from inhabitants of Rustenburg, for remission of repatriation debts.

from 467 others, officers of the South African Railways, formerly employed in the service of the Cape GovernmentRailways, who since Union have had their original terms of service altered and their privileges curtailed, for consideration of their case and for relief.

from inhabitants of Steenkampsberg, for remission of repatriation debts (three petitions).

from the Mayor of Benoni, praying that provision be made for the admission into South Africa of material in connection with rail less tramway systems under the same conditions as are applicable in respect of material for track tramway systems.

from A. P. Potgieter, police-constable, for condonation of a break in his service.

brought up the third report of the Select Committee on Native Affairs.

in moving the second reading of the Wharfage and Light Dues Bill, said that on several occasions during the last few years it had been claimed that the harbours should be made to pay for themselves—that was to say, the deficit which had hitherto been shown on the administration of the Harbours—between £200,000 and £300,000 per annum—should be wiped out as being an unfair charge on the railway rates, and in that way imposing an unfair burden on the dwellers in the inland portions of the Union. It had been admitted that this was a reasonable claim, and whereas it had been impossible for many reasons and on account of inevitable difficulties to meet a similar claim made on behalf of the inland communities in respect of railway rates and other matters of a cognate character, there was no doubt their claims in respect of Harbours could be met. The Government was undoubtedly committed to making an effort in that direction. It was an exceedingly complicated and difficult matter to readjust the system of charges at the various Union ports so as to assure the wiping out of the Harbour deficit, and at the same time to recognise the local points of difference and to bring the new system into operation without doing an injustice. Since last year the Railway Administration had been making a very careful investigation into the whole of this question, and in doing so it had acted in consultation with the commercial communities concerned. There was called together in Cape Town in February last a conference, which was attended, he thought, by every community concerned in the matter in the Union, except one. There was no delegate sent by the Johannesburg Chamber of Commerce, which he exceedingly regretted, because no portion of the country had been more clamant in this regard than the Johannesburg commercial community. He felt sure that if Johannesburg had sent a delegate he would have been impressed with the sense of the fairness of the Administration and its desire to do justice as far as possible to the various interests concerned. The conference did good and the interchange of views had gone a long way towards placing the matter on a more favourable footing. The proposed method and the actual detailed scheme were still under consideration, but he intended, if he possibly could, to commence operations during the present year. In order that the country should have the fullest opportunity of considering the change that was proposed to be made he intended that the actual scheme in detail should once more be laid before each of the commercial communities concerned, so that the Administration might have the benefit of their criticism. Of course, the tariff and the charges were not matters which came before the House, but the Administration required some legislative machinery in order to get a start, and he had hoped that in the present session he would have been able once more to introduce and carry through the Railway Regulations Bill, in the course of which it would have been possible to deal adequately with the legislative machinery required to commence operations. Unfortunately the pressure of time and of more urgent business had rendered that impossible, and the Railway Regulations Bill must wait for another session. But there was no reason why, although the whole scheme could not immediately be put into operation, a start should not be made with it, and it was the object of the Bill to make a beginning with the question of the Wharfage Charges and Light, Dues. The general scheme for the assimilation of harbour charges and tariffs would aim at ensuring uniformity of charges as far as possible, but it was not possible to do this entirely because of the varying conditions prevailing at the ports.

said he must plead guilty to being one of those who for some years had urged the Government to take notice of this grievance, and he had done so not only in the Union Parliament, but in the old Cape Parliament. As a member of the recent Congress he wished to express his appreciation to the Minister and the Department for endeavouring to arrange matters so as to give satisfaction to all concerned, but he did not think they had succeeded entirely, as that would be a most difficult thing to do. He wished to say a word to the up-country people, many of whom did not understand the position at which the Department was trying to arrive with regard to wharfage charges. In the past those using the harbours had been paying less for the services rendered than they ought to have paid, while those in the interior were paying more. That deficiency on the harbours had to be met out of railway earnings, and therefore that had to be paid by those people who used the railways. He would point out that if the railways had continued to make a profit, as in the past, and they had not to meet this £300,000 deficiency on the harbours, the department would have been enabled to reduce railway rates still further. At the present time, if there was no surplus on the railways to meet the deficiency, the department would have to increase the railway charges in order to meet that deficiency on the harbours. If people up-country did not pay more for their wharf age charges they would have to pay more on the railways, and by paying for wharfage they were getting a greater consideration out of the railway rates. Unless they got rid of this loss on the harbours, and the burden was placed on people using the harbours there would be no possible thing to do but increase railway rates. As a representative of an inland Chamber of Commerce, he expressed his appreciation of the work the department had done in this connection.

said that the Minister was going to bring about these alterations, but there were still those railway rates to be adjusted, and these, he thought, should have been adjusted at the same time. He was of opinion that these proposals of the Minister levelled up things the wrong way, so far as the interior was concerned. They had waited for years for the Act of Union to be carried cut, but he contended that clause 101 had not yet been put in force. Their food in the interior was dear because of these preferential rates, for they had to pay high railway rates on flour and wheat.

said that the last speaker had spoken as though the Minister had done nothing in regard to the matter of running the railways on business principles. He must have forgotten the speech of the Minister of Posts and Telegraphs last Tuesday, when he said that by running the railway on business principles the department had done the postal and telegraph men out of their free passes. The Minister expressed regret that the Johannesburg Chamber of Commerce had not been represented at the conference, and he thought that the Minister would have been fairer if he had given the reason why. He left the House to infer that that Chamber had not been represented simply out of cussedness. He (Mr. Quinn) was not prepared, on consideration, to say that the Johannesburg Chamber was right in not coming down, but the Minister should have explained to the House why the Chamber was not represented. At first the Chamber resolved to be represented, and he (Mr. Quinn) was asked to attend the conference. Then the Chamber decided that it would not be represented. Mr. Quinn then proceeded to quote a letter from the Johannesburg Chamber of Commerce to the General Manager of Railways, in the course of which it was stated that the Chamber was utterly disappointed at the limitation of the scope and effect of the proposals generally.

was understood to say that he took it that the Minister’s idea was that the harbours should pay their own burdens, and that the deficiency should not be paid out of the railways and harbour funds.

said he did not think there was any opposition to the general principle of making the harbours pay, but he would point out that the amount of the deficiency was, to some extent, misleading. The Government, as the largest importer in the country, had been using the harbours and paying nothing. If they were going to run the harbours on business principles, everybody should pay. If the Government had paid in the past the deficiency would have been considerably less. The Government and all Government departments, as well as other importers, should be treated alike.

said he thought the Bill was a step in the right direction, because it would to a small extent mean a relief of rail way rates. The main line in the past had nearly always borne the burden. There was not a single branch line in the country that paid, and in that connection he instanced the Caledon line. He hoped the Bill would go through because the people up-country were feeling more and more the heavy burden they were called upon to bear in the shape of railway rates.

said he was pleased that the Minister had introduced the Bill, because he felt that every undertaking should pay for itself, and every part of the population should pay its share of the expenses connected with the ports. Although he felt there was much in the remarks, of the hon. member for Pretoria District. North, he wished to point out that people from the coast sending anything up north had to pay just as much as people from the north sending anything to the coast. He was heartily in favour of the Bill.

said he wanted to say something with regard to lighthouses. The country was to be congratulated on the system of lighthouses they had on the coast at the present time especially those which were under construction. He thought the House ought to know that the lighthouses on the coast compared very favourably with those in any part of the world. It meant safety not only to the ships that came to their own ports, but also safety to those ships which passed on their way to other ports. He would point out to the Minister that they were not taking a forward step in charging lighthouse dues, because he found that other countries were doing away with those dues. None of the recommendations in the Bill should be put into force until they had been passed by that House. It was giving the Government too much power, to frame regulations and tariffs without the approval of Parliament.

said he thought it was only fair to ask the ships to pay lighthouse dues. The Imperial Government insisted on having the charge. It appeared to him that their friends up-country expected more than they would get through the Bill. There was a deficit on harbours of £290,000 on the current financial year and £175,000 on the railways. That left a surplus of £115,000 on the Estimates as presented to the House. That would not leave much room for the reduction of rates. It was not altogether correct that the deficit on the harbours had been made up by the railways. Prior to Union they made the railways and harbours pay their own way. It was only since Union that that deficit had arisen as the result of the heavy depreciation which was charged. He wanted to remove the impression that prior to Union the harbours were charged to the railways, and he pointed out that since Union there had been a remission of £1,305,000 in rates. That was a very material item indeed. He did not see that preferential rates had anything to do with the matter. There were two matters of policy involved in the Bill. The first was that the harbours should pay their own way. At the conference in February no objection had been taken to that being done, and he thought the Johannesburg Chamber of Commerce would have been in favour of it. There was one policy he took strong exception to—that was the policy of uniform charges. The department was utterly regardless of the different charges that existed in different parts of the Union. The two large harbours, Durban and Cape Town, were harbours where ships came alongside and paid wharfage and dues. At East London some ships came alongside. Then there was the other harbour, Algoa Bay, which was a free roadstead for all ships. Hon. members would see how difficult it was to adjust uniform charges so as to do justice to all the ports. The trades accommodated themselves to those varying circumstances. The freight charge to Algoa Bay was cheaper than to any other harbour in the Union. Why was that? It was largely because there were no dues to be paid at that port. If they had uniform charges at every port, then a preference was given accordingly. Under the old system each harbour had to pay its own way, and the consequence was that the Board controlling the harbour had to be economical, because extravagance would have meant an increase of dock dues. What was the result now? They were going to pool all the receipts from the various harbours, and he did not think that was at all sound in the interests of economy.

said the hon. member for Cape Town, Central, was quite right in saying that the commercial community would have no objection to the disappearance of the deficit with a view to assisting the working of the harbours. They felt that they were placing themselves entirely in the hands of the Ministry, and that they might make any alteration in the regulations under the Bill. As long as clause 34 had stood it provided that no alteration should be made without the Government coming to the House, The Minister should again call together the representatives of the commercial bodies. He did not understand the Minister to mean that there should be complete uniformity. He wished the Minister had said that he would endeavour to retain the trade in the existing channels.

I said I would maintain the status quo.

If the Minister says that, I am perfectly satisfied, and I have no very great objection to this Bill. In conclusion, Colonel Crewe said that as to the advantage that was going to accrue to the up-country districts, he thought the hon. member for Kimberley would be disappointed if he expected to find any material reduction in railway lates. On the whole, he (Colonel Crewe) was prepared to support the second reading.

said he was entirely in accord with the hon. member for East London. If each wharf was put on its own bottom he was perfectly content to let matters remain as they were. As far as Algoa Bay was concerned, he thought the commercial community would be quite content to run the port on its own lines. As to Algoa Bay being a free port, it must be remembered the ships lying in Cape Town harbour received a remission of insurance so long as they were in port, but the ships lying at anchor in Algoa Bay did not reap that benefit, so that this levelled matters up. It was unfair, however, that Algoa Bay should pay the same rate of depreciation as was borne by East London and Cape Town. So far as Cape Town, Durban, and East London were concerned, he did not think that 10 per cent. was too much to put aside for depreciation. Under the Bill the regulations would have to be handed over to the Government, which could do exactly as it liked.

We can do so under the existing laws.

That is what I object to. Unless we can come to a satisfactory arrangement to put Algoa Bay on the same footing as the other ports I shall object to the Bill. Take the lighterage off.

That has nothing to do with this Bill.

said the people of Natal welcomed the attempt to revise the dues. For many years they had been protesting against the system under which goods landed at Durban had to pay higher wharfage dues than at any of the other Union ports. This had handicapped the Natal manufacturers. It was a misapprehension to say that the losses on the Durban harbour were heavier than those on any of the other Union ports. These losses had not been fairly charged, and Durban had suffered because of the fact that it was charged with a larger portion of capital which ought to have been wiped off years ago, and also with charges which should have been borne by the Railway Department. When these matters had been readjusted Durban would pay as well as any other Union harbour. Light dues were being abolished all over the world, and the proper course would be to abolish them at Durban, so that none should be paid in South Africa. The people knew where they were at present in regard to harbour charges, but if they were going to hand over to the Minister of Railways and Harbours a blank cheque people would not know where they were, and the position would be rather awkward. He warned the Minister against tampering with the wharfage dues, or altering them unnecessarily, even for the purpose of regulating traffic to the competitive areas. He had intended to oppose the measure, but in view of what the Minister had said that he was going to have another conference much of his opposition had been withdrawn. In conclusion, he said he strongly opposed legislation of this sort being brought in in such a way, and he thought that the public should have been given a better opportunity of discussing the details and forming some conclusions thereon.

was understood to say that the up-country people were placed in a difficult position under this Bill, and they might be bound hand and foot to the Minister without receiving any extra consideration. Under the Bill the Minister could do what he liked, and he could charge and exempt any products he cared. He believed there was a Commission in 1913 which went into this matter, and they made drastic proposals, which amounted in effect to a recommendation to impose export duties on various articles which required very little handling at the ports. He thought they might have some assurance from the Minister that nothing of that kind would be done, and that before anything further was done a conference would be held, at which he hoped the Johannesburg Chamber of Commerce would form a part.

said he had always supported the principle that the harbours should pay their own way, and the port to which he belonged had always endeavoured to carry out that principle, and in the main had succeeded. The deficit was less in the case of Algoa Bay than any other port in the country. Algoa Bay had always demanded that each port should pay its own working expenses, which would be fair to that port and fair to the country. That was why he had some hesitation in supporting the Bill. The Minister spoke of what seemed to him to be an impossible proposition. He was going to make the whole of the ports pay their way, and was going to try to bring about uniformity in the tariffs. If they brought about the latter it would mean that the ports paying their way would have to make up the losses sustained by other ports. With regard to the up-country view, he pointed out that they were going to make those people pay for losses on harbours that they did not use. He thought the principle laid down by the hon. member for Cape Town, Central, was a sound principle and a good business principle.

The motion was agreed to.

The Bill was read a second time, and set down for Committee stage on Monday next.

intimated that he wished to withdraw his amendment.

moved that after the word “kingdom” the Words “or elsewhere outside the Union” be inserted. He pointed out that there was an agent of the Union in Gorman South-West Africa who should be exempt, as well as agents in the United Kingdom.

said that agents in the United Kingdom were exempt because they paid income tax there. On what principle the hon. member wished to exempt this agent in German South-West Africa he did not know.

The amendment was negatived, and paragraph (j) was agreed to.

said that he wished to raise an important matter. Under this sub-section it was proposed to exclude ordinary gold mining companies and diamond mining companies that paid the profits tax, which was fair. But he took strong exception to the following portion “or from a company which is exempted from such tax under the provisions of section 6 of that Act.” It amounted to this, that where the Government was a partner in any mining company, as they knew they were, then the Government did not levy a profits tax, and now proposed not to levy income tax. He did not see any reason at all why they should be exempted. He would deal with one case—the Premier Diamond Mining Co. The Government was a partner in that concern and received 60 per cent. of the profits, which was not taxed in any shape or form, because it was the Government’s share of the profits. Suppose the Government thought it necessary to sell its share to a private company. In that case the Government would proceed to levy the profits tax on that, and not only the 60 per cent., but on the rest of the holding of 40 per cent. What justification had the Government got in not charging the 40 per cent, of the private owners under this Bill. Let him point out what the Government would get. From Skinner’s Mining Manual for 1914 the share of the 40 per cent. of owners of 1912 amounted to £340,000, from which the Government did not get a red cent. If income tax were charged on that amount the Government would get £25,500. Last year there was paid in dividends to the 40 per cent., the sum of £400,000, and if that amount was charged at 1s. 6d. the yield would be £30,000. He moved the deletion of all words after “mining” to the end of the paragraph.

moved that the word “the” be inserted before the word “Profits.” Continuing, the Minister said there were two cases of exemption under this head to which the hon. member for Gape Town, Central, objected, and to which the income tax would not be applied. The first case, which was the simpler case, was the Government mining areas on the East Rand. Hon. members knew there were certain areas on the East Rand which the Government had leased to companies and which were now being worked. Under these leases the company paid over a share of the profits—not a tax. There was provision in the Gold Law of the Transvaal No. 35 of 1908 for this. That gave power to the Government to grant leases, and went on to say: “No tax shall be payable under the said proclamation—that meant the profits tax—or any amendment, on the annual net profits.” It was laid down by statute in the Transvaal that the Government might enter into partnership, might enter into leases, recover certain amount of profits, but it laid down that the balance of the net profits which accrued to the company should not longer be taxable. It was quite clear that they must exempt these companies in this case unless they were prepared to break the provisions of the law under which these companies obtained their rights. Without a clear breach of the law and the agreements it was impossible to tax their profits. In the case of the Premier Mine, the mine was originally on private property. The farm was granted by the Government under what was known as the Free State title. The Government of the Transvaal said they would take over a 60 per cent. share or at least that those working the mine should get 40 per cent. That was the law in 1903. There was an attempt made in the Transvaal Legislative Council to go further and take 75 per cent. At the same time the Transvaal profits tax had been passed, under which the net profits of mining companies were taxed to the amount of 10 per cent. The Crown Colony Government did not take the step of imposing the profits tax, and the reason why must have been that they thought they were taking a sufficient share. If the Transvaal Government had looked upon the remaining 40 per cent. as still taxable, as the profits of gold mining companies, they should logically have taken that step. The reason why they did not must have been because they had thought they had taken enough, that it was not good policy, equitable or just, to further tax the remaining 40 per cent. That was how the Crown Colony Government dealt with the case, and that was how the case remained until Union.

Did the Government pay a proportion of that capital expenditure?

said that for some time the Premier Company adopted the policy of devoting profits for extension work.

Let them come to the Union legislation which precluded them from accepting the amendment of the hon. member. In 1910 they came to deal with mining taxation and passed Law 6 of 1910. That law laid down that in case of any of those areas— the Premier Mine and the gold areas—if the Government could recover less than 10 per cent. profit tax then it should be made up, and if it exceeded that amount there should be no further taxation. The gold areas paid the profit tax, but the Premier Mine did not pay it. If the Union Parliament in 1910 had looked upon the 40 per cent. taken by the Premier Mine as free to be taxed it could have been taxed to the extent of 10 per cent. Under the Crown Colony Government the Government looked upon the 40 per cent. to the Premier Mine as free from the further profit tax of 10 per cent. When they had had a free hand to deal with the matter four years ago it had been dealt with in the same way as they were doing now. That seemed to settle the matter. It seemed to him that unless they wanted to reverse their whole policy and reverse their laws they were bound to say that the 60 per cent. from the Premier Mine was equal to the 10 per cent. paid by the gold mines. With regard to the gold mine areas, it was clear that they were precluded from further taxing them. The income tax was a tax on profits, and the old law laid down that they should be exempted from further taxation on their profits. Without a breach of agreement, he did not see how they could further tax the gold areas. The only question that remained, therefore, was in connection with the Premier Mine. Both the old Transvaal Parliament and the Union Parliament placed the 60 per cent. on the same basis as the 10 per cent. profit tax. He did not see how they were going to differentiate between the two. If they had a free hand in the matter he would not hesitate for a moment. It was clearly laid down that no profit tax should be payable by those mines which already paid more than 10 per cent., and he thought that applied to both cases If they said that they should pay income tax they got back to the wording of the law, because an income tax was a tax on profits. He could not accept the amendment. He could not see what was the difference between the Premier Mine and the gold areas. In the latter case the farm had been owned by the Government, and they had let it out on leases. If the policy adopted with regard to the gold areas was fair, then it would be fair to treat the Premier Mine, which started as a private property, in the same way. He thought the exemptions which were taken from the Act of 1910 should be included in the present legislation. There was a clear case for them to follow in what they had done in 1910. He knew that if they could take a different view they could get a tremendous amount of revenue from the gold areas and the Premier Mine.

said the Minister had said that they had to proceed on the Act of 1910, and that if they further taxed the Premier Mine they would be going back on the Government areas. It appeared to him that the deal with the Premier Mine had been an extraordinary good one for the owner. It had been asserted at the time that there were certain portions of the mine which were extraordinarily rich, and the owners had said that they would rather have the 12½ per cent. and have the right of selection than have the 40 per cent. The owners got a great deal more than they were entitled to. (Hear, hear.) The legislation with regard to the profits tax and the amounts secured to Government under mining areas and the State’s proportion of the Premier Mine’s profit rested on a different basis to that of the income tax. But in the case of the Premier Mine it was working an exhaustible asset of the State, and therefore it was incumbent that the State should take a certain portion for its benefit, which was entirely apart from the income tax. If they were going to be logical, all incomes from mining should be treated quite irrespective of the fact whether a mine had paid the 10 per cent. profits tax or not He could not see why an investor with an income of over £1,000 a year should get off scot free in respect of the income tax on his holdings in the Premier Mine and gold mines. At the same time he (Mr. Creswell) admitted that to tax the gold mines 10 per cent. on their profits and eighteenpence in the pound in addition for income tax did not seem quite fair. Because the State made a mistake in 1909 so far as the Premier Mine was concerned there was no reason why that should be continued, although that mistake was repeated in 1910. It was clear that the 60 per cent. on the Premier Company was not in the nature of a tax, but was an owner’s share in the enterprise—(hear, hear)—an owner’s share in which the country had exercised the most extraordinary self-restraint. On an initial capital of £80,000 the Premier Company now had enormous assets, and to say that none of that was taxable was a gross injustice to income taxpayers in other enterprises.

said the Minister of Finance had adopted a very subtle line of defence by arguing with great skill that if the income tax were imposed on the profits of the Premier Mine it should also be imposed on the gold mines which paid the 10 per cent. Profits Tax. Put there was no connection in logic between the two. When the State gave up claims to people to work it took what it regarded as the State share. After the State had done that it could not say “We are going to take some more as we did not take enough at first.” He held that at the time the profit tax was imposed the country was not in the same flourishing condition in which it was to-day. Had it been, he could assure the House that a general income tax would have been imposed. At the time the only industry which had anything to tax was the gold mining industry. The position in regard to the Premier Mine was not analogous to that of the gold mines or of the leased mines. In regard to the latter the State was the owner of the farm, and bound itself by lease not to impose the 10 per cent. tax. As for the Premier that company never owned the whole of the mine.

Who owned it then?

said that under the old diamond mining laws of the South African Republic, after the mine had been pro claimed the owner could have pegged out one-eighth, and that would have been all he was entitled to, and he could not say that the State was taking away seven-eighths of his property.

Who owned the title before?

said his hon. friend carried his individualism back too far. They did not want to go back to the days of the flood. (Laughter.) The Premier Company was never entitled to more than it had at present. They should not get it into their heads that the State took away six-tenths of the Premier Mine. Therefore it seemed to him that the Government was under no agreement with the Premier Mine. (Cheers.) The Minister of Finance had asked why the Crown Colony Government did not levy a 10 per cent. tax on the profits of the company. There were various reasons for that, one being that the 10 per cent. profit tax applied only to the gold mines The idea was that they were not going to put the mine under disabilities in comparison with the De Beers Company, because it was supposed that De Beers would not be unwilling to see the Premier Company put in such a position that De Beers would be able to acquire it without difficulty. He said he did not think there was any justification for them not imposing this tax. The only agreement between the Government and the Premier Mine was as to how the share of the profits should be applied.

Why was that not done in 1910?

I don’t know whether it was not done. I thought the exemption in 1910 was a mistake.

rose.

rose to a point of order, and asked whether under the Standing Rules the hon. member was entitled to speak.

said he thought they should hear all sides, and he moved that permission be given the hon. member to speak. (Hear, hear.)

was understood to say that he thought it was a question which the hon. member for Pretoria District, North, should decide.

said that for years he had listened to shots being fired at the Premier Co., and he wanted the permission of the House to defend the company and himself.

moved that the required permission be granted

said that the hon. member for Jeppe had made out that this was a huge diamond mine building up its capital out of its profits, and what was the State going to get? That was the policy inaugurated when the company was started, that they should take the money of the shareholders and the Government and build up the company. That was the only way of making the company pay. The hon. member for Jeppe knew that if the company had not done that it would have shared the fate of the Voerspoed Mine.

I was not accusing the company—

That is what you said.

You must not misquote.

was understood to say that the law was put on the Statute-book to shut that company down. In the Free State and the Transvaal this law was brought about by nominated Governments. Was it possible for any company to raise money on those conditions? This Premier Co. was already formed at the time, and he said that all the arguments dealt with the particular case of the Premier Mine. They put on 60 per cent. because the mine was rich. In reply to Mr. Duncan, he said that the law laid down a specific contract, and if the men were not satisfied to work on those terms the Government would advertise for tenders. The idea of the law was to stop diamond mining He would point out that in this particular law it was laid down that diamond mines found on Government land could only be worked if the person who worked them paid the Government 90 per cent. of the profits. The hon. member for Fordsburg knew perfectly well that the owner and prospector generally worked together and that the discoverer was entitled to a large share.

How much?

One-tenth. The hon. member went on to say that his hon. friend also knew that the owner of the farm when the mine was pegged out could get half of the claim licence. He also knew that when a township was mapped out the owner got three-quarters.

As to the working of the industry, some hon. members seemed to think that they had just got to turn a handle somewhere and the diamonds came out. The people in connection with that diamond mine had had to do a lot of thinking before they placed the mine on its present basis. It was worked to-day more cheaply than any mine in the world. It was worked on a system that was not in vogue anywhere else. On the perfecting of one process alone they had spent £300,000. The Government had got the benefit of that. He at the time advocated a sliding scale if they were going to put this 60 per cent. on, and he said, “Give us an equivalent if we come down.” The idea that this mine was just a sort of field where one could go and pick up diamonds and that it did not require brains and energy and common sense to work it was absurd. The Premier Company had had to spend the shareholders’ money there.

said he did not think the speech of the hon. member had thrown a great deal of light on the subject as to whether they should or should not impose this income tax on the shareholders of the Premier Mine. Some valuable figures were given in regard to this so-called struggling diamond industry by the hon. member for Cape Town, Central. He had shown that it was no longer a struggling industry. He thought the hon. member (Sir T. M. Cullinan) ought to congratulate himself that this mine did not happen to be in German South-West Africa. He read with a great deal of surprise of this exemption. It seemed to him that the Minister was trying to make this exemption on the ground that, because former legislators did not see fit to impose a profits tax on the Premier Diamond Mining Company it was, therefore, never intended that this property should be taxed in the future. He did not think that was in the minds of legislators in the past. When the profits tax was instituted he was quite sure that the idea of an income tax was not in the minds of members of those Parliaments, and that it was intended, if ever it was imposed, to place it on the diamond mining company as well as other companies. He believed the profits tax in the Transvaal was passed in the first place just prior to the Diamond Mining Ordinance. If that were so, how could they have contemplated a profits tax on the shareholders of the Premier Company? There was no company then in existence. It was true that in 1910 he provision was made in regard to this company, but that was not because hon. members in this House did not protest. There were pages of protest in Hansard. Surely if they thought of imposing an income tax upon the mine at the present time the actions of 1910 should not in any way debar them from doing it. After all, what were they taking? That which belonged to the State, the right to mine for precious stones and minerals. That right they had sold, and they were asking the price for it in the 60 per cent. It was sold cheaply; in fact, as his hon. friend reminded him, it was given away.

It would have been a better thing if the State could take the whole of those proceeds to-day, but the State at that time passed the Ordinance, and he thought the company was very leniently dealt with. If the diamond mine shareholders did not pay this tax it had got to come out of other people’s pockets. Surely, when it was a question of ability to pay, it had far better come out of the coffers of the Premier Company shareholders than out of the coffers of some struggling gold mining company that was paying 3 or 4 per cent,

said he thought that, whether they were dealing with a diamond mining company, a gold mining company, or a private individual, they should act fairly. If they wished to act fairly they must act fairly to the taxpayers, and so far, unless he had misunderstood, a case had not been made clear to him why there should be an exemption in this case. The hon. member for Fordsburg had put the matter very clearly, but he did not quite understand it yet. The hon. member had said that the mineral law under which this farm was held before the Crown Colony came into being was that the owner of the land only had a right to one-eighth. The rest of the area was a proclaimed digging. The public would have had a right to peg, not the State, so that the rights had been taken away from the public really, and not from the owners of the property. The public had a right to the 88 per cent. He understood the hon. member further to say that the Crown Colony Government decided at the time that instead of the owner then having a right to 12 per cent. it was arranged to give him 40 per cent., so that really at present the owners of the 40 per cent. and the Government were partners, and in getting that 40 per cent. were placed in a better position, and the 60 per cent. of profits now paid by the company to Government represents the Government’s share of the property to which it was entitled. If he had understood it rightly, then he could not see that the case for exemption had been made out.

said he had been much interested in the discussion, and he thought that what the Committee had to take into consideration in connection with the Premier Mine was the 60 per cent. Was it a tax or not at the present moment? He thought the Minister of Finance recognised that the 60 per cent. share which the State held was held as part owners and was no portion of the tax. The Minister of Finance had referred to the debate in 1910; he was sorry the Prime Minister was not there, because he know he would have the support of the Prime Minister in that contention. He said that because in the debate in 1910, which he had taken the trouble to look up, when there was a discussion on the Mining Taxation Bill the Prime Minister said with regard to the Premier Mine that the Government had stepped in as the representative of the public and became the owner of 60 per cent. of the mine. He (Sir T. W. Smartt) wanted to ask the Minister of Finance if the Government was not the owner of 60 per cent. of that mine. They were taxing the people of this country, they were taxing their thrift through the medium of the life assurance companies, and there was no justification in not levying the income tax upon the profit derived from the 40 per cent. belonging to that company. There was no justifiable reason, no equity or justice to the taxpayers of the country. If the Government had levied a special tax on that 60 per cent. it would have been an iniquitous thing to subject them to an income tax, but as the State owned 60 per cent. and they amalgamated with the owners of the 40 per cent., which had the effect of enabling them to make more profit, then the owners of the 40 per cent. should be subject to the income tax as everybody else was.

said that according to what the Minister had stated there were at the commencement of Union different scales of taxation for the mines. There was a profit tax of 10 per cent. on the gold mines. Then there were the State mines, which had been hired out by the Government. The Premier Mine belonged for the greater part to the public, and only a portion of it to the owner. The Government had demanded 60 per cent. from that mine. Now it was laid down in the present Bill that both kinds of mine were to be exempted from the proposed new tax. For one reason or another they were already exempt from the profits tax. But if the mines were called on to pay income tax, and that tax amounted to 25 per cent., then they would be placed in a very much worse position than ordinary mines, because the latter would pay in the form of profits tax less than the former would pay in the shape of income tax. Well, that was wrong, and it would be very much better to treat all the mines in exactly the same way.

said as one who had been converted on that subject, he wanted to make his position perfectly clear. The hon. gentleman who had just spoken missed one point; that was they were going back to the country to say they were taxing mutual life insurance companies and institutions of that sort and they were going to leave out companies making as much as 600 per cent. profit. It was perfectly clear that the hon. gentleman who had just spoken was labouring under a misapprehension which he (Mr. Merriman) certainly shared with the hon. member until the matter was explained to him. The idea was that the Government went at a certain time and seized the property and took it away from them and proceeded to work it, but what were the facts? They were explained so clearly by the hon. member for Fordsburg that it was unnecessary to go into them again. Under the law which then existed those people had a right, when discovered, to work 12½ per cent. of the area, to select it, peg it off, and work it. There was a somewhat similar law in the Cape with regard to diamond mines.

All the rest of the mine was open to the Government to work. It belonged to the public. The Government were the trustees of the public, and the Transvaal Legislative Council was pressed to give a larger share to the company, 60 per cent. then belonged to the Government. The Government made an engagement with the Premier Company to work the mine on joint account on extremely favourable terms to the company. The only thing they had really done for the company was this: when the profits tax was imposed on the gold mines and on De Beers and Jagersfontein companies they allowed the Premier Mine to go scot free. He did not agree that they should put an income tax on the profits tax. That would be going too far. But surely to ask them to pay the income tax was not asking too much. It would be paid with an exemption of £1,000, and also upon the scale starting at 6d. in the pound. That really seemed to him to be doing the barest right to the public. If they had not made that extremely favourable engagement with the company in 1910 the company would have had to pay the profits tax. The hon. member who had last spoken had given a disquisition on the Modderfontein Company, but that was an entirely different matter. A lease had been made of the ground, and certain terms were put into the lease. He did not see how, with any conscience, they could go back to the country and say they had taxed the insurance companies on the highest possible rate, and at the same time had let off the shareholders of that wealthy Corporation of a just share in taxation. Until the matter had been explained to him by the hon. member for Fordsburg he had been in some doubt about it. They would be doing something flagrantly unjust if they let the company go free.

said the subject was one of great difficulty, and it was most important. It was a question of high State policy.

said he proposed to alter his amendment to exclude the gold mining areas from the operation of the tax. He agreed that under the law of 1908 it was laid down that the tax should not be imposed. No such contract, however, existed with regard to the Premier Mine.

said the matter also referred to the mines in the Free State that paid 40 per cent. He understood that the Elandsfontein property was held under a Free State title, and it was private property and belonged to the owner. The Kimberley titles were all old Free State titles, and up to the time the Transvaal Parliament stepped in the Premier Mine was private property. In 1896 the old Transvaal Parliament passed a law which reserved to the owner the choice of one-eighth of a claim in a diamond mine. Rights which had under the old title belonged to the owner were subsequently taken away by the paramount rights of the Legislature. He hoped his right hon. friend (Mr. Merriman) would not only look at the matter from the latter stage of the proceedings. He did not want to put the ease on a technical point at all. His own desire, of course, was to get money from the Premier Mine, or from whenever else he could get it. The first question which had arisen was why they could not apply the income tax to the gold mines which paid 10 per cent. profits tax. Why did they not do that? They did not do it because it would not be politic to do it. Enormous sums of money had been invested in the mines on the basis of the 10 per cent. tax, and it would not be policy to put on another 7½ per cent., although there was nothing to prevent them doing so. Let them take the Premier or any of the Free State mines. What was the position there? Since 1903 the State had taken from those mines 60 per cent. interest on their net profits. On that basis millions of money had been poured into the country. They had had the opportunity of reviewing that policy in 1910, and they had stuck to the policy. Was it wise for them to say that they had made a mistake? If they did so, it would shake the foundation of the credit of the country. He did not want to take any partisan view, but if they reversed the policy that had been in existence for the last ten years they might meet with very serious consequences. If they did it they would suffer far beyond the £30,000 which the tax would raise.

In conclusion, the Minister said: I have had my say, and leave the matter entirely in your hands.

said the hon. gentleman had alluded to the diamond mines of the Cape, which were held under precisely the same title as the Premier Mines—that was a Free State title. He (Mr. Merriman) had never heard any question raised about the country having a perfect right to impose a tax on De Beers. It was a nice distinction whether they called it a profits tax or an income tax. A profits tax was really an income tax, to why quibble about the name? His hon. friend must not try to frighten old soldiers like himself and others. (Laughter.) He had never heard a tax proposed without the same old “paaiboeli” being shaken in front of them and their being told that they were going to drive capital away. But no matter where capital landed it would find somebody waiting for it with a gun. (Laughter.) It was pretty safe here with a conservative country like South Africa. Therefore he had no hesitation whatever in asking the House not to do ah injustice by specially benefiting one particular Corporation, when it was taxing every other in the State.

said that the Premier Mine was started under the law of 1898, under which the discoverer had a right to pick out only 12½ per cent. of the total area, and even giving him the landowner’s rights, the total would amount to only 22½ per cent.

In the Transvaal we have the right of selection. Rhodes was able, with that right, to force all the other diamond mine owners in Kimberley to come to his way of thinking

That has nothing to do with the matter. The Government (continued Mr. Jagger), instead of throwing the remainder of the mine open for pegging, said it would keep it and work if for the benefit of the people, and it gave 40 per cent. to the owner, which was ample compensation. The property belonged to the people and was worked for their benefit. Where was there any injustice done to the Premier Company? His hon. friend (Sir T. M. Cullinan) knew that he was not buying the whole of the mine, for which he paid only £67,000. The total capital put into the mine was only £60,000. During the first year the Government generously said that it would not exact its share of the profits, but would allow it to go towards helping to pay for the cost of equipment. In fact the whole of the equipment came out of the profits. Had not the company been generously dealt with? (Hear, hear.) Was there an agreement with the company in 1903 or 1910 that no profits tax should be imposed on it? There was no promise of any sort. (Hear, hear.) A mistake was made in 1910 by not taxing the company, and that should be remedied now. He failed to see where they were doing any injustice or moral wrong to the Premier Company. The diamonds were discovered in the Cape in 1870, and no direct taxation was imposed on the diamond mines until 1904, thus reversing a policy which had been in existence for 34 years. Was any injustice done thereby? From every point of view we had every right to tax the Premier Company. It would be a burning shame to tax life insurance companies and let the Premier go free— in fact it would be a monstrous state of affairs. (Cheers.)

said an unprecedented circumstance had occured, the Minister of Finance having announced that they could vote as they liked.

I did not say that at all; I said I left this matter with confidence to the Committee.

said the Minister remarked that in such dulcet tones that certainly the impression was conveyed that he did not make the question one in which he desired his supporters to vote in any particular direction. He would give his vote for the exemption as first moved by the hon. member for Cape Town, Central.

said after the explanation of the Minister of Finance he was convinced that the Minister had taken up the right attitude in that matter. The Leader of the Opposition had put the matter in a nutshell when he said that 60 per cent. belonged to the State. The original idea as put forward by the Minister was that the owner of the land under the Mining Law had the right to 12 per cent., but the State did not own the rest. The State said “We will administer the rest, and for that will take claim licences.” They administered it for the claim licences. It was only now that the claim had been made that Government was acting on behalf of the State. The hon. members on the cross-benches wanted to take the whole lot. It was the turn of the Premier Mine to-day, but he would warn hon. members that the time might come when it would be he and they taxed in that way. They had no real right in that matter. The hon. member for Cape Town, Central, and the right hon. gentleman for Victoria West were confused between the right of the public and the right of the State. It was his wish to get property into the hands of individuals and out of the hand of the State, and he would support the Minister of Finance in that matter.

said the Minister of Finance, after coming in and proposing a series of new taxes, said that if they imposed a tax upon the Premier Mine it would shake credit to its foundations. That argument was untenable. A complete theory of anarchy was put forward by the Minister. The Minister spoke of what was done by the Transvaal Parliament and by the Union Parliament some years ago as if that gave any sort of vested right in this or any other country. The Minister of Finance had said that millions were invested under those circumstances, but he (Mr. Fremantle) was quite certain there was no foundation in fact. That such arguments should be used should be a warning. What reason was there that they should tax as they agreed to do yesterday their own creditors by a new imposition which was imposed and then say they had no right to tax the shareholders in a private company. The argument was untenable. Proceeding, the hon. member said they wanted to lay down one set of rules for the farmers and another set for the shareholders in the Premier Co. They had plainly got the right to tax the Premier Co. in that case, and it followed that they had a duty to do in this country, either they must not tax the poor people through their thrift or if they did they had no right to exempt a Wealthy company like that. He hoped the Committee would support the amendment proposed by the hon. member for Cape Town, Central.

The Minister’s amendment was agreed to.

proposed to amend the amendment by the emission of the words “six of that Act” and to substitute “46 of Act. 35 of 1908 (Transvaal).”

put the question that the words be omitted, and declared that the “Noes” had it.

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

Ayes—50.

Alexander, Morris

Andrews, William Henry

Baxter, William Duncan

Berry William Bisset

Blaine, George

Boydell, Thomas

Brown, Daniel Maclaren

Chaplin Francis Drummend Percy

Creswell, Frederic Hugh Page

Crewe, Charles Preston

Currey, Henry Latham

Duncan, Patrick

Fichardt, Charles Gustav

Fremantle, Henry Eardley Stephen

Haggar, Charles Henry

Heatlie, Charles Beeton

Henderson, James

Henwood, Charlie

Jagger, John William

Juta, Henry Hubert

Keyter, Jan Gerhard

Kuhn, Pieter Gysbert

Maasdorp, Gysbert Henry

Macaulay, Donald

MacNeillie, James Campbell

Madeley, Walter Bayley

Maginess, Thomas

Merriman, John Xavier

Meyler, Hugh Mowbray

Nathan, Emile

Oliver, Henry Alfred

Oosthuisen, Ockert Almero

Quinn, John William

Sampson, Henry William

Searle, James

Serfontein, Hendrik Philippus

Serfontein, Nicolaas Wilhelmus

Smartt, Thomas William

Van der Riet, Frederick John Werndley

Van Niekerk, Christian Andries

Vintcent, Alwyn Ignatius

Walton, Edgar Harris

Watermeyer, Egidius Benedictus

Watkins, Arnold Hirst

Wessels, Daniel Hendrik Willem

Wessels, Johannes Hendricus Brand

Wilcocks, Carl Theodorus Muller

Woolls-Sampson, Aubrey

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

Noes—43.

Alberts, Johannes Joachim

Bekker, Stephanus

Bezuidenhout, Willem Wouter Jacobus J.

Bosman, Hendrik Johannes

Botha, Louis

Burton, Henry

Clayton, Walter Frederick

De Beer, Michiel Johannes

De Jager, Andries Lourens

De Waal, Hendrik

De Wet, Nicolaas Jacobus

Du Toit, Gert Johan Wilhelm

Fawcus, Alfred

Geldenhuys, Lourens

Grobler, Evert Nicolaas

Joubert, Christiaan Johannes Jacobus

Krige, Christman Joel

Lemmer, Lodewyk Arnoldus Slabbert

Louw, George Albertyn

Malan, Francois Stephanus

Marais, Johannes Henoch

Marais, Pieter Gerhardus

Myburgh, Marthinus Wilhelmus

Neethling, Andrew Murray

Nicholson, Richard Granville

Orr, Thomas

Rademeyer, Jacobus Michael

Schoeman, Johannes Hendrik

Smuts, Jan Christiaan

Smuts, Tobias

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 Eeden, Jacobus Willem

Van Heerden, Hercules Christian

Venter, Jaa Abraham

Vermaas, Hendrik Cornelius Wilhelmus

Watt, Thomas

H. C. Becker and F. R. Cronje, tellers

The amendment was accordingly agreed to, and the words were omitted.

then put the words proposed to be inserted in lieu therefore, and declared that the “Noes” had it.

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

Ayes—50.

Alexander, Morris

Andrews, William Henry

Baxter, William Duncan

Berry, William Bisset

Blaine, George

Boydell, Thomas

Brown, Daniel Maclaren

Chaplin, Francis Drummond Percy

Creswell, Frederic Hugh Page

Crewe, Charles Preston

Currey, Henry Latham

Duncan, Patrick

Fichardt, Charles Gustav

Fremantle, Henry Eardley Stephen

Haggar, Charles Henry

Heatlie. Charles Beeton

Henderson, James

Henwood, Charlie

Jagger, John William

Juta, Henry Hubert

Keyter, Jan Gerhard

Kuhn, Pieter Gysbert

Maasdorp, Gysbert Henry

Macaulay, Donald

MacNeillie, James Campbell

Madeley, Walter Bayley

Maiginess, Thomas

Merriman, John Xavier

Meyler, Hugh Mowbray

Nathan, Emile

Oliver, Henry Alfred

Oosthuisen, Ockert Almero

Quinn, John William

Sampson, Henry William

Searle, James

Serfontein, Hendrik Philippus

Serfontein, Nicolaas Wilhelmus

Smartt, Thomas William

Van der Riet, Frederick John Werndley

Van Niekerk, Christian Andries

Vintcent, Alwyn Ignatius

Walton, Edgar Harris

Watermeyer, Egidius Benedictus

Watkins, Arnold Hirst

Wessels, Daniel Hendrik Willem

Wessels, Johannes Hendricus Brand

Wilcocks, Carl Theodorus Muller

Woolls-Sampson, Aubrey

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

Noes—44.

Alberts, Johannes Joachim

Bekker, Stephanus

Bezuidenhout, Willem Wouter Jacobus J.

Bosman, Hendrik Johannes

Botha, Louis

Burton, Henry

Clayton, Walter Frederick

De Beer, Michiel Johannes

De Jager, Andries Lourens

De Waal. Hendrik

De Wet, Nicolaas Jacobus

Du Toit, Gert Johan Willem

Fawcus, Alfred

Geldenhuys, Lourens

Grobler, Evert Nicolaas

Joubert, Christiaan Johannes Jacobus

Krige, Christman Joel

Lemmer. Lodewvk Arnoldus Slabbert

Louw, George Albertyn

Malan, Francois Stephanus

Marais, Johannes Henoch

Marais, Pieter Gerhardus

Myburgh, Marthinus Wilhelmus

Neethling, Andrew Murray

Nicholson, Richard Granville

Orr, Thomas

Rademeyer, Jacobus Michael

Schoeman, Johannes Hendrik

Smuts, Jan Christiaan

Smuts, Tobias

Steyl, Johannes Petrus Gerhardus

Steytler, George Louis

Theren, Hendrik Schalk

Theron, Petrus Jacobus George

Van der Merwe, Johannes Adolph P.

Van der Walt, Jacobus

Van Eeden, Jacobus Willem

Van Heerden, Hercules Christian

Venter, Jan Abraham

Vermaas, Hendrik Cornelius Wilhelmus

Vosloo, Johannes Arnoldus

Watt, Thomas

H. C. Becker and F. R. Cronje, tellers.

The amendment was accordingly agreed to.

moved that progress be reported and leave asked to sit again.

The motion was agreed to, and leave obtained to resume on Monday.

then moved the adjournment of the House.

The motion was agreed to.