presented a petition bearing over 44,000 signatures, against the proposed import duty of 5s. per hundred feet on bioscope films.

from inhabitants of Boshof, for increased police protection.

from P. S. J. Rademeyer, formerly in the service of the South African Republic, for relief.

from inhabitants of Boshof, praying that it be made compulsory for mines to provide compounds for natives employed thereon.

from J. Kitching, prison warder, to be retired as medically unfit, for relief.

from C. J. Buur, cartage contractor, for compensation in respect of losses sustained by him in an accident on the railway line at Muizenberg.

from F. Caine, Cape Town Police, for a pension.

Report of the SLA. Museum, 1913; Government Notice No. 814, promulgating certain amendments to the Public Service Examination Regulations.

Papers relating to a resolution by the Transkeian Territories General Council on the subject of quitrent, etc.

These papers were referred to the Select Committee on Native Affairs, for inquiry and report.

moved that the items be considered seriatim.

asked the Minister of Finance to make a statement as to the methods to be pursued in regard to any alternative proposals which hon. members might bring forward. He (Mr. Fremantle) took it that they would not be in order in bringing forward alternative proposals in committee, because the committee had not instructions to deal with them, but on Wednesday the Minister of Finance stated that he would have no objection to considering alternative proposals. He (Mr. Fremantle) hoped the committee would consider the question of the preferential tariff. But he understood it would not be possible to do that without a direct mandate from the House, because its abolition would naturally impose fresh taxation. Under the circumstances, he hoped the Minister would agree to the House giving the committee instructions to consider alternative proposals.

did not see how that could be done. He agreed that they should have full discussion on these proposals in committee, but the hon. member came forward with alternative proposals, and he (the Minister) did not see how it was possible for the committee to consider them.

said the Rules of the House provided for alternative proposals in regard to taxation. Rule 94 read: “(1) Unless the proposal for taxation has been first made by a Minister, no proposal to raise funds may be made by a member, and then only to the extent intimated in such Minister’s proposal. (2) When a member, not being a Minister, desires to submit any question similar in effect to such proposal by a Minister, he shall give notice to move in Committee of the Whole House on a future day for leave to submit his proposal for the consideration of the Committee of Ways and Means.”

said it was impossible to take advantage of that Rule, owing to the fact that Government had possession of the Order Paper. It would be very unfortunate if there should be any misconception. He did not think it was necessary to have a Message from the Governor-General to consider the preferential duty, as it was not a question of expenditure but taxation. In the Cape Parliament, the committee simply reported progress, and the House allowed the committee to consider the proposals. He hoped this would be done now, otherwise there would be a feeling among some of the members that they had been misled, although he was quite confident the Minister did not intend in the least degree to mislead the members.

I cannot allow the discussion to go on indefinitely. There is nothing before the committee.

asked what facilities would be given by the Minister for the discussion of alternative proposals. He urged upon the Minister to give facilities to members to take advantage of Rule 94. The Minister got rid of a good deal of discussion on Wednesday afternoon when the House met him, and the impression was left that the Government would facilitate full and ample discussion.

said the point he raised last Wednesday was that it would be better to consider the proposals seriatim than to have a long rambling discussion over the whole matter. He did not understand that the hon. member for Victoria West (Mr. Merriman) suggested that the committee should have power also to consider alternative proposals. No Standing Orders could override the South Africa Act, section 62 of which stated: The House of Assembly shall not originate or pass any vote, resolution, address, or Bill for the appropriation of any part of the public revenue or of any tax or impost, to any purpose unless such appropriation has been recommended by a Message from the Governor-General during the session, in which such vote, resolution, address, or Bill is proposed.”

That is appropriation.

If that is so I won’t raise the point. I do not want to unduly hamper discussion.

said he had come to the conclusion that it would be better to apply Rule 97, and he was prepared to receive any amendment to omit or reduce any item. In view of the fact that no debate took place on the motion to go into Committee of Ways and Means he would give every latitude.

said they were under the impression that the Minister was going to give them every facility. It was up to the Minister to make it clear that the House had not been tricked.

said he could not allow this discussion to go on, and must have a concrete case.

said he wished to point out the circumstances which had led the House to agree to the proposal of the Minister—

remarked that he could not allow a second reading debate.

A deliberate request—

said he could not allow the discussion.

I want to speak on it.

Mr. Chairman, I— (Cries of “Order.”)

moved that resolution No. 2 be taken first.

asked whether members could move amendments to any of these paragraphs?

Yes.

said they wanted to know where they were. Could they move amendments after a resolution had been passed?

answered in the negative.

said he regretted to hear all this discussion at that stage. (Cries of “Order.”) The Minister of Finance had made it clear— (Cries of “Order.”)

said that he could not allow the hon. member to proceed.

I wish to say — (Cries of “Order.”)

I hope the resolutions will be taken as they appear on the Paper.

I would like to ask —

said he could not allow any further discussion.

moved that progress be reported and leave asked to sit again. (Hear, hear.)

The motion was put and

declared the “Noes” had it.

called for a division, which was taken, with the following result:

Ayes—25.

Alexander, Morris

Andrews. William Henry

Baxter, William Duncan

Boydell, Thomas

Creswell, Frederic Hugh Page

Grobler Pieter Gert Wessel

Haggar, Charles Henry

Jagger, John William

Macaulay, Donald

MacNeillie, James Campbell

Madeley, Walter Bayley

Maginess, Thomas

Meyler, Hugh Mowbray

Nathan, Emile

Quinn, John William

Runciman, William

Sampson, Henry William

Serfontein, Hendrik Philippus

Serfontein, Nicolaas Wilhelmus

Struben, Charles Frederick William

Van Niekerk, Christian Andries

Wilcocks, Carl Theodorus Muller

Woolls-Sampson, Aubrey

Charles G. Fichardt and J. G. Keyter, tellers.

Noes—71.

Alberts, Johannes Joachim

Becker, Heinrich Christian

Berry, William Bisset

Bosman, Hendrik Johannes

Botha, Louis

Brown, Daniel Maclaren

Burton, Henry

Chaplin, Francis Drummond Percy

Clayton, Walter Frederick

Crewe, Charles Preston

Cronje, Frederik Reinhardt

Currey, Henry Latham

De Beer, Michiel Johannes

De Jager, Andries Lourens

De Waal, Hendrik

De Wet, Nicolaas Jacobus

Duncan, Patrick

Du Toit, Gert Johan Wilhelm

Fawcus, Alfred

Fremantle, Henry Eardley Stephen

Geldenhuys. Lourens

Griffin, William Henry

Grobler, Evert Nicolaas

Heatlie, Charles Beeton

Henderson. James

Henwood, Charlie

Joubert, Christiaan Johannes Jacobus

Juta, Henry Hubert

King, John Gavin

Kuhn, Pieter Gysbert

Lemmer, Lodewyk Arnoldus Slabbert

Leuchars, George

Maasdorp, Gysbert Henry

Malan, Francois Stephanus

Marais, Johannes Henoch

Marais, Pieter Gerhardus

Merriman, John Xavier

Myburgh, Marthinus Wilhelmus

Neethling, Andrew Murray

Nicholson, Richard Granville

Oosthuisen, Ockert Almero

Orr, Thomas

Rademeyer, Jacobus Michael

Schoeman, Johannes Hendrik

Schreiner, Theophilus Lyndall

Searle, James

Silburn, Percy Arthur

Smartt, Thomas William

Smuts, Jan Christiaan

Smuts, Tobias

Steyl, Johannes Petrus Gerhardus

Theron, Hendrik Schalk

Theron, Petrus Jacobus George

Van der Merwe, Johannes Adolph P.

Van der Riet, Frederick John Werndly

Van der Walt, Jacobus

Van Heerden, Hercules Christian

Venter, Jan Abraham

Vermaas, Hendrik Cornelius Wilhelmus

Vintcent, Alwyn Ignatius

Vosloo, Johannes Arnoldus

Walton, Edgar Harris

Watermeyer, Egidius Benedictus

Watkins, Arnold Hirst

Watt, Thomas

Wessels, Daniel Hendrik Willem

Whitaker, George

Wiltshire, Henry

Wyndham, Hugh Archibald

H. Mentz and J. Hewat, tellers.

The motion was accordingly negatived.

said he would put resolution No. 1.

moved that No. 2 be taken first.

said it was understood on Wednesday that the resolutions should be taken seriatim. (Cries of “No.”) Now the hon. member wanted to jump all over the place.

said he did not agree with the statement of the Minister of Finance. He had stated to the House distinctly that this procedure had been adopted for the purpose of simplifying business and giving the House a full opportunity of discussing these resolutions when they came before the Committee. He had stated that it was the intention when they went into Committee of Ways and Means to make a full and clear statement in connection with each of these resolutions. That most unmistakably did not bind this House to take one resolution before the other in any sense whatever. It did not bind the House as to the order in which the resolutions should be taken. It was distinctly understood when the Minister made his statement that the resolutions should be taken seriatim. Surely it would be quite as easy for the Minister to make his statement on proposal No. 2 before proposal No 1, as it would be to make his statement on proposal No. 1 before proposal No. 2, especially as they knew there was such unanimity amongst hon. members opposite in regard to proposal No. 2. (Opposition laughter.)

said he hoped the Minister would not accept the amendment. He was sorry that on such an important matter as this they should have had the sort of buffoonery they had just had (Opposition cries of “Order” and “Withdraw.”) The hon. member, proceeding, said that if the Chairman asked him to withdraw he would withdraw. It did seem to him that when they were dealing with a land tax or an income tax these were matters which did not provide an appropriate occasion for the display of their wit. Hon. members had come that day prepared to discuss the income tax, and he hoped the Minister would not allow the Order Paper to be altered.

said he hoped the Minister would accede to the request made by the hon. member for Durban, Berea. It was clear that the land tax was a tax that a good many people would get through. It was not a real tax upon land as it should be. It depended a good deal on the shape in which the second resolution left the House as to how far this tax was going to be a reality, and when they discussed the income tax and the various paragraphs in connection with the income tax they must know to what extent the landowner intended to get off scot-free before they decided upon such questions as taxable income. ”

put the motion proposed by Mr. Henderson, and declared that the ‘Noes” had it.

called for a division, which was taken, with the following result:

Ayes—39.

Alexander, Morris

Andrews, William Henry

Baxter, William Duncan

Berry, William Bisset

Boydell, Thomas

Brown, Daniel Maclaren

Chaplin. Francis Drummond Percy

Creswell, Frederic Hugh Page

Crewe, Charles Preston

Duncan, Patrick

Fawcus, Alfred

Haggar, Charles Henry

Henderson, James

Henwood, Charlie

Jagger. John William

Juta, Henry Hubert

Keyter, Jan Gerhard

King, John Gavin

Macaulay, Donald

MacNeillie, James Campbell

Madeley, Walter Bayley

Maginess, Thomas

Meyler, Hugh Mowbray

Nathan, Emile

Quinn, John William

Runciman, William

Sampson, Henry William

Schreiner, Theophilus Lyndall

Searle, James

Silburn, Percy Arthur

Smartt, Thomas William

Struben. Charles Frederick William

Van der Riet, Frederick John Werndly

Walton, Edgar Harris

Watkins, Arnold Hirst

Whitaker, George

Woolls-Sampson, Aubrey

H. A. Wyndham and J. Hewat, tellers.

Noes—58.

Alberts, Johannes Joachim

Bosman, Hendrik Johannes

Botha, Louis

Burton, Henry

Clayton, Walter Frederick

Cronje, Frederik Reinhardt

Currey, Henry Latham

De Beer, Michiel Johannes

De Jager, Andries Lourens

De Waal, Hendrik

De Wet, Nicolaas Jacobus

Du Toit, Gert Johan Wilhelm

Fichardt, Charles Gustav

Fremantle, Henry Eardley Stephen

Geldenhuys, Lourens

Griffin, William Henry

Grobler, Evert Nicolaas

Grobler, Pieter Gert Wessel

Heatlie, Charles Beeton

Joubert. Christiaan Johannes Jacobus

Kuhn, Pieter Gysbert

Lemmer, Lodewyk Arnoldus Slabbert

Leuchars, George

Maasdorp, Gysbert Henry

Malan, Francois Stephanus

Marais, Johannes Henoch

Marais, Pieter Gerhardus

Merriman, John Xavier

Myburgh, Marthinus Wilhelmus

Neethling, Andrew Murray

Nicholson, Richard Granville

Oosthuisen, Ockert Almero

Orr, Thomas

Rademeyer, Jacobus Michael

Schoeman, Johannes Hendrik

Serfontein, Hendrik Philippus

Serfontein, Nicolaas Wilhelmus

Smuts, Jan Christiaan

Smuts, Tobias

Steytler, George Louis

Theron, Hendrik Schalk

Theron, Petrus Jacobus George

Van der Merwe, Johannes Adolph P.

Van der Walt, Jacobus

Van Heerden, Hercules Christian

Van Niekerk, Christian Andries

Venter, Jan Abraham

Vermaas, Hendrik Cornelius Wilhelmus

Vintcent, Alwyn Ignatius

Vosloo, Johannes Arnoldus

Watermeyer, Egidius Benedictus

Wart, Thomas

Wessels, Daniel Hendrik Willem

Wessels, Johannes Hendricus Brand

Wilcocks, Carl Theodorus Muller

Wiltshire, Henry

H. Mentz and H. C. Becker, tellers.

The motion was accordingly negatived.

then moved the following resolution: This Committee recommends (1) That from and after the first day of July, 1914, there shall be charged, levied, and collected throughout the Union for the benefit of the Consolidated Revenue Fund, subject to such conditions and to such exemptions and abatements as may be provided in a law passed during the present session of Parliament, an Income Tax at the rates and calculated in manner specified hereunder, in respect of any taxable income. “Taxable income” shall mean an income exceeding £1,000, which has been received or receivable by, or has accrued to or in favour of, any person wheresoever residing, from any source whatever in the Union, during the twelve months ended the 30th day of June, 1914, and during the twelve months ending the 30th day of June in every year thereafter. There shall be deducted from each taxable income the sum of £1,000, and the amount of taxable income which remains after that sum has been deducted shall be regarded as the “taxable amount” of that taxable income. The rates of income tax in respect of the taxable amount of any taxable income shall be as follows: (a) Where the taxable amount is £1, the rate of income tax shall be 6d, (b) as the taxable amount increases, the rate of income tax per £1 of the taxable amount shall increase uniformly at the rate of one 2,000th of a penny for each £1 of the taxable amount until the taxable amount is £24,000, so that in respect of a taxable amount of £24,000, the rate will be 1s. 6d. for every £1 of the taxable amount; (c) where the taxable amount exceeds £24,000, the rate of income tax shall be 1s. 6d. for every £1 of the taxable amount.

The Minister said he was glad to notice that there was such unanimity about the first proposal that hon. members were anxious to pass on to the more difficult proposals. He thought the best way to get to No. 2 was to dispose first of No. 1. (Laughter. ) He hoped they might be able early this afternoon to come to No. 2. He was rather fortified in this because he had heard, apart from details, which, of course, would appear in the Bill, no objection against this first proposal, except on one point, and that was, that the exemption was too high. (Hear, hear.) He was not going into details, for the simple reason that this was not the stage yet to discuss details. There were numberless points which they could discuss when they came to the Bill. He had had deputations on these points from day to day, from companies, insurance societies, and people who would be affected by this system of taxation. Those points he did not think they should discuss at this stage. (“Oh.”) His hon. friend (Mr. Jagger) shook his head. The hon. member would have a grand opportunity of going into these matters when they came to the Bill. (Laughter.) The scale on which this tax was proposed would, he thought, operate more fairly than the former scale. They had adopted this formula, which gave a regular rise, instead of big jumps, from £1,000 up to £24,000. As to the exemption, there was a great deal to be said for the exemption, as fixed here. Hon. members must bear in mind that, in certain Provinces in South Africa, they had not had this system of taxation before. In the Transvaal and Free State, as far as he was aware, there had never been a system of income tax. The lower they made the exemption, the more difficulties they would have. The difficulties in the way of a tax of this kind would be far more considerable if at the very start they had to deal with the innumerable cases that might crop up all over the country. It was far better to start the tax in a way which would give the Administration a chance to smooth away difficulties which occurred at the outset. It was admitted that those best able to bear taxation should bear it. We required only a certain amount of taxation to make up a shortfall in the revenue. That being so, he did not think they should come down with a heavy hand, but rather let them do it gently, and that was why the Government had fixed the exemption as high as it had done. Thus it would not have thousands of difficulties to deal with in the early stages, but if too much hay were taken on its fork at the present stage, they would be overwhelmed by difficulties with people all over the country, who do not understand this form of taxation. The tax was proposed to be a permanent one, but that was a detail. He believed in the income tax as a sound and a proper tax, much sounder than most of our taxes. (Hear, hear.) If hon. members thought that this should be an annual tax to begin with, there would be no objection to making it so. But if they did make it an annual tax, Government would have much greater chance of tightening it up, as the attention of Parliament would be forced upon the matter every year. There was a great deal to be said on principle in favour of making this a permanent tax, as it was sound in policy. (Hear, hear.) However, he did not propose to disclose the details, as they were in the Bill, and as soon as they had made some headway, he would publish the Bill, which hon. members would be able to discuss. It would simply mean a duplication of discussion to discuss the details now. (Laughter and cheers.)

I have heard many adroit speeches from my hon. friend in the course of my short Parliamentary career since Union, but I have never heard from him a more adroit one than this. (Cheers.) He got us into Committee, and having got into Committee he said it would be better to defer a discussion until he had got the Bill ready, and so he leads us on to taxation and scatters flowers of oratory on our way. (Laughter.) He states that everyone is pleased with this tax. Well, I am not. (Hear, hear.) I am in a minority of one perhaps. (Laughter and cheers.) I don’t think that any taxation should be put on in a lighthearted way, to be screwed up as required. (Hear, hear.) One object of taxation is to make us look after expenditure. If you look after expenditure the revenue will look after itself. But the idea of the Minister is to provide revenue as much as he wants to allow the expenditure to go gaily along. That, continued Mr. Merriman, was the real weakness of this Bill. (Cheers.) He wished to draw the attention of the House to the question, “Do we want this tax?” No member was likely to go back to his constituents and say, “We did not really want this money, but it was such a convenient engine to put into the hands of the Government that we agreed to put the burden on the people, but you, my good friends, won’t pay as you have not £1,000 a year.” (Laughter.) The Estimates this year were swollen beyond all previous records, and they were, compared with the Estimates of last year. But that was a faulty comparison. What they had to base their Estimates upon was not a comparison with the Estimates of last year, but on a comparison of the expenditure of last year, and then they saw what the country really required. We knew that the country was as solvent as any country in the world could be-(hear hear)—although there was a falling-off in diamonds and ostrich feathers and there was a drought over a large part of the country. (Cheers.) We were perhaps, not just going to the top of the wave, although he did not say we were coming down. It was a time when we should be careful and people should not call out for extravagant expenditure. He was astounded to hear an hon. member say we had not enough Civil Servants, as if they were a kind of ornament, and that just as a woman put on a necklet of jewels so we scattered a few more Civil Servants around. (Laughter.) The expenditure of last year, swollen as it was by £300,000 on account of the disturbances, amounted to £16,481,000. The normal expenditure was £16,181,000. This year they were asked to vote £16,818,000 without the Supplementary Estimates. He said that was not right. (Cheers.) These Estimates ought to be reduced. Proposals had been made to refer the Estimates back, but the Minister did not like to do that. No Minister would. But if hon. members were really in earnest and really meant what they said, the only way was to curtail the revenue, which was large enough. (Hear, hear.) Why should they vote fresh taxation simply for the pleasure of the Minister going on with his blown-up Estimates or to enable him to say, when he did not spend it all, “What a clever fellow I am.” (Laughter.) No one was entitled to put on fresh taxation which was not absolutely required.

If they took the Estimates of this year on the basis of the expenditure of last year at the highest amount and including £300,000 of what they trusted would be nonrecurrent expenditure—at £16,481,000 and took credit revenue of £15,707,000, they had a balance to make up of £774,000, against which they had to set-off £250,000 of bewaarplaatsen money. They had also a balance in hand of a surplus not yet allocated of £228,000 on the year before. If they deducted that from the estimated balance of £774,000, they had a deficit of £296,000 which they ought to provide for, not by putting on a tax, but by a moderate readjustment of the Customs Tariff. (Hear, hear.) The Minister of Finance had stated that he liked the income tax. So did he (Mr. Merriman) when he did not have to pay it. (Laughter.) It was a just form of taxation when put on in a just way, but he protested against a tax paid only by a handful of people while the people who spent it did not pay it. With an income tax such as they had in the Australian Colonies, New Zealand and in the Cape at one time, which included a moderate exemption, they had a large number of people interested in checking expenditure, which they would not get now. There was no need for an income tax like that. Why enter upon a pernicious course of an income tax with a high exemption paid only by a few people when at the same time the expenditure was made on the demands of people who did not pay a halfpenny in income tax? That was the way to lead this country to ruin, prosperous as it was. The amount of income tax that would be derived from individuals would be very small indeed, for the greater portion of the money would be obtained from companies. (Hear hear.) He presumed it was not intended to touch the mineral companies, because already a large income was derived from them in the shape of the profits tax. The large companies were mainly composed of small shareholders —people who derived small income from the shares they held in such concerns as banks, insurance and trust companies. Perhaps some poor widow had some shares in a trust company from which she derived her whole income, and it was proposed to tax her to the extent of 1s. 6d. in the £, while allowing people earning big incomes to get off scot free. That was not fair. If the country were in a state of dire necessity he could understand the proposal, but we were not in dire distress. If Parliament provided the Government with a certain sum of money it would have to cut its coat according to its cloth. He was in the same position once as the Minister of Finance is now. He introduced a real Income tax, coupled with a land tax. It passed through the Cape House of Assembly but it was defeated by the capitalist section in the Legislative Council. The Cape Government then reduced its expenditure. The whole value of an income tax was lost by the present proposals of the Government. This value lay in the fact that it brought home by direct taxation the fact to the ordinary man that he had to pay for the Government of the country, but the Government’s proposal was a mere encouragement to extravagance. It was wrong to impose on a small number of individuals the whole burden of taxation. In the Cape in 1904 companies paid 77 per cent. and individuals 23 per cent. of the income tax; in 1905-6 companies paid 78 per cent. and individuals 22 per cent.; in 1906-7, when the spread of knowledge and education had gone on— (laughter)—the companies paid 80 per cent, and individuals only 20 per cent.

The whole burden in 1908-9 on the £1,000 basis fell on 1,600 individuals. Probably most of the well-to-do individuals lived down here, though, perhaps, the wealth was derived mainly from the Transvaal. With regard to the last income tax in the Cape it was a curious thing that the population was divided into three sections. Those with incomes exceeding £50 and not exceeding £300 numbered 135,000, and they paid 30 per cent. of the whole amount of taxation received. Those people between £300 and £1,000 numbered 10,000, and they paid 34 per cent. of the tax; the people above the £1,000—of course, those were very bad times—numbered 1,204, and they paid one-third of the tax. The 135,000 had more voice in the expenditure of the country than the 1,600. He thought the Minister was finding that it was not such an easy thing to get a taxing measure through the House. One ran against a great difficulty, such as had been found in many other countries of the question of farmers’ income. There were very very few farmers who had an income over £1,000; how to arrive at their schedules was one of the most difficult things possible. The only way was by way of the land.

The land?

said that in 1899, when his hon. friend was behind him, he saw that a tax derived from land, instead of an income tax, was the fairest way of taxation after all. He (Mr. Merriman) had at that time no greater supporters than the farmers. Of course, there one was faced with the difficulties of valuation. He did not consider this income tax was required, and he believed it was a grossly unfair way of putting on a tax if it was required. The only time to impose such a tax was when one could distribute it over the whole community.

said that the Opposition had pointed out that the proper way of meeting the position was to cut down the estimates of expenditure, but this view had not been accepted by Parliament. They on that side of the House repudiated any responsibility for the taxation proposals which had been placed before the House by the Minister. If Parliament said that it did not care whether the expenditure was cut down, they would have to consider taxation proposals. He could repeat all his arguments again, but he would not go into the details. He would point out to the House, however, to be very careful of what they passed in the resolution, because the House would be bound by the resolution as worded by that Committee. He thought the first paragraph covered the points raised by the right hon. the member for Victoria West. There was a point he wished to put before the Committee: Whether this was to be a yearly tax or a permanent tax? In the Cape it was stipulated that it should be a yearly tax, and Parliament had to be consulted every year. He thought they would be wise in maintaining that principle, and in saying that it should not be an ordinary source of revenue to be utilised by any Government. He hoped the Minister would accept that principle, and he would propose as an amendment that he should leave out all the words in the first paragraph after “June, 1914.” Another point he wished to bring to the notice of the Committee was the highly-complicated calculations which were proposed by the Minister. The Minister should not think that everybody who paid the tax was a mathematician. He thought that the formula should be simplified, and he suggested that in subsection (b), for the words “l/2,000th of a penny for each £1,” the words “1d. for each additional £2,000” be substituted.

said he thought that would mean an increase of expenditure.

said his friend informed him that it would mean a slight decrease. They would not get a penny until they reached £2,000. Moreover, it would be a simple form which everybody could understand. With regard to some of the exemptions, he would call the Minister’s attention to the fact that certain institutions were very highly taxed already, and on top of that he proposed to put a tax of 1s. 6d. in the £. He had the figures for one of the banks. That bank already paid in licences and taxes £14,881. The bank had to pay licences in the four Provinces—in the Cape amounting to £1,175, in Natal £100, in the Free State £4,425. and in the Transvaal £1,175. Then it had to pay note duty to the amount of £8,060. Now the State intended to put on a profit tax of 71/2 per cent. and it was questionable whether the State would not take a larger amount in proportion of the bank’s money than it derived from the mining industry. This must inevitably fall on the population. There was no doubt that in almost every case the tax would be passed on. If the landlord was taxed the tenant had to pay as the result.

Every time!

said that if they taxed the bank’s profits and made a heavy charge upon that bank, inevitably the public would have to pay. It was going to be taken out of the customer. They were, therefore, taxing not only the rich people, but they were taxing the whole population. There might be a large number of small shareholders in this institution. A man’s income from an institution of this kind might be his only one. It might be so small that he was exempted from taxation altogether in the ordinary way, but surely, if he drew his income from an institution of this kind, he was put on the 1s. 6d. level. In the ordinary way he would not pay taxation at all, because he was exempted, but because he drew his income from a bank or some industrial concern, with a large number of shareholders all over the country, this man was going to be taxed. He hoped that when the Minister considered the exemptions he would carefully consider this point.

His amendments in full were as follows: In line 3, after “Fund”, to insert “for the service of the year ending the 31st March, 1915”; in lines 4 and 5 of the definition “Taxable Income”, to omit “and during the twelve months ending the thirtieth day of June in every year thereafter”; and to omit paragraphs (a) and (b) and to substitute “(a) Where the taxable amount is £1 and does not exceed £2,000 the rate of income tax shall be 6d. per £1; (b) as the taxable amount increases the rate of income tax per £1 of the taxable amount shall increase by one penny per £1 for each additional £2,000 or part of £2,000 until the taxable amount is £26,000, so that in respect of a taxable amount of £26,000 the rate will be 1s. 6d. for every £1 of the taxable amount.”

said that the right hon. gentleman (Mr. Merriman) had given them some interesting information with regard to his own experience in the matter of income tax, and had mentioned the fact that there were 135,000 persons who paid income tax between the limit of £50 and £300, and 1,204 persons who paid on over £1,000. He should say that these 1,204 persons were very fortunate individuals who could snaffle practically one-third of the income of the country.

said that it was a question of the scale on which they paid.

said that the figures at any rate showed how extraordinarily ill-distributed was the annual wealth of the country. He entirely agreed with a great deal that had fallen from the right hon. gentleman with regard to the expenditure and so on, but with a reservation. He (Mr. Merriman) had favoured the House with his personal experience when he tried to put through the income tax, and explained that it was owing to the capitalistic section in the Upper House that his income tax proposal was defeated, and then there was nothing for it but that he had to reduce expenditure and he looked upon that as having been rather a happy and healthy experience. What was the actual fact? Being afraid, not standing to his guns as he should have done, he ought not to have gone on with the government of the country. (Hear, hear.) Failing in a constitutional manner to impose the income tax on the country, he then said that he had got the Civil Service and he would dock their salaries and raise the income tax out of one portion of the community that had not the power to defend itself.

said that the hon. member was confusing two different matters. He (Mr. Merriman) had been speaking of 1909. The Civil Service were docked, unfortunately, in 1908, and not by executive act, but by a Bill carried through this House.

said that, as far as hon. members on those benches were concerned, there would be a good many people who would have to go short of their annual gains—he would not call them “ill-gotten”—before the screw was put on the Civil Service, and they were made to work for less wages than they should get.

For his part, he could not say that he had any great enthusiasm for the income tax. They did say, however, that between a system of indirect taxation by way of Customs and a system of direct taxation by income tax or land tax, they had the strongest objection to taxing the necessaries of life through the Customs House and they preferred a direct system of taxation to that. He disputed to a large extent the statement of the hon. member for Port Elizabeth, Central, that these imposts were always passed on, that a man who had to pay a certain amount more income tax then took it out of the tenants of his houses. He had always understood that the amount of rent a man paid was always determined by the amount the landlord could get. He was surprised that the Minister of Finance, in tackling this question of income tax, had not made some distinction between earned and unearned income, which was now recognised as a very equitable thing to introduce in any taxation of this kind. He would suggest that the Minister as a proposal for his consideration, that if he could confine this income tax to incomes the produce of property, as opposed to professional incomes, wages incomes, etc., he might make the exemption very much lower. He would move that, in the definition of “taxable income,” “£1,000” should be deleted for the purpose of inserting “£300,” and that the following words be added: “which is the produce of property of any description and not the result of the personal exertion of the recipient and.” This phraseology he had taken from some Victorian legislation. It appeared to him that taxation on unearned income was much less open to objection than taxation based on earned income. He hoped that the Committee, in discussing this subject, would keep this question of unearned and earned incomes clearly in their minds and insist upon the Minister bringing forward a proposal which would clearly distinguish between those two classes of incomes.

warned the Committee that in putting aside what the Minister of Finance called the details they might find themselves in exactly the same position as they did when they allowed the motion to go into Committee of Ways and Means to pass without discussion. (Hear, hear.) There was no more difficult question than where, on the Committee stage of a money Bill they could make amendments. (Hear, hear.) There was a large body of precedents on the matter, some one way and some the other, for there seemed to have been no uniformity of practice. If the House did not want to get into a difficulty the proper place to move for exemptions was in Committee of Ways and Means.

said the exemption of £1,000 was probably the highest of any in the world. (Hear, hear.) The exemption in Great Britain was £160, in New Zealand £300, in the Australian Colonies £200, Tasmania £125, Prussia £45, Saxony £20, Baden £25, Bavaria £25, and the United States 3,000 dollars. He admitted that by putting the exemption at £1,000 the Minister had followed the example of the hon. member for Port Elizabeth, Central (Sir E. H. Walton), when that gentleman was Treasurer-General of the Cape, but then it was found to be unjust. The hon. member for Victoria West (Mr. Merriman) went to the other extreme, and taxed down to £50. This high exemption was going to lead to very grave injustice. It was purely a matter of expediency, and the Minister had adopted the line of least resistance. If the Minister had gone into the matter thoroughly, he should have told the House why he had any exemptions at all. (Hear, hear.) The real reason they had exemptions was because the poorer part of the population paid more than its fair share of taxation through the Customs. (Cheers.) This year’s revenue was estimated at £15,897,000, of which taxation would provide £8,259,000, of which £4,615,000 or 55 per cent., would be obtained through the Customs. When a man bought a pound of tea he had to pay 4d. to the State in the shape of duty, and when he spent 4d. on breadstuffs 1d. went to the revenue. Again, on a readymade suit of clothes, costing 35s., 3s. or 4s. was swallowed up in Customs duties. Last year the duty on foodstuffs amounted to £1,303,000, and on clothing to £1,281,000. These taxes were not based upon income or upon a person’s ability to pay, because a man did not buy his tea, coffee, or sugar according to his income but according to his requirements. (Hear, hear.) A man, however wealthy he might be, could not wear more than a certain number of suits of clothes. When a man paid taxes through the Customs he did not pay according to his wealth but in proportion to the size of his family, and the more mouths he had to fill the more taxation did he pay. A man with a small income paid far more than his proper share of taxation—(Labour cheers)—whereas the single man with the big income got off comparatively lightly. The lower the income the heavier the taxation a man paid in proportion to his income. A man earning £3 15s. a week paid 71/2 per cent. of that in taxes. The proper thing to do was to make a fairly liberal allowance for exemption, which might be drawn at £500.

Then there was the injustice to shareholders. Limited liability companies had always been harshly treated. They had to pay a duty on the amount of their subscribed capital—not the paid up capital. Then they had to pay a pretty heavy registration fee and to take out the usual trading licences. In addition to that the Minister proposed to tax every penny of their profits, irrespective of the number of people among whom the profits might have to be divided. A company with 100 shareholders, and making a profit of £30,000, would have to pay on the highest scale, that was 1s. 6d. in the £. When this £30,000 was divided among 100 shareholders it averaged only £300 a-piece. It came to this, that these individuals because they had their money invested in companies would have to pay 1s. 6d. in the £ in income tax, whereas if they invested their money in private concerns they would not pay a penny. Take the case of a mutual life insurance company. It had no shareholders and made no profits. It was proposed to tax it on its income from investments and not on its income from premiums. Unfortunately the Minister of Finance seemed to have taken the hon. member for Port Elizabeth as his pattern on this point. There was the case of the S.A. Mutual Life Insurance Company, which already paid a fair amount of taxation—licences and stamps £1,400 a year and stamps on policies £500 a year. It would under the Minister of Finance’s proposals have to pay in addition £22,000 a year. Ninety-five per cent. of the policy-holders in that company would not pay income tax in the ordinary way at all, and yet they would have to pay a tax of 1s. 6d. in the £ so far as their policies were concerned. It was nothing less than a tax on savings and thrift. (Hear, hear.) It was rather strange that the financial genius of the Minister of Finance should have evolved only two things: a tax on thrift and a subsidy to the landowners through that charitable institution, the Land Bank. The Minister tried to tax at the source—a sound principle, but he had united with that a very high exemption. The position of companies under the Minister’s proposals would be very serious, because the great bulk of the tax would come from them. In 1908-9 there were only four individuals and 35 companies in the Cape enjoying incomes above £10,000. The whole system was grossly unjust.

He had endeavoured to show that 55 per cent of their taxation came out of the Customs, and that when they taxed heavily on the Customs a man paid in duty according to the amount he bought. A man with a big family paid out of all proportion to his income, and he thought that some exemption should have been allowed. It would have been better if the Minister had made allowances for families because the married man paid out of all proportion to the single man. The most remarkable feature of these proposals was the reference to farmers. The Minister followed the example of the hon. member for Port Elizabeth, so they had the result of past experience to go upon. If there was one part of the community who had a difficulty in keeping accounts it was the farming community. He quoted a report dealing with the collections of the Cape Income Tax, to the effect that the officer in charge said that while every effort had been made to get returns from the farmers the result had not been satisfactory. The officer pointed out that another difficulty was the question of the variation in the value of stock at the beginning and the end of the year. The officer said he did not see how the farmers could pay a fair share of the tax unless a charge was levied on the annual rental of their farms or they should be exempted from income tax and charged a land tax as was done in other countries. The hon. member proceeded to deal with the forms that were used in the Cape in order to demonstrate how difficult it was for a farmer to make out correct returns. He pointed out that if a sheep was killed the portion that went to the boys on the farm had to be charged to the working expenses of the farm, while the portion of the sheep that was used in the farmer’s house was taken as part of his income. The wages of the driver who worked on the farm would go to working costs, but if he drove the farmer’s wife out for pleasure that was part of the farmer’s income. He went on to deal with points such as the wages paid for labour on farms and the rations supplied to employees. The only way he said to tax the farmer fairly was to tax him on his land, and that was the course followed in every part of the world. He pointed out that he thought the scheme of the right hon. member for Victoria West was the most perfect so far as the farmers were concerned. The right hon. gentleman taxed them 1/2d. in the £, taking the property as it stood. Then he gave an exemption up to £900, and taxed them on the balance. In Australia—m most of the States—there was a tax of 1d. in the £, and an exemption allowed up to £250. This was an accepted principle all over the world. It was fair to the farmers, and it was very much easier to collect. Of course there was a difficulty of valuation, and it would be unfair to levy on the valuations as they existed in the Cape Province to-day. When a general and fair valuation had been carried out such a scheme of taxation as he had referred to was the fairest. Under this tax the land-owner would practically get off free. According to the last census there were 74,000 farmers in the Cape Colony, out of whom but 219 paid the tax. Where was the justice of letting off a large section of the people and throwing the burden on to a few? They allowed the land-owning section of the population to get money cheaper than any other section of the population. It was the bywoner who paid more than the landowner. He had come to the conclusion that his hon. friend had not given proper thought to the matter. He had not given it proper thought from a scientific point of view. The only science he (Mr. Jagger) could see in it was the gradation, for he did not believe in the rule of thumb method of the hon. member for Port Elizabeth. But the Minister had simply taken the Bill which had been drawn up in a hurry by the hon. member for Port Elizabeth, and had adopted that. To his (Mr. Jagger’s) mind, it should be reconsidered by the Ministry. (Cheers.)

asked the Minister of Finance if the amendment of the hon. member for Jeppe would not mean increased taxation.

was understood to reply in the affirmative.

said that when the limit was reduced from £1,000 to £500, it also made a very important condition as well, as nothing was taxed except unearned incomes. Any man who received £12,000 or £13,000 through his exertions would be free from income tax, but the man who derived his income, whether £300 or £500, from investments and the like—that would be unearned income—would be taxed; while it reduced the limit on the one hand, it confined the tax to unearned income on the other. It was impossible for a private member of that House to have the information at his demand to show definitely whether the amount derived from that tax would be a few pounds more or less.

ruled that he was unable to accept this amendment for the reason that, if carried, persons will be taxed who would be exempted under the original taxation proposals.

protested that if it limited the area in one direction, it extended in another.

I must disallow it.

Then it is on the Minister’s statement. Proceeding, he said he wanted to point out that, when the Minister so adroitly asked them to go into Committee, “to walk into his committee,” as it were, he gave the House to understand that he was going to facilitate discussion.

said that most of the hon. members who had been discussing that measure appeared to ignore the fact that that was a substitution of taxation already remitted. If the Committee was prepared to restore the £1,300,000 railway rates which had been remitted for the benefit of the people of the North and the interior, the £280,000 income tax of the Cape Colony, the £100,000 poll tax in Natal and the half transfer duties, there would be no necessity for this substituted taxation, but they on that side of the House approved of the taxation, because it was a tax which touched wealth and exempted poverty. It was a just tax. What the hon. member for Victoria West proposed was that they should go back to the conditions prevailing in the pre-Union days, when everything was cut down and all development stopped. There was no expansion then. He urged that there could be no reduced expenditure so long as expansion was going on. Through indirect taxation the poor man always paid more than his share, for he generally paid 50 per cent. more than the Treasury demanded from him, because of the middleman, who paid provisionally but reimbursed himself later with interest from the consumer. The law could be regulated according to the financial requirements of each year. He advocated this tax, because it would not disturb prices in the first case, as would an alteration in railway rates or Customs duties. If there were a surplus at the end of the year, they could continue this tax, make it an annual tax, and remit indirect taxation, which was really unfair to the consumer in more ways than one. He had no objection to lowering the exemption, if it could be shown that the country required it. The fact of the exemption being so high indicated what our reserve forces were. If the requirements of the country demanded that the exemption should be reduced to £500, then let them reduce it; but, until he was satisfied that there was any necessity for a reduced exemption, then he did not see why there should be this additional taxation.

said he was keenly disappointed that they had had no clear statement from the Minister of Finance in regard to this tax. There had been nothing to show where the tax was to be collected, whether at the source, or from the individual. Most people reading this resolution would believe that it was to be collected from the individual. He might be told that under our own Act “persons” included limited liability companies. But he found that “persons” included also Divisional Councils, Municipal Councils, and Village Management Boards. He presumed that the Minister was not going to impose his income tax upon those bodies. The Minister had stated that when the Bill was brought up they could consider these matters. The whole question, however, of whether they passed these resolutions depended upon the point as to what these limitations, etc., were. He (Dr. Watkins) had no objection whatever to the principle of an income tax. He would rather have seen an income tax provided as had been indicated by the hon. member for Jeppe which distinguished between earned and unearned incomes There was no indication as to the line the Minister proposed to take in regard to that until he brought in his Bill. A distinction between earned and unearned income was a difficult thing to draw. For instance, would the savings of a man who had been providing for old age be subjected to income tax if they were invested in shares, while the pension which accrued to a Civil Servant would escape? It was stated in the resolution that this tax was to be “subject to such conditions and to such exemptions … as may be provided in a law.” They had had no indication whatever as to what those conditions and exemptions were to be. The one condition laid down in this resolution was that incomes under £1,000 were to be exempt. Judging by the speech made by the hon. member for Cape Town, Central, who assumed the tax would be collected at the source, it would seem that the man who had an income under £1,000 was to be taxed. If that were the case, it was clearly wrong to allow the impression to go forth to the country that people with an income below £1,000 were not going to be taxed. Then again, were people going to be taxed twice? He was sorry to say he did not trust the Minister. (Cries of “Oh!” and laughter.) The Minister had to get money, and if he found that he must keep the meshes of his net small he was afraid that the hon. gentleman would keep them small. Their business, as members of this House, was to see that they were protected, and he thought they should have a definite statement as to what the exemptions were to be. He would take the Minister’s word. Unless some guarantee were given to them as to how this matter would operate, he should be compelled to table a large number of amendments. The hon. member for Cape Town, Central, has referred to life insurance societies. There were many other societies, such as building societies, which were entirely small men’s concerns, and the question arose whether these people were to be taxed.

whose opening remarks were inaudible in the Press Gallery, was understood to say that if railway rates were reduced, in the future he hoped it would not be taken as an argument for an increase of the income tax. It was a mistake to take it for granted that this taxation could not be moved on to other people, because such a scheme of taxation had never yet been devised. He quoted the case of a man who was arranging a lease for the shop at a considerable rental, but when it became known that an income tax was to be introduced, the amount under the agreement was increased for the purpose of covering a tax of this sort. The question was whether this taxation was necessary at all. It was no good to anybody, and he thought they should devote their energies to getting rid of it altogether If they were able to do that it would be a source of satisfaction to the Minister, to the members of that House, and to the people of the country. Continuing, he said that institutions that had been encouraging thrift among the people for many years now found that they were going to pay at the highest rate under the scheme, and he did hope that the Minister would give way on that point, because they should not discourage thrift. He thought that if they made up their minds to do without this scheme of taxation they would be able to accomplish that end. He was half-inclined to agree with the hon. member who said that the Minister had not taken sufficient pains in working out this scheme before he brought it before the House.

said he thought that the Minister would curtail the proceedings considerably if he would tell the House what attitude he was going to adopt with regard to the representations made to him by deputations from insurance and other companies. Most hon. members, for instance, wanted to know the intention of the Government with regard to the South African Mutual Life Assurance Society. That was a South African institution set up by the contributions of small people who wanted to leave something for their families. They were told that this institution encouraged thrift. Would anybody deny that? He did not suppose there were twenty members of that Society whose incomes were over £1,000.

Oh, no. There are 50 in the House.

said that if the Minister was going to apply the tax in a case like that he was going to do a great injustice. The hon. member then went on to deal with other companies in connection with the scheme of taxation, and said that it had been shown that the amount that should go to ordinary shareholders in the shape of dividends would go for the purpose of meeting the tax on preferential shareholders. Instead of paying a dividend to the ordinary shareholder, the amount would go to the payment of a tax levied on preferential shareholders. They were told to wait for the Bill. He did not know what the Bill was going to say, because the Minister did not say anything. Personally he was in favour of an income tax, but he thought that it should be just and fair. He hoped the Minister would have something to say on the question of this possible duplication of taxation.

said that the statement of the hon. member for Cape Town Central, that they should tax the farmer on his capital, was the strangest inconsistency he had heard from that gentleman. He thought it would be most unfair if that House was going to tax the farmer on his capital. If that were done the farmer would have to pay whether the farm brought in anything or not. He thought farmers should be placed on the same footing as anybody else. He thought hon. members were disappointed because they had found that the farmers were poorer than they thought, so they wanted now to tax him on his capital.

said that his hon. friend was quite wrong. Let them take England, where our income tax came from. When they taxed the farmer on the rent of his ground, that was his capital, and he was not taxed on his stock at all. He pointed out that under the same system, which he had adopted in the Cape on two occasions, their object was to make it as easy and simple for the farmer as possible. Taxing the farmer upon the schedule was unfair. To tax him upon the increase of his stock was a most unfair thing, for a great part of his stock might die next year. The only reason for putting that tax on on that basis in the Cape Colony was because of the ostrich farmers, who made large incomes out of comparatively small areas of ground, and the result was that taxing them upon their ground was really an absurdity. So they shifted it on to the schedule, and found that for one year a great deal more money was collected. One hon. member he saw in the House told him that he had paid a great deal more upon his land than upon the scheduled income. It acted differently. Stock farmers, when they paid on the value of their land, paid more than when taxed upon their schedule, because they got adroit in drawing up their schedules. In England they gave the farmer the right to go to the Income Tax Commissioner and demand to be assessed upon his income. That was very good. Sometimes it worked very well indeed. At other times the farmer found himself taxed more upon the basis of his income than upon his land. It was an extraordinarily difficult thing to deal with farmers in respect to the income tax. It was one of the difficulties they had in this country of putting on an income tax, and it was a difficulty which had been faced in every country. In Australia, where an income tax was put on, it was on that basis, and the farmer got off tolerably easy. So he ought to do. He could show a hundred reasons why the farmer should get off lightly. When he was in England he went to the head of the Income Tax Department, who gave him all the information he could, and confided in him (Mr. Merriman) that the farmers in England who were taxed upon the basis which his hon. friend objected to did not pay one-third of what they ougnt to do. He contended that there was no need for imposing this income tax at the present time, and the discussion they had had would show there were an enormous number of difficulties which would have to be considered very carefully before they passed a resolution—if indeed they were going to do so at all. They would find that what the hon. member for Cape Town, Harbour, said was well worthy of attention, because he spoke from experience as a Speaker as well as great experience as a lawyer. The whole thing required very careful consideration indeed. There was a question of exemption for insurance. The only fair way of dealing with that was to give an exemption to a man for the amount of his premium. That was the way he dealt with it in 1908, and the way in which some of the Australian colonies dealt with it. Now it was adopted in England. The evil of that Bill was that that would not meet it at all. It was all very well when they came down to £300 and lower, but the premium would be valueless when they were dealing with people with an exemption of £1,000, and then they would be taxing the savings of the small people at the rate of 7½ per cent. (Hear, hear.) He did not know that they could meet the difficulty by people claiming a refund from the Income Tax Commissioner. That was a very costly and difficult thing and the poorer people were generally the ones who did not get the exemption. It was really only a penal tax upon the people. It was a great misfortune that they should go into a tax at all, and he did urge the House to be careful and above all to be extremely careful that the tax should be so framed that it provided only for the services of the year. An income tax was not a permanent tax. It was an engine of very great power which should only be used in dire circumstances.

said it was the extravagance of the Government rather than the necessities of the country which had given rise to those proposals. Proceeding, he asked the Minister of Finance to give some information regarding the principles of exemption in the proposals. To his mind the exemptions were of the utmost importance. Did the Minister intend to exempt the revenues of building and friendly societies? They were associations of poor men. They were exempt under the Act of 1904, as were mutual ordinary life insurance societies, except so far as investments were concerned. The right hon. member for Victoria West in 1908 agreed to accept an amendment that he (Mr. Alexander) moved to exempt the investments of friendly and benefit societies. Other exemptions in the interests of the small man were also made. Mr. Alexander urged that the Minister ought to tell the House what were the general lines of policy laid down in his Bill, mere particularly with regard to exemptions.

said that the hon. member for Jeppe wanted to tax what he had called unearned incomes. The hon. member reminded him of a character in Dickens who drew the “King Charles’ head ” conclusion from all arguments. His proposal, which he (Mr. Fawcus) was glad to see disallowed, was that a £300 limit should be imposed, which would leave out all the hon. member’s supporters. In so far as the present proposal was direct taxation it had his support. He was a believer in direct taxation. He thought it was necessary to get at every man who had a vote, and bring home to him what the actual cost of government in this country was. The hon. member for Cape Town, Central, had tried to evolve from what he might call his “inner consciousness ” a fair form of taxation. There was no fair form of taxation, except voluntary taxation—(laughter)—and he was afraid that voluntary taxation would not be sufficient to meet the requirements of the Minister of Finance. The hon. member for Cape Town, Central, had also spoken about economies that could be effected. There were economies that could be effected. For instance, he (Mr. Fawcus) would scrap the Mines Department, which was run to-day at a cost of £200,000. He put down practically all their disturbances which started at Benoni to the mining regulations which were brought forward by the Secretary for Mines and the Minister of Mines.

Order. The hon. member must not discuss the Estimates.

Perhaps I am getting away from the subject. (Daughter.) Proceeding, he said that they might also save about £800,000 a year by doing away with the Agricultural Department, which did precious little for the farmers. Until such anomalies as these were removed, he was opposed to additional taxation. One voter out of every five in South Africa today was a man in Government employ, whom the other four voters had to find salary for while he was working, and a pension at the end of his time. It was about time, he thought, that that proportion was altered.

asked would it not better effect the object of the hon. member for Port Elizabeth, Central (Sir E. H. Walton) if, instead of deleting the words, “and during the twelve months ending the 30th day of June in every year thereafter,” he inserted the words, “for the services of the financial year ending March 31, 1915”?

adopted the suggestion, and altered his amendment accordingly.

he was very glad that the hon. member for Port Elizabeth, Central, had moved the amendment in its altered form. He wanted to say a word with regard to the possible danger of exemptions. His hon. friend talked of the premium revenue in the way of life insurance. He hoped the Committee would go very carefully into this matter, because it would be the greatest injustice to tax benefit societies of any kind. It was very doubtful, if they passed the second section as it stood, whether they could exclude premium income. It was very doubtful whether they were not tying their hands, and he thought that further consideration of the question was absolutely essential. Then there was the question of the differentiation between earned and unearned increment. Some of his friends thought that the hon. member for Jeppe had made something of a discovery, but it was in all Income Tax Acts. If the amount mentioned by the hon. member for Jeppe was too low, perhaps the Minister of Finance could meet him. The question was whether they were going to follow the ordinary course of Income Tax Acts, and differentiate between earned and unearned incomes and large and small families. The hon. member for Jeppe’s amendment had been disallowed, but if he met the Minister and consulted with him, perhaps a proposal might be evolved which would not be disallowed. It was only fair to the House that they should be free to consider the question.

Proceeding, the hon. member said that the Provincial Councils were in great difficulties, and they had given them the right to impose direct taxation. As a result of the taxation there they might have a provincial sur-tax, upon the general taxation. The whole machinery of the income tax might be used by the Provincial Councils to impose a sur-tax as a simple way of raising revenue. They should therefore be doubly careful as to the machinery which they set up with regard to their direct taxation. It was no fancy danger which he was putting before the House. It was a most common thing on the Continent, and it was quite possible they would have it introduced into this country as the result of what they were doing if they were not exceedingly careful. He did not think the Minister would get as much out of the tax as he thought he would. It seemed to him (Mr. Fremantle) that taxation of large incomes which left small incomes untaxed was going to be a disappointment in revenue in the same way that it was going to be an injustice in regard to the incidence of taxation. At this point the hon. member moved to report progress and ask leave to sit again.

The motion was agreed to, and leave granted to sit again on Monday.

rising just before six o’clock, said that he thought it was fitting for this House to pass a vote of condolence with the relatives of the late Sir Pieter Faure, whose lamented death they had heard of to-day. Again a man had been taken from their midst who had given much time and energy to the services of South Africa. It was in 1888 when the deceased entered the political life of this country, and for many years he had been a member of Parliament. For twelve years he had been a Minister of the Crown, having during that time been in charge of the portfolios of Native Affairs and Agriculture, while he had also held the office of Colonial Secretary. Sir Pieter rendered great service to South Africa. When a man died and one rose in one’s seat to propose a vote of condolence, one might not always agree with all his views, but he (the Prime Minister) wished to emphasise that in Sir Pieter Faure the country had lost one of its sons who had rendered great services to this country, and he was sure that he was expressing the sentiment of this House when he expressed sympathy with the relatives of the deceased. (Hear, hear.) The Prime Minister concluded by moving as an unopposed motion “That this House having learnt with deep regret of the death of the Hon. Sir Pieter Faure, K.C.M.G., resolves to place on record its sense of appreciation of the distinguished services rendered by him to this country during his long public career as a member of the Legislature of the Colony of the Cape of Good Hope and as a Minister of the Crown.”

in seconding, said he entirely agreed with the sympathetic remarks that had fallen from the Prime Minister in connection with the lamented death of Sir Pieter Faure. He had the honour of being associated for many years with Sir Pieter Faure in politics and also as a colleague, and he thought it could be said of him, as it could be said of very few people who were so long associated with the politics of the country and who took an active part in the political questions agitating this country, and especially during a great period when there was such great differences of opinion, that he had practically not left behind him one single enemy. (Hear, hear.) His disposition was of such a character that, though he took up the strongest position in what he conscientiously believed to be right in the politics of this country, he always did so without making, as he (Sir T. W. Smartt) had said, a single enemy. Everybody recognised the charm of his disposition and his good fellowship, and recognised that in the position he took on political matters was one of conscientious political conviction. The Prime Minister had referred to the many services which Sir P. Faure had rendered to this country. There was one to which he (Sir T. W. Smartt) wished to draw particular attention. That was that during the whole course of his political career he recognised that there should be no racial division throughout the length and breadth of this country, and he (the hon. member) thought that was a position which any statesman might be proud of. In connection with the affairs of this country he would only refer to one matter in which the late Sir P. Faure stood out pre-eminently as having rendered great services to this country, and that was the enormous development which had taken place through the interest he had displayed in the fishing industry of South Africa. He did not believe any Minister of the Crown had ever done so much to assist in developing the fishing industry of this country as had been done by the late Sir P. Faure. He would like, on behalf of hon. members on that side of the House, to endorse everything that had fallen from the Prime Minister and to say how deeply their sympathy went out to Lady Faure and the members of her family in the terrible loss which they had sustained.

said that he would like to add his testimony to that which had fallen from the Prime Minister and the hon. member for Fort Beaufort. He remembered Sir Pieter Faure joining the Ministry of Mr. Rhodes, Sir James Rose-Innes, and Mr. Sauer. He was a gentleman who was particularly liked by Mr. Rhodes. He was always ready to give advice. He (Mr. Merriman) wanted to draw attention to the work Sir Pieter Faure did. He was Minister of Native Affairs, and a most excellent one, being firm, sympathetic, and just, and commanding the confidence of the native races in a very eminent degree. It was rather strange that some of the people who had done more to bring forward a liberal policy in this country in regard to native affairs had been people who had been born in this country. (Hear, hear.) People were often misunderstood in their attitude towards the native races. He would mention a few. There were the late Sir Jacobus de Wet, who fought in many Kafir wars, and there was no better Minister of Native Affairs than he; the late Mr. Sauer, a son of South Africa; the late Mr. Jan Hofmeyr, to whom the natives owed much, and the late Sir Pieter Faure. There was no more kindly disposed man, and no man more eager to give the natives and the coloured people their just rights than Sir Pieter Faure and the others he had mentioned. They had done much in the building up of a native policy on sound lines and he thought the Prime Minister was following in their footsteps and hoped that he would continue to do so. It reflected great credit on South Africa that we had managed to live as we had done with the native races, and to develop their industry, and on the whole he thought we had treated them justly and wisely. Sir Pieter Faure came in new to the work, and took it up with the greatest zeal and success. He (Mr. Merriman) deeply regretted that Sir Pieter had gone to his long home, and he was sure the deceased left behind him a kindly memory in the mind of every man who knew him. (Hear, hear.)

The resolution was adopted, hon. members rising in their places in acquiescence.