. The hon. member then went on to refer to the review by the Stellenbosch University of the economic prospects for 1961. In that connection he referred to the fact that in the ten-year period from July 1950 to July 1959 the average net increase in the national income had been 1.7 per cent. He added that there were other countries where it had been 5 per cent or more. He did not mention the names of those countries, although he could have done so because they appear in the same return from which he extracted these figures. There we see that the countries in which that increase took place were the Netherlands, for example, where it increased by 4 per cent, Italy 4.2 per cent, and then France and Germany 7.8 per cent. We notice therefore that this increase since 1950 took place in those very European countries that were devastated during the war. This was a period of reconstruction after the war; capital was being pumped in, the Economic Market was established, and there was enormous economic activity. It is true that there was this increase. But let us now look at the figures of those countries in which the increase was lower than that in South Africa. We find that the average increase in the United States was precisely the same as in South Africa, namely, 1.7 per cent. Look at the United Kingdom, a country which after all has a great deal of capital. The hon. member says that South Africa saves a great deal and also gets capital from abroad, and that the increase should therefore be greater in this country. America not only has all the capital she needs for her own requirements but she exports an enormous amount of capital, and even there the increase has been no greater than in South Africa. Then we come to the United Kingdom and we find that whereas the net increase in the case of South Africa was 1.7 per cent, the increase in the United Kingdom was 1.6 per cent— in other words, lower than in South Africa. The hon. member can go further down this table. There is Canada, for example, where the increase was also 1.6 per cent—lower than South Africa therefore. In New Zealand the figure was not 1.7 per cent but only .4 per cent. Australia was one of the countries to which an enormous amount of capital flowed from abroad. She absorbed more immigrants, a policy for which the hon. member again pleaded here to-day. All the factors which make for prosperity were present, as he said, but in spite of that the average for these ten years, during which there was an average increase of 1.7 per cent in South Africa, was not an increase in the case of Australia but a drop of .3 per cent per annum.

The hon. member went on to say that the real national income in South Africa per capita had decreased in the past few years. That is correct; it decreased and then it also increased again. He says that with all the capital that we are getting we ought to be able to show much better results. But let us take Canada as an example and see how Canada compares with Australia. Canada obtained all the capital she could from America. She could not get it from Britain because there was the question of the dollar quota. Canada obtained all the capital she could get but in spite of all that capital her unemployment figure to-day is 8 per cent and her net national income is back to what it was in 1952. South Africa therefore is in a much better position. The hon. member also mentioned Australia, but, as I have shown, there was not even an increase in Australia.

The hon. member for Jeppes says that we should have fared better because we had the capital, and I refer him to all these young countries which had more capital at their disposal and which did not do nearly as well as South Africa. If his accusation against this Government is that there has not been the same degree of development here as in other countries, because of the policy of the National Party Government, then he is very wide of the mark. Because in the countries which I have mentioned, we find that there has not even been the development there which has taken place in this country—in spite of the Government, as he alleges.

Mr. Speaker, the first leg of the United Party’s amendment is that there is lack of confidence in South Africa, that there is an outflow of capital, that there is a lack of confidence which is causing capital to be withdrawn from this country. The fact that that capital is leaving the country is due mainly to the price of shares. The fact that share prices have dropped to such an extent proves that countries abroad no longer have confidence in us and that our economy is retrogressing. The hon. member for Jeppes, in his address as chairman of the Netherlands Bank, set out the reasons for this outflow of capital. Inter alia he said this—

The disturbances which broke out at the end of March 1960 and the declaration of a state of emergency which then followed, caused a new wave of oversea sales of local shares. The net amount involved during the first six months of this year, amounted to approximately £21,000,000.

In the first instance the hon. member said that it amounted to approximately £21,000,000. The statistics do not entirely support him, however. He is not very far wrong. But what I find remarkable is that here we have a report that was published of an address delivered by him on 29 November. The September issue of the Reserve Bank had already been published, and there I notice that the so-called £21,000,000 in shares was not £21,000,000 but only £19,400,000. The hon. member had the correct figure at his disposal when this report was drawn up. There is a difference of 8 per cent. He may say that it is not a great difference but, as I said a moment ago, he occupies a position of responsibility and one does not expect him to inflate this figure unnecessarily just to create effect.

*Mr. RAW:

Tell us why there is an outflow of capital.

*Mr. HAAK:

Don’t try to help the hon. member now. Let him take his own medicine. In the course of this same speech the hon. member for Jeppes stated in 1959 the net foreign sales of South African stocks amounted to approximately £20,000,000. That is quite correct. But the fact remains that even here it is mentioned that as far back as 1959—some months before Sharpeville and Coalbrook and even before Mr. Macmillan’s speech in Cape Town—there was a net sale of shares to the tune of approximately £20,000,000. That only goes to show that there were also other reasons for it. It was not due, as the hon. member says here, to Sharpeville and the state of emergency. The state of emergency was only proclaimed on 30 March. There was an outflow of capital through the sale of shares even before that time, and the reasons for that are perfectly clear. Let me quote from a circular from one of our well-known brokers, a circular dated 4 January 1960, which was three months before Sharpeville. This is what he says—

Germany has sold certain stocks, for example Anglo-Americans, which was not unexpected as holders there show substantial profits. Paris has been a seller for some time, not as a result of any lack of confidence in South Africa’s security, but rather on account of France’s economic recovery under the De Gaulle régime.

There he mentions the reasons for this outflow. The gold shares of South Africa reached their peak towards the end of 1959. These people sold because they were making a handsome profit, because they knew that at that time share prices were very high. The value of any possible increase in the price of gold had already been discounted on the Exchange. The increase in the production of our new gold mines had also been discounted already. They believed that this was the best time to sell. But the hon. member himself referred to this and stated that Europe was asking for capital. The Common Market there attracts capital and investments because they are anxious to biuld up industries within that Common Market. They want to build up industries within the protective wall of the Common Market and that accounts for the great influx of capital.

But there is also another reason for these sales. It is not only South Africa that lost capital. The hon. member himself pointed this out. He says that the general idea is that South Africa is just like Africa; when people think of South Africa and Africa they think of one and the same country and that conditions which obtain in the rest of Africa also obtain in South Africa. In that approach he is correct; in this particular respect he spoke like a business man. But when he came to deal with what happened in the year 1960, he linked up everything with what had happened during March 1960 and thereafter. Sir, the Netherlands Bank also publishes a monthly review and here they set out the correct reasons; they say—

A number of factors had a depressing influence on the Johannesburg Stock Exchange during March. In the early part of the month continued overseas selling and disappointing dividend declarations of Orange Free State gold mines took their toll of prices. Further selling pressure was caused by the Coalbrook mining disaster and the race riots.

There they mention other events which occurred before the happenings which according to him were the main cause. But, Mr. Speaker, when they say that share prices dropped as a result of the state of emergency and because of Coalbrook, let us see for a moment to what extent South African shares had already dropped, before Sharpeville and before the state of emergency. I notice here, according to the return of the University of Stellenbosch, that taking the share index as at 15 January 1960 as 100, industrial shares dropped by 6 per cent from 15 January to 15 March. Free State gold shares had already dropped by 16 per cent before Sharpeville. The leading gold shares had already dropped by 12 per cent. We notice therefore that even before these occurrences in South Africa, which are now being represented as the reason for lack of confidence, there had been a big drop in industrial shares as well as in gold shares. But, Mr. Speaker, it is interesting to note that even the Economist realizes this because the Economist of 2 April under the heading “Gale in the Market”, referred to the drop in the value of shares and said that it amounted to £500,000,000. They went on to point out that £125,000,000 of this drop had taken place after Sharpeville, but the drop of something like £300,000,000 had already taken place before Sharpeville.

*Mr. S. J. M. STEYN:

What does that prove except that before Sharpeville the Government was also worthless?

*Mr. HAAK:

I shall tell the hon. member what it proves. It proves that there was already a drop in share prices in South Africa from the beginning of that year, after prices had reached their peak in 1959. But I want to show the hon. member for Yeoville (Mr. S. J. M. Steyn) that it is not only in South Africa that there has been a drop. Let us look at the United States of America and see what happened there. What do we read in the U.S. News and World Report of 15 February? Here we have an article under the heading “A close look at the market decline”. “Drop in stock prices, measured from the highs of 1958 through early 1960 to February 3rd, 1960.” I notice under “Stocks down” that some dropped by 41 per cent, 29 per cent, 25 per cent. So we could go on and we find that they took the average drop in shares in the United States up to 10 March. Incidentally, it was shortly before Sharpeville, and here it is stated—

The longest bull market in history—stock prices quadrupled; then in two months the market went off 12 per cent.

During the same period therefore we had a drop of 12 per cent in American shares and here on the same page I find this, under the heading “It’s the same story in Canada”—

By early March the industrial average had fallen 11 per cent below the 1959 high, and more than 7 per cent below the high of January 1960.

That was the position in Canada. There is no apartheid there and there is no Dr. Verwoerd in power there. But let us look at the United Kingdom. According to the index of the Financial Times we see that during the same period British shares also dropped. They talk about “a 13 per cent decline since the beginning of the year which cannot be dismissed as being merely a technical correction.” There we have an example to show that share prices dropped throughout the world. Since our gold shares are held to a large extent by foreign investors, they are linked up with the decline in prices throughout the whole world. This is not something which has only happened in South Africa. The hon. member wants to know why there has been this decline. Our reply is that share prices here dropped from the peak prices of those days, just as they dropped in the rest of the world. That decline was attributable to factors entirely beyond our control. Reference is made to the decline in the price of South African shares. Even the Economist published an article which almost sounds like schadenfreude. It tells how South African shares have dropped on the London Exchange and points out that our loan stocks there have also dropped. But let us see how those of other countries have declined. Let us look at the peak and the lowest quotations for the loans of other countries on the London Exchange. Whereas the loans of South Africa dropped by 6¾ points, from 85 per cent to 79 per cent, we find that those of Australia dropped by 7½ points—more than in the case of South Africa. Those of New Zealand dropped by 10 points. In Southern Rhodesia there was a drop of 23 per cent. Then let us look at certain loans which are quoted on the Exchange and which were floated in Britain itself. We find that the South African Government loan dropped by 6¾ points while that of Birmingham dropped by 4½ and that of the City Council of Bristol by 91, and even the loan of the Corporation of London dropped by 8 points. The loan of the London City Council dropped by 10¼, and that of Middlesex by 11¼. We find therefore that the South African loan dropped by the lowest margin.

It is interesting to note that it is not only South African shares which have dropped. We find that those of the Federation have dropped even further. International Nickel and Riotinto have all dropped enormously—not only South Africa’s gold shares. There is not a single mining share that is quoted on the London Exchange which is not in the same position as South Africa’s mining shares. I mention this only to show that the drop in share prices has not taken place in South Africa only and is not entirely attributable to conditions in South Africa, or purely the outcome of Sharpeville and the state of emergency. However, shares have dropped in South Africa, and nobody denies it. I have here the average returns of the Exchange in South Africa showing to what extent shares have dropped, and it is interesting to see that the average drop in share prices in 1960 was 21 per cent. When that figure is broken down we find that the biggest drop of 38.8 per cent took place in metals and minerals. Free State gold shares dropped by 23 per cent, financial shares by 22 per cent and the industrial shares by 16 per cent, and diamonds by 15 per cent, which gives an average of 21½ per cent. But when we compare price movements in 1960 with those during the previous year, we find that there was a rise during the previous year. It has been said that the market value of South African shares has dropped by more than £600,000,000, but during the previous year there was an increase of £774,000,000. In other words, the drop this year has been slightly smaller than the increase last year. When we look at these gold shares, the market value of which has dropped by 38.8 per cent this year, we find that in the previous year the prices of the same shares increased by 74 per cent, which still leaves a big profit therefore. Diamond shares which have declined by 15 per cent, rose by 52 per cent the previous year, when the National Party Government was also in power. Free State gold shares have dropped by 23 per cent, but in the previous year they rose by 33 per cent. Our industrial shares have dropped by 16 per cent, but in the previous year they rose by 10 per cent. We notice therefore that although there has been a drop in the value of shares during the past year, there was a big increase during the previous year. The drop that was announced by the chairman of the Stock Exchange in Johannesburg was about £600,000,000 and this was attributed to the unpopularity of this Government, but the previous year when there was an increase of nearly £700,000,000 they said that it was “due to the buoyant conditions of the market”. There we have the contrast. When things go well it is due to the “buoyancy of the market,” but when things go against us it is the fault of the National Party Government. There was an increase again in 1960, but very little is said about that. At one stage it increased by £125,000,000. That increase is not attributed to the Government but to the buoyancy of the market or to some other factor. But we must bear in mind that even though there has been this drop in the value of shares, the people who sold even at these low prices, still showed an adequate profit. I notice that the Manufacturer of June 1960 has the following to say about these sales—

It is a fact which should be borne in mind when assessing all the reasons why foreigners threw so many of our shares on the market that from their own point of view it was good business.

They still sold at a big profit. The £1-shares of General Mining were then still more than £5. Union Corporation’s 2s. 6d. shares were still 62s. 6d., and Daggafontein’s 5s. shares were still being sold at 18s. 9d., and so I could go on mentioning many others to show that enormous capital profits were made on these sales. But we also know that the investors in South Africa who bought these shares, bought them at a good price, a price which was profitable to them, and the confidence that they displayed in buying those shares has been justified, because the prices of most of those shares have already risen considerably. But there are other reasons as well. I notice that one of the brokers writes as follows, amongst other things, with regard to the purchase of shares by South Africans—

It is therefore felt that it cannot be long before the majority holding in many mines will move from foreign into South African hands.

The fact is welcomed that the control of some of these big financial and mining institutions is going to pass into the hands of South Africans in the near future as the result of these large-scale purchases by South African investors.

We are told that there is no confidence in South Africa. The investment possibilities here are just as good as they have ever been, and when one thinks of investments throughout the world, one might almost ask, “where can one find safe avenues of investment in any part of the world”. If one wants to invest in America, one has to take into account the uncertainty of the dollar. If one wants to invest in Europe, one gets closer to the centre of future world conflicts. Even in Canada one finds oneself in that neutral field between America and Russia. This country offers very fine opportunities for investment. It has been said that there is no confidence in South Africa, and hon. members want to know where the hon. the Prime Minister gets hold of the idea that there is prosperity here. We need not dwell on that point very long. What does the Statist say?

Although South Africa has good reason to regret the financial consequences of this year’s unhappy turn in our racial problems, our economy must be said to have withstood this severe test remarkably well.

Even the President of the Reserve Bank has announced that there is a decided improvement in external economic conditions. And the Netherlands Bank in its monthly bulletin said—

There is no evidence of an economic recession in South Africa.

And on 1 January it was stated in the same bulletin—

Fortunately economic activity has not yet been influenced to an important degree, thanks to the strength and buoyancy of the national economy with its basic sound structure and ample natural resources.

When we look at the productivity of the Railways and the increase in investments in building societies, when we look at all these economic activities, we find that great progress has been made in every sphere, practically without any exception. There have been attempts in recent years on the part of business institutions and Chambers of Industries and Chambers of Commerce to predict a gloomy future for South Africa, but those prophecies co-incided with an election period. It was hoped that an atmosphere could be built up against the Government in South Africa, as there is overseas. Well, that election is over. South Africa’s economy is carrying on, and may I express the hope that in the future there will be more reasonableness on the part of those who try to oppose us. In spite of setbacks, there is ample evidence that there is confidence in South Africa, not only internally but also externally, and we can continue, to the best of our ability, to strengthen our economy and to raise the standard of living of the inhabitants of South Africa.


Where I have the honour to address this House for the first time, I just want to say that I consider it a particular privilege to make use of this opportunity. I thoroughly realize the responsibility resting on me when making my humble contribution to this debate. Mr. Speaker, when a newcomer makes his first bow in this House it is obvious that he wants to express the deepest sentiments in his heart and select a subject about which he feels strongly. Therefore I want to discuss a subject which has not yet been discussed ad nauseam in this House already.

There is a particular state of emergency existing in one part of our country. Fifty years ago our beloved fatherland, and particularly the interior parts of South Africa, was populated mainly by a farming community, people who practised agriculture. But as development took place there was a steady migration from the platteland to the cities. This migration or urbanization formed part of the historical development of our nation. It was sometimes accompanied by painful uprooting, poverty and misery, and numbers of staunch Boer families were uprooted and forced to seek accommodation in miserable surroundings, sometimes in a small room in a slum. These people were completely demoralized. They were disrupted and humiliated, and in most cases their condition was caused by circumstances over which they had no control. After World War I, between 1920 and 1923, a large number of these families congregated around Bloemfontein in order to obtain employment on the Railways. In those days housing conditions were very miserable. Under those conditions these people built little hovels of hessian and galvanized iron behind the Bloemfontein railway station and established a shanty town there. They were erstwhile proud Boer families who first had had to endure the experiences of the Anglo-Boer War in which they were conquered, and thereafter they returned to farms which had been burnt down, in order to make a fresh start and try to earn a living. Some of them could not survive this struggle and eventually they had to give up. But we believe that this is part of the history of the moulding of our nation. We believe, in the words of the poet, that our Heavenly Father keeps a guiding hand over us and keeps in view the furthermost turn in the road. Therefore we believe that this sad episode in our national history also forms part of His plan, that the rural population we had had to be transplanted to the cities where they could also play their role in the tremendous industrial development which took place. I mention these matters because in view of these miserable conditions which existed and in which these people had to live, one can readily understand that they were anxious to leave those hovels and go and live on the small farms round about Bloemfontein, which were conveniently situated and near to their work, and where they could enjoy the rural background to which they had been accustomed. Therefore I want to say that these small farms or plots fulfilled a very important function in the development of our nation. They also played an important role in regard to housing and in regard to supplying labour to our large cities for our industrial development. Mr. Speaker, there are 3,500 such plots around Bloemfontein and 3,300 of them are inhabited. If one pauses to think for a moment one realizes that those people were put there under those circumstances, and at that time no precautions were taken properly to lay out these plots and plan them. Any man who wanted to cut his farm up into plots could do so, and was allowed to do it. Later a commission was appointed, the Tomlinson Commission, which investigated the matter, and we are grateful for that report, and these plots were further developed with the assistance of the Administration. All the necessary measures were effected to exercise proper control. Nice houses were built and school facilities were provided. In the vicinity of Bloemfontein there are 11 schools, of which four are high schools, with between 400 and 600 students. Power is provided by the Municipality of Bloemfontein, and the Municipality would certainly have provided water, but they saw the red light. Bloemfontein’s catchment area, the Rusfontein Scheme, has reached the lower water mark and therefore no assistance can be received from that direction. Then also the industrial development of Bloemfontein itself is a very important matter and I feel that in view of the expansion there something should certainly be done in the near future.

In regard to this picture I want to mention that we in South Africa are very fortunate. We are living in a rich country, with riches above as well as below the surface, a country with potentialities which have enabled us to experience great industrial development in recent years. Investors in the first place require raw materials, labour, transport and power, and I want to include this also in my plea. I believe that South Africa stands on the eve of further developments which will make great demands on the farming community, the producers. Therefore it is essential that we should develop every possible potential to provide facilities. South Africa’s greatest potential, our main water channel, the sponge and the vital artery of the country, from the peaks of the Drakensberg runs unharnessed right throughout South Africa, through very fertile ground, for 1,200 miles to the sea. This mass of water is lost to us. Here we have 2,900,000 morgen feet of water. To put it more accurately, it is 6,122,000 acre feet of water which annually runs into the sea, sufficient to irrigate an area of 350,000 morgen. Furthermore, the Caledon River with 600,000 morgen feet of water runs past the upper reaches of the Kaffir River, where the Kaffir River Scheme and the Riet River Scheme are, schemes which find themselves in an unenviable position to-day. It runs past the catchment area of Bloemfontein, the capital of the Free State, and is lost to those plots which might possibly have benefited from it. I am mentioning this position in view of the fact that I got up to talk about something which is close to my heart. The Orange River is the largest river in South Africa, our greatest national asset and water potential, the Kariba of South Africa, and it has a complex of schemes. It is impossible to sketch the scope of the potentialities of the Orange River. It offers us the opportunity of having the second biggest hydro-electric power station in the Southern Hemisphere. Here we have the opportunity to develop cheap power, so that the border industries can be developed there. Here one can build a canal running through the whole of the interior, and those areas where water is of the greatest importance can be changed into the most vital area in South Africa, offering potentialities for enormous development. Are we going to accept this challenge? Sir, I am glad to have had the opportunity of bringing this matter to your notice.


I should like to avail myself of this opportunity to congratulate the hon. member for Bloemfontein (District) (Mr. Schlebusch) most heartily on his maiden speech in this House. I think a few matters which he has raised here, such as housing and the problems of the owners of smallholdings and the possibilities of the Orange River, are of great importance. If the hon. member devotes his attention to matters of this kind, he will also get the appreciation of this side of the House. We can congratulate the hon. member on the nice way in which he delivered his speech.

But I should like to come back to the hon. member for Bellville (Mr. Haak). He stood up with just about as many newspaper clippings in his hand as I have, and he quoted one passage after another to show how well South Africa was faring, and where he could not say that we were faring well, he proceeded to quote something else to show that South Africa was faring better than any other country. But the hon. member contradicted himself completely. If things are going so well in South Africa, why should he compare South Africa with any other country? But for every quotation that the hon. member for Bellville can read out I can read out another to prove that things are not going very well.

In the first place, I want to quote what was said by Mr. Engelhard, a prominent member of the South African Foundation. Last year, according to the Burger of 28 May, he said that South Africa would find it difficult to raise loans abroad. He said—

From an economic point of view it is clear that definite and concrete steps will have to be taken to restore confidence. South Africa’s economic position is dependent on the development of a policy of co-existence between the races, a policy that is acceptable to the world.

And the heading is: “Engelhard says South Africa will struggle to raise loans.” If things are going so well in South Africa, why were the rates of interest of the Reserve Bank raised last year, and why was it necessary for Dr. de Kock as Governor of the Reserve Bank to say, according to the Burger of 11 August of last year—

In order to utilize the Union’s economic opportunities and potentialities to the best advantage, this country should exert itself to restore the confidence of foreign investors, particularly those who already have interests in the Union or who are considering the question of participation.

I can go back as far as 1959 and refer to a speech made by Mr. P. E. Rousseau in which he said—

South Africa has reached a stage where a new industrial climate must be created.

I can also quote from a speech made by the hon. the Minister of Transport. A few years ago he showed an enormous deficit on the Railways, and not long afterwards he announced that the Railways had an enormous surplus. The staff associations then went to the Minister and asked for 3d. extra per hour, in view of the fact that the Railways had this huge surplus, and they asked that they, the people who had to make these enormous sacrifices in order to improve the position of the Railways, should also be given a few of the crumbs falling off the rich man’s table. That is what happened according to the Burger of 8 July of last year. He replied that he could not accede to their request because—

The economic position may become difficult. We shall have to tighten our belts. We shall have to turn over every penny twice. Our economic position in the next six or seven months is an unknown factor.

Sir, that was said not by anybody on this side of the House nor by anybody who was out to harm South Africa. [Interjections.] The financial position of the South African Railways depends on the economic position of this country as a whole. [Interjections.] The hon. member for Bellville quotes what the Netherlands Bank says, but he does not go on to quote what the Burger says. On 5 February of last year the Burger said—

The position of commercial undertakings in South Africa over the past few years has greatly deteriorated, judging by a survey made by the Bureau of Census and Statistics. The increase in the turnover could not keep pace with the increase in the costs and the profit position has greatly deteriorated, particularly in the past few years.

I do not think we need take any further notice of the hon. member for Bellville because his whole speech consisted of quotations from newspaper clippings, etc. The hon. the Minister of External Affairs is not here at the moment and we wish him a speedy recovery, but I think the hon. member for Bellville has now taken the hon. the Minister’s place as far as newspaper clippings are concerned.

Mr. Speaker, under this National Party Government we cannot determine over financial and economic policy separately from the general policy of the country. We cannot separate it from the general policy and submit it as a separate issue to the electorate. It is to be deprecated that that is the position. This Government can never come forward with an independent economic policy. All their other policies have to be made subservient to their race policy. If therefore one wants to examine the economic policy of this Government more closely one must first remove the Iron Curtain— or granite curtain as it is now called—of their race policy.


Who said that?


No, that is what I say myself. When the Government’s economic policy is changed, that fact is also hidden; it is not allowed to see the light of day. The reason for that is this, Mr. Speaker, that if one removes the granite curtain one finds one cobweb after another, cobwebs of forgotten promises, made by them to the people of South Africa. They said to the public: “We shall see that the cost of living comes down; we shall give you undreamt of purchasing power; we shall give you increased salaries with reduced taxation; we shall give you a forty-hour working week; we shall consolidate the cost-of-living allowance with basic salaries.” What became of all those promises? The hon. member wants to know who said this. If he will go search amongst the cobwebs for that booklet that they wrote in 1948, “The Road to a new South Africa”, he will find all the promises there that were made in 1948.

I want to come now to an industry which is very dear to me and that is the agricultural industry. Mr. Speaker, there is no branch of our agricultural economy in South Africa which is going through such difficult times as this industry. And if this Government is not prepared to do something to eliminate those difficulties, a great catastrophe is going to hit this industry in South Africa. Eighteen months ago the hon. the Minister of Agricultural Technical Services said that there was a great need in South Africa for more prosperous farmers. According to the Burger of 21 October 1959, the hon. the Minister of Agricultural Economics and Marketing told us that the agricultural industry was in great danger. The mouthpiece of organized agriculture, “Organized Agriculture” said the following as far back as August 1959—

Farmers’ biggest problem; big disparity in prices.

Prof. C. H., du Plessis, an economist of standing, said the following in Merino, ia September 1959—

Great surpluses are mounting up.

But the best quotation that I can give hon. members is from the article which appeared in “Organized Agriculture” of December last year, in which it was stated—

The year now concluding was not a good one for farmers. Among other catastrophes there has been a further narrowing of farmers’ margins. In spite of their striving for greater proficiency in their calling farmers are worse off at the end of 1960 than they were five years earlier.

This is not United Party propaganda, Mr. Speaker. This was not said by somebody who stood up in this House just for the sake of saying something, as the irresponsible member for Vereeniging (Mr. B. Coetzee) might do. This is what organized agriculture says—

In agriculture farmer versus farmer competition has been eliminated to a large extent by means of price control. In its place we now have, as a deterrent to overproduction, the gradual narrowing of farmers’ margins. This is far from satisfactory. This is a far from satisfactory means because farmers invariably produce more when they find their incomes failing to meet their needs. Actually it is producing more at the same or even higher per unit cost which led farmers into their present predicament. Had they been content to produce the same quantities or less at the cost per labour unit employed, the position would have been vastly different.

This article is so simptomatic, so typical to me of what is now happening in our agriculture. The Farmers’ Assistance Board, the Land Bank and other institutions have spent large sums of money on the agricultural industry. The hon. member for Drakensberg (Mrs. S. M. van Niekerk) quoted figures. But every time when we examine the position of the farmer we find that it gets progressively worse. We quote the gross income from the annual reports, or even the net income, but we find an increase in the one and a decrease in the other. The farmers, however, are told that they are doing so well. When the farmer hears that he thinks to himself: Perhaps the farmers in another area are doing well, because I and my neighbour are not. Where is the Utopia in South Africa where things are going so well with the farmer? Mr. Speaker, I say that the majority of farmers I know, and hon. members opposite know it, too, to-day are burdened with debts and suffer from a decreasing purchasing power. We should not talk about the number of tractors, implements and ploughs which are being purchased. Of course the statistics show that there is a tremendous improvement in regard to these purchases, but the farmer has to buy these implements, he has to buy fertilizer, he has to buy oil and fuel; he cannot do without these things. Unless he has these things he can produce absolutely nothing. But if one wants to examine the man’s financial position one should not look at the stud sheep or stud cattle or the contour walls on his farm; he must have and do those things. Where should one look to see how prosperous he is? One should look at that man’s bank account, one should look at his house, and see whether he can afford to buy new furniture, or whether he has a new motor car. When we look at the living standards of the farmer we will find that there is a gradual deterioration. The income of the agricultural sector in relation to the income of the non-agricultural sector is steadily becoming more unfavourable and its capital burdens are continually increasing. [Interjections.]

The hon. member referred to wool. I am glad he mentioned it because that is the very subject on which I want to conclude. Instead of the hon. members opposite and the Government having devoted their attention to the real problems of the farmers of the country, what did we have during the past six months? Last year when we discussed the Wool Commission Act, the hon. member or Somerset East (Mr. Vosloo) and the hon. member for Kimberley (North) (Mr. H. T. van G. Bekker) said that a man like Dr. Jan Moolman ought no longer to be the Chairman of the Wool Commission. Instead of devoting their attention to the real problems of the farmers in South Africa, they preferred to devote their attention to Dr. Jan Moolman and advocated that the Wool Board and the Wool Growers’ Association should get rid of one of the greatest servants of agriculture in South Africa.

Mr. Speaker, I want to ask this question: Why did hon. members opposite give that guidance to the wool farmers of South Africa? They did so because a man like Dr. Jan Moolman dared to criticize this Government. It is quite clear that a man’s political affiliations count for more than his service to agriculture in so far as hon. members opposite are concerned, and that his services and efficiency are subservient to his allegiance to the Nationalist Party. [Interjections.] I ask the hon. member for Cradock (Mr. G. F. H. Bekker) how a large portion of those people who think differently are supposed to feel to-day in regard to a body like the Wool Board and the National Wool Growers’ Association? Surely they also pay for the maintenance of those bodies, and possibly their contributions are the largest. Sir, those people have no hope of serving on the directorates of those bodies because this dangerous precedent has been established by hon. members opposite. Unless a man is well disposed towards the Government, he either does not get there or he is kicked out. We ask them whether this will stem the criticism which is being voiced everywhere nowadays against the agricultural policy of the Government. Do they want these boards to consist of a number of yes-men who will protect the Government against all criticism? Have they made Jan Moolman an example so as to silence the voices of others? All of us in this House object if somebody abuses his position and weakens the administration of such a body. Then we will not object if such a person is dismissed. But, Sir, everybody in South Africa spoke with great praise about Dr. Jan Moolman. He started the wool stabilization scheme, so much so that the hon. member for Somerset East last year also trotted along behind like a puppy and said: “This is really the policy of the Nationalist Party.” Mr. Speaker, this is the most scandalous thing that has ever been done to a good servant of agriculture in South Africa. They knew very well that Dr. Jan Moolman also occupied international posts due to his position in South Africa. Regret was expressed throughout the whole world, but, Mr. Speaker, in the ranks of the Nationalist Party and amongst their flag-bearers malevolent laughter was heard because of the fact that another milestone along the road of the continued stability of the Nationalist Party, had been reached because there is one more tombstone from which a voice from the grave will in future utter no criticism. But I want to say this to the hon. member for Somerset East and his companion, the hon. member for Kimberley (North), that in this process initiated by the Nationalist Party in order to get rid of Dr. Moolman they also made enemies of many friends, and those erstwhile friends they had will undoubtedly rush to the assistance of those who fell on the battlefield because they voiced justifiable criticism of this Government.


When the hon. member who has just sat down, replied to the hon. member for Bellville (Mr. Haak) he tried to refute the quotations which the hon. member for Bellville had made and he said that he too could boast and give quotations, and in making those quotations he referred to the Burger inter alia. It has become the fashion amongst Opposition members to say “the Burger says this” and “the Burger says that”. I want to teach the hon. member, who is still young, this: If he wants to quote, his quotations should at least be such that they support the point he is trying to make, he should not quote the way he did this afternoon in an attempt to reply to the hon. member for Bellville. I want to teach the hon. member and the hon. member for Drakensberg (Mrs. S. M. van Niekerk) and quite a few hon. members opposite how to quote. I too want to quote from the Burger and it has a great bearing on the whole discussion we are having here to-day. When the hon. the Prime Minister visited King William’s Town the other day the mayor, Mr. Galloway, who is not a member of the National Party as far as I know, said the following, inter alia

To-day South Africa is one of the biggest small countries. From every corner of the world the communists are looking at South Africa with greedy eyes, because we have had industrial development here as no other country in the world has had.

Hon. members often argue, Mr. Speaker, about whether or not we have progressed in the industrial field but here the mayor of King William’s Town says that we have had industrial development in South Africa on a scale unparalleled in the world.


He is an expert!


The hon. member for Queenstown (Dr. Steytler) says he is an expert. In that case he should know what he is talking about. Let me tell you, Sir, what more he said. I repeat that this is the sort of quotation which has a bearing on the subject we are discussing at the moment. The hon. member for Drakensberg wanted to now where the hon. the Prime Minister got his information from. Mr. Galloway also said this inter alia

Dr. Verwoerd has also earned the respect of his enemies …

That is not something which we hear very often from that side of the House—

… and when he goes to London shortly, our earnest prayers will go with him and he will have the best wishes of everyone in King William’s Town.

It would have been a good thing, Sir, had we heard that language from the other side of the House as well. He goes on to say—

I go so far as to say that the earnest prayers and good wishes of everyone in South Africa will go with him.

That is the kind of thought that we should send into the world, Sir, with the same measure of trumpet blasting that hon. members opposite indulge in when they undermine South Africa abroad, something they are so fond of doing. If they would only show the same enthusiasm and say to the world outside that when the hon. the Prime Minister goes to London their earnest prayers and blessings will go with him, it would be much better. Mr. Galloway went on to say this—

The Prime Minister will find more friends in London than he expects.

I trust he will find many more in London than we sometimes find on the side opposite. I say, Mr. Speaker, that this is the sort of quotation that is worth while quoting.

I want to quote from the speech made by the Secretary for Bantu Affairs in Durban. He was referring to a matter which we are always arguing about in this House. He showed that since 1936 up to to-day, particularly during the past four years, the income of the Bantu had risen by 600 per cent and that of the White section by 300 per cent. If those few words do not emphasize the fact that South Africa is making good headway along the road to progress, I do not know what else you can prove with figures.


Now you are talking nonsense (kaf).


Very good feed for political donkeys, if they would only eat it.

Seeing that the Opposition pretend to know such a great deal about farming and about those persons who work for a salary you would have expected them to try to find out in this debate, Sir, what the reasons for these problems were, but not one of them tried to do that. What did we get from them? We got vague compositions, but not one single speech in which criticism was levelled at the policy of the Minister of Agriculture, or against the policy of the Government in general or the policy of the Minister of Railways; we got ordinary vague compositions, compositions which an ordinary Std. VI child would write in order to create the impression in the mind of his teacher that he also knows something about a certain subject. That is the trouble with hon. members opposite.

I want to associate myself with what hon. members on this side of the House have said, those gentlemen who spoke about the difficulties of the farmers. The question which affects every man and woman in this country is the question of food distribution. I am afraid there are some of them who sometimes use the word “over-production” too loosely to the detriment of the whole of South Africa. Every time we make out that there is an over-production of any product in the country, we are wittingly or unwittingly, harming South Africa. We should realize that the welfare and prosperity of the labourers, of the workers, depend on the welfare and prosperity of the primary producer. If it does not go well with the primary producer, it does not go well with the ordinary consumer. Mr. Speaker, there is no over-production. The question that we should concentrate on is the question of better and more effective food distribution. In spite of all the measures which are adopted there are still certain parts in the country which are not properly fed as far as food in general and fruit are concerned. Our distribution system in South Africa leaves much to be desired. My hon. friend over here says there is a scarcity of hanepoot grapes. I know that, nor is there a decent type of grape in either the Transvaal or in the Free State which is not scarce. The distribution system in our country leaves far too much to be desired to permit us of talking about over-production. There is great room for improvement in so far as the consumption of grain, meat and all dairy products in this country are concerned, Mr. Speaker, but we have to analyse the position as regards distribution if there is anything to be analysed. In passing, I want to make this suggestion. The Opposition talks very glibly and tells us that one way of increasing the consumption in this country is to increase the salaries of the lower income groups. Allow me, Sir, to say this to the Government with all respect: In most cases an increase in salary will benefit the lower income groups, but not in all cases. For that reason I want to suggest very earnestly that the question of the subsidization of food should receive greater attention—subsidization is always beneficial. The subsidization of food has two advantages; firstly it stimulates production, and secondly it places those people who need it, in a position to buy those products at a reasonable price. We have the example of dairy products in South Africa. During the years 1934 and 1935 when butter cost 7d. per lb. in South Africa we subsidized that same butter on the London market but when it penetrated our minds to subsidize food locally the consumption of dairy products increased in South Africa to the value of nearly £70,000,000. My hon. friend knows better than I do that that was the position. We would never have managed that had we not subsidized those dairy products. The best method that we can adopt in this country to help the dairy farmer is to place the lower income groups in a position to afford those products. We must therefore concentrate on the question of subsidizing food and by doing that we will ensure that the method we are applying is having the desired effect, whereas in the case of an increase in salary or wages the benefits which accrue to those people are not always utilized for the purpose of purchasing those products in respect of which there is over-production. That increase in salary is often utilized for the acquisition of other luxury articles—it gets wasted. But if we subsidize food no wastage can take place: it can have one effect only, it will benefit the consumer in the first place and it will benefit the producer in the second place.

Another point I want to make is this Mr. Speaker. We sympathize with the farmer who finds himself in difficulty; and the farmer who finds himself on the brink of insolvency year in and year out, but we have to look for the cause of his trouble. In all humility, Mr. Speaker. I now want to tell you who is the cause of that and who will be the cause of the insolvency of a number of our farmers. It is not the policy of the Government, nor low prices, nor the profit margins. That small farmer, whether he be a small mealie producer, or a small fruit-grower or anything else, will be ruined one of these days by the sellers of machinery and agricultural implements in the first instance and in the second instance by the sellers of oil and fuel. That is the root of the trouble, that is the reason why we find farmers in every sphere of agriculture on the brink of bankruptcy. We may go along and increase the prices of their products, but what is the use of that if the oil becomes more expensive. Of what use is it if we increase the price of the farmer’s product if the price of that piece of machinery which he has to buy goes up as well? Of what use is it if you increase the price every year but whenever you do so the price of his requirements goes up as well? We are told, for example, that the high prices of land is one of the reasons why the farmers find themselves in difficulty. That is true, but we must not forget, Mr. Speaker, that when a farmer owns a farm of £10,000 to-day and he wants to develop it properly, you will most probably find that the implements, etc., that he has to purchase for that purpose will cost him more than the price he paid for the farm. And that is recurrent expenditure, Sir, it does not come to and end; there is always some expenditure connected with it. Every one of us knows that imported implements simply do not last in this country. After you have used them for four or five years you find that your spare-parts account is just as high as the original price paid for the implement itself. In other words, the farmer is being ruined and he is placed in the position where he continually has to ask for increased prices, but he himself does not get the benefit of that increase. This is a matter which I recommend with all the power at my command to the Government for their consideration. I do now know what can be done. I am not suggesting that I have a solution, but I do say that that is the cause of the farmer’s difficulties. That is what I say, and once we know what causes the difficulty we may perhaps be able to find a solution.

Mr. Speaker, then I want to emphasize this: We have had various motions in this House on the subject of water conservation. I want to ask the Government something again—I have already done so on previous occasions. I am not pleading for any scheme in particular but there is one respect in which nature will continue to punish us unless we come to our senses. Our approach should be this that in order to place South Africa in a position to carry a larger population we should evolve a positive water conservation scheme. I am not asking for one particular scheme but it is absolutely essential that we undertake something of that nature for the benefit of the whole country. I also want to emphasize that such a scheme should not be undertaken by the Government alone. What I have in mind is that more effective assistance should be given to the individual farmer who shows the initiative to conserve water. We subsidize the building of dams, etc., to-day, but when we come to the actual question of water conservation we find that those subsidies are subject to so many conditions that only a small percentage of those farmers who show the initiative to embark upon a scheme of water conservation, avail themselves of those subsidies. Those subsidies should be given to the individual farmer who shows the initiative on a more effective basis.

In view of the fact that the Opposition has hitherto failed hopelessly in its criticism on the Government and have always come forward with destructive criticism, I make no apology for coming here as a member of the House of Assembly, and raising matters which I regard as being of the utmost importance to South Africa and to the nation as a whole and bringing them to the notice of the Government.


The alleged political cub of the former Minister of Irrigation in the old United Party Government who now represents Port Elizabeth (West) (Mr. Streicher) has seen fit again to drag Dr. Jan Moolman into this debate to-night. What he hopes to gain by doing that he alone knows. What I find so peculiar is that he has so little information about the working of the Wool Board and of the Wool Commission and of the National Wool Growers’ Association that he now says that the Nationalist Party kicked Dr. Jan Moolman out of the Wool Board. I cannot imagine anybody coming to this House with a more ridiculous argument than the one advanced to-night by the hon. member for Port Elizabeth (West).

In so far as the case concerns Dr. Jan Moolman, I think it has been disposed of, but let me say this for the edification of the hon. member for Port Elizabeth (West): With reference to the political speech made by Dr. Jan Moolman in Queenstown last year, the hon. member for Kimberley (North) (Mr. H. T. van G. Bekker) and the hon. member for Cradock (Mr. G. F. H. Bekker) and I raised this matter in the House. We make no excuse, as wool growers and on behalf of wool growers, for having taken exception to the fact that an organization of the wool growers was dragged into politics. It was proved that the three of us were not the only people who took ecxeption to it. There was proof that the wool growers as such took exception to it. It was proved that the Wool Board as such took exception to it. That is why the Wool Board issued a statement. The hon. member need not shake his head.


May I out a question? I want to ask the hon. member whether he is aware of the fact that because of the statement that was issued a member of the Wool Board, Mr. Hugh Connan, resigned as a member out of sympathy for Dr. Moolman?


The Wool Board itself issued a statement after this particular speech by Dr. Jan Moolman. Then Dr. Moolman objected to the statement made by the Wool Board. The Wool Board then said that it was not prepared to retract that statement, and under those circumstances Dr. Moolman resigned his position. Is the hon. member not aware of that? But now he sees fit to lay the body of Dr. Moolman down at my door as well as that of the hon. member for Kimberley (North) and of the hon. member for Cradock. No, Sir, the wool growers are not prepared to allow their industry to be dragged into politics, neither by Dr. Jan Moolman nor by the hon. member for Port Elizabeth (West). The hon. member would be doing the wool growers and Dr. Jan Moolman a favour if he would leave the matter there. He need not come and tell me what Dr. Jan Moolman did for the wool growers. I myself told the House that last year already. He can look up my speech and he will see that there were other hon. members who supported me there. We all spoke appreciatively of what Dr. Jan Moolman had done for the wool growers.

It struck me as significant that members of the United Party who hitherto have participated in this debate have merely complained about how badly the farmers are faring. It now seems to me that they are attempting to regain the lost ground amongst the farmers, the ground they lost throughout the years because of the manner in which they treated the farmers at the time when they were in power. You know, Sir, it is often said that we farmers are very fond of complaining, but this debate reminds me very much of someone who on a Sunday afternoon sits in the sun and complains about all the plagues and droughts and the other troubles we have without recognizing the good things which agriculture gives to us.

But I want to come to a few more specific points. The hon. member for Drakensberg (Mrs. S. M. van Niekerk) also became very loquacious here about how badly the farmers are faring. She pretended to have all the wisdom in the world in regard to the citrus growers, and she wanted to ridicule me when I made an interjection while she was speaking. Let me tell her that one single farmer in my constituency, the Amanzi Estates, produces more citrus than is produced in the whole of the Drakensberg constituency, and then I am not even talking about the Sundays River Valley and the Gamtoos Valley. She pretends that the citrus growers are finding things so difficult as the result of the policy of the Government. What I am now going to say will also serve as a reply to the hon. member for Gardens (Mr. Connan), who also said last Friday that it was due to the policy of the Nationalist Party that we are being boycotted and that that is the reason why the citrus growers receive such low prices on the market. It is peculiar that they are still imitating Dr. Jan Moolman when he said last year: “The Government must change its policy, or else …” Let me give these hon. members a little information. I have before me a report of the Citrus Board, which was sent to all the exporters of citrus, and it is headed: “Reasons for the serious fall in prices obtained for South African citrus overseas during July and the first two weeks of August 1960.” This report is marked “Confidential”, and therefore I do not want to read the whole of it, but I am prepared to make it available to any of those hon. members who want to see it. I will quote a few extracts from it. There is not a single word in this report to the effect that prices fell as the result of Government policy. I want to read this extract—

Just when a return to normal supplies would have remedied this position in the United Kingdom, the docks strike in Liverpool commenced and more than 100,000 cases in the United Kingdom had to be withdrawn after a delay of a week in the off-loading port of Liverpool, whilst negotiations were being initiated with the dock workers. The result of this was that the whole distribution scheme became completely confused. Steps were immediately taken to divert a transatlantic ship, which was at that time on the high seas, in order to increase the supplies in the United Kingdom as fast as possible.

It is not, as the hon. member for Gardens wanted to intimate, because they no longer want to buy our oranges in Switzerland because of the boycott, but to increase the supplies in London—

As can readily be understood, the effect of this delay could not be fully remedied. Therefore, summing up the position, originally a lack of supplies in the United Kingdom was caused as the result of the late rains, and thereafter the strike caused a further delay of approximately two weeks.

So we can continue reading various extracts from this official document sent to the exporters of citrus by the Citrus Board, but nowhere is it stated that it was due to the policy of the Government, due to our policy of apartheid, that prices fell.

Now I want to deal further with this slogan which has become so hackneyed that even the Cape Times this morning said that it had become worn out, the slogan that if we change our policy we will be able to do more business with the outside world. This slogan was used by the United Party and by every person who saw fit to try to bring us into discredit. It is said that if we change our policy we will benefit financially. That is a very easy way in which to create dissatisfaction. We know that every man is most vulnerable when his pocket is touched, and when somebody thinks that as the result of the actions and the policy of the Government he may lose money he will be concerned and ask whether that is the right policy to apply. But the Opposition, in adopting this method, is over-doing it, just as they did in the referendum when they said that if we became a republic we would be kicked out of the Commonwealth and would lose the preferences we enjoy in regard to certain articles we export overseas. You can realize, Sir, that it will disturb producers if they are told that the price of their product will consequently drop. But now I want to ask those hon. members and also that lady in the United Party: What is the alternative? Do they want to adopt Dr. Moolman’s alternative? Do they also want to say that the Government should change its policy? Should we abandon the policy of apartheid in order to do business? If we are to abandon the policy of apartheid of the Nationalist Party and adopt the policy of the United Party which now wants to give the Natives eight White representatives in this House and six in the Senate—and I do not know how many representatives they would want to give to the Indians—what will the position be then? Those hon. members still want to apply the same racial discrimination, but they want to give the non-Whites a few representatives here. Do they think that we will then recieve higher prices for our citrus? Do they consider that if they do that our own people will begin to eat more and will consume the surpluses, as the hon. member suggested when he said that we should get rid of our surpluses by eating those products ourselves? Will that send the sharemarket up? Will it give the farmer a better price for his meat? And there are many other products. The hon. member for Drakensberg mentioned a long list of them this afternoon when she was referring to all of these people who find things so very difficult. The tears almost ran down our cheeks. What on earth will bring about that change in respect of our economy? The hon. member for Queenstown (Dr. Steytler) will, I am sure, agree with my proposition, because for a long time already he has been saying it will make no difference. But if the policy of the Progressive Party were to be adopted, how would our economy fare then? If the policy of the hon. member for Queenstown is adopted and we have a multi-racial state in South Africa, as he advocates, we will get the position now proposed for Rhodesia, and where Rhodesia is now compelled to mobilize its forces. Will that improve our position? Will it not land us in a position where there will be less confidence in our political stability than in the past? And then the question still arises in my mind: If we can adapt that policy so as to fit in with the policy of the hon. member for Queenstown, will we not simply land in the position in which Rhodesia finds itself, or even the position in which the Congo finds itself, where chaos rules? I do not think that these arguments have any value, and I do not think that the farmer will allow himself to be misled by them, by this sort of cry we now hear: “Change your policy because it is costing us millions.” I want to mention a few other people who are also beginning to talk that way. The hon. member for Port Elizabeth (West) took great delight in quoting the Burger to-night. He quotes the Burger just when it suits him. I want to quote this morning’s Cape Times, where it refers to the vice-chairman of the London Stock Exchange, who is now visiting our country and who also warns us and says that trade is not merely a matter of how sound our economy here is, but that our political activities here also count. He also mentioned other reasons. Then I also do not want to lag behind the hon. member for Orange Grove (Mr. E. G. Malan) and the United Party. I also want to quote the columnist “Dawie”, who writes in the Burger, who last Saturday complained strongly about a German teacher whose residential permit was withdrawn, something which, it is supposed, will cost us £5,000,000 in loss of trade because he has to leave the country because we would not allow his children to spend their holidays with their Black nurse girl. And then this columnist mentions other incidents too, which he alleges cost us even more millions of pounds, and then he says that it reminds one of the days when we similarly, used to play with our own servants on the farms. I know that will be quoted here, and that the hon. member for Orange Grove, inter alia, will try and make use of it. But let me now say this: We so often hear these days about “the British way of life There is also a South African way of life which we cherish beyond everything else and which cannot be measured in terms of pounds, shillings and pence. Even if in our childhood we might perhaps have played with the little Coloured boys we were still told how to keep ourselves apart. It was hammered into us, this feeling that the White man should keep himself apart in order to preserve his identity in this country. If something like this should happen, that the children of a White family (the ages were given as being from 4 to 9 years) spend their holidays in the house of one of the Bantu— and I have the greatest regard for the Bantu —then it undermines that in which we believe, what we believe to be the correct way of life in South Africa, and that which we believe will preserve White civilization in South Africa. We can well imagine what would have happened if these children had spent their holiday with that nursemaid. If one of the members of the United Party should perhaps get that idea, or if some of their friends or acquaintances thought of sending their children to such a place, would it have their approval? No, there is nobody in this House who agrees with it, and therefore I conclude by saying that these things cannot be measured in pounds, shillings and pence.


Rand and cents.


I comply with the request of the Minister of Finance to show my respects to the dead pound, therefore I am still, for the last time, talking about £ s. d. It is not to be bought, even in rand and cents. Some sections of the farming population are finding matters difficult. I want to mention just one reason for it. I have here the rainfall figures of one of my voters who live in the Somerset East district. This is not a figure which comes from the Kalahari or the Sahara, but from an area where the average rainfall is approximately 15 inches per annum. During the past year, 1960, 4.55 inches of rain fell on that farm. But I want to analyse this a bit. In January 56 points fell, but that was on three rainy days, and the highest rainfall on one day during January last year was 36 points. In February no rain fell. In March there were two rainy days which together gave 47 points; in April there were four rainy days which gave one inch, 62 points being the highest rainfall for one specific day. In May there were three rainy days with 66 points, in June two rainy days with a total of 12 points; in July one rainy day with four points, in August three rainy days with a total of 80 points, in September two rainy days with a total of 80 points, in October three rainy days with a total of 48 points, in November one rainy day with 15 points, and in December there was no rain. One can understand that there are people who get discouraged and who despair in such circumstances. This specific person lives in the catchment area of Lake Mentz. He is one of the people who has to use the water from Lake Mentz, and Lake Mentz must provide the citrus growers with water from irrigation. One can therefore understand what the position is if there is no water in Lake Mentz, and why the citrus growers and the cattle-farmers find things difficult. But these tactics of trying to prey on discouraged and desperate people and of telling them that things are difficult as the result of the policy of the Government and that we should change our policy so that things can go better with the farmer will be treated by the farmers with the same contempt as that with which they treated the slogans of the United Party in 1948.


The Minister of Finance when he introduced this Bill indicated quite clearly that the Bill had a lot to do with £ s. and d. The hon. member who has just sat down tried to dismiss that argument and tried to suggest to us that all is well in the country. The other day the hon. the Prime Minister said that throughout the country without one single exception, progress was evident. Yet, practically every member on the Government side has indicated to us that there are difficulties particularly among the farming community. One expects them to say that in no way is the Government responsible. The last speaker has blamed the weather, and has said that the Government cannot be blamed in any way. However he admits that the citrus farmers are in difficulty.

Before I go on to the main point of my argument, I want to deal briefly with the hon. member for Bellville (Mr. Haak) who quoted from various papers arguments to suit his case. The hon. member for Bellville completely missed the argument of the hon. member for Jeppes when he argued that the rate of investment in South Africa of over 15 per cent should have led to a rapid increase in the national income, 5 per cent and higher. The hon. member for Bellville then selected certain countries and compared the position in the United Kingdom and the position in the United States of America and he referred to this survey of contemporary economic conditions and prospects, a survey done by the University of Stellenbosch which shows South Africa as 1.7, the United States 1.7 and the United Kingdom 1.6. Surely the hon. member for Bellville knows that the United Kingdom is far from satisfied with this increase and the hon. members knows too that the United States of America is far from satisfied. Does he want South Africa to be the worst case? Does he want to remain in the same position as the United States of America and the United Kingdom? Both those countries have a much higher standard of living than that which obtains in South Africa. The hon. member knows that only this year the President of the United States of America has asked for a figure of 5 per cent and better. Here the hon. member for Bellville tried to destroy the argument of the hon. member for Jeppes and he tried to indicate that because the figure for South Africa is 1.7 per cent, we must be satisfied because it compares well with that of the United States of America and that of the United Kingdom.


That was not the argument at all.


The hon. member instead of examining properly the position in the United States of America and in the United Kingdom and realizing that those two countries he has chosen are particularly examples, where on their own admission those countries are not satisfied and therefore he has damned his own case when he tried to destroy the argument of the hon. member for Jeppes. He did not, conveniently read from the survey this extract which says—

During the whole of the period under review, January 1956 to June 1960, South Africa has experienced two years of net private inflow and 2½ years of net capital inflow. It would appear that the net inflow during 1956 and 1958, although partly occasioned by developments on the overseas market have been more of a genuine investment than of a speculative nature. The net outflow during 1957 on the other hand, can largely be explained in terms of higher overseas money rates. Although overseas money rates were again higher during 1959 and the first half of 1960, the greater part of the net outflow of capital was not activated by speculative considerations. In other words, for the first time since the war there has been a net outflow of funds from the Union, not because of conditions in overseas money markets in relation to those in the Union but because of the foreign appraisal of investment prospects in the Union.

Does the hon. member suggest that this is a party propaganda document, or does the hon. member accept the Bureau of Economic Research of the University of Stellenbosch as a responsible body?


And the 1959 increase? How do you explain that?


It is quite clear, Mr. Speaker, that the persons responsible for this survey are satisfied that the net outflow of funds from South Africa did not occur because of conditions in the overseas money markets compared with that of the Union, but because of foreign appraisal of investment prospects in the Union. That supports the case ably made out by the hon. member for Jeppes and the hon. member for Johannesburg (North) that the investment position in this country, the economic position is such that instead of attracting investment capital, there has been an outflow of funds from this country. But I am not only concerned with the capital position. If we are going to get any improvement in this country, we must be concerned with the development of markets.

I wish therefore to direct the attention of the hon. Minister of Economic Affairs, the Minister of Finance and the Minister of Bantu Development to the development of markets. I think it is agreed that there are three general branches of markets that we would like to see developed: The internal market, the market on the African Continent and the market overseas. I want to deal firstly with the internal market and the market in Africa, and I think the hon. the Minister will agree that both the farming community and the industrialists are very materially concerned, primarily with the development of the African market. The hon. member for Drakensberg has already indicated the necessity of increasing the consumption of the primary products of the farmer. The hon. Minister knows that certain of these primary products are processed by industry, and we are concerned with the attitude of the Government with regard to the development of the local market. Industries will tell you, Mr. Speaker, that they have the greatest difficulty in developing the potential African market.

This Government will admit that it has embarked on extensive housing schemes near our large towns. Now I am sorry that the hon. Minister of Bantu Administration and Development has chosen this moment to leave the Chamber. He will assure the House that it is the policy of his Department to discourage any market survey in any Bantu township. I know of leading overseas firms who had been encouraged by this Government, being encouraged by the efforts of the Minister of Finance and the Minister of Economic Affairs to invest in this country. The State Information Department has made propaganda and officials of the Government have made propaganda and these people have established industries in this country, and some have endeavoured to increase their industrial potential, and as hon. members know, the best way to increase your industrial potential is to ensure that you have an adequate market, and the best market is that at your doorstep. So they have sent travellers and representatives, and some have gone further and sent African representatives to call at these townships and to canvass their wares, and in many cases to embark on market surveys. I know of more than one leading organization processing food products (I am not talking of luxuries) which have endeavoured to survey the market in order to extend their range, in order to increase the consumption of their industrial products in the South African market, and they have been met by a total prohibition by the Department of Bantu Affairs. The various industrial housing schemes, like Kwa Mashu, near Durban, and Meadowlands and others near Johannesburg have been closed to them. The managers of these undertakings have been informed that it is contrary to the policy of the Minister to allow house to house canvassing. The argument frequently given is that these canvassers might be disseminating communist literature. I have never heard such an absurd argument in all my life. If we are going to raise the standard of living in the whole of the country, we have got to encourage people of all races and of all colours to wear better clothes, to eat better food, to consume more of our primary products, to consume more of the products of secondary industry, and how can we distribute these products and encourage the consumption of these products, how can we create the new wants in the minds of these people, settling to a new form of life in these townships, if we don’t let them see what industry has to offer. It is no good just sending a few goods to a local store. Hon. members know very well that those days are gone and that organized selling is to-day a highly developed science; organized selling whenever it has been applied in a closely settled community has always resulted in increased consumption, particularly where the housewives have been shown that it is to their advantage and the advantage of their families to stock quality goods. Yet, the possibility of encouraging the housewives in the Bantu areas to extend their range, to get new products, is met with total frustration. I know of more than one organization which has said that conditions are quite hopeless in South Africa, that they cannot develop the market, and that it would be better to carry out experiments in Rhodesia, and to make surveys in Rhodesia. More than one organization has established branches in Rhodesia and has extended its activities to Rhodesia because the possibility of progress in South Africa is thwarted by the policy of the Government.

The hon. the Minister of Finance, the other day, when speaking at the opening of the Stock Exchange enjoined overseas investors to come to this country, and he said that he hoped that they would stay in this country and that they would hitch their wagon to our star. Mr. Speaker, when the hon. Minister of Economic Affairs goes overseas, does he tell the prospective overseas investor that the ordinary marketing techniques are denied to the overseas investor when he comes to South Africa, that we have two different techniques, one to be operated on by the industrialists in the European field and another, subject to officialdom in the non-European areas? Does the Minister tell the overseas investor, who shall we say wants to can South Africa’s milk that when he wants to sell his product in the European market, he can have a market survey with all the modern technique of a market survey, and house to house canvassing, a survey of the potential demand and a survey of the requirements of the households, but that as far as the non-European households are concerned, that market is denied to them? He must first of all go to the Minister of Bantu Affairs and the Minister of Bantu Affairs will, if he requires that information, furnish it to his officials. I can assure you that the overseas investors will not readily accept that and they will not be bothered with the kind of information dished out by officials.

At 10.25 p.m. the business under consideration was interrupted by Mr. Speaker in accordance with Standing Order No. 26 (1), and the debate was adjourned until 14 February.

The House adjourned at 10.26 p.m.