from J. C. P. Eedes, public accountant, Oudtshoorn, and members of the Corporation of Accountants, praying that the said corporation may be included in the Accountants’ Registration (Private) Bill among the societies whose members are eligible to practise under the Bill in the Union of South Africa.

from D. G. Roux, a teacher at the Boys’ High School, Lower Paarl, praying for the condonation of a break ill his service or for other relief.

from J. A. Theron and 81 others, 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—Viorfontein line, or for other relief.

from Alice M. Nicholson, widow of C. S. Nicholson, late Resident Magistrate of the Paarl, who died in 1912, after 35 years’ service, praying for a gratuity, or for other relief.

from K. D. Naidoo, representing the Islamic Society of Pietermaritzburg, Natal, and 23 other Indians, British subjects, praying for legislation whereby greater facilities will be accorded to Indians in (a) the issue of trading licences; (b) entering the Province of Natal, and (c) securing fire-arms for their protection.

from J. H. de Bruyn and 45 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.

from Marion Grindrod, who on the death of her husband. Sergeant-major J. Ralph, of the Cape Police, was granted a pension which terminated on her remarrying, praying that the House may grant her an annual sum to be devoted to the child of her first marriage, or for other relief.

from J. A. D. Serfontein and 74 others, voters of the electoral division of Boshof, 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, and a similar petition from C. J. Marais and 117 others, voters of the electoral division of Boshof.

from J. J. Noone, of Bloemfontein, who on 31st May, 1910, left the Post Office Department and three days later entered the railway service, praying for the condonation of this break in his service or for other relief.

from J. H. B. Cadle and 11 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.

: Government Notice No. 267 of 1913. having reference to regulations under Land Settlement Act, 1912.

: Annexures to General Report, Census, 1911; Parts VII. and VIII. Regulations for holding examinations for admission to public service of Union.

Papers in connection with removal of Mr. C. C. Campbell from the position of Messenger of the Court at Bloemhof, 30th June, 1912.

Papers relating to non-beneficial occupation of certain native allotments held under title deed (Cape). Return showing farms (Transvaal) registered 1910 to 1912 in names of natives.

These were referred to the Select Committee on Native Affairs.

moved, as an unopposed motion, that the committee of the Whole House on the Arms and Ammunition Bill have leave to revert to sub-sections (1) and (2) of clause 14, and to consider clauses 18 and 36.

seconded.

The motion was agreed to.

asked the Prime Minister when would the report of the Delimitation Commission be made public.

As soon as possible. Unfortunately, my colleague in whose department the matter is, is unwell, but the reports are in the Government’s hands, and will be laid on the Table as soon as possible.

: Might I be allowed to ask the Minister of Railways a question on a matter of urgent public importance?

What is the question?

It is now three weeks since the Minister promised to appoint a committee to enquire into the grievances of the railway employees. I think it is due to this House that we should have some explanation as to the delay in the appointment.

I think only about three or four days ago the hon. member put a question to me on this matter.

It is over a week ago.

Well, a week ago. I told him then I hoped within a few days. I hope to be able to appoint a committee within a couple of days.

*Dr. A. H. WATKINS (Barkly), resuming his speech, said that, since he last spoke in this debate, he had been supplied by the Treasury with certain figures as to the licences. He felt that when the members of that House saw the extreme discrepancies that existed between the system of licences in the different Provinces and recognised the handicapping that, there must be of trades and industries and professional men in regard to some of these licences, the House would be extremely careful how it handed over such revenues as this to the Provincial Councils. He felt that for some years to come the Provincial Councils must be maintained, and be given an opportunity of doing the work for which they were appointed, and he believed that under a sound system of financial relations there was ample scope for them to do useful work in the different Provinces. It would appeal to him that the subsidy should be fixed on the capitation basis, thus fluctuating only as population fluctuated. He thought it would be possible to have a differential scale, according to the Provinces in which it was applied. He recognised that in some of the inland Provinces naturally and necessarily they would have to give a higher subsidy per head than in the coastal Provinces. That principle had already been recognised in the local allowances given to Civil Servants. The subsidy, he thought, should cover the ordinary cost of administration. He did not believe that the people of those Provinces would refuse to tax themselves for their local works, if the only alternative were to go without local works. Why should these Provinces object to local taxation? The Cape Province for a half century had had the principle of Divisional Councils. To his mind, there was no essential difference between the Cape Province and the rest of South Africa, and no reason why the system of local government, which in the one Province had proved eminently successful and which had been accepted universally throughout that Province, should not be applied to the other Provinces, if some pains were taken to convince the people of the rightness, necessity and wisdom of it. There seemed to him no reason whatever why it should be impossible to apply to these other Provinces the same system of local government which had been in operation so long in the Cape Province. As a temporary measure, no doubt, the Provincial Councils would still have to administer the roads, but the acceptance by these people of a measure of local taxation for local needs would be the first sound step towards getting local administration and proper local works. He thought, too, that the present system of allocating a lump sum for education had been a bad system in every way. The grant for education also should be fixed on a capitation basis, on the number of children absolutely attending school. What we particularly wanted in this country was to encourage education among the outside population, whose needs had not been so well attended to in the past as those of the town populations. Continuing, he said that the capitation grants would have to be judged by the class of school. The subsidy should be large enough to cover the ordinary cost of the education, arid he did not think that any system would be healthier or sounder than that. He was not in love with the present system although it had done a great deal of good. For many years the schools were starved; now there was a sort of hothouse growth which had led to extravagance. He might be asked the question as to whether the system he had proposed was not too complicated. Speaking from a great many years of experience, it was simplicity itself compared with the present system of grants. Though he had a great desire to see the financial relations between the central Government and the Provinces firmly established, he did not see how he could support the second reading unless the measure were modified. He would be opposed to passing any unsound measure that would do infinite harm, and he hoped before they got to the end of the debate the Finance Minister would place some modified scheme before them. There were signs that the Government was prepared to modify the measure before the House, and he hoped that the Minister would furnish members with an idea of what it was proposed to do.

said that before dealing with the criticisms that had been advanced in the course of the debate, he would like to refer to the criticism addressed to the House by the right hon. member for Victoria West when he spoke the other day. He said that this House had practically resolved itself into a second sitting of the National Convention. He (the speaker) thought that that was a dangerous line to take in dealing with any Bill that came before the House, because this was one of the things regarded as a fundamental portion of the Act of Union. He did not say that he differed from the view of the right hon. gentleman that they had not arrived at the last word in local government in South Africa. The question was discussed by the Financial Relations Commission, of which he’ was a member, and he thought that the system of enlarged District Councils a most helpful one. But he thought it was most important that the House should not take the view that they had, at this recent date, arrived at a time when the Act of Union could be torn up. The right hon. member for Victoria West had said that this was a question which the National Convention considered, but could not arrive at a final solution, and that it was left to be solved by practical experience. Could it be said in the two short years that had elapsed that they had had enough practical experience to show upon what lines change should be made. The Provincial Councils had not been given a chance of carrying out their work on the lines laid down by the National Convention. They had not been masters in their own houses. They had not been financially independent. For these reasons he urged that they should be very careful about adopting the view that they must alter the Act of Union. There was another point—the point of sympathy. The Act of Union had not been an easy thing to accomplish. The States of the Union had met, and one attached great importance to one section of the Act, while a second attached great importance to another. When such importance was attached to one portion or another, it was essential that they should be careful not to touch any provision that might be adverse to the sentiment that put it there. That was a consideration they should not like to lose sight of What was laid down in the Act of Union should be worked up to its full development by practical experience.

If they examined the Act of Union they would find that this Provincial constitution went to the very root of the fabric. This House was constituted on the provincial basis. If they cut up the boundaries and cut up the map afresh, what were they going to do with the constitution of this House and the constitution of the other House? So that, even apart from any other considerations, even if the House thought that the time had come when they might modify the Act of Union in regard to the Provincial Councils, it would mean not merely the modification of the section referring to the Provincial Councils but to a complete reconstruction of the Act of Union. (Hear, hear.) For that reason he thought they should be very careful about settling down in this House to alter the constitution of the Provincial Councils. He thought, also, that if any alteration was going to come about it was not one that was going to be accomplished in twelve months, as some hon. members thought; but would take a very considerable time. If that was so, he would ask hon. members to consider how they were going to be content to go on leaving the Provincial Councils to go on without any more definite arrangement in regard to their finances than they had now. As far as he was concerned he thought it would be a danger to allow the present arrangement to go on. (Cheers.) It would be for one thing unfair to the ratepayers of the Cape Province. (Cheers.) Two fundamental objections had been brought forward against the second reading of this Bill. The one was that they must equalise taxation before doing anything. They had heard a good deal about that, and an honourable member had moved an amendment that the Bill must not be read a second time, until, he did not say all the taxation, but certain taxation in the Union had been equalised. Well, could they agree as to what would be equality of taxation throughout the Union? If it only meant that certain taxes, which were higher in certain Provinces, were going to be reduced to the level of certain others, but the others were going to be taxed to bear the cost of this reduction without having any relief from the burdens they complained of, then he thought this talk of equalisation of taxation was fatuous.

No, he did not think this matter could be put off until taxation had been equalised. It must be dealt with now. Now was the time to arrive at a system to govern the financial arrangements between the Union and the Provinces. But he did not see that the provisions of this Bill were going to stereotype the existing form of Provincial Councils as had been said they would. No reason had been given for that assertion. It would not stereotype the system except to this extent that the additional subsidies given to the Free State and Natal for ten years were given for too long a period. Another objection made by an honourable member was very plausible. He said they should have had a different form of getting this subsidy, and it was urged that the Provinces should be able to tax themselves to the same extent as the Cape Province did now. Well, that was a very pleasant thing to propose, but how was if going to be done? After all, one had to look at the point of view of these provinces and not merely of the Union. The Commission made proposals which would have resulted in their having to tax themselves to a very considerable extent. It was very easy to see, however, from the views put forward by the minority of that Commission what very strong objection there was to further taxation. The House should consider what their arguments were. It was that by the Act of Union, the Union Government came along and took over the whole revenue of South Africa. Then they say “Is it fair for the Union Government, if there is going to be any new taxation, to say that the new Provincial Councils must be the taxing agents?” They say, “No; you have taken our revenue; make a fair division, and give us sufficient revenue to cover our expenditure, and don’t throw upon, the Provincial Councils the onus of being taxing bodies.” It was an argument that was entitled to a great deal of respect, and that was why any measure that attempted to compel the Provincial Councils throughout South Africa to proceed to tax themselves at once would very likely be thrown out of this House But now the Government had got beyond it.

They made provision that would make it necessary for the two smaller provinces to tax themselves for a period of ten years. He thought that was too long a period. It tied the hands of the people of South Africa for too long a period. He did not anticipate that any measure that would be put forward would have asked the States to tax themselves. He thought some sliding scale would have been laid down to avoid that. But he would ask the Government to consider whether such a period of easement should be given as ten years. He hoped they would consider that point. (Hear, hear.) Apart from the fundamental objections that had been urged, a good many criticisms had been directed against the system proposed to be set up by this Bill. He was a member of the Commission, from the majority report of which this Bill had been evolved, and he thought a good many of the criticisms directed against that Commission and the Bill were criticisms that would not have been made if honourable members had had the same opportunities of hearing objections and examining witnesses as he had. Some honourable members on his side of the House told them that in their opinion the pound per pound system was a bad one. and that the capitation system should have been adopted. That was, that so much should have been paid to the provinces per head of the population. He might say that the Commission considered the question of capitation grants very carefully, and they decided against it for these reasons. They said in the first place “How are you going to reckon the population? Are you going to pay a uniform sum per head of the people regardless of the fact whether they are Europeans, natives. Indians or coloured and if not, how are you going to calculate what ratio you are going to take as to how many coloured people are to be taken as equal to one. European?” That was a question on which they found very strong differences of opinion from different parts of the Union. He did not think any one of them could sit down and give a figure that would give satisfaction to the whole of the Union. Another reason was this: Supposing they arrived at a figure that they agreed represented an average ratio of the population, how were they going to fix their subsidies? The majority of members said they should fix the subsidy at such a sum per head as would bring every Province out without a deficit. That was one way of fixing it. That view was based upon the principle that the provinces should not ever tax themselves, and that the Union should always provide their taxation. And once they left that principle, how were they going to fix the amount per head; and, what was more, if they ever arrived at a grant per head, how were they going to guarantee that it was going to be final, and not subject to re-arrangement? The capitation grant system was not such a good system as even the pound for pound principle. How many hon. members could come forward and say that the capitation system was more fixed and Jess liable to change than the pound per pound system? In the first place it was impossible to arrive at a basis of agreement, and, in the second place, it was practically impossible to say that such a basis was fixed and settled.

Another thing he would like hon. members to bear in mind was that they had four colonies which had come together—communities which had had quite different systems of expenditure. In the Transvaal they had been accustomed to quite a lavish expenditure; in other colonies to a more moderate expenditure, and in other colonies still it had been, not an ambition, but a necessity, to keep low the expenditure in the years which had preceded Union. If they were going to make a capitation grant, how were they going to make allowance for that; were they going to condemn the “poor but honest” Province, as he understood the Cape Province had been before Union? (Laughter.) He thought that if hon. members would consider these matters, and would consider them a little more carefully than they had apparently done so far, they would find that, after all, the pound for pound system, imperfect as it was, was open to less objection on the whole, than any other system which could be suggested. It was certainly less open to objection than any other which had been suggested in that House; because it was very characteristic of the criticisms against the pound for pound system that the critics had carefully abstained from suggesting any system which was better. His hon. friend behind him had said, in regard to education, Why not have a capitation grant there? Well, it was only necessary to look at the actual expenditure which was going on at present in the different provinces per head of school attendance to see the enormous variation which existed in these provinces, and to see the immense difficulties which would have’ to be met to arrive at an equitable capitation grant as between the Provinces. They would have a high grant in the Cape Province, but would they have heard the last of it? (Hear, hear.) He would ask hon. members who proposed matters of that kind to consider the practical difficulties—to bring in one uniform system in regard to four provinces which had come into Union and were under different scales of expenditure and different administrations. Reference had been made as to what went on in other countries where the central Government contributed to the local finances. His hon. friend had said that that thing (a capitation grant) was done in many other parts of the world and done satisfactorily; and why could it not be done here? He did not think that they could find those satisfactory conditions elsewhere. As to England, the hon. member for (Jape Town, Central (Mr. Jagger), had said that there was some control there in regard to system, and that as regards the Continental system of local government, it provided for that central control which he thought they also ought to have here. His answer to that was that it was not in the Act of Union. It was a barrier against control by the central Government. Did the hon. member think that the German system would have suited South Africa better than even the present attempt at a system? He would like to know how long the County Council or the Rural Council of the Cape would tolerate that system. (Hear, hear.) He did not think they would have tolerated it very long if the hon. member for Cape Town, Central (Mr. Jagger) was a member. (Hear, hear.) Do not let them criticise that Bill, because it did not do things which the Act of Union did not allow. They could not go beyond the Act of Union, and institute a control which the Act of Union did not provide. The hon. member for Cape Town, Central (Mr. Jagger), had also cited an Australian case, where he said the capitation system had been introduced, and had worked satisfactorily. They had always these systems being put to them without these systems being explained to them. It was quite a different thing, however. When federation had been effected in Australia, the Federal Government had taken over the whole of the Customs, with the arrangement that they should hand back to the states so much, and for that purpose they decided to give to each State according to its inhabitants. That was obviously quite a fair method.

: Where is the difference of principle?

said that in the Australian case the Government handed back a share of the local revenue, and a particular class of revenue, which might be calculated, per head of population; but when they came to decide the amount the central Government should contribute to local expenditure per capita it became an entirely different principle. (Hear, hear.) The expenditure in different areas in South Africa differed so much that that system no longer became a fair one. He thought that, on the whole, although he was prejudiced, perhaps, that £ for £ principle was much fairer in laying down the expenditure as between the central Government and the Provincial Councils, and fairer than any other that had been suggested. He did not think it was a final step, nor did he think it was intended to be a final step, but to last as long as local government lasted in that country. He thought that to effect a radical change in the local Government of South Africa would take a long time. He thought that if the Minister would agree to limit the scope of that Bill to a certain extent, and say that these additional subsidies should be, not for ten years, but for a shorter period, and if the Government was prepared to set about and enquire as to what system of local Government was most suitable in South Africa— an enquiry at which evidence should be heard and conducted by impartial men who looked at the permanent interests of the country—much good could be done. (Hear, hear.)

said that he rose at that stage, not to reply generally to that debate, but to make a few observations in reference to the amendment moved by the hon. member for Ladybrand (Mr. Fichardt), in the hope that it would be possible to shorten the debate, which had lasted a long time, and promised to last a much longer time. (Laughter.) Many important points had been made in that important discussion, and there was the argument on which the hon. member for Cape Town, Central (Mr. Jagger), had laid great stress; that that Bill made for extravagance because it contained no limit in future years as to the amount the Government might contribute on the pound for pound system under that Bill. A question of that kind could be dealt with far better in Committee, and the Majority Report had made some tentative proposals in the direction of limiting the amount the central Government would be liable for, and it might be possible, after they had discussed the matter in Committee, that a limitation might be introduced which had the consequences which the hon. member anticipated.

The main burden of the attack on the Bill had been that it perpetuated what had been called the “Federal” idea. It was not in this House only that the difficulty had been met with. He assured hon. members that there was no point which gave the National Convention more thought than this Provincial Government.

The National Convention was dealing with a double problem, and could not find a proper solution for either. On the one hand, there was a very strong federal party in the Convention, and on the first day attempts were made to meet the claims of delegates in favour of the federal system. Those delegates urged their claims with the greatest force and pertinacity, and it was only with the greatest difficulty that their point of view could be met. When they came to the question of Provincial Government, they had to bear that in mind. If the Convention had simply to solve the question of what on its merits was the best form of local government, he had no doubt whatever that it would have come to a different conclusion front the one it did come to. But they came to that conclusion because they were also dealing with the other question, which almost overshadowed any other question—the meeting of the claims of the Provinces. The miracle was that they should have been able to satisfy the federal proclivities of so many members in that Convention, and at the same time evolve a system of local government which although it was not working quite satisfactorily, yet was working more and more smoothly all over the country.

But although he agreed with most of what the hon. member for Fordsburg (Mr. Patrick Duncan) had said, he did not agree with him that the provincial idea was so deeply embedded in their Constitution that it was really one of its corner stones. No doubt, territorially, the Provinces were important both for the constitution of this. House and the constitution of the Senate, but that was very largely territorial. It was quite possible to drop the provincial system as a system of provincial government without pulling down the whole fabric of the Constitution. (Cheers.) Of course, the election of members of the Senate would require alteration, but he was sure that from the discussion which they had at the time and from the wording of many of the clauses of the Act, it could not be inferred that it was the idea of the Convention that the provincial system was to be permanent for all time. He did not think they could gather that from the debates of the Convention. The provincial system was intended to be provisional, but of course it was the intention of the Convention and the Act of Union that it should be given as fair a chance as possible. Now they could not get away from certain fundamental facts, and the first was this, that it was not in the public interest to continue the present provisional arrangement of Provincial Administration which had been working since Union. He would even go further and say that it was not contemplated by the Constitution. The Constitution clearly contemplated that there should be a short period during which an enquiry should take place and that Parliament should settle the financial relations on a sure and good foundation. The present system of provincialism was not working satisfactorily from the point of view of public expenditure. The hon. member for Cape Town, Central (Mr. J. W. Jagger) had quoted the rate of increase in Provincial expenditure since Union.

But what the hon. member did not know was that these figures represented only a certain portion of the figures which the Provinces presented to the central treasury. Every year those figures had been severely cut down before being presented to Parliament. He (General Smuts) mentioned this be make hon. members realise that deliberate and strong efforts were being made to control and keep in check Provincial expenditure. It must be very hard indeed for the Treasury to go further than it had gone in this matter, because, after all, the Provincial Government—although it might represent a bad system— must, to a large, extent, be trusted as to the extent of its wants. It would be most detrimental to the public interest to continue the present system of financial relations— most ruinous. The other fact they had to bear in mind was one the hon. member for Fordsburg (Mr. Duncan) had argued so forcibly, and which he (General Smuts) fully endorsed—that they ought not merely to keep before their mind’s eye the best form of local government, but how it was brought about and the inducements which led certain parties to acquiesce in a scheme of federation. If they did that they would not lightly disturb the present system. There were certain honourable understandings connected with the Constitution which were respected. If there was one explicit understanding in the Constitution which they must respect it was the one regarding this system of Provincial administration. When they had convinced the people of South Africa that the system was not working well, and that there was a better system, and given the time and necessary opportunity for thought, it would be possible to convince the people of South Africa that there was a better alternative. But do not let them, in disturbing the Provincial system, endanger the whole fabric they had raised.

Another important fact they had to bear in mind was that the Divisional Councils of the Cape Province were no substitutes for the Provincial Councils. (Hear, hear.) If they abolished the Provincial system of government the Divisional Councils would not help them. The functions which, under the Act of Union, were entrusted to the Provincial Councils could not be delegated to the present Divisional Councils. Whether they looked at education, at local government public works, or public health —matters in which the Provincial Councils had not only administrative but legislative authority—he thought hon. members would agree with him, that the Divisional Councils could not take over the duties which had been entrusted to the Provincial Councils. It might be said that much of the work done by the latter could be given to the Central Government and to Parliament, which could deal with education in all its aspects. But let them bear in mind when they used that argument that the Central Government was already carrying as heavy a burden as it was advisable for it to carry, and they must make up their minds that they did not want more centralisation than they already had under the Act of Union. He thought the idea of that Act was to have as much local administration and delegation as possible. To say now, “Pull down the Provincial Councils because there are Parliament and the Union Government,” was the wrong answer, because it was an answer which would lead to great administrative friction, much more than we had had during the last two years—and it would also lead to a more highly centralised type of Government. (Hear, hear.) The upshot was that if they wanted to deal with the question of the provincial system and any possible substitute for it, they would have to devote very considerable inquiry to the matter. The Commission which sat recently was precluded to a large extent from going into that question. He did not think they had ever had in South Africa a more competent Commission. (Hear, hear.) There was no doubt that in the end the needs of local government in South Africa would be met by bodies which were less parliamentary and which did not cover such enormous areas as some of the present Provincial Councils, and which, therefore, would have to turn attention more particularly to questions of local government. For that he thought they would have to evolve bodies different from the present Divisional Councils For some years they should give every research and inquiry into this question, and if they could not only go into the question of what this country of ours required, but how similar problems had been solved in other countries, he was sure it would be possible for them ultimately to discuss and consider a scheme which would be in advance of either the Divisional Council system or the Provincial Council system, which was settled upon at the Convention.

If that were so, he thought their course in this House was clear. He agreed with his hon. friend from that point of view that a ten years’ period was too long. The conclusion that the Government had come to was this. Towards the end of this year there would be an election of the Provincial Councils all over the Union; the Provincial Councils all over the Union would be simultaneously elected for a further period of three years, and he could not conceive, even if they were to deal with these bodies at some future date that Parliament was likely to make any serious inroads upon the powers of these bodies during the time for which they were elected. Therefore, they arrived at this result, that a four years’ period was to be given for the operation of this Bill and for the inquiry which should be simultaneously instituted. During this period it was the intention of the Government, if the House agreed, to have a proper inquiry held into this alternative. He only hoped that they would be able to get for this new Commission as able members as they had for the Commission whose work had been so much criticised. His hon. friend, in moving this amendment, referred to the questions of transfer duties and licences. He (the Minister) would say that it was his conviction that it would not be possible during the time at their disposal this session to deal with the large question of trade and professional licences. There were hundreds of these licences which would have to be unified, and he assured hon. members that the unification of the licensing system of South Africa was one of the most difficult problems that they could have to deal with. With regard to the other portion of the amendment, the same difficulty could not be found. The transfer duty system was itself a complicated system, but the scale of duty did not form a very complicated matter, and they thought it would be possible to deal with it, so that it might be possible to deal with the transfer duty as they had dealt with the liquor licences and the employers’ passes in the Transvaal, i.e., make the transfer duty an assigned matter, so that the Union Parliament should continue in future to deal with the question of any legislation affecting it. If that were done, it would be possible for them to reduce the high level that the transfer duty had attained in certain of the Provinces to a more common level from 4 per cent, to a lower percentage, and in that way get over that difficulty. The result of any such innovation would be that the finances of the two smaller Provinces, as indicated in the present Bill, would be affected to some extent, and it would be necessary to readjust the additional subsidies. He was sure a solution could be reached along these lines, which would not perpetuate the federal idea, and which would deal with the question of financial relations in a reasonable way, and give the House and the country an opportunity of evolving a proper and effective system. (Hear, hear.)

said he would like to ask the Minister if he intended to assign the licences?

No.

You will leave the licences as they are?

Yes.

said the speech which the Minister had made had put quite a new complexion on the Bill, and removed most of the objections raised to the Bill on that side of the House. He did not think anybody at this stage would wish to deal ruthlessly with the Provincial Councils without putting anything in their place. The House had to consider this Bill in conjunction with the papers which had been laid on the Table by the Minister. He thought the Bill ought to have been sent to a Select Committee to thresh out the financial proposals in the Bill. They were truly alarming. The Commission which had been referred to had said that there would be no great objection if the Provincial Estimates rose to the extent say, of 5 per cent, per annum. But these Estimates were rising in the most appalling manner, and for the Minister to stand up and tell that House that when Provincial Councils came to him and said that certain things were their necessities, and therefore they had to find money for them, it seemed to him (Sir L. Phillips) a very weak position, and one that could not be tolerated either by that House or for the benefit of the country. What we had to do in this country was to measure our resources, and build up. development as quickly as we could consistently with those resources. Some time ago they asked for details in connection with these Provincial Estimates. Provincial Councils could not come and say they wanted three millions from the Union Treasury without detailed estimates. He thought this House would not be doing its duty unless it had details in connection with the stupendous expenditure on the part of Provincial Councils, which had risen very enormously during the last few years.

When Provincial Councils were in a position to carry out the ideals of the Commission, which involved the raising of the money which they spent, then they would be content to leave the Provincial Councils to do what they liked. To-day they were not in a position to do that. He hoped that the Minister would send that document to the Public Accounts Committee, for they required more information with regard to these figures. Referring to the criticisms which had been advanced by the hon. member for Fordsburg, the speaker said he thought that his hon. friend was more of a theorist than a financier because if he had had more to do with figures, he could only have viewed this alarming increase in the expenditure with alarm. He hoped that the Government would not pass these Estimates in the form they were at the present time. On considering the figures, he found that there had been an alarming increase in the last couple of years, and it was essential that these figures should not be passed without mature consideration. He did not say that the Provincial Councils were extravagant. Probably they would be able to spend the money which they asked for to the greatest advantage but the point? was, as to whether the Union Government was justified in letting them have this money? Were they not perpetuating a bad system in giving them all this money? He did not feel as happy as the hon. member for Fordsburg or the Minister in charge of the Bill with regard to the £ for £ principle. It was true that such a system had been recommended by the Commission, but they all knew that Commissions were not infallible. Unless they could find some means of limiting the expenditure of the Councils, then he would say that the £ for £ principle was bad, and he was not sure whether the objections to the £ for £ principle could not be raised against the capitation grant system. He thought that what was required was a limitation of the contribution that was given by the Central Government to the Provincial Councils. With regard to this matter, he would throw out a suggestion. The amount which they were subscribing to the Provincial Councils was about a fifth of their Budget. He thought the contribution should be made on that basis, and that, under no consideration, unless by a special Act of Parliament, should it be higher than proportionately in keeping with the Union Budget. The point he was making was that the Estimates of the Provincial Councils showed that there had been an enormous rise in the expenditure. He considered that if they carried out a scheme such as he had proposed, they would never be faced by such alarming increases and such huge figures as they were at the present time. He was very glad the Minister had told the House that the period would be limited to seven years, but he thought they could consider themselves very fortunate if they could arrive at a solution of the whole matter within that period. He pointed out bow impossible it was to do away with the Provincial Councils, in view of the fact that, according to the Act, they were called upon to perform a number of specified duties. He pointed out that in England endeavours had been made to solve the complicated problem, of the relations between the Central Government and local bodies, and though commission after commission had studied the question, they had got no further than reports. They in this country were in a much happier position. They were a new country and a young country, and they should endeavour to place this matter on a sound basis, instead of allowing it to drag on year after year. The hon. member for Fordsburg had said that there was no means of checking the expenditure of the Provincial Councils. There were several systems that could be adopted, and he was sure that if the Minister would only devote a little more time to the matter; he would be able to devise one scheme that would be suitable out of the several that were available. They might have a decreasing sliding scale, or they might have the system which he had suggested in connection with the Budget. Proceeding to deal with the equalisation of revenue and the attitude that had been adopted thereto by the hon. member for Cape Town, the hon. member for Barberton, and the Minister, he said he believed that titles for mineral ground in the Cane Province were held with a reservation in favour of the Crown, and added he did not think that the taxation that was imposed was taxation upon diamonds. It was the expropriation by the State of rights that belonged to other people.

It is worse than that.

said that it had already been done in the Cape Province. He would not go into the question of the morality of the matter. That was unnecessary. But he would like to point out to hon. members opposite and to the hon. Minister that it was a very unfortunate example to take, because directly they took rights away in that way, they opened a door to it in other directions. Gradual expropriation without payment by the State of rights held by the people was wrong in principle.

There were some things in the Bill which he thought required consideration. For instance, he noticed that in clause 8 there was a provision that came from Sir Perceval Laurence, that when the Provinces expended a sum of more than £500 in one direction and £1,500 in other directions, it was to be debited to capital account. It was a good thing in one way, because they must have a limit on the sums to be spent on capital account. But it also offered an inducement to the Provincial Councils to wait until they could spend more than £500 or £1,500, so that they could debit it to capital account. He therefore thought they should devise some means of limiting the amounts to be spent on capital account. One way to do it would be to say that all expenditure which could be redeemed within a period of eight or ten years might be put to ordinary current expenditure. It would be merely deferring payment for a few years. Of course, the Union Government had to raise the money, and it was very proper that they should, because the credit of the State, as a whole. Was better than that of the Provinces. He would urge upon the Minister this one aspect of the matter: that he should not ruthlessly force this Bill through the House without giving any further information about these figures which were causing some of them so much anxiety. He would urge upon him that he would either lay those Estimates upon the Table of the House, or agree to refer them to the Select Committee on Public Accounts, in order that they might be properly examined, because if that House was going to pass over three millions of money to be spent on the Provincial Councils, without some information then they would not be doing their duty. (Cheers.)

said he thought the statement made by the Minister a few minutes ago probably removed from the minds of many of them the objections they had to the second reading of this Bill, because it was quite clear that this Bill could not be regarded as a permanent settlement of the financial relations between the Provinces and the Union. It appeared on the surface to be a considerable change from the system in the past, but it appeared that by giving a lump sum the difference was rather more in form than in reality.

Of course, as time went on the position might be considerably altered; but it was that consideration, rather which convinced him that this could not be and should not be, regarded as a permanent settlement, because in any efficient adjustment of the financial relations, surely the one thing necessary was that the revenue should fluctuate, and be dependent upon the policies the Provincial Councils take, and not upon the policy that Parliament took. Take the Transvaal. There was an assigned revenue of £400,000 from the native pass tax. Now, the question of native policy was often discussed in this House, and its termination, one way or the other, might result in a very severe diminution of the revenues accruing to the Provincial Council, and so, clearly, on the present basis they could not look on this as a permanent settlement. Therefore, it was distinctly relieving to hear that the Bill would only be a stop-gap. With regard to the important question of the suitability of the Provincial Councils, he thought it was quite clear that as engines of local government they were unsuitable. But that did not mean that they wished to sweep them away immediately. He thought that the suggestion made by the Minister met, in the greatest possible measure, all his objections. Because, at one time, the people of the various Provinces looked upon the institution of Provincial Councils in their present form as an essential condition of the smooth working of the Union, it did not follow that they were going to be prepared for all time to sacrifice the advantages of a more suitable engine of local government to that of provincial feeling. How far this provincial system might be modified, a good and strong Commission should set about to discover. Under these circumstances he hoped that the Bill would be now read a second time and then thoroughly discussed in committee.

He would, however, call the Minister’s attention to that one item of £400.000, the native pass fees of the Transvaal. There were other matters in other directions where the revenue of the Councils would depend very largely upon the policy which this House thought it right to give effect to; but, under the circumstances as it was merely a stop-gap measure, and as it gave a greater measure of authority to the Provincial Council, he hoped it would go through; but that the Commission would institute a very thorough and searching inquiry into the system and to determine how to obtain real local government for the Provinces. (Cheers.)

said he rose to address the House principally on certain provincial aspects of the discussion, which so far had divided itself into three portions; the first was the Bill as it originally stood; the Second the amendments proposed by the hon. member for Ficksburg; and the third the announcement just made by the hon. Minister.

: Mr. Speaker, I think there is no quorum.

said the Bill was one to tide over a period in the history of the Union for which they could make no definite provision until they had got more experience of the working of the Union itself.

The Convention, having a difficulty with that matter, left it over to a Commission, and on the basis of the reports of the Commission, the Government had brought in that Bill. All these reports agreed that some subsidy must be given to the Provinces to enable them to carry on. If they were having a perfectly clean start in a new country, they would, of course, have equalisation of taxation all through, and have no difficulty whatever. But here they had brought in four Provinces, each of which had its own system of taxation, and it would take years and years before they could bring assimilation through the whole country as they all desired. In the meanwhile, were they to wait? Surely it was better to adopt something in that period which would tide them over that time. He had been surprised to find in the Majority Report of the Commission that so little stress had been laid on the sacrifice of railway revenue, because in the three northern Provinces railway revenue had entered very largely indeed into their resources. Both in the Transvaal and the Orange Free State a large sum of money from the C.S.A.R. had been devoted to the ordinary expenditure of the country, and in Natal the railway had also been looked upon as a source of exploitation, from which the Colony could get money and means. But under Union these sources of revenue had to be surrendered after four years. Under Union they were asked to tax themselves to meet expenditure which they had not themselves incurred, but which other places had incurred. The hon. member for Port Elizabeth, Central (Sir E. H. Walton), had called attention in his speech to Cape people regarding themselves us being taxed, under that Bill, for giving doles to Natal and the Orange Free State. Doles from the Cape to Natal and the Orange Free State! A more outrageous and a more astounding statement they had never heard in that House. The hon. member went on to quote figures dealing with the debts, reproductive and non-productive, of the various Colonies of South Africa in the year 1907-1908, and said that in the Cape, out of a total debt of fifty-two millions, thirty-nine millions had been regarded as reproductive, and 13 millions as non-productive, on which the interest charged was £419,000 per annum. He deeply regretted that in this one had to be provincial; but they had been accused in Natal of taking doles from the other Provinces. Proceeding, the hon. member went on to say that while in the Cape there had been a loss of £615.000 on railways and harbours in that year, in Natal there had been no loss, while the C.S.A.R. showed a profit of 1½ millions. If they took the figures for 1911, the Cape lost on railways and harbours £102,000; in the Orange Free State they had a gain of £205,000, in the Transvaal of £1,800,000, and in Natal of £418,000. They had taken over a liability of £419,000 interest on nonproductive debt, £500,000 deficiency in revenue, and £616,000 loss on railways and harbours from the Cape, and if they took into consideration the remission to the Cape Province of income tax and the patent medicine tax, they got a total of £1,8333,000, in addition to which there was a large reduction of railway rates of which, up to the present time, the Cape had had the greatest benefit. Under the proposed Bill they had been informed that £120.000 more would be remitted, and £40,000 school rate. If there was one thing that stood out clearly in the Act of Union it was this, that of the four Provinces which went into Union, three could have gone out again the next day, and the fourth, if it could not have gone in, would have been bankrupt—(dissent)—and if hon. members came to that House and challenged them that they in Natal lived on doles from the Cape, he said that the boot was on the other leg. Continuing, he said that in the two years before Union only £50,000 had been spent in the Cape on school buildings, but in the three years after Union the sum was £500,000.

: On which we pay interest.

went on to say that they had the whole of the heads of departments sitting for three months of the year at Cape Town to satisfy a sentiment in that town that the Cape should be the capital. (Some dissent.) If they asked these questions they must receive these answers, and if they took away those “doles” they (Natal) must take away that capital. (Laughter.) So far from the Cape in taxation contributing to the other Provinces, it was the three northern Provinces which since Union had been so successfully contributing to keeping the Cape. The hon. member went on to draw the attention of the Minister to clauses 13 and 15 of the Bill, dealing with the proposed transfer of certain revenues derived from licences in municipalities of Natal, to the Provincial Council, to which, he said, attention had not as yet been drawn. There was an extraordinary provision in the Bill that that money was to be taken through the corporation and handed to the Provincial Council, and the Government was to come to Parliament and hand back the equivalent sum to the corporations. He thought it would be better to do away with all that bookkeeping, unless there was some other object or motive behind it. As to the Provincial Councils, the Minister had just referred to them as not being corner-stones of the Act of Union, and seemed to think they might deal in a manner more lightly with the Provincial Councils than with certain other clauses in the Act. Referring to sections 24 and 25 of the Act of Union, he said they would show clearly that it was the intention of the Convention that the Provincial Councils should be given a fair and lasting trial at least for a period of ten years. He quoted section 54 to show that the main idea of that section was that the Provincial Councils should be safeguarded in every possible way against the too early interference of the Central Government, and it showed again the importance which was attached to the Provincial Councils. He referred to other sections to emphasise his argument that every possible safeguard had been devised by the Convention that the Provincial Councils should be given an absolutely fair trial for such a period as would enable them to prove their worthlessness or their worth, and give the country a fair chance of determining after their period of trial whether they should continue to make use of them or not.

In Natal a referendum was taken on the Act of Union, and one of the inducements held out to the people at meeting after meeting throughout the whole of the Province was that although the members of the Convention representing Natal had failed to secure federation of the four Provinces they had secured an ample form of local self-government. In Natal they were necessarily timid of entering into this Union because they knew they would be far removed from the seat of Government and from those who were governing. The Administration would be centred at a distant point. These announcements were made throughout the whole Colony that they were protected by the Provincial Councils who would look after local interests. Sir Frederick Moor, the then Prime Minister, in answer to a question as to whether the powers which had been reserved by the Constitution to take away the Provincial Councils would be exercised, said that he did not take that view of it, and expressed the opinion that the Central Government would not dare to interfere with the Provincial Councils unless it was the will of the people that that should come about. He (Mr. Orr) would warn the House that if there was any attempt to deprive Natal of the Provincial Council at the present time they would demand the voice of the people should be taken, and that they should have a general election upon it. If there was one thing clear in the Act of Union it was that the Provincial Councils were safeguarded until the people themselves declared that they would have something in place.

Regarding the amendment that the Government should take into consideration the advisability of appointing a Commission for considering the question of Provincial and local government with special regard to the smaller Provinces, that was innocently moved, but was not innocently seconded, by the hon. member for Victoria West. The hon. member was a member of the Convention and was responsible equally with other members of that Convention for bringing this scheme of Provincial Councils into the Act. He was equally bound with other members of that Convention to see that these Provincial Councils had a fair trial in this country. Had the hon. member for Victoria West done so? Was there any man in this country more than he who had gone about denouncing them and all their ways? He had been doing everything to bring discredit upon these Councils which he himself had helped to set up. That was not playing the game under the Act of Union. In Natal they thought they had some measure of security in their Provincial Council. They thought their local affairs would be administered locally, and so far from wanting their powers done away with, they would like to see them extended. They would like to see some measure of devolution of the powers of the Agricultural Department so that they would be able to get things done in a far more speedy and efficacious manner than was possible at the present time. The Ministers should turn their attention to devising some means by which more local control could be given to the Provinces. He believed that would do good both to the department and to the country.

The proposal of the hon. Minister, as foreshadowed in the speech he had made, was that they should pass this Bill for a period of four years only. He (Mr. Orr) did think that that period was too short. It would take some time to complete this investigation which was foreshadowed by the Commission. The Provincial Councils would be elected next year for another period of three years which would expire at the end of this four-year period suggested by the Minister, but he would put it to the Minister that a better period still would be the period at the end of the second normal round of the Union Parliament, which was ten years from the Constitution of Union, or in the year 1920. If they had the four-year period under normal circumstances there would be a general election in 1915. He did not think that would be decided altogether on the question of the Provincial Councils, but they were entitled to go to the country on that, so that if this system went on until 1917 there would perhaps be another general election on that, and general elections were things to be avoided if possible. (Cheers.) He hoped the hon. Minister would not adhere to the four year period, but would give a period of seven years from the present, or ten years from the Act of Union. That would give time for the Union Government to consider the very important point of whether Parliament would be able to extend the powers of the Provincial Council and give them extended powers in local matters. The Union Parliament had an enormous amount of work before them, and it might be found possible to devote further powers to the Provincial Councils than they had already. Let them take time in that matter, and let them have this Commission. In the meantime, it might be that the Provincial Councils would have proved their worth, and that the hon. member for Victoria West would have changed his opinion, and would go about blessing the Provincial Councils. He intended to vote for the second reading of the Bill, although in doing so he might incur the displeasure of the hon. member for Uitenhage.

said he would like to reply to some of the arguments that had been advanced by the hon. member for Cape Town, Central (Mr. Jagger.) It was true that Natal had no direct school tax, but the municipalities in that Province supported education to a very large extent, they having given large tracts of ground for school purposes. Durban had given no less than £100,000 worth of ground for schools. It had also contributed £1,000 to the Technical Institute. As regards native taxation those in Natal paid more than did those in the Cape. In Natal the transfer duty was 3 per cent., and in the Cape it was 4 per cent., but the difference was not worth crying about. He claimed that the remarks of the hon. member for Cape Town, Central, were only beating the air. (Laughter.) People should be very cautious about throwing stones. The hon. member for Cape Town, Central, had asserted that the Cape was called upon to contribute to money given to the Free State and Natal, but the hon. member forgot that the railway profits in the Free State amounted to £385,000, and in Natal to £464,000, while the loss on the Cape Railways was £79,000. So that the poor little Free State and Natal really were called upon to contribute to allow Cape Town to send goods all over the country at a loss. (An HON. MEMBER: “Shame” and laughter.) Then the hon. member for Cape Town, Central, had made a great point over the increased expenditure of the Natal Provincial Council. He (Mr. Henwood), had looked into the matter, and he had found that in 1911 that expenditure was £384,000. Last year it was £538,000, and this year it would probably be £508,000. In 1911 the amount voted for education in Natal was £129,000, last year it was £181,000, and this year it would be just on £200,000. In regard to hospitals, Natal spent £25,000 on them in 1911, and £35,000 last year, so that £81,000 of the increase was taken up by hospitals and education. Surely that was money well spent. There had also been a great increase in the amount spent on native wages. For the whole Province they had a sum of £508,000, whereas the estimates of the Durban Municipality alone were nearly £1,000,000. He did not think any member of that House could say that the money was not well spent.

The right hon. the member for Victoria West had made a general sweeping charge of extravagance, but he failed to produce any facts or figures, and he must admit that the Provincial Councils had not had a fair chance. If the Bill were passed in its present or amended form, it would give them an opportunity of dealing with their local affairs, and if they failed, he for one would say, “Let us have something better.” The right hon. gentleman had pinned his faith on what happened in New Zealand in 1895, when Divisional Councils were substituted for Provincial Councils. He (Mr. Merriman), was a member of the Convention. Why did he not disclose these facts then, seeing that it was 14 years after they had occurred when the Convention sat? As a matter of fact, he was almost one of those who proposed Provincial Councils, and yet they found him to-day disclaiming his only child. (Laughter.) It might be proposed as an amendment that this Commission which it was intended to appoint, should enquire into the question of the dual capital. They would then see whether it was not possible to have one central capital and save expense.

In Natal?

It is not selfishness; we don’t want it in Maritzburg. We will let it go to a more central place. Proceeding, he said that as far as finance was concerned, they would save ten times as much by bringing that about as they would by abolishing Provincial Councils. But he felt that these Provinces came into Union with a clear understanding that Pretoria should be the Administrative Capital, and Cape Town should be the Legislative capital. Until that had had a fair trial he should vote against such an amendment. He was against starting to tear up their Constitution before they knew where they were. There was also the question of the heavy blow which this Bill struck at the Natal Municipalities, because it took away, by clause 13, the right to their retail and wholesale licences. Clause 15 dealt with the Liquor Act in Natal. It seemed to him that this was unfair, because it was decided by Law 19 of 1872, under the old Crown Colony, that the right to collect licences in the Municipality should belong to the Municipality.

This was further protected by Act 22 of 1894, while the Provincial Council passed another Ordinance dealing with the matter only last year. They had had the right for over forty years, and it would be unfortunate were that Parliament to take these rights away. It would damage the financial position of the municipalities, and they would be breaking faith with the debenture holders. If these rights were taken away, what would the debenture holders have left? Only the Rating Act. It was not the actual value of the licences, but the fact that it gave the municipalities power to deal with matters that closely concerned the public health. The Minister had agreed to strike out these two clauses when the Bill got to committee, and such an action would be much appreciated in Natal.

said that matters of good faith had been assailed in that House, and some of the sentiments expressed in the course of that debate had caused bitterness and consternation in Natal. The Minister rather coolly remarked that what he had to do was to convince the people of South Africa of the inadvisability of keeping on the Provincial Councils. There was no great difficulty about that. Most of the people of South Africa had been convinced of that fact long ago. It was not the people of South Africa as a whole that they had to convince. It was the people of Natal who had been induced to enter Union on the principles which they were discussing. He would like to know why it was that all these difficulties had been found out that afternoon. Were they not patent all along? Surely they could have been discovered when the Union of the Provinces was being considered? Before Union, Natal had invested her capital in railways, and they were earning a great deal of revenue by doing work for her neighbours. What was Natal’s position to-day? Financially she had not a feather with which to fly, and he contended that the Transvaal had built up a big railway system on profits filched from Natal. The hon. member for Port Elizabeth had referred to doles. Who wanted their abominable doles? They did not want them in Natal. They wanted back a fair share of the revenue gained by the Union from Natal, and the Union could keep its doles. The hon. member for Ladybrand had talked about the Free State as if they were merely hangers-on. If the hon. member was glad that such should be the case in regard to the Free State, he (the speaker) would repudiate the suggestion so far as Natal was concerned. No other Province had brought such assets into Union as Natal. The hon. member for Barberton was willing to give the Provincial Councils a further trial of two and a half years, but would he be willing to do the same with regard to the dual capital? He considered that the dual capital was one of the most shameless pieces of log rolling ever introduced into the South African Union Convention. He would like to refer to the right hon. member for Ladybrand again. He said that the Free State had no need for a Provincial Council. Perhaps they thought they had not. They had the ball at their feet and had had it for a long time, and everything was going their own way. However, it might not always be there. They in Natal thought that the Provincial Councils were there for the protection of the rights of the minority, which were very often in jeopardy through the caucus-ridden majorities of this House. He would like to ask who prevented compulsory bilingualism being forced on a country that abhorred it? (Cheers, and cries of “No.”) Perhaps the hon. member’s Provincial Councils failed him in this regard, and that was why he disagreed. The Natal Provincial Council did not fail them, and that, he thought, partly explained the dead-set at present being made against the Natal Provincial Council. And he would say that they had had none of that abominable racialism in Natal. Then, again, Natal did not stand in quite the same position as the other Provinces in regard to its distance from the Central Parliament of South Africa. Natal’s ablest men were to-day, he believed, in their Provincial Council. (Laughter.) Their actions, at all events, in reference to the language question, showed that. Therefore he thought they could trust the Natal people. They were quite shrewd enough to look after their own affairs. He believed if there was to be any question of the abolition of the Provincial Councils, it was from the people of Natal that the question should emanate, and not from this House. The Provincial Councils had been a success, not that they had had much scope. In the settlement of the Provincial revenue he noticed that half a million a year was to be taken from the transfer dues. Surely that was an anomaly in such a country as this, which pretended to encourage closer land settlement. He considered that an unwarranted attack had been made on the Provincial Councils. At the time of Union the position of Natal was that she wanted to go in on the lines of federation. The Minister of Finance said this was on the lines of experiment; but was the dual capital also an experiment, and was the judicial capital being at Bloemfontein also an experiment? No. He thought the Provincial Council was a distinct understanding to Natal, and it was the condition on which they entered Union. However, there was always one way out of it. There were three Provinces which had one way of thinking. Why not let them unite and act together, and confederate with Natal? They would have no objection. In Natal the principle of personal liberty had always been jealously guarded; but he thought it had not been so carefully looked after by the Minister of Finance. Hon. members from Natal had been dragged into many discussions and many differences which they wanted to have nothing to do with at all, and such as, up to the time of Union, had never disgraced Natal. He would support the second reading of the Bill.

said that he thought most of them recognised that it would be very difficult at that stage to alter the present system, and considering the provisions of the South Africa Act, it was almost inevitable that these provisions must continue in their present form for, at any rate, some years to come. The hon. member who had just sat down (Mr. Fawcus) said that he had liked the Bill in the form which it would take as a result of the speech of the Minister of Finance less than before; but he must say that he could not agree with the hon. member, and he thought that the Minister had been wise in getting rid of some of the objections that were in the Bill as he had originally introduced it. He thought that the Government had been wise also in favouring the appointment of a Commission to inquire into the whole subject, and he had been somewhat amused that members on the Government benches were now favouring the appointment of two Commissions, when a few days ago they had said that the appointment of a Commission would be a waste of time. He observed that although a great many speakers had deprecated provincialism, nearly all of those who had been foremost in their deprecation of that, had been putting forward the claims of the Provinces from which they themselves had come. (Laughter.) The hon. member went on to say that he thought the inhabitants of the Witwatersrand had some cause to complain of the provisions of that Bill, and he presumed that the only reason that they had not put forward these complaints was that they had been accustomed for so many years to pay more taxation than they should have done-, that they had accepted the position with a cheerful face. (Laughter.) If they looked at the sources of revenue supposed to be assigned to the Transvaal provincial authorities, they found that practically the whole of these sources applied only to the population of the Witwatersrand, and practically nothing of that was paid outside the Witwatersrand. He admitted that, as regards transfer duty, something was paid outside the Witwatersrand, but it was quite obvious that the bulk of the taxation was paid by the population of the Witwatersrand. But he also admitted that it would have been difficult to assign the sources of revenue which the country districts of the Transvaal contributed, because at present they contributed practically nothing, so that it was impossible to assign anything. (Laughter.) As he had understood the Minister just now, he proposed, in the case of the Cape and Orange Free State Provinces, to reduce the transfer duties to two per cent., and then hand over the reduced revenue to these Provinces. In the Cape Province, as he understood, it would lead to no difficulty, because it was understood that in the Cape Province there would still be a surplus even out of that reduced transfer duty, but if it was handed over to the Free State, an amount of £19,000 would have to be made up, and they on his side of the House would certainly like to know whether that amount would be made up by the Union Government, or if the Provincial Council of the Free State was expected to make up that amount. There was another matter they should like to have some information on, which was whether the hon. Minister proposed to level up to two per cent. the transfer duty of the Transvaal as he proposed to level down the transfer duties of the Cape and Free State.

replied in the negative.

said that he was very glad to hear it. Then there was the matter of the pass fees, which was really one of the most iniquitious things they had to suffer on the Witwatersrand. and the amount produced by those fees (£373,500) was practically paid by the Witwatersrand. These fees were paid entirely by the employers of the natives, and any householder who employed a native had to pay. In the Orange Free State, they also had a similar system, but the law allowed the employer of labour to recover the amount from the native. Handing over that amount to the Provincial Council simply meant putting on the Statute-book the principle against which he had been complaining, that the Witwatersrand paid and continued to pay a tax for the rest of the Transvaal. Originally the pass fee had been a shilling, and had been imposed in order to provide hospital accommodation, but the amount had been largely in excess of the amount required for that purpose, and the Government decided to make a grant instead to the Johannesburg Hospital—an insufficient grant—and put the rest into the Exchequer. It had been argued that it was only fair that those who employed the natives should provide the hospital accommodation, but the mines were compelled by law to provide hospitals for their natives. If the mines had no hospital the Johannesburg Hospital was used and the mines had to pay for it. The ordinary householder also had to pay for it. So the tax had come to mean that it was a tax levied upon one section of the population for the benefit of the rest of the country. It was unfortunate that that system should be perpetuated and, to use a description that had been more than once employed in the debate, that it would be stereotyped in the Bill then before the House. It was evident now that the Commission recognised the unfairness of the proposal, because their proposal was that half of these fees should he handed over and that half of the deficit which would arise should be defrayed by a rate on real property which was estimated in the Transvaal at seven-sixteenths of a penny. The hon. Minister in introducing the Bill said there would have been considerable difficulty in levying that rate. The difficulty was not likely to be less in the future. The hon. Minister also pointed out that the pass fees payable in the Transvaal and the Divisional rate payable in the Cape Colony were analogous, but that was, of course, a fallacy. In conclusion, he said he thought it would be only right if the Government in introducing the Bill had given some encouragement to the Provincial Councils, whose members did their best to see that the grievances that the Rand was suffering from should be gradually removed.

said that there were two questions before the House. First, whether the system of Provincial Councils should be continued; secondly, whether the present Bill should be read a second time. Most of the speeches had been with regard to the maintenance of Provincial Councils. He referred to the speech of the hon. member for Umlazi as most offensive and aggressive, and said he had raised a question that should not have been raised. He believed with the hon. member for Fordsburg, that this question of Provincial Councils itself seemed to be part of a contract by means of which Union was arrived at, and if they could induce the people of Natal to withdraw their embargo he should be delighted to do it. It was another question to ask whether they would be well advised or right in using the majority of the three Provinces in that House to force the people of Natal in a matter in which they held very strong opinions.

He felt bound to enter a word of protest against some of the criticisms of those who had opposed the system of Provincial Councils. With regard to the Cape Provincial Council, it seemed to him that it had done good work, and he doubted very much whether that House would have been able to do it better. He did not refer to the Ordinance which was unfortunately referred to by the hon. member for Umlazi but to the remarks of the right hon. member for Victoria West. He doubted very much whether any impartial observer would think that that House could have done any better. It was unfair to make comparisons with three years ago; however alarming these increases were they were not greater than the increases in other parts of the world. He did feel that when they accused the Administrator of the Cape of being autocratic, it was hardly right for them to do so. Under the constitution he alone was in constant touch with the business of this Council, and the inevitable result was that he had great power. He had no doubt that if the right hon. gentleman were in the Administrator’s place the same thing would happen. It was not for those who insisted on the Provincial system and refused to consider amendments to rail now at the unfortunate Provincial authorities. Nor was there any real reason for supposing that the Provincial system would interfere with the Union or break it up. In no country in the world was this the tendency. Why he would like to see the Bill passed would be for the reason expressed by the hon. member for Ladybrand in his amendment. The Provincial feeling was unfortunate, especially in Natal and the Free State, for there it was connected with the racial feeling. If the partition which divided the people could be broken down the racial, as well as the Provincial feeling would die out. But a Bill of some kind must be passed at the present time, for Natal was in a condition almost of panic in regard to this question. Mr. Fremantle then moved the adjournment of the debate.

The motion was agreed to, and the debate adjourned till Wednesday.