We would prefer the Opposition to express its views on the Budget and to criticize the Minister of Finance. They have indeed tried to make attacks but I am disappointed that, although in some cases figures have been quoted, and criticism has been made, nothing of a constructive nature has been said. Why has nothing been suggested? Much has been said about the foundation laid by the S.A. party, but if we were to build on that foundation I should feel sorry for South Africa. I want to answer a few points of my hon. friends. I want to associate myself with the hon. member for Albert (Mr. Steytler) in what he said about the harmony which has arisen in South Africa as a result of the solution of the flag question. There were bitter feelings on both sides, and it is our duty as representatives and leaders of the people to do everything to encourage them to love the flag of South Africa, which is deserving of everybody’s love. We on this side—and I say it without bitterness—have never before had a South African flag which we could love. A point on which I do not agree with the hon. member for Albert is his complaint about the funds the Minister is establishing for old age pensions.

Why not?

Possibly because the hon. member for Caledon (Mr. Krige), and also the hon. member for Albert come from prosperous parts. They have no knowledge of conditions as they prevail, for instance, in the district I represent. There are old people who are worn out, not by their own fault, but by Providence, which has deprived them of all their possessions, and they need the support of the State. If you ask me what is the best point in the Budget speech, I shall probably say this one. I want to point out that it might happen in any part of the country, even in the districts of Caledon and Albert, for someone to be poor when he is old, not through his own fault. We can never tell our position when we are 65 years old, so that it is necessary to make provision for the old and poor people. The hon. member for Cape Town (Central) (Mr. Jagger) made in my opinion one of the best speeches on the Budget. He seems concerned because the South African party is no longer in office, but I want to mention a few details of what happened during the period it was in power. In the first place the expenditure was not only increased, but there was reckless wasting of public money, and they would not give any proper account of it. I do not know whether the hon. member is aware that his Government refused to give an account to the Auditor-General.

When did I refuse?

I do not mean the Railways Department, but the Auditor-General’s report says that he was obliged to call upon the Defence Department for returns and statements, and they refused to give them.

The Defence Department?

Has the hon. member also read the reports for the last three years?

Yes, that Department falls under the Government just as much as the Railway Department. People who have knowledge of fish say that there is one called cuttle-fish, which, when it wants to get out of trouble, darkens all the water about it. That is also the policy of the S.A. party. I wish hon. members opposite would compare the last two reports of the Auditor-General with those of former years, when they would see an amazing difference. Another reason why the S.A. party did not get back into power was because the last Government did not take sufficient count of our educational needs. And if it had not been for the Nationalist Government there would have been drastic measures. The hon. member for Cape Town (Central) knows that when the Financial Relations Act of 1924 was being debated, before the fall of the S.A.P. Government, express orders were given to the Cape Administrator not to publish the existing deficit before that Bill was passed. The S.A. party intended to tax the people more, and if it had not been for this Government that would have taken place. What further plans did the Provincial Council of the Cape have, induced thereto by the S.A.P. Government? They are stated, in a Government Gazette published on the 13th March, 1924, shortly before the end of the S.A.P. Government. They wanted to abolish the school board, to reduce the teachers’ salaries by £58,000, and to have all teaching of music paid for by the public. Further, they wanted to kill the agricultural societies by withdrawing £8,000 of the grant. In that way they intended doing other things, but thank God, they were never able to carry them out. They intended to introduce a poll tax of £1 for other than natives in accordance with the Transvaal system, from which they would obtain £194,000. Further, they wanted to impose a tax of 5s. per £100 of taxable property. The Provincial Council of the Cape Province would have imposed all the taxes to cover the deficit of £660,000. I think the people in general, and the Provincial Council in particular were grateful when the present Government came into power to rectify matters and save the position. Then there is the Baxter report, another reason why the Opposition is no longer sitting here.

But surely you adopted that?

My hon. friend knows nothing about it. What were the proposals in the Baxter report? The Minister of the day recommended the principles, one of which was that the small farm schools should be abolished, and small elementary schools with from 10 to 19 pupils would be changed into farm schools. The Baxter report was a further nail in the coffin of the S.A. party. The farmers had to board the teacher gratis and to provide classrooms, and schools which did not have at least 20 pupils would not be regarded as elementary schools. The most serious thing was that the inhabitants had to bear much more expense. Where did the Baxter report come from? It was born from the agitation of merchants, especially Cape merchants.

What is the reason of the failure of your party?

I want to assure the hon. member that the next election will mean his downfall. I hope he himself already realises that. And what was the policy about factories? I wonder what the Natal sugar planters said about the speech of the hon. member for Cape Town (Central) (Mr. Jagger) during this debate. I wonder what will happen if the hon. member goes to Natal, where the sugar planters are, at the next election and make that speech there.

Is that all you have to talk about?

I am very sorry the hon. member is so concerned. What I regret with regard to harmonious co-operation in the future are the irresponsible statements which are made in the country, statements which are unfair and unjust towards the Government.

What are they?

I am sorry the hon. member is so concerned. I do not take the statements of the rank and file, but only those of leaders. I see the hon. member for Johannesburg (North) (Mr. Geldenhuys) is also getting uneasy. I shall be sorry for him when once the iron manufactory has been established. But what was said by the leader? It was stated that we were a democratic people, and that we had a people’s Government, but that the people were at present in the humiliating position of being governed by a Government which had lost their confidence, and which clung to office and the Cabinet. Where is the humiliation? That we have tried to maintain the Afrikaans language? It is possibly humiliating to a large section of hon. members opposite who do not understand a word of our language. Is it humiliating for us to give preference to our own competent people rather than to those who are imported from overseas? Is it humiliating for the Government to have decided that the farming community as the backbone of the country should also be better looked after?

Do the Labour party think so too?

My hon. friend is worrying so much about the Labour party. I want to express appreciation of the harmonious way they have worked with us up to the present. We appreciate it. The hon. member for Pretoria (West) (Mr. Hay) is present. Possibly he, too, will yet be converted. But we appreciate the harmonious cooperation. We have been co-operating in the interests of South Africa and its people, and not in the interests of a foreign power. The Government has the support of the large majority of the people. I do not again wish to refer to the speeches made two years ago at Worcester, referring to the unholy alliance, and that we would be stung by scorpions. “An unholy thing has been done in South Africa.” “Principles overridden,” etc. The principle which we have kept in the forefront in the harmonious co-operation with the Labour party is “South Africa first, always, and alone,” irrespective of what other countries do. I deplore a statement by the hon. member for Uitenhage (Mr. Bates) that we have employed 15,000 white men on the railways, and that 15,000 coloured men had to make way for them.

I did not say so.

That is what the hon. member said at a meeting in South Peninsula, according to the newspapers. If it is not so then it is an error in the paper and I apologize, but if it is so, then it is an untruth. The hon. member for Cape Town (Harbour) (Maj. G. B. van Zyl) always gives preference to the natives, but the hon. member for Uitenhage is surely not of that stamp? Someone recently asked me whether the hon. member for Cape Town (Harbour) was a native. I answered, “No, old chap, he is as white as you are.” His advocacy is always on behalf of the natives, not of the Europeans. The Opposition outside the House talk about the terrible state of the country’s finances, but always forget to set out the actual position. No criticism at all is made of the Budget. The hon. member for Cape Town (Central) (Mr. Jagger), who has perhaps made the best speech, criticised the 30 per cent. customs duty on boots. He said that he made boots when the duty was only 8 per cent. Perhaps he is justified in criticising it, but I wonder what the boot manufacturers of Port Elizabeth will say to him. There are the hon. members for Three Rivers (Mr. Gibaud) and Port Elizabeth (South) (Sir William Macintosh), but they are pretending not to care. The financial position when we took over was parlous. They cannot get away from that. There was a deficit of £2,000,000 which we had to take over. Actually the accumulated deficit was then £5,000,000 but the former Minister of Finance was very capable and clever, and tried to confuse the public by taking £2,700,000 from loan funds for current expenditure. If the S.A.P. had remained in office South Africa would in consequence have had to pay £120,000 a year to pay off the deficit of £2,000,000 instead of paying off the deficit of £4,700,000 immediately. There were also many promises which were not fulfilled and which caused the disappearance of the S.A.P. Government.

What about your promises?

I have great respect for the hon. member, but not for his politics. He himself feels inwardly that his politics are wrong. What did the former Government do for the farmers? What did it do during the big droughts of 1917, 1918 and 1919? There was an Emergency Loan Act in 1917. Oh, yes. The loss in 1919 was estimated at £16,000,000. And what was the amount which was made available under the Emergency Loan Act? There were about 100,000 people to be saved because it was a general drought, and the small amount of £50,538 was provided.

They laid a foundation.

But what remains of the foundation? What happened then? Immediately this Government came into office it made almost half a million available, namely, £418,000, and in 1927 the present Minister of Finance furnished the Minister of Agriculture with another amount of £400,000 for the purpose. I want to urge the Government very strongly to double the amount and make it £800,000. The Government also started in 1924-’25 to reduce taxation. Members of the Opposition and their organizing secretaries are trying to repudiate those reductions. The customs duty was altered, the income tax reduced, the tobacco tax was first reduced, and thereafter abolished as to rolled tobacco, the medicine tax was repealed, the death duties reduced. The medicine and tobacco taxes hit the people who were suffering most. Then the postage on letters was reduced to a penny. This does not mean much to the countryside because we do not write much there, but I can assure the House that the countryside appreciates what the Government has done. In 1926-’27 the exemption from income tax was raised from £300 to £400, and in 1927-’28 there was a further reduction in taxation, which meant a loss to the State of £215,000 a year, and now in 1928-’29 taxation is being reduced by an amount of £1,270,000. Now I come to something in which I entirely agree with the hon. member for Fort Beaufort (Sir Thomas Smartt), namely, irrigation schemes.

You did not say that on the second reading of the Irrigation Bill.

We were then discussing “sacred rights,” but the hon. member was only thinking about the sacred rights after 1912. I hope that I am not saying anything that I should not, but in the Select Committee on Irrigation—

You cannot quote it now.

The hon. member cannot debate what took place there. He may not discuss what has not yet been disposed of there.

Then I should like to be enlightened. I want to speak about irrigation schemes which have already been disposed of.

The hon. member is entitled to do so.

Resolutions were passed in the select committee, and I want to say that the hon. members for Fort Beaufort (Sir Thomas Smartt) and Port Elizabeth (Central) (Col. D. Reitz) are deserving of all honour in connection with them.

On a point of order, has the hon. member any right to refer to what took place at a select committee, the report of which committee is not before this House, and what is more, the report has not even yet been discussed?

I understand the hon. member is referring to the report that has already been laid on the Table.

I am speaking about a report which has already been dealt with.

The hon. member may not discuss any report which has not yet been laid on the Table.

I can quite understand the anxiety of the hon. member. He must undoubtedly in his time have had sleepless nights about people who were thrown into the depths and could not pay the tax. Now he is working in harmony with us and we are proud and happy, and he is of invaluable assistance, but it was his duty to meet these people before, and to put the irrigation schemes on a business footing so that the people could make a living there.

You are prejudiced.

My constituents have appealed very little to the Government. When they wanted to build dams they built them themselves, and those that were estimated during the previous Government to cost thousands of pounds they built for hundreds.

I am glad to hear you are making excuses for your second reading criticism of the Irrigation Bill. You have said you were perfectly satisfied with the Bill. Your constituents have expressed another view.

I am still satisfied, but the hon. member spoke of “sacred rights,” but the hon. member spoke of “sacred rights before 1912.

I cannot allow another debate on that subject. The matter was dealt with in a previous debate. The hon. member can refer to it, but not go out of his way to deal with the same subject again.

I should just like to make it clear that I want to deal with irrigation schemes which are disposed of, and to refer to the unfairness of the 1912 Act. Then a few words about the railways. The hon. member for Cape Town (Central) (Mr. Jagger) is so much concerned about the statements that he dismissed Europeans and appointed natives in their places.

It is not true.

I have here the report of the General Manager of Railways, which shows that in 1923, on the 31st March, there were 36,492 Europeans in the service of the railways, while on the 31st March, 1922, the number was 37,444—950 less. 950 were discharged.

They were superfluous.

But during the same years there was an increase of 8,845 in the number of natives, Asiatics and coloured people. That is clearly stated in the report. How does the hon. member get over that? One of the further reasons for the downfall of the Opposition was the state of affairs which induced the present Government to introduce the Colour Bar Act. I deplore the attitude of the English churches in that respect, and I regret that I have to mention it. Why did they not Act in the matter from 1911 to 1923? Why are they now interfering with a matter which is of urgent importance to the white people in South Africa? I wonder how hon. members opposite would like it if there was a post vacant on the mines and their sons had to compete with a native, and the native got an appointment worth, say, £1,000, because he was more fitted for the work, and had a perfect right to apply for it. Then there was a terrible fuss about the Wages Act, but we cannot deny that a large section of the South African population were exploited, and had to work for wages they could not live on. I want to mention another matter, namely, the electrification, and the terrible cost involved. Take the Sea Point line, on which about £50,000 a year is being lost. There are nice platforms and costly subways at all the small stations between Cape Town and Sea Point, and Cape Town and Simonstown. The line to Simonstown after electrification will certainly show a loss as well, but more platforms should be built on the countryside. I do not say that every halt should have a platform, but there must be platforms at the stations serving the inland villages. The farmers suffered a terrible disaster and had to transport their stock. The farmers and their womenfolk who held out on the farms and tried to keep their stock alive were all heroes and heroines, and I want to appeal to the Government to give them an unrestricted opportunity to get straight and to pay off. The position in consequence of the drought was indescribable, and hon. members must not think that everything is in order now that the drought is over; it will take at least a year before matters get right again, and the farmers are out of their desperate straits. I saw the conditions myself and just want to refer to the report in the “Argus” of a commercial traveller who travelled through those parts last year, and who described how well-to-do farmers had to accept charity, how the country was changed into a desert, how all the stock had died, those that were still left, and how young children suffered. Every motor that came through was rushed for water and food. The position was indescribable. The Minister himself said that the drought was the worst since 1863. Now they have had proper rains, but I want to point out that at present the farms in this country are bonded up to about £500,000,000, and the Government must prevent the mortgagees from pressing the farmers. The farmers are not insolvent, but the mortgagees may possibly press them and the Government must take steps and, possibly even in some cases, take over the bonds, so as to prevent the farmers losing the ground. I see the Minister of Finance is looking very serious, and I know then that he is the most inclined to make a concession. I pleaded with him on behalf of the people to assist especially in connection with the bonds, even if it costs millions of pounds, because the people are solvent, and it will be better to keep them on, than to drive them off the land. On the whole, however, the people are quite satisfied with the position of the finances, even with those of the railways. I only want to ask that the Government, which has been sympathetic towards the farmers in the past, will also show its sympathy in the future.

This is the fourth day of this important debate and I am sorry that I also still have to put the patience of hon. members to the proof. Interesting speeches have been made on both sides of the House, instructive speeches, but also very long ones, and just after the second day of the debate one already heard in the lobbies that one member and another had unnecessarily wasted the time of the House. We are not here, however, to represent members of this House, but the electors of the country. We must remember the 300,000 people who read the newspapers to-day, who have the franchise and pay taxes. The more instructive the speeches that are made here, the more will the people outside develop and understand the conditions of the country. People are the jury, and their verdict is given as soon as the opportunity comes. The information they get is not only obtained from the press, but also from our speeches. I do not intend to discuss the Budget generally, but will confine myself to the important matter of the defence of the countryside. We hear so much about, and might almost think, that there really is a world peace, and that the great nations of the world are engaged in destroying the terrible engines of war. Nevertheless to mention only the four countries England, France, Japan and America, hundreds of millions of pounds are spent on war material, and they are training their men with a view to contingencies. I do not believe that South Africa has yet experienced the darkest times. Whenever the question of defence is raised in the House I get the impression that this important matter does not meet with much favour in the House, but nevertheless I can assure the House that the people very much appreciate the few champions who get up time after time and plead for more attention to and justice for the defence of the countryside. Personally I consider the work as one of the most important, one of the most patriotic works of South Africa. I also believe that we cannot just entrust the defence of the country to anybody. I have myself inspanned my powers to assist people, to render them fit in the handling of arms, and to be an asset to the State and a surety for the safety of the country if ever it is threatened. About £1,000,000 a year is spent on the defence of the country now. In this connection I want to say that I think we can divide the population into three categories. One which thinks that it is not necessary to spend £1,000,000 on defence, another think that it is quite sufficient, and a third, I will call it the younger school, think that it is quite insufficient. Although I cannot include myself in the younger school I still think that we do not do enough by way of defence. We hear so much about sovereign independence, and that we are one of the nations on an equality with any other nation, and the £1,000,000 is, I think, only a premium on the bond for the safe continuance of the white civilization in South Africa. This is a serious matter, and without intending to criticize the Minister of Defence seriously I still want to emphasize a few things. I am sorry the Minister is not present, but I hope the Minister of Finance will tell him my criticism. Hon. members know that from 1920 to 1924, especially those in the north of the Union could hardly choose subjects which would so soon arouse feeling as that of a radical change of the system of defence on the countryside if another Government were to come into power. The other Government did arrive, hut the people have the suspicion that so far as defence is concerned little alteration has been made; the suspicion that there has only been a change of Minister, but no change of control. I am one of those who, from time to time, accompanied deputations to the Minister to ask that the people should be given an opportunity of laying grievances before him, to try and prevail on the Minister to do justice to the interests of the people. We asked him to comply with the requests and interests of the people, but up to the present I have experienced nothing but great disappointment. I will not refer to promises that were made, because they are made at any election, and the candidate often takes it upon himself to say that he will see that someone or other will get a job, or that something or other will be rectified. There will always be candidates who do that, and in any case there was a certain amount of promising, but there was not much done by way of fulfilment. Under the last Government the people had the idea that the defence force was sometimes used for work for which it was not intended, that in certain respects it was used as a political machine. No one in this House will contradict that our country is young, and that the future is uncertain, that we in no case may use the burger forces or the defence force for political purposes. Why then have the people had cause for thinking that the defence force in those days was used as a political machine? Because under the former Government wonderful things were done by men in the defence force, and the people to-day are possibly restless because my son has to-day to be trained and my brother has to serve under those men. I want to see an alteration in the system; outwardly the force or system has never yet looked sound, and the people, yes, the parents of the boy, want the assurance of the Minister that things had been properly cleared up inside the force. There was a time when the present Minister of Defence took the responsibility on himself so that the defence force was not in very good odour with him and his followers in the House, or with ourselves. To-day we are not yet quite quit of them, and this is also a reason for a certain amount of unrest among the people. I now want to say a few words, particularly in relation to the Free State. Hon. members from the Transvaal and the Colony can speak for themselves. In the first place I want to remind members that the Free State was disarmed in 1902 and in 1914. Notwithstanding that, I challenge any hon. member to select a portion of the Union and to compare it with the Free State and then to deny that in defence matters the Free State is an example. To-day we find that in the Free State no less than 37,000 burgers are members of the defence rifles associations, with 900 officers who act voluntarily to assist the people, and who are trying to instil discipline into the simple burger in a simple way. This costs the State only about 10s. per burger per year. From time to time the people have asked and prayed for rifles to be put within their reach in such a way that they can buy them. The system to-day is to allow the purchase only at the full price, and to make it possible only under the most difficult circumstances. Another great blot is the terribly circuitous way in which burgers have to get cartridges. Many of the people in the Free State live miles and miles away from the railway, and they hardly ever get an opportunity of buying 50 cartridges to practise. The difficulties put in the way are very great. I do not want to go into all the details, because I would like a commission of enquiry to be appointed, so that all these things can be submitted to them, provided the Minister is prepared to give the people a chance of explaining their difficulties, and that he will take up a friendly attitude. Formerly there were two military districts in the Free State, and the first reward the Free State got for having organized itself so well for defence purposes, and having gone to work so thoroughly, was that the privileges were reduced. One office was closed, ostensibly for economy, but was there any economy? There is a staff of 18 white officers with salaries amounting to £10,000 a year, and the people are there to control the quiet Free State. Three of the men of this small staff draw £2,885 a year, and some of them do not work more than 12 days a month, and then I am speaking of a working day of four hours. Sometimes they travel in the motor cars, which have been bought by the Government, to attend social functions in the country, or otherwise they are engaged in organizing wapenshaws. £10,000 is spent to control the quiet Free State, and I say that there is no question of economy, because the expenditure is exactly the same as before. If there is to be economy the Free State will also be content to be controlled from Pretoria. The feeling among the people of the Free State is excellent, but the system is no use. Recently there were unpleasant occurrences about the appointment of officers. I just want to refer to the unpleasantness at Kroonstad, Zastron and Wepener. The burgers come forward, pay out of their own pockets, make sacrifices, and the commandants have practically never yet asked a penny’s compensation. Then we expect the Government to meet us, and that the burgers will be given an opportunity to appoint their officers in peace time, people whom they love, and under whom they are prepared to risk their lives for the fatherland, commandants for whom they have respect. For enthusiasm and patriotism no part of the country can compare with the Free State, but the good spirit is being injured by the defence system. I attribute the fact that the Free Staters still maintain their spirit to the great sacrifices of the officers, and the spontaneous support of the burgers. They deserve the thanks of the whole public. The military policy in the Orange Free State has no right to make any claim to the present position and we can manage with less highly-placed officials there, the subordinate officials are the men in the Free State office who do the work and deserve respect. In 1908 and 1909, before we ever heard of a defence force, there was an old tradition in the Free State which dated far back; the burgers established their national rifle association and held a Bisley every year, to which the Free State Government always contributed liberally, and one of the first difficulties between the present Minister of Finance and the Free State was when we wanted a small amount as a contribution last year. They have done useful work; I, for instance, learnt rifle firing there, and in that way I was able to use my knowledge and influence on the countryside to lay the foundation for a good defence force. Good foundations must be laid, and one must continue to build on them to fit the people for defence, but the defence force came and the good spirit is entirely destroyed to-day. Today a small subsidy is given, but it is not even sufficient for sending out proper notices about the doings of the rifle associations. I understand that there is a new scheme, and that the Government will be approached to make a little more money available so that we can re-start the Bisleys which the defence force has destroyed. I trust that he has the support of this House, and I hope the Minister will put £5,000 on the estimates for the purpose. Useful work will be done with it—work necessary for the continued existence of a white South Africa.

I wish to refer to certain aspects of the expense of farming. When a man takes to farming late in life he is looked upon with suspicion by hon. members opposite, who claim that he can have very little knowledge of farming. Although my experience of farming operations has not been as lengthy as theirs, I claim to have made good. I am not ashamed to show anyone my farm. I have some of the most up-to-date stock and machinery in the country. There is no doubt that farming is a most highly speculative and precarious business, the aggregate income of the farmer being very small. This and the last Government have done a great deal for farming, thus showing statesmanship, for without a strong yeomanry the country can never reach any eminence. I am particularly pleased at the attitude of the present Minister of Agriculture when he tells the farmers be more self-reliant, for if you want to ruin the industry, spoon-feed the farmers. To me as a practical farmer there are principally two “desiderata” to put farming on a sound basis—cheaper power and cheaper fertilizers. When we have the early rains in the spring oxen often are unfit to do the ploughing, so that the golden opportunity of turning over the soil is missed. This is the period especially when mechanical power supersedes animal power. To plough properly at all times you require mechanical power, and for that we are almost wholly dependent on imported fuel in the shape of petrol, paraffin and crude oil. Mechanical power will in time take the place of animal power, and the sooner that change is made the better, but at present mechanical power is very expensive. The duty on paraffin is 1d. per gallon, and on petrol 3d. per gallon. The wholesale price of paraffin at the coast is 13s. a case, less 7½ per cent., and the wholesale price of petrol at the coast is 16s. 8d. a case net. The import duty on petrol is 2s. a case. It costs 6s. 3d. to send a case of petrol from Durban to Johannesburg; the railway rate from East London to Bloemfontein is 5s. 8d., while on a case of paraffin the duty and carriage work out at 4s. 11d. a case. The State takes an enormous amount out of imported fuel, so that if the transport charges were reduced and the duty taken off, when the fuel is used for farming purposes, real assistance will be given to farmers. They should he encouraged by the State, as a man who works his farm with mechanical power is an asset to the country and is able to assist his neighbours. Recently it was possible for me to buy the mealie crop which would not mature from some of my neighbours and to use it as ensilage. When this question of remitting the duty on imported fuel to be used for farming purposes was brought up, the Minister said there was the practical difficulty of control. That difficulty, however, can be overcome, and it should be made possible for farmers to avail themselves more generally of this very necessary power. In fact it is of paramount importance that you should have mechanical power, as we cannot depend on oxen which are slow, and we must take advantage of the early rains. Then cheap phosphates are also required, not only for field crops, but for improving our pastures. We have had some wise words recently from the right hon. the member for Standerton (Gen. Smuts) in regard to the care of grass lands, and I am afraid that is an aspect of farming which is very often lost sight of by many farmers. In Europe, however, the subject is receiving careful consideration. A very interesting book has just reached the library. It is entitled, “Latter Day Rural England,” and refers, i.a., to a conference which the British Agricultural Department held recently at Cambridge, with the idea of obtaining the utmost value from grass lands. The principle is to raise grass to the point of its highest value, graze, dress and pass stock over it again and again. In this way it is possible to keep cows in full milk without the aid of a concentrated proteid ration. It may be of interest to members of the House to learn that in the Northern Transvaal a discovery has been made of what promises to be a valuable phosphate deposit. I think a discovery of that sort would be a greater boon than almost anything else I can think of to the farmers. We are constantly hearing rumours of the discovery of oil in this country and adjoining territories, and it would be a positive godsend if it was found. Cheap phosphates and cheap power would bring the farmers of this country forward very considerably. It has been hinted in a number of papers that there should be a farmers’ party in the country. I do not approve of that at all. We are sent here not to represent a particular class. Still, there is no doubt that farmers on either side of the House may very well consult from time to time in regard to matters appertaining to farming and be helpful to the Government. There is certainly more in common among the farmers on either side of the House than grounds of difference. I am really at a loss to understand why boots are so expensive in this country. I hoped when we gave this enormous protection to the boot industry, that boots would be cheaper and better. I have been unfortunate in my experiences in regard to South African boots. They have been a dismal failure. They became so shapeless that I decided to wear only the imported article. You find that with all this protection and facilities for cheap labour that the cost of the locally produced boot, although the boot is inferior in quality, is little less than that of the imported article. When this excessive protection was extended to the boot industry I thought we would have a large and flourishing industry. We have the leather here, and I thought we would have first-class boots, and that we could start an export trade, but so far as I have been able to ascertain, not a single pair of boots has been exported. The net result is that we are unduly taxing ourselves for our footwear, and I am expressing my disappointment at the results. A very important announcement was made a few days ago by the Minister of Agriculture in regard to the scourge of the tsetse fly and nagana. He referred to Dr. Fuller’s supplementary investigation, which had now, he said, established the fact that the tsetse fly is led to its quarry by a sense of smell, and not of sight. The Minister proceeded to state that the further information obtained strengthened his view that the existence of a game reserve in which the tsetse fly is found, is incompatible with European settlement in or near such areas. I was very much perturbed by that announcement. We know that Mr. Harris has been carrying on in Zululand, investigations into this intricate subject for six years. Mr. Harris’ conclusions, which are embodied in a brochure issued by the department, indicate that the existence of tsetse is not incompatible with the protection of fauna. I am not here to discuss the respective merits of these two authorities, but I will point out that Mr. Harris’ pains-making investigations have extended over a very considerable period, while those of Dr. Fuller, I will not say are superficial, but they are very short. He seems to have arrived at his conclusions somewhat hastily. They are all these facts which I wish to bring to the Minister’s notice. You get tsetse fly where there is no game. That is incontestibly established, so that the existence of the tsetse fly is not dependent upon game being present, in other words the blood of a mammal is not necessary to sustain the life of the tsetse fly. It has also been proved that where game has been destroyed the tsetse fly will attack the human. I am sorry I have not my file here with regard to these matters, otherwise I should have been glad to give my hon. friend on my right, chapter and verse. I want to emphasize that we must exercise extreme caution pending further investigations. Do not let us be guilty of the tragedy of wiping out the game, and then finding that we have not got rid of the tsetse fly. I know the Minister of Lands is greatly concerned about the protection of white rhinos in the Umfolozi reserve. There are only about 16 to be found here, and I think in Northern Africa, and in very limited numbers. Members may have read a recent interesting article by Dr. Warren of Pietermaritzburg, in regard to the white rhino, describing the haunts and habits of these rare and extremely interesting “pachydermata”. I hope the Provincial Council of Natal will, as they have done hitherto, be vigilant and protect these animals. I implore the authorities not to take any extreme steps in regard to game extermination until they are completely satisfied that the tsetse fly will also disappear, I would now like to refer to the unprogressive policy of the Government in regard to two very important matters. The first is the question of telephones. When the present Minister of Labour had the portfolio of Posts and Telegraphs, after investigation based on expert advice, he decided on superseding the present general call system in large towns by automatic telephones, and it was decided that no new-general call plant was to be installed when the existing plant had to be discarded in the larger centres. It was recognized that the manual system was done, and that the complete change to the automatic system was only a question of time and money. That was the policy decided. When the present Minister came into office he reversed the whole policy, not on any expert advice, but on his own decision. He declared that he had no time for new-fangled ideas, and he would never be a party to putting hundreds of telephone girls out of employment. The result is that orders for automatic telephones were hastily cancelled, and buildings that were in course of erection and plants for the automatic telephone system had to be altered at considerable expense. We find that two years have passed and the automatic system has made enormous strides in other countries, With the single exception of South Africa, every country in the world is adopting the automatic system, and the Minister knows perfectly well that not a single girl in Port Elizabeth or Pietermaritzburg was left unemployed as a result of the change there. In his own department he sanctioned the use of the automatic system. I do not think the Cabinet should allow this state of things to continue. If this automatic system is the most up-to-date, convenient and economic system, the Minister ought to be told that he must change his policy and not retard the progress of the country because he has, what I call, stupid whims. I would like to refer to another retrograde attitude of the Government in regard to an important question, and that is the hopeless attitude of the Minister of Railways with reference to the competition of motor traffic. The railways should be run, as the Act of Union states, on business principles, and my advice to the Minister is to adapt his railway business to the changed conditions. The railway at one time ousted the road, but the road has now come into its own again, and there is no doubt that the threat which the Minister holds forth to meet this new situation, namely, that he will increase the rates on certain classes of goods, is a threat which is not going to bring increased business. If the Minister wants to combat this competition, the only way of doing it is by exercising economy and promoting efficiency on the railways, so that he can meet this new situation. Small economies in the aggregate are the factors that tell. Take, for instance, a small matter, the appointment of white supervisors to attend to the bedding of passengers. The white man comes round and asks passengers if they require bedding. The next thing that happens is that a coloured man brings the bedding and makes it up. The coloured man sweeps the floor and removes the bedding. The white man then comes round with the bill, expecting to get the tip. That costly and unnecessary practice has recently been done away with, the Minister told us a few days ago, but why was it ever introduced. Take the railway which I have already referred to, the Sea Point railway. Here the State is subsidizing a line of railway which should be the concern of the local authority. It is not the business of the State to provide transport in a municipality. That is a matter which concerns the local authority. They have their tram cars and their motor busses, but here, day by day, there is a loss to the State of between £100 and £200 daily to subsidize a line of railway for the conveyance of people in a municipality.

Do you believe that the municipality should have control of the transport?

The municipality should look after the transportation in the municipal area. That is done almost everywhere.

It is a private company here.

Yes, I know the tramway belongs to a private company.

A good thing.

Yes, I often wish the railways were a private concern, we would get greater efficiency and economy and cheaper rates. Coming back to the Sea Point line, I would ask whether it is not possible for the Government to make an arrangement with the tramway company or the interested parties, and say, “We will scrap this railway, but we will see that the public are not overcharged. We will retain a certain amount of control over the fares which you are going to charge.” I know this, that no private business man would run that railway for a day longer.

Why did your Government commence it?

No, we didn’t.

I am not intimately acquainted with the history of this line, but that does not affect my argument, I am dealing with existing conditions.

I am alluding to the electrification.

You started the electrification.

No, it was started by you.

This is very interesting. I understand that the manager of railways, or rather the engineers, were against the electrification on account of the expense.

Hear, hear.

And it was sanctioned before we came in.

No, the Minister of Railways and his board allowed themselves to be talked over by the general manager. The Prime Minister, after all, must look at it in this way, is it a business proposition? Is it sound? Would you for a day tolerate the paying out of hundreds of pounds to cater for what is the business of the local authority? I hope that no further time will be lost and that this saving will also be effected. My plea is for greater economy. The Government preaches thrift. The public are told to buy Union loan certificates. I am afraid the Government does not practise that. I think Parliament ought to start by setting an example. There is no doubt that this machine is a cumbersome and expensive machine. We have got a handful of voters in this country, and there are 135 members in this House, and we are threatened with a possible increase. I gave the figures some time ago of the per capita representatives in the different countries of Europe and America. I do not want to repeat them. Take only Holland, with a population of 10,000,000 and 100 representatives in the Chamber. I know it has been said that distances are great, but I do not think that argument carries any weight. Unfortunately, many country members look upon their duties as legislators, as representing the people, entailing a sort of necessity of going round and spending hours with the individuals. That is very pleasant, no doubt, but I do not think it is the object for which a member is sent to this House. After all, we have newspapers which circulate in all parts of the country.

Only one party.

“Die Burger.”

We have got that light in the literary world, “The Guardian.” Every man no doubt in the countryside gets his newspaper, and I say that the representation in this House could be cut down very materially, and the work would be done just as expeditiously and far more economically. Let us look at our civil service. Let us take, for instance, in the Department of Justice, the magistrates. You know what is required of a magistrate. He has to pass fairly difficult examinations, and he is entrusted with very responsible administrative and executive work. The magistrates are a very hard-working class of men. I do not say there are not other departments of the service where hard work is required. What do you find? That from the estimates the commencing salary of 50 magistrates is £475, and of 137 it is £573.

They are all underpaid.

Of course they are. I was told only the other day of a magistrate with a large family who found it was impossible to come out on his salary and, being a thrifty man, he was compelled to make his furniture of packing-cases. That is a disgraceful condition, and when we pay these men such poor salaries, are we justified in taking £700 a year ourselves?

You have a private income.

I certainly am not a professional politician. If, in the administration of government affairs we imported some of the principles and care we practised in our own affairs there is no doubt the machinery of State would be run far more efficiently and at far less cost. My plea is for economy and efficiency.

This is the fourth day we have been occupied with the budget. It is not so easy to discuss the budget. It deals with an amount of nearly £60,000. It is not so easy to deal with it, but everyone can see from the budget the tremendous progress and the prosperity of our country, and we are entitled for that only to the ability of the Minister of Finance only, and the policy of our Government. It is strange to see how the budget has been received. I have sat here for years and have noticed how budgets have been received. In other years there has been life and there has been criticism of the Government’s policy, but this year I think the financial position of our country is so good that no one has any comment to make on it. Yet there are lion, members opposite who manage to say poisonous things about it; both honey and poison can be got out of a flower. It is the same with the Opposition and the budget. It is now suddenly suggested that our country is in great danger, although the financial statement of the Minister in his budget speech is the best ever put before the country. Notwithstanding this, it is used to prove that our country is in danger, and the Government is acting wrongly, and that too much money is being spent. The truth, however, is that the people are too well informed, because there are men in the country who are more enlightened than members sitting here. The people are no longer asleep, they go into these matters. They enquire into the position in 1924, and they compare it with the present. That is the method of the ordinary man. He does not split hairs about the £60,000, but he looks at things from the point of view of the past and of the future. He sees that we have a Minister who can show a balance of £1,750,000, and the ordinary man compares that with the state of affairs under Minister Burton. The latter took half a million out of the loan fund to cover his current expenditure. He had a deficit of £260,000, and when he had put his hand a little too deeply into the loan fund and taken half a million out of it, he came along with a fictitious surplus of £240,000. But the present balance of £1,750,000 does not come out of the loan fund, but out of the revenue of the country, as a result of the good administration of the Government. The Opposition now says that the people are taxed too heavily. Who taxed the people? It was the Opposition when they were in office. In 1924 a tax was imposed on tobacco, the most disgraceful tax ever raised in the Union. Tobacco was sold on the Johannesburg market for 5d. or 6d. a pound, and then the Government came and put 1s. tax on it. The poor tobacco farmers were, in consequence, driven from their farms and had to go to Hartebeestpoort to look for work. The sick people were also taxed by the medicine tax. These taxes were imposed on the poorest people, but the rich man with his big warehouse escaped. Our Government, however, has reversed the scale. Formerly £600,000 was presented as a reference to the overseas factories, but that scale too was overturned, and it is the result of good government Those people who are not wilfully blind can now see that the country is prospering. We can go from one end of the Union to the other, and find prosperity everywhere. In 1924 everybody’s head was drooping towards the ground, there was no future for them. To-day things are quite different, and now it is said that the Opposition must again come into power. I shall pray against that. Do the Unionists and the South African party think that the people of South Africa are blind and senseless? The South African party have only twelve of their old members here, the other 43 are all old Unionists, and it is their policy which has to be carried out. They say they are all converted to the South African party, but never yet have people been converted in fourteen days as the Unionists were. Nor can anyone believe it. It only shows us the course of events. The policy of the old South African party was the same as ours is to-day, but in the South African party it is dead, and they have now adopted the policy of the Unionists. The hon. member for Cape Town (Central) (Mr. Jagger) referred to the terrible customs duties, but we must not forget that the duties have given relief to the people. They are not for the overseas factories. For the last half century the Opposition have represented overseas capital, and so long as that capital can flourish they do not mind one whit what happens to the people. That is the policy of the old Unionist party. It is the policy which brings murder, homicide and poverty. All the people should be grateful to the Government for saving the country. Our country was on the edge of the abyss, but to-day the position is entirely different. Everybody is satisfied with the present Government, with the exception of the Opposition. The Prime Minister went to England. We had a national dispute for years. It has been removed by the Prime Minister, it exists no longer, but the Opposition are again trying to drive a wedge between the two races. While we try to get co operation between them they struggle to keep them apart. The hon. member for Zululand (Mr. Nicholls) referred to the gift of £5,000,000, which we got from the British Government, and he said we ought to show our gratitude for it. What does he mean by that? We are thankful for the gift, but he must not forget that in consequence of the war we took a burden on us of £50,000,000 on which we had to pay interest and redemption, and that we sacrificed our property and our blood to win the war. The object of such stories is only to incite one section of the people, and to insist on our ordering all our requirements from England. But what has Durban done? Did they not place orders in Germany? No, the criticism of the Opposition on the budget is just as unsound as all their other criticisms. They want to mislead the public, but the public will no longer allow it. On behalf of the people I represent I thank the Government and the Minister of Finance that they have started from the bottom. They have taken all classes of the population into consideration. The last Government only taxed the poor people, but this Government has come to the help of every section of the people. Already a section of the old people have received grants to enable them to live, and now the Minister of Finance makes his proposal of old age pensions. I thank him for it. In the years of the South African party these people were never thought of. They were the old pioneers, and made our country habitable, and are entitled to much gratitude. The hon. member for Caledon (Mr. Krige) said at Muizenberg a few days ago that we were in great danger. What danger is there? Financial matters are in good order, the people are satisfied, nobody loses his life What danger is there then? This serves no other purpose than to frighten the people, but the time for that is passed. Today they know what is going on. We are going next year to them with open hearts, and we shall give an account of what we have done. The Opposition take things out of their context and then represent them falsely to the country. If they think they can mislead the people, then I want to tell them frankly that they are late. Why is our country in such a flourishing condition?

On a point of order, is the hon. member entitled to single me out as if I were a public meeting?

I do not think the hon. member particularly referred to the hon. member for East London (City).

A guilty conscience !

I am sorry the hon. member is so touchy. The Opposition criticized the expenditure and revenue of the country. If a Minister introduces a deficit, then his hair is almost pulled out; when he introduces a surplus, he is criticized. I want to tell the Opposition where their great mistake is. They want to persuade the people that the Government is incurring heavy expenditure, and that it is constantly increasing. I am prepared to agree with them. A school child can tell us that when a business extends, the expenditure increases. When the Government borrows money the remark is made, slowly over the stones, but you go too fast. I challenge the Opposition, however, to give me an example of a single pound being wrongly invested. The Opposition commenced in 1910, and in 14 years they borrowed £92,000,000. What did they do with the money? They bought flour, and suffered a loss of £800,000; they built grain elevators, and on two transactions they lost £1,050,000. They bought ground and built dams in the Karroo to conserve water, but they conserved nothing but sand. What is the result of that to-day? The Hartebeestpoort dam was built, and as in the case of the Durban elevator, it was built so badly that the foundations had to be blasted away. Why has our country got into such a state? The money was thrown away and we have to-day to pay interest on it up to future generations. The present Government is, however, operating differently. They well understand that the money must be paid back, and it is so invested that that can actually take place. When our Government came into office in 1924, what was the position? Every sensible person at that time knew what the position was. Our country was on the verge of bankruptcy, there were thousands of unemployed. The Government was compelled in 1924 to save people from starvation in Namaqualand, and in a few places in the Transvaal. Now hon. members speak about unemployment. I cannot understand them. In 1924 there was unemployment in South Africa such as was never known before. Much has been said here of a petition by unemployed which has been sent in, but I well remember how in 1924 the unemployed came from Johannesburg and sat up in the gallery here to draw the attention of the House to the hunger and want they were experiencing. What was done about it? The hon. member for Cape Town (Central) to-day denies that as Minister of Railways he discharged people from the railway service. He cannot make me believe that. I know quite well that he transferred white men from the branch lines to the main lines when there was no room for them there, and 10,000 of them were discharged. They were also discharged from the mines and in the postal services. It is calculated that about 15,000 white men were discharged at that time. What is the position to-day? There is hardly any unemployment to-day. It is the drought which has driven the people to Johannesburg, and then the removal to the diggings, that make the people unemployed. But I say that when a Government wants to put its hand to the plough it can solve the unemployment question. The railways have a deficit of £107,000. If we look at the capital which is employed, and we then consider the provision in our Constitution that the railways must not make a profit, then I say it is difficult to balance exactly with an expenditure of £28,000,000. A difference of £100,000 is nothing in the case of such a large amount. The Minister of Railways has already had a surplus of £670,000, of which he saved £400,000, and with that amount he can easily cover the deficit. The accidents on the railways are used to frighten the public. If, however, we look at the statistics of the last 15 or 20 years with regard to accidents, we see that there are no more accidents to-day than previously. It is disgraceful to say that the accidents are due to the white labourers who have been employed on the railways. It is absolutely without foundation. It is an invented lie. A commission of enquiry is appointed in the case of every accident. It appears from the reports that the fault always lies with the old officials who have been 10 or 15 years in the service, and that in not a single case was it due to the white labourers. The people only repair the permanent way. What is behind the agitation, however? It is only done to make the people uneasy. It is done in a false way. We welcome a good Opposition, because it is of great value to the country, but the poor chaff they utter is ridiculous, and the country knows it. Read the Opposition papers. The hon. member for Bezuidenhout (Mr. Blackwell) talked the greatest nonsense here, but his newspaper says it was the best speech in the world, and yet there is nothing in it. The Government has decided to pay off £650,000 a year from revenue off the debt. The hon. member is opposed to that, and he wants the surpluses to be used for that purpose, but when his party was in office they never had surpluses, only deficits. The Minister of Finance is now taking £500,000 of his surplus and adding it to the £650,000, and is, therefore, paying a full £1,000,000 off the debt. It is much better, and it is ridiculous of the hon. member to make such a fuss, yet, notwithstanding that, he is the big man of the House, who makes big speeches. He wants to make the people believe everything, but they are too clever. It is all in vain. Next year the Government’s time will be up, and we have to go to the country, but I say emphatically: God save the people if the S.A.P. get into power. They will get the country into a bad state once more. When we took office we had to employ 15,000 people on the railways, we had to put 6,000 people on the land, and assist people in other directions. It is calculated that we had to assist 24,000 people who had no future. Now the Opposition say that the natives must be assisted. They are standing up for the natives. Oh, the dear brother. Why is that being done? Just to get cheap labour. The Opposition have come here to make money and the country must be so administered that they can get cheap labour to increase their overseas capital. They are opposed to the Labour party because that party defends the working class who have for years worked at starvation wages. The position is now changed. The policy of the S.A. party is now equilization. They want to put the natives on a like footing with the Europeans, but they will never succeed, because the people are too wide awake. Our Government has done what no Government has ever yet done. We all know that our people have been impoverished by wars and unfortunate conditions. There are people who cannot make a living. What did the last Government do? In 1923 they voted £750,000 for relief works. Of what use is that? When the work is done the poor man is in a worse position than before. If the S.A. party come into power then every white man will have to go, and natives will be appointed. When we came into office in 1924, there was nothing but natives from Brandfontein to the Kazerne. The hon. member for Cape Town (Central) even had native clerks. I saw them with pens behind their ears. When our Government came into office, and when I first got to Cape Town I went to the Minister and said that all the natives must leave within three months. They are gone to-day. There are only Europeans working there now. Under the previous Government every European tradesman had three natives. They lie down with a long pipe in their mouths, smoking half the day. We have altered all that. Now the Opposition are again pleading for the natives. It is just for his vote. The criticism on the budget made by the Opposition is as insipid and soulless as I have ever heard in my life. I do not deny that there is unemployment to-day, nor grievances nor difficulties, they will always exist. But where there are grievances we do our best to remove them. When people had grievances under the old Government, then they had to look to themselves, and could leave. Now things are different, and all grievances are investigated, and if possible, remedied. I admit that there are groundless grievances, but there are also substantial ones. Is it the fault of the Minister of Railways, or of the general-manager or of the staff? I say no, it is the subordinate people who should deal with the men. They are nearly all Saps, still, and they only do it to make the people discontented. They do injustice to the people whenever they can. If they would only treat them sympathetically there would be no complaints. There were a few of the Saps, in one of the departments who also acted in that wrong way. I went to the Minister; they were transferred, and others put in their place, and the result was that for at least a year there was no complaint. In most cases the blame for the grievances is due to the remaining Saps. They do it with a political object, but I warned a few of them. I know that every man must do his work, and be honest, but there must be no pinpricks. Then there was a point mentioned by the hon. member for Vrededorp (Dr. Visser), viz. that the Chamber of Mines was one of the largest political bodies in South Africa, but they found out it did not pay under this Government to meddle with politics so that they have now come to their senses, and, as a matter of fact, they appreciate what the Government is doing for them. Hon. members opposite think that they will still be supported by those people, but it is too late. The people will not allow themselves to be misled any longer. Their eyes have been opened by experience. Now I want to say a few words about our old people. There are people of 60 years who have been discharged from the service. They cannot get work. I am sorry the Minister of Labour is not here, because I should like to point out that it is his duty, and that of the Government, to give his attention to these people. They will not come under the pensions scheme, because they are not yet 65 years old. They will have to wait another five years, and during that time they cannot work; they surely cannot steal, or die of hunger. I wish the Minister of Labour would give his attention to this, and try in consultation with the Government to elaborate a scheme to do something for them. On the whole, I think the people of South Africa can be satisfied today. Our manufactories, agriculture, trade and industry are prospering. I have just remembered something I want to ask the merchants in the House about, namely, why we find the prices for many articles are cheaper e.g., in Johannesburg than in a harbour like Cape Town. The prices are lower in Johannesburg, but I thought they would be cheaper in a port than in the interior. In the Transvaal the merchants complain that the railage from the harbours to the interior is often more than the freight from abroad to the harbours by ship. Now I ask, how do the merchants make up their prices? Goods are landed in Cape Town, there are no further transport charges. How, then, can the prices be higher here? I think everybody will admit that they get larger profits. This is a great grievance, and I ask hon. members opposite to answer the point and give an explanation. The big merchants, the Chamber of Commerce, can surely give an answer. What is the reason that people here pay more for their goods than in the interior?

All profits.

Yes, the hon. member is presumably the cleverest member in the House; he will possibly be able to explain. I do not want to detain the House too long, but there is another matter I want to discuss. It is the conditions on the mines. The mines to-day are working as well as ever before, and their output was never so large. The output and the profits are increasing from year to year. I want to realise the point mentioned by the hon. member for Vrededorp, namely miners’ phthisis. He explained to the House that the healthiest section of our people go on the mines, and within ten years their health is ruined. What happens then? The man is put out of the mines, and he gets £300 to £400 for his ruined health. That £300 means practically nothing, it is exhausted in a few years. The man possibly goes on to the land and tries farming, but in a drought he loses everything and comes back again to Johannesburg without work, and without an income, and that is the reason of the numerous difficulties existing there. Those people must be assisted. The time has come for us to rectify the objectionable features of that Act, so that the full amount allowed by law is paid in monthly instalments. There are people who look after their money very carefully, and there are others of course who are unfortunate, but they are people who have lost their health on the mines, and steps must be taken to enable them to maintain themselves and their families. I think the Government should enquire how an improvement can be made. People have come to me with complaints, and I have told them that those who are members of the Mine Workers’ Union should meet and suggest amendments to the people’s representative. When we see those people suffering we are, at least I am, prepared to assist them; at any rate the people of South Africa can be satisfied with the four years this Government has been in office. There is no reason for dissatisfaction, and the country ought to realize how much they are indebted to the present Government.

The hon. member for Yeoville (Mr. Duncan), in his speech yesterday, referred to the backward state of South African industries, and one could not but be struck by the candour of a statement like that, seeing it is mostly due to the apathy of the Government of which he was a member, that our industries are in a backward condition. Since this Government came into power and afforded a measure of protection, our industries have steadily improved. The most pleasing feature of the budget speech to me was the statement by the Minister showing how our industries have progressed and also his statement that they are progressing without increasing the cost of living or the cost of production of the primary industries. The success or otherwise of an industrial policy must be gauged by the amount of employment it affords, and judged in this way, it must be agreed that the policy of protection we are pursuing has been very successful. Although it has been in force only three years, we know that the factories are increasing their European staffs by 4,000 a year, and at the present time the Europeans employed in factories amount to no less than 61,000. For a long time we had regarded the mines as the principal channel of employment in the country, but now we find the factories have out stripped them as regards the employment of Europeans, seeing that they now employ 61,000, while the mines only employ 39,000. Fortunately the mines are still going well, but there must come a time when they will diminish, and against that time we must be in a position by increasing our industries to avoid the nuemployment and dislocation which would otherwise occur. The factories, fortunately, afford a better standard of employment than the mines, for the reason that the ratio of Europeans employed is better in the factories than in the mines. The ratio in the factories is 1.8 non-European to 1 European, whereas in the mines it is 9 natives to 1 white man. The modern trend in industry is to make that ratio better, because the tendency is to introduce machinery wherever possible and more intelligence is then called for and, therefore, whites are employed in preference to natives. What I want to see in this country is the same position as has occurred in Australia where industry has replaced the mines without any dislocation. For instance, last year the gold output of Australia had decreased to £3,000,000 worth, whereas manufactures had sprung up to no less than £380,000,000, and agricultural products were £360,000,000. The manufactured products have now surprised everyone by passing the agricultural products by £20,000,000 a year.

What is the result?

The result is quite good They have had a few bad years lately through bad seasons, as we have done, but it is going to come out all right in the long run. If you allow for the difference in population, and if we have the desire to succeed, I see no reason why South Africa should not follow in the footsteps of Australia in the development of its industries. But we must have real protection, not the moderate protection some people talk about, which really means taxing people to no purpose. The tariff we have in South Africa to my mind is, in many instances, merely revenue producing, and what we want is that necessaries which cannot be manufactured in South Africa should come in free, but anything which is natural to the country should be taxed so heavily as to compel its production in South Africa. Our parliamentary visitors to Australia last year were surprised to see names on big factories of well-known English manufacturers whom we in South Africa only know from advertisements. The explanation is that these firms, to retain their trade, were compelled to establish themselves within the tariff wall of Australia, and they brought with them skilled workmen acquainted with the work and, as a consequence, the factories were successful right from the outset. To-day, despite the so-called protective tariff we have, we still find millions of pounds going out of the country to import goods. If we only had a larger output the overhead charges which we could save would bring down the cost considerably, and the workmen would have greater possibilities of increased wages, and the manufacturers greater profits. The boot industry has been spoken about, and we know that it has a protection of 30 per cent. and, with that protection, the industry has progressed very well indeed. For instance, in 1925, the number of boots and shoes manufactured in this country was 2,998,878 pairs. In 1926 it sprang up to 3,332,962, and in 1927, the last year for which we have a record, to 3,600,000 pairs. As the output has gone up the production cost has been reduced, which has enabled the workers to get a substantial increase in their wages; in fact, most of the profits earned in the boot factories particularly have gone in increasing the wages of the workmen, which before were at a deplorably low level. Many white men in the boot factories are now only getting £4 a week, which, I say, is insufficient for a white man to bring his family up on decently in this country. In 1927 1,500,000 pairs of boots and shoes imported were made under conditions for the workers which are not nearly as good as ours, and more especially was this the case in the Eastern portion of Europe. A great number of these boots and shoes cost only 5s. to manufacture. The average factory price of all our importations was only 9s. 11d. per pair, and when we remember that some thousands are of very high grade for our supposed smart set, and which sell at £2 to £4 per pair, quite a lot of the boots must have cost only 5s. a pair. I would like to suggest to hon. members who are very keen on the importation of boots, whether it is any real benefit to the public for this country to allow these cheap trashy boots to come in at all. The hon. member for Yeoville (Mr. Duncan) spoke about the necessity for cheaper boots for the poor, and suggested the duty being reduced by 2½ per cent, and thought if that were done the costs would be brought down. The hon. member is generally well informed, but on this occasion it seems that he is decidedly off the rails. Most of the boots used by the poor are locally manufactured, and the duty does not come into account. Importers long since recognized that they could not compete in the importation of that class of boot, and importation has fallen off entirely. The determining factor in the price is the competition between the local factories, and more important still, the profits which the retailers are prepared to take. Under the present conditions of factory working, machinery is such a very vital factor that with equal conditions of labour and hours, there is no reason why boots cannot be manufactured as cheaply in Port Elizabeth as in Northampton. The English manufacturers have the advantage of a larger output, but our manufacturers have the advantage that they have to pay less for transport, as practically all the raw material is locally produced. Our people should, however, not be compelled to work under the same conditions of pay and working hours as prevail in some other parts of the world. The English factories are much improved as compared with before the war, but labour conditions in some of the Continental factories are still in a state in which I should be sorry to see our factories. If the Minister really desires to reduce the cost of boots, I would like to offer him a suggestion, which I am afraid would be very strongly opposed by the hon. member for Newlands (Mr. Stuttaford) and others on that side of the House. One of the big causes of dearness of living in this country is overtrading. Conditions as regards cost of licences, etc., are all in favour of the large firms, and this applies particularly to the boot industry. We have one large concern—it is like an octopus—with 20 shops in Cape Town and suburbs and 150 throughout the Union, and there is hardly a desirable street corner without a boot shop, and the people who purchase boots and shoes have to pay unnecessarily heavy overhead charges and managerial expenses. I would like to quote the case of one boot shop in Adderley Street which pays £280 rent, and with the ordinary expenses added, the overhead charges altogether amount to £600 per month. I happen to know that the turnover is something like £2,000 a month, and anyone will realize how necessary it must be to charge enormous prices to make the smallest profit on these figures. There are other ways in which the consumer fares badly.

A gentleman who knows the boot trade from A to Z, and on whose word I can depend, told me that in travelling through the country, in one of the country towns he noticed that ladies’ shoes which were manufactured at Port Elizabeth, and which are sold at the factory at 12s. 9d. were marked up to 37s. 9d.; that is a fairly indecent profit. He also said men’s shoes costing £1 1s. at the factory, are very frequently marked up to 45s. in various parts of Cape Town and elsewhere, and these huge profits have to be made owing to the very high overhead charges. It seems absurd to me to quibble about the difference between 27½ and 30 per cent. duty when this sort of thing obtains. The remedy, in my view, if the Government is really in earnest in the matter, is to consider boots as a public necessity, and bring in a law forbidding any trader to charge more than 50 or 60 per cent. gross over the factory price. Everybody knows this sort of thing is going on —that the people are being overcharged, and it is a public scandal. It seems to me that as the matter has been so prominently brought forward, the Government should take some action on these lines to remedy the evil, but I am sure they will get no help from the gentlemen opposite. All our protected industries since the present Government has been in office have done very well indeed, but we cannot continue improving unless we capture more of the import trade, and I consider that this can be done. But when one talks about doing this we have cries that we are going to increase the cost of production of the primary industries. The Minister, I am glad to say, denies that this is the case. The farmers, or rather the newspapers, who claim to speak for them, are continually urging that the farmers interests are being ruined by this protective tariff, and not only is there objection to further protection, but efforts are made to reduce what the industries have already got. The hon. member for Yeoville (Mr. Duncan) said he understood that the boot factories were doing exceedingly well, and could stand a reduction of duty from 30 per cent. to 27½ per cent., but probably he does not know that three boot factories have closed down within the last year. In other cases, no doubt the profits have been good, but they have had to be shared with the workmen. What is going to be done about further development? Free traders will say if our industries cannot carry on with the present protection or a good deal less, they should close down, but if it is suggested that in order to obtain commodities at a slightly lower rate—provided that in that case the importers would allow a large rate—the South African factories should be closed, would anybody outside a lunatic asylum say it would be a benefit to the country to discharge 60,000 factory operatives and pay the ten millions sterling they annually receive in wages to foreigners while our own people walk the streets in search of employment? I think not. On the other hand the sooner we can stop the importation of goods the sooner will gold cease to flow out of the country, and the sooner will be the general prosperity of South Africa. There is an agitation fostered by importers and wealthy oversea concerns which contends that our industries are artificial, and are bolstered up at the expense of farming and mining. But many things which come in duty free are higher in price than they were before a protective tariff was adopted, so protection has nothing to do with the increase in the price of those articles. As to the allegation that industries hamper primary industries, the boot industry has been selected specially for blame, but as far as the farmers are concerned, the protection of this industry does not affect them one iota. The class of boots used by farmers and their families are not now imported, the importers recognize they cannot come down to the price, and they have to be content to leave this class of trade to the local manufacturers. But, assuming for the sake of argument that there is a farmer who would like to buy imported boots, I would put the supposititious case of a man with a family of four children and allow the family 24 pairs of boots a year, which is a generous estimate. The selling price of these boots would be 15s. per pair and the factory price for the lot £12. On that £12 the duty of 30 per cent. would mean that the farmer would have paid £3 12s. in customs for his family’s footwear. Let us assume that the farmer grows mealies and that his annual crop is 1,000 bags. What he has been called upon to pay in duty on his boots would represent less than 1d. per bag on his mealies, but as only one-quarter of his crop would be exported, the great handicap he is supposed to suffer in the world’s maize market because of the duty on boots, would be less than one-fifth of a penny per bag on his entire crop. The supposed handicap is contingent upon his competitors getting their boots duty free. But our greatest competitor in the maize market is the Argentine, which recently doubled the duty on leather goods, the duty now being 50 percent. Boots are about four times as costly in the Argentine as they are here, hence if the duty on boots, as some cranks allege, is going to be the determining factor in the mealie market of the world, South Africa will very soon run the Argentine out of the market. Our wool farmers are generally wealthy people, well able to look after themselves, and will not worry about the few shillings involved. As a set-off for what they pay in taxation, the farmers get protection for any crops they grow— they get a home market for many of their products, including hides, and they enjoy low railway rates and other facilities which it would be absolutely impossible for the Government to give them, but for the presence in the Union of the industrialists.

How much profit does the mealie farmer make?

They don’t do badly, judging by the number of motor cars you see running about. Practically the only other commodity which we export is fruit, which reminds me that the hon. member for Cape Town (Central) (Mr. Jagger) made the absurd statement that fruit farmers were handicapped by a duty of 20 per cent. on fruit wrappers. Recently some unpatriotic people have sent to Sweden to buy fruit wrappers, at the cost of 2s. a thousand, and upon which there is a duty of 20 per cent, amounting to 5d. a thousand. Fruit is packed 25 in a box, so this duty entails a burden of only one-eighth of a penny per box. Fruit growers have a slogan “Eat more fruit,” and complain that the local market is not large enough, yet they want to send to Sweden to buy their wrappers. I do not think such conduct is worthy of the hon. member. With regard to any increase in the costs of mining owing to customs duties, this is a different position, because the mines cannot pass on to the consumer their extra costs. I know that the mines, if they really wished to assist our industries, could do much better than they are doing at the present time. Because large financial interests in the old country are able to pull the string, the mines buy a number of supplies there which they could buy here cheaper if they would give local firms decent orders. For instance, an engineering firm is given a small order, which is executed at a comparatively high price, while large consignments of the same goods are bought from Great Britain or the continent. If they were to place the whole of the order in this country they would come out better than they do at the present time. The worker on the mines does not object to the protective duties, because he rightly regards them as an insurance against unemployment for himself and his family. I have been investigating on my own account, and I must agree with the statement of the Minister that owing to the severe limitations imposed by nature in this country, farming has about reached its limit and we cannot expect much expansion. But for everything the farmer does grow he should realize that if he had no home market he would have to take his chance in a gamble in the world’s market and would get less compensation than he does to-day for his labour, because he would come in competition with cheap labour in other parts, and he would also have to compete with better natural conditions of other countries. While that is the case for the owner-farmer, it is much worse really for the man who has to work for a wage on the farm. His wage would have to be cut down to meet the competition. Farmers would be foolish to object to this protective policy, seeing that it brings about a home market. I have not heard any genuine farmers object. Generally objection is raised by people for political purposes. We were all very pleased to hear the hon. Minister in his memorable speech say that “We could face the future in a spirit of optimism and confidence.” I wish he could pass on to the gentlemen opposite some of his enthusiasm and patriotism. What we are troubled with in this country is the inferiority complex.

Is that the Labour complex?

It is difficult to instil into South Africans that they can gain and retain a foremost place in industry if they have the energy and will to try. The chief reason we cannot do this is the continuous efforts by interested parties to push foreign goods to the detriment of the local article, and the apathy of the average buyer who takes what is given him instead of insisting on getting locally produced goods. There are a number of people who, from blind prejudice, object to taking colonial goods, but it is rather amusing to know that thousands of pounds worth of stock is sold in this country as imported, although it is made locally. If the salesmen were to say that the goods were made locally, then unpatriotic customers would push them aside and say they wanted something better. Obviously we want to avoid the industrial evils of other countries, and in order to maintain wages and hours which are fair and reasonable to our workmen, we must not only have a protective tariff, but we must individually support our own industries. Working conditions in all industries are becoming more favourable to the workmen because wage boards and other determining bodies make employees really preferential share holders in an industry, for if their wages be not sufficient to maintain themselves and their families decently, then they are increased out of any profits which are made. There is, unfortunately, and always has been, a clash of opinion as to what should be the social condition of the workers. We on these benches consider that no industry is of any value to the country unless it will enable the workers in the industry to bring up their families in comfort and decency. Gentlemen opposite think the first consideration in industry is to have cheap labour, so as to compete with the rest of the world. The hon. member for South Peninsula (Sir Drummond Chaplin) voiced this opinion the other day, and I would be rather surprized if all the members on that side go all the way with him, but I am sure some of them do. The hon. member said, “Do not let us go too far with this policy of everybody receiving a comfortable wage; let us consider to some extent whether the industries in which wage determinations are made are worth the artificial support given to them by these awards.” The hon. member and others on that side of the House, have a craze to bring about a cheaper mode of living for other people, but it is fittingly illustrated that cheapness is not all that is required when we consider the cheapness of living in Japan, which is one of our industrial competitors. A Japanese worker gets a wage of about 15s. a week. He can live on 6s. 6d. and save 8s. 6d. for luxuries or put it in the bank. No doubt he considers himself, and the gentlemen opposite would consider him, passing rich, but I am sure this class of living would not be attractive to South Africans or be a class of living they would care to imitate, and they are quite right. But it is the standard of cheapness. To insist on cheap costs and a high standard of living is to essay the impossible. Therefore, while we are anxious to give our workers a comfortable wage—I would like to give them a bit more than that—it is absurd to be continually talking about bringing down costs. If the so-called cheap living is so much to be desired, I should advise hon. members opposite to begin instantly instructing the people how to extract happiness from a rice diet, and I hope I shall be present at the first meeting on the Rand when the hon. member for South Peninsula (Sir Drummond Chaplin) opens the campaign. The Minister referred with pleasure to the fact that we had imported during last year 17,000 motor cars, and that, in addition, 4,728 chassis came in for which we had to build bodies. This is satisfactory, as far as it goes, because when first the preferential duty was given in this matter in 1925, there were only 22 motor chassis introduced, while in 1926 the number sprang up to 2,177, while last year it was 4,728. But I contend that if this preference had been larger instead of being a petty five per cent., this ratio of increase would have been much higher. I would have liked the Government to take its courage into its hands and follow the example of Australia, and put on a duty of 40 or 50 per cent. on motor bodies. In Australia one firm alone in six years increased its annual business from 4,000 motor bodies to 35,000, and its wage bill from £75,000 to £750,000. I admit, of course, that the population in Australia is larger than ours, but we could do much better than we are doing. In this country we have one company which is anxious to embark upon this class of business, the General Motors, Limited. The company has a motto, “Growing with and helping South Africa to grow,” but for the life of me I cannot see that our Government is giving them much encouragement to grow. To my mind the company is not getting the consideration it is entitled as against its competitors, who are sharing our markets, but making no effort to assist in our industrial life. The General Motors Company is employing 650 Europeans, with an average wage of £20 a month, and employ more whites than any other firm or company in the Union. I would appeal to the Minister that in a case like this it is really paltry to give them a mere five per cent. preference. I would appeal to the Minister, not only for to-day, because we want this to become a far bigger business. As a matter of fact, to-day the company is merely assembling cars. What we want to do is to make the business so large that they can afford to manufacture as they do in Australia. In Australia they manufacture the bodies from Australian goods right from the start.

But they don’t only assemble here. They do as much work here as they possibly can do.

I have seen what they do. I know they bring in a whole lot of material from America which could be produced in this country, and they do a lot of work in America which could also be done here. In Australia the whole motor car body is produced from Australian products, steel, timber and leather. We are hoping in a short time to have an output of steel. Does the Minister not desire that when the time comes our steel should be used for the manufacture of motor bodies? But this would not be economically possible unless the volume of trade increases considerably. I say we should do everything we possibly can to increase that trade. No doubt the Minister will say that motoring is no longer a luxury, and, therefore, it would be unfair to increase the cost, but I would like to put a suggestion before him, which I think is worthy of consideration. I would suggest that on all motor bodies coming into this country he should put on an extra tax of at least £10, which on last year’s importation would realize £170,000. With this £170,000, if he wants to study the motoring fraternity, he can give that back to them as a rebate on petrol imported, amounting to over 1d. a gallon. The whole scheme would have this effect, that it would encourage an industry which is a very valuable one to us, and it would also give relief to 100,000 motor users throughout the country. I very much disagree with the Minister’s policy with regard to the remission of taxation. The customs duties show an excess of a round million, and yet when the Minister comes to hand back some of this, he hands back only half in remission of duties, and I am afraid very little of that will reach the people for whom it is intended, for even with the best intention in the world it is impossible to hand out a reduction of five per cent. to purchasers of cheap articles; with regard to income tax, revenue is only £100,000 over what was anticipated, but the Minister is giving 68,000 income tax payers £750,000 back. So it almost seems as if the Minister had misappropriated the savings of people who have contributed to the customs duties. The remission of twopence a pound on tea is a very good example of what should be done to reduce taxation on the necessaries of life, and to see that the consumer is getting the benefit of it. I hope the Minister will keep in view the idea of reducing the customs tariff, and particularly on the necessaries of life, which is very essential to reduce the cost of living for many poor people who are not affected by the income tax reductions.

I think it should be unnecessary to talk about protection now in this House, since it is the policy of the whole country. I would not attempt to do so had it not been for the speech of the hon. member for Cape Town (Central) (Mr. Jagger), who has treated us to his usual free trade attack. I do want to impress upon the House, or rather the country, the fact that the hon. member speaks only for himself on this point. It is well known in the House, and I hope throughout the country, that all the three parties, I believe, in politics, stand for protection. It is a principle of their party platform, and therefore, it should not be necessary for anyone to get up and defend a policy which is already a policy of every party. So, in speaking as he has done, the hon. member was in no way speaking for his party, but on the contrary, in direct opposition to its policy. What I am particularly concerned with at the moment is that the hon. member went out of his way to attack an in dustry with which I am connected, and I think he attacked it quite unjustly and unfairly. I think he will be prepared to admit that he did so. I hope that afterwards he will have the grace to admit that his facts are all wrong. The hon. member made a statement concerning the terms accorded by the sugar industry to jam manufacturers which he made last year in almost identical terms, and which I then repudiated on behalf of the industry itself, and which repudiation the Minister subsequently confirmed. And, indeed, if it were true, if the hon. member’s statement were true regarding the refusal of the industry to grant a full rebate of the amount of the duty to jam manufacturers on all sugar contained in jam exported from the Union, then the industry is guilty of a gross violation of the agreement entered into between the Government and the industry.

How is it that that agreement has not been published? That is the point.

The whole point is the truth or otherwise of the hon. member’s statement. The hon. member for Cape Town (Central) (Mr. Jagger) stated that the fruit industry was growing by leaps and bounds, and was a very valuable industry to the country, a statement with which we all agree. The policy of the sugar industry is to assist in every way possible all those industries which depend on sugar for their production. The hon. member says the Union exported £800,000 of fresh fruit last year and a miserable £6,896 of jam, and went on to tell the House that the reason why the jam industry was exporting such a miserable quantity was due to the difficulties of getting sugar at a reasonable price. Is that a correct statement?

That is correct

He says the jam industry had to pay 20s. 6d. per 100 lbs. for sugar, while the people in Europe paid only 15s. 6d.; the difference between the two prices, he said, is the whole secret of the trouble the jam industry has experienced; is that correct?

In a measure.

What does the House understand from that? The agreement is that the jam manufacturers shall, as far as jam for export is concerned, purchase their sugar at world’s prices—what it would cost them to land sugar at if there was no duty. If the hon. gentleman's statement is true, he convicts the sugar industry of a breach of the agreement entered into with the Government.

The world does not know of it; publish it.

We are now dealing with facts, and not with theories. Here is an hon. member who comes to this House and makes a solemn statement of fact which he does not take the trouble to verify.

I saw the officials. The Commissioner of Customs knew nothing of this agreement; the Auditor-General knew nothing of it; the agreement, as a matter of fact, is known to very few people in South Africa. I certainly did not know of it, although I made inquiries about it. Now I find that, although an agreement has been made, it has never been published. How can hon. members know? Did the Minister know?

I said in the House, we have agreed with the sugar people that they would supply the jam people—

We cannot have a discussion between the Minister and the hon. member.

I do not wish to misrepresent things at all. I took pains to find out. The only thing I knew was they charged 20s. 6d. to the manufacturer, instead of 24s. 6d. charged to the merchant. That I stated fully. I did not know that this rebate was given to jam for export.

I put it to the House whether a statement of mine in the House, and the subsequent statement of the Minister in replying on the Budget, was not sufficient publication? I then read a telegram received from the sugar industry giving full particulars on that point. The Minister corroborated me, and the fact is that jam exported by the jam manufacturer has always received a rebate. This is not a question of opinion, it is a question of fact. Can the hon. member quote a single instance in which a manufacturer has exported jam from the Union without receiving the rebate? Here we have an admission just made that the facts as I have stated them may be the case, and, therefore, by his own showing, the hon. member misled the House.

I had no intention of trying to mislead the House; I gave all the facts as I knew them. The fact that a rebate of 3s. 6d. was given on sugar used in the manufacture of jam for export was not known to me, and was not known to the officials of the Government.

I do not think the hon. member accused the hon. member of Cape Town (Central) (Mr. Jagger) of deliberately trying to mislead the House. If he did so, it would be out of order.

I would be the last person on earth to accuse the hon. member of deliberately misleading the House. I have too much regard for him. But I want the House to judge the facts. I have “Hansard” here, which contains a full record of my statement last year.

I have read it.

The hon. member has read it and knows what the Minister has said, and yet he comes forward with the same statement as last year. I say on the face of it the hon. member did not take the trouble he ought to have taken to verify the facts. I want now to re-state them afresh. I have received the following telegram from the representative of the sugar industry at Durban—

From this telegram we see that the industry rebates the whole of the duty on sugar used in jam manufactured for export. That is, it sells such sugar at 7s. less per 100 lbs. than it is sold to the merchant, the 7s. being the amount enjoyed by the duty. The value of the sugar industry to South Africa can be judged by the fact that we are sending jam to New Zealand. New Zealand grows fruit, but it does not make jams for export solely because it has no sugar industry. And no country which does not refine sugar can build up an export jam industry. Therefore, the South African sugar industry is directly assisting the South African jam and cognate industries to build up an export trade. I deprecate these unwarranted attacks. Nothing is more likely to retard our industrial progress than for one section of producers to get wrong ideas about another section. Jam is manufactured from refined sugar and refined sugar only. The sugar exported from South Africa is raw sugar, and is of no use for jam manufacture. It costs much less to produce, and has to be refined before it can be consumed. The jam industry has an opportunity of building up an export trade, an opportunity which it would not have but for the existence of the South African sugar industry, which is doing its utmost to help the jam manufacturers in every way. Good industrial relationships will not be created if we have unjust suspicions as to the endeavours of one industry to benefit at the expense of another industry Of course, I know that sugar annoys the hon. member for Cape Town (Central) (Mr. Jagger). It has done so for many years past.

You are wrong, absolutely.

The House will remember some questions asked by the hon. member a few weeks ago regarding an alleged secret rebate granted to certain Cape Town merchants by the industry. I want to explain what happened. About February last the Cuban sugar crop, which had been limited by special residential decree, was sold to the United States with the exception of some 150,000 tons to meet their own consumption, and some two hundred thousand tons standing over to be put into any country decided upon. The Cuban Crop Disposal Board decided to send a certain number of tons of surplus sugar to New York for refining for export to Europe which could be safely done without affecting the market. They then looked round and saw various outlying spots where the landing of a few thousand tons would not affect the world sugar market, and said: “Let us land a few thousands of tons in some of these spots.” South Africa appeared a very likely spot for landing a certain number of tons, and they got in touch through New York with the various merchants in Cape Town to buy this sugar. The sugar was offered at prices much below the world’s quoted prices. The industry found itself threatened with a state of unfair trade, and they were confronted with a position which was not a reflection of the world’s price, and which could only be of a temporary nature, and took measures to protect the interests of the producer, by saying: “Very well, if you purchase American sugar, we will meet your competition by selling our sugar at a lower price to those who have stood by the industry. You can have your American sugar, but we will sell our sugar at a reduced price to people who will not buy American sugar.” Immediately the hon. member for Cape Town (Central) (Mr. Jagger) brought the matter up in the House. Here, he said, was an interference with the legitimate rights of trade. In the Liquor Bill the other day we had under discussion a clause in regard to the restraint of trade which sets out to prevent liquor merchants from selling liquor to retailers under any method of discrimination. This was said to prevent any restraint of trade. What happened? The merchants in the House were immediately on their hind-legs, and said: “It is a sacred right of every merchant in the country to place what restrictions he likes on the sale of his commodities. It is the practice of commerce to charge different rates to different people.” This is fish for one and flesh for another.

Not at all.

What is perfectly wrong for the sugar industry is perfectly right for the merchants of Cape Town. Commerce may differentiate as much as it likes, but the primary producers are guilty of an offence if they do so. Let me tell the House the sequel of this transaction. They imported American sugar, but before they imported it they made sure there would be no risks by getting it insured, and they got each pocket of sugar insured at 2s. 6d. When the sugar arrived here it was found to be in such a state that they all claimed their insurance, and the insurance companies have had to pay out 2s. 6d. for every pocket of this sugar which they bought at a reduced price from America. I want to ask if the consumer is going to get the benefit of that—whether the sugar which has cost 12s. is going to be sold at 13s. That is the beginning and end of the episode, and it does not reflect credit, I think, on the merchants of Cape Town. Let me take the other point. The hon. member says the sugar industry is going to export one-third of its crop this year, and send 100,000 tons overseas. We are dumping sugar! Well, supposing we were, supposing that is true, and that we are dumping sugar, is it to the disadvantage of South Africa that we would send 100,000 tons of sugar worth £20, or whatever it may be a ton, and bring £2,000,000 into this country? Is that a disadvantage to this country?

It is a disadvantage if you charge extra to your consumers in South Africa to cover your losses in Europe.

I cannot follow the reasoning of the hon. gentleman, who is an economist, when he insists that two millions worth of exports can be of disadvantage to anybody in South Africa. But I will now deal with his other point, that the consumers of South Africa are bled to cover our losses in Europe. I have tried to point out to the House on previous occasions that the sugar industry all the world over is one which has always been subject to political control since the days of Napoleon. The fact is that there is no sugar refinery in the world which is not producing its sugar behind a high tariff wall.

When business was suspended I was dealing with the question of sugar as an industry of this Union, and also as an economic question which is well worthy of anybody’s study, because the sugar position of the world and sugar policies in general which all Governments in the world have adopted are very good illustrations of the differences between free trade and protectionist theories and practice. I do not think that any one interested in economics can neglect the study of sugar. Now, sugar has for over 100 years been a very isolated phenomenon in the whole economic world. A hundred years ago Napoleon placed an embargo upon its importation into Europe and closed down the West Indian sugar industry, and, as a result of that, established the protected beet-sugar industry in Europe. Since then sugar has been the battledore and shuttlecock among Governments all over the world. It has been the cause of the downfall of governments and has formed the subject of many international treaties. From this angle of approach, I want to answer one or two of the points which have been brought up in the course of this discussion, purely as an economic problem. The hon. member for Cape Town (Central) told us that sugar could be bought in Europe at 15s. 6d. per 100 pounds, whilst here in South Africa it costs the manufacturer 20s. 6d., that is with the duty added, and the impression created is that the South African consumer is placed at a disadvantage because of the existence of our sugar industry. Where does this sugar come from at 15s. 6d.—what is it? Is it a commodity which circulates freely in all the markets of the world, or is it a dumped article which is in fact the surplus production of the country exporting it? That is the problem which every one ought to consider. The Board of Trade and Industries in 1926 went into the position of the sugar industry in the Union. In the course of its study of the position the Board had to study the production of sugar in other countries, and discovered that the duties in the country of origin on this particular sugar, which it is asked should be imported into this country, were, in the case of the Netherlands, especially, 19s. 1d. per hundredweight, a higher price indeed than the price at which it is sought to be brought into this country. In Czecho Slovakia the duty is 11s. per hundredweight, and in Belgium it is 16s. 3d. Compare those figures with the 7s. duty imposed in the Union. So here you have all the sugar-producing countries producing sugar behind high tariff walls with only so much coming into the world’s market as spills over that tariff wall. In England they are establishing a beet-sugar industry, and they are paying the producers, I think, £20 a ton as a bonus, in addition to the duty which sugar enjoys in that country. So that the free trade argument applied to sugar is fallacious. All sugar is dumped from whatever country it comes. If that is so, what becomes of the argument that we dump sugar on the world’s market, since all sugar all over the world is dumped in the same way? I would finally ask the House to consider what this additional protection has done for South Africa as far as the sugar industry is concerned? Prior to the Government putting on this duty, a couple of years ago, the Sugar industry in South Africa was in a very bad way. There were quarrels between the various sections of the industry; they had two small and inefficient refineries; there was no cohesion in the industry itself, and production in field and factory was in a fairly low stage of efficiency. As the result of the recommendation of the Board of Trade, the Government stepped in and insisted upon a different method of payment for cane, instead upon a certain standard of efficiency in the mill, and upon the establishment of central refineries and generally brought about a concentration in production which has had the effect of increasing the efficiency of the industry. In exchange for this efficiency, the Government increased the duty without any expense to the consumer. The free trader says that is impossible, that if there is increased customs duty, there must be an increased price to the consumer, but the fact is this; The price fixed to the consumer when the agreement was made was the price actually existing in the country at that time, before the duty was imposed, so the price of refined sugar was fixed at 3¾d. over the counter, and mill white sugar 3½d. over the counter. In consequence the consumer has got a much better sugar at precisely the same price. The industry on the other hand, has got into a better organized condition, with profit to itself, and the only difference made is in the lowered cost of distribution, which is very much less. Here we come to a problem of vital importance to the consumer, which our free traders neglect, that is the problem of distribution. Let us take, for instance, this question of boots, so ventilated during the debate, as an illustration. We have heard the criticism that the Government refused to take 2½d. off the duty on boots, as was provided when the duty was just imposed, and we are told that the result of refusing to take off this 2½ per cent. is to keep up the price of boots to the consumer. What are the real facts of this? The facts, as I understand them, are these: The average cost of boots and shoes produced by the boot and shoe industry, is 11s. 0½d. at the factory. The average cost at which they are sold over the counter to the consumer is probably somewhere in the region of £1. The 2½ per cent. amounts to something between 2d. and 3d. per pair. Does the free trader ever tackle the question of how we are going to bring down the cost of distribution? Why is all the emphasis laid upon the productive cost and nothing said about the cost of distribution? You have absolutely no check one way or the other upon your cost of distribution, and they can put it up to 120 per cent. or 130 per cent. above production costs, or bring it down without any let or hindrance, and no Government policy in this country or any country has put that necessary check upon the cost of distribution. Yet, the fraction of rise in the customs tariff is regarded as a scandalous exaction upon the consumers by the producers, while the distributors can raise or lower their cost without notice. Here we are faced with this conundrum. The old theory that the cost of distribution went down with greater production has been found to be utterly fallacious. The more distributors you have, the higher becomes the cost of distribution, for this reason: If you have 50 people engaged in distribution, all demanding a civilized standard of living, and a certain remuneration for their work, and if that 50 is increased to 100 without any increase in the volume of goods distributed, that 100 will continue to demand the same rate of remuneration and the cost of distribution goes up. How are you going to tackle this great question of the costs of distribution, which in this country, I believe, are extraordinarily excessive? We are getting immigration of a class who engage very largely in distribution, and we are not getting a corresponding increase in production. I commend to the consideration of the House the devising of some method of achieving limitation of the costs of distribution, upon which at the moment we have not the slightest check, instead of placing all the emphasis upon the producer, who is creating all the purchasing power of the country. I want to come to the other phase of this question, which is not concerned with either boots or sugar, and that is the Minister’s statement in his budget speech that the primary industries of this country, as at present constituted, do not afford a civilized living for the whole of our white population. Is that true or is it not true? If it is true, it is the biggest economic factor in our existence. If it is true, then what becomes of the argument of free trade? If it is impossible for the primary industries to support the whole of the population, then what are we going to do with the surplus population? Obviously we can’t let them starve. Is it not our duty, is it not the patriotic thing, to devise means for employing this surplus population and so working the primary production in with secondary production? Apart from whether one is a protectionist or a free trader, the fact is this: The primary producers of this country have to carry the industrialists. It is the exchange of primary products for secondary products which allows the whole nation to exist; that is to say, if there is a burden at all to be borne, that must be borne by the primary producers in the general national interests of the country.

Is not that rather rough on the primary producers?

I am going to argue that. If the Minister’s statement is correct, and there, is not sufficient wealth produced by our primary industries to support the whole population, what are you going to do?

Improve your methods.

Then the statement of the Minister is not true?

I would not say that; he said that the primary producers could not absorb all that population.

Does the hon. member believe that we can maintain the whole of our population on our primary production? If the hon. member believes that, it is useless to argue with him; it is not borne out by a tittle of evidence; it is all the other way. I take that as my thesis. This country is far too poor by nature to support a large population by primary production. From a national point of view then, the primary producers must shoulder the burden of the secondary industries. But there should be some corresponding relief to the primary producers if they have to bear that burden. Obviously, if they say that they are perfectly prepared to bear their share of the burdens of protection, if there are any, they have a right to say to the Government, “We shall be considered in all the policies which shall be adopted by the Government.” You should not, in order to bolster up the secondary industries, adopt policies which result in limiting one production. You should not adopt inimical policies, devised to assist secondary workers, but which seriously prejudice primary production. What are the inimical tendencies which tend to give a better return to the industrial population than to the primary producers? Take them one by one. Obviously the production of primary wealth by the mines can be increased. If they can produce ten millions more in the gold mines, which will circulate throughout the whole country and provide markets for the products of our industries and products of our farms, everybody benefits. Any inimical tendency in our legislation with the idea of benefiting secondary industry which limits the production of our gold in any way is to be deplored from that point of view. In this respect we find ourselves up against the white labour policy adopted by the Labour Party on the mines. Here we have an industry which is crying, and has been for many years, for more natives in order to produce more wealth, but additional natives are refused because their admission runs counter to the policy of the Labour Party. We have the prohibition of Portuguese or alien natives for our farms, and the production of primary wealth there is very largely hindered or retarded because of the refusal of a free importation of Portuguese natives—their coming freely over the border. We have a third factor in our white labour policy on our railways, which results in excessive railway rates with their consequent effect upon primary production. Our friends argue that we have 15,000 white men there at 5s. a day, and that they are better employed than where they were before, but obviously they managed to live before they went on the railways. The assumption is that they suddenly sprang out of the air, but as a matter of fact, they did exist before, and produced some form of primary wealth; to-day they are engaged in service, and we have far too much service in the country—not serving the best purpose for the creation of wealth. We have also an inimical tendency in our industrial legislation, particularly that which places a bar on production—such as the Wages Act and certain harassing legislation interfering with full production. The effect of all this legislation upon primary production can be judged from an illustration from Australia. I have here one of the latest economic books on the question, which gives this information. In 1901, 44.5 per cent. of the total population of Australia was engaged in industrial production, while 55.5 per cent. was engaged in primary production, that is, farming and mines. In 1911, the ratio had changed to this extent; the industrial population amounted to 48.3 per cent. and the primary producers to 51.7 per cent. In 1921, there is a further accentuation of this, the industrial population being 54.7 per cent. and the primary 45.3. That is the cause of all the trouble in Australia to-day. The centre of gravity has shifted from primary to manufacturing production, with the consequence that the primary wealth is not being produced in sufficient quantity in exchange for manufactured products. I want to deal with another phase of this; in 1904-'08 the volume of production of those engaged in agriculture was 60, and in manufactures, 91; in 1909-’13, it was 100 in agriculture and 100 in manufacture, or they were equalized; in 1915-’16, 1919-’20, the productive efficiency of agriculture had gone up to 109 and the manufactures had gone down to 85. These figures show what is going on—one constant migration from the country districts to the towns with a corresponding decrease in the productive efficiency in the industries of the towns and an increase of that in the primary industries in the country. Improved methods “have in primary production undoubtedly, been adopted in Australia. The productive efficiency of the individual working on the land there is higher than it was some years ago, but on the other hand, that of the individuals in the towns is less, and yet they are better paid in the industries of the towns than of those of the countryside. The secondary workers in Australia, as their figures show, are getting a much greater share of the national dividend than they are entitled to. That process is going on here. There is no doubt that all over the world the industrial workers have the primary producers by the throat, and in every country that is happening. The secondary workers are organized into their trade unions. They have their wage boards, conciliation boards, minimum wages Acts, etc., but the primary producers having no organization and no cohesion are consequently feeling the pinch all round. While, as a strong protectionist, I feel that the primary producers must be asked to bear the burden of protection in the interest of maintaining white civilization in this country, I feel we should be very careful not to adopt any inimical tendency which might have a reflex action on the primary producers. That, however, is what is happening now. The Government should carefully consider the balance between the manufacturing and the primary industries. The other function of the Government to which I wish to refer is the question of markets, for if we can increase the demand for our primary products, either here or overseas, the country will be very much wealthier. The local market which can be created here for our manufacturers’ products will be created very largely by those markets which we obtain for" our primary products overseas. We have two places only to look to—the hinterland, where we can sell our manufactured products—

No, you can’t, I have tried it.

That argument was used in the eastern states of America 50 years ago, and if the hon. member had any vision of that great potential north and realized that 40 years ago Lobengula was knocking in skulls with a knobkerrie at Bulawayo, and all to the north was darkest Africa, and that that country is now producing millions, he would not be so despondent. The other market I look to is the overseas market. Here I speak as an imperialist who looks to the economic welfare of South Africa, and thinks that can best be served by imperialism and not by a little Afrikanderism. I do not think we grasp the opportunities we should. We have at our doors the finest markets in the world. We have every kind of encouragement extended to us. We have got what foreign nations would be only too glad to have—an empire trading board which is giving us free advertisements and educating the people of Great Britain to the purchase of our goods; indeed, efforts are even being made in the schools of Great Britain to create the will to buy Empire goods. Unfortunately, we very largely turn our backs on those opportunities. We appear to despise them. I think it is a poor policy to put any prejudice and any high political ideals in the way of selling the produce of this country. We must have reciprocity in preference in order to attain to the fullest extent the markets which are ours. I will give a concrete example. South African sugar has a preference in the British markets of £4 10s. a ton. There is a very strong movement to try to get empire sugar into Great Britain free, and it would then have a preference of something like £9 or £10 a ton. England can take 1,000,000 tons of sugar a year. If we put more suger-bearing land under cultivation, land which it is useless at present to cultivate, we should be exporting another 500,000 tons of sugar to Great Britain which would bring us in £10,000,000 a year. That in turn would circulate throughout South Africa, for the purchase of the products of other farmers, and would give a fillip to our manufacturing industries. But observe the anomaly. Although we obtain a preference of £4 10s. a ton on our sugar sold in Great Britain, we give no preference whatever to British machinery which manufactures that sugar.

We give it on other articles—the balance is in favour of South Africa.

That seems hardly credible in face of the fact that we export 100,000 tons of sugar on which we receive a preference of nearly £500,000, so I do not see how the preference is reciprocal.

We made it up by taking off some of the British preference last year.

We are trying to build up a great fruit industry, and our chief fruit market is Great Britain. That fruit is purchased by the working men in all the towns of Great Britain. What kind of a psychology are we building up amongst the purchasers of our fruit when we proclaim the fact that we refuse to purchase the goods they have made? We are losing all sense of proportion in these things. There is a very uneasy feeling abroad that the Government has been adopting policies diametrically opposed to reciprocity. We have had very strong rumours that the Government has gone out of its way to purchase in other countries of set purpose. I do not know whether there is any truth in those rumours.

Not the slightest truth.

We would like a frank statement as to the Government’s economic policy. We ask how it came about that the Minister of Railways visited Germany last year and that an order for German locomotives subsequently followed. The Minister said that the visit was a purely private one, so the whole issue was burked. I put this question to the Minister—what special instructions were issued to the High Commissioner relative to the purchase of railway material in Germany? The Minister replied, “none.” Many people wondered if the question had been worded in a different way whether it might have drawn a very illuminating answer. A large section of people feel there is something that is quite wrong about this, and that the Government should make the fullest disclosures and should take the country into its confidence in regard to its economic policy within the empire. It seems to me to come very ill from us after having solemnly declared in this House that we intend to work in co-operation to further the principle of empire, of the commonwealth of free nations, that we go out of our way to do violence to that declaration. Personally, I do not want to, impute wrong motives to the Government in any way, but I am giving expression to what is being talked about elsewhere and openly stated, and I think the Government will be well advised, and it would do them no harm, to make a frank declaration.

The House has on previous occasions listened to very interesting budget debates, because whoever happened to be in Opposition took the opportunity of making constructive criticism, and of pointing out to the Government where it had done wrong. But up to the present this debate has been particularly dry, and we can only conclude that the Opposition have not much criticism to offer. I think the country was longing for this budget, as a skirmish before the general election, and I think the supporters of the South African party will actually be much disappointed at the debate in this House in view of the general election. The Opposition could bring forward nothing to convince the public that the present Government no longer deserved its confidence. On the contrary, I think the supporters of the Nationalist party will more than ever get the confidence of the electors when they see how weak the criticism has been. The hon. member for Cape Town (Central) (Mr. Jagger) led the offensive on the budget, and one might have expected that the whole Opposition would follow him, but every member of the Opposition practically contradicted him, and we have the strongest example in the hon. member for Zululand (Mr. Nicholls) who emphasized that the hon. member for Cape Town (Central) was not supported by other members on that side. It is really difficult to criticise the Government, and to show where it has been negligent. It has done its best for the country, and the position is better than ever before, notwithstanding the great drought which has tried a part of the country. Without that drought South Africa would have been in such a flourishing condition as never before. That is the result of the sound policy of the Government in connection with the most important factors of the economic system, with the mines, factories and agriculture. In connection with these factors I want to say a few words. In the mines there is a tremendous increase, notwithstanding what the Opposition said at the general election, namely, that the mining industry would retrogress. According to them the whole industry would tumble to pieces under this Government, but we find it is still flourishing. I want to express a thought which in this connection has not yet been heard. We have to do with the various links or factors of the economic system, and we must take care that these links are strengthened in accordance with the requirements of the people. In developing we must bear in mind the people’s requirements. The mining industry to-day is one of the chief links, and we must take care that that link is not emphasized too much, and developed too quickly, because it is a disappearing industry. By too quick development we run the risk of that link collapsing, and thereby the whole economic structure will be damaged or tumble to pieces. Although, therefore, we are favourably disposed towards the mines, the development must not be too fast, but we must reserve them as an asset for the future, and not exploit all the minerals in a few generations. The “Star” of Johannesburg, in a recent article, preached the opposite doctrine. Probably owing to lack of other criticism on the budget, it only said that the mining industry was not sufficiently developed by this Government. I think that this Government is doing enough, and I want to warn it not to be too hasty in developing the mineral wealth, but rather to see that this link in the economic system is so developed that it will continue of value for generations, and not disappear before the other factor, manufacturies, has been further developed. The factories are being developed by the Government on sensible lines. To-day we already see great development as the result of that policy, and it is approved by the whole country, in spite of the view of the hon. member for Cape Town (Central) and some other individuals, and I hope the Government will take further steps in developing factories. According as we develop them our people in South Africa will get work. The hon. member for Cape Town (Central) said that the agricultural industry was in the position to provide work for the whole white population of the country. Such a system is unsound and unpractical. No country in the world is exclusively agricultural, except young countries before they are developed. As soon as the population of a country increases, the agricultural population, in comparison with the industrial population, constantly becomes smaller, and it is unthinkable that a country of any importance will give work in agriculture to everybody. I want to refer the hon. member to America and other countries, where the agricultural population is comparatively small. If we want to make South Africa a prosperous country where many people will be able to find work, we shall have to increase agricultural earnings, but also develop industries, and this Government is doing much in this direction and having great success. We then come to agriculture, the backbone of the country. Notwithstanding all that has been done in this connection, we still find the industry has not yet been developed as much as it might have been. When we compare how many persons are employed in the three industries in South Africa then we appreciate the importance of the three industries in relation to supplying work to the people. I have the figures here as they appear in our industrial statements. On the mines there are at present about 305,000 employed, but only 31,900 Europeans; in the industries there are 182,000 persons with 66,000 Europeans, and in agriculture there are 689,000 persons with 160,000 Europeans. Agriculture, therefore, provides most work for the people. We also see that in agriculture one out of every four persons is white, while on the mines there is only one white person for every ten. The hon. member for Zululand has already pointed out that we cannot expect that position to remain always, that most people will find work in agriculture. We shall have to supply other avenues of employment. In Australia where the agricultural population was also once larger than the industrial population, the position is reversed to-day, and we find a large mining population, but especially a very large number of people who find work in factories. There are 66,000 people working on mines, 480,000 in agriculture (less than in our country), and in factories 440,000. Although we find that including all other industries a total number of 725,000 people are working in industries.

What do the farmers think of it?

In Australia there is an industrial population of 725,000 and an agricultural of only 480,000. The point is that there has been a revolution, and where previously the agricultural population was the greater, now it is the industrial. In answer to the hon. member for Cape Town (Central), I want to say the Australian farmers say that by developing their industries properly they get better prices for their agricultural products. We must make provision for the sons and daughters of South Africa, and it is impossible to develop into a big people if we are only dependent on agriculture, and we must see that the development of the three industries is in accordance with the requirements of the people. When I come in detail to agriculture I want to point out that although the Government has done much to develop it, we still find the phenomenon in South Africa that the agricultural population is decreasing and drifting down into the towns. In 1921 the countryside population was 168,000, and on the 1st August, 1925, it was 160,000, or a reduction of 8,000 in four years. This proves that many farmers can no longer make a living on the countryside. This retrogression took place under the last Government. We have no more recent figures, but they will doubtless be more favourable. Yet we find that it is necessary to look for work for our people in other directions, as, however, the phenomenon already exists we must make the link as strong as possible. Therefore, I hope the Government will further strongly support agricultural development. I do not exactly want to make political capital out of the fact that the countryside population decreased under the previous Government, and that their agricultural policy was weak, because that cannot be contradicted, but I want to assume that the circumstances of the country make farming particularly insecure. I just want to say that there are many people who are under the mistaken impression that South Africa is an especially rich agricultural country. They do not realize how difficult circumstances are, but I just want to point out that because our agriculture is not rich, we must apply the best scientific, methods; only then will the countryside be able to carry a large population. The cause must, I think, be especially sought in the fact that South Africa is repeatedly subject to times of great drought. I think that is one of the causes of retrogression by the agricultural population. Therefore, I hope the Government will enquire whether some scientific system can be found to enable farmers who have suffered through drought to continue their farming again. I know the Government is doing much, and is not neglecting the point, but the droughts which are in reality national calamities must be tackled at the roots, and we must find a system, not only to fight droughts, but to put people on their feet again in order to become productive farmers. I am not exactly in a position to suggest a system, but I hope the Agricultural Department will give increasing attention to the great plague, the drought, and will also especially take measures to help farmers after droughts. I want to mention one thing, namely, agricultural credits. We have already supplied easy facilities by means of Land Bank loans, but the work of the Land Bank can be extended. Farmers can only borrow up to £2,000. Why not more? The Land Bank loans have been a great success, but from the nature of things many farmers in South Africa often require larger loans, and I prefer their going to the Land Bank than to the commercial banks. Then our farmers must be assisted so as to be able to buy stock after droughts. This is possible under the Drought Emergency Loan Act, but that is an Act for definite cases. We ought to make provision for any farmer when necessary to be able to buy stock with the help of loans from the Land Bank, not only in special times. Otherwise with regard to the Karroo and other-sheep areas we shall have the same position as in Australia, and whole sheep areas will get into the hands of a few large sheep buyers or companies. In the interior of Australia there is not a large number of sheep farmers, but a few who are tremendously rich and own from 100,000 to 200,000 head of stock. After every drought a large number of stock farms are on the market and the rich farmers or companies can buy them up. Big capital gets large areas into its hands, and possibly that is one of the causes of the countryside population being reduced in a few years by 8,000. Another cause is the fencing of sheep farms. Less labour is required in consequence. I want to appeal to the Government to attend more in future to agriculture as opposed to stock breeding. I think that in South Africa stock breeding has already been so developed that the stock farmers can stand on their own feet. I do not recommend the Government to reduce the facilities for experiments for stock farmers, but I mean that, where, in the past, great expenditure has been incurred in the development of stock breeding, and the farmers have been assisted, more money should in future be spent on agriculture. The grain, maize, tobacco and cotton farmers need more help, because they are still a long way behind the stock farmers, and offer an opportunity of existence to a large population on the countryside. In other parts of the world we find also that most people do not find work in stock farming, but in agriculture. I am particularly thinking of grain farmers. Much has been spent in the past on sending students to Australia to study sheep breeding and wool. Excellent work has been done, our wool is equal to that of Australia, and we have experts here who are not inferior to those of Australia. The same thing can be done in connection with grain farming, and if we sent some of our best students to Canada or Australia to learn new methods to be applied here, then we shall find that grain farming will go ahead tremendously. A great success has been made of grain farming-in Australia, and in South Africa there is room for great development at the coast and in the Transvaal. The students will be able to advise, and the Government will be able to hold practical demonstrations, and grain-growing will be very much developed. And now, in conclusion, I come to something which requires the special attention and help of the Government, and that is the tobacco industry. We are, in this connection, in the unfortunate position of having large over-production. We have built up the industry in the past and people have organized, and now we have an insufficient market. The Union consumes only about 16,000,000 lbs. a year, but our production is much greater now. In consequence we have to look overseas and to take steps to find other markets. We are thinking particularly of the English market which we consider the best, but we must remember that when a person sends a product to a market for the first time it is very difficult to get a footing. The market must be built up gradually and, as the farmers are well organized, I hope the Government will help them to find a sale and create new markets. I especially hope the Government will take care that the co-operative societies do not fail. The farmers are organized and there is compulsory co-operation, and the Government must not for one moment permit that to be altered. In consequence of the overproduction there may possibly be farmers who are inclined to withdraw, but the Government must be firm and tell them to exercise patience until export markets are obtained. Such markets are not only required for tobacco, but we must also give our attention to our inland markets. South Africa consumes only about 16,000,000 lbs. a year, and we find that Rhodesia is rapidly taking away our own market from our fanners. The imports from Rhodesia have mounted tremendously. In 1918 there were 759,0 lbs. from southern Rhodesia, and 446,0 lbs. from northern Rhodesia, a total of 1,205,0 lbs; in 1922 it had risen to 2,810,000 lbs., in 1925 to 2,835,000 lbs., in 1926 to 3,565,0 lbs., and in 1927 to no less than 8,628,0 lbs. We see, therefore, that Rhodesia last year had already conquered more than half of our market, while the imports a few years ago were only a few million pounds. I do not want to make enemies of our neighbours, just the reverse. It is, however, a serious matter, and I feel the Government, just as in the past in the case of cattle, must negotiate in a friendly way with the Rhodesian Government about tobacco, and come to an agreement so that our inland market is not entirely won. I do not recommend an immediate prohibition of sale, but negotiations for an agreement to regulate the sale of tobacco in the Union. Then our farmers can in future sell more tobacco in our local markets. It is not fair that Rhodesia should take our whole market, and that we should have to look for foreign markets. Perhaps we could fix a percentage of the quantity that Rhodesia may send in here. The tobacco which Rhodesia exports is for use in our country, not for export to England. The tobacco industry is essentially an industry where a large number of people can find work, as much possibly as in any branch of farming. Then I make an earnest appeal to the Government to do something for the tobacco industry. I am convinced that Rhodesia will take up a conciliatory attitude. As for the criticism of the budget, my impression is that criticism and requests to the Government have almost exclusively come from this side, and there seems no longer to be any desire to speak on the opposite side. It seems to me that they are more satisfied with the Government than this side. I am certain that the public are satisfied with the policy of the Government and with this budget. I trust, therefore, that this Government at the next election will be returned to power with a larger majority. We are not going to the country with promises which are not carried out like those of the previous Government, but with the results and fruits that have been obtained, and the people will certainly send the Government back in greater strength.

One wonders what passes through the mind of our “Napoleon of finance,” listening day after day to remarks regarding his past work and his future policy. The varied advice he gets ought to be of very great assistance. Sitting in lonely splendour— almost completely isolated—what is it he so patiently contemplates? Does he, like Roosevelt, consider that like the presidency, the job is not what it is cracked up to be; or does he simply think of an endless array of built-up surpluses—one after another? One would like to gaze into such a mind—that of a monarch of finance—the one who really controls the policy of the Government; but as that cannot be, we must be content with what can be gleaned from the speeches, and the budget laid before us by the Minister. There is no doubt that he feels somewhat the fierce light shed on the throne of finance, and the great responsibility resting on his weary shoulders. Perhaps, however, he takes some consolation from the philosophy of David Harum, that a reasonable number of fleas is good for a dog, as it keeps him from brooding over being a dog. Possibly the Minister may look upon that as a very useful reflection in regard to this troublesome House. I have a reminiscence of the old days when we used to coach northwards, outspanning at a place, half farm and half wayside inn, and finding that the mistress had been ordered to bed by the doctor. We were asked to go in and see her, and found that she was a thrifty housewife, using time and the warmth of her body to hatch a setting of hen’s eggs. 1s the hon. gentleman quietly hatching a brood of political chickens? If so, I hope they will not be like the chickens of the Opposition, which came home to roost as big as ostriches! I hope his chickens will be of a less troublesome nature, for he has our goodwill; and indeed, we should be very grateful to him for having said that the Labour Party has given him no trouble whatever. That is the most wonderful testimony to have of our docility. Knowing the party for 14 years, I could not have deemed it possible.

You are thoroughly tamed.

You will eat out of his hand.

Seven hundred a year makes all the difference.

Led as we are, the Minister can look forward to no trouble from that source. I think he is the child of good fortune, and he must have been born not with a silver spoon, but a golden shovel in his mouth. Possibly the sailor’s charm, a caul, for he had nothing but uncommon luck. He came into office and found £3,500,000, which practically belonged to German enemies, and promptly appropriated it, as the Opposition failed to do, one of reciprocity. I commend the action as he has gone from success to success, and is lucky also in having a Prime Minister who, while compelled by his conscience to vote for Union neutrality in the great war, had no inconvenient scruples when it came to collaring £3,500,000 of enemy money. A handy kind of conscience to have, which prevents you doing a thing at one time, but enables you to do it at another. He is lucky also in pursuing that orthodox financial policy which the Opposition finds so difficult to attack because it simply follows the example they advocate. Everywhere in financial circles he is described as being thoroughly orthodox, and as always doing the correct thing. There is really no adverse comment on the Minister of Finance; except by one or two ill-conditioned persons who sit on these cross benches and are never contented! His halo is being brightly burnished, and professional financiers ask in wonderment where he could have been trained; this man from the Orange Free State who can be safely trusted to go alone under any conditions. The halo is getting so large that the Minister will have to see whether he can expand his head to fit it. He will go down to posterity as the hatcher and breeder of budget surpluses. Well, after 40 years of effort, we have at last succeeded in half converting a lawyer to the benefit of protection. As a rule lawyers, absolute protectionists in their own preserve, are free traders, arguing that their emoluments will go further and buy more in a free trade than in a protectionist country, but forgetting that for every prosperous client they have in a free trade country they will have three in a protectionist country. Last year the Minister had a surplus of £1,750,000, but had he been a full-blooded protectionist, we need have had no unemployment, and his surplus would have probably been still larger. Therefore, we regret to see any signs of weakening in regard to that proved satisfactory policy. It is that which has given him £990,000 above his estimated customs receipts, and broadened the purchasing power of the whole country. One can have little sympathy, however, with a surplus that gives opportunity for adverse critics to say that too much money has been taken out of the pockets of the taxpayers, and surpluses show bad calculation on the part of the Government. All through the year we have had to suffer from the statement that there was no money available for the advancement of the country. But it was not so, and it is better to risk something to develop the country than simply to put aside money and gather a large surplus. There are those who think, and the hon. member for Cape Town (Central) (Mr. Jagger) is one of them, that “a penny saved is a penny gained.” A more stupid political economy was never preached. The very opposite has high Scriptural authority. The man who buried his talent and saved it was condemned, but those who used their talents to make other talents were praised and rewarded. If the Minister had seen that money was coming in freely and he had used it to create further assets, it would have been a far greater advantage to the country than saving it up to distribute in spectacular ways, no doubt more attractive politically. If he had said to his colleague, the Minister of Agriculture—a man full of energy and willing to devote his best years to the advancement of the country—“Here is a substantial sum to spend in putting an end to scab,” that would have been a worthy and remunerative purpose to put this accumulated money to in the best interests of everybody. Or if he had said to him, “We have nine or ten million cattle, mostly scrub stock, and all going backwards, get busy and import fresh blood into the herds and bring on a meat export trade so that we can have greater prosperity in the country districts.” If he had said to the Minister of Lands, “There is plenty of money coming in, settle more people on small farms,” he would have encouraged Ministers who would do it, and been creating assets all the time. In that respect I have not any hesitation in saying his success is really failure. That is not success which merely lumps up surpluses and has money accumulating for future distribution. From one end of this country to the other comes the piteous cry of insufficient house accommodation, and people having to pay extortionate rents, especially the poor. There was opportunity for the hon. gentleman to show himself a great man, a great financier, one to think clearly beyond the mere money coming into his treasury, and to determine what could be accomplished with it. Unemployment certainly might also have been dealt with efficiently. My remarks show the amount of sympathy I have with merely saving money. Now we come to what is to be done with it. Income tax payers are delighted to have a smaller amount to pay, but what does it amount to? The whole secret of income tax, like other taxation, is have you broadened the base? Have you made it easier for people to pay? That is exactly where the Opposition, when in power, failed, and where the present Government is also failing. It is not wise to forego what can be collected reasonably from the people, but always to use that revenue to benefit the people in a way which they are unable to do themselves. Everywhere the people are crying out for schools, bridges, roads, irrigation, farm assistance in boring for water, a thousand things badly wanted, and it would be infinitely better to show pluck and belief in our country and to say, “Money is coming in freely, we shall not give it back in driblets, it will help then so little.” After all, what does the remission amount to divided up amongst individuals, but in the total amount it would have been of very great assistance in developing the country. There are those who praise the hon. gentleman because he used some of this money to reduce the national debt. Yes, we borrow some £7,000,000 of money at 5 per cent., and purchase stock we need not, which was out at 3½ per cent. to 4 per cent. That is “a great transaction” and everybody in the financial world is delighted, because it was a double operation. Why there should be any defence of that system I do not know. Using the credit of the people for the people is much like the domestic deferred payment system. You use a thing while you are still paying for it. All this paying off funded debt claims no sympathy whatever from me, not that I think that debt should not be paid off, but I think the present Government did right in providing a sinking fund of a definite annual amount, so that in 40 years the debt we owe and which has not been provided for will be paid off. But having done that, I cannot see that there is any great virtue in taking another million of money as the Minister is doing, to put into brokers’ hands to buy up existing stock, and so please professional financiers. There is really nothing in it, but unfortunately the hon. the Minister of Finance belongs to the old orthodox conservative school. This practice of high finance—raising loans and then praising oneself for reducing them—conveys nothing to me, and conveys nothing whatever to the ordinary commercial business man. If he thought he was justified in providing for extension, he would not trouble at the same time to try to reduce the amount of debit, when he was actually wanting more cash to work his business prosperously. We have greatly added to our debt by the wretched process of not using the credit of the people. Indeed, £7,000,000 we owe that we never saw at all—merely the commissions paid for raising our loans. The hon. the Minister of Finance does not like a contrast being drawn between the Commonwealth Bank of Australia and his own system (see how sad the hon. the Minister looks that this matter should be still brought up), but just as he has been converted from free trade to protection, we hope to be able to convert him in process of time to the fresh view of the soundness of a monetary system based on the State use of the credit of the people. Here in the Reserve Bank—he will not have a State bank—he allows private shareholders to issue legal tender notes amounting to nine or ten millions on which they pay no interest, then he raises what temporary funds he wants on Treasury bills and discounts them, and puts the amount on deposit with the Reserve Bank. No wonder he is hailed as a very great financier! Let me point out how the Commonwealth Bank of Australia has made further huge profits for the people. During the 12 months ending 30th June, 1927, the profits of the Commonwealth Bank amounted to £580,000, and on the note issue department £1,136,000, so that carrying the credit of the people for the people and using the legal tender which rests upon what the people require, the Commonwealth Bank, in 12 months, made nearly a million and three quarters of profit for the State. After that proof, what is the use of the hon. the Minister of Finance talking about the uselessness of a State bank? We have that illustration of success year after year, but somehow the old-fashioned idea that we must go to financiers and put everything through their hands still obtains, and the people’s credit, that legal tender of £9,000,000, is handed over to a shareholders’ bank out of which to make a profit, so that the shares may rise in value, as they have, by nearly a hundred per cent. It is legal robbery in practice. True, we obtain some small share in that private institution, but it is so pitiably small that it is scarcely worth referring to. Yes, the hon. gentleman deserves the fulsome blessing of financiers, and if he reaches ultimately that better land to which financiers go, I have no doubt he will be suitably welcomed.

Which one?

Where is the better land?

Now I come to the question of the balance of trade. We are congratulated that the balance of trade is again greatly in our favour, that we have exported to a larger extent, and that result is entirely to the credit of the people. Last year our balance of trade was 20 millions in our favour, over 94 millions of exports and about 74 millions of imports. I know this latter sum is subject to invisible charges, such as freight, insurance and commission. The Government after careful calculation and watching for some years finds that such charges amount to 8½ per cent. Add that sum of, say, 7 millions, and then you still get an exceedingly large sum which does not come back. Then we are reminded that we have to send some 6 millions a year, interest on our loans, overseas. We seem long ago to have paid back everything we owe, according to the balance of trade year after year, but, no, there is never a return of this favourable balance. We are assured by these wonderful financiers that it all comes back, but they will never show how it comes back. As a matter of fact it does not come back, for this country is financially exploited, and the trade balances prove my contentions. Now while we are constantly borrowing overseas we ought to have specie or goods coming for our indebtedness. In spite of that truism, the yearly returns show to what an enormous extent this is an exploited country. We never find financiers dealing with the interesting question of our favourable balance of trade, and yet always in every other country much is made of a balance of trade being in favour of the country concerned. If it does not come back—and I can assure the hon. gentleman it does not—if one takes the invisible costs of 7 millions and 6 millions more for interest charges, and take also into account the credit we are entitled to draw upon, we find that we have still far more than 7 millions extracted from this country last year. I will not pursue that matter further; it is an unpopular subject. I want to refer briefly to the hon. member for Cape Town (Central) (Mr. Jagger) on the question of population relative to increased public expenditure. The figures that he gave were that there was an increase in expenditure of 22 per cent. and there had only been an increase in population of 8 per cent. How fallacious such figures are. The real question is one relative to increased prosperity of the country. Of course, we ought to have had more than an 8 per cent. increase in population, and if we had pushed ahead the policy we are now pursuing of establishing industries, we should have had a larger increase of population. I want the hon. gentleman, not merely to put it upon a basis of £ s. d., but to consider whether we cannot broaden the basis of taxation, and make it easier, and not mourn that expenditure has gone up. Indeed, we ought to be proud of increased expenditure upon education and upon the numerous wants of the community. We have some concessions from this handsome surplus. We had a concession of 20 per cent. off the income tax, and some reductions in customs duties. Why the latter were made one can hardly guess, because the criticism that has been passed is a fair one, that they are of such a nature that they will never reach the consumer. One of these concessions is in regard to silk stockings, and we are supposed to be very grateful. We may not all be able to see eye to eye with the Minister of Finance in that matter, but, at all events, there is, perhaps, some sense of reciprocity showing gratitude in regard to present conditions. Time brings its changes and its compensations, and it may be that for a tram ride which costs 2d. you can have to-day what one used to pay 10s. 6d. for in the front seats of the opera. I ask why some other concessions were made. Take, for instance, citron for making candied peel, instead of 20 per cent. duty it is to be free. I thought we were growing groves of citrus in the Union, yet, strange to say, we find this peel put on the free list. With a generosity which does credit to the Minister he says: “I am going to allow favourable concessions to Great Britain on field-glasses, binoculars and telescopes.” We are to allow 20 per cent. preference, equal to £2,000 a year at most, but at all events, for these small favours, I suppose we must express our delight. The hon. gentleman has been very liberal in the past to certain interests, and I am glad that, as far as the income tax is concerned, companies are not to receive the benefit individuals receive. They can well afford to pay, and, seeing that the Minister presented the gold companies alone with £180,000 a year by abolishing a tax of the provincial council, which I myself think it was right to keep on, he has been liberal enough. I would like the Minister of Defence to know that mining companies benefit to the extent of £25,000 a year on the boot trading concession he made, the companies being allowed to sell boots they were not permitted to deal in before. Owing to this generosity, stores, which are run for the companies, established by the native recruiting agency, were able to come out with a profit in the last two years on the concession which the hon. gentleman so good-naturedly made to them at the expense of legitimate traders. A question I wish again to bring prominently to the notice of the Government is the position regarding diamond production. It is a very serious matter, and one which they will not be able to evade. They have pursued a policy in accordance with the desires of the big producers which will ultimately result, and is probably intended to result, in practical extinction of the digger. But the industry is not going to be extinguished easily. When the Government had this big question to decide they should have held the balance even as between the digger producer and the big company producer; but instead of that they are standing by the big producer, having been induced to do so by the argument that it is the big producer who sustains the market. The digger has unquestionable rights, and is going to stand out for a fair deal, and that is 50 per cent. of the yearly production to the diggers, and 50 per cent. to the big producers. If the Government are not to give that fair deal, they are sure to have a great deal of trouble. Already there is some indication of it. The Government have got over the temporary difficulty by giving out more claims, but they have stopped prospecting entirely and yet allowed other new mines to work. There is one outstanding instance of that in the Free State, where those who were prospecting and winning diamonds have been ruined, while other more favoured producers were permitted to go on That is one of the bad things that will come home to the Government. Unless they are prepared to deal quite fairly with the relative interests, they are bound to come face to face with extreme difficulties. Where they have made a great mistake is in not putting into execution the principle which we approved in regard to the board of control. If that board of control had been brought into existence as provided for in the Act of 1925, they would have had some men who understood the position and would have been able to deal effectively with it. Instead of taking that sensible course, Government have kept it entirely in their own hands, which will render them not only extremely unpopular, but lay them open to the criticism that they have not held the scales evenly. The people are becoming better informed as regards finance, and the whole trend of politics, and are not satisfied The Minister of Finance has it in his hands to introduce reforms in the financial system in such a way that the country can develop and grow, and the people are looking to him, as the one responsible, for that possibility. We ask him to consider the financial question from a new point of view, namely, as to whether restrictive economy on economy is likely to give satisfaction in a growing country. We ask him to come into line with the fresh life and the new movement of credit control.

On the motion of Mr. Marwick, debate adjourned; to be resumed on 23rd April.