On the motion by Mr. H. L. CURREY (George) to adopt the first report of Select Committee on Pensions, Grants, and Gratuities, together with certain resolutions agreed upon by the House in committee yesterday,

The revenue for the past year was £15,970,000. From this has to be deducted the proceeds of the bewaarplaatsen for that year, amounting to £176,000, leaving the revenue for the past year at £15,794,000. The difference between revenue and expenditure shows a shortfall for the past year of £687,000, which is a figure different from the one I gave to the House prior to the recess. The estimated shortfall I gave to the House last year was £1,207,000, so the position at the end of the year is considerably better than what it was estimated to be at the beginning. (Hear, hear.) The net expenditure which I have given exceeds only by a small amount the original estimate—in fact, only by £61,000. Of course, there has been a great deal of fluctuation in the expenditure figures. There were savings on the expenditure estimates of last year to the extent of £495,000, but we had additional estimates to the amount of £556,000. The difference between these two amounts was £61,000.

Of the additional estimates we voted some weeks ago, the major portion was used in connection with the disturbances during the year. But for these disturbances, instead of the expenditure estimates being exceeded by £61,000, there would have been a very different result—there would have been a net saving of about a quarter of a million on the expenditure of the year. As I explained a couple of weeks ago, a great difference has been made, in the neighbourhood of £300,000, in consequence of the industrial troubles and disturbances through which the country has gone.

Coming to the revenue figures hon. members will see that I have given the revenue receipts for the year, after deducting the bewaarplaatsen money, as £15,794,000. The amount which was estimated at the beginning of the year was £15,212,000, so that the revenue has exceeded the original estimate by the amount of £582,000. Before I come to examine this figure more closely I wish to say how we propose to meet this shortfall. I have already stated in the House that we propose to devote to wiping out this shortfall the surplus which we were carrying forward from 1910-1911. This was £773,000, but this amount included £110,000 charged to the local Loan Fund of the O.R.C., which had been wiped out and the proceeds merged with the revenues for that year. Last year there was a debate in the House in reference to this transaction, and exception was taken to the inclusion of this fund in the revenue balances. (Hear, hear.) I undertook to make further inquiries, and to correspond with the Provincial authorities in the Free State on the subject. As a result it has been decided to restart this fund and to deduct it from this amount. That fund will be administered by Public Debt Commissioners, and the proceeds will be devoted to the purpose for which the fund was originally intended by the Free State Parliament. (Cheers.) That leaves us with a balance of £663,000. If this be devoted to meeting the shortfall of the year there would still remain a small debit balance against us on the year’s working of £24,000, which will have to be carried forward to the following year. On the whole, sir, this result will, I think, be taken as eminently satisfactory. (Hear, hear.)

The year 1913-1914 has been one of the most terrible years in the history of the country. (Cheers.) In fact I do not think it was possible to have applied to this young Union a severer test, either in respect of its financial resources or its manhood and organisation, than was applied to it during 1913-1914. (Cheers.) It is marvellous to see how the country has stood the test in every respect. (Hear, hear.) The country has shown an elasticity and a reserve force which were little suspected. We have had three great labour disturbances during the year. We have had an unprecedented drought, following on another great drought the year before. We have had stock diseases, a very serious set back in the ostrich and tobacco industries, and there are other calamities which have come over the country, and notwithstanding all this, the result is that at the end of the year the revenue is better by £582,000 than had been anticipated at the beginning of the year. This is all the more remarkable when we bear in mind what the hon. member for Cape Town, Central (Mr. Jagger) said last year, when he said that my estimate was too sanguine. Notwithstanding all these calamities, the result has been more than half-a-million.

I wish for a moment to turn the attention of the House to some of the principal items of increases of revenue. These are: Customs, £103,000; Excise, £146,000; diamonds, £125,000; succession duty, £25,000; native taxes, £30,000: interest, £60,000; departmental receipts, £30,000. Altogether these items which I have enumerated show an increase beyond the estimate of some £520,000; but there are smaller increases in other items, too, and the curious thing is that the total increase has been contributed to by almost every head of revenue, which, I think, may be taken as a sign of steady general expansion and progress in the country. (Hear, hear.) I now want to say a few words about some of these items I have mentioned. The Customs revenue is given as £103,000 better than was anticipated, but, of course, when we take this figure into consideration we must bear in mind that a very great change was made by the Excise Act which we passed last year. The Excise Act, which came into force in the middle of last year, June, 1913, has had the effect of making into Excise revenue what hitherto had been Customs revenue. All the spirituous liquor which had been exported from the old Cape Colony to the other Provinces fell under Customs revenue in those Provinces, but after this Act was passed last year the result was that this became Excise revenue, and to that extent Customs revenue shows worse here than it has hitherto done. Moreover, one of the results of the Act, and one of the results which was anticipated, has been that a great deal of foreign imported spirituous liquor has been displaced by wine brandy from the Cape, and to that extent also the Customs revenue has been considerably reduced, notwithstanding this increase of £103,000. It is estimated by the Customs and Excise Department that a great deal of foreign imported liquor has been displaced by the Act which we passed last year. It is estimated that about 60,000 gallons less has been imported in consequence of a larger resort being made to our Cape products and a remarkable changer which has taken place is shown by one figure. The importation of wine brandy into the Transvaal between June and December of last year has been 136,000 gallons, as against 37,000 gallons in the year before. That showed the enormous change which is being worked and which was anticipated as the result of the Excise Act passed last year. There had been a similar change, though perhaps not on the same scale, in the Orange Free State. But, as I say, notwithstanding these decreases in Customs revenue, there still is this increased amount over the estimate of £103,000, and that is due, as hon. members are aware, to some extent, to the misfortunes of the country.

Owing to the severe drought which the country passed through this year and last year, foodstuffs to a larger amount than was anticipated have been imported. In dealing with the Estimates last year with regard to the large importation of foodstuffs, flour and maize, we made allowance for the drought of 1912 which at the time I explained to the House, The drought, however, has been so severe that the effect has been even larger than was anticipated, and the result has been that the Customs revenue, the importation of wheat, flour and maize has been much larger than was anticipated, and the Customs revenue from these sources considerably larger than anticipated. A remarkable increase is shown by sugar. In 1912, judging from the progressive way in which the importation of sugar has gone down, it was anticipated that very little sugar would be imported thereafter in 1913. Instead of that being so, more sugar was imported than in the year before, and the Customs from sugar has gone up by £27,000 last year. That, as hon. members will remember, was due to the drought which existed in parts of Natal and also to torrential rains in other parts, which disastrously affected the sugar crop. I am told that in the coming year the sugar crop in Natal is, however, going to be of an excellent character, so far as one can judge from present indications.

There is another large item of increase in Customs, and that is the importation of motor-cars. We had anticipated a large increase, judging from former experience of how this business was going forward, but the increase of Customs revenue of £93,000 altogether exceeded our anticipations, and to what extent this increase has gone on, hon. members will see from comparing the figures for last year, 1912, with the figures for 1913. Motor-cars to the value of £577,000 were imported in 1912, and in 1913 this figure was almost doubled, and the importation was £1,100,000.

The diamond revenue has also gone up by £125,000. This is due largely to increased production, but also to better prices ruling in the early part of 1913. However, towards the end of 1913 there was a very serious fall in the price of diamonds of certain classes, so serious that it may probably affect our revenue for the next year. The Government has been in consultation with some of the larger diamond producers in this country, and the decision has been come to that the time has come for the various producers to hold a conference and see whether it is not possible to find means by which greater stability can be secured in the diamond trade. The conference of diamond producers will be held some time next June, and the German Government will also participate as they are very largely affected by the violent fluctuation in the price of diamonds. The next item, “Succession Duty,” shows an increase of £25,000. This is largely due to the increase in the value of property in the Cape Province, and the same fact is shown by the reduced transfer duty at the Cape, which will exceed by a very large amount the amount that was originally anticipated. That is revenue that has been transferred to the Province. It is customary, sir, in speaking on the Budget, to refer to the trade figures for the year. I do not intend to detain the House very long in this way, because they have been very fully reviewed by the hon. member for Cape Town, Central, only last week, in a speech which has no doubt been read and appreciated by everybody in South Africa. But there are certain large items which I may refer to briefly. It is wonderful the rate at which the external trade of this country has increased. If one compares the figures even over a short period one is struck by the enormous development that has taken place.

In the year before Union, 1909, the external trade, combined export and import, amounted to £78,000,000, and in 1913 it has risen to £109,000,000, so that in the five years the external trade of the country has gone up by £31,000,000. That is an average rate of more than £6,000,000 per annum. That, sir, shows you that the country is making progress notwithstanding apparent calamities which, for the time being, attracted widespread attention. The increase of the last year 1912-13 is more than the average rate. The imports increased last year over those of 1912 by almost exactly three millions, and the exports increased by £3,386,000. An hon. member has just asked what part of the advance is due to gold and diamonds and what is the amount of export of other South African produce. The exports of South African produce other than gold and diamonds for the last year have increased over the figures of 1912 by 11/2 millions—(hear, hear)—and have increased over the figures of 1909 by 41/2 millions. (Hear, hear.)

And my information from various parts of the country is that things are not so bad in the ostrich feather industry as people tend to think. (Hear, hear.) People tend to exaggerate calamities, but the position is by no means so bad as it has been made out to be. With regard to wool, the position is eminently satisfactory. The exportation of wool for 1912 amounted to £4,780,000, and in 1913 it had gone up to £5,719,000. It is an increasing quantity, but it is also increasing in quality. (Hear, hear.) No doubt the efforts which were made not only by the Government, but by private owners is the main reason for the increase in the quality of the wool exported. Not only has there been larger production of wool, but the wool attained much better prices in the market. Mohair has gone down and there is also a decrease in the export of fresh fruit. In 1912 fresh fruit was exported to the value of £54,000, while in 1913 the amount was £52,000. That was owing to the season and the conditions that existed. But there is an increased trade in fresh fruit this year. I may say that in the month of January this year fresh fruit was exported from Cape Town to the value of £16,854, as compared with £2,200 for 1913. In that one month the export of fresh fruit has gone up by almost eight times. The export of bark has also gone up. In connection with this industry, too, we have heard some doleful tales, but notwithstanding the trade has gone up and there has been a very good increase in the export of bark from South Africa. Coal has gone up very largely, due to a large extent to a very recent coal trade that has been established. I think 3,000,000 tons have been exported from this country to India and Ceylon, which shows that a good export trade is being built up. We exported from the country £693,000 worth of maize in the year of Union, but since then, owing to droughts in the interior, the export has gone down, and reached the lowest amount this year.

I need not refer to any other figures, but hon. members should not think that everything has been done that should be done in the development of our resources. I wish to give a few figures in connection with the export trade of New Zealand. New Zealand is a country with a white population smaller than our white population in South Africa, and I find from the figures of 1912 that in that year they exported from New Zealand wool to the value of £7,092,000, whereas our export of wool was only £4,730,000. In regard to the export of grain, there was exported from New Zealand grain to the value of £753,000. During that same year we exported grain to the value of £554,000. New Zealand in the same year exported £2,000,000 worth of butter, and we exported £2,700—(laughter)—not to speak of the amount we imported. I just mention these figures for the sake by comparison to show that there is a good deal of work ahead of us if we want to come up to the standard of some other young countries. (Hear, hear.) I need not detain the House over the loan accounts for last year. When we come to deal with the loan account for the following year, it will be a better place to deal with the figures. I now come to the Estimates for 1914-1915. Hon. members will see from the White-book containing the Estimates that our expenditure is estimated at £16,818,000. It is our invariable experience that there is a certain amount of saving affected on this total. I have explained that last year, but for the strike and other disturbances, there would have been a saving of a quarter of a million, and this year, too, there is sure to be a saving on this particular expenditure. But, of course, as we gauge our requirements more accurately, the saving will become less, and we estimate this year that there will be a probable saving of £150,000, so if hon. members will deduct that from the total figure I have given, they will find the net expenditure figure for this year may be taken at £16,668,000. If that figure is compared with the expenditure of last year, hon. members will see that there is an increase of £187,000 over the expenditure for last year, and I wish to refer to a few of those items, to show the House that this expenditure is not simply mounting up. The public debt provision, interest charges, debt charges, and so on, account for an increase of £101,000. The Provincial Administrations claim this year an increase of £115,000, and I think that is quite a reasonable figure.

The Financial Relations Act is undoubtedly bearing good fruit in providing a check on the expenditure of the Provincial Administrations. The great difference between former years and this year is that in former years the application was simply made to the Union Government and the Central Treasury for the supply of funds, whereas now very strenuous efforts have to be made in the Provinces to screw money out of the taxpayers, and that, of course, acts as a very considerable check. I have no doubt that this increase is not an unreasonable figure. Defence claims a total amount of £84,000. This is not in respect of defence arrangements proper, but is in respect of the S.A. Mounted Rifles, who police a portion of the Union, which has been taken over by the Defence Department. It was explained some years ago that the taking over of this force, the addition of artillery to it, and their being turned into a semi-military force would require the additional provision of some 500 or 600 men. We are now getting these men, and the additional estimate for defence is due almost entirely to that force. The police vote itself has gone up by £65,000, which is due to the actual necessity for better police protection and better police provision. The Post Office claims an additional increase of £55,000, which is the normal increase due to expansion. Hon. members will see that these amounts total to an amount very much larger than the increase I have mentioned, and of course that is due to decreases in other estimates. Other estimates have gone down, but these are the principal increases, and they show that they represent only provision for absolutely necessary requirements.

Now I come to the revenue, which is the most difficult part of the Budget—to estimate revenue for a year ahead. This is an occasion on which even the wisest of men fail and go wrong. Every year since Union the estimates of revenue have been falsified in a good direction by the event— (hear, hear)—and have been exceeded. That is due to the general steady increase of prosperity in this country. We have our difficulties and our set-backs, but as a rule they are surface movements and underneath there is a steady undercurrent of progress and expansion carrying this country forward. The result is that every year, notwithstanding the troubles and the difficulties, we have found that our revenue was better than we anticipated. (Hear, hear.) This is borne out by the steady growth in our trade. There is no doubt the policy which has been followed in recent years by the Government is bearing good fruit. We have spent large amounts on railways, irrigation, the Land Bank and other reproductive services, and we must expect in the ordinary course of events that these outlays will bring in a big return—(hear, hear) —in increased prosperity and revenue. I certainly have no feeling of pessimism. There is no doubt 1912 was a bad year, and 1913 was in many respects an abnormally bad year, and we are going to feel the effects in 1914-15 much more than we have felt them in any previous years. But notwithstanding, I am no pessimist, and we need not take a pessimistic view of the position for the coming year.

After giving the subject most careful consideration we have come to the conclusion that a reasonable estimate of the revenue for 1914-1915 will be £15,707,000; that is, without taking into account the be waarplaatsen receipts. This is an amount slightly smaller than the actual revenue for the past year. We have considered the question very carefully, and we have deemed it necessary to make certain reductions in the Customs revenue and to make allowances in respect of the diamond revenue, which may be affected by the position to which I have referred, and the result is that we budget very much for the same revenue as last year, with these small alterations. We estimate the expenditure for 1914-15 at £16,668,000 and the revenue at £15,707,000. The difference between these two amounts will give us an anticipated shortfall for 1914-15 of £961,000—close in the neighbourhood of £1,000,000.

In the first place, I wish to say that it is proposed to deal with the bewaarplaatsen receipts on the basis which was suggested last year by the Government. Last year a Bill was brought before the House for the purpose of dividing the bewaarplaatsen receipts between the registered owners of those areas and the Government, and giving each of them half. The total amount of accumulations in the bewaarplaatsen fund from 1910 to the end of this year is £700,000. Half of that is £550,000, and from the Government’s half which it is proposed to be given to revenue falls to be deducted the £100,000 which the House voted in respect of Miners’ Phthisis Compensation, so there remains—if this is carried out—quarter of a million to go to the revenue. This includes the bewaarplaatsen receipts for this year. Deducting £250,000 from £961,000, there is still left £711,000, for which provision will have to be made if we are to balance this year. We propose to take from bewaarplaatsen receipts this year a quarter of a million, and it is anticipated that the total bewaarplaatsen receipts next year will be £250,000, of which the revenue will get half. The financial position is not likely to improve in the next financial year, bad as it looks this year. We have now come to a definite point in our financial history. (Cheers.) We have exhausted all the various expedients and devices to which we have resorted since Union for making the revenue and expenditure balance. I say this to point out to the House that the position has not arisen to-day, but it has been in existence ever since the beginning of Union. We have never from the beginning of Union been able to make revenue and expenditure balance. We have had to resort from year to year to expedients in order to carry on. At first we resorted to the railways. The old system of taxation relied very much on the railways.

Whilst the old system was altered and was altered under the South Africa Act, a period of four years was given for consummating this great change, and the railway contribution for the first three years after Union was a contribution on which the Treasurer relied. If hon. members will look at the figures they will find that in 1910-1911 the Revenue got a contribution from railways for the first ten months of Union of £1,520,000. In the next year, 1911-1912, the railway contribution was £1,159,000. That was necessary in order to make up the shortfall. In 1912-1913 the contribution from the railways fell to £500,000. However, in 1913-1914 we had no longer this railway contribution to rely upon, although, as a matter of fact, there was an opening left in the South Africa Act to make a call upon the railways for a further sum in respect of the fourth year, but the Government thought it inadvisable to do so, and the result has been amply justified, because as hon. members know the railway position is not such that we would be justified in making further demands on the Treasury of my hon. friend (the Minister of Railways and Harbours). So that in 1913-1914 we had to resort to a different means to balance our revenue and our expenditure, and we devoted to this purpose the surplus of 1910-1911. We have had, in order to meet the altered circumstances in South Africa and the great change in our financial system, to be helped through by expedients in getting a balance at the end of the financial year. Well, sir, the fact of the matter is that the Union has brought about an enormous change. Before Union, as I say, the railways were looked upon legitimately as a taxing machine, and to what extent the railways were used as a taxing machine is shown by this little fact that for the first ten months of Union the railways were in a position to give us more than £1,500,000, in order to help the Revenue. Now that system had to go under Union.

The South Africa Act made that change necessary and, instead of Revenue being helped out by contributions from the railway, the railway rates have had to be decreased. That is really an assistance to the taxpayer. An amount of more than £1,300,000 has up to now been remitted to the taxpayers by means of decreased railway rates, and that, of course, is an enormous financial alteration which has been made in our system. Nor is that the only change that has taken place. Whilst we have been giving away railway Revenue under the compulsion of the South Africa Act, we have surrendered Revenue also in other directions. We have surrendered the following Revenues which we got in former years: At Union the Cape Income Tax went and that meant an annual amount of £280,000; the Patent Medicines Tax, which was abolished, £12,000; Natal Poll Tax, £100,000; Reduction of the Transfer Duty at the Cape, Natal, and Orange Free State, £200,000; and the surrender of interest and sinking fund on Cape School Loans, which was done in the Financial Relations Act last year, £60,000. Hon. members will see if they count up the surrender of revenues to which I have referred that it amounts to £652,000. Well, sir, adding this amount to the remission of taxation by way of railway rates to which I have referred, we arrive at the conclusion that since Union taxation to the extent of £2,000,000 per annum has been remitted. Whilst this was being done it was to be foreseen that there would be very largely increased * demands made on the Treasury in future. Hon. members know, and I need not labour the point, that several of the Provinces came into Union in somewhat straitened circumstances. Certain services in these Provinces had been stinted to a large extent prior to Union, and the result is that great expenditure has been incurred in the last three years in order to make up for this leeway of former years. Take one item alone—the education estimates. Our education estimates for the last three years have gone up by over £700,000, and, although one may criticise these figures and say there is abnormal growth, yet you hear on all hands, and from all parts of South Africa, that not sufficient has been done yet. As a matter of fact, there is no doubt that in at least two of the Provinces education was very largely stinted before Union, and enormous expenditure has had to be incurred in the years after Union to make up the leeway of former years. (Hear, hear.) Besides that, certain other expenditure was bound to become necessary in consequence of Union. (Hear, hear.) For instance, as a young nation, it was necessary for us to put our house in order in the way of defence, and we had to inaugurate a defence system which is one of the most efficient and cheapest in the world. (Hear, hear.) That is a means of additional expenditure of about half a million per annum. Therefore, taking these two items alone, and setting aside all other forms of expenditure, on education and defence we have had an increase since Union of more than £1,200,000, whilst at the same time we are remitting taxation right and left in the ways I have indicated. Well, sir, it was inevitable that we should come to a point when we would have to survey the whole position very carefully, take stock, and come to a new financial settlement and a new basis for the future.

Steady progress has been made throughout the country in increased revenue from year to year, but it has been quite impossible for the increased revenue to make up not only for normal increases in expenditure owing to the progress of the country, but also new developments like the Defence Force, that have come into being, since Union. It was impossible then as it is now to make up for the taxation that was being remitted to the amount I referred to. It has become necessary to provide other forms of taxation, to look for other sources of revenue in order that we may balance things. It is remarkable that, while this transformation has been taking place, while we were compelled by the provisions of the South Africa Act to drop sources of taxation—it was remarkable at the time of such a transformation we bound ourselves up hand and foot in the Public Debt Commissioners Act, by providing that the surplus of any year should not be carried forward to the next year, but should go towards debt redemption. That is a provision the effect of which we are feeling now. The result is, we have been —I do not say this in criticism of my predecessor, because I am just as responsible as he was, and it was done with the best intentions in the world—we tied ourselves hand and foot at a time when we should have allowed ourselves the greatest latitude. What has been the result? The result has been that we have been redeeming debt at an extravagant pace, as I shall show, and at the same time now we are called upon to tax the people. On Union we brought balances to the amount of £1,477,000, which we voted to debt redemption. Then, under this provision in the Public Debt Commissioners Act, that surpluses go to debt redemption, we have nut to the redemption of debt the surplus of 1911-12, £681,000, and also now the surplus of 1912-13, £228,000, will have to go in the same direction. That is in addition to the statutory sinking funds that exist.

What effect all this has had I will show later on. We have tied ourselves up in the most remarkable way so that now we have come to the position that we can’t make use of the surplus revenues of previous years in meeting deficits such as we have to face, but we have to tax the people; and, at the same time, we redeem debt at a pace which I think is quite unnecessary. Well, sir, the question may be raised, and it is the old question which has been raised every year: “Has the Government been economical? ” Economy before taxation. (Hear, hear.) We have heard that song every year, and I think the Government has taken it to heart. (Laughter.) I think it would be difficult to find a Government which has taken such pains—(hear, hear, and laughter)—as this Government. Well, sir, it has always been somewhat difficult, because of the complexity of the figures, to supply the proof. Last year my hon. friend the hon. member for Port Elizabeth. Central, made an extremely effective indictment against the Government by comparing the total over a certain period of years, and showing how the expenditure has gone up for a certain period of years. I tried to answer him—and I hope the answer was even more effective than the criticism—by showing that these increases were due to necessary expenditure in respect of new services and new development, and that the expenditure of the Central Government had gone down. In the year which has intervened the Treasury has prepared figures for the last ten years, and hon. members have before them, I hope, the comparative summary of expenditure from revenue for the last ten years, 1904 to 1913. If they look at these figures they will see that the position is an entirely good one and a sound one from the point of view of the country. If hon. members will look at the paper they will see that the expenditure on general government has not been going up since Union. They have to bear in mind the figures for 1909 and 1910 refer to the eleven months period, and the year after Union is the ten months period, and in order to compare the figures they will have to add one month to the first year and two months to the second year.

If they look at the figures they will see that on. Central Government there has really been no increase of expenditure since Union. On the contrary most of the items show decreases. If they look at the total at the foot of the table they will find that from 1904 to 1913 there has been an increase of expenditure of about £3,000,000. That is for the whole ten years period. If they look at the items—the several items —they will find that the greatest increase is in respect of education and school buildings, the increase during that period being £2,200,000. In respect of public debt the increase has been £500,000, and in respect of posts and telegraphs the amount is £200,000, and if they add these figures —you need not go further—education, public debt, and necessary expansion in the Postal and Telegraphic Department accounts for an increase of approximately £3,000,000 during this period. The position is quite a sound one. Hon. members will see that the details show that there have only been large increases in respect of two items—law, order and protection— which was due to the defence system, and there is an increase here of several hundred thousands, and in the next item, “Education,” there is an increase of £1,200,000, and these are the increases to which I referred as having been necessitated by the circumstances some of the Provinces found themselves in at Union. If hon. members will look at statement No. 1 it will be possible for them to see the details. In regard to the details of the Central Government, take, for instance, Governor. In the year before Union for the 11 months the expenditure was over £40,000. while the expenditure last year was £22,000. That decrease was due to the substitution of one Governor-General for four Governors.

If you look at the Legislature you find the same result. The Prime Minister’s Department has gone up slightly. In 1909 it was for the eleven months £6,500, and is now £8,400 with the additional month. With regard to the Department of the Interior the figure for the past twelve months was £62,000, so that there is a very considerable come-down. I do not want to weary the House, but I am just giving these figures because I want to show that there has been a great deal of economy due to the Union. Take the Treasury for the eleven months of 1909. The old Treasury cost £244,000, and for the twelve months this year it has cost £218,000. The same thing applies to practically every other Department. The increases are due to Defence, which was a new service, and the additional expense incurred by education, school buildings, etc.

We have not had any reason before to go in for any taxing system, but now we are in a position where it is necessary to make new provision. The country is in a sound position, the country is making progress, and it is our duty to make the necessary provision in our financial system in order to make revenue and expenditure meet. Now we are reaching a very important era in our financial history—now we are coming to new forms of taxation, we have to consider very carefully what is the best policy for this country to pursue. There is no doubt that financial policy is the most important aspect of the State, much more far-reaching is it than the financial policy of any business institution. Now we are changing from one basis to the other, it is necessary for us to consider very carefully what is best in the interests of South Africa in the form of taxation. In the past we have mainly taxed through Customs and Railways. We have mainly taxed on consumption and transportation Transportation is really a part of consumption, so the policy has been mainly one of taxing consumption through Customs and Railways. It was submitted to by the public as being less irksome than the direct form of taxation. (Hear, hear.) But in regard to the railways a great change has been brought about by the South Africa Act, an enormous change, and as regards Customs, the Customs taxation has its limitations. You can use that source of taxation up to a certain limit, but it is not good policy to use it any further. So far the policy in South Africa has been to have not a protective tariff but a revenue tariff. We have taxed people through the Customs, but not from the point of view of erecting a tariff wall round the country, but because we wanted revenue. That has been the policy in the past, and I may at once say it is not the intention of the Government to depart from that sound policy. (Hear, hear.) There is no doubt the circumstances of South Africa are such that a protective wall round the country and a protective tariff as distinct from a revenue tariff would not be in the highest interests of the country.

At the same time—(loud laughter)—at the same time there is no doubt, that a considerable alteration is necessary in the details of our present tariff. (Government cheers.) The last alteration was made in 1906 at the Maritzburg Conference, and since then we have been working under it. But time and change have disclosed many points in the tariff which require alteration. Not only is that the case, but we have conducted inquiries through the Industries Commission. We have asked all the young nascent industries of South Africa to put forward their claims. (Government cheers.) That Commission has heard the case of these industries, and has collected very valuable evidence, and has made very useful recommendations. The Government feels, and I think it is a legitimate view to take, that we ought not to leave that question open too long. The time has come for us to close that question. The people have been asking, from year to year: “What is going to be the tariff? Is it going to be a high protective tariff? Is it going to proceed more or less on the existing lines?” The people have clamoured for revision and final settlement, and it is fair that this debate should be closed and that we should have the tariff settled, at any rate for a number of years, on a definite basis. (Cheers.) The Government has taken into consideration the inquiries and recommendations made by the Industries Commission, and the Government itself has also conducted inquiries through its agencies into the requirements of the country and of industries, and, of course, we are guided by the necessities of the Treasury.

The result is that Government is going to submit to the House—not on the present occasion but on another occasion—a number of alterations in the present Customs and Excise Tariff. The financial result it is anticipated of these alterations after giving the matter the closest possible attention will be an additional revenue of something between £150,000 and £200,000. That will include a number of points dealt with by the Industries Commission; it will also include a number of points not dealt with by that Commission, but with which the Government has dealt independently. It is, of course, very difficult to gauge accurately what the effect of any additions to the Customs tariff may be. It may be that, instead of increasing the revenue, it may decrease it. I cannot, naturally, give details on this occasion, but it is hoped fairly early to bring forward a resolution to go into Committee of Ways and Means, and then the details of these alterations will be laid before the House.

There are many people anxious that we should change the whole basis of our Customs tariff, and should go much more in the direction of Protection than we propose. (Government cheers.) When we wanted to arrive at a conclusion as to what is the best Customs policy to go in for, we had to bear in mind a number of considerations. In the first place, the question arose: is it a wise thing for us to build up, as the Labour position is at present—to artificially build up a large number of industries here at the coast on black labour? (Cries of “No.”) Is that in the interests of South Africa—how is it going to affect the people of this country? I mention this point because the financial policy is one of the most important things to be considered in the development of the country. If we suggested laying down a policy the result of which would be the building up of future black industries in South Africa on a much vaster scale, many thinking, thoughtful people would advise that we pause, quite apart from the economic consideration, but on social grounds, before taking that step.

Another question we have considered is: what is our market? That is one of our main troubles. We want to foster industries as much as possible, but you are always face to face with the question: what market are you working for? Are you working for the South African market, or are you going to compete with the world? In regard to the production of maize and minerals, the thing is settled at once We have the whole world for our market, and we can go on producing as hard as our energy will allow. But when you come to articles of manufacture, the position alters at once. The local manufacturer is at enormous disadvantage. While the foreign manufacturer works on a large scale and at a cheap cost, the local man will have to work for a very much smaller market and at a very much higher cost. (Mr. JAGGER: Hear, hear.) Cognate with this is the difficulty we always feel in South Africa, for, owing to the backward development of our country, there is an unreasonable prejudice against anything produced in South Africa. You come to a place like Cape Town, and you see to what extent local industries are being supported here. To a very small extent indeed. (Cheers and dissent.) When you ask a tradesman why is this stuff not kept in stock he says, “It is not bought here.” (Hear, hear.) A great deal of propaganda work has still to be done in this country, because I am sure that the South African product is in many respects far better than the imported article, only people are too modest to believe that anything good can come out of this country. (Hear, hear.)

Sir, I think that the cost of living in South Africa is such to-day that no Government, no Legislature, that has the good and development of this country at heart, will take any steps to make living higher and more expensive than it is to-day. (Hear, hear.) The figures have been inquired into very carefully by the Economic Commission. (Hear, hear.) The object for which the Economic Commission was appointed was largely to go into this question of the cost of living in South Africa as bearing on the wages of the industrial classes, and we have the results of their investigations before us, and they are most remarkable as bearing on this cost of living and on the wages obtained by artisans in South Africa. For a brief moment I wish to refer to some of these figures. Hon. members will find on page 17 of the Report of the Economic Commission a comparison made between the relative cost of food in South Africa and in other countries, and they will find that when the cost of food is taken on the Witwatersrand at 100, the following figures have to be taken for certain other countries in the world: United Kingdom, 62; France, 65; Germany, 61; Belgium, 53; United States, 82; Canada, 85; Australia, 68; New Zealand, 62. So that hon. members will see that the cost of food on the Witwatersrand, which, of course, is slightly higher than in other parts of South Africa, though not so much higher, is in many cases almost double what it is in other manufacturing countries of the world.

If you look again at house rent, which is the other great item in the cost of living, and take Johannesburg as equal to 100 again, you will find the following figures for various countries: South Africa, 80; United States, 47; Australia, 46; New Zealand, 46; Canada, 45; Germany, 28; England, 23; France, 22; Belgium, 17. That is, where house rent at Johannesburg stands at 100, and in South Africa generally at 80, you have the figure of 17 for Belgium and 22 for France, and the cost of living, of course, consists of these two elements, the cost of food and rent. Taking these two together, you get the other table for the combined effect on the cost of living. Taking the Witwatersrand again at 100, you find the following: United Kingdom, 46; France, 49; Germany, 49; Belgium, 39; United States, 69; Canada, 69; Australia, 61; New Zealand, 57. Well, sir, these are most remarkable figures, and they go to show that we stand easily, from the point of view of the cost of living, at the top of all countries in the world. Of course, that high cost of living is reflected again in the cost of wages. If you are going to start industries on a large scale, you have to pay your artisan. In table 13 is given a comparison of the prices of wages of artisans in various countries. Taking Johannesburg again at 100 and South Africa at 80, we find the following: England, 31—(hear, hear); France, 23; Germany, 26; Belgium, 20; United States, 72; Canada, 70; Australia, 60; New Zealand, 58. Of course, the meaning of this is that, taking New Zealand, for instance, the wages in New Zealand for skilled people are little more than half what they are in South Africa. Now, sir, when we come to deal with the Customs Tariff, and we consider the question of starting this country on a new career as a manufacturing country, we have to bear in mind these very important considerations which I have laid before the House, and which show, on the one hand, an enormous leeway to make up in primary production, and on the other, that we are extremely handicapped by the high cost of living in this country and the dear price of the wages of labour.

That being so, I think it is the wisest course for any Government in South Africa to go slow, to do as their predecessors have done, to remove anomalies and to readjust our tariff in such a way that we will give legitimate encouragement to legitimate industry; but not a policy which will stultify the country with a high tariff. I do not want to argue the question further, but I think I have placed some of the most important considerations before the House which will have to be dealt with on this question of Customs Tariff. The result will be that there is not a very large sum to be got out of Customs revenue, but the amount will be between £150,000 and £200,000 per annum. But hon. members will see that we have to meet a deficit of more than £700,000, and it, therefore, becomes necessary to go further, and, sir, the Government proposes to do the right and wise thing, and to settle the economic policy of this country on a sound basis without delay and I think that the best and fairest thing to do would be to go in for an income tax. (Hear, hear, and laughter.) Indirect taxation, naturally, although it is not felt directly, indirect taxation bears more heavily proportionately on the poor man than on the rich—(hear, hear)—and, of course, the sound economic policy is to lay, if there is any fresh burden to lay, on the shoulders best able to carry it, and from the point of view of policy and social justice, if further money is required for public requirements we ought to supplement our present Customs policy by an income tax, which will lay the burden on the shoulders best able to bear it. There is no doubt in abstract argument there is the very strongest case to be made out in favour of an income tax, but the difficulty that is experienced is in relation to administration. It is a more difficult tax to administer, you pry more closely into the concerns of the people, you make returns, and very often you tempt people to say what is not true.

All these difficulties can be met by a proper system of administration for the income tax, if the necessary exemption is given, so as to gain the object desired and the burden placed on the shoulders of those best able to carry it. The Government has gone into this matter very carefully, and has come to the conclusion, I am not going into details, that we ought to adopt in the Union the policy, a system which largely resembles the system which was in force in the old Cape Colony from 1904 to 1908. I am not speaking of the later proposals made by the right hon. the member for Victoria West, and which were made under the stress of very great difficulty and financial trouble, which existed in the Cape in the years that followed 1907. I am confining myself to the proposal in the preceding period made by the hon. member for Port Elizabeth, Central. That scheme, sir, was this: An exemption was given up to £1,000, and all incomes up to £1,000 were exempted from the tax, and on incomes above £1,000—the deduction was made for the first £1,000—the tax started at 6d. in the £ to the next stage, where the man had an income of £2,000, and at a higher stage it became 9d., then rose to 1s., then 1s. 3d., and 1s. 6d. for larger incomes.

If a fairly large exemption is given then a large bulk of the people in the country will not be taxpayers. (Labour cheers and laughter.) Now, sir, I have said there will be no taxation of land apart from the income tax. The landowner will pay like the rest by way of income tax, but it is proposed to make an exception in one respect. There is no doubt that one of the evils this country is suffering from is the large holdings of undeveloped lands. One of the greatest evils we are confronted with in South Africa to-day is that individuals, persons and companies, sit with large areas of land which they do not work and do not develop, but which they hold for a rise in the land market. There are very large numbers of people who want land in this country, but they cannot get it because of other people holding the land and doing nothing to develop it. The Government considers that this is a matter to be dealt with. There is very little income from these large holdings of land simply because they are not worked and developed properly, and if we have to make these large landowners pay their share then special provisions will have to be made in respect of large holdings of undeveloped lands. The Government proposes, with certain exemptions, to apply the principle of an unimproved land tax to those areas. Our object is to exempt all improvements made on the land and to tax only the value of the land itself in those cases in which individual holders own more than 10,000 morgen of land valued at more than £10,000. (“Oh, oh.”) In Australia the Commonwealth Government exempts land up to the value of £5,000, but of course the circumstances in Australia are different from ours. Australia, apart from the desert parts, is a much more densely populated country than South Africa. The holdings here are necessarily much larger than in Australia, and the consequence is that we have to make a larger exemption than is the case in Australia. We therefore want to double the exemption they give in Australia and exempt all lands of a less value than £10,000 and of a less area than 10,000 morgen. Take the North-western part of the Cape Province and take a large part of the Transvaal and Bechuanaland, where it is impossible to develop the land—it is impossible to tax people who have smaller holdings. Of course if their income is large enough they will pay an income tax.

The result will be if these two exemptions are given that areas under 10,000 morgen and of a less value than £10,000 will not be taxed. There are many holders in this country who have much more land than that. Take the Transvaal alone—in the Transvaal there are 17 individuals and companies who hold more than 50,000 morgen, and there are seven who own more than 100,000 morgen, while there is one company owning almost 1,000,000 morgen of land. If we are to develop the country some policy will have to be adopted to make these large landowners develop their ground and let loose the ground which lies under their control, and which is so necessary for occupation by others.

Now there are the loan estimates. I have just laid on the Table the loan estimates for the coming year, and I will not refer in detail to all the items. The total for 1914-15 will be £5,719,558; of this, millions will go to railways. The actual expenditure of the railways on loan account in 1915-14 was £2,300,000, so they are getting practically the same amount again. This does not include any new railway construction, and it is not the intention of the Government as at present advised to bring forward any new construction this session. We passed a very large programme last year, and the construction of those lines has not been proceeded with because of circumstances known to everybody in this country. It will take us some years to get through that programme, and the Government think it is not wise to press further schemes, but rather supplement our railway policy by a bolder irrigation policy.

The amount which will be allocated to land settlement this year will be £233,000. Last year it was £213,000. I wish to give some figures showing the operation of land settlement this year. Under the Land Settlement Act of 1912, Government settled on the land last year 276 settlers. They got 117,000 morgen of land, valued at £238,000. Of course, in certain areas, we did not bring into operation the Land Settlement Act, but we made use of pre-Union Acts and regulations. Under these 331 settlers were put on the land, and they got 100,000 morgen, of a value of £150,000. For irrigation we propose this year to allocate £550,000. The issue last year was £260,000, so a considerable advance is being contemplated. In the Estimates are a number of these schemes it is hoped to push on this year. Three of them are large schemes. There is the Brandvlei Reservoir, near Worcester, which will supply water to all the irrigation schemes lower down the Breede River. That will cost £100,000, and a start will be made this year. The next scheme is the Worcester Robertson Canal, which will bring under irrigation an additional 17,500 morgen, at a cost of £438,000. The third, and bigger, scheme is on the Crocodile River, in the Transvaal. It is proposed to block up the Magaliesberg, and make a big dam. (Government cheers.) It will cost £605,000, and will bring under irrigation 15,000 morgen.

With regard to the public debt of the Union (proceeded the hon. Minister) last year the funded debt on the 31st March, 1913, was £105,856,994. That has been affected by the loans raised last year. Hon. members will remember that we raised £6,000,000 here in the Union, to be substituted for Treasury bills held by the Public Debts Commissioners, and we raised in London two loans of four millions, amounting altogether therefore to £14,000,000. Of course, we have not been paid in toto for the last loan raised in February. We have not received all the proceeds, and the total amount of fresh funded debt under this loan is £12,684,000, but we have at the present time redeemed and cancelled debt to the amount of £869,000, so that hon. members will see that there has been a net increase in our funded debt during the year of £11,815,000, and that, with the £105,856,000, brings the funded debt to £117,671,000.

The floating debt we have reduced very considerably. We have created £8,770,000 and have redeemed £13,433,000. We have therefore reduced the floating debt by £4,633,000, so that we have left of our floating debt £7,308,625. Altogether the total indebtedness at present is £124,980,000; roughly £125,000,000. The total indebtedness at the 31st March, 1913, was £117,829,000, and, therefore, there has been an increase of debt of £7,151,000. At Union the debt was £116,502,000, and now on the 1st March, 1914, it is £124,980,000; therefore the total increase of the indebtedness since Union is £8,478,000. We have redeemed debt at a great pace.

Since Union we have devoted to debt redemption £4,848,000. This is at the rate of £1,264,000 per annum. The result is, therefore, that we have been redeeming debt at a greater rate than one per cent per annum on the whole amount of the indebtedness since Union. By far the larger part of our debt consists of railway property, and the railways are keeping up their assets in the way which I think cannot be criticised in the least. The result is that, notwithstanding the provisions made on the railways, the major part of our debt is devoted to reproductive services, we are still redeeming at the rate of more than one per cent on the total. I challenge my hon. friends to show me one case where a Government is redeeming debt at this rate.

I just want to give one more figure to the House to show that our indebtedness even our total indebtedness of £125,000,000 —is a very reasonable amount. If you take the Commonwealth and States of Australia and calculate their indebtedness per head of the population, you will find that it is £58 10s. per head, while in New Zealand the indebtedness is £82 7s. per head. In South Africa, if you take three natives and coloured persons as equal to one white, which is the usual thing, our indebtedness is £39 6s. per head. (Hear, hear.) I mention these figures because I think, sir, that it all bears on this question of revising the policy which we laid down of carrying surpluses towards sinking fund. I think it is a policy which calls for revision. I am sorry I have detained hon. members at such length. (“No.”) The matters which have been touched upon and which concern the future financial policy of this country are of the deepest importance and concern to this country, and I therefore think that they deserve the most careful attention of hon. members. I beg to move, sir, the motion standing in my name. (Loud cheers, during which the hon. gentleman resumed his seat after speaking about two and a half hours.)

Of course, every strike had its educative effect, and whether it was successful or not the educational value of every disturbance was very large indeed. (Labour “Hear, hears.”) He thought that this matter could be very well developed in an important speech if one had the time or if one was speaking to a Debating Society, but as a matter of fact he thought it necessary to point out this difference, because he wanted to make it plain that this Bill approached the question of the relations of capital and labour from the first point of view, and he rather expected, and it was quite possible, that the people who took the second point of view would oppose any legislation of this kind. They were against collective bargaining. (Labour interruptions.) He did not know whether hon. members on the cross-benches were revolutionaries or reformers or both; they would have to settle that point among themselves. He said that people who did not wish to see better relations established on the existing basis would oppose any legislation of this kind. On an occasion like that he thought that one should just touch upon the experience of other countries, because it served as a guide when they started to deal with their own problems. In the United Kingdom they found that industrial legislation for the purpose of regulating the relations between employer and employee was first introduced as far back as 1824. A second attempt was made in 1867, and a further attempt in 1872, but as a matter of fact all these attempts were regarded as premature, and although they appeared on the Statute-book they had little practical effect, and one could really say that the first Act of the British Parliament which had any real consequences was the Conciliation and Arbitration Act of 1896. The main provisions of this Act of 1896, under which a great deal had been accomplished, was its voluntary system by which Conciliation Boards were established between the employer and his employees or a group of employers and a group of employees.

The number of representatives on both sides was equal, they had their own rules, they appointed their own chairman, and decided whether they would go in for arbitration or not, and what classes of dispute should be relegated to them. There were over 300 of these Boards working in the United Kingdom at the present time. It was rather instructive to see on what lines they had formed their rules, and he proceeded to quote figures to show what steps these Boards had taken. Under the English system this Act of 1896, a considerable amount of latitude was left to the Board to arrange as to how they would do their work, and deal with the disputes which came before them. There were over 300 Boards in existence, and last year over 2,000,000 employees were interested in these Boards.

On the Continent of Europe they had adopted a different system. They had not gone in for collective bargaining, which the English-speaking people of the world had adopted. They had special courts for all industrial disputes. These courts consisted of an equal number of representatives of the employers and the employees. This was the system in force in France, Germany, Switzerland, and practicably the whole of the Continent. In the United States they had also made several attempts, but the only one that had had any direct effect was made in 1898. This Act dealt with the employees on the different railways. For the first 81/2 years only one case was brought under this Act, showing how slow the people were in accepting the provisions of the measure, but since then any important disputes on the railways had been dealt with under this Act. Up to 1911 over 70 cases had been dealt with, and the results had been very satisfactory. The provisions of the Act were very simple, and provided for voluntary conciliation or arbitration, and the machinery of the Act could be set in operation at the instance of one or other of the parties. When a complaint was lodged, Commissioners visited the place and dealt with the matter. They met the parties separately, and in the majority of cases they had arranged a settlement and avoided a strike.

In practice it had been found that the conciliation part of the Act was the most important. The arbitration part very seldom came into force. In Australia, where they had long experience of industrial legislation of that kind, they had gone on the principle of compulsory arbitration. A special court was appointed to deal with those matters, and a judge of the Supreme Court presided over it. A strike or lockout was illegal—the case must go to the Arbitration Court—and pains and penalties were provided to give effect to the findings of the court. One of the main provisions was that the finding must be for a certain time. It bound the parties to the finding of the court, and they could not re-open the matter during the stipulated period. This led to great inconvenience, as the conditions of the trades continually vary. Besides, they found great difficulty in enforcing the awards. He found that in New Zealand a new Act was passed last year, and that they had abandoned the old basis, and had gone on the English principle more for conciliation. In Canada, in 1907, an Act was passed to prevent or delay, if possible, strikes in the public services. The main principle of the Canadian Act was known through the Transvaal Industrial Disputes Act, under which a case was being heard now. The main principle of the Canadian Act was that when a public utility service was in jeopardy, and the community was affected, they became a third party in the dispute —it was not then a dispute between the employer and the employee, but the general public came as a third party, and it was laid down that before they struck work the general public must have a say in the matter, and must know what was the cause of the dispute and who was right and who was to blame. For that time was required, and the Act laid down that before any change in wages and the conditions of employment was made a month’s notice must be given. After that notice had expired, and if there was still a difficulty and a chance of a strike, then an inquiry was held. A Board was appointed, and both sides selected representatives to that Board, and they inquired into the matter, and no strike might take place within a month of that Board reporting. It was hoped that during that period a settlement would be brought about. As a matter of fact, the British Board of Trade sent a Commissioner, Sir George Askwith, in 1912, to investigate the working of that Canadian Act, and, on the whole, his report was a very favourable one indeed. In 1909 the Transvaal Legislature introduced an Industrial Disputes Act, and adopted largely the Canadian principle. What was the position of South Africa at the present moment? Was there any necessity for legislation of that kind? It was true that industrial life in this country was in its infancy, but he thought the experiences they had gone through showed that some legislation of that kind ought to be provided. He found that in the Transvaal there had been since Union the following strikes or disputes: The bricklayers at Pretoria, the masons at Johannesburg, the Transvaal Miners’ Association on the Aurora West, Johannesburg Tramways (twice), and the Transvaal Miners’ Association, so that, in the Transvaal since Union, there had been seven cases. In five out of those seven cases a Board was appointed under the Industrial Disputes Act. The working of that Act had been criticised, but only in one case did a strike take place after the finding of the court was published.

In different parts of the Union there had been fourteen strikes and disputes since the Act of Union came into force.

Proceeding, he said the object of the present Bill was in the first place not to supersede the ordinary law courts. They were not deliberately adopting the Continental system of saying that if there was a question of an interpretation of a contract or anything arising between employer and employee, a special court would be created to deal with it. No, it was proposed to leave the courts of the country undisturbed. The important provisions in the Bill were to provide for the establishment by the Government of a central Labour Bureau with Labour Bureaux elsewhere which would watch over the interests of labour all through the country. The Bill provided also for the registration of Trade Unions by the Government, and the registration of private registry offices and matters incidental there to. There was also the establishment of Conciliation Boards, on the basis of the British system, and simple machinery was to be provided for dealing with disputes when there was no Conciliation Board, or when such Conciliation Board had failed to bring about a settlement. Then there were certain exemptions from the Bill. All Government employees were exempt.

In the course of his explanation of the Conciliation Boards the hon. Minister said that they were based very largely on the provisions of the Conciliation Arbitration Act of England of 1896. The whole idea was that in normal times when the industry was going on in its normal way employers and employees should come together voluntarily and create a Board, which was called the Conciliation Board. This Board could deal with any dispute arising from either wages, hours of labour, or conditions of employment. In that connection he would refer hon. members to the report of the Economic Commission on page 46, where the question was exhaustively treated. At the head of that Commission was a man of great experience and knowledge and in the report they would find that these Conciliation Boards were very strongly advocated. The system was an elastic one. In the majority of cases in connection with the English Boards, they selected a man from amongst themselves to be the Chairman, in some cases for six months an employer would be the Chairman and an employee was the Chairman for the following six months. In still other cases they elected an independent Chairman from outside and occasionally they provided for arbitration; if they could not agree they voluntarily agreed to the appointment of an arbitrator, who settled the matter for them and they were bound by his decision, and in other cases they created a conciliator, and then neither party was actually bound by this third party. All these details were settled in the room and on the whole it had been found that that was the better course to adopt, not to go into details, but to leave it to the parties themselves, All that was provided was that when such a Board was established it could be registered and both parties were bound by their own rules. He thought, judging from experience of the working of the Act in other countries, this would prove in the actual working of the system most effective.

He now went on to the following steps. Suppose there were a difference of opinion between an employer and employees and if there were not a Conciliation Board or, if there were, that they could not come to an agreement, what then? Then clause 15 of the Bill came into operation. It laid down that no change should be introduced in regard to certain points without giving 14 days’ notice. The points referred to were wages, allowances, or other remuneration to any employees or the price to be paid to them in respect of their employment, hours of work, or any conditions of their work, or any terms of their contract of employment. So that, if there were a Conciliation Board and they had agreed to an alteration, say, in the rate of pay, it took effect at once, but if there Were no Conciliation Board or if the Conciliation Board failed to agree, then they must give 14 days’ notice. In this Bill he had shortened the period of the Canadian Act by one-half, and, instead of one month’s notice, he had made it 14 days.

There was, however, a fourth alternative. Suppose that neither party came forward to ask for an arbitrator, a conciliator, or a Board, should the public, then, as represented by the Government, remain outside the dispute and wash their hands of it? They said “No.” Sub-section (d) gave the Minister the option of appointing, of his own motion, either a Conciliation Board or a conciliator or an Investigation Board to go down and investigate the matter and report, and in that way give the public the benefit of an inquiry, give them an insight into the dispute, let them understand what the merits were, and bring public opinion to bear on the dispute. It was very often found that when they got public opinion strongly expressed on one side or the other a settlement was very shortly arrived at. While the investigation was going on under any of these four alternatives, they said in the following chapter, clause 19, that no strike or lock-out could take place. There could be no strike until a ballot had been taken. He found that in the majority of the rules of the existing Trade Unions in South Africa at the present time provision was made for that. He thought it was a safe provision and a wise provision. He knew it was brought forward by the people who sometimes represented the workers that the main benefit of a strike was that it came unexpectedly and that they must strike at once—(hear, hear)—and that if they warned the employer he could prepare himself. It had been found in practice, however, that that was not a sound argument. They saw that in England the railway employees had given notice of what they were going to do on September 15 next, unless certain things happened.

It was only right that a reliable ballot should be held. Now, he came to the next chapter—the registration of Trade Unions The main provision was that any union might come forward and ask for registration. It was a purely voluntary system. Though he found in some countries they had gone in for compulsion, he had thought it better for them to hold out inducements. Among the advantages were that the unions would be recognised in case of a dispute; if any dispute arose they had the right to speak for the men under the options given in clause 16; and another disadvantage was that it would facilitate the recognition of the unions by the employers. Then there was the argument that the employers did not know anything about the Trade Unions, and he pointed out the difficulties that arose in July because the management of the New Kleinfontein refused to recognise the T.M.A. After the T.M.A. was recognised it was found that it did a great deal of good. Trade Unionism had come to stay in South Africa. (Labour cheers.) They must recognise that, and it was only when they provided machinery for the purpose of facilitating the recognition of the Trade Unions by the employers that they could hope to have industrial peace in this country. It might be said that the inducements in the Bill were not enough, but if they were not there was time to consider that question. He thought that those on both sides would see the necessity of the recognition of the union. The fourth advantage that would accrue to the union was the fact that there would be protection for the individual members of these bodies.

Clauses 36 and 38 provided for the auditing of Trade Union accounts, etc. Clause 40 was an important one—(hear, hear)—it dealt with legal proceedings against Trade Unions. The Economic Commission had dealt with the question of the recognition of the Federation of Trades, and had recommended that the Federation should also be recognised. After careful consideration, he had come to the conclusion that they should not adopt that recommendation.