I think most members of the House will have remarked on the change of spirit which has come over the budget debate. The 12 to 14 speakers who have already addressed the House have all of them devoted their remarks entirely to the budget, and party recriminations have now ceased to fall upon the ears of the House. I hope that we shall continue in this way, and that we shall do something to restore the waning prestige of Parliament. I intend to go on that line, and to criticize the budget in the free manner in which it has been criticized by hon. members. I think, with other hon. members, that the coalition has been amply justified in the measures proposed in this budget. In the very parlous condition to which South Africa has been reduced the need indeed was urgent for the adoption of financial measures which would more equitably distribute the burden of the depression. Certain sections of the population during the past few years have had to bear almost the whole burden of the fall in our national income, while other sections of the community have suffered no appreciable loss whatsoever. The aim of this budget, as I see it, is to endeavour to restore something of the equilibrium which should exist between the various sections of the community and that no one section takes more from the national pool of annual wealth production than it is entitled to. In the very short space of time which has been given to the Government since it assumed office, it was not to be expected that it could evolve far-reaching plans for the economic resuscitation of the country. All that the Government has had time to do has been to deal with the threatened bankruptcy of agriculture, by the utilization of a fair proportion of the gold premium, and to ensure that sufficient of the premium is left to the mines to give us the maximum of mining development and employment. Under these circumstances I think the Government has acted wisely and with discretion. Few of us in the House have sufficient knowledge to know whether the plan of taxing the gold premium will work out just as the Government intends. Upon that point we shall have to take matters on trust. The mining industry does not appear to know itself. On the face of it, the plan adopted appears to me to be fair and equitable. The gold premium represents the difference between the gold pound which we had in our pockets yesterday, and the paper pound which we have in our pockets to-day. It is a creation of the nation and is therefore, the property of the nation, and nobody can contend that in utilizing a proportion of th s depreciation of our South African pound for the benefit of the country as a whole, any injustice is done to the shareholders of gold mines. The Government, while recognizing the national claim to the premium, has not forgotten, however, that the mines are a national asset which we must safeguard, and exploit wisely. It would be folly of the greatest magnitude to do anything to shorten the life of the mines, or to reduce their output of gold, or to make further exploitation impossible by frightening the investing public. The mines are directly contributing one-third of our national revenue, and probably if we could ascertain all the indirect contributions from which our revenue is derived, we should find that the gold industry was responsible for 50 per cent. of the money we shall vote for current expenditure. In essence the budget is really very simple, apart from the intricate method of taxing the mines. But if I may venture to criticize the budget, as a supporter of Coalition, I would say that it fails at the very point where it should have been most successful. The chief objective of all governments should be to increase the wealth production of the country. In this budget, this policy is concentrated almost entirely upon the mines. In so far as the measure for distributing the gold premium will lead to an increased production of gold, and to the lengthening of the life of the mines, and, of course, to further employment in the mines, the budget is good, but with the general economic position and with the policy of increasing our national income, the budget is very much less concerned. It is distinctly financial, not economic. It follows along the generally accepted lines of public finance. Its chief virtue is that the budget is balanced. I take it that in the time at its disposal the national Government could do nothing else than attend to the pressing financial position. Economic planning needs time and study, and that has not been possible during the last few weeks of election activity. My remarks, therefore, have more application to the future than to the present. The country, as a whole, will probably regard the budget as affording breathing space for a proper study of the economic measures necessary for the country’s rehabilitation. Now the economic position which the Minister unfolds in his budget speech still remains one of unrelieved gloom. The figures he gave us with the budget did not breathe any new spirit of confidence. They show that we are still undergoing an alarming decline in our national income, out of which the whole country has to find its livelihood. The past statistics of the country are illuminating. From 1929 to 1931 the value of our exports fell by no less than £36,000,000 per annum. After making all allowance for the fall in prices, it is estimated that our real loss of income received from abroad has been £29,000,000 a year. The effect of that fall is seen in increased unemployment. The official statistics show that there was a decline of 14 per cent. in employment from 1929 to 1932. That state of affairs still continues and was, in fact, the cause of the formation of the National Government. In his budget speech the Minister showed that our exports are down by an additional £2,750,000 over last year, despite the fact that 70 per cent. of our exports consist of gold. Our imports are down by £20,000,000. Our mineral production has fallen by £2,500,000 over last year, although our gold production has gone up by £3,000,000. The Minister told us that we had 4,352 bankruptcies over a period of 18 months. Now the proposals in the budget can make very little impression upon this state of affairs. They will not increase the amount of our exports, nor will they bring about much increase in our purchasing power, for the budget merely aims at a redistribution of our existing production. No transfer of money from the pockets of one section of people in the Union to those of another section of people is going to increase our purchasing power. There is only one way in which our economic position can be improved, and that is by an increase in our national income. Now that is a truism, but it needs to be stressed. Only in so far as the measures proposed by the Government go to increase the national income, and thus increase the purchasing power of the people, can our position be improved. But the measures foreshadowed in the budget which are new and which are designed to achieve that object are not of very great magnitude. Those measures are, in the first place, those which deal with soil erosion and farm improvement. In so far as these measures will afford additional employment and increase the assets of the country, they will add to the national wealth. Then there is the amount set out in the Loan Estimates. We have £1,000,000 on the railways, which is an annual expenditure; £515,000 on public works; £532,000 for irrigation; £412,000 for afforestation; and £750,000 for the relief of unemployment. There is no new planning here, no new economic scheme here. They represent the usual small sums so spent on these services. The £4,000,000 which is being given to the Land Bank to meet the mortgage difficulties of farmers, may all find its way to the banks to swell the already existing millions that are frozen. These amounts which do not total the pre-slump figures of loan expenditure will not serve to bring about much change in the purchasing power of the country, for they are outweighed by the continued fall in our exports. The position can only be improved by a very generous programme of loan expenditure on a large scale. As Prof. Keynes has pointed out in his recently much discussed pamphlet on prosperity—

And then he goes on to say—

The most urgent and the most national of all our objectives must be the rehabilitation of agriculture. Agriculture is still the basic industry of South Africa. It employs 30 percent. of the total European population and it gives indirect employment to many more. The ruin of agriculture would not only be an economic matter, it would affect the very existence of our white population. For the agricultural depression has set a stream of dispossessed and unemployed flowing towards the towns. The effect of this exodus from the countryside is to throw upon the charities of the towns and upon the municipal authorities an increasing number of people for whom no employment exists. These new-comers, all of them unskilled, all unaccustomed to urban life, find themselves when they get to the towns in competition with the native, the Asiatic and the coloured. Every avenue of advance to the skilled trades is closed to them, and they sink into a state of slumdom which is becoming a cancer in our urban life. The continued depression in agriculture will aggravate this state of affairs. The bywoner, all those who have no possessions on the lands, will gradually drift to the towns to swell the ranks of the unemployed and add to our national difficulties. It is not merely the relief of the farmers which is at stake, but the maintenance of the whole rural life of South Africa. There can be no improvement in the business of the towns, there can be no expansion in employment, no activity in trades or manufacture while the countryside is stagnant. That this is so is shown from the fact that the gold mines are to-day at the zenith of their production, employing more people today than ever before, and the economic benefits of the gold mines are just as active to-day as ever; yet the tide of bankruptcy all over the country continues and unemployment grows daily. How can the mines then save the situation. Any plans for the relief of farming, therefore, must, if successful, go a long way towards the relief of unemployment. The measure for the relief of farming, however, appears in the guise of our old friend the subsidy. On this occasion it is a subsidy upon mortgage interest. The proposal is for a year, but we are led to conclude that its re-enactment is probable if the conditions do not improve. I must speak a word of praise for the very thorough manner in which the scheme has been worked out in all its details. The Minister of Finance appears to have considered most of the cases which will be affected by his proposals. The Minister has told us that his object, while bringing essential relief to the farming community, has been to preserve the ordinary contractual relationship existing between creditors and debtors. In asking the creditors to accept a reduction in the rate of interest he says that he is as much concerned with the creditors as with the debtors, since a collapse of agriculture—a wholesale desertion of the farms such as has been witnessed in America— would cause the loss of the creditors’ capital. In coming to the assistance of the debtors, therefore, by a subsidy on interest, he is also protecting the assets of the creditors. The Minister bases his scheme upon a belief that the true relationship between creditors and debtors is a cash relationship and not a commodity relationship. It is based upon the cheerful optimism that prices will again rise in the near future and that farmers will be able to repay their loans and accumulated interest, whatever that interest may be. It is based upon the belief that there is nothing wrong in paying back three bales of wool for every bale borrowed. It is the view of the ancient world, a view which is being discarded between nation and nation and must ultimately be challenged between the various sections which form the population of a country. Otherwise there would be a collapse of modern society. Now I do not share the Minister’s optimism either that prices will rise or that agriculture in general, either in South Africa or in any other part of the world, will ever be able again to repay the load of indebtedness incurred during the post-war years. That period must be regarded as distinctly abnormal, and the debts incurred during that time arc just as much a consequence of the war as the lavish expenditure engaged in by the governments of those days. In any case, the assistance which the Minister is prepared to give depends upon very mutable factors. I discern no permanency at all in our position. The Minister will have to come forward with the same proposals next year. Moreover it is a subsidy by the State, which is not returned; it is a subsidy given away, and it offers no opportunity of reconstruction of agriculture as a whole. Everything which is proposed in the budget depends upon the maintenance of the gold premium. The whole of the financial measures are based upon the price of gold remaining at 120s. per ounce. If anything were to happen to cheapen the price of gold, or, in other words appreciate the value of South African currency, the whole structure of the budget would fall to pieces. Such a possibility is not distinctly remote. The world economic conference may easily adopt measures which would effect an alteration in value of our currency. Even a possible stabilization of the position by devaluation is not in our own hands entirely but must depend upon the action taken by the world upon currency matters. It would therefore he wise, while hoping that the existing parity of gold will be maintained, to be on the alert for any change in the matter. While it will prove a useful help over the style to farmers, it will no more prove a solution of their difficulties than the subsidy upon exports has done. As the Minister has told us, it is a temporary measure designed to meet an emergency. The measures proposed by the Minister will not rehabilitate agriculture, and the Bill will not permanently improve the position in the country unless there is a world wide rise in prices. The measures are designed to tide the farmers over their difficulties of the next 12 months, by giving them a subsidy on interest— but they will not relieve agriculture from the load of debt which is crippling it. The only way in which agriculture could be relieved, short of complete reconstruction, is by a rise in prices of primary products. That was the expressed opinion of the Ottawa Conference, as it is the opinion of the whole world. That is the opinion expressed by the Minister in his budget speech the other day. But there is nothing in this budget which makes for a rise in the price of commodities. The small infla tion brought about by the gold premium will not achieve this object, even for our internal prices, and over the world prices we can exercise no influence whatever. What could have some effect upon internal prices is the utilisation of the vast sums which are lying idle in the banks, and the best way of bringing that money into circulation and into the hands of the people as additional purchasing power is by means of a great expenditure upon public works. Without additional purchasing power agriculture cannot be saved. As Mr. Keynes says in his pamphlet already referred to—

That is, our exports—

Public loan expenditure and an increase in our exports are not a great feature of the budget. We have actually been contracting our loan expenditure during past years on the mistaken grounds of economy, and our foreign balance representing our exports has been steadily falling. As sensible men, we must therefore make our plans on the assumption that prices are going to remain for some time at their present level and not look for any immediate rise. There is nowhere any indication of any change. We must therefore face the fact that South African agriculture cannot survive without reorganization.

What about wool?

The price of wool is still down.

No, the price has gone up by 10 per cent. since last week.

Ten per cent. on wool will not rehabilitate agriculture. The while paper issued by the Treasury shows the precarious position to which the farming community has been reduced by reason of the appreciation of gold in terms of commodities. The £100,000,000 worth of mortgages were probably contracted when the price of commodities on the average was three times that of to-day, and on the assumption that a rise in prices is unlikely, it is quite impossible for agriculture to repay the huge sum of £100,000.000 out of the profits of the farms. The scheme of the budget merely makes provision for one year s relief. At the end of that period the farming community may have to face the old interest burden without any improved prospects of being able to pay. There are many of us who hope, therefore, that during the coming months the Government will give much more consideration to some permanent scheme of rehabilitation than they have yet been able to do. The plain truth of the matter is that South African agriculture is bankrupt under the present price level. Its assets are no longer realizable. They have shrunk in value since the debt of £100,000,000 now owing in bonds was contracted. The problem is one of solvency. The annual production does not realize sufficient to pay interest upon the debt and pay wages to farm workers. The problem is: how then can the State restore the 1928 position to agriculture? Several suggestions have been made to attain this end. The van der Horst scheme has achieved most notice, and while I do not subscribe to all the details of that scheme, it appears to me to suggest a possible basis for permanent rehabilitation. Certainly the scheme cannot be dismissed in a few works of challenge. The Minister was concerned by the idea that in adopting a farm debenture scheme backed by the State, it would be necessary to raise a colossal sum of money. To carry out such a scheme, it is not necessary to raise any money at all. In simple words, what is sought to do is to transform the collective security of agricultural lands into a State security, which will bear the present world rate of interest, in stead of the ruinous post-war rate of interest, and change the mortgages into long-dated loans. That action would in no way prejudice the interests of the State. Indeed, in a country of whose exports 70 per cent. consist of gold, it always appears to me absurd to pat ourselves on the back because the world esteems our credit to be good. It could hardly be otherwise. I think that the position of South Africa as the chief gold producing country of the world has never yet been fully exploited from a banking point of view, and our credit will not be assailed by the issue of State farm debentures. The Minister of Finance asked how farmers would finance themselves in future if farm debentures were issued. The existing creditors are not prejudiced by the issue of farm debentures. Their money would remain invested in a gilt-edged security or they could withdraw their money by the sale of these negotiable State bonds and invest it in other directions. That process would stimulate development all round. Farmers would contract their future loans on the basis of the new land values created and upon the then existing price of commodities, precisely as they do to-day, and not upon the inflated post-war values of the past. The effect upon land values by the issue of farm debentures would be to write them down to something like the realizable values of to-day. If you halve the interest on a loan, you go a long way towards writing down capital values.

What do you mean by farm debentures?

†Mr. NICHOLLS; The issue by the State, or by institutions authorized by the State, of debentures to farmers in exchange for their bonds, for which the farmers themselves would be responsible.

State purchase?

No. The transfer of all private agricultural security to State security in order to rehabilitate agriculture.

On the credit of the State?

If agriculture goes bankrupt, what does the State do then?

You told us that agriculture is bankrupt.

i said on present price levels without re-organization it is bankrupt.

Borrowing more money.

I do not propose to borrow more money. My hon. friend can think only in terms of the gold mines but not in products, not in men, not in the State—only in terms of gold. The only other way is by the way of my hon. friend from Johannesburg (Col. Stallard) that of orthodox finance, to allow all debt charges contracted during the expansion period to be pruned away by the knife of depression and bankruptcy. Along that line lies national disaster. The issue of farm debentures is not a new idea in South Africa. I believe it forms part of the proposals for agricultural reconstruction in the United States, and it has been tried with success elsewhere. My hon. friend, the acting Minister of Finance, smiles because these methods do not coincide with the ideas of Throgmorton Street, but unless we can get away from those ideas, there will be, no chance of rehabilitation here. The issue of farm debentures will not in any way increase the national debt. It places no additional burden upon the taxpayer; it gives the country a much needed form of Government security bearing interest at current rates, in which all idle money can be invested with benefit. The interest and redemption of these debentures lies entirely upon the farmers, who are given security of tenure and a long-dated loan instead of the uncertain and fluctuating loans at high interest which are raised to-day. And, what is important, it gives a long time for redemption. It gives 40 years or thereabouts, and gives encouragement for improvement, and will put heart into many who are to-day hesitant of the future. It is economically sound and nationally prudent, and I hope the Government will give the matter favourable consideration during the recess. There is one snag about it, however, the snag which the Minister mentioned, the danger of turning so large a section of the population into debtors of the State who will exercise their voting power for ultimate cancellation. That is a risk which should not deter the State taking the step. The farming community would be the first to suffer by such an act of political sabotage. Such power exists in many ways in all civilized states, in the organized trade unions, for instance, and amongst other interests, but that power is not abused. The rehabilitation of agriculture cannot be achieved by old banking methods, or by methods of Gladstonian finance. The new age demands new methods, and the national Government was accepted by the people because they believed the new methods would be adopted. The budget as it is is a sound bankers’ budget, based upon the same principles which have led to those standstill agreements between the nations, with which we are familiar, in a futile effort to ensure future payments The budget proposes a standstill agreement in the financial position of the farmers, to give them breathing space for a short while, but it says inexorably that the farmer shall pay every cent of what he owes in hard cash, with capitalized interest added, when the standstill comes to an end. That is not the way the world is proposing to settle its debts between nation and nation, and it is not the way in which the various sections of the community can restore amongst themselves equilibrium in the burden of depression. South Africa cannot grow rich and contented while one section of the community bears all the arrows and vicissitudes of fortune, vicissitudes of climate, and the vagaries of the world’s markets, while the other sections remain sheltered by the sanctity of gold contracts and the unchanging rewards of service. The dangers to us as a young nation, still grappling with almost insoluble human problems, are too great to think only in terms of Throgmorton Street. We need national policies from a national Government, and I hope that during the recess the Government will evolve an economic plan of action for consideration at the next sitting of Parliament.

I rise to take part in this debate primarily with the object of making a statement in connection with the proposed enquiry into the relations between the Union and the provinces. On Tuesday, in answer to a question by the hon. member for Zululand (Mr. Nicholls), I undertook to make an early statement in regard to the proposed Provincial Commission. I desire to implement that promise now. The House will remember that last year a commission was appointed—

That commission’s appointment was clearly based upon the assumption of the early disappearance of the provincial council system in some, if not all, the provinces. With this assumption the policy of the present Government is definitely not in accord. The policy of the Government in this regard is based on the joint statement in regard to co-operation issued by the hon. the Prime Minister and the right hon. the Minister of Justice in February of this year. In that statement the following was laid down as one of the principles on which the new Government was to be formed—

With that must be read the further declaration of the joint statement—

The provincial policy of the present Government may therefore be summed up in two clauses: the maintenance of the unitary principle in our constitution—the maintenance of the status of the provinces within the limits of our constitution on such a basis as will enable them to function adequately and effectively and in the manner contemplated by the constitution. The second of these points carries with it two corollaries. Up to a point the present system of financial relations between Union and provinces has broken down—I need not enlarge in this connection on the plight of the provincial administration in the Orange Free State—and in certain other respect weaknesses in the existing system have been disclosed. The Government stands committed to an investigation of the whole problem of financial relations, and in the light of the results of that investigation it will take such steps as may be necessary to place those relations on a sound and equitable basis, having due regard to the position of both the Union and the provincial taxpayer. I hope that, as a result, the provincial system, in so far as it has in recent years been impaired in its financial aspects, will again be rehabilitated. The question of financial relations can, however, not be detached from the question of provincial powers and functions. The provincial administrations have never had granted to them all the powers which under the Act of Union it would have been permissible to confer upon them. The Government stands committed to the favourable consideration of proposals for the extension of provincial powers and functions within the framework of that Act. Tn that connection the effect of an extension on the financial relations between the Union and the provinces will also fall to be considered. I would express the further hope that the investigation of these matters, and the policy eventually to be enacted by the Government in terms of legislation will remove the provincial question from the sphere of controversy, and assure to the provinces the opportunity of justifying the place assigned to them in our constitutional fabric. The conflict between the policy which I have now enunciated: and the assumption underlying the appointment of last year’s commission is obvious. When the new Government assumed office, that commission had done a good deal of useful work and taken much valuable evidence, but it had not yet reached the stage of considering its report. The Government felt, however, that it was not desirable that the work of the commission should be continued, and it was therefore decided that it should be terminated. I have already expressed by letter to the chairman and members of that commission the Government’s high appreciation of the services rendered by them to the State—I should like to do so publicly now. I am sensible of the disappointment which they must have felt at the cutting short of their work while it was still in progress. I think, however, that they have appreciated that there was no other course for us to pursue. Our next step was to proceed to the appointment of a new commission to conduct the enquiry promised in the joint statement of the hon. the Prime Minister and the right hon. the Minister of Justice, to which I have already referred. I am now in a position to announce the personnel of that commission. We have been fortunate in securing lor the chairmanship the services of Mr. J. de Villiers Roos, formerly Controller and Auditor-General. Mr. Roos’s wide administrative experience, his outstanding ability and thoroughness, his absolute impartiality, will, I am satisfied, make his appointment acceptable throughout South Africa, and will go a very long way to ensure the success of the commission’s work. The other members will be the hon. member for Turffontein (Mr. Sturrock), Mr. F. C. Hollander, M.E.C. (Natal), Mr. S. H. Pellissier, Director of Education of the Orange Free State, and Dr. A. J. Stals, who was the chairman of the late commission. It will be observed that, apart from the impartial chairman, there will be one member of each of the provinces. I want to emphasize that I do not, however, regard the members as representatives of particular interests. I have had many requests and suggestions for the appointment of such representatives. The municipal associations and the teachers’ associations have made such requests. Such requests have come also from other quarters. I am sorry that I have been unable to comply with them. To have done so would have led us into the pitfail of an unduly large commission. I want to say very emphatically that I hold the view that a small commission does better work than a large commission. It would also, I think, have impaired what I consider a most essential characteristic of any commission, and that is that its members should be regarded as generally representative of the community as a whole, rather than as the mouthpieces of specific interests. Now in this case we have, I think, been able to get together a commission which is of a convenient size, and yet well balanced, and adequately representative of the community. The hon. member for Turffontein is not only in touch with business interests, and with the engineering aspects of provincial activities, but he has the advantage of having played a most valuable part in an investigation of a most important aspect of our provincial problem a few years ago. Mr. Hollander has outstandingly valuable experience of both provincial and municipal affairs; in addition to very long service as a member of the Natal executive committee, he has had considerable municipal experience and has been chairman of the United Municipal Association of South Africa. Mr. Pellissier is a distinguished educationist, holding a very high administrative post in our educational service. Dr. Stals, apart from being especially competent in matters of public health and hospital administration, will be of great value to the commission as the repository of the information gleaned by the last commission over which he presided. I think the Government can certainly congratulate itself on the commission’s composition. I pass on to state the commission’s terms of reference. These will be as follows—

1. (a) the financial relations at present ex isting between the Union and the provinces, more especially in respect of the sources of revenue available to the provincial administrations and the basis of subsidy pay able to them by the Union Government, and
2. (b) upon the present financial position of the several provincial administrations; and (2) to make recommendations as to whether any changes should be made in those relations, having regard to the powers and functions at present exercized by the provincial administrations, and to such further powers and functions as could more appropriately be discharged by them within the framework of the South Africa Act, 1909.

I should like to make more explicit what was implied in my earlier remarks. The commission is being appointed on the underlying assumption that the status of the provinces will be maintained. But for the rest the Govern ment will give the commission no further guidance and impose on it no further restrictions other than those that are contained in its terms of reference. We shall look to it to consider the system of financial relations as at present in operation and as it admits of being improved. We shall look to it to examine all proposals that may be submitted to it for an extension of provincial powers and functions, within the framework of our constitution, and any other such proposals which it may decide to investigate. But its decisions as a result of such an examination will be entirely unfettered. It will be free to report exactly as it thinks lit within the scope of its terms of reference. The responsibility for the ultimate determination of the policy to be followed will, of course, lie with the Government itself. It will be noted that the terms of reference have been couched in broad and general terms. I think it will be agreed that this was the best course to pursue. Various representations have been made to me to make special mention of certain specific points in the commission’s reference. A deputation of Transkeian members of Parliament and of the provincial council recently discussed with me two such special points; in the first place the question of the financing of native education, and, secondly, the question of relief from the Union Government to the Cape Province, in respect of a portion of the liability for roads in the Transkei—a territory in regard to most of the inhabitants of which—the natives —provincial taxation powers are very definitely restricted. But the mention of certain specific points might be held to imply the exclusion of others, and, since points, such as I have mentioned, clearly come within the terms of reference as drafted, I indicated to the members who saw me, that I regarded it as preferable that we should content ourselves with a broad general description of the commission’s work. But certain other representations have also been made to me, tending in a different direction. It has been strongly urged that the scope of the commission should be wider so as to enable it to report not merely on the financial relations between the Union and the provinces, but also on the financial and other relations between the Union, provincial and local administration. Now I am prepared to admit that in view of legislative changes which have taken place in recent years, affecting the financial and administrative powers of the local authorities, the case for such an investigation of the financial position of these authorities in relation to the Union Government and the provincial administrations certainly merits consideration. I am, however, averse from the introduction of this further issue to complicate the enquiry which must now be undertaken. The position of the local authorities in this regard must, I feel, stand over until the more urgent matter has been disposed of. I think I have touched on the various points which have received consideration in connection with this matter. I believe that I can, with assurance, commend the commission which is to be appointed to the confidence and good will of the country as a whole, its task will certainly be one of the most difficult that has ever been entrusted to a body of this nature, but it will have the opportunity of rendering service of very high value to South Africa. If I may add one word in this connection, it would be this. In the past the provinces have been haunted by the fear, or at least the suspicion, that the Union Government was seeking to encroach upon their preserves. I hope that that fear will now be regarded as finally dispelled, that it will be recognized as the definite policy of the Government to give the provinces that opportunity of which I have spoken, and that as a result a new confidence will be born leading to hearty and effective co-operation. In the sphere of education there has, I fear, sometimes been the danger that the provinces’ suspicions of the tendencies of the Union Government towards over-centralization might impair such co-operation. Well, centralization, as a policy in education, is now outside the picture. I trust that the acceptance of that fact will provide a stimulus to the co-ordination on an entirely voluntary basis of provincial and Union educational i activities. I am one of those who have often urged the desirability of a national policy in education; but I have also emphasized the point that it is not only along the lines of centralization that the enunciation of such a policy can be achieved—there is another way to that goal. possibly more toilsome, but certainly no less effective, and that is voluntary co-ordination of effort on a basis of confidence and goodwill. I trust that as a result of the new orientation of our provincial policy, the educationists of South Africa will be encouraged to direct their best efforts to that end. 1 should like in the time that remains to me to make a few remarks on some of the points that have been raised in the course of the budget debate. In the debate so far there has been a good deal of criticism of the budget and it has been remarkable how, while some of the watch dogs of this House have been somnolent, the supposedly muzzled supporters of the Government have been showing their teeth. Let me say at once that so far as most of the criticism levelled at the budget is concerned, that criticism is welcomed and not resented by the Government. Most of the criticism has been put forward by hon. members in absolute honesty and in perfect good faith and sincerity and without any party aim to serve or any party axe to grind. We welcome criticism of that kind, we appreciate the fact that hon. members who have undertaken to support this Government should have come forward and offered criticism of that nature and in that spirit. I hope the time is a long way off when people will be able to say of this Government that it resents criticism directed by its supporters in a spirit of that kind. I think we may go further and we may welcome the fact that this debate has given evidence of the reinstatement of Parliament in its proper place as the supreme council of the nation. We are here to-day as the elected representatives of the people, but we have not come here in order to dispute with one another as to which party should govern the country. We have come here to deal with national questions in a national spirit and to pool our resources on behalf of the nation in dealing with the conditions with which we are faced to-day. That spirit in itself is, I think, already almost sufficient to justify the venture represented by the formation of this Government and to ensure its success. I cannot in the time allowed to me deal in detail with the criticisms that have been raised. Moreover, they will be dealt with much more adequately by my colleague, the acting Minister of Finance, but I think there are one or two general remarks which might properly be made by me at this stage. I think hon. members will have noticed that most of the criticism levelled at the budget has been completely mutually destructive. We have been told that we have taken too much from the mines, we have been told that we have taken too little from the mines. We have been told that we are giving too much to the farmers and we have been told we are doing too little for them. The hon. member for Piquetberg (Mr. de Waal), has answered the hon. member for Turffontein (Mr. Sturrock); the hon. member for Zululand (Mr. Nicholls), has answered the hon. member for Roodepoort (Col. Stallard), and I feel it in my bones that the hon. member for Cape Town (Gardens) (Mr. Coulter), will answer the hon. member for Zululand. I think that fact in itself serves to indicate that the Government in this budget has achieved its aim of dealing fairly and justly by all sections of the community. This budget is not a farmers’ budget, it is not a miners’ budget, it is a budget conceived by a National Government to deal with a national emergency in a broad and impartial national spirit. A good deal of the criticism to which I have referred, has come from valued colleagues of my own with whom on previous occasions I have been associated in the criticism of other budgets presented by my present colleague, the Minister of Finance. They have spoken—T am referring more particularly to the hon. member for Troyeville (Mr. Kentridge), the hon. member for Turffontein and the hon. member for Roodepoort—as urban members and as Witwatersrand members. I am also an urban and a Witwatersrand member. But during the years I have represented my corpstituency, I think I can claim that I have never failed to present as strongly as I could, the essential inter-dependence of urban and rural interests in this country and more especially the close link which binds the interests of our two great primary industries, agriculture and mining. I have time and again urged upon my own constituents the importance of agriculture. I have in recent months emphasized to them that the problem of the rehabilitation of agriculture must be our main concern at this stage. And in exactly the same spirit I have gone through the country districts and sought there to emphasize the importance of the mining industry to the whole of South Africa. To-day, I think we can rejoice that we are in a House in which the old spirit of suspicion against the mining industry has in a very large part been dis pelled. We all recall the suspicions and prejudices of the past. To-day, we have a House in which the urban members quite clearly sympathize with the plight of our distressed farmers and are willing to help. We are also in a House where the rural members do not resent but welcome the good fortune of the mines, because they appreciate their significance as a great national asset. If the hard times through which we have been passing have done nothing more than teach the people of this country the magnitude of our indebtedness to the gold-mining industry in respect of the maintenance of our economic structure, then we have at least attained some advantage from them. Old misunderstandings have been removed, old prejudices have fallen away for the most part, of course. We still have some members, Rip van Winkels, like the hon. member for Piquetberg and the hon. member for Benoni. We still have the old shibboleths, the old cries of the past being raised in this connection, but I have hope for those hon. members; in the charitable spirit that prevails today, I have hope even for the hon. member for Benoni. I think it is an encouraging thing that we should have here a budget in which unto precedentedly heavy taxation is being placed on our gold mines and yet we can claim that the Government has imposed that taxation in such a manner as to give absolute proof of its bona fides not in desiring to enrich the shareholders but in desiring to ensure the continuance of the industry’s life and also of its contribution to our national welfare. What exactly are we taking from the industry, more especially in respect of the gold premium, under this budget? The most absurdly conflicting statements have been made in this regard. We have had the hon. member for Piquetberg implying that we are only taking £6,000,000 out of the premium and we have had other hon. members echoing the statement of the President of the Chamber of Mines implying that we are taking £13,500,000 out of the premium. Of course, both cannot be true. As a matter of fact each is based on a half truth. What is the position? I think one can explain it in this way. I think one can classify what the Government is proposing to take from the mines in two different ways. The first method of classification is this: We can discriminate between what I shall call old money, that is money got by way of taxation independent of any gold premium, and independent of our having gone off the gold standard. On that basis, and on the basis of the actual returns shown in last year’s figures, we would have got £2,200,000 to revenue, and £1,900,000 to loan account. In other words, we would have got £4,100,000 old money quite independent of the gold premium. On the other side, we have new money, that is, money which accrues to us because of the premium, and out of the premium. That falls again into two classes. There is first that portion which accrues to us on the basis of existing taxation, and which would have accrued to us if we had left the taxation as it was last year, unchanged. On that basis we would have obtained out of the premium an additional amount of £1,800,000 to revenue, and £1,900,000 to loan account. The latter sum is, however, being diverted to revenue account. We, therefore, retain out of the premium, on the basis of existing taxation, £3,700,000. Over and above that the Government proposes to find a further amount of £6,000,000 of new money, also out of the premium, by the new method of taxation. Now those are the three figures to bear in mind. First of all, there is this £4,100,000 of old money, and then there is £3,700,000 new money on the basis of existing taxation, and a further £6,000,000 out of additional taxation. The £6,000,000 figure of the hon. member for Piquetberg is therefore correct, in so far as it represents that part of the premium taken as a result of new taxation. But it certainly does not represent the whole amount taken from the premium. The figure of £13.8 millions is correct insofar as it represents all the money, both old and new, which will accrue both to revenue and loan account from the gold mines for the year. But it repre sents much more than will come out of the premium. The amount which we shall get out of the premium is represented by the last two figures, namely £9,700,000. Now the other method of dealing with the matter is this. The total amount which the State will get is £13,800,000, but it will be entirely wrong, as is sometimes done, to represent all that as the proceeds of taxation. That is not entirely so. An amount of £4,700,000 of that will come from the leased mines, representing the Government’s share of profits, in consideration of the Government’s rights as landlord. A sum of £9,100,000, however, can be called pukka taxation. Only £9,100,000—and the remaining £4,700,000 is the Government’s share of profits. It is a common fallacy to speak as if all that accrues to the Government from the mines accrues from taxation. It is wrong to regard as taxation moneys paid to the State in consideration of the use by the mines of property belonging to the State. I have said that we are taking £9,700,000 from the premium. What then will be left to the mines out of the premium? I am confining myself to the premium.

They will not have much left except tears.

Oh yes, they will have quite a lot left, and they will be able to buy gilded handkerchiefs with which to dry those tears. Now all these figures are based on the assumption of the Minister of Finance, of gold averaging 120s. per ounce, and on that estimate the whole of the gold premium is calculated at £19,250,000. That is based on the further assumption that the yield will be 11,000,000 ounces this year. Last year the yield was 11,500,000 ounces, and the reduced yield is the result of two factors, on the one side the lowering of the grade by the mines, and on the other side the increased tonnage milled. It is assumed that as a result the yield will fall from 11,500,000 to 11,000.000 ounces, and on that basis the amount of the premium will be £19,250,000. Now of that we propose to take £9,700,000 for the State, or roughly half. But let me emphasize the fallacy of the argument of the hon. member for Piquetberg (Mr. de Waal) that the whole of the balance goes to the shareholders. It certainly does not mean that the remaining 50 per cent. goes to the shareholders. Out of the remaining £9,500,000 will have to come the higher working costs—there will have to come the cost of development, and here may I emphasize this, that if the mines do more development than the Minister of Finance is contemplating, the rebate to the mines will be more, and the yield to the State will be less. Further, there has to come out of the gold mines’ share of the premium, the cost of the lowering of the grade. Now, at this stage I want to say this, that I think that some word of appreciation should be expressed on behalf of the Government of what has already been done by the mining industry regarding the lowering of their grade. The industry, some years ago before the Low Grade Ore Commission, promised an extension of the life of the industry if its costs were reduced. The working costs have not in fact been reduced, but the same effect is now produced by an increase in the value of the product, and we can say that the mines have given effect to their promise made to the Low Grade Ore Commission. It will be clear, then, that the remaining £9,500,000 does not, except in part, go to the shareholders. I daresay that the shareholders would wish that all that money should go to them. In part it does go to them. To some extent it goes to increased working costs, but I would emphasize this, that in a large part the £9,500.000, or a very considerable portion of it, will be in the nature of a reserve fund. It has been put to me by some hon. members, “Why are the mines not put in a better position to build up a reserve fund?” My answer to that is that they are given the opportunity of building up the best kind of reserve fund under the Government’s scheme. The reserve fund will be in the form of the lower grade ore that is worked and in the development that is being undertaken, and I think that in that manner they will be able to build up a much better reserve fund than they would be in any other way. Now it has been suggested that we have taken too much of the premium. Let me analyse that. Are we taking too much from the point of view of the industry? I do not really want to deal with that point, which I prefer to leave to the acting Minister of Finance, but I do merely want to say that we are, in this budget, making ample provision for the expansion of mining development. Are we taking too much from the point of view of the State? Is this £9,500,000 too much? In answer to that I would say that we are taking no more than is necessary to balance our deficit. If we took less than £9,500,000, one of three things would have to be done. Either we should have to increase the burden of taxation on other taxpayers, or we would have to carry over a deficit to next year, or otherwise we would have to reduce our expenditure. I think it is quite clear that the first of these alternatives is not a possibility at all. We could not contemplate increasing the burden of taxation on the other taxpayers. The next alternative is, “that we might have carried over a deficit?” A great deal might be said in favour of that. It may be argued that we are dealing with a deficit of £2,000,000 carried over from last year, that we are dealing with a tremendous emergency in regard to agriculture, requiring a tremendous amount of expenditure. It might be asked, “why must we bear the whole cost this year, seeing it is very likely that we shall be much better off next year?” Our answer to those who are arguing in that way is that they do not realize one of the essential things of this budget, and that is that after all this budget, and all the calculations in it, are based on the shifting sands of the gold premium, and that there are still quite a number of people who are pointing the way towards the quagmire of bimetallism. In the circumstances it would be unsound finance on our part to do anything otherwise than to attempt to secure in this year, while we have the opportunity, a balanced budget. But that leads us to a further consideration. I have referred to the exceptional features of this year’s budget. Next year, we hope, that there will be no deficit carried over, and we hope that as a result of the increase of the world prices of commodities, it will not be necessary to help the farmers to so great an extent. That will have an important effect on the framing of next year’s budget. It holds out a ray of hope both to the general and the mining taxpayer for next year’s budget. The remaining possibility is that we might have reduced our expenditure.

Hear, hear.

I should say to the hon. member for Cape Town (Gardens) (Mr. Coulter) that as far as our ordinary expenditure is concerned it is almost entirely based on estimates prepared before we were faced with the result of going off gold, and framed at a time when the late Government had reason to expect that it would have to sustain a most serious responsibility. The ordinary expenditure estimates were therefore framed on a most conservative basis, but the big item of expenditure which might have been reduced in the opinion of some people is that in the shape of assistance to the farmers. We have heard a good deal about that. We all like listening to the hon. member for Roodepoort (Col. Stallard). He carries us away with his eloquence and almost convinces us with his logic, but when in surveying his conclusions we find it is an abstract logic. When we listen to the hon. member we are reminded of Plato’s Republic. He would have fitted admirably into the scheme of the philosopher kings. But despite almost 2,500 years of study of Plato we have never yet had a state governed by a philosopher king, nor are we likely ever to have a State governed according to the principles laid down by the hon. member for Roodepoort. The burden of his remarks and of other speakers was that the money we get from the gold premium could have been used to better advantage by putting it into increased mining development. I think we have in any case gone as far in this direction as it was physically and technically possible for us to do. But apart from that I appeal to hon. members to take a long view of this matter. It is not a question after all of surrendering the interests of the town to the country, but of safeguarding both in the difficult years that lie ahead. The essential thing about our economic position, as I see it, is this. Our economic structure rests on two supports—mining and agriculture. Mining has hitherto been carrying the Atlas share of the burden. We have become appreciative of the extent to which the mining industry has carried that burden in recent years, but it will not be able to do so for ever. Gold is a waning asset, and agriculture will have to take the place of mining as a pillar in the support of our economic structure. We are engaged in a twofold race against time. We have to extend the period during which mining will retain its carrying capacity—we have to hasten the day when agriculture will be able to take its place. Well, to-day we have the opportunity both of strengthening agriculture against the day when it will carry the burden, and also of extending the carrying capacity of mining. The supreme virtue of the budget is that it avails itself of the opportunity of working towards both these ends. For that reason chiefly I commend the budget to the House and to the country. I regard it as an honest and sincere attempt to deal with a national emergency without fear, favour or party prejudice. I regard it as a budget which holds a just balance between the interests of the present and of the future. I regard it as a very substantial contribution towards the strengthening of these foundations on which our European civilization must inevitably rest.

I am very glad to be able to say a few words on the budget and in the first place I want to thank the Government for the concessions to the farmers. A sigh of relief went through the country when the intentions of the Government became known. It is indeed only a temporary measure but it is of great assistance to the farmers who have suffered under the heavy interest burden. I would like earnestly to press the Government to make a thorough study of the scheme to put the farmers permanently on a sounder basis. Throughout the country they are longing for some such scheme, because, as the Minister said, farming must replace mining when the gold is exhausted. Throughout the country there is a desire for a scheme like the Van der Horst scheme. We have heard all kinds of objections and we can quite understand that that scheme has faults, but still I want seriously to ask the Government to enquire whether something cannot be done in that direction. Another question that I want to bring to the notice of the Government is in connection with the relief loans. As is known, the farmers under that Act on farmers’ relief are entitled to raise money on movables. The Land Bank has sometimes included second and third bonds in calculating the bond which the farmer could get, and we understand that all those bonds will come under the interest reduction. The question now is whether loans raised on movables will also get that relief. If not, then I want to ask the Government to make it applicable. The position is that farmers, without any fault of their own, have got into such a position that they are not able to fulfil their obligations, and I want to ask the Government to bring, as far as possible, the loans under the relief Act also under the scheme. Another point I want to draw attention to is the cases where farmers have obtained sheep and other stock under the Drought Emergency Relief Act. Those animals have now so depreciated in value, but the people who have such tremendous debts under those loans still have always to pay off the full amount. They have not got into this trouble through their own fault, but owing to droughts and the dropping of prices. If it is possible I want to ask the Government to do the same for these people as is being done for the maize and wheat farmers. There are two possibilities of assisting the people; the amount obtained for the sheep under the Drought Emergency Relief Act can be written off, or otherwise the value of the sheep can be written down to to-day’s value. The farmers have suffered such heavy losses owing to drought and the dropping of prices that they cannot to-day make any further payments in reduction, and have accordingly to sell the stock. In that way the man who has had such a struggle retains practically nothing, and yet he constantly gets notices from the Land Bank that he is still held fully liable for the amount lent to him. While speaking about the Land Bank, I want to say that it is particularly unsympathetic towards the farmers, not only to the people I have mentioned, but generally to the debtors. I know the Act requires the Land Bank to demand repayment of the money, but when the farmers give an explanation their position ought to be borne in mind. When a man explains his position today the Land Bank says that possibly it will give an extension of a month. Often that is of no use, e.g., when a wool farmer has to fulfil his obligations in the winter. He cannot shear his sheep in winter in order to fulfil his obligations. I do not say that there are actually cases where farmers have been turned off their farms, but the Land Bank could really have given more consideration to the farmer’s position. I am particularly glad that the Government have asked the moneylenders to reduce the rate of interest. But what depresses us a little is just the cases I have mentioned that in respect of sheep bought in 1927 and 1928 at a high market price interest at the rate of 6 per cent. has still to be paid. As the Government is asking the moneylenders to reduce the interest, we expect the Land Bank, which is a Government institution, to follow the example, but nevertheless the Land Bank continues to demand the full 6 per cent. interest on drought emergency loan sheep, or farmers’ relief sheep.

And do they pay?

I know many who pay. I wish the Government would seriously consider to meet the debtors in these cases as well. I want most heartily to thank the Government for the concession in connection with the transport of stock, and especially the intimation that the rates for the transport of fodder are again being reduced, but I am very disappointed at the determined attitude of the Government in not providing the farmers with fodder where they have no grazing. It will surely he cheaper for the Government to supply the people with fodder—many of the animals die in transport—than to carry the stock. We know that one of the greatest problems in South Africa is how to fight the droughts. The man who solves this difficulty will become a millionaire very soon. But yet I think that one of the most serious attempts which the Government should make is to investigate the Schwartz scheme. In many parts of the country it is insisted upon, and I see from this morning’s paper that a big committee has been appointed in Bloemfontein in connection with it. I know that the Government had it enquired into by a commission in 1925, but there are many experts who differ from the report of that commission. The matter is so serious that the Government ought again thoroughly to investigate the scheme. Then I want to say something more about the Minister’s statement in regard to the provincial commission. In the first place I hope that the House on the next debate about financial relations will make it plain that one power will be taken out of the hands of the provincial council, That is the right to levy taxation on land. We feel that it is very unfair to our province as against the other provinces that the provincial council has levied this tax. I want, therefore, in all earnestness, to urge that this House should make its voice heard that the land tax ought not to be a source of taxation for the provinces, I also want to say that it has become quite necessary for the life of the provincial councils to be extended from three to five years, Except in the two smaller provinces, the members of the provincial council represent the same constituency and electors as the members of this House. They have the same costs of election, etc., but the life of the provincial council is only three years, and they have to go to election more frequently, A further matter is the question of the salaries of provincial councillors. In 1910 the salaries of members of Parliament was fixed at £400, and those of the members of the provincial council at £120. 1 The latter are still receiving exactly the same salary, while members of Parliament get £700. Everyone who has had the experience knows that the member of the provincial council who does his duty cannot possibly come out on that i allowance. Many of the members have large constituencies and have to travel big distances. It makes a great difference whether a member lives at the seat of the provincial council here or lives far out in the north-west. The constituencies there are nearly as large as the Free State. My former constituency was 32,000 square miles in area. The journey here takes a long time, and it takes much time to travel through the constituency. I, therefore, think that when the commission prepares its report it should take these matters into consideration.

Certain criticisms have been made against the Government that they have not been very speedy in the introduction of promised measures for the assistance of the country. The announcement that the M nister of the Interior has made this afternoon of the, appointment of a provincial commission is, however, a matter upon which the Government should be congratulated on the speed with which the appointment has been made. I think one can say that the personnel of that commission will inspire confidence, and that the chairman who has been appointed is a gentleman who is very well known throughout South Africa and whose integrity and ability will inspire confidence. The work of the commission should be highly satisfactory ana beneficial to the country. Many criticisms have been offered in regard to the budget, and the Minister of the Interior has drawn attention to the fact that arguments advanced against the budget have been controverted by other members who have: spoken in the course of the debate. I am sure that it would have been extremely interesting to this House if they could have listened to the Minister of the Interior if he had been speaking as a private member. We would have thoroughly enjoyed listening to the criticisms he as a private member would have offered to the budget now before the House. I would like to read a few remarks which he made last year, which I am sure will be interesting. Referring to the Minister of Finance, he said—

I am perfectly certain that we can also congratulate the hon. the Minister of the Interior, on the financial skill which he has shown in supporting this budget. I do not think there is any question at all that the budget was primarily designed to assist the farming section of the country. The Minister of Finance has given a very clear and lucid exposition of the state of affairs which exists in the country today, and has shown how the depression has caused a decline in the trade and in the imports of the country by many millions. He has also shown what a disastrous effect it has had on the industries of the country. The business men of the country have no need to be reminded of the very disastrous effects of the depression. In listening to hon. members, and particularly to the hon. member for Zululand (Mr. Nicholls), one might get the impression that there is only one section of the country which is feeling the effects of the depression, that the farmers are the only people who have felt the effects of the depression in the last few years. Many farming hon. members, I am sure, have no conception at all of the hardships which are being experienced in the urban areas, and apparently they have no conception at all of the deplorable state to which the whole of commerce and industry has been reduced. They have no conception; apparently of the increasing unemployment due to the depression and to the hardships which have been felt by urban sections during the last year or two. Every section has suffered. But to think that the farming section is only one section that has suffered is a misconception of the true position. That section will receive the full support of commerce in any efforts that are made to rehabilitate them and put them on a sound basis. But the business people of this country and the population generally are becoming somewhat alarmed at the constant calls which are made on the Government for assistance to agriculture. We are told that the position to-day is unique, and that it is entirely due to the fall in commodity prices, and that as a result of this farmers are placed in the parlous position in which they are to-day. If you go through the budget statements of the country and the financial statements published during the past 20 or 30 years, you will find that hardly a single year has passed that the State has not been called upon to advance big sums of money to agricultural interests. In 1916, and before that, the Government of the day had to come to this House and ask for approval to write down land values and it was pointed out that it was impossible even then for farmers to make a satisfactory living, when maize was fetching 12s., 15s. or more per bag. The Government wrote off as much as four-fifths of the land values which the settlers were being called upon to pay. Yet every year we find the same position coming up: and whether prices are high or low, this House is called upon to come forward to the assistance of the farmers of this country. I support the suggestion put forward by the hon. member for Roodepoort (Col. Stallard), that it is time to take a survey of the whole agricultural position in this country to see what areas can be made profitable for the farmer in this country, and to see what areas should be cut out. Now with regard to the question of the payment of subsidies, these were originally designed to meet losses incurred in exchange by those farmers who were called upon to meet such losses in the export of their products. There was a certain measure of justification in this. Alter all, prices were exceedingly low, ana you could not expect the producer to meet a loss of 30 to 40 per cent. on his exports. But I want to put to the Government that, in view of the fact that prices of primary products are over 40 per cent. higher than they were last December, and considerably higher than they were in December, 1931, what justification is there to continue paying these subsidies for another year and saddle the country with a payment of £2,000.000. If that payment was not made before September, 1931, it is rather difficult to justify the granting of an additional subsidy to-day especially in view of the great additional benefits which formers enjoy to-day in other directions. I realize, and business men generally do, the importance of agriculture. I find that in the 1926 census agriculture employed 203 males per thousand males, and the females employed were five per thousand; in industry and commerce there were 223 males per thousand and 48 females per thousand. These figures show that the interests of industry and commerce are just as vital to the country in the matter of employment as farming. I do not quite agree with the contention that has been put forward that commerce and industries of the country depend altogether on the welfare of agriculture. They do depend largely on it, but industries an be promoted arid developed on useful lines, and if to be of permanent value to the country cannot be wholly dependent on the prosperity of agriculture. I want to deal for a moment with the matter raised by the hon. member for Benoni (Mr. Madeley), who raised one or two questions with regard to unemployment, and asked the Government to take steps to deal with this particular problem. I want to raise the question from the point of view of a problem which is becoming world wide to-day; that is, the increase of female employment to the detriment of male employment. The hon. member for Benoni (Mr. Madeley) has stated that he is prepared to advocate a reduction of hours as a means of solving the unemployment problem. The hon. member apparently does net realize that if you are going to reduce hours in this country without a general reduction throughout the world, it means that the costs of industry will be raised to such a point as will not enable it to compete with goods produced in overseas markets, where longer hours are worked and cheaper wages are paid. The other problem, that of male and female employees, is to-day becoming of such great importance that I want to put it to the Government that during the next few months they should seriously consider and investigate the problem, and see in what way, without any unfairness to either section, the balance can be held fairly between the two sections. According to the last census the increase in male employment in 1926 over 1921, in industry, was 21 per cent., but the female increase was 27 per cent. In commerce, in the five years, there was an increase of 17 per cent. in the case of males, but in the case of females the increase was 22 per cent. This question has been arousing interest and is becoming a vital one in many other countries, particularly European countries. Tn England there are over 1,000.000 women in employment taking places hitherto held by men. They have found that women are more and more taking the places of men in every branch of commerce, and they are encouraged in this country to do so by the legislation which has been enacted, which places the minimum wage of a woman at practically only half that of a man. In commerce to-day it is possible to employ three women to two men at no increase in the wages bill. There is a definite class of business which is increasingly employing women at a small wage, and more and more encroaching on to those branches of employment which hitherto have been reserved almost solely for men. This is not a matter of any hostility to the employment of women. They are entitled to take their place in the economic world, hut where the problem is becoming acute is that a woman is prepared to accent employment at a wage which it is impossible for a man to take if he wishes to build up a home and maintain a family. It seems to me the only way to deal with the problem is either to make definite provision in the Wage Act for the same wage to be paid to males and females in certain sections, or in other sections to definitely restrict certain avenues of employment to males, and certain avenues to females. I want to deal with the allocation of funds under this budget. I speak frankly as an urban member. I am prepared to accept that it is a principle of primary importance that you must help the farmers in such times as they are now passing through; but I entirely disagree with the statement of the Minister of the Interior that this budget has been framed in a way which is in the best interests of all sections of the population. If it is not unsound to carry forward from year to year a deficit of £3,000,000 on the railways, then I cannot see why the taxpayers should be called upon to bear the whole of this burden of relief to farmers in this year’s budget. If the premium of the gold mines comes out of the pockets of the people of this country, then they are entitled to some consideration and to some relief from the burden which they have been called upon to bear. The hon. member for Hospital (Mr. Henderson) indicated yesterday one or two measures which I think would have given relief, and would, I think, have removed the feeling of grievance which the urban centres and the business section feel today under this budget. I think they were entitled to claim consideration in the form of a return to penny postage or to relief from other stamp duties. They were entitled to the remission of some of the additional customs duties imposed two years ago when the Government wanted £2,250.000. Even if the Government had made provision in this budget for the remission of only £1,000,000 on the general budget, it would have given general satisfaction, and would have removed that feeling of unfairness in the distribution that has been made. One appreciates it is difficult, at all times, to satisfy all sections, but is it quite reasonable to ask the taxpayers to-day to bear the whole of the cost of this relief this year which is going to be provided for the farmers? But there is an even more serious defect in the budget, in that a vast increase in expenditure has been incurred on the purely hypothetical assumption that the gold premium is going to remain during the coming twelve months. Yet we are in the anomalous position that our representatives have gone to London to attend the economic conference, to do their level best to raise commodity prices and to restore the gold standard, which may have the effect of reducing the gold premium. Two years ago we provided £5,000.000 for the relief of farmers. That was placed on the loan estimates. The budget to-day is based on unorthodox finance, and we are perfectly justified in asking the Government to carry out the suggestions I have made. I think there is one rather distressing feature about this constant expenditure which we are called upon to meet year after year, in respect of the farming section without necessarily corresponding benefits to other sections. One realizes that the burdens which they have been called upon to bear are very heavy indeed, but a number of statements have been made here which I should like to deal with. The hon. member for Zululand (Mr. Nicholls) said that when the bonds on property were originally passed they were based on prices three times higher than what they are to-day. All the statistics which one can get entirely disprove the hon. member’s statement. After all, you find that the bonds in this country have been passed over a very long period of time and if you go back in the history of this country you find ever recurring cycles during which prices have been as low as what they are to-day, and hon. members who speak of bonds being passed based on prices which were three times higher than they are to-day are under a misapprehension. E.g., in 1908 wool prices were as low as they are to-day. As a matter of fact the farmers and their representatives are trying to prove too much and they should bear in mind that there are other sections of the community in this country as well. There are other sections who during this past year have also been called upon to bear untold hardships. It is not only the farming industry which has suffered, other sections have suffered as well. Now the farmers are receiving certain relief—but one wonders is it really going to be of permanent assistance to the farmers, because this continuous system of doles does not really help them. Our trouble in this country has been that the farmers every year have come to the Government cap in hand asking for assistance. I agree with the suggestion of the hon. member for Roodepoort (Col. Stallard) that we should have a survey of the whole agricultural position. We find the farmers coming to the Government year in and year out lor more help. It is a disastrous position that they should have to do so and that relief is given to them every time. A number of people are placed on the land under the Land Settlement Act who do not know the difference between a weed and a turnip and in two or three years’ time they come to the Government for help. My contention is that assistance should only be given to the men who are able to use that assistance. It should not be given indiscriminately so that men year after year come back to the Government. The farmers are suffering great hardships, but so are the urban people, who have done their utmost in addition to help their more unfortunate brethren who come from the countryside. I had hoped that the Government in its proposals would have seen its way to ease the burden of the urban areas in some way or other. It would have been a wise and generous policy if, for instance, the income tax and other taxation which I have indicated had been reduced. It would have given relief to the people who need it most. If the stamp duties and the customs fees had been reduced a great deal would have been done to give general satisfaction to the people generally throughout the country and a great step would have been taken towards securing the success of this Government.

It is really a pleasure and a very pleasant change to listen to this debate in comparison with the budget debates of the past. I have been listening to the debate with great interest since yesterday, and I have followed the discussion closely. I have come to the conclusion that this is the first opportunity in all the time I have sat in the provincial council and in Parliament I have erperienced where a free expression of the people’s point of view has taken place. The impression I have gained is that we are really representatives of the people here, with two definite jobs before us. The first is to assist the Government to the best of our ability by informing it as to the conditions of the people, and the other is to advocate the interests of the people to the best of our ability. I hope that it will be of use. I believe that we should do everything in our power to make this spirit stronger and stronger, and with that object before our eyes we should not object when certain interests are agitated by certain representatives. It appears inevitable to me, e.g., that when representatives in this House who, so far as the mining industry is concerned, cannot do otherwise than bring the interests of that industry before the Government. On the other hand, I do not see how they can act otherwise than making the Government acquainted with the point of view of that section of the population, just as we, who represent agriculture, would also like to make use of the opportunity to inform the Government as to the position of agriculture, and just as we, so far as is possible, to the best of our ability want to try to add to the information which the Government already possesses in this connection. As a representative of agriculture, I want to tell the Government that I hope it has not got under the impression that there is no longer any one in this House who stands behind it, except our friends the two Roosites, as the hon. member for Jeppes (Dr. Reitz) has called them. I believe the Government can be certain that the representatives of agriculture in this House are very thankful for what the Government has already done, and for the measures which it is now proposing here after the comparatively short time it has been in power as a coalition Government. I hope that my friends, who represent the urban part of the population will not get the impression, or try to create it, that the Government has only done its best to look after the interests of the agricultural section of the population at this time. I am convinced, and I was thankful that on one occasion I heard the Minister of Finance say that the measures that were taken, or the Government now proposed to take, would ultimately also have to be of use and service to the urban population. Here I want to address a word to the representatives of the mining industry. I hope they will be glad that the mining industry, which during the past four years has smelt comparatively little of the financial depression which the public in general have passed through, will be glad that they still have the opportunity of assisting the Government to relieve to some extent that distress in which the agricultural population finds itself. I hope they will not assume the attitude that they are being exploited to assist another section of the population. But that the friendly relations which have always existed in the past between agriculture and the mining industry will continue and that the latter will be glad that it is able to assist when the other industry, agriculture, is in an unfortunate position. Coalition has come about especially for one reason. Inter alia, we know that in a document signed by the Prime Minister and the hon. member for Standerton (Gen. Smuts) (the Minister of Justice) there are certain reasons given, and one of them—I think it is the chief—the national need, the economic pressure which is resting on the people, and that relief and alleviation of it must be brought about. I am glad that it is possible to be able to testify to-day that what we have seen since we came together again, after the 26th May, and what we have experienced that everyone of us who was in the previous Parliament, and who has loyally supported his leader to bring about closer co-operation, can testify to-day that that closer union now being taken by the steps and measures of the Government, is being justified. In my opinion it is now the period of the people. It is no longer the time when political parties play the chief role. That time has passed, and I have always regarded coalition as being that the opportunity had now come for the people to make its voice heard without any political hindrance or political prejudice, and that the people in consequence of it are able to send its representatives to the highest legislative body with this definite mandate to go and support the national Government which is in office, and by giving it its support to enlighten the Government as to the needs of the people. Now I come to the measures in relation to the agricultural population. When I examine them closely and give them consideration, which I think they should receive, to fix how they are going to affect the people, and particularly the agricultural population, then I arrive at the conviction that it, in the first place, gives relief to a large section of the agricultural population. As one of the representatives of agriculture I would like to express my thanks to the Government for it. But in the second place it does not affect all the sections of the agricultural population who are in need. In the third place, it does not remove the cause of the financial pressure. I would like to consider the position from that point of view, and to lay it before the Government, but I want to assure them beforehand that in what I am going to bring to its notice there is not a scintilla of agitation. I only want to assist it in order that in the further measures it will have to take to assist the people it will know what the need is. The electors I represent are principally maize farmers. When then I want to put the position to the Government as it really is, then it must permit me to put those farmers into five groups. The first consists of the farmers who are debtors to the Land Bank; the second is that group who are debtors to the commercial bank, other financial institutions, and to private persons. The third group is a class of farmer who, it seems to me, is often forgotten by us, it is the farmer who is in the position of having outgrown the bywoner status, but has not yet become a land owner. He still hires land. Then we have the fourth group, viz., those who last year and the year before were assisted by legislation of this House under the Farmers’ Relief Act. Finally, we have the group that is self-dependent, the settlers. I heard that someone said the other day that the settlers never paid. I hope it was only a joke because they really are not as bad as that. Everyone in those groups has a heavy burden pressing on him. Those who owe the Land Bank money or who owe money to the commercial banks or to private persons on mortgage are pressed down by an intolerable burden of interest. The burden is overwhelming. Those in the third group are people who I want at this stage to bring to the notice of the Government. Groups one and two are being fully helped, and are given relief in respect of their burdens. I say again that we cannot but be inwardly thankful for the help given by the Government, because even if the hon. member for Roodepoort (Col. Stallard) yesterday uttered the reproach that it was only the people who in the past lived somewhat flourishingly who were to-day suffering, we nevertheless cannot deny that those people are the people who constitute the most progressive class of farmers. The man who has developed, the man who has worked himself up, is the man who has incurred debts, not so much in buying motor cars to drive about in, etc., but to strengthen farming in South Africa, and to make it a flourishing industry in the country. They have suffered severely. They bought farms at high prices and they are carrying a heavy burden to-day. We are deeply indebted to the Government for the concession that has been granted. We come to the third group. That group has no money and no harvest. It will be said then they have no interest burden. But they have rent burdens, and they must anyhow carry on their farming and they must live. They have no money to pay with, they have no credit, and their position is extremely difficult. The fourth group consists of people who are really having a hard time to-day. It is those people whose local credit has been interfered with because their movable property, stock and such things, have been mortgaged to the Government under the Farmers’ Relief Act. And ultimately we are left with our settlers who live on ground which is too dear, and which is to-day encumbered with high capital instalments, and interest. And, in conclusion, the great difficulty is that they can struggle as much as they like, but when they have finished struggling they are not able to transfer the fruit of their labour into hard cash which would enable them to pay their debt. As I have said, those first two groups are done for; the Government has assisted as far as possible, and there is nothing further to be said. Fortunately in relation to the other groups, more particularly four and five, it is possible to submit their interests to the Government who can take steps in connection with them without special measures or legislation being necessary. Group three does not want money to buy stock. Their need is rent money. They have no harvest owing to the drought and the danger is one which the Government is trying to avoid, viz., the leaving of the land by the population. If a helping hand is not also held out to them, then there is only one course open to them. They will quit the land, and go on to the roads when they will be a greater burden to the Government than they are to-day. I want to ask the Government to assist the people not because I think that the Government has intentionally neglected those people, but because for groups one and two such a tremendous amount would have to be done that the Government at the moment was not able to do more to assist them. But this does not prevent me from asking the Government to-day to give the lessors an opportunity of obtaining local credit—a thing they have not got to-day—and to extend a helping hand to them. Will not the Government try to keep them off the roads by now spending the money which it would have to spend on them in the future as road workers in order to keep them on the land. The hon. member for Wakkerstroom (Mr. Martins) was friendly enough to remind me last night that I also have to do with credit associations that have debts. But he wants the Government to swallow twice at the same time, and we surely cannot ask the Government to do more than is possible. I also received instructions from my constituents, I admit it, but I have decided that it would be better for me to consider the difference in my instructions and the scheme of the Government and to see which is the best. I am now convinced that the scheme of the Government for the debtors who are members of credit associations is better than my instructions, and I am prepared to defend those proposals of the Government, and if it turns out that they are of no use, then to apply to the Government again, and ask for further consideration of their position. Therefore, I do not want to detain the House any longer about this matter, but I do want to say something about the position of the farmers who incurred relief debts. Those people availed themselves of the opportunity this House gave them to obtain a loan, they borrowed money and could give no other security than the law demanded, viz., their movable property. They have no local credit to-day. I have my own opinion about what will eventually occur, and must occur, but I do not think that we as yet go so far. I want to ask the Government if it is not possible that the movable property, which is acting as security, can be released.

They do not want it released.

I am glad to hear that at Boshof they do not want it released. It will be easy for us to tell the Government that the debt must be written off. That will eventually happen anyhow, but we cannot ask everything at once. I want, however, the Government to consider whether there is not an opportunity of releasing the movable property which is pledged, so that the local credit of the people will be restored. As for the settlers, of whom there are many in my district, they have heavy debts of arrear capital instalments and interest. I brought the position of the people to the notice of the Minister by way of petition and the answer I received convinced me that the matter had at any rate not enjoyed the serious attention that it deserved. I want to point out to the Minister that those arc not people who do not want to pay. They also would like to pay, but they cannot. The previous Minister of Lands—the present Minister of Native Affairs—I will readily admit did a great deal to reduce the high costs and burden of interest, but that is not enough. The people cannot win through they will have to leave the land and will become a new burden on the State if nothing is done for them. I want, therefore, to ask the Minister whether he is inclined to reconsider this matter and give his attention to the needs of those people. In my own and other constituencies they were also keen on the principle of coalition. They felt that these two leaders had come together to relieve the needs of the people. The necessities they are enduring are a part of the people’s needs, and the question with me to-day is what is the message of coalition to them? I want again to assure the Prime Minister and every member of the Government that we stand behind him like a rock, and want to assist to solve the problems of the people and to relieve the necessity they are in, but do not ask us to go to the country to the people, we who have pleaded with the people, and told them “Here is a way to rescue the people from its necessities,” do not let us now go back and say to that class who have no bond, but who are debtors to the relief fund, and the Land Board: “For you the coalition had no help, for you the coalition has no message, you must just remain in your need.” No, I appeal to the Government, and let me say that there is not a trace of agitation in what I am saying here, it is purely and simply a plea for people who are suffering, it is not that the Government will do nothing to assist those people, but it is because the Government has not yet had time to take their position into consideration while it was engaged on other matters. 1 said that the proposals and the grant of assistance by the Government do not remove the cause of the need, and the state of depression. The maize farmers say, e.g., that their great difficulty consists of two things. In the first place there are the high costs of production which are partially caused by the high railway rates on plant, and other requirements of the maize farmer. There is much truth in the proposition that these high railway rates are one of the great causes of the trouble. Let me give a few examples to the House to prove it. One of the farmers of Bethal said at a meeting we were all at to discuss the position in the district, mentioned this case. He bought 100 poles in Ermelo to pack his maize. He paid £5 for them, but it cost him £10 to transport the poles from Ermelo to Triehardts. Another said that it cost him 50s. to transport a plough from Durban to Triehardts. Yet another said that it cost 3s. to carry a bag from Triehardts to Cape Town. Here the bag of potatoes is sold for 6s., but 3s. has to go for railway freight. It is too much. I want to ask the Minister of Agriculture and the acting Minister of Railways and Harbours to consider whether it is not time to appoint a commission of enquiry as to how agriculture can be given relief in connection with railway rates. As to the high level of prices the Government says that the hope is cherished that the World Economic Conference, to which three of our Ministers of State have gone, will do something which will result in the rise of the prices of primary products. Many of us in this House are representatives of maize farmers, and I say, this afternoon, that in this respect it is possible for the Government immediately to help the maize farmers, that it is not necessary for us to wait, nor to delay till after the Economic Conference. The maize farmers ask a simple thing. Give us the opportunity to sell the articles we produce through one channel so that at least we can fix the inland price, so that we do not year after year, after we have worked, become poorer than we were before we started. I make bold to plead for this with the Minister of Agriculture, and to ask for it. There is still an opportunity. Parliament is in session. Help those people, and give them the opportunity of controlling their own produce. Let hon. members think for a moment how bitter the times are. Maize is sold on the open market for 8s. 6d. and 9s. and a large section of the maize farmers who listened to us, who listened to the voice of the Government, and joined the co-operative societies, have practically to sell their maize for 5s. They only got an advance of 5s. from the societies. The people are poor and are in misery, and that is what they received from the societies. I do not want to say things here which will at all complicate the position of the Government, but I must plead for these people, and I am only asking the Government to consider whether it is not possible with the assistance of this House, even during this sitting, to rescue the poor maize farmers from their parlous position and to enable them to get a better price for their maize so that they shall not have to sell it for 5s. I want to disturb the peace of mind of the Minister of Agriculture by reminding him of what happened at Bethal. It was said in a newspaper, and he is aware of it, because he read it himself, and I only want to quote a resolution which was passed at Standerton. The resolution reads as follows—

In conclusion I ask the Minister again to introduce legislation this session in connection with the maize co-operation. The people ask for it and I hope he will not send them away with nothing done. I know that a deputation from the central agency went to him. Listen to them. Do not make those people suffer so bitterly as they have suffered in the past, and let us help those whom there is still an opportunity of freeing from their distress. I have tried to advocate here what I consider my duty to advocate, and to submit the interests of my constituents, of whom I am the mouthpiece, honestly and faithfully to the House. I just want to add this that the Government can be assured of this that all of us in that constituency, without exception—I, as their representative, and they as the electors—are standing loyally and faithfully behind him. We will help him to relieve the necessities of the people in this country.

When this House was prorogued in March our Government made an appeal to the people to send a unanimous national Government to the House. The people reacted magnificently to that appeal. South Africa can be proud to-day of a Government which is practically the strongest in the world. When this Government came back so strong, and backed by the people, the people naturally cherished the very highest expectations. It looked keenly forward to the budget, and expected it to be constructive, that it would be a budget which at this stage of our national life would be able to meet an abnormal state of affairs. When we examine the position we find that that budget, in my opinion, to a great extent, answers the expectations of the people. To put higher taxation on the agricultural population at this stage is a thing no one could think of. Consequently the Government had to fall back on taking a part of the gold premium to relieve the burdens borne by the agricultural population. Mention has been made that the farming population constantly comes to the Government hat in hand and applies for assistance to release them from their burdens. I want to show that that is not always the case. On a closer view the position which the people are in to-day and in which the farmers find themselves, we shall see how the position arose. In 1920 the average price of our wool was 29.4d. a lb. Since that time it has dropped considerably, and last year the average price was about 6d. a lb. As for the position of our maize farmers, it is similar. The production of maize has increased tremendously in South Africa. In 1924 we were still only producing 361,000 tons of maize, not even sufficient to supply our own needs. In those days the cry was beard: “Take off your coats and produce more maize.” Once more the people reacted magnificently. In 1928 our production of maize stood at 1,900,000 tons. Reckoned at 10s. a bag it meant a yield that year of more than £9,000,000, which represents a one-ninth share of the total value of our agricultural produce in that year. The condition of the farmer naturally developed to the position which they find themselves in to-day. Our farmers are progressive, and the prices which prevailed in 1919-’20 and in 1928 brought many farmers into difficulties because they were too progressive and extended on a large scale with the result that when the reaction came they were not in a position to meet their obligations. This is a condition of things brought about by world conditions. It is a good thing that the Government is taking extraordinary measures in its budget to create a relief, in an extraordinary state of affairs which commenced in 1930. What is more I hope that when our Government administer these relief measures it will always remember that the measures must be of such a kind that we do not thereby undermine the sense of independence of our population. If we lose our sense of independence we should be much more poorer than we are to-day. Another matter I want to mention and in connection with which I want to identify myself with what the hon. member for Bethal (Mr. Jooste) has said, is the condition of the maize farmer. The maize farmers are fighting uphill, especially the farmers who have joined co-operative societies. Up to the present they were the section who practically created the prices for the nonparticipants. I hope that before the House ad journs the Minister of Agriculture will take steps to enable the co-operative societies to pay higher advances to the farmers. We admit that the Government has gone out of its way in writing off the deficits of last year, but on all sides is expected that the price level this year will go much higher than the 5s. basis laid down by the Land Bank, and therefore the advance can safely be made higher. Up to the present very chary assistance has been given by the Government to the north-western parts of the Free State in relation to the supply of Government water bores. In this unprecedented drought there are to-day thousands of head of stock in the Free State which went there to find a way out. There are thousands of morgen of land where stock could be saved, but the water supply is lacking. In consequence I hope that the Minister of Irrigation will re member that this is an area which must receive special attention in relation to water bores. If there is water thousands of head of stock can be saved, because the grazing exists there. There is another matter that I would like to mention at this stage: It is that the layman who is an onlooker and listens with attention to the complaints of unemployment which come from all parts will want further enlightenment, to wit, about the importation of aborigines under the Mozambique convention to work on our mines. The question is whether the time has not come for us to look more at our own people to employ them, and that the importation of aborigines should be curtailed more. We must employ more of our own labour. We have many natives that are unemployed, and perhaps we also ought to increase the percentage of white labourers in the mines. Another matter is that those of our people who have recently found a living on the relief works are now increasing alarmingly. This is a great question, because we find many people on the relief works who arc progressive and have initiative and the question is whether they ought to work there continuously. The question is whether the time has not come for a sifting out of white labourers on the relief works. The Government has the machinery. There are thousands of people who are working on the roads. The Government has its inspectors and it would possibly be a good thing if the Lands Department in co-operation with the Labour Department would select the people who are suited for farming and put them back on the land by means of subsidies or with farmers who need that class of man. In conclusion, I want, on behalf of my constituency, to express my thanks for the relief measures contained in the budget, and, in relation to Hoopstad, I may say that we feel the greatest appreciation for those extraordinary steps by the Government.

The few remarks I want to make with reference to the budget will be restricted mainly to the valued help which the Government is granting the farmers. I may say that the land in its entirety is grateful for the help given by the Government. Great expectations arose among the farmers as to the measures that would be taken to relieve the position of the farmers, and I think I may say the Government have not disappointed the people. In the short time available the Government has worked out schemes to assist the farmers on the most important points. The greatest difficulty the farmers had was the interest burden, and here the Government has met them. The reproach is sometimes heard that the farmers cannot adapt themselves to the altered circumstances, but I think, on enquiry, it would be seen that that reproach is groundless. It is usually the progressive farmer who gets into trouble in times like these. I think it may be said of the farmers of South Africa that when they are required to adapt themselves to new times and new circumstances, they have never failed. I think really that the farmer, by his desire to go with the times, and to introduce new systems, has got into difficulty. The difficulty is the general drop in prices which has hit the farmer particularly severely. There are two ways of solving this trouble. One is to raise the price level of the produce, and the second for the farmer to be assisted in these special circumstances to carry his interest burden. We find that the Government in both cases is taking steps to assist the farmers. With the aid of subsidies the prices are kept high, and the second measure is the lightening of the interest burden. I think that this help will be of great use to the farmer. We can divide the farmers who are in difficulties into two classes. The first is the farmers who have passed too high mortgages over their farm, and only a miracle can save them. There is no doubt that there are farmers who were careless in the past and passed too high bonds. I think any attempt to save those people would be unsound. I do not believe that under ordinary circumstances those people can be saved. What I fear, however, is that this class of farmer will not be saved by the help which is now being given, but that the evil day has merely been postponed for them. Instead of being enabled to accept the position they are in, and to make a new start, they will, by the remedial measures, merely be enabled to keep on for a time, although the evil day will have to come. I wondered whether machinery could not be found to bring the mortgagees and the farmers together to effect an arrangement, could not the mortgagees be induced to reduce the bonds? I hoped that as a proposal was being made here to relieve the interest standard for the farmer that the mortgagee could be influenced to reduce the uneconomic bond. I know of cases in my constituency where bonds over farms exist where there is not the least opportunity in the world of being able to pay full interest. The mortgagees often do not want to call up the bond, because they know that the people on the land are paid the highest interest possible in the circumstances. But under the new provision which is being provided for, I fear that the people who ought to meet the farmers will be less inclined to alter their attitude. Now that the Government is going to contribute 1½ per cent. of the interest the mortgagee will be tempted to give a receipt for 3½ per cent. interest, where possibly three per cent. or less is paid. In that way the mortgagee is assisted and is tempted to carry on with the bond which actually ought to be reduced. I would prefer to see that a proper enquiry was made beforehand whether the people who show proof that they have paid 3½ per cent. interest have actually paid that money so that there shall be no evasion of the provision, by which the mortgagee would get just the same interest from the farmer as in the past and would not be prepared to reduce the bond. I hope the Government will make use of the opportunity to investigate every case and to try to induce the mortgagee to reduce the bond he second class of farmers being helped are those whose bonds are not too high if things improve a little. I think the largest part of the farmers fall under this class, and they will really be helped very much by the steps of the Government. If it is not too long until the time comes when prices improve these farmers will be able to win through. But the drawback in this matter is that the farmers have as yet got no stability in connection with their obligations. The assistance is given for the vear and while the farmer is put at rest for this year he does not know as yet what the future will produce. I think the Government and the Minister who is responsible ought to reassure the farmers in this respect. I am convinced that the Government will feel that, as this kind of assistance, which is being given to the farmers, it cannot stop before and until the level of price of products has risen. I hope that the farmers will be reassured on this point, and that it will be clearly indicated to them. This is one criticism I want to mention in connection with this class of farmer—those who will be assisted by this scheme—but there is not enough security given to them, and that we ought to put them at rest. In the second place I fear that it may happen that the mortgagee, on account of interest on bonds now being reduced to five per cent., will be tempted when new bonds are being applied for to call up the old ones to be able to grant the new loans if a higher interest was offered. It may be that the people who would like to pass the bond offer the financier six or seven per cent., and 1 think that will be a flaw in the Act. I range myself by the side of the persons who think that the Government should have limited the interest on all farm bonds to five per cent. If we do this, then this danger will be practically removed. I can imagine there will be cases where the mortgagee will yield to the temptation if he is brought into it by any one applying for a bond and offering him six per cent. He will call up the old bond which falls under the proposed arrangement. It is natural for him to do so because he can do better business, and he enters into the new bond. Now it is said that provision is made for this kind of thing by the availability of £4,000,000 at the Land Bank. I do not believe that that amount will be in the least sufficient. I hope that the Government will take steps to stop this as far as possible and that it will prevent this system being abused. I am thinking, e.g., of a thing like this. We know that 1½ per cent. will be paid out to the mortgagee by the State if the mortgagor can produce a receipt by him that the interest has been paid on a basis of 3½ per cent. It may happen that a higher rate than 3½ per cent. is paid, but only that amount is shown on the receipt. The farmer is in the power of the mortgagee and the system is open to abuses of this kind. I, therefore, trust that the Government will be careful to see that the farmers are not got the better of in this way. On the whole I feel that the class of farmers who have bonds that are not too high but who cannot in the circumstances fulfil their obligations, will be able with this assistance on the part of the Government to continue long enough so that they can once more get on their feet when things recover. They constitute a large section of our farmers, and, therefore, this assistance means a great deal to the country. There is, however, a third class of farmer, viz., the class which is already played out in consequence of the hard times the country has suffered, Here every one of us can without blushing say that insufficient is being done to assist that class of farmer. The help given to him is hopelessly insufficient, and I think that they ought to get more, and that better provision ought to be made for them. Some of those farmers haVe been driven off their farms, and have to-day hired farms, or who have hired their services to other farmers as bywoners, or who have taken service as managers on their own farms, steps had to be taken, to enable them to make a fresh start. We ought to make provision for giving them an opportunity of cultivating land or of obtaining land under the Land Settlement Act. And here I feel that the proposed assistance is quite insufficient. For land settlement under the Act £120,000 is set down in the estimates for the purchase of land. If there ever was a time that a large amount should be made available for that purpose it is just now. Now is the time to buy land. It is said that many of the settlers are in trouble to-day, and that they cannot win through because they bought ground too dearly. They bought the ground dearly because the price of land at that time was abnormally high. If, however, land is bought for them to-day it can be obtained at a low price, and settlement ought then to be a success, they ought to be able to succeed. For this reason I am sorry that at the present juncture more is not being done to assist people in buying land. In the past we often voted a million and more for that purpose. It was an expensive time, but now that ground is cheap we are only making £120,000 available. In my opinion that is wrong. Not only should we buy land now because the price is low, but it is just now that we can get the more progressive farmers to become settlers. It is the more progressive farmers that have been ruined and we can now give them land. I want to urge the Government to consider steps whether it is not possible to provide a considerable amount to assist this class of farmer. The bywoner class are suffering to-day and I hope that more provision will also be made for them. Then I want to plead for another class, viz., the farmers who have bought stock under the Drought Emergency Loan Act. A few years ago when it was very dry advances were made to farmer’s for the purchase of stock. Stock then was very dear, and the farmers who took the advances bought sheep at £1 5s. each, to-day those sheep are only worth 5s., and the people find it par ticularly difficult to get through and to fulfil their obligations to the State. Instead of keep ing those people on a string we must tell them clearly what their position is so that they can know where they are. With that object in view I think that the Government should take steps to have the stock re-valued on the present basis and then allow the people to pay what the stock are worth to-day.

Why “what the stock are worth to-day”?

The stock are worth 5s. to-day and no longer 25s., which was paid for them.

Why not the normal value?

Because the normal value is 5s. to-day.

Why the present value when no one is being asked to pay?

But the capital burden remains against the farmer, and the interest is increasing., He will have to pay that if there, is no re-valuation.

But they are not asked to pay to-day.

Nevertheless the burden remains, or does the Prime Minister mean that the farmer need never pay?

Why can we not wait until the day comes for payment to find out then what the stock is worth in order to ascertain what the individual owes?

Then steps must be taken to notify this and then the interest must not be paid because the stock is becoming dearer. Now it is all accumulating. The position is uncertain ana it is just the uncertainty that is demoralizing. The farmers concerned will not know what their obligations are, nor do they know whether they will be able to meet them. I want certainty because I feel that if there is one thing that is demoralizing to the farmers it is the existing uncertainty. I agree with the hon. member for Hoopstad (Mr. Viljoen) that we must be very careful and do nothing that will demoralize our farmers and wound their self-dependency. On the other hand we must take care not to put too great burdens on those people because they must continue their work and they must not be loaded too heavily. We must give them hope so that they will have the courage which will enable them to overcome their troubles. We can give them hope and courage if we give them security. In connection with this matter I just want to express the hope that the Government, in considering the general state of agriculture in South Africa, will not accept this as disposing of the matter. I hope that the Government will take steps to enquire into the general condition of the farmers and, therefore, I want to suggest that an economic commission be appointed to enquire into the condition of the farmers in general, and particularly into the question of marketing and that of agricultural credit. I heard with pleasure that the Minister of Agriculture intended to appoint a commission which would enquire into our co-operative societies and the possibility of selling all agricultural produce through one channel. I think the Minister should make the commission much wider. The commission should also enquire into the general economic state of the farmers. It must consist of experienced people, practical men who know something about farming. When then this commission makes a report on the general position of the agricultural industry I think that its advice would be of very great use to the farmers and the State. I think the Government will get tremendously great assistance from the commission. At present very much good advice is being given by the Government. We know the advice that comes in various directions. Some of the recommendations are good, others are less so. If we appoint a commission which institutes a general enquiry, the Government can reckon on the advice it gets. There is no doubt many of the resolutions we pass to-day in connection with farming are mere guesswork. We think a percentage of the people are in a certain condition, but we have no data about the actual position. There are no figures and statistics. If such a commission were appointed it could analyse the position and give us actual facts. If then we have to do with the question of marketing and credit, then we have considerable information and advice, and that is just where we need it very much. When we try to solve the difficulties of the farmers we cannot get away from the fact that we have as yet not touched one great root of the evil, viz., how is the farmer to be assisted not again to get into the same state he is in to-day. There are various well-intended schemes suggested for helping the farmers, but it is all temporary help. There is as yet not one scheme which says what we should do to prevent a repetition of the presnt condition of the farmer. If a commission is appointed it must investigate the general position of the farmer, and give advice of such a kind that there will be no repetition of the conditions prevailing to-day. Therefore, I want to suggest that the commission appointed should have wider terms of reference than what the Minister of Agriculture at present intends to impose. The commission must be such that, when it advises, the Government will act on the advice. Then I just want to say a few words on the gold mines. I do not want to pose here as a pundit. I find the general idea of the Government of attaching a part of the gold premium a good one of course. We all expected a considerable amount to be taken. There was a time when we thought that the people had the right to the premium and that the whole premium should go to the people. After the explanation of the Minister of Finance I can understand that the Government did not do it, and that it only took a part of the premium. I feel, however, that the Government could have gone further. The greatest mistake the Government made in the budget, in my opinion, was to take nearly £2,000,000, to be precise £1,900,000, from the loan fund, and use it for ordinary expenditure. I think it is a very wrong way to cover expenditure out of the loan fund, and this mistake the Government should not have made. I am very sorry about it for our Minister of Finance has made the same mistake that Mr. Burton did when he was Minister of Finance, for he also took an amount out of the loan fund to cover current expenditure. I consider it a great sin, and the more sinful because if a particular mineral industry produces a great deal at a certain stage, then that is the time for the State to grasp as much as possible of the proceeds of the industry for the State without, however, crippling it. That money ought then to be paid into a State fund which could then be used in years when it could not set so much money out of that industry. We find that this has been done in the case of the diamond industry. A few years ago the State made £3,000,000 out of the diamond mines, today the position of those mines is very bad. If at that time a fund had been established then there would have been provision now for the lean years. That is the policy we should follow, and I cannot approve of the further taking of money from the loan funds to cover current expenditure I think the country would have been very glad if we had taken this money from the gold mines as well. As the Government have allowed the mines to retain a great portion of the gold premium I hope that it will see to it that the development of the gold mines shall be more definitely directed to the development of the low grade mines. If there is one thing we ought to be careful about it is that we do not use the eggs of the goose that lays the golden eggs in a way which we will regret in future. We must remember that the goose will not always lay golden eggs. In this connection I agree with what was said this afternoon by the Minister of the Interior that the economic structure of South Africa rested on two pillars, the gold mines and agriculture. I think he might have mentioned three and included our manufactures. We must so regulate things that the equilibrium of the economic structure will be maintained, even if one of the pillars falls down and then the country can still go on.

Business suspended at 6 p.m. and resumed at 8.5 p.m.

At the adjournment I was pointing out the three pillars on which the economic structure of South Africa rested, viz., industry, agriculture and the mines. The Government’s policy should be to maintain the correct equilibrium so that if one of the pillars weakens the others are strengthened. When, e.g., the mines produce less we must see that agriculture and industries are better able to take their place. A thing that very much troubled me was that the Minister of the Interior made the indirect promise this afternoon that if next year the Government no longer needed the premium it would not take so much of it again. I hope that that promise will not be carried out. No, in my opinion, as long as we have the gold mines we must take as much from them as we can in order to strengthen the other pillars of our economic structure. Providence has so ordered things that while South Africa is pool in agricultural matters we have mineral wealth, and posterity will reproach us if we do not use the mining industry to assure the future of agriculture and industries. We must use the revenue from the mines to improve the conditions for agriculture and I therefore hope that the Government will build more irrigation dams, and in other ways try to put agriculture on a sound basis. I also hope that the Government will use the premium on gold to encourage the iron and steel industry, and make it a success. As we know, that is a key industry, and if it is successful a general manufacturing development will result. While we have the premium we ought to make use of it, and I hope the Government will also further encourage the development of the mining of base metals. In particular the production of oil from coal ought to be assisted. If that is done this product may possibly in the future be able to replace precious metals. I, therefore, hope that the promise of the Minister will not be fulfilled, but that the premium will be used to assure good future for posterity. I want to repeat that I hope the Government will give serious attention to farming problems, that a commission will be appointed and make a broad and searching enquiry into marketing, agricultural credit and other farming interests so that past mistakes will be avoided, and I also hope that the premium will be so used as to make posterity grateful to us.

When the hon. the Minister of the Interior spoke this afternoon he made an announcement, speaking with the full authority of a member of the Government, that I personally welcome. He said that the Government welcomed criticism from any quarter of the House. He said that the watchdogs of coalition would be unmuzzled. He even said that he would be glad if they would show their teeth. I felt at once that a weight has been lifted from my mind, if not from my shoulders: but I think that the hon. gentleman reached the very acme of political cordiality when at the same time he added that he felt something moving “in his bones”. An invitation like that would almost wake a slumbering de-volntionist from Natal. But speaking quite seriously, I don’t see anything in this coalition to which we have given our assent as members of the South African party—because we are still members of the South African party—to bar me from speaking my mind, while at the same time maintaining a perfect loyality not only towards my party, but towards the coalition agreement. That being quite clearly established after what the Minister of the Interior has said, and availing myself of this leave—this right to criticize, I would like to say that if coalition implies a united joint effort on the part of all of us to assist in the undoubted emergency with which the country is faced, then I think it also implies an equality of sacrifice on the part of every section of the community, and it is because I find that this equality is absent from the budget, that I feel bound to rise, representing the commercial and industrial interests that, inter alia, I do represent to voice my disappointment and to state the grounds why I do feel disappointed with the budget. It seems to me that I can fairly make the point that the Government is guilty of unfair discrimination, and that in consequence they are striking a blow at the stability of the coalition. They are creating a precedent and powerful though the interests benefiting by this budget may appear to be, they are setting a precedent which may act eventually to their detriment. If there is one thing which is clear from this budget, it is this that despite all that we heard last year and the year before about the evil of a compulsory transfer of wealth, there is little doubt that his budget has been framed to effect it. The warning that I have just tried to utter finds a remarkable corroboration in a passage I would like to read from “Hansard”. It occurs in the 18th volume, on page 279. I believe it is a statement which will appeal to the Acting Minister of Finance, and I would like to read it to him apropos of my reference to the undesirable precedent that would be created by legislative action having the effect of a compulsory transfer of wealth. What did the speaker say? He said—

That, sir was said by the hon. the Minister of Finance; Yet to-day under the altered conditions that prevail we are adopting the very principle which on that occasion, speaking in November, 1931, in this House, he said would be “tinkering with fire”. Therefore in putting forward my views on this budget 1 can reinforce them with a quotation from the speech of the Minister of Finance to which I have just referred. This budget is a farmers’ largesse budget, to which all the other sections of the community must contribute their share of the burden. I am not concerned to give particular illustrations of what I have just said, as this my colleagues on my right have already done, but I would like to state this problem as I see it. If the effect of this budget is to confer what I think is an unfair proportion of the country’s wealth, of the country’s revenue derived from taxation, upon a particular section of the community, are we who represent other sections, commercial, industrial and mining sections, are we, who represent some of us the larger towns of the Union, and others who are excluded from this sacred circle in which a veritable golden shower pours down, are we to sit quiet and create a precedent which will be followed up only too quickly in the next and succeeding years? Let me try to justify what I have said. I say I feel that it is an occasion where objection must be recorded. How far it will be necessary to follow up that objection with an adverse vote will depend very largely, as far as I am concerned, upon the explanation we may have from the spokesmen of the Government. There may be other members who share that point of view. Therefore, I feel it my duty to state my grounds. Perhaps, if they are wrong, somebody will be good enough to get up and explain their falsity. If I take them one by one, I would say the first is that I cannot find any ground for the assumption, an assumption which I think is unwarrantable, that all the bonded farmers of South Africa are in need of relief at the present time. That is the foundation of the budget. Every bonded farmer under this budget is to receive a subsidy from the State. Is there not in the whole of this vast Union a single bonded farmer who can be left out of this scheme of indiscriminate relief? One would have thought that we would have had some statement of facts from the Government giving a comprehensive review of the situation of the country, and showing how far it is the case that every bonded farmer must receive a subsidy from the State. No such information has been given to the House. There may be reasons for that; the time may have been insufficient. The fact is that it is not there. Let me contrast that with the information I have from an institution in this country which has an opportunity, through its operations and through its intelligence department which covers every portion of the country, to learn what the situation is, and to give information as to the real situation of the farming community. The conclusion arrived at is that 60 per cent. of the farmers do not require such assistance at the present time.

What do you know about farming—

Selected cases.

There is no indication here that they are selected, and it is a fair comment to make on the situation. That statement and the statement of the Minister of Finance, who quotes practically the same figure, should dispose of the suggestion that these are selected figures. He gave 1.5 per cent., and the statement gives 1.25 per cent. Is it reasonable, I ask, for legislation to be passed on the assumption that every bonded farmer is in a state of such dire destitution that he needs assistance from the State in this manner? If you ask whether there has been undue pressure put upon them, it is interesting to note the way in which these institutions have treated their debtors. Out of the number of 4,296, proceedings have been taken against 34 town and 72 rural debtors for interest amounting to £43,393, or a little more than 10 per cent. of the total amount of the interest in arrear. I think I can fairly take the point, when we have information of this kind at our disposal, that it is hardly sufficient to come to this House and to propose a scheme on the assumption and on the footing that every bonded farmer in South Africa is in such a serious situation that the country should he called upon to give relief to all of them. Tn his budget speech the Minister rejected the idea of a moratorium, and said he could not he a party to a scheme which protected both good and bad debtors alike—he was not, he said, in favour of indiscriminate relief—but he then proceeded from that standpoint to the very opposite principle. Let me come back to the point whether a demand can fairly be made upon the country to give such relief. Let me take four classes of primary producers in this country. I will not take sugar, except to remark on the magnificent benefits it has enjoyed for years. With regard to maize, we know that a direct subsidy is proposed to individual members of co-operative societies to the extent of £525,000 and in the case of the wheat farmers, in a sum of £120,000. Can it fairly be said that the State has not done its duty to these classes of farmers? We have laid down a system of economy by which they have had the benefit of higher internal, artificial prices What the exact monetary benefit of that may be I cannot calculate, and I suppose nobody can; but it must run into millions of pounds. If Parliament has already made these great efforts to ameliorate the situation, is it reasonable to come here and ask for this large indiscriminate measure of relief which is embodied in this budget? I have listened to speech after speech thanking the Government for what has been done and asking for more.

Why not?

That is exactly the spirit I have found to underlie these speeches. I contrast that with the old-fashioned individualism that distinguished our farming community, and I cannot but be surprised at the transformation that has occurred, and the alteration in the character of our farmers from the most conservative of conservatives to a class almost of semi-dependents upon the State. If you look at the record of encroachments upon the rights of farmers, which is to be found in the legislation passed through this House in the last few years, you will find a most remarkable record of the steps that have been taken one by one to destroy his individuality, to sap his independence and to cover his activities with a wealth of restrictive legislation. I would like to read to the House a list of these boards and a record of some of these restrictions to support the point of view I have been putting forward that we have in this budget a further manifestation of this tendency continually to lean upon the Government instead of exercizing that old spirit of individuality which laid the foundation of successful farming in this country. I am indebted for these particulars to an authority to which the hon. member for Piquetberg (Mr. de Waal) will raise no objection. I am reading from an article written by Dr. van der Horst in the “South African Economic Journal,” in which he draws attention to the ramarkable character of the legislation to which year by year we have committed ourselves. The existence and extension of this system is one of the causes why whenever South Africa is faced with an economic crisis the farming section feels at liberty to come here and demand as a right assistance from Parliament at the expense of other sections. I will read a list of the boards appointed to control farming activities. There are boards relating to dairy products, meat and wheat. A quota can be levied in respect of tobacco, mealies, cheese and butter. Contracts must be made through a board alone in the case of fruit and dairy products. Then there are prohibitions in the export of fruit, dairy products, coal, wheat and diamonds. If this were considered in detail, you would find here a record of that tendency that governs our legislation to prop up the farming industry by artificial means instead of throwing it back to some extent upon its own resources and allowing it to exercise its capacity to stand by itself. I drew attention just now to the fact that when you once introduce a principle of this kind there is no means of knowing how far it will go. I have heard the hon. member for Zululand (Mr. Nicholls) assuming that next year these benefits will be continued. The hon. member for Oudtshoorn (Mr. le Roux) made the same assumption. The fault he found with the budget was that there was no express declaration by the Government that this system of subsidies would continue in the next financial year and I presume for a number of years after that. Tn fact, he drew with much enthusiasm a picture of how bonds should be regulated. There should be a subsidy towards interest, he would go on to claim, and this scheme would apply to bonds passed after the 1st April, 1933, and not alone before that date, and logically I suppose bonds should be fixed, and then if default occurred they should not be called up. I am really surprised at his moderation, because he might just as logically have said that in the event of default there should be provision for writing off the capital. He drew this picture of what he thought should be done and spoke as though there would then be a ready flow of money to lend on mortgage. The hon. gentleman pictures a world in which bondholders will submit to 5 per cent., and bonds will not be called up in case of default and the logical conclusion I supposed that the capital on default would be written down. It is a beautiful picture, but it has one defect—there will in the long run be no bonds to which it can apply. If you pass legislation like this, do you think that bondholders are going to lend money on mortgages on farms, when it is taken for granted by this House, that when there is the slightest difficulty the farmers can depend upon the Government to interfere with the contract being carried out? This golden hope must be shat tered, because as the Minister of the Interior pointed out, we are after all by this budget gambling upon a continuance of the gold premium. What would become of these glorious dreams if by any chance sterling was stablized with a gold content of 15s. to the £. Let us at least be quite clear on this point! Do not let us hold out to the people the idea that they merely have to come here in some succeeding year and claim in the same way as is being claimed here that they merely have to make a request for assistance and it will be granted. Here we have these proposals brought forward at a time when we are at the very bottom of the state of affairs that has been created by the deflation policy upon which the Government of this country embarked, and on which it insisted until the end of last year. And the grim irony of the situation is that the burden resulting from persistence in that policy should be thrown upon the very people who did their best to oppose it. It would be humorous if it were not so tragic. Now let me give some grounds for my statement that I think the assumption underlying these demands for vast measures of relief is to some extent panicky. Is it the case that prices have shown no improvement or is it the case that we have touched the bottom and are gradually climbing upwards? I pointed out that we have already an exchange premium of 40 per cent. on our exported agricultural products. I rather hesitate to call it a premium and I hope I shall not be misunderstood by the Minister, because if one refers to a premium in connection with the gold-mining industry then that is a legili mate object. I won’t say for spoliation but for appropriation. But when a premium on the export of maize is mentioned, then that is the legitimate and precious possession of the person who may be exporting that maize. I wonder if there is a single person in this House who would have the audacity to say that the budget should contain provision for the appropriation of one-quarter of that premium. When such a course is spoken of in connection with the gold-mining industry then my hon. friend on my left (Mr. Nicholls) goes into enthusiastic raptures and another hon. member is heard to say that it is a pity that the whole lot is not taken from the shareholders, who are making that money. We are told that internal prices are unsatisfactory, but it can hardly have escaped the attention of the House, if one looks at a table set out in the Minister’s memorandum on the depressed state of the farming industry before us that the wholesale price indexes show that there has already been an appreciable increase in internal prices from October, 1932, to April, 1933. It may be small, but when the tide is rising one cannot expect the flow to be rapid at the outset, one cannot expect the increase to be a rapid one. I venture to say that this reflection in our internal prices of the increase which one can see clearly in our exports is an indication which should have warned the Government that they should go slowly in their assumption that these far reaching measures were necessary in the interest of the farming industry. Then let us look at the subsidies. Parliament has accepted the principle of subsidies, but we all know what happened in that connection. I remember that the Minister of Finance had a deputation of primary producers waiting on him which put to him the suggestion that there should be a subsidy on export. This was in October, 1931. The Minister then held up his hands in holy horror at the very suggestion. But like Paul he suffered the pains of conversion. Later on, in November or January, he introduced a Bill for a subsidy on export and now the right to a subsidy is taken for granted. An amount of £2,500,000 is to be made available by this budget, and just as the legitimacy of the principle of a subsidy on exports has grown here, so I want to make it perfectly clear that this new type of subsidy on interest, temporary though it is to-day and limited as it is for the year, will place the Government in difficulties later on when they will have their present action quoted against them as a precedent. The principle is pernicious in itself. The actual wealth of this country can never be increased by transferring money from the pockets of one section of the community to the pockets of another section. It may be said by farmers that I do not show a sufficient appreciation of the difficulties that have arisen largely in consequence, very largely, of our policy of remaining on gold. I am aware that there is a disequilibrium of prices affecting the prices of primary products in our national economy, and I shall make that point perfectly clear as I wish to meet it. The hon. member for Zululand (Mr. Nicholls) referred to it this afternoon, and although I may be in danger of repeating his figures I would take the House back a little further than the Minister of Finance has done in his memorandum, where he sets out these prices for the period from 1929 to date. I can, I think, see the problem which the Government has to face, but I contend that the Government is not going the right way to cure it. I wish to refer to an article in the “Economic Journal” by Professor Fraenkel on South African monetary policy. He points out in dealing with the state of the farming industry that export prices have fallen in 1931 to 56 per cent. below their level in 1924. But the prices of South African goods have fallen in the same period by only 23 per cent. and of imported goods by 24 per cent.; that was before we went off the gold standard. There are the figures and they naturally must make one appreciate the situation of the farming industry. To put the matter plainly, if the revenue from which a man derives his livelihood has fallen from one hundred to forty-four pounds and his working expenses have fallen by 25 per cent., obviously there may be a difficulty in his maintaining his operations on a profitable basis. I know that the problem is how to fill that gap but the answer is that it can only be filled by an increase of prices. But what does the Gov eminent do? Here is the inconsistency in their policy. These prices can only be raised by increasing the demand for the products of the farmers and in order to bring that about it is necessary to increase the purchaing power of the people of this country. What does the Government do? First of all they take a large share out of the pockets of the people on the Rand, out of the pockets of the mining people and put that into the pockets of another section. What effect will the writing off of interest have on the purchasing power of the people of the Peninsula who are as rentiers largely affected. In addition the Government takes another one and a half million out of the pockets of the whole of the community and pays it over to one particular section. The inevitable result of this interference with the rights of creditor and debtor will mean that the demand for a reduction of interest will extend to urban mortgages and you will have an all-round decrease in the earnings of the community, and what becomes then of the theory that this budget will increase the purchasing power of the community? That is a serious difficulty. Now let me ask who are these ren tiers, who are these investors? One would imagine if one listened to this debate that we are getting at wealthy people, that we are getting at people who can afford to suffer the loss of all this money. But a large number of those bonds are held, not by rich men, but by large investing institutions, such as life insurance companies, building societies, friendly societies and thrift societies. [Time limit.]

I move—

Is there any objection?

Yes.

I feel that I must thank the Government for what they intend doing on behalf of South Africa as a whole, and more particularly I wish to commend their plans to alleviate the distress of the farming population by reducing the interest on farm mortgages. After all, the farmer is only a trader, and he must have capital in order to carry on his operations. I compliment the Government for having appointed a Minister to look after trade, and thus giving a clear demonstration of their recognition of the axiom that it is through trade that the life blood of the community flows. In times past, I have repeatedly urged upon the late Government the importance of trade and commerce, and I am glad that now we are to have a special Minister to deal with commercial people, for in the past, we have been bandied about from one junior clerk to another. It has been said that the farmers pay too high a price for their land and that they are bad financiers. I admit that they are not good financiers, but they know what branch of farming is, or is not, profitable. In speaking as I do now I am accepting the invitation given out by the Minister of the Interior on behalf of the Government, when he said that the Government would welcome any sound criticism or suggestion to lighten the burdens of those South Africans who are still suffering, notwithstanding that we have left the gold standard. I maintain that the fact that we have gone off the gold standard has not improved the farmers’ position one iota. I refer with great pleasure to one of my former utterances, because some of my recommendations have been accepted by the Government and embodied in the budget. In times past I urged the Government to take steps to combat soil erosion ad to go in for an extensive and well-thought-out scheme of afforestation. I am glad to see that the Government has adopted those suggestions. In 1931 I recommended governments to end the world depression by wiping out the war debts. I hope the Union’s delegation to the World Economic Conference will use its best efforts to that effect and bring about a better position in South Africa also. The hon. member who has just sat down (Mr. Coulter) has referred to the South African farmer. I will tell him the real position. Has the farmer invested in a project which has no chance of showing a return on the capita] invested in it; has he paid too high a price for land? f am glad the Government is going to tax capital for the benefit of the Union. The high price of land has been brought about by various means. I will give only one illustration showing how this is done in certain circumstances. Say I learn that a piece of land is coming into the market. I go to the auctioneer concerned and ask him on what terms I can purchase it. He may say by taking over the first bond and adding that if necessary he can negotiate a second bond. From the auctioneer I inarch off to my hanker and impart my wishes to him. He advises me to go on with the purchase. The same thing happens to John, Paul and Peter, and so we all go to the sale of the land, and by bidding against each other send the price up beyond what the land is really worth, and thus the farmers are saddled with ground which, owing to the high price paid for it, makes any chance of its profitable utilization at present entire.lv out of the question. Is it land hunger, or hunger to possess something of South Africa, something that is all his own, which prompts a man to go to a land sale and bid against others? At these land sales capital has been seeking investment, and men have been willing to invest capital to develop land. Take the case of the man who has bought. After he has been seen through by his banker, he negotiates loans. A first bond is passed, then a second bond, and subsequently a third bond is passed; but the poor farmer finds that each loan costs him a higher rate of interest. The lenders received their due interest at due time. What else does capital want but its interest? But in 1929 and 1930, when our prices started falling, and from then up to 1931-’32, interest was met out of capital. I say that since 1929 farmers have paid their interest out of capital, and not out of profit. Consequently we have the position to-day that 90 per cent. of the farmers who have bonded their farms are in a state of bankruptcy. They have been paying interest out of capital, and not out of earnings. Therefore, the temporary measures we have taken during the past two years have not taken us any further as far as the saving of agriculture is concerned, or the saving of the farmer is concerned. What our farmers want and the only thing that will save them, is not so much a reduction of interest down to 3½ per cent., a reduced interest which they even now cannot pay. The 1½ per cent. which will be contributed by the Government, under this scheme of theirs on the bonds, could be better utilized by creating an inland market, and increasing the spending power of the community. If I add to the spending power of my customer, I increase my business. With regard to the protection of capital and the protection of the first bondholder. I would like to ask whether he is the only bondholder that has a claim, and whether the second and third bondholder have not the same right to protection? Shall they have to go to the wall? Certainly not. In dealing with this matter, the Government should not confine themselves only to the first bondholder. In going through the list of what, our Government intends to do, I would like to remark that by arranging for a low rate of interest, great assistance will be given to a section of the farmers. There is a percentage of the farmers of my district who will benefit by this lower rate of interest. I owe a debt of gratitude to the Government for doing this. One group will benefit by this assistance. There is another group who will get assistance where the Land Bank will take over first mortgages. Help will also be given in the case of mortgages being called up. The Land Bank will take up a limited number of first mortgages where in their estimation such mortgages will be safe investments, and funds will also be set aside for the assistance of those who have lost stock owing to drought. I made it my business, knowing my district, to try to analyse what the percentage of farmers was who are going to be assisted.

One and a half per cent.

I put it a little higher. I take it this way, that 15 per cent. of the farmers in my district will be benefited by a reduction of the rate of interest on their bonds. They are those who have still a little of their first capital left. After that I find there are only 3 per cent. who will derive benefit from the other sources of assistance which will be given, making a total of 18 per cent. who will receive benefit from the Government’s scheme. I have already stated the prices at which land has been bought. The average bonds in my district run to approximately £7 10s., and land values from £10 to £15 per morgen, and capitalized at up to £25 per morgen; and that, when we had a normal value of 10s. 6d. for our maize, and 20d. or 24d. for our wool.

Do you call that normal?

I call them normal prices, because it was on those prices that the investments were made, and advances were accepted. The time has also come for a readjustment of values, which should be applied not only to the farmer and acceptor of those advances, but it should be justly applied to the advancer as well. We have had other speakers who pointed out what the figures were on which we based those loans. When a man’s capital figure has sunk down 75 per cent., and his earning capacity has come down to the same extent, and his liabilities have risen, how on God’s earth is this man to come through? Not only is there the cold economic term of supply and demand which regulates the market, but I claim that in the world to-day there is, not over-production, but under-consumption at a tremendous rate and on a tremendous scale. We know that there is under-consumption in South Africa—we have not sufficient consumers with spending power. We know that in our own business. The amount of goods passed through is only 25 to 30 per cent. of the amount in normal years, and prices are 75 per cent. below those of normal years. Salaries have been cut, wages have dwindled, industries are standing still and artizans are walking the streets. They want work, but there is none for them. I agree with what has been said by, I think it was, the hon. member for Jeppes (Dr. H. Reitz) that we have a right to see that our budget balances. But I ask why not take another two millions and give work to our workers? Work should be found for them, and so increase their spending powers. I, as a producer of commodities which are vital to this country, of which 65 to 70 per cent. finds it market in South Africa, can have only a small percentage of my productions consumed in South Africa at present, and so it is with every farmer. We only have wool, meat, and a little bit of maize for export, which is sold overseas at 50 per cent. below the cost of production. I hope that the Government will see their way clear to spend an additional two millions for the workers of South Africa to enable them to consume the products of the farmers of South Africa—and I am sorry the Minister of Finance is not here to-day. We want him to assist us to find markets for our products and to establish better markets. We know there are industries in South Africa which have the benefit of a market, and which do obtain a return. But there are those farmers who have already been driven off the land, apart from the conditions I have mentioned, by drought and the like, and owing to these conditions more will be driven off the land. They should be asisted to get back to the land, instead of being driven into the towns and cities, where they are misplaced, and where they further swell the forces of the unemployed. Means should be found to assist them so as to enable these people, who have suffered in the way 1 have described, on account of drought and other conditions, to get back to the land. I put a question to the Minister of Railways the other day to which he replied to-day telling me there are 131 engines standing idle, representing £216,979. I do not want to question that amount but it seems to me if it is correct that South Africa has been buying engines at a very cheap rate. I want the Minister to have this figure verified because I think there has been a misprint. There is a figure missing, I am asking the Minister another question to which I hope he will reply. I notice that a considerable amount of money is asked fur under loan funds for capital expenditure. In that is an amount included for the proposed electrification from Daimana to Harrismith. From a business point of view I am going to assist you in every respect to carry on your railways, but when you have a tremendous loss in capital like that you will hear my voice raised in protest.

I feel very diffident about taking the floor after listening to the eloquence and oratory of the hon. member for Bethlehem (Mr. R. A. T. van der Merwe). I must also congratulate him on his clear elucidation of the points raised by the hon. member for Cape Town (Gardens) (Mr. Coulter). I would like to congratulate the farming community on the wonderful windfall they are receiving, but I think this policy of spoon-feeding the farmers is altogether wrong. I agree that these measures are absolutely necessary under present conditions but that does not alter the fact that the system is wrong. I have been surprised that I have not heard a single member bring to light the two main questions which if solved would probably be the key to the solution of the farmers’ problem, and those are, firstly, to bring down the costs of production and, secondly, to find satisfactory markets. On examination of the budget I find that on loan account there is an amount of £4,000,000 for the Land Bank and there is £80,000 for special relief. And on revenue account there are various items totalling £4,882,000—a grand total to the farming community of nearly £9,000,000 in South African currency, and against that we find a mere paltry sum of £800,000 set aside for the relief of unemployment! That is truly a terrible state of affairs. The success of this coalition agreement was I think largely due to the force of public opinion, and public opinion thought that this Government would in some manner bring forward some scheme for the general relief of the country and not for only one section. Tn my constituency I have to consider the question of unemployment as one of very great importance. Under this scheme of subsidizing interest to farmers we find £1,500,000 set aside. I just want to endorse what was said by the hon. member for Cape Town (Gardens) that there are a large number of farmers in this country, and particularly in the Western Province of the Cape, who do not require their bonds to be reduced to 3½ per cent. If it were compulsory for all farm bonds to be reduced to 5 per cent. that would be ample relief for the majority of these farmers. I think the best system to adopt, and I honestly recommend it to the consideration of the Government, would be to investigate every individual case before paying out any of this interest subsidy. It might be argued that it would mean setting up a very expensive organization but, I think the matter could be dealt with by appointing the resident magistrates with, say, two of the leading citizens in each rural area. If each case were dealt with entirely on its merits, a saving would result which could be applied partly to the further relief of unemployment and partly to solving the problems of reducing the cost of production and the question of marketing. The hon. member for Bethlehem stated that since South Africa left the gold standard the farmers have not benefited in any way. I cannot agree with him. We know that all our exporters have benefited in the first place by the rate of exchange, in the second place by the grant of Government subsidy, and in the third place by the Ottawa preferences. We are now going to give them an additional benefit at the expense of the community as a whole. I do not wish to re-open old sores but I cannot help saying that if we had adopted a wiser policy earlier, with regard to the gold standard, the country would have been saved £25,000,000, and the farmers would not be in the position they arc in to-day. I would like the Minister of Agriculture to consider a few points which to my mind are of vital importance to the farming industry. In the first place, with regard to the question of the cost of production, 1 find on looking through the estimates that only a small sum of £640 has been set aside for agricultural experiments. That is a ridiculous sum to deal with a vital question affecting the whole farming industry. We are spending large sums of money in South Africa on irrigation but how many of our farmers know how to use the water which they have? How many farmers know the amount of water which each particular type of soil requires at certain times to produce the best crop? I think the answer is not I per cent. Surely that means a wicked waste of water—the thing which we cry out for every day in South Africa? We are going to continue to waste water because we do not know how to make the best use of the water we have. If we solve that problem we are going to bring down costs. We have also to consider breeding and selection. I am very pleased to notice that the Minister of Agriculture intends to introduce a Bill for the improvement of cattle. In the second place, with regard to citrus, through wrong selection of certain different types and of soil, we are producing types of citrus in all sorts of areas which are entirely unsuitable. Not only that, but we are producing varieties which are not suitable. These are questions which will have to be considered very carefully. Another point which we have to consider is that of co-operation and there again I congratulate the Minister on his decision to appoint a commission which is going into the whole question of co-operative societies. We know that vast sums of money have been wasted that have been sunk in co-operative concerns and that no great benefit has resulted to the country. The reason is that very few people who manage these co-operative societies know the first fundamentals necessary for the success of running co-operative societies. The first principle is that unless a society can give a service of as efficient a nature as is given by any existing service of a similar kind, but more economically, it should not come into being. We find that in nearly all cases where co-operative buying takes place that although large orders are placed for goods—and that is particularly so in the fruit industry—lower prices are quoted by firms outside, and the reason is that the overhead expenses of management of these societies are out of all proportion to the business done. I have put a question to the Minister as to whether the Government has considered the question of establishing the American farming bureau system in South Africa. At some future date I shall be pleased to go carefully into that matter with the Minister and put all the points to him. The system briefly amounts to this, that instead of continuing to run expensive experimental stations in different parts of the country, one or at the utmost two stations are run and instead of having officials at one centre only they are distributed all over. They would take up permanent residence in different areas. In Ceres, for instance, you would appoint a fruit man who would be well versed in all matters connected with the fruit industry. He would act as a sort of liaison officer between the department and the farmer. He would disseminate information and give demonstrations and lectures. His running expenses are usually contributed by the farmers whom he benefits, but his salary is paid by the State. It is a good system as a result of which the department keeps in continuous touch with the areas with which it is concerned. I would like to ask the Minister to reconsider the question of the voluntary levy which the fruit farmers of the Western Province asked for in connection with the marketing of their products. Our local markets are a scandal and we put goods on the markets which are not fit for pigs. Our best fruit goes to England, our next best goes up country and the very worst remains here. We should have some method of inspecting the fruit and we should not put on our markets any fruit that is not fit for human consumption. In regard to the creation of local markets for our goods, the first thing which we have to do is to create employment, the second is to foster local industry either by means of tariffs or by means of subsidies. We must seriously consider that question in the future. We have to develop our local markets, but this can only be done after a thorough investigation. Finally, 1 want to say that I think we are trying to blind ourselves to the very large potential market which we have here in our native population. The time has come when some policy in regard to our natives will have to be adopted as a result of which a very large market will be created for South African goods in South Africa. Then I want to say a few words on the question of the payment of subsidies, particularly in regard to our fruit. The method which prevails to-day is rather cumbersome, in as much as it is necessary in the first place to send all documents and claims to headquarters in Pretoria. Then these documents are sent back to Cape Town. If a small mistake occurs everything has to be sent up and down again and eventually the subsidy money arrives. I believe that a very much simpler way could be arranged. Instead of money being paid to individual farmers or companies, these monies should be paid direct to the shipping companies and the differences could be deducted from the freight charges of these companies. The shipping companies would have to submit a bill of lading and the money could be paid straight over by the Government. That would save a tremendous amount of expense and delay. I have no fault to find with this budget, except that I would have liked very much to have seen larger provision made for the unemployed of South Africa, and if the methods which I have suggested could be adopted or some other method could be adopted whereby a portion at least of the amount set aside for the benefit of the farming community could be utilized for the relief of unemployment then I feel that this budget, as an emergency measure, will serve a very good purpose.

Although the hon. the Minister of Finance has framed the budget with the ability and clarity that the country has come to expect of the hon. Minister, it appears that being human he has failed to please everybody. Among others, the budget has not received the approval of the hon. member for Roodepoort (Col. Stallard), who complains that the scheme put forward by the Government with the idea of assisting the farmer is realy a makeshift, one —and of a temporary nature. Speaking with the deference to which his years and renown entitle the hon. member, I say that we should feel obliged that the scheme is merely a temporary, and not a permanent, one. Speaking without deference, but with all the feeling of a taxpayer, I say that it would be fatal to attempt to assist farmers permanently on the lines projected in the budget. The malady from which the country is suffering to-day is not national but international, and no budget, no matter how wisely conceived, can permanently remedy the position. It is complained that the scheme put forward will not assist the poorer class of farmer. Of course there are individuals and classes of individuals who are not specially provided for. Naturally, the scheme is not perfect; but then, one must remember that Ministers have only recently taken office. Speaking for people in my own constituency I wish to point out that there are a great number of settlers who have suffered very severely, because their farms have been turned into a buffer area, in order to protect the rest of the Union from the spread of foot and mouth disease. No provision has been made for them in the budget, but I am confident that when the Minister is placed in possession of the facts, as he will shortly be, he will not turn a deaf ear to those who will make the representations. Again, under section (11) of the Land Settlement Act, settlers were advised and encouraged to buy land at a price approved of by the Government. As a matter of fact, however, the land is to-day not worth one-quarter of what the settlers paid for it. Again, no provision is made for these farmers who will still have to pay interest—to their creditor, Government—at the rate of 4 per cent., although those owing money on bonds j to private individuals will have to pay interest at only 3½ per cent. but I have no doubt that when the matter is brought to the notice of the appropriate Minister, it will receive appropriate consideration. The hon. member for Cape Town (Gardens) (Mr. Coulter) has doubted whether it is necessary for the Government, to assist the farmer, and he has quoted a number of statistics. I do not know where he obtained those statistics from, but I can assure him that if he will come with me, I will show him something far more convincing than all the statistics in the world. I will show him men and women accustomed to living under as comfortable conditions, as we are, who are now existing below the bread line. I know people who have paid the interest on their mortgages up to date, but because they have done that, they have not food left in their homes. As far as the farmers are concerned who have been provided for by the Government, they should not think that because the state is now their creditor, the day of payment will not dawn. Let us hope that these farmers will be conservative in their demands, and ask not as much as possible, but as little as possible. Let hon. members who are endeavouring to beguile the Government to tamper with the relations which exist the world over between lender and borrower, bear in mind that repercussions are bound to follow this tampering. There are invested in land in South Africa annually hundreds of thousands of pounds of capital from outside, and it will be a sorry day for all of us when the overseas investor feels that money invested in land in the Union is not safely invested.

When coalition came about it was said that it was the object of the Government to assist the farmers as much as possible. We knew that there was a gold premium, and it was said that a portion of it would be taken to enable the Government to assist the farmers. We have now met as representatives of the Transvaal, and various parts of the country, and we must now investigate the schemes laid before us in order to approve or reject them. It is necessary, in order that a new member should make up his mind whether these schemes should be approved or disapproved of, that he should consider two factors particularly. Firstly, he must examine the estimates himself to see whether they coincide with the policy which has been announced and with the promises made during the election, and secondly, he must bear the criticism in mind which has been made on the budget here to see whether it is not of such a nature as to induce him to vote against the proposed schemes. I want to start by dealing with the criticism offered. It consists chiefly of two kinds. In the first place, we have the criticism of the Opposition in this House. There are actually two Oppositions; there is the one which we can call the official Opposition, and then the Opposition which sits on the Government side and whose criticism ought to be constructive. The first Opposition—this was made very clear by the two leaders of it—consists of six members, and the two leaders of it claim that it constitutes the official Opposition. The two leaders, however, have not yet agreed amongst themselves which one is actually the leader who speaks on behalf of the Opposition. Let us for argument’s sake admit that they are both leaders. One of them the hon. member for Benoni (Mr. Madeley) introduced an amendment to the proposals made by the Government, and he himself admitted that he drafted the amendment before the budget was prepared. Therefore, he knew that whatever proposals the Government introduced he would have to oppose them and move his amendment. I do not hestitate to say that no one in this House would he more astonished than him if the amendment were passed. His amendment was stillborn and I believe that he left and did not even attend its funeral. As a young member I listened to his speech and enjoyed it, but the effect of it was that one of his followers dropped asleep while he was speaking and when they woke him and said that his leader was making a speech, he did not even stop awake, but dropped off again. I do not think that I can offer more effective criticism on his speech than his own follower did. The other leader, the hon. member for Jeppes (Dr. H. Reitz.) told us that he had come to criticize. He said this before he was elected, and he said that he would say so repeatedly. He will, therefore, tell us the same thing again, and yet we find that on behalf of the party, the Roos party which he represents here, he gives his complete approval to the budget before us. The Roos partv admits with all its criticism that a better budget could not have been put before the House. I think that it means a great deal for the coalition party in its first budget to have submitted one of which the leader of the Roos party says that it meets with the approval of the whole of that party in the House. We can therefore, say that three out of the six members of the Opposition entirely agree with the budget. I think I, as a new member, am right to this extent when I say it is a good budget, which the Government have introduced. Then we come to the further criticism and that is what comes from members of the coalition party itself. Like all criticism, there is a great deal which can be passed over, but there is also much which cannot be passed over. I am going to try to express my views as to why I will vote for the adoption of the budget as it stands. The criticism chiefly is that some think that we have taken insufficient of the gold premium, others think that too much has been taken. Some think that the money that has been taken is being well spent in the interests of the country, but that enough has not been taken. While others think that the money is not being well spent in the country’s interests. There are various hon. members who hammered on that point. I think the first hon. member that one should deal with is the hon. member for Roodepoort (Col. Stallard). One should ascertain whether the data on which he bases has criticism are right or not. If his data are wrong, the criticism based on them automatically drops. He said that the change from the gold basis to sterling had affected the whole country, and that it hail benefited] the farmers as well as the mines. It is said now that we have the right of taxing the mines, why have we not the right to tax the farmers as well? It is clear from that that the hon. member thinks that the farming industry has had the same benefit from the quitting of gold as the mining industry. If it is so, then there is force in his criticism, if not his argument on that point falls away. What is the actual position? There is no one who docs not know that the price of gold was never affected by the depression. The price was the gold standard price in the world, and by quitting gold for sterling that standard price of gold was increased by about 30 per cent What is the position of the farmer? What is the standard price of his produce? If the hon. member is prepared to tell the House what that is, and ought to be, then a comparison can be made. The only standard we can try to fix in connection with that matter is that referred to here by the hon. member for Cape Town (Gardens) (Mr. Coulter), and that standard price one will find in the document quoted by him which shows on what it is based. Allow me to quote it here. It is grounded on the basis of 1,000 for the year 1920. I want to explain that in that year the price of gold was about the same as it always was before. The standard price of the farmers’ produce, which was based on 1,000 in 1929, stood, we find, at 347 in 1932, and 426 in 1933; in April, 1933, after we had left gold, it was 444. Skins (merino) were 251, sheep 404, goats 244. Is it necessary for me to continue, or is it clear that according to the standard, which was 1,000 in 1929, the prices of agricultural produce, which next to gold is the greatest industry in the country, were not one-third of the price that they were in 1929? What was the price of gold for the same period? When I quote the figures given in the document referred to by the opponents themselves, then that argument must immediately vanish. It appears from it that the premium is the amount which exceeds j the standard price of gold, and that is not the case with the farmers’ produce. If one of the hon. members who made that comment will show that standard prices can be fixed in this j country for the costs of production, the risk they run, the labour of the farmer, and show that on those standard prices a large profit by way of premium is made by the farmers in consequence of changing from gold to sterling, then I will immediately concur with him, tax those profits of the farmers. If that cannot be done, hon. members must not use an assumption which ought not to be made. A second point I want to deal with is the statement by the hon. member for Turffontein (Mr. Sturrock) in his speech. He said: “The speaker’s view, however, was that that was not the best way to give that money to all sections in the country. It would be much better if the general welfare of the country were advanced by enabling the mines to continue developing with that money. If the Government compelled the mines to use the £20,000,000 for the development of low-grade mines, and the money went into the pockets of the miners, in the end it would mean at least £120,000,000 then the premium would be productive in the true sense of the word.” The hon. member is speaking for Johannesburg. I must take it that he is speaking to some extent for the gold-mining interests: Now if I assume that, for pure purposes of argument, if the Government allows the whole premium to go to the mines, and can compel the mines to use the whole £20,000,000 to work the low-grade mines, and that in that way £120,000,000 will actually be brought into circulation in the country instead of £20,000,000, it is a good method. Accept it, and I say that if he is speaking for the mines it is a good scheme. If we take half of it, viz., £10,000,000, then there remains £10,000,000 for the mines. Will he give the assurance that the mines will use the other £10,000,000 in that way, and so put another £60,000,000 into circulation? If he will undertake that, then it will not be necessary for the hon. member for Vrededorp (Maj. Roberts) to plead on behalf of the unemployed. I say that the money is not being used in the right way, and if it is proposed to use the money, as suggested by the hon. member for Turffontein, then weight will incline to the side of the Government. That is the criticism made. But then there is criticism of another kind. We listened to the hon. member for Cape Town (Gardens) who, in a well-thought-out speech, gave his point of view to-night. His argument was mainly that the Government did not have the right to take the wealth of one section of the population to give it to another. There is much in it, very much in it, as a matter of fact, but it has already been shown that the wealth of the mines is wealth which comes out of the ground. It is taken out of the ground under Government licence, and the additional wealth is not obtained by extra work by the mines, but by a Governmental act. If we take this standpoint that by an act of the Government the value of gold has increased, then the Government is entitled to use a portion of that for the general welfare of the people. If the Government does so, it is nothing but its duty, and it would be neglecting its duty if it did not do so. The hon. member quoted “facts” from a memorandum on the Van der Horst scheme, where the percentage of arrear interest on bonds is mentioned. Are they facts? Facts surely are only what is true. The hon. member accepts them, although every district has a representative here and anyone who knows anything about farming knows the position of the farmer, yet the hon. member accepts the statement that the farmers are not much in arrear with their interest. If that is so, do you not think it can be taken as praise which is being given to the farmer that he is nevertheless trying to pay his interest? I know of farmers who have sold their oxen or their house to pay their interest, and now the statistics of trust companies who are interested in the investment of money are used against the farmers to show that their position is not too bad. I say that the hon. member is here again proceeding on a wrong foundation. He said that the farmers had the best times before 1928, that they had ever yet had. What is their position then to-day since that time? He says that 60 per cent. of the farmers are not yet in need of help. If it is true, and they have for four years had very bad prices, then they must all have been very rich previously. Why then are not the farmers prosperous today? Because they had to struggle under the weight of too heavy burden of interest. That is the answer to the hon. member’s argument. I myself live in a district which was considered one of the richest in the Transvaal, and as an attorney I have to prepare the income tax statements for many farmers. I can assure the House that not in a single case has a farmer made more than two per cent. on his capital. If that is so, then it is the fault of the Governments of the past who should have realized that that was the position of the farmers. I could quote many facts to emphasize that point, and every member who is a country attorney can confirm it. It is also said that we are gambling on the gold premium, i.e., that the Government will not bind itself that the 1½ per cent. of relief will again be given next year. The hon. member says that we are gambling on the gold premium. But at the same time he said the prices of farming produce were mounting. But if that is so, then I hope—and the House will be the first to see the necessity for it— that this relief will again be abolished. I think there are sufficient representatives from the country here who know that the farmers prefer to pay their own debts rather than to be dependent on Government help, and they will see that they send proper representatives of their interest to the House. There are some hon. members, like the hon. members for Piquet-berg (Mr. de Waal), Oudtshoorn (Mr. le Roux), and others who want the Government to take the whole of the gold premium. They represent farmers, but they ask for something they are not entitled to ask for, and they only injure the good case of the farmer. The hon. member for Piquetberg says that Johannesburg is a dying town, and that we had not the right to build a big station there. This and other arguments show such a lack of knowledge about the assets of the country existing on the Wit-watersrand that he is not entitled to say such a thing in the House. Hon. members who talk like that are looking through the clouds of Table Mountain, and do not know what is going on on the Rand. They must not forget that the Rand alone has a population about the same size as the population of the whole of the Cape Province. If the Government takes the right steps, then the mining industry will go on so that our children ad possibly our children’s children will yet have the benefit of it. As the farmers are from loan funds and other sources directly and indirectly receiving assistance from the State up to an amount of £10,000,000 it ought to be accepted gratefully, and we ought not to look that horse in the mouth, nor should we belittle the industry which has, to a great extent, made it possible to give that assistance, viz., the gold mining industry. It will be of great benefit to our country if the mining industry is made to realize that it will be treated fairly by the population of our country and that it will be made possible for it to continue its development, because it is the gold mining industry which makes it possible for South Africa to he a white man’s country. If we are to follow the advice given by some hon. members that our experts should he allowed to say what branches of farming we must abandon, we should find that they would say that maize farming, wheat culture, etc., could not be continued here unless conditions improve. We cannot continue with those industries if the plants are not carefully looked after and assisted extraneously until it can get along independently. If they are to follow the advice to abandon such things, then in 50 or 100 years gold will still be produced on the Witwatersrand by white men, but the rest of the country will belong to the natives, that is the difference between us. We who live here and who cannot establish ourselves elsewhere must make every endeavour, even if some attempts fail, to see that we can remain here, because the mines may go, but our country will remain. That is what we feel, and therefore, as a new member, I am not in the least anxious about what the Government is proposing here, and have not the least difficulty in voting for the budget. I feel convinced that the farming industry is being assisted in a way that it did not itself think would be possible, and which would not have been possible if it were not for the revenue obtained from the gold mines. As a nation we can be thankful for it. On the details of the budget there are just a few points I would like to mention. Firstly, I would like information from the Minister of Agriculture about the maize co-operation. The advance of 5s. a bag made by the Land Bank is used against the Transvaal farmers to fix the price of maize. Two farmers live next to each other, one is a member of the co-operative society and the other not. The former gets an advance of 5s. on which he has to pay interest up to the end of the financial year, and then he gets the balance less interest, but the man alongside him gets 8s. 6d. or 9s. for his maize. Can the societies in these circumstances then be expected to flourish? Can it be expected that the farmers will join the societies in these circumstances? Will it not more probably lead to dishonesty? It will be a concession to the member of the society not to deliver his maize to the society, but to sell it out of hand. I am glad to learn that a commission will be appointed to go into the matter, and I hope the statement will be officially confirmed by the Minister. Another matter I want to raise is the question of Swaziland. When we look at the map we see that Swaziland, Basutoland and Bechuanaland are three territories which are situated adjoining and inside the Union, and are still being directly governed by England. Basutoland is practically between three provinces of the Union. I think those three territories should be handed over to the Union. I am mentioning the matter here and hope that the Government will consider it, especially the position of Swaziland. Farmers in Ermelo, Bethal, Wakkerstroom, and other districts own land in Swaziland, they have cattle there, and they trek there with their sheep. For cattle there is only one port of export from Swaziland, and cattle in the neighbourhood of Piet Retief have to go 100 miles to the north to go through the one channel in the Union, because at Komatipoort they have first to go into quarantine. It is the only means of entry into the Union. I speak subject to correction but I think that for a few years there has been no east coast fever in Swaziland and east coast fever was the reason why other ports of exit were not allowed. If it is possible the Government must meet the farmers by allowing two other ports, of exit. Then there is a further matter that I want to bring to the notice of the Cabinet, viz., to consider a reduction of railway rates next year if the gold premium still continues. If there can be a reduction of railway rates it will assist the country very much. Wood from the Eastern Transvaal is charged twice as much as the price of the wood itself to reach the Johannesburg market. I do not yet know the coal position of my constituency, Witbank, so very well, but when I look at the railway budget then I see that the weight of coal carried has decreased to the extent of £1,500.000. That is a serious state of affairs when we bear in mind that it is poor people who cannot buy that coal for warmth in the winter. It is a serious matter for the country and for the mines themselves, and therefore I hope that it will be seriously considered whether a reduction of railways rates will not be possible next year. I am glad to hear the Minister of Railways say that the money borrowed for railway purposes will be placed on proper business principles. It is not sound business not to give the railways the benefit of the rate of exchange on that money. It prevents the railway rates from coming down, and it is detrimental to the interior. Even if a part of the gold premium has to be used to subsidize the railways, I still hope that the Cabinet will consider whether the rates cannot be reduced. Just one word in connection with the provincial commission. I am very glad that it has been appointed. I am particularly pleased about the terms of reference given the commission. The Transvaal will feel, I think I can say it, that its interests are safe and can confidently be left to the hon. member for Turffontein (Mr. Sturrock) and Mr. de Villiers Roos. I served on the main reef commission with the hon. member and I feel convinced that they will make an impartial report to the best of their ability. These are the points I wanted to submit to the Cabinet for consideration. I know it is impossible for the Cabinet to do everything now and I trust that they will appreciate these points being put up for their consideration. I hope, however, that the sign of a threatening division between the urban and the rural population will go no further. I also hope that those who are heading that way will not continue to ask for things for the farmers that are not right, and for which they ought actually to be ashamed to ask. Your farming is the incubator of poverty in the country. This should really be hammered very much in connection with the question of unemployment. There is not the least question that the impossibility of the countryside farmer to assure an existence for their children on the countryside is the chief reason why the children go to the towns where there are already more people than work can be found for. If you have voted money for a scheme to provide work in a village, I know this from experience as a member of the Transvaal Executive Committee, then ten stream in from the countryside when you can only employ one of them in the village. Why? Because there are no facilities for making an existence on the countryside. I hope the Government will really put a stop to the exit of people from the countryside. Let us make it possible for the farmers to exist on their farms then they will stop there. I hope that the first step is now being taken in that direction. On the motion of the Minister of Labour, the debate was adjourned; to be resumed on 5th June.