When the House adjourned yesterday I was slightly surprised at a remark by the hon. member for Barkly (Mr. W. B. de Villiers). He said that the diamond diggers were quite satisfied, and that it was only a few men belonging to the S.A.P. who were inciting others and making a noise. I can assure hon. members that there is great dissatisfaction.

How do you know it?

It is generally known that there is great dissatisfaction among the diggers, and not only among them, but also in the whole public service, because promises made at the election have not been fulfilled.

State the promises.

It was promised, e.g., that the Graham report would be carried out. There is also great dissatisfaction on the railways. Many promises were made to the railways which have never been kept, such as that of the eight hours working day.

That was not promised.

The teachers also are dissatisfied. As hon. members have seen a large number of teachers met in Cape Town a few days ago to protest. It is a provincial matter, but we must see that the provincial administration gets the money it needs. If the Cape Province were to be treated the same as Natal, the Transvaal, and the Free State it would not be necessary for the administration to be at a loss for money. Hon. members opposite are also much dissatisfied, but they dare not say so. But yesterday the hon. member for Vrededorp (Dr. Visser) broke out, and announced his dissatisfaction with the position of the white men on the mines. I am also in favour of their not remaining so long in the mines.

How long do they remain in the mines?

Eight years, but after three years many often contract miners’ phthisis. Some members on the cross benches said a little while ago that some of the mines ought to be worked solely with white men. I cannot understand it. Do they then intend to exterminate the white men? Why do they want to put the people in the mines? Other members on that side are trying to justify the great expenditure. They will also have to give an account to their electors, but they do not know how to do it. They will get into trouble because they cannot hide the deficits.

Where are the deficits?

Those same hon. members who are now interrupting me so much grumbled the most in 1924 when the public debt was increased up to £208,000,000. Now it is £238,000,000, but they dare not say a word. Yesterday an hon. member rose and said that if we sold the railways to a foreign company we could liquidate the debt.

It was not a member on this side, but on your side.

I believe it was the hon. member for Barkly. Hon. members say that our expenditure is not too large, and that it is not a loss, because it will increase the revenue. It is however a fact that our national debt is increasing perceptibly every year under this Government. I do not blame the Minister because he is forced. Hon. members now say that it happens because the country is developing, but the country also developed before 1924, and we had the difficult years of the war, and yet the debt did not increase as much then as now. In 1924 hon. members opposite said our taxation was too high, and they whined because the tobacco tax and the medicine tax were not reduced. To-day the tobacco tax is reduced and the medicine tax abolished, and yet we do not buy any of the medicines cheaper than before. It therefore shows how little influence the tax had. Personally I do not wish that those medicines should become much cheaper, because I think they do more harm than good in many cases. I want to congratulate the Minister on his surplus, but he has again forgotten to deduct the £697,000 which he owes to the Minister of Railways. That is the amount for the unemployed which have been shunted on to the railways. I think that amount should riot stand to the debit of the railway, but that it should come out of the Treasury, and if the Minister also deducts £500,000 for redemption, then he only retains three-quarters of a million. But we see from the report of the Modderfontein mine that the State’s share of the profits is almost half a million pounds, so that if we work it out the Minister has only £250,000 over. The mines are merely a temporary asset.

But that has nothing to do with the revenue.

The Minister was kind enough to reduce the tobacco tax, but how do the farmers benefit by it? It practically does not help the farmer at all, but only an individual big man with a big income. The 20 per cent. reduction in taxation does not assist much because the way in which the tax is obtained from the farmer—and I am speaking here particularly about the Western Province—is quite unfair, and I might almost say unjust. To give an example I will support my statement by figures. A farmer on a farm in the Western Province pays in direct and indirect taxation only on things he produces on his farm, therefore not on things he buys, a direct tax of £533. It is said that the tobacco tax is paid by the consumer, but those who say that forget that it is still recovered to a great extent from the farmer. This farmer of whom I am speaking pays indirectly in that way £3,106. In excise on what he distils or gets distilled he pays £9,739. That is on a small portion of his grape yield, because if he were to turn it all into brandy he would have to pay about £23,700. His earnings are a drop in the bucket, because he has to give everything away in taxation. He himself gets practically nothing. It is very unfair that the farmer can only deduct 10 per cent. for depreciation on his engines or pumps in calculating their value for taxation purposes. I myself have never had a pump or machine of that kind which has lasted ten years Sometimes it lasts three years and then is useless. Take a plough. Sometimes it does not last six months, and it would have to last ten years for anything to be written off. If a wine farmer makes a wooden vat he may write off 2½ per cent. annually, and if he constructs a cement vat he may write off nothing for the building or depreciation in value, because if he builds it they say it is a new work. Sometimes such a vat bursts, because it cannot withstand the climate. Then it often does not pay to reinstate the cement vat and one is built somewhere else. Then nothing may be deducted because again it is regarded as a new work. If a farmer erects a building to contain his wine vat, he may deduct nothing if it is an improvement of the establishment. He may not deduct a farthing. Now I just want to say something about the reduction of the duty on tea by 2d. a pound. How does it assist a man who drinks a cup of tea when the tea costs 2d. a pound less? Will he notice any difference? Then I come to a thing which is almost too ridiculous. It is the reduction of duty on flowers for hats, and the duty on silk stockings. It is ridiculous to make such a reduction. How does the poor man benefit by it? His wife does not need flowers for her hats, and she does not wear-many silk stockings. Why was not the tax duty on material for frocks reduced, then the ladies would possibly not have been so sparing with the material? A better measure would be to deduct the 5 per cent. extra duty on ready-made clothes which was imposed last year. It would be very useful, for instance, to reduce that 5 per cent. on suits for the poor man to £2 10s. or less. With regard to the increase in taxation I want the Minister to double the duty on motor-cars. I mean the customs duty on used-up motors. Then we can, while the present iron and steel industry is not yet making motors, and it will take rather a long time, have the body of the car and the painting done here as is already being partially done at Port Elizabeth. This would again provide more employment for our people in our country. Then I want the Minister to put a stop to the money streaming out of the country for lottery tickets. Hon. members opposite laugh, but if we were to make an enquiry, I do not think there would be many hon. members opposite who have not got lottery tickets in their pockets.

How many have you in yours? Have you a Calcutta ticket?

Large amounts go to Delagoa Bay every month in lotteries. There are many big and small lotteries, and 85 per cent. of the money comes from the Union. As for the Calcutta Sweep, it is expected this year that it will reach half a million, and we can reckon on at least 25 per cent. of that money coming from the Union. I do not even want to speak about the much smaller lotteries our money is put into. Instead of prohibiting lotteries in our country the Minister might act differently. He can, for instance, issue premium bonds. Why is he afraid of that? In that way he will put a stop to the other lotteries, and the money will remain in South Africa. The profits the Government will make on those premium bonds can be very usefully employed. Hon. members opposite who most object to them are those who gamble the most at bazaars, etc. They call this “raffles,” but I say that it is nothing but a form of gambling. If the Minister got much money from his premium bonds the Cape Province would be able to get the same allowance as the other provinces. Then there would also be no deficit with regard to teachers’ salaries. It will be unnecessary to reduce the salaries if the Minister follows my advice. It will stop gambling in South Africa, and keep the money in the country. It is possible that there will then still be money left to take water out of our big rivers and put poor people on the ground. I do not mind what river it is, whether the Vaal River, or any other, as long as we assist our poor people. My heart aches when I see that big river running uselessly to the sea. I am sorry the Prime Minister is not here, because I want to say a few words to him. He knows that during the flag controversy, when political feeling was running very high, this side made no use of it for party purposes, because it would have been a splendid chance for us. We, on this side, were moderate, and made it possible for a compromise to be arrived at, and we made it easy for the Prime Minister. We did not receive many thanks for it. If we had delayed the question till the referendum the other side would not have sat there much longer. At present the leader of the Opposition is again assisting in solving a difficult question, namely the native question.

Is that not then his duty?

Yes, it is his duty, but what thanks does he get? The Prime Minister goes and at a picnic or whatever it was held on his birthday—and on the very day on which he was congratulated by one of the leaders of the Opposition, to which he replied in beautiful language—makes out that the Afrikaans-speaking people in our party are without souls, and the English people Jingo Imperialists—

It is not true.

It was so reported, and I have not heard that the Prime Minister has contradicted it.

It was contradicted in the press.

My heart aches when I think of the Prime Minister saying that. If he did not say so I shall be the first, if he withdraws it, to apologise. If he did say it, it is the greatest disgrace, because feeling will not be improved by such remarks. I shall not say any more now.

Hear, hear.

Yes, hon. members opposite doubtless enjoyed it very much. I hope the Minister of Finance will carry out my suggestions of premium bonds, and I am certain that in that way he will get large revenue. I also hope that he will inform the Prime Minister, who was absent, what I have said.

This is the third day I have sat here—I am a faithful attendant —listening to the Opposition criticism of the Estimates, but so far I have been much disappointed. There has been no criticism worthy of a reply from this side of the House. The last speaker (Mr. J. P. Louw) said that we have not shown enough gratitude to the Opposition for what it is doing in solving certain great problems in South Africa in and out of the House. I have sat here three days waiting to see if any thanks would be given by the Opposition for the policy of this Government during the past four years, but I was again disappointed, and I can only say that in a very casual way the other side have made a reckless attempt to try and attack the Government on small matters, and I am convinced that they have not succeeded. It looks as if it will continue in that way, and no one seems to have the courage to speak any more. The last speaker spoke of soullessness, but it seems to me that there is not only a certain amount of soullessness, but also a want of interest with respect to the country’s affairs I prefer to go on to something else, something of national importance, in which every right-minded citizen of the country ought to take an interest, and which deserves more attention from this House than it has hitherto got, namely, the country’s defence. Some of us think that it is not such an important matter, that it is one that will right itself. When, however, the day of reckoning comes, I wonder where we shall find those friends. Other peoples, whom we probably do not think of as highly as of ourselves realise the importance of a sound national military training for the people, while we content ourselves with the circumstances that we belong to an extended commonwealth of nations, and that in time of danger we can reckon on the assistance of these friends to protect us. Self-defence, however, is an irrisistible law of nature. From plant life through all the kinds of life up to man there prevails a continuous and unceasing struggle for existence, and those who are the best equipped for it outlive the others. So it is with nations. Those who apply the best methods and continuously take account of the development in order to create means of defence in time of danger are in a better position for defending themselves then. Our people are inspired with a feeling of freedom, with a feeling which constantly strives for complete independence, and the recent Imperial Conference said that we already had sovereign independence. Yet we neglect to take proper steps for the defence of that independence, not to speak even of the defence of our national assets. The present system of defence.

Send for the Minister of Defence and tell him all this.

Yes, I tell it to him, and I think it is also good for the hon. member to listen to a few words about national defence. The present system of defence, if we can call it a system, leaves much to be desired, and it is in my opinion unreasonable to expect the people to give their approval to it any longer. The Minister of Defence is approached from year to year by deputations of important bodies in our country, and resolutions are passed by the people and sent to him by hundreds, but so far no attention has been paid to them, as far as I know. When I say that dition, then I am undoubtedly speaking on the defence of the country is in a hopeless conbehalf of every right-thinking citizen.

What were the requests?

The requests were that there should be a change, and if the Minister wishes I can explain to the House (he requests and resolutions which were handed to him when the defence Vote comes up. To-day I only want to talk about defence generally, and to speak as the majority of the people think about it. If we have to continue as in the past I do not see how the expenditure on defence can be justified. In this House emphasis has more than once been laid on the fact, but the reply of the Minister has always been that it would be superfluous for us to prepare for a war of any importance, because in his opinion we can reckon on the protection of the British fleet. I cannot share that view according to the light I have. In my turn, I want to ask is that the language of those who once were the famous warriors of our country. Is it the language of a people with high national aspirations, of a sovereign independent people? No, it is the language of a slave people. As long as we wish to remain dependent of the protection of other countries, we are not an independent people, and the resolutions of the Imperial Conference, and of this House remain empty words. If we argue that we are dependent for protection entirely on the British fleet, it would be unworthy of us to deny our responsibility towards the fleet. The only measure by which we can ascertain the responsibility is by our overseas trade. The total value of our overseas trade is, on the average, £150,000,000 a year. The total value of the overseas trade of the whole British Empire is £4,150,000,000 per year. The total amount which great Britain and the Dominions annually spend on naval defence is more or less £64,000,000. If this burden were to be divided amongst the members of the British empire in proportion to the respective values of their oversea trade, then the share of South Africa would run to over £2,000,000 a year. Suppose that we contribute this amount annually, and that one or more of our sister states goes to war with another power, and the British fleet takes part in that war—which we cannot prevent, because we have no control over its operations—should we then still, in view of our interest in the fleet, have the right of declaring our neutrality? To me, at any rate, it does not seem possible. Therefore, if we are to adopt the attitude taken by the Minister, our sovereign freedom leaves much to be desired. As in the past I maintain that our country is sufficiently independent economically for us to confine ourselves merely to internal and coast defence. The lot of South Africa will in the future, as in the past, be decided on land, and not at sea. If it were to happen in the near future then I fear we should not be able to defend ourselves as every freedom-loving and self-respecting people should be. We are so situate geographically that we are not dependent on the sea for strategic purposes. Proper coastal defence and a well-trained and equipped land force is all that South Africa requires and all that she asks to-day. Without it she is a meaningless, subordinate State. I want to repeat what I have said before in this House, namely, that the stretched-out Union of South Africa does not to-day have the same trained forces and armament as the two republics of the Transvaal and the Free State did thirty years ago. That in itself is a deplorable fact, and the sooner we look the truth in the face, the better for us, and for the future of our people. No one can argue away the fact to-day that there is great lack, yes, a disquieting lack, of military training amongst the youth of South Africa, and as we intend to justify our present position, then we ought without delay to make radical alterations in our military system, especially if we want to count among the smaller peoples of the world. In South America, e.g., notwithstanding their recent declaration of peaceful intentions, there has recently been an astonishing advance in the armed forces of the republics there. Chile can at present put in the field an army as large as that of Britain, that is, 400,000 well-trained men, trained and organized on the German system. Their officers are equal to the best officers in Europe, and its general staff has a high reputation. The merits of its aircraft school are so widely known that officers from the other South American states go for training to that institution. It is organized in a way which enables extensions to be very easily made in wartime. The Argentine has an army of 400,000 men organized into 5 divisions with modern arms and equipment. Peru can put 100,000 well trained men, organised in five divisions, with a properly equipped air force into the field. By a resolution passed the year before last, and which is already being carried out, all the secondary schools of Peru are obliged to give a strict military training to the pupils. Brazil can mobilize an army of 120,000 men, consisting of five divisions with independent brigades. Bolivia has undergone a complete reorganization, and the training is of the same grade as in any European army. It can put on a war footing, in a moment, 200,000, with the most modern weapons and equipment, and trained on German lines. Uruguay has an army of 50,000 men, a national guard of 100,000 men, and an air fleet of 300 men trained on the French system. Military service is compulsory in all these republics, and when one remembers their populations one cannot but say that their land forces are noteworthy. The fleet of Chile is one of the best in the world for its size. In September of the year before last the Argentine Government spent £15,000,000 in putting its fleet on a modern basis. Provision was also made for the construction of a naval dockyard. A further £15,000,000 was authorized for the Argentine fleet in pursuance of the policy which was approved by the Government the previous year, when the Senate voted an amount of £40,000,000 for naval defence. I only mention these cases to show what is being done in their defence by other small nations, and how far we are behind them in this respect, notwithstanding the fact that our dangers are much greater than theirs. Let us look for a moment at our own dangers. We are not only one of the advance posts of Western civilization, but besides local dangers we might quite easily some day be the point of conflagration in the coming struggle between the white civilization of the West and the coloured races of the East. Already jealous eyes in the East are turned to the possibilities of South Africa, south of the equator as a favourable settlement area and trading field for their superfluous populations and production. North Africa, is an incubator of militarism. On the 6th September, 1926, the Egyptian Chamber of Representatives, over and above their own defence vote, voted a sum of £750,000 (almost the amount of our whole defence vote) to help to pay for the defence force of the Sudan. The question involuntarily arises, why Egypt is doing that? Is It not with a view to the future to strengthen the ties between it and the Sudan? Is it not the case that its future does not lie in the north, but in Africa, and that it's natural expansion of territory and authority is towards the south? Its interests, and that of its co-religionists in Asia Minor, are to extend southwards as much as possible, in order to have control over the thousands of black Mohammedans in Africa. Still nearer to us are the 3,000,000 French black troops. Through its low birth rate, France is now compelled to maintain mercenary armies, and unfortunately Africa has become the horizon and the cradle of those armies. The mercenary armies of the past taught us what a great danger they could be to society. They have no national aspirations.

Why do you not hand over a written document to the press?

I am only using my notes.

The hon. member may not read his speech.

Their only apparent object is plunder and booty. Just think of what a danger to us it is to have millions of well-trained black soldiers in the north and middle of this continent, especially when they have railway communication with us. And that is possibly coming more quickly than we think. A telegram from Paris which appeared in the “Star” will possibly be of interest in this connection. The headlines read: “Must have African troops basis of French naval policy.” And then it reads—

As long as France is our friend, there is nothing to be concerned about, but who can say that in the next war she will not be against us? We already have all the signs of that possibility. If it ever comes to that (and war is much more possible than it is impossible) then all the British territories in South Africa, as well as ourselves, a sister state of England, are exposed to that black danger. And who knows whether we shall not then have to undergo the same experiences as fell to the lot of the Rhine territory at the end of the world war? What is permitted there may possibly also become our lot, unless we wake up and look after our own defence better.

How will they get here?

They are busy joining up the Congo with all the coastal areas, and there is a connection between the Congo and ourselves. Notwithstanding all our reorganization during the past few years, alarming retrogression is visible in our defence force in so far as its usefulness and quality are concerned. I make no pretensions when I say that the countryside regard the present methods more as a joke than a serious national undertaking. All the enthusiasm has already disappeared and the longer we trifle with this national matter, the less interest will the people take. For the last three years only young men from the large towns, like Johannesburg, Pretoria, Durban, Cape Town, Kimberley and Port Elizabeth are trained. The rest of the Union is left to itself, and the once world-famed veterans of the past are disappearing, one after the other, with successors. Throughout the whole countryside, and the whole of the Free State, not a single youth of between 17 and 21 years of age is called up, as the Defence Act provides, for training in discipline and the use of arms. So-called special squadrons are established in outside districts and compelled four times a year to come up for parades at their own cost. I call them parades because they are not for any training of importance, but just to see whether they are still there. Not only must these young men wear their own clothes, and supply their own horses gratis, but whether the distances are large or small, they must also bear their own travelling and maintenance expenses. They have to do all this, while in the large towns, as I have already said, the young men receive uniforms, rifles and transport and maintenance expenses from the Government. I was recently invited by a few so-called defence rifle associations to attend their exercises, and what I there saw inspires me with anxiety for the future. There were no two rifles with the same sighting for the same distance. The inefficiency which characterizes the administration of the Defence Act at present causes the people to look upon the defence force with contempt instead of pride. And if the memorials which from this southern coast spread throughout the length and breadth of South Africa mean anything, then it is that it is the highest duty of every citizen to be a competent rifleman for his country and people. That is not the case to-day, and why not? The reason is not far to seek.

Tell the Minister the truth.

The Opposition have always neglected to criticize constructively. I am only giving them a lead for their policy with regard to this matter. Instead of the authorities giving a lead to and encouraging the people to take part in our defence organization with national pride, unless attempts are made in an unenthusiastic way to keep something going in name but not in act, which policy is in conflict with the doctrines laid down by two great statesmen. I should like to quote them here. The celebrated Gladstone said—

Our own Prime Minister said more or less the same thing, namely—

This people has accepted sovereign independence, and is therefore obliged to defend itself, according to these two statesmen. But can it do so against even one of the most insignificant little peoples of the world? No, it cannot, because it is unarmed, untrained, unequipped and unprepared to meet an enemy having all these privileges. If it goes on in this way we shall remain insignificant and have no claim to sovereign independence. Who is to blame? Not the people. Every citizen of South Africa is prepared to give his last drop of blood for the maintenance of his sovereign independence, but he is powerless. Who is then the cause of his powerlessness? In part this House is responsible, because the subject does not receive the attention it deserves, and partly it is due to the policy of the Minister of Defence. The Minister is a personal friend of mine, and so I should prefer to have things different rather than to make this serious charge against him. But he will surely allow me to make use of a saying of Napoleon in explanation of my attitude. Someone once asked why he could not co-operate with his friend Apaoli, the Corsican patriot. His answer was, “Apaoli is my bosom friend, but my people are my lucky star.”

The hon. member who has just spoken complained about the want of criticism that the Government were experiencing in this Budget debate, and very rightly he set himself to supply the defect. He has given us a very searching criticism of one department of the Government’s work. I am not competent to follow the hon. member in the criticism of the Defence Department which he gave—a criticism that went very much to the root of the matter— but I do not pretend to have that military experience that he has, and I shall leave the handling of that particular matter to others. But I was glad to see one thing in his speech—that he realized, and it is time that we did realize, that this claim we are making now, and rightly making, to independence, national self-control, and even sovereign independence, carries with it a serious responsibility. I am glad that the hon. member realizes that, and it is time that we did. I differ from him very much in some of the things he said, and I think it is a little strange, perhaps, at this time of day, when we find all over the world statesmen meeting together and talking of disarmament—about steps to abandon the possibility of war—to find a leading member of the Government party of this House almost making our flesh creep with the need for further armament and more military experience. I do not agree, admitting that we are not as well defended as we should be, with the hon. member when he says we need not trouble about the sea, and that South Africa's lot will not be decided on the sea, but on the land. Well, I am afraid one cannot take that light-hearted view when one either looks at the past history of South Africa or its present needs. We are no longer cut off from the sea; we are the Union of South Africa; our ports are exposed to attack; and what is more, we are not a self-contained people. We cannot support ourselves. We produce large quantities of commodities which we must sell to other parts of the world, for we cannot live upon our wool or our gold; we have to export them in order to buy food. The hon. member lightly put aside the question of sea defence, thus leaving out of consideration the most important matter connected with our national defence. I do not see why our acceptance of the help of the British fleet to defend us need infringe our independence, and I do not see why we should be slaves because we are not yet able to defend ourselves by sea. Part of the declaration made at the late Imperial Conference and admitted by all parties was that, for the present, until the different dominions are stronger and more developed, the main responsibility for defence and diplomacy would rest on the senior partner, i.e., Great Britain. There is nothing ignominious to us about that—we are not slaves because we have entered into this partnership—

Should we not be a better link if we were able to defend ourselves?

No doubt we should, but the point is—have we the means to do so? Are we capable of raising a fleet? The hon. member pointed to a South American republic which was spending £15,000,000 in order to put its fleet on an effective basis. £15,000,000, however, do not go very far in putting a fleet on an effective basis, and even if we had the ships, they would soon become obsolete and we should do well to cultivate the arts of peace rather than those of war. Of course we have to be able to defend ourselves, and I have not the least doubt that the spirit of South Africans will prompt them to defend themselves to the last, if need be, but, with our resources, we ought to be careful how we rush into great armaments and spend money on fleets. Let us train our people—we have the spirit of patriotism—and make them proud of their land, but don’t let us spend vast sums on military armaments. The hon. member complained that there had been no criticism of the Government during this Budget debate. I don’t quite agree with him, but I think there has been a lack of interest in the House. I do not know what the reason is, whether it is as soon as hon. members hear there is a large surplus they are quite happy. The hon. member for Riversdale (Mr. Baden-horst) thinks that everything is going perfectly well, but I don’t think that one can draw that inference. The mere existence of a surplus does not mean that the country is necessarily in a flourishing condition. If hon. members opposite complain they are not getting enough criticism, I would point out that one reason is that, in the main, since the Government came into office, it has followed the lines which they already found and followed the policy of their predecessors in office. Criticism, therefore, should come from the other side—from the people who told the electors during the general election that when the Pact came into power, there were going to be a State bank, State fleets, an 8-hours day for all railwaymen, segregation for natives, secession from the empire, and all sorts of things. Criticism should come from that side that these things have not been carried into effect, and it does come occasionally from the Labour benches when they are sufficiently wound up to let their feelings go. I am surprised that there is no criticism from that quarter seeing that the record of the Government shows a wide divergence from the Government’s election promises. Hon. members opposite sometimes tell us that all this prosperity is due to the fact that the Government is in office. I think it is, to a certain extent—to the extent that they have abandoned all these wild schemes and have followed the path made by their predecessors in office. They have surprised the world to that extent and people are beginning to think that they are not such a wild lot after all.

People are beginning to find out that the bogies have not come true.

Yes, because what the Government has done has been so widely different from what they said they would do when they asked for the votes of the people. To come back to the question of the surplus. When people ask about the welfare of the people and economic progress of this country it is no answer to say we have a surplus. What, for instance, about the question of unemployment? We have been told over and over again that the Pact has solved unemployment, but it has done nothing to solve it. If the number of unemployed men has been reduced, it is because many of them went to the diamond diggings, but, unfortunately, they are coming back. Deputations of unemployed have come here, and I was surprised to see the attitude adopted yesterday by the Minister of Posts and Telegraphs when the Kroonstad deputation was mentioned. He sat there and smiled as much as to say: “That does not bother us now.” When he was in the Opposition, however, he assumed a very different attitude. Is it a healthy sign for this country to find thousands of our people with their families on the diamond diggings ekeing out a scanty livelihood and unfitting themselves for any sort of permanent work?

Is the Government doing nothing to stop them?

Certainly. The Government is doing something, but they are not doing very much more than was being done when they came into power. They have training establishments, a sugar plantation, and men working on the roads, and they have taken a few thousand men on to the railways who were not needed there.

What about industries?

Yes, there has been an increase in the number of people employed in industries just as there was going on when hon. members took office. What they have done which I say they should not have done is to throw open the railways as a kind of relief work and they have boasted of it all over the country. This is strangling the productive powers of the country because you are increasing the cost of transport, and diminishing the chances for tens of thousands of other people in the meantime. I would not have taken those men into the permanent employment of the State.

The other alternative was to leave them to starve.

I cannot imagine a worse economy than to turn a permanent department of the State into relief work. It is permanent work, but it is work that is not necessary. They are surplus to the requirements of the railway. You are putting up the cost of transport all over the country. The work could be done without them by a small number of men. If the hon. member will study the figures he will realize that expenditure has been going up out of all proportion to the increase in the traffic.

I want to know what these people would be doing.

I cannot tell the hon. member what they would be doing, but I know if you are carrying on any industry and employ more men than you need, the efficiency of that work will go down and the expenditure will go up. I was pointing to that as one of the disquieting features of the present situation which is not disposed of by merely looking at a huge surplus. There are others too. Look at our industrial production. The Minister of the Interior talks about our industries. We have a certain number of industries, but look at our industrial production compared with other countries of the world. Look at our agricultural production compared with other countries of the world.

Is not the position better to-day than it was?

That may be; I do not say that it is better or worse, but it is very much below the production and efficiency of other countries of the world at the same stage of civilization as ours. We are spending more on administration than we can afford, and more than the productive powers of the country warrant, especially when we think that one of the great productive assets of the country at present is one which may be expected gradually to diminish. It is not so easy to get your expenditure down once you have got it up. I am not saying this as a criticism only against this Government. It is a criticism also against those who went before them, and, incidentally, against myself, but it seems to me they are spending more on our administrative machine than the productive capacity of the country warrants. That brings me to the question of this budget debate. What is the real use or effect of a budget debate in the matter of getting a real reduction of national expenditure. We stand up here and utter criticisms and they are answered by the other side. The Government makes expenditure a question of confidence. We know perfectly well that when the time comes and the vote is put the Government will vote on one side and we on the other.

That is not the trouble. We have all talked like this, but nobody will help to bring it down.

I know that quite well. That is a danger of this system of parliamentary government that we condemn expenditure in the mass, and every one of us tries to get a bit for his own particular interest. That is one of the difficulties of parliamentary control of national expenditure. But this is another—that, whatever the criticism may be, as long as the Government make expenditure in the estimates a question of confidence, nothing can be done in the way of practical reduction of expenditure. I do not know what can be suggested as a remedy, but I feel that we are not so well situated now as we were a few years ago in regard to the control of expenditure, because the Public Accounts Committee, and the same thing holds good of the Railway Committee, is not the effective instrument it was in criticizing expenditure. It also has gone the way of party division. You have Parliament repeated in little. There was a time when, although the Government of the country was what was then known as the South African party, a member of the Opposition was appointed chairman of the Public Accounts Committee. I think that is a precedent that should be followed. I think the chairman of the Public Accounts Committee and the chairman of the Railway Committee should be members of the Opposition. You might then get more effective criticism, and get away from the strict party lines on which these things are being run now.

In spite of that they were very much on party lines before.

They were not to the same extent as they are now. That is my experience. Ever since I came into Parliament I sat on the Public Accounts Committee until a few years ago, and, in my opinion, it is not the effective instrument for criticizing expenditure that it was.

We stood out for this, and you were in Opposition and would not agree to it.

I am not here to hand out praise or blame, but I recall a precedent that did exist at one time I do not know whether we could in this country set up any sort of machinery such as they have in France. There they have a Budget Committee composed of representatives of the Houses of Parliament, and they have enough influence from time to time to compel the Government to alter the budget in accordance with their wishes. That is quite contrary to our ideas of responsible Government, and to the precedent on which we have built up our constitution, but I think we ought to try and devise some system of criticism of public finance which will enable the Government to accept suggestions for economy and carry them out without necessarily making them a question of confidence. When the late Government was in power they found themselves compelled to make certain reductions in the scales of the public service and in the pay of the railwaymen. A storm was raised against them right through the country. They were exposed to every form of unpopularity and attack by their political opponents. The Government have come into power, and the reductions made by the late Government remain as they were. I appreciate their courage in standing up to the demand which was made upon them to reverse the decision of the late Government.

We supported those reductions.

Oh !

I do not know whether the hon. member read the utterances of some of his supporters on the platform at the election, but the support we got from them was something less than neutral. Take another instance. Members who were in the late Parliament will remember what a storm there was. Can the hon. member have forgotten what he and his friends, especially the Labour party members, said when the late Government introduced a Bill to provide for uniform teachers’ salaries throughout the Union to be fixed by the Public Service Commission, and there was a clause which gave any province the power, if financial needs compelled it, to make reductions for one year? I remember the present Minister of Labour almost threw his hands off in his indignation at this attempt to reduce the scale of salaries of teachers in this country. There was no such thing, of course, but that is how it was represented by the Opposition. When this Government came into power they repealed that section. I told them at the time that they were doing the teachers a sorry day’s work in the interests of the teachers. Now the wheels come round, and one of the provinces finds itself obliged to reduce, not for one year only, but permanently, the salaries of its teachers. Where are the tears and shouts of the Minister of Labour now? We do not hear a word. Not even a word from the hon. member for Liesbeek (Mr. Pearce). These are things that make me feel that financial criticism in this House carried on on strict party lines is a bit of a farce, and if we want to do something to reduce national expenditure we must try to get some kind of machinery where the different sections of the House will have the opportunity of examining the Government’s proposals for expenditure, and criticizing them without its being made a question of confidence in the Government of the day. Then one criticism I would like to make of the Minister’s budget is the reduction, or rather the remission of income tax. I am, of course, very glad to have it, and so will everybody else be who has to pay income tax, but the question is, if the Government is in a position to make a remission of taxation, whether they should have taken it off in that way. It seems to me that it would have done far more good to give remission of taxation to those who are at the opposite end of the scale. I think it would have been far better, if the Minister was in a position to make these remissions, if he had given the remissions where they would have been more needed, and where the pressure of taxation is more felt, and that is amongst the poorest, who have to pay taxation through the customs. It would have been better if he had remitted taxation on some of these things that we have to wear and to eat, than to give the remission to those who have to pay income tax. I admire his courage in pledging himself to the future so much as to give this remission of 20 per cent. I have no doubt, if in the future the Minister needs this money, when he comes before the House and tells us that, there will not be the same careless ease on that side about the budget as there is to-day.

We will have to nurse that baby.

Seriously, I think the remission ought to have been made at the other end of the scale. I would like to say something about the protective policy of the Minister. As he stated his policy of protecting industries, I have not much fault to find with him, because he stated expressly that we was only in favour of protecting secondary industries in so far as that protection did not interfere with the full development of our primary industries. But I am afraid that practice does not always follow that beautiful theory, and I do think that he was a little too easily persuaded by the Board of Trade and Industries when he agreed not to allow the 2½ per cent. to come off the duty on toots and shoes. I have read the report of the Board of Trade and Industries, in which they recommend that the duty should not be allowed to drop, that the 30 per cent. should be maintained, and I must say that I find it a bald and unconvincing document, I could see very little ground for interfering with the arrangement which was made five years ago, an arrangement which, in the opinion of very many people, gave a large and ample measure of protection to the boot industries of this country. I would like to quote a few figures from this report of the Board of Trade and Industries, just to show that this boot and shoe industry is not one of those languishing infants which looks as if it might be alive to-day and dead to-morrow. It seems to be thriving vigorously, as far as I can make out. They give figures in which they show that in 1919-’20 the output of South African boot and shoe factories was 1,800,000 pairs, while in 1927 the figure was 3,600,000, exactly double. The imports of boots and shoes—that is the competition we hear so much outcry about—in 1919-’20 were 2,309,000, and in 1927, 1,541,000. The South African output is going up rapidly and imports are falling off rapidly.

Do you object to their going up?

I do not object to their going up, but I do say that it shows me that the industry is strong enough to stand without putting a tax on the poorest section of the people.

How many people are they employing?

I am just going to tell the House that. The European employees in 1919-’20 were 1,838, and the estimated number in 1927 were 3,108. The non-European employees in 1919-’20 were 1,792, and in 1927 numbered 1,633. The total number of employees was, therefore, in 1919-’20, 3,630, and in 1927, 4,741, the increase being entirely among the Europeans. That is a very good record, but I say that an industry that can show that cannot come hat in hand to the Minister and say: “Please give us more protection, or we cannot go on.” They should meet competition by trying to secure more efficiency, by re-organizing their works, and by better methods. This protection involves an unfair contribution from the taxpayers, and especially from the poorest classes of the taxpayers. I am sorry that the Minister did not allow the duty to come down by 2½ per cent., because I am quite confident that the boot industry of this country is well enough organized to have stood the drop without any material injury. I would like to suggest to the Minister that, instead of looking to help industries solely by raising the tariff, he should rather look to help them by extending the markets. I wonder what we get by way of return for the money we are spending on our trade commissioners. Take our trade commissioner in the United States. What do we get for that? We get the report, yes, an amusing report; he adds to the gaiety of nations, I admit, but this crayfish he carried round does not inspire me with much confidence. Why cannot he get a market in America for our fruit? The fruit we grow here would find an excellent market in New York at the time when there is no American fruit on the market. It seems to me it is worth considering whether we cannot, in some way or other, induce the Government of the United States to give our fruit a chance.

I suppose the first essential would be that we should have to build a State fleet to carry the fruit there?

No, I do not believe the Minister would be driven to that, but the trouble is the Government of the United States will not have our fruit. They have closed their doors against it. I think, seeing the amount of American goods we in this country buy, American motor-cars and engines and all sorts of things, our trade commissioner over there might put in a little word to say they might leave a little door open for some of our products to be sold there. Trade consists of exchange, after all, and I do not see why we should open our market with open arms to American manufacturers and producers as long as they close theirs to our goods. I think that is something the trade commissioner might turn his attention to when that tin of crayfish becomes bad or explosive. He might turn his attention to fruit. After all, we are a people that can exercise a little pressure in the world. There is one other point I would like to deal with, and that is the question of local government. I am very sorry that the Government has done nothing, and shows no sign of doing anything, in regard to local government. I hold very strongly, and many people in the country hold, that the day has come when the system of provincial councils must be revised. It was put in the constitution as a compromise because they could not reconcile the two different currents of thought, one asking for federal government and one for a unitary constitution, and so they put in this provincial system as a compromise. Compromises are all very well for a time, but they do not make very good permanent machinery. I think with these provincial councils we have got, not local government, but we have four little parliaments elected just as this is, very often on questions which have nothing whatever to do with local government, and they are simply a little replica of this Parliament, a sort of battle ground of the various parties in this country and questions of local government are left to themselves.

Why didn’t you tackle it?

Because the Minister and the people behind him did not give us enough time, but I should have thought the fact we left it untouched was a very poor excuse for the Minister. He came into power with a large and docile majority behind him and with the wind filling all his sails. What has he done? Nothing at all.

Give us time.

No, I am afraid the people think he has had too much time already. I think his time is about up. What I object to about this system, is not so much that it is a compromise constitutionally, but it cuts across the field of government action in so many; different spheres and in a quite irrational was just take education. Who could possibly decide, if they did not know the actual facts to which particular authority any one educational question belonged? The constitution says, “Higher education and education other than higher,” but no one knows what higher education is or what other than higher is. The consequence is we have a system which simply paralyses education. You get inefficiency and waste. Take a thing like what is called poor relief. Poor relief is one of the most important national functions of the national government. It is the question of dealing with the section of the people who are unable to provide for their own maintenance. Now we say poor relief belongs to the province. Take a matter in which I have taken some interest, and that is what is called mothers’ pensions. Under the Children’s Protection Act, passed by the last Parliament, the Government pays a certain amount by way of maintenance for children whose mothers are unable to provide for them themselves, but are capable of keeping up a good home. If these children are committed by the magistrate to the care of their mothers, the Government pays a certain maintenance rate for them. But now we find the question arising: Is this not provincial work? Is it or is it not? Who knows? Everyone is hampered because of this uncertainty. Take hospital administration. We find exactly the same thing. Is that a national thing or is it not? Each province goes along its own way, and as a result we get confusion. I would like to quote from a speech by the Administrator of the Transvaal, who has had some years of experience of provincial administration, and is quite capable of observing what is going on. He says in his budget speech—

I do not think it could be put in stronger language. He goes on, of course, to add the warning that before we embark on abolishing provincial councils, we must be prepared with some scheme to replace them, and I know that that is not altogether popular, especially in the country districts, because they think that means local taxation. Local services have to be paid for somehow. My view is that local government is one of the most essential functions of the community. If a country has not got good local government, its national government suffers correspondingly. Local government can only be properly called local government when it does not take people away from their homes for weeks and months, so that only those who are a sort of politicians can afford to go. Local government bodies should be carried on by people who can attend them, without being dragged away from home, and without being dragged into controversies of party politics. I think the Government, if they have not already been thinking on that problem, might give their attention to it. It is a crying need of the country to my mind. The Government appointed a commission in 1916 to inquire into the provincial administration. My hon. friend was chairman. I was on, and some other hon. members were on; the question is not so much who was on, but what has become of the report. I am afraid it is covered with dust and microbes in some Government department. I now want to come to railway matters, and I regret the Minister of Railways and Harbours is not here. Unless there was some pressing need for his going, it was his duty to be here to deal with his estimates. I sympathize with the Minister of Finance, who has to deal with the railways, as if he had not enough on his own shoulders already without taking on an additional burden. When the Minister of Railways and Harbours returns, I hope he will bring back something with him as the fruit of his labours. He told us he had a deficit on the railways, but we must not be too much misled by that statement, because you find when you look into his expenditure that he is paying a quarter of a million for betterment, and another quarter of a million for the repayment of debt, which is practically betterment under another head, besides the payment he has made to put the pension fund on a sound basis—to which I do not object in the least, but I think it is time that the people who use the railways had some claim for consideration. It is not as if there is nothing being done out of income to maintain our capital assets. There is the Depreciation and Renewals Fund, to which we make a contribution of 1½ millions every year, and on that fund at the present day there is a very considerable surplus. A few years ago there was such a considerable surplus, that it was raided by the Government of the day when it was needed for a deficit on railway working. That shows, to my mind, that it is sufficient to keep the working of the railways on a proper standard. Before the Minister sticks away a quarter of a million here and a quarter of a million there, he should consider the users of the railway, and reduce the railway rates. Without cheap transport this country cannot progress, and the railway rates are, in many cases, too high, and act as a block to the development of the country. I am all in favour of meeting expenditure out of revenue, rather than out of capital, where you can, but I think the users of the railway ought to have a say. So long as he is paying these amounts I do not think we should be content with this statement that we cannot do anything because of his deficit; it is only a deficit because he has created it by using his revenue in that way. I want to mention one of the points already mentioned by the hon. member for Cape Town (Harbour) (Maj. G. B. van Zyl)—the very unsatisfactory state of our Construction Acts at the present time. Acts were passed authorizing new lines of railway which are so drawn that the Railway Department can build a line anywhere they like, so long as they start from the point mentioned in the Act and end at the point mentioned in the Act. The Act of Union says we shall get a report from the Railway Board. It has to be an exhaustive one, showing where the line goes, the farms through which it passes, the probable revenue, and so forth, but the report is not referred to in the Act. Parliament votes for the building of a railway, but we ought to be quite sure, when we are voting the money, that the line is the particular line examined and reported on by the Railway Board, and not some other line.

Another thing I would like to bring to the Minister’s attention is that these estimates of railway expenditure are, to a large extent, unintelligible and the House cannot follow them. I take, for example, Head No. 2, Maintenance of Permanent Way: £3,100,000, superintendence, so much salaries, office expenses; permanent way, salaries, £1,297,901; materials about half a million, and various heads, the total being £1,844,000. We cannot criticize these figures; no one can do so; they are quite useless unless there is laid before the House, when these figures are being considered, a detailed report by the Administration showing how many miles have been relaid, how many sleepers are being put in, repairs to bridges and so on. We have a very serious complaint in regard to the nature of the permanent way, and, as the hon. member for Cape Town (Harbour) said, the chief civil engineer cannot give a clear certificate, such as he ought to be able to give, namely, that the line has been maintained in good working order. He says it has been maintained in working order, and in some parts it wants attention. That is not a satisfactory statement. That is the complaint I have against the Administration as a whole—we get no adequate statistics; what I mean by that is, statistics by which you can test the working of the line—not a mere mass of figures—but figures by which you can test the efficiency under which the system is carried on. I do not want to go all over again the question of branch line statistics; we have done so before, apparently with no result. The argument of the chairman of the Railways and Harbours Committee was that it was no good to give these figures, as they are not accurate, and you have to make certain allowances for the contributions these branch lines make to the main lines. Of course they are not accurate, to the extent of being the actual figures and to the extent to which this arbitrary allowance is made, but they are accurate to this extent— you can compare one year’s working with another and you can see how particular branch lines are getting on, whether they were paying or not, whether they were less satisfactorily managed than the years before or not; but the department refuses to give the figures, saying it costs £12,000; they add that the figures are there, and any hon. member can see them if he likes— but we are not going to publish them to the world. Take this question of the operating ratio. As the hon. member for Cape Town (Harbour) (Maj. G. B. van Zyl) pointed out, the proportion of working expenses to income has been going steadily up, and is now over 80 per cent., which is a high figure. The Minister says, “Oh, that’s nothing, it only means we have been carrying more low-rated traffic, and not that the expenses are proportionately greater than they were before, but that the revenue is proportionately less.” No doubt that is true to a certain extent, but it is a figure which most railways use in order to criticize the efficiency with which the lines are being run. Take again the question of cost per train mile, which is also going up. The Minister says the train mile one year is different from that of another year. But there is no absolute test by which the Minister, and still less the House, can gauge the efficiency with which the railways are being carried on. The only test are ton mile statistics, which would show us roughly whether we were paying more for our railway service than we should, whether the cost is going up or down, and that is the only test of efficiency which can be applied by means of statistics. The Minister assumed the policy which is libellously and unfairly applied to the ostrich—that of hiding his head in the sand. I would urge the Minister to give us some statistics which would enable a real test to be applied to show how the railways are going. Another point is the question of civilized labour. Personally, I am in favour of paying a man who has to live under civilized conditions, a civilized wage. If that is what civilized labour means, I have not a word against it, but I am afraid it means largely European labour—the encroachment of the white man and the weeding out of the coloured man, although he has to live under civilized conditions, the same as the white man has. Whatever the coloured man’s life may be, he does not come within the favoured circle of civilized labour. The Government’s policy also means employing on the railways a large number of people who are not wanted, but are employed because they are unable to get other work. That, however, does more harm than good. If you want to solve the problem, let the Government help our productive resources, which would provide employment far more effectively than the taking on of a few thousand men by the railways. Another point I would like to mention is one which we do not hear so much about now as we used to once. The railways are drawing large quantities of sleepers from the forests of South Africa—sleepers made from yellow-wood which is far too valuable to be used for that purpose. The production of these sleepers involves an immense amount of waste, as you can get only one sleeper from a tree. Their cost is nearly twice as much as sleepers from Java or Australia.

Or the Argentine.

Could not something be done to find alternative work for these men employed in this act of national destruction to some of the finest forests in South Africa, which are being wastefully cut down to provide work for men who could be better employed elsewhere? I would like the Minister of Railways to have been here, because he would have been able to put his finger on the spot, the forest being in his constituency. However, now that the Minister of Labour has abolished unemployment, cannot he do something for these woodcutters?

He has not abolished unemployment.

He has some forest settlements, but if they are all like the one I saw the other day, then heaven help the people living there. I think this is a budget which is generally interpreted as showing that we are in a period of abounding prosperity, but there are some things which might give us pause, things which are sapping our vitals as a people, and which need attending to. I hope the Government will set its face against the idea that the progress of this country can be helped by putting on restrictions or taxes in favour of this or that particular industry, or to bolster up the interests of a particular section of the people. I hope they will bear in mind that we are a potentially rich country, but it can only be developed by production and individual enterprise, initiative and resource, and not by teaching people to come to the Government for help. The Government should give improved communications and cheap railway rates, but for heaven’s sake give the people the fullest freedom and encouragement to develop the country by their own initiative and resource, but don’t sap their energies by excessive Government assistance.

I wish to compliment the hon. member for Yeoville on his speech, and I am very glad to again hear a member of the front Opposition bench dealing with the very complex system of railway finances. Some years ago the hon. member for Cape Town (Harbour) (Maj. G. B. van Zyl) used to go into the question very fully, and I agreed with many of his conclusions, but recently the hon. member has not dealt with the question of the Railway Administration Department tucking away such large sums of money into certain funds, and I understand the reason is that his views on the point are somewhat unpalatable to the hon. member for Cape Town (Central), so it is agreed not to discuss the matter any more. However, if large sums can be tucked away into various funds, the users of the railway and the staff also have reason to complain. I am exceedingly sorry that the Minister of Railways is not in his place. It is true the Minister of Finance has a good grasp of railway matters, but it would have been preferable if the responsible Minister had been here to answer criticisms on his budget. The position with regard to railway matters is that, although you have a change of Government from time to time, strictly speaking, your railway policy and administration go on the same. Your permanent officials, generally speaking, are the same officials whatever Government may be in power, and if we had a Labour Government the same officials would carry on, and I want to see some impartial body set up to go into the question of the general conduct of the railways, especially in regard to finance. This funding system has got to be a set policy, a traditional kind of thing. In my opinion, what is needed is an enquiry by way of a commission of business men. I really believe that if a bona fide commission of enquiry was set up composed of business men who have, perhaps, some special knowledge of railway matters, that commission would do good work and probably present a report which would mean, in certain respects, that this traditional financial policy of railway administration, this funding system, this holding up of large sums of money from year to year, would be put an end to, and we should simply work as an ordinary business concern, knowing the possible requirements a year ahead, and making provision for them. I do not think any ordinary business man would adopt the policy adopted on the railways, where you have certain funds, the biggest of all being what is called the Renewals Fund, which is supposed to exist for the renewal of stock, but hon. members know that year after year this fund carries forward a balance of over £2,000,000—an ever increasing balance. I look upon this thing from the Labour point of view, and no one has ever succeeded in persuading me that it is necessary in the interests of railway administration for big balances to be carried forward permanently from year to year without apparently any use for them. Some superior gentlemen who sit in the press gallery have suggested that I want to raid these various funds. I do not suggest that you should not carry balances, but I say balances should not be excessive. My view is borne out by the statement by the hon. member for Yeoville (Mr. Duncan), and by the previous remarks of the hon. member for Cape Town (Harbour) (Maj. G. B: van Zyl) that, generally speaking, the balances of these various funds are excessive. My point of view is supported by the greatest authority in this country, the Auditor-General, who has consistently remarked on the fact that these balances are excessive. Of course, the gravamen of the Auditor-General’s charge is that the Renewals Fund, which is supposed to exist for the renewal of stock, is consistently used for the purchase of material, which is not renewals in the ordinary sense at all, but simply ordinary requirements of the railway, which should be met out of capital expenditure. The hon. member for Cape Town (Central) (Mr. Jagger) agrees with the policy of using the Renewals Fund to purchase new stock. I say that if an ordinary business man conducted his business in that way the auditor would have something to say about it, because the proper way to do it is to pay out of capital account for requirements which are not renewals. To purchase these goods out of the Renewals Fund is altogether wrong. The hon. member for Cape Town (Harbour) used to be very eloquent about this. In 1925, speaking about the Renewals Fund, he said—

One could go into a lot more detail, but the point is that the Renewals Fund carries, in my opinion, too large a balance. That money should be made available for the users of the railways. When concessions are asked for the staff we are told that “we would like to do these things, but we have not the money.” I argue that we have the money, and we have it annually. Every year your contribution to the Renewals Fund is about £1,500,000, and every year it is very seldom that that amount is exceeded, and so you have this permanent balance. What is the balance of the fund according to the Auditor-General’s report this year? The Auditor-General, on page 38 of his report for last year, makes this statement—

When we sit in committee upstairs and bring this question up, these permanent heads of departments, these people who, I consider, manipulate figures to suit their own particular purposes, tell us: “It is quite true we have got a large balance, but then you see the commitments are so much, and we have got to order so much.” We sit and listen to these things, but the following year we find that the Renewals Fund has increased, not decreased. It is time that some competent body of persons went into this question. I do not suggest for a moment that we should not carry a substantial balance, but I do contend that, to carry forward this permanent balance of over £2,000,000 year after year, when the users of the railway are complaining that certain concessions which they require are not made, and we, from a Labour point of view, are complaining about the low rates of pay and the need for extending the 8-hour system beyond what it is at present, is not a proper procedure. When we ask for these things, we are told that there is no money, while the money is there tucked away, as the hon. member for Yeoville (Mr. Duncan) has said, in various funds. That brings me to another point. The Auditor-General also deals with the question of what I regard as an anomaly, that while you have this large sum of money, at the present moment, approximately £4,600,000 lying idle, what is regarded as working capital, we have this spectacle of the railways being run on business lines by the wonderful heads of departments who advise the Minister, or whoever it is, to go to the Treasury and borrow money for railway purposes at 5 per cent, and lending money themselves to the Public Debt Commissioners that they do not require at the moment at 3 per cent. That, to my mind, is an absolute paradox. It amounts almost to a scandal that a big public department, when it wants money to pay for its requirements, instead of lending some of this £4,500,000 which is lying idle in various funds to itself, goes to the Treasury and borrows money at 5 per cent., and at the same time deposits funds for temporary investment with the Public Debt Commissioners at 3 per cent. What sort of business lines are these? I put it to the Minister that if the Standard Bank or the National Bank or the Reserve Bank followed methods of that kind they would soon find themselves in an ungodly mess. As regards the Renewals Fund, the Minister is, of course, aware that a departmental committee was set up to inquire whether it was advisable to alter the basis of contributions to the Renewals Fund. I want to suggest that it is time we got that report. I understand that it has been completed. In any case, I would urge that this matter is one that should be inquired into by persons who are not all officials of the Railway Department. They might have two or three officials as advisers, but the whole question should be inquired into by an impartial body, because the matter of railway finance mainly rests on the question of what is or what is not a fair working life for the rolling stock on the railways. I would like the Minister when he replies, to give the House some indication when this report will be available. This huge business concern, the railways, has a turnover of £25,000,000 a year. Out of this amount certain charges have to be met, working expenses, interest on loans, and items of that sort, large sums of money. According to the estimates this year, a sum of over £5,000,000 has to be provided out of railway earnings for interest on capital. That means that you have got a certain amount of earnings, your working expenses are so much, and all the balance available, about £5,000,000 in round figures, is paid out in interest in connection with your various loans. I know the present Government has made some arrangement to repay £250,000 annually off the capital debt, but, in addition, the Administration has taken over liabilities, such as the interest on superannuation and other funds. To a certain extent, although it is a railway concern, it is also a State concern, and much of the revenue is being used for what are State responsibilities. The Railway Administration has taken on tremendous responsibilities and I give it full credit for its action. They also contribute £150,000 annually in reduction of the pension fund deficiency. I do not see that there is any great urgency to pay these huge sums of money annually to reduce this pension fund deficiency so rapidly. Why could not the Administration have said they would make the amount £75,000? That would have left money available for the purposes I have mentioned. On the Part Appropriation debate I went into the question of the transportation system. I know many competent railwaymen who hold the opinion that that system is a very costly one and no better than the old system that obtained in the days before Sir William Hoy had control. It is a very unwieldy method in regard to correspondence and things of that sort. I recommend the acting Minister to consult if possible, the very able secretary of the Salstaff organization who would be able to convince him that that wonderful system in regard to the conduct of correspondence and bookkeeping and so on is not all that could be desired. He would show him how to make the work far easier in regard to the work of the staff especially and in connection with grievances and things of that sort. You frequently have two officials sitting in adjoining rooms, writing letters to each other. I am told that quite frequently weeks elapse before a reply is received, although they are sitting in the same building. In regard to rails on the Renewals Fund, I just want to remind hon. members that the South African party Government in 1922 raided the Renewals Fund to some purpose. The hon. member for Cape Town (Central) (Mr. Jagger), when he was Minister of Railways, raided it to the extent of £2,000,000 in one year. A more recent case is in connection with the purchase of the new Cape Central railway. It was bought by the Government at what I understand was regarded as a fair price. I do not say we should not have purchased that railway. I believe it was a good thing to purchase it, and I believe that in time it will be a payable proposition. The line, when it was bought, was in an unsound and practically unsafe condition. When it was bought the Administration knew perfectly well that it was simply a track through a certain part of the country. They are bringing it up to proper standard requirements, and quite rightly, but now we have the anomaly that most of the cost of doing this is to be paid out of the Renewals Fund. That, in my opinion, is a very wrong thing to have done. If you buy an old building in Adderley Street and you wish to bring it up to modern requirements, naturally you include that in the capital cost. To take this money from the Renewals Fund I say was a misuse of that fund. The Auditor-General draws special attention to that.

Late New Cape Central Railway—Relaying and Strengthening.—An amount of £592,600 has been authorized for the relaying and strengthening of the line from Worcester to Fore Bay (late New Cape Central Railway), of which sum £142,888 is being charged to capital and £411,505 to Renewals Fund—that is, to revenue. The amount charged to Renewals Fund in the year under review is £99,206.

In my report of last year (paragraph 5) I expressed the view that to allocate expenditure on improving this newly acquired asset to Renewals Fund was wrong in principle, and in effect results in the true capital cost of the line, not being reflected in the railway accounts, being understated by the costs of relaying and resleepering charged to revenue estimated at £411,505. I am still of the opinion that an adjustment of the accounts should be effected.

This matter is brought up again in view of the terms of Resolution 18 of the Select Committee on Railways and Harbours fifth report for 1927.

I agree with him that if you buy a railway that is in a bad state of repair and you bring it up to standard requirements, it is a fair thing to say that is a capital cost, and should be charged to capital account. Naturally, as time goes on your Renewals Fund will have to bear its proper share of the cost of renewals, but the additional line will also contribute to the fund on the proper basis. I want to go on to deal with one or two staff matters. On the last occasion when I dealt with this question of so-called civilized labour on the railways, it was suggested that I advocated that the artisan staff was too highly paid. I never suggested that the artisan staff or the skilled staffs were too highly paid. I did not make a general charge at all. I said that the civilized labourers were paid one wage while working along with artisans on piece-work who were receiving much more. In some cases artisans could draw up to £40 or £45 per month, but the labourer was not getting any share of piece-work—in any shape or form. No other country in the world has that anomaly. I entirely endorse what is called the civilized labour policy of the Government, and I say the Government has done a big thing in adopting that policy. We have heard during this debate that they are a sort of relief works, on which these civilized labourers are working, and there are hon. members who seem to think that if these civilized labourers were not working on the railways they would be on relief works. I want to disabuse the minds of hon. members that the work they are doing is that of relief works. It is necessary useful and routine work for the railways. In my opinion, what the Government should have done was to raise the pay of these men very substantially. I would like hon. members to put themselves in the position of many of these men, married men with wives and children. When they were taken on they were told that if they conducted themselves properly there was a reasonable chance of an increase in their emoluments, and obtaining graded positions. The Minister of Railways and Harbours admits now that as far as the majority of these men are concerned, there is no reasonable chance of their getting promotion, and that they can get a graded position only when a vacancy occurs. At urban centres like Salt River, Durban and Uitenhage it is impossible for these men to live on their present wage as civilized beings; it is impossible even for a single man to live on this wage. No private employer, certainly no public body, in urban centres would be allowed to give such a wage. We are breeding at Salt River and these other centres one-room citizens, slum people. I want to quote what the Minister of Railways and Harbours said in 1925, which was—

The hon. member for Pietermaritzburg (Mr. Strachan), who is not here at present, dealt with the question very fully, and also quoted this remark of the Minister. I would like to quote further from the Minister, who, on the 9th of July, 1925, according to “Hansard,” page 5804, said in his reply on the debate—

I entirely agree with the Minister’s statement. This Government has spent millions for the farmers, on grain elevators and on the electrification of the railways, etc., and no one begrudges and regrets that, because it is progressing with the times, but I want to ask the Minister if he really considers that these “workmen receive a decent wage on which they can lead decent lives.” I thought the Government realized that it was impossible for men to live decently on 6s. a day. The Minister said that after three years’ service the men would receive an enormous increase of 1s. 6d. a week. If I had been Minister of Railways I would not have dared to stand up in the House and pretend that I was doing something to enable these unfortunate people to live under civilized conditions. This will go down to history as the “Tickey Budget,” a budget which gave poor railwaymen a tickey a day increase after three years’ service, and after another year’s service an additional 3d. per day. I am sorry that the rules of the House do not permit me to move that these men be paid a living wage, which most certainly is not 6s. or 6s. 6d. a day. How a married man with a family can live on such a miserable pittance I cannot understand. Cannot the Minister of Finance do something more than this? We can find money for other purposes—£70,000 for a mooring mast for airships at Durban—I am not against the mooring mast, but the money should not come out of railway funds—money for graving docks, and we can squander hundreds of thousands of pounds on elevator foundations. So why we cannot do something more substantial for human beings I cannot understand. Evidently all the things I have mentioned are more important than the poorly paid railway workers. The City Council would not dream of employing a European labourer at 6s. a day—it pays 8s. to 10s. a day. The post office certainly pays more than the railways, and the Minister of Labour has laid it down that in all building contracts a minimum wage of 8s. a day must be paid. So far as wages are concerned the law should operate against the Government as well as against private employers. I appeal to the Minister on behalf of these men who are doing honest work, and I repeat, not relief work, but necessary, productive, routine work, and it must be remembered also that the great majority are Dutch-speaking South Africans, and they and their wives and families have a just claim to better consideration from the Pact Government in which the Labour party is a partner.

I shall say very little about the general budget, for I have no deep knowledge of finance. I leave such matters to those who have that knowledge, and limit myself to things I understand. I want to appeal to the Minister of Finance in the interests of the native people. I believe he has received the following telegram from the East London Chamber of Commerce—

I hope the Minister of Finance, with his big surplus, will bear in mind the poorest people— the natives, who are so essential in every form of our activity. What I have to say chiefly relates to the railway budget, and I am very much concerned, indeed, that the Minister of Railways is not here. He may be studying the scenery, people and special cookery of Portugal, but we want him here attending to matters affecting his own department. It is most inconvenient to speak on railway matters in the absence of the responsible Minister. Personally, I am very sorry for the Minister of Finance—I believe he is not quite well, and I am sorry he is saddled with these additional duties. However, I must again take up the question of the turning basin at East London My honour is at stake. During the debate on the supplementary estimates, the Minister of Railways questioned certain statements I made. If he were present I should speak with exceeding plainness. He challenged the correctness of my statement in two respects—that I did not reflect the views of the Chamber of Commerce, and that I was not able to speak with any authority on the intention of the Union-Castle Company to send its large steamers into Buffalo harbour when a turning basin is provided. I knew the facts then, I quote them with emphasis now. The Chamber of Commerce is wholeheartedly out to get this turning basin, and has placed the fact on record, and we have in our possession documents to prove that. We have other documents. The Union-Castle Company, on the initiative of its chairman, Lord Kylsant, are prepared to send their largest steamers into the river when facilities are provided. That is said officially. Those of us who listened to what the Minister of Railways had to say, came to the conclusion after very much trial of our patience, covering four years, that if he was convinced about these two things his objection would go; that he would, in other words, give favourable consideration to the strong arguments, the justifiable pleas, repeatedly put up in this House by my colleague and myself in furtherance of this scheme of a turning basin. It would be waste of time to dwell on the arguments which have been used so frequently. I say we have reason to believe that the Minister of Railways, if assured on the two points I have touched upon, would withdraw his opposition and give favourable attention to the plea advanced by the people of East London. He is not here. I plead with his representative or deputy to give heed to this strong request that we get what we are entitled to in East London. It may be the Minister of Railways regards the two East London members as lineal descendants of the importunate widow. We are compelled to take that attitude, and if we are a nuisance to him, he can end that nuisance by giving us the turning basin. I want to touch on matters affecting the staff of the railways. First of all, there is the matter of new entrants to railway service. I have correspondence which indicates that a young man, who has passed the matriculation standard of education, and for two years has served a commercial firm in East London, was induced by the statements made to him on behalf of the railways to offer for employment in the railway and the harbour service. After waiting some time he was notified that he could join on the status of white labourer at a very low wage, and a status which, to him, might have been degrading. He thought it out. He discussed the matter with his father. He hoped things were not as bad as they looked. He joined the service, and one of his duties was to wash the cups and saucers used for the refreshment of clerical seniors in the service. If that scheme were devised to work out of the service those who want to get into it and do well, it would indeed be a clever scheme, but I submit to ask a man with that amount of culture, implied by the possession of a matriculation certificate, to join the service as a white labourer, is degrading to his self-respect.

Surely he was not asked to join?

Well, we are playing with words now perhaps. My meaning is perfectly clear.

There are thousands of these people who want to go into the service. We do not entice them to come.

Do you treat them all in that way? I will give you another case. Here is a man of nearly middle age, who for years was a temporary clerk in the defence force. Owing to some measure of retrenchment, this man, who was married and of blameless character, was discharged from the service. He sought employment in the railway service. I have seen the correspondence. All that man could be offered was the position of white labourer.

There are plenty like that.

Not of that class and with that education. If the railway service is to be a home for those who are unemployed or unemployable, then start them all as white labourers, but if you want a career for young men of promise and education, do not insult them by classifying them as white labourers. I have heard it said in this House, until I am almost tired, by the Minister of Railways and Harbours that he is very much concerned about getting a contented staff in every branch of the railway service. What about men like these? Booking clerks, reservation officials, who at certain times of the year have scarcely time to breathe, day after day, who cannot get an eight hours’ day, who have a 15, 16 and 17 hours’ day, without any extra remuneration? These men are specially busy at a time when the department is getting in its golden harvest of excursion fares, and yet these poor servants of the administration are working ruthlessly without even a “thank you” and without a penny of special allowance for all the extra work they do. I want to come to a grievous case that I, deliberately choosing my words, stigmatise as official tyranny in the attitude of the Administration to an old servant. I have touched on this matter before during the debate on supplementary estimates and, as a result of what was said then, I was informed that the hon. the Minister had given instructions in view of his pending absence from Cape Town, for the further consideration of the case I then brought up. A man, after 27 years’ service on the footplate, through a momentary forgetfulness when driving a goods train between Berlin and Blaney on a dark night, overpassed a point by 15 yards. Of course, there was an inquiry, but why “of course” should that man be dismissed? Flung out on the world with a wife and family, without any pension, for a momentary lapse of that kind. There is something tragic about the case. I want the sympathy of the House as I narrate the simple facts. I have here a medical certificate signed on the 17th November, 1927, in relation to this man by a railway doctor. This man, when the inquiry was begun, was not sharp enough to call to his aid some abler speaker. He is that kind of man who can drive an engine with only that one mistake in all those years, but he cannot drivel his own tongue in his own interests. He is one of those dumb, inarticulate people, who can simply be turned inside out by a few sharp, shrewd departmental questions. He had forgotten that he had been in hospital for two months in 1922 for a reason altogether out of his control. The medical certificate tells the story, a pathetic human document. In 1922 he was driving an engine in the vicinity of Queenstown, something went wrong in some part of the engine and this man, considering it perfectly safe, went along the side of the engine as it travelled at 18 miles an hour, holding on to the hand-rail, and through some defect in that hand-rail, he was flung to the ground, had concussion, and for two months was in hospital under charge of the medical man whose certificate I have. This man, owing to lapse of memory, the result of that accident, forgot that the doctor had attended him at the Queenstown hospital for two months, but later on got the certificate and that was attached to the papers and came before the Minister and the commissioners of the Railway Board. A few weeks ago, the Minister being away, having gone to Johannesburg or Pretoria, expressed his wish that I should see the railway commissioners about this matter. I went there, accompanied by a member of the Provincial Council, who knows very well this poor fellow whose fate is in the balance. What happened? One member of the Board was ill. Only one member was present when the case first came under review. Before the end of the meeting another member of the board came in. We put before them every argument possible. Everything has been done to get justice tempered with mercy to a man like this, and all we get is a formal cold letter that, after due consideration, the hon. commissioners of the Railway Board must concur in the discharge of this man. A contented service! You will never get it while cruelty is dealt out to an unfortunate employee like that. You will have your service seething with discontent when “justice” of that sort goes on. Although the case has been turned down by the Minister and the Railways Commissioners, I do plead for the institution of such a better, humaner policy as shall bring the human element under consideration and not merely the mechanical things and the regular routine, but the human element, the man and his wife and family, the man who had served blamelessly for more than a quarter of a century and who, through an accident, in doing his duty on the railway, gets these occasional lapses of memory. He may be unfit to drive engines. The department knew of this accident that he had had, and yet, in spite of their knowledge, they permitted him to go on driving engines for five years. For something that he did in a moment of forgetfulness he is flung out at middle age, penniless, with nothing to help him. I appeal to the sense of this House to insist upon a reconsideration of a matter of this sort. I appeal to the humaneness of members of this House to insist upon a better policy. After all is said and done, it is not the general manager of railways who initiates a policy. It is his duty to carry out a policy. In the final resort, it is not the Minister of Railways, it is not the commissioners of Railways, and it is not the Government of the day that can dictate and formulate a policy and say that this shall govern affairs, but it is the sense of righteousness, justice and mercy of Parliament itself. In view of a case like this, I do claim that better attention be given, with retrospective effect in a case like this, to humanity, and less to mechanism.

I have listened this afternoon with much pleasure to the speech of the hon. member for Yeoville (Mr. Duncan). I think that hon. member opposite always gets the attention of our side. Although we do not always agree, there are points upon which we are at one, and this afternoon again there were some matters about which I agree with him, and one is in connection with what the hon. member for Marico (Mr. J. J. Pienaar) has said. I, too, do not altogether agree with that hon. member. He wants an extensive defence force to show the world how strong we are. The hon. member for Yeoville said something in this connection with which I agree. Make an appeal to the patriotism of South Africa, and if the country is in need, our people who love it, and our citizens who have learned to shoot will be ready. If we see that we have a citizen force, and have taught everyone to shoot, then our country is safe, but if we are divided and not united, and one section fights against an enemy and not the other, then all the guns and airships will avail nothing. We must cultivate feelings of unity and patriotism in South Africa. That is the direction in which we should lead the people. Another point mentioned by the hon. member, with which I agree, is that the expenditure of the country is heavy and that we should try economy. I think everyone agrees that the expenditure is heavy. When the hon. member for Yeoville says that we know that he is not only regarding the matter from a party point of view, because he is one of the members who does not always regard matters as a party man, but also sometimes as a South African. I suggest that when we go into committee he should mention instances in which we can economise, and I am certain the Government will be prepared to consider them. It is certain that we all want to economise, and we agree that for a country with such a small population, our administrative expenditure is far too large. It is not necessary for me to congratulate the Minister of Finance on his surplus. Hon. members have already done so, but I must say it was a pleasant surprise to me. I thought after the severe drought the country has suffered that if there were another surplus the people would be confirmed in its trust in the Government. What has happened now? Although we had the severe drought, and the population of the countryside has been so impoverished that thousands of people have to be supported by the Government, the Minister of Finance comes with the largest surplus that we have had since he took office. We are all grateful to the Minister, and I believe hon. members opposite are the same.

They are never grateful.

No, I do not believe it. I believe that they are actually grateful that the finances of the country are sound. If there is no sound financial position, disorders arise We heard that if the Nationalist party came into power there would be financial confusions, and that capital would be driven out of the country. Those were only party political bogeys. I have been long enough connected with party matters to know when a member is serious or not. Hon. members opposite are not in earnest when they tell the public they are not satisfied with the surplus. The public will take no notice of it. I want to say, not as a party man, but as a representative of the people, that the people are delighted that, notwithstanding the drought, the Minister of Finance has such a large surplus, and I am sure that the Minister can rest convinced of the gratitude of the people for the sound state of the finances. It is not necessary for me to say that I agree for the most part with the budget speech. Notwithstanding the great admiration I have for the Minister, it is only natural that I should not entirely agree with him. There are certain points in his speech with which I do not agree. Firstly, there is the deduction of the customs’ duty on certain articles. Of course I am glad at some reductions, but there are others where that is not so. I notice in the list before me some articles on which in my opinion the reduction will not be for the public benefit, such as the five per cent. on linen goods. We all know that the merchants are the best organized people in South Africa. Hon. members opposite who are merchants will agree with me. Now I am afraid that the public will not get the benefit of the reduction, but the trade, which will say, “Let us put it in our pockets.” I should prefer the Minister to leave it as it is, and to use it for reduction of the dead liability. The public will then ultimately get the benefit of it. I know that the merchants will not agree, but I mention this as constructive criticism. I hear no applause from the other side.

It will have the effect.

Will the hon. member tell me that if, for instance, a merchant sells out all the linen he has, and gets a fresh stock under the new tariff, he will reduce the price? That is not my experience of merchants. Hon. members will say that the competition will force them to lower the price, but I think they are so well organized that they will put the difference into their pockets. I want to thank the Minister for the reduction of the income tax by 20 per cent. We appreciate it, but at the same time I regret that he did not see his way to completely exempting the farming population. This House sometime ago passed a resolution on these lines, and the Minister of Finance said that, in as much as the farmers were not unanimously in favour of it, he saw no chance of putting it through. I can understand that if it is so, he cannot do it, but I can assure him that the agitation among the farmers will continue. I am not opposed to the tax because I am a farmer, and do not want to pay taxes, but farming in South Africa is done under such conditions that the request is justifiable. In a year of drought a farmer often loses everything, and he has to work five to ten or fifteen years to get on his legs again. The State should encourage such farmers, and when they manage to start afresh again, they should be exempted from the tax. We should also encourage monied people to invest their money in farming for the development of the industry. There is another very unfair point in connection with the income tax, namely that no depreciation is allowed for dams, fences, etc. I was never allowed to deduct anything for depreciation of dams and fences, although I invested thousands of pounds in them for my own benefit and that of the State. I want to ask the Minister to consider seriously allowing something to be deducted for depreciation of dams, fences, etc. Their there is a great deal said about old age pensions. I do not know what has influenced the Minister to agree to them ultimately, nor do I know why we hear nothing from the opposite side about it. It seems to me that I am alone in the wilderness. Even if I am absolutely alone, I shall yet express my conviction, namely, that I am afraid of old age pensions— I do not say that it will be so—doing the people more harm than good. I am afraid it will undermine the thrift of the people. We all learn from our parents to work while we are young, if we do not want to work when we are old, but if we do not work when we are young, we shall have to work when we are old. If it is going to undermine the thrift of the people, it will do much harm. Between £700,000 and £800,000 will be paid out in old age pensions, but I want to warn the Minister that it will not stop at that. Just as strong as the pressure was to get that amount made available will it be to increase the amount of the pensions. I can assure the Minister that he will have to entrench himself very strongly to stop the stream.

They are your brothers.

They are not my brothers. Not one hon. member opposite has spoken about the matter. Only the hon. member for Cape Town (Central) (Mr. Jagger) made a guarded reference. I fear this House contains too many party men, and too few statesmen. I consider this as a very serious matter, and am discussing it seriously. I do not want to create the impression that I have no strong feelings on behalf of the old people. I want to say that I sympathize very much with those who were ruined in the three years* war, the war of independence, and I should very much like to see them assisted. Let them apply, and let the Pensions Committee see that they are assisted. We are concerned here, however, with the principle of a pension for every poor person of 65 years. I think it is a wrong principle. Take a young man who has inherited £50,000 or £100,000, and so lived that he has got through it all on attaining 65 years. Then I, or someone else who has lived carefully, must pay taxes to support him.

These are special exceptions.

I hope so, but I am opposed to the principle. Let the Minister meet the people in a different way. I wanted to say a few words to the Prime Minister, the leader of the Opposition, and the leader of the Labour party. I am sorry they are not here. I wanted to say that the people appreciate the co-operation which led to the solution of the flag question. I have travelled through the country, and if there is one thing the people appreciate, it is the co-operation and agreement about the flag. There are some hotheads who think that we ought to have fought on, and we should probably have won the referendum, but then we should have got a party flag, and not a national flag. Then we should have brought our national flag into the same position in which the Union Jack has always been in in South Africa, namely, a flag of a section of the population. The co-operation resulted in our having a flag to-day which belongs to the whole people. The 31st May will be a historical day for South Africa. Then the national flag will be flown, not a flag of a section of the people, but a flag of the whole people. We shall have our own symbol to which I can look up, something I have missed for 17 years. The whole people will accept it, and it will result in our getting unity and more patriotism in South Africa. Race feeling will disappear, and we shall no longer hear talk about Englishmen and Boers, but only about South Africans.

It will last a long time yet.

I do not agree with that view. When I look at 1902 and 1903, and think of 1910 and 1914, and the change which has come about in the country, then I say the racial differences will disappear very quickly. We shall then possibly have a division on sound economic lines, but not a racial division.

Be careful.

That is just what we ought to look in the face. When we talk in Parliament and someone opposite applauds, then we imagine that we are wrong. The cause of that is party spirit, and I challenge any member of my party to say that he does not agree with the spirit of my speech. Everyone who loves South Africa, and has the interests of the people at heart, agrees with me.

What about the budget?

I am not a financial expert, but I want to remind the hon. member that we were not sent here merely to criticize each other. I have criticized the important points in the budget, but this is the only opportunity that a representative of the people gets as a leader of the people—which we surely are—to give the people a lead, and to say what direction we should follow. I think we sit here to give a lead to the people, and not merely to throw mud at each other.

At the adjournment I was speaking about the good co-operation which led to the solution of the flag question. I appeal to the leaders of the people, the leader of the Opposition, the leader of the Labour party and Ministers to preserve in cooperation on great questions. As long as we make party matters of them, we shall not solve them. We can fight to the end, but unless we lay down our arms and sit round a table, not as party politicians, but as South Africans, we shall not solve the problems. I refer especially to the difficult native question. I hope that they will continue in that spirit, and that they will try to solve the problem jointly. There are other matters about which I will not now speak, but the people know them. I hope those questions will also be solved by co-operation.

The hon. member for Yeoville (Mr. Duncan) pointed out that the fact of having a surplus was not necessarily a sign of prosperity, and I would, perhaps, go a little further and say that even if there is prosperity it is no reason for supposing that it is due to the Government. There is no proof that the prosperity in the country is due to the Government. In fact, the prosperity may have arisen in spite of the Government. I must say that this statement from the other side of the House we are constantly hearing, that the prosperity in the country is due to the great advantage we have in having this Government in power is to me very much like the fly on the chariot wheel. You will remember the old tale of the Roman and his chariot dashing round the stadium with a fly sitting on the axle, and the fly looking backwards saw all the dust and turned round and said: “My, what a dust I am raising.” That is a very good simile to apply to the Government in the present position, that the prosperity has arisen owing to the enterprise and work of the people of South Africa, and the Government turn round and say: “My, what prosperity we are bringing to the country." As a matter of fact, the Government have not shown us, in any way, that the prosperity is due to themselves. They are exactly like the fly on the chariot wheel. Last year I drew attention to the question of expenditure. Like the hon. member for Yeoville and the Minister of Finance, I think all of us recognize that it is only by way of decreasing the expenditure that we can touch the taxation. One might almost say that if we look after the expenditure, taxation, to a great extent, will look after itself. We cannot possibly expect any material decrease in taxation as long as the expenditure goes on increasing. The hon. member for Cape Town (Central) (Mr. Jagger) has pointed out that our expenditure is increasing out of proportion to our population, but I would prefer to make the test rather on the income tax assessment, because, after all is said and done, the people who pay the income tax are the people who pay by far the biggest proportion of the taxation of this country. They pay the same as other portions of the population as regards customs and excise, and in addition to that the income tax alone, I notice, is 47 per cent. of the revenue collected by the Inland Revenue Department, and it is, I suppose, about 30 per cent. of the taxation raised by the Government. If the Minister will look for a moment at the report of the Commissioner of Inland Revenue he will find that the assessments made on the 30th June, last year, were £80,793,000, whereas the previous year the assessments made amounted to £85,849,000. In order to put the matter in the best light from the Government point of view, we must deduct from that £85,000,000 the assessments of incomes under £400 a year, which did not come in the last assessment, and we find that these assessments amounted to £3,755,000; that is, that the assessments to the 30th June, 1927, were £2,000,000 less than the previous year; that is, the people who have incomes to spend in this country had £2,000,000 less than they had in the previous year, and the Minister of Finance proposes to make these people with £2,000,000 less income pay roughly half-a-million more in expenditure. At this point I would say that I do not think the Minister’s statement that the excess of the current year’s estimates over last year is £176,000 is quite a fair comparison. I do not suggest the Minister intends to mislead the country, but the Minister has said that the estimates of last year, plus the supplementary estimates, are £176,000 less than the estimates for the year ended March 31st, 1929. Surely the Minister recognizes that there are bound to be supplementary estimates this year.

I said so.

Yes, I recognize that. So the only fair comparison is to take one lot of estimates versus the other lot of estimates, and you find that the expenditure of this country is going ahead at the rate of roughly half-a-million a year.

It used to be very much more in former years.

I will credit the Minister with one thing, and that is that he seems to be holding the reins a bit tighter than when he first assumed office. If you take the expenditure of this year, the Minister tells us that in the year just past the expenditure was roughly £28,000,000, and if he refers to the Auditor-General’s report for 1923-’24, he will find that the expenditure of that year was £24,000,000.

Why not take 1924-’25?

I take it from the time the Minister assumed office.

I assumed office in 1924, not 1923.

As a matter of fact, immediately this Government took office in June-July, 1924, the brake was taken off, and for the first year or two it was very excessive— it went up with a great big boom. Then the Minister saw the direction in which his supporters were leading him, and he has now got the position down to an increase of roughly half-a-million a year. What I want to point out is this, that as far as our income is concerned, it does not allow us to increase our expenditure, our Government expenditure, continuously by half-a-million a year. The worst part occurred in the first two years after the Government took office. What it really means is that this country is paying one-and-a-half to two millions a year for the luxury of having this Government in office—this Pact Government. I share with the hon. member for Yeoville (Mr. Duncan) the feeling that we must have some method of putting a tight hand on this expenditure, and I am perfectly certain that the Minister of Finance would support anything we could do in that matter. The first thing to do I would say, as a man who has had to live within his means all his life, is to find out what each department costs. Now if we look at our estimates under any of the heads, and imagine that that was the cost of that service, we are very gravely misled; for instance, let us take “Justice.” I take it, not because it shows grave grounds for spending out of all proportion to the needs of the country; in fact, it is one of the departments which has been reasonably economical; but if you see what is spent under the estimates, it does not contain any of the costs of any of their buildings or rent. If they decide to put up a fine court at Bloemfontein, they are not charged in any way with the interest and rent of that, and all the departments are in a similar way. If you take the post office, they not only get all their buildings without being directly charged with the interest involved, but with regard to all their equipment they do not get charged with the interest. If the Government would employ a proper costing accountant, with some experience of Government accounts, and lay down a system of analyzing these other expenses, we would know every year whether a department was increasing its expenditure or not. The Public Works Department is practically a department doing all its work for other departments, and it does not charge these departments direct for anything it is doing. If we could depend on our figures, we could call to book those departments which are constantly increasing their expenditure. I know it has been said that certain of our business departments are actually charged with their expenses, but I would point out that all the important expenses are pure estimates; for instance now, take printing work, if you look at the Auditor-General’s report, you get quite a nice account, it looks very nice, and shows a profit, but when you start examining your accounts, you find that they are entirely misleading; for instance, you will find that they have about £100,000 of liquid capital they are using in stocks, machinery and so on, and they get that £100,000 entirely free—with no charge for interest. We pay roughly 5¼ per cent. for our money, we hand it to the printing works and say: “We charge you nothing for it.” You find the rent is £5,000. You ask the value of the buildings, and you will find they are worth something between £97,000 and £100,000. The rent is not adequate for the buildings. You pay £5,250 a year for the money invested. There is nothing for depreciation of the buildings. It is not an amount which should be put down if a proper costing accountant had dealt with it. A proper costing accountant could easily analyze the whole of your charges for interest. If you take the post office, and I must say I appreciate very much the remarks of the Minister of Finance regarding it, particularly owing to the well-known extravagance of the Minister of Posts and Telegraphs, who, I hope, will take what the Minister of Finance said to heart; in fact, I consider it was a very deservedly administered rebuke by the Minister of Finance—I was glad to hear him say there was no margin for any material increase in the expenditure of that department. Everybody in the House will endorse that remark with acclamation, and I hope the Minister of Posts and Telegraphs will follow the lead of the Minister of Finance. If you take the post office as an instance, a very large proportion of the charges are purely estimated, and there is no detail showing how they are arrived at. If they are arrived at in anything like the way the figures of the printing account are arrived at, this report is not worth the paper on which it is printed. It is rather misleading us than the opposite. We know from this report that the last year under review the Minister of Posts and Telegraphs showed a decrease in revenue of £42,000 and an increase in expenditure of £119,000. If you can only depend on these accounts being correct, many things ought to be said to the Minister of Posts and Telegraphs; in fact, he is supposed to be running a business department; and I would like to know if the managing director of a company showed figures like this whether he would not have his resignation in his hands. The Minister knows his revenue is decreasing, and he goes on increasing his expenditure, piling on personnel; in three years he put on 1,500 additional staff. No wonder his revenue is decreasing, and his expenditure is increasing. So much for the business departments. As regards the other departments they are judged rather by the amount of money they spend than the efficiency they display. If a department spends a great deal it regards itself as a particularly fine department, and there are certain of our departments which one hardly dares mention. Anyone, for instance, criticizing the expenditure of the Educational or Agricultural Departments is regarded as a person who should not be allowed in the House and who is doing his worst for education and agriculture. I am not at all certain, however, that if greater economy were exercised in both these departments education would not be better or agriculture would suffer. I also think, though I hardly dare say so, that if the agriculturists were made to pay by levy for some of the luxuries they enjoy there would be less expenditure, but more results. At present farmers on both sides of the House are always asking for increased expenditure, because none of it comes directly out of their pockets. As regards education, I have a good deal of sympathy with the views of the hon. member for Liesbeek (Mr. Pearce). He has urged the necessity of spending more money on technical education and a little less on higher education. I agree with him that a country cannot live on university graduates alone. That does not mean that I depreciate higher education, but we seem to be so enthusiastic about turning out doctors and lawyers and clergymen —very estimable people—that we forget that it is just as important to train men who are going to be producers. The country will become top-heavy if it has all university graduates and no workmen. With regard to the Minister’s predeliction for surpluses, he is now under no obligation immediately to transfer his surplus to a sinking fund, but is free to arrange to do what he likes with it. He has estimated for the current financial year for a reduction in revenue of £1,181,000 including a short-fall of £464,000 in customs. Unless the Minister is very pessimistic, I do not see why he has estimated for such a shortfall. Personally, I believe that next year he will again have a very good surplus and that, after having taxed the people unnecessarily to the tune of £1,181,000— money which would have been better left in the people’s pockets for development purposes—he will be able to return them half-a-million and keep the other half to be spent by Government. I have very little sympathy with the method of finance which takes too much from the people so as to be on the safe side. The Minister might have taken his courage in both hands and have been satisfied that his customs receipts will be the same this financial year as they were in the last financial year. The Minister stated that they could now gauge the customs revenue with fair accuracy, but later on, he said he was £991,000 out as a consequence of the way in which he gauged the revenue last year. I am convinced he is doing exactly the same this year, and, instead of having a shortfall of £464,000, he is just as likely to have an excess of £464,000. Then he will be faced with another surplus of which he will be able to retain half, and hand the other half back to the taxpayer, a result which will be received with cheers by the whole of the Government benches.

The hon. member for Cape Town (Central) (Mr. Jagger) thinks we will be in difficulties next year.

As to the Government’s protectionist policy, I would emphasize that it is a legacy from the South African party.

What about the hon. member for Cape Town (Central)?

There may be one or two members on this side who are, and always have been, strong free traders, but that does not mean to say that the South African party, as a party, is necessarily a free trade party any more than one would say that the Minister of Finance is a communist, because a few of his supporters have very strong leanings in that direction. We would not say that there is a communistic party on the Government benches because we see three Labour Ministers there. Our position is that protection must be protection within reason. The difficulty I have always had with the Board of Trade is to find out exactly what test they apply to an industry before deciding whether it is, or is not, worthy of being protected. The test I prefer is whether the protection of any given industry will provide considerable work for our people. The minimum South African labour added to the value of the manufactured article ought to be at least 40 per cent. I am not taking only the labour in the factory, but, in the case of South African-grown produce or materials, you have to take into consideration the value of the labour concerned in the production of the raw material.

That is taken into consideration.

The lowest percentage of the gross value should be 40 per cent., and I should like to see it higher. I would suggest that a test be made to prove whether the industries are of the value they allege they are. Unfortunately, the figures that are published do not give us the figures in detail that would be necessary to test it. It is only the Board of Trade and Industries that can do that. Let me take an industry like the motor assembling industry. I would “say at once that I have not the figures of the motor assembling industry, and I am only giving an illustration of what I mean. The figures may prove that it is worth protection. The way I see this assembling business is this. Practically the whole of the material is brought into this country. A very big proportion of it is practically manufactured before it arrives here. The business is purely a business of assembling.

That is where you make a mistake. It is one of the finest examples of success.

I should like to have the figures, because the Minister has pointed out the very large increase in the importation of chassis in the last year or two—it was really in the last year that it showed up. It is quite clear from those figures that we have lost roughly, I reckon, between £40,000 and £50,000 in customs owing to the reduced duty because they import these chassis. It is a big sacrifice for this country to make in revenue, because there is no doubt the public who use motor cars can, to a very great extent, afford to pay the tax. I am now eliminating the poor country doctor, and so on, that you hear so much about. A very big proportion of the motor cars made in Port Elizabeth, and imported also, are imported purely for joy purposes, and it is a very fair product on which to put a reasonable duty. That is the class of industry that should be tested constantly to see that of the total value of the output we get in South African labour at least 40 per cent. I would next like to refer to the customs management. I am not now in any way talking of the officials in the customs department, because they are simply the servants of the State carrying out the Acts which this House has passed, but there is no doubt the customs management is giving very grievous trouble and anxiety to the commercial community. The Minister will recollect that a month or two ago I brought to his notice the demands that were made for customs dues, months, in many cases years, after the goods had been imported. There were cases in which the goods had been imported four or five years ago. The customs people, through their inspectors abroad, had got certain information, or believed they had, and they have come down on the merchant to pay up the arrear customs dues years after the transactions had been completed. They have not suggested in any way that there is any case of fraud or anything of that nature, and it is quite evident that it is impossible to carry on commerce if you do not know what your goods cost. In some instances these goods have been imported for contracts, the contracts completed, and the money paid, and there is no possible recourse, and the merchant is asked in one case I have in front of me, to pay up £2,000. I suggest that if there is no case of fraud, if there is no suggestion of fraud, the utmost the department should have is six months. If they cannot get the evidence they want in six months, they had better let somebody else get the evidence for them. The question is one of home consumption value—the value of the goods in the country of origin. The merchant on this side is entirely in the hands of the manufacturer on the other. He does not know, nor does anybody in this country, what the exact cost to the public is of any range of articles, but he simply has to take his manufacturer’s certificate and be satisfied. I say that there is just as much likelihood, I believe more, of the department making a mistake in the home consumption value of any article than there is of the manufacturer making a mistake. The manufacturer is not interested in the matter. He is simply asked to make a statement. I know of one case in which the department held goods up and demanded extra money, and when the thing was investigated it was found that the inspector on the other side had got hold of an old catalogue of some previous date, and therefore the merchant who was being inconvenienced on this side was entirely right all the time, and the manufacturer was entirely right all the time, but the inspector on the other side made the mistake. I do not for a moment suggest that the inspectors we keep in America and England and on the continent should be done away with. There is nothing that the honest merchant wants more than for the department to see that the fair and right duty is paid by every merchant. There is nothing the honest merchant wants more than for the Government to prosecute the man who is humbugging, but I am afraid the department is so keen about this home consumption value that it is probably letting the crooks through its fingers while mulcting the honest trader in all kinds of difficulties. The other point is with regard to interpretations. I brought up a question the other day in which the customs people have decided that a trek chain for hauling wagons is not a chain for hauling.

Quite rightly decided.

That is a question of opinion. I would suggest that if a trek chain for hauling a wagon is not a chain for hauling, we should ask our legal people here to write down clearly what is a chain for hauling, because it seems to me quite within the possibilities of the ordinary man in the street to make it perfectly clear what the customs do mean by a chain for hauling. This brings me to the suggestion I want to make that there should be some form of a board before which a merchant can go and have his case heard.

That is a hopeless suggestion.

That does not suit the Minister of Finance, but the position today is that the commissioner of customs is a Pooh Bah. He simply sits down and says that a trek chain for hauling a wagon is not a chain for hauling, and that is the end of the matter. You pay up, and the difference is between 25 per cent. and 30 per cent. Now the hon. member for Cradock (Mr. G. C. van Heerden) will appreciate this. He has to pay the money. The farmer pays the money.

Why don’t you go to the courts if you are not satisfied?

I do suggest that we have no intention of filling the lawyer’s pockets. Business men have not the time to spare to go into the courts. I do suggest this, that if the Minister would appoint it, it need not be expensive, they would probably give their services for nothing—say, two reputable business men with the Commissioner of Customs to decide these definitions, it would give a great deal of satisfaction to commerce in this country, because the present position is rapidly becoming impossible. I would like to mention another matter which I think I brought before the House a year or so ago, that is the question of the Guardians Fund. Last year, I think, it was, we raised the rate on this orphans’ money from four per cent. to 4½ per cent. under the 1926 Act, and it was a very satisfactory move, but we did not take into consideration one thing, and that is that the Government do not pay compound interest. Let me put it in this way, if there is an orphan whose estate is being administered by the Guardians Fund, and that orphan spends £50 a year less than the income due to him, the Government takes the £50 and invest it, they get the interest on the £50 and they do not credit the orphan with a penny.

That is most unfair.

It is not only unfair, but it is unbelievable that we do such a thing. I agree that to-day the profit on the Guardians Fund is a very small matter, now that we have given another half per cent. Whatever profit we do make we put into our own pockets, into the Consolidated Revenue Fund. I do suggest to the Minister that he should celebrate the last year of his term of office by righting the wrong done to the poor orphan and allowing compound interest on income of orphans that is unspent.

You had no time to do it.

Finally, I would like to take this opportunity of thanking the Minister for the recognition he has shown this year of the position that I and many others on this side have taken up for some years past, that the taxation of companies, both on debentures and general income, is unfairly high. I have recognized all the while I have been in the House for the last four years, when I have been worrying the Minister about this matter, that he also recognized the justice of the case, and I also recognized that the reason why he could not do justice was that, being Minister of Finance, he could only do justice as far as his pocket allowed him, but I am glad, now that he has had this welcome surplus, that he has at any rate used some of it for righting a portion of the wrong that is done to the ordinary shareholder and debenture holder in limited companies in this country.

I should like to say a few words with reference to the speech of the hon. member for Albert (Mr. Steytler). He said something with regard to pensions, and criticized the old age pensions. I will only say that the hon. member does not express the feelings of his constituents. If he held meetings in his constituency he would find that everybody there unanimously favoured them. I congratulate the Minister on this step. The people are grateful for it.

I did not disapprove of all old age pensions.

The hon. member said that he wanted pensions for people who had served in the war.

I said I sympathized entirely with the old people, but that the principle of granting pensions without respect of persons might possibly undermine thrift. I said that each case must be decided on its own merits.

I accept the statement, but the hon. member wants the old people to go as beggars to the charitable societies for support. I know that he is sincere, but he was possibly a little hasty. He should first investigate the Government’s scheme, and the conditions attached to the grant of pensions. Then he will doubtless be in favour of them. Members of the Opposition say nothing about old age pensions. Are they in favour of, or against them? The hon. member for Fort Beaufort (Sir Thomas Smartt) I know that it is a difficult position for them, because the people feel very strongly that old and infirm people should be assisted. The Government has already done something for the oud-stryders, and we know that many of the old people who gave up everything for the country died from want without this assistance. Now the Government is extending this to other old people.

Dr. Leyds was, I suppose, one of the needy people.

My hon. friend made a long speech, and said that his plough only lasted six months. I am very sorry for such a practical farmer. In the Transvaal they last from five to ten years. When it is necessary we put in a new share. Perhaps my hon. friend ploughs without shares. The hon. member for Weenen (Maj. Richards) made an interesting speech and commenced criticizing the budget without correlating it with the facts, and he ended with gallamsiekte. He made an attack on the Minister of Agriculture, because there was gallamsiekte in Natal, and he said that a certain person had found a remedy against the disease, but that he was not allowed to sell it. I think the hon. member will do well if he could find someone with a cure for gallamsiekte of the Natal people. Our farmers in Natal have various remedies for different kinds of gallamsiekte. In Natal there is a very strong national gallamsiekte, and the hon. member should try to fight that disease. I listened to the criticism on the budget, and it impressed me as being the disappointing criticism of disappointed people. How anyone can say that a surplus of 1¾ millions is detrimental to the country, and that the Government has done badly, beats my comprehension. What do the business people say, the hon. member for Cape Town (Central) (Mr. Jagger), and the hon. member for Port Elizabeth (South) (Sir William Macintosh), who has criticized most moderately? When they open a new business or extend an existing one, and make a considerable profit, will they not be satisfied with the manager? Will those on the opposite side not be dissatisfied if there is a deficit, and dismiss the manager? That also applies to the Government.

Where has economy been effected?

I am sorry that we did not hear that from the hon. member when his own party were in office. I am in favour of economy on right lines, but also of extending the development of our country. We cannot develop without expenditure, but everything depends on whether the money spent is productive or non-productive. The country has progressed under this Government, and I will prove it by figures. I have the Chamber of Commerce Commercial Bulletin here. It says that no one would have been surprised if the imports and exports, as a result of the serious drought, had been reduced for a few years, but that, notwithstanding, the imports had increased by more than £700,000, and it was very encouraging to find that the exports, excluding gold and diamonds, exceeded those for 1926 by 6¾ million pounds.

In spite of the Government.

The hon. member therefore admits that it happened during this Government’s period of office.

What about the prices of wool?

I am coming to that. The people see what is going on, and know what the position was when we came into office, what a hopeless position had arisen under the Opposition and retarded the country. The people will never believe those stories. I just want to mention how sheep farming has progressed. In 1923, when the hon. member for Fort Beaufort was in office—he never took much interest in stock farming—the number of wool sheep in the Union was 23,072,548, and in 1926 it was £35,269,228, notwithstanding the fact that in consequence of the terrible drought we are told that 6,000,000 died. Is that progress, or the reverse? When the Minister of Agriculture established simultaneous dipping, he was repeatedly attacked by the Opposition. It rained telegrams from Natal, and it was said he would ruin the farmers. However, he was courageous enough to carry out simultaneous dinning notwithstanding the attempts to make it a failure, and scab has decreased from three to one per cent., and the embargo on our wool in London has been removed.

What embargo?

As against the Australian wool, there was an embargo on our wool of ¾d To-day we get the same price for our wool as Australia because we eradicated scab. If this Government remains in office another five years, I prophesy that the number of sheep will be doubled and the scab will entirely disappear. I am convinced of the future of our sheep farming, but scab must be eradicated. I only hope the S.A.P. Government will not come into power again to break down the good work of this Government. There is another big industry in the country, namely the mining industry. I want to say something about the gold industry, because I know it well, and I do not want to talk about things I know nothing about. I remember when I spoke in the first session of this Parliament on the prospect of my district with regard to mines, the hon. member for Von Brandis (Mr. Nathan) interrupted me and said that the reason I was elected as representative of the district must have been because I thought so much of it. I made no reply, but since that time the district of Heidelberg has opened one of the richest gold mines, namely the Sub-Nigel, and it has appeared that the richest reefs of the East Band are still undeveloped. Various companies have bought land there, and I believe that Heidelberg will shortly develop into one of the most important gold mining districts. If hon. members do not believe it, I am prepared to show them everything in my district, and if what I have said is not true, I am also prepared to pay the expense. When the Government came into office, the Opposition prophesied that the mines would be closed, and capital would go out of the country, and the Government would not remain in office three months. I have figures here showing the progress of the mines. The gold yield in pure ounces was 9,149,000 in 1923, a value of £38,862,792, and in 1924 it was £40,672,000 in 1925, £40,767,000, in 1926, £42,285,000 and in 1927, £42,967,000; a continuous advance. We have not yet got the figures for last year, but I understand they constitute a record. Contrary to the prophesy of the Opposition, the mines have developed tremendously. The progress of the country appears from the reduction in the number of bankruptcies.

What about cattle farming?

I am not so well informed about it, but I can just say that slaughter oxen which fetched £4 on the Johannesburg market under the last Government are now sold at from £12 to £15, and that wethers which formerly fetched 17s. or 18s. are now sold at from 30s. to 35s. That is due to the Government which has in a friendly way arranged matters with Rhodesia so that the slaughter cattle of Rhodesia are not sent to the Johannesburg market in such large numbers as formerly. Few cattle are sent to the market now. Rhodesia is satisfied and the farmers are also satisfied.

The position is less favourable now.

Does the hon. member deny the figures I quoted? He is entitrely confused. I want to make another remark to prove that under this “bad” Government the country has brought about amazing progress. It refers to the taxation the Government got from the mines. In 1923-’24 the State got from the gold mines—I am not talking of the diamond mines —£2,777,000 as its share in taxation. If the country had not progressed, how could that share of the Government in the gold mines have become greater? It goes without saying that the country has progressed. I believe hon. members opposite have sufficient sense to see it. At least I assume that there are some members who have sufficient sense. The hon. member for Witwatersberg (Lt.-Col. N. J. Pretorius) has lived for many years in a mining district, and he ought to know how the Government’s share gets higher as the production of the mines increases.

What has the Government done for it?

The hon. member must be careful, I am not saying an imaginary thing, but I am quoting facts, and I challenge hon. members opposite to contradict them, and if there is a member who can contradict my figures I will be man enough to admit it. I shall not say anything more, and I hope the House has not got tired of my speech. I have not been a member of the House very long and possibly some members will think I am a backvelder, but I have also had considerable education, and I used to belong to the South African party. Every sensible man who still belongs to that party ought not to remain in it a day longer. How a sensible man can still remain in it, I cannot understand. I do not blame them; a time will come when they will be converted and see that they are wrong. I think it is already a fact to-day that they are appreciating it. There are many members of the party who in the last few days have personally frankly acknowledged to me personally that this Government has done what no Government has done yet. Any sensible man in the country will admit that the Government has done well, and even hon. members opposite, when they frankly express their personal opinions, will do so.

I would like to follow a remark made by the Minister of Finance in his budget speech by which he drew attention to the relative proportions of the trade between the United Kingdom and South Africa and other countries. He drew attention to a decrease in the volume of trade without making any comment, possibly because his intention may have been to invite, by drawing marked attention in that way to these figures, some sort of expression of opinion from this House as to exactly how we viewed that particular development. I am glad to think that this matter can be discussed in this House at this stage without anyone who may strongly favour the development of that trade being accused of what has been described as “trade jingoism.” I noticed some time ago when an attempt was made outside this House to draw attention to the trend of these figures, immediately the remarks made were seized upon and described in lurid language as trade jingoism. My object in drawing attention to them to-night is to point out that that antagonism to the development of trade with the United Kingdom and other dominions surely cannot redound to the benefit of South Africa in the long run. I would try to discuss it purely from the business aspect without referring to another phase of it which is equally important, that is the sentimental aspect, which we in South Africa cannot possibly ignore. I say that although I am addressing hon. members on the other side who may not always have taken that point of view, because I feel that they must realize that the promotion of that trade is one of the consequences which must ensue from the adoption by this House of the Imperial Conference report; in particular of that portion of the report which spoke so clearly and strongly of the necessity for active and practical co-operation in the development in every direction of the empire to which we belong. If the Minister of Finance has sometimes thought that this question has been unduly stressed from this part of the House, and if, as I have heard him suggest, that hon. members are wrong in thinking that there was antagonism on the part of the Government towards the development of this trade, I would like to remind him of a circumstance which gives some justification for that view. I would be glad to hear from him just exactly what his views are on the point, because on a notable occasion in October of last year an opportunity occurred for us to learn something of the general attitude of the Government on this question. I refer to the banquet given by the Government to the Congress of Chambers of Commerce which was held in this city, at which we had a speech from the Minister of Mines and Industries in which he dealt with this particular question—a speech which I think was one of the most unfortunate that could have been delivered at that time and place, and one which must naturally have been responsible for the dissemination, not only throughout this country, but throughout the empire, of the belief that the Government of the Union of South Africa was not anxious to co-operate in matters of empire trade. That speech has been very severely criticized, but I only want to draw attention to the outstanding feature of it, which seemed to express—I am not sure if it was the opinion of the Government—but certainly the opinion of the Minister, to the effect that empire cooperation in trade was valueless. And in addition to that the hon. the Minister criticized the Empire Marketing Board, and said that he did not feel able to give any support to the principles which it was advocating, because he believed there was some “ulterior object” behind its operations. He seemed to think that we might “lose our identity” if we shared in supporting the objects which lay behind that movement. He went on to say that in effect he could not see any value in the idea of empire co-operation. I would like to draw attention to the manner in which utterances of that kind and the general attitude of the Government on this question has been viewed elsewhere, because if it will produce a reply from the Minister in a favourable sense, it may do a good deal to dispel the doubts which have arisen in consequence of the remarks to which I have referred. It is interesting to contrast the attitude that is adopted in the United Kingdom with reference to the development of South African trade. I was greatly struck by a speech made at a dinner given by the British Government to the South African farmers in London about June, 1927. A speech was then made by Mr. Walter Guinness, Minister of Agriculture and Fisheries in the present Government. Referring to their visitors he said that although they came from different races they had very much in common, and, after dealing with that, he said—

He went on to say that in return he hoped the dominions would see how far they could buy goods produced in England. That is the spirit in which the development of our own particular industries is view by the Government of. Great Britain, but while that is an indication of the official encouragement given to the development of our trade, it must not be thought that speeches of the kind made by the hon. the Minister of Mines and Industries are not observed, or that the tendency of which I have spoken has escaped notice. I notice when the 67th annual meeting of the Association of British Chambers of Commerce was held in London in May last a motion was placed on the paper which dealt generally not only with South Africa, but with this tendency on the part of the dominions to shut out products of the United Kingdom. A resolution was proposed to the effect that while recognizing the right of oversea dominions to take all legitimate and reasonable steps for their development, the tendency was deplored to impose prohibitive rates of customs duty on goods of United Kingdom manufacture, and it drew the attention of the Governments of overseas dominions to the fact that the propaganda in favour of the sale of empire products in the United Kingdom is being stultified and rendered futile by the restrictions and difficulties placed in the way of the United Kingdom manufacturers continuing to trade with other parts of the empire. That is rather a significant resolution, and in effect it was adopted at the congress held in this city in October last. I would like to refer to a speech made in London by a gentleman from Nottingham, who proposed this resolution. He pointed out that they were not objecting to the dominions developing their markets, but if they wanted to find forty million ready buyers of empire products in Britain they would not succeed if they put up barriers against manufactures and prevented the legitimate exchange of goods for goods, and prevented the flow of trade in the ordinary economic channels. May I point, as I was asked just now to do, to one step that was taken by this Government, which certainly constituted a deterrent to that trade, and that was the abolition of the British preference. That was not a friendly gesture. That was something that must have been noted, and noted very carefully and noted for future reference by the manufacturers to whom I have referred. If we examine the figures we cannot help noticing that a remarkable change is occurring in the balance of trade. For my part, I think it is to be deplored. Hon. members might well ask me for the figures on which I base the general statement that I have made. I have here a statement of the trade between the Union and the United Kingdom for the period from 1923 to 1927. I find that in 1923 this trade with the United Kingdom amounted to £28,400,000, and that, although it did grow in volume to the end of 1926, and has somewhat declined in 1927, the fact is that the percentage of trade declined from 53.3 per cent. in 1923 to 48.9 per cent. in 1926. If we look at the figures given by the Minister himself, we shall find that the volume of trade in 1927 declined from £32,000,000 to £31,500,000. Those are the imports. And so far as exports are concerned (dealing again with percentages), I find that in 1923 the United Kingdom percentage of our export trade was 49.8 per cent., falling in 1926 to 47 per cent. These figures are exclusive of the exports of gold, silver and diamonds. That, I think, is a regrettable tendency, and I would like to put it to the Minister whether, in face of these figures, he does not feel that something should be done to counteract the impression which has been created, which, as I have shown from these speeches, does exist, and whether, after all, there is not some justification for the view that there is a degree of antagonism on the part of the Government towards the development of inter-empire trade. If the Minister will follow me, I would like to make a reference to something that is contained in the report of the Empire Marketing Board, which will not only go to show something of the keen interest which is being taken in the development of our trade, but which, it seems to me, contains a valuable suggestion that I hope it will be possible for the Government to follow up. I quote from the report of the Empire Marketing Board for the year ended June, 1927, and I draw attention to what the board describes as the value of establishing personal touch with representatives of overseas producers visiting the United Kingdom for the extension of their markets. It appears that a representative of the Australian dried fruit industry was invited by the board, at its own expense, to visit the United Kingdom, and the result of that visit was of great value to the dried fruit industry in Australia. The board commented on the value of visits of this kind. I do not think that sufficient endeavour has been made to take advantage of the preferences which are at present available to South African fruit and tobacco and wine in the United Kingdom market. That it must be a market worth developing is borne out by the fact that there has been a remarkable increase in the production of tobacco in Rhodesia and Nyasaland, largely due to the facilities given for the sale of their products in the English market. It cannot have escaped notice that a large number of our South Africans are going to Rhodesia every year. I believe the figure is 300 for the month of February.

Why are they leaving the Union?

They believe that the opportunities there of farming are better than they are in the Union. In place of antagonism, our watchword should be co-operation and, in place of creating trade barriers, we should endeavour to eliminate them. At the congress of the Chambers of Commerce a resolution was passed drawing attention to the harm done to trade by the creation of trade barriers. I want to refer also to, what is perhaps, a minor aspect of trade restriction. The Minister will remember that in 1925 he re-introduced into our income tax law a provision which had existed in the year 1914 for the taxation of business of non-resident manufacturers, and that after a considerable amount of representation, that section was withdrawn in 1926. The attempt to tax the agents of manufacturers in this country and to hold them responsible out of the assets they might hold on behalf of those manufacturers was unsound. I notice that, as a matter of administration, the Inland Revenue Department has been endeavouring to hold these manufacturers who may sell goods on consignment in this country responsible for the profit on the sales of goods that they may make here. As the law stands at present, it seems to me quite clear, where profit is made by persons from the sale of their goods in the Union, even though it may be done through agents on consignment account, that is perfectly proper so long as we have a system of taxation which taxes profits at the source, but what has been attempted is this, to endeavour to get not only the “merchanting profit” on the sale of these goods, but to get behind that and to tax a proportion of the “manufacturing profit.” Let me illustrate that by taking a specific case: “A” may be a merchant overseas and he may send to “B”, here, goods on consignment. That is done on a considerable scale. Ordinarily the profit that would be made in South Africa is the difference between the home consumption value and the sale price in the Union, less the charges in connection with sending and selling the goods here. As a matter of fact, in Australia this question came up a number of years ago, and the basis that has been adopted there for determining the profit is the difference between the home consumption value and the sale prices, less the cost of importation, etc. But, in addition to that—and I am speaking irrespective of any particular case—an attempt has been made to go further and to claim that a portion of the actual profit made in the United Kingdom or rather, that the profit should be calculated on the difference (or nearly all the difference) between the actual cost of production in the United Kingdom and the eventual net sale price in South Africa. I think that is unnecessarily pressing our income tax law to a point where it can only create irritation and can only put overseas manufacturers to a very considerable and very often most unnecessary expense. I will ask the Minister whether he would make enquiries with reference to that matter and to see whether it would not be possible to make a clear and positive declaration as to what is really the attitude of the Government in that respect. It seems to me this is one of those cases where there might be uniformity in the rule applied and, if in Australia it has been expedient to adopt the basis to which I refer, then certainly that may prove to be a useful and satisfactory basis which might be applied in South Africa. I would like to ask the Minister another question. I know certain representations were made to him on behalf of people who are interested in this matter, as to the effects of double taxation and double death duties, and I believe there must have been some negotiations which possibly have reached a stage when, perhaps, the Minister might be able to make some statement on the point. I am fortified in this request by a resolution which was passed at the congress of the chamber of commerce of the empire in Cape Town and which I should like to read. It is to this effect—

This is felt, of course, very largely by shipping interests. I would like to bring to the notice of the Minister a rather remarkable illustration of this system of double taxation in regard to the imposition of death duties in South-West Africa. I have a very remarkable case which shows that this principle of “South Africa first” which is always lauded to the skies in some quarters, sometimes becomes rather inconvenient. In South-West Africa, under the Death Duties Proclamation, where a company goes into that territory to do business and a shareholder therein may die, the death duty on the holding he may have is assessed against the company in South-West Africa, and the company is given power to deduct it from the dividends on the shares or debentures which that particular shareholder or debenture holder may have held. I am dealing with the case of a company which may carry on business in the Union and also carry on a portion of its business in South-West Africa. It may have a shareholder who has never been in South-West Africa, but if that shareholder happens to die, being a resident within the Union, then the share-holding he may have is made subject to death duties in that territory, while, of course, at the same time paying death duties within the Union. If the shareholder happens not to be resident in South Africa, there is no means of getting at him except, possibly, by deducting the death duties from his dividends, unless these are payable in London or outside the Union. The net result would be that a shareholder resident in South Africa pays double death duties and the one resident in the United Kingdom escapes, which is very much to the detriment of the South African who may have put his money into such a company. I think where state duty is imposed in the Union, a rebate should be made of death duty in South-West Africa. The United Kingdom very generously gives a rebate in respect of double income tax, and it does not seem at all a difficult matter to put that matter right as between the Union and South-West Africa. It is an illustration of the difficulties and injustices which a system of double taxation may involve.

There is nothing much to complain about in our legislation on the point.

I have not said it was due to the Minister’s legislation, but I would like to point out that is the effect of the existing law. It is a matter which certainly deserves attention at the Minister’s hands. Let me refer to another aspect of our income tax laws, and that is the tendency on the part of the Inland Revenue Department to act without due regard to the interests of the taxpayer, of which I would like to give a rather curious instance. The department in one particular year was brought by a large taxpayer before the special court because of an endeavour to fix liability upon him for income tax and was on its part successful. The next year the department appeared before the court and contended that the previous judgment was entirely wrong, and endeavoured to adopt the contention of the taxpayer himself and make him liable on that basis. That can hardly be regarded as the fairest way of dealing with taxpayers. Another tendency I have noticed is the endeavour to re-open settled assessments under Section 45, which gives power to the commissioner to make additional assessments, based on a change in interpretation of the law, by which it is hoped to fix in respect of settled assessments a bigger liability upon the taxpayer. I would like to say with the hon. member for Newlands (Mr. Stuttaford) that I am not endeavouring to defend the taxpayer who may seek to evade his obligations, but where there has been assessments going back for three or four years, where a taxpayer has paid his tax, in which, because the commissioner takes an altered view of the law, it is proposed to rip up those assessments—

The commissioner has to carry out the law.

We have given him power under this Section 45, which he never possessed before. I think he was given a power which was altogether in excess of that with which he should have been entrusted.

You are now criticizing legislation passed by Parliament.

I am criticizing the section introduced by the Minister in his Income Tax Act of 1925.

And passed by Parliament.

It is not as the laws of the Medes and Persians.

You began by complaining against an administrative act of the department, and now it appears you are complaining of an Act of Parliament.

A better discretion should be exercised by the commissioner, who should not contend one year for one view, and next year that that view is wrong.

The commissioner has no right to waive revenue.

It is not a question of the commissioner doing that. If you have no fixity with regard to these assessments there is constant trouble and anxiety which may arise as to what a taxpayer, who has paid legally, may be called upon to pay at a later stage. Where these cases involve a large amount of money they have a very hampering effect on the business of the individual concerned. The principle at stake is the one to which the hon. member tor Newlands (Mr. Stuttaford) referred—the constant tinkering with the ordinary course of commerce, the unnecessary interference with the normal course of trade. That really falls within the terms of the resolution I have quoted. I want again to-night to emphasize what I have said as to the report of the imperial conference. The effect of this has been referred to in quite a number of speeches made in the course of this debate, and I hope they will make the Minister realize that there is a strong body of opinion which feels that one of the obligations which flows from what we are pleased to call our “higher status,” as embodied in the report of the imperial conference, is to show some practical co-operation with our empire partners. When I sometimes hear the narrow criticisms, such as the statements made with regard to neutrality, I ask myself perhaps whether it might not be thought abroad whether we in South Africa are incapable of appreciating the true meaning of that status—a free and voluntary partnership which is of immense value to South Africa, especially when we find that hardly a word has been said, certainly on the part of the Government, as to the obligations which it involves, and very little by way of thanks for the recognition of our rights recorded in that report. Certainly as far as closer co-operation in regard to our trade is concerned, the Government has an opportunity to show that we do appreciate some of the practical implications of that report, and I hope as a result of the debate that has taken place on this subject that we may find in place of an obvious tendency to stray away from this voluntary co-operation with our partners, that there may be a sounder and more practical appreciation shown of our obvious responsibilities.

On the motion of Mr. I. P. van Heerden, debate adjourned; to be resumed to-morrow.