House of Assembly: Vol14 - FRIDAY MARCH 7 1913
as Chairman, brought up the third report of the Select Committee on Public Accounts, as follows,
The attention of your committee has been directed to the fact that in the Estimates of Expenditure of the South African Railways and Harbours for the ensuing financial year, an amount of £15,000, being recoveries from Railways, has been deducted from the total of Head No. 26, Cartage Services, Harbours, on page 32. In view of the terms of the second report of your committee, and of the decision arrived at thereon, your committee recommends that the same principle should be applied to these Estimates, and that the above amount should be deducted from specific sub-heads of the Head referred to.
The fourth report of the Select Committee on Public Accounts, is as follows:
Your committee, having considered the Estimates of Expenditure of the South African Railways and Harbours, for the ensuing financial year, and having had in attendance the heads of departments concerned, begs to report as follows:
Head No. 3: Running Expenses—
- 1. Your committee learns that the purchase of Indwe coal for the Railway Administration entails an extra cost of £15,000 per annum more than would have been paid if the same amount of coal had been bought from Natal, Transvaal, or Orange Free State collieries. In the opinion of your committee the Administration is not justified in incurring this large extra expense.
- 2. The attention of your committee has been drawn to the fact that from the report of the General Manager of Railways and Harbours for 1911, it would appear that the number of employees per 100 miles of line operated is 537, as compared with 410 in Australia. In the opinion of the General Manager, this number is somewhat excessive, and your committee recommends that the most careful scrutiny should be maintained over all new appointments, and every endeavour made to check any increase of staff out of proportion to the traffic.
- Head No. 8: Depreciation of Permanent Way and Works and Rolling Stock—
- 3. Your committee directs attention to the opinion of the General Manager that the provision for depreciation of permanent way and works is inadequate, but in view of the fact that a Departmental Committee is now inquiring into the matter your committee makes no further comment thereon.
- Head No. 19: Sleeper Factories—
- 4. Your committee has received information in regard to sleeper factories, and finds that the quantity of sleepers obtainable under existing arrangements has become so small that it has become a question for serious consideration whether it is worth while keeping open the factories at Knysna and Storms River.
moved, as an unopposed motion, that the third report be now considered.
Agreed to.
then moved that the report be adopted.
desired to know if the amounts had been passed by the Public Accounts Committee.
said he would like it to be made clear that this report, which purported to come from the Public Accounts Committee, had actually been passed by them. Unless it had been passed by the committee it could not be justly called their report. If it were passed by the Public Accounts Committee it would be adopted in the usual way.
explained that it was simply a resolution passed by the Public Accounts Committee and reported to the House. It was not necessary to pass it twice.
said that as a back bench member he objected to that motion being taken now. If there was a difference of opinion between members of the Public Accounts Committee, what was the position of hon. members? (Hear, hear.)
The hon. member is too late to object. When I asked for any objection the hon. member did not object, and it was carried unanimously. (Hear, hear.)
said that what he would like the Minister of Finance to do was to explain exactly to the House what was proposed to be done. What he would like to know was whether that particular case was on all fours with the other. He understood that in the present case a certain sum was deducted from the revenue instead of being voted.
said that his hon. friend seemed to have forgotten what had taken place on the former occasion. The chief accountant had been asked to deduct from the items, just as was done in the main estimates.
was understood to say that his recollection of it was that they had already the question on the main estimates, and the instruction to the committee was that a similar resolution should be brought up on these estimates. He would like, as a matter of convenience, before they discussed a report of that kind, that they should have it in print, so that they could understand what they were talking about. (Hear, hear.) He moved that the debate be adjourned.
suggested, as an amendment, that the report be referred back to the Public Accounts Committee. (HON. MEMBERS: “Oh, no,” and “Why?”)
thought every part of the House was entitled to know what was going on. Members sitting in his part of the House were absolutely in the dark as to what was going on, and he asked hon. members to make their remarks so that everyone might be clear as to what their intentions were. (Hear, hear.)
said that he was not clear himself as to what should be done, and he suggested that the debate should be adjourned to see what the position was. He entirely agreed with what the hon. member for Pietermaritzburg, North (Mr. Orr) had said as to the printing of these reports.
pointed out that the whole matter would appear in print on the Votes and Proceedings.
pointed out that that was too late, as hon. members wished to record their votes.
asked Mr. Speaker’s ruling. He said that if the debate was adjourned and it was found that in that report the ordinary procedure was not followed, would he be prepared to give a ruling to the House?
If during a discussion on the adjournment of the debate members find that the members of the Public Accounts Committee are not clear as to what took place, it would rest with the House to decide whether to refer back the report to the Public Accounts Committee, or otherwise.
The motion was agreed to, and the debate adjourned until Monday.
return showing total amount of profit made by De Beers Consolidated Company, Ltd., from trading in mine compounds for the past ten years; and its general allocation, etc.; Report by Chief Inspector of Explosives on an accident at the British South African Explosives Company’s works, Modderfontein, on 24th September, 1912; Report on the Wonder Mine, Natal, by Inspector of Mines, Natal, and Mr. Howard Pim.
papers relating to grants of land (Nos. 19 to 33).
These papers were referred to the Select Committee on Waste Lands.
announced that the Governor-General, having been informed of the provisions of clauses 1 and 2 of the North Barrow and Weenen Commonage Amendment Bill, providing for the disposal of certain Crown lands, gives his consent that in so far as His Majesty’s interest is concerned, the House may do therein as it shall think fit.
moved: That this House approves of the following contract and agreements entered into on the 6th day of September, 1912, and laid upon the Table of the House on the 4th of February, 1913, viz.: (1) Ocean Mail Contract between the Government of the Union of South Africa and he Union-Castle Mail Steamship Company, Limited; (2) Government Freight Agreement between the High Commissioner for the Union of South Africa acting for and on behalf of the Government of the said Union and the Union-Castle Mail Steamship Company, Limited; and (3) Homeward Produce Agreement between the Government of the Union of South Africa and the Union-Castle Mail Steamship Company, Limited.
The hon. Minister said: In moving the resolution standing in my name, may I ask the indulgence of the House while I place before it the salient features of the contracts entered into with the Union-Castle Mail Steamship Company? In the first place permit me to remark that the Union of the several Provinces of South Africa and the legislation passed in 1911 through the medium of the Post Office Act, which latter received the hearty support of many gentlemen on the opposite benches, placed the Government for the first time in a position to deal effectively with the shipping and freight questions affecting the interests of this country. In consequence of this legislation, the Government was able to take up a very firm attitude and to achieve the objects which is had in view. These were: (1) The abolition of the rebate system which has now gone by the board. (Hear, hear.) In this connection it will be remembered that a primage charge at the rate of 10 per cent. was levied by the Conference Lines on all goods imported into this country, of which 5 per cent. was retained by them for a period varying from 6 to 12 months and subsequently returned to the shippers in the form of rebate. In the opposite direction the whole of the amount formerly rebated to shippers has been given up by the shipping companies. Rebates having now been abandoned, the whole of this money remains in the hands of importers and exporters, whose annual nett saving in this respect is undoubtedly very considerable. (2) Then there was the securing of an open freight market for South African trade. This has practically been effected because shippers are no longer bound to the Conference Lines in the matter of rebate moneys and are free to make their own arrangements at their own convenience outside of those Lines if they desire to do so, without any monetary penalty being incurred by them. (3) The Government also desired to secure the transportation of maize from South Africa to Europe at a reasonable figure, and in this respect I am convinced that a very favourable rate indeed has been obtained. When the negotiations were commenced, the rate of freight stood at 11s. 6d. per ton and the company was asking 14s. including outports. A flat rate of 10s. per ton has been secured and this for a period of 10 years. (4) Then again, the Government was anxious to secure lower rates for the fruit export trade. These rates have been reduced by amounts varying from 27 per cent. to 60 per cent. (5) Further, the wool industry has been greatly advantaged by the action of the Government and the very substantial reduction of 10 per cent. has been made under the present system of making up the wool, while a further reduction of 5 per cent. is obtainable if the wool is pressed to Australian standards. (6) During the discussion on the Post Office Act I mentioned that skins exported from South Africa were carried at an abnormally high rate of freight. Here again the Government has secured a substantial reduction. (7) Reasonable rates have likewise been arranged for chilled meat, butter and frozen mutton. (8) The Government was also anxious to encourage the export of coal, and this too has been achieved, the Mail Company undertaking to purchase for this purpose not less than 50,000 tons per annum. (9) Another matter we had in view was the importation into South Africa of pedigree stock from Europe, and this very important service to the farmer and to the country generally has been arranged free of freight; only the cost of the food for the animals on the voyage needs to be borne by the importer. (10) As to the mail contract itself, the Government has secured its renewal on the basis of a payment of £150,000 per annum, in other words at the same figure as was paid for the extension of the old contract.
Before passing in review in more detail the various terms of the contracts and the advantages which have been secured, it may be well to say that during the last few years the rates of freight from all parts of the world to and from the United Kingdom have been on the upward grade. I have before me a very striking chart which recently appeared in “Fairplay,” a shipping journal, which shows that for the three years 1910, 1911, and 1912, the outward and homeward freights from and to the United Kingdom have gone up on an average of about 40 per cent., and there is no doubt in my mind that had it not been for the Government passing the Post Office Act and exercising its influence in the direction of cheapening freight rates for South African products, the rates of freight from and to South Africa would have followed the general tendency. It cannot, of course, be estimated what the saving to the country has been in this connection, and I must leave it to honourable members themselves to form an idea to what extent South Africa has benefited. Apart, however, from any increase in freight rates which might have been demanded by the shipping companies, the actual saving which has been effected by the abolition of rebates and reduction in freight is very substantial. I think, therefore, it will be admitted that the Government has made good use of the opportunities which Union has afforded. I will now proceed to deal seriatim and more fully with the terms of the contracts and the benefits which have been secured thereunder.
The contract, as the House is aware, is based upon the anti-rebate clause in the Post Office Act, and notwithstanding prophecies to the contrary a contract has been made with the old company for the conveyance of the mails to and from South Africa, although it is fair to say that the contract was negotiated with the new management, which met the altered situation with characteristic enterprise.
The contract, like the preceding one, is for a period of ten years; the annual payment has been fixed, as previously stated, at the same figure as was paid during the two years extension of the 1900-10 contract, namely, £150,000 per annum, and similar arrangements as to sharing the subsidy have been agreed upon with the Imperial Post Office.
In passing, I may say that the Imperial Postmaster-General, the Permanent Secretary of the British Post Office, Sir Alexander King and others concerned were most helpful in every way while the negotiations were proceeding. Without the co-operation of these gentlemen it would have been much more difficult to have come to satisfactory terms, and for their interest and help the Government is much indebted to them.
The extension of the voyage of the mail steamers from Table Bay to Durban is also provided for, so that the Natal community will be able to take advantage of all the provisions of the agreement similarly to the communities at the Cape ports. An amount of £21,000 per annum, the sum paid for this service by the late Natal Government, is being continued.
The period of the voyage between the mail ports, Southampton, and Table Bay, has not been altered, but provision for acceleration in speed has been arranged should such at any time be necessary for Government purposes. To my mind, increased speed for the conveyance of the mails is not a pressing matter in view of the facilities at cheap rates which now exist for cabling urgent communications. Nevertheless the company has undertaken to provide during the term of the contract not less than six new mail steamers of larger tonnage than any vessel now in the service, and to keep abreast of the time as regards methods of propulsion. With the growth of population and the development of the material resources of the country there can be no doubt that shorter passages will come in natural course. Two mail steamers of the larger tonnage have already been ordered. The old provisions for ocean mail sorting have been incorporated in the new agreement. The loss of the Titanic last year directed special attention to the safety arrangements of ocean liners, and this point has not been overlooked in the new contract. It may be expected that during the next ten years there will be a very considerable increase in the number and weight of mails exchanged between Europe and South Africa, and in securing for that period the same terms as were latterly being paid, the House will no doubt agree that a by no means bad bargain has been made with the company.
Turning now to the extra conditions which have been included in the contract, it will be convenient in the first place to refer to statements made in this House by those who, when the Post Office Bill was being considered, opposed the clauses dealing with the question of rebates and shipping combines, and I shall leave it to the House to judge whether the prophecies have been fulfilled. We were told then that to do away with the rebate system would only benefit the large merchants and that the small shipper would be killed if the system were abolished. My reply to this will be found in clause 51 of the mail contract, from which it will be seen that the contractors have undertaken to protect the interests of the small shipper by carrying his cargo at the same rate of freight as that of the larger shipper, except under extraordinary circumstances when the Government would be referred to with a view to dealing with such circumstances in co-operation with the contractors. The Government has not up to the present been called upon in this connection; in other words, equality of rates has so far offered no difficulty. All countries which have before tried to do away with the shipping rebate system have failed, and South Africans may well be proud of the fact that theirs is the only country which has succeeded. We were also told that the Government proposals were calculated to do an immense amount of harm to this country, and that the Bill was not a producers’ Bill, but an importers’ Bill. I propose to show presently that so far from damaging this country, the abolition of rebates, the terms of the mail contract and the homeward produce agreement have resulted in substantial benefits being secured both to importers and exporters, and I may say I was glad to see in the Press recently that Brazil is proposing to legislate against shipping rebates, and that the Congressional Committee at Washington is investigating the question of the detrimental effect of British shipping combines upon American trade. No doubt these countries are experiencing similar trade difficulties to those in South Africa. We were also told that the mealies and fruit industries would suffer very much indeed. With regard to the fruit industry, it will be seen from the mail contract that a flat freight rate of 40s. net per ton of 40 cubic feet has been conceded in respect of fresh fruit carried in the cool or cold chambers of both the mail and the intermediate ships of the contractors, subject to such fruit being graded and passed by Government inspectors.
This rate of 40s. means, in the case of peaches and nectarines carried by mail steamers from Cape ports, that a reduction of 25s per ton, or over 38 per cent., has been secured, as compared with the rate of 65s. formerly applying. The present rate of 40s. per ton in the case of pears and plums carried by mail steamers from Cape ports means a reduction of 20s. per ton, or of over 33 per cent., as compared with the former rate of 60s. per ton. The present rate of 40s. per ton in the case of grapes and other soft fruit carried by mail steamers from Cape ports means a reduction of 15s. per ton, or of over 27 per cent., as compared with the former rate of 55s. per ton.
Then in the case of similar soft fruit from Durban, where a rate of 70s. plus 2s. 6d. shipping charges obtained, the flat rate of 40s. per ton now secured means a reduction of 32s. 6d. per ton, or 44 per cent. Again, citrus fruits and pineapples carried in the cool chambers, which formerly were carried from Durban at a rate of 60s. per ton, plus 2s. 6d. shipping charges, will now be carried at 25s. net per ton, that is to say, a reduction of 37s. 6d. per ton. or of 60 per cent.
I might go further and point out the substantial reductions applying to the carriage of fruit by the intermediate steamers, but I do not wish to weary the House with too many details, and I think it will be sufficient for me to mention that the reduction in the case of soft fruits from Cape ports and Durban, carried by intermediate steamers, averages 30 per cent., and that the reduction in the case of citrus fruits and pineapples from Durban is 56 per cent. These reductions amount in the aggregate to a considerable sum, and will, no doubt, stimulate the fruit export trade from this country to such an extent that the ultimate benefit to South Africa cannot be adequately reflected. So much for the fruit rate. I think there can be no doubt that the fruit-grower in South Africa has every reason to be pleased with the reduction obtained, and that the prophecy that the fruit trade would suffer has been conclusively shown not to have been fulfilled.
Before I pass on to the next item, I think it would be appropriate to mention here, for the benefit of the fruit shipper in particular, that the contract stipulates for refrigerated accommodation to the extent of 18,000 cubic feet to be provided by the contractors in every mail steamer for the conveyance of fresh fruit, dairy produce, and other perishable articles, and also stipulates for such accommodation to be increased if found necessary. I may add, however, that owing to the pressure upon manufactures and the considerable time required for the construction of refrigerating machinery, the Union-Castle Company has advised that it will not be possible to provide the additional cold-chamber accommodation in time for the present fruit season, but the company has already placed its orders for the necessary plant, and the additional accommodation will be available during the next fruit season. Further, in order to minimise inconvenience in this connection, the shipping company has promised, as far at it is possible, to arrange for the landing of fruit by the intermediate steamers at Southampton, and for its delivery at Nine Elms Railway Station in London without any additional expense to shippers. (Hear, hear.) This will be appreciated by my fruit-growing friends, because it will, I am assured, enable such fruit to be placed on the London market earlier than if it were taken on by sea to the Thames, and thereby secure a better market and better prices. (Hear, hear.)
Then with regard to the maize industry dealt with in the homeward produce agreement. It was said that this industry would suffer as a result of the Government proposals relative to the abolition of rebates. It will be seen from the homeward produce agreement that the contractors have agreed to carry up to 200,000 tons of 2,000 lb of maize per annum in bags at 10s. net per ton, including shipping charges, if carried in loads of not less than 150 tons, and to extend the conveyance of maize on these terms to Rotterdam in respect of consignments of not less than 2,000 tons. The contractors have also agreed, in addition, to carry a further 300,000 tons of maize at 10s. per ton of 2,000 lbs. in full bulk cargoes of from six to nine thousand tons, subject to the necessary facilities being available for the loading and unloading of bulk cargoes, and in respect of such cargoes shippers have the option of ordering the ships to discharge at the following additional ports to which formerly special rates would have had to be paid, namely: Portishead, Avonmouth, Sharpness, Dublin, Harwich, and Plymouth. It will be remembered that the rate was 11s. 6d. per ton of 2,240 lbs., and that the Conference Lines were seeking to raise it to 14s. or more, and but for the intervention of the Government there is every probability that the higher rate would be in operation today. While the reduction from the tentative rate of 11s. 6d. is not great; the annual gain to South African shippers on the basis of the total amount exported is substantial and it must be borne in mind also that this stable rate of freight will materially help the producer and must tend to foster the industry. It certainly cannot be said that the maize industry has suffered. I have now shown that two classes of exporters have benefited, but these are not all the exporters who have reason to be pleased with the reductions secured.
For example: Skins are now conveyed at a rate of 12s. 6d. per ton of 40 cubic feet, plus 10 per cent. primage. The former rate for sheep and goat skins from South Africa was 70s. per ton of 2,240 lbs. On the basis of the 1912exports the saving to the shipper in connection with skins will be considerable. Then there is the wool exporter. The former rate was ⅜d. per lb. for grease wool and ¾d. per lb. for scoured wool. The rate of freight on wool has been reduced by 10 per cent., or 15 per cent. provided consignments are compressed to Australian standards. On the basis of the exports for 1912 the annual saving to the exporter of wool will be very substantial. The rates of freight in respect of chilled meat are not to exceed current contract rates from the Argentine for the time being. The former rate from South Africa was 37s. 6d. per 40 cubic feet. The rate from the Argentine to London last ascertained was ⅜d. per lb. On that basis the reduction in freight is roughly one of 20 per cent. Butter is to be conveyed at ½d. per 1b. net. The rate for butter prior to November, 1911, was 100s. per ton of 40 cubic feet, but was reduced by approximately 35 per cent. to the present rate during that month. Frozen mutton and lamb is to be conveyed at ⅜d. per lb. net. The former rate was 37s. 6d. per ton of cool chamber space. The reduction is roughly one of 20 per cent. The export of chilled meat, butter, frozen mutton, and lamb from South Africa may not be of special importance at the moment, but I am looking forward to the time when the agricultural development of the country will lead to a large increase in the matter of stock raising and to our surplus products being exported to Europe. The undertaking that the freight from South Africa in respect of chilled meat shall not exceed that from the Argentine will, at any rate, place the producer in this country on level terms with the producer in the Argentine in competing in the European markets.
The contractors have also undertaken to purchase for export not less than 50,000 tons of coal per annum provided the coal can be supplied at not less than 1s. 6d. per ton, delivered at the ship’s side, below the average prices in July, l9l2. This amount of coal will be in addition to that purchased by the company for use on board its ships. I am hopeful that this will be the beginning of a large export trade of coal from the Union. Up to now the expansion has not been so rapid as could be wished. Nevertheless some business has been done with Mauritius and the East. Apart from either the mail contract or the Homeward Produce Agreement, and quite voluntarily on the part of Sir Owen Philipps he has promised to carry free of charge the first 2,000 tons of cotton grown in South Africa and shipped to the United Kingdom. The effect of this is stated to be that until shipments from South African Union ports have reached a total of some 8,000 bales, of a probable value of between £60,000 and £70,000, there will be nothing at all to pay for freight. The freight rate for cotton from Delagoa Bay in May, 1911, was 75s. per ton, and was subsequently reduced to 60s. per ton plus 10 per cent. I only refer to this as an indirect result of the negotiations with the Union-Castle Company. The full credit for this concession belongs to Sir Owen Philipps. I think enough has been said to show that exporters from South Africa have secured material benefits. Before dealing with the question of the advantages gained by the importers I should like to refer to a concession obtained from the contractors which is bound to have a far-reaching and beneficial effect in this country. I refer to the free importation of pedigree stock. The contractors have agreed to carry pedigree stock, that is to say stallions, mares (excluding racehorse mares), bulls, boars, sows, rams and ewes destined for the Union of South Africa free of freight in mail or intermediate steamers, or other ships to be indicated by the contractors, from berth ports of the company on the Continent and in Great Britain, subject to satisfactory credentials as to pedigree being produced, the stock to be carried at owners’ risk and food to be provided by the shippers. This concession is being extensively availed of, and over 400 animals have up to the present been imported into the Union of South Africa free of charge. For the information of intending importers of such stock I should like to explain that the stock must appear in the stud, stock, or herd-book of the Royal Agricultural Society of the United Kingdom or other recognised association approved by the High Commissioner for the Union in London.
If there are no regulations prohibiting the bringing of stock from the Continent to England, the company will carry free of charge, pedigree stock from Continental berth ports of the company to England for ultimate free transport to South Africa. If the company has boats sailing direct to South Africa from Continental ports of the company, the company will carry pedigree stock from such Continental ports to South Africa. Further, if there are 150 head of pedigree stock for transport and the company has no suitable boat or boats available it will, upon being given reasonable notice, charter the necessary boat or boats to carry such stock free of charge. In addition to these facilities, which have been specifically provided for under the contract, I am in a position to give the House the assurance that the contractors will accept pedigree stock at Rotterdam free of charge providing that the company has a vessel loading there, and that no restrictions in regard to calling at a British port are involved, and I am further informed by Sir Owen Philipps that he will be prepared to arrange for a ship to call specially at a Dutch port periodically after leaving London, say three times a year, provided at least 100 cattle are booked for each shipment.
The effect of these provisions with regard to pedigree stock is that the facilities afforded under the contract bring the South African farmer into touch with the best stock markets in Europe, and at a nominal expenditure enable him to avail himself of new blood, which is so essential to stock breeders, and practically place the farmer on level terms with competitors in other parts of the world. In other words, it means bringing the European markets to the door of the South African farmer. It may be said that the ordinary farmer with a little capital to spare may, even under this favourable arrangement, be unable to avail himself of the facilities provided, but I think it quite possible that the Government may take into consideration the advisability of itself importing periodically stock of the best breeds obtainable, which could be placed on Government farms throughout the country, and there purchased by smaller farmers, who are not in a financial position to go in for direct importation. The Government has, of course, all the machinery necessary for importing stock in large quantities, and would be able to purchase on the best terms. Under such circumstances, the Government could, no doubt, place such stock on sale to the farmer at cost price, plus the actual importation charges. In purchasing stock a farmer naturally desires to examine the animals himself, and while this could be done in England, and on the Continent, yet he would, I am afraid, be in the hands to some extent of dealers. The Government could also more rapidly provide suitable supervision on board vessels than individual farmers.
Now with regard to the benefits accruing to importers. In the immediate availability of the money formerly held as rebates by the steamship companies for periods of from six to twelve months, importers will secure a material advantage, but this is not the only advantage obtained by importers. The primage of 10 per cent. formerly charged by the Conference lines has now been abolished on imports in respect of all steamers other than mail steamers, in regard to which a primage of 5 per cent. is still charged. As half of this primage of 10 per cent. used to be returned to importers in the nature of rebates, the net reduction of freights on imports by other than mail steamers is one of 5 per cent. On the basis of a rough estimate of the freight value of merchants’ cargo carried to South Africa in a year by the Conference lines, this reduction of 5 per cent. will result in a very substantial gain to South African importers. This is one of the advantages which the Union of the South African States has made possible, and which could not have been obtained had there been no Union. I think it is only fair to the members opposite, who gave their support to the rebate clause of the Post Office Act, that they should be given full credit for their valuable assistance in securing this gain for the country. The contract does not secure everything that has been suggested, but necessarily, in matters of this nature, there must be a certain amount of give and take. I should like to place on record, however, that throughout the negotiations Sir Owen Philipps, with due regard to the interests of his company, met the Government in an entirely reasonable spirit. In all circumstances, I feel that the Government can claim that the contracts entered into with the Union-Castle Company are greatly to the benefit of South Africa.
We were told, when the rebate clauses in the Post Office Bill were under consideration, that the shares of the Union-Castle Company not being at a premium, the shipping trade with South Africa was not a lucrative one, and that the measures of the Government would not only result in our being left to the job steamers, but also in the ruin of Cape Town and the ports short of Durban. Again, it was stated that the system of rebate was the only one that made liners possible, and the alternative to that was the tramp. Those who said that the South African trade was not a lucrative business will, I think, admit that the financial position of the only company which made it possible for us to gauge the true inwardness of its affairs, showed Very clearly that the business with South Africa was one which paid handsomely. The £10 shares of the Union-Castle Company were purchased by the new management at £32 10s. These figures speak for themselves. As regards the other prophecies just referred to, I think that this House will agree that Cape ports have not been ruined, that the liners find a profitable business is to be done here, and that if the tramp steamer should make its appearance more frequently in South African waters, it will not by any means be a bad thing for the country.
I may say that extensive inquiries have been made by the Government in regard to the building of high-class steamers, and that the Post Office has now in its possession information which will be of the greatest value should it be needed at any time. Full details with regard to the construction of ships, the cost of running high-class mail and passenger steamers, including cost of operation, maintenance, victualling, insurance, coal consumption, and management have been collected. Information has also been gathered relative to the earnings on passenger and cargo traffic both to and from South Africa. Should the Government have to fight again it will be much better armed for the fray than at any time before.
Now, to deal with the freight agreement which has been recently placed before shippers. The agreement only applies to cargo carried to South Africa, and has been approved of by the representatives of a number of merchants in this country. Of course, the Government is not anxious to interfere in any way with the freedom of private individuals to make contracts, and so long as the agreement with the shippers does not contravene the terms of the Post Office Act it is not proposed to take action. If an agreement is signed by all shippers, then undoubtedly the freight market will be a closed one—at any rate for a period. But even if an agreement be signed, the position is still far better than when the rebate was in operation, for the following reasons. In the first place, the rebate money held by shipowners will have been returned in toto to shippers in the course of the next few months, when the shipowners will entirely lose their hold on the exporters from South Africa, and will so far lose their hold on importers that if the latter choose to ship their goods by a vessel not belonging to the lines subscribing to the agreement, the shipowners will not have it in their power to confiscate any rebate money. Secondly, the shippers are able to free themselves from the agreement after the fixed period of 12 months by giving six months’ notice, whereas under the rebate system they were bound hand and foot, and their money would have been confiscated had they left the Conference lines. They will no doubt adhere to the contract so long as the rates are favourable to them, but they will know when to cancel the contract and make other arrangements.
Moreover, as I have mentioned, the agreement is only in respect of importers cargo, so that the exporter may be said to have altogether an open freight market, being free to avail himself of any ship loading in South African ports without loss of rebate money as formerly would have taken place. Further, the reduced rates for South African produce are maximum rates at which the company must carry if offered to it, but the shipper is—as I have said before—free to export by any channel he may think fit. The hands of the exporter are, therefore, entirely unfettered.
This open freight market from South Africa means that importers chartering vessels for their cargo will be able to secure lower rates of freight than would have been possible formerly, for it stands to reason that, with the ability to arrange for a return cargo from South Africa, the owners of ships specially chartered will be in a position to quote cheaper rates than if they were forced to bring their ships back in ballast or send them elsewhere for a return cargo. Such an arrangement would not have been practicable in the past, because the exporters were, like the importers, in the grip of the Combine, and would have lost their rebate money had they availed themselves of any tramp steamer offering to take cargo. Further, when the rates of freight are once more on the descending grade, and when shipowners generally realise that the whole of the South African export trade is open to them, I think we may confidently expect them to turn their attention to this country. When that time comes, I shall be surprised if any difficulty is experienced by importers in securing vessels for the conveyance of their cargo at entirely satisfactory rates.
In this connection, I should like to quote from remarks as reported in the Press, made on the subject of the agreement by Mr. W. A. Martin, a well-known business man, at a meeting of the Johannesburg Chamber of Commerce, held on the 17th January last, namely: “I am not enthusiastic about it, although I consider it much better than the deferred rebate system, for the reasons I have given. It must be regarded as merely a temporary measure. I am just as much in favour of an open freight market as I ever was, believing, as I do, that it would be of great advantage to South Africa; but I prefer to choose my own time to demand it, and to exercise my right to arrange for my own freight in my own way, or to join with others for that purpose. I also prefer to wait until there is no danger of a financial penalty being enforced against me; and. above all, I prefer to wait until the conditions governing the supply of the commodity I wish to purchase are in my favour.”
With regard to the Government freight contract, I may say that it is to run for a period of five years from the 1st October last, with an option to the contractors to extend it for 15 months, and an option to the Government to prolong it for a period ending with the expiration of the mail contract. The Government has also reserved the right to determine the freight contract, if the contractors fail to carry out the provisions of the agreement in respect of the conveyance of South African produce, and a further reason for determining the freight contract is the termination of the mail contract. Then the basis rates applying to railway and telegraph material, bridge work, etc., have been reduced by amounts varying from 5 to 8 per cent. in the case of pieces or packages of seven to ten tons weight landed at Lourenco Marques. In other respects, the Government freight contract has been concluded on very much the same lines as the previous contract. In conclusion, Mr. Speaker, I have every confidence in submitting these agreements to the favourable consideration of the House. The rates of freight which have been obtained for the products of this country are maximum rates, and, in my opinion, are entirely reasonable. They offer an incentive to our people to go in more largely than hitherto for the cultivation of the soil and the breeding of cattle and sheep. The contracts secure regularity of transport, and they should, and no doubt will, foster and stimulate the export trade of this country. I hope that the members of the House will mark their appreciation of what the Government has been able to achieve by an unanimous vote in favour of the ratification of the mail contract and the supporting agreements. (Cheers.)
seconded the motion.
said the Minister without Portfolio was very much to be congratulated on having had so many good things to give to what were called his own people. The Minister had been talking for nearly an hour and enjoying himself thoroughly. The Minister thought he had made a remarkably good contract, and from one point of view there was something to be said for that claim. Mealies and other produce were to be carried at a cheaper rate and pedigree stock was to come out free. The Minister had told his friends that they were inexperienced, though one would scarcely think so if one had dealings with them. (Laughter.) He had also told them that the Government was going to provide everything for them. The Minister had accomplished much for a section of the people, and it was some satisfaction to know that somebody was going to gain by the contract, but there were other things we imported besides cows. (Laughter.) People did not, live on cows. (Renewed laughter.) What, about the general imports? The importers did not gain at all—(Ministerial cries of “Oh”)—and had no prospect of doing so in the future. There was nothing to stop the combination as soon as the agreement was signed from putting the freights up to what they liked. (Mr. MERRIMAN: “Hear, hear.”) He had every confidence in the Minister’s ability, but there were other men in the world as clever as he was, and shipping men had a tremendous reputation for ability. Was it likely that the Royal Mail Steam Packet Company would have paid £32 1s. for each ten-pound share in the Union-Castle Company unless the former saw some means of getting all that it paid back again? Who was going to pay the return on this increased capital? (A MINISTERIAL MEMBER: You.) The gentlemen who got pedigree stock in free and who exported mealies at a low rate would not pay, but the ordinary man and woman would pay. The arrangement whereby the agricultural section of the population was favoured under the contract was a very clever device for removing once more the burden of taxation on to the shoulders of one section of the population. The Minister had spoken all the time to those behind him, but it was too soon to rejoice over the contract, for before long the freights would go up as, indeed, they were doing all over the world. We had not an open freight market.
Oh yes we have.
In the Post Office Act the Government take power to prevent the very thing they said they wanted which was competition in freight. The Government would see to it that the line which carried pedigree stock free was not injured.
When this Bill was last before the House two years ago, the Minister said he would stipulate for two mail boats a week, but he saw nothing about that in the contract.
I rise just to take exception to this. I never mentioned anything about two mail boats a week.
Well, I never interrupted the hon. Minister while he was speaking, and he spoke for over an hour. He had evidently been practising his speech for the last three weeks. He (Mr. Quinn) understood that the Minister without Portfolio would certainly stipulate for two mail boats a week. For all the privileges in the contract they were going to pay. The hon. Minister had failed absolutely in his duty in the country. This was a serious charge to make, but he made it deliberately. He had certainly secured unquestionable advantages for a section of the people, but he had ignored the great bulk of the people of the country. (Hear, hear.) There had been no change in the freights upon general imports, although there were decided advantages for the farmer. Wherever he had a chance of pushing farmers’ interests he (Mr. Quinn) had done so, but surely they would not deny him the privilege of urging the claims of other people.
Farmers are the backbone of the country.
You can call them the backbone or the front-bone, if you like—, (laughter)—but there are others besides farmers in the country. (Cheers.) The bulk of the people would suffer by this agreement. He warned the Minister two years ago that he would have to deal with men cleverer than himself, and he had not got the best of the bargain (Hear, hear.) They had not secured an open freight market, because who would put on steamers to fight this combination. If the farmers got certain things carried at cheaper rates, why should not the same privileges be extended to other people. One of the things that was going to push on the industries of the country was cheap freights. (Cheers.)
said he did not wish to criticise the contract in the manner the hon. member far Troyeville had done because there were a good many provisions in it which he approved. He congratulated the Minister on the contract which he had entered into. The hon. member proceeded to refer to the provision dealing with the importation of pedigree stock, and said that the Minister had spoken as if the contract gave enormous benefits to farmers. Well, matters were not so rosy as they were given to understand, and he quoted some figures to prove his contention. He held that it was not very easy for importers to get 100 head of cattle together in Holland or Belgium for export, because it was hardly ever that such a large quantity was wanted at the same time. During the last five months the Union-Castle Company imported 125 horses, 228 cattle, 13 calves, and 32 pigs. Well, to meet them the company would three times a year, when there were a hundred head of cattle for export to South Africa from the Continent, send over a boat to Holland to fetch these cattle. Since 1907 the shipments from Holland amounted to 71 animals, and those belonged to the Government of the Transvaal. As a matter of fact, he feared that the provisions of the contract did not fall equally on all the importers of livestock, because those who believed in Friesland cattle and liked to import Friesland cattle were handicapped by these provisions. It was not an easy matter to collect together a shipment of 100 animals, and he hoped the number would be reduced to 50. He held that farmers should be able to import cattle without going to the Government; they did not want to have to go to the Government for everything, and for that reason he hoped the Minister would try and get the provisions altered, so that, for instance, boats might call at Rotterdam after having left England. At present there was an impression among farmers, which he did not endorse, that an attempt was being made to compel them to purchase pedigree stock coming from England, and not from Holland. That impression should be removed.
who seconded the motion approving the contracts, deprecated the remarks which had been made by previous speakers, and contended that the Government had done their utmost to look after the interests of the country as a whole. The hon. member for Troyeville had not given the smallest indication of what he wanted, but merely said it was a Government for the farmers. Did he never use butter or milk? (Laughter.) If that were improved, would he not benefit. Some other hon. members apparently wanted the Government to buy the cattle for them and distribute them free of charge. It was impossible to satisfy everybody.
agreed with the previous speaker, and supported the contract. He also thought the Minister was deserving of the gratitude of the House, and held that many years after the Minister had died the country would still remember the good work done by him. (Hear, hear.) In regard to the importation of stock from the Continent, he urged that farmers who wished to import stock should inform the Agricultural Department, so that when a hundred head of cattle were required there would be no delay, and the Agricultural Department could at once inform the company of that fact. Otherwise, it would be very difficult to get 100 animals together for import at one time. Failing the adoption of some such scheme, he feared the thing would fall into the hands of the speculator.
said that one of the results of mealies being carried at such low rates was that mealies which had been shipped to Europe and for which farmers got 10s. per bag, were now being brought back and sold in Durban at 23s. per bag. The present position was an absurdity, and it would be better to increase the local trade in mealies than to encourage the policy of throwing mealies oversea. He could not agree with the Minister that there was anything to be gained by encouraging people to send so much out of the country. If such a large quantity had not been sent across the water so many cattle would not have been lost in the drought, as they could have used the mealies to feed their own cattle. He did not agree with the Government spoon-feeding the farmers, and he would like to see what happened if a Government official wanted to choose stock for an up-to-date Natal farmer. They had chartered ships, sent their own men across to the Argentine to select stock for them. The Royal Mail Steam Packet Company was not, he need hardly point out, a philanthropic institution, and they would charge higher rates on agricultural implements, and other articles used by the farmers to make up for the free carriage of stock. If the hon. member for Ermelo (Gen. T. Smuts), was not satisfied now, would he ever be satisfied? Perhaps he wanted a special train to carry a single pig from the Port? He (the hon. member) had opposed the Shipping Bill when it was before the House, and he would vote against the agreement now.
said that he agreed with those speakers who had said that they would be thankful to the Government for what it had done. Although the hon. member for Troyeville (Mr. Quinn) had opposed the agreement, he was glad that the hon. member spoke in favour of agriculture going ahead. His attack on the contract was only in fulfilment of his promise made in Johannesburg. The hon. member for Ermelo was afraid that they would not be able to get together 100 cattle, and that the middleman might come in; but he would say let them not interfere too much with private interests and enterprise. (Hear, hear.) He thought they should also do something for themselves, and not depend too much on Government assistance. If they did, he was afraid that they would have something similar occurring as in regard to the Barbary ostriches. If others could co-operate why could not the farmers? The Government had already done a good deal for them, but they could not expect the Government to buy cattle for them. The attitude of the hon. member for Troyeville (Mr. Quinn) and Weenen (Mr. Meyler), struck him as being opposition to the agreement merely for the sake of opposition.
said he thought that hon. members in discussing the smaller aspect of this important question had quite lost sight of the larger aspect. Last year many of them had backed the Government though it had been against their desires. He did not think that, on the whole, the Minister could be congratulated on the result of the negotiations. The Union-Castle Company, owing to its obligations, could not do the things the Government wanted it to do, and the result was that someone else came in and bought them out. They were told in the House last year that in spite of paying £32 10s. per share they were only buying the ships at a lower price than which they could be built at the present time. He thought that that was true. But while they remembered that the cost of building ships at the present time was abnormally high, they must also remember that with the exception of the two latest ships the fleet must be considered somewhat obsolete. The contracts must result in the company having the country practically in its own hands, and South Africa was going to pay its freights on the basis of the higher price that these people paid for the shares of the Union-Castle Company. He believed the welfare of the country on the whole had not been served by the interference of Government with private enterprise. South Africa would have been better off if it had gone on with the Union-Castle Company. The Minister plumed himself on having done away with rebates. At the present moment freights were very high and there was no competition, but freights would fall again, then their freights would come down. Nothing in the way of provisions which they could insert into any agreement would prevent private people—merchants—from making private contracts on their own initiative. The clause, he thought, read very nicely, but the House would be powerless if private people chose to make private arrangements. He did not think that this measure was going to achieve the results which so many of them imagined it would do, and on the whole he thought that South Africa would have been better off without it. The fact remained that they had gone so far and it was impossible for them to go back. With regard to the time allowed for the voyage, he saw that it was 16 days 15 hours, but that by the payment of £1,900 each voyage would be cut down by 15 hours. He thought that it would be to the benefit of South Africa to secure the accelerated service by the payment of this extra sum. He also noticed the clause with regard to immigrants. He hoped that, there would be a great number of them in the future, but there was no indication of the influx at the present time, and he did not see much chance of this clause coming into operation for some time. With regard to the farmers, he would like to say that he wished to do all he could to foster agriculture, and he did not object to the people of the land having certain advantages. But he would point out that while a number of things were mentioned at special rates he noticed that other things were omitted. He would like to draw attention to apples and bananas. He took it that they hoped to have a big trade in these articles in the future, but in this measure they were not protected in any way. It was reasonable to suppose that this shipping company would have what was virtually a monopoly, because it was hardly likely that anyone would enter into competition in the circumstances. He did not say that such a state of affairs was bad if the work was done at reasonable rates, but he was certain that having forced the Union-Castle Company to sell out they would have to pay a lot for the advantages which were supposed to accrue, but which he could not see. The hon. member then referred to the position of the company with regard to the carriage of timber from the Baltic, saying that the company had the right to take this timber at the lowest rate tendered by any outside company. Everything was thrown into the arms of the company. Continuing, he said he thought that in times of plentiful shipping they would find tramps only too ready to come here with freight, leave that freight here, and then go on to Bombay for more. He thought that they were placing themselves in a dangerous position. But having got so far with this matter he would give his support to the Government, because he thought they were bound to go forward.
He did say that South Africa was going to pay the price of the blunder which the Government made last year when they brought in their Shipping Bill. He said that undoubtedly they were going to pay through the nose for this little escapade of theirs in the realms of finance, and he thought it would be a lesson for them in future not to interfere with large private enterprises, because whatever enterprise the Government went into, it was not carried on as well, and it was not carried on at as low a cost as a private enterprise. (Hear, hear, and dissent.) One of the highest State finance authorities in the world, Le Roi Bouillier, speaking of railways, said that railways owned and managed by the State were run at a higher cost, with fewer trains, with less advantages to the public, and with loss to the State, as compared with railways run by private enterprise. (Labour dissent.) It was in the natural order of things that that must be so. Here was another case, and he said that when the Government took it into its head to interfere with the private enterprise of shipping, it made a blunder for which South Africa would have to pay dearly in the future, and he hoped it would be a lesson to prevent them from entering into realms which were not the right sphere for the State to interest itself in. (Hear, hear.)
said that he must condole with his hon. friend the Minister upon the loss of one of his most distinguished supporters. (Hear, hear.) When the right hon. gentleman (Mr. Merriman) and the small and despised minority suggested some difficulty, the hon. member (Sir L. Phillips) spoke against them, and he lent the whole of his enormous support and enormous reputation as a financier, to back the Government. He then said he would support the Government because they intended to do something which was for the welfare and stability of the country. Now he talked about the “escapade” of the Minister. He was like a little boy in London, who pulled the door bell and ran away, and left someone else to face the responsibility. (Laughter.) Now he (Mr. Fremantle) was not so nimble-witted as the hon. member opposite, and he stood in the same position as he stood in a year ago. His hon. friend the Minister now came with three contracts which he said were good, though he skated rather lightly over two of the contracts, but, instead of saying what a great thing he had done in getting these contracts agreed to and getting them all to admire his financial genius and diplomatic skill, he went and quarrelled with them all and showed them how wrong they were to differ from him. Now, as far as the financial “escapade” was concerned, he did not think the time had yet arrived to form a judgment with regard to it. (Hear, hear.)
He thought it would be extremely imprudent now to pass judgment on the Post Office Act. They had got rid of rebates. The objection to rebates was because they secured a monopoly, but if they had got rid of the monopoly and left the rebates, they would have done what they had intended to do, but they had got rid of the thing which did not matter, and they had got the thing which did matter still left. They had got a monopoly, and a monopoly far stronger than they had got before, and the opinion of shipping authorities, as far as he had been able to ascertain it, was that the opponents of this line would not venture to come into this trade because they had got such an immensely strong opposition to them that it would not be safe for them to do so. He was inclined to think that they had screwed down the yoke of the monopoly on the neck of the trade of this country more firmly than ever it was before. His hon. friend the Minister could not have been speaking seriously when he pointed to the present condition of freights as the result of the present agreement. It was the result of the anxiety of the company to get the agreement ratified by this House. Then the Minister went in for a fine Socialistic scheme. The Government was going into the business of buying stock for the people of this country, and personally, he saw great advantage in that for the farming community, but he thought it was very possible, as the hon. member for Rustenburg had pointed out, that middlemen might take advantage of it and that they might help the middlemen to make their fortunes rather than help the farming community in their business. It was not clear to him that this contract put the Government in a better position than it was in before to embark on this stock-buying business. Private people were in a stronger position if they had sufficient capital to go in wholesale for this business, but not otherwise. As far as the small shipper was concerned, he would like to point out that the fear was expressed when this matter was under consideration not that the large shipper would get more favourable rates in regard to his freights, but that freights would fluctuate, and as the result the great advantage would be to the large shipper instead of the small shipper, who could not afford to follow the fluctuations of the freight market. On the Minister’s own showing it was not yet possible to say whether this was likely to be so or not, for there was still a monopoly, in fact if not in name. Altogether, he was bound to say that he was sorry the Minister should have been so warlike that afternoon, because the whole House was inclined to take a friendly view of this matter, but, instead of considering freights, they had been asked to discuss matters connected with the P.O. Act. He did not think the time had arrived when any prudent man would form a final opinion as to that very doubtful clause in the P.O. Act. The Minister had presented to the House an agreement which was extremely favourable to the country as far as the farmers were concerned, but he had not presented to the House another agreement that was offered, namely by the old Union-Castle Company. Naturally, after ten years they would expect an improvement in the conditions. There was an improvement, but, as far as he was aware, the House had no means of judging between the two things which ought to be compared, i.e., the contract, offered by the old Union-Castle Company and the contract, that was offered to-day by the new Union-Castle Company. This speech of his hon. friend the Minister was really throwing dust in the eyes of the House. As a South African, he was inclined to say that the old Union-Castle Line was preferable to the new Union-Castle Line. They had a South African Company before—(“Oh!”)—and now they had got a cosmopolitan company.
The interests of Donald Currie and Co. were the interests of South Africa. We were enabled to abolish rebates because we were in the hands of a company which was so strong that it could secure a monopoly without rebates. It was (proceeded Mr. Fremantle) in the interests of the farmers that they should have cheap imports as well as any other section of the community. (Hear, hear.) They had been reminded that there was such a person as the taxpayer, but, where did he come in in that afternoon’s discussion. (Mr. QUINN: “He pays.”) The most important contract was the Government freight agreement about which the Minister had said practically nothing. The Government was not a gainer by that agreement.
Why not?
Because it does not get cheaper freights. As far as I can make out, Government freights are exactly as they were. In conclusion, Mr. Fremantle said Government freights were higher than they otherwise would have been in order to enable his hon. friend to negotiate an agreement in favour of a section of the community. The contracts meant a great loss to the taxpayer and to the country as a whole. He believed a better and more advantageous agreement in the interest of the farmer as well as the interest of the rest of the country, might have been made, and he could not congratulate the Minister on what he had done. The time would come when the public would feel that it was unwise for the Government to go in for Socialistic experiments. Let the Government manage its own business, which it did not do so conspicuously well that it could afford to go outside that sphere.
said the arguments against the contract were based on the fallacy that there was no free freight market. That was incorrect, for any new line of steamers wishing to come into the South African trade was quite at liberty to do so—(hear, hear)—and shippers who shipped by them would not be called upon to sacrifice rebates. Shippers should not be penalised for supporting outside lines. That was all that the Minister contended for. (Hear, hear.)
Have you signed the agreement?
No; nor have 75 per cent. of the Cape Town merchants. Continuing, Mr. Jagger said that what the importers had gained was the free freight market, but if they were so unenterprising as not to ship by outside line, that was not the Minister’s fault. (Ministerial cheers.) Did the hon. member for Troyeville expect the Ministers to run ships themselves?
I should hope not.
I should hope not too. Proceeding, Mr. Jagger said that for years the Union-Castle Co. paid five per cent. dividend, and six per cent. was the maximum. When the merchants agitated for years for reduced freights, the mail company always pointed to its five and six per cent. dividends, but what did they find now? That the Union-Castle Co. had been accumulating reserves of at least three millions. If the new company wanted to charge too high freights, the South African merchants had a way out. (An HON. MEMBER: How?) Charter ships themselves. Proceeding, the hon. member asked what more could the hon. Minister do than he had done; he had done everything that could reasonably be expected? It rested now with the enterprise of the importers to take, advantage of the opportunities offered. Under the old regime, shippers had to pay on rebates; they had to pay at the finish. Now they had a way out. (An HON. MEMBER: Wait and see.) He was going to support the contracts made by the hon. Minister. He regretted, however, that there had not been a contract for greater speed; it was exactly the same in that respect as it had been for many years past. But he strongly objected to paying more for greater speed, for they ought to get that, owing to the cheaper coal and cheaper working expenses on this side.
The hon. Minister had concluded another contract for ten years, notwithstanding that the mails and parcels had always been on the increase; still, the new contract was exactly at the same rate, which, to his (Mr. Jagger’s) mind, was a satisfactory bargain, and with six new steamers, there was a probability of greater speed in due course. The subsidiary contracts were innovations. Previously the mail contract was kept entirely to itself. Now the subsidiary contracts were part and parcel of the contract. He did not think there was any matter of principle involved; it was entirely a matter of expediency whether it was wise to keep apart the mail contract, as in the past, or mix it up with other agreements, as on the present occasion. With regard to the contract for bringing out Government importations, the Government was the biggest importer in South Africa and the largest shipper, and, in his opinion, they were entitled to these concessions. Prior to 1902 they were charged at merchants’ rates, so far as he could find out; but in that year they took advantage of a position which arose, and got an extremely favourable contract. Two years later a new contract was entered into; that contract provided for 20 per cent. of first and second class merchants’ rates, and 10 per cent. of third and fourth class rates. At that time that agreement had no connection with the mail contracts. It appeared to have been renewed from time to time, and the preferential rates had been continued. Those rates were practically the same agreed upon in the present contract, except so far as Natal was concerned, where the rates were on this occasion somewhat more favourable, so that now the Union-Government had concluded an agreement in 1912 on exactly the same basis as the one of 1904. There was nothing wrong in that, and, upon the whole, it was a satisfactory agreement. He contended that the policy of contracts for the carriage of stuff by the Government had been a successful one. It had saved the taxpayers of this country since 1902 many thousands of pounds, and they would be saved many thousands of pounds in the future. He did not see how it would have been possible, supposing the agreement had no connection with the mail contract, to have been much more favourable. Then there was an agreement which had obtained special rates for maize, cereals, etc, which was for ten years. They could now ship maize in any quantity, and there was a great saying on wattle bark, wool, skins, and fruit, etc. They also got a great concession in the free carriage of pedigree stock, which was going to be taken advantage of to a very large extent. Those were all-important concessions, which were going to benefit this country, and it would all go into the pockets of the population of the producing country. It would very largely stimulate production in South Africa, and would have a stimulating effect on business and trade. When they considered the concessions which had been made, he thought a very good bargain had been made. The Minister had been able to obtain a perfectly free-trade market in South Africa, and if the importers did not take advantage of it, that was not his fault. To-day the trade was in the hands of the same company, but what else could they expect under the present circumstances? The shipowners were enormously prosperous at present, and, under those circumstances, did they think they were going to get a great competition for the trade? They would have to wait a little time, and there were more ups and downs in the ship-owning trade than in any other. They would have to wait for a depression in the shipping trade, and then new avenues would be opened up, and then would come the opportunity of the importer. As to the small importer, what more could the Minister do than had been done? Small importers were not so very much afraid as one would be led to believe from what their supporters in the House had said. The hon. member pointed out that the retail dealers of Cape Town had passed a resolution in favour of the Post Office Bill when it was before Parliament in 1911. He contended that so far the Government had successfully carried out their contract. It had been mentioned that the shipowners were trying to form one combination of shippers in London, and it was also true that they were using threats to shut out cargo of those shippers who were not coming into that combination. He pointed out that a percentage of the importers of Cape Town had refused to come into the combination. Shippers could not compel the shipowners to carry their cargo, but he agreed with the Minister that if shipowners brought coercion to bear on the shippers, they came within the law, and the law should step in, (Hear, hear.) In conclusion, he said that for these reasons he intended to support the agreement laid upon the Table, and he thought that the mail contract was perfectly satisfactory; the contract for imported goods was also perfectly satisfactory, and the rates for the carriage of their produce oversea were such as would stimulate the production of the country. (Hear, hear.)
congratulated the Minister on his achievement, and thought the whole country would be grateful to him for what he had done. On one point, however, he agreed that something should be done, and he asked the Minister whether it would not be possible to reduce the number of head of cattle to be introduced from the Continent from a hundred to fifty. The Minister had stated that the Government would import cattle for them, but that should not be done. Farmers should be taught to think for themselves, but he could not see how farmers from one side of the country could possibly co-operate with farmers from another part. The present large number of cattle to be imported at the same time would make matters very difficult and would result in the middleman receiving all benefit. He, therefore, supported the suggestion of the hon. member for Rustenburg to the effect that the Government should collate all requisitions for cattle, and so secure the required minimum of 100.
said that after the explanation made by his hon. friend near him he was very much more satisfied with some of the points of this measure than he was at the conclusion of the Minister’s speech. There was no doubt that some of the points were exceedingly favourable. He thought that the point which they had to consider was whether, in the circumstances, the Government had made the best bargain possible. That was the point. He did not think that it was worth their while going back to the Post Office Bill. That had been done, and the Government was bound to act under its Bills. The hon. member for Uitenhage had charged his hon. friend on his left with inconsistency, but that, coming from the hon. member for Uitenhage, seemed to him rather droll. Many of them supported the measure for the reason that in the circumstances, it was the best thing that could be done in the interests of the country, and not because they were in love with the principle. The hon. member for Cape Town, Central, had remarked upon many favourable points, but he had not met one point that might be argued against the bargain—that there was not sufficient protection for up-country consumers. His hon. friend had merely looked at the matter from the point of view of the big importer. He did not think that it would be possible for the Government to insert in the agreement at that stage a clause dealing with the rates on mining machinery, but, practically speaking, there was no reason why one industry should be overlooked when the things that were essential to another industry were protected. Dealing with these industries, he would like to say that he thought that something might have been done to reduce the freight rate on gold. Sir Owen Philipps took up the position that neither he nor his company were philanthropists, and, in the circumstances, his attitude was not unreasonable. His point was that the Government might have done something to help the producers of one article just as well as the producers of another article. The Minister had interfered to a certain extent on behalf of some parts of the community, but not on behalf of all. It might be said that insufficient representations were made, but he did think that in some cases such representations should have been unnecessary. He was told that the hon. member for Barberton had been looking after the interests of the up-country people, but he had followed the career of the hon. member both in the Transvaal and in that Parliament, and he had found that the only thing that the hon. member had done for the up-country people was to place taxes on them. Continuing, he said he would like to refer to the question of speed in connection with the mail contract. He believed that it would be in the best interests of South Africa if the speed of the steamers were increased, and he could not understand what the citizens of Cape Town had been about seeing that they had made no special efforts to get a change in this direction. Nothing would benefit South Africa, and especially Cape Town, more in the way of bringing people here, especially during the winter in England, than a better service from a speed point of view. The Minister had told them that he had been unable to do anything in that direction, and the hon. member who sat near him had also said that it would have been useless to expect a better service for the money. They had no evidence to show that it had not been possible to obtain a speedier service, and if it was not possible he thought that it would have been worth while, in the material interests of South Africa, to have paid more for a speedier service. He did not think, however, that his hon. friend the member for Cape Town, Central, had met the point of the up-country importers, who were going to be at the mercy of the shipping company—a far stronger combination than in the past—and the big merchant. He hoped that if the shipping company saw fit to raise its rates that the big merchants would rescue the small importers by chartering ships and selling goods to the smaller merchants at a low rate. That would be a splendid opportunity for his hon. friend the member for Cape Town, Central.
said he must congratulate the Minister on the good bargain he had made for the controlling interests of the party which he represented. Nowadays economic advantages went hand in hand with political control. The Minister in his statement had gone out of his way to say that these contracts were in no way at variance with the Post Office and Shipping Combination Discouragement Act. Clause 6 distinctly laid down that the Governor-General should not enter into any such mail contract with any person who was connected directly or indirectly with any such shipping or other combination as the Governor-General might deem detrimental or likely to affect adversely South African trade or industries.
He had a certain amount of information supplied to him, which, if it were correct— and he was not prepared to say that there was not another side to it—it seemed to him that the Government in entering into contract with the Union-Castle Company were violating clause 6 of the Post Office Act. A fortnight ago he asked the Minister of Mines whether it was a fact that the Government mail contractors had acquired a controlling influence in the coal trade. The reply was that the Government’s information was that the mail contractors had acquired an interest in two collieries which were not in the combination. In reply to a previous question, the Minister had said he was aware that ten collieries in Natal, which went under the name of the Natal Associated Collieries, had formed a combination for the purpose of regulating the price of coal, but the Union-Castle Company had no controlling influence in that combination. The Union-Castle Company had acquired a controlling influence in two collieries, and agents who were in the habit in the past of obtaining their coal supplies from these two collieries had recently been informed that they could no longer get any supplies from these collieries, because the Union-Castle Company had obtained a controlling influence. The Union-Castle Company took some 300,000 or 400,000 tons of coal from these collieries which were in the combination. As far as he could gather—he mentioned this with a view of further inquiries being made—the Union-Castle Company purchased a large amount of coal from these collieries in the combination, and there had been a working agreement entered into between the Union-Castle Company and the combination, so that the combination would not supply any coal to any other agents, except through the medium of the Union-Castle Company. They had the position now that these local agents must go to the Union-Castle Company before they could get any coal for bunker or cargo purposes. They had the Government trying to break down a shipping monopoly, while it was springing up in another place, if his information were correct, and collaring the Natal coal trade and driving out the agents who in the past had been able to get their supplies, without any trouble whatever, from the different collieries in the combination. He thought the Minister should inform the House whether the information was correct, and if the contract entered into with the Union-Castle Company would be a violation of the Shipping Act to which he had referred. Although the Union-Castle Company were not in the ring, as far as he could gather, they had a working agreement, because they would only purchase coal in large quantities from these collieries on the understanding that they would not sell to any other agent for shipping purposes, unless it were done through the Union-Castle Company.
said he thought the hon. member was travelling rather wide of the question before the House.
said he was trying to show that, if these contracts were ratified, they would be in conflict with the Post Office Act. They had now ten collieries in the combination, and five outside. Of four of these collieries outside, two were prevented from joining owing to a previous contract with the Natal Government Railways, and the other two had been acquired by the Union Castle Company.
said that as one of the strongest opponents of the Post Office Bill—and a perfectly unrepentant one—it would be ungracious if he did not say that the Minister without Portfolio had made a far better contract under the circumstances than he (Mr. Merriman) expected that he would. (Cheers.) There were points in it which were open to criticism, but the Minister having got himself into a mess had got out of it far better than any of them expected. (Laughter.) At the same time the Minister had thrown overboard the strongest principles to which he (Mr. Merriman) objected in the Post Office Bill, which was a ridiculous proposal to post gold and ostrich feathers. (Cheers.) It was the most prejudicial thing to put a clause in a Bill so that one could aim a pistol at the head of someone they were dealing with. As they found righteousness in the shape of the Minister without Portfolio, and peace in the person of the hon. member for Cape Town (Mr. Jagger) kissing each other over the Bill—(laughter)—he was not sure that it would be all right with the general public. (Laughter.) There was a little sus-suspicion over the embrace of the two gentlemen to whom he referred. He seemed to think there was something behind it. It had afforded him the greatest pleasure to hear the illustrious convert opposite who poured scorn last year on the little band which opposed the Post Office Bill. Was there a glittering lure, and had it been snatched away? Where was the conveyance of gold now? In the same position as it was before. He (Mr. Merriman) understood that gold was to be carried on more reasonable terms. (An HON. MEMBER: “No.”) He had not been wallowing in Hansard to find out the details, but at any rate that lure had gone.
He did not want to criticise the details of the contract, as he was not competent to do so, not being in the mercantile trade, but it struck him as a simple onlooker that the eminent altruist who purchased the shares of the Union-Castle Company at a very high figure, came out here and threw out a large number of sprats to catch the S.A. mackerel, which was a shy fish, but on that occasion it had been caught. He was afraid that before very long they would find his hon. friend (Mr. Jagger) playing the part of the mackerel, and he would be landed. He was completely in the hands of this monopoly. They had done away with rebates, and had put an agreement in its place. His hon. friend (Mr. Jagger) and the band of devoted men in Cape Town who were listening to him, and who were refusing to sign the agreement, forgot that there was a very simple way Of bringing them to heel. There would be no refusal to take their goods, but there would be no room in the ships for them, but there would be plenty of room for the goods of importers at Port Elizabeth and Durban. That was what was going to take place. Did any person suppose that the eminent altruist, who was one of the smartest shipping experts in the world, and who had paid a very high price for the shares of the Mail Company—and here he (Mr. Merriman) would digress to convey to the Minister without Portfolio his humble thanks for having made the fortunes of some of his (Mr. Merriman’s) friends—the former owners and managers of the Union-Castle Company, who ought to put up a golden statue to the hon. member. The eminent gentleman to whom he referred, had to earn interest on a very much larger capital than the Union-Castle Company had to. He had thrown sprats in the shape of the free conveyance of pedigree stock, and low freights on mealies, but somebody was going to pay for that. He (Mr. Merriman) was afraid that that somebody was the importer. But it would not hurt the importer a bit, because the burden would be passed on to the simple consumer, and the importers of pedigree stock would have to pay through their breeches and boots, and agricultural implements for the free conveyance of their pedigree stock. (Hear, hear.) In regard to Government freights, it was said that the rates were the same as they used to be, but clause 5 said that these freights had to be paid in accordance with the tariff on merchants’ goods.
His hon. friend objected to the old company having built up reserves, as if that were a crime. He (Mr. Merriman) supposed every business man built up his reserves out of his profits. Did the hon. member suppose that the new company was not going to build up reserves out of something?
They have not got a monopoly.
We are on the reserves question now. The hon. member attempted to make a crime of the action of the old company in building up reserves. Was the new company going to build up reserves, or was it going on without reserves?
I cannot say.
The hon. member would not, if he were managing it. The new company would build up reserves, as the old company had done; and out of whose pockets were they going to build up their reserves? How were they going to do it; not out of carrying pedigree stock or mealies. They would have to fall back upon the importers, which was another name for the consumer. They were going to get their reserves out of the consumers of this country, so they should not begin to throw up their hats too soon on the matter. If they had got rid of a monopoly, they had got a combine in its place. He was informed that coal had gone up two shillings a ton, and it might go up two shillings more for all they knew. It was only the first bud that was put out. Then his hon. friend said they had got rid of rebates. Was the rebate in itself such a bad thing; was it a crime to charge rebates? He (Mr. Merriman) had seen something about the Government’s rate for fruit to Natal, which was uncommonly like a rebate, and he believed they had something to do with the carriage of coal from Natal. He did not hear his hon. friend bring the roof down on that matter. (Laughter.)
We have not had the opportunity.
Not had the opportunity! He added that if it had been a question of the old Union Company, his hon. friend would have been eloquent enough, and he was sure that his (Mr. Jagger’s) whole action in that business had been a wandering from “those rigid economic paths.” He had always looked upon him as a sound man; and he had wandered from those paths. (Laughter.) He had pointed to the great benefits which they got to cover up his tracks. (Laughter.) In conclusion, Mr. Merriman apologised for taking up the time of the House, but he had, he said, been goaded into his utterances by his hon. friends opposite. On the whole, and under the circumstances, he considered the Minister had made the best contract he could, and opposed as he (Mr. Merriman) was to the Post Office Act, he thought it would be an ungracious thing on his part not to have taken the opportunity of saying so. (Hear, hear.)
moved the adjournment of the debate.
The motion was agreed to, and the debate was adjourned until Monday.
The House adjourned at