from H. Botha and 15 others, for legislation providing for the Direct Popular Vote.

from F. A. Johnson and 1,240 others, in opposition to the proposed Customs duty on bioscope films.

from E. C. Goss, Court Messenger, for a pension.

from W. Langford, formerly in Department of Railways, for commutation of his pension.

from P. Kelly, formerly a clerk in the Post Office, who, owing to blindness, was retired in 1909, for relief.

had moved as follows: 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 ending 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 rate 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.

To this the following amendment had been moved by Sir E. H. Walton (Port Elizabeth, Central): 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 30th 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 he understood that the Chairman ruled that, in regard to certain alternative proposals which the hon. member for Barberton wished to submit to the Committee, it was not competent to receive alternatives. He, therefore, desired to move to report progress and ask leave to sit again with the object formally of passing a resolution to allow this Committee to consider alternatives. He understood from what the Minister of Finance said on Friday that there would be no objection to taking that course.

said he did not think the hon. member was in order in saying that he would not consider alternative proposals. He had given a ruling on certain amendments, but he had never made the statement that he would not consider alternative proposals.

Is it not competent for us to move, as an alternative to the proposals now before the Committee, that the rebate on goods imported from the United Kingdom and other parts of the British Empire be not granted?

If that were moved, I would rule it out of order, because it would be increasing taxation.

put it that, if it were moved as an alternative to the whole of the proposals, would it not be decreasing taxation?

said that the case was governed by Standing Order No. 94.

said that he proposed to take the course there laid down, and he hoped the Minister would offer no objection, so that the Committee might have the necessary instructions to consider these alternatives. He added that he was sorry if he had misrepresented the Chairman in his ruling.

said he did not know what the effect of this motion would be When would they get into Committee again?

Ten minutes.

I don’t know how we can get into Committee again to-day. I thought the hon. member would make some proposal while Mr. Speaker was in the chair. The hon. member waits until we get into Committee, and then moves that progress be reported. If progress is reported we cannot get into Committee again to-day.

Yes, yes.

I don’t know whether the hon. member knows all about the Rules. I don’t see how we can get into Committee again today.

said that this just showed how easy was the downward path. Here they were sitting on a day when they ought not to be sitting—(hear, hear)—and at once the Minister got into difficulties with his own supporters. He (Mr. Creswell) heartily agreed with the hon. member. The position was due to the Minister’s own fault in tempting the House to get into Committee before they were ready. The proper place for really discussing the whole of those alternative proposals was before Mr. Speaker left the chair.

hoped that the Minister would not agree to the hon. member’s suggestion. Why should a private member suggest alternative taxation to the Government? Let them deal with what the Government had put before them. He was going to oppose the motion to report progress.

said that that was an entirely new doctrine which the hon. member had enunciated, and from the rules it seemed clear that a private member might make such alternative proposals. The only way in which that could be done was to report progress, and ask the House to give instructions to the Committee of Ways and Means to consider any specific alternative proposals for new taxation.

said that surely it was only reasonable that they should discuss the various modes of getting the money which the Government required. Whatever suggestion one seemed to make, one was ruled out.

said that they on that side of the House and the right hon. member for Victoria West (Mr. Merriman) had made it clear that additional taxation was not required, and that the Government could effect economies. Holding that view, they said that the Government should not go headlong into that extra expenditure, but should devise other means.

thought that the hon. member for Jeppe (Mr. Creswell) had not correctly understood the suggestion of the hon. member for Port Elizabeth, Central (Sir E. H. Walton). There was no reason why any member should not in the fullest and frankest way point out alternative proposals, but he had understood from his hon. friend that it was not for a private member to move any alternative proposals of taxation, because the Government was responsible for that. The hon. member (Mr. Duncan) also said that, according to rule 94, they could not go into Committee again that day if progress was reported.

said that despite the fact that the Rules of the House contemplated members bringing forward alternative proposals, they now seemed to be debarred from doing so. He had understood on Friday from the Minister of Finance that they would be allowed to pursue that course. His recollection was that it was possible to get instructions from the House, if progress was reported, and then resume in Committee of Way and Means, in ten minutes or so. He suggested asking Mr. Speaker’s ruling on the matter.

said that the hon. member for Jeppe (Mr. Creswell) had evidently misunderstood the hon. member for Port Elizabeth, Central (Sir E. H. Walton). The whole object of hon. members on the Opposition side of the House was not to embarrass the Government.

requested the hon. member to deal with the subject before the Committee.

said that he thought that private members had the right to submit alternative proposals of taxation, as their constituents were the ones who had to pay that taxation. If the Minister had not meant that they could submit alternative proposals by having the fullest and freest debate on the matter, what had he meant?

said that there ought to be no misunderstanding at all about what had taken place. He agreed that if they went into Committee they should discuss these proposals fully and freely, and he had no objection to alternative proposals being so discussed, if the Chairman allowed that to be done. If rule 94, sub-section 2, was to be complied with, he thought it was impossible for them to go into Committee again that day, if progress was reported.

All that could be done was to give notice for a future date, and when the matter had been discussed, it could then be referred to the Committee of Ways and Means. If they followed the Course proposed by the hon. member for Uitenhage, they would lose several days in the discussion. If the hon. member for Barberton wanted to raise alternative proposals, let him do so, and let him criticise the Government’s proposals to the full, by showing that there was a better course. But the alternative proposals would only be used as a means of criticism. He did not think they should shelve the discussion that day.

said he had been misled, and he was sure a number of other members had been misled. The Minister in his speech, as reported in the “Cape Times,” clearly said to the House: “If you will accept my motion to go into Committee of Ways and Means without having a discussion, you will be afforded the fullest opportunities in Committee of Ways and Means of discussing, not only my proposals, but other proposals.” There was no doubt that this was the effect of what the Minister said, and he put it to the Minister that it was his duty to assist the Committee in arriving at that result. If the Minister did not agree, he supposed the faithful followers would do the rest.

said that, as an ordinary member of the House, he understood the Minister to say that he would give the fullest opportunities for discussion. It seemed to him that members were mixing up the question of the discussion and the question of the proposals. What motion could have been moved, then, that could not be moved that afternoon? Rule 94 laid it down that notice must be given of proposals, and these proposals discussed in Committee of the Whole House. Any amendments would have been ruled out of order. What other motion could the hon. member for Jeppe have moved?

said that, by a substitute motion, any hon. members could have got any alternative system discussed. He could have moved to delete all the words after “that,” for the purpose of inserting other words. They were not deprived of anything by the Minister of Finance. He was playing a game, and playing it most cleverly, and the only fault was that they had not played the game so cleverly. The Minister certainly gave the impression that he would not stick to the letter of the law, but give all facilities. He (Mr. Creswell) knew that he could not bring in any alternative detailed measure of taxation, but any amendments giving expression to some other principle of taxation would be quite in order.

said that if they followed the lead of the Minister, many members would feel they had been deceived, wilfully or otherwise. The hon. Minister agreed to a certain course on Friday, and now he raised difficulties as to whether other proposals could be made. He (Mr. Fremantle) thought he gave notice on Friday, but if he had not done so, there need be no difficulty about the question at all. The question was whether the Minister desired it should be done. (Hear, hear.) The Minister now raised the question as to whether they could get back into Committee that afternoon. He thought they could have been out of Committee and back again long ago if the Minister had so desired. Why did not the Minister agree to ask Mr. Speaker? Now, on the Rule 94, it was not possible for him to give notice.

said, if there was any misunderstanding, it was a misunderstanding on the part of the hon. member for Uitenhage. (Cries of “No, no.”) He remembered a similar incident in the old Cape Parliament. But they could not give general instructions to a Committee of Ways and Means to consider alternative proposals, and that was what the hon. member for Uitenhage proposed that afternoon.

That is not true.

Well, that is what I understood. Continuing, he said that if the hon. member for Uitenhage wanted to bring forward alternative proposals he must give notice to the Committee of the Whole House on definite proposals. The House would then go into Committee of the Whole House. There was nothing to prevent the hon. member giving notice of alternative proposals on the following day. These proposals, after being considered by the Committee of the Whole House would be referred to the Committee of Ways and Means. The difference in so far as the Cape Parliament’s instance was concerned was that the Government accepted the alternative proposals.

Will you give facilities?

That is the whole point. (Laughter.) The hon. member can move on any Tuesday he likes. (Laughter.) As to the suggestion that we should take alternative proposals in Committee that was out of order.

Did the Minister of Finance give an undertaking?

He did not. The right hon. member for Victoria West did not use the words “alternative proposal,” because he knows better. He said, “Will you allow a full discussion in Committee of Ways and Means?” To that the Minister of Finance replied “Yes.” But as to alternative proposals no man who knows the rules of the House could suggest such a thing.

I would like to correct my hon. friend. I had my eye more on the general discussion of the finances of the country. Let me point out that when you do have a discussion on the amendments they have to be made in Committee of Ways and Means. In 1908 there was an amendment moved by myself, after notice was given, which was discussed in Committee of Ways and Means at very great length.

said when the House was assured that free discussion would be allowed, the Minister had not made the condition that his proposals only could be discussed. The Minister had asked the House to allow the proposals to go into Committee, and the House had agreed, but by speaking as he had done he had given the House a false impression. He held that the Minister should now meet the House. At the same time he (Mr. Wilcocks) did not greatly favour alternative proposals, as he held the view that such proposals should come from the Government. It was clearly the duty of the Minister of Finance, however, to afford opportunity for the discussion of alternative proposals.

thought if a mistake had been made it was the fault of the Minister of Finance. When the Minister used the words “fullest discussion,” he (Mr. Fichardt) had not the least doubt that the Minister meant that they would be afforded an opportunity of introducing alternative proposals. Otherwise, why use such words? The Minister of Finance misled a great number of hon. members. The Minister of Finance rather surprised him that afternoon, for he was such a great stickler about breaking the law. Why, the House was breaking the law by sitting here to-day. (Hear, hear.)

You fine the shopkeeper.

The Minister does not care a button about the law.

said that in order to put the matter right the least the Minister could do was to arrange the position so that hon. members could discuss these alternative proposals. Was the Minister of Education prepared to wait until June 16 to discuss these alternative proposals? Could not the Minister meet them so as to allow them to bring forward alternative proposals? It was not a question of party but the arriving at the best means of securing the revenue required.

said in 1905 he had made certain proposals relating to School Boards, alternative to those of the Government. He had been obliged then to ask for the recommendation of the Governor-General, and the motion had been put when the Speaker was in the chair. The Minister then met him, and thus he had been able to pass his motion. But the hon. member for Uitenhage to-day aimed at achieving his object in a totally illegal manner, which he (Mr. Vosloo) could not countenance. (Hear, hear.)

said it struck him the House was on the wrong tack altogether. They had been discussing Standing Order No. 94, but that did not refer to the position. What did refer to the position was Standing Order No. 106, which was as follows: “All proposals to raise funds, whether by way of taxation or the imposition of any impost, rate, or pecuniary burdens upon the people shall originate in Committee of Ways and Means, on previous notice given by a Minister; provided that when such proposals are only incidentally involved in a Bill, they may, if recommended by the Governor-General, be proceeded with without reference to Committee of Ways and Means.”

said that by opposing the motion the Minister of Finance was directly going back on the word he gave on Friday. The Minister of Education had put up some proposal which he (Mr. Fremantle) supposed the Minister knew he (Mr. Fremantle) had never suggested at all. He never suggested a general alternative, and the Minister of Education knew perfectly well he never suggested it, but the Minister wanted to make some sort of argument. It was a deliberate breach of an honourable understanding, and was departing from the honourable traditions of the House, and he (Mr. Fremantle) was sorry that it should come from the Minister of Education or anybody else. He wanted to ask the Minister of Finance if he would help them to this extent by giving them an opportunity before the House went into Committee of Ways and Means next time to bring forward their proposals for leave to consider alternative methods of taxation and to take the motion as a formal one, in the same way that the House had taken the Minister’s motion to go into Committee of Ways and Means.

said he thought the House ought to accept the motion of the hon. member for Uitenhage. The Minister of Finance had given the House another wrong impression, no doubt unwittingly. He had told them that they could use arguments as to alternative means of taxation as a criticism of the Government’s proposals. He (Mr. Madeley) would like to have the Chairman’s ruling as to whether that could be done, and what would be the effect of Rule 107. He would support the proposal of the hon. member for Uitenhage.

said he could not understand how the Minister of Finance had misled anyone who had any knowledge of the Rules of the House. (Ministerial cheers.) The hon. member for Uitenhage (Mr. Fremantle) apparently wished that they should break the Rules now, and had in fact invited the House to do so. What the Minister of Finance had suggested was that in order to save a general discussion of the proposals they should go into Committee at once and discuss the proposals in Committee. He found on reference to the report of the speech of the Minister of Finance that not a word had been uttered about alternative proposals—not a single word. It would be entirely out of order to discuss alternative proposals as to taxation. Rule 106 dealt with the matter, and there it was laid down that only a Government could introduce taxation proposals. The hon. member for Uitenhage had had an ample opportunity of dealing with the matter. He could have placed his specific taxation proposals on the Paper, but it appeared to him (the Minister of Railways and Harbours) that the hon. member was not ready with his proposals. (Laughter.)

said if the hon. Minister’s interpretation of the Rules was correct then the House had been misled. The fact was that according to the Rules they would have been out of Committee a long time ago, it a Committee had been agreed to.

said he wished to know whether the Chairman supported the Minister of Finance or the Standing Rules and Orders? Should the Minister’s wishes over-ride the Rules of the House? The hon. member for Victoria West had referred to a case in 1904, but he found that in that year the hon. member, and also the hon. member for Port Elizabeth (Sir E. H. Walton), had moved financial proposals. Everything then had gone as merry as a wedding-bell.

said the Minister of Railways had said that the Minister of Finance had not misled anybody who understood the Rules of the House. He (Sir H. H. Juta) did not agree that Rule 106 affected the matter. The view he took was that all taxation proposals must be introduced by the Crown. Nobody could move, in the first instance, except a Minister. It wanted a Minister first to introduce taxation. Then it seemed to him the ordinary process was that they had got to move for leave in Committee of the Whole House to introduce certain measures in Committee of Ways and Means. He did not think it was fair to say that all the members would have known all about that complicated proceeding. There was no doubt that there was an idea prevalent in the minds of a good many members that they were going to have an opportunity of doing something. He did not know what that something was. (Laughter.) At any rate, it showed that there was an idea that they were in some way or other going to deal with alternative proposals. There was nothing clear as to how they were going to do it. No doubt notice should have been given. He would remind the Minister of Finance that these would-be short cuts were often found to be the longest way round. He could only suggest to the Minister, for what it was worth, that if he really wished to expedite matters, he had better give to those hon. members who thought they had been left under a misapprehension an opportunity of putting forward these alternative proposals; otherwise, he was afraid, they would be taking up a great deal more public time than was really necessary.

said that they had had a very full discussion on this matter, and he thought the time had come when this debate should come to an end. He, therefore, moved that the question be now put.

rose to address the House.

The hon. member cannot debate this motion. (Cries of “The gag.”)

The motion that the question be now put was then submitted, and the “Ayes” were declared to have it.

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

Ayes—54.

Alberts, Johannes Joachim

Bezuidenhout, Willem Wouter Jacobus J.

Bosman, Hendrik Johannes

Botha, Louis

Burton, Henry

Clayton, Walter Frederick

Cronje, Frederick Reinhardt

Currey, Henry Latham

De Beer, Michiel Johannes

De Jager, Andries Lourens

De Waal, Hendrik

De Wet, Nicolaas Jacobus

Du Toit, Gert Johan Wilhelm

Geldenhuys, Lourens

Griffin, William Henry

Grobler, Evert Nicolaas

Heatlie, Charles Beeton

Joubert, Christiaan Johannes Jacobus

Krige, Christman Joel

Lemmer, Lodewyk Arnoldus Slabbert

Leuchars, George

Louw, George Albertyn

Maasdorp, Gysbert Henry

Malan, Francois Stephanus

Marais, Johannes Henoch

Marais, Pieter Gerhardus

Merriman, John Xavier

Meyer, Izaak Johannes

Myburgh, Marthinus Wilhelmus

Neethling, Andrew Murray

Nicholson, Richard Granville

Oosthuisen, Ockert Almero

Orr, Thomas

Rademeyer, Jacobus Michael

Schoeman, Johannes Hendrik

Smuts, Jan Christiaan

Steyl, Johannes Petrus Gerhardus

Steytler, George Louis

Theron, Hendrik Schalk

Theron, Petrus Jacobus George

Van der Merwe, Johannes Adolph P.

Van der Walt, Jacobus

Van Heerden, Hercules Christian

Venter, Jan Abraham

Vermaas, Hendrik Cornelius Wilhelmus

Vintcent, Alwyn Ignatius

Vosloo, Johannes Arnoldus

Watermeyer, Egidius Benedictus

Watt, Thomas

Wessels, Daniel Hendrik Willem

Whitaker, George

Wiltshire, Henry

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

Noes—46.

Alexander, Morris

Andrews, William Henry

Baxter, William Duncan

Berry, William Bisset

Botha, Christian Lourens

Boydell, Thomas

Brown, Daniel Madmen

Chaplin, Francis Drummond Percy

Creswell, Frederic Hugh Page

Crewe, Charles Preston

Duncan, Patrick

Fawcus, Alfred

Fichardt, Charles Gustav

Fremantle, Henry Eardley Stephen

Grobler, Pieter Gert Wessel

Haggar, Charles Henry

Henderson, James

Henwood, Charlie

Hull, Henry Charles

Jagger, John William

Juta, Henry Hubert

Keyter, Jan Gerhard

King, John Gavin

MacNeillie, James Campbell

Maginess, Thomas

Meyler, Hugh Mowbray

Nathan, Emile

Oliver, Henry Alfred

Quinn, John William

Runciman, William

Sampson, Henry William

Schreiner, Theophilus Lyndall

Searle, James

Serfontein, Hendrik Philippus

Serfontein, Nicolaas Wilhelmus

Silburn, Percy Arthur

Smartt, Thomas William

Struben. Charles Frederick William

Van Niekerk, Christian Andries

Walton, Edgar Harris

Watkin, Arnold Hirst

Wessels, Johannes Hendricus Brand

Wilcocks, Carl Theodorus Muller

Woolls-Sampson, Aubrey

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

The motion was therefore carried.

then put Mr. Fremantle’s motion, and declared that the “Noes” had it.

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

Ayes—18.

Andrews, William Henry

Boydell, Thomas

Creswell, Frederic Hugh Page

Fremantle, Henry Eardley Stephen

Haggar, Charles Henry

Hull, Henry Charles

Keyter Jan Gerhard

Madeley, Walter Bayley

Maginess, Thomas

Meyler, Hugh Mowbray

Sampson, Henry William

Serfontein, Hendrik Philippus

Serfontein, Nicolaas Wilhelmus

Van Niekerk, Christian Andries

Wessels, Johannes Hendricus Brand

Wilcocks, Carl Theodorus Muller

Charles G. Fichardt and P. G. W. Grobler, tellers.

Noes—83.

Alberts, Johannes Joachim

Alexander, Morris

Baxter, William Duncan

Becker, Heinrich Christian

Berry, William Bisset

Bezuidenhout, Willem Wouter Jacobus J.

Bosman, Hendrik Johannes

Botha, Christian Lourens

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

Geldenhuys, Louiens

Griffin, William Henry

Grobler, Evert Nicolaas

Heatlie, Charles Beeton

Henderson, James

Henwood, Charlie

Jagger, John William

Joubert, Christiaan Johannes Jacobus

Juta, Henry Hubert

King, John Gavin

Krige, Christman Joel

Lemmer, Lodewyk Arnoldus Slabbert

Leuchars, George

Louw, George Albertyn

Maasdorp, Gysbert Henry

MacNeillie, James Campbell

Malan, Francois Stephanus

Marais, Johannes Henoch

Marais, Pieter Gerhardus

Merriman, John Xavier

Meyer, Izaak Johannes

Myburgh, Marthinus Wilhelmus

Nathan, Emile

Neethling, Andrew Murray

Nicholson, Richard Granville

Oliver, Henry Alfred

Oosthuisen, Ockert Almero

Orr, Thomas

Quinn, John William

Rademeyer, Jacobus Michael

Runciman, William

Schoeman, Johannes Hendrik

Schreiner, Theophilus Lyndall

Searle, James

Silburn, Percy Arthur

Smartt, Thomas William

Smuts, Jan Christiaan

Steyl, Johannes Petrus Gerhardus

Steytler, George Louis

Struben, Charles Frederick William

Theron, Hendrik Schalk

Theron, Petrus Jacobus George

Van der Merwe, Johannes Adolph P.

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

Woolls-Sampson, Aubrey

Wyndham, Hugh Archibald

H. Mentz and J. Hewat, tellers.

The motion was, therefore, negatived.

moved that they take these paragraphs seriatim.

said he regretted he could not accept it.

moved, as an amendment, in paragraph (b), that the words after “received” be deleted, and the word “By” substituted, the effect of which was, he said, that people would only pay on incomes which they had received. He also moved a proviso, at the end of “taxable incomes,” to the following effect: “Provided that revenue accruing to Life Insurance Companies in the form of life insurance premiums shall not be included in taxable incomes.” The hon. member referred to what he had said on Friday, and thought that the proposition he had made was a very fair one. Why should a person pay on an income which he had not received? To make an insurance company pay on all the money which had been collected from policy holders would be taxing the poor man, which he did not think was the intention of the Minister.

said that if they were going to do what the hon. member proposed they were going to cut away at once all income taxes received from mortgages, because the income of these companies was largely invested in mortgages. If they said that the companies were not going to pay, they came down on the mortgagors. At the present time the farmer and the householder deducted his mortgage, and a tax upon that was paid by the mortgagee? Was the mortgagor going to pay? They were going to let the mortgagee off.

No.

said that he presumed that was one of the exemptions which would come under the Act. It was a great misfortune that they did not have the Act there. (Hear, hear.) The contention was that they should not tax investments. Nobody ever dreamt of taxing premium income.

suggested that they should leave out what the hon. member for Von Brandis (Mr. Nathan) had proposed, until they came to exemptions. Under the old Cape Act there had been a number of exemptions, but let them not press a single exemption now by itself.

said that they did not know at the present moment a single exemption which the Minister and the Government wanted to bring in. Let the Minister get up and state what exemptions he proposed. An ex-Speaker of great reputation had said the other day, and another ex-Speaker agreed with him, he understood, that they were not safe to let the Minister take a general motion, and then trust to luck. Proceeding, the hon. member said that they ought to put on record that the taxation of thrift in that country was the greatest blunder which that Government was guilty of. There was the premium income of insurance companies, and they were told by the right hon. member for Victoria West that there would be an exemption in this case. But they only had his word for it.

suggested that if the Minister was going to tax the premium income of benevolent and building societies he was going to get at the poor man.

said he should really have dealt with this point before. (Hear, hear.) Most hon. members were familiar with the framework of taxation proposals and knew that there were certain exemptions. The Bill that would come before the House would exempt Friendly Societies and Building Societies. The Act to be followed by the Government contained these exemptions. The premium income on insurance would also be exempt.

What about the premium of the individual who pays for his insurance?

That is another matter.

It is exempt in England.

said the question had been raised as to whether he should not publish the Bill at once and simplify matters. The procedure was against him—(laughter)—otherwise it might have been possible.

Publish it in the “Gazette.”

said that if he did so the trouble might be that the Bill he published in the “Gazette” might not be exactly the same as the one put before the House. (Laughter.) After these resolutions had been passed, Mr. Speaker would appoint a Committee to draft the Bill, and it was only at that stage that the Bill could formally be brought before the House. Hon. members need not entertain any difficulty about the matter, because they had before them the Cape Act and they were taking 95 per cent. of those provisions, with the exception of a few minor details. The hon. member for Barkly West had raised the question of double taxation, and there he might say there was not the least idea of the income tax being paid on the same income twice. After the income tax has been paid by a company the individual shareholder would not be called upon to pay a tax on a dividend he got. Anybody who knew the Cape Act and the framework of the income tax would know that that could not happen.

said the trouble was that few hon. members had an opportunity of looking at the Cape Act, and fewer still knew of the framework of the income tax. The Minister of Finance was himself to blame for not letting the House know what the exemptions were. In the 1904 Cape Act there was, for instance, nothing said about premiums.

That is in the 1908 Act.

The man with over £1,000, who pays £200 in premiums, ought to be allowed to deduct that amount.

said the Minister wanted them to be guided by the Cape Act, and to put their faith in the Cape Act. The first thing one looked at in the Cape Act, which was very simple, were the words “income derived or received.” For some reason they now had the phraseology which has been received or receivable by, or has accrued to or in favour of. Until they knew the meaning of those words, it was no use asking them to put their faith in the Cape Act. This phrase might mean nothing, but it might mean a good deal. The Minister promised them an explanation, and he was still waiting for the full explanation. (Hear, hear.) If they did not get that explanation they would not know what they were doing.

said he wished to associate himself with the observations which had just been made. There was a further point that he thought the Committee should carefully consider before they accepted the proposals. They had seen during the last week that they had to be very careful (Laughter.) The Minister had said that anybody familiar with the machinery of the taxing measure would know that a number of exemptions were provided for, but was his hon. friend aware of the ruling of Mr. Speaker in the Cape House in 1908. Then in the Cape in 1908 certain taxation proposals were considered by the Committee of Ways and Means, and the Committee of Ways and Means approved of certain resolutions which were incorporated in the Bill. Later on, when this Bill came before the House, the hon. member for Cape Town, Central, proposed an exemption, and Mr. Speaker ruled that the exemption could not be considered, because exemption should have been considered by the Committee of Ways and Means. There were no exemptions at all in the resolution before them. Shareholders in diamond companies already paid 10 per cent. in the profits tax. He was told it was not proposed to tax them again, but there were no exemptions in the Government’s proposals.

The motion stated that the charge shall be subject to such conditions, exemptions and abatements as may be provided for.

The Minister does not know the Rules of the House. Continuing, Mr. Hull said that in the Cape resolution regarding the income tax, there were similar words about exemptions, but when Mr. Jagger moved the exemption of sums paid as life assurance premiums, Mr. Speaker ruled that the proper place for discussing all the details of taxation was in Committee of Ways and Means, and that it was not competent to vary those details when they were included in the Bill, which would give effect to the resolutions of the Committee of Ways and Means. Mr. Hull added that unless the Committee discussed all the exemptions and inserted them, Mr. Speaker would rule that they could not be considered in the Bill.

said that before the Committee went any further it was necessary it should have a ruling as to what its position would be when it got into Committee on the Bill. (Hear, hear.) It would be very unfortunate if, after they had gone through these proposals and found them embodied in a Bill it was ruled that it was not competent to bring forward exemptions or amendments which were not contained in the proposals passed by the Committee of Ways and Means and on which proposals the Bill was drafted. They might be met by the Minister shrugging his shoulders and saying he was very sorry. This was an extremely slip-shop manner of dealing with legislation, for the Minister not to be able to tell the Committee in the clearest manner possible what the Government’s intentions were in regard to the exemptions. The Cape Act allowed £25 to be deducted for insurance purposes, but in the English Act a person could have the whole amount of his premiums exempted so long as they did not exceed l-6th of his income. It was the duty of the Minister to tell the House what the proposals of the Government were. It looked as though the question had not been discussed by the Cabinet.

said that as one who had had considerable experience of Cape taxation, he would say there were some things in connection with it of which they did not approve—(hear, hear)—and which had been found to be very unfair. (Hear, hear.) For instance, a widow receiving an income of £100 from a limited liability company was charged 2s. in the £ on that small income. Every income derived from any limited liability company, no matter how small the income was, had to pay the income tax.

said the difficulty was to get a chance to speak.

We all give way to you.

said the point raised by the hon. members for Barberton and Fort Beaufort was quite a simple one. As to the ruling of Mr. Speaker, which had been quoted, that ruling was not agreed to when the Bill came to be considered. He (General Smuts) did not think there was any reason whatever for doubt on the point. The framework of the resolution was such as to give hon. members opportunity to move whatever exemptions they liked when they got to the Bill. The procedure was a very cumbersome one. (Hear, hear.) First they had to agree to the taxation proposals in Committee of Ways and Means, and only afterwards did they get to the Bill itself. He was very much afraid that if they went into every detail of the present discussion they would simply be wasting their valuable time. That was why he had been trying to avoid details. Hon. members could move whatever they liked when they got to the Bill. When they got to the Bill it would be competent for any member to move exemption. He hoped they would stick to these proposals, for the phrasing was wide enough to cover all the exemptions which might be moved afterwards.

said he did not agree with the Minister that it would have been objectionable to have gone through a lot of cumbersome procedure in dealing with the proposals, because they were placing extra burdens on the people, and the people should be given the opportunity of knowing what those burdens were. He thought it was necessary on an important matter of that sort that they should have the ruling of Mr. Speaker as to what they could do in the Committee stage. He moved that Mr. Speaker’s ruling be taken on that question so that the Committee might know where it was.

said he supported what the last speaker had said, but he wished to know whether hon. members would be entitled to move further exemptions to the income tax, also would it be competent for an hon. member to move the abolition of some of the exemptions which the Government had proposed? Unless the amendment of the hon. member for Fort Beaufort was altered the House would be perfectly helpless to reduce the exemptions, and he suggested that something should be added to the motion of the hon. member.

said it was rather an unusual course to ask Mr. Speaker’s ruling before the Chairman’s ruling had been taken. He thought the Chairman should be asked to rule on the point first. The Chairman should be asked to rule on any point of procedure which arose in Committee. Both in 1904 and 1908 that procedure had been adopted.

said he thought the Minister who had last spoken was rather off the rails. He had suggested that they should not ask for the Speaker’s opinion. He remembered that on various occasions in the Cape House the Chairman’s ruling was not taken and the Speaker was called upon to express an opinion. The Bill would have to be reported to the Speaker, who would be called upon to decide whether certain things could or could not be put into the Bill. It was Mr. Speaker who would be called upon to decide eventually. The Minister knew perfectly well that a very exceptional course was being adopted in connection with the taxation proposals, and he thought that as that was the case the Speaker should be asked to direct their course. He thought it would be most advisable to take the Speaker’s ruling.

That the Chairman report progress in order to obtain Mr. Speaker’s ruling on the following point, viz.: “Whether in view of the phrasing of this resolution members will be at liberty, when the Bill to give effect there to is under consideration, to propose exemptions and abatements not adopted in Committee of Ways and Means”, and ask leave to sit again.

said that on a previous occasion after a measure had been dealt with by Committee it was referred back to the House and then referred to Committee again. A Bill, even a Finance Bill, was open at all its stages to amendment by the House, providing, of course, that it did not increase taxation.

said he did not know where he was. He did not wish the Committee to find itself at a later stage with another ruling, and have lost the opportunity of making any amendment or abatement in the Bill. He desired that they should have the ruling of Mr. Speaker in the present case.

The motion was agreed to.

in the chair.

stated the point which had arisen in Committee.

The question now asked is, I believe, identical with the one raised in the late Cape House of Assembly in 1908, when I gave the ruling as recorded on page 280 of the Votes and Proceedings of that year. The point arose in Committee of Ways and Means when Mr. Jagger had moved a certain exemption. I find, however, that the ruling I then gave is very briefly stated, and I do not think it was fully recorded. What I then wished to impress upon the House was the fact that the proper place where the burden and incidence of taxation should be fixed was the Committee of Ways and Means, and that subsequently when the Bill to give effect to the taxation resolutions was before the House that incidence could not be changed nor the proposed taxes so varied as to increase them. On reference to the Votes and Proceedings of the year 1908, it will be seen that when the enacting Bill was before the Committee of the Whole House (vide pages 403 and 404 of the Votes) a number of exemptions were moved, thus indicating that the ruling was not fully recorded. As instances of the exemptions then proposed I may mention those moved by Mr. Alexander, by Mr. Jagger, and others as recorded on page 404 of the Votes and Proceedings. According to our practice it will be competent to deal with exemptions and abatements in the enacting Bill. Moreover, I would point out that under the form of the resolution which is now being discussed, it is specifically stated that the income tax shall be charged “subject to such conditions and to such exemptions and abatements as may be provided in a law passed during the present session of Parliament.” There can be no doubt, therefore, that honourable members will be at liberty to propose exemptions or reductions when the enacting Bill is before the House.

said that before Mr. Speaker left the chair, there was a further point of order that he wished to raise.

said that he could not give his ruling upon anything except what the Committee had asked him to rule upon.

said that the Committee had agreed to a resolution to report progress and ask leave to sit again. That point of the Committee was over.

said that progress was reported for a definite purpose. He had given his ruling on a definite point and he was unable to deal with any further matter at this stage.

then vacated the chair, and the House resumed in Committee of Ways and Means.

reported that Mr. Speaker had ruled in the affirmative on the question submitted to him.

said that in view of the fact that the Minister of Finance had not taken the opportunity to explain the details of his proposals, he would be reluctantly compelled to move some of the amendments which he intimated on Friday last it was his intention to bring forward. They had appealed to him time after time to give them details of his scheme, but he had made no attempt whatever to give them details, and had simply told them that the details would be found in the Bill. But where was the Bill? The Minister might have saved a good deal of time if he had only put these details before the Committee. With every desire to avoid obstruction or delay, they were forced to state what their position was in regard to exemptions. He would, therefore move his first amendment, which was to add to the resolution “provided that no income tax shall be collected in respect of any income which pays the mining profits tax."

said that the hon. member was wasting the time of the House.

said that, if the Minister would state that this exemption would be provided for, then there need be no further discussion upon it.

said that, in view of the ruling of Mr. Speaker he was quite prepared to withdraw the proviso which he had moved. As to the other amendment, he would like to have an expression of opinion upon it from the Minister. Surely the Minister did not mean that taxes paid by preferential shareholders should be paid by the ordinary shareholder?

How can we do it? We are not dealing with the Company Law.

Then I call upon the Minister to see that the ordinary shareholder is protected.

said that he had half a page there which dealt with exemptions. He read a part of the Bill dealing lengthily with exemptions in regard to the matter raised by the hon. member for Barkly (Dr. Watkins), and said he did not want to weary the Committee, but the exemptions had to be stated in rather complicated language, to make due provision for circumstances which might arise, and the exemption of his hon. friend (Dr. Watkins) was so badly stated that it did not meet its purpose. He hoped that his hon. friend would withdraw his amendment. The hon. member for Von Brandis (Mr. Nathan) had taken it amiss that he had not answered his question of last Friday as to insurance premiums. His hon. friend had priority of raising that question and he hoped that he would get the credit for it. (Laughter.) Proceeding, the Minister said that if the articles of association of a company were so framed that preference shareholders could escape liability, it was impossible for them under an Income Tax Act to differentiate. They did not tax the shareholder, but the income of the company, and if a company in its articles established certain relations between its members which operated hardly, then it was for the company to consider. The company was dealt with as a concern, and that being so, his hon. friend would understand that it was not competent for them to deal with such a complicated issue in the manner he had proposed.

said he wanted to point out to his hon. friend the member for Von Brandis (Mr. Nathan) that the whole object of that Bill was getting the income at its source. They dealt with the company as an entity, and the company must deal with its own affairs.

Will the Minister tell us what other exemptions be is going to give us?

replied it was the old Cape list, with these mining provisions added. The Minister proceeded to read the list, which included revenue of all local authorities, revenue of building and friendly societies, income of life assurance companies not carried on for purposes of gain, except as regards the investments of these societies, incomes of charitable, ecclesiastical and educational institutions, incomes from public stock, and others, such as the moneys of the Governor-General and staff in so far as these were in respect of salary, income of Imperial Government servants in the Union, Consular staffs, and incomes in regard to which mining profits tax had already been paid.

asked whether the Minister proposed to except insurance premiums up to a certain amount, as was done in Britain, so as to encourage thrift.

replied that in view of the high exemption of £1,000 that was not the view of the Government. The British exemption, he pointed out, was very low indeed and where they had such a large exemption, it covered a multitude of sins. All the subtle distinctions which had been drawn were very useful when the exemption which was given was very low, but when they gave a very large exemption, such as they did, he did not think it was necessary to draw distinctions between the bachelor and the married man, earned and unearned income, and the like, as the exemption was already large enough to cover all these cases.

said that he would withdraw his amendment in view of what the Minister had stated, and he would also abstain from moving a number of others, as he had intended to do. He asked whether an allowance could not be made for people who lived in a more expensive part of the country? Government recognised the principle in the matter of the local allowances it made to Civil Servants. It would be easy to make this discrimination, as the Civil Service Commission had designated certain areas as being more expensive to live in than the remainder of the Union.

who supported the suggestion, said the differentiation according to locality was contained in the last draft of the French Income Tax Bill, and there was far more necessity for differentiation in the Union than there was in France. Other differentiations were also necessary. A man might be quite poor on £1,000 a year. The tax should be paid on the average income, for a man might make £1,000 in one year, and much less in the following year. The average should be taken over a period of three years. It was not fair to confine the tax to incomes made in the Union. (Hear, hear.) In England the tax was not confined to incomes derived in Great Britain. A man living in the Union might be enjoying a very large income from mines in Rhodesia, and it was only fair that he should pay income tax. He (Mr. Fremantle) would suggest that the tax should be paid on incomes derived from British South Africa instead of from within the Union only. The Minister should reconsider the question of men with large families, and they should not be treated in exactly the same way as men with small, or no families at all. Continuing, Mr. Fremantle said he wished to draw attention to the extraordinary history of this tax, one Minister borrowing it from another The Union Minister of Finance decided on the spur of the moment to have an income tax, but he did not think out a scheme for himself. Instead, he took the Bill of the hon. member for Port Elizabeth, Central, who when Treasurer-General of the Cape was compelled to impose taxation in a hurry, and no one could criticise him for not thinking out a scheme. In fact, he took the scheme of the hon. member for Victoria West.

With certain additions.

said that with regard to general machinery the Bill embodied a scheme which Mr. Merriman introduced in 1898. It was ridiculous that we should impose taxation of this kind, sixteen years old, without thinking the matter out afresh.

There had since been all sorts of machinery and devices in order to impose an income tax. He submitted to the Committee that, under the circumstances, it was most imprudent to go on with the income tax proposals at all. The Minister had suggested that they should know on what basis the permanent taxation of the country was going to be. He (Mr. Fremantle) thought it was ridiculous to impose unconsidered taxes under these circumstances. He agreed with the member for Victoria West (Mr. Merriman) that there was no reason why they should impose fresh direct taxation at all. He thought that when the House came to deal with the exemptions, that the yield of the tax would be curtailed. Altogether it was not worth having. They must remember that they had a nest-egg in the bewaarplaatsen. With this, if they dealt wisely with the strike expenditure, and cut down expenditure for the present year, they would need little fresh taxation. The right hon. member for Victoria West had suggested taking the surplus of 1912-13, which had gone to the Sinking Fund. He did not think this wise or necessary. But he had also put forward the suggestion that an alteration of the Customs tariff would deal with the whole question. If they dealt with a preferential tariff, they would have enough to settle the whole matter, and he did not think hon. members realised how large a question that was. Figures had never been presented to them unless they had called for them until this year. He hoped hon. members would realise that they were paying £628,000 in rebates.

We are not paying it. We are saving it.

repeated that South Africa was paying in rebates £628,000 a year. In any case, it was money lost to the Treasury. How was that preference working out? The figures were these: 1913, £629,000: 1912, £603,000; 1911, £601,000; 1910, £594,000; 1909, £464,000. It would be seen that the figures advanced with their prosperity, and he hoped they would advance very greatly in the future. What were they getting for it? It was a reciprocal arrangement to some extent. They got nothing from the United Kingdom. Nor was reciprocity such as would benefit them feasible. The views he would like to quote on the subject were those of Mr. Chamberlain, and the views of his Commission. According to the proposals of that Commission only about half per cent. of the exports of South Africa to the United Kingdom would benefit at all. South Africa gave Australia £52,000 a year. That was the figure in 1913. Australia gave South Africa in rebates in 1910 £1,628. Let them come to a clear understanding on the matter. (Cheers.) There was a tariff of 15 per cent and a rebate of 3 per cent. on British goods.

The hon. member went on to say that the point was that differentiation was made. The differentiation that we allowed in the case of Australia was £52,000 a year. The amount they had allowed to us in the year 1910 was £1,628, and in 1911 £794 17s. He had not got the latest figures for Canada, because, for some reason that he was not aware of, they were not published. The rebate allowed in the case of Canada by us was £20,000. He believed that the rebate allowed by Canada in the case of our imports into Canada was a few hundred pounds a year. He would urge that, if taxation were necessary, it would be far better that they should deal with this matter at once, and abolish this preferential arrangement, which was forced upon the people of this country against their will, and which was not in the interests of this country. (Hear, hear.) He detested this preference; he regarded it as a drink of poisonous wine that was being brought to our lips. This procedure had wrecked one British Empire. He hoped to God it was not going to be allowed to wreck another one. At the Custom House in England he had been told that there was a large amount of fraud in connection with this preference. He was assured by the Customs officials that goods were brought into England with the object of getting the advantage of our preference, although they were foreign goods.

said he thought the hon. member would do much better to discuss this question when the Committee dealt with the Customs Tariff.

said he did not wish to dispute the Chairman’s ruling, but he desired to point out that why he brought it up now was because it dealt with a much larger amount of taxation than the proposals of the Minister with regard to the tariff. He brought it forward now as an alternative to the whole of the proposals of the Minister.

said that the hon. member could proceed.

said that there was open fraud going on in connection with this matter. Goods were regarded as British goods if only one quarter of them had been made in England. Goods were sent from the Continent to England to have a little finishing touch put upon them so that they could be brought within the preference. With regard to the effect of this preference, that was, he knew, a most intricate matter, and he would suggest to the Government that they might consider whether it would not be well to appoint an expert Committee of business men and financiers to inquire into the effects of the preferential tariff. He hoped hon. members opposite, who were wedded to the preferential tariff, were not going to get up and say it was certain that the preferential tariff was doing any good to anybody, because that was by no means certain. He found in the Australian Year Book that those who had made investigations, said that British manufacturers had improved their positions in some cases without preference, and in other cases had lost their position with preference, and they added that no indubitable pronouncement in regard to the effect of the preferential tariff could be made. There were grave reasons, Mr. Fremantle went on to say, for believing that one effect of the preferential tariff had been to slacken the efforts of British manufacturers in some cases. (“Oh.”) It had been suggested that this was a matter which should be referred to the Imperial Conference. What, he would like to know, had the Imperial Conference got to do with it? This preferential tariff had come from a South African Conference, a Conference in which a large part of the people of South Africa were not represented “We,” declared the hon. member, “were represented by people who went back on the mandate we gave to them.” This preference, he urged, bad been forced upon South Africa. Ever since the Minister of Finance had been in office it had been suggested to his (Mr. Fremantle’s) mind that he and the whole Ministry disliked preference, but were afraid to deal with it because they might be accused of luke-warmness and half-heartedness with regard to the British Empire. It was time that they cast off those shackles; and were they afraid of casting them off for fear of being accused of disloyalty? Were they to allow for ten years the badge of slavery to remain upon them? (Dissent.) He felt, as Chatham felt, that nothing could justify the imposition of taxation from without, not even the acquiescence of the taxpayer. From an Imperial point of view, it was desirable to put an end to that system, as it was from a South African point of view. There were two creeds about the Empire, and they must choose between them. Must they have an artificial system like that to bind the British Empire together, or must they bind it together by a sense of freedom and liberty?

said that his hon. friend who had just spoken had preference on the brain to such an extent that he had been misleading the House. One would have inferred from what the hon. member had said that something similar had been imposed on South Africa as had been imposed on the American colonies in the eighteenth century. Had ever a more misleading statement been made than that by the hon. member for Uitenhage? The Imperial Government had never pressed for that preference nor asked for it in any shape or form. It had been done by representatives of the colony, and agreed to by that Parliament. The hon. member had talked about the amount of fraud that took place, but what he had said was grossly exaggerated, and there was nothing near the amount of fraud took place that the hon. member had said. Continuing, the hon. member said that no rebate was given, but the foreign-made goods paid 5 per cent. more. It meant that £600,000 was given to the taxpayers of that country. (Ministerial dissent.) It was grossly misleading that House to say that they paid £600,000 to Great Britain. As to not getting preference in Great Britain, they had an absolutely free market there, and what other country gave them that?

Business was suspended at 6 p.m.

resuming, said that when the Committee adjourned before dinner he was dealing with some statements which had been made by the hon. member for Uitenhage. Those statements he then said, and ha now repeated after further reflection, tended greatly to mislead the whole House. That preference for British trade had been adopted not only by South Africa but by other self-governing Dominions. Then the hon. member stated that it had been forced upon this country by threats; but who had threatened? It was simply childish to use a remark of that kind. The hon. member inferred that it had been forced upon the country by the Imperial Government. Had the Imperial Government ever asked for it in any shape or form? Even in the Crown Colonies it was not imposed. They pleased themselves. The idea of thinking that Great Britain or the British Government or the Imperial Government brought any pressure to bear in any shape or form was absolutely devoid of the truth. Another statement was that it revived the old preference, but there was a very material difference indeed between the preference given in those days and the preference given to-day. In those days preference was forced upon them. Did the British Empire force it upon us? At the present time it was absolutely and entirely on the free will of the self-governing Dominions themselves. By resolution that very evening they could take it off, reduce it, or increase it, and there would not be a single word in remonstrance from the Imperial Government. The Imperial Government had made no proposition to give any preference here. Such statements were grossly misleading. What did this preference amount to? It meant nothing more and nothing less than that goods which came from Great Britain were charged 12 per cent. Customs Duty and on goods which we get from other countries 15 per cent. was charged. That was all the difference. If that were done away with we should have to pay £600,000 more in taxation. (Hear, hear.) At the present moment, went on Mr. Jagger, the people of this country keep that money in their own pockets. He had been in business here for 30 years, and was in business before preference was given at all; importers in purchasing their goods give the preference to British goods, every thing else being equal. In his opinion the effect of this preference was greatly exaggerated. As a matter of fact, at the present time this country imports 55 per cent. from Great Britain of the total imports into South Africa. Things such as coffee, tea, timber, oil, wheat, and flour Great Britain could not supply whatever preference was given. Speaking from his own experience, he was of opinion that if they took off preference and made British goods pay 15 per cent., it would not make 5 per cent. difference, That 55 per cent. of imports from Great Britain would not be reduced by 5 per cent. What then was the good of talking? The only result would be that we should have to increase taxation so as to bring in that £600,000. The people would have to pay more. He had always supported preference ever since it was first brought in. He had always looked upon it as some small return of the obligation they owed to Great Britain. Great Britain provided South Africa at the present time with the external defence of the country. Hon. members knew the importance of South Africa as a stragetical position. The Imperial Government provided a fleet which costs annually over £50,000,000 sterling, and this country got the protection of that fleet. It gave just as much protection to South African coasts as to British coasts. This country enjoyed absolute freedom. We were allowed to develop on our own lines in our own way with no outside interference, and enjoying as we did such inestimable advantages, that preference was but a small return of our indebtedness to Great Britain. (Cheers.)

said that with regard to history he had with him some remarks which had been made by Sir Gordon Sprigg, who had voiced the opinion of the vast majority of the people in the Cape of Good Hope. When those remarks were made they, in the Cape, were with the only people who had self-government in South Africa. Sir Gordon Sprigg was then Prime Minister. Sir Gordon Sprigg had gone to the Convention with a distinct pledge that the question of preference would not form part of the Convention. He (Mr. Merriman) had predicted that a tariff would be forced on the country. The High Commissioner at that time was an ardent Imperialist and had, with some others the crazy notion that by preferential treatment they would draw the Empire closer together. What had happened since then? His (Mr. Merriman’s) predictions had been fulfilled, a tariff containing provision for preference had been forced on the country, and with what result? Their trade relations with other portions of the Empire had not improved, they declined. They were now from 3 per cent, to 5 per cent. worse off in those relations, in proportion to foreign countries, than they had been four years ago. The proposed tariff had then not done one atom of good. Preferential treatment so far as Canada was concerned had also done no good. The percentage of British trade with Canada had not increase done iota.

If they went in for preference who were they who would benefit? It went into the pockets of any man, a German or a man of any other nationality who liked to establish a business in England, and that was what they called acknowledging the services of Great Britain. He did not think that the rebates had amounted to £600,000 additional taxation. What it really meant was this—Great Britain only paid 12 per cent., and this country 15 per cent., and the balance went into the pockets of the man who distributed the goods here. What really took place was that a large share of the profits went into the pockets of the middleman He instanced Ford motorcars, and said that the reason the money for them went into the hands of the American manufacturers was because America knew how to push its wares.

said it was quite true that he had moved the resolution which had been referred to some years ago. He (Sir E. H. Walton) was then a free trader. The conclusion he had come to was that free trade might be applied under certain conditions to certain countries, but he did not think it could be applied to this country. As soon as they established industries in this country they had the allied industries of all the world competing with them. If they transferred that tax in the Minister of Finance’s proposal to the hon. member’s proposal, the effect would be this, that they would be taxing the people on the necessaries of life to a great extent, necessary articles of clothing, and necessary articles of food. Instead of putting this taxation as they were on incomes, they would be really taxing the consumers of this country. To the articles of clothing now consumed in South Africa they would be adding 25 per cent. to the Customs duty. So far as foods from Australia, Canada, or Great Britain were concerned, they would all be liable to the same increase of taxation. Therefore, what the hon. member proposed was simply a transference from the taxation proposed by the Minister to the consumers in the country, to the very poorest of them. Every working-man in the country would have to pay his proportion of this additional taxation on the clothing of himself and his wife and family. He would have to pay increased taxation on all his food supplies that were imported. That was a proposal, he thought, which would not appeal to this House or to the country.

As for the whole question of Imperial Preference, he was sorry that the question had been raised, because he did not think that this was an occasion on which they ought to go into the principle. He believed in it, because he believed that ultimately it would lead to our getting a reciprocal advantage in the markets across the seas for our products.

How?

said let them suppose that we had a South African wine or tobacco. We were a young producing country, and had not yet risen to our full height in these matters. In all these articles of produce he maintained that it would be a great advantage to us to have this preference in such great markets. He knew that there was a good deal of opposition amongst certain parties to give any preference. He did not know whether the right hon. the member for Victoria West belonged to one and the hon. member for Uitenhage to another.

I followed you.

But you did not follow me long enough. (Laughter.) I don’t know whom the right hon. gentleman is following now. It is a great thing never to be too old to learn. Continuing, he said he was hopeful that the growth of public opinion and the trend of public opinion would be in the direction in which South Africa had taken a lead. He believed that the common-sense thing for people belonging to one great organisation, one great Empire, as we did, was that we should all combine together to help each other when we could. He wanted to emphasise the fact that all that was meant by the proposal of the hon. member or Uitenhage was that they removed this taxation from people receiving incomes of £1,000 a year and over, and put it on the backs of every man in the country, and especially on the working-men.

said that when the hon. member for Uitenhage (Mr. Fremantle) rose in his seat, he had remarked that the hon. member for Barberton (Mr. Hull) was ready to explain his alternative proposals, and the House had waited to hear these proposals, but surely this suggestion in regard to the preferential tariff had no relation to the hon. member’s proposal?

It is one of them.

said it was not in the proposals submitted by the hon. member for Barberton. But what had surprised him (the Prime Minister) most of all was the tone adopted by the hon. member for Uitenhage. The hon. member, when speaking on this matter, had brought forward the question of loyalty. Now he (the Prime Minister) wished to say that it was absolutely unnecessary to talk about this in South Africa. It was just the sort of thing which the hon. member said about the country when he was talking at meetings. He did not think there was one man in South Africa who regarded this preferential rate as a question of loyalty— with the exception of the hon. member for Uitenhage. Then the hon. member had said that this preferential rate meant a tax of 3 per cent. on South Africa, but he was pleased to see that the right hon. the member for Victoria West (Mr. Merriman) and the hon. member for Port Elizabeth, Central (Sir E. H. Walton) had corrected the hon. member for Uitenhage (Mr. Fremantle) there. South Africa did not pay that tax, he wished to say. It could not by any stretch of imagination be called a tax on the people. If the hon. member wished the people to be taxed, then he should do away with the 3 per cent preference. Proceeding, the Prime Minister said that it was quite true that, when this preferential tariff was established, the people in the North had not had a vote, and had not been consulted. But if he understood the position rightly, he wished to tell the House that at the time there was an idea in England, which was gradually being developed there, at that time to bring about the system of reciprocity between the various Dominions. Of course, that ideal had never been attained, but he did not doubt that, if South Africa received the same reciprocity for what they gave, it would be of the greatest benefit to this country. (Cheers.)

Instead of abolishing the preferential tariff they should try and bring about reciprocity, and South Africa would benefit by it. Let them look at the district of the hon. member for Rustenburg (Mr. P. G. W. Grobler), for instance, where a large quantity of tobacco was grown. If there was reciprocity, farmers would no longer have to look for markets for their tobacco and their wine. If, however, they now abolished the preferential tariff, they would never achieve reciprocity. Now, what was the object of the proposal of the hon. member for Uitenhage? It was to bring about this system of indirect taxation. The question at once arose in his (the Prime Minister’s) mind what the people would say if they had the two proposals properly explained to them. They must not be misled and told that they were at present paying £600,000 in taxation, but they must be told what the real position of affairs was—(hear, hear)— and he held that the people would then agree that the Government’s proposal was by far the better. He held that if they passed the income tax proposals of the Government the majority of the people were not taxed. The same applied to the land tax proposals, which perhaps might be altered in their present form, but even under these proposals the bulk of the people were not touched. As to the Government’s Customs proposals, he held that the only object was to encourage industry. The taxes were by no means general taxes. They only touched the rich man, and the rich man was the man best able to bear the tax. Now it was proposed by the hon. member for Uitenhage (Mr. Fremantle) to impose an additional 3 per cent. on the tax on British goods. What would be the outcome of that? The rich man would pay exactly as much as the poor; in fact the poor Dutch families with 10 or 12 children would be hit even harder than the rich man who had not so many children. (Ministerial cheers.) Proceeding, the Prime Minister said that he had not risen to defend the existing tariff, but he said that it would be bad statesmanship now to pass a resolution to pull down the preferential tariff. It would simply mean that if they did it in that manner they would do great harm to South Africa. (Hear, hear.) There were many ways in which they could deal with this matter and put it to rights. They could put the matter right in a more fitting manner, and they could deal with it when the time came when they had to deal at the Imperial Conference with the country’s naval contribution. (Cheers.)He again said that he was not here to defend the present system, but whatever they did they must deal with the matter in the right and proper way, and not in a haphazard way. In any case, he was not prepared to levy an extra three per cent. duty on imports in order to meet the deficit.

said that various versions of history had been given to-day, and he thought that the two champions of freedom (Mr. Merriman and Mr. Fremantle) ought to have been more consistent. He (Mr. Duncan) had been one of the Imperial nominees representing the Transvaal and he agreed with what the Prime Minister had said, that the people of the Transvaal had not been directly represented. If the people of the Transvaal and of the Orange Free State had complained of preference, he could quite sympathise with them. But who were the people who had complained? The people from the old Cape Parliament. (Cheers.; If there was any body who had passed preference in that country it was the old Cape Parliament. Why had they accepted that “badge of slavery” when their representatives returned from Bloemfontein? if Parliament had not agreed with them, they could have been turned out. Why had it been accepted? Because it was worth while. (Hear, hear.) If anybody was responsible for having fastened that “badge of slavery” on them it was the old Cape Parliament. The taxes fastened on the American colonies had been fastened by the Parliament of Great Britain; and in South Africa that “badge of slavery” had been fastened by the Parliament of the old Cape Colony. Let them not hear anything more of that “badge of slavery” having been forced upon them by the Imperial Government because it was not so. They had been told that British imports had declined since preference, but the figures did not bear that out. The British imports had increased.

The point is, the percentage of British goods to the total imports has decreased.

If that is the right hon. gentleman’s point, I agree with him that the British imports have not increased as the foreign imports have increased. The hon. member added that if the alternative proposal was accepted, and preference was abolished, would it mean that that country was going to stop giving away that revenue? It would mean that a larger revenue was raised through the Customs, and the people of the country, who paid through the Customs, would have to pay more. (Hear, hear.)

said that there was no question of the people of the North having had a say in the question of preference. As to what the Prime Minister had said about the benefits of reciprocity, they had waited twelve years for it; and how much longer must they wait for the benefits to come? (Hear, hear.) It was the hon. member for Barberton (Mr. Hull) who had first drawn attention to the matter of preference, and had spoken against it, and he had then been cheered by hon. members on the Ministerial side. The hon. member dealt with what had taken place in the Senate the previous year, and a member of the present Cabinet (the Minister Without Portfolio) had then spoken against preference, and said it cost the country half a million a year. He did not know if the hon. gentleman was still of the same opinion; at any rate, the motion in the Senate asking for a Customs Tariff Reform Bill had been agreed to. He felt that the alternative proposal which had been made was much better than the Government’s proposals, which were only the thin end of the wedge. He thought that an export tax on rough diamonds could be levied.

said he had listened with great interest to that somewhat lengthy debate. He had listened to the various financial pundits, and while he did not profess to be any great authority on protection or free trade he had nevertheless been wondering what that discussion which had been raging in that Committee on Imperial preference and reciprocity had to do with an income tax. Possibly the answer might be that the matter was introduced by the hon. member for Uitenhage, and the natural consequence was that it had raised considerable interest, especially among the hon. members of the Opposition side of the House, but with the exception of his hon. friend he had heard only one speaker, and that the hon. member for Port Elizabeth, Central, who had mentioned the working-classes in connection with the discussion. It struck him (Mr. Andrews) that the intense interest shown by hon. members in that House in that question of taxation rather indicated that it did not much matter that the wage earner of the country whether he was taxed in one way or another, with the exception of the land tax. On all other matters it was a question of one financial interest or another. They had seen an exhibition in that House of the tendency for one financial interest to shift as far as possible the burden on to another financial interest. That was high politics. The hon. member for Port Elizabeth, Central, spoke truly when he said the workingman had no margin. If they taxed him further they would tax him below the subsistence line altogether. It was to a large extent a matter of indifference whether they had Imperial preference or they had not; or whether they had free trade—he did not know that such a thing existed anywhere anyhow—or whether they had preference; it did not matter to the workingman. In protected Germany and the United States of America there were the same problems of unemployment and poverty as were found in so-called free trade England. In the Australasian colonies even, where one had a free trade policy and another policy of protection—he was alluding to New South Wales and Victoria— the same problems existed so far as the working-classes were concerned. An eminent authority, Mr. Chiozza Money, said that after careful calculation he found that the working-classes on the average received only 4d. on every 1s. of what they produced. What then was a tariff so far as the working-classes were concerned if they were taxed to the extent of two-thirds of what they produced? Proceeding, the hon. member said that economy had been the subject of discussion by many hon. members of that House. The hon. member for Troyeville in effect said, “Never mind expansion or requirements, but cut down expense.” He said that mis-spent money was wasted. He (Mr. Andrews) would agree with that. Much money had been misspent on such matters as the Defence Force, Police, Prisons, Asylums, and matters of that kind, which, had it been spent in other directions, would have been to a large extent unnecessary. The £300,000, the cost of the January trouble, was mis-spent money undoubtedly, and could very well have been avoided by a more far-sighted and statesmanlike policy in the past.

Continuing, Mr. Andrews said that they were not at all solicitous over the savings of the workingman, who did not earn much in any case. He thought he could suggest a simple system of arriving at the farmer’s income—suppose they took the capital value of his property and said that 6 per cent. on that value was the amount of his income, then, he thought, they would arrive at about the amount of his income. Although he admitted that to a large extent taxation did come out of profits he realised that there were some better ways of taxation than others. Therefore, he did not agree with the suggestion of the hon. member for Uitenhage (Mr. Fremantle). He objected to any further taxation through the Customs tariff. He held the view that if taxation were necessary the direct method of taxation was the best. He hoped that if they agreed to an income tax that the graduations would be altered. He was sorry that in all the exemptions there was no one who took notice of the source of individual incomes, if a man had £1,000 or more—whether the income was earned by the personal exertions of a person or was derived from other people’s labour. He moved: In line 1 of the definition “Taxable Income”, after “£1,000”, to insert “which is the produce of property of any description and is not the result of the personal exertion of the recipient of the income, and”.

said he had listened with interest to the remarks of the hon. member for Uitenhage (Mr. Fremantle) because he had expected him to introduce his alternative taxation proposals, but they had not come forward. He had, however, given them some indication of what those proposals were. Boiled down, the proposals amounted to this—that he proposed to substitute for direct taxation, indirect taxation. He (Mr. Fremantle) wanted to take £600,000 out of the pocket of the people of South Africa. They (the Opposition) objected to any such form of taxation, but if they were bound down to some form of taxation they preferred direct taxes. They wanted a tax which would include every man in the community, including the miners in the Witwatersrand, who were earning £60 and £80 per month. Everyone knew that employees on the Witwatersrand earned more than a margin on which they could live.

He hoped if they were to have any more of these alternative suggestions from the hon. member for Uitenhage they would have something more sensible and more in the direction of what modern experience had shown was the right path. He thought it was a fatal mistake on the part of private members of this House to bring forward alternative proposals.

Why?

said he would tell the hon. member why. He thought that, by making alternative proposals, they were taking upon themselves a responsibility which belonged to the Government, and there was also a risk that the Government would accept these alternative proposals as additional proposals. As to the proposed income tax, he was quite prepared, speaking for himself, to pay that income tax if and when he was able to earn £1,000 a year, but he hesitated to support any resolution accepting the principle of income tax until he was perfectly certain that the Government were determined to press on with the proposed land tax. When they had passed the income tax and they came to the next proposal, the land tax, he was perfectly certain that on the part of some of the hon. members who sat on the Government side, large landowners, poor men, there would be an effort made to see that the land tax was amended in such a form that it would never hit the landowners. He felt that, before they committed themselves to the principle of an income tax, they would like to see the Government committed definitely to the principle of a land tax. He had no vindictive feeling against the landowners.

They all knew that hitherto in South Africa the landowner had talked a great deal about being the backbone of the country, but he had taken good care that the country of which he was the backbone should be paid for by the helots in the towns.

said he was rather interested in the things that the hon. member for Bloemfontein would like to see the Government do, but he would have preferred to have had some assurance from the hon. member that he was prepared to help them make the Government do these things. He was sorry that the Prime Minister had left the House. He was rather afraid that the right hon. gentleman would leave when he made one or two attempts to get up. (Laughter.) He had listened with a great deal of interest to his voice vibrating with feeling when he spoke of the poor man paying taxes. If it were such a desperately iniquitous thing that the preference should be taken off, if it were so desperately iniquitous that the poor people of this country should pay taxation through Customs, why not take the Customs duties off altogether? Then they could make up the difference by putting an extra shilling or two on the income tax paid by the rich man. He was afraid, however, that such a course would not have the effect of increasing the taxation on the rich man, but that it would probably mean a reduction of the exemption of income, so far as the poor man was concerned. He was for taking off this preference. He was tired of all this idea of gratitude so far as he was concerned. He did not know what the Free State had to be grateful for. They had never received anything from the British Government that they had any particular reason to be grateful for. The Prime Minister seemed to express his approval of this “gratitude” in his speech. If there were one Government in England to whom they owed a certain amount of gratitude it was the present Government that was in power—(hear, hear)— and the Prime Minister had in an extraordinary way shown his gratitude to that particular Government. First of all, we had had the deportations, and now we had got this question of mutual preference, playing into the hands of the Tariff Reformers, against those who were at present in power. The Prime Minister had then gone on to say that his ideal was a mutual reciprocity. He would like to ask him if he thought it was practical politics that we should have reciprocity with England? He had told them what a monstrous thing it was to place a tax upon the goods that the poor people consumed, and then he had suggested that they should do that in England in order to give us a preference. As to who got the benefit of this preference, he did not propose to pit his views against the experience of the hon. member for Cape Town, Central, but he could not help thinking that there were very keen business men on the other side, and he was not sure that, when they fixed their prices or when they tendered with the rest of the world, they had not some sort of memory of the 3 per cent. preference that they got. Dealing with the proposal of the Minister of Finance, the hon. member said that they in the Northern Provinces had to be educated up or educated down to the taxes, and that was what the Minister intended. By adopting the Minister’s method he would get the principle accepted, and would get it through. There was no doubt about it that there could be economies, and that it was unnecessary to propose taxation, and he agreed with the right hon. gentleman, the member for Victoria West (Mr. Merriman), but he did not think it necessary to go into the matter again.

pointed out that the 3 per cent. preference enabled the British manufacturer to quote his goods at 3 per cent. less, and that the importer could quote British goods at 3 per cent. less than those goods which did not enjoy that preference.

said that if hon. members who had spoken about that £600,000 being saved had had any experience of business they would see that it did not cost the country £600,000, but that it gave an inducement to the British manufacturer. The 3 per cent, preference was a powerful inducement for people to import British goods into this country and to place their orders in England. From his knowledge of business he could say it was the consumer who got the benefit, and he pointed out that a large quantity of foodstuffs and other articles of every-day use were imported from Britain. The late Mr. Hofmeyr had gone to the Ottawa Conference, and his proposal there had been that an extra 2 per cent. should be put on foreign goods and that the proceeds were to be handed over to the Imperial Government for helping the British Navy. If hon. members who had opposed preference that day had opposed that sort of proposal he could have understood them. The whole burden of the Budget speech of the hon. member for Uitenhage (Mr. Fremantle) had been no more taxation. Well, whether it had been by intent or through ignorance, he (Mr. Baxter) thought it was ignorance, the hon. member came forward and said that by putting 15 per cent, duty on all goods, British or foreign, they would raise another £600,000 by means of the Customs. If they abolished that preference it simply meant that the prices of food would go up. The proposal that had emanated from those benches simply meant increase in the cost of living. As to what the hon. member (Mr. Fremantle) had said about Customs authorities in England, what could they know about the import of goods into South Africa? Dealing with the income tax, the hon. member said that if extra taxation was necessary—which he did not admit—an income tax was infinitely better than an increase of taxes and other indirect means. When they came to examine the proposals of the Minister of Finance it seemed he had muddled things up in the most extraordinary way. He mixed up an individual with a collection of individuals. He had not seen, evidently, when he drafted his proposals, that it was one thing for a man who earned an income over £1,000 to pay such and such a tax, and it was another thing when they got a collection of individuals and said they must do the same thing. The Minister’s proposals had no reference whatever as to the justice of the tax falling upon those who ultimately paid it. The analogy between the English principles and what was proposed in connection with South Africa would not bear examination. The hon. Minister ought to go into that matter. If he was going to tax companies, it really meant shareholders, and irrespective of their incomes. A very strong case was made out for the exemption of the funds of life insurance companies, their interests and their loans, because in the long run that money was going to be taken out of the pockets of the policy-holders. They were asking that people who were laying something by for their old age, and doing a national duty by so doing, should be treated differently from the spendthrift; but it was a good thing for a country to subsidise thrift by making it exempt from taxation of that character.

said that he stated on a former occasion that he was not in favour of that taxation. He held that if they cut their coat according to their cloth that taxation was unnecessary, but if taxation should become necessary, it should be put on in a just way, so that every voter, and more particularly every member of that House, should bear his fair share of the burden, so as to prevent the one trying to shift the burden on to somebody else’s shoulders. No respectable landowner, no respectable company, no respectable bank or private investor would dream of trying to shift his share of the burden upon somebody else, who already carried his fair share of that burden, unless that class of person was imposed upon, as would be the case by that proposal. He held that it was unjust that, a certain section should vote expenditure, and when they found themselves in Queer-street, then tax another section to get them out of the mud, while they got off scot free. It was unjust that a certain section should go about burning down houses and stations and then try to get another section to pay for the damage done by them. Certain statements had been made in that House which he could not allow to pass. It was said those proposals affected but 10 per cent. and let the 90 per cent. go free. That was misleading; in reality the 90 per cent. were the people who would pay, and not 10 per cent. He warned the House that the people who were going to pay the tax were the men who required and must have land and money.

The country was passing through a severe drought and a severe money pressure. There should not be a tax at all. If they passed the resolution they must bid goodbye to economy and retrenchment for ever. They would get more and more taxation every year, and he would not lend his hand to that. He would not tax the people of South Africa to enrich a few manufacturers of Great Britain, and would vote against the proposition.

asked if it was fair to other parts of the country that people who had votes should not pay income tax? Was it fair that people who got £1,000 a year or a little less should not pay income tax? Mr. Hofmeyr’s 2 per cent, proposal had been referred to by the hon. member for Gape Town, Gardens (Mr. Baxter), but they were paying £85,000 a year towards the British Navy, and they gave 3 per cent. preference to British goods. He did not favour these preferential proposals. He regretted that the Government had not made the limit lower, and he considered that everyone who possessed a vote should have to pay his share, including those with incomes of £300. He was glad that the Prime Minister had declined to defend the 3 per cent. preference tariff, which the speaker considered was injurious to the Union, and if a motion were brought forward to abolish it, he would feel himself bound to vote for the motion.

said the hon. member for Ladybrand was very much annoyed about the income tax. The curious thing about it was that the tax would have to be paid by someone else. They had had a most interesting discussion with regard to Imperial preference—it was a sort of kangaroo habit. (Laughter.) They had had the extraordinary statement made to them that 3 per cent. was going to make no difference to them at all. Imperial preference was no doubt a matter which was very dear to the hon. members of the Opposition, and perhaps it was thought that that money was going to bind the Empire. There were no family quarrels which caused more trouble than those which were connected with money matters. They could not have an Empire which was founded on £ s. d. It meant that if it were not for the extra 3 per cent. the other man would be able to import his goods here and we should be able to get these particular goods at 3 per cent. less. The hon. member for Ladybrand had given away entirely what the object was of that little group with which he was associated in supporting this. He did not want any land tax; he did not want any income tax; he wanted the extra 3 per cent. put on these things, an extra burden put on the things we all used. Touching on the question of a land tax, Mr. Creswell remarked that they already paid that tax on the land themselves. What they said was that they should tax these landlords, tax them on the site value of the land they owned.

They had been told by the hon. member for Jansenville that a land tax was a tax on capital. Why not tax capital of this kind? Was the taxation of land going to diminish the useable land in this country by one square inch?

said that he had risen for the purpose of mentioning a little matter in which he took some interest. He referred to the position of building and friendly societies in relation to the income tax. He had listened carefully to the list of exemptions read out by the Minister of Finance. So far as he could follow them, they seemed to follow word for word the Cape Act of 1904, except that the Minister had taken one or two points from the Act of 1908. He wished to draw attention to a point that was not dealt with under the Act of 1904. The wording of that Act in relation to these benefit and friendly societies was such that it was considered necessary in 1908 to pass the amendment that Mr. Speaker had referred to to-day. He would ask the Minister if he would not make a similar amendment in his Bill. He was sure that he did not wish to tax benefit and friendly societies at all. He hoped the Minister would amend his Bill so that the income tax collector would not be able to come round and demand that these societies should pay on their investments.

said he supposed they were now coming to a vote, but he had not heard any debate, except from the hon. member for Cape Town, Harbour, on the amendment he had moved.

I will come to that.

said that the hon. member for Jeppe had told them that if they did away with the 3 per cent. preference, they would get their goods at 3 per cent. less. That was a most extraordinary proposition. Listening to the hon. member for Uitenhage, one would have thought that £600,000 was collected here annually, and then sent as a cheque to the British Government. In conclusion, the hon. member contended that the consumer got the advantage of the 3 per cent.

said that, as to what the hon. member for Jeppe (Mr. Creswell) had said, that they were moving the burden on to someone else, he would say that, if this increased taxation was absolutely necessary, and the Government seemed to think it was, he was strongly in favour of an income tax with a high exemption, such as the Government had brought in. If the 3 per cent, preference was done away with, the extra 3 per cent. which would have to be paid through the Customs would be borne by the poorer classes, and he wished strongly to oppose such a thing. The hon. member proceeded to point out that a large number of people got their income from dividends paid by limited liability companies. These people had to pay the highest percentage, but if they had got their income from any other source, and they got less than £1,000, they would not have to pay at all. The hon. member quoted figures relating to the income tax of the old Cape Colony, showing how the various sections had contributed, and went on to say that he saw it was a difficult matter for the Minister to calculate on what he was going to receive from the tax. The Commissioner of Taxes had reported that he had made every effort to get a proper return from farmers, but the result had not been satisfactory, and it was impossible for a farmer, without keeping details and adequate accounts, to say how much of his outgoings were on capital expenditure. He supported the hon. member for Jeppe in his contention that there should be a smaller exemption in the case of bachelors than for married men, and added for the information of the hon. Minister and the House that in Switzerland they had adopted a system of exemption in different parts of the country based on the varying cost of living

speaking in English, said nothing was clearer to him than the ingenuity with which the Minister of Finance had manipulated that business. He had divided hon. members into several camps by giving his proposals separately, so that when he came to the income tax he had a certain section who would support him in that but not the land tax, and when he came to the land tax there were a number who would support that, including the Labour men, who were not in favour of the income tax. Hon. members had been placed in an invidious position. He (the speaker) was certainly under the impression that the Minister of Finance had given them an assurance that in Committee stage an opportunity would he given of instituting some alternative proposals, but hon. members who thought so had been misled. It was too much to expect any layman to know every inch of the rules of the House; even such an eminent authority as the hon. member for Cape Town, Harbour (Sir H. H. Juta) had said that he had been nonplussed in that matter by the Minister of Finance. In future they must carefully consider Ministerial promises.

Because the Minister of Finance very seldom spoke in Dutch he (Mr. Wessels) was speaking in English. Because the Minister did not so often speak in Dutch they (the Dutch members) were losing what was their just right in that House. They had had a great discussion as to the income tax proposals and the matter was still a doubtful one to him. He thought the hon. member for Uitenhage had given the matter very careful consideration. When he came to the question of a preferential tariff he did not understand the commercial pundits of the House. He must confess that he felt sorry for the hon. member for Cape Town, Central (Mr. Jagger), whom he knew to be one of the greatest importers in the country. The hon. member for Cape Town, Central, was supported by the hon. member for Cape Town, Gardens, and he (Mr. Wessels) felt there must be something behind those speeches, as he understood that they were related. He was convinced that the 5 per cent. duty was not enjoyed by the consumer but was going in the pockets of somebody else. He was concerned in the ironmongery business and other articles, and he knew that sometimes the German article had a larger sale because it was the better one. Let him take a concrete case. They had an article, say worth £100, the German merchant would quote the price at £100, but the English merchant would quote it at £102. When the duty was added the German article cost £115 and the English article £114. Nothing had convinced him more than the speeches of the hon. member for Cape Town, Central, and his worthy son-in-law, the hon. member for Cape Town, Gardens, that nobody got the benefit of the preferential tariff more than the wholesale merchants of Great Britain and South Africa. It was not the consumer who got the benefit. The better market to-day for ironmongery, which was so extensively used by the farmer, was not in England but in Germany and the U.S.A. What England did provide was what was known in the commercial world as “softs.” Who wore “softs?” (Laughter.) They all wore softs, but it was the rich people who wore the fine silks and the fine linen. It was no good for these wholesale merchants pleading for the poor man in this matter. It was a poor day when they had to pay money towards the British Crown to show their loyalty. The money went to the merchant’s pocket, and not the exchequer of the British Government. They had not got to pay for the kindness of the British Government towards South Africa. They had to deal with a question of merchandise. His own feeling in that matter was that the hon. members for Cape Town, Central, and for Cape Town, Gardens, had absolutely convinced him that that money went to the English, as well as the South African, merchant, and was not enjoyed by the consumer. He could not agree with the proposals of the Government with regard to the income tax.

said that his predictions about the intentions of the Minister of Finance had proved true. It had been made clear that the man who would ultimately have to pay would be the poor man. It was not an annual tax, but they would see that it was to be a permanent one, when the House once agreed to the principle of it. Why make the income tax a permanent one, when the ordinary sources of revenue of the country were sufficient? Only when they were insufficient should such a tax be imposed. The income tax was a new thing in the O.F.S. and Transvaal, and he did not see that they should be burdened with it now. There was no necessity for it, and once they had the principle laid down, its basis would soon be broadened. Dealing with the question of preference, the hon. member said it simply meant that £600,000 was given back to the British manufacturer in the form of rebates, for that was the preference the latter got. The consumer did not get the benefit, because the price was raised to the article which paid 15 per cent. duty, and therefore the producer benefited. A portion of that preference went into the pockets of the manufacturer. It was not necessary to go to Inter-colonial Conferences to solve problems which concerned them there in South Africa such as that question of preference, and it was a question which they as a self-governing State should decide for themselves.

said that he had given the hon. member no occasion to make such remarks. The right hon. gentleman repeated that it was statesmanlike to deal with the question in conjunction with the question of naval defence; and said that it was not correct for the hon. member to say what he did about the Inter-colonial Conference.

said that his intention was not to deal unfairly with the Prime Minister, or to twist his words.

said that if preference were abolished, would they have the money they wanted? Would they not have to impose other taxation? The only result of abolishing preference would be that they would have to pay another 3 per cent. on English goods, and how would the grain farmers, who imported machinery from England, like that? What became then of the proposal of the hon. member for Uitenhage, and those who had supported him? The man who imported goods himself got the benefit of preference, and he knew of many such instances. It was incorrect, so long as there was competition, to say that it was the big importers who got the advantage of the preference, whilst if the tariff was raised it would be the interior which would have to pay. The hon. member went on to speak in support of the income tax proposals of the Government. He could vote without any hesitation for them, and was going to do so.

at 11.20 p.m., moved that progress be reported.

hoped that progress would be reported remarking that they had still got 40 minutes left in which to celebrate Empire Day. (Laughter.)

also appealed to the hon. Minister to accept the motion.

intimated that he would be prepared to accept the motion.

The motion was agreed to.

Progress was reported, and leave obtained to sit again to-morrow.