with leave, stated: With reference to Question No. VIII, put by the hon. member for Zululand (Mr. Nicholls), on the 6th March, 1928, and my reply thereto, I have now had an opportunity of discussing the question of nagana more fully with the Director of Veterinary Services. The hon. member asked—

(2) What were Dr. Fuller’s instructions;

(3) what report did the investigators make;

(4) what action does the Minister propose to take to put the recommendations into operation?

The following particulars are given in reply to these questions—

I move—

seconded.

Agreed to.

When I moved the adjournment of the debate, I said that I had some doubt as to the soundness of the budget. Of course, we welcome the reductions in taxation, but we would have welcomed them more if they had come from savings in the expenditure, for in that case they would have been permanent. There has been an increase of expenditure every year since the present Government came into office. The Minister of Finance took charge in June, 1924, and the increase in expenditure for the financial year, 1924-’25 was £501,000 over that of the preceding year: in 1925-’26 an increase of £1,737,000 over the previous year; in 1926-’27 the increase was £1,097,000, and in 1927-’28 the increase was £561,000. According to the estimates, the increase for the current financial year will be £176,000, without taking into account the supplementary estimates which have not yet been placed before Parliament. The increase in the four years from April 1, 1924, to March 31, 1928, is £3,896,000, or 16 per cent., whereas the increase in population for those four years was only eight per cent. The country and the House should understand that our expenditure is increasing more rapidly than the population is growing. The taxation has grown from 1924-’25 to 1926-’27, from £16,853,000 to £21,280,000, or 22 per cent., although during the three years, the population has increased by only six per cent. This increase has not taken place because my hon. friend is in office, but there happens to be a cycle of prosperity. If hon. members opposite think that this prosperity is due to the fact that they are in office —I don’t want to use strong language—but that would show a fair amount of conceit.

It is because you are out of office.

We laid the foundations of the prosperity which has since come about. We all welcome the prosperity, but you will have your slump in trade.

When you come back.

Before then, I have no doubt. When the depression does come it will be a very serious thing for this country, for we have gone full tilt in expenditure, and have spent practically all the money we can get hold of. We shall have our periods of depression, just as we have had them in the past, and when depression returns it will be a very had outlook for those in charge of the revenues of the country. That is why I call this an unsound budget, because no preparation is made for any cycle of bad trade that may come along. I do not know if hon. members know the amount of money we budget for in this country. If you take the general budget and the railway budget, it is £58,000,000 per annum—an enormous sum for a small community such as we are in this country, with a million-and-three-quarters of white population. We shall have to make it up. Hon. members can easily see that a slight falling off in trade would result in a very heavy deficit. The pity of it is that both the railway budget and the general budget are dependent on the same prosperity. If bad times come for the general budget, the railways will also show a falling off. Hon. members will see clearly the extremely serious position. I do not say it is a dangerous position now, but I do say we are responsible for an enormous amount of money, and any turn in the tide will have a very serious effect indeed. Now, in 1929-’30 we have to make a further provision for old age pensions, namely £780,000, less £200,000 we are providing during the current year. There cannot be the slightest doubt that if we are going to guard against the future we have to put some check on the expenditure of the country. We have always further to remember that the gold industry of this country cannot last for ever. We have said that so often that we are rather inclined now to disregard it, but we had a warning some time ago by Sir Robert Kotze, confirmed in some degree by Dr. Pirow, the present mining engineer. We know the gold industry must, in the comparatively near future, shrink very considerably. The wool industry has stood us in good stead during the past few years, and that is permanent. Wattle bark is doing very well, and wines are looking up, but none of these can make up for the loss sustained when the shrinkage of the gold industry comes about. There are one or two items I would like to mention which indicate the enormous growth of expenditure of recent years. We are spending on education in the Union to-day—the Union and the provincial administrations— £8,152,000, or 25 per cent, of the total expenditure of these bodies. The cost of primary education alone—that which is paid for by the provincial administrations—has increased from £1,640,000 to £6,958,000, or 320 per cent.

From what year?

In 1911-’12 the total cost for provincial education, inspection, training, teachers and schools and general, was £1,640,000, and in 1925-’26 for the same items exactly it was £6,958,000.

You have raised the standard of education.

Ninety-six per cent. of this money came out of the taxpayers’ pocket. There is only £304,000, or four per cent., which came from fees paid to secondary schools and boarding house fees. Can you be surprised at the enormous growth in taxation when the taxpayers find the money and other bodies spend it? That is what it comes to, and that is the reason for this enormous expenditure.

And not the taxpayers’ parents?

They are different people. It would be far more satisfactory if we had to do as they do in a good many other countries, and let the local bodies find the money. It is a well-known fact that wherever the central Government finds the money and other bodies spend it, they spend far more than would otherwise be spent. There is not the check upon expenditure there would be if the local bodies have themselves to find the money. As a consequence, we have probably the most expensive system of education in the world, certainly the most expensive in the British empire. According to the Provincial Finances Commission of 1923, the cost of education in Australia, per head, is £8 5s.; in New Zealand £10 3s.; Canada, £11 10s.; and in South Africa, £19 10s.

Small population and dual language.

That may have something to do with ft, but Canada has a dual language too.

In only one province.

In Australia the circumstances are somewhat similar to here—sparse population, in the country at any rate, and yet the total cost per head is only £8 5s. It is a pretty well-known thing that there is the greatest extravagance in the administration of this particular vote. I do not think any man in this House wants to reduce the facilities for the education of the children, but surely it can be done more cheaply. We have the example of other countries, like Australia and New Zealand, which do it for almost half the price.

What is your remedy?

I am not called upon to give a remedy. When we go to the other side of the House we will find a remedy. Another point I want to call attention to is the growth of the bureaucracy, which is very striking. Do hon. members know that the civil service establishment of this country in 1912-’13, not including the railway service, numbered, according to the estimates, 27,664, and included natives and Indians who were employed? The cost at that time was £4,856,000. The civil service establishment of the Union in 1928-’29 numbered 39,341, while the salaries, according to the estimates, were £9,314,000, pretty well double.

What was it in 1923?

I have not gone into 1923. It makes no difference. The public should know the way in which the expenditure of this country is going up, because they have eventually got to pay. What astonishes me is that hon. members opposite, who represent the farmers, and who are always the keenest in watching expenditure, never raise their voice. Will it interest hon. members opposite to know that I have myself received letters from farmers outside calling attention to this growth of expenditure? Let me also say this, that hon. members opposite came into office very largely on a cry of economy, by denouncing the extravagance of the previous Government and saying that they were going to introduce economy. They have done exactly the opposite. I have another list of figures which deals with both the general administration and the railway department as well. These figures deal with the period during which the present Government has been in office. On the 30th March, 1924, there were employed in the general Government 35,739, and on the railways 70,806 employees, a total of 106,545. In 1928 the number of employees in the general Government had grown to 39,431, an increase of 3,693, while in the railway the number had grown to 86,686, an increase of 15,831, or 22 per cent.

Hear, hear.

If hon. members, like the hon. member for Graaff-Reinet (Mr. I. P. van Heerden), like it, well and good.

We were perturbed about the white people you were driving away.

I can assure my hon. friend that I did not dismiss any white people.

I hope the hon. member for Graaff-Reinet employs nobody but white people on his farm.

I want to ask my hon. friend how you can expect to have any reduction of railway rates which you are always crying out for?

Do you suggest retrenchment?

I am simply stating the position. During four years the number of employees in the general Government and the Railway Department has increased by no fewer than 19,522.

Hear, hear.

Can it be wondered that we have all this increased expenditure? Here is one way in which this increase has been brought about. These figures do not include teachers and the like, but are confined to people who are engaged in the railway administration and the general administration of the country. Even during the current year, there is to be an increase in the general administrative staff of 1,031, and in the railways there is also to be an increase of 269, making a total increase of 1,300 in the number of people employed by the Government in one way or another. I Rave got some further figures which I might mention. I have here a list of chief officials employed in the administration of the Government, starting with the chairman of the Public Services Commission, the secretary to the Prime Minister, the Secretary for Finance, the Controller and Auditor-General, etc., numbering in all 19. I have the salaries paid to these officials by the Union and the salaries paid to corresponding officials in Australia, Canada and New Zealand. Do hon. members know that in every single case the salaries we pay in this country are higher than they pay either in Australia or in Canada by about 10 per cent. or 15 per cent.

By whom were these salaries originally laid down?

There are the salaries; that is the position. I only want, as I said, to draw the attention of the country—it seems useless to draw the attention of members of this House—to the way in which the money goes. Now I come to the policy of the Government in regard to another matter, especially the policy of protection. My hon. friend the Minister went a good bit out of his way in his effort to justify this policy since he has been in office. He stated that he had not increased the cost of living. That may be the case, but he has done another thing, he has prevented it from falling, which it has done in other countries and which otherwise it would have done here. Let me give the figures. According to the statistics of the League of Nations —I have taken this as being perhaps the most impartial source—the wholesale prices in Enggland from 1924 to 1927 fell by 24 to 25 points, while the figures for South Africa, taken from the same source, showed that, during the same period, the wholesale prices fell by 6.5 points. I agree that my hon. friend may not have increased the prices as far as South Africa is concerned, but at any rate he has prevented them from falling to a much larger extent by the policy which he has pursued. In other words, if this protectionist policy had not been imposed on this country, there is no doubt that the cost of living would have been very much less than it is to-day.

People would not have been able to pay.

They would have been able to pay, there is not the slightest doubt. My hon. friend the Minister also made another statement, that the farmer got the benefit of protection, except in regard to two cases, wool and cotton. There are also other articles. Take hides and skins, mealies, wattle bark, mohair, fresh meat, fresh fruit, eggs, etc. In the near future we shall be exporting butter and cheese and the like. The producers of these articles get no benefit from your protection, in fact the reverse; they are hampered in some ways because they have to pay more for what they purchase to carry on their industries. They get absolutely no benefit from the tariff. I can speak from my own knowledge in regard to fresh fruit. The fruit growers are already commencing to grumble at the 20 per cent. tax on printed wrappers. With the narrow margin of profit on the export of fresh fruit, even a tax upon wrappers is a consideration and it is about time, I should think, it was taken off. My hon. friend made a further statement which to me sounds rather strange, and that was that the expansion of the primary industries, of agriculture and mining, was not sufficient to absorb the natural increase in the population of South Africa.

That is rather a serious statement, because, if it is correct, then in my view it is simply hopeless to expect a big population in this country, because if there is not the expansion in the primary industries, farming especially, there cannot be expansion in secondary industries. After all is said and done, this is a country with a small population and the consequence is that your markets locally are very small. Everybody in business will tell you that. You cannot do any export trade in the products of secondary industries for the simple reason that it costs more to make the goods here than it does overseas. Take a market like East Africa, for instance. What chance have we to compete there with large manufacturers in Great Britain or Germany or the United States of America? We cannot do it, because the larger producers have a much larger market to supply than we have, and they can produce cheaper than we can produce. If we have to rely upon the secondary industries for our population, then I say it is a very poor look-out for this country. As regards costs of production, the position has been made considerably worse recently by these wage decisions. Take, for instance, furniture. It is costing now 15 per cent. more to produce. What chance have we to compete in Central Africa or any other part of the world with the furniture that comes from overseas? You cannot do it, and consequently there is not that scope for secondary industries in this country that there is where there is a big population. I think I am correct when I say that I do not know of any secondary industry in this country which is on an export basis except the wattle bark extract business, but when you take furniture, boots and leather generally, we cannot compete with the producers in such countries as Great Britain, Germany, the United States and so forth, where there are enormous markets and where they can turn out on a very big scale. If we are going to have expansion in this country it is only in the export trade, and the only export trade we can do from South Africa, is in the products of the primary industries. It is only they which can afford to produce and do produce the stuff which is exported. I am speaking largely of agriculture and also of mining. All our exports belong entirely to those categories so that, in my opinion, the policy of the Government should be to reduce the expense of production and give as large a margin as they can for profit in the overseas markets. We can only depend on world prices on the other side. The cheaper we can produce the better profit for the producer. If you want to promote the prosperity of this country, allow us to produce as cheaply as possible, and that applies all round. The Minister appears to think that there is not much room for expansion in agriculture. I hold exactly the opposite view, and I have gone carefully into it. I believe there is great scope for expansion in agriculture in this country of ours. That opinion is based upon the fact that agriculture to-day shows a very poor return. We will admit that, I will compare the production in South Africa with Australia and Canada according to figures furnished by the Economic Commission. The output per person occupied in the agricultural industry in South Africa is £80, in Australia it is £420, and in Canada £300. What is the reason for that? It is simply that they have better methods of agriculture, better methods of cultivation than we have. I want to quote from Mr. P. J. du Toit, formerly the Secretary of Agriculture. He gives details of the yield of products in the Union, showing it is very low compared with other countries. The chief reason, according to him, was that the great proportion of our farming is backward farming. The low output is attributable to relatively inefficient methods. In a further statement, he says—

And so forth. Then we have the Secretary to the Department of Agriculture, in his report for 1924. [Extract read.] That is the reason our return per person is so very low as compared with Australia and Canada. Furthermore, if we had improved methods we could and would carry a far bigger population than to-day. Let me give a quotation from a Free Stater. I quote from the Administrator of the Orange Free State, Mr. Grobler, who told us that he was of the firm opinion that under proper scientific methods the country could carry many times the white population it carries to-day. Now he is a man of standing in the Free State, and a farmer, as far as my knowledge goes. I have here the opinion of another administrator—the Administrator of the Transvaal,—and he does not probably carry the same weight as Mr. Grobler does in this respect. He says—

That is what the Minister of Finance is doing at the present time, and that is where he has gone wrong. [Extract read.] The Minister of Finance told us he is trying to do both things; he is trying to develop the industrial side, and he does not want to damage the rural side. The Administrator of the Transvaal also said that he felt sure—

My hon. friend will admit that he also has some knowledge of things.

Of what; has he any knowledge of farming?

He has some brains, no doubt, and can see where things are wrong and where they can be improved. He also says—

After all is said and done, in the four provinces the European population is only 3.5 to the square mile.

After 50 years of free trade.

We have not had free trade, as a matter of fact, unfortunately. What we do require are more modern methods in agriculture. Surely the fact that there are only 3.5 Europeans to the square mile indicates that there is ample room for development, and that there is room for thousands and millions more. I agree with Mr. Grobler, the Administrator of the Free State, that under proper scientific methods this country could carry many times the white population it does. Everybody who studies the thing will tell you that the great requirement of South Africa to-day is increasing the European population. The soundest principle and method on which the Government can concentrate would be to develop agriculture under proper scientific methods. Some time since, the League of Nations decided to call an economic conference to investigate economic difficulties, standing in the way of general improvement and prosperity in the world, and the best way to remove those difficulties. On the 27th of May that conference was called; we had a representative there. A report was drawn up, which our representative signed, and consequently we are partners to it, and the report states—

We do not do that except in regard to diamonds. The report also states—

It just shows exactly the position in which we are to-day. Is the Minister going to alter that, and is he going to follow what is contained in the report of our representative at that conference at Geneva? Is he going to send a representative there, and then pigeonhole his report? We have some reductions, I confess, straightaway.

Who was the representative?

I do not know; it was some official, I think. My hon. friend the Minister should give some consideration to this. This is a conference which has considerable influence; over 40 nations were represented there, and the report was unanimous. There is one matter where my hon. friend has ample room to follow those suggestions; I refer to the duty on cotton blankets. I admit the Minister has made a liberal reduction in some directions in customs duties, amounting to £501,000 in all, but there is one article, used by the poorest part of the population in the country, where the duty is laid on exceedingly heavy. In some cases it amounts to over 100 per cent. I have an invoice where the duty works out at 114 per cent.; to my mind, such a duty is literally oppression. I very much regret that the Prime Minister, who is also Minister of Native Affairs, has not seen fit to interfere for the sake of the people who are in his charge. I cannot use too strong language—it is a perfect scandal, if I may say so, for the Minister who has just been reducing the rates on artificial flowers, laces and ribbons—pure articles of luxury—to maintain a duty on an article which is absolutely a necessity, and my hon. friend must acknowledge that these blankets are required by these poor beggars in winter time to keep warm. I hope the Prime Minister will forgive me if I repeat that it is a perfect scandal that this duty should be maintained. The customs duties collected last year on imported cotton blankets and sheetings was £395,000; but this is not all, for 540,000 blankets were made in South Africa, and they cost the purchaser more because of the duty on the imported article. I calculate that the extra amount that the natives will have to pay on South African blankets alone will be at least £40,000; so that the total taxation paid by natives on cotton blankets and sheeting will be £440,000. If these blankets are used by white people, then they are the very poorest members of the community. With all this heavy taxation we should expect to have a large and flourishing industry, but the South African factories turning out these articles employ an average of only 140 Europeans and 65 non-Europeans, their total wages being £19,424 per anunm. For this the natives pay £440,000. It would pay the country better to pension off every one of these 200 people and to take off the duty. Of course, I shall be told it is an infant industry, but it will never come to maturity. It is a bastard industry.

It will grow old at the breast.

And the natives will have to find the milk with which to feed it. All the material has to be imported. But this is not the only tax the natives have to pay. They have to pay a duty of 6d. a pound or 25 per cent, on beads, as well as duties on boots and clothing, etc. In addition there is a head tax of £1 on every adult male native and 10s. has to be paid by the occupier of every hut; then there are also pass fees, the total of head tax, hut tax and pass fees being £970,000, in addition to the £440,000 in customs duty I have just mentioned.

That is the total amount for 5,000,000 people.

Does any fair-minded man or lover of justice agree that it is right to tax the poorest part of the population directly to the amount of £970,000, and indirectly to the extent of £440,000. This is in addition to the ordinary duty on boots and clothing.

Three shillings and sixpence per head per annum.

The duty on boots proves the utter fraud of this infant industry plea which is often put forward. The Minister’s excuse, whenever he places on a duty is that it is done to protect an infant industry. The boot industry has been in existence for seven years under heavy protection, but according to the manufacturers themselves, it is as weakly to-day as it was seven years ago, and I have no doubt that five years hence it will still require mother’s milk.

How many people do they employ?

I manufactured boots when the duty was 8 per cent., and we were doing relatively as well then as we are to-day, although the duty has gone up to 30 per cent. It was promised that in March last per cent, would be taken off, and a similar amount would be deducted each year until the duty went back to 20 per cent. The time has come to redeem that promise, but, unfortunately, it has not been redeemed; the Minister has been got over by the boot manufacturers. The Minister has also actually put a duty of 20 per cent. on leather lining, which I am told will increase the price of boots by 2d. or 3d. a pair. If there is one heavy item of expenditure in an ordinary household it is on the children’s boots, and the bigger the family a man has the more he has to pay in taxation on boots. Yet my hon. friend has gone out of his way to reduce the duty off silk stockings, which are purely articles of luxury. That may suit the girls all right, but if they can afford to buy silk stockings they can afford to pay the duty. It does seem a shame to reduce the duty on silk stockings and keep up the duty on boots.

Do you allege that boots and shoes are a more necessary commodity than stockings?

Very much so, undoubtedly; there is no question about that.

Keep the duty on, but give the women the vote.

I should like to hear the Labour party say something about this.

We don’t mind the price of boots. We want work.

Do you want to reduce the duty on silk stockings and retain the high duty on boots? I draw the conclusion that the hon. member has not a big family. When you make reductions in the duties on luxuries, it is not fair to leave them at the old level on such necessary articles as boots, shoes and cotton blankets. Another point is about sugar. I want to point out first, that the fruit-growing industry of this country is growing with great rapidity. It is increasing by leaps and bounds, and it is absolutely necessary to find every possible outlet for the fruit grown. One of our best outlets is overseas, and I want to thank the Government for what they have done in regard to the agreement with the Union-Castle Company. That will certainly be of tremendous assistance to us in getting our stuff away, and I want to point out that we sent out of the country last year £800,000 worth of fresh fruit, including citrus, and of dried fruit, we sent out £128,000 worth, of canned fruit £49,000, and of jams a miserable £6,896 worth. Of course, we cannot be satisfied with that miserable export of jams; if that industry is going to be allowed full development, we must do a big business in jams. There are classes of fruit which must go to jam-making and the like, and we must be able to provide for that. For that we must have an export trade. Australia in 1924 exported no less than £85,000 worth of jams, and I have not taken into account dried and bottled fruit. The difficulty we have here is the price of sugar. You cannot develop a proper export trade in jams from this country while you are paying your present price for sugar. The duty on imported sugar is 8s. per 100 lbs., or close on 1d. per lb. The excise on sugar produced in South Africa is 1s. per 100 lbs. Now we shall produce, according to some figures which I saw published in the paper the other day—they are not necessarily exact, but they will serve my purpose—300,000 tons of sugar in South Africa during the present year; that is the estimate. There is not the remotest doubt we must export 100,000 tons of that for the reason that we cannot consume it. I doubt if you can consume 200,000 tons. South African sugar is sold to-day wholesale at 24s. 6d. per 100 lbs., and to the jam manufacturer at 20s. 6d. per 100 lbs. The price in Europe to-day, at Hamburg, for instance, is 15s. 6d. per cwt. Some of it is even cheaper. Some came out within the last two months at about 14s. 9d. c.i.f., though that, I think, was an exceptional price. I think 15s. 6d. can be taken as a fair price. Hon. members will see at once why we cannot do an export trade in jam. Jam manufacturers in South Africa have to pay 20s. 6d. per 100 lbs. and people in Europe can buy for 15s. 6d. That is the whole secret of the difficulty we have at the present moment. Hon. members will see that the Government have gone out of their way to protect one industry and very seriously indeed hampered another one which is just as natural, and comes out of the produce of the soil as the other does. I do not see how the fruit-growing industry is to flourish if it does not get every possible opportunity fairly to get rid of its fruit, that is to say by making jams and drying fruit. The placing of a duty of 8s. per 100 lbs. on sugar not produced in South Africa makes it impossible to do an export trade in jam. Furthermore, the wholesale price to the merchant is 24s. 6d., and 20s. 6d. to the jam manufacturers. At least one-third of the sugar from South Africa is sent oversea, and will have to be sold at the market price oversea, which will be somewhere about 15s. 6d. The consequence is that the extra price made in South Africa has to cover the loss when the sugar has to be sold oversea at the world price. That is the position we are into-day. The Government actually give a rebate of 1s. on the export overseas, but they do not give a rebate on the sugar used for making jam. No less than £72,000 in rebate was paid in 1926 and 1927 to the sugar exporters at 1s. per 100 lbs., but nothing was given in rebate to the man who used his sugar for making jam. We pass legislation in this country to stop dumping. We are fond of denouncing dumping, but we are about the biggest dumpers of sugar in the world. We dump on the other side thousands of pounds worth every year. I wish the Government would follow their own policy, and do away with dumping as far as sugar is concerned.

I, in turn, experience a difficulty in connection with the criticism of the hon. member for Cape Town (Central) (Mr. Jagger) is not knowing for whom he speaks. He took, for example, old age pensions in connection with the increase of expenditure in the coming year. Now I should like to know why he referred to it, whether he is in favour of, or against, the system. It is no use telling the public that we are going to spend £700,000 on it next year. I want him to say whether he is for or against it. Otherwise, it surely is no criticism. We expect him to criticize what the Government has done wrong. Possibly hon. members who are yet to speak in this debate will say whether they are for or against it. We on this side can expressly say that we are for it, and, as the hon. member for Cape Town (Central) said, the public must know it. The public must know that the Government are in favour of old age pensions. The hon. member is neither for nor against. He merely mentions it. I congratulate the Government in that South Africa is at last going to do its duty towards the old people. I remember that we strove for this as far back as 1920. The hon. member next spoke about the better times which this Government has enjoyed. He even admitted that the favourable state of our finances was due to the progress of the country. I want to add that the progress of the country is largely due to the policy of the Government now in power. We may possibly have difficulties later in connection with old age pensions. It may possibly be said that the amount is too small, or the age too high. In any event, however, we can go to the country and say that we have commenced the fulfilment of our duty to the people. I will not say that the Opposition is opposed to it, but I merely quote the remark of the hon. member for Cape Town (Central). He made very little criticism. I shall return later to a few points, but I want first of all to criticize one matter myself, and I hope the Minister of Finance will remove that objection of mine. It is a very delicate point to the Opposition, because for so long they were sinners in this respect. I want, however, to be consistent; I also want to criticize this Government in connection with the costs of loans. It is absolutely unsound for us, when we raise loans, to take the expenses in connection therewith from loan funds, and not from current expenditure. It may be fair and reasonable when a loan is raised for the first time, but if from time to time thereafter loans are raised to pay off the previous loan, then the cost must be paid out of current expenditure. If I build a house for £1,000, and I have to borrow £1,000, and the expenses in connection with the loans are £25, then it is reasonable to add that amount to the cost of the house, but if after five years I again borrow £1,000 to pay off the first £1,000, and do the same again in five years, then it is unfair to add the cost of the loans to the purchase price of the house. From 1910 to 1926 our debt increased by £106,000,000, but during that time we borrowed no less than £334,000,000 each time to pay off previous loans. We borrowed £228,000,000 to pay off old debts from time to time. We borrow from Peter to pay Paul, etc. The Minister has made nearly all the improvements we were working for, our hobby-horses, but that point must be put in order on the estimates. The costs of the loans must be paid as current expenditure. There has not been much criticism to-day. I do not only wish to go into the criticism of the hon. member, but also into that which has been made outside the House. It is said that the Minister should not have had a surplus. It is very easy to say that. But then it is said that the Minister has intentionally underestimated in order to have a surplus. That seems very illogical, that the Minister should go out of his way to have a surplus, a thing they call a sin. We must, therefore, take it that the Minister has not intentionally obtained the surplus. There is a difference of opinion in the Opposition whether it is a good or bad thing to have a surplus, and whether it is good or bad to have a deficit. The hon. member for Standerton (Gen. Smuts) got out of the difficulty easily last year. He strongly disapproved of the surplus of the Minister of Finance and the deficit of the Minister of Railways and Harbours. He reminds me of the proverb: “Heads I win, tails you lose.” I want to ask hon. members whether they think that it is always such an easy matter to estimate the revenue, especially with such a good Government as ours in power. Since 1924—thanks largely to the Government—we have had surh colossal prosperity, that it is very difficult for a Minister of Finance to estimate properly what the revenue will be. Did the hon. member for Yeoville (Mr. Duncan) last year expect that this result would have been obtained?

No.

I am glad to hear that, because he said last year that our prosperity was declining, and that the facts showed that we had come to the end of surpluses. One of the Opposition leaders, therefore, had concluded last year that we ought to be careful, that we were over-estimating our revenue; another leader said that we were under-estimating intentionally. What does that criticism amount to? The chief leader of the Opposition disapproves of both. The hon. member for Cape Town (Central) a few years ago criticised the fact that we were only putting aside £650,000 for the payment of dead liability. Now the Minister comes and provides a further £500,000 besides the £650,000 already available. The hon. member now says that we have taken £1,150,000 out of the pockets of the taxpayers. When, two years ago, he said that £650,000 was too little, he did not think then that it was coming out of the pockets of the taxpayer. I only mention this to show how weak the criticism is. I now come to protection. Hon. members doubtless noticed how quiet the Opposition benches were while the hon. member for Cape Town (Central) was talking about protection. One could hear a pin fall. Yet the hon. member was criticising on behalf of the Opposition. Dir he speak on their behalf, or on his own? In this connection I must also refer to the criticism passed outside the House, because inside there has been precious little. The hon. member for Cape Town (Harbour) (Maj. G. B. van Zyl) said, according to the newspapers, that they would have to put things right in 1929 or 1930. I just want to tell him that he need not be afraid of having to do so. There is not the least hope. The hon. member for Cape Town (Central) is particularly consistent so far as his personal policy is concerned, but his arguments are not always consistent. In 1925 he prophesied that there would be a rise in the cost of living. In 1926, when there was no increase, but it was just about the average, he said: “There was no increase, but if it were not for this or that, there would have been a decrease.” In 1927 there was a reduction, and he then said: “It might have been more if it were not for this and the other.” Now I want to ask him when we shall get to the end of that. In any case, it is surely no argument. The hon. member also said in 1926 that the object of the Government was to provide more work, but that, in his opinion, they would not attain their purpose. He said, further: “I also think that it will not result in an increase of (1) the welfare and (2) the riches of South Africa, (3) no development of factories and that (4) the cost of living will increase.” That was the criticism of the hon. member, but it has already been answered by a member of his own party, the hon. member for Port Elizabeth (South) (Sir William Macintosh). He spoke after the hon. member, and said that the protection policy resulted in more factories being created, and more work being provided, and that that was nowhere more visible than at Port Elizabeth (South) where he lived. The hon. member for Port Elizabeth (South) has, therefore, completely contradicted the hon. member for Cape Town (Central). I also wish to refer to the report of the chief inspector of factories. The hon. member for Cape Town (Central) remains obstinate. The chief inspector says that the regular advance of the previous 12 months was maintained in the year under review, that the extension in many industries was particularly satisfactory. The report says, further, that in the western Cape Province industrial development is very en-couragaing, that in the eastern Cape Province regular progress was noticeable, and that in Natal a slow advance was taking place in most industries. Three of the four points are thus answered by people belonging to his own party and by the inspector of factories. I want to quote a few figures in connection with factories, such, e.g., as the value of the raw materials (to prove how important it is to encourage factories) that are produced in South Africa and are used by factories here. In 1923-’24 the value of the raw material was £18,200,000, in 1925-’26 (two years later) £23,000,000. In two years the factories used £5,000,000 more of South African products We reasonably expect that it will be much more still in the future. It is also of great importance to the farmers who will be able to sell their skins, etc., in the country, and get a better price for them. The total value produced in the factories in 1923 was £74,500,000, and in 1926 £91,500,000. The hon. member speaks of a few hundred labourers having found work. I do not know how he arrived at that. Including the Government workshops, there were 66,000 white labourers in 1923-’24, and in 1925-’26 there were already 76,000. When we look at the figures, and still do not approve of the policy, then there is no hope of the hon. members ever approving it. I ask again whether he speaks for himself or the Opposition. The hon. member for Standerton (Gen. Smuts) said, as long ago as 1920, that he was in favour of the protection policy, so are the hon. members for Dundee (Sir Thomas Watt) and, I think, the hon. member for Yeoville.

Yes, for a moderate protection policy.

The hon. member for Zululand (Mr. Nicholls) always walks out when the hon. member for Cape Town (Central) speaks on protection. He becomes like a raging lion. It, therefore, seems that the hon. member for Cape Town (Central) is speaking for himself. We fixed the policy in 1924, and went to the country on it, and are still in favour of it. We know there are difficulties, but the question is whether it is beneficial or detrimental. The policy of the last Government eventually became like a bad tooth, and this Government had to pull it out. It is painful for the moment, but excellent for the future. We have also heard a great deal recently about white labour. That also is practically a policy adopted and carried out by this Government. I again quote the report of the chief inspector of factories. He says that in most factories an encouraging advance is noticeable in the wages, and that as a result, more efficient work can be demanded. We have adopted the policy, and stick to it, and some members of the Opposition support us. In this connection I find an interesting quotation from a book by the hon. member for Yeoville, namely: “Public opinion is awakened with regard to the difficulties connected with the large numbers of uncivilized labourers in a civilized society, at a scale of wages which make existence on a civilized basis impossible, and the competition of uncivilized workers with European or coloured persons who live, or try to live, in a civilized state. The slums of Cape Town, which have been invaded during the last five years by native labour, and where the workmen work at natives’ wages and compete with the working class of Europeans and coloured persons are a striking object-lesson of the effect of cheap labour.” I cannot say it better myself, but it is the policy of this Government, and that of the Opposition in theory. The Opposition describe in beautiful language what we carry out in practice. It does not only apply in this respect. In 1920 the hon. member for Standerton spoke so splendidly about the minimum wages and white labour that one became greatly impressed. That was in 1920, but in 1924 nothing had yet been done. It is all theory, but no practice. That is the difference between the last Government and this one. In the past we always heard of the desirability of the gold standard, but it never came until this Government—

The Bill was drafted.

It was postponed year after year, and it would have been postponed further if we had not come into office. The old Government, except possibly the hon. member for Cape Town (Central), was theoretically in favour of civilized labour and old age pensions, and all those things, but it remained a matter of theory. The same applies to the steel industry. It never would have come, not even in 20 years, if tins Government had not tackled the matter. We should always have heard, however, of that magnificent ideal of the Opposition. Our Government tackles matters and is not what the late Mr. John X. Merriman used to call the previous Government—“a tomorrow-is-also-a-day Government.”

Is this an electioneering speech?

The hon. member for Cape Town (Central) said that the people must know, and I must answer the criticism which has been so weakly made. I then come to economy. We hear every year that we ought to economize. Last year the hon. member for Pietersburg (Mr. J. F. Tom Naudé) asked why it was necessary to economize. He dealt with the points one by one, but no one could answer him. The hon. member for Cape Town (Central) has been too long in the country to say where we should economize, but other hon. members have put their foot into it, and the hon. member for Cape Town (Central) has made the same mistake to-day. He said there were too many officials in the service. What did the hon. member for Dundee say a few years ago? At that time there was, I think, a commission, appointed by the last Government, consisting of the hon. members for Yeoville, Dundee and Cape Town (Central).

Not I.

The hon. member for Dundee said that if the Minister of Finance would appoint a commission to investigate every branch of the public service to see where there were unnecessary officials, it would be found that they had already done the work, and that there was no further economy possible. That was two years ago, but now another Opposition leader says that there are too many public servants. Have they been appointed during the last two years? Then give the figures. The hon. member does not reply. Another criticism was that the capital expenditure was too great, or that there should be none at all.

I said nothing about it.

No, but it was said outside the House. If the hon. member agrees with me, let us let the matter rest. If he says that capital expenditure is wrong, then we know where we are. Every young country is obliged to spend large sums on development. The old Government had capital expenditure, and so has this Government. It was not our grievance against the old Government that the debt of the country was increased. Our great objection was that loan funds were used to defray current expenditure. Did you not do so? A further objection was that deficits were written off against loan funds. We did not criticize money well spent, but wrong control. The hon. members were challenged to mention instances of extravagance. One hon. member mentioned the payment of members of Parliament as members of commissions in Cape Town. Well, that does not make much difference. Another mentioned fountain pens, which were issued to a certain department. Last year the hon. member for Pietersburg repeatedly asked the question as to what instances of waste there were, but they could not mention anything. Why should we economize? I want again to ask hon. members to tell us in what way we ought to economize. I see the increase this year is about £450,000. Of that amount £187,000 is for annual increases, £148,000 for interest, which leaves £70,000, which is chiefly for increase in police and in connection with posts and telegraphs. Are hon. members opposed to increasing the police? More police are being asked for every day. As for posts, telegraphs and telephones, they pay for themselves, and there surely can be no objection to spending more money on them. I find that in 1923 the length of telephone line to farms was 4,000 miles, now it is 22,000 miles. I do not mention this to make a political speech, but to prove by facts the hollowness of the criticism. The hon. member for Cape Town (Central) urges retrenchment. The population, he says, has in four years only increased by 8 per cent. and the expenditure has increased by 16 per cent. Why does he quote the figures? Why does he mention the proportion? Is is the experience of all countries in the world which are still developing that the expenditure increases more in proportion to the population. What is the use of mentioning those figures. The hon. member must say what he aims at. I do not want to say much about the reduction of taxation* but when it is said that our taxation has increased, my mind cannot comprehend it. How is it possible for us to increase taxation without altering laws? I admit that we have received more money, but that was in consequence of prosperity. If I have to pay a tax of 1s. in the £ to-day on £100, that is £5, and in the second year, when the tax is only 9d., I shall have to pay £7 10s. on £200. The Government is then getting more, but the tax is, nevertheless, reduced. Does the hon. member see it now? Let me give a few reductions in taxation; in 1924 income tax was due on incomes over £300 and the abatement was £50, now it is paid after £400, less 20 per cent., and the abatement is £60. In 3924 we paid 2d. postage on a letter, now it is 1d. The estate duty was paid above £1,000, now it is above £7,500. The tobacco tax has been repealed, the medicine tax has disappeared. In connection with the tobacco tax which has been removed, I want to point out that in 1924 the yield was 8,500,000 lbs., in 1927, 15,400,000 lbs.

This year it is 24,000,000 lbs.

The hon. member for Yeoville asked if I was making a political speech, but the hon. member for Cape Town (Central) said that the public must know. In 1924 the dead liability was £63,000,000, and, strangely enough, the hon. member for Caledon (Mr. Krige) did not know it. Last year he wanted to explain here that there was no dead liability of £63,000,000, but a surplus of £4,000,000. It is amusing, but it is attributable to the fact that the last Government never introduced a politically honest budget. It was never said what the dead liability was. We had to work it out ourselves. From 1920 to 1923 the former Minister of Finance never said a word about the dead liability, and the result was that a leader of the party, the former Speaker, proclaimed a stupidity like that. Our policy is to submit everything to the light of day. In conclusion, a word about the mines. We heard that the mines would be closed if we got into power. When we took over the output was £52,500,000, now it is £61,000,000. It is said that we have nothing to do with that. Everything that goes wrong is the fault of this Government, but everything that succeeds is due to the Opposition. Well, let us continue on these lines, let the Opposition take the credit, we will continue doing our duty.

We have had a little bit of party propaganda from the last speaker, who rather surprised me when he stated that he did not know what the attitude of the Opposition would be in regard to old age pensions, seeing that the late Government announced that as soon as finances would permit, they would institute old age pensions. The old Government also appointed an officer to inquire into the matter and one of our members served on the Old Age Pensions Commission. We expected and had the right to expect from the Chairman of the Public Accounts Committee something in the nature of a financial statement this afternoon instead of a mere catechism of members of the opposite side. He had nothing but praise for the hon. the Minister of Finance. Is he satisfied that a Minister of Finance with a total of £27,000,000 should be out in his reckoning by 2½ millions, no less than 8.3 per cent.? In customs receipts alone he was out by nearly one million pounds. The Minister was warned last year that this would be the case. Income tax has produced half a million more than was anticipated, and so we can go right through the whole list. If we read the hon. the Minister’s Budget Speech, we see that on his own showing, on every head he has had far more than he estimated. Expenditure also has been under-estimated, though only by £500,000. It is not very surprizing he should have a very large surplus. I would like to draw attention to the fact that, in 1911, an Act was passed under which the old South African party Government always worked, and that was that any surplus on the current year’s work had to be paid to the Public Debt Commission for debt redemption. Every bit of the surplus had to be paid in. This Government was not satisfied with that and, in 1926, they repealed that Act. I say, deliberately, that without that repeal it would never pay a Minister of Finance to have large surpluses, because he knows if he wants to withdraw taxation, he must reduce expenditure. Instead of reduction, we find that expenditure has actually increased by half a million. It must not be forgotten that the Treasury, as such, is free from large expenditure, which, under ordinary circumstances, it would have been called upon to meet. It pays nothing with regard to civilized labour. The railway users have to bear the brunt of that. Under the old Government the amount over and above the usual wages on the railways would be paid by the central Government. They bear nothing with regard to the carriage of cattle during drought. The railways bear the whole brunt of that, and the Agricultural Department is free. There are innumerable services rendered by the railways for the central Government for which the railways get nothing, but the strange thing is that the Agricultural Department now enters into road competition with the railways. Is it surprising they can show an inflated budget which they have no right to show? In regard to the railways the Minister this year anticipated a surplus of £22,000. In how far he is justified in that I do not know, but I think if we consider his previous forecasts he must excuse us if we throw some doubt on his estimate. Let us take the last three budgets. In 1926-’27 he forecasted in his budget speech a debit of £85,700. When, later on, he had to revise his estimate, he estimated for a deficit of £146,400, but the excess of expenditure over earnings actually amounted to £158,800. We are told the whole of the deficit on the railways last year was £136,000. When we turn to the Auditor-General’s report we find that the result of the working of the railways for the year was a deficit of £451,400 in place of his estimate of £85,000. For the next year, 1927-’28, he forecasted a surplus of £39,700. His revised estimate was a deficit of £107,200. Strangely enough, here also the Minister was warned what was going to happen. We are not told what the excess of expenditure over earnings is for the year, but we find that on the railways alone there is a deficit of £487,000, making it impossible, therefore, to expect any reduction of the rates in the near future. When we come to the present budget, 1928-’29, he forecasted a surplus of £22,200. If this budget is as accurate as his previous budgets, I think the position at the end of the year will be a greater deficit than the past year. Rut during the same period, not only the actual balances, but also his estimates of income and expenditure were wholly wrong. For 1926-’27, he estimated expenditure at £27,310,000, and the actual expenditure was £28,210,000, an increase of £876,000. The estimate of revenue was £27,224,000, and the actual revenue was £28,000,000, or a difference of £816,000. For 1927-’28 he estimated expenditure at £28,700,000, and the actual expenditure was £29,364,000, an increase of no less than £635,900. Revenue was estimated at £28,768,000, and the actual revenue was £29,257,000, again wrong by the sum of £488,900 only. But the important point, to my mind, is this, that to get the extra £489,000 he had to spend £636,000, or in other words, to make £5 he had to spend £6 10s. For 1928-’29, his estimated expenditure is £29,400,000, an increase of £685,000, and his estimated revenue is £29,436,000, an increase of £668,000 on the previous year. On the accustomed basis, no doubt, when we come to make the usual additions for appropriation, the expenditure on our railways alone will be in the neighbourhood of £30,250,000, and the revenue will be £30,000,000, in other words a deficit of at least a quarter of a million in place of a surplus of £22,000. The loss under the present Minister, that is from the date he assumed office, already is £1,600,000, and at the end of this financial year, I have not the slightest doubt, it will be in the neighbourhood of £2,000,000. If we remember that when he had very successful years he accumulated a surplus of just on £3,000,000, we must remember that to-day those £3,000,000 have been spent to help him out of his difficulties during his administration. Even if we allow for reduction of rates about which so much play is made—forgetting entirely that when we were in power with nothing like the revenue they are getting to-day and with a concern being run at a loss we reduced the rates by at least four times the amount they reduced them during prosperous years—and let us allow the amount written off as dead assets and we find during his term of office he has actually over-spent by £3,000,000 and probably this year 3½ million pounds. Let me say this, it is very difficult to criticize the Minister of Railways, because this year, like last year, he has run away when we come to the criticism of his Administration. Last year when we came to the very important criticism of capital expenditure, the Minister was not here. This year again he is not here during any portion of the debate. Since he took over, while the revenue increased from £24,500,000 to £29,500,000, or by £5,000,000, his expenditure increased from £23,000,000 to £29,000,000, or £6,000,000. Take alone the head, general charges, there we find an increase of £8,917, while on the general manager’s vote there is an increase of £3,265. These are not increases for the ordinary workman, the ordinary labourer, whose cause is so ably advocated by the cross benches. These are expenses in the head departments.

Where are the cross benches?

Take the general manager’s vote, the progressive increases under this head alone during the last three years are worth considering. In 1925-’26, the increase was £1,244, in 1926-’27 the increase on top of that was £5,104, in 1927-’28 another £9,076 is added, and in 1928-’29 another £3,265 is added. That is all in the general manager’s office. In other words, there is an increase during the four years under the present Minister of a sum of no less than £18,689. Take the chief accountant’s office. There we had in 1926-’27 an increase of £13,318, in the following year £9,333, and in the year after that, £9,100, a total in the four years of £30,190. Running expenses increased by £254,899. Take the extra train and engine mileage. In 1928-’29 the train mileage increased by no less than 2,609,000 miles, equivalent to 4.56 per cent. According to the general manager’s report, the running expenses for the four years show a progressive increase in the cost per train mileage. In 1923-’24 it was 23.9d. in 1924-’25, 24.01d., in 1925-’26, 24.20d., and in 1926-’27, 24.65d. In the four years there was an increase of over 1d. per train mile. While the increase per train mile would appear to be due to the additional cost entailed by the change in the hours of working system, it is clear that with the progressive increase in train mileage we should have found a progressive decrease in cost of train mileage. It is an accepted fact in railway economics that the working expenses do not increase in the same ratio as the increase of train mileage. Here they have increased more than the increase in train mileage. In other words, the percentage of fixed expenditure does not increase in direct proportion to the increased traffic handled. Among the main increases in running expenses, we find the item wages and electric current £101,900. Let me say that the Electric Supply Commission’s accounts to-day are not audited by the Auditor-General, and seeing that the Railway Administration has to bear quite 99 per cent. of the whole cost, I think the time has arrived when the Minister should insist, as far as the railways are concerned, on the Auditor-General reporting on the work of the Electric Supply Commission, the same as every other activity of the Government, and if we had that, much of the expenditure would be reduced. Under the head electric power, there is a very substantial increase of £78,000. Approximately £3,000,000 has been transferred from the railway capital account to the Electric Supply Commission, but the fact remains that 99 per cent. of the interest charges on the capital still is borne by the Railway Administration. That is a burden on the users of the railway, and the administration and the users should have the opportunity of knowing from a personality such as the Auditor-General, whether the railways are being worked on an economical scale or not. Now let us consider the staff. The Minister tells us that at the end of 1927 the total was 95,011, a net increase of 413 for the year. The graded staff increased by 2,145, civilized labour increased by 444, Indians decreased by 340, and natives decreased by 1,836. This present Government is the first Government that has “gone all out” as they claimed, for the coloured man. I am using their own words. They want the coloured man to be of exactly the same status as the European. I am wrong in saying that they want this. They say they want it. In the returns there is not a word about the coloured man. If you look back at the reports of the select committee and the questions put to officials, and try to find how many coloured men have been put on, or what wages they get or what facilities are given them, you will find that the reply invariably is that coloured, Indians and natives are classed as one. We ask them again what has become of their civilized labour policy. We say again, “Be more honest and use the term ‘European labour ’ instead of civilized labour.” In the three years the number of Europeans employed increased by 15,500, while others decreased by 7,000. Judging from the estimates, there is a large reduction in the number of non-Europeans this year, larger even than during the three previous years. The position to-day is that there are now employed 55,000 whites and 31,000 non-Europeans. Take the salaries of the employees. The salaries have increased to £15,000,000, or 50 per cent. of the total expenditure of the administration. In 1926-’27 it was 49.57 per cent., and in 1923-’24 the percentage was only 40.27 per cent., or, in other words, the increase has been just on 10 per cent. since the present Administration took over. The Minister, with a characteristic flourish of arms, declared that “the Government would continue the development and gradual expansion on sound economic principles” of the civilized labour policy. What, in His opinion, constitutes sound commercial principles I must say I really, after all our experiences during the years of his reign, cannot understand. But he, being wholly unable to forget his activities before he became a Cabinet Minister, has half an eye on the administration and the rest of his full gaze on a possible election, when he now declares he is going to increase the salaries of civilized labourers by sixpence. What strikes me as very strange is that the Minister does not tell us what the cost of that is going to be. We warned him, year after year, that he was giving too low a salary to these men. Now he does not estimate the cost. Let me remind him that two years ago he informed the House it was quite impossible to give any increase, because sixpence a day extra would have meant £96,000 a year. To-day there are a largely increased number of white labourers. I think we are entitled to know what the cost is to be, and if it was too much for the Government two years ago to give sixpence a day to the then comparatively small number, what is the reason for giving this increase to-day? There again, I think we can safely look to the anticipated election. The capital expenditure since Union has increased from 87¼ millions to 147 millions. When they assumed power the capital expenditure was 117 millions, and now it is 147 millions, an increase of 30 millions in four years. A simple calculation in arithmetic will show that the rate of increase is 7½ millions per annum. For this year the interest on capital has increased by £166,000. In the three previous years we had increases also: In 1925-’26, £341,000; the next year £208,000; and the next year £334,000. The total provision for interest today is £5,889,000. On the maintenance of permanent way—and this to my mind is a very serious matter—we have decreased our expenditure by £137,000. This is the only item in the whole of the estimates where there is a decrease, and a very substantial decrease, and the one item on which there should be no decrease, one on which I would willingly agree to an increase, seeing we are having train mileage extended and the lines extended, and we are having accidents occurring daily.

Do you suggest that is due to the permanent way?

I will tell the Minister what I suggest in due course. This is a very substantial reduction, and calls for enquiry. More especially does it call for enquiry when we consider what the general manager in his report says, and what the note on the estimates was. If the Minister will turn to page 2, paragraph 5 of the estimates, he will see what the Minister of Railways and Harbours says. He says “the decrease is accounted for by the reductions made for the maintenance of permanent way, and structures.” Good and well, but let us turn, in connection with that, to the Auditor-General’s report, and we find he draws special attention to the fact that the chief civil engineer refused to give a clean certificate. The certificate says—

And yet the expenditure is reduced by £137,000. I think we have a right to ask for an enquiry into this matter. There is a further notable defect in the accounts. There is a complete absence of information of the actual expenditure on maintenance of the permanent way, and more particularly is there an absence of any reference to repair work being done as affecting renewals on the railways. I think we are entitled to the fullest information in a matter like that. Again I say, having regard to the notes in the estimates and to the Auditor-General’s report, we have a right to say that the public should be satisfied that these accidents are not due to neglect on the permanent way.

That is putting it more mildly now.

I am glad the Minister is waking up at last.

That is not worthy of you.

The Minister must curb his passions.

I have been listening to you patiently and courteously, and you have no right to make that remark.

I am no more discourteous than the Minister is. I want to contrast this with practically every other system in the world. Let us take the British system. There they are private lines, but by Act of Parliament every railway company is bound to give the actual expenditure on the permanent way, not only the actual expenditure per annum, but they are bound to give categorically the cost and the number of cubic yards of ballast put in every year; they are bound to give the number and the cost of the sleepers put in every year, and they are bound to give the number and cost of new rails put in every year. The Act was specifically passed in the interests of the safety of the public. Here we do nothing of that kind. All we do know is that there is a decreased expenditure of £137,000, and when we refer to this the Minister seems to get annoyed and seems to think we have no right to do it, because he says “You must be suggesting these accidents are due to the permanent way.” Let the Minister appoint an independent commission when we have these accidents, let him agree that in future he will not appoint departmental but independent men, and the public then will be more satisfied. The Minister of Railways and Harbours returned to the charge in regard to operating ratio. If, he says, the rates and fares had not been reduced, and if the added expenditure on the new superannuation fund and the increased contribution to the renewals fund had not been incurred, he would have had an operating ratio of .11 per cent. below that of the previous Minister. The Minister might have gone a little further with his “ifs,” and proved nothing, and his deductions would have been of equal value. But if a reduction of rates has anything to do with the reduction of the operating ratio, and the Minister says there cannot be any reduction if the fares are reduced, I would like to ask him why it was, when the fares and rates were reduced by four millions, the operating ratio went down. Germany brought down her operating ratio by 5.5 per cent.; Canada by 9 per cent.; the United States South Pacific by 5 per cent.; and the Pennsylvania by 10 per cent. South Africa’s operating ratio has gone up by 5 per cent. To-day it is only 2 per cent. higher than the high-water mark of 1922. I need not tell hon. members the reason for that high-water mark—after the war everything was enormously expensive, and we had what the Government with all their promises have not got, a full and universal eight hour day. The ratio on our railways is higher by 10 per cent. than the next highest in Africa, higher by 8 per cent. than on the South American railways, and higher by 2 per cent. than on the Australian railways. I quite agree that it is perhaps not conclusive to compare one railway system with another railway system, but at the same rime the fact remains that it is the universal practice in every railway system to work on the operative ratio, and they adopt this as a statistical fact, especially as a means of comparing their own working with the working of other railways under similar conditions. We should have our operating ratio carefully worked out, not only in comparison with other systems, but with our own year by year, for unless you can do so year by year, it is impossible to make any reduction in expenditure or improve your system. Unquestionably, operating ratio figures, taken one year against another, and the latest year’s figures against those of the previous years in retrospect, provide a useful factor for intelligent criticism of operating results. On these premises, then, a rising percentage must indicate broadly more expensive management, and it is not going too far to suggest that this also may connote wasteful management. If we confine ourselves to comparative figures on our own railways, the extraordinary increase in the percentage of earnings absorbed in working expenditure in recent years is most noteworthy. Going back to 1913, the pre-war normal period, we find the percentage figure is 72.4. If we compare that with the last three years, we find the percentage has increased in 1925 to 77.5, in 1926 to 77.58, and in 1927 to 80.67. On the other hand, if we make a comparison with other railways, and I think a comparison may fairly be made with Rhodesia, South America and southern Australia—the Rhodesia railways are a private company, run under conditions similar to which we run our railways here, and it is a similar country—some startling results are disclosed whereas previously the percentage of the Union railways was 77.5, that of the Rhodesia railways was 59.6; strangely enough, it was the same for Kenya, to which the Minister took such strong exception. If we take the Great Southern railway in the Argentine, we had 64.9 per cent., the Central Argentine railway 67.32 per cent., the Buenos Aires and Pacific 69.35 per cent., and the Buenos Aires and Western 64.9 per cent.; and if we come to Australia, we find that on the New South Wales railways it is 73.91 per cent., and on the Victorian railways 75.18 per cent. The Argentine figures are of particular interest. If we look at their report for 1926-’27, we find that goods traffic increased to £7,900,000, in 1926-’27 from £6,600,000 in 1925-’26. It is not unlike the position here. The actual average receipts per ton of goods was less, namely, 18s. 6½d. in 1925-’26, and 17s. 2¼d. in 1926-’27. They succeeded in reducing operating costs by 2.56 per cent.—very unlike what we are doing here. There is an example for the Minister—the same conditions and the same set of circumstances. We increased our percentage enormously while the Argentine reduced it. The Minister said that the railway rates in the Union were specially low for long distance traffic, and he seems very pleased with himself. These figures were so satisfactory to himself, that he thought he had scored a great point. I am not arguing on his arguments, but I will give a few plain figures. This is a country of long distances, and the longer the distances the better the provision which should be made for the transport of goods if we are going to make this a successful country. Take travelling; the first-class fare, single, on the trans-Australian railways and the South African railways for 50 miles is exactly the same, but when we come to 1,000 miles, South Africa is higher by 42s. 11d. With regard to the second class, for 50 miles the difference between South Africa and the trans-Australian railways is 2d., but, again, when we come to 1,000 miles, South Africa is higher by 30s. Take the higher class of freight. In South Africa for 50 miles, 200 lbs., it is higher by 6s. 1d., but when we come to 1,000 miles, South Africa is higher by 72s. 3d. Take parcel rates; 122 lbs. for 500 miles is 13s. 3d. in Australia as compared with 17s. 3d. in South Africa for the same distance for 100 lbs., and so we can go on. The Minister told us, and he seemed very pleased with himself, that ample and suitable refrigerating space had been provided week by week throughout the year for the export of the perishable products of the Union. He said that fruit exporters were now assured that their products would be removed from the port of shipment with a minimum of delay, and conveyed oversea in fast vessels. With all these conveniences, and we are pleased to know of them, why does he continue that expensive board of his? The chairman is paid £1,800 a year, and the ordinary members each get £600 a year; besides that, there are considerable travelling expenses, and the expenses of many officers who are seconded. These are debited to traffic expenses, adding to the burden of the users of the railways. Why, when we have every facility, does the Minister not save the administration this large expense and allow the fruit farmers to do the work themselves through their own organization as they desire? Then we have the question of road motor transport. I am with the Minister in his desire to extend that as far as possible, and I with to congratulate him on the fact that with 71 services with a working expenditure of £118,000 he had a loss of only £341. That is very creditable, and I hope it means that road motor transport is going to be extended. In 1926-’27 the working capital of this road motor transport increased by £104,000, as compared with the previous year, but I wish to draw attention to the remark of the Auditor-General that as these services have now become permanent activities of the administration, the time seems to have arrived when the expenditure should be transferred from working to permanent capital. Under the present arrangement the administration can institute services and can also stop them whenever they like without Parliamentary sanction. The department has been very successful up to the present in carrying on these services, but the time may arrive when pressure may be brought to bear to start services which will not pay. I suggest that we should have Parliamentary control over these undertakings. The Minister of Railways held out a threat which, I think, was quite unworthy, for he should remember that the railways pay neither taxes, rates nor customs dues, and consequently have a very greatly reduced operating charge. On customs alone the administration saves £1,500,000 a year, as well as something like £1,500,000 in rates. So if the administration, after saving £3,000,000 still finds it difficult successfully to compete with private individuals, it proves that there is something very wrong with the administration. You cannot blame a man who runs a private service under adverse circumstances and still manages to make it pay, yet the Minister says the time has arrived when our competitors should be compelled to carry all descriptions of traffic, instead of choosing only the more lucrative classes; otherwise, added the Minister, the time may come when it may be necessary to give consideration to increasing the rates on low-graded traffic. Although the Railway Department enjoys such great advantages over the private individual, and can run the services without any limitation as to weight, speed or dimensions which other road users have to conform to and over roads paid for by their competitors. They have thus an absolutely free and unrestricted hand to run their services as they like, yet they fail when they come up against the private man; yet the Minister threatens the private companies. The services have now become permanent activities of the administration, and Parliament should have control, as with the railways. I complain that Parliamentary control, wherever possible, is being more and more withdrawn. Take works at harbours. The Durban graving dock was built, estimated to cost £780,000, but the actual cost was £1,340,000. No report on this project was submitted to Parliament by the Railway Board. There were no plans, and no construction Act was passed. Then there were Buffalo harbour and storage ground at Durban costing £50,000; again no report was made to Parliament, nor was any construction Act passed, the contention being that, no matter how great any work may be in connection with alterations to harbours, Parliament has no say. In the case of the Algoa Bay extensions costing £1,500,000, Table Bay Harbour, £1,200,000, and Table Harbour Modified Southern Scheme, £2,500,000, all were initiated without the full information required being put before Parliament. I understand that the position is that if the department constructed the whole of the South Arm at a cost of £2,500,000, it could do so without coming to Parliament, but if it built a little railway on that South Arm, it must obtain Parliamentary sanction. The position seems absurd, although the Act lays it down that every proposal for the construction of any port or harbour work or any line of railway, before being submitted to Parliament, must be referred to the Railway Board, which shall report thereon and advise whether they think it should or should not be constructed. The department has ruled, however, that “harbour works” must be interpreted, not as additions, but new harbours. That may be a very convenient interpretation, but I am certain it was never anticipated when the Act was drawn. With the departmental interpretation we have some remarkable cases which unfortunately cannot at this stage be referred to, but which, if the administration is correct, effectively and entirely deprives Parliament of any control over the expenditure of millions. Now the Minister a little while ago, I think in his budget speech, spoke very strongly against supplying statistics, and he quoted Henry Ford as his authority, saying that Henry Ford cut out unnecessary statistics, and worked for results and results only. I am afraid that, unlike Henry Ford, the hon. the Minister rather ignores the fundamentals, and he forgets what made Henry Ford. Ford had a great vision, and, in spite of innumerable drawbacks, he made his vision his life’s object. He did not start his peace trips until he had made good, and certainly not while his administration was open to criticism. He had an inflexible purpose, and that was to produce the best article at the lowest possible cost. I feel that the Minister cannot really believe, if he has read Ford’s book, that Henry Ford to-day brushes aside all statistics. His whole success has been built up on it. If we read his first book—I would rather go by that than his second book—he tells page by page how he has worked out every single item so as to bring down the cost, and he kept very careful account of all statistics. I am rather surprised that the Minister should suggest that he is following Ford in brushing aside statistics. Why, his whole success is based on statistics. He knows every move of that great machine. Can the Minister claim such knowledge in regard to his railways? If not, then he should have the fullest possible statistics, and he should not withhold these from us. Information is being systematically withheld from us. He has refused to give us branch line statistics, and civilized labour statistics, and year by year we must vote the money absolutely in the dark. Take branch line statistics. Year by year a select committee reported in favour of full statistics. In the fourth report of 1917, page 54 of the Auditor-General’s epitome of Railway Committee reports, we find the chairman of the Railway Board (Mr. Wilcocks,) who to-day is quite against supplying any branch line statistics because it is much too expensive, was a party to this resolution—

It will be remembered they were dropped during the war. To-day he is dead against these statistics. Now we come to something more important and more interesting. In the second report in 1918 of the Railway Committee, we find this resolution—

The House may be surprised to know that the two chief movers in regard to that resolution were the present Minister of Finance and Minister of Railways. I happened to be a member at the time, and I remember how they held forth. Let us consider the position in other countries. The railways in the United States have always occupied a foremost position among the undertakings of the world, and they give comprehensive statistics of every branch. We can study their methods to very great advantage, but it is not only in America where they do this, but in Germany, India, and, in fact, every country of importance in the world, and the strange part of it is that their reasons for giving these full statistics are the reasons we have been giving here year by year since the contemplated change, namely, to assist the administration and executive officers in effective management; to enable the Railway Board to watch and control the management and operation of the railways in the direction of efficiency and economy; to furnish the Government and the Auditor-General with such information and returns as are requested by them. Those are the principles on every railway system throughout the world. But I would like to refer to a later authority than even Henry Ford. I want to refer to Pitman’s Transportation Library, “Railway Statistics, their compilation and use,” by A. E. Kirkus, Director of Statistics, Ministry of Transport, written in 1927. This book contains much important and interesting information in regard to how railway statistics should be kept—

All those conditions are applicable to this country at present. Without statistics it is practically impossible to test the efficiency of business operations on a large scale. The author goes on to say—

All very important, and of such importance that I do hope that the Minister will send this report to the Minister of Railways so that on his long voyage he may peruse it at his leisure. On every point the Minister’s practice differs from the practice of the rest of the world. His expenditure is increasing out of all proportion to even increased earnings. His estimates are about as inaccurate as they possibly can be. His administration is expensive, if not wasteful. He has apparently no hold on the working of his department. He has discarded every known safeguard, and he keeps Parliament in ignorance of every matter of importance, and with this state of affairs no one can be surprised that the railway finances are in the parlous condition we find them in to-day.

I think my hon. friend opposite (Maj. G. B. van Zyl) has certainly spent many hours with the midnight lamp. When you analyze the whole statement that he has made this afternoon, I am afraid that he has been firing off squibs at us, most of them damp squibs.

He has not thrown a sleeper at you.

Let us be serious. It is peculiar that when we try to be serious we should be treated to silly remarks by the hon. member for Fort Beaufort (Sir Thomas Smartt). One would have thought that at his age he would have learned a little sense. The speech of the hon. member for Harbour (Maj. G. B. van Zyl) was an indictment of the policy of administration, and one of the most serious statements he made and one which I think was ill-founded was when he said that the Minister of Railways stated inaccurate facts, or made inaccurate statements to the House. I do not think anybody can accuse the Minister of Railways of a thing like that. I think the country has much to be proud of in having our large railway system in the hands of a zealous and capable man like the Minister of Railways.

And a zealous chairman of the Railway Committee.

Yes, and a zealous chairman of the Railway Committee, as the hon. member said. Let me answer a few of the points that the hon. member for Harbour has made. I will start with his long quotation about Henry Ford and some other gentleman on statistics. One might think that the department does not keep any statistics.

Very few that are worth having.

The department keeps those statistics which are of use to the department and to the country. The hon. member made a statement about their having stopped the statistics as regards the branch lines. That is quite correct. There is a reason for it. It was found that those statistics are of very little use to the State, and that they cost the country between £11,000 and £12,000 a year. I think the Administration, when they found that these statistics, owing to their nature, cannot be very accurate, and as the cost to the country was so very large, very wisely and correctly discontinued the system of keeping those statistics, but to insinuate that no statistics are kept is going too far. Although the statistics are not published in any paper or any report, if any member wants the statistics of any particular branch line he can obtain them. I think, personally, that the railway Administration are perfectly justified in having discontinued these statistics. The hon. member also spoke about the motor service rates. The Minister was quite right in warning the country of what would be the effect of the competition of private busses and motor lorries against the railways. Hon. members must not forget that these are State railways. What the Minister says is quite true, that these motor services pick out the eyes of the more expensive traffic. Our railways are carrying low-paying materials over long distances. Take mealies and wool and coal and so on. We carry them at the very lowest possible rates the railways can afford, but when you have competitors coming in and only carrying the highest paid traffic, it stands to reason the railways cannot compete. I think the Minister is perfectly justified in warning the country that the time may come very soon when the Government will have to re-consider their policy in regard to these motor services. Take the motor service between Cape Town and Bellville. I believe there is hardly any railway traffic between those two points, and I am told there is a great loss, running into several thousands a month. I should certainly say the time has come when we have to take notice of what I call unfair competition of that kind. Then the hon. member spoke of the salaries paid to the board that looks after the export of our fruit. I think these gentlemen are doing excellent work for the country. It was my privilege recently to inspect the refrigerating plant at the docks. They handle the fruit there from the time it is picked to the time it is landed, and I am told they save about five or six handlings of fruit. One of the most interesting things I saw was the little trolley for running the fruit direct from the railway truck into the cooling chamber, and from there it is taken by a crane and loaded direct into the ship. The gentlemen who have the management of that place deserve every credit. That little trolley is quite an innovation. It has only been put in use within the last few years.

That is not true.

That is what I was told. Then the hon. member talks about the permanent way and the condition it was in so that the chief civil engineer refused to give a certificate. He said he refused to give an unqualified certificate. The Auditor-General comments on it by saying that where before 1925-’26, the certificate stated it had been maintained in good working condition, subsequently the certificate omitted the word “good,” and merely recorded that it had been maintained in working condition. Well, there is a very good reason for that. The hon. member knows as well as I do, and perhaps better, that when his Government was in power our rolling stock and permanent way were neglected in a gross manner by the previous Administration. They went so far as to take even our Renewals Fund, which ought to be used for the replacement of our rolling stock, and in 1923 they took £2,000,000 from that fund to pay for their ordinary running expenses on the railways—no wonder our rolling stock and engines got behind, and I am told that a defective engine has a materially damaging effect on the permanent way. As a result of the tremendous economy the hon. member for Cape Town (Central) (Mr. Jagger) went in for during those years, there is no doubt that our permanent way and rolling stock got into the condition in which it is to-day.

What are you doing to make it up?!

We are paying considerable attention to making it up.

You are spending less.

You will see that we spent ho less than £1,900,000 on the maintenance of permanent way and keeping it up. There is a saving in the estimates on permanent way, but listen to what it is due. The general manager says that the reason for it is permanent way wages, labour to the full extent estimated for new lines was not required; there were changes of personel and wash-aways were fewer than those for which provision had been made. So much for the certificate; the hon. member also mentioned civilized labour. For my part I cannot understand the views of the hon. member and other hon. members opposite. When we try to find work for our unemployed white men, and they grudge the extra amount which it may cost, I cannot understand them. I believe that this civilized labour, I am speaking from memory, cost us a quarter of a million extra, but surely it is better to find employment for our white men, even at that cost, than to allow them to drift into the towns and cities, to starve and to become poor whites.

We object to the railways being made relief works; that is all.

It is better to employ men on good relief works like the railways, which is productive expenditure, than to employ them on building roads. I think the country is perfectly satisfied, and it has shown it in various ways, with the policy the Government has adopted in the employment of civilized labour, and I hope the day will be far distant, if it ever comes, when that policy will be reversed. I could not understand what the hon. member meant when he said that the present Government had overspent by £3,000,000. When the late Government ran the railways, the deficiencies on the working were: 1921-’22, £1,590,000; 1922-’23, £31,000, and then there was a period of increased trade, so they actually showed a profit of £1,400,000. That, however, was not due to any reduction in expenditure, but to an increase in trade. When the present government came into office it showed a surplus of £765,000 for 1925, and £769,000 for 1926, although last year there was a deficiency of £158,000. When the Opposition was in power there was an accumulated loss for 1921 of £2,598,000, and in 1922, which I think was the year that the hon. member for Cape Town (Central) (Mr. Jagger) took over the portfolio, there was an accumulated loss of £4,189,374.

Absolute nonsense!

The next year it was even worse, there being a loss of £2,220,000, but it would have been £4,000,000 if they had not token £2,000,000 from the Renewals Fund to pay for running expenses.

What was that due to?

Bad management and bad policy. Then there were the pension and superannuation funds. The late Government knew its liabilities to these funds, but took no notice of them, with the result that the pension fund fell into debt to the tune of £1,706,000, and the superannuation fund £1,854,000. When this Government came into power, however, it commenced to rectify matters, and during the last three years has paid £200,000 a year into both funds, making a total for the three years of £1,200,000. So much for the criticisms made by the hon. member for Harbour (Maj. G. B. van Zyl). I do not think that the country will take his speech really seriously. The hon. member for Cradock (Mr. G. G. van Heerden) has referred to what the hon. member for Cape Town (Central) (Mr. Jagger) did for European labour, and quoted certain figures which stated that during the year 1922, when the hon. member took over the railways there were 38,409 Europeans in the service, and 37,700 non-Europeans. Then by 1924 those figures have risen to 39,892, and 47,700. Let us take what the position is to-day. In December, last year, the figures for Europeans had gone to 56,590, and that for non-Europeans to 38,400. They make a lot of statements about us dismissing natives. I know of no case where any single native has been dismissed, and a coloured man put in his place, but when a native leaves the service, or dies, his place is not filled by a native, but by a coloured man or European.

When business was suspended, I was busy explaining to the hon. member for Cape Town (Harbour) what this fine Government are doing with their surpluses, and I explained that we are trying to cover up the misdeeds which the previous Government had committed for the last ten years. We are busy trying to cover up the marks of bad administration that they left here. I was trying to tell the House how, in the last three years, we have not only been paying £200,000 a year to the pension fund and the superannuation fund, making £1,200,000 during the last three years, but this Government have also done a thing which the previous Government never did during the whole time they were in power. We have now started allocating a sum of about £250,000 a year in redemption of capital which is non-interest bearing. We have about £9,000,000 of non-interest bearing capital in the railways, and I think one of the wisest things that this Government has done is to allocate about £250,000 a year in order to redeem that non-interest bearing capital. In addition to that we have also paid a substantial amount every year to reduce these amounts on the Superannuation Fund and Pension Fund which we inherited from them, and in the course of years we hope to have cleaned the slate of their mal-administration. The hon. member for Cape Town (Central) (Mr. Jagger) always says: “Why don’t you reduce the rates?” and the hon. member for Cape Town (Harbour) (Maj. G. B. van Zyl) the same. They forget that in the last three years this Government has reduced the rates to the tune of 1¾ millions. That is an annual amount. It is a permanent reduction; it has never been relevied again. I want to speak about staff matters on the railways. I find in my experience in Johannesburg there is an enormous amount of dissatisfaction amongst certain classes of employees. It is the ambition of these young men that makes them complain. When they get to a certain grade, we will say Grade 3, drawing £300 a year, they cannot get advanced quickly enough into Grade 2. Grade 3 is really a dead alley for certain men on the railways. There are so many men in Grade 3 and so few that get promoted to Grade 2, that many people are compelled to leave the railway service. These men have ambition. They want to get on in life, and they cannot quickly enough get promotion. Some years ago, it was the custom on the railways to promote men by personal promotion. The one mistake that was made was that these men were paid up to £90 a year extra. They were in an intermediate grade between the two. I want to make the suggestion to the acting Minister of Railways that he should see whether they cannot revert to that system, but not to pay the men. If you have, say, a thousand men who have been twelve years in the service, and who are entitled to get promotion from Grade 3 to Grade 2, but there is no vacancy, let them be promoted into, shall I say, a grade 2a. Then these men will know that at the next vacancy, if they have the length of service and the efficiency, they will have the first claim.

Without any extra remuneration?

Extra remuneration causes great dissatisfaction. I think one of the causes of complaint is that a great deal of favouritism has been shown in the past in promoting these men. This system has ceased to exist for the last three or four years, but I would like to see it restored, but without payment. I think I have effectively demolished the criticisms of the hon. member for Cape Town (Harbour), and I now want to say a few words upon a subject about which I have felt deeply for years. I want to say something on the question of miners’ phthisis as existing to-day on the Rand. It has been my unfortunate experience to see during my practice in Johannesburg many men with miners’ phthisis. I have always been one of those men who wished to get the white men out of the mines. I know that five or seven years ago that would have been absolute anathema. To-day there are 20,000 men working on the Rand in the mines. There are 9,000 men underground. To go underground to-day you have to pass a very stiff physical examination by the medical bureau. I have some figures which may interest the House. During the year 1924-’25, there were 12,500 men examined by the medical bureau, and in 1925-’26 there were 12,800 men. Those born in Africa were 65 per cent., and those born overseas 34 per cent. Here comes the sad part of it. I always say it is the flower of our country that offers up their lives in the mines. Of these men only 40 per cent, in 1924-’25, and only 32 per cent, in 1925-’26 passed the necessary test. The result is that the flower of our nationhood is allowed to go down the mines, and in twelve years’ time these men are afflicted with miners’ phthisis. It is true that since 1916 fewer men who started work then have contracted the disease. The reason is, not that they won’t contract it, but only because the evil day has been postponed. When I was on the commission of 1911 we found that the average period a man has to work in a mine to get phthisis is between seven and eight years. Through improvements and so forth, it is now between ten and twelve years. I want to quote figures, according to the medical bureau of 1926, during 1923-’24, 1924-’25 and 1925-’26. For miners’ phthisis in 1923, 319 men were put out of the mines, in 1924-’25 428 men, and in 1925-’26 490 men. Tuberculosis cases were 20 in the first year, 28 in the second, and 7 in the third year. The sad part is that these men get miners’ phthisis and probably from 90 to 95 per cent. contract tuberculosis and die from it. Now that we are establishing industries in our country, and as the hon. member for Wonderboom (Mr. B. J. Pienaar) showed, we have 10,000 more men who have been taken up in industries, and we are starting our steel industry, the establishment of which will start many secondary industries. I say that the time has now come to consider seriously whether we ought not to make some arrangement under which the number of men employed underground shall be gradually reduced and put on the surface. Miners’ phthisis is an insidious disease, and gradually grows on a man. No man working underground should lose his right to compensation, but I maintain it is our duty to save the flower of our country. To-day 9,000 men are working underground. It is not the intention that no white man should work underground, but it will be sufficient if only 2,000 work underground—such as shift bosses, mining captains, to see that the regulations are carried out, and for purposes of safety.

What about the colour bar?

I am coming to that. I see the Minister of Defence is smiling at me. I wonder whether he is not the only man today who thinks you can work the Witwatersrand mines economically on white labour. The hon. member for Jeppes (Mr. Sampson) said we must import 4,000 English miners, but I ask who is going to pay these men compensation when they contract miners’ phthisis.

You are talking like the Chamber of Mines.

To-day the country is paying £1,000,000 compensation for miners’ phthisis. With regard to what the hon. member said about the Chamber of Mines, there was a time when I was a bitter enemy of it—years ago the Chamber of Mines was nothing else but the most important wing of the old Unionist party—the wing that provided the wherewithal. I have lived in Johannesburg for the past 30 years, and know what I am talking about. When Sir Lionel Phillips, Sir George Farrar and the hon. member for South Peninsula (Sir Drummond Chaplin) held the leading strings, they were the right hand of the Unionist party. Read Gen. Smuts’ speeches in 1907-’10, and you will see what the Chamber of Mines was. It became the right wing and the financial wing of the South African party. I am always glad to give credit where credit is due, and I am glad to see the Chamber of Mines recognizes that there is a strong Government in power, and that they (the chamber) cannot do what they like. They have come to recognize the mining industry as a proper industry, and not as a political body.

That means they are supporting the Nationalist party.

Thank God, we do not require their support, but what we want them to do is to apply their energies to the mining industry, and not to interfere with the government of the country. I want to put the white man on the land.

Will you get them there?

I have thought many a long day on it, and I think that eventually it maybe the happy solution of our troubles in this country. They accuse the National party of being a bolshevistic and socialistic party; but we on this side of the House and many on the other side would like to see every man in South Africa the possessor of a plot of land; if he can only tend it successfully he is a valuable asset to the country and a producer. It might surprise some hon. members if I tell them that the Vaal River at Vereeniging is 300 feet higher than at Kroonstad, and at Christiana it is 200 feet higher than Kimberley. If the Vaal River and the Krokodil River were dammed up, you could flood the whole of the northern Free State, and you could have a couple of hundred thousand farmers there—

What would you do when you had drowned all the inhabitants?

That is one of those silly, light-hearted remarks of the right hon. member. I am trying to find a solution as far as the miners are concerned. It may be asked: “Where will you get the money from?” We must not build dams where it never rains, but let us rather adopt the policy of building dams where we know there is water and there are running streams—the Vaal River, Modder River and Krokodil River. I find from the speech the Minister of Finance made that we got from the leases we have in the Transvaal —the gold mines—£1,600,000 last year. The gold mining industry, as everybody knows, is a waning one, and I think the time has come seriously to consider using some of the money we get from these leases, and ear-mark it especially for the development of the country and blocking up or damming up these rivers in some way. The Minister has decided to add the revenue from Namaqualand to the loan account. You could use the capital or raise loans, because it is reproductive work. From the general revenue of the mines we get £3,500,000. The proper policy is to ear mark some of that money for the construction of irrigation works, and the men who have sacrificed their health in winning gold from the bowels of the earth should have the preference in obtaining ground on the irrigated areas. I would like to see some plan evolved by which the low-grade mines on the Rand could be worked. I am told that they contain millions of tons of gold-bearing ore.

There are millions of tons on the mining dumps with a little gold in them.

But there are millions of tons which can be worked. The time has come to make the Chamber of Mines understand that the policy of the Government is to work all these millions of tons of low-grade ore, and have the gold extracted for the benefit of South Africa. It would be a criminal act to the people to allow these millions of tons to be wasted for ever, and if once some of these low-grade mines close, they will be lost to the State for ever. It would be criminal when we require so much money to develop South Africa, not to make some attempt by which we could have this low-grade ore worked. I would say to the mining industry that it can have as many natives as it requires.

Why not coolies?

No, because they are foreign to South Africa. The natives should work under the supervision of properly trained white men, who should see that the mining regulations are carried out. The ratio of natives to white men working on the mines is 9.3 to 1, but as long as the mines are properly run the ratio counts for nothing. I am out to get money to develop the agricultural resources, and you can only do that by making use of the gold in the ground and applying it for the construction of permanent work.

What about the gold mines on the top of the ground?

Exactly. That is in the top six inches of the soil. I do not say that these ideas can be carried out in a day, but I wish to see that potential wealth in the low-grade mines extracted for the benefit of South Africa.

It was very interesting to listen to the speech of the hon. member for Cape Town (Central) (Mr. Jagger), whose policy could be condensed into the words “everything should be sacrificed to have a cheap article, never mind if that meant no employment for the people of South Africa or no openings for the youth of South Africa—everything we require should be produced by some other country, not for the benefit of the people of that country, but for the benefit of a few South African importers.” We don’t want cheap goods or cheap food for the people if there is no work for them. What we want is work for the people of South Africa. That can be obtained only by following the policy of this Government of producing, as far as possible, the requirements of South Africa in South Africa by South African workmen. I remember when the hon. members for Fort Beaufort (Sir Thomas Smartt) and Cape Town (Central] sat on the Government benches they used to talk about lofty ideals, but very little about finding work for the people of South Africa. The hon. member for Cape Town (Central) said the Government were employing 19,000 more men. I wish they were employing 90,000 more men.

At what?

In producing the requirements of South Africa. You can never have a population until you develop the industries. The foundations have been truly laid by this Government, the corner stones of industry including an increased number of workers for the State and a large number in industrial and commercial spheres. Roughly, £6,750,000 more per year are paid in wages now compared with the period before the present Government came into power. I am surprised that the hon. member for Port Elizabeth (South) (Sir William Macintosh) does not approve of that, because the merchants get a great proportion of that extra money in circulation. We, on this side of the House, represent to a greater degree than the Opposition, the producers of South Africa. It is true that farming has not developed as we should have liked it to have done, but the farmers know that the Government has done its utmost towards assisting them. Without agriculture no country can be properly developed. When I come to think of the policy of the Opposition, I am very amused. They say take off the duty on wheat, take off the duty on everything! What would happen if we did not encourage the growing of Wheat? The time might come when there would be a drought in other countries, or in time of war, we should then have no food for South Africa. They tell us to take the duty off foodstuffs, boots and clothing. No, put on the duty, find work for your own people, so that they can purchase that which they require. What does it benefit a person unemployed if a loaf of bread costs 6d. and you have only 5d.? Why not make it 9d. and give them 1s. to buy it with. That is the Government policy. We are not out solely for cheap commodities. We do not want to purchase boots in China. We do not want to purchase the cotton goods which, unfortunately, the British so-called Imperialist, who has invested money in the International Settlements in China and erected factories there, and produces at a fraction of the price cotton goods for which they can be produced in Lancashire. In a very short time we shall have these cotton goods coming to South Africa. We know the parrot cry of the Saps. Let us reduce the duty on cotton goods! Let the people buy cotton goods cheaper! They are produced, it is true, in China or Japan or some other country—let them come in cheaper! No, we want, as far as possible, even if it costs a little more, that the requirements of South Africa shall be produced by people in South Africa. If we cannot get that, it is our duty to purchase the goods from people who are living on our economic standard. If a country is on a lower economic standard than we are, it is utterly impossible for it to purchase that which we produce. Therefore, we have a right to play the game with our own people by purchasing goods produced by people living on our standard or of our own production. But if we followed the policy of the South African party, we should buy goods, as long as they were a little cheaper, irrespective of the poverty and degradation of our own country. The South African party did not buy German engines from Germany, but they gave orders to one of their so-called imperialistic friends, but the goods were manufactured in Germany, Belgium and Switzerland. True, they gave the order to a Britisher, but they did not stipulate that that Britisher should play the game with the Britishers and have the goods produced by Britishers. We believe in doing things in a true business basis. We do not believe in placing an order in Britain and paying a higher price to certain gentlemen when we know full well the goods will not be manufactured there. We deal with the persons who produce the commodities, if we are unable to produce them ourselves. I was amused at the hon. member’s speech this afternoon, when he stated that we had increased our debt besides an increased expenditure. I believe that hon. member, when he builds a branch store, also needs more capital. If you extend your business, naturally you will need more expenditure, but it is the income that you look at. This Government is getting nearly two millions more income. The very fact of our employing, roughly speaking, 23,000 workers, which is a low estimate—I think we can calculate roughly on 30,000 more workers employed, than when this Government took office, but I will take the Opposition figures, 23,000 means that there is 6½ million more money in circulation every 12 months in the form of wages than when we took office. Does not that warrant greater expenditure in the development of our business? We invested our money by expanding our business, and we are getting it back, not only in income tax, customs, etc., but by all the different methods by which the Government gets its revenue. But the greatest blessing of all is that we have diminished the relief workers from 10,000 to 2,000. Whereas, the Opposition, when in office, were paying out doles, we are employing them on sound economic lines.

Where?

In the industries of South Africa. I acknowledge it does not come up to our ideal, but that is not the fault of this Government. You cannot get labourers working in the workshops of this country or any other country on really economic lines unless you have the equipment. The Opposition neglected that development. There was very little development in the workshops of this country. As the hon. member for Uitenhage (Mr. Bates) must acknowledge, there are machines in the railway workshops of South Africa which have been obsolete in Europe and America for 50 years. The result is that when you employ the so-called poor whites, you are told you should not employ them, because it is non-economic. We must make it economic by equipping your workshops, and by so doing you can make the employment of these people economic; it would be a great blessing in a country like this, where in the past Governments have neglected the boys and girls, therefore men were devoid of a certain educational standard. I have only been here about 30 years, but I remember when there was no opening for any white boy or man unless he was above a certain standard in education, whereas, in other countries, it is acknowledged that roughly 22 per cent. of the boys born are devoid of initiative and creative faculty, but are useful citizens as labourers at two-thirds the wages of tradesmen. There were no openings for those boys, and they were allowed to become degraded, they drifted into the unfortunate poor-white class of this country. This Government has said that there is good even in the poor white, therefore poor whites of this country are being taken by the hand and, not only are they being taught to work in honourable occupations, but a large number of them have proved themselves worthy of holding responsible positions after a few years, also respect from every individual. Up to 1924, after 14 years of “Sap” rule, there were no technical institutes in South Africa. It is true that a number of years ago the Chamber of Mines supported a training institute in Johannesburg, but we had nothing of that kind in Cape Town until 1924. What has happened now?

What about Durban?

I do not speak about Durban, we have plenty of Natal members to blow their own trumpets; in fact you hear very little from Natal members except about Natal and Durban. I belong to Cape Town, and I am very proud of it, too. But let us get on with the subject. It was only in 1924 that a technical institute was created in Cape Town.

Under which Government?

You are a year or two out, that’s all.

It was owing to the efforts of the provincial members in another House that that institute was brought into being. I am very pleased that the present Minister of Education has realized the necessity of the boys of South Africa having an opportunity, and I would inform my hon. friends on the Opposition benches that this Government is erecting technical institutes in every industrial centre.

Cold storages as well.

I wish they were.

They are producing, and will produce in the future, South African boys who will hold their own with any boy from overseas. I realize the necessity for technical education. I remember when I first came to this country men with technical knowledge were very scarce. Boys in South Africa had no opportunity. If a boy had not the ability to become a classical scholar, he was allowed to become a depraved being. I am very pleased to say that we have now entered upon a new system, where not only will South Africa be producing its requirements, but just as South Africans who have gone to Europe or America have proved themselves equal to the men born there, so the boys in South Africa will prove themselves equal if given the opportunity with oversea boys. Not only will we be producing better men and women, but we shall also be producing the requirements of this country in this country. Do hon. members realize that sufficiently? Do they know that if you import a book, a pair of boots, a motor car, or a railway truck, 50 per cent. of the value of that article is left in the country where it was produced in the form of wages and profits? Do they know that 50 per cent. is the wealth of that particular country employed for its internal wealth and development? We must realize that, whatever the cost may be, the requirements of this country must be produced in this country. I take the credit of being a South African just as much as those who have been born here. It is true that I left my country because this was a better one, but, at the same time, we South Africans must play the game to South Africa, and it hurt me to hear the hon. member for Cape Town (Central) (Mr. Jagger) ridiculing the expenditure on education in this country. He quoted certain figures about the cost of education, stating that in South Africa the cost was £19 per head, in Canada I believe it was about £11, and in Australia £8. These figures are not correct figures, as I shall prove to the House. In the educational system of South Africa we include technical and vocational training, training of teachers, hostels, food and clothing, blind, deaf and dumb schools, etc. In Canada technical education does not come under the educational vote. We have also in Australia and New Zealand a different system altogether. In order to try to get at the truth of the expenditure, I got the blue books on education of Australia, New Zealand, Canada and South Africa, and I sent them to London to a person of great eminence in the educational world, and asked him to report whether they agreed in any shape or form. I have a letter which makes it quite clear that it is utterly impossible to compare the expenditure in any country, because certain items are included in some cases and excluded in others. Take, for instance, Germany, which the hon. member for Cape Town (Central) loves from a business point of view. What do they do in Germany? When a boy reaches the age of 11 or 12, he specializes in learning a certain art, craft or calling. That expenditure is not debited to education. In Canada also the chief expenditure on technical education comes under an entirely different vote from the education vote, and I hope that hon. members of this House who visit Canada will investigate these matters and see whether the hon. member for Cape Town (Central) is correct, or the hon. member speaking. With regard to education, let us take, for instance, teachers’ salaries, which are in this country the same as carpenters, in other countries 100 per cent. higher than carpenters in that country. Although this is really a provincial matter, the money is voted from this House under the Financial Relations Act. My hon. friend touched on the general increase on primary education. I would like to quote a few figures. It is true that the educational vote increased between 1913 and 1922 in this country by 133 per cent. In Great Britain they had an increase in the same period of 168 per cent., in Denmark 219 per cent., and in Sweden 392 per cent. If we look at these figures, we must realize there is something wrong. I have taken these figures from the Government blue books.

Figures are wrong.

I use plain glass in my spectacles, and I see the figures correctly. Take, for instance, Namaqualand. There are 17,556 square miles, there are only six scholars to every hundred square miles. Can you expect the cost in an area like that to be lower? Even if the cost of education was high in South Africa, all honour to South Africa for looking after the needs of future generations. I hold that nothing can be wasted on sound education, and I am very pleased that the universities are also going in for vocational subjects, which will be of great help to all concerned. I would like to mention in that connection that when we took office—

Who?

I am going to take my share of the good things this Government has done, just the same as I have to take my share of the had things. See what we have done in regard to grants for education. In 1924 we were spending on vocational and technical training 31 per cent. of the amount we were spending on scholastic subjects. In 1928 the proportion now spent on vocational and technical is 60 per cent. of the amount spent on scholastic subjects, so that I consider that if for nothing else the Government has done useful work in increasing the amount spent on technical education in enabling boys to occupy spheres to which they are most adapted and where there are opportunities for them to develop. I was very sorry about one or two points in the budget speech. I think we can all congratulate the Minister on his tenacity in fighting for a principle, and also upon the fact that when he took office he laid down a sure foundation for the future prosperity of South Africa. The hon. member for Cape Town (Central) (Mr. Jagger) wanted to take away that credit. He has often said the most efficient man develops the soundest business, and makes it a success. If that is so in private life, is it not so in Government? Is it not possible that our Minister is a more efficient man from the national point of view than the Opposition had? If it is not, then we must say to the hon. member for Cape Town (Central), “You built your business not on business principles, but on luck.” No, let us play the game. When he took office a large number of members of this House disagreed with what they thought was a conservative policy, but now we realize that he has built on a sound foundation, and we are reaping the benefit to-day. While I acknowledge I would have liked to have altered the policy a little, still I realize the Minister has to look at it from the point of view of satisfying all. I would ask him if next year he will not allow an exemption from income tax of children up to the age of 21. This is a very serious matter. We have unmarried men, and we have married men without children, and in some instances their wives working. Let us play the game by men who have the expense of rearing children. I would really like a £100 exemption for each child up to the age of 21, for the following reasons. There are a large number of parents who would like their children to attend not only scholastic classes, but art schools and technical institutes, who would also like to see their children have a better chance than they had; also farmers are unable to give their children that education unless they send them to board and educate in towns. They therefore do not finish their education until they are 18, 19 or 20. I hope the Minister will consider that point, and I hope he will concede this point, that unless a child is earning £8 it shall have an abatement until it is 21. In regard to old age pensions, it is true that in the Transvaal and the Free State you have different conditions, but in the Cape we have a large number of non-Europeans who are living on the same standard of civilization as the European. I would like the Minister to consider whether they cannot be placed on the same basis as Europeans; after all, if we want them to live our life, we must give them a fair deal. On the other hand, I appreciate the action of the Government in introducing the old age pension scheme, which I believe has been neglected too long in South Africa. They say this Government has had the opportunity. That is ridiculous. It is true, though, that we have the money and we have the men. Another subject I would like to suggest to the Minister is that he should try and raise his loans in South Africa. It is true he might have to pay a higher rate of interest, but it would mean keeping the money in the country. It astonishes me to read the bank reports, then listen to hon. members stating that there is no money in South Africa. There is plenty of money in South Africa; in fact, I believe they are sending it out of South Africa for investment in other countries. I would like the Minister to consider that point. I have heard a great deal of discussion about developing Union loan certificates; I hope and trust the Minister will give a little more interest on those certificates. I know it is very high. Let him encourage the people to invest in these certificates. As there are a large number of speakers to follow on—

Where are your colleagues?

Not in the place where the hon. member was a few short minutes ago. In conclusion, I would like to say I appreciate the taxation proposals on the broad basis laid down by the Minister, and appreciate much more the honest effort there is to give young South Africans an opportunity they never had before.

When I listened to the remarkable latter portion of the speech of the hon. member for Vrededorp (Dr. Visser) I could not help thinking of those lines—

It is only five or six years since the most bloody domestic strife, the most devastating industrial upheaval we have ever had in this country, took place, because the Chamber of Mines proposed merely to reduce the quota of Europeans to natives on the mines on the Rand, involving perhaps the dismissal from work of 500 to 1,000—

Four thousand.

Two thousand at the outside.

It raged at its hottest in the constituency of the hon. member, and it was from that particular locality that the commandos came and from the activities of which much of the fighting resulted. When the hon. member goes back to his constituency and propounds these new theories of his, I would like to go with him. When one listens to some recent Pact speeches, one is inclined to say, “It’s a mad world, my masters.” We have heard the hon. member propounding a theory for working the mines with a complement of 2,000 Europeans, and yet sitting next to the hon. member, almost on the next bench, was the Minister of Mines and Industries, who two years ago forced through a measure, the raison d’etre, of which was that the native was incapable of handling machinery of any sort. Of course, if a native is capable of working a locomotive on the mines and working hauling machines, are you going to keep up the pretence any longer that he is not able to work our railways or the rest of our industries? I must congratulate the Government on the new developments shown by its front bench this evening. It is only a few weeks ago when we listened to the hon. member for Bloemfontein (North) (Mr. Barlow) saying, “I believe the sound thing to do for this country is to import native labour ad lib,” and do away with the restrictions the Pact and the Labour Party have fought for for years, and allow natives in from tropical Africa—much to the delight of the hon. member’s, shall I say, former leader, the Minister of Defence! Another colleague of the Minister of Defence, shall I say is, or was, the hon. member for Troyeville (Mr. Kentridge), who from those benches a few months ago propounded another theory, and said, “As a Socialist, I am dead against land taxation, because it cuts up big farms into small farms, and small farmers never vote for Labour.” We are living in stirring times. To-night we have been told by the hon. member for Vrededorp that the hated and wicked Chamber of Mines has now reformed; we must be careful not to antagonize them, but help them along. Verily, a mad world, my masters. But I did not get up to deal with the hon. member for Vrededorp, but to speak on more serious topics. I want to come to the Minister of Finance and deal with financial matters. The Minister, in his budget speech, took occasion to refer to certain criticisms of his sinking fund policy, which had been voiced during the year. I will quote what the Minister said. [Speech quoted.] I happen to be the author of these criticisms, which were expressed by me in a series of articles which I contributed to the press a few months ago. I now wish to return to the charge, and break a lance with the Minister on that subject to-night. I am quite impenitent as to those remarks I made, and I intend, on the floor of the House, to give the main points I made on that occasion. I realize it is a case of “Athanasius contra mundum,” because the Minister has sitting behind in the secretarial bay a galaxy of financial talent—he has the resources of his department to draw upon, and they naturally will be astute to pick holes in any of my facts or figures. But I may say that I have taken the greatest trouble to verify the figures I am going to put before the House. My criticism of the new scheme of debt redemption is that it is not only retrograde, but bad finance in that it does not show a sufficient appreciation of our sinking fund needs. The old system provided for debt redemption on the following lines: First, there were certain fixed contributions attached to some of the principal loans, the chief one being the £40,000,000 Free State and Transvaal loan, to which a 1 per cent. sinking fund payment is attached. Then the Act of 1911 provided that all surpluses of revenue should be handed to the Public Debt Commissioners for debt redemption and, thirdly, there were miscellaneous accruals. That system was abolished in 1926, and in its place was substituted a system by which there was to be a fixed contribution of £650,000 a year, and that was the only contribution which the State was bound to pay towards debt redemption, but there could be adventitious and miscellaneous accruals. The Minister of Finance, in defending his new system, said—

That is a truism. There is nothing to prevent any Minister paying an extra amount at any time towards debt redemption, but my point is that there is nothing to compel him to pay over his surpluses to debt redemption in addition to the £650,000 a year. A comparison can be instituted between what the new system is doing and what the old system did. If hon. members will turn to the Auditor-General’s report, they will see on page 51 what amounts accrued since Union in the shape of surpluses and how much was paid to the sinking fund from surplus revenue. These amounts totalled for the years from 1911 to 1927, £6,039,595, and there were certain small accruals in addition, of £57,773. In 1926 £250,000 of the declared surplus was deflected by the Minister towards certain pension funds, although he had no legal right to do so except under a special Act of Parliament Finally, in 1927, there was a surplus of £1¼ million, and an accumulated surplus of nearly £1½ million at the time of Union, making the grand total of money paid in debt redemption from surpluses from the date of Union to March 31, 1927, of £9,039,000. To make the comparison a just one, I must make certain deductions. In 1915 there was a deficit of £2 millions, which was charged to loan account. In 1921 the Debt Commissioners had to pay back to the Treasury £460,000 out of £2,500,000 they had previously received. Allowing for that £2,500,000, a sum of slightly over £6,500,000 was actually paid in debt redemption from surpluses alone. If that policy had been continued, £1,750,000 would have been placed to debt redemption this year, instead of being left to be the plaything of a Minister and to be used for electioneering tactics. This gives a yearly average for 17 years of close on £400,000, and, if the system had not been interfered with, this year’s surplus would have made a yearly average of nearly £500,000 for the 18 years since Union. Side by side with that, we paid each year a varying amount of never less than £400,000, and sometimes exceeding £600,000, as a fixed contribution towards the sinking fund. Since Union, we have paid £8,863,000 from this source out of revenue towards debt redemption, or a yearly average of £521,000. The taxpayer has, therefore, actually contributed, since Union, by fixed contributions out of revenue and by surpluses, £15,500,000 towards debt redemption, or an average of nearly £900,000 a year. These years included the years of the war and the years of post-war depression. I have taken bad and good years alike. What were the results of that system? We actually redeemed in debt in these 17 years £14,350,000, and we made sinking fund provision, in addition, to the extent of about £15,000,000. That is to say, our £15,500,000, spread over these years, was equal to redeeming £14,350,000 and to making sinking fund provision to the nominal value of £15,000,000, but to an actual cash value of a million or two less. Again taking off that £2,000,000 debited to revenue, you get the net result for the 17 years of £27,500,000 utilized for debt redemption. The Minister, in his budget speech, said—

Unless I have misunderstood his words, he means that £650,000 compounded at 4½ per cent. would amount to more than 27½ millions. If he does not, I would like to know what he does mean, because the new system involves only a payment of £650,000 a year.

He has paid more this year.

Of course he has. The Minister’s claim is that if this £650,000 had been in force since the date of Union, it would have produced far better results than the old system. I would like to hear him prove it, because while the old system was responsible for obliterating or making sinking fund provisions for 27½ million pounds of debt, £650,000, compounded at 4½ per cent., over 17 years would amount to only £16,000,000, so that the old system was at least 11½ million pounds better than the present system would have been had it been inforced from the date of Union. The Minister claims that he has put the matter on a scientific basis and that £650,000 compounded annually—not applied to debt extinction, but compounded from year to year—would give better results than those actually achieved up to the time of the change.

I mean exactly what I say, and I shall deal with it when I reply.

If that means taking the surpluses as well, plus the £650,000, we would have a better result, it is a truism. But the whole essence of his system is that you do not get the surpluses. You get only what the Minister may be inclined to give the Public Debt Commissioners from time to time, like a man throws a bone to a dog. What the treasurers in past years would have given if the law had not made them give it, I cannot tell, nor can he. What is the new system—this great sweeping measure of financial reform which we are told from every platform the Minister has adopted in place of the old haphazard methods of past Governments? It involves an annual contribution from revenue of £650,000. That is all that is involved at the present time, but the Minister has laid certain obligations, not on himself, and not even on the next Government, but on posterity. The first of those obligations commences in 1935, and then only to a small amount, and the main obligation will fall on his successor 25 years from now. What are those obligations? The first obligation is this. If any stocks are held for the general Sinking Fund and mature before the expiration of the 40 years period for which this £650,000 scheme is to run, interest at the rate of 4½ per cent. will continue to be paid in respect of such stock until the expiration of the 40 years. That is a comparatively small amount. What is the second obligation? Of this £650,000 a year we pay for debt redemption, the greater proportion, nearly all of it to-day, is earmarked for the redemption of certain particular loans, mostly the Transvaal and Free State loan. The Minister says, in the Act laying down the new scheme, that as soon as these particular loans are paid off and an account will be taken of how much has been used of the £650,000 from time to time since its inception to pay off those loans, and on the amount so ascertained interest will continue to be paid at 4½ per cent. It so happens that this great £40,000,000 loan, which is costing us £400,000 a year in sinking fund will be paid off in about 25 years from now, and then it will be found that about £10,000,000 or £11,000,000 for its redemption has been financed from this annual sum of £650,000. Then comes along my hon. friend, the Minister of Finance, and says to his successor of 25 years from now, “You have now got to increase that £650,000 which you and your predecessors have been paying since 1926 by 4½ per cent. on £10,000,000 or £11,000,000. In other words, your contribution has to jump from £650,000 to £1,050,000 or £1,100,000." I do not know what will be the feelings of the Minister of Finance of 25 years hence. He may say, “Who the devil was this Minister who said in 1926 that 25 years afterwards I should have the doubtful privilege of paying £1,100,000 when he paid £650,000?” I can imagine my hon. friend, who I hope will be alive and in office in those days, saying “Yes, of course you will have to pay an extra £450,000 to the sinking fund, but you are relieved of the interest on the loan, which is now paid off but in the meantime my hon. friend and his successors will have been busy in increasing the public debt at the rate of £8,000,000 to £10,000,000 per annum, with correspondingly increased interest charges. I do not think that this will be any salve to the wounded feelings of the Finance Minister of that day when he wakes up one morning and finds that while hitherto he has been contributing £650,000, the next day he has to start off on a new basis of £1,100,000 a year, and to continue that for another 15 years. I am afraid my remarks have been rather technical, but the point is that the Minister has committed himself and his Government to a payment only of £650,000 a year.

Minimum.

Minimum and maximum of what the State need contribute, and what the State has contributed up to then was at least £900,000. I have given the figures and they can be checked. I say that by law we have hitherto had to contribute at least £900,000. We are told we have had a great measure of financial reform because we have exchanged the old system for a new system which binds the State to £650,000 a year and no more. Of course a Minister, if only for decency’s sake, with an overflowing treasury like the present one, will have to give something extra, but it is entirely in his pleasure whether he will do it or not. The Minister makes a great song of this, that it has now been put on a regular basis, that the State has in good and bad years to contribute £650,000. But where is the special virtue of that? By law, at the time he passed this, he had to contribute £574,000 a year. All he did, therefore, was to undertake an additional liability of £76,000 a year and collar the surpluses. In effect, what he said to the Public Debt Commissioners and the investing public, was this, “All I am going to give you in future is £650,000, and you must give me the surplus.”

It was quite a good bargain.

Of course from the point of view of the Minister of Finance, it was one of the best bargains he could make. It has enabled him to go to the public of South Africa and say, “On the first of January next, I am going to give you 20 per cent. off your income tax.”

But that bargain was made, you forget, at a time when, for a number of years, there was no surplus at all.

That bargain was made in 1926, when the Minister had already had two surpluses, and had used the custodian’s fund to liquidate the deficit he took over. Of course, from his point of view, it was one of the best bits of electioneering I ever heard of. I am addressing myself, however, not to whether it was good electioneering tactics, but whether it was sound finance. Once we, the S.A.P., had a surplus of £2,000,000. That was in 1921, and the whole of that surplus just in the year of an election, too, went to debt redemption. There was no bait dangled before the electorate in the form of income tax refund or other largesse, and it was not used as a pawn in the great electioneering game.

And the deficit you had in 1915, what did you do with that?

That was the first year of the war. We charged it to loan account. Notwithstanding that, I took it into account in making up my average for the first 17 years of Union of £900,000 a year towards debt redemption. Let me get back to this, that at the time this great financial scheme of the Minister was brought up, he had to pay £574,000, and all he paid in addition was another £74,000, and for that he got the right to collar every future surplus. I think that it will never redound to the credit of the particular chairman or members of the Select Committee on Public Accounts that they, putting party above sound finance, voted for a scheme of that sort. The Minister persuaded the committee, abetted by my hon. friend who sits opposite me (Mr. B. J. Pienaar), to exchange a system by which we got an average contribution of £400,000 a year from the surplus for £74,000, and to sell our birthright for a mess of pottage. This year the position is worse. How much of that £650,000 do you think now goes to general debt redemption? I will tell you—£30,000. The rest of it is earmarked for the redemption of particular loans, and our general sinking fund gets a beggarly £30,000 a year fixed contribution. If the Minister had had any real desire for a sound scheme, he would have said that he would pay this £650,000, and out of that he would pay the special sinking fund provision for the old pre-1924 loans, but for any new loan with a sinking fund provision attached to it, he would, in addition to the £650,000, pay that money. Did he do that? No. Now I come to another point. In his total accruals this year to the sinking fund of £1,585,000, he took credit for £435,000 of reparation receipts. Now what are the facts in regard to these reparation receipts? The truth is, as hon. members will find, if they turn to the Auditor-General’s report, that these reparation receipts have been accruing over a long series of years. The accruals to the 31st August, 1924, were £342,000, and the accruals since that date amount to £113,000. Of this contribution of £435,000 which the Minister is making, two-thirds or more accrued in the time of Mr. Burton, and now, by a book entry, they are being handed over to debt redemption, and in this year of grace, 1928, the Minister says—

Under the old system it would probably have been taken into revenue and spent.

I can only say that these receipts were not taken into revenue, and that they were still in the Treasury, and were, I suppose, kept in a suspense account until the Minister passed his Act last year. I have given you some comparisons between the old system and the new. I have shown you that the only obligation to which this Minister has committed himself in regard to redemption of debt is £650,000 a year, and any other monies that should go and swell that amount will come into operation long after the present Minister has passed out of office. Just let me say this in conclusion on this point. In the old days, the years that elapsed between Union and the Great War, 1910 to 1914, our revenue was less than half of what it is to-day. Our public debt was less than half of what it is to-day, and yet during those four years we contributed out of revenue towards debt redemption nearly a million pounds a year. To-day we have doubled the revenue and doubled the debt, and yet we have the Minister persuading his back benchers, who know as much about finance as a Chinaman does about Hebrew—

I think the hon. member should moderate his language.

I am sorry. They all swallow it and say this is the soundest finance ever inaugurated.

Don’t be silly, man.

In 1911-’12 our contribution to debt extinction was one per cent. of the total amount of the public debt, and it reached the high-water mark in 1919-’20, just before the general election of 1920, when it reached the maximum figure of 1.4 per cent., since when it has been steadily going down. The going down process has been accentuated under the present Government. To-day our compulsory contribution towards debt redemption is about one-quarter of one per cent. With a public debt standing in the neighbourhood of 240 millions, we contributed £650,000, plus anything that the Minister of Finance may care to contribute out of his surplus of one-and-three-quarter millions. I say the present scheme is inadequate, selfish and unsound It is selfish because it takes the burden off our shoulders and puts it on to posterity. It is unsound because it is fixed on a percentage, one per cent. of our so-called unproductive debt. The Minister has one way of determining what our unproductive debt is, and the Auditor-General has another way. It is a wise man who would be able to say what will be and what will not be our unproductive debt five or ten years from now. We have £150,000,000 sunk in our railways. I wish I could be certain that every penny of that will be productive five or ten years from now. I believe our railways are passing through one of the most critical stages of their existence, and God knows what is going to happen to that £150,000,000. The Minister ranks it as productive debt, because at present it is interest paying. Will the railways always be able to keep up their interest payments? It is unsound finance, because it ignores the steady expansion of our debt. It is fixed at the definite repayment of £650,000 per annum, while the debt is going up at the rate of eight to ten million pounds per annum. I do verily believe that this whole scheme was conceived two years ago to enable a position such as the present one to be brought about.

That is mean.

It is not mean. It is a criticism I want the Minister to meet. I believe it was a scheme so as to allow a Minister to have a surplus that he might carry forward from year to year, and utilize on the eve of an election, where it might bring the largest possible dividends in the shape of increased votes.

I think the hon. member is going rather far in making a statement like that.

It is fair criticism.

What else can you expect?

I am sorry. I am not ascribing dishonest motives. I say this is a scheme which was intended to allow to be done what is being done now.

That would be perfectly in order, but the hon. member suggested that the Minister took steps with certain ends in view.

You ought to be ashamed of yourself.

On a point of order, Mr. Speaker, has an hon. member not the right to say that he considers that the action of the Minister, which is not a dishonourable action from a personal point of view, was guided solely and entirely by a political view of what effect this would have at a particular psychological period of time on the eve of a general election?

I think even the suggestion that any action on the part of members of this House is done for vote catching, is out of order. It is going rather far, the way the hon. member put it.

I want to call a spade a spade. Well, I say this, the effect of what was done two years ago is to allow the Minister to do what he is doing to-night. I would go so far as to say it was designed to that end

I rather think that the hon. member, by stating that, ascribes ulterior motives to the Minister. I do not think that is permissible.

On a point of order, surely it is the privilege of any member of this House to express what he considers the action of the Minister has been, because, with all due respect, if we are going to curb our criticism so much, we will become like friendly debating societies. Surely an hon. member has a perfect right to express his opinion and let the country judge whether his opinion is a correct one or not. The idea of the hon. member is that the action of the Minister has been instigated by the effect which his action is going to have upon the country. Surely the hon. member has a perfect right to express that opinion. If not, I say, with all flue respect, that really we will not be able to express our opinion.

I do not wish to curb any hon. member in the expression of his opinions, but those opinions must be expressed within the rules of debate, and one of the rules of debate is that ulterior motives must not be ascribed to any hon. member, and certainly it seems to me that if an hon. member suggests that the Minister bad in his mind such ulterior motives as the hon. member wishes to imply, it comes very closely to ascribing dishonesty to the Minister.

I would like to know whether we are to understand it is unparliamentary to suggest that the speech or action of any hon. member here is intended to create some political effect outside the House, because that is a motive that is constantly attributed by that side to us, and I must say by this side to them.

No. Suggestions may be made, but I have always felt that these suggestions would be far better left out of debate altogether. But the hon. member went much further.

Would it be wrong for a member of this House to express his opinion that the action a particular Minister had taken had been taken with an eye to political advantage? If so, I think that sort of criticism is constantly going forward, as my hon. friend said, from one side of the House to the other. Is an hon. member not at liberty to express his opinion that the action of a Minister has been done generally for political effect?

I do not think it is quite parliamentary to do that; however, the debate can continue, and if I think the hon. member goes too far, I shall inform him.

There is no member for whom I have a higher respect than the Minister of Finance, and when I speak of him I speak of the Government as a whole. But I am not sufficiently unsophisticated to believe that, when they made this change with an eye on possible surpluses, they were wholly unaware of the political advantages which might accrue. I do fancy, when the Minister of Finance two years ago debated the pros and cons of this arrangement, he was not wholly oblivious of the fact that the day might arrive when he might have a surplus and use it to win the maximum amount of popularity. I leave it at that. When our financial system was laid down at Union it was considered that a surplus should not be the plaything of the Minister of the day, but to-day the surplus is being used as such, and is being used as an electioneering counter; it may be good politics, but it is bad finance. How was that surplus arrived at? In the last year before the present Government took office—1923—the customs duties amounted to £6,789,353, whereas in 1927 they had grown to £9,374,400, a difference of two and a half millions over four years; in other words, the ordinary taxpayer is paying that amount in customs more than when the Pact came into power. On food and drink he is paying 2 millions; on clothing a million and a half; or on food, drink and clothing, the ordinary things of the ordinary people, he is paying three and a half millions to-day. I am interested in blankets, as my hon. friend, the hon. member for Cape Town (Central) (Mr. Jagger) is; and on blankets alone the customs receipts are half a million. The Minister is proposing to give back half a million in customs reductions. Do hon. members realize he is giving back less than what he took on the tariff he imposed three years ago? I called for a return, and I find that under the old Burton tariff, he would have collected in 1927 on the same goods £8,828,000—£548,000 less than what was collected under the new tariff. So what the Minister is giving back in 1928 is part of the extra money he took on the customs tariff of 1925. I would like that fact to sink home. Most of that £548,000 is due to the abolition of British preference, and he is not restoring that. Now I would say to the Minister that instead of giving back £720,000 to income tax payers, much as it will be appreciated by all of us, I would be much happier, and I think the country would be, if he took a million off our inordinate customs duties and gave only a 10 per cent., or even a 5 per cent. rebate on income tax, because the 1 million would have come off the expenditure of the many, and the income tax off the expenditure of the few. I am waiting for one or two champions of the under dog on the Labour benches to voice this. One million taken off the customs would have had an extraordinary tonic effect on the country and on all branches of industry. It would have meant probably two millions off the cost of living when it reached the consumer, and would have a far more beneficial effect in fostering trade than much of the protective tariff which the Minister hopes will serve that end. I want to protest with the hon. member for Cape Town (Central) against the decision to continue this 30 per cent. duty on boots and shoes. I remember so well when Mr. Burton introduced it, I think in 1919 or 1920, saying—

I told Mr. Burton it would happen, and I believe the hon. member for Cape Town (Central) said the same things we said, that long before the first day on which the reduction would operate, the manufacturer would be knocking on the door of the Minister and saying that they could continue only if the duty was kept on—and that has happened. So we are to go on paying 30 per cent. on our boots. The duty collected in 1922 was £192,000, in 1923 £278,000, in 1924 £319,000—a steady rise year by year—in 1925 £291,000, in 1925 £327,000, and in 1927 £278,000. We are importing to-day boots of far greater value than five and six years ago. So much for the effect of that duty. It simply means that the consumer is paying. Side by side with this 30 per cent. duty further remissions of duty on raw material are to be given. Already they get remissions on every item in regard to boots, and I am told that this value is about £50,000 a year and that is to be extended. Here we have an industry which imports all its materials duty free, enjoys the highest protection given to any industry except that of printing, and gets its labour at extremely low rates, except the skilled labour which it imports. The industry is located at the coast, it has the advantage over its competitors of not having to pay freight and yet it tells you that it cannot carry on unless this 30 per cent. duty is perpetuated. If my son asked me to keep him at school and college, and said that when he had finished his education he would earn his own living, I would say that that is a fair proposition. So I would say to a new industry: “while you are passing through your infancy we will keep you.” But if my son, when he reached the age of 25, still asked me to maintain him, I would kick. If this industry now says that we must keep on protecting it by making the general taxpayer pay 30 per cent duty, then I repeat “there is something rotten in the state of Denmark,” and if the industry can be kept alive only at this high cost, then I very much question its value to the country. One word in conclusion in regard to old age pensions. Nothing in the Budget proposals meets with more enthusiastic approval from our side of the House than this old age pension provision. It has been a strong point in the policy of this party for years, and had we been in office, we would have introduced it at least as soon as the present Government, A commission was appointed and reported on the matter well over 18 months ago. I suppose I am a nasty, sneering fellow, but I am wondering whether it is a mere coincidence that two things will happen on January 1st next. One, the commencement of old age pensions and the other that income-tax circulars will go out with a 20 per cent. rubber stamped rebate notice affixed to them. The general election will be very shortly after that.

On January 20th.

The present Minister of Finance is a much better hand at electioneering than his predecessor was. I strongly object to the absence of any provision for the payment of old age pensions to the poor native. I do not represent a native constituency, but I do not see how in the name of common fairness we can tax the natives and then turn round and say to them “you shall not share in the benefits of old age pensions.” South Africa will be the first country to adopt an old age pension scheme from which the poorest section of the community will be excluded. We say in effect, we will give old age pensions to the whites and to the coloured, but the poor native, however dire his poverty may be, will not receive a penny. I say frankly to the hon. member for Yeoville (Mr. Duncan) that it has been a source of surprise to me that he could sign a report which denied old age pensions to the natives but merely expressed the hope that the indigent natives’ rations should be increased. The Minister’s budget speech, however, even ignores the increase of the natives’ rations which the commission with a twinge of conscience recommended.

It is the only way to do it at the present stage.

You talk about colour bars! The most iniquitous colour bar I ever heard of was this which says that the native is equal to the white man for the purpose of taxation, but when it comes to the distribution of relief to the very poorest, the whites and coloured may share in the distribution, but the hungriest of all may go hang. I think it is damnable.

I do not think that is a parliamentary expression.

I am sorry, sir, I will substitute it is an unworthy proposition. Where are we driving the natives to with our present policy which apparently allows Europeans who burn down the offices of a native organization to escape with a fine of £1, which allows white men who shoot natives to get off with a fine of £10 or £20, which prevents natives joining trade unions, which makes them parties to wage determinations which they have never had a voice in settling, which says they shall be taxed with the rest of the population, but further says that they shall have neither lot nor share in benefits to be given to the very poorest. Such a policy is no credit either to us as a civilized community, or to the Government which introduces it.

On the motion of Sir William Macintosh, debate adjourned; to be resumed to-morrow.