I move, as an unopposed motion—

That, notwithstanding the provisions of Standing Order No. 22 (1) (b), the House at its rising on Thursday, 4 February, adjourn until Friday, 5 February, at 2.15 p.m.

That is in line with the agreement between the hon. the Prime Minister and the hon. the Leader of the Opposition.

Motion put and agreed to.

I move the following amendments—

In line 55, to omit “fifty-five” and to substitute “fifty-three”; to omit paragraph (c) of sub-section (1); to omit sub-section (2) and to substitute the following new subsection:

(2) Paragraph (a) of sub-section (1) shall be deemed to have come into operation on the sixteenth day of August 1962, and paragraph (b) of that sub-section shall be deemed to have come into operation, with respect to any officer occupying the position of chief training captain, senior training captain, training captain or senior first officer, as from the date on which he first began to occupy such position.

Agreed to.

Clause, as amended, put and agreed to.

On Clause 57,

Clause 57 deals with an amendment to Section 28bis of Act 22 of 1960, as inserted by Section 16 of Act 7 of 1963, and I think the first thing that we have to do is to ask the hon. Minister to establish why it is necessary to introduce this amendment, in the light of the existing Act and the provisions contained in that Act. I am asking the hon. Minister to do this because it would appear that the existing Act is sufficient. I am going to quote Section 28bis (2) of the existing Act which reads—

The word I want to emphasize here is “retardation”. If I understood what the hon. Minister has already said, the effect of work to the service manual strike that involved the airway technicians last year, was a retardation in their normal output. If that is correct, why was the Minister not in a position to take action in terms of the existing section? One can only assume that it was because the retardation that did in fact take place was lawful, that in working to the service manual the servants were in fact doing what they are lawfully entitled to do, and therefore the Minister was not in a position to invoke the provisions of the existing Act. Now if that is so, then it follows that the new provision that the hon. Minister now seeks to introduce is going to penalize servants of the Administration who are in fact carrying out their lawful duties. I do not think the hon. Minister can have it both ways. Either the existing Act is defective because it does not enable the Minister to take the action he would like to take, or the amendments which the Minister is introducing are going to make it illegal for servants, acting together (if the hon. Minister would like to put it that way) for the purpose of bringing about a strike.

For the purpose of enforcing certain demands.

Yes, for the purpose of enforcing certain demands. Now that is in the present Act, that same position is covered: Acting together for the purpose of bringing about a certain effect. That is there and it is referred to as “retardation”. I think the hon. Minister should explain this position to us before we get involved in any further arguments, so that we will know quite clearly why it is that this amendment is being introduced at this stage, in the light of what is already in the Act at the present time. What has prevented the hon. Minister from taking the action which the present Act lays down when the action of the airway technicians last year brought about a retardation in their output, with the consequent chaos flowing from that. I think the Minister should first clear up this position. It might save a lot of discussion.

I think hon. members will agree with me that it was the intention of the House when this amendment was adopted in 1963, that any form of go-slow strike should be prohibited in respect of workers in essential services—any form of strike, whether a go-slow strike or working according to the manual. The House agreed to that. Working to the manual when it has resulted from concerted action with the purpose of enforcing certain demands from the administration, the employer, is actually a go-slow strike. I do not know whether hon. members appreciate what that really entails. These manuals are issued by the manufacturers of aeroplanes, describing every operation in regard to the repair and maintenance of planes. When these servants decide to work to the manual, and when they know perfectly well that they have to turn in a bolt and tighten it to a certain extent (they have been doing that for years) then they purposely go to the manual and see what the manufacturer says. The result is that there is a considerable delay and a disorganization of the whole service. That is a deliberate attempt to embarrass the Administration and the employer.

Was that not covered by the old Act?

I am coming to that. But nobody can say that that is not in effect a go-slow strike. There is no doubt about it. And the hon. member who knows about these matters will undoubtedly agree with me. When you have done an operation for years and you know precisely what to do and how to do it, and there is concerted action and everybody turns to the manual to see what the manufacturer says in regard to the operation you have been doing for years, merely for the purpose of delaying and embarrassing the Administration, then that is in effect a go-slow strike. The intention of the amendment that the House passed in 1963, was to cover that, because air services are essential services.

What happened? When the aircraft technicians embarked upon what I call a go-slow strike, the matter was handed to the Attorney-General for prosecution. Hon. members know that I do not do the prosecution, that is a matter for the Attorney-General.

You threatened them.

I threatened with prosecutions in terms of the Act, but the actual work is of course done by the Attorney-General. He is responsible for the proceedings in court and instituting a prosecution. The Attorney-General refused to prosecute on the grounds that that particular procedure was not covered by the Act, although that was the intention of the House. He said that there was a weakness in the section, and he thought that he could not get a conviction. As a result of that, I asked the law-advisers to draft a new amendment to cover that type of procedure in future. I can say that I met the Federal Consultative Council of the Staff Organizations some months ago (I think in November). On that council all the staff organizations are represented. I met them after the go-slow strike had taken place, and I told them what the reasons were why there had not been a prosecution. I also informed them that I was going to amend the Act to cover that type of action in future. Not one member of the F.C.C. disagreed with me. As a matter of fact, I think they were shocked at the attitude and action of the technicians. I informed them that I was going to amend the Act to make provision that this type of thing, working to the manual, would not recur, and there was no objection. I did not send the different staff associations a copy of this amendment, but they know perfectly well that I was going to amend the Act to cover that point. There was no objection from any staff organization when I explained it to them. Mr. Liebenberg gave this interview to the Cape Times the day before yesterday, but, as I said in my speech yesterday, he was under a complete misapprehension in regard to the purpose and implications of this amendment. The staff organizations did not object to the principle of amending the Act to make provision that there will not be a recurrence of the action taken by the aircraft technicians.

The hon. Minister seems to think that we must support this clause because two or three years ago we were all in agreement that in an essential service like the country’s transport go-slow strikes should not be permitted. That is true as far as it goes. What the hon. Minister forgets is that the whole House supported the 1963 legislation because we sincerely believed that alternative machinery was being created that would make such strikes unnecessary. I do not want to repeat what happened during the second-reading debate of that Bill, but the hon. member for Bloemfontein (East) (Mr. van Rensburg) was kind enough to read extracts from Hansard of what I said at the time, which makes it perfectly clear that we were supporting this ban upon go-slow strikes and other delaying measures by the staff in order to bring pressure to bear upon the Administration, or the management, because we thought that in Clauses 14 and 15 there was alternative machinery to obviate the necessity for such strikes. But now it has become very clear, and I do not think the Minister realizes how clear he himself has made it, that this alternative machinery did not function in this case, that there were certain fundamental weaknesses in that alternative machinery. The hon. Minister comes very eagerly and readily with further measures against the staff, but his measures lack the necessary tightening up of the alternative conciliation machinery. It is purely negative. For that reason we cannot support it. The Minister apparently wants us to believe that these airway technicians, as a result of whose action this clause has become necessary, acted utterly irresponsibly and were, as was suggested by certain members of the management at the time, almost guilty of sabotage, that they were acting arbitrarily, that they were completely reckless of the interests of the country, that they did this in a spirit of irresponsibility. But, Sir, with great respect we cannot accept that. These men who work for the South African Railways and who maintain the planes technically are on the whole a decent band of men, responsible men, to whom every South African who is interested in our Airways owes a debt of gratitude for the tremendous amount of work they have done, far beyond what their duty demands. At a time when there was a shortage of manpower they stepped into the breach and they kept our planes going. And now the Minister wants us to believe that suddenly they have become utterly irresponsible and inimical to the interests of South Africa, and irresponsible. We do not accept that. There is something wrong. I can make many suggestions on what is wrong, but the chief suggestion I want to make now, and I make it to show how much we regret the fact that the hon. Minister has not applied his mind to this course, is the fact that these men belong to a trade union or a staff association where they have no identity of interests with the majority of the members. Yet the Act provides that if they are dissatisfied under certain circumstances, they must get the majority of that staff association to side with them in order to have the matter referred to the State President. But there is no identity of interests between these few hundred Airway technicians and the thousands of members of the salaried staff. They wanted their own trade union, as the Minister will remember. They were not happy with their association with the Artisan Staff Union and they asked for their own trade union, and they were persuaded (I must be very careful, I do not want to enter into quibbles with the hon. Minister) either by the Administration or by the Management to associate themselves with the salaried staff association. But that is where the difficulty arose. These people to-day belong to a trade union where they have no identity of interests with the rest of the members, and obviously it must lead to strains and stresses and frustration. Has the Minister considered giving any attention to that? They wanted their own trade union. They were stopped. And we have seen the results. In other words, Sections 14 and 15 of the Act were not satisfactory and could not meet the situation.

I want to say, too, that I am convinced that a little bit more tact on the part of the Management, for whom the Minister is responsible, might have prevented this. The Minister must not argue that there is such a difference between the Administration and the Management and that he as the Minister is not responsible for the actions of the Management. One of the clauses he himself read to us yesterday says very clearly that the Management does act under the Minister. I have before me the newspaper report of that meeting on 6 October when a letter from the Management was read out, and there was an immediate, violent reaction from the airway technicians. Here it is reported that one of them shouted out “very well, let the ticket-examiners come and service the planes”. Why these comparisons, for comparisons are odious. Why were these comparisons made to the detriment of the airway technicians? Why was there an attempt to bring them down a peg or two? There was something wrong and we have had no satisfaction from the hon. the Minister whatsoever; we have only had insults from the hon. Minister. We have had no satisfaction that steps are being taken to avoid a similar situation arising in the future. It is all very well to say: I am going to tighten up the law, as this clause does; I am not going to permit people to work to the manual; I am going to embarrass myself by taking people to court and prosecuting them for working according to regulations. Whose regulations? That may suppress grievances, but it certainly will not redress grievances. A wise administrator and a wise management, both of them, would have as their object to discover and uncover grievances, and if possible to redress them. The mere suppression of grievances, the mere bottling-up of grievances is not good management. And that is all that we are asked to do in this clause. But the fact remains that after we hopefully and optimistically passed legislation in 1963, within two years you had a group of responsible employees of the South African Airways resorting to—let us call it for argument’s sake “a disguised go-slow strike. In spite of the law, in spite of their responsibility, in spite of their loyalty to the S.A. Airways, they resorted to this action. The Minister should have gone into the matter to see what was wrong. To come merely with repressive measures is not a wise solution, and that is not the way the Minister will get the co-operation of the Opposition, if it means anything to him. If the Minister would go back and think, or even get up now and tell us that this is a measure that is urgently necessary but that in the meantime he is going to take steps to avoid a recurrence of the unfortunate incident of October last year, he would find that the Opposition would be very willing to help him and to assist him. We only have one interest, and I hope the same applies to him, and that is an orderly, well-managed South African Railways and Airways. That is what we are after. The hon. Minister is not showing us the necessary indication that he has got that interest at heart. I hope the hon. Minister will rectify his omissions and show us that he has at heart the prevention of events such as happened last year.

This speech of the hon. member for Yeoville (Mr. S. J. M. Steyn) will perhaps be to the taste of the Airways technicians, but I am afraid that as the result of it he is going to antagonize all the staff associations, and there are seven of them.

I just want to see justice being done.

No, the hon. member does not want to see justice being done, but injustice, as I shall indicate.

In the first place, the hon. member talks about the weaknesses in the present conciliation machinery. These weaknesses are now supposed to have been revealed because a group of workers, a group of members of a particular staff association, took the bit between their teeth and took the law into their own hands. But no conciliation machinery in the world can provide for something like that, except to prohibit it. The hon. member was for many years the chief speaker on labour matters for the Opposition, and he ought to know that Section 46 of the Industrial Conciliation Act prohibits workers in essential services from striking, and there are very heavy penalties attached to it.

But there is automatically conciliation machinery.

In spite of the conciliation machinery for which provision is made and in spite of the penal provision, it has still happened that certain groups of workers have taken the bit between their teeth in industry, with the result that they have had to appear before court. I remember that when I was Minister of Labour I had to take to court almost 200 mine-workers who went on strike illegally—not in terms of Section 46, but because they did not make use of the procedure laid down in the Industrial Conciliation Act. They were fined. Since then it has repeatedly happened that groups of workers have taken the bit between their teeth—I am speaking now of workers falling under the Industrial Conciliation Act. That is what also happened in this case. Here a group of workers took the bit between their teeth, and not the staff association of which they were members; that is a responsible association, and the staff association never agreed that they could go on a go-slow strike. They simply took the bit between their teeth. I have the highest regard for the workers in the Airways. They do excellent work. But that does not mean that they should therefore be allowed to become unruly and to disrupt the whole service. And now the hon. member has said a very dangerous thing. He says there is a weakness in the conciliation machinery, and according to him the reason for it is that the Airways technicians are, inter alia, compelled to be members of a staff association in which there is no community of interests. That is the hon. member’s standpoint, is it not?

More or less. I say that there are not sufficient community of interests.

Very well, “sufficient”. The hon. member adds to that: “Why are they not allowed to have their own trade union which is recognized by the Administration?”

Another grouping.

Can the hon. member tell the House what other grouping there can be? They do not want to belong to the Artisans’ Association, and the other staff associations we have are the Salaried Staff Association, the Footplate Staff Association, the Train Staff Association, the artisans, the employees including the checkers and truck repairers and suchlike workers, and then there is the Police Staff Association. In which one of those associations will they have more community of interest than in Sal-staff? But I ask further whether there is any community of interest between the marine staff and clerks in offices, who are all members of Group A; is there community of interests between the works foreman, who was an artisan in a workshop, and a clerk sitting in an office?

You are now answering the question yourself.

This grouping took place with the consent of the staff. The Airways technicians wanted recognition of their own trade union. I do not know whether the hon. member knows that they have a registered trade union. They wanted me to grant recognition to that trade union of theirs. I refused to recognize it. They no longer wanted to remain with the Artisan Staff Association, and they then said that they would be prepared to join Salstaff. They themselves said so. I did not force them.

A second choice.

Of course, the second choice, but now comes the dangerous thing which the hon. member said, viz. that they should receive recognition. Do you know, Sir, that as the result of this speech he will antagonize every existing staff association? And I shall prove it, and challenge the hon. member. I shall let all the executives of all the staff associations come here, and the hon. member can address them on the subject. I want to say further that the standpoint of the staff associations and my standpoint was this: If once I open the door to recognizing a particular group, then I open the door to all the other groups for the same thing. Does the hon. member know that there are 630 various grades in the Railway Service? And does he know that over the years representations have repeatedly been made that I should allow some or other group to break away from its staff association and form its own association? And does the hon. member know, further, that if I had granted recognition to the Airways technicians, I would not have been able to withhold that recognition from any other group, because any other group can, in terms of the Industrial Conciliation Act, receive registration if they are representative of their particular group and of a particular area. Does the hon. member know that I shall then have to deal with 30, 40 or 50 different staff associations? I am not exaggerating. The specialist workers have wanted to hive off from Group B, and the station foremen wanted to hive off from their particular staff association, Group C. I can mention numerous workers who wanted to hive off and demanded recognition for a staff association of their own. Can the hon. member imagine what confusion that would cause in the Railway Service? I now say to the hon. member that if he can find a single staff association which agrees with his views that this group should be recognized as a staff association …

They must have a community of interests.

Tell me where is that community of interests?

I think they have much more in common with the artisans.

But they do not want to remain with the artisans. Does the hon. member know that a few years ago they started to work to the manual for two days just because of this matter, that they definitely refused to remain with the artisans? The hon. member for Umhlatuzana will be able to tell the hon. member that, because he knows the artisans.

I know that.

The hon. member knows it now. As I said, the hon. member’s plea is to sow confusion, to recognize one group now as a separate staff association, because then I cannot refuse it in regard to any other group which wants to hive off, and the result will be that there will be at least 20, 30 or more staff associations, and it will be quite impossible to negotiate with all of them. What I have now told the hon. member will be told them also by any staff association, and seeing that the chairman of the Artisan Staff Association is now in Cape Town (I met that staff association this morning), I challenge the hon. member to get hold of him this afternoon and to ask him what his views are. He is the chairman of the Federal Council. Let the hon. member discover what the opinion of the staff associations are in regard to this matter.

The hon. member refers to the relations between the Administration, the Management and the staff, which he alleges are not very good. I can emphatically say that the relations between the Management, the Administration and the staff have never been better than they are to-day. And now I shall issue another challenge to the hon. member to prove this: I am prepared to convene all the executive committees of staff associations here in Cape Town and the hon. member and his friends (the hon. member for Turffontein also had much to say at a congress about the bad relations between the Minister and the staff), can attend this gathering and address them. I will not be present. If they can persuade the executives to adopt a motion of no confidence in me I shall resign as Minister of Transport. The hon. member says that the relationship is so bad. If it is so bad, then he now has the opportunity to test it.

You are now behaving like a jack-in-the-box.

No, I am not. I am trying to expose the hon. member in regard to the stories he is telling here. I am trying to prove that the hon. member is making allegations which he cannot support. The hon. member has suggested things which will create confusion in the service, and he says that the relations between the Minister and the staff are not good. I now give him a chance to test it. He should further tell me what the weaknesses in the machinery are.

I have already stated that.

You did not. All that the hon. member said was that the Airways technicians should be recognized as a trade union, and that the fact that they are not so recognized was one of the weaknesses. The hon. member knows that the conciliation machinery comes into operation as soon as the representations reach me and I reject them. But they must come from the staff association.

And now I want to tell the hon. member something else which possibly he does not know. Does he know that it was at the urging of the staff associations themselves that it was provided in this conciliation machinery that negotiations can only take place on representations made by recognized staff associations, and not groups? The staff associations felt that if negotiations took place as the result of representations made by groups, then the authority of the staff associations would be undermined. I can tell the hon. member that they are very strenuously opposed to group negotiations. Therefore there could be no negotiation with the group. When the Management received a request, before the Management could even say “Yes” or “No”, they adopted their own course and commenced this go-slow strike. If provision is to be made, that the Minister can also negotiate with, and put the conciliation machinery into operation as a result of representations or actions of a group, then the staff associations might just as well dissolve because their authority will be completely undermined. I can tell the hon. member that they are very strongly opposed to negotiations with groups. That is why the Management did not negotiate with this group of artisans, but with their staff associations, but before the negotiations had even been completed, before the Management had said “Yes” or “No” to their representations, they took the law into their own hands and went on strike. That dare not happen. In view of the fact that hon. members opposite last year supported the principle that workers in essential services should not have the right to strike, a moral obligation rests upon them to support this provision.

What a different story we are listening to to-day. Yesterday when the hon. Minister replied, his note was full of jeering, and he tried to score against the Opposition by referring to them and saying “hulle praat twak” and everyone on the Government side had a very good laugh.

I listened very carefully, for instance, to one of the great champions of the railwaymen, the hon. member for Parow (Mr. S. F. Kotzé) who I am sorry to see is not in the House at the moment, He almost seemed to carry an insinuation in what he said namely, that the technicians in the Airways in fact were something of an entirely different kind to the average member of a trade union, that they did not even support their leaders. In fact his insinuation almost put the technicians beyond the pale of good law-abiding citizens, because he was so anxious to support these deriding remarks of the hon. Minister.

Sir, there is no question at all about it that there obviously was some bungling last year when this matter came to the fore, because an administration like the Railways, and a Minister with that experience are well-equipped to deal with this type of difficulty when it arises. The Minister knows the Industrial Conciliation Act. He can even quote it without looking at the Act, and yet when he brought an amendment before the House last year he omitted to think of this important provision which he suddenly finds necessary now; and if another instance occurs either this year or next year which he thinks is due to another loophole he will not deal with the matter as one should, by normal mediation. No, he will pass further repressive legislation. Sir, it is a very unhealthy state in a country when the affairs of those who work for the State have to be dealt with, so far as the problems are concerned, by continuous legislation. Sir, there is elaborate machinery provided. Is the hon. the Minister prepared to say that the association did not come to the Administration at all at any stage earlier than that date in October? Because if they did, then the Administration must explain in terms of Clause 28 (1) (a) and (b) why they were not satisfied.

Did you not listen to my speech?

Yes, I heard your speech. I am satisfied, from what we have heard from a number of other sources, that there was some contact. The problem was known to the Department. That is another thing one must take into account. Surely one must take cognizance of what goes on, even assuming that there were no actual, formal documents laid in front of the Minister. Surely he must take cognizance. Everyone know what was taking place among the Airways technicians. This goes far beyond the fact as alleged that we suggest that we want to divorce one section and so break up the associations into various little sections. We know that in the Airways and even in the General Railway Administration there must be some form of communion or identity of interests, as was stated by the hon. member for Yeoville. There must be something that is common to them. You must have a body of people who have something in common, and here we had such a body. Therefore the moment this thing broke there was no necessity to sit on one’s high horse and to deal with these people in the stringent manner the Minister says he must deal with them. No, we should, particularly these days, when we know that we must make the most effective use of all the manpower at our disposal, when we know that we are being served by this small community which has to serve a number five times as large in this country, and when we know that we are served by them with devotion, use whatever machinery for conciliation that exists, or even something more than that. There should be a spirit of mediation and conciliation. That should have been the spirit in which the Minister should have approached this particular issue, and I must say that we are very disappointed indeed. After all, this Minister after seven years should not be insensible to what labour problems are. I feel that this type of labour legislation is most unhealthy. Year after year we have more repressive legislation to deal with a specific ad hoc situation. What is being done here virtually is to penalize a section. [Interjections.] Does the hon. member for Port Elizabeth [North) (Mr. J. A. F. Nel) know that the pilots, e.g., have an organization of their own and that they are dealt with in an entirely different manner?

They are all members of Salstaff.

They may be members of Salstaff, but I would like to ask the Minister whether he would deal with them as he is now dealing with the technicians. I challenge him to tell us that.

I will deal with every section of the staff that takes the law into its own hands.

These people did not take the law into their own hands. That is the point. If they did take the law into their own hands, they could have been dealt with under the law. What the Minister has discovered is that these people, as was correctly suggested, suffered from such a sense of complete frustration that they carried out the letter of the law, but they did not take the law into their own hands. But the Minister is unhappy about that and therefore he is determined to narrow the limits of the law and to confine them even more by changing the law. That is not labour conciliation. I say the Minister should not adopt that attitude, and his attitude yesterday was very wrong. It is all very well for these baying hounds here … [Interjections.]

On a point of order, should not the hon. member apologize to this side of the House?

Order! The hon. member may continue.

The Minister has been dealing with Railway matters for years. Does he not appreciate the fact that the Opposition is as much interested in the railway workers as hon. members opposite? Surely, when we put up points of view and discuss matters which we believe are in the interests of those who serve the State, the hon. the Minister should be pleased because we take that interest, and if he feels that we have erred he should explain the position. If he perhaps feels that we do not have a full appreciation of the facts, he should give us the facts. If he feels that we do not entirely appreciate his purpose he should tell us what his purpose is, but he should not castigate us because we put certain points of view to him and criticize what we think is not the correct way of handling the matter. But we do so as a legitimate Opposition should do. I say that there would be a very much better understanding in this House if, far from an hon. member being derided for what he does, the Minister expresses appreciation for the interest he shows in the work he is carrying out, not on behalf of himself but on behalf of the people of South Africa, on behalf of the Republic.

It is perfectly clear to me now that hon. members on the other side realize that they have committed a great blunder in opposing this clause. They are looking for excuses, but what are their excuses? I am convinced that if you were to ask the hon. member who has just sat down what he said, he would not be able to tell you. He said, amongst other things, that he was concerned about the manpower shortage, but what he was advocating here was that our manpower should be allowed to waste their energies on go-slow strikes.

The hon. member for Yeoville (Mr. S. J. M. Steyn) said that in 1963 this principle of prohibiting strikes was supported by them because they were under the impression that the conciliation machinery would function properly, but he says the position is entirely different now that they have become convinced that the conciliation machinery is not functioning properly. Sir, the Minister put a very reasonable question to the hon. member for Yeoville and I hope he will make use of the first opportunity to tell this Committee why this conciliation machinery is not functioning properly, and where it is not functioning.

Were you not listening?

The hon. member will have an opportunity to speak: let him give me a chance now. Sir, what is the procedure that has been followed in terms of this Act and in terms of the conciliation machinery which exists on the Railways when demands are put forward by a staff association or by a group of a staff association? The staff group concerned approaches its association; the staff association then gets in touch with the Management and tells the Management that the group concerned wants this, that or the other thing. If the Management turns down the request, the staff group concerned is at liberty to make further representations through its staff association to the Administration, to the Minister, and if the Minister refuses to heed its representations or refuses its request—in the first place the Minister has the right to decide whether or not he is prepared to report the matter to the State President. If he feels that the request comes from an insignificant number of people he may refuse to report it, and he would then notify them accordingly. What is the procedure which is open to them in that event? They can cause a petition to be drawn up in which they ask the State President to appoint a commission of inquiry. If the majority of the members of the staff group concerned asks for the appointment of a commission of inquiry the Minister is obliged to report the matter to the State President and the State President then appoints a commission.

Through the staff association?

Yes, through the staff association, but not the majority of the members of the staff association.

May I ask a question?

I know what the hon. member wants to ask. He wants to know whether the decision will be taken by the majority of the members of the staff group concerned or by the staff association. The staff group which is involved in the dispute draws up the petition and if the majority of their members ask for a commission of inquiry they forward the request through their staff association to the State President and the State President is then obliged to appoint a commission.

You are wide of the mark.

No, not at all. Before the hon. member makes such an accusation he should first go and read his Act, the Act of 1963. Let me quote it. Section 15 amends Section 28 of the principal Act and sub-section (2) of the new Section 28 reads as follows—

“Concerned in the dispute.” It is the members of the association who are concerned in the dispute. [Interjections.] If hon. members opposite cannot understand the Act, I will read out to them what is stated in Section 28 (7)—

Can any language be clearer? It affects only those members of the staff association, of the particular group, whose interests are involved at that stage. In the case with which we are dealing here it only affects the Airways technicians. That is the position. The Act set out the position very clearly in 1963 and if hon. members on the other side interpret these provisions as meaning that it must be the majority of the members of the staff association, then they are wrong; it is the majority of the members of the staff association who are concerned in the dispute.

You are talking nonsense.

I am not talking nonsense. Hon. members should go and read the Act again and see whether they can understand it. The position is set out clearly and unequivocally in the Act, in Section 15 of the Act of 1963, which amends Section 28 of the principal Act. If the hon. member for Yeoville is so certain that I am talking nonsense, I challenge him to prove that that is not the position. [Time limit.]

I find this very interesting, because this was the gravamen of the case 1 presented to the Minister yesterday, that it is not only the members of the group who are affected in a dispute that have to have a majority in order to get the State President to appoint a commission, but they have to get the majority of the whole of the staff association, of all the groups. The Act is quite clear in that regard. That is why the hon. member for Bloemfontein (East) (Mr. van Rensburg) now discovers that he is supporting us in this case. The point we have made is that because there is no identity of interests between this group and the rest of Group A, the salaried staff, the Airways technicians are not likely to get the support of the majority of the staff association to which they belong, although they will easily get the majority of their group.

That applies only in the case of a petition.

That is the point that the hon. member for Bloemfontein (East) has made, that the men in this dispute, the Airways technicians, only have to get a majority of their members to submit a petition to the State President, but that is entirely wrong. That is not the position. They have to get the majority of the members of the entire staff association, and not only of the members of their own group. The Minister has made it quite clear. Before I go on, does the Minister agree with the interpretation of the hon. member for Bloemfontein (East)? Will he tell him straight away that he is wrong?

You are missing the ball entirely.

The Minister does not support you in your contention. [Interjection.]

We could end the argument immediately. Does the Minister agree with the hon. member for Bloemfontein (East)?

No, I do not. [Interjections.]

The weakness we have referred to is due to the fact that the Minister in his wisdom and at the request, as he says, of the Airways technicians, transferred them from the artisan staff, Group D, to Group A, the salaried staff. If the Minister asked us whether we would be prepared to accept the challenge on this question of whether the Airways personnel are better served by the artisan staff than by the salaried staff, that would be a different issue, because the Minister will remember that the Airways personnel consider that although they are artisans their work is of a higher grade than that of other artisans, than the rest of the artisan staff, and for that reason they wanted to be given a higher status. The Minister had this two-day work-to-the-service-manual dispute, and to meet the position he put the Airways technicians into Group A with, I believe, the consequences we saw last October. Because had they remained in Group D, I am quite sure they would not have taken the precipitate action they did. The Minister may differ from me on that; it is conjecture, but I believe that the Minister is responsible for having placed these men in a group with which they had no identity of interest. I do not want to use strong language, but I think the Minister was ill advised to place these men in a group which was in conflict with the principles of the identity of interests.

What is the alternative?

There is no alternative. They should have remained in Group D.

They threatened to work to the manual if they had to remain in Group D.

The Minister is in a position to say to them now that he is putting them back into Group D.

I cannot. They are salaried people.

But there are a certain number of artisans in Group D who are salaried also. There is no distinction between salaried staff and daily paid staff in Group D as a whole. The Minister will find that he is wrong there.

No, I am not wrong.

Because there are a considerable number of signalmen who are on monthly pay.

Signalmen?

Signal fitters.

But all railway servants are monthly paid to-day.

But we are talking about those who are in Group D. In Group D there are salaried staff, or monthly paid people.

Everybody is monthly paid now—all artisans, but there is a difference between monthly paid and salaried people, and the Airways technicians are salaried and not monthly paid.

And because they are salaried, although their work is not more important than that of artisans who are monthly paid, that entitles them to go from Group D to Group A. I say that the principle which determines in which group a servant falls is not whether they are salaried staff or monthly paid or daily paid, but their identity of interests is the key, and the identity of interest of Airways technicians is not with Group A but with Group D. The Minister put them into Group A against the identity of interest. They can turn round and say they are happier in Group A, but it is not a question of what they want or do not want; it is a question of what is correct in terms of the identity of interest. That is the issue, and now we are faced with the problem that they themselves will know in advance that they have no hope of getting a petition to the State President, in terms of the Act.

Do you not realize that there is no closed shop on the railway? I cannot compel a man to be a member of an association, and the Airways technicians resigned from Group D. I cannot compel them to be members of Group D.

The Minister has the right to transfer them from Group D to Group A, at their request.

Yes, at their request, but they will not.

The underlying principle is that there has to be an identity of interest, and not the wishes of the men. Their interests do not depend on their personal feelings, but on the nature of the work they are doing. The intention was to get all the staff who were closely associated by way of identity of interests into one group, and that is why the Airways technicians were in Group D, and that is where they should be. On the question of their higher status, the Minister knows as well as I do that there are technicians and artisans in Group D doing work of equal status and responsibility as any Airways technician, but because they consider that they should have this higher status they almost compelled the Minister to put them in Group A, and that is where the mistake was made.

Now the hon. member for Bloemfontein (East) has said that the disgruntled members of the staff association have a remedy, and he has proved to himself that that is what they should have done, but that would not have been sufficient to get the petition through to the State President, as the Minister has made quite clear. So we are left with this, that the difference between the definition of “Management” and “Administration” has brought about the deadlock. The Minister told me yesterday that the Airways personnel never approached the Administration. When I went further and said they approached the Management, he said no, they did not. Well, I can only assume that somebody approached the Management. [Time limit.]

I never said that. I think I must correct the wrong impression of the hon. member for Umhlatuzana (Mr. Eaton). First of all, how does he define “identity of interests”? Does the hon. member realize that identity of interests does not mean that one man must do the same type of work as the other? This identity of interests, the division of the staff into different organizations, was done in Mr. Sturrock’s time, and a large number of servants were grouped together when there was no relation at all in regard to the work they did. I gave some instances yesterday. What identity of interest is there between a checker and a carriage and wagon examiner? But they are in the same staff organization.

Checkers can become carriage and wagon examiners.

Everyone can become a carriage and wagon examiner. Everyone can become an artisan too, if he goes through the training.

He can even become a Minister.

Yes, I became a Minister, and I was only a fireman. Even that hon. member can become a Minister, although I think that is very improbable! But identity of interest cannot really be defined. How it was defined was by saying that some people have an identity of interest in regard to their leave, sick fund, status, etc. I said by way of interjection that there is no closed shop in operation on the Railways. In other words, I cannot compel any worker to become a member of a particular trade union. The position was that the Airways technicians resigned from Group D, from the Artisan Staff Association. They obtained registration for their own organization, in terms of the Industrial Conciliation Act. But I could not compel them to become members of Group D. They would not do it. They refused. They had a fight with Group D for years. I had consultations with them here in Cape Town and tried to persuade them to remain with Group D, but they were absolutely determined not to do so. I had only two alternatives. I either had to give recognition to their trade union, which was registered in terms of the Act, and I have explained why I could not do that and I think hon. members will agree I could not do it, or they had to become members of another staff organization. They could not very well become members of Group E or of Group F, Spoorbond, or of Group C, the running staff, or of Group B, the footplate staff. There was only one organization of which they could become members if they were salaried, and that was Group A, Salstaff, and I gave them salary status, of which they were very proud. That is the position.

In regard to the other matter, I just want to refer to the machinery. In this particular case Salstaff made the representations on their behalf and it wrote the letter on 17 August. Those were the first representations made on their behalf for increased wages. The Management replied on 6 October to Salstaff, and not to them as a group. These matters have to be examined.

Two months.

Whether it was two months or not the hon. member said it was five months.

I did not say it: I will tell the Minister who said it.

The hon. member said that it was in May that representations were made.

I have a source for that. I did not suck it out of my thumb.

Well, it must be a very bad source.

It is the hon. the Prime Minister.

If that is so, then the hon. the Prime Minister must have been misinformed, but he was not misinformed by me.

I did not quote the Prime Minister himself but his source.

Well, that is different. The fact remains that Salstaff made the representations on their behalf. The correspondence took place not with the group but with Salstaff. The representations were acknowledged on 8 September and on 6 October the Management replied in the letter from which I quoted extracts yesterday. That letter asks for more information; they had to motivate their claims. That letter was read out that night at a meeting, and as a group they took the law into their own hands and decided to go on a go-slow strike. Those are the facts.

Why was the letter read out?

They read it out themselves. It was sent by Salstaff to the chairman of their group. If the hon. member knows anything about the set-up he will know that these organizations have their branches; they have their Airways Branch and they have a chairman of that branch.

May I ask the hon. the Minister a question? They took the decision the night the letter was read to them.

Yes.

What are the full contents of that letter that prompted them to take the decision that night?

I quoted some extracts from it yesterday.

Because I would have assumed that the letter would have been of such a nature as to prevent a strike.

No, this is the usual thing that the Management does when they receive representations in regard to wage increases, especially if it is a very substantial increase; the Management ask the staff organization to motivate the request for an increase.

Did it take them two months to ask for reasons?

It makes no difference whether it took two months or not. The whole matter had to be fully examined. These are not the only representations that the Management received; they receive many other representations and they have lots of other work to do. I quoted the extract from the letter yesterday in which the Management asked for more information, and I am not going to reiterate what I said yesterday.

Why did it take two months?

It makes no difference whether it was two months or not. Very often when representations are made it takes considerably longer before the matter is finalized.

Sir, that is all I can say and I do not think it is necessary for me to reiterate what I said yesterday. I think the position should be quite clear now.

The more one listens to explanations given by the Minister, the more one becomes convinced that there is no necessity for this clause. Sir, I want to take this Committee back to the position that existed when the legislation of 1963 was passed. There is a certain similarity between the conditions which prompted this clause and the conditions which prompted the 1963 legislation. In both cases the legislation was prompted by the fact that a group of railway servants had embarked upon a go-slow strike. In the case of the 1963 legislation it was not a small group; it was a very large group which the Minister could not prosecute as a whole, namely the Artisans’ Staff Association. But the Minister’s approach at that time was quite a different one.

When was that?

That was in 1962, and the Minister introduced the legislation in 1963.

But there was no go-slow strike in 1963.

Sir, the hon. the Minister referred to that fact himself.

You had better read it out then. Do not misquote me; you habitually do.

Surely the Minister cannot say that.

Sir. I think it is quite unjust to say that I habitually misquote the Minister.

On a point of order, is the hon. the Minister entitled to say to the hon. member that he habitually misquoteshim. He is imputing dishonourable conduct to the hon. member.

I take the strongest exception to the hon. member’s statement that I referred to that fact myself. I repeat that the hon. member habitually misquotes me. Only a few days ago he misquoted me across the floor of the House. I told him so outside and he had to apologize to me. He admitted that he had misquoted me. I had referred to the speech made in this House by the Leader of the Opposition, and the hon. member misquoted me.

Sir, I take the strongest exception to the statement made by the Minister. I am prepared to ask for a committee of enquiry of this House to find out whether I habitually misquote the Minister in this House. I challenge the hon. the Minister to move a motion for the appointment of such a committee. You see, the Minister is in the habit of making these statements in the House. It happened only the other day again. If the Minister finds himself in difficulties he resorts to one of two tactics; he either resorts to abuse or he throws challenges across the floor of this House and we on these benches are getting heartily sick of it. The Minister must remember that he is not only Minister of Railways but also Leader of the House, and as Leader of the House we expect better conduct from the Minister than he has displayed in the House to-day; I certainly expect better conduct from him. Sir, I repeat that the reason which prompted the introduction of the legislation in 1963 was the fact that there had been a go-slow strike by the Artisans’ Staff Association. The attitude of the Minister on that occasion was quite a different one. He introduced these conciliatory provisions into the Act as it now stands, which this clause seeks to amend, on the basis of a quid pro quo. The Minister’s words in Hansard are perfectly clear. This was the quid pro quo that he was giving the Artisans’ Staff Association in particular. That quid pro quo was that they would have the right in the future, whenever a commission was appointed to settle disputes between the Administration and any section of the staff concerned, to have a representative on that commission and that the Minister would be bound to accept the findings of the commission. The Minister himself said—he said so repeatedly and it is recorded in Hansard—that it was on those grounds that the Artisans’ Staff Association were prepared to forego the right to strike, apart from the fact that they also recognized their responsibility as far as the transportation of the country was concerned; they recognized their responsibility to keep the wheels of the Railways turning. Sir, we on this side of the House have stood by that principle as long as it has been embodied in our legislation. But, Sir, this clause does not only affect the Airways personnel whose recent action in embarking upon a work-to-the-manual strike prompted this legislation. This clause is prompted by similar conditions to those which prompted the legislation of 1963. We are now talking about the Airways personnel but this clause, once it is on the Statute Book, can apply to any other small group of dissatisfied workers in the employ of the Administration whose interests are absorbed in a larger association of members. Sir, the Minister has condemned his own case to-day. When my hon. colleague here pointed out the weaknesses that exist in the present conciliatory measures, the Minister said that he was not prepared to give recognition to every small section of workers in the employ of the Railways and that if he had acceded to the demands of the Airways technicians to give independent recognition to their Association, one can imagine what would happen in those circumstances. Sir, it is perfectly clear that the difficulties that arose could never have arisen in terms of this conciliatory measure if the Minister had recognized them separately because they could have followed the procedure laid down in the Act to petition for the appointment of a commission, and there is no doubt whatsoever that the majority of their members would have signed such a petition. But you have this weakness that in order to be able to get adequate redress in terms of the conciliatory procedure laid down in the Act of 1963, they would undoubtedly have to get the support of many thousands of other workers within the same staff organization. They would have to put the case to all the workers who are members of the salaried staff association. I put it to the hon. the Minister that it would virtually be impossible for such a small group to get the support of the majority of the members of the particular staff association concerned. That proposition which applies to the Airways technicians can apply to any other small group within the salaried staff association. They would have precisely the same difficulties. Sir, the Minister cannot get away from the fact that by introducing this type of amendment to the 1963 Act, he is in fact introducing legislation as a measure of intimidation as far as the railway workers are concerned.

Bullying.

One must ask one’s self what redress any other small group of dissatisfied workers would have if for one reason or another they had a justifiable complaint. The Minister is not compelled to report it if in his view their interests are insignificant. I put it to the hon. the Minister that when the Airways artisans embarked on the step which they eventually took, the Administration, according to a report which appeared in the Vaderland, attempted to borrow approximately 73 technicians from the Air Force in order to service the aircraft of the Airways, but the Pilots’ Association, according to the report in the Vaderland, said that if the Administration did that, they would refuse to fly the aircraft because they were not satisfied that these technicians borrowed from the Air Force could adequately service the aeroplanes of the S.A. Airways. I want to ask the Minister this question: Assuming such a situation arose again, would he take action against the pilots if this legislation is placed on the Statute Book? The Pilots’ Association adopted the attitude that it would not be in the interests of the safety of the travelling public if they acceded to the request of the Administration. Would the Minister then have them criminally charged in a court of law? You see, Sir, there is no end to the type of action that one can envisage under legislation of this kind. Either the existing conciliatory machinery is satisfactory or it is not, and it is not going to be made satisfactory by extending the provisions of the Act to this type of legislation as embodied in this clause. I think this clause embodies the general attitude which the Minister has displayed in this House, and that is, to intimidate the workers of the S.A. Railways and the S.A. Airways.

The hon. member for Yeoville (Mr. S. J. M. Steyn) was very pleased about the fact that I was apparently misinterpreting the 1963 Act. Well, I am not a lawyer. The hon. member for Yeoville is a lawyer. It took me a day to discover my mistake but it took him two years to discover his mistake.

He has still not discovered it.

But even if I did make a mistake, it still does not in any way detract from my argument.

Anybody can make a mistake.

I can understand why the hon. member is so pleased that I made a mistake; he himself has made so many mistakes in the past that he is glad to have company, particularly when it happens to be good company. However, that does not detract from my argument that these Airways technicians were able to follow a certain procedure; they followed that procedure only as far as the Management. They could have gone further to the Minister, and they would possibly have discovered at that stage, if the Minister rejected their representations, that the conciliation machinery was not functioning effectively. The hon. member for Yeoville has therefore furnished no proof at all, on the basis of the action taken by the Railways technicians, that the conciliation machinery did not in fact function properly. I want to put this question to the hon. member for Yeoville, as I also did in the second-reading debate: Why does he continually ask the Minister why this procedure was not followed all the way? Why does he not put that question to the Airways technicians?

The procedure broke down.

Where did the procedure break down?

There was a strike.

No, the Airways technicians submitted their representations to the Management; the Management asked them for certain information, and when they received the letter in which the Management asked them for that information, they decided without further ado to embark upon a go-slow strike. They did not follow the path to the end in order to put the procedure to the test. The hon. member for Yeoville now mentions the example of the Airways technicians. I want to ask him now to prove, on the basis of these events of last year, that the conciliation machinery laid down in this Act did break down, and I hope that the hon. member will stand up and prove it to me and to this committee.

The hon. member for Bloemfontein (East) (Mr. van Rensburg) need not be concerned. One does not hold it against him that he misinterpreted the Act.

Are you becoming worried now?

The hon. member for Karas (Mr. von Moltke) need not become worried either; he does not know much about the Act in any event. Sir, let me just say this to the hon. member for Bloemfontein (East): If he misinterpreted the Act, or if he is not sure what the provisions of the Act are, then he must not become personal and fling disparaging remarks across the floor of the House.

Such as what?

The hon. member told me that I know nothing about the Act. I do not hold that against him but he must not use such disparaging language. Sir, I want to show the hon. member why this procedure does not work. To my mind the hon. member himself stated the position very well …

Take the example of the Airways technicians.

Sir, here we have a group of workers who are members of a staff association; they have a real grievance; they approach the staff association, as the first door which is open to them, and they first try to convince their staff association that they do have a grievance. But they constitute a minority group and they belong to a staff association where there is no great identity of interests. In spite of the fact that they have a real grievance, the group does not even succeed in convincing its staff association. As a practical person does the hon. member agree that such a thing is conceivable? Of course it is conceivable. And if that happens, then that minority group, with a real grievance, now finds itself in this position that its last weapon is taken out of its hands under this clause.

But did that happen in the case of the Airways technicians?

The hon. member closes his eyes to everything but this one incident. My objection to this clause as it stands is this …

May I put a question to the hon. member?

No, the hon. member will be able to speak again. My real objection to this clause is simply that here we are taking out of its hands the most powerful weapon which organized labour has used throughout the centuries. It is left with nothing at all.

Nonsense.

The United Party said in 1963, “Yes, it is a good thing to have such a provision in our modern life provided we make available conciliation machinery which will be some quid pro quo for these people”. I want to prove to the Committee that it is possible to have a situation in day-to-day life, in the organization of the Railways, where a group may have a real grievance and yet be unable to do anything about it. The first door is closed to them and because the first door is closed to them, the Act closes every other door to them and this weapon is finally taken out of their hands. All I am asking the hon. the Minister to do is to say to us candidly, “I am not interested in any minority group in a staff association.” If the hon. the Minister wants to be honest, he must admit that is the only possible conclusion. Unless more than 50 per cent of the members of the staff association are prepared to support the group, the Minister is in effect saying to every railwayman in South Africa, “If you constitute a minority group in a staff association, then I am not interested in your grievances, however real they may be.” That is the situation as the hon. Minister himself must realize, and that is why I make this plea to him. We are not being wilful, as the hon. member for Parow (Mr. S. F. Kotzé) suggested here yesterday. We are not looking for trouble …

You are not looking for trouble but that is what you are going to get.

… but we say that the machinery as it exists to-day cannot work. The present machinery has left minority groups in the Railway Administration in the lurch, and as long as that remains the position we are prepared even to endure slights from the other side, because we know that we are dealing here with people who have to be looked after because we know that the right to strike has been taken out of their hands. and we want to create conciliation machinery to take the place of their right to strike.

The hon. member for Maitland (Mr. Hickman) says that in 1963 the United Party voted for the principle to prohibit strikes in the Railway Service and that they are prepared to accept this principle provided there is adequate conciliation machinery. But nobody made it clearer in 1963 than the hon. member for Yeoville (Mr. S. J. M. Steyn) that he had confidence in that machinery. He shares the confidence which I have in this machinery …

Until it failed.

No, it has not failed because the whole of the machinery has not yet been tested all the way. But the hon. member for Maitland also advanced a second proposition; he really pleaded for what amounts to a splintering of railway trade unions.

Oh no.

Oh yes, what else did the hon. member do? He wants to undermine the strength of the staff associations by giving each separate group the right to act outside of the staff organization …

I never said so.

What the hon. member advocated here amounts to nothing else. Of course, that is what it amounts to. In effect, he advocated a splintering of the trade unions. But you will remember, Sir, that we on this side were always accused by the party over there of destroying the strength of the trade unions in this country by splintering the unions.

May I put a question to the hon. member?

No, the hon. member can take part in the debate again.

Does the hon. member agree that it is possible within the framework of this Act, or this Bill, by way of an amendment, or in some other act, to make provision for minority groups in a staff association to enjoy proper protection?

We should get back to the fundamental issue here. The fundamental issue is that in 1963 this House, by agreement, unanimously adopted legislation to declare certain strike action by railway personnel illegal and at the same time gave them conciliation machinery to compensate them for the bargaining powers which they would lose in consequence. The hon. member for Bloemfontein (East) (Mr. van Rensburg) is quite correct; we all entertained the highest hopes of this new machinery; it seemed to be excellent. We praised this new machinery on both sides of the House, and we looked to this new machinery to stop the type of action that we were declaring illegal. But practice has shown that within two years a set of circumstances arose which made it impossible for that machinery to operate. I agree with the hon. member that it was not even tested fully. But why not? We came back to the inescapable conclusion that this was due to the fact that a group of the personnel were put into a trade union with whom they did not have a true identity of interests. I want the hon. the Minister to cast his mind back for a moment and to recall what happened. Sir, the trouble started, according to Press reports at the time, when increases were given to the pilots and the navigators and other people concerned with the running of the Airways. But the Airways technicians did not get an increase at the same time. These men immediately felt that they were doing similar work, that they were working in a similar sphere as the pilots and the navigators, and they asked why they were being ignored. The trouble then started and pressure was brought to bear upon the Management. We were led to believe that this pressure had been exerted for a long time; it was not something that arose overnight. All the newspapers which reported this at the time stated as a fact that the trouble had been going on for months. The Rand Daily Mail of 7 October, for example, reported—

But I am not relying on the Rand Daily Mail. We also find a report on the same day in one of the Afrikaans newspapers of Johannesburg, a report which reads—

Sir, this comes from the Transvaler and the chairman of the Transvaler is the hon. the Prime Minister. This impression was never corrected. Surely we are entitled to assume that the hon. the Prime Minister is the chairman of the board of directors of a newspaper which speaks the truth, and that if what the newspaper publishes is not the truth the Minister will correct the report at the earliest opportunity. However, I say that in passing. I want to come back to this question of identity of interests. I say that this trouble arose because in granting increases to the pilots and the navigators and others but not to the technicians the Administration ignored the identity of interests of people working in the Airways. That was mistake No. 1, but then there followed this miserable, this most unfortunate letter that was written on behalf of the Management to Salaried Staff Association and which was passed on to the Airways technicians. That letter set about exploiting the lack of identity of interests amongst the members of the Salaried Staff Association in Group A, which was a wicked thing to do. The letter was so worded that it had to be interpreted by the Airways technicians as a rejection of their demands because the letter said that the Management did not accept that they were doing work of a more difficult or more intricate nature than other people. Then it went on to say that the Airways technicians had to justify their claim that their work was of a more responsible nature or more technical or more intricate or more involved than the work of people concerned with bedding on the S.A. Railways or the work of air flight stewards—people who serve food and drinks. They are very fine people; but, Sir, you cannot compare their work with that of the Airways technicians. The Management, however, did to the tremendous indignation of these people. Moreover—the Management may not have intended it but then they should have stopped to consider what they were doing—at the same time they were putting other members of the Salaried Staff Association against the claim of the Airways technicians by suggesting that if the Airways technicians got this increase it would be an injustice to bedding supervisors and air flight stewards. Surely the Minister must see that that was wrong and the Minister must not say that that did not come to the Administration in which he is involved. The Minister himself knows that under Section 3 of Act 73 of 1962 we are told that “the Management and working of the Railways and Harbours shall, subject to the control of the Minister, be carried out by the General Manager”. The Minister is responsible for the fact, firstly, that ignoring identity of interests led to this grave dissatisfaction on the part of the electricians and, secondly, for the fact that there was an attempt by the Management to play the one section of the same staff association off against other sections in order to prepare the ground, as these people saw it, for a vote by the people affected against their using the rest of the machinery. I say with great respect that that is bad management for which the Minister is responsible under the Act, not only in the Administration but as the man in charge of the Management of the S.A. Railways. I feel that we cannot as a Parliament vote against work-according-to-the-manual, which is really a vote of censure against the Airways technicians, unless at the same time we as a Parliament take steps to avoid a recurrence of the incidents which took place when the conciliation machinery, which we so hopefully introduced in 1963, proved inadequate, inadequate in the face of the attitude of the Minister’s Management. That is what happened. The attitude of the Minister’s Management was so wrong that even this fine machinery which we created could not survive this mismanagement. Does the hon. the Minister not feel that that should be put right? Does the Minister regard his function as being only the suppression of grievances and not the redress of grievances. The Minister made great play of the fact that these technicians voluntarily and very insistently withdrew their support from the Artisans’ Staff Association. That does not alter the fact that if you consider identity of interests, then in the opinion of any objective person they have a greater identity of interests with that Association than with any other association. But, of course, the Minister wants us to govern the Railways for him by making detailed suggestions …

Heaven help us.

I want to say to the hon. the Minister that he could have avoided this situation very easily if he had followed the advice given by the United Party over several years when we told him again and again that the S.A. Airways had developed to a stage where it should be a separate entity under the Ministry of Transport, in which they serve, would have the identity of interests of people working on our aeroplanes recognized. They will have their union within the Airways organization under the Minister. But that has not been done. The Minister must not come with his clever, clever challenges. The United Party Opposition has had a clear answer to this; we anticipated this sort of difficulty years ago. But unfortunately, Sir, the Minister, the Cabinet, the people in charge, did not have the insight to realize it. As has so often happened in the past the United Party had the foresight and the Minister has not even got the hind-sight.

Mr. Speaker, I accused the hon. member for Turffontein (Mr. Durrant) yesterday of misquoting me. I wish to withdraw that.

Hear, hear.

I still want to move the following amendment—

Amendment put and agreed to.

Clause, as amended, put and the Committee divided:

AYES—83: Badenhorst, F. H.; Bekker, G. F. H.; Bekker, M. J. H.; Bezuidenhout, G. P. C.; Bootha, L. J. C.; Botha, H. J.; Botha, M. C; Botha, P W.; Botha, S. P.; Coetzee, B.; Coetzee, P. J.; Cruywagen, W. A.; de Villiers, J. D.; de Wet, J. M.; Diederichs, N.; Dönges, T. E.; du Plessis, H. R. H.; Faurie, W. H.; Fouché, J. J.; Frank, S.; Froneman, G. F. van L.; Grobler, M. S. F.; Henning, J. M.; Hertzog, A.; Heystek, J.; Hiemstra, E. C. A.; Jonker, A. H.; Knobel, G. J.; Koornhof, P. G. J.; Kotze, G. P.; Kotzé, S. F.; le Roux, P. M. K.; Loots, J. J.; Malan, W. C.; Marais, J. A.; Maree, G. de K.; Martins, H. E.; Meyer, T.; Mostert, D. J. J.; Muller, H.; Muller, S. L.; Nel, J. A. F.; Nel, M. D. C. de W.; Niemand, F. J.; Otto, J. C.; Potgieter, J. E.; Rall, J. J.; Rall, J. W.; Rall, M. J., Sadie, N. C. van R.; Schlebusch, A. L.; Schlebusch, J. A.; Schoeman, B. J.; Schoeman, J. C. B.; Schoonbee, J. F.; Serfontein, J. J.; Stander, A. H.; Steyn, F. S.; Steyn, J. H.; Treurnicht, N. F.; Uys, D. C. H.; van den Berg, M. J.; van den Heever, D. J. G.; van der Ahee, H. H.; van der Spuy, J. P.; van der Walt, B. J.; van der Wath, J. G. H.; van Eden, F. J.; van Niekerk, M. C.; van Rensburg, M. C. G. J.; van Staden, J. W.; van Wyk, H. J.; van Zyl, J. J. B.; Venter, M. J. de la R.; Venter, W. L. D. M.; Viljoen, M; Visse, J. H.; von Moltke, J. von S.; Vosloo, A. H.; Waring, F. W.; Wentzel, J. J.

Tellers: D. J. Potgieter and P. S. van der Merwe.

NOES—46: Barnett, C.; Basson, J. A. L.; Basson, J. D. du P.; Bennett, C.; Cadman, R. M.; Connan, J. M.; Cronje, F. J. C.; de Kock, H. C.; Durrant, R. B.; Eaton, N. G.; Eden, G. S.; Emdin, S.; Field, A. N.; Fisher, E. L.; Gay, L. C.; Gorshel, A.; Graaff, de V.; Henwood, B. H.; Hickman, T.; Higgerty, J. W.; Lewis, H.; Malan, E. G.; Miller, H.; Mitchell, M. L.; Moolman, J. H.; Moore, P. A.; Oldfield, G. N.; Plewman, R. P.; Raw, W. V.; Ross, D. G.; Steenkamp, L. S.; Steyn, S. J. M.; Suzman, H.; Taurog, L. B.; Taylor, C. D.; Thompson, J. O. N.; Timoney, H. M.; Tucker, H.; van der Byl, P.; van Niekerk, S. M.; Warren, C. M.; Waterson, S. F.; Weiss, U. M.; Wood, L. F.

Tellers: A. Hopewell and T. G. Hughes. Clause as amended, accordingly agreed to. On Clause 58,

May I just take this opportunity of saying thank you to the Minister for having withdrawn those words. I do not usually misquote.

Order!

Clause 58 provides for the establishment of a savings fund for non-White servants of the Administration. During the second-reading debate the hon. the Minister made it quite clear that he was, in the first instance, establishing a fund as far as Coloured servants were concerned. Sir, I find somewhat of a difference between what the hon. the Minister said in his reply to the second-reading debate and what he said when he introduced the Bill. Because the Minister described the fund as a pension scheme in the form of a savings fund. I hope the Minister is listening because I am quoting to him. I hope the Minister will not say that I am again misquoting him. The Minister said—

A pension scheme in the form of a savings fund. I have no objection to the description there, but looking at the reply of the hon. the Minister’s to the second-reading debate …

It is not the right description.

Am I to assume that there was no intention on the part of the Minister directly to mislead the House if it is not the right description.

I should not have put it that way.

am not misquoting the Minister?

No.

In other words, it was a slight error on the part of the Minister to call it a pension scheme—it made it look better politically? I leave it at that, Mr. Chairman.

The point I want to make with the Minister is this. As I read this clause there is no provision for payment out of the savings fund at the expiry of the Coloured servant’s period of service. The Minister pointed out yesterday that a Coloured servant got an annuity in the event of that servant’s period of service coming to an end, say, after a period of 15 years. In the case of this savings fund will that Coloured servant get paid out to him what he had contributed, plus interest, as well as the annuity which he to-day gets from the Administration? The clause is not clear, Sir. As far as I can see the clause provides for payment in the event of his death, or if he wants to borrow money, or in the event of his early retirement or in the event of any other reason. But it does not say that the savings fund is established as a pension scheme, for example, as a form of security for the servant concerned, to be paid to him after the expiration of his period of service in the Administration. I shall be glad if the hon. the Minister would clarify this point.

If he retires from the service he receives his savings plus interest. In addition to that he receives either his annuity or his gratuity. The savings fund does not replace that. Let me give hon. members some examples of what a Coloured servant receives after a certain period of service. A Coloured servant with 20 years’ service, receiving a maximum wage of R52 per month, receives a gratuity of R693—I am giving it in round figures—or R70 per annum in the form of an annuity together with a temporary allowance which works out, in the case of a married servant, to R240 per annum. That is the temporary allowance a Coloured pensioner receives if he draws an annuity. It is based on the wage he actually received and his length of service. So my reply is that he receives the amount he has paid into the savings fund, plus interest, and, in addition, his gratuity as provided for in the Act or an annuity based on his length of service and the wage he received while in the service.

As the Minister says this is not a correct description and I now agree with him. But I want to know why this step is only taken in a half-hearted manner when the position already exists, in respect of Coloured servants, that they get either the gratuity or annuity after certain periods of service. He has to make a contribution.

No …

Is there no contribution on the part of the servant? I thought a percentage was deducted.

The Administration makes no contribution.

As the position exists at the moment the Administration does make a form of contribution if it is going to pay an annuity towards which end the Coloured servant himself is making a payment; he makes no payment now. So there is a contribution in a sense by the Administration.

May I explain to the hon. member? Both the gratuity and the annuity is paid out of revenue. The Coloured servant makes no contribution. He makes the sole contribution towards the savings fund. He gets his savings fund balance, together with interest, at the date of retirement.

I appreciate that, Sir. The point I am trying to make with the hon. the Minister is this: If there is now going to be a percentage deduction from the emoluments of the Coloured servant for this savings fund and the Administration is already committed to the principle of paying an annuity in the form of a pension why not go the whole hog and establish a fund to which the servant and the Administration make a contribution?

What is it going to cost?

I appreciate that it is a matter of costs. But the Minister will appreciate that while the number of Coloured servants is limited at the moment that figure is not going to remain static. An increasing number of Coloureds and Indians are going to be employed. The Minister even mentioned Bantu servants in his speech. By the nature of the work they will fulfil and the needs of the Administration that number must increase. If a pension scheme is going to be introduced at a later date—it will come; it must—then the cost will be far greater than it will be now.

The more servants the higher the costs.

My question is this: This is the first step and it is in respect of Coloureds. It is envisaged to extent it to Indians and to Bantu. Why take this halfhearted step now and not the whole step, instead of taking it later, as far as establishing a pension fund for this class of servant is concerned? That is the issue on which I should like to have clarity.

If I introduce a contributory pension scheme for Coloured servants I would have to extend it to Bantu servants. There is no reason for discrimination. In respect of the Bantu servants alone a contributory pension scheme would involve an expenditure of £800,000 from revenue. That will be the Administration’s contribution. It is entirely a question of cost why it is not being introduced now.

Clause put and agreed to.

Clause 63 put and negatived.

On new Clause to follow Clause 62,

I move—

That the following be a new clause to follow Clause 62:

Agreed to.

Clause 64 put and negatived.

Clause 65 put and negatived.

On new clause to follow the new Clause 63,

I move—

That the following be a new clause to follow the new Clause 63:

Agreed to.

On Clause 76,

I would like to come back to a point raised by me on another occasion to which the Minister did not reply. I refer to the erection of protective devices. I do not want to cover the whole ground but I am still a little bit concerned in one respect. The case made by us formerly was this that where a delay was going to take place in the elimination of a level crossing then steps should be taken by the committee to ensure, as a temporary measure, that flicker lights or other warning devices were erected at that particular crossing. This clause now provides that the costs of those temporary warnings should be borne by the fund and this is what perturbs me. As I said on a previous occasion that is all very well and good in principle. It is always just as a temporary measure. As the Minister knows, a list of priorities is drawn up in respect of level crossings and the committee make recommendations accordingly. But what worries me is the wording of this clause. It says—

The point I want to make is this: The erection of warnings at level crossings has always been a normal function of the Administration. The costs of such flicker lights and other devices have always been borne by the capital account of the Railway Administration as part of its function of running the Railways. The way this clause is worded the funds of the Elimination of Level Crossings Fund can now be

used to cover the costs of performing a function which is normally a function of the Railway Administration in the running of its Railways. In other words, the money which should be used for the elimination of level crossings can be diminished in that the Administration can use part of that money for the erection of warning lights, flicker lights and other devices, the cost of which was formerly regarded as capital expenditure. I shall be very pleased to receive an assurance from the hon. the Minister across the floor of this House that where the provisions of this clause are put into effect they will only be put into effect where the flicker lights and other devices are erected as a temporary measure before the crossing is entirely eliminated and that the funds of the Elimination of Level Crossings Fund will not be utilized to erect warning devices which have to be erected because of the normal development of the Railways, such as the construction of a new line. The costs of such devices should be defrayed out of the capital of the Railways. I hope the Minister will be able to give us that assurance. It is difficult enough to find the money for this fund and the list of level crossings to be eliminated is long enough as it is without placing any additional financial burden on this fund.

The hon. member probably knows who the contributors to the fund are. The Railway Administration contributes, the National Roads Fund does as well as the Provincial Administrations. The hon. member will probably also know that the Minister has no control over that fund. It is entirely in the hands of the permanent Level Crossings Committee. It has to decide. In other words, the Railway Administration cannot decide to erect flicker lights or booms at any particular crossing The cost is paid out of the fund and that decision must be taken by the permanent Level Crossings Committee and is communicated to the Railway Administration, as the clause reads. The costs of those protective measures will be paid out of the fund. There are obviously many dangerous level crossings which are not on the priority list. The Administration cannot provide the funds to erect protective devices at every dangerous crossing. It is only in exceptional cases that it is done. Booms or flicker lights are erected in some cases. It may take 15 or 20 years before those level crossings are eliminated either by the construction of a bridge or a subway. So the only assurance that I can give is that this will not affect the programme for the elimination of level crossings, and that the fund will not be used to such an extent that it will be depleted so that there will not be any funds to do the more important work of eliminating level crossings by way of bridges or subways.

Clause put and agreed to.

On Clause 79,

We are very pleased that this clause has been inserted in the Bill but there is one point I think the Minister will have to clarify and make quite clear exactly what is intended. I refer to the provisions of Clause 79 (4) (a) (ii) in respect of a servant who died during the time that the option was valid. I shall read it—

It is not clear to me what is going to happen where a member dies during the period of three months which he has to exercise this option. In terms of the provision I have just read out the Administration will in fact accept that the member has paid back in full the amount the Administration had advised him would be required if he was going to get these extended benefits. The point I want to make to the Minister is this that provision is made here that the said arrear contributions and interest may be paid in one amount or by such monthly instalments as will be determined by the Administration’s chief accountant in consultation with the member concerned. That is quite in order. But do I understand that if the member happens to die during this three-month period the Administration will pay in the full amount of the arrears and that it will not be off-set against the estate of the deceased member. I do not know what the position is. The way it reads at the moment it would appear that the Administration is going to pay the full amount and that it will not be a charge against the estate.

As far as the second point I wish to raise is concerned I hope the hon. the Minister will give wide publicity to this provision mainly in the interests of the womenfolk of members. I do not know whether the Minister has had the experience that I have had in respect of representations made to me by widows. They have come along and said: Why can we not get the benefit of the Widows Pension Fund? I have discovered that although the option was extended to the husband while he was in the service he did not exercise it and that the widow was now paying the penalty. I feel that publicity should be given to this that if any railwaymanȉs wife is going to get the benefits of this amending legislation she should be on the alert to see that her husband exercises that option. There are men, I am sorry to say so, in the railway service who do not care two pence what happens to their wives. They are covered by a pension and if the wife is going to get a better pension as a result of this amendment, the men often do not seem to care two hoots because it means that they have to make arrear contributions now. But I believe that if the wife knows exactly what is involved here, she should be able to bring sufficient pressure to bear on her husband to make him exercise this option. That is why I hope that publicity is going to be given to this, because otherwise it would appear that there is an inducement given to a wife to do something to her husband if he refuses to exercise his option, because, as I have indicated earlier on, if he dies in the interim, then the Administration is going to pay in any case.

You mean the wife should have a bedroom-talk with him?

The wife can have a bedroom-talk with him, but we do not want the wife to do anything to him, the husband passing on, so that she can get the benefit of the pension. I hope there is going to be wide publicity given so that the wives will be in the position to protect their own interests, even if it is against the will of their own husbands. Because this is an issue that comes to us as Members of Parliament when it is too late for anything to be done. The widow is there, the husband has neglected his duty and she becomes now a burden on the State in one way or another. That is why I am asking firstly: What happens if a member dies during this period when he can exercise the option? Will the Administration pay or will it be a charge against the estate? Secondly, whether the Minister is prepared to give wide publicity on the lines I have indicated in the interests of the wife of the railway servant.

I think it is going to be difficult to give that publicity. The railway management cannot write to every contributor’s wife to tell her that this is what her husband is in a position to do.

Perhaps a statement in the Press?

That is possible, but I do not know how otherwise publicity can be given to this matter, but I will ask the management to go into this matter. This of course is a recommendation of the Joint Superannuation Committee, and their recommendation in regard to those servants who die is the following—

And then (4)—

I have raised this point because the Act does not make it clear that the arrear contributions can be recovered from benefits, and my feeling is that unless it is stipulated in this clause, it will not be possible to recover the arrear contributions that I have mentioned.

It is not necessary to embody that here. It is a question of procedure.

I hope the hon. Minister is right.

Clause put and agreed to.

Remaining Clauses, Schedule and Title of the Bill put and agreed to.

The hon. Minister concluded his speech yesterday by asking for the support of the House for this Bill, and I do not think it is necessary for me to say that as far as we are concerned we certainly support the Bill, in fact we think it is long overdue.

The hon. Minister explained in detail the major proposals in the Bill giving very wide powers indeed to the Registrar to enable him to exercise the fullest control possible over insurance companies, and I do not think it is necessary for me to repeat the points which the hon. the Minister made yesterday afternoon very clearly. All these points, bringing compulsory third-party insurance, and guarantee insurance within the scope of the Act and the provision of deposits with the Treasury and the conditions for the holding of assets and the restrictions on borrowing, guarantees and the conditions in regard to the handling of agents’ premiums, in short-term insurance, and so on, all these things, together with the penalties for not complying strictly with those conditions when called upon to do so, are designed to stop the gaps in the existing legislation. The hon. the Minister pointed out that it was not possible to guarantee that he is going to stop them all. but he hoped that he could stop most of them. Whether he will succeed with this Bill or not time alone can tell. But of course we have got to remember that there is a commission to be appointed on this subject, and it may well be that this commission may in its findings and in the course of its investigations may reveal further gaps which they will report, and if that happens we would expect the hon. Minister to come back to this House without delay in order to obtain the necessary amendments to this Act.

That is why I announced that I would ask them to make suggestions in the terms of reference.

All I am saying that this is not necessarily the last word. But incidentally, when is this commission going to be appointed? The matter is a very urgent one, because the hon. Minister must remember that the longer he delays—and he has known for some weeks now that he was going to appoint a commission—the longer he delays with the appointment of the commission, the more time he is giving to possible wrong-doers to cover up their tracks and to enable the real villains, if there are any (and I must say it looks as if there are), to escape, as we have known to happen in the past. I would impress upon the hon. Minister that the sooner he can publish the terms of reference of the commission as well as the members of it, so that they can get to work, the better it will be. One wants to give a note of urgency about this question. One cannot help feeling that the Bill itself is very much like closing the stable door after the horses have escaped, because in the last three years at least 13 valuable horses have escaped from the stables, taking with them many hundreds of thousands of rand belonging to people who can very ill afford to lose them. The losses incurred over the last three years by people, most of whom were people of moderate means and some of them were very small means, have not yet been calculated, but that it is a very serious matter indeed is quite undoubted, and whatever the reasons for this state of affairs may be, I want to say that I do hope that the hon. the Minister is going to see to it that the terms of reference of this commission will be as wide as possible. This last disaster upon which everybody’s attention has been fixed recently, the Parity case, is after all only the most recent of a whole series of similar occurrences, very serious occurrences, and if we are really going to put the house in order and if we are really going to make quite certain, as far as is humanly possible, that this state of affairs will not reoccur, I think that this commission which is being appointed should have wide enough terms of reference, especially if it is going to make recommendations as to how this Act can be improved. It should have terms of reference enabling it to enquire into the circumstances which allowed the other cases to occur during the past three years. Because what has happened in the last three years, in my opinion is nothing short of a tragic public scandal, and it is a public scandal for which the hon. the Minister must accept responsibility. He must accept responsibility because he is supposed to be controlling these institutions. The hon. the Minister is the gentleman who is charged by Parliament, by legislation, to control all these financial institutions, and he must therefore be held responsible for what has happened.

The hon. Minister told us yesterday that this is an agreed measure and that it has the approval of the insurance companies—long and short term—and indeed I am sure that is the case after the long negotiations and discussions which have taken place, but I think he said that it was “a time-consuming task”. That means that it has taken something like nearly three years to draft this legislation. I can well believe if. Admittedly the insurance business is a highly technical and complicated business with many ramifications and branches and to cope and deal with all its aspects is a highly complex question. But the fact remains that the hon. Minister must have known at least three years ago that things were going wrong and it has taken him three years to take any drastic action in the matter. Because whilst we did pass the Banking Act, last session, the majority of these occurrences have been in connection with insurance companies. To my mind it is inconceivable, I just cannot understand it, that having known what was happening he did not take some action. He must have known what was happening, otherwise why was a start made to redraft the legislation, and if he did not know, it makes it much worse because then his staff was not informing him of what was going on; but he must have known that things were going wrong it is unbelievable to think that the hon. Minister did not immediately, three years ago, take some action, even if it meant coming to this House with emergency legislation to give him temporary powers. Other colleagues of his have not hesitated to come to this House for drastic powers in an emergency, and goodness knows what has happened in the last three years is very near a national emergency! I simply cannot understand why the hon. Minister a long time ago did not either come to this House, or if that was not necessary, use his powers that he has got to take drastic steps to hold the position until such time as full legislation like this could be introduced.

What drastic steps do you suggest the hon. Minister should have taken?

I do not think this is the occasion to consider the drastic steps that should have been taken. That is not the point. If the hon. member for Ceres is foolish enough to get up here and start trying to deal with the subject, I hope the House will not listen to him. because it is a highly complicated and difficult question.

What cheek!

I do not think he knows anything about it. I do not intend to be an expert myself, but I know a disgraceful state of affairs when I see it anyway. It is quite inevitable that in a Bill like this the Registrar has to have wide powers, and I think it is inevitable that when he has such wide powers he must be given a good deal of discretion in using those powers. He has to deal with all sorts of situations and various concerns which fall under his aegis and it is right that he should have a wide amount of discretion. But whilst the Registrar quite properly has a great amount of discretion, let us never forget that the hon. the Minister is responsible to Parliament for his actions, and whatever the Registrar does, or does not do, it is the hon. Minister whom we hold responsible for what goes on. Therefore I would say that with the passing of this Bill the immediate task of the Minister is first of all to see that the Registrar is a capable man. I am not referring to the present Registrar, I am not being personal, but I am saying that it is his business to see that the Registrar is a capable man. The present Registrar may be highly capable. I am not referring to him at all, but the Minister should see to it that he is capable, efficient and that he is a man in whom he has the fullest confidence. That is the first requisite. Secondly, having satisfied himself in that regard, he should see that the Registrar is fully and adequately staffed to carry out the functions of the Registrar and to see that the Act is properly administered. Because inefficient control is worse than no control at all.

Why?

I will tell the hon. member why. Inefficient control is worse than no control at all because it is the happy hunting-ground of every imaginable crook. The moment you have inefficient control, who takes advantage of it? Not the honest man. It is the people who see loopholes, and I say that that is the root cause of all our troubles in this matter that the control so far has either been inefficient, but certainly ineffective. That is why I want to emphasize that whilst the Minister’s main task now is to see that the staff is adequate and competent and qualified, and once the Minister is satisfied that he has the right man as Registrar, the Minister must give him his full backing and give him all the support and assistance that he requires.

Mr. Speaker, I do not think there is very much more for me to say except this that I feel bound to tell the hon. Minister that whilst we are approving of this Bill, in our opinion by his failure to act during the last three years, by his apparent inertia in the face of accumulative disasters which have overtaken these financial institutions during the last three years, we believe that he has completely forfeited the confidence of the people in him as a protector of their financial institutions and we believe that they have no doubt whatsoever in their own minds that he ought to resign.

It was rather shocking to hear the very strong sentiments expressed in his short speech by the hon. member for Constantia (Mr. Waterson). There were two outstanding aspects in his criticism of the hon. the Minister, the one being the extravagance of the criticism and the second the absence of any detailed justification of that criticism. Because if the hon. member’s criticism had been justified, one would have expected him, in dealing with this piece of legislation, to say, “For three years the Minister brooded over this legislation; if he had introduced it earlier Clause So-and-So would have averted this disaster and Clause So-and-So would have averted that disaster.” But he did not do so because the fact of the matter is that even the provisions which are contained in this Bill and which are the outcome of negotiations between the insurance industry and the Registrar of Insurance, would not have been able to obviate those specific incidents and abuses because legislation per se cannot always eliminate human fallibility. But, Mr. Chairman, the hon. member for Constantia and the Opposition admit that this legislation is adequate. They cannot argue that this legislation has been introduced too late; they cannot argue that it would have been able to cure or prevent the failures which have taken place in the insurance industry. What then is their real criticism of the Minister? Their criticism of the Minister is simply that certain unfortunate incidents took place which the Minister was unable to prevent. Why was he unable to prevent them? That is the point that I want to take up with the Opposition. The reason is that our insurance legislation is regulatory legislation, limiting legislation. We simply fix the limits within which this highly technical industry may operate. We say to the industry, “As a framework for the various classes of insurance, we require you either to furnish a deposit or, as is being provided for in this measure in respect of short-term insurance, to keep a certain prescribed surplus; we require you to make your investments within certain categories—in the case of short-term insurance 30 per cent in gilt-edged investments and in other cases in prescribed investments.” Our legislation has never been designed to ensure that the State is able to dictate to or to organize the insurance industry in every detail. I want to ask the Opposition whether their plea is that this Minister and his successors and the Governments of South Africa must follow the extravagant course of assuming complete control over the insurance industry so as to eliminate all abuses in the future by means of complete State control? I want to say at once that that is what they are suggesting; that that is the only conclusion to which one can come in the fight of their attack here. But that is not what hon. members opposite want, just as little as we want it, simply because the insurance industry, the long-term insurance industry at any rate, makes such enormous capital investments that it is impossible for the State to go and prescribe in detail just where those hundreds of millions have to be invested. The State can never place restraints upon the freedom of directors to such an extent that they are deprived of all initiative in the control and direction of the business. The Opposition agree with us that all we have to do is to introduce regulatory legislation to determine the limits within which the insurance industry may operate. That is why the Opposition agree with us that this legislation that we have before us is good legislation. It is good legislation in the first place because it was drawn up in consultation with the insurance industry and with their agreement and because every one of the provisions dealt with by the hon. the Minister in his second-reading speech ensures a moderate strengthening of control and additional safety for the general public.

Why did we have these unfortunate situations to which the Opposition referred? We are going to have a commission of inquiry which will no doubt give us the answer. I am not in a position to deal with those aspects of the hon. member’s speech; the hon. the Minister will probably do so. The commission will certainly come forward with certain answers, but what hon. members of the Opposition have at no stage been prepared to admit in connection with the experience of the past and in connection with Parity specifically is that to a very large extent that company carried very bad risks over a long period; that it did so, moreover, at a reduced premium, and that inherently the business which they did was of a very dangerous nature. The blame for what happened in the result, therefore, must not be sought in external things only such as lack of control or dishonesty or anything of that kind; what happened in the result is possibly due also to a very considerable extent to the nature of the business that was done, the risks that were carried and the company’s scale of premiums.

Was there any dishonesty?

I say that we must consider all factors in seeking the cause. Dishonesty may have been one factor amongst others. There is also this factor of the inherent weakness of the type of business in which these companies engage. We do not want to repeat the facts in connection with this case; we know that in the no-confidence debate we were given an account of what was done in respect of Parity; in other words, within the last year steps were taken to ensure that Parity’s tariff of premiums was raised and brought on a par with those of the other tariff companies and that its capital was increased. But that does not detract from the fact that what was basically wrong in the situation of that company is the fact that its available assets were inadequate to enable it to make the necessary provision for the risks that it carried. The Opposition cannot therefore come along with the specific reproach that the Minister failed to introduce these provisions earlier and that if he had done so it would have saved the situation. I challenge them to prove that any of the specific provisions contained in this measure would have rescued Parity from this difficulty.

I want to conclude by making one or two references to the Act. I come back again to the proposition that I advanced a few moments ago that we are merely dealing here with regulatory legislation which fixes the limits within which the insurance industry has to operate. I want to assure the hon. the Minister of my appreciation of the fact that the amounts which have to be deposited have not been fixed at an unreasonably high, unattainable level. We must not require such high deposits that only very large, existing financial institutions are able to enter the insurance industry. Our approach to the insurance industry in a young country such as South Africa should be such that it will still be possible for smaller but effective financial groups to enter the industry. I am grateful for the fact that that provision has been made here.

I am also grateful for the fact that provision has been made to meet insurers who are already in the industry, who are now required to increase their deposits, and that the Minister has been given the discretionary power to allow them up to a maximum of five years to comply with the new requirements. I want to express the hope that the Minister and the Registrar of Insurance, although they will take stringent steps to see that the business of every company is conducted as safely as possible, will give the smaller companies, which do a particular type of business, every possible assistance to build up their increased deposits.

In the last instance I want to refer to the extremely important provisions of Clause 22, in which the discretionary power is now being given to the Registrar of Insurance to threaten to close a company if the company does not comply with the Registrar's requirements. I tink in Section 22 of this Act, which is supported by both sides of the House, we have now for the first time created an instrument which places a weapon in the hands of the Registrar and also of the Minister to take really effective action against a company where they feel that a dangerous situation may be developing. We trust that this power will not be used lightly. On that note I want to conclude. If we want to render a disservice to the insurance industry and to capital formation in South Africa, then we must adopt the panic-approach towards the insurance industry that we have had here from the Opposition in the past few days. The insurance industry in this country and indeed in any country is not an industry that one should view as a potential threat to the general public, as an industry that must be hemmed in with restrictive measures. It is an industry par excellence which can serve as one of the most powerful factors for capital formation in the State and it is an industry therefore which should be viewed with sympathy. That is why the powers contained in Section 22 should not be used to put insurers out of business on the slightest pretext; they should be used, as the Minister described his policy earlier this Session, as a coercive measure to ensure the effective nursing of insurance undertakings; they should be guided by the Registrar and, if necessary, threatened that these powers will be invoked if they refuse to follow his guidance. But I particularly want to make this appeal that it should not be the policy in the future lightly to use these drastic powers against insurers, but that the insurance industry, with the maximum sympathy and support of the State, should be allowed to continue in our country to be a capital-formation factor, for the protection of the public, as indeed it has been in the past.

Mr. Speaker, the hon. member for Kempton Park (Mr. F. S. Steyn) came in very vehemently to protect the hon. the Minister of Finance who, I am quite sure, is capable of protecting himself. But I think he started off on the wrong foot. It has never been our belief, and I do not think it is the belief of any member in this House, that laws can be introduced which can ever give complete protection to the public where financial matters are concerned. That is common cause; it just cannot be done. Nor has it ever been suggested, and I hope it never will be suggested in this House, that we as Parliament, the Government, can take complete control over these institutions. The hon. member noted happily, that too large deposits will not be asked for from companies and that certain periods of grace will be given. His reasons for being well satisfied with these aspects of the Bill were that it would enable the smaller and the younger companies to grow. This, I think, is the objective of everybody, but one cannot allow the smaller and younger companies to grow at the possible expense of the insured, and therefore these provisions are essential and they must be rigidly adhered to. What we want, and what everybody wants, is that the good, sound, reputable insurance company shall cater for the public, irrespective of size, and that those companies which do not conduct their affairs in the normal businesslike manner should come under the purview of the Registrar and the Minister and either be made to behave themselves or be put out of business. I think that is common cause.

The safeguards that are provided in this Bill are, I think, agreed by all of us to be very necessary, and they are welcomed not only by both sides of the House but by the vast public outside the House who, to date, have been the major sufferers in the debacles we have had in regard to insurance companies over the past few years. The Minister in his secondreading speech said that the purpose of the Bill was to make it as difficult as possible, or impossible, for any insurance company to fail to meet its commitments, a very sound objective: and he went on to say that provided the staff of the right quality could be obtained this should be possible. But there is a feature of this Bill to which attention was drawn by the hon. member for Constantia (Mr. Waterson), and it is one which must not be lost sight of. This feature is that the Registrar of Insurance not only has a discretion, but is able to suspend every one of the major provisions of this Bill, at his discretion. In other words, the Registrar of Insurance can vitiate this Bill at will, because every proviso—I will deal with them in a moment—in the Bill of any importance is subject to certain conditions which may or may not be imposed by the Registrar, or he may give alleviation of them. So in effect the safeguards that are provided in the Bill can be removed at any time in relation to any insurer at the discretion of the Registrar. Sir, discretionary powers have to be given. We admit that, but if they are not exercised in a most responsible manner the Bill will have very little import or effect.

If we look at the Bill, we find in terms of the definition section, Section 1, that the securities to be lodged are to be approved by the Registrar. This is a new feature. Previously the securities which would be acceptable were determined by the Treasury. I should like to know from the Minister why he has taken this right away from the Treasury and passed it over to the Registrar of Insurance? It seems to me that either the Treasury or the Secretary for Finance would be the most appropriate persons to determine whether a security is acceptable in terms of this Bill than the Registrar, who in any case will have enough hay on his fork without being burdened with unnecessary additional duties. In the registration of a new company the Registrar has almost autocratic powers. He must be satisfied that the applicant for a licence is desirable, that the manner in which the applicant proposes to carry on the business is not inconsistent with the Act, and that the business is in the public interest. It is right that he should have the powers, but it is also important that he should use his powers in the interest of the public.

Another provision in the Bill is that certain new deposits must be deposited with the Registrar, but again the Registrar has a discretion. In the case of companies which have been in existence for 20 years and have carried on their business in a sound financial manner for ten years, the Registrar may withdraw these requirements in so far as deposits are concerned, although he may re-introduce them at a later date. Sir, I wonder whether this provision is really sound. Those institutions which have been in existence for 20 years, and those who have carried on business successfully for the past ten years (which probably means that they have carried on their business successfully for 20 years) will not find it difficult at all to provide the Registrar with the deposits required in terms of this Bill. It will be those companies which are not quite so sound which will have problems. It seems to me that this proviso may be in favour of those companies which will really need watching and which are completely unimportant to the sound companies which are already established.

Do you know what the present position is?

No, that is not important. We are talking about the future.

This is more stringent now.

Yes, but I am talking about what this Act provides. No, a new provision in this Bill, and an intelligent one, is that an insurance company, in addition to its requirements under the Companies’ Act to provide the Registrar of Companies with its balance sheet and accounts within six months of the end of its financial year, must now submit these same accounts to the Registrar of Insurance. I think this is a very good provision indeed. We have here the same provision that we have in the Companies’ Act, that the Registrar—in the one case the Registrar of Companies and in this case the Registrar of Insurance—may, if he thinks it necessary, allow the company an extension of time within which to lodge its accounts. I do not know how long this period of six months has been in the Companies’ Act—this six-months period and then the discretion. I know it was in the Act when I was an articled clerk many years ago, but the preparation of the accounts of companies, particularly companies which have a public association—can to-day produce their balance sheets and accounts in a much shorter period than six months. We know from experience that the first sign that there is something wrong with a company is when it fails to produce its accounts, and that applies not only to insurance but also to companies quoted on the Stock Exchange. When you do not get the accounts of a company on due date, that is the first sign that something is wrong. I wonder whether the Minister will not consider in this day and age, when there is mechanical means to assist accounting, and in view of the fact that companies are being encouraged to produce not one balance sheet a year but at least two, and in some cases four, whether he will allow this provision that the Registrar should be entitled to say to the company that it can have an extension of time in which to produce its balance sheets and accounts. Does he not think it better that action should be taken immediately if this has not been done?

The hon. member for Kempton Park commended this five-year extension which is provided in the Bill for people to make their deposits. In fact, the period can be ten years, because again the Registrar has a discretion to allow further periods, not exceeding a further five years. Here I want to ask the Minister whether he does not think that a period of ten years, in the light of what we are trying to achieve in this Bill, is not too long a period of time? The Registrar has other rights. He can allow companies to hold part of their investments overseas. That is a very important provision. No company can guarantee or borrow money without the permission of the Registrar. Perhaps his most important power is that the Registrar in terms of Clause 21 may prevent the transfer of shares or interests in any insurance business, and if he does not like the transfer he can put the company under judicial management. I have said that it is necessary that a certain modicum of discretion must be given to the Registrar, but there is not a single provision in the Bill, as I said before, which the Registrar cannot negate by his own action. We have learnt from experience over the last few years that any latitude in these matters usually leads to disastrous results. It has been said in this House that the function of the Registrar is not to close up or to liquidate companies, but to try to maintain them. I think that is only half correct. His function is perhaps to try and save them, but not at the expense of the people who are insured by those companies. In granting this latitude which apparently has been granted in the past, one takes into account that it is difficult to sort out fiction from fact in these cases, and to decide what is rumour and what is fact. But I would suggest to the hon. the Minister that the old adage that there is no smoke without fire is one which could well be taken over by him and the Registrar of Insurance. You see, Sir, we are dealing with very large sums of money when we deal with insurance companies and the protection of the public. If you look at the annual report of the Registrar of Insurance for the period ended 1962—incidentally, the last report we have had although it is now 1965 and those figures deal with the year 1961—we find that in respect of long-term business the premium income of the insurance companies was R200,000,000 and the total sums insured were over R4,000,000,000, and that the assets of the companies were well over R1,000,000,000. In respect of short-term business, the premium income was of the order of R18,000,000, and the assets were of the order of R120,000,000. These are globular figures we are dealing with. There are vast amounts of money involved. In regard to the catastrophes—and I use the word advisedly—that have taken place over the past few years, there was little doubt in the minds of the Press and in the minds of those members of the public who mix in financial circles that something was rotten in the state of Denmark. And none of us was surprised. Mr. Chairman, when the Sword of Damocles fell. I would like to suggest that the Registrar of Insurance know well what was going on, because if you read the report of the Select Committees which sat in regard to third party insurance you will find some observations, apart from anything else, which should have indicated to any prudent person that something was going wrong. For example, in the second Select Committee’s report, when the gentlemen who represented the insurance companies were giving evidence, this is what one of them said—

The question was asked—

The reply was—

And this was in March 1964. The Registrar himself when giving evidence said this—

This is Parity—

which I understand, was done—

And the same was discussed when the Chairman of Parity gave evidence, and I posed this question to him, which I think is very applicable to what has taken place. I asked him—

And this is exactly what happened. This is nothing new. It has been going on since 1963, and yet we find that suddenly this catastrophe takes place. I have no doubt that the Minister know as well as any member of this House that Parity and Auto-Protection and the Johannesburg Insurance Company and most of those companies that have failed were, to use the word we use in the city, “dickey”. He know that there was trouble, and when we asked him for an explanation he gave us a lot of facts, but he told us that it would not have helped to have taken action against Parity a year earlier. This is one of the most amazing statements I have heard in the few years I have been in this House and I would like the Minister to elaborate on that statement.

Order! Is the hon. member now coming back to the no-confidence debate?

No, Sir, I am talking about the provisions of this Bill and I say that no latitude should be given in its implementation, and that the Registrar must act quickly and timeously. Perhaps we will find, when the commission of inquiry which has been appointed reports, that it would have been in the interest of the company if it had been liquidated long before. It seems to be a failing on the part of hon. Ministers to appreciate the responsibility in regard to insurance, and I hope that when this Bill becomes law we will not have a continuance of this situation; because we had exactly the same thing from the hon. the Minister of Transport, who said he had no responsibilities in the matter, a statement which of course is completely incorrect. We are giving willingly to the Minister a Bill which has considerable teeth in it, and it is now up to the hon. the Minister, in consultation with his aides, to see that the provisions of this Bill are carried out with firmness and fearlessness, and quickly when the need arises.

I want to refer briefly to one clause of the Bill in some detail, and that is Clause 17 on page 28, which is a new provision dealing with the protection of funds in the hands of insurance agents and brokers. Now the first thing that comes to mind is that I do not think there is any special definition of an insurance agent or broker, except in so far that he represents a company, and I think one will find that there are many agents, if not brokers—and “brokers” seems to have a very special meaning these days—who in fact do not represent companies but are sub-agents; and one wonders whether, when this Bill has had an opportunity of revealing itself in its goodness or its badness, the position might not be considered of licensing insurance agents and brokers, so that each agent and broker will be known. In these provisions, which are designed to ensure that the agent pays over his premiums to the company or companies for which he acts, there are three alternatives given. Firstly, he shall pay in cash, secondly, that he shall deposit the money in a trust account within 45 days, and thirdly, that he can remit the money within 90 days provided he supplies guarantees. Now in the third case provision is made that premiums not received shall be deemed to have been received by the 90th day and he shall then remit to the insurance company. In the second case, where he must deposit in the trust account and remit within 45 days, there is no provision for a premium being deemed to have become due. I wonder whether the Minister would tell us why he has differentiated in the case of a trust account, where there may be a remittance within 45 days, and the case of a guaranteed account where he must remit within 90 days. It seems to me that although the periods are different, the principle of the collection of these funds is important. We know from practical experience that one of the things this clause will do is to tighten up credit for insurance premium payments which are being given because of the competition between companies. But that will not be the case under sub-section (b), where you can give as much credit as you like as long as you remit after 45 days.

Another point is that where in terms of paragraph (3) you have to remit within 90 days, you must provide a banker’s guarantee. One wonders why the clause specifically provides for a banker’s guarantee. It seems to me that we could have had two other provisions. That the agent—I know it will not happen in many cases, but it may happen in some cases that the agent will provide adequate security—should be able to lodge with the Registrar security acceptable to the Registrar up to R10,000 or R100,000, or any figure in between as the case may be. Secondly, it seems strange, in an Insurance Bill where provision is made for guaranteed companies, that we do not allow an insurance company to guarantee the agent—not the agent’s own company, but another company.

Sir, as the hon. member for Constantia (Mr. Waterson) and I have said, we welcome this Bill. We hope that it will achieve what everybody in this country wants very sincerely; we hope that there will not be an opportunity again for either unscrupulous people or people with insufficient knowledge of business to take funds from the public, particularly for compulsory insurance, and then to leave them high and dry.

I must admit I can find little fault with the speech of the hon. member for Parktown (Mr. Emdin). I think it was fairly constructive, except for the one mistake he made and that was to accuse the Minister of not having taken action timeously. If the Opposition want to be honest I think they must admit that there is really only one accusation they could perhaps level at the Minister in the case of the incident to which they have referred, namely the case of Parity, and that is that he acted too soon because the hon. the Minister took action in the middle of November, appointed a curator, that means that within a matter of four or five months after the end of the financial year the company was placed in liquidation. I think if the Opposition want to be fair and reasonable they must admit that the hon. the Minister acted honestly, expeditiously and wisely as far as this matter was concerned.

Mr. Speaker, I ask myself what the object of insurance is. What we have before us to-day is a Bill to amend the Insurance Act. We all know that the Insurance Act was introduced to give security to the public in respect of life insurance and short-term insurance etc. Unfortunately things have lately gone wrong in the case of short-term insurance, particularly motor vehicle insurance, as happened in the case of Parity. We find that the public has lately been asking why the Government does not take third party insurance over. I want to say immediately that private enterprise has asked the Government not to do so because if it did they foresaw the danger of the State eventually taking their business out of their hands. We must put it frankly to the public that neither the Government nor the State is prepared at this stage to take over third party insurance; they prefer to leave it in the hands of private companies. If it should appear at a later stage that private companies cannot or will not undertake it, then the Government and the State will either take the insurance business over or give attention to the matter.

The object of this amending Bill is to give better protection to the public; to do so greater powers are required and the Minister will receive those additional powers under this amending Bill. The object is furthermore to smarten up our Insurance Act. Experience has shown that things have gone wrong in recent years and that it is extremely necessary to place additional legislation on the Statute Book in order to close certain loopholes. Mr. Speaker, I ask myself this question: Why did Parity collapse? Is it because of this big disaster which has hit South Africa that this amending Bill is before this House? The reason why Parity collapsed, as the hon. member for Kempton Park (Mr. F. S. Steyn) said, was bad risks, in the first place, and, in the second place, too low tariffs. The hon. member for Parktown said the hon. the Minister did not act timeously, but I want to remind him that timeous action was taken last year when the tariff was increased from R14 to R17. There was therefore a uniform tariff in respect of all insurance companies. What right has the hon. member for Parktown to level the accusation at the Minister this afternoon that timeous action was not taken? Does the hon. member want the tariff to be increased to beyond R17? The tariffs in the case of Parity were increased to the same amount as those of other companies. Surely the hon. member cannot find fault with that?

There are also other reasons why this company collapsed and one of them is bad administration. We all know that when a public company, or any company for that matter, is not properly administered, it may and will go under. There are also many other reasons why Parity collapsed and I want to devote myself to three reasons in particular why we are obliged to-day to pass this legislation. In the case of Parity there was a steady drain on the funds and in this regard I wish to refer to various newspaper reports and the information contained in the petition submitted to Court. It is information which is at the disposal of everyone of us. We know what happened in the case of Parity; amongst others, thefts were committed on a large scale and the Minister and the Registrar did not have sufficient power to put a stop to it. We see, for example, that a salary of R30,000 was paid to Mr. Wolf Heller in terms of a resolution passed on 14 October 1964 and it was made of retrospective effect from June 1963. It is this type of drain on the funds, this type of irregularity, which has caused the company to collapse.

But surely that was dishonest, was it not?

It was dishonest. I want to know from the hon. member for Hospital (Mr. Gorshel) whether the Minister is responsible for thefts committed in October 1964?

Did not the chairman know about it?

Thefts were committed even before October 1964. According to the petition submitted to Court, and according to newspaper reports, within a matter of four months R200,000 was paid into the banking account of the chairman of the board for work he had done but for which no accounts had been submitted.

Who was the chairman?

Mr. Goldberg. We also learn from this petition to Court that they loaded the prices of Parity-‘drive-in’ to the Parity Insurance Company with 15 per cent. There was a fantastic drain on the funds. The main reason why this company went under was really connected with reinsurance. According to newspaper reports, the information contained in the petition, and according to the Financial Mail falsified figures were submitted to the reinsurers over the past few years. I ask the Opposition whether the Minister is responsible for the fact that falsified figures were submitted to the reinsurers.

Scandalous.

And then the Opposition accuses the Minister of not having taken action! The hon. the Minister had no knowledge of the fact that falsified figures had been submitted to the reinsurers by the chairman of the board and other persons.

Who is the other person?

I shall come to him later. We know that reinsurers extend reinsurance to other insurance companies in good faith and what happened in this case? In October 1964 the reinsurers repudiated the reinsurance agreement. That is evident from the petition and from newspaper reports. The repudiation of that agreement immediately meant a difference of nearly R900,000 to the financial position of Parity and that caused the downfall of that company. Is the hon. Minister to blame for these things? Surely he cannot be held responsible.

Let us go a little further, Sir. I want to make a very clear statement, namely, that Parity has gone under and that this catastrophe has hit South Africa, mainly as a result of actions of leaders of the United Party. I am going to prove this statement, Sir. I am very sorry that the hon. member for Yeoville (Mr. S. J. M. Steyn) is not here—I have sent for him. I am pleased, however, that the hon. member for Germiston (District) (Mr. Tucker) is present. I shall be pleased if the Opposition would give me their attention because I want to put a few questions to them.

Mr. Goldberg is the deputy leader of the United Party in the Cape Provincial Council and is a member of the Executive Committee. He was chairman of the board of directors and according to form J which was handed in at the office of the Registrar of Companies, and of which I received a copy, he was appointed in April 1963. He was then in charge of this company. He was the person who went over to London to obtain this reinsurance. He was also the person who took those figures over; to what extent he was involved I do not know, but he was the person who went overseas to finalize that reinsurance. He was the person who did all the legal work for Parity, and within a matter of four months R200,000 was paid to his firm without his having submitted any accounts.

He was not a director at that time.

He as chairman of the board of directors allowed the board to pass a resolution in October 1964 whereby Mr. Wolf Heller was paid a salary of R30,000 with retrospective effect from June 1963. It appears from the petition that the directorate did not even know why it was paid to him. Sir, none other than the leader of the United Party in the Transvaal Provincial Council, Mr. Harry Schwarz, was the person who accompanied Mr. Goldberg to London to finalize the reinsurance. The catastrophe which hit this company was based on this reinsurance. The leader of the United Party in the Transvaal Provincial Council …

But he did so in his capacity as an attorney.

Yes, he did so in that capacity, but he is the leader of the United Party in the Transvaal Provincial Council. I want to ask the hon. member for Germiston (District), through you, Mr. Speaker, what he is going to do to save the skin of his Party in this case.

He cannot save it.

We now learn that this member of the Executive Committee has said that, as a result of the Parity disaster, he is not making himself available for election. I think that is an honourable decision of his. I want to go a little further. We also learn from this petition to court that there is a company known as the Dundee Coal Company

Oh, Marais Steyn.

Parity invested a fair amount of money in that company. I visited the offices of the Registrar of Companies and obtained a photostatic copy of form J. I found that at its 65th annual meeting which was held on 27 April 1964 Mr. Harry Schwarz and Mr. Fooks were the two people who represented Parity Insurance Company. The two of them were elected to serve on the directorate. At that same meeting, or just afterwards, Mr. Harry Grant Whyte was appointed as a director. Sir, you will ask me who Mr. Harry Grant Whyte is. Mr. Harry Grant Whyte is the full-blooded brother of Mr. Mannie Goldberg.

Did he change his name?

Yes he changed his name but the information about his previous name was not revealed in form J. I may just mention that Grant was the maiden name of his wife. I learnt that by pure chance in Johannesburg. It was by pure accident that I discovered it. Who are the other members of the directorate? Amongst others, there is Mr. H. E. Charles, United Party member of the Provincial Council in the Cape Province.

It is scandalous.

When we look a little further down the list we see that a journalist was also appointed as a director; his name is S. J. Marais Steyn. Mr. Marais Steyn is deputy leader of the United Party in this House. We all know the police are investigating the matter, Sir, and I do not want to say too much about it. You yourself, Mr. Speaker, has seen what was published in the newspapers and you have all this information at your disposal. It appears from the newspaper reports and the petition to court that the funds of Parity were diverted to the Dundee Coal Company. At that stage Mr. Mannie Goldberg, M.E.C., and deputy leader of the United Party in the Cape Provincial Council was a member of the Parity directorate. The members of the directorate of the Dundee Coal Company were Mr. Charles, M.P.C., Mr. Marais Steyn, the hon. member for Yeoville, but the hon. member did not reveal the fact that he was a member of Parliament. This information was not revealed. I realize the Opposition is in an embarrassing position. I know how I would have felt had the leader of my party been involved in this type of scandalous thing. I think I am quite justified in saying that the world outside should know that the Leader of the United Party in the Transvaal Provincial Council, a Cape United Parity member of the Executive Committee, the deputy leader of the United Party in Parliament and another Provincial Councillor, all of them prominent figures in their party, were involved in this type of business. And then they level accusations at the hon. the Minister!

Mr. Speaker, I shall not expatiate upon this matter any further. I want to make a few recommendations to the hon. the Minister. The object of this legislation is to prevent insolvencies in future, as happened in the case of Parity. But I am afraid that unless certain things are done there will be further insolvencies in future and it is in this regard that I want to give the hon. the Minister a little advice! If in the future he should see the name of one of the front-benchers or leaders of the United Party on he list of directors of an insurance company, he must look out!

I want to say a few words about the Inspection of Financial Institutions Act. I suggest—I have already discussed the matter with the Department and I understand that is the intention—that at least three chartered accountants be appointed on a full-time basis to this inspectorate with sufficient facilities and powers to investigate these financial institutions. Their powers should be so wide that it will also be possible for them to investigate other institutions such as the Dundee Coal Company in order to give proper protection to the public’s money where this type of knavery is going on. Other financial institutions conduct their business on an honest and sound basis and there is no knavery.

But no United Party front-benchers serve on their directorates.

There is something else I wish to suggest to the hon. the Minister for his consideration in connection with third party insurance, and it is this, that we should consider pegging the amount paid out in the form of claims. The premium in respect of third party insurance is R17 per annum to-day and what happens? Last year there was an accident case on the East Rand, which I know about, in which R120,000 was paid out. Sir, nowhere will you get a life insurance policy that will pay out such a colossal amount at a premium of R17. Why should it happen in the case of third party insurance? If a person has a high income he has the means at his disposal to take out additional insurance, There is a ceiling in the case of the Workmen’s Compensation Act where certain amounts are paid out in respect of certain claims. If the same principle were introduced in the case of third party insurance, the terrifically high claims which are made to-day and the terrifically high legal costs that accompany them will be eliminated. I am honestly convinced that if we place a ceiling on claims in the case of third party insurance we shall also be placing that on a sound basis.

Then there is a further point as far as third party legislation is concerned. I want to ask the hon. the Minister whether the time has not arrived to place third party insurance, which now falls under the Minister of Transport, under the Department of Finance. The fact that two Ministers administer the same Act gives rise to considerable problems in practice. I think the time has arrived for this matter to be put right and I want to make an earnest plea for third party insurance to be placed under the Minister of Finance alone.

In conclusion I wish to express my gratitude and appreciation to the hon. the Minister for his excellent piece of legislation before the House to-day. I am firmly convinced that where this legislation is now to be applied we shall in future find ourselves in a much better position in South Africa as far as insurance is concerned. Nor should the hon. Minister hesitate to come forward shortly, with more drastic legislation, if that is necessary. It will prevent a repetition of what has happened recently.

The hon. member for Pretoria (Sunnyside) (Mr. van Zyl) in my opinion is the last member of this House who should come along and make the sort of attack which he has made here on certain members of this House. The hon. member for Sunnyside bears a greater responsibility than most people for the fact that a large number of motorists lost their money with Parity Insurance Company, and he must accept that responsibility. His signature appears on the balance sheet of Parity Insurance Company; on 27 January 1964 he signed a balance sheet to say that that company was solvent to the extent of R302,966 and he did so in spite of the fact…

It was solvent.

…in spite of the fact that the official auditors of Parity Insurance Company, on the 17 November 1963 had said that Parity was insolvent to the extent of R694,562. Sir, what sort of member are we dealing with when a discrepancy of R1,000,000 is ignored in such a manner.

Order! Order!

The hon. member for Sunnyside has been unfair towards certain people in connection with their directorships of the Dundee Coal Company. He omitted to tell the House that the loans made to Dundee Coal Company by Parity Insurance Company were all paid back. Does he deny that? Why did he withhold that information? Is that a fair type of attack to make on hon. members in this House?

Shocking.

Why did the hon. member for Sunnyside not disclose to this House that within two months of Mr. Harry Schwarz becoming a director of Dundee Coal Company Ltd. he resigned? The hon. member saw that on the same company form which he quoted here. Why did he not disclose that information? And what is wrong with Mr. Schwarz and Mr. Charles and the hon. member for Yeoville (Mr. S. J. M. Steyn) being directors of Dundee Coal Company? Have they done anything illegal? Have they committed any malpractices? Was the hon. member fair in making this attack upon these people?

Just mud-slinging.

I will give him my reply.

Sir, I now therefore feel that I am entitled to make the same sort of attack, as that made here by the hon. member for Sunnyside. I want to quote letters which were sent to the hon. Minister of Finance, letters sent to the Minister of Transport and letters sent to the Registrar of Financial Institutions. Sir, these are facts which appear in black and white; not allegations such as those made by the hon. member for Sunnyside. When I quote these letters I want the House to bear in mind that if there were any allegations which were false, libellous or defamatory in these letters, the writer of these letters should surely have been brought to Court and made to bear the consequences of defamation libel, etc. Sir, what are the allegations that were made in these letters? In a letter to the Minister of Finance on 20 April 1963 a number of malpractices which had taken place in the case of the insurance companies controlled by the Cramer organization were brought to the hon. the Minister’s attention and he was asked what he was going to do about it. This was in April 1963. The writer of this letter asked for an inquiry to be instituted and he wrote—

That is to say, the bankruptcy of the Auto Protection and the Provident Insurance Company—

Sir, there are other allegations which have been made in letters to the hon. the Minister of Finance. On 30 November 1962 a copy of a letter sent to the Registrar of Financial Institutions was sent to the Minister, and amongst a large number of allegations there appeared this particular allegation—

This is the concluding part of the letter—

Sir. there are further allegations as to what has been taking place in the Department of the hon. the Minister of Finance. He received a letter on 31 January 1962 dealing with activities of the Cramer organization, that is to say, Auto Protection Insurance Co. Ltd., Yeoman Insurance Co., Provident Insurance Co. Ltd., S.A. Reinsurance Co. Ltd. and the lot of them. This is what is contained in the letter—

I would have imagined, Sir, had the Minister charged with securing the interests of the farming community in this manner—life insurance—without adequate risks, I would have made it my business to see that the company that reinsured these farmers was worth considerably more than R2 only, which is the purchase price at which the South African Reinsurance Company was purchased from the Yeoman Insurance Company. It was purchased for R2 and this is what the letter goes on to say—

(who at that time was well known to be in stringent financial difficulties—)

Which, incidentally, he never did—

Sir, I should like the hon. the Minister of Finance to specifically reply to the following pertinent aspect of this particular letter—

This was in January 1962 and in April 1963 this honourable gentleman, with all his organizations, was put into liquidation. But the Minister’s official tried to satisfy the manager of the Land Bank of the integrity and the financial ability of this Mr. Cramer. I read on—

Where was the Registrar going to get that money for the Cramer organization to increase its capital? I shall tell you, Sir: From third party motor vehicle insurance premiums—the public’s premiums, Sir!

I must strike this note because I want to show how dishonest and unfair the hon. member for Pretoria (Sunnyside) …

Order! the hon. member must withdraw that.

I withdraw it, Sir. The hon. member’s attack on certain people was unfair. I am now referring to this aspect, because the same letter goes on to say—

A similar watch was sent to the Registrar of Companies who returned it. These are honourable gentlemen. But three other watches were sent by Mr. Cramer to three other officials and they were not returned according to this letter. What is going on in the Department of the hon. the Minister of Finance?

I have referred to the question of a capital increase from income of insurance companies, where it was suggested by the Registrar of Financial Institutions that the S.A. Reinsurance Corporation should increase its capital. I would like to deal with that particular aspect at a later stage because I want the hon. the Minister of Finance to have sufficient opportunity to investigate some of these allegations, and to follow my argument that this pattern of finance manipulation in insurance companies has been pursued right through the line from 1961 up to the collapse of the Parity Insurance Company. For that reason Sir, I move—

Agreed to; debate adjourned.