from F. G. Harwood-Nash, Mayor of Fauresmith, and 255 others, voters of the electoral division of Fauresmith, praying for the construction of a line of railway from Fauresmith to Koffyfontein and thence across the Bloemfontein-Kimberley line through the districts of Boshof, Hoopstad and Kroonstad to connect, ultimately, with the proposed Kroonstad-Vierfontein line, or for other relief.

from A. Townsend and three others, voters and property owners of Frankfort and district, praying that the Reitz-Frankfort line of railway, at present under construction, may be extended to the Natal main line, or for other relief; a similar petition from B. D. Bierman and 32 others, voters and property owners of Frankfort and district; a similar petition from B. C. du Plessis and 81 others, voters and property owners of Frankfort and district; a similar petition from C. J. van der Merwe and 186 others, voters and property owners of Frankfort and district; and a similar petition from R. C. Roux and 83 others, voters and property owners of Frankfort and district.

from George Schweinsberg and 99 others, voters of the electoral division of Fauresmith, praying for the construction of a line of railway from Fauresmith to Koffyfontein and thence across the Bloemfontein-Kimberley line through the districts of Boshof. Hoopstad, and Kroonstad, to connect, ultimately, with the proposed Kroonstad-Vierfontein line, or for other relief.

from C. P. van der Merwe and 52 others, complaining of the practice of many European landowners of allowing coloured people to plough and sow on the share system, and praying that the necessary steps may be taken to grant relief.

Annual report Department of Lands, 1911.

Return showing position of Railway Charitable Fund at 30th November, 1912, and disbursements made there from 1st December, 1911, to 30th November, 1912.

moved: That Mr. C. L. Botha be discharged from further service on the Select Committee on Fidei Commissary Bequests, and that Mr. Fawcus be appointed in his stead.

seconded.

The motion was agreed to.

moved in sub-section (2) to insert after “or to,” the words “or for the use of.”

The amendment was agreed to.

moved to add at the end of sub-section (2): “ But nothing in this section or in section 14 contained shall be deemed to limit the amount of rifle ammunition which a licensed dealer may sell and which a duly authorised official of a rifle club or rifle association may purchase on behalf and for the use of members of a bona fide rifle club or rifle association”; in line 40 to omit “purchaser or”; and in line 41 to omit (“as the case may be).”

I am in favour of the insertion of “to” after “ may sell” in the amendment.

I think my hon. friend is violating the rules of good grammar.

I am afraid the Minister has not done me the justice my little amendment was entitled to.

was pleased at the concession made by the Minister. He wished to assure the Minister in the first place that he had no wish to obstruct the Bill, and he was glad to have the assurance that members of rifle clubs would not get into difficulties if they acted in accordance with the provision of this amendment. Mr. Alberts went on to ask whether the reference to an “official” meant that person exclusively.

replied in the negative.

was still not satisfied. According to the Bill, he said, nobody was allowed to lend his rifle to another, and yet it might be necessary to do so. An amendment in clause 14 was necessary, and he would move it at a subsequent stage.

urged the Minister to take into consideration the wants of the districts and villages in regard to the supplying of ammunition. He urged that facilities should be given to rifle clubs so that members should not be driven to general dealers.

replied that rifle clubs acknowledged under the Defence Act would be supplied free of charge or at cost price by the officials of the Defence Department. He agreed that it was not desirable to send the people too far to get ammunition. In regard to the remarks of the hon. member for Standerton, he pointed out that the amendment was moved so as to provide for rifle clubs not falling under the provisions of the Defence Act.

The amendment proposed by Mr. Mentz was withdrawn.

The amendment proposed by Mr. Watermeye was negatived.

moved, as an amendment to the amendment proposed by the Minister of Defence: In line 2 of the proposed insertion, after “sell,” to insert “to;” in line 3, to omit “and which,” and in the same line after “ association,” to insert “and which such official.”

agreed to accept the amendment.

wished to know whether secretaries of recognised rifle clubs could buy from an official of the Defence Force.

replied in the affirmative.

The amendment of the hon. member for Von Brandis was agreed to.

The amendment of the Minister of Defence was agreed to, and the clause as amended agreed to

The Bill was reported with amendments and set down for consideration on Thursday next.

resumed the debate on the second reading of the Financial Relations Bill, and said he agreed with the Minister that it was desirable that the financial relations between the Provincial Councils and the central government should be settled without delay. At the same time he would lay stress on the fact that it was more necessary and more important that such a settlement should be on fair and sound lines. The Minister had also said that the principles of the measure had been agreed to by the Provincial Administrators. He (the speaker) could quite understand that, because as far as he could see the Administrators came down here for the express purpose of getting as much money as they could without being forced to agree to any extra taxation. But in framing this Bill, the Government had overlooked the principles of economy and equality that should govern the settlement come to with these different Administrations. He would call this a Bill for the encouragement of extravagance on the part of the Provincial Councils. Though it was common cause they had had to go upon a subsidy basis, still he thought that such a system was regrettable, because he did not consider that it was a sound system. The hon. member then went on to refer to the systems of subsidies that were in vogue in other parts of the world, and said that they were all familiar with the £ for £ system which had been in vogue in this country for so many years. At the same time, he would say that he did not think that this was the best of systems, and added that those who had worked on Education Boards in the Cape Province knew that when expenditure was questioned, the argument was always brought forward that the Government was going to pay half. He thought that the same argument would be advanced in the Provincial Councils when anybody questioned the expenditure of money.

There was absolutely no control over this expenditure. Parliament was asked to sanction an expenditure of two millions, and they had not any particulars to the extent of sixpence as to how this money was going to be spent. Then, take school matters. In the Cape, in every case where there was a £ for £ contribution, the Education Department always kept some control. He did not think the Minister would find a case where money was given in the same way as it was given here—absolutely without the slightest control in any shape or form. Under clause 7 of the Bill, all that the Administrator had got to do was to send down a certificate to the Treasury that he wanted so much money, and it had got to be found. Under clause 18, he could go even beyond that; he could spend £25,000 over and above what the votes sanctioned by the Provincial Council came to. It was, he submitted, an excessive power to be placed in the hands of any Administrator. The normal expenditure of the Provinces showed a substantial increase over the previous year in the case of the Cape of 25 per cent., Transvaal 6.8, Natal 21.8, and Free State 22.6. Of course, this meant that the subsidy would have to be increased accordingly. This, notwithstanding the large increase on the assigned and transferred taxes. He maintained that if this went on, the Act would lead to extravagance on the part of the Provincial Councils. The Treasurer might find it necessary to cut down his expenses. How was he going to resist the demands of the Provincial Councils? So long as they put up their pound, he had to provide the other pound. There was also a large capital expenditure to provide for, in addition to the normal expenditure. The total capital expenditure on the basis of the estimates laid down in the return would amount for the whole Union to £1,125,000. He ventured to submit that, under the circumstances, the £ for £ principle, without any control, was very unsatisfactory. The Minister of Finance was bound to find himself in difficulties in the future. He thought the principle that should have been adopted in this Bill was the principle that had been advocated by the minority in their report, i.e., a grant per head of the population.

Proceeding, Mr. Jagger said he desired to draw attention to the differentiation in the treatment of the Provinces that took place in this Bill. He might be accused of provincialism, but he would like to point out that this was essentially a provincial matter. Take, for instance, the matter of debt. It was proposed that the Cape should start and pay interest and sinking fund on its school debt, which meant that the Provincial Council would have to raise something like £29,000 per year. The other Provinces started without a penny of debt. The Cape Provincial Council raised about £500,000 in local taxation for school, road, and other purposes. Against that local taxation, the other Provinces raised the following amounts: Transvaal, £27,000; Natal, about £20,000; and the Free State, about £20,000. To his mind, it was a scandal. Then, as to the transfer duty: the Free State today paid 4 per cent. It was part of the agreement that the Free State transfer duties should be reduced at the cost of the Union revenue. In the Cape, also, they paid 4 per cent. transfer duty, and raised about £240,000 from this source; but they were not told that this was excessive, and they were not promised relief from the Union revenue. Then, again, as to licences: he should say that the Cape paid probably more than any other part of the Union on this matter. These licences were laid down about 1909 by the right hon. the member for Victoria West (Mr. Merriman) in a case of emergency, and they were told that they would be reduced at the earliest possible moment. The Bill departed entirely from the recommendations of the Majority Report of the Financial Relations Commission. The cost of local government in the Transvaal was to be borne entirely by the Union, which, to his mind, was a most unjust proceeding. In the Free State and Natal no local taxation was to be raised, but they were to be granted subsidies of £67,000 and £90,000 respectively out of the Union funds to which the Cape Province contributed.

In other words, the people in the Cape had to continue to pay a higher rate of interest—a higher rate of taxation—than in any other part of South Africa, and they had to continue to pay local taxation to the extent of £450,000 and, further, to contribute to the Free State and Natal a certain sum to rid them of the necessity of levying any taxation at all. What made matters worse was the enormous increase in expenditure in the Free State and Natal. Had they kept down their expenditure, there would have been no necessity to make these special grants. In the last two years—since Union—the expenditure in Natal had increased by 48½, per cent. and in the Free State 56½ per cent. Could one, therefore, be surprised that these Provinces required special subsidies? In the case of the Transvaal the increase had grown by 12¾ per cent., whilst in the Cape the expenditure had increased by 32.6 per cent. (An HON. MEMBER: “Oh.”) He wished to point out that in the Cape they had to pay the increase out of their own pockets; they did not ask for a special grant. Unfortunately the position was made worse by the fact that this system of special advances was to be maintained for another 10 years. If it were intended steadily to increase the grant year by year, they could have put up with it, but it was to go on for 10 years and there was no guarantee at all that at the end of 10 years there would be any difference. Was this what they called equalisation of taxation? He would like to point out that one of the principles of the South African Party, as contained in its programme issued at Pretoria, was an equitable system of taxation throughout the Union. That principle, however, was not embodied in this Bill. The hon. the Minister of Finance was, he supposed, wishful of getting rid of provincialism, but did he expect to do that when he left the Cape Province under a sense of injustice and injury for the next 10 years? As a matter of fact, the Minister had gone the best way to keep alive the provincial feeling. There was only one method by which the Minister could do away with the provincial feeling, and that was by placing all the Provinces on an equal footing as regarded taxation. There was another point. The Minister should have taken advantage of the position as it was to-day to introduce some system of local taxation in the other parts of South Africa. They often complained—and there was good cause for complaint—of centralisation in South Africa, and the only real safeguard against that was local government—leaving the people to pay and mind their own affairs. He did not think they would find many countries, certainly not in the British Empire, where the government was as highly centralised as it was in this country. Outside the municipalities, in the other three Provinces, there was absolutely no local government at all, because he did not look upon the Provincial Government as local government. Instead of facing the position, the Bill dealt a very severe blow at local government. Natal and the Free State got special favours and special grants, whereas the Cape Province, which was fully developed in the matter of local government, was treated worst of all. The result was that he had heard it said more than once, and in his own city, “let us do away with our local government.” He said, with every sense of responsibility, that the Bill dealt the biggest blow at local government that had been dealt for some very considerable time. He was strongly opposed to the second reading of the Bill. It was founded on an entirely wrong principle, it was gravely unjust in the differentiation it set up as between the various Provinces, and it tended to destroy local self-government in South Africa, What he washed to urge upon the House was that they should continue the present system and make grants to the various Provincial Councils for another twelve months, and then appoint another Commission with wider powers than the last Commission, which was appointed solely to consider the financial relations. It had not power to consider local self-government in South Africa, but the Commission he suggested should have power to consider not only the matter of the financial relations between the various Provinces and the central government, but also the desirability of establishing local self-government. It had been suggested that they should pass this Bill as a temporary measure, but he was opposed to that. Their best plan was to resist the Bill, which was unjust, and was only a partial settlement, and wait another twelve months. And if they had to wait another twelve months, let them wait; but let them have a settlement on what was perfectly fair and just lines.

said that there had been considerable criticism of the proposals put forward by the Minister of Finance, and he thought that upon an important question such as this there should be criticism if that criticism would help the Government to improve its measure. He was bound to say that up to now the criticism so far from helping the Government and the House in arriving at a solution of this very difficult problem, had only been criticism of a destructive character. Now, he thought all hon. members were in agreement that a solution of this question was, and would be, one of the most difficult questions the House had to solve. It was found so difficult at the National Convention that that body, consisting of the most eminent statesmen in South Africa, including his hon. friend the future Treasurer of the Union (Sir E. H. Walton) and the hon. member for Cape Town, Central (Mr. J. W Jagger), decided to refer the question to a Commission to be appointed by the Government, and they also laid down in the South Africa Act what the functions, powers, and scope of that Commission should be The Commission was a strong one, and the House would be well advised carefully to consider its recommendations. Not only did the National Convention find the subject a very difficult one to solve, but so, too, did the Commission, with the result that the latter presented two reports—a majority and a minority. That being so, it was only natural that the House should find the problem a difficult one. But he hoped if they had a little patience with each other and considered their own Provinces less than they were inclined to, they would have a better opportunity of arriving at a just and fair solution. (Hear, hear.) But if they followed on the lines of the hon. member (Mr. Jagger) they might just as well tear up the Bill. If they argued on the lines the hon. member (Mr. Jagger) had adopted they would never solve the problem. (Hear, hear.) It was said that before they decided what the financial relationships should be the existing inequalities should be removed. (Government cheers.)

He quite admitted that some of the inequalities were painful to the people who had to pay taxation in one Province which was not exacted in the others. He admitted that these inequalities pressed very hardly on the people and led to a spirit of discontent. But these inequalities of transfer duties and school and road rates were only the fringe of the matter, and were very minor points. If they discussed these inequalities as they affected every Province they would never get to a settlement. The hon. member for Cape Town, Central (Mr. Jagger), had made great play with the fact that the Cape was taxed to the extent of £500,000 for School Boards and Divisional Councils. That was perfectly true, but it entitled him (Mr. Hull) to use an argument which he would rather not use. What about the £1,800,000 which the Transvaal paid through railways—(Government cheers)—the £300,000 railway tax which the Free State paid, and the £200,000 railway deficit due by the Cape? (Government cheers.) What about the inequalities in respect of estate duties? If a man died in the Transvaal or had estates there when he died he had to pay on the principles of the Bill he (Mr. Hull) introduced last year, which unfortunately did not become law.

That was not our fault, why don’t you remove those inequalities?

Must we stop until all these inequalities have been removed?

Yes.

said if gold were discovered on private land in the Transvaal the Government took 80 per cent., the remainder going to the owner. In the Cape if gold were discovered――

It has never been discovered yet— unfortunately. (Laughter.)

You are unable to regard this matter outside the Cape point of view. (Hear, hear.) I suppose it is possible for a diamond mine to be discovered in the Cape. If one were discovered in the Cape to-morrow the owner would get everything, but in the Free State the Government would get 46 per cent., and in the Transvaal the Government would get 60 per cent.

Why don’t you alter it?

I am trying to show that in all these matters hon. members who are so fond of criticising don’t know what they are talking about. It would take years to pass legislation on all these small intricate subjects, and are you going to bang up the Bill until they are settled? Last year when I endeavoured to equalise the estate duties hon. members on the Opposition side of the House were prepared to debate the subject for six months if they could throw out the Bill. (Opposition laughter.)

Continuing, Mr. Hull said: Take the case of native taxation. In the Transvaal natives paid from £2 upwards per annum.

Shame.

But you are putting the money in your pockets. In the Free State the natives pay £1 a year, and in the Cape most of them pay nothing at all, but a large number pay 10s. (Government cheers.) Hon. members on this side of the House know that if they came forward with a scheme to equalise native taxation throughout the Union it would rend their party in twain. I challenge anybody in this House to come forward with a scheme for equalising native taxation which it would not take this House two or three years to settle. (Cries of “No” and “Land tax.”) I respect the honesty, zeal, and desire of hon. members to see all these inequalities removed, for they should be removed, but when they say they should be removed first it is all nonsense. Proceeding, Mr. Hull said another great difficulty was that unfortunately they did not know whether or not the Provincial Councils were to remain a permanent part of their Constitution. That was, in his opinion, the most difficult part of the whole subject. If this House were certain that the Councils were to remain, then he thought some of the difficulties would be removed. But because many of them believed that the Provincial Councils were not going to stay they hesitated in tackling finally the matter. (Hear, hear.) All the members of the Commission, he thought, agreed that one thing was clear, namely, that there was no room in South Africa for both Provincial and Divisional Councils. (Hear, hear.) And so far as he had been able to study the matter, he agreed with them. He did not think South Africa would tolerate a Union Parliament, Provincial Councils, Divisional Councils, and School Boards, all with taxing powers. (Hear, hear.) But unfortunately this House had no power to deal with the question of the Provincial Councils and to say whether they were going to stay or not.

They were bound to respect the South Africa Act. This difficulty which he had mentioned only served to complicate a question that was bristling with difficulties. There was that other provision in the South Africa Act with regard to primary education. It was an open secret that there was a good deal of discussion in the Convention before it was thought advisable to insert that provision. There were a good many people who thought that education should have been dealt with by the Union Government, and this Parliament would be called upon within two and a half years to deal with this very important provision which was contained in the South Africa Act. Assuming that the House decided to take over education in two and a half years’ time, then he said that the continuance of the Provincial Councils would not be justified. He was referring to this point to show how difficult it was to finally deal with a question that already bristled with a great deal of difficulty. A solution might eventually be found in the abolition of the Provincial Councils and the substitution of local authorities with the power of self-government on the lines of the Cape Divisional Council system. He did not see why they should not accept the Cape Divisional Council system as the best to start with, and he did not see why they should not decrease the number of these Councils and give them extended jurisdiction. To that extent he was disposed to agree with the hon. member for Cape Town, Central, and did not think that they should prejudice the rights of the Union Parliament in any way. With regard to the lump sum system to which reference had been made, he could assure the House that it was a dreadful system to work, for he had had a great deal to do with that system. They were entirely at the mercy of the executives of the Provincial Councils. It was the worst possible system that could be devised, and he would like to see it stopped, immediately. This Bill would stop it.

We have not got any check now.

Will you suggest a better plan? Continuing, he said that for two and a half years hon. members on the other side had been allowing this system to go on. Now, they objected to that. He took it that the hon. member for Cape Town, Central, was the financial expert on the other side, and that he was voicing the views of the Opposition on the subject. It was a vicious system. It made for extravagance. It seemed to him that they could only deal with the question on the basis of the Provincial Councils remaining as they were at the present time. It would be wrong for the Union Parliament to break them down at the present time.

It seemed to him that the only way they could deal with the matter was on the basis of the Councils remaining as they were at present. He thought that they ought to have some safeguard for the future. He hoped that they would not go on and perpetuate a system that was not good for another ten years. He thought that the arrangement should be merely tentative, and that Parliament should not lose the right of dealing with the important question of primary education. He thought that, on that basis, members of the Opposition could easily give their support to the measure which the Minister had placed before the House. Now he would deal with one or two points of criticism that he wished to make against the measure. It did seem to him that the expenditure of the Provincial Councils had gone up enormously. He had gone into the figures, and he had found that, on the basis of the current Estimates, the Union Treasury would be over a million pounds worse off than it was under the proposals that were submitted to the Financial Relations Commission. He did not say that in passing that measure they were passing the figures that had been submitted, but he would like to sound a note of warning to the Minister in charge of this Bill that he should reconsider these figures, and discourage the Provincial Administrations from being extravagant. He would like to quote some of the figures, to show the House the advance that had been made. He found that the expenditure of the Cape had gone up from the £849,000 that had been submitted to the Financial Relations Commission to £1,126,000, that appeared on next year’s Estimates; Natal from £342,000 to £508,000, the Transvaal from £1,150,000 to £1,258,000, and the Free State from £308,000 to £482,000. With reference to revenue assigned and transferred, he found that the Cape amount had gone up from £373,000 to £443,000; Natal from £119,000 to £164,000, the Transvaal from £415,000 to £607,000 and the Free State from £140,000 to £174,000. These figures showed that the Union Treasury would be over a million pounds worse off on the next year’s Estimates, as compared with the statement that was placed before the Financial Relations Commission. The figures were very striking, and the Government should see that they were cut down. He regretted to see also that no provision was made in the Bill for making a valuation of all the landed property throughout the Union. This would be needed in the future, and here was an unique opportunity of carrying out what would be required. He thought that it would have been wise, in the interests of the credit of the Union, that something of the sort should have been carried out, and pointed out that in the report of the Financial Relations Commission Mr. Justice Laurence had added a note to this effect. He thought a simple machinery could easily be settled upon The valuations to be obtained from the Deeds Office could form a basis. The valuations should include something more than the mere value of the land. They ought to distinguish between prairie value and improved value, and mineral value also. He thought here was a good opportunity of making provision for the establishment of machinery by which such valuations could be made. (Hear, hear.) He would suggest to the Minister of Finance that he should amend his Bill by including a chapter making provision for such a valuation. He did not wish to follow the hon. member for Cape Town in the line of criticism he had adopted, although he knew that he (Mr. Hull) had been accused of being the greatest provincialist in South Africa. (Hear, hear.)

All he could say was that never by speech or action had he taken a provincial line. He thought it was just as well to follow on the same lines. He thought the Bill perhaps was not the best solution of the difficulty; it was merely a stop-gap solution, but he saw no other way out of the difficulty. (Cheers.)

said that, although he was but a humble back-bencher, a musket-bearer, he wished to offer an objection to the Bill as it stood, on general principles. He felt he must do this, because the passing of this Bill meant the perpetuation of the federal idea in South Africa. (Hear, hear.) He felt that when we went into Union, what the people wanted was not federation, but union. (“Question.”) He could not help feeling that the whole system of Provincial Councils was merely laid down as a sop to the disrated capitals. In the Free State, so far as the Provincial capital idea was concerned they had very little use for it at present. At one time they thought it would be a serious loss to them, but to-day they were far more prosperous than ever they were as a capital. Was it necessary for them to-day to perpetuate this federal idea? He did not think so. They had already seen the disadvantages of this federal idea. The country, there was no doubt about it, clearly plumped for union. The final result of passing this Bill would be a bastard union—neither a good federation, nor a good union. The larger Provinces were going ahead at a greater rate than the smaller Provinces. They in the smaller Provinces felt that they would always be called upon to pay per head possibly heavier taxation than the others. Naturally, the people in those Provinces would not be satisfied with the position as it was made for them by this Bill. Let the Union spend the money it had to find for the whole of South Africa. He admitted that they could not change things all at once, but he did protest against the passing of a law which would perpetuate this federal idea. As to the expense of the Provincial Council and Provincial Government, they in the Free State felt that they could get as much from the Union Government as they could from the Provincial Government. They felt that, after all, these Councils were not provincial, or, if they were provincial, they were not sufficiently provincial. He thought when he saw what took place in the Cape under the Divisional Councils they ought rather to go back to the Divisional Council system. He realised that they could not equalise all the taxation in the Union at once, but what the people of the country did want was that they should make a start in the direction of equalising taxation. They must equalise the taxation before they brought in any of the Bills they had got before them now. He moved the following amendment: To omit all the words after “that,” and to substitute “this House do not now proceed with the consideration of the Financial Relations Bill, but recommends that the Government should undertake the work of equalising the taxation in regard to transfer duties and trade and professional licences throughout the Union; and further that in the opinion of this House the Government should take into consideration the advisability of appointing a Commission to consider the question of Provincial and local government, with special regard to the requirements of the smaller Provinces.”

Seconded.

said he rose to support the second reading of the Bill. Had it not been for the last speech and the amendment which followed it, he would not have addressed the House on the subject. The question of the proposed abolition or curtailment of the Provincial Councils was a matter probably of more vital importance to the people of Natal than any proposed Bill of Financial Relations, no matter how favourable its terms might be to that particular Province. The Minister of Finance, in introducing the measure, merely hinted that it might be necessary, or that it had been suggested that the Provincial Councils should have their powers curtailed, and he was followed by the hon. member for Port Elizabeth, Central (Sir E. H. Walton), who suggested that that would be a desirable course, and went further and stated that in his recollection as a member of the National Convention, the Natal delegates did not place particular stress upon this form of provincial legislation. Now, he (Mr. Robinson) was one of those who took part in advocating Union, and he would like to tell the House what they in Natal understood was the attitude of their delegates at the Convention. It was that unless a federal system of legislation in some form or other was established under the South Africa Act, they would have retired from the Convention and Natal would have refrained from entering Union. He would like hon. members to look at the preamble of the South Africa Act, which made it clear that the establishment of Provincial Councils with certain powers preserved to them was an essential condition of the Union of the South African Colonies and that no attempt could be made to curtail those powers without submitting the matter specifically to the Colony of Natal. Upon that condition Natal entered Union, and naturally that Province looked to the other parts of South Africa to adhere to the contract which was entered into at the Convention. He would go further and say that the people of Natal, far from being dissatisfied with the federal system of government, were more and more convinced that the provincial system of government, as existing in Natal at the present time, was the only one suitable for that Province, and that instead of the Provincial Council having its powers curtailed, it should rather be granted additional powers, so that its utility would be felt. Again, he wished to point out that the contractual aspect of the South Africa Act indicated quite clearly that the present Councils were established for at least a fixed period. Upon the assumption that the Provincial Councils were to remain for a fixed period, the present Bill should be discussed. If the debate were to be extended, and if the question of the desirability of disturbing the present system of legislation as it existed in the Province was to form part of this discussion, he would ask hon. members to bear in mind the fact that they in Natal were not in any way suited for the form of Divisional Councils such as existed in the Cape. The Europeans in Natal were only one-twelfth of the whole population of the Province—(An HON. MEMBER: Shame)—and they had large native locations upon the boundaries of their municipalities, which rendered the introduction of the Cape system of divisional associations entirely impossible. (An HON. MEMBER: Why?) That was not only his experience. In the report of the Financial Relations Commission, Mr. Justice Laurence emphasised that Natal did not lend itself to the form of government by Divisional Councils, as the Cape did. What he (Mr. Robinson) desired to emphasise was that they in Natal entered Union believing that they would have for a considerable period of time a system of provincial legislation. His main reason for rising was to issue a note of warning as to how this matter would be regarded in Natal. It would be regarded as a going back upon the conditions of the contract upon which Natal agreed to enter Union. As to the Bill itself, three objections had been raised. The first was that the proposals were not based upon any scientific basis; the second was that, before any financial adjustment took place, the present inequalities and burdens should be removed; and the third was that the present proposals would lead to extravagant provincial administration. As the hon. member for Barberton (Mr. Hull) had said, it was impossible, under existing conditions, to propose any scientific method of adjusting the relations between the colonies. He submitted that whichever system was proposed, it must be of an arbitrary nature.

Had we all entered Union on an equal basis, it might have been possible to propose adjustment of differences based on a scientific principle. In every country some artificial system had had to be adopted The hon. member for Cape Town, Central (Mr. Jagger), in his admirable speech, had carefully refrained from putting his finger op any system and saying that that was the one particularly adapted to Natal. (Hear, hear.) It was not for him (Mr. Robinson) to suggest what system could be adopted; but whatever system was adopted must be a more or less artificial adjustment of all relationships, so that a purely scientific basis was untenable. Even if it were possible to adjust the differences that prevailed, a very long time must elapse. No one seemed to have an adequate control (continued Mr. Robinson) over the finances of the Provinces. It was significant that there was not a word in the South Africa Act to the effect that, following Union, the financial burdens of the various Provinces should be equalised or adjusted. If any such proposal had been put, some of the Provinces would have stood out. (Hear, hear.) If all the balances were to be coolly appropriated for the advantage of the Cape, there would have been no Union. Without urging the financial aspect of the question—

Oh! dear, no!

I am prepared to urge it, but I do not wish to do so now; but I urge that there should be a simultaneous re-adjustment of the advantages which the various Provinces have received. The members from Natal would agree then that the further adjustment of financial relations should stand over. Concluding, Mr. Robinson said that, strictly considering the South Africa Act, the adjustment of the burden must be postponed until the financial relations between the Provinces had been established. If some system were not established, then this unquestionable extravagance must go on. It was practically impossible to so re-adjust the financial relations within a reasonable term of years as to give satisfaction to those Provinces. It had been asserted that the proposal contained in the Bill would lead to extravagance, but in Natal the £ for £ principle had not had that result. If that principle had not been conceded to Natal, its delegates would have withdrawn from the National Convention. The people of Natal would never have voted for Union had they not been satisfied that an established form of provincial administration would be set up which would continue for a very considerable length of time. (Hear, hear.)

said he might say for the benefit of the Minister of Finance that he (Mr. Merriman) would not have dared to second the proposal of the hon. member for Ladybrand if he had not been perfectly certain that the Bill could in no sense be called a party measure. It was too serious for that. The House was now a sort of Convention for deciding upon an alteration in the form of the constitution under which we were governed. Naturally, on a subject like that there must be considerable difference of opinion, and they saw the hon. member for Durban (Mr. Robinson) quarrelling with the hon. member for Port Elizabeth (Sir E. H. Walton). (Laughter.) Well, he (Mr. Merriman) was not going to quarrel with anyone, nor did he desire to take up any attitude of violent hostility. The speech of the hon. member for Barberton (Mr. Hull) was eminently contradictory, and the hon. member finished up by saying exactly what his (Mr. Merriman’s) feelings were in part, The hon. member had said he did not think the Bill was a good one. Nor did he (Mr. Merriman), but he was sorry to hear the hon. member say that he thought it was inevitable. Surely the hon. member recollected the remark made a little time ago by an astute statesman, that such a word was a confession of despairing incompetence. He hoped his hon. friend was not despairing, and he knew that his hon. friend was not incompetent. Nor did he (Mr. Merriman) follow the views of his hon. friend (Mr. Robinson) when he said that the House was inhibited from dealing with this matter. They had been referred to the Act of Union, but the thing which commended itself most to him about the Act of Union was that it was not a rigid constitution, but that it was flexible and they were able to alter it.

The House was perfectly at liberty to reconsider the form of local government. That there should be local government he was as strongly in favour of now as he was then. He held that the local government was the true nurse of freedom, and that without local government they could never get people to take a true interest in the affairs of their country. He stood in this matter with the Minister of Finance in a white sheet. He owned his fault. He was, perhaps, as responsible as anyone for the setting up of Provincial Councils. But they were the Frankenstein’s Monster. The experience was that these Councils did not stand for local government. (Cheers.) Their hope and desire was to set up a kind of glorified Divisional Council, to occupy themselves with local affairs. But instead of that they had set up a kind of bastard parliament—(laughter)—and the more they went on and listened to the grave and potent signors who governed these Councils the more they became convinced that local government was slipping away, and that they were having a sort of autocracy set up with something at the head, going about as an earthly providence, scattering doles in those districts which were large and prosperous, and could give support. In no sense could the people of this country feel that they had advanced towards local government. Proceeding, he said that if he might venture to review the past, there was a proposal or suggestion made that the Cape was much too large. They had that idea about the difficulty of local government before them. It was suggested that they should split it up into a different number of areas, so as to be something more like local government. They felt that unless they dropped the extremely contentious matter of provincialism they were very likely to wreck the whole scheme by diverting the whole discussion, not upon the merits or demerits of Union, but as to whether one part was properly included or not, or whether they were not striking a great blow at Cape Colony; that was the feeling then.

Experience had shown them since that they ought to take steps forward, but this Bill would take them a step backward. Speaking for his own Province he wanted to ask in what sense was it local Government for a man from Aliwal North being dragged down to Cape Town, and sitting in an Assembly with a man from Somerset West down here. What were the local wants and circumstances that were analagous between them. They dragged down to the Peninsula a man from Griqualand East, and supposed he got local Government. Fifty thousand pounds were being scattered here and seventy thousand there, and the man from Griqualand East asked where did he come in. He had the satisfaction of sitting down here and having local Government. He had not even got a Divisional Council; he had got nothing at all.

If he wanted to strengthen his own conviction upon this matter he would turn to the report of this Commission. The report had been rather unjustly criticised by the hon. member for Port Elizabeth, because the Commission went to work with their hands tied. They were not asked to consider the best form of local government, but were tied down to certain financial arrangements. But they did in two or three paragraphs—which he quoted—show a thorough disapprobation of the system which was unfortunately set up by the Act of Union. His objection to the passing of this Bill at the present time was that it stereotyped the old arrangement.

He wondered if his hon. friend remembered the story of Sinbad, who was induced to take the Old Man of the Sea upon his shoulders; he got so heavy that Sinbad could not get rid of him. They would find that they had taken on their shoulders an Old Man of the Sea who grew heavier and heavier. He looked forward to the time when they might find the provincial authorities lobbying in that Parliament. They might even find them threatening members who did not vote exactly as they wanted. If they attempted to curb their extravagance he could fancy the Administrator coming down with fifty supporters at his back threatening the unfortunate Minister of Finance. What did they contemplate when they passed the Act of Union? Were they likely to manage to stop that successfully? What would the Administrator say in the future? Who was going to object? He warned the Minister if he had been as long at the job as he (Mr. Merriman) had been, he would shudder at the prospect. He would have to raise the taxes, and the Administrator would have all the honour and the glory of scattering the doles. He hoped the hon. Minister would remember that fact, and be warned in time.

What had been the effect of Provincial Councils elsewhere? In the case of New Zealand the expenditure and extravagance were so great that it was breaking the country down. They had to hurry a Bill through Parliament. They passed the Bill, abolished Provincial Councils, and substituted instead District Councils. The thing had worked very well. That was in 1875, and it had worked well since. He had never heard that anybody wept many tears over the expiry of the Provincial Councils, and they might be assured that when the time came not many people, even in Natal, would shed many tears for the loss of their Provincial Councils. He did not want for one single moment to go into the local business. That was too large a matter. They started in Union with the idea, with the main object, of making one country of South Africa. Had they succeeded at the present time? He feared not. There was a tendency to hurl accusations at one another. They tried to get undue advantages and undue profit out of Union. He thought that was one of the most fatal things; as far as he could see they were getting further and further apart. If they were going to make this thing stronger and make the Provinces depend upon the very inequalities they had got they were going to set Provinces further and further apart. They were going to strengthen the federative idea. The federative idea was one they combated in the Convention as strongly as they could. Was that Bill going to bring them nearer to the ideal of a United South Africa? It would push them further away. For that reason they should be careful and cautious before they took that Old Man of the Sea on their shoulders. There were other objections to the Bill. He doubted if any Finance Minister in any Assembly in the Empire could press a complicated measure like that through without giving any information whatever. They had got practically no information before them. They had got some interesting particulars, but they had been given no figures, and could not get them. They were asked to make bricks without straw, and the Finance Minister said, “Go to, ye are lazy; pass the Bill at once.” But they could not do that. They wanted the most minute inquiry before they could enter upon a complicated measure like that.

Continuing, he said that he was sure that he heard his hon. friend say something about diamond taxes. He said that the Transvaal paid what was not paid in the Cape or Natal. (Laughter.) He quite lost sight of the fact that the Cape had an enormous amount of sold and unsold Government land. He could also tell them of other things that the Cape had brought into Union—(laughter)—both moral and material. (Laughter.) The fact remained that they were here in the Union, and they wanted to build up this country, and then the Government came forward with a Bill that was going to stereotype all these artificial differences. He could tell them what they were going to do; they were going to strengthen the federal idea. These local Parliaments would get stronger. They would hand them over more and more money, and then these local governments would find that they could do without Union, and that would be most disastrous to South Africa. He did think that was an unkind remark of the Finance Minister when he said that the equalisation of revenue was impossible. He considered his hon. friend was one of the most brilliant authors of the programme of that party of which he marched as a humble recruit—(laughter)—or, rather, he should say, he limped after. (Laughter.) What had he (the speaker) to think when his hon. friend hauled down his flag. (Laughter.) He (the speaker) wanted to see what was going to be the colour of his new flag. He had hauled the flag down on one of the most charming—he thought the most charming—features of that programme—in fact, it was the only part of that programme which might not have been taken out of a copy-book. (Laughter.) But he would like to refer to the question of transfer duties and traders’ licences. Those things did not belong to the provincial government. He thought that it would be fatal to allow these two items to go to the Provincial Councils. These things belonged to the Central Government, and the Central Government should have taken these things in hand before and put them on an equal footing. If something of the sort was not done then they would leave a sense of rank injustice behind. They could be put up or down by the Councils, and the Treasury was at the beck and call of these Councils. He wished that the hon. member for Barberton would get rid of that idea about railway taxation. The railways were a commercial undertaking. One paid for services rendered and was not taxed. It was in the hand of the Government, of which the hon. member for Barberton was a member, to change any inequalities so far as the railways were concerned. He did not think that it was right of the hon. member to throw stones at the members of that House. It showed the danger of dabbling with these matters and the quagmires that they could get into. He felt that if they passed this system they were going to stereotype the federal system in that South Africa of theirs. They were going to take away all hope of amending the thing for many years to come and they were going to incur the fearful danger of strengthening that provincialism and feeling of antagonism between one part of South Africa and another, which they felt was the most deplorable thing that existed in South Africa at the present time. The Minister did not bring in the Bill with that joyous confidence with which he brought in the Defence Act. He introduced it in such a way as to make him (the speaker) think that he had very little faith in the measure.

He did not have much confidence in it, for at the close he said that it was only a stop-gap. Why should they pass a mischievous stop-gap? Why let them not try and see if they could not lot this system go on for another year or two and then prepare some properly constructed scheme of local government, something that would lift the people up instead of pushing them down. If they passed this measure they would simply be pushing them down. The people would not sit down under all this burden of taxation. He thought that the hon. member for Ladybrand had made a very sane proposal when he said they should take time to consider the matter. If it did nothing else, it would enable them to get a little more information on a most important and most difficult matter. There was not one man in that House, the Minister of Finance included, who could tell them how the financial details of that Bill would work out. Let them treat the matter in a broad way. Let them consider the matter carefully. Were they going to make the Government better, or were they going to put it backward? He thought that Bill would put the Government back. He thought it would lead them further and further from the golden way which was prophesied when they entered Union, and, therefore, he sincerely subscribed to the motion that had been placed before the House.

said he could show that they could place the Provincial Councils on a firmer footing and yet reject this measure. He thought that the Bill before the House entirely changed the principles that were placed before the Financial Relations Commission. Of course, it would be better if the Provinces could raise the whole of the revenue, but they could see that such was impossible.

The subsidy was based on the £ for £ principle. It was an unsound and mischievous principle. It was not carrying out the idea that they had in their minds of putting upon the Provinces the responsibility for their expenditure. It was a system that would encourage extravagance. It left the Provincial Council practically to fix the contribution which the Union Treasury should pay to the Province. The Commission, in their report, recognised that that this would be putting considerable power into the hands of the Provincial Councils, but they suggested that there should be a limit imposed of an increase of 5 per cent. per annum. That safeguard was entirely withdrawn. There was absolutely no control. If they passed this measure, they were abrogating in this House the great trust imposed upon them by the nation of looking after their finances. Any Province which raised a certain amount of revenue could come to the Union Parliament and demand an equivalent amount of revenue, if it were going to spend it upon works within its power. He saw the difficulty of the Provincial Councils submitting their estimates to the Union Government, but he certainly thought some other basis than the one in the Bill ought to have been introduced. It had been stated that the Provinces, having to find half of the expenditure themselves, would be a sufficient check. The fact remained, however, that one Province may be prosperous, and able to incur a great deal more expenditure than other Provinces. Not only might a Province be prosperous but one Province might have such a large revenue from these matters which it was proposed to hand over to it, that it would have no need to tax itself, and yet be in a position to demand a subsidy from the Union Government which was out of all proportion at the time to what the Union Government might be able to afford. Moreover, a Province might even make a profit out of the subsidy. He instanced the grants for hospitals where patients paid the whole cost of their treatment. He did not wish to blame the Minister of Finance for not having equalised taxation, but what he did say was: that they should be striving in that direction, instead of, as this Bill did, crystallising the present unsatisfactory state of affairs, and making it impossible to move in that direction for a very long time. The House ought to know more about these revenues that they were to be assigned to the Provinces, how they were obtained, and particulars of the amount they produce.

Dealing with the question of licences, the hon. member asked whether it was likely that the Provincial Councils, when once they had got the control of the licences in their hands, would meet together and make licences uniform throughout the Union? He submitted that it was not at all likely. Referring to the question of professional licences, he put in a plea for a uniform licence, which would enable a medical man, for instance, to practice in other parts of the Union than the particular Province in which he resided. He also urged the need of uniformity in regard to the fees and scope of game licences. Continuing, he said the Government practically admitted the importance of retaining the control of licences. It reserved to itself the control of liquor licences, and many others. The list included the ownership of boilers, and he regarded that as a most important matter. No doubt there was a good reason for the retention of the control over boilers by the Government. But it was a little thing like that that showed the weakness of the Bill, because there might prove to be other matters beside boilers over which Parliament should have retained control. It seemed a very bold thing for him to say that, personally, he could not regard licences as direct taxation, though he was aware the Courts had laid down that they were. Direct taxation was where a man. paid the tax himself. Licences were not paid by a man himself; it was the business that paid for them. The proprietor did not put his hand into his own pocket to pay for the licences. And licences must frequently have a hampering effect on trade, so that the less they had the better. Then in regard to the native tax. It was not really a native tax, because it was a tax on the employer. Both the Financial Relations Commission reports recommended that the pass tax should not be handed over. The pass tax was first inmposed in Griqualand West in regard to the boys at work on the Kimberley mines, and it was imposed for a philanthropic motive. It was to provide hospitals for the natives. The tax was introduced into the Transvaal for exactly the same reason. He believed at first that the revenue was used in the Transvaal towards the hospitals, but it was found to be such a splendid source of revenue that the Government of the Transvaal had doubled it, and used it for general purposes, not for natives. He did not see why that should be regarded as provincial revenue, and handed over to the Transvaal. If the House decided that any other method of revenue would he fairer they could not do so, because the Provincial Councils would stick to it like leeches. Dealing with the transfer of revenues, he asked what was the object. They might far more equitably have included them in the subsidy towards the Provinces. Proceeding, the hon. member referred to the fact that there had been three reports from the five commissioners, and said that one felt that one might, without conceit, have some right to an opinion of their own. The Government however, had gone further, and had manipulated these figures still worse and after all that manipulation they came back to the bald fact that the two sides would not add up, and so they had to give special grants to the Orange Free State and Natal. When they came to the third source of revenue they felt as one in the position who had to write an essay on “Snakes in Ireland ”—because; there were none. (Laughter.) In the Act of Union the term “direct taxation” was used, and in the reference to the Commission the Government used the term “ direct taxation.” In the majority report there was also reference to direct taxation, but in the Bill there was no reference to it at all The Minister, in his speech, had said that one could not dictate local taxation. Parliament could however, indicate local taxation to the Provinces, which had already been done in the Act of Union, and in the reference to the Commission, but was withdrawn in the Bill. Under that Bill it had not been made easy for the Provincial Councils to do the right thing in regard to local taxation The Bill had made it hard for them to do the right thing, and easy for them to do the wrong The Minister had deliberately framed a Bill, which blocked the way to local taxation. The Cape had had to have a big surplus in order that the revenue of the other Provinces might be made up. This was no real benefit to the Cape. It threw on them a large amount of money, and said that they must be extravagant. Either they had to spend the money, or reduce local taxation. The hon. member, alluding to the Divisional Councils of the Cape Province, said that there was no institution more dear to the hearts of the Cape farmer than the Divisional Councils. Of course he grumbled sometimes, as they all did. (Laughter.) But they had been in existence for the past fifty years, and after that system of local taxation had stood the test of that length of time it had shown itself to be a good one. They had extended it a little of late, and they had an education tax now, which he also thought was a sound one. The Divisional Council tax was certain, easily collected, easily increased or decreased. The education tax was also sound, and these two taxes were better than raising revenue by means of licences.

There was a grave element of danger in the Bill in the matter of non-recurrent expenditure, there being a temptation to the Provincial Councils to be extravagant and to put into loan expenditure items that should be defrayed out of current revenue. Then the period of repayment of loans— forty years—was far too long, for it would saddle posterity with a debt for the benefit of the present generation. He had seen school buildings that required re-erecting within twelve years. He did not think the Provincial Councils had so far had an opportunity of demonstrating what they could do. He did not think it would have been possible for better or sounder work to be done by any other bodies under similar circumstances. The Provincial Councils should be given a fair trial, and their finances should be placed on a sound basis. Continuing, he said he thought that the minority scheme had not received the consideration that it deserved, and he thought the pro rata subsidy system was better than the pound for pound principle that was found in the majority report, and which had been adopted by the Government. He complained that they had done away with local taxation. He moved the adjournment of the debate.