House of Assembly: Vol2 - WEDNESDAY 6 AUGUST 1924
First Order read: Adjourned debate on motion for House to go into Committee of Supply, to be resumed.
Debate adjourned on 31st July was resumed.
In opening the debate on this motion from this side of the House, I labour under a certain disadvantage in that the proposals of. the Minister of Finance, as far as I intend to deal with them, are practically what the Government have taken over from their predecessors. Neither in regard to the figures which they put before us, except in certain minor details, nor in regard to questions of policy, is the Budget speech which was put before us by the Minister of Finance appreciably different from what it would have been had we still been occupying those seats. A certain amount of credit is due, I think, on that account to the Minister of Finance; of course to a large extent it was inevitable; but still a certain amount of credit is due to him and the Government in that they have put aside all the wonderful schemes and promises which were held out to an expectant electorate during the recent elections.
Such as for instance?
It is difficult to know where to begin, but let me mention one or two of them. We were promised a State Bank. In the difficulties that many of us had throughout the country in obtaining credit from the ordinary commercial banks were at once to be relieved by a State bank.
Does that appear on the Budget?
I would have thought it was a most important matter to be mentioned on the Budget. A question that is going to control the currency of the country not to be mentioned even in the Budget! Why the hon. member has something to learn about Budgets yet. That was one of them. Let me see if I can think of any other matters. Yes, our cattle farmers were promised that when the new Government got into power the borders were to be closed against the importation of cattle from Rhodesia. Now that, we are told, is going to be carefully considered.
Do you want us to break an existing contract?
Is not that the very argument we put to them when they were calling for the stoppage of the importation of cattle into this country. We know how it was received. Of course I do not ask the Government to break an existing contract. I am congratulating them on having put these things behind them.
Who made the contract?
It was made by the Government in power and ratified by this Parliament. I am congratulating the Government. I am not criticising them for not having repealed the tobacco tax on which they got thousands of votes. I am congratulating them on having courage to say to their disappointed followers: “No gentlemen, we are in power, don’t worry us now; we have put these things away into cold storage and will give them our most careful consideration.” For the first time apparently these things are going to receive careful consideration. I do not hesitate to suggest that the more consideration they receive the less we shall hear about them. I do not know whether the hon. member (Mr. Fourie) has had enough. Perhaps he is not satisfied.
By no means.
Neither are the electors.
The Government have not “delivered the goods” yet.
You had fourteen years of it.
No, Ministers tell us these things cannot be done in a day. Of course they can’t. I am congratulating Ministers upon having told us that these things are being very carefully considered. They have much need to be. As Isaid just now, there are few changes in the figures which were put before this House by the Minister from those which were put before us by his predecessor. He is fortunate in one respect, and that is that one of the more important changes that he indicated to us was that he is able to increase his revenue estimates. I congratulate him upon that, too. He is in a very different position to what his predecessors were. They had to reckon year after year with revenues that did not come up to their estimates. He is in the happy position of saying that he can increase his estimates.
They estimated wrong.
No, they did not estimate wrong, but the Minister had the good fortune to be put into power by the people when the revenues were on the up grade instead of on the down grade, as they were when we were in office. I hope the Minister’s estimate is correct, and that the revenue will continue to improve as he evidently anticipates that it will, and that the Government will preserve that attitude of caution with which they have begun, to encourage that feeling of confidence which the Minister referred to with so much satisfaction. I do not intend to go into the estimates in any detail, and I do not intend to deal with matters affecting the Railway Budget because my hon. friend the member for Cape Town (Central) (Mr. Jagger) will probably deal with that part of the business. I want to touch on one or two main questions of interest which were referred to by the Minister. Before proceeding I would like to say in regard to the position which the Minister has found in connection with the revenue he has come into his position at a fortunate time, and I think it was a little ungracious of him to lay so much stress on what he spoke of as the “so-called” surplus left to him by his predecessor. That, of course, is an echo of the election campaign. We heard all over the country during that campaign that so far from there being a surplus of £200,000, there was a huge deficit. The House knows quite well what the real position is. At any rate those of us who were here last session know what the real position is. There was no attempt ever made by the Minister’s predecessor at concealing the real position. On the contrary, he emphasized the position that we have accumulated deficits from the past years. He emphasized the position that we were taking from loan revenues, from revenues which were intended to go to Loan Account, that we were taking these into the Revenue Account. It was his constant contention that without some economy the revenues were insufficient to meet our current expenditure. The Minister of Finance kept up what I may call the election attitude by talking as if there were something underhand or something that had not been properly explained to the House in regard to the taking of these moneys from Loan Fund and using them for current revenue. It was done by this House, and it was legalized by this House. The late Minister of Finance never lost an opportunity of bringing it into prominence. The position is in the only sense of the word, and as understood by every one who heard the Minister that there was a surplus of £200,000 of revenue over expenditure in 823-’24—that is what we mean by surplus, and it was a little ungracious of the Minister to quarrel with this little gift. The first point I want to deal with is the question of the Currency and Banking Act. I do not intend to go into this at length, but I am glad the Minister realizes that this is a matter on which an early decision is desirable. The country should know as soon as possible whether it is the intention to ask Parliament to renew in one form or another the Currency and Banking Act or to let it lapse on June 30th. Now, I did think, and it was a natural thing to think, that the Government had really some plan in regard to that, some policy with regard to the Currency and Banking Act passed by this Parliament two years ago. That Act was passed through this House in the teeth of the most determined, I might say ferocious, opposition. I did think opposition of that kind and criticism carried to such lengths must be backed by some considered policy—that there was really some alternative policy.
They are still cleaning up your mess.
It is not a question of cleaning up any mess. Do not let them take that flattering unction to their souls. I did think that behind all that criticism there was some considered policy of their own. I take it now that they see the wisdom of what we urged on them.
The position is quite different to-day. Three per cent. of ten per cent.
I was glad also to hear the Minister say that he realized that in a matter of this kind there was a great difficulty of making a break in regard to the currency as between South Africa and countries with which its business is mostly carried on. When we put up that contention it was received with scepticism, but now it is realized by the Government that there are great difficulties in the way of a country like South Africa breaking away from the sterling, basis of currency when the great bulk of our trade is carried on with the United Kingdom. I am glad that that is realized, because as regards the basis of our currency that is the real point. These questions are very conflicting and difficult, all the more so, owing to some weakness of the human mind whereby we all imagine that we are all currency experts. But to look at it without any prepossessions of that kind the point mentioned by the Minister is really the crux of the question—can we really set up for ourselves a gold basis so long as the bulk of our trade is with a country which is on a sterling basis. There is no magic as far as I can see in a gold standard so far as our internal needs in the matter of currency go. It does not seem to me that we should be richer or happier if we had the gold standard so long as we have a currency that is fairly stable and not arbitrarily inflated or deflated. So long as we have that there is no special magic in a gold standard, and there is no reason why we should run any risks to get on to one. The real point is when you come to international relations,—very obviously the gold standard is of the greatest advantage, it gives you a basis of international exchange, and it gives you a method of regulating the exchange between various countries. It is a very open question, however, whether our going on to a gold standard is going to help very much to that end. We may suffer very grave inconvenience and loss by getting on to such a standard. If we could help by the adoption of a gold standard to get it adopted also by the chief industrial and commercial nations and get away from these fluctuations of exchange it would be a great advantage. They are a great hindrance to business and add greatly to the cost of carrying on business and appreciably keep up the cost of living. We have a special interest in this question, as we are the biggest gold producing country in the world, and it is certainly to our advantage to have a gold standard throughout the world. But to do it by ourselves I am afraid the disadvantages may well outweigh the advantages I am glad to see that the expert is going to be called in again, and the matter is going to be discussed by a committee of experts. Well, we shall wait and see what they have got to say but, I can promise the Minister that as far as we are concerned, when he produces his plan it will not be subjected to any carping criticism. We shall give him every possible assistance from this side to bring about a condition in regard to currency which will promote our trade and industries internally, and with the rest of the world. But we shall try to stop him bringing about any fancy plan which will not lead to this result. I hope the country will know as soon as possible what the outlook is going to be in regard to the Currency Act after the 30th June. Another matter I wanted to mention was the position of the Provinces. The financial position of the Provinces is one of the gravest problems we have got to face to-day. The two larger Provinces are in the position of incurring deficits every year. The Cape has practically abandoned all attempts to cope with the situation. They have welcomed the facilities given by the Government to borrow money, and they apparently do not look beyond that. The Transvaal, according to the Administrator, were attempting to make their Budget equalize—whether by economies or some other method I do not know—but desisted from doing so because they understood the Government wished them to borrow the money and wait and see. This problem is one which demands that it shall be dealt with, and there again we have to accept the position put forward by the Minister that they are facing the situation. I was glad to find the Minister approaching this subject with an air of lighthearted confidence. He told us they had a policy which would put an end to the present state of things. I was very glad to hear that. There is nothing like light-hearted courage and confidence for carrying one through difficulties. I appreciate the difficulties and do not want to discourage the Minister. We should all like to see that happy state of things brought about. I would like, however, to put one or two considerations before the Minister. They are considerations on which we, on this side of the House, lay stress. It is my opinion that the relation between the Union and the Provinces which existed after the 1913 settlement, by which the Province spends just what it likes and the Union Government contributes approximately half its expenditure without any control or check over that expenditure—I say that is a relation which, in my opinion, cannot go on. Therefore the Minister will be driven to abandon that position, whether he likes it or not. What is he going to do? He may do one of two things. He may say their policy is not to increase the control of the Union Government over the Provinces, but to increase the independence of the Provinces. He may say he is going to give them greater power of raising revenue and greater independence of the Union Government and Treasury. Well, in my opinion, that is simply going a long step on the road to a federal state, to federation, and I would warn the Minister not rashly to tear up that principle of the Act of Union which laid down that this Union was not to be a Federal Union but on the unitary system.
Are you in favour of restricting the powers the Provinces have got under the Act of Union?
I would prefer to go in that direction rather than in the other direction. At the same time, I would warn the Minister against abandoning that cardinal principle of the Act of Union.
Have you not got to keep a balance between the two?
Yes, I think you have, but I think you want more control by the Union Government.
That is more centralization, is not it?
Yes, I think it is, but you cannot go on the system by which the Union Government contributes large amounts of revenue without control over the expenditure. Apart from that, in regard to education, which is by far the most important service which these Provincial Councils have to do, I think you must have more national control of policy than you have now. The system which is laid down by the Act of Union where you have education, arbitrarily divided into two sections—higher education on the one side and education other than higher on the other—and these two sections administered by different authorities, that system has been a failure. It has acted detrimentally to the interests of South Africa. It seems to me that the line we should follow is not the line of making the Provinces more independent of national control, but making them more subject to that control, particularly in the matter of education. It seems to me dangerous to allow education to drift from the Union control and to be in four water-tight compartments as it is now. We have heard a great deal about the Baxter Report. It has been condemned by members on the other side of the House because, I think, they have not appreciated the real principles of that report; because the grants suggested are not high enough; because it does not make adequate provision for the country child as well as the town child—
You admit that?
It may be so, but these are details. The principles embodied in that Baxter Report and the two reports which followed it, are, I think, of the greatest value and indicate the lines along which we ought to go if we are ever to establish a national system of education. I hope the policy the Minister will contemplate will be along those lines. I believe the present system cannot continue, but that there will be a deadlock. If you give the Provinces more power and greater revenue, you will be on the wrong path altogether. We have to follow the line of more careful control over these Provinces. It is the true direction indicated by the Act of Union and by the interests of South Africa. There are one or two other matters I want to touch upon. The Minister does not indicate any particular relief from taxation, but he is going to repeal the medicine tax; that I think will disappear without many tears being shed over its grave—not even by this side. Many a good man helped to put the Government into power because he believed the tobacco tax would immediately be repealed. I am very glad that it is not going to be repealed, because I believe it is a very valuable item in our scheme of taxation, and it is a tax on an article of luxury which is taxed everywhere. The Minister has not erred on the side of generosity in the amount of remission, nor has he erred on the side of knowledge because all the complaints we heard were, not that the amount was too great, but that the tax pressed unduly on the small producer. However, the small producer will have to suffer for some time to come, and I am afraid he will not be very thankful for the remission. It is like all these other things, and I do not know that there was ever such an election in which so many glowing promises were held out and so few carried out. I congratulate the Minister on following the line of caution and not of generosity. The Minister referred to various liabilities which still exist, and which some day or other will have to be dealt with. He mentioned the question of a sinking fund, and he is of opinion that more provision should be made for setting up such a fund. There I agree with him, and his predecessor said very much the same thing, I think, in his last Budget speech.
He never did anything.
No, because you cannot establish a sinking fund when your revenue does not meet your expenditure.
There is such a thing as raising revenue to reduce liabilities.
We had a great deal of sympathy when we tried to raise the revenue and an equal amount of sympathy when we tried to reduce the expenditure.
What did you expect?
That is exactly what we expected. The Minister knows quite well that at a time such as we passed through it was impossible to put additional taxation on the country, and it would have been extremely inopportune to cut down expenditure further than we did. Therefore I entirely agree with his view that more provision should be made for a sinking fund; but there is no difficulty in answering the question why it was not done before. I think such a proposal was made some years ago by the Public Accounts Committee. How is the Minister going to raise the revenue for that purpose? It may be that he thinks the revenue will come in such a buoyant way that he will find the money without additional taxation. On previous occasions when Budgets were brought in by those now sitting on this side of the House the one line of attack made by the Nationalists was the need for economy, but I did not hear a word from the Minister in his Budget speech about cutting down expenditure. I would suggest to him that in regard to the sinking fund and the other liabilities he mentioned he will find it very hard to do very much beyond pious expressions of opinion, unless he can cut down his expenditure.
Are you advocating further retrenchment?
No, I am suggesting that unless the Minister is extremely lucky in regard to revenue he can only find money for these things by cutting down expenditure, and I daresay he will receive the same support from the hon. member for Benoni (Mr. Madeley) in any enterprise of that kind as we did. Then there is the question of the old deficits, the Cape Pension Fund and matters of that kind. I agree with him that these things have to be dealt with, but for a Minister who realizes all these obligations and liabilities I was surprised to find there was no reference in his Budget speech to any efforts to cut down expenditure. The Minister has come into office at a very fortunate time, and if he follows the policy which he has indicated of caution, of enquiry, and of keeping at a distance all those glowing schemes and policies which we hear so much about he will be very well advised. He told us that there was a great deal of confidence throughout the country in regard to business and finance, and that capital, so far from being scared away, was coming into the country. I hope he was not referring to the Munnik millions which the hon. member for Vredefort (Mr. Munnik) carried in his pocket throughout the election campaign. I hope it is more substantial and less fairy-like than that. I have no doubt whatever that capital will come into the country so long as the Minister follows out the line of policy which he indicated in his Budget of building on the foundations he found. So long as he does that the confidence of the country will be restored.
I am going to depart from it in several instances.
What about the Durban grain elevator foundations?
That little gibe is worthy of the hon. member for Ceres (Mr. Roux), but I will tell him that there is no great fault in finding a bad foundation at Durban, but there is some merit in going into the matter so thoroughly as the Government did in showing clearly where the trouble was. No, there was far more credit in having put the whole matter before the light of day than discredit in having found bad foundations at Durban. I will not pursue these gibes of the hon. member opposite which are only worthy of the hon. member and those who laugh with him. I may say that from this side of the House, as long as the Minister pursues the policy to which I have referred—the cautious policy—he will be faced with criticism from this side of the House, but not facetious criticism, and we shall not make party capital out of his difficulties, but give him assistance in the interest of the country. The Opposition will have the interests of the country at heart and place them above those of party.
The hon. member for Yeoville (Mr. Duncan), in his speech said that the speech of the Minister of Finance was a repetition of the speech that might have been delivered by Mr. Burton had he been in office. But the Minister of Finance is to be congratulated that although he came into office when the financial year had almost been completed and arrangements had been made by someone else, and surrounded as he was by officials—I desire to say nothing to disparage them, but officials have always been repugnant to change and innovations—at the short time at his disposal he was able to show a tangible indication of change of policy and outlook, as far as the financial policy of this country is concerned. We found the first indication in the remission of the Medicine Tax. I know perfectly well that in the heat of the election campaign wonderful promises, all these glowing promises, which the hon. member for Yeoville (Mr. Duncan) mentioned, were made, but very many glowing promises were made by leaders of the South African Party, and unfortunately for them, the public had become so accustomed to these un fulfilled promises that they paid no attention to them. One of these promises was that the Medicine Tax was to be repealed by the party which had imposed it. The Minister of Finance is to be congratulated that he has given a definite indication that the promises made on the Government side of the House are going to be carried out, and that the Government will not follow the policy of the South African Party during the last fifteen years—to make promises and very rarely carry them out. It is perfectly true that the whole tenor of the criticism that has been made by the hon. member for Yeoville (Mr. Duncan) is based on this. He says “you have not delivered the goods.” The South African Party has been in power for the past fifteen years, and has got the country not into the state of prosperity to which the hon. member for Yeoville (Mr. Duncan) referred, but into a state of depression which is almost unexampled in the history of South Africa, and yet here the criticism is made: “You have been in office since the end of June, and you have not delivered the goods.” The Government shows it intends to reverse the evil done by the South African Party. The Minister has also told us that he will reconsider the policy adopted with regard to Provincial Councils for the past fifteen years, and that the Government intends to reverse it. The hon. member for Yeoville (Mr. Duncan) has indicated that the correct policy to follow in future with regard to these Councils is the policy which has been followed in the past; that is, to break the Act of Union so far as the Provincial Councils are concerned, and take away rights which the Act of Union has conferred upon them. The hon. member for Yeoville (Mr. Duncan) has always been in favour of the policy of getting rid of the Provincial Councils altogether, although the South African Party has never come out roundly with such a policy towards the Provincial Councils. A good deal of the attacks which are made are on account of the deficit of the Councils—deficits which are due to the action of the South African Party, withdrawing from the Councils the right to tax this or tax that, although the Act of Union definitely conferred such rights. When the Transvaal Provincial Councils started taxing, certain friends of the South African Party, they went to the courts of law about it, and the highest court in the land decided that the Council was perfectly entitled to impose the tax. Then the South African Party came along and said, “we must get round this position,” and promptly introduced legislation to override the decision of the court. Having taken away the opportunity of raising revenue as provided under the Act of Union they said. “Look at this terrible Provincial Council—deficits here and deficits there.” I am glad to see the indication given by the Minister of Finance that the right policy is to be followed, and rights restored to the Provincial Councils which the Act of Union contemplated to give them—the right to administer the affairs entrusted to them without interference—and then giving them a chance. If they fail, members of the South African Party side of the House can come along and say, “we must reconsider the position of these Councils,” but before you give them such a chance it is unfair to level this criticism against these bodies. Another direction in which the Minister gave a very definite indication of a change of outlook and a change of policy from that which has been placed before this House for the past 15 years is contained in his reference to unemployment. He has shown not only that the Government realize the growing evil of unemployment in this country, but that it is no good being niggardly in connection with these matters, and although I do not think the provision he has made is adequate, he himself has very frankly and fairly indicated that from information coming to hand from day to day the provision which has been made will be inadequate, I feel confident that, if it is necessary to make further provision for the unemployed in this country, the Government will not hesitate to make such provision. While congratulating him most heartily on these matters, I hope that he will appreciate the point which was made the other day by the hon. member for Benoni (Mr. Madeley) and that is to avoid, in the first instance, being completely guided by the Civil Service, by head officials. I believe it is necessary that it should be clearly laid down that the Government is responsible for the policy of the country and that the Civil Service, a very able Service of which we are all very proud, is responsible for administering the policy of the Government in accordance with the wishes of the Minister. Speaking of my own experience in the Municipality of Johannesburg, I may say that we determined to give effect to our own policy and not simply to take over the policies of the past, and we found that the staff very loyally and adequately helped to carry out the new policy which was introduced into that body. I am confident that if the Ministry adopts that attitude and states that it is their business to lay down the policy and that, however different it may be from the policy pursued in the past, it is their intention to see that this policy shall be administered, they will find that the officials will loyally and adequately give effect to their will and their policy. There is another warning note which I might perhaps sound, and that is that there should not be too great a desire to aim at safety or security, to try and prove to the people who have been controlling things in the past that, after all, the Government is going to secure them and that everybody is going to be secured. We do not want everyone to be secured. We want the masses of the people to be more secure than they have been in the past, even if those who have been exploiting them in the past are a little less secure in the future. What is needed is not a policy of trying to satisfy this or that interest, because in the past that has been the outlook, but a bold policy of making changes where changes are necessary regardless of whether they please the high financial interests in this country or not. In that regard may I also express regret that in this Budget, although introduced in such a hurried manner, the tobacco tax, instead of being tinkered with as it has been, has not been repealed? With regard to the income tax, I think it is to be regretted that some attempt has not already been made to alter the incidence of that tax, so as to shift the burden a little more on to the shoulders that are best able to bear it and take it away from those who are least able to bear it. When we remember in connection with that income tax that there are only about 70,000 people receiving over £300 a year in South Africa, and that the balance of 1,500,000 white people are in receipt of less than £300, it does not say much for the wonderful manner in which the South African Party has been steering the country in the last 15 years. Surely there should have been a better distribution of the wealth of this country than is reflected by those returns of the income tax. The member for Yeoville (Mr. Duncan) says he is glad to say that the South African Party have laid a solid foundation. Let us see, in dealing with the financial situation, what is the foundation which has been left to the present Government and what are the legacies which have been bequeathed to them by the Governments of the past 15 years. Unemployment to an ever-growing extent, bankruptcies in an increasing measure. The Chairman of the Johannesburg Chamber of Commerce, not a Bolshevist, but a most reputable individual, has stated that for the period 1923, on making a comparison of the insolvencies and taking every one thousand of the white population in the respective countries, the bankruptcies in Great Britain were 1.27, in the United States of America 1.74, in Canada 3.89, in New Zealand 5.6., and in South Africa, under the beneficent government of the South African Party, the number was 13.38. Having realized that terrible state of affairs, they said we must look for some explanation of it. Where is that explanation to be found? Obviously they refused to find it in the policy of the South African Party. They said we have got too many fraudulent trustees in South Africa. That was the first explanation. When that explanation failed they said you have got something worse than that, not only fraudulent trustees, but people fraudulently going insolvent. That, however, does not account for such a difference between the number of insolvencies in this country and in other parts of the world. The real reason for the difference is to be found in the economic conditions to which the South African Party has reduced the country. It is to be found in the results of the upheaval on the Rand in 1922, when men were forced back to work at a wage on which they could not exist, and thousands were sent on the streets to starve. The people who in 1921 were led by the South African Party became disappointed with them, these commercial people who had so long supported them, supported the Pact at the last election because it was the only method by which they could get rid of the present depression in the country. There is no doubt that you have a state of starvation in this country. Let any member of this House go to the Rand, or to any other city in the Union, and ask any of the charitable organizations to inform them of the number of people in this county who had to seek assistance from charitable institutions. These people are not only unemployed, they are starving. Can the South African Party be proud of such a legacy? The Minister has made reference to the use of a favourite statement of Mr. Burton—judge the prosperity of the country by the number of motor cars imported. I do say, and I hope and believe, that the present Government will judge the prosperity of South Africa not on a basis of the number of motor cars imported, they will not judge it on the basis of the dividends of the mines, of the diamond industry, and on the incomes of people who can afford to be taxed; but they will judge the prosperity by the amount of unemployment, by the number of people starving and who are dependent on charity to keep body and soul together, and by the increasing number of suicides in South Africa, due to depression and misery brought on this country by a policy of keeping down wages and looking at everything from the point of view of the economic wage, so dear to the heart of the hon. member for Cape Town (Central) (Mr. Jagger) and by the policy of the hon. member for Yeoville (Mr. Duncan), who stated that the white people must be in a position to compete with the coloured people.
I never made such a statement.
Yes, wilfully misunderstood. Yes, here I have the exact words used by the hon. member for Yeoville. They were: “The European standard of living is too extravagant, and for this reason it is difficult to combat the competition of coloured labour.”
We have got to get away from this question of competition of coloured labour and you will increase the consuming capacity of the people of this country, alleviate unemployment and the present state of depression existing in South Africa. Might I refer to another legacy—the hon. member for Yeoville (Mr. Duncan) has referred to a little deficit of £200,000, which he terms a surplus—a surplus which is brought about because certain loan moneys were utilized. It reminds me of advice given by a certain poet on a little sum in arithmetic. He said 3 from 2 won’t go. You must borrow one, but take my advice borrow more. That is what Mr. Burton the Minister at the time did. He borrowed a little more. He said our revenue does not balance with expenditure, so we will borrow, and while borrowing we will borrow a little extra and show a surplus. The accumulated deficit at the 31st March, 1924, was £2,227,000 odd. That accumulated deficit was there in spite of the fact that £2,000,000 odd had been taken from loan funds. For the years 1913-’14 and 1914-’15 when the late Government was still in power, in spite of the fact that, it is true, some of them were in opposition—a very loyal opposition—there was an accumulated deficit of £2,012,464, a deficit which was put aside to loan account by Act of Parliament. If you add these sums you get as a legacy of the South African Party about £7,000,000 added to the debt of this country, for purely administrative purposes, and on which the people of South Africa have got to pay interest. The deficit was due to the fact that from the day the South African Party got into power until the day they were thrown out by a disappointed and despairing people, they invariably hesitated and refused to increase the revenue of the country through taxation which would hit their wealthy friends. You have got to get away from this position of being afraid of hitting the people who can afford to pay. You have to realize that if you are to have revenue so arranged as to enable you to carry out the affairs of the country to advantage and in accordance with a financial policy which will benefit the whole country, you have to alter the whole incidence of taxation. In connection with this question of the loan, may I quote something which was uttered in this House in 1915. In the Hansard report of the Budget debate this statement occurs: “I remember in years gone by, when Sir E. H. Walton conducted the financial affairs of the Cape Colony, he managed to spend £800,000 upon discounts, and the expenses of raising loans. It will be within twelve months that we have to spend something like £1,000,000 for the same purpose, and that £1,000,000 is put on our debt, and is a permanent mortgage of this country, and is not of the slightest advantage to any human being except to the sharks who have lent us our money.” I am sure that some of our friends when they read that phrase “Sharks who have lent us their money,” will think that this criticism came from these benches, but, Sir, this criticism did not come from a member of the Labour Party or from a Socialist. It came from Mr. Merriman, who always had the courage to criticize his own friends when he saw that things were going wrong. He said you have to get away from this policy of piling up debts for the benefit of the sharks. This policy has been contrary to the best interests of South Africa. It has taken up a great part of your revenue. At the moment we are paying something over £8,000,000 in interest. For the Defence Force, Police, Prisons and Reformatories we pay something like £3,000,000—all very largely brought about by the economic depression and the conditions which exist. From this you will see to what the policy of the past Government has brought this country. Whilst on this question, may I say this: that while I think the proposal for borrowing money locally is undoubtedly an improvement on the old policy, I hope that the Minister will get away even from this, because even that means we shall have to pay back with interest one and a half million pounds for every million of the amount raised, and if you take a 20-year loan you have to pay back who you borrow two-fold, or in other words of every million pounds borrowed you only have one-half available for development and the other half you pay away in interest. I believe the time has arrived when the Minister and Government should take into consideration whether they could not get away from that system of raising money; take into account the warning given by Mr. Merriman, and review the whole of our position as far as finances are concerned and see that the power resting in the hands of private banks in this country be taken away from them, and that we should raise our loans on the credit of the country, by issuing Treasury notes, using the money for capital works and expenditure on developments, and withdrawing a portion of the amount raised annually until that money is paid back.
Yes, without interest. I may be told that that is inflation. As a matter of fact it is not inflation. You have inflation only when you are creating currency without real assets behind it, but when you are developing and creating wealth in proportion to the notes issued you create currency without bringing about inflation. By this means you are raising money on the credit of the country which can be applied to productive work without using any part thereof for unnecessary payment of interest. Then there is the question of the gold standard. We have travelled far since the hon. Minister made his statement. A great change has come about in the affairs of Europe. Some settlement at least is in sight after all these years of struggle. You have at last arrived at a settlement, thanks to the fact that in England you have a Labour Government.
Oh yes, due I say to a Labour Government. Even the leader of the Opposition admits it. Even he gives credit to Mr. Ramsay Macdonald. Thanks also to the fact that France too recognized the need for a change of Government. In that country the despair of the people has shifted the last Government and put in a Government which is practically a Labour-Socialist Government.
Occasionally you do hear the truth from your friends.
And I do believe that now there is a better spirit in South Africa—a better spirit than in the past. You will find it throughout the country and you will find it in the general desire of those in power to-day to try and see that the masses shall be looked after a little better—because, after all, the wealthy can look after themselves. This settlement in Europe is likely to bring about a return to the gold standard, and I suppose the probabilities are that we in South Africa will also return to that happy position. In connection with the proposed appointment of a Committee of experts I do want to warn the Minister not to be too enamoured of experts. Our experience in the past has been that experts come along with very definite ideas and theories of their own and you are better off with people who look at things not from the expert’s point of view but from the commonsense point of view. In appointing any Committee to deal with this matter I would suggest to the Minister that he should get a number of commonsense persons to serve. As a result of the return to the gold standard there may be an attempt to create a very unduly accentuated policy of deflation. However bad inflation may be, unduly accentuated deflation will bring about very unsatisfactory results, and I suggest to the Minister that the possibility of this accentuated deflation should be carefully guarded against, and that in order to safeguard the interests of the country he should establish a State Bank at the earliest possible moment, and that the financial requirements for capital expenditure of the Government, the Provincial Councils and the Municipalities shall be met by the Government in the manner above indicated by me, and shall not be handled by private banking institutions. Credit has been so restricted by these private banks that unless we take very cautious steps on the lines I have indicated, great as has been the number of insolvencies in the past, they will be still greater in the future when deflation does take place. Already as a result of the anticipated removal of the gold premium we have indications that there is likely to be a reduction in wages on the Rand gold fields. I notice that someone has stated—the statement is evidently inspired—that the moment you lose the gold premium which amounts to three millions it would not be fair, so this gentleman suggests to take that money out of dividends, and therefore we have to anticipate a ten per cent. reduction in wages. Whether the gold mining companies intend to do that I do not know; it is probably a little camouflage to avoid giving the increased wages asked for by the Miners’ Union. This wages question will arise during the next few months, and I feel confident the Government—unlike its predecessors—will be more sympathetic towards the workers. In this connection may I mention that I happened to spend sixteen days in the cells in Marshall Street police station in Johannesburg a few years ago, and I notice on the Estimates an item of £15,000 for additional cell accommodation there. I do not know whether the late Government which made this provision was anticipating further use for those cells, but I would much rather the money was spent in improving the condition of the cells, for those conditions are comparable to the Black Hole of Calcutta. If by any mischance the indication of the intention to reduce wages on the Rand should lead to industrial trouble I hope that the Defence Force at any rate will not be used again in industrial disputes. I want to urge upon the Government not to run away with the idea that by granting £500,000 for relief works they are going to do anything towards solving the unemployment problem. One of the most essential things for solving that problem—apart from the question of its immediate alleviation—is to bring about a state of affairs by which the consuming capacity of the people will be so increased that there will be greater opportunity of buying products which the country can produce, and less necessity for those producing those commodities having to close down. However unpalatable it may be, you are going to find this unemployment so long as your present economic arrangements continue. In this connection I would like to draw attention to an article by the New York correspondent of the “Manchester Commercial Guardian,” in which he refers to a probability of a wage cut of 20 per cent. in non-union works, and short time and growing unemployment. “It is considered,” he said, “likely that unemployment will become a menace again next winter, as it was in the winter of 1921, unless industry brisks up meanwhile. As a matter of fact grave doubts are being expressed as to whether periods of acute unemployment may not in future be as much a part of the economic system of the United States as they are in other industrial countries. It is pointed out that the increase in producing equipment has almost reached the point where it is a hindrance rather than a help to an even flow of prosperity. The steel plants of the country and the shoe industries can produce twice as much output as the country can consume.” It is not a question of not being able to produce what people require—houses, clothing, food, etc.—and we are in a position to produce them, but as a result of our economic policy the people are not in a position to buy these things. So industry is curtailed and people are thrown on to the streets to starve. It will be necessary not only to take steps to alleviate the unemployed by this £500,000, but to increase their capacity to acquire what they need. The Johannesburg municipality has come to the conclusion that it is no good going in for relief works and giving relief pay, which pauperizes people, but rather to give them work at a rate of pay which enables them to live like civilized human beings, or at least approaching such a condition. The Johannesburg municipality has decided to pay 10s. a day to people carrying on these productive works, and are asking the Government to meet them by subsidising the Council to the tune of 5s. per man per day, in respect of these people, and I hope that the Government will very favourably consider this, because by helping Johannesburg they will only be helping themselves. There are thousands of things in this country which are required: railways, post offices, telephones, roads, bridges and schools—innumerable matters—and if a huge construction loan be floated on the lines indicated to carry on these works, we will go a long way towards the alleviation of this unemployment. There is the general spirit to do something to raise the people, and this policy should be carried out, so as to bring about a state of affairs under which no one shall have everything until everyone has something.
The hon. member for Yeoville (Mr. Duncan) has congratulated the Government on its present policy because he alleged that this Government was building on foundations laid by the South African Party. The hon. member for Troyeville (Mr. Kentridge) indicated, at any rate to some extent, what this foundation was or what part of this foundation consisted of; and I would like to refer perhaps to another small section of this foundation to make clear how difficult a task the present Government has in building up anything at all on this foundation. As it was put by an hon. member in interruption of the hon. member for Yeoville (Mr. Duncan) and who said the present Government was sweeping up the mess, I would like to mention just one or two small instances to illustrate the amount and extent of the mess which this Government has to face. I would like to deal with one or two rather doubtful transactions with regard to the Lands Department, and I do not think I am over-stating the case when I say that there is no Government department abused to the extent the Lands Department is, both for personal purposes and for Party political purposes. The first instance that occurs to me is the state of affairs as I found it at Zoutpansberg in the 1920 elections. It is curious that in the North—the North is that part of the Transvaal which contains more land, more Crown land, that is, than any other part of South Africa—it is curious that the Lands Department only became active there in election time. In 1920 we started with an inspector of lands in Zoutpansberg who was virtually illiterate, but who was able to make a beautiful cross behind the name of the South African Party candidate. This fevered activity extended to neighbouring constituencies, and during election times this Land Department was very active and strenuous indeed. Hundreds of applications came in, and all were practically recommended by anyone in the Lands Department. A survey of Government ground was undertaken during the election or before the election. It was never said, but there was a feeling amongst the public of Zoutpansberg: here are hundreds of Government farms being surveyed, and the man who supports the Government may receive a slight compensation later on. There was building of roads from nowhere to nowhere. Many were being built by the Lands Department, although one would have imagined that they would have been quite satisfied to leave road-making to the much-abused Provincial authorities. Finally there was an allocation of Government farms mostly to sworn South African Party men, and if a Nationalist got a farm you could be quite certain that he was a gentleman who had been inoculated with the spirit of hereniging. Then we had the present inspector of lands, a prominent Nationalist at the head of the movement there, who suddenly, although he was in the best of health, became South African Party. It was a pure coincidence that he was appointed for many days and weeks cutting up Government farms. He now occupies that lucrative position. There are hundreds in the Northern Transvaal who are willing and able to be good settlers; thousands of people who want ground but have no ground, and others who have two, three or four farms each. There are two instances in particular to which I want to draw the attention of hon. members, and more especially the attention of hon. members on this side of the House—the few that are left; the few that were spared to us from the General Election. I desire to deal with the case of the farm “Tommy.” The farm “Tommy” is a farm that has been referred to in this House. When I refer to that farm I naturally have to refer to my late opponent Col. Mentz in that connection. I want to make it quite clear that I do not take a delight in mutilating a corpse. The reason why I mention the farm “Tommy” and the name of Col. Mentz is because it is part of the general mess, part of the insecure foundations that have been left to the new Government. I pass over the fact that it has been disclosed that Col. Mentz had out of 36 farms in a northern constituency which he owned or part of which he owned, 34 which were occupation farms, while the 35th was one bought with Government money. I pass over that because it does not indicate that there was anything in it which per se was wrong. I pass over the fact that the saltpan in Zoutpansberg is at present being leased to a small syndicate, and that cattle bearing the brand of Col. Mentz graze in that saltpan. I pass over those facts for the simple reason that the farm “Tommy” embodies everything that I can possibly say about that kind of land dealing. The farm “Tommy” was referred to in a question put by the hon. member for Hoopstad (Mr. Conroy) on February 19th, 1924. It was obviously a transaction which called for an explanation, being a case of a Government occupation farm transferred to the Minister of Lands while he was Minister of Lands. The hon. member for Hoopstad (Mr. Conroy) asked when this transaction took place and how it came about and the answer by Col. Mentz was that the farm was originally issued in 1909. He went on to say that the then allottee, a certain Mr. Moller, was a friend of his, that he had advanced certain moneys, that a certain Mr. Kruger had taken over the farm because Moller could not keep up his payments, and that he, Col. Mentz, had thereafter taken over the farm to help Moller, who was his friend. In that connection I want to refer to certain documents. I do not want to put the case too strongly. After all I am discussing a man who is not here. I want to tell the House that I have repeated all this outside and challenged a libel action. Although I do not want to emphasize this too strongly, I do want to refer to the documents which go to show that the explanation given by Col. Mentz was absolutely wrong, was hopelessly unreliable, was thoroughly untruthful. I have mentioned that the farm was issued in 1909. The option was exercised in 1914. At that time he rendered an account to Mr. Moller showing £340 due to himself and £400 due to the Government in respect of the farm “Tommy”. In 1917 whilst Col. Mentz was Minister of Lands gives a private power of to Moller to sell the farm on his behalf. The Minister of Lands gives a private power of attorney for the sale of a Government farm for the sum of £740. The Minister of Lands, at that time, Col. Mentz, gave an explanation which is wholly inconsistent with the fact that before Kruger came into the transaction he personally gave a power to Moller to sell this farm. The next point is the question of the cession to Kruger. A power of attorney by Moller is filed under date November 1, 1916, and a power of attorney by Kruger in favour of Mr. du Plessis, the admitted agent of Col. Mentz, is dated August 20th, 1917. Kruger is the man of whom apparently Col. Mentz approved as a suitable lessee of Crown land, a suitable settler to occupy a Government occupation farm. Now, Mr. Kruger is a very honest and very trustworthy dealer in produce in the town of Pietersburg. He is introduced into the transaction, although on the face of it he is the last person in the world to whom a Crown grant of an occupation farm should be issued. The cession takes place in 1918 in consideration of £50 alleged to be payable by Kruger to Moller. I have an affidavit from Moller saying that he knows nothing whatever about this particular transaction except that on one occasion he signed a blank power of attorney. The second point upon which the whole case hinges is that on February 21, 1919, Col. Mentz signed a deed of sale purchasing from Kruger for £700. He has already paid £300 to Moller and he still pays £700 to Kruger, on the face of the deed of sale. Hon. members will be interested to hear that at a later stage Col. Mentz was prepared to sell the farm, for which he had paid £1,000, back to Moller for £500. He buys in February, 1919. Col. Mentz’s explanation was that he did this to assist Moller. In February, 1919, he buys, and in October, 1919, Moller writes and asks him what about the farm, what has happened to the farm. Col. Mentz replies in October, 1919. This letter to a man whom Col. Mentz said he was going to help was written eight months after he had bought the farm—according to the Deeds Office. Here is his letter: “I have received your letter, and as the farm “Tommy” does not belong to me I cannot tell you anything about it. Any power of attorney you may have from me is herewith withdrawn and cancelled.” He writes a letter clearly denying any knowledge of the farm or that it belonged to him. Moller was not satisfied, and a second letter was written to which Col. Mentz replied: “I have received your letter of November 22nd, and it is as I have already told you, the farm does not belong to me, and I cannot give you any further information.” He could not tell this friend of his, whom he had intended to help, anything of the farm. After that the affair took the ordinary course, and a fortnight later the Executive Council approved of a Crown grant to Kruger and the transfer to Mentz took place in 1920. I have an affidavit from Moller, but I am not attaching any importance to it at this stage, he merely denies the whole transaction. Since this question was raised in the House offers were made to Moller of £780, £740—which had been made before—and eventually £500, to sell this farm for which, on the papers, Col. Mentz had paid £1,000 out of his own pocket. Hon. members will say that this is a case disposed of by a Minister who is no longer a Minister of this House. But I do say that it leads to the fact that this is part of the legacy which this Government has taken over. I should like to refer to a little transaction in which another hon. member of this House was interested. I refer to it not as a transaction in which he is personally interested to his detriment, I refer to it as showing how lax the Department of Lands was that this kind or transaction should have taken place and that there can be a waste of public moneys amounting to a gift of approximately £20,000 to a certain purchaser by the Lands branch. It is a case concerning five farms in the Piet Retief district. A certain Mr. Brink bought certain four farms in the Lydenburg district and paid £5,310 for them. He bought them from a private company and the sale took place in February, 1920. These four farms were exchanged by Brink for five farms in the Piet Retief district, which were then Government property. The Minister of Lands sanctioned the exchange of four farms, for which £5,000 was paid. The point of this exchange is this, the exchange value of the ground for duty purposes was £8,300, and Brink paid £5,000, but for exchange purposes his land was valued at over £8,000. That, of course, was a perfectly proper transaction, an honest transaction, and was not by itself an improper one, but it shows the difficulties which the present Minister of Lands has to face. The Minister at the time was the hon. member for Port Elizabeth (Central) (Col. D. Reitz).
On a point of order, Sir, that is not so; it is on a plane with other statements made by the hon. member. It is a deliberate lie. (Government cries of “Withdraw.”)
The hon. member will please withdraw.
I withdraw the word lie; it is a deliberate mis-statement, as deliberate as other mis-statements made by the hon. member.
I am glad it is put in that way. The Deeds Office records, I am afraid, are wholly inaccurate. According to the records of this House and the Ministry the hon. member who said these nice things about me was Minister of Lands from March, 1921, so that when this exchange took place the hon. member was in office.
That is not the date.
If he is correct he was burdened by the legacy left him by Col. Mentz, and it is quite possible he allowed this transaction to go through because he was so bewildered at having office thrust upon him. I am not attacking his integrity though I might say things about his intelligence.
On a point of order, Sir.
What is your point of order?
It is whether he accepts my statement that the purchase was made.
That is not a point of order.
It is a point of decency.
You can give an explanation later on unless the hon. member (Mr. Pirow) wishes to take the explanation now.
I am giving details of a particular transaction, and if he can throw further light on the point and can explain why it went through during his period of office I am prepared to accept it. The whole point of my speech is what a difficult position the new Government is in where it has got to take over a legacy of this description. The exchange value of the farm was £8,000 sterling. But what do you find? Already on the 18th of December, 1920, Mr. Brink, through whose department this matter was dealt with, sold to a certain Mathew James Church a portion of Onverwacht for an amount of £14,000. That is one farm. Mr. Church has since sold the farm for which he paid 30s. a morgen for £3 a morgen, and I understand the present owner hopes to get even more. A second farm was sold for £5,060. So in respect of the farms for which the Government fixed the exchange value at £8,000, Mr. Brink had already made a profit of £4,000, and he remained with the other three farms in his possession. As far as the first of those three farms is concerned, the position was on the 8th March, 1924: Mr. Brink sold the farm Ungnama to a Mr. Bouillard for £3,071. He therefore disposed of three farms for well over £12,000, where he had paid £5,000, and where the Government fixed the value at £8,000. The original exchange was that four farms were exchanged for five farms, two farms were left with a morgenage of approximately 7,000 morgen. He has already made a profit of £7,000 on his own figure, and he still retains over 7,000 morgen of ground valued at £3 a morgen. Those are just two little incidents. I do not intend to give a full survey of everything that took place in the department, but those are typical of the legacies left to this Government by the South African Party Government. When we realize the sort of thing that has been going on hon. members will see how carefully the Government will have to scrutinize every transaction that is incomplete in the Department of Lands and should beseech the Government not to be in too great a hurry, but should carefully examine everything which has been left them by the late Government.
Perhaps we may be allowed now to get back to the Budget. I should think hon. members on the other side listened with something like mixed feelings to the hon. member for Troyeville. I noticed at first a good deal of cheering but when some of the hon. member’s economic doctrines were given expression to not a word was said. There was not a single cheer. I think hon. members on the Opposition side realize that they have very strange bedfellows. The hon. gentlemen mentioned Mr. Merrimen in connection with the statement which he quoted. There is no doubt about one thing: Mr. Merriman would never support a State Bank. My hon. friend also advocates an issue of Treasury Notes in payment of public works. Certainly that was not the policy of the South African Party and there is very good reason why it was not. If there is one thing which is going to lead to inflation it is the policy advocated by the hon. member. He says it would not lead to inflation because of his policy of developing capital works and so on. But that is quite apart from the point. What brings about inflation is the circulation among the people of a large number of Treasury Notes. Of course if the Government is prepared to redeem those notes as fast as they are issued and not have them circulating among the people there would not be inflation. But that of course is not the intention. You are bound to have exactly the amount of inflation in proportion to the number of notes issued. The hon. member has decided that a change of policy and outlook is to be perceived on the part of the Government. I rather congratulate my hon. friend on his having perceived a change of policy. What have the Government done? They have repealed the Medicine Tax and slightly reduced the Tobacco Tax. But the hon. Minister anticipates an increase of revenue next year. He has put it considerably above what his predecessor estimated. I am sorry the Minister has not gone further and remitted more. He has only repealed the Medicine and Tobacco taxes, but he is in a far better position than his predecessor in office was. The hon. member for Troyeville (Mr. Kentridge) said that some people in South Africa were too secure. He hoped there would be a little less security. I noticed hon. members opposite did not cheer that. Now there is another matter: that is unemployment. I must say that I myself was disappointed to see how little has been done to deal with unemployment. It was said in election speeches that as soon as this Government got into office unemployment would disappear.
Who said that?
Yes it was said; but we know that election promises cannot always be redeemed. Look at what the hon. Minister of Defence said at Durban. The Minister of Finance is making increased provision for unemployment. Where is the disappearance of unemployment? Actually it is going to increase. It is a very strange thing indeed that before June 30th last, all this unemployment was due to the “wicked Smuts’ Government”; since then, strange to say, it is put down to drought, locusts and inability to find employment. I suppose that drought and locusts did not exist before June 30th and I am sorry that the present Government should alone be troubled by these plagues. The new Government has adopted the same remedies for dealing with unemployment as its predecessors adopted. For instance the new Government is employing men for the construction of railways and on afforestation work, which is exactly what we did. It is also going to subsidise municipalites and the Provinces although the Prime Minister in a speech in Smithfield denounced these subsidies as being wasteful—which they are. There has been great talk of widening the basis of civilized labour, especially in the railway workshops, which is exactly what the previous Government proposed to do.
You sacked 12,000 men.
Nothing of the kind—absolute nonsense. Before leaving office, I had a consultation with the General Manager, the Chief Mechanical Engineer and other officials with the idea of trying to find work in the railway workshops for youths in place of the natives. It was decided that something could be done in that direction and that we should endeavour to make Uitenhage an entirely white workshop.
I don’t remember, but that has nothing to do with the principle. As to Salt River it was to be made a white workshop to a very large extent. What further has the present Government done? Certainly they have created a Ministry of Labour, which means more expenditure in certain directions, but it does not find work for the unemployed. I hope the Government is not going to adopt some of the recommendations of the Trades Union Congress which has been sitting in Cape Town, which recommended among other things heavier duty on clothing of all kinds, agricultural implements of all kinds and machinery and tools. Are we going to increase production by increasing the customs duties in that way? The recommendations of the Congress, if carried into effect, will handicap the primary producers—the agriculturists, the farmers and the mining industry by making their machinery and tools dearer. Then, if you increase the duty on clothing, you will materially increase the cost of living, but at the same time you would not create more employment. There is one remedy, and a very effective one, although I do not expect the Minister will accept it, and that is materially to reduce the taxation. The Government propose to take something like £17,397,000 out of the pockets of the people in the shape of taxation. Let some of that money remain in the people’s pockets, and they will use it for increasing existing industries or starting new industries. You can have either heavy taxation, which swallows up a large proportion of the people’s money, or you can leave the money to the people and allow them to utilize it. The money would not be idle. Let the Minister make a good cut in the taxation, and by so doing he will do more to increase prosperity than by any other means.
You did not set us an example?
Because we were not in a position to do so. The Minister of Finance is in a very different position to that of his predecessor, who three years ago had to figure with falling revenues and a highly inflated expenditure.
Who was responsible for that?
The circumstances of the time, to a very large extent. The Minister’s own memorandum shows how he is getting the benefit of the economies brought about by his predecessor, the savings in salaries being £257,000. Let me mention one or two other points; prisons and reformatories, the Vote shows a decrease of £24,000. Mr. Burton brought the reduction about and got the opprobrium and the present Minister of Finance gets the credit. In all the efforts we made we got no assistance from the other side, and the Minister of Finance and his friends, when they were in opposition, voted against any proposal we made to reduce expenditure. The opposition never brought in a single proposition to reduce expenditure. There is the police, which is just the same. There is a large reduction, and strange to say even the Department of the Minister of Posts and Telegraphs, that has been decreased by £169,000. Well, it just comes to this, if I may venture to say so, that it is no wonder that the hon. the Minister of Finance is in a comfortable position; he is reaping now what others have sown, and he gets the full benefit of their efforts to reduce expenditure and to improve the revenue of the country. I agree with the hon. member for Yeoville (Mr. Duncan) and I am glad that we are in this position, not particularly for the sake of the hon. the Minister, but for the sake of the country, that we have got into a very much improved position. But let me tell the hon. the Minister that there is still plenty of work to be done, and he is in a better position and has more ample opportunity than his predecessor in office had. There is still an urgent need for economy in this country. The hon. Minister has an accrued deficit of something like two millions, I cannot find seven millions as stated by the hon. member for Troyeville (Mr. Kentridge) and I find from the Auditor-General’s report that it is £2,144,000, so that I take it at two millions, and I presume the hon. the Minister of Finance is going to liquidate it, and not add it to the public debt; then, furthermore, this country is demanding—and I wish to impress this upon my hon. friend the Minister—this country in demanding relief from the heavy public burdens put upon it in recent years of depression—and some measure of relief should be given in the shape of reduction of taxation. In 1913-14 the cost of the administration of this country, excluding interest on public debt, was £11,580,000; to-day, under the same heads, it has grown to £20,108,000, an increase of £8,528,000, or 75 per cent., whereas the white population of this country has grown by 20 per cent. Surely there is plenty of room for my hon. friend, the Minister of Finance, to economise; with these figures! Then let me put another side also. Taxation, exclusive of the Provinces, has increased from £8,846,000, in 1913-14, to £17,397,000, according to the estimates now before us, an increase of almost double in 10 years’ time, whereas the population has increased by only 20 per cent.
So have your imports and exports.
Not to the same extent. The wealth of this country as shown by Professor Liefeldt’s book has not increased even in accordance with the population. It is very strange that other countries have been able to bring about reductions of taxation. Take Great Britain. This year there has been a reduction of about £40,000,000 of taxation, and this is not the first time reductions have been made. Take Australia. There the income tax has been reduced by £2,000,000. New Zealand has made large reductions, and Canada made a reduction of 24,000,000 dollars in taxation this year, and surely it is time that we have our share of it. If I may make a suggestion to the Hon. Minister of Finance—he is new to office—revenue and expenditure are balancing and revenue is on the increase—it ought to be his ambition to reduce the burdens of this country as soon as he possibly can, and if he does he will do more to bring about prosperity i South Africa than by any other means. Let me make another suggestion, and that is to reduce the postal rate from 2d. to 1d. The estimated revenue from the Post Office, telegraphs and telephones, is £3,309,000, and the estimated expenditure in working that department is £2,675,000. So that he expects to have a surplus of no less than £683,000; in other words, he is using the Post Office at the present moment as a taxing machine which is against all general practice at the present time. I think it is generally recognized that means of communication should be as cheap as possible. It is no use the hon. member—I see that he smiles at this—saying “Why did you not do the same thing yourselves?” We were not in a position to do so at the time. Our revenue was falling and it was not a growing revenue at that time. I believe that reducing the postal rates would cost about £300,000, or only half the surplus at the present moment, and a reduction of that kind would be extremely welcome in the country. I was glad to hear what the hon. Minister said about the Sinking Fund. There is no doubt that the position is not as satisfactory at the present moment. If a surplus accrues it is contributed to the Sinking Fund, and also 1 per cent. of the guaranteed loan, but it is not as much as we ought to contribute, although I may point out that in the 13 years of Union we have contributed just £13,000,000 out of revenue alone; the exact figure is £12,944,000, or on the average £1,000,000 a year. At the same time we have also devoted very large amounts received from gold mining leases, bewaarplaatsen, and so on, into the loan funds, which naturally has decreased the amount which otherwise we would have had to borrow. I agree with my hon. friend the Minister that something should be done, and I venture to suggest to him that he should consider the proposal made by the hon. member for Yeoville (Mr. Duncan). I would do away with the contributions of the surpluses; I would carry those forward, but I would have a fixed contribution year by year from the general revenue of the country a small percentage of the gross revenue. The system of depending upon surpluses is, to my mind, altogether too uncertain. I want to say a few words now about what I think is perhaps the most important matter we have to deal with as regards the financial position, and that is Provincial finance. At the present moment every Province is running on a deficit, including even Natal, but, instead of compelling these Provincial administrations to face the position, to retrench, to cut down their expenditure, or increase their taxation, it is now proposed that more money should be lent to them.
It is your policy; I am not responsible for it.
I am coming to that in a minute. We are going to allow them to use borrowed money to pay the ordinary expenses of the day. I am not blaming my hon. friend the Minister for this. We on this side, the Ministry of which I was a member, are also responsible, but my hon. friend is now in a position to alter it. We advanced to the Cape Province in 1922-’23 £200,000. We also advanced to the Cape Province in 1923-’24 £600,000, and now it is proposed to make a further advance of £505,000, or a total in the three years of £1,305,000, to meet the deficits which are accruing on ordinary expenditure. The consequence of making a promise to the Cape Province of a further advance is that the Cape Administration is dropping all idea of economising or of further taxation, and in fact is launching out again on increased expenditure. We now come to the Transvaal. They had a deficit last year of £198,000—and they anticipate a deficit this year of £330,000. We are going to advance them £198,000 to meet their ordinary expenditure. I do blame the Government for this. The Administrator of the Transvaal states that he is prepared to tackle the job of meeting the deficits, but this advance was offered or almost forced upon him. In a speech which the Administrator made in the Provincial Council he stated that the Executive could not well do otherwise than decide as it had done, but it must not be inferred that he favoured a policy of borrowing to meet the deficits. The Administrator also said that he was not satisfied that this was the only way of meeting their difficulties and that the deficit could have been met in large part by increased taxation along with such savings as it would have been possible to effect in the course of the year, and he also stated that he was not satisfied that it would not have been better to have acted along these lines than upon the dangerous course which had been decided upon. Furthermore, there is a deficit in the Free State of £136,000.
That is the accumulated deficit.
The Minister is correct there, but I do think the House is entitled to some explanation in regard to the Transvaal. Then there is also a small loan for Natal. The danger attached to this system of borrowing year after year cannot possibly be put better than it is put by the Administrator of the Transvaal. He says that the danger in advances are the dangers of the decline where each step forward seems merely to remove the resistance to the next step in the downward course and that this is especially true of borrowing to meet deficits. I am not accusing the Minister of being the cause of the present most unsatisfactory and most dangerous state of affairs in regard to Provincial finances, but, if he has some explanation to offer in regard to the loan to the Transvaal, I may accept it. The Administrator of the Transvaal says that the loan charges on the loan of £330,000 will amount to over £40,000 and that the increase of these loan charges is a disquieting feature in their Provincial finance. I think I have shown—and this has been my object in mentioning these matters—that there is no time to lose in tackling these questions. I hope my hon. friend the Minister will keep to his promise and that when the Session is over he will tackle the whole job. There is no doubt that the Provincial Administrations have been spoilt in the past. There has been no control over their expenditure. They have gone on and when they have got into difficulties they have come whining to the Union Government. They have lost all sense of financial responsibility. If they had been compelled as we were compelled in the Railway Department to meet our own obligations and not come to the tax-payers for assistance, I have not the slightest doubt they would have been in a very much better position than they are in to-day. In times like these when people have had to cut down their private expenditure, when the Union Government and the Railway Administration have had to introduce economies, the only people in this country who are allowed to go on merrily increasing their expenditure year after year are the Provincial Administrations. We are told that it is all done in the sacred cause of education. When education is mentioned such a thing as economy goes by the board. As a rule with economies there is more efficiency. We have in this country perhaps the most expensive system of education in the world. In the Cape according to the report of the Provincial Finances Commission, it cost £17 per enrolled pupil. In the Free State £19 8s., in the Transvaal £21 18s., in Natal £21 15s. For the whole Union the averages works out at £19 19s. per pupil. Just compare that with other countries analogous to us, New Zealand £10 3s., Canada £11 3s., Australia £8 5s. I am justified in saying that we have probably the most expensive system of education in the world. The total cost of our education has grown from £2,344,000 in 1913 to £6,750,000 in 1921. There is no doubt that the foundation of our Provincial Financial system is rotten, the subsidies being on the pound for pound basis. The principle has been proved thoroughly unsound. In some cases as in the case of the Free State and Natal we are paying more than pound for pound. In fact we are paying 64 per cent. of the total expenditure of the Free State.
Because of the £100,000 extra. If any one goes back to the records they will find that the pound for pound system was for the purpose of encouraging expenditure and was used in the old Cape Colony. But now when you have to fall back upon the taxpayer it has encouraged extravagance, and extravagance on a very big scale. The expenditure of the Province has grown since 1913 137 per cent. This system as I have already said has so encouraged extravagance that every Province in the Union is carrying on partially on borrowed money. All I can say is that the sooner my hon. friend the Minister of Finance tackles this job the better it will be. I think I have shown clearly how urgent the necessity is. Let me remind them of another thing. He does not want to appoint any more Commissions. We had one in 1917 and one in 1923 and in these he has all the information he requires to suggest some remedy. I want now to deal with my friend the Minister of Railways. I have not much to say, but there are one or two points on which he disagreed with our policy in the past. Take the policy of the contributions to the Renewals Fund. The old contribution of that fund was based on the valuation and the assets of the Railway Department. A certain percentage of that value in accordance with the estimated life was contributed to the Renewals Fund irrespective of the financial position of the Railway Department. The consequence was that large sums were accumulated in the Fund, larger than we were able to use and it must be remembered that at that time the Department was running under a deficit. I thought that was absurd and took £2,000,000 to repay part of the accumulated deficit. The plan suggested, and which I followed up to last year was this—I wanted to connect up the contributions to the Renewal Fund with the gross revenue and in doing so I followed the principle which is largely followed in the commercial world. No firm losing money makes a big contribution to the depreciation account but increases the contribution in most cases when times are good and makes its contribution with some relation to the amount of its profits. I did this by taking a percentage of the gross receipts of the Department and basing it on what has been done on other railways, I made it seven per cent. The result is that if traffic is good, and the receipts are larger you contribute a larger sum to the Renewals Fund than when times are bad. Last year you added £102,000 to Renewals on account of the increase of revenue. That principle has another benefit. You can at any time in making up the Estimates increase that percentage to 7½ per cent. or 8 per cent. and you base the contribution to the fund on the state of the revenue at a particular time. My hon. friend has gone away from that. He has gone away from any principle so far as I can make out, and put up the contribution to £1,500,000. Well, of course, he thinks he will do something different to what I did, but I think basing the contribution on the state of the revenue is to adopt the soundest method. I now come to the question of manufacturing our own stock in South Africa. This is an important question, and involves other considerations besides simply giving work in this form in South Africa. It has been the policy of the late Government, so long as I controlled the Railways, to reduce rates and fares to the lowest possible point. We sacrificed revenue to the extent of over £3,000,000, and we did so simply because we considered low rates in a country like this of long distances is the best thing we could do to encourage production and increase that production so as to bring the country to a state of prosperity. I venture to think that that policy has been fairly successful, We had last year on the railways a record so far as tonnage of traffic carried is concerned. I do say this that quite a considerable part was due to the reduced rate. Take for instance coal. Both bunker and shipping coal would not have been carried at all if we had not given reduced rates, and part at least of the other traffic we carried last year was due to our decreased rates. I hope, however, that the Minister is not going to give up reducing rates. This country is to-day paying £5,000,000 for the carriage of goods in the course of a year above what it would pay if we had pre-war rates. This is a big burden for the country. If the policy which my hon. friend has laid down, that is the policy of making our rolling stock in this country; be carried out, then that is going to interfere considerably with the reduction of rates in South Africa. You cannot have it both ways. For instance my hon. friend stated that he has reversed an order which I gave, and that certain coaches are to be made in South Africa instead of overseas. That is going to cost this country—although that order is only a small one—close on £1,000 a year for all time in the shape of interest if it is charged to capital account. By making these coaches in South Africa you increase the capital account unnecessarily and increase the interest which the railways have to pay. That is only one instance.
It is a very good investment.
As I have said you cannot have it all ways. You cannot have cheap rates, which is the very best thing that you can have to increase production in this country, and at the same time pay out hundreds of thousands of pounds a year extra in making rolling stock here. If the country is prepared to do this there is an end of the matter as far as I am concerned; but there is no doubt in my mind that if this policy is carried out as my hon. friend proposes you cannot have cheap rates and fares. It is for the producer to study that. I say frankly I believe the soundest policy, while giving a moderate preference as I did—I gave five per cent.—is to buy in the cheapest market; because I believe in keeping down the capital expense and interest charges.
Is that done in Germany and Switzerland?
You must remember that this country is different. In this country you have to carry long distances. For instance, you carry coal to Cape Town, about 1,000 miles, and manufactured goods from the coast to the Rand about 1,000 miles. I believe our coal rates are the cheapest in the world; unless you charge cheap rates you do not get the traffic. I believe that the very best method to encourage production in this country is to give the cheapest possible rates, and by encouraging production you take the very best means you can to bring back prosperity to this country:
How many white men are employed in the coal mines?
It is not only coal; cheap rates have been given on scores of articles. For instance, one of the last things I did was to give cheaper rates on building materials. I believe to-day the rates on some goods are still too high. Is it better to give these cheap rates to encourage local production, which you certainly would do, or give these high prices for locally made stuff—in this case 26 per cent. above oversea prices? To my mind the best way is to buy in the cheapest market.
And send the money overseas?
You do not send the money overseas. That is an extraordinary thing which I am surprised my hon. friend the financial expert on that side imagines. Certainly to some extent this policy of the Minister is going to reduce production in this country.
Very well, you will see. There are just a couple of other points. I see the Minister is very strong in promoting road transport. I have done that myself. But the Minister has to consider the state of our country roads. Several applications for motor transport had to be turned down because the roads were in too bad a condition and I hope the Minister is not going to spend railway money on making country roads.
Because the local authority ought to do it. Why should you take railway money to improve roads in South Africa when that is the business of your local authority? My hon. friend alluded to rail motors. I believe there is a big scope for them, for we run long trains on our branch lines, particularly in Natal, and they have not anything like the traffic they ought to have. Rail motors have been run with great success in Australia, and I have been trying to introduce some here for two years, and I hope the Minister will have more success in that direction than I achieved. Then I notice that he has increased the expenditure on steam ships by £69,000. I agreed to one ship being chartered to go to Damarara to fetch sleepers, but I see that last night the Minister stated that the Government was going to buy ships—in fact I understood from his speech given last night that he has adopted the policy of the hon. member for Benoni (Mr. Madeley). At the present time we have three steamers to carry sleepers for our own purposes—but not for sale from Australia and Java, and we carry coal to the latter place. If the Minister is going to buy more steamers it means that he is going into the competitive trade, but hitherto we have not been out to compete with the ordinary ship-owner, and very wisely too, for every Government that has gone in for owning and running ships has lost heaps of money over the enterprise, it being about the most risky business they could enter into. The United States, which went in extensively for building and running ships, have lost hundreds of millions of dollars over the scheme, and would be only too glad to get rid of the ships. Australia has lost a good many hundreds of thousands of pounds over State owned ships, France has lost millions of francs in the same business, and Canada—which was held up to me as an example to be followed—has also dropped money over this business. The “Economist” of July 5 contains a letter, dated June 9, from its Ottawa correspondent, who states that the Canadian Government Marine has lost millions every year since its creation, and this year it shows a deficit of 9,768,000 dollars, or about two million pounds sterling. In fact, I do not know of a single Government in the world which has made shipowning a successful enterprise. You cannot have a monopoly of ships, as you can have a monopoly in the way of railways and the post office, I warn the Minister that if he goes in’ for shipowning the result will be that this country will lose hundreds of thousands of pounds in the next few years.
I have some misgivings in criticising the Budget for the reason that though I am opposed to it in many important details, for obvious reasons it would be unfair to criticise it as I would like to do. The Budget is not popular in my constituency as the Minister had to take over the Budget of his predecessor, which Budget naturally is not acceptable to the vast majority of the people. The greatest need of the country is a policy to relieve unemployment, and to this end I would like to make a few suggestions which may be the means of bringing about more employment, but I cannot associate myself with the remarks of the hon. member for Cape Town (Central) (Mr. Jagger) who desires that everything should be cut down to the cheapest possible limit. I am a protectionist, who believes that our first duty is to foster our own industries to provide employment instead of spending money on relief works. As showing how adversely the railway rates affect the inland centres of the Union, I will mention a consignment of 20 tons of pig iron the landed cost of which at Durban, was £142. The landing charges at Durban were £8 2s. 11d., while railage from Durban to Johannesburg cost £99 18s. 10d. If that pig iron had been sent in the shape of manufactured agricultural machinery it would have paid exactly the same railway rates. In order to assist industries the railway rates should be altered so that raw materials should have a very material preference over manufactured articles. Another more glaring case is that of a shipment of 110 tons of steel plates which cost £808. The freight and clearing charges amounted to £252, but the railway rates for conveyance of the plates from Durban to Johannesburg came to no less than £931. If these plates had been manufactured into agricultural machinery they would have been carried by the railways at half the price charged for them as raw material. In this case you absolutely handicap local industry in the interior. Let us assume that a commercial traveller is asked to give a quotation for an order. On the basis of the figures I have, quoted, in the first place he has a handicap of £450 to make up on railway rates alone as compared with the imported manufactured article. He cannot hope to compete. These railway rates absolutely place inland industries out of court, and I strongly suggest to the hon. Minister that if he is sincere in his endeavour to assist industries in the interior, and I am sure he is sincere, he should bear this in mind and make a great reduction in the rates for raw material. According to the Act of the Union the railways are to be run on business lines bearing in mind the necessity of developing the interior. Now here is a case in point. It is also apropos of the remarks of the hon. member for Cape Town (Central) (Mr. Jagger) with regard to the coal trade. Coal is carried from Witbank to Durban—which is 100 miles further than the steel plates were carried—at 13s. 6d. per ton. This coal is for export purposes, but the steel for our own inland industries, and to provide work for skilled mechanics had to pay eleven hundred per cent. more freight than the coal! Other instances of the same kind can be mentioned, and I hope the hon. Minister will take this matter into his most serious consideration and give inland industrialists much-needed redress. It had been mentioned that the railway accounts had been balanced, but I only hope that we will not have more balancing of the same sort. The late Minister of Railways effected a balance by reducing wages and increasing the hours of the workmen. As a matter of fact no fewer than 2,200 were sacked in one year owing to the abolition of the eight-hour day and £750,000 were saved by the reduction of salaries. If we have more balancing of this sort the problem of unemployment will be greatly aggravated. I hope that during the recess the Minister will restore the eight hours day on the railway. When I mention the eight hours’ day I know that we will have the stationmaster at the Karroo station quoted against us, but I hope the Minister will not be frightened by bogeys of that description. The hon. Minister has made an appeal for service right through the railway service, and I hope that he will reciprocate. I am sure the men are willing to give faithful service, but the granting of the eight-hour day would be the first step to a much better feeling in the service than has been existing under the hon. Minister’s predecessor. Another matter I would like to mention is the pensions to railway men. At the present time it is quite a misnomer to say we have pensions in the railway service. In the past the Government has done nothing to protect the men against their own improvidence. Some men paid 2½ per cent. reduction from their salaries and others 5 per cent. towards the pension fund, but later on some of the men, owing to growing family responsibilities, thought they had been foolish and desired to be allowed to pay 5 per cent. and arrears, but the Government would allow no alteration. I think these men should have been allowed to contribute on the higher scale, and the option should be granted to them now. We have had some shocking examples of the way the present system works. I know one man, a first-grade engine driver, who had 35 years’ service. When he was compulsorily retired he got the miserable pension of £3 18s. per month. In the interests of the men the Government should insist that the pensions scheme be placed on a better basis so that after the men have left the railway service they should in their remaining years be able to live in comfort and decency. I was rather interested in the statement of the hon. Minister of Finance that the Civil Servants’ Pension Fund at the Caue was insolvent, and his suggestion that £180,000 should be paid annually from the general revenue for sixteen years to bring that fund into the position it should be in. I will not say that the railway pension fund is insolvent in the sense that it cannot meet its legal liabilities, but I do say that it is absolutely insolvent in the sense that it cannot meet its moral liabilities. The hon. Minister for Railways should see whether he cannot take a leaf out of the book of his colleague and take sufficient money from the general revenue to make the railway pension scheme a real pension scheme instead of one only in name as at present. I know my hon. friend is not responsible for what has gone before, but in this case he should reverse the policy of his predecessor and put the pension scheme on a footing of which we can all be proud. When it is considered that the men have given all their lives to the service of the department they should on retirement be treated generously instead of being thrown on the scrap heap as at present. I notice there is provided for an additional contribution of £29,000 to the pension and superannuation fund, but that seems a very paltry amount even though it is in the direction I have suggested. There is, however, an ominous set-off in the estimates which show a saving in overtime, salaries, and so forth of £178,234. Later on we are told that half a million pounds of revenue had been sacrificed in reduction of rates and fares I hope the hon. Minister will not follow the policy of his predecessor in this respect by reducing the numbers and pay of the workers to make up this amount. In regard to the question of building rolling stock in the country I have heard the remarks of the hon. member for Cape Town (Central) (Mr. Jagger), but I must say I am entirely in disagreement with them. I think the people of this country will not at all mind paying a little extra for rolling stock provided the work is done here and employment is found for the people of the country. I regret, however, that the Government has not seen its way to go in whole-heartedly for the construction of its rolling stock, and has merely said the question will be seriously considered. However, the Government has made a small start in this direction, and if later on we get the proper machinery to make our entire railway requirements there is no reason why there should be a great disparity in the cost between the imported article and that made in our workshops, and any extra expenditure incurred will be more than compensated for by the employment afforded our own people. I understood that the Government party were committed to the principle of local manufacture, and if they brought forward such a proposition in this House it would have been carried almost unanimously, for as a matter of fact the late Prime Minister has already committed his party to a scheme of this description. In conclusion, I would appeal to the hon. Minister of Railways to assist the industries of the interior and widen the scope of employment by granting substantial rebates on the rates for raw materials, and to meet the employees by a reversion to an eight hour day and improved pension conditions, when I have no doubt his appeal for loyal service will be suitably responded to by the men.
I had not intended to intervene in this debate this afternoon, but the hon. member for Zoutpansberg (Mr. Pirow) has thought fit in his first speech in the House to make an attack upon me personally. Let me say this, that as far as the remarks of the hon. member about me are concerned every one of them is a mis-statement.
The House will judge of that.
Yes, the House will judge. The House can only judge after having had all the facts, but hon. members have not yet had the facts. They are now going to get the facts. The transaction mentioned by the hon. member (Mr. Pirow) took place in or about the year 1918 when I was otherwise engaged overseas. The transaction was this: a certain Mr. Brink, whom I do not know, and whom I do not believe I have ever met, he and his partner owned five farms in the Sabie game reserve. I know these facts from having seen them in the Land Department’s file. The Government has always been anxious to acquire the privately-owned farms in the Sabie game reserve. A large percentage of the land in that reserve is privately owned. Accordingly an exchange was made between these two partners, who received some farms in Northern Zululand. At the time the exchange was a perfectly legitimate one. As far as I remember, it was an exchange morgen for morgen, and the values were approximately even. But since then cotton has loomed on the horizon. It is probably true that Mr. Brink has since then made a profitable sale. But why the hon. member (Mr. Pirow) should found an accusation upon me or upon my predecessor or upon the South African Party on what is a perfectly legitimate business I cannot understand. If the Minister of Lands looks in the department’s files he will see that in 1922 a revaluation of these farms in Northern Zululand was made. The magistrate of Vryheid reported then that he valued these farms at 2s 6d. a morgen. He reported that the area was so malarial that no natives would live there; it was a regular death-trap. Up to 1922 that was the opinion held by the magistrate at Vryheid and by other officials in general as to that land. But since then cotton has loomed on the horizon and values have bounded. Unfortunately for the Government a similar process has not taken place in the Sabie game reserve. That explains the whole position. A great deal of land has changed hands in the Vryheid district. The hon. member’s (Mr. Pirows) statements are a tissue of half-truths—a tissue of mis-statements and half truths. In making this attack on me he started by asserting that this transaction had been put through by me. The hon. member (Mr. Pirow) is, I believe, a lawyer. He knows the difference between the date of a transaction and the date of putting through the papers in the Deeds Office. He made great play with the papers. He told us that the transaction went through, I think he said, in June 1921. He deliberately refrained from explaining to this House that the date he mentioned was the date when the titles were registered in the Deeds Office, not the date of the transaction, which went through in or about 1918, when I certainly was not in the country and certainly was not Minister of Lands. I repeat to the hon. member for Zoutpansberg (Mr. Pirow), and I repeat to this House that that transaction went through years before I had anything to do with it.
Anyway, it went through.
Yes, and at the time it was a perfectly fair deal. It was considered that the Government had made a very good bargain and on the then values the Government had made a good bargain. As far as the charges levelled against Col. Mentz are concerned, I personally have no knowledge of Col. Mentz’s private affairs, but, after the numerous misstatements and half truths which the hon. member (Mr. Pirow) saw fit to make about me, I leave it to this House and I leave it to the public to judge as to the accuracy of the other statements. The hon. member (Mr. Pirow) makes this statement in the House.
Why not bring an action for slander?
The insidious nature of his attack lies in the fact that technically his statement is not libellous. It is like calling a man a liar which in itself is not libellous. I have often been asked if such a statement made by one’s opponents is a lie, why don’t you take them to the Court? The average member of the public does not understand the difference between technical libel and a mis-statement and so I must leave this personal attack at that. If, as is more than probable the hon. member’s attack upon Col. Mentz contains as many misstatements as does his attack upon me, I think the House and the public will have no difficulty in deciding as to Col. Mentz’s integrity as they will have no difficulty in deciding upon my own.
Business was suspended at 6 p.m. and resumed at 8 p.m.
I will ask the Minister of Lands whether he will table the papers connected with the case—the office file dealing with the case raised by the hon. member for Zoutpansberg (Mr. Pirow)—in order to show that the case was not dealt with during my term of office. I have stated, and apparently the hon. member does not accept my word, that that particular transaction took place before I became a Minister. I was not in the House this afternoon when the hon. member for Zoutspansberg (Mr. Pirow) started to speak, but as I came in I think I heard him insinuating that it was the practice of the South African Party Government to issue land to its own supporters only.
In Zoutpansberg it has been done.
I fancy I heard that inveterate chatterbox, the hon. member for Benoni (Mr. Madeley), say “Hear, hear” when the hon. member for Zoutpansberg (Mr. Pirow) made that remark. I think the hon. member for Benoni (Mr. Madeley) might remember that he applied for and obtained Government land himself while I was in the Lands Department. It is impossible to know to which political party any applicant belongs. I will say this without any fear of contradiction that from what I have seen of the Government settlers more than 80 per cent. of them belong to the Nationalist Party. I have this further charge to make—the hon. member ought to know that Ministers do not allot land to applicants. The land is gazetted by the Lands Department and the allotment is made by the Land Board. The hon. member intended to attack the Minister of Lands, but he is impugning the honesty of the Land Board and the Land Department. I have now finished with the hon. member for Zoutpansberg (Mr. Pirow), and I flatter myself that I have dealt with him very effectively. I think it very regrettable that a young member in his maiden speech should have thought fit to indulge in a scurrilous speech such as he presented this afternoon.
The hon. member must not impute scurrilous motives to any hon. member.
I withdraw the word, but I should like a better definition of the character of the remarks made by the hon. member. He has proved himself an apt pupil of the Party to which he belongs. The hon. the Minister of the Interior will bear me out that this is not the first time an absent or a dead member has been traduced in this House by hon. Nationalist members. We are not going to follow the hon. member’s pitiful example. Our leader, the hon. member for Standerton (Gen. Smuts) has indicated repeatedly that we are going to give the Government fair play and just criticism. At the same time we are going to exercise the utmost vigilance, we are going to watch their every word and deed, but, as I said, we will give them fair play and a square deal. The past political record of the hon. the Prime Minister is not such as to inspire this country with any confidence. He has in the past played fast and lose with this country and he has trimmed his sails to every political wind.
He has not.
The Prime Minister has rung the changes on political issues in this country to such an extent that his own followers do not know where they stand to-day. If they do know where they stand I shall be glad if they will tell us.
The electors know where we are sitting, anyway.
Where do they stand in regard to the Prime Minister’s Two Stream policy? Where do they stand with regard to Secession policy? Where do they stand with regard to his Segregation policy and his republican policy? What do they think about his liberty expedition overseas? The hon. members opposite laugh, but I will be glad if they will give an explanation as to where they stand. He has been responsible for keeping this country in a state of turmoil for 12 years, and now he is back again at the point where we started from. The hon. the Prime Minister is back on the road we pointed out to him in 1910. He is to-day telling the country that he stands for conciliation and co-operation; the very principles upon which we fought him and the very principles upon which he seceded from our Party. We welcome this change of heart, although we cannot forget—nor can the country forget—that during these troubled years that we were fighting for peace and unity in South Africa our chief opponent was the hon. Prime Minister opposite. Racial peace and quiet exists in South Africa again as a result of the handiwork of the South African Party. For 12 long years we pounded home the lesson that racial bigotry and intolerance does not pay in this country, and we fought him to a standstill on that point with the result that to-day, whatever they may think in their hearts, the Nationalists dare not indulge in the rabid racialism with which they so nearly brought the country to the verge of ruin. It is because of the tenacity of the South African Party that we have peace in this country to-day.
Tell us about the harbour works at Port Elizabeth.
We do not accept the hon. Prime Minister’s penitence at full face value, we distrust these sudden conversions, especially when we see him and his second in command, the hon. Minister of Justice, making appeals to one race only to combine against the other. When I look at the solid phalanx of extremists opposite I wonder how long the hon. the Prime Minister is going to keep the Nationalist tiger quiet, on, what to them is, a diet of milk and water. However, we do welcome this apparent change, this outward semblance of the spirit of moderation, which we hammered into the Nationalist Party, though the purely one-sided nature of the Nationalist Party is not reassuring. The Prime Minister has now accepted our policy of unity and conciliation and while he continues in that way we shall assist him, but there must be no backsliding and no attempt to play political confidence tricks on the public. If ever again, Sir, the Nationalist Party revert to type and fall into the old racial rut it will be a sorry time for the Prime Minister and his Party. The same holds good of the financial measures of the new Government. We welcome the appearance of moderation with which the new Minister introduced his Budget. We welcome the fact that he has Introduced the South African Party financial measures practically en bloc. When he delivered his Budget address I thought he was reading a speech which had been left in the drawer of his desk by his predecessor, Mr. Burton. It sounded so familiar. But here again there are grave discrepancies between what the Government told the public at the elections and what the Government have done since the election in this House. At the election the Nationalist Party told the country that the South African Party had maladministered the finances of this country. And yet our financial policy has been taken over en bloc. The chief offender was the Prime Minister himself. He went about telling the people that we had wasted the taxpayers’ money. I would challenge the Prime Minister to give a single instance of where we had wasted the tax-payers’ money.
The grain elevator.
The grain elevator. Let me digress a moment and discuss the Durban grain elevator. I read the report and it certainly does not make pleasant reading. The only bright spot in it is that it triumphantly vindicates our technical advisers, but I do not think it is for opponents to act the Simon Pure in this matter, or to adopt an attitude of unctuous rectitude with regard to the grain elevator. When the present Prime Minister was in the Cabinet previously he appointed an expert, one Dr. Knothe. What happened?
A pure South African.
Within three months of that man being appointed by the present Prime Minister he was arrested in a native brothel. We at the time did not blame the hon. Prime Minister, we said, “No, he acted in good faith and the expert let him down.” I had at least expected the same magnanimity and generosity from the hon. Prime Minister and his party. And if it comes to a question of anyone being impugned for wasting the taxpayers’ money surely the Nationalists should be the last to complain. Wasting public money seems to be a short road to political preferment in the Nationalist party. I see, for instance, the Minister of Agriculture, who squandered a million pounds of public money, and what is the result? He is in the Cabinet to-day. There are others. I see the hon. member for Hoopstad (Mr. Conroy)—he cost the country a quarter of a million or so.
Yes, where were you in those days?
I was chasing the hon. member for Hoopstad (Mr. Conroy). Unfortunately, I did not recover the money. Then there is the hon. Minister of Lands, he cost the country about another quarter of a million. There are others. When it comes to wasting money and accusing officials and impugning their good faith I think the very last people to say anything should be the hon. members opposite. The Prime Minister during the election campaign held us up to obloquy: his choicest epithet was that we were a gang of muddlers. He held up the size of the Loan Fund; he told the country this iniquitous S.A.P. had run up a debt of £116,000,000. He did not tell the country that without a loan fund there could be no development. He did not tell the country that we have ample assets for every penny of that loan money; above all, he failed to tell the public that he and his party had voted for every penny of that public debt. He said: “Return me to power and I will put an end to all this borrowing. Yet, as soon as he is returned to power, one of his first acts is to say that he is going to borrow more money himself. I will prophesy that next year he will bring in a larger Loan Bill and the year after that even a larger. I look in vain in the new Budget for any sign of economies. The great charge against us was extravagance. I prophesy that next year there will be greater increases of expenditure, and after that greater still. And so it will go on until the public will see that they have been spoofed. And what has happened to the blessed word “Segregation”? During the election the Prime Minister made great play with that word, but he very carefully refrained from attempting to give any explanation of what he meant by it. An hon. member in this House only the other day asked him what he did mean, and he could not say. I will challenge the Prime Minister to produce a segregation scheme that will hold water. To my knowledge he has been talking segregation for 14 years and he is as hazy to-day as when he started. He can no more segregate one native of this country than he can segregate the moon.
The moon is very effectively segregated.
Any attempt to segregate the native in this country would be so flagrantly immoral that it would shock the conscience of humanity, but apart from its inherent injustice the practical objections to segregation are insuperable. The Prime Minister knows that we have native reserves right through the country; in other words, we have segregated areas, and yet year after year we are faced with deputations and petitions and demands from Europeans wanting us to cut into these reserves, and want farms to be opened in these reserves. There are demands, nay, threats, that we should curtail these reserves. If the hon. the Prime Minister wants to segregate the native, the present reserves are quite inadequate, and they will have to be doubled or trebled, and we will have to displace Europeans. I would like to see how he would do it.
How do you propose to do it?
Our policy was not to segregate the natives. Segregation is a policy of the hon. the Prime Minister. Do not try to evade the issue. Before the hon. the Prime Minister will displace a single European he will have to do it at the point of the bayonet. My experience of people who are in favour of segregation is this—they say: “Yes, I am in favour of segregating the native, but go and segregate him somewhere else, and not near me.” I do not think the hon. the Prime Minister was serious in his segregation policy. It served his purpose for vote catching, like so many others; like the Rhodesian Cattle Embargo. When I travelled through Bechuanaland I was told at every meeting that the Prime Minister had promised the cattle farmers that if they voted for him they would get an immediate embargo. I told them “you will not get an embargo while there is a Labour wing of the pact which will not allow an embargo on the peoples’ food.” I challenge the Nationalist Government to place an embargo on the cattle. They dare not do so while this pact lasts. I was told that I was wrong, but I would like to ask these cattle farmers now who is wrong, I of the hon. the Prime Minister? What about that other great item of the Nationalist programme—the poor whites and the unemployed? They promised them a new Heaven on earth, and these people honestly believed what they were told. But instead we have frittered away our time and wasted the time of the country and of this House with Attorneys’ Bills and other fallals and frills of Ministers. But this great question has not yet been touched except for the platitudes of the hon. Minister of Labour. Apart from the speech from the Throne nothing has been done in this matter. There are a great many other important questions awaiting the attention of the new Government, instead of attention being devoted to Attorneys’ Bills and other trifles. Take the question of our settlers. Thousands and thousands of settlers are waiting in suspense to hear whether the new Government is going to adopt our proposals. You will remember that last session I told this House that we had a Bill on the stocks to relieve settlers by double the time of payment, by capitalising arrears, and writing down over-valuations.
And then you ran away from it?
Oh no, we made a definite promise in this House and we had the Bill drawn up, and now we are waiting in vain for a single statement from the new Government. This is a matter of vital importance. There are ten or eleven thousand Government settlers in this country with 50,000 dependents who are kept in suspense while hon. Ministers bring in finicky Bills of their own. The same holds with regard to irrigation. We are promised a Bill to deal with all the tangles and troubles of irrigation schemes, but up to now we have not had a single proposition.
You had a big majority, why did you not carry it out
We did not have a big majority. These are matters on which the country wants a lead and not flowery speeches of self-congratulation by Ministers. We want to know where we stand on these vital matters. Let me refer to the deplorable conduct of the Government in regard to Zululand. The South African Party Government for some years past has been building up a great scheme there for cotton growing. The country is malarial, but the Lands Department had its officers working up the scheme and investigating the best type of settler, and recently gave over 100,000 acres to over 100 pioneers owning over half a million in cash to develop the Cotton Industry; but without knowledge of the facts, without a single Minister ever having been in Zululand, within a week they upset the work of years, and the new Government now tells us they are going to turn Zululand into a poor white settlement. The Prime Minister made a visit to the Candover Estates for three days, on the strength of which he tells us he has found a solution to the poor white question. I have been Chairman of the Unemployed Commission for 3½ years, but in the interests of the poor whites themselves. I would warn the Government that Zululand is the last place for these unfortunate people. We sent some settlers, and two out of three died of blackwater fever within a few months, a very high rate of mortality indeed; and yet the Prime Minister is going to turn that country into a poor white reserve, simply on account of a few suggestions made to him by Mr. Rouillard of the Candover Estate. Whether this gentleman had any ulterior motive or not is not for me to say, but he is running a little propaganda of his own in the press. He says: “Let the Government give 100,000 acres in Zululand and I will settle poor whites on them.” He owns over 100,000 acres of land himself there, but he has been very careful not to put poor whites there. These are a few of the matters which I would commend to the new Government.
Who would you place on that land?
I would put the type of man there whom we have already placed there, a type that I call the planter settler, the type of man with a little capital, and, above all, with brains and intelligence and directive abilities. That type of man is, at any rate, better qualified to survive the climatic conditions. To put the poor white into such an area is worse than a crime—it is a blunder. I would advise the new Government to dissolve their mutual admiration society, make less flowery speeches and attend a little more to the business of the country and a little less to the aggrandisement of their Party. We do not want to be too hard on the new Government. We realise, as somebody has put it, that they are engaged in the painful necessity of attempting to put into practice certain light-hearted dicta originally intended for peroration.
One listened to the hon. member for Port Elizabeth (Central) (Col. D. Reitz) more in sorrow than in anger. We are back ten years.
You are back a century; you are living in the last century.
And living in the last century I am more modern than the hon. member for Port Elizabeth (Central) (Col. D. Reitz). There was a time when that type of speech went down. The hon. member tries to drive in his patent fashion, a wedge between the Labourites and ourselves, but his efforts are futile.
I thought the Pact was over on June 17th.
Yes, and an alliance has started since then. For five years they have listened to the Pact and realized the value of the Pact. We are not the old Tories. The old Tories are sitting on the opposite side. As far as we are concerned, we are going to play the game with our Allies. The hon. member for Zoutpansberg (Mr. Pirow) has made assertions which, if there is any public morality in this country have got to be taken up. I am sure the hon. member for Rondebosch (Mr. Close), whose views are not as wide as they might be, will say that this country should be governed on good lines and he will want to know whether any decent answer can be given to the allegations made by the hon. member for Zoutpansberg (Mr. Pirow). The hon. member has made these statements in public and he has made them in this House, and we shall allow no red herring to be drawn across the trail. We want to know whether the actions he has referred to can be justified or not. The hon. member for Port Elizabeth (Central) (Col. D. Reitz) has not answered the dealings in Ermelo. This is a question which will need explanation and an explanation must immediately be forthcoming. I would warn hon. members on the other side against being led astray by the prophecies of the hon. member for Port Elizabeth (Central) (Col. D. Reitz). Before the result of the general election was known he predicted a landslide and stated that the S.A.P. was confident of gaining seats in the country—in fact the confidence of the S.A.P. was never so great.
It is all true.
The hon. member also said that he had never seen such enthusiasm on all sides amongst S.A.P. supporters.
We polled more votes than you did.
According to the hon. member there was a thrill of victory in the air, and it seemed to him that the nett result of Gen. Hertzog’s policy would be that the Nationalists would be returned weaker than before. He had no doubt of the successful issue of a general election. The hon. member’s definition of a successful issue was wrong.
I got in.
We want an answer to the áble indictments of the hon. member for Zoutpansberg (Mr. Pirow). That question can not be answered by segregation, separation and the two stream policy.
I will give the hon. member the lie direct.
I will make a prophesy. I prophesy that the Pact is going to be very successful. We Nationalists are going to play the game by our allies. Whether we have a clear majority or not we are not going to let them down, but their only difficulty will be to keep us in order. If they do not move fast enough we shall move faster than they do We beat the S.A.P. and we are going to beat them. We on this side shall not allow a single question of racialism to come in and disturb the Pact.
That is why you asked the S.A.P. to join the Pact.
I asked you to join us. If there is any mistake about it, we invite all of you—if you come to political repentance—to come over to us—you will be welcome.
The invitation was extended only to the Dutch-speaking members of the S.A.P.
May I extend it to the English-speaking members as well? You will be very welcome. As far as our party is concerned we have succeeded by Dutch and English votes in smashing racialism, and we extend a hearty invitation to gentlemen on the other side, Dutch or English, to join us. We do not see why we should fight on the prejudices of a generation ago. Let me assure hon. members opposite that they are behind the times. We are going to do what is best for the country, and we shall do it irrespective of race and we shall play the game with our allies. The policy enunciated by the hon. member for Port Elizabeth (Central) (Col. D. Reitz) went down very well many years ago, but it does not go down now. We want a clear and definite answer to the indictment of the hon. member for Zoutpansberg (Mr. Pirow), and unless we get it we want to know the reason why.
It is some time since this House had the pleasure of hearing the voice of the hon. member for Bloemfontein (South) (Dr. Steyn). and apparently the gist of his speech is to the effect that anything on this motion to go into committee on the Estimates of Expenditure that has not to do with the disgraceful attack which was made this afternoon is a red herring across the trail. I am unable to share his views, and I now return to the matter before the House—the finances of the country and the general outlook. The Budget speeches as delivered by the Minister of Finance and the Minister of Railways are admittedly very much the Budgets that would have been delivered by their predecessors as to the matter. As to the manner in which they were delivered, I would like, as an old member, to congratulate both Ministers upon the clear exposition they made and their handling of the figures. Under ordinary circumstances it would not be unnatural for the Minister to have taken over the Budget prepared by his predecessors; I would not have had anything to say about it if it were not for the unrestrained language used both in the House, and outside during the elections, We have heard a good deal about reckless expenditure, want of Treasury control and “pandering to big money.” I think that was the favourite phrase of the Minister of Defence and Labour. Under these circumstances one would think that they were things that were very urgent and could not brook delay further hon. gentlement who now compose the Government would understand these things and would be prepared to deal with them. Instead of that we find, with the exception of a few trifling things, there is nothing that cannot well stand over for a year. That is what happened with regard to election speeches. Now what happened in the House? We have the records. In 1922, on a similar motion, Mr. Fichardt moved to substitute “not to proceed with consideration of the estimates without full and accurate information as to the financial position of the Government being given before the House, and an effective programme for developing and fostering the industries of the country.” That was immediate and could not wait for a year. Now it stands over for a year, and to make it more complete, the records say that Mr. Boydell, who is now the Minister of Posts and Telegraphs, moved to omit the word “go” and to substitute “defer going” until definite assurance has been received from the Government that during this session it will introduce legislation providing for revenue for the opening up of the country by means of a tax on the site value of all land—to bring in a special grading of income tax and death duty—to differentiate between earned and unearned income for the purpose of taxation, etc., etc. He also said that more adequate provision be made for the purpose of taxation. Now all these things can wait, but at that time they had to be done instanter. That was in 1922, but in 1923, on the same motion, Mr. Fichardt advised the early appointment of a Parliamentary committee representative of all parties to enquire into the best means of securing economy in administration compatible with the best interests of the country. These are motions which came from the other side during two years, and according to them there was nothing then which could wait for a year. Now everything can be put aside and can wait. There are three ways in which the Government might have dealt with the finances of the country. One is Mr. Fichardt’s economy method to spend less. But what do we find? They are actually proposing to spend £372,000—more than Mr. Burton proposed to spend. Another way would be to see that better value was got for services rendered, but they propose no change. They could also adopt the method mentioned by the member for Cape Town (Central) (Mr. Jagger), to reduce taxation or alter the incidence of taxation, but we find there is no change in the incidence, there is no alteration with the exception of the two items referred to. One is the tobacco reduction of £20,000 for six months and the abolition of the medicine tax which it is agreed was an irritating tax, which would mean reducing in one year £75,000, or a total of £115,000. Taxation amounts to £17,000,000, and added to that we have got £4,000,000 for services, making a total altogether of £21,000,000, and all the Government does is to bring in a reduction of £115,000—after all the denunciations and loud talk. There is no justification for the violent attacks made in the House in view of the fact that there has been such a small reduction. The Minister must say to his backers both inside and outside the House. “Do not judge us by what we do, but by what we have said.” Our motto is “words not deeds, instead of deeds not words.” He has probably realized that the S.A.P. Government did not do so badly after all, and that speaking of reductions and economy, it is much easier and simpler than carrying them into effect. I hope the Minister will persist in this matter of economy because there is plenty of room for it, and in that way you will get a different spirit into this country. There is one quality, the quality of thrift, which seems to have vanished from South Africa, and the tendency is to follow the cynic who said, “the only money we have is the money we spend.”
Especially the poor whites.
I do not understand the point.
They can be thrifty, can’t they?
I should like to go into the question as to whether we really are a prosperous people. In ordinary circumstances our revenue returns should be the barometer. I do not take the import of motorcars as a sign of prosperity. It is more of a sign that a great many people of this country are living beyond their means. The revenue returns show an increasing return and I feel fairly puzzled with the position. We are going ahead in development, our mines we are told are working more fully than for a long time, there is prosperity in gold and diamonds are improving. There has been a good market for everything we have to sell overseas. There has been a good market for wool. There has been a certain carry over, unfortunately I think too high prices have been paid in some cases for our wool and buyers have been rather disappointed in the clean yield, which will rather militate against our wool in future. Our mohair has been practically cleared out. The maize we had has been sold out. Ostrich feathers have improved. Fruit is going ahead by leaps and bounds, and we have the prospect of doing something with cotton. The overseas markets, as I say, are satisfactory. Then the Customs returns are constantly increasing and everywhere one goes one sees building going on and yet, Sir, we have accompanied by that a position of affairs which we know is not satisfactory. The mere fact that we have Bills introduced into this House such as that to relieve distress from drought and that which makes provision for unemployment and that as we know there is the greatest anxiety on the part of the people about these irrigation schemes, that there are a large number of insolvencies and so on, shows the other side. We know among the mercantile community there has hardly ever been a time of greater anxiety than to-day. That may be due to there being too many traders in this country. Or it may be due to a change in the way in which business is being done. But there is that position, so that it is impossible when one goes through the country and sees the widespread areas of drought stretching from Bechuanaland, through the Queenstown district and all those parts to the sea—unprecedented droughts—and one knows among one’s own friends the state of anxiety they are in and the number of people in all walks of life who are out of employment, although the finances of this country are in a sound state, the state of the people cannot be looked upon as satisfactory. There are one or two matters arising out of the Minister’s speech to which I should like to make reference. One is about the gold standard and his declaration on that matter I was very glad to hear. The Minister of Defence will remember that years ago, when this matter came up, we were both on a Committee which had to deal with it and we were all of opinion that we should aim at the gold standard. The only difference of opinion was as to when it should be done. The question was would a sudden return, a sudden jolt, give a jar to trade which was not advisable. Certainly no such opinion was expressed as that expressed in this House to-day by the hon. member for Troyeville (Mr. Kentridge). There was no such difference of opinion as that then nor when this matter was raised last year. The only question was when the country should come to the gold standard. At any rate the hon. Minister was not of the same opinion as his friend the hon. member for Troyeville (Mr. Kentridge). I only hope the Minister of Finance will not have difficulty in finding the experts he wants to advise him in going into this matter. There are very few experts on this question in this country. It is a very intricate question and our interests are so closely bound up with Great Britain, that I do hope the Minister will look overseas and get some assistance and have some man who is connected permanently with the Bank of England. There is a great authority in Holland, Dr. Vissering; he has been referred to. I think it would be a great help to us—it would give confidence—if people of that sort were asked to give assistance. It is a most important and intricate matter. As the Minister of Defence will remember, we found on that Committee which I have mentioned a large number of theorists. We had a number of professors who had a number of theories, but when we asked the professors to apply their theories to the facts of the case they failed. I would suggest the Minister should get people who have had actual experience in this matter, and not theorists, to advise him. I am glad the Minister has approved in theory of having a general sinking fund although, so far, all he has done is to make a gesture in that direction. If you apply a one per cent. sinking fund to a ten-year loan you do not get very far. By the time the loan is due you redeem something like one-eighth of what is due.
I am not doing anything this year; I told the House what. I would do next year.
One would have thought from some of the speeches which have been made (not all in this House) that the late Minister of Finance had almost been robbing the till because these loan moneys have been diverted, but these moneys which are due to loan—the bewaarplaatsen and mining leases—were really in the nature of a sinking fund, and even in the British House of Commons, where they have the severest economists there are, in certain times the sinking fund is suspended. There is another matter to which I would like to refer. It was contemplated by the Government to establish a tariff board which would have the right to alter the dues on customs without coming to this House, but I would appeal to the hon. the Prime Minister to be very careful before they do that. It is getting to be more and more difficult to get men to come down to this House because of the gradual encroachment on the powers of Parliament by the executive Government. I do not say it is only in this Parliament, but it is also in the House of Commons. Taxation from customs is jealously considered to be a thing to be decided by the House. Any movement in the direction of taking away the powers and functions of any ordinary member of this House tells, in my opinion, against the efficiency of this House, and from that point of view alone I hope that nothing will be done in that direction. I would like to make a few remarks with regard to the Budget of the railways, and I would like to say in the first place that I did not agree with my hon. friend the hon. member for Cape Town Central (Mr. Jagger) when he made the change in the way of computing and arranging for depreciation, and I am glad that the hon. the Minister of Railways and Harbours has gone back to the old system, because I could never see and cannot see yet—even after the explanation of the hon. member for Cape Town Central (Mr. Jagger)—what connection there is between depreciation of your plant and rolling stock and your earnings. There is this relation, that when you have big earnings you have a good deal of money to put on one side; but it seems to me that the hon. member for Cape Town Central (Mr. Jagger) is not logical, and I said so at the time he introduced his ideas because, to follow them to their logical issue: if the railways stood still for a year you would have no money for depreciation. I would also like to make some reference to the earnings of the harbours. I do this because, as the hon. Minister knows, we at Algoa Bay are asking for a certain special provision, particularly in the way of facilities for the export of fruit, which is becoming a bigger and bigger thing. In the Green Book are given particulars of the earnings of various harbours. Durban comes first, and shows a profit of £167,000; Algoa Bay comes next with a profit of £111,000; Cape Town comes next with £85,000, and I will not mention East London because it comes on the wrong side. I put it to the hon. the Minister that, seeing that there is a profit of £111,000 at Algoa Bay, whether we are not justified when we ask for special provision to be made for the shipment of fruit, of which I spoke the other day, and I would like to say in connection with this matter that I heard the hon. the Minister say when he was mentioning the amount he put down that he had put down for the extension of the breakwater at Algoa Bay only £125,000, whereas for the past few years we had the sum of £150,000 put down. I understood from the hon. the Minister that that reduction was really made by my hon. friend on the right here (Mr. Jagger). If that is so I say to the hon. the Minister: “Do not take him as a guide as regards Algoa Bay.” There are many good qualities in which the hon. the Minister may follow the hon. member for Cape Town (Central) (Mr. Jagger), but in regard to Algoa Bay please look upon him as an entirely unsafe guide. But I am told that the reason is that the amount set down has not been fully spent, and it is stated that the works are not being pushed on quickly enough. I ask the hon. the Minister to reconsider that matter and give every inducement to these people who are working there to speed up the work and not to slow down. Two of these big works were sanctioned at the time—the graving dock at Durban and the harbour works at Algoa Bay. The Durban work is almost complete, that at Algoa Bay is not half finished. I would like the Minister to consider whether, notwithstanding certain unfortunate experiences we have had in regard to contract work, it would not be more satisfactory to give this work out to contract and get it pushed on at a more rapid rate? There is one other matter that I wish to refer to which is included in this year’s account, the provision for the chartering of steamships. I would put it whether from an accounting point of view that is the correct way of dealing with it by putting it into the Steamships Account. The chartering of ships is no different from the ordering of 100 tons of rails and putting them into any other ship. It is not the running of ships. It seems to me that to mix this up with the steamships that you are running on your own account is not the correct allocation of this amount. I would say to the Minister of Finance that I hope he will continue in the course of economy that he has not begun on yet, and that he will keep a very strict eye on the finances, for I can assure him that, although things are better and he has been able to present a better statement than it has been possible to present for years, there are still holes that need filling up. We ought, for instance, to be making some beginning on a real reduction in that unproductive war debt of ours. We have done very little in that direction yet. There is still, I believe, plenty of room for economy, for I believe that as a country we are still living beyond our means and there is still a necessity for cutting down. I would urge upon the Minister the need of seeing that amounts are not put to Loan Account that should be put to Revenue Fund. I would add my voice to that of the hon. member for Cape Town (Central) (Mr. Jagger) in asking that he should try and see if it is not possible to reduce taxation, because I endorse every word of what the hon. member has said as to the effect upon the country at large.
I listened carefully this afternoon and evening to everything that was said by the hon. member for Port Elizabeth (Central) (Col. D. Reitz). Nothing in the way of constructive criticism has come from that side of the House. We used to hear it said from this side that our Party while in Opposition and during the elections, had nothing constructive to offer, but what has that side of the House offered to this side or outside the House during the past year in the way of constructive policy? Nothing at all. We had the statement that the Prime Minister seceded from the South African Party on the conciliation question. That is quite a new thing. Then the hon. member (Col. D. Reitz) went on to deal with the question of racialism, telling the House again that we are a racial Party. If I remember rightly, the late Prime Minister used to say in the countryside, “Take great care and don’t vote for the Nationalist because they are racialists,” while in the cities he said, “Take good care and don’t vote for the Labour Party because they are racialists.” There you have the hon. member for Standerton (Gen. Smuts) telling people that you have here the essence of racialism. I think that the two parties who are sitting on this side of the House demonstrate to this country once and for all perhaps the finest proof of non-racialism that this country has ever seen. There is nothing but a pure racial party on the opposite side of the House. My own countrymen are misled into the belief that that side of the House is not a racial party.
What is your bond of union?
Our bond of union is saving the people of this country. If the hon. member for East London (City) (Mr. Rider) visited my constituency he would find thousands and thousands of people in little huts, mud huts, paper huts, where women are afraid of going outside because they have no clothing to wear, and where people live on mealie pap, and that has been going on from day to day and year to year. Has the late Government done anything to save them?
How many of them have your people employed?
Where can you expect to employ them to-day? How long does it take to start anything on which to employ them? Does the hon. member imagine that it is good policy to build a dam simply to give people employment? It is a pity he never visited my little drop for you have the greatest poverty that the country knows in my constituency.
How many of these people did your Nationalist farmers employ?
My people are too poor to employ anybody. Even the locusts die in that part of the country, because they have no food to live on. What amuses us is to find the Opposition criticising us for not having done anything so far. Why this party came into power only 5 weeks ago.
We ask what are you going to do?
Wait and see. We have told you, but we cannot do it in a day. Unlike the hon. member for Standerton (Gen. Smuts), who declared that all taxes must stand, and then when the dissolution took place said the S.A.P. would abolish the medicine and tobacco taxes, our Minister of Finance is giving relief where he can. Let us take the so-called constructive policy which the hon. member for Standerton (Gen. Smuts) laid before the country.
You have taken most of the other things, you may as well take that as well.
The hon. member for Standerton (Gen. Smuts) convinced the people that his Party (S.A.P.) was not only bankrupt in policy, but is suffering from political delirium tremens. I think it was on April 9th, after the result of the Wakkerstroom bye-election was made known, the then Prime Minister said that because of the important matters before the House he was not prepared to rely entirely on the majority in the House, but desired to see whether he had the confidence of the country as well. He dissolved Parliament, but not a single issue then before the House was raised in the general election. The bogies such as Bolshevism, Socialism, Syndicalism, Revolutions, all things that did not exist were raised, but the people did not believe him any more. In 1920 the hon. member for Standerton (Gen. Smuts) told the electors that if they voted for the Nationalists they would have bankruptcy, poverty and revolution. The public voted for him and the country had all three evils, in fact it had more bankruptcies than ever before. During the last general election exactly the same goggas were raised. To-day we have this position that the issue raised in the last general election has resulted in the return to this House of a majority in favour of a Government which is going to do its level best to solve the problems of the country. We are not going to tolerate the sight of thousands of people absolutely poverty stricken throughout the Union. Something must be done to remedy this state of affairs, and I am satisfied that something will be done. If we can but carry out the points upon which we are agreed we shall have done a great deal for this country. We shall have served a purpose and this Government will have come to stay. It is the people who have suffered most, the people who have had to carry the burden on their own shoulders who have now combined, determined to govern this country, and you see the result now on this side of the House.
The people of South Africa take a keen interest in the finances of the country, and the younger members of the House are greatly refreshed by the manner in which the question is tackled. Attention has been drawn to the many bankruptcies in the country; to all the suffering there is, and then members make party capital out of the matter. When people in the country know that members exploit this hardship for party capital purposes they will be greatly disappointed with those they send here to represent their interests. I congratulate the two Ministers on their Budgets and on the lucid manner in which they laid the financial position of the country before us. And this, despite the fact that they had to give so much time to people who came to see them at their offices. Ministers must have worked very hard indeed. They had been left with an unenviable legacy. But we have confidence in them, and know that the interests of the country are in good hands. The Opposition makes much of the fact that the Budgets have been to a great extent the work of their predecessors. On the other hand, however, the Budgets are criticized. Surely it is illogical to praise and condemn at the same time. During the last five years the burden of taxation has been pushed on to the shoulders of the rural population, with the result that the country districts have become depopulated. The people have fled to the towns. Practically all the new taxes were levied on the rural population; the wine farmer had to pay a higher excise duty; the tobacco farmer was taxed; the land of the farmer was taxed by the Provincial Council; they had to pay the medicine tax and they were threatened with the Baxter report. They were disappointed because so little money had been spent in the development of the land. Not enough was done in the finding of new markets. Education was neglected, resulting in an increase of poverty. We have great resources and a thrifty population and yet, provision has to be made on the Estimates for over £300,000 for unemployment. That is a disgraceful state of affairs, which has greatly disappointed me. The natural consequences were discontent and riot. Woe to the Government whose remedy for this state of affairs is force of arms! I am glad to see that no new taxes are levied. We feared that new taxation would be the result of the Baxter report, but fortunately we have a new Government. The Opposition expects impossible things from the Government. I do not understand the mentality of members who expect from the Government in four weeks what the previous Government could not accomplish in fourteen years. The nation welcomes the abolition of the medicine tax and the reduction of the tobacco tax, and it realizes that it is impossible to expect more than that now. I particularly welcome the attempt of the Minister of Finance to revise the import duties. It ought to be the primary aim of the Government to foster the independence of the nation by encouraging its industries. In this regard I want to mention the case of a factory at Worcester where a large number of white people are employed, and which would have found it a hard struggle without the assistance now promised by the Minister of Finance. Ministers have a very difficult task, and if we criticize that does not signify that we have no confidence in them, but it is with a desire to assist them with suggestions in the interests of the country. With others, I feel that there ought to be a revision of our system of taxation. Of course, I do not expect it within four weeks, but I hope the Government will enquire thoroughly into the matter of the incidence of taxation, and whether a readjustment is not possible so that some of the taxation, at present borne by the agricultural community, may be put on the mines. Of course, I do not want a sudden readjustment, but I think the matter merits investigation and consideration. On the other hand, there is a feeling that there are certain industries which have to be protected. The Nationalist party has always pleaded for the small man, and it is for the small man, namely the digger, that I want to put in a word here. He suffers just as much from the export tax on diamonds as the big companies, but the alluvial digger cannot pay it. I hope the burden will be laid on shoulders which are better able to bear them. The farmers have more than their fair share of taxation. They are not unwilling to pay their share of the expenditure of the country, but the feeling is general that the present form of income tax for the farmers is unjust. I think Ministers should make a careful enquiry into the matter or the incidence of taxation. There is a certain amount of discontent because taxes have to be paid on improved land values. The wine grower desires an alteration in the import duty on spirits. Some relief is urgently needed, and if it cannot be brought about by an increase in the import duty, the excise must be reduced. It is true there has been a great increase in our national debt, but I realize that capital is required for the development of the country. One has to judge the national debt by the amount put into productive undertakings. The money has to be obtained by means of loans. According to the loan account much money has been spent on dwelling houses. That is an unproductive investment. Money could be spent in a better way on undeveloped parts of the country. There is a large sum on the Estimates for dwelling houses, but for new roads there is only £1,000. More attention has to be paid to the health of the diggers in the North-West, which is in such a state that it will menace the country should epidemic break out. I have already brought the matter to the notice of the Minister. The diggers contribute thousands yearly to the Treasury. There is a great need for agricultural and technical education in the North-West. I do not want to criticise the other agricultural schools, but the needs of the progressive people in the North-West and the large-number of children of the diggers, who have to make a living there, are very great. Education should take a more practical form. We have had a bitter experience of the way in which the money of the taxpayers was spent in the past. We know that things will be different now, but it is just as well to keep a watchful eye on the finances of the country, despite the absolute and sincere confidence of the Nationalist party in the Ministry. Above all, we want confidence and stability, and then there will be an unprecedented development or the resources of the country.
As the hour is rather late and this is the first night sitting we have had, and some of us have been working since 11 o’clock this morning, I would like to ask the courteous hon. Minister that the debate might be adjourned.
Go on. The night is still young.
I found in the King’s speech certain lines which I must admit did appeal to me very strongly. I allude to the references to unemployment and to the need for the establishment of industries. The King’s speech does not contain very much detail with regard to these matters, but I suppose as regards the settlement of the land and the schemes which the Government have in view, these have been now more or less disclosed and take the direction of establishing in Zululand a settlement of poor whites. I can only suppose that this is being done on the principle that these people who for generations have been a failure on the healthy lands of the high veld must necessarily be a success in the fever-stricken haunts of Zululand; that they will there wax fat and grow prosperous and raise healthy children. I do not know whether the Ministry have any anxiety or any desire to earn the good opinion or regard of the people of Natal, it may be that they are indifferent, but the members representing that Province would much like where vital matters concerning their own Province are involved to be considered and to be consulted, and in this case not one of them has had that courtesy extended to him. As regards the establishment of industries, a question which is troubling the minds of a good many of us, particularly those who are concerned with industries already established, is, “what really is your policy”? If you are really out to solve the unemployment question, if you are out to turn this country of ours into a prosperous and a happy community, you can only do it by finding legitimate employment for the people. The mere voting of large sums of money to be expended in relief works and in doles and efforts in that direction are only palliatives. I happen to represent a constituency which for a country constituency has quite a number of factories, such as bacon factories, creameries, cheese factories, rubber factories and sundry others. But almost without exception everyone of these institutions in which hundreds of thousands of pounds have been invested and in which large numbers of people are being employed to-day is tottering, and that because of the unfair competition with which they are met from America and other highly protected countries. May I quote the experience of a rubber factory? In one month the sales of rubber soles and heels may reach to £1,200, and the following month it may drop down to £120. Cannot hon. members understand that under these circumstances it is impossible for the manufacturers to stablize their industry and reach the economic point of manufacture, these fluctuations being entirely due to dumping from time to time. You may talk for ever about establishing new industries, but if you do nothing to protect the industries already here, not only must they collapse, but you will prevent capital anxious to come here to establish these factories from doing so. This rubber factory happens to be controlled by a house at Home which is closely connected with the manufacture of rad way rolling stock, and it was quite within that firm’s intention to bring out plant and construct rolling stock here. That would have supplied work for thousands of people, but this further development will never take place if existing industries are allowed to perish. Here is an illustration of how we would be placed if local factories are allowed to disappear. About 12 months or more ago cotton suddenly rose from 8d. to 16d. per lb. Now cotton is one of the basic ingredients in the manufacture of rubber goods, raw rubber also made a corresponding jump in price. Now rubber hose is manufactured out here, but not rubber belting, therefore the agents of American firms who make all these things were instructed to inform the mines and trade in South Africa that owing to the rise in the price of cotton and rubber the price of belting and one or two other lines which are not turned out in South Africa would be put up 25 per cent., but the articles which were manufactured here were not to be increased in price. Now, if none of these articles had been made in South Africa there would undoubtedly have been a general increase of 25 per cent. all round to the consumer. Thus these people use their power to destroy our struggling industries. Canada, however, will not put up with this sort of thing, and the result is that the Americans have been compelled to erect their factories in Canada and likewise in France, but we are content to allow America to dump her goods here and ruin our manufacturers. Speaking as a convinced protectionist, I say that if you are going to establish factories you can only do so successfully by giving them adequate protection until such time as they are strong enough to compete successfully with the imported article. Why can’t we take a lesson from other countries, Australia, for instance, which not only affords every one of her industries a high protection but goes further and supports them in the most practical manner by a standing order to every one of her public spending departments that before they spend a shilling overseas they must thoroughly exhaust the local market. The Government have made many promises which I hope and trust they are going to carry out. They have about two years in which to do it. Let them here and now issue orders that having regard to price and quality that nothing shall be imported for the public use which can be obtained from the local manufacturer. But our Governments have in the past had a tendency to use local factories merely as a convenience, drawing on them only in emergency, and so soon as they have got over their immediate difficulties they go again to the cheapest market abroad for their main supplies. I am glad to notice that the railway department is beginning to get its requirements in rubber line from local sources. The Government can do a lot of good by adopting a sound policy of protection, by getting the mines to support that policy. Let them get the mines to say we shall place 65 per cent. of our orders in this country provided we get a good article. I urge on behalf of these factories—and I am not alluding to any particular factory—that they should be offered a protection which will enable them to get up to the economic point of production. Now as regards another matter, namely, railway rates, I was pleased to hear my hon. friend Mr. Jagger say that these ought to be reduced. They are certainly far too high and require the urgent attention of the Government. There is an illustration in point, in connection with our bacon factories which are in urgent need of increased protection and sympathetic aid. The cost of receiving a live pig, weighing, feeding, and delivery to sticking pens is 3d. per pig. Refrigeration costs 17d. a pig; killing, curing, singeing, trimming and smoking comes to 43d. a pig; transport to railway and packing is 30d. a pig; office expenses, 11d. a pig; selling charges, 59d. a pig, but railage works out at no less than 107d. a pig. The Government can give a very great relief to these industries if they consent to revise their tariff in that direction, but we must have increased protective duties. These are essential. I do not know if there are any free traders in this House to-night.
Cape Town (Central).
You talk to them.
I am perfectly certain if there is any free trader in this House that when he has money to invest he takes good care to invest it in those industries which are highly protected. Lastly, I hope the Government will adopt the policy of purchasing their requirements in this country. To recapitulate, then, what our factories are asking for is: (1) That all raw materials required for use in our factories be placed on the free list; (2) that there shall be a thorough overhauling of our railway rates with the object of securing substantial reductions in charges; (3) that increased protective duties be imposed where such are not already sufficient; (4) that the Government, following the example of Australia, obtain their requirements as far as possible from local sources. One point which is really beside this question, but I would like to raise it, is in connection with the new native convict goal which the Government is proposing to build at Durban at a cost of £41,000—a place for all the worst criminals in South Africa to be dumped in. We do not want this convict settlement in Durban. We have had experience of such people already. We do not want them brought into our country where we have no criminals of our own, to speak of, and set loose on the termination of their sentences to cut the throats and rob the homes of our people. I am sure the Minister of Posts and Telegraphs could not have known anything of this matter; if he had, he would never have agreed to it. I do hope, when the Minister makes his reply he will tell the country in no uncertain manner that we intend to protect our industries.
Is it competent for me to move the adjournment of the debate now?
I move the adjournment of the debate.
The motion was agreed to, and the debate was adjourned until Thursday, 7th August.
The House adjourned at