House of Assembly: Vol2 - WEDNESDAY 30 JULY 1924
The MINISTER OF RAILWAYS AND HARBOURS was granted leave to introduce the Third Railways and Harbours Appropriation (Part) Bill.
Bill brought up, read a first time; second reading 31st July.
This Budget is being introduced under exceptional circumstances. Four months of the current financial year have already elapsed and expenditure for that period has, of course, already been incurred. It is barely a month ago that the present Government took over the administration and where it has become necessary, immediately, to ask the House to make the necessary financial provision for the rest of the financial year. Hon. members of this House, and I think the country in general, will, of course, not expect the figures and the general position which I have to lay before the House this afternoon, to disclose or reflect any material changes or alterations in the financial policy of the country. On the 8th of April last, just before the rising of the late Parliament, on the introduction of the Second Appropriation Part Bill, my predecessor in office gave the House a lengthy statement of the financial position of the country at that time. During the same Session he also laid on the Table Estimates of Expenditure and Revenue for the current financial year. Fairly complete information in regard to the position, the nature of which it is customary to put before the House, has therefore already been in possession of the country for some considerable time and consequently it will not be necessary for me this afternoon to cover the same ground again or to repeat what has previously been stated and is already known. I shall therefore proceed at once to deal with the financial position for the year 1923-’24. The Revenue account for that year shows an amount of £24,253,000. The expenditure is £24,028,000, giving a surplus of £225,000. Yes, that would be fairly satisfactory, but hon. members will of course not forget that that so-called surplus was only obtained after bringing into revenue the sum of £525,000 in respect of receipts from mining leases which properly belonged to the Loan Account. I repeat that the surplus would have been quite satisfactory if it had not been due to the fact that it was only obtained after bringing into revenue over half-a-million which belonged to the Loan Account.
That was clearly stated to the House.
Yes, why cannot I state it again? It is a very material factor in regard to our financial situation which the country should know. Now this sum of £225,000 has reduced the deficit, the accumulated deficit over the preceding three years from £2,144,000 to £1,919,000. That is still after crediting the so-called surplus to the accumulated deficit. Naturally the floating debt represented by that deficit has been reduced by the same amount. The revenue was £383,000 more than the original estimate. The particular increases are: Customs, that elastic source of revenue which has on more than one occasion, come to the rescue of a despairing Treasurer, has produced an increase of nearly half-a-million, the exact figure is £427,000; postage, £77,000; telephones, £53,000; Government ownership on diamond mines, £152,000. We are glad that the diamond position is looking up. I hope that the expectations of the hon. members for Beaconsfield and Kimberley, which we heard so much about during the elections, will be realized, and that we shall have the long-hoped-for improvement in regard to that very important industry in this country.
I hope so for your sake.
There are further increases under various heads and the total increases amount to £1,051,000. On the other hand the receipts under the following heads fall short of the estimates; excise, £143,000; telegraphs, £47,000 (I think my predecessor stated that was due to the telephones infringing very largely on the telegraphs), Licences showed a reduction of £28,000. Then there was a reduction of £206,000 in income tax and super tax; £73,000 on Excess Profits Duty; £27,000 in the Diamond Export Duty and Departmental Receipts, £168,000. These reductions total £692,000. As the general position is known, it does not seem necessary to discuss these figures at length, but it should be pointed out that although income tax (including super tax) shows a reduction of only £206,000 on the estimate, if the figures for mining taxation are excluded the position becomes very much worse. The receipts from the gold mines for normal and dividend tax have increased by £328,000 above the estimate, but we get a decrease from other sources. The receipts from diamond and other mining are £l16,000 below the estimate. The general income tax and super tax are £418,000 below the estimate, the super tax being responsible for £194,000 of the shortfall. The yield on the general tax was smaller owing to the fact that there was a very much smaller carry-over than we have had in previous years. At one time there was a very large carry-over of tax due, but which the department could not collect. That carry-over has now been reduced to £975,000 and that figure is likely to be the normal carry-over for the future.
The expenditure in 1923-24, on the other hand, does not call for comment except to remark that the expenditure on locust destruction amounted to £324,000 and on pensions to £120,000 above the estimates. The total amount paid out on pensions in that year was over £2,000,000. That was abnormal owing to the fact that we passed an act last year which necessitated fairly large contributions from revenue to the fund constituted under the act. Even in normal times the figure for pensions will be very nearly in the vicinity of £2,000,000.
I now come to trade and production. The outstanding figures relating to the exports and imports for 1923, were given to the House in April, when my predecessor made his statement. There is therefore no need to go over them again. I may just mention, however, that during the first six months of this year, our overseas trade has been well maintained, the imports showing an increase of £5,439,000, or twenty per cent. over the figures for the corresponding period of 1923, while the exports show an increase of £1,510,000, or four per cent. over the figures for the corresponding period for 1923.
Detailed statistics of imports and exports are only available for the first quarter of this year, and a comparison of the figures with those of the previous year would not, therefore, be useful. There are, however, a few features to which I might refer. First of all there is, what has always been regarded by the former Minister as a useful barometer of the trade of this country, the importation of motor cars. It has shown a progressive increase. I find that the importation for the first quarter of this financial year is more than double that of the corresponding quarter of the previous year in quantity and value. There is another feature, and that is fertilizers. The importations show an increase of 4,000 tons, while the price has fallen 3s. a ton. A few words in regard to the mineral production—the value of the mineral production for 1923 was £52,633,000, an increase of £14,000,000 over the production for 1922 (which, of course, was an abnormal year, owing to the strike), and £800,000 over the production for 1921. The value of the mineral production for the first half of 1924 has been £28,779,000, that is at the rate of £5,000,000 per annum more than the production for 1923. The present indications are that if this rate of production be maintained, there will be an increase of something in the neighbourhood of £5,000,000 more than the production for 1923 for a full year. Of this increase an amount of £2,000,000 is due to the higher gold premium, and £1,000,000 to the increased production of gold, taking it at the standard value and nearly £2,000,000 to increased production of diamonds. The output of coal has continued at the record point reached in 1923, and that of tin and copper has also continued to increase. In 1923 the value of the coal output was £11,900,000, and this year it is so far £6,800,000, so that hon. members will see that the output continues to increase. The number of white men employed on the gold mines of the Rand on December 31, 1922, was 17,147, There was an increase during last year of 749, and during the first six months of the present year there was a further increase of 754, making the total number of white employees at June 30 last, 18,650. The improvement in the mineral production of the country has come most opportunely and has compensated to some extent for the decreased production of the agricultural industry as a result of drought and locusts. The improved result is due in part, I am informed, to the increased gold premium, but in the main, owing, to the reduction of working costs. It is stated that there has been increased efficiency and an increased output per man employed.
Now I may mention also that it is a source of some satisfaction that a tender has been received for working the Geduld East mining area. This proposition was put up to public tender in December, 1922, and for 18 months has elicited no response whatever. The Government is still waiting for a report of the Mining Leases Board on the offer, and I do not yet know whether the offer is satisfactory. At any rate, a tender has been received and is being investigated by the Mining Leases Board.
The position of the Agricultural community in certain large portions of the Union as the result of drought and locusts is unfortunately very serious as hon. members will know. The losses are enormous, and in some districts the distress has become really acute and will require the earnest attention of the Government. In the ostrich feather industry there appears to be a tendency towards improvement.
Well sir, before I leave the position with regard to the gold and mineral production, it may be convenient to say a word about the policy of this Government regarding the currency question and the restoration of the gold standard, because this question affects the gold mining industry more directly than any other interest in the Union.
We are satisfied that the restoration of the gold standard not only in this country but in the world at large, is essential to our well being as a gold producing country and to the gold mining industry of South Africa, but we recognise the difficulties firstly of bringing about readjustment to a substantially lower level of prices, and, secondly, of the Union acting independently of the United Kingdom in view of the intimate commercial and financial relations between the two countries. Yes (he replied to the Opposition members), we frankly recognize the existing intimate relations between this country and the United Kingdom. It is a fact that we have to recognize, and we cannot act independently of the United Kingdom in this matter.
The British Government has declared itself in favour of restoring the gold standard at the earliest opportunity, and has also declared its adherence to the Cunliffe report, which sets its face against further inflation. Hon. members will remember that the report provided that the note issued should be limited in certain ways. Moreover, the feeling of the banking and commercial community of the City of London appears to be tending towards a policy of taking active measures of a deflationary nature to restore the pound sterling to gold parity instead of sitting still and waiting for the United States of America to depreciate her currency to the level of the pound by inflation. This feeling appears to have been stimulated by the Dawes report, and the recent report on the possibilities arising out of the Dawes report by the Advisory Council of the Federal Reserve Board of the U.S.A., which brings out the possibility of a serious challenge to the position of the pound sterling, as an international currency, through the establishment of a second great world currency on a gold basis. What developments may take place in England in the near future it is of course impossible to forecast, but while a few months ago an early return to the gold standard there seemed almost impossible, it now seems possible within the next year. If this should be brought about Union currency would automatically return to gold parity in company with, if not in advance of sterling without independent action on our part. I want hon. members to bear in mind that we are watching the position in the United Kingdom, and there is this possibility that we may be obliged to take independent action to protect our own interests. The exact nature of the action to be taken and its effect on various interests and industries in the Union and on business generally and the sacrifices and gains in so far as the various interests of the community are involved, are highly technical questions and require consideration by experts. We propose to institute an expert committee to investigate them as soon as the business of the Session is over, for we realize that the country will expect the longest possible notice of any impending change in the regulation of its currency. We realize that action has to be taken soon. Hon. members will remember what the Act which expires next year, lays down in regard to the inconvertibility of our notes, and that, unless we do something, we automatically return to the gold standard. Before we do that the country will want to know what action the Government proposes to take.
I now come to the expenditure for 1924-5, the current financial year. Hon. members will find particulars in the revised Estimates which I have laid on the Table, together with the Estimates which were laid on the Table by the former. Minister of Finance. When this Government took office in June, commitments had already been entered into to an amount of £286,000 in excess of the previous estimates which the Government had tabled last year. Of this amount £170,000 was for locust destruction and £62,000 for pensions. The original Estimates in regard to pensions had been found to be inadequate. In regard to locusts, the total amount available this year will be £300,000. This is made up by the £30,000 provided on the first print of the Estimates, £170,000 additional now provided, and the value of stocks and materials in hand from the previous campaign—about £100,000—making about £300,000 in all. It is probable that the next campaign will be even more strenuous than last—the whole Union is threatened with a serious invasion next year.
It may be well to call attention to the creation of a new Vote, No. 36, for the Department of Labour. This Vote comprises the provision of £33,093 for the expenses of the Labour Division of the Mines and Industries Department included in Vote 25 in the first print of the Estimates. The provision of £200,000 for unemployment relief under Vote No. 36 of the first print, together with an additional £100,000 which it has been found necessary to ask Parliament to vote for this service. An additional £3,000 has been included for the general expenses of the proposed new Ministry of Labour. Besides these two new items the present Government has added £4,800 to the Irrigation Vote to assist water boring and £6,000 in connection with scientific and technical research and fishery survey. I might perhaps point out to hon. members what the total provision for unemployment will be under these estimates. The amount will be the £300,000 on the Labour Vote which I have already referred to, plus £100,000 on the Loan Vote for advances to the Provinces to enable them to undertake relief works and £130,000 on the Forestry Vote; a total of £530,000. (The normal Forestry Vote for this purpose used to be about £70,000, but this year provision is made for £203,000 under that vote.) I may say that, as a result of the condition of the country caused by drought and locusts and owing to the inability of people to find work in the various industries, the Government will very likely find later on, probably during the recess, that even this fairly substantial provision will be inadequate. The Minister of Labour is resolutely tackling the question, but I am just afraid that even after the provision made here the country will be faced with greater expenditure than is now contemplated, because, as hon. members know, conditions are very serious in the country. We have had deputations from various portions of the country where what amounts to a famine is prevailing and my hon. colleague will have to tackle this question. On these figures the revised estimate of expenditure totals £24,346,077, or £371,829 more than the original estimate.
I now come to the revenue figures for the current financial year 1924-’25. The increased importations and the progress made by the mining industry are naturally reflected in improved customs returns and mining taxation returns. A revision of the original revenue estimates for 1924-’25,—of the estimates which the former Minister laid on the Table,—has been made within the last few days, and it brings out fairly substantial increases In these receipts over those estimates. With increased importations and the improved customs returns and mining taxation receipts substantial increases are recorded. The estimate which was tabled during last session was based on the collections for the last six months of last financial year, but the actual collections during the first three months of the current year show an increase of £110,000 over the previous estimate for the quarter. If that is multiplied by four we would expect an increased return of £440,000, but I am taking an expected increase of £300,000. The excise receipts on the other hand are expected to fall below the estimate by £25,000 as the result of a reduced consumption of beer. Postal receipts are now expected to yield £19,000 and telephone receipts £5,000 more than the original estimates. The revision of the estimates of inland revenue shows an increase of £148,000, the variations being increased income tax, normal, from gold mines. £75,000 income tax, normal, from diamond mines £65,000, income tax general £100,000, dividend tax from gold mines £15,000, dividend tax general £10,000, giving a total of £265,000, with an additional £8,000 in respect of revenues of advances.
The reductions due to over estimates were licences £10,000, death duties £50,000, departmental receipts £65,000, making a total of £125,000 giving the figure as previously mentioned of £148,000. The revised estimate of Inland Revenue for 1924-’25 is £582,000, less than the estimate and, £600,000 less than the actual collections for 1923-’24, which is explained by the fact that the receipts in respect of mining leases for the previous year were taken into Revenue, while this year they go to loan account, where they properly belong. The diamond mining revenue is estimated to bring in £178,000 less than the receipts for last year, the share of the Premier Mine’s profits will be substantially less (about £202,000), owing to the fact that last year the company’s profits were swollen by sales of diamonds from stocks. The export duty will also be less than last year by £73,000. On the other hand, the Income and Dividend Tax on diamond mining is expected to produce considerably more than last year, the figure being £97,000, gold mining revenue, apart from mining leases and bewaarplaatsen is expected to be £117,000 more than last year; this, however, will go to Loan Account. The details will be found on page 1 of the Loan Estimates.
As regards Income Tax, excluding that derived from the mines, the carry-over to the present year will be about £975,000. The yield for the year ending June 30, 1924, is expected to be £450,000 more than the yield of the 1923 tax (£3,600,000 against £3,150,000). Assuming that we shall be able to start collection at the usual time—the third week in August—we expect to collect £3,600,000 before the end of the financial year—£750,000 of the carry-over and £2,850,000 of the current year’s tax. The other material differences between the estimates 1924-’25 and the collections 1923-’24 are an increase of Death Duties £58,000—the full effect of the duties levied under the Act not having been reflected in the collection for last year. There is an increase of £87,000 in regard to interest, and £43,000 in departmental receipts. There is a reduction in respect of excess profits duty of £22,000; that duty lapsed in 1920, and the Department expects to get in only about £5,000. Next year the item will disappear altogether. Native taxes show a reduction of £48,000. During the previous years increased collections were made in respect of a large amount of arrears which were outstanding.
I have dealt with these figures on the basis of existing taxation. The proposed changes in rates of taxation and consequent adjustments of the revenue figures will be discussed later. I find on the basis of existing taxation the revised estimate of revenue is £24,338,000, or £447,000 more than the estimate presented to the House in April. A few words in regard to the Loan position. The Loan Account and Debt position were dealt with fairly fully by the previous Minister in the House in April last, and it will not be necessary therefore to go over the same ground again. The balance on the account at the close of the year was £4,701,384. This balance on the Loan Account has to carry the deficit and also provide a working balance. I now come to the Loan Account for the present year, 1924-’25. The estimates of expenditure under this head represent almost entirely the commitments of the late Government, and it does not seem necessary to discuss them in detail, beyond one or two remarks with reference to the advances to Provincial Administrations for the improvement of Native teachers’ salaries—that is the £100,000 which hon. members will find under Loan Vote M.—this provision follows the provision of £60,000 in the previous financial year which had been placed on the Loan Vote on the understanding that it would be recovered from funds to be provided by a readjustment of native taxation. It is the matter we discussed in the House a few days ago. We are providing £100,000 again on the understanding that the amount will be recovered, and that the Loan Account will be recouped from an adjustment of native taxation.
Well, sir, that is the Bill which I foreshadowed a few days ago, and which the Leader of the Opposition thinks the Government should drop. But let me point out again here that such a course will upset the whole scheme of this Budget I do not think it would be fair to drop this Bill and still ask the House to make provision for £160,000, because it was on the distinct understanding that the Bill would be introduced, that it was provided. Just a few words in regard to a rather big item appearing on the Loan estimates. I refer to the advances to Provincial Administrations of £1,044,000. Let me say at once that I was surprised to note the criticism by the Opposition Press in regard to this provision, where it was stated that it is no use trying to escape from these Provincial troubles by the expedient of granting additional loans to the Provinces to meet their deficits. Let me point out to hon. members that it is a commitment of the previous Government. These are not loans which have been made by this Government. Last year, we passed an Act which provided that the Provincial deficits were to be met in this way.
Now I don’t think it quite fair to saddle this Government with the responsibility for the proposals in regard to provincial financial matters. No! If a Micawber-like attitude has been adopted in the past with regard to Provincial finances the blame does not lie at the door of this Government but of our predecessors, who have allowed the matter to drift from year to year. So far as the anticipated deficits for this year are concerned the provincial authorities have come to me and requested that I should assist them. I have done the only possible and sensible thing—told them, not as the former Government has done that I will give them a loan, but that under the authority of the Act which was passed some years ago, I will authorize them temporarily to borrow from a bank until the whole financial relations can be regulated, a question which we propose to settle very shortly. It is a very difficult question, but we intend to face it. We will not allow it to drift and allow the Cape people to pile up deficits. It is a very important question. The Cape Provincial Council has acceded to my request to go in for reasonable economy and the Administrator has informed me that this year he has saved £76,000, on that understanding I have told him that the Government would in the meantime give him this authority to borrow. The same applies to the Transvaal, subject to reasonable economies being effected there.
What is the total for all the Provinces?
£330,000 for the Transvaal and £476,000 in the Cape, which is now reduced to £400,000.
And in the other two Provinces?
In the Orange Free State and Natal I think they are practically balancing their Budgets. On these Loan Estimates hon. members will find provision made for £100,000 in respect of the amount required under the Drought Distress Relief Act passed last Parliament. The Estimates of Expenditure from Loan Fund total £12,821,600. I may mention that the Treasury received applications from various departments to provide funds to the extent of about £17,000,000, but that as will be seen, has been cut down. Still, it is a large figure, I admit, but this figure constitutes practically all commitments of the previous Government. The opening balance was £4,701,000 and the estimated loan receipts £1,850,000, making a total of £6,551,000 and leaving a balance of £6,270,600. The position is therefore that we shall have to borrow from eight to eight and a half millions during the current year besides “temporary borrowing” to meet current revenue deficits.
Now as to the temporary loan—that is the floating debt. On the 30th June it stood at £19,000,000 excluding about four and a quarter millions in Union Loan Certificates. This again has been increased by another £300,000 during the current month. This is a large figure, even taking into account that eleven and a half million is due to the Custodian of Enemy Property and may be regarded as a long term loan. Then there are the amounts of £4,100,000 due to the banks, which is abnormal. The Government has accordingly decided to make an immediate issue of stock locally, and contemplates raising a stock loan in London later in the year. The list for the loan to be raised locally will be opened on the 1st August, interest will be five per cent., and the loan will be repayable on the 15th January, 1935.
What is the amount to be?
We are going to keep the list open and shall see what the amount is to be later. We think that the fixing of a definite date of repayment, instead of making it at the option of the Government after five years, will be attractive to investors. For this purpose a sinking fund will be established. This is, one hopes, a step to a more conservative policy in this regard. The issue of this Loan synchronizes with the maturity of the first Union Loan Certificates. The idea is that the early investors in Union Loan Certificates will have a stock into which they can convert their savings as the loan certificates are redeemed. Arrangements have also been made with the Public Debt Commissioners to take up a block of this stock to enable them to exchange certificates which will mature after the list has been closed. I have already told the House that the revenue for the current year has been discussed on the basis of existing taxation. Now with regard to the new taxation proposals. There are a number of amendments to the existing Tariff basis, most of them on the recommendation of the Board of Trade and Industries. These adjustments are made for the benefit of various local industries such as the manufacture of harness, saddlery, furniture, explosives, soap, paints and shirts, dips, the packing of fruit and dairy produce, etc. There will also be an adjustment of the tea duty.
The cost to the revenue of these adjustments is expected to be £40,000 in a full year and £24,000 for the remainder of the current year.
Secondly, it is proposed to readjust the rates on tobacco by reducing the tax on roll tobacco by 11/2d. and on tobacco for pipe smoking by 1/2d. per lb. The costs to revenue will be £20,000. Now, let me say in regard to this tax that the whole question, the rates payable and the incidence, will be gone into by the Government during the recess. The immediate relief which the revenue is able to afford at this stage is that which I have intimated. That will make the roll tobacco 2d. per lb. and the pipe tobacco 3 1/2d., but we hope, although the proportion is not very big, and the remission not a very big one, that it will at least give a certain measure of relief to the primary producer.
That is what the Nationalists won their seats on.
Then it is proposed to abolish the tax on patent and proprietary medicines, which will mean a loss of £75,000 for a full year and £60,000 for the remainder of this year, which, of course, will include certain refunds which have to be made.
Does that include toilet preparations as well?
No, only patent and proprietary medicines. As regards income tax, whatever amendments we may hold desirable, it is too late to give effect to them this year. Hon. members will remember the procedure which has to be adopted. The notices have to be sent out. Then the taxpayer has to render his returns—that is one month; then assessments are made, which takes another month, and the payment of the tax taxes another month. So three months will have to elapse after the date of the written notice, and if any modification or change is made in the tax at this stage it will seriously retard collections, and it will mean a reduced collection which the revenue is not able to face at this stage. So I propose to leave the income tax as it is.
What a sigh of relief!
The remission of taxation referred to accordingly total £104,000, reducing the revenue for 1924-’25 to £24,234,000. The expenditure is shown at £24,346,000, giving a deficit of £112,000. This deficit, let us hope, by the exercise of the strictest economy will be covered by the usual surrender of surplus moneys. I may mention that effect has been given in the estimates of revenue to the remissions referred to. Now in the statement, already referred to, by my predecessor, the prospect was held out that this year’s Budget would balance without having recourse to the unsound practice of appropriating to revenue certain receipts properly belonging to loan account. We are glad that this is likely to be realized unless of course, the revenue should unexpectedly come down, or we should be faced with unavoidable additional expenditure. It is, however, equally true, as I pointed out at the time, that there are several very unsatisfactory features in regard to the financial position which should be continually borne in mind. I will briefly refer to them. In the first place there is the accumulated deficit of £1,919,000 after deducting the so-called surplus of last year, which was achieved by financing revenue from loan account, Parliament will sooner or later have to decide what will have to be done with that deficit. Well, there are several large prospective “write-offs” in regard to land settlement and irrigation schemes, on which there have been losses. Then there is the position in regard to debt redemption. Of the loans with sinking funds only the Transvaal and Orange Free State guaranteed loans remain outstanding. The annual contribution in regard to these loans is £400,000. At the time of Union the annual contribution to sinking funds of this nature was £700,000, but since Union it has gradually dwindled as the loans matured and were paid off, and so during the last few years up to the present we have only been providing about £400,000.
Since 1920, there has been no surplus of revenue available for this purpose and since Union the amount of debt actually redeemed has been negligible, for deficits have nearly absorbed the sum of the surpluses which have been realised. Substantially more ought to be done in the way of regular debt redemption than is done at present, and the sinking fund to be established in connection with the new local loan will do something in this direction.
Another matter calling for attention is the position of the Cape Civil Service Pension Fund, in which there is a very large anticipated deficit. That fund is hopelessly insolvent, and requires £180,000 a year for 16 years to reinstate it and prevent a big heavy liability after that time. It is proposed to extinguish this deficit over a period of years and provision for this will be made in next year’s estimate.
The position in regard to the Natal Police fund is also very unsatisfactory, and fairly substantial votes from Revenue Funds will have to be made to it annually. I do not propose making contributions to set that fund on a proper footing, but to make contributions from revenue as the payments mature.
In view of all these facts, hon. members will agree that the situation will require watching very carefully in the future, and this will be done by the present Government. I do not think the country need be afraid that financial ruin is close at hand. Industry, business and trade generally decline to be disturbed by the recent political change, and I hope will preserve a fairly even course. The revenue has not only been maintained but has increased, and not only has capital not been frightened away as was predicted would be the case by hon. gentlemen opposite, but there is increasing evidence that investors in industrial undertakings are anxious to transfer their activities to this country where in future they will be assured of more sympathetic treatment. I think on the whole we can look forward with confidence to the future. By resolutely tackling the many great and difficult problems and with a determination to widen the field of openings for our sons and daughters and with the hearty co-operation of all sexes of the community, South Africa shall and must continue to advance on the road of progress.
A very nice platitude.
I think I have dealt with the most important items of interest in regard to the financial position, and I shall therefore not detain hon. members any longer. I lay on the Table the Estimates of Revenue, and I now beg to move—
I lay upon the Table—
Mr. VERMOOTEN seconded the motion.
The debate was adjourned; to be resumed on 31st July.
This is going to be the special committee to which I have referred. The Committee will consider war pensions. It cannot complete its work during the session, and therefore I will ask that the Committee sit during the recess. I hope it will be a small but a strong committee, on which all parties will be represented and in which the whole country will have full confidence, so that the matter may be fully dealt with and closed.
Mr. VERMOOTEN seconded.
I do not wish to pose as opposing this motion in any way, in fact I wish to congratulate the Minister in taking action in regard to what is a very vexed question, but I feel some doubt as to the wisdom of the course proposed to be followed. He proposes to set up a small Select Committee in this House, and he realises that, owing to the short duration of this session, that Committee will not have finished its labours by the time this House rises. In that he is perfectly correct. There is not the remotest hope, if that Committee is to perform its labours thoroughly, that it will be able to get to grips with the question before the House rises. But he says, realising that difficulty, he will ask that Committee to sit during the recess. That is an expedient of very doubtful value. In the first place, it is totally opposed to the traditions of this House to ask a Select Committee to sit during the recess. There was only one occasion that I can remember where it was done, and that was in the case of the Miners’ Phthisis Committee some 5 or 6 years ago. Members come from all parts of the Union, and they are prepared to sit on Select Committees while the House is sitting, but they are not prepared to sit in Cape Town, or elsewhere for the matter of that, during the recess.
How do you know?
It will be very difficult, I think, to constitute such a Committee. If a Commission is appointed, where members receive a daily subsistence allowance during the sitting of that Commission, that is one affair, but to ask members of Parliament who have already sat 3 or 4 months in this House during this year and who will sit four to six weeks this session to remain behind and sit in Select Committee after this House has risen—
They cannot do it.
Perhaps my hon. friend will tell the Minister that.
It will be constituted into a Commission.
Ah, now we are getting to it. Why not start with your Commission straight away and not limit the membership of that Commission to this House? According to the reports which appeared in the Press at the time, the Prime Minister, then the leader of the Opposition, was interviewed by a deputation at Johannesburg representing the Military Pensions Association, and he promised that Association that there should be a Commission of enquiry into the administration of war pensions. I think that promise was well made, if made; I only go by the Press reports. But I do think it would be far more satisfactory if a Commission is to be appointed that a proper Commission of three or four members, not necessarily members of this House, should be appointed straight away. The procedure now proposed is, I think, most unprecedented. There is no particular reason why the matter should be dealt with in this way. I take it that on both sides of the House we are all agreed that there is a case for enquiry. We are only discussing now how that enquiry should be conducted, and I would suggest to the Minister of Finance that he should consider very carefully whether this enquiry should not take place by a Commission constituted ad hoc.that is constituted specially for the purpose of this enquiry, and, if that is so, he need not be restricted in selecting the personnel of that Commission to this House. I may say that the Acts in question are most difficult to administer, they are extremely technical, and it will take an ordinary member of this House, who has had no previous experience of these Acts, quite a considerable time before he becomes conversant with them. It may prove an advantage in the long run to appoint a Commission straight away. It is admitted that the Select Committee cannot complete its reports during the limited time this House is sitting, and I think it would be better to appoint a Commission straight away rather than to appoint a Select Committee and give them special powers to sit after the House has risen.
I think we could get together members of this House sufficiently acquainted with the work to get a strong commission together, gentlemen who take a keen interest on this pensions question. I have already in my mind persons who are well fitted to become members of this committee. I do not think there is much in what the hon. member says. I thought if we could get together a body composed of members of Parliament it would carry more weight in the country with regard to this question. Now the question of selecting the personnel does not rest with the Government. With regard to the hon. members opposite their party would be asked to nominate suitable gentlemen to work on the committee, and later on the commission. I feel the country would feel that there will be more confidence in such a body than a body solely selected by the Government. I think the hon. member will see that this is the proper course to adopt, and I hope he will withdraw the objection. He has already stated that it was adopted in the former case of the Miners’ Phthisis, and which was a great success.
The motion was agreed to.
I wish to ask Mr. Speaker’s ruling as to whether in the debate on Order of the Day No. V—Second Reading, Financial Relations (Teachers’ Salaries) Bill—it will be in order for members to discuss the financial position of Provincial Councils or to discuss the financial relations between the Union and Provincial Councils?
The section sought to be repealed by the Bill which forms the subject of Order No. V deals entirely with teachers’ salaries, and in so far as the position of Provincial Councils or the financial relations between the Union and Provincial Councils is affected, as far as teachers’ salaries are concerned, a discussion will be allowed. It is difficult to lay down beforehand what will be allowed on the debate in question. Points will have to be decided as they arise. But generally I may intimate that as far as the relations are affected by teachers’ salaries a discussion will be allowed.
In these circumstances, will we be allowed to have a full discussion on the general financial position of the Provincial Councils?
So far as the position is affected by teachers’ salaries a discussion will be allowed, but the general financial position of the Provincial Councils will not be allowed to be discussed.
First Order read; second reading Third Appropriation (Part) Bill.
The object of this little Bill is to get a vote on account pending the passing of the main estimates which we have had just under discussion. Hon. members will remember that the former Minister introduced the First Part Appropriation Act which authorized the supply of £7,000,000 on revenue and £3,200,000 on loan account and that took the Treasury to the end of June. The second portion of the Appropriation Bill £3,500,000 on revenue account and £500,000 on loan account will carry us to the end of this month or perhaps a few days further. I propose in this Bill to ask for a further £2,500,000 on revenue account and £2,000,000 loan account to meet disbursements up to the 10th September. I hope by that time we will have passed the main Appropriation Bill. On the three Bills we have placed expenditure to the extent of £13,000,000 on account and £3,950,000 on loan account. The issues to the end of July will be approximately, revenue £10,300,000; loan account £3,000,000. I hope that in view of the fact that discussion on the main Budget will start next week and hon. members will have an opportunity to range over the whole field, they will agree to say what they want in the financial position, of the main Budget, and that they will have no objection to the passing of the supply asked in this little Bill. I therefore move the second reading.
This is an opportunity, perhaps the earliest opportunity, of getting some information which the rules of the House debarred me from getting yesterday. It will be remembered by many hon. members that the Prime Minister after he assumed office made a statesman-like utterance which we all applauded, to the effect that his Government would not belong to any party, but that the would represent the State as a whole and that no section or interest would have a preferred claim from his Government. That is altogether admirable. We know, owing to distance and time, the status of a country is apt to be identified with its Government, and party divisions are also apt to be obliterated by distance. Now there are a large number of citizens of this country that are not satisfied to be identified with the circumstances connected with the release of Gen. Manie Maritz without further information. A very wise man has said you can judge of a man’s character by what amuses him. I’ll leave it at that. I have a special reason for bringing this matter up It so happens that many of my constituents were themselves victims of Gen. Manie Maritz’s actions. And it has also been my fate to come across the relatives of many individuals who lost their lives or in other ways endured severe suffering in consequence of his actions. It is true, as an hon. member says, it is about ten years since these events took place, and almost six years since active hostilities concluded, but that is entirely fortunate in our consideration of the circumstances. We are away from a time of popular excitement and we can be glad that the highest Court of this land, the High Court of Parliament, should have a better perspective of events and can take the judicial view as far removed from heat as possible. Well, I may say and remind hon. members, that Gen. Manie Maritz was convicted not ten years ago, but about three months ago, of the crime of high treason. Treason is another word for betrayal, and high treason means the gravest form in which a man can betray his country. Hon. members will remember that ever since peoples evolved from barbarism into civilization and formed organized communities it has been necessary for the very existence of a State to define treason and also to provide a punishment for the crime of treason. There are many definitions of treason, varying with different countries, ages and periods of time, but it is interesting to know that right from the beginning of the evolution of peoples into states, there have been one or two definitions of treason that have been common to all countries. They are: Communication with an enemy, giving up an army or fortress, and desertion. We find, too, naturally enough, that the punishments for treason vary throughout the ages, but they have this common characteristic, that, all through, the punishments have been the most painful and infamous obtaining in the country. We have, of course departed from many of the barbarous customs with regard to punishments, and perhaps it is fortunate that it should be so, but at the same time we cannot lose sight of the fact that in the old days, before civilization had attained to its present stage, there was practically only one method of righting wrongs, real or imaginary as the case may be, and that was by armed force. There are less violent and drastic methods available nowadays. That is all the more reason why attempts to subvert government by force should still be viewed in a most serious manner. Still, there are some facts connected with the release of this ex-officer of the Union forces we should remind ourselves of, and a question was put in this House some years ago, which unfortunately does not appear on the Records. The following is the question handed in by me, was amended by the Clerk of the House on the instructions of Mr. Speaker and appeared in a different form on our Votes and Proceedings:
To ask the Prime Minister:
(1) Whether he has read the following extract from a report of the proceedings of this House on the 2nd April, 1918:
“Captain Cilliers asked the Minister of Defence (1) whether it is a fact that Gen. Manie Maritz stole a large sum of Government money and property before he rebelled and joined the Germans in order to fight against the Union forces including his own former regiment; (2) if so, what amount did he steal and (3) whether the Government has recovered any part of the sum stolen.”
The reply was: “(1) Yes. (2) (a) the amount of the actual cash stolen by ex-Col. Manie Maritz is £194 1s. This amount would undoubtedly be considerably larger had not all payments from a large account, credited to him as force commander, been promptly stopped. (b) In addition he took Government horses and mules of an estimated value of £5,000; (c) he further stole ordnance stores to the value of approximately £15,000, of which a portion to the approximate value of £3,000 are estimated to have been stolen; (d) two motor cars, valued at £800, were similarly appropriated.”
(3) Under this heading it may be mentioned that during the three months, February to April, 1915, 236,099 marks or £11,804 19s. 5d. were paid in on behalf of Maritz at the Süd-West-Afrikanische Gesellschaft, Windhoek, of which amount 194,992 marks were from official German sources. With 75,000 marks Maritz purchased a farm and stock in the Windhoek district, ostensibly in his wife’s name. The Union Government captured the stock and laid an embargo on the disposal of the farm.
- (2) Whether he is aware that the large amount credited to Maritz as force commander referred to in answer 2 (a) as above was approximately £30,000.
- (3) Whether he recollects that in consequence of “Maritz’s active mutiny and treachery” (so termed by the then Governor-General of the Union): (a) a portion of the Union forces were surprised and badly cut up at Sandfontein with the loss of many young South African lives; (b) much suffering in mind and body was endured by members of the Union forces, traitorously delivered into enemy hands by Maritz, entailing great mental agony in some cases to their relatives; (c) the campaign in South-West Africa was prolonged, causing great additional loss to South Africa of life and treasure.
- (4) Whether it is a fact (a) that Maritz did not return to the Union of South Africa until the proceeds of his thefts were exhausted or nearly so, and (b) that he has remained, publicly at least, unrepentant.
- (5) Whether he is aware that under all the circumstances the coincidence of the release of Maritz with the commemoration of the anniversary of Delville Wood battle has deeply wounded the feelings of many thousands of South Africans.
- (6) Whether his attention has been drawn to the following true extracts from the report of the proceedings of a Select Committee of this House on the Rebellion, appointed on 2nd March, 1915, page 21, “Gen. the hon. James Barry Munnik Hertzog, M.L.A., having been cautioned in terms of section 21 of the Powers and Privileges of Parliament Act, 1911, was examined … page 265 (31st March, 1915):
2472. “Do you not disapprove entirely of his (Maritz’s) conduct as an officer in command of that part of the Union forces in handing over as prisoners a large number of our officers and men?—Certainly. It is a crime of a very heinous nature.”
- (7) Whether Maritz was granted a free pardon or merely a remission of the unexpired portion of his sentence?
- (8) How does he reconcile the release of Maritz (after serving only about one-twelfth of an admittedly lenient sentence for an unpardonable crime of a very heinous nature) with the safety, welfare and honour of South Africa?
I at once acquit the Prime Minister of any deliberate intention of wounding the feelings of his fellow South Africans, but the circumstances are unfortunate, and I do hope that for the future good feelings between the people of this country a satisfactory explanation may be forthcoming from the Prime Minister. I would ask, how does he reconcile his action with the safety, honour and welfare of South Africa. It is not my intention to delay the House, or by any words of mine to do anything other than to endeavour to clear up this matter which has caused a great deal of pain and indignation in the country. I do hope that this matter will be satisfactorily explained, and that it will be approached by members of this House in the proper spirit. It is a matter on which the people of South Africa feel very deeply. Our reputation as a country is at stake. I hope the Prime Minister will be able to explain some of the circumstances surrounding the release of Gen. Maritz at a time when he has served such a very small part of his sentence.
I do not want to detain the House, but there is a matter of great importance in my constituency with regard to the Act on Jackal Proof Fences. Bondholders sometimes refuse to allow the owner of a farm to get a loan from the Land Bank for the purpose of fencing in his farm. It is a very difficult question, and I am sorry that the Minister of Agriculture is not in the House. I hope that the Government will speedily solve the matter by passing the Bill which was drafted by the last Government. The Fencing Act is one of the best measures which the Government ever passed for the farmers, but the proper carrying out of the Act is hampered by the difficulty I have mentioned. It creates trouble and causes hardships to farmers who are financially weak. I hope therefore that the Minister will bring in legislation at once to remove the difficulty.
I have just one brief contribution to make on the discussion inaugurated by the hon. member for East London (North) (Brig.-Gen. Byron). I have lived long enough in this country to know the wisdom of forgetting a great deal of the history of this land. A most valuable help to the art of forgetting is to have things put right, and I for one shall be profoundly relieved if the hon. Prime Minister will give this hon. House his assurance, that a man guilty of such grave crimes against this land has expressed penitence for his evil-doing.
Before the hon. Minister replies surely he is going to give the hon. Prime Minister an opportunity of making a statement on this very important matter. (Ministerial laughter.) Hon. members opposite may laugh. The Prime Minister will acknowledge that we should not be too dilatory in making restitution for the misfortunes of the past.
Why so excited?
I am not excited, but I can understand that the man who rode round the country when the war was on and hid himself out of the way from the bullets getting excited. It would be much better for the hon. member for Hoopstad (Mr. Conroy) that he did not join in a discussion of this character. I am referring solely and entirely to the Prime Minister, and I think he certainly should reply to the hon. member for East London (North) (Brig.-Gen. Byron). As I said when the hon. member opposite interrupted me, I am not one of those who have been out for a policy of revenge.
Tell us another.
I will tell the gentleman opposite why I think we have a right to demand an explanation. Rebellion is a very serious crime. Had Maritz gone into rebellion after a period of 10 years I think hon. members opposite would have realized that there would have been many members on this side of the House who would have been ready to forgive and forget. Maritz committed one of the most dastardly acts that any man could have committed in any country.
What about Jameson?
If members will contain themselves a little while I will explain my reasons. Had Maritz gone into rebellion and had the Government released him not in indecent haste I would have been the last to raise the matter in this House. But I say that Maritz committed one of the most dastardly acts.
Not as bad as Jameson.
I have not arraigned the Minister of Agriculture because he went into rebellion. I have a perfect right, although I am in the minority in this House, to speak, and I claim of you, Mr. Speaker, the protection every hon. member is entitled to. Not only did Maritz go into rebellion, but he used his position to persuade young men to go into rebellion as well.
Just the same as Jameson.
The hon. member the Assistant Chairman of Committees is showing his suitability for the important position to which he has been chosen by the Pact, and the hon. member will not put me off the remarks I desire to put to the country. Maritz used his position of responsibility, not only to go into rebellion himself, but to encourage other young Afrikanders committed to his charge to go into rebellion as well, and some of them have lost their lives. But that is not the gravamen of the charge which has brought me to my feet to ask for an explanation from the Prime Minister. The gravamen is that an officer of the Union Forces not only went into rebellion but that he disarmed young men committed to his charge and handed them, bound, over to the enemy. Some of these young men were personal friends of my own. I know the privations and indignities they suffered, and some of those young fellows, owing to those privations, are no longer with us. We are prepared to forgive and forget a great deal, but the Government should have considered the feelings of those young men and of the relations of those young fellows who were handed over to the enemy because of their faithfulness to their oath. That is a crime which cannot be lightly forgiven, and the hon. member for East London (North) Brig.-Gen. Byron) is perfectly within his rights in asking the Prime Minister to give an explanation to the House. The feelings of hon. members, and the feelings of the people—both loyal Dutch and loyal English—deserve some consideration. During the trial of Maritz—I hope the Minister of Agriculture is not going out—for high treason, the evening of the same day that he was let out on bail, the feelings of hon. members were flouted by the fact of his sitting in the Distinguished Strangers’ Gallery. It was an exhibition of very bad taste indeed, and it was an action which has caused a good deal of feeling throughout the country. The Minister of Agriculture knows how Maritz gained admission to the House—he did not do so under the name of Maritz and that the Minister of Agriculture knows full well. I say to the Minister of Agriculture that a man in his position should not have been guilty of an action of that character. I say unhesitatingly that the feelings of a large number of people had been deeply wounded by the fact that an officer of the Union Forces not only went into rebellion, but committed a most dastardly action in handing over young fellows under his care bound and defenceless to the enemy. No matter how strong party feeling may be, the good sense of all people in this country will throw the public stigma of abhorrence on an act of treachery of this nature.
When this question was raised by the hon. member for East London (North) (Brig.-Gen. Byron) I had hoped that the matter might have been disposed of by the convenient form of question and answer. The reading of the question by the hon. member has thrown new light on this subject and I think the hon. member is entitled to the thanks of other hon. members who were unable to obtain the information contained in his question by means of the records of this House, for on reference to the records dealing with the question in 1918, I find that the answer to this question was not printed in the record. I do think, in view of the Prime Minister’s comfortable words to the country in regard to his future government of South Africa, that we are entitled to a statement of his reasons for the release of Gen. Manie Maritz, because I think we may lay claim to having reached a time at which it is incumbent on the Prime Minister to give us his opinion on this painful episode. In his evidence before the Select Committee on the Rebellion the Prime Minister made this very guarded statement in regard to Gen. Maritz: “I am going to reserve my judgment for later, so that whenever that judgment may be given it is not to be based or given at a time when all the facts are not before me.” Well, all the facts have been before us for some time. All the facts were adduced at the trial and none of us can claim that the facts have not been before us. I should be sorry to believe that the Prime Minister’s judgment meant that he completely exonerated Gen. Maritz from any stigma in this matter, that we are to interpret the immediate release of Gen. Maritz as indicating that was the Prime Minister’s attitude. That will be the interpretation put on it by a very large class of the community in South Africa—that is the inevitable conclusion which a very large section of the community will attach to the significant action of the Prime Minister in making it one of his first acts to release Gen. Maritz and to grant him a free pardon. But it does seem to me that the Minister should enlighten the House and enlighten the country at large as to whether Gen. “Manie” Maritz has been granted a free pardon, and as to whether from this time forward he is put in the position of being absolved from any further culpability or blame in connection with his actions. I speak with a due sense of responsibility, and I hope with a sense of restraint in this matter. Those of us who come of Highland stock, from the North of Scotland, will agree that rebellion, so rife in the early history of that part of the country, is perhaps not regarded with the same abhorrence with which it has been regarded in more settled countries and countries which have had a different history, and they will make due allowance for all the circumstances of this case, but I should like to emphasize certain points which I think every South African who loves South Africa and who loves the peace of South Africa should bear in mind, and that is that the history of South Africa in regard to rebellion in the past has not been wholly consistent, that in certain respects it has been marked by great severity, in certain other respects by a certain amount of leniency, and the English-speaking side of the House, I think, appreciate the leniency under which certain painful events of the past were composed. But I want to deal for a moment with the position of Gen. Maritz, who was a Defence Force officer, who went in for a special course of training in the Military Schools in which he was taught the responsibility of a military officer. He was taught by perhaps one of the best authorities of that time, Gen. Aston, the military code, and he could not plead ignorance of the very severe penalties that attach to breach of that code or breach of military law. Notwithstanding that, we have Gen. Maritz—I don’t want to go over the whole of the incidents—taking an action which in the most lenient light must be regarded as an act of treachery and an act of treachery which was perpetrated at a time when things in South Africa were in the balance. I think, in view of all these circumstances and in view of the feeling that exists throughout the length and breadth of South Africa amongst the English-speaking community on this subject, that we are entitled to a frank and plain statement from the Prime Minister on this question. That is the object of our continuing the debate. We should have been content to have left the matter to have been stated by the hon. member for East London (North) (Brig.-Gen. Byron) in the manner in which he brought it before the House, but as long as the Prime Minister treats this side of the House in the way in which he has treated us on this debate it is our duty to continue this debate and press upon him the desirability of taking us into his confidence and stating plainly why and for what particular reason this action was taken on that particular day. The position indicated by the hon. member for East London (North) (Brig.-Gen. Byron) is one which calls for a very precise explanation of the apparent change of attitude of the Prime Minister on this subject. We have him stating under circumstances in which his mind must have been solemnized to the seriousness of the statement he was making—he was warned under the Powers and Privileges of Parliament Act—at that time it was customary for witnesses to be so warned and whatever he stated then was stated under serious and momentous circumstances—we have him stating that it was an “unpardonable crime.” Why has he seen fit to pardon the crime, or, if not to grant a formal pardon, at any rate to release the man who committed the crime from any further penalties? That, briefly, is the question we wish to urge on the Prime Minister with fairness and with restraint, but with very great persistency.
I am glad to have heard the plea of the hon. member for Illovo (Mr. Marwick), which certainly greatly tended to clear the air and made it clear to me that information was sought in a bona fide manner as to the reasons which have prompted the Government to recommend the release of Maritz. Hon. members will agree, after the question which had been put by Gen. Byron, and more so after the tone adopted by that hon. member this afternoon, that the object of the hon. member has not been so much to secure information as to make an attack, which I regard as somewhat indecent. It is not the right thing for an hon. member to rise in this House and to go back into the history of seven or eight years ago, to put questions and answers given at a time when all the circumstances connected with the particular case were not before the public. It is not right to do so, particularly in view of the fact that the person concerned with these questions and answers has since been brought before the public tribunal, and tried by that tribunal, when all the facts and circumstances have been clearly placed before the world. It is wrong for an hon. member to go back into past history, especially in view of the fact that what had been regarded as facts in those days have since been proved not to be facts. I contend that Gen. Byron has not adopted the right tone towards the House, and it is for that reason that I did not intend replying to him, but Mr. Marwick has placed the matter on a different footing and has proved that what he really wanted was information. Well, the position is briefly this. We all know that Maritz committed certain offences. What he has done is known through the evidence which has been published. We all know that what he has done constitutes a serious offence, and for that offence he has been punished. Members know that during the election the question has been repeatedly put to me whether, if I was returned to power, I would take steps to release Maritz, and my reply was invariably that I would avail myself of the first opportunity to see that he is released. Members can therefore not say that this release was sprung upon them. That question was put to many Nationalist candidates, and all replied in the same manner. I will say this, that, however sour the apple might be, however unpleasant the taste, the day has come that we must put our teeth into it and bite through it, and we must put an end to the unpleasantness of the period of 1914-1920. It is because it is clear to me that, so long as Maritz remains in prison, so long will the feeling of bitterness prevail among thousands and tens of thousands of people, men, women and children, not merely of the Nationalist Party, but of the S.A. Party as well. Rightly or wrongly that feeling will prevail. It will be a feeling of Dutch against the English. It is all very well to say that Maritz has committed a crime, a heinous crime; there are hundreds of thousands in South Africa who will agree that Maritz has committed a crime, but at the same time they will agree that Maritz was not the primary cause He acted under circumstances which considerably mitigate the crime. It does not help us to say to-day that Maritz should not have acted as he did. We all feel that Maritz did wrong, but we must all agree, too, that the sooner we let Maritz out, the sooner we shall put an end to that feeling of bitterness, to those recriminations which are made loudly sometimes, sometimes in the homes, sometimes in public; and the sooner we shall have a better state of affairs prevailing in South Africa. The step we did take was the only step we could take, it was the right step to make South Africa feel that English and Dutch in this country stand as one. Now that the European War is over, now as never before in the history of South Africa should we be made to feel and appreciate that Dutch and English must stand together, and that there should be an end to all that friction of the past. That is what induced the Government to recommend to the Governor-General that Maritz should be released. As to the question of Maritz having been granted a free pardon, I may say that no free pardon has been granted; all that has been done is that he has been granted a remission of sentence. It might be said that Maritz was only in prison for a short time, but we must not forget that he was in exile for nine years. I will not say that his punishment was too severe or too light. That is not the question. The question is whether we have the courage to-day to stand up as men and say: “Let bygones be bygones.”
I want to reply to the hon. member for Cradock (Mr. van Heerden) and to say that the question raised by him requires legislation. It is one of the matters which has the earnest attention of the Minister of Agriculture. It is not possible during this session to do anything in the matter, but it is being carefully considered and will be tackled next session.
Motion put and agreed to.
Bill read a second time.
I move, as an unopposed motion—
Mr. B. J. PIENAAR seconded.
House in Committee.
The Chairman read the Clauses and Title of the Bill, which were agreed to.
The Chairman reported the Bill without amendment.
Bill to be read a third time on 31st July.
Second Order read: Second Report of Select Committee on Native Affairs.
Report considered and adopted.
Third Order read: House to go into Committee on the Fourth Report of Select Committee on Native Affairs.
House in Committee.
Paragraph I, recommendations Nos. (1) to (14), and Paragraph II put and agreed to.
Resolutions reported, considered and adopted.
Fourth Order read: Second reading, Rents Acts Extension Bill.
It will be seen that as far as the Bill is drawn, there will be small objection to its scope. It is intended to extend the old Acts dealing with the subject, and in connection with that it is necessary to insert the second clause in this Bill, because that second clause is to make provision for cases, especially in Cape Town, in which landlords have tried to eject their tenants. I believe the policy of the tenants has been to fight these cases—I do not think a single ejectment order has in point of fact been obtained, but to cover the costs of such proceedings it was necessary to insert the second clause. This Act comes into force as from June 30th so that there may not be any interregnum during which the Rents Acts are not in force. As to the expense involved in the administration of this Act, in the past there was practically no objection, as far as I know, from the country districts. The principal work is done in the eight large centres. The administration of the Rents Acts costs £4,880 per annum; the places where the expense is incurred are Cape Town, Johannesburg, East London, Port Elizabeth. Pietermaritzburg, Bloemfontein, Pretoria and Durban. The original expense amounted to something like £20,000, but that has been cut down by rigid economy to £4,880.
By the late Government.
No, by the Treasury Department. I don’t think there will be any serious objection to the Bill as it stands because I think members on both sides of this House during the election promised that the Act should be renewed. But I rather imagine we are going to have a discussion as to whether this Bill should apply to shops. There has been an agitation on this matter in the Press, particularly in regard to Johannesburg. I do not think the position is acute in any other part of the Union. Certainly if we are to take the newspaper reports at face value it is acute in Johannesburg. In the course of this debate we wish to have information on that matter. If that information shows that it is necessary, I think we shall find it desirable to cover shop rents as well as house rents, but that matter we are leaving till later on in the debate. Members who took part in the discussion in Johannesburg will no doubt take part in the discussion in this House. I may say I have received information from a large number of tenants and landlords in Johannesburg, and this information is naturally contradictory. Where it is necessary to tighten up the Bill this will emerge during the course of the debate.
We on this side of the House have no objection to the principle of extending the existing Bill for another twelve months, but the Bill before the House seems to me a serious infringement of the spirit in which the original Act was passed. It seems to me that the Minister has glossed over the chief clause of this Bill. Up to now the Bill has been renewed from year to year. This Bill proposes to make it a permanent feature.
I will tell the hon. member. This Bill as passed originally was a temporary measure to meet a temporary house shortage. It was that and that alone which induced the House to pass this Bill. Clause 2 is therefore a breach of faith. We were told that this Bill was to be kept alive only during the temporary housing shortage. That shortage still exists and therefore we are not opposed to renewing the Bill for another year, but to make this Bill a permanent measure is a distinct breach of faith with the House and the country. Not only so. The Bill has a great many unpleasant features which the country has accepted in view of the acknowledged shortage of houses, but I do not think anybody has ever been enthusiastic about the Bill. It is an interference by the State with private enterprise. It is an infringement of the liberty of the subject; it is class legislation. It discriminates against one section of the public only.
Yes, the rack-renter.
I understand the Minister of Posts and Telegraphs is in favour of this Bill. One sees clearly why. The Bill bears the clear imprint of the Labour wing of the Pact—it is the Labour tail wagging the Nationalist dog. There is another point if this Bill is to be made permanent. The old Bill affected only houses built prior to 1921. If this Bill is never to be repealed, are we always going to hark back to 1921? Twenty years hence, I take it, we shall be referring not only to houses built in 1920. This Bill has to my certain knowledge done a great deal to restrict building operations. To-day building operations are practically confined to flats. There is practically no building of houses for the people going on, and that is largely due to this Bill. Let me give the Minister an outstanding example in my own constituency.
This is not my Bill. This is the last Government’s Bill.
No, it is not the last Government’s Bill. The Minister is trying to suppress the fact that Clause 2 makes a fundamental change.
I hope hon. members can read.
There is a vast difference between passing a permanent Bill and re-enacting one every year. The difference is this, when the Bill was originally brought forward it was on the understanding that it would be re-enacted every year to enable members to discuss it and to enable the public to judge whether there was any necessity to keep it alive indefinitely, but the Minister had not the common honesty to draw attention to the fact that principle in the Act was repealed in the present Bill. That being the case I shall, when the House goes into Committee on the Bill, move an amendment extending the Bill to twelve months only. Now let us come to Clause 2, which the hon. Minister so airly disposed of. I am surprised that a gentleman of his legal training should have been responsible for the drafting of Clause 2. Personally I would show no mercy to a landlord who took advantage of the hiatus between the old Act and the new one to eject a tenant; but let us see how Clause 2 works out in practice. Take the case of a landlord who secured an order of Court, and who required one of his tenants to quit, and who took a new tenant. As Clause 2 stands, the landlord, having acted perfectly legally, finds six weeks afterwards that what he did has since become illegal, and that he may be mulcted in costs and his new tenant will have a claim for damages as well. All this is involved in the slovenly drafting of the clause. Can you allow a man to do a thing one week and next week pass a law punishing him for what he did previously in a perfectly legal manner I shall move in committee that the Bill be extended only for the current year, and that Clause 2 be excised, not because I lack sympathy with the tenant, but because the clause is against the spirit of our legal procedure and cannot be carried out in practice.
I should have thought that there was no difference of opinion in this House on this matter, because when the hon. member for Salt River (Mr. Snow) and myself brought this question up in the last Parliament and asked the late Government to introduce an emergency measure extending the Rents Acts, we were told it was quite unnecessary and that the new Government—they thought they were going to be the new Government—would bring in a Bill doing the very thing which the hon. member has just said is impossible. The Minister of Public Works said: “I have just turned up Act 12 of 1922 and there it is provided that the Bill shall continue between June 30 and the commencement of the Act July 4, 1922.” The Minister in answer to me said, “It will be quite possible when Parliament meets again to pass a Bill which will have the effect of covering the interregnum from June 30 next, so no hardships need be experienced by anyone.” When Parliament was dissolved and the Government began to realize what a serious effect their action was having on the minds of poor people, they issued a public notice through the mouth of the hon. member for Dundee (Sir Thomas Watt), who said that if the South African Party were returned, one of the first things it would do would be to reintroduce the Rents Act and to make it retrospective to June 30 last. There were leading articles on the subject, especially in the leading paper that supports the late Government here. I will not call it a paper of the late Government—I know nothing about who owns the shares—but it supports the South African Party and no other. This paper had a little leader in which it said that while it was true the Pact was also going to reintroduce the Bill, you must vote for the South African Party because it will be some time before a new Government would be able to introduce such a Bill, whereas it could be done quickly by the old Government. Yet we are now seriously told that there are difficulties in carrying out the promise made by both parties to the public. I congratulate the Government on the fact that one of its first acts is to redeem the promise given to the voters. I do not see the difficulties to which the hon. member has referred. If a man does anything against the law he is punished, and that also may be held to be an interference with the liberty of the subject. Whose liberty are you interfering with except the man who was going in for rack-renting in a way that every person who had some regard for fairness would deprecate. I don’t mind interfering with the liberty of a man who wants to make blood money out of people. Then as to class legislation, the class of rack-renter forms only a small section of landlords. Landlords are entitled to a fair return on their investment, but unfortunately there is a small section that goes in for speculation and rack-renting at the expense of the poor. The hon. member criticised the form of the Bill. He made the astounding statement that there had been an honourable understanding—with whom I do not know—that this Bill must always be an annual Bill, renewed from year to year. Every year there was the most determined opposition to that clause which limited the operation of the Bill to a year. This opposition was not limited to hon. members who belonged to the Labour Party. There were members of the South African Party who supported some of these amendments to extend the measure for more than a year. It is obviously time that this matter should be put on a permanent basis instead of being brought up year after year. The hon. member (Col. D. Reitz) condemned his own argument when he talked about interfering with building operations, for any building erected after 1st April, 1920, is not subject to its provisions. No house that is built to-day comes under this Act at all. The fact of the matter is that middle-class people and the wealthy people have no difficulty whatever in building, but, so far as the poorer part of the population are concerned, the housing is very inadequate, and it seems to me that the time will come when that problem will have to be tackled by the Government and the Municipalities building the requisite houses for the poorer section of the population. But, in the meantime, this Act is not stopping anybody from building. Let us come now to the hon. member’s objection to Clause 2. Unless the Government are going to allow certain small sections of landlords to snap their fingers at this House they could not possibly avoid putting in Clause 2. I know something in regard to the facts of this matter. I communicated with the Minister of Justice when these facts were brought to my notice, and I am glad that the Government in the correspondence then published assured the public that they were going to introduce the Bill. What is the position in a nutshell? A certain number of landlords saw a golden opportunity of turning their tenants out and taking advantage of what they knew must be an interregnum between June 30 and the time when Parliament could deal with this matter. That was pointed out to the late Government. Only a certain number of landlords, and not by any means belonging to all parts of the country, took advantage of that position. These gentlemen sent notices in May and June, while the Rents Act was still in operation, to various tenants and demanded that they should leave the houses they occupied at a month’s notice. I know these cases—good tenants, men who had been in the houses in some cases for 16, 18 and 20 years. There was no question whatever of their being in arrear with their rent. There is no question of these people being in default in any other way or of there being any legitimate grievance against them. The landlords merely saw an opportunity of getting a rack rent, and accordingly wanted to put in new people, so that when the new Act came into force they would be in occupation. Fortunately, these people took legal advice, and it was put to them to disregard all notices given to them and to dispute any notice given on or before June 30th, while the Rents Act was in force. The magistrates held that was a sound point, sufficiently so to prevent summary judgment being taken against these people. I know a tenant who got a notice on July 2nd, and he took up the position that he could not be put out until August 31st. In that way the matter has been kept open, and so far as I know, no actual ejectment has taken place. The point raised by the hon. member for Port Eliabeth (Central) (Col. D. Reitz), is not in accordance with fact. These people wanted to steal a march on the legislature of this country, to steal a march on their poor tenants. Seeing that these promises were made by the late Government it surely was not right to issue summonses and, I say, section 2 is an absolutely necessary section. When we get into Committee I propose to make it still more effective and deal with the question of costs. It is necessary that this Bill should go through with the utmost despatch. There are some of these cases in the Wynberg area, and they are set down for hearing on August 13th, and it is desirable that the matter should be disposed of before then. If there is any measure upon which the Government should be congratulated, if there is anything which will bring real relief to the poorer section of the population it is this Bill introduced by the Minister of Justice.
I would like to make my position clear with regard to the modification I propose to vote for in Committee. The first point taken by the hon. member for Port Elizabeth Central (Col. D. Reitz) was as to a serious alteration made in the scope of the Bill in making it a permanent Bill instead of an annual one. In that I entirely support the point of view of the hon. member in front of me. The hon. member for Cape Town Hanover Street (Mr. Alexander) denies that it was an emergency Bill in 1920, but I certainly always regarded it as purely an emergency measure to deal with contracts as to rent in an entirely different way to that in which contracts generally are dealt with. There are people in every walk of life who disgrace the class to which they belong, and during the war this class of person was able to make his presence felt in the way of distressing the community. I was personally in favour of the principle of the Rents Act, and I was the one who moved the first motion with regard to the Rents Act in this House, in connection with the Committee for the cost of living. I regard the position as follows: In the present time there is still a call for the renewal of this emergency legislation. The circumstances of tenants and of the building trade are such that there is still a call for it, but not a call to make the Bill a permanent one. We should provide again a definite limit, say for the ensuing year, as has been done before, so that we should have the opportunity as the need arises year by year to re-enact it, if necessary. We can then decide whether the Bill shall be allowed to lapse or be continued for another period. There were some more remarks made with regard to section 2 of the Bill by my hon. friend in front of me. I have been and am in favour of making this Act retrospective, and have said so. This was an undertaking given by the Minister of Public Works in the House last session. It was an undertaking which I supported. No tenant should be penalised for anything that took place between June 30 and the date that this Bill becomes operative, and there should be something like clause 2 in this Bill. I consider that the hon. member for Cape Town Hanover Street (Mr. Alexander) let himself go rather unnecessarily in attacking my hon. friend in front here. With regard to the drafting of the clause, it wants a certain amount of amendment, and I think the hon. Minister will see eye to eye with me on that point. I am in favour of the principle of clause 2 in making it retrospective, because I want to see protection given to the tenants against the landlord who took the risk and went to Court and tried to snatch a temporary advantage over against the tenant, knowing that all parties were supporting the renewal of the Act with retrospective effect. How it has to be done is not quite clear, but the clause does require a certain amount of amendment. Subject to this observation, I shall support the second reading of the Bill, and subject also to my making an amendment in Committee. This is what I have under-taken to do during the last few weeks. I support the principle of the Bill, and feel that it is right to do so.
I oppose the Bill. I am against the interfering with private interests, and I will always be against it. I voted for the Bill in the first instance, but then it was only an emergency measure. In its present form, however, I cannot support it, and I cannot congratulate the Minister on this first Bill which is being introduced. The Member for Cape Town (Hanover Street) (Mr. Alexander) has congratulated the Minister with the Bill and no wonder, for he made big promises during the election. I am not against the restriction of shop rents, but the rent for dwelling houses should not be tampered with. In the cities every man can build his own houses, and we must help people to become independent. I do not want to protect rack-renters, but we must not encourage those who get large salaries and high wages and spend no money. This is still one of the unfortunate post-war measures which has to be rectified. If we no longer interfere with private interests things will right them selves again. The member for Port Elizabeth Central (Col. D. Reitz) has said he would like to see the Bill made applicable for an-other year only. I think the Minister will do well to withdraw this measure. The Act has lapsed, and we must leave the matter as it is. If people are not satisfied with the rent they have to pay let them rent other houses or build their own.
I am not going to follow the hon. member of Hanover Street and give my legal experience in this matter, but I wish to say that I entirely support this Bill, and I do so for several reasons. We who live in the towns know how people are turned out of houses and made to suffer simply and solely because they cannot, as the hon. member who has just spoken has suggested, build their own houses. We all know that the assistance given by the Government towards building one’s own house is very inadequate—a very small proportion of the public indeed has been able to avail themselves of it. A certain class of landlord is simply out to profiteer. They have profiteered to such a large extent that it is impossible for people to live under decent conditions. I on previous occasions therefore moved that the Act, instead of being an annual Act, should remain in force for some years. I do so be-cause the good landlord wants this Bill. He knows that it is a protection to himself. He is freed by this Bill from incurring the odium which attaches to the profiteering land lord.The big trust companies are in favour of this principle, and when men like that want it, it surely shows that the profiteering landlord is acting in a way which should be stopped. As to interference with private business, I do not think it is interfering with private business: the man who is profiteering is not the man who is building. The profiteer is the man who buys slum property and week by week in-creases the rent. We know that while Parliament was not sitting hundreds and hundreds of notices were served on tenants threatening them with increased rent or ejection. I sincerely trust that hon. members will consider very carefully before they vote against this Bill. I trust the Bill will be carried.
I have on previous occasions when the Rents Bill has been before this House expressed my dissent from the principle of penalizing one section of the public for the benefit of another. Here you have a clear interference with the right of private con-tracts; you are interfering with the rights of ownership. I do not say in a certain stage it is not necessary that this should be done, but, if found necessary, then I maintain that section of the public which is penalized should be compensated. If it is necessary that houses be found for certain people then those people whose rights of property and free contract are interferred with should have protection from the State. I know people of humble means who have invested their savings in house property, but under this Bill you interfere with their right to get the whole benefit from such investment. If you do that, they have the right to demand compensation from the State, for I contend that if the Legislature fixes a maxi-mum rental it should at least guarantee that rental. People will continue to be penalized by the continuance of this measure. It should be fully proved to the satisfaction of the House in how far recourse has been made to the facilities given to people to borrow money to build houses—money advanced by the Government, and if municipalities have taken advantages of the facilities given under Government advances, for it would be un-fair to longer penalize private landlords for the “laches” or negligence of municipal bodies. This statute is of a spoilatory character. You are taking away from a man that which under the ordinary law he is entitled to, and you are depriving him of his legitimate rights in respect of his own property. The Johannesburg Land Agents Association has issued a memorandum, and I think they have set out a case which shows incontestibly that so far as Johannesburg is concerned, there is no further necessity for the continuance of this measure. I do not think sufficiently cogent reasons have been advanced for renewing the Act, and I decidedly intend voting against it.
With regard to what has been said as to Municipal housing schemes, I think I am right in saying that the Durban Corporation have during the past two years done their best to build cheap houses for the working classes of Durban. They have spent all the money that the Union Government has given to them for that purpose, and they are applying to the Government for a good deal more. I would point out to the hon. member who has just spoken that they have not got money at cheap rates of interest; they are now having to pay 5 per cent.
Not for housing. We have built over two hundred houses in Durban and we want to build more. Private builders are building houses in Durban, but there is still a very great shortage indeed, and the rents which are being extracted by some of the landlords to-day are exorbitant. The Rent Act is required in Durban, and the Rent Board is required. I would like to say to the Minister in charge of this Bill that I hope, on behalf of the small commercial men in Durban, that he will extend its provisions so as to cover shops. There is only a very limited shopping area in Durban, and people in that area are being squeezed by the landlords. I know one case where an estate agent bought a block of property on which were a number of shops and increased the shop rents anything up to 70 per cent. Two of the tenants who were disliked by him were turned out. I know of at least two cases of insolvency through exorbitant rents, and I sincerely hope that this Act introduced by this Nationalist Government will be better in many respects than any we have had during he past few years.
It seems to me that hon. members naturally look upon the subject-matter of this Bill from the point of view of the localities in which they find themselves. The hon. member for Hospital (Mr. Papenfus) has told us just now that he does not think that the circumstances in Johannesburg are such as to warrant an extension of this measure. From my experience in my constituency I think that an extension of the measure is needed. It is beyond dispute that there is in certain parts of the suburbs of Cape Town a shortage of houses, especially the class of houses required by the coloured people, and something, therefore, must be done to prevent those people having to pay rents which are beyond their means. I know, of course, that it is a most complicated question. It is beyond dispute, I think, having regard to what one reads as to what has taken place in England, that the existence of legislation of this kind does to some extent put a brake upon the building of new houses. It is quite true, as the hon. member for Hanover Street (Mr. Alexander) said just now, that new houses do not come under the provisions of the Act, but it is also obvious that the fear that similar legislation may be applied to houses built since the year specified in the previous measure does to some extent operate as a deterrent to people to build new houses. Then there is the further point, that the existence of an Act like this brings about a feeling of insecurity and doubt. I think it is much better that the Act should continue to be a yearly measure, because people will not be satisfied to keep continually on the Statute Book legislation which constitutes an interference with private rights, and the fact that this measure will come up for confirmation every year will do something to direct attention to the necessity for remedying the evil, if it continues to exist, of the shortage of houses. Reference has been made to the Durban Municipality. I am not sufficiently acquainted with the work of municipalities in the matter, but it does seem to me that existing legislation with regard to housing loans is not such as to enable them to take sufficient advantage of it and bring about real improvement in the existing state of affairs. This is a matter which cannot obviously be discussed at the present stage. The fact of this Bill coming up annually will enable members to bring to the notice of the House circumstances which might in their opinion justify an appeal to this House to provide funds for municipalities and other public bodies to enable them to provide houses at reasonable cost. The reason why, in many cases, rents have reached such a high figure is because the cost of building has enormously increased, due, no doubt, to the extra cost of material and the extra cost of labour in this country. It seems to me, in the meantime, that this measure should be re-enacted so as to come up for review every year. As regards the point raised by the hon. member for Fort Elizabeth Central (Col. D. Rentz), I am not sufficiently a lawyer to say whether the wording the clause 2 is correct or not, but I have not much sympathy with any landlord who has taken advantage of the hiatus between the lapse of the previous Act and the introduction of this Bill, because he must have known the parties were pledged to a renewal of the Act with retrospective force.
I have looked at this legislation which is described in Clause 3 of the draft Bill as “the Rents Act, 1920-’24.” If ever there was anything which could be described as “a thing of the nature of shreds and patches” it is this legislation. I have the Acts here, and you will see we have amended the original Act every year. We have amended our own amendments, and anybody who wants to get a comprehensive grasp of these four Acts will need to wrap a wet towel round his head and study them for hours, and then I doubt if he would understand them. I would suggest that for this year, at any rate, the Rents Act be renewed up to 30th June next. Then if it is the policy of the Government when they have had time to consider the matter to continue this legislation indefinitely, if it is decided that future relations between landlord and tenant are to be regulated by Boards, the Government can do so by a well-thought out Act. We should, however, be very cautious in interfering with contractual relations between people. The Rents Act was a War measure. There were many other similar measures, such as the Profiteering Act, but the Rents Act is the only such legislation which had not been allowed to lapse. If the Government passes the Bill in the form in which it appears now, it lays it down as a permanent political principle in this country, that whereas nothing is done in the direction of regulating, or rather restricting, private contractual rights in any other sphere of enterprise, it is to be done in regard to the relations between landlord and tenant. I do not agree with that. It may be necessary under special circumstances to pass legislation of this sort, and I am prepared to support this Bill on that ground, but to lay it down that this is to be done indefinitely is a mistake, and I think the Minister on reconsideration will agree with me that it should not be done.
You do with burglars.
But the relation between me and a burglar is not one of contract. I think it is necessary to explain that to the hon. member, coming as he does from Benoni. I just want to deal, if I may, with Clause 2, which has been referred to by the hon. member for Port Elizabeth Central (Col. D. Reitz). I think the hon. Minister will require to consider this clause extremely carefully. I have looked at it from the lawyer’s point of view, and see the greatest difficulties arising from this clause as it is drafted. Although we are pledged as a House to make this Act of retrospective force—I agree with that fully—do not let us minimise the consequences resulting from that course. The common law came into play on June 30th, under which a landlord was free to make a contract with new tenants. I see that provision made for the repeal of ejectment orders, but nothing is said about the new tenant who has come in. The landlord may either under the threat of legal proceedings, or under actual legal proceedings, have succeeded in effecting an ejectment of tenant A. He may then have entered into a contract with tenant B for, say, a period of six months or a year. Supposing the Court does cancel its ejectment order given against tenant A, what is the position as regards tenant B who can show under his lease that he is legally competent to be there? You cannot put him out. There is no legal machinery provided, and the landlord is left between the devil and the deep sea. The ejectment order is cancelled, and no provision is made for any other person with whom the landlord may have entered into a contractual obligation. There are other difficulties under this clause, of which I have given a brief indication to the Minister so that he may consider them. I hope that we shall be very careful in this House in regard to legislation which has a retrospective effect. Such legislation, as he knows from his legal experience, and I know from my experience, often leads to litigation.
Mr. HAY moved the adjournment of the debate.
The motion was agreed to, and the debate was adjourned to 31st July.
The House adjourned at