I move—

The difficulty about legislation of this kind, when you read all the existing Acts in force, is an absence of definitions. In some there are some definitions, and in others there are none. The word “gambling” is not defined anywhere, but “gaming” and “gambling houses” are defined. The meaning of the word “gambling,” according to an ordinary dictionary, is to play or game for money or other stake. It does not say how much money, but to play or game for money. The Minister, I understand, only intends to deal with unlawful gambling. I want to make this quite clear by the insertion of the word “unlawful” before “gambling.”

I accept that.

Amendment put and agreed to.

Clause, as amended, put and agreed to.

New Clause 2,

I would like to move an amendment which does not in any way interfere with the professed object of the Bill. I want to move—

2. Nothing in this Act contained shall affect gambling on licensed premises or betting in connection with a horse-race or other race, fight, game, sport or exercise, which shall continue to be governed by the law in force at the commencement of this Act.

That simply carries out the intention of the Minister in a clear way.

If the first part of the hon. member’s amendment were accepted, in which he says that nothing in this Act shall affect gambling on licensed premises, then all that is necessary for one of these gambling hells on the Rand to do, in order to keep within the law, is to transfer itself to licensed premises.

I think the hon. member has not considered the last part of my amendment, which says that gambling on licensed premises shall continue to be governed by the law which is now in existence. Gambling on licensed premises is an offence under the Liquor Act.

I am sorry I cannot accept the amendment. I am afraid that, if I accept it, the legal gentlemen may put their heads together and find some loophole.

Proposed new clause put and a division called.

As fewer than ten members (viz., Messrs. Alexander, Bain-Marais, Faure, Gray, Hirsch, Sir Joseph Robinson and Messrs, Sturrock and Wadley) voted in favour of the proposed new clause the Deputy-Chairman declared it negatived.

Clause 2 and title having been agreed to,

House Resumed:

Bill reported with an amendment; to be considered to-morrow.

When the pact—I mean this latest pact—was brought about, I ventured to assert in this House, as I have done in the country, that I very much feared the Chamber of Mines was going to control the Government of this country. I see very little reason in the financial proposals of the Government, what, they are pleased to call “mining taxation,’’ and very little suggestion to prove me wrong in my prognostications. I know the acting Minister of Finance is the butt at the moment of representations of a rather fiery character, by the Chamber of Mines, and its representatives in the House, and an agitation is going on such as to my mind we have never known before. All the strings are being pulled that it is possible to pull, and that is because the Chamber of Mines resents this miserable little amount— I do not like the word “taxation” at all— which the acting Minister of Finance proposes to take from them. And even he has surrendered, in part, at all events, to this tremendous agitation. He himself realized, when the proposals were first made, that they were the least they could go to, and even after all these representations made by the Chamber of Mines, the acting Minister of Finance, not, I presume, without consultation with his colleagues in the Cabinet, has agreed to rebate some of his proposals. I want to say to the Minister that he is largely to blame—not he, so much, but he inherited it from his colleague, the Minister of Finance, who has got him into a tremendous mess, and why is that so? Largely because in the first place he was afraid to grasp the nettle, and the man who is afraid to grasp the nettle always gets stung. And secondly, because they seem to be so lacking in understanding the formulae of taxation. The form itself of these proposals is intricate, and I defy any ordinary member of Parliament, let alone an ordinary member of the public, to come to a really sound, solid idea of the amount of taxation, or the amount of money to be taken from the mines in any one of these proposals. He has only himself to blame for this tearing, whirling whirlwind, and this cyclonic agitation on the part of the Chamber of Mines. If they had put their proposals in simple language, understandable by everybody, the public would not have been misled by this agitation. I agree with the hon. member for Roodepoort (Col. Stallard), who made an admirable speech last night, to which I listened with the utmost pleasure. His well-delivered speech gave evidence of his having well studied his brief. The effect of it upon me was that he did his very best for his clients. But we legislators, if we can call ourselves legislators, although we are acting in rubber-stamp fashion, are not so much influenced by the hon. member. Then we have the hon. member for Springs (Sir Robert Kotzé); and I want to say that, with regard to that hon. member, and his general outlook on the question, you have to discount a tremendous amount of what he says, apart from his “facts ’’ being incorrect, because of the attitude of all his lifetime he has adopted towards the Chamber of Mines. He is in the habit, whenever he gets up to speak, of always directing his argument in favour of the Chamber of Mines and against the general interests of the country: and so much so—I am sorry he is not here—that when he was chief Government mining engineer he had the common reputation amongst organized labour of being always interested in the Chamber of Mines, and against the men’s interests.

It is a mistake.

It may have been a mistake, but it is an inevitable mistake arising out of the attitude always adopted by the hon. member. The hon. member for Roodepoort (Col. Stallard) made that old—I was going to say dishonest—rather hypocritical appeal to us on behalf of the unemployed.

†The ACTING SPEAKER (the Rev. Mr. Hattingh); The hon. member should not make that imputation of hypocrisy on the part of an hon. member.

I did not, Mr. Speaker. T repeat the words: “Made the old, rather hypocritical appeal” that is the language. I did not say the hon. gentleman was a hypocrite.

On a point of order. Mr. Speaker, is it in order for the hon. member to suggest that a speech in this House is, in its essence hypocritical, because that is what the hon. member is suggesting?

Before you give your ruling. Mr. Speaker, I would like to point this out, that a man can tell a lie, and not know; it, and he is not necessarily a liar; but if I; said he was a liar, that would be a different thing. A lie might be an unwitting one, and it does not make the speaker necessarily a liar. I do not, for one moment, say the hon. gentleman was a hypocrite in the sense that he was deliberately misleading the House.

If there was any insinuation that an hon. member is a hypocrite, the hon. member would have to withdraw; but if his remarks applied only to the hon. member’s speech, and not to the hon. member personally, he is in order. The hon. member should be careful, however, in regard to other members of the House.

I am generally careful towards other members of the House, Mr. Speaker. I at once withdraw the statement I made, although you ruled that I was perfectly in order, Mr. Speaker, in having made it. Then there was this well-worn gag—that is not out of order—employed by the hon. member for Roodepoort (Col. Stallard) that this action of the Government was going to frighten away capital. How many years ago was it that they started on this gag? From my start, politically, I remember it—it echoes down the ages. Everything that did not fit in with the desire of the Chamber of Mines meant “frightening away capital.” The hon. member for Roodepoort, to reinforce his assertions, used a cablegram which he said he would allow me to see; but I did not see it. I suspect who is the author, and suspect, first of all, his reliability, and secondly, his bona fides—because at the time that the cablegram was sent—the Minister asked the date—I think he said June 7, or thereabouts, the people of London—in the city from which that cable was sent—were falling over one another to purchase gold stock, and in point of fact it will be well remembered by hon. members that every propaganda has been made by the newspapers, by word of mouth and by every other means to bear shares and hold a pistol at the heads of the Minister and of the Government. It did not succeed in bearing the stocks here because buying these in London forced up the price. And as a complete refutation of the claim made by the hon. member for Roodepoort, I will take one example of the high-priced mine to which the hon. member for Springs referred, with a pained expression and tears in his voice; I will take the Crown Mines as a case in point. At no time during the whole of this agitation has the price of Crown Mines shares dropped below £8, and if you look at this morning’s paper, you find in the “Cape Times,” after the thundrous remarks of the hon. gentleman, that the prices opened at £8 10s. and closed at £8 2s. 6d. And do you know how much the par value of these shares is? Ten shillings.

Poor shareholders.

The poor unfortunate starving shareholders, on whose behalf so pathetically pleads the hon. member for Roodepoort in his well-known, forensic manner, and also the hon. member for Springs. It would be well to know that another of these stocks, close to the constituency of the hon. member for Springs, was priced at £4 19s. to-day, and after all their agitation, Sub-Nigels stood at £7 12s., and Geduld, in the vicinity, geographically, of the hon. member for Springs, at £5 16s.

You know what they were in December last?

I cannot for the moment recall, because usually I am not interested in the share market, but I do think it was necessary to delve into the reliability of the information of these two very interested members, the hon. members for Roodepoort and for Springs. It has been disgraceful the propaganda that has been instituted and carried on by the Chamber of Mines, its newspapers, its agents and its hirelings, in order to influence the calm judgment of this chamber of ours, and I protest most emphatically. The culminating point came when we had that rush down from the Rand of the nine Rand mayors.

Including the mayor of Benoni.

Yes, I know. I have often heard the statement that it takes nine tailors to make a man. Our experience shows that it takes nine mayors to make whoopee. I know of no other term that so adequately describes both the object and effect of their visit. I hope the Minister was duly impressed.

I was.

I suppose that caused you to rebate the 80 per cent. to 70 per cent.

Not that alone.

If ever there was a collection of individuals who knew nothing at all about the subject, it was these Rand mayors, including the one who represents Benoni. I had occasion once before to verbally thrash the then mayor, and the present mayor of Benoni, upon his rather tender solicitude, so far as municipal finance is concerned, for the mines in that vicinity. I say their evidence is suspect, not from the point of view that they as individuals are suspect, but its reliability is suspect. They are merely the gramophone record of those who control them. I will refer to these telegrams while Benoni is looming in the offing. I also received these telegrams. We all got them. They seem to be rather well-off in Benoni. Even although von have so heavily and burdensomely taxed the mines, as these hon. gentlemen put it. I got that telegram, but I ventured to interject that there were 1,900 unintelligent people in Benoni, as was demonstrated in the last election, because there were 1,900 people who were foolish enough—or not sufficiently advanced intellectually, at all events—to vote for my opponent. It is easy to get a public meeting of 5, 10, 15 or 20 men of an unintelligent type like this, to pass any resolution you like. That may rather militate against the argument I am going to make, but, at the same time, I want to point out to my Í hon. friend that he did not read the third of the telegrams that came down. He read the one protesting against this frightful taxation, but let me say this, that while these hon. gentlemen are continually concerned in conveying the idea to us that the Government is taking so many globular millions from the gold mines, they omitted to tell us what is left in globular figures to the gold mines, and it is a much bigger sum, believe me, than the amount that is taken, even after we have waded through the formula devised by the Minister. The other telegram that was sent has quite a different effect, not directly, but indirectly—

Now the hon. member did not read that to us. That might have qualified their views a little, realizing that to do justice to the mine workers you might have to take a little more from the premium to institute an adequate pension for all mine workers as a step in the right direction of providing pensions for all workers. I agree with the hon. gentleman, I agree with the hon. member for Springs (Sir Robert Kotzé). Abolish this intricate method of calculation, and introduce in its place a flat rate. I urged that last year, when you made your pact, when I knew, as the world knew, that, in all probability, the premium on gold would result in additional profits to the mines. It is quite right that members in their mental calculations should divorce from each other the question of taxation of profits in the ordinary way, and taking a portion of the premium of gold, which is ultra-profit, superadded to the old profit. It is a windfall, and whether it fell from heaven, or was projected from below, is quite beside the point. It is something that was never there before, and has resulted from the action of the Government, and from that alone, in going off gold. The mine owners had no part or parcel, no finger except that of influence, in bringing about this additional price of gold. It bids fair to be stabilized, and here may I say that I heard with the utmost regret that statement which in itself is a surrender to the representations of the industry, the statement of the acting Minister, that he was going to secure to the gold mines that for the next three years under no circumstances would they take any more than they are taking today.

I did not say that.

Then how is it that you gave me that impression?

I said that for three years after the next financial year, we would not take more than 50 per cent. of the excess profit, whatever that may be.

I accept that, but even that in itself is a surrender. The fact that you had to give that assurance to the mines shows you did so in order to placate them. I say it is wrong. We should control the Chamber of Mines, not let the Chamber of Mines control us. Even my hon. friend’s friends cannot defend him, because they do not understand the formula, and they cannot apply it, except in a rough and ready way, to any particular instance which might be brought before them. My hon. friend had better consider that, before we go any further. Yes, let us have a flat rate, and let that flat rate be 100 per cent. of the premium. The mere laugh shows how the influence of the Chamber of Mines has warped the judgment of hon. members who ought to know better.

Would you apply that to mines that have never declared a profit?

No, I have already said, and it is made clear in the amendment I propose to move, that we propose the Government should take 100 per cent. of the premium on the normal gold production for a year; in other words, you base your calculations upon the gold produced in the ordinary producing mines of the Witwatersrand last year. That would leave completely untouched the mines for which my hon. friend was pleading, the low-grade ore mines, and the low-grade ore in high-grade ore mines, because it is not being worked to-day, and therefore it does not take its place in the normal gold production of last year. What I am wanting to take is the amount of the additional price that that gold is receiving as a result of the action of the Government. I ventured to state before that on two fundamental grounds we have the right to do this. One is what I have just enunciated, that the Government itself and not the Chamber of Mines was responsible for the increase of 50 per cent. on gold. The other is that the gold belongs to us. The actual words in the Act clearly demonstrate that we are entitled to that gold. The very first words in Clause 1 of the gold law are—

Can anybody, however cleverly they may argue, whatever command they may have of beautiful language, can anybody demonstrate any other result from these words than that which I read into them, and that is that nobody but the State, that we, the people, own the gold in the Transvaal. We do not give them the gold at all. We license them to work it. So you have the two necessary fundamentals upon which I build my claim for the whole of this £20,000,000 to be used in the development of South Africa, and not to be sent in the main to shareholders overseas, and to be used as a market agent factor for high ’change, either here or in London. I very much regret to say that the acting Minister and his Cabinet have unfortunately placed themselves in the position of really being agents for the Chamber of Mines, and the stock exchange, whether operating here or overseas. The Minister himself saw the danger. He evidenced that in his remarks a little while ago. No, I want this £20,000,000. When I say that I mean the country wants it. When the hon. member for Roodepoort (Col. Stallard) says he wants it, he means the Chamber of Mines. There is the difference. I want that £20,000,000 for the development of this country. I want it to help to solve this terrible problem of unemployment. When I was pulled up by the hon. member for Kensington (Mr. Blackwell) I was referring to what I thought was the hypocritical statement of the hon. member for Roodepoort in regard to unemployment. In the course of the Minister’s speech I ventured timidly to interject the view that there was no guarantee that the mine owners would employ more men. The Minister admitted there was no guarantee but he said, “I know that since January they have taken off 800 men.” Exactly, and how many have they sacked? That is the point.

No, the figure I gave was the increase.

It is a most extraordinary thing, how easily the Chamber of Alines by its submission of statistics, can wangle the minds and the brains of members of the Government. Everything and anything can be called “white staff.” Does not the hon. member know that they made certain proposals—and the low-grade ore commission was disposed to agree with them—under which they would take on over 200 boss boys and regard them as white staff, and that they would then appear in the statistics as an increase in white staff. It is a damnable thing that this should be so. The Minister had a deputation from the Mine Workers’ Union on the matter—and what is done is done to agitate the public mind, but during the last few weeks the Chamber of Mines has been actually discharging white men. Is this House to be dragooned? Not if I can prevent it. The Minister got no guarantee that the mines would employ more white men, nor has the Chamber of Mines made any offer of employing any more, nor does it emerge from these negotiations that provision will be made for further employment. I say that the Minister should have made it a condition that a certain proportion, well worked out, of additional Europeans, should be employed on the mines. But the whole tendency of the gold-mining industry is to the contrary. The tendency is to reduce the white staff, although temporarily they may have taken on a few, which, however, has been considerably offset by discharges in the last few weeks. But the whole tendency is to get rid of European employees and to take on natives in their places. You can go along the Reef and you can see the expansion of their compounds, which is a most significant thing indeed. I had better break off here to read my amendment, in case I am caught napping. I move, as a further amendment—

Now I shall get back to the unemployment question. The tendency is more and more to do away with white labour. Not many years ago the whole of the drill sharpening on the gold mines was conducted by white men at an average rate of from 20s. to 22s. 6d. per day. To-day, with the exception of two or three mines, which are rapidly coming to the same conclusion as others, the whole of the drill sharpening work is being done by natives. Tramming, lashing, track-laying, waste packing, all individual jobs, are all being lumped on to the unfortunate miner to-day, whereas they all formed the subject of a different job in the past. Men did waste packing, track-laying, lashing, tramming, all separate jobs, which to-day are thrown on the shoulders of one miner. In addition they are asking the miner to look after too many working places. A man has to attend to five different working places to-day and sometimes more. That is not an unusual thing. And you are talking about leaving the unemployment question to the tender mercies of the mining industry, which wants to do away with whites and thus considerably increase the problem of unemployment. In the low-grade ore commission’s report you will find evidence by the managers, supported by the hon. member for Springs (Sir Robert Kotzé) in his public speeches, to the effect that by loosening the underground regulations they could do away with four thousand men from underground and substitute them with natives. And this is the philanthropic body to whose tender mercies the Minister proposes to trust the future of the working classes of South Africa. It should have been made an absolute condition of lightening your taxation on the mines, that they should employ more and more white men in proportion to the natives that they are themselves employing at present. I am jealous of the honour of Parliament. I want to take the memories of hon. members back a few years, to the time when the late Mr. Solly Joel came out. He came here and just before his departure for overseas, he gave an interview to the press, and this is what he said—

I do not want the present liaison officer between the gold-mining industry and the high command overseas to be able to go and say, “I have consulted with the Government of Smith Africa and my South African Parliament has to do so-and-so.” There is grave reason fur suspicion in the minds of the people, as a result of this method of taxation, that the gold-mining industry will be given a free hand to cause even more misery than it has been doing for so many years. Now let me deal with my amendment as applying to the low-grade ores. It only seeks to take the overplus from the production of gold normally produced. So they still have their ordinary profits. I do not touch what has been hitherto known as low-grade mines—which are now high-grade. My amendment does not touch them at all. The fact that gold will fetch over 120s. per ounce will be sufficient inducement for the working of the low-grade ore. If the chamber declines to work low-grade mines, it is in the power of the Minister to take over any mine or any proclaimed area which is not worked by the people who have the licence. I want to combat here and now as deliberately as I can, the suggestion that the proposal which I make is against the interest of the low-grade mines. [Time limit.]

I move that an extension be given.

I object.

You cannot give one member the right to continue his speech and deny it to others.

I second the amendment. As a member representing a Natal constituency, I can take a somewhat detached view of this matter, particularly as I have not had any telegrams from mayors in the Transvaal. The various arguments which have been put forward in this case have appeared to me to be somewhat perplexing. All sections appear to be at variance with each other and it would appear that the real coalition spirit is in danger. I must, however, confess that a very lucid statement was made by the Minister of the Interior on the Government’s attitude on this matter. He has definitely stated that a certain sum was required to balance the budget and the Government is taking that sum, no more no less, from the gold premium. The Minister is entirely consistent. The farmers must be assisted and the mines must pay, assisted by a slight saving in social welfare work at Cape Town and Johannesburg. I just want to warn the Minister that if he wishes to join the Labour party he must moderate his somewhat communistic views. There is, however, one outstanding fact. The Minister of Finance has definitely stated that the premium has not been earned by the mines, but has been created by the State. He is the financial expert of the Government and his views are entirely acceptable. That being the case, the Government should take the whole premium for the benefit of the people as a whole. May I suggest that from this sum subsidies should be granted to the mines? There is no reason why the mines should not be subsidized as well as the wheat farmers and the sugar industry. I submit rhe following suggestion for consideration. The Govenrment desires to remove unemployment. To this end, subsidize very handsomely the development of low-grade workings on the basis of European employment; review in increase the allowances to sufferers from miners’ phthisis; assist the farmers who really need help; and remove all taxation, direct or indirect, from the people’s food. Now is an excellent opportunity to put the old age pension scheme on a sound footing and make really sure that these old people are not thrown over to charity. I trust the Government will seriously consider these proposals.

I wish to intervene very briefly in this debate. It had not been my intention to intervene at all, until last night after hearing the speeches of the hon. members for Kensington (Mr. Blackwell) and Roodepoort (Col. Stallard). I wish to express the appreciation I feel, and everybody on the Rand must feel, at the concessions which the Minister has been able to grant to the gold-mining industry. I think these concessions will be recognized as important and far-reaching, and will go a long way to satisfy the Rand and to restore any loss of confidence which may have been created when the original proposals were first made known. More especially will satisfaction be felt with regard to the income tax, which is an important concession, and also the future limitation of taxation. In the circumstances, in all the circumstances and in the atmosphere of this House, I think the acting Minister of Finance has gone as far as it was possible for him to go, to meet the point of view of the gold-mining industry. In regard to what fell from my hon. friends on my right (Col. Stallard and Mr. Blackwell), of course there was a good deal in what they said with which I agree. I agree entirely with their criticism of the remarks of the Minister of Finance, as to the gold premium being the property of the State, and his contention that the producers of this premium would have had no grievance if the State had taken the lot. That contention of the Minister is not only economically unsound, but it is politically unwise for Ministers to make statements of that kind. I also agree with a great deal of what they say in regard to the ineffectiveness of the Government’s measures to relieve farmers. However, the farmers appear to be satisfied, and it is not for me to object if they are content. I fancy that once more the farmers will find that these proposals are not so satisfactory as they now think, but time will show. With regard to the general attitude of the hon. members for Kensington and Roodepoort, and also the attitude of one or two other Rand members, I think there is a danger that they are losing their sense of proportion over this matter. Was it ever contemplated that there should be no taxation on the gold mines after we had left the gold standard?

Certainly.

When it was found that some portion of the gold premium was to be taken by the State, what was in the minds of people before any taxation proposals were advanced? We had a statement by Mr. John Martin, the leader of the mining industry, who said the mines expected to be asked to make a very substantial contribution to help the farmers over their difficulties. If the Government, any time last year, had said to the gold mines: “If you undertake to give us £6,000,000 we will go off gold,” I feel sure the mines would have jumped at the offer. I am satisfied that, in those days, everybody connected with the gold-mining industry had it in mind that a substantial contribution would have to be made to the general taxpayers out of this premium, and I say that the gold-mining industry had discounted that, to the tune of at least £5,000,000. That was the generally accepted figure. What has the Government done? The Government has taken £6,000,000 out of the gold premium. I am not dealing with income tax, because it was never expected that the excess profits would not be taxed in this way. The difference then boils down to this—that the industry contemplated an additional taxation of £5,000,000, and the Government has taken £6,000,000. A difference of only one million pounds.

An HON. MEMBER [inaudible].

It was generally accepted, notwithstanding what the hon. member; says, in mining circles on the Rand, that at least £5,000,000 would be taken. I say that we are losing our sense of proportion when we draw pictures in this House about development being stopped, about unemployment being increased, about capital being discouraged and so on, all because the Government has taken £1,000,000 more than they might have taken. I think personally the Government should have given the mines the benefit of that £1,000,000, but the Government in their wisdom have decided not to do so. They have, however, made concessions in other directions, and it does seem to me that there is not sufficient ground for the Rand members to take the very strong stand that they are taking, practically advocating a vote of no confidence in the Government. We know the difficulties on the Rand, but despite what the hon. member for Benoni (Mr. Madeley) may say, we are none of us very much concerned about the shareholder. We are concerned about one thing and about one thing only, and that is that the development of the industry shall not be stopped, and that the maximum employment shall be given to white people. Have we any reason to believe that the Government is not as fully alive to that as we are? I say that nothing has been said or done by the Government in this connection that has not brought home the fact that they are as fully alive as we are to the necessity for these things. Under these circumstances I shall vote with the Government, and I urge every other Rand member to reconsider his attitude and to do the same.

The levy on the gold premium of the mines is so complicated an affair that I do not propose going into the figures. An agitation has been set afoot against this taxation, not only by the Chamber of Mines, but also by the workers on the Rand. If we go to the Government to-day, we are told: we have taken as much as we are entitled to in order to make the budget balance. Representatives of the Chamber of Mines contend that the Government has taken too much, that the mines are unable to expand, that they are not in a position to employ more people owing to the tax on the premium rendering this impossible. This is a matter of argument. I deeply regret the fact that this agitation should have been started as it is creating great difficulties on the Rand. Some people are of opinion that too much is being taken, while others hold the view that too Tittle is taken, and the man in the street is experiencing difficulties to ascertain what the real figures are. In the circumstances it is a pity that the Government has not agreed to make some concessions and to meet the mines in some respects. I am not saying this with the object of criticizing, but I consider that it would be in the interest of a very large section of the population, not merely in the interest of one section but in the in interest of many sections. There is a risk that the Chamber of Mines will not be able—I do not say whether this is so or not—to extend the work on the east and on the west Rand or in shafts which have been shut down in the past because they did not pay. I imagine that if they were able to carry on that work of expansion a great many more people would be employed. Hon. members must appreciate the fact that I am looking at the matter from the point of view of the man in the street. If we were able to employ 3,000 white men at an average salary of 25s. a day, it would mean over £3,000 a day for white men alone. If they are employed it will be necessary to employ another 30,000 natives. This means another £3,700 per day in wages, making a total of £6,700 per day, which money would be spent on the Rand— money which is not being spent there to-day. This would be to the advantage, not merely of those people on the Rand, but also of the Government which would have 3,000 fewer white men and 30,000 fewer unemployed natives on its hands. The increased purchasing power will also benefit the farmers. If an additional 30,000 natives are employed, those people have to be fed, which would mean an additional 180,000 bags of mealies per year. What does that mean to the producers? A great deal more slaughter cattle would be needed than is the case to-day. The question which I wish to put to the Minister is whether he is of opinion that the Chamber of Mines is able to expand under present conditions, and if the answer is in the negative, I should like to know the reason; and if it is in the affirmative, I should like to know whether it will happen.

I am somewhat surprised at the last speaker where he expresses the view that, to his mind, the Government has not made sufficient concessions to the Chamber of Mines. What we have to bear in mind is that the Chamber of Mines has played so fast and loose during the past six months that I consider it should at last be satisfied that the Government has met it to the extent it has done. I must honestly say that I have come to the conclusion that the representatives of the mining industry are most ungrateful towards the Government. The mining industry during the past six months have played fast and loose in South Africa. They created an agitation to force the Government off the gold standard in order that they might achieve their own ends. They were successful in this. When they achieved this object they went a bit further and caused the newspapers to set up a demand for a national Government. They naturally wanted a national Government because the Government of the day had expressed itself very clearly as to what it would do with the gold premium. The Minister of Finance and the Prime Minister did not leave anything to the imagination. They expressed themselves very clearly and we were pleased to know that the gold premium which would result after our departure from the gold standard would not belong to the mines. It would belong to the nation as a whole and it was the intention of the Government not to allow the mines more than 85s. per ounce of fine gold, and the Government would have the control over the distribution of the balance in the interest of the people as a whole. A short while hack the Minister of Finance in his budget speech told the country that the gold premium did not belong to the mine bosses but to the nation as a whole. It was the mine bosses who demanded in the first instance that there should be a coalition Government, and what is making me feel uneasy now is this. The representatives of mining interests are those people in this House who, in the first instance, took me to task for saying something against the coalition Government. To-day they are not getting all they want and now they are the big people who say: “Kick the Government out.”

But you will not allow it.

That is the irony of the situation which is being created to-day—I have to stand by the Government, while those who have created that Government carry on a shameless agitation. I wonder whether the time has not come for us to prorogue Parliament. The longer we sit here, the more agitation do the mine bosses indulge in, and the more concessions they get. I want to ask whether we should not go home so as to put an end to all those concessions. I want to refer to a few points in order to show that the mine bosses should rest content with what they have secured. In the first place they have been met by the Government no longer insisting on the mines only receiving 85s. per fine ounce, and by the Government not saying any longer that they, the Government, should distribute the balance in the interest of the nation as a whole. Immediately after coalition came about we departed from that point of view of the old Government and we said to the mining interests; Look, you are getting about £34,000,000 per year in profits now—

How much?

£34,000,000. The Government said: “You are making £34,000,000 in profits, and as we are allowing £4,000,000 for the development of low-grade ore and other industries in the country, there is £30,000,000 left for you.”

Where do you get those figures?

If the Minister will listen, I shall tell him. He understands the position better than I do. Of that amount of £30,000,000 the Government says that it will altogether take £13,800,000 and then it leaves an amount of £16,200,000. Is that so?

No.

In regard to that amount of £16,200,000, we now say to the mines: “Very well, according to the normal calculation you take £9,000,000 for dividends, which leaves £7,200,000, which you can also take for the payment of dividends or to expand the work of the mines.” That also is my reply to the hon. member for Kensington (Mr. Blackwell), who asked here what the workers of the Witwatersrand were going to get out of those large profits of the mines. My reply is that the mines in the first place get this £9,000,000, in addition to which there is this amount of £7,200,000, which can be used for the development of low-grade mines, for the improvement of wage and labour conditions or which they can use for the payment of larger dividends. The Government, furthermore, said to the mines that the extra taxation in any case would be about £6,000,000, and the hon. member for Springs (Sir Robert Kotzé) very quickly calculated that that tax would not amount to £6,000,000, but to £6,750,000. The newspapers immediately started an agitation which affected the acting Minister of finance, who informed the mines that he would make concessions to meet them. The Government would not take more than £6,000,000 and if the amount derived from the tax should reach the estimate of the hon. member for Springs, the amount of £750,000 would be rebated to the mines. It really amounts to this that a further £750,000 of the premium is presented to them. They can use that money to increase their dividends. What to my mind is the serious part in connection with the return of that amount is this: if the mines should decide to add that to their dividends it would mean that their dividends altogether would be raised by 75 to 80 per cent. in comparison with what they were formerly. The acting Minister of Finance further says that we must encourage capital to flow to the mines. If capital is not encouraged by the figures which I have mentioned, then I do not know what will ever encourage capital in South Africa. When the Government made that concession—do not misunderstand me, I want to show that a time had almost come for the mine bosses to be satisfied and to stop their agitation—when the Government made that concession, the papers and the mine bosses of the Rand started their agitation to incite the public, and a deputation from the people that were on the Rand at once came south, It was then that the Minister made a concession, as he explained to us yesterday, and it was then that the mine bosses received an assurance which is going to be of great assistance to them for the next five years. Other people cannot get that assurance. The farmer has to take what he gets from year to year and does not know what he is going to get. But the mines know now, at any rate, as a result of their agitation, what is going to happen to them over a period of five years. What does that five-year plan mean? And why should the mine bosses be satisfied now? For this reason: the premium amounts to £19,700,000, and the Government says: “In the next financial year I shall not take more than £7,400,000.” The surplus profit on that £19,700,000 amounts to about £13,000,000. And now the Government says that it will in the first place not take more during the next financial year than half of the excess profits, about half of the £13,000,000. The difference between £7,400,000 and half of the amount which I have mentioned amounts to about £1,000,000. This means immediately that for the next financial year the mine bosses get about £1,000,000 more. They should, therefore, be satisfied. This will be the case if the price of gold remains what it is now, viz., 120s. per ounce.; The Minister says that he will not take more than half of the excess profits. I would rather have seen the Minister mention the figure, which he should have put down, viz., £6,000,000 and not less and not more. Now, however, he is face to face with the income tax on the £6,000,000, i.e., that he adds the £1,400,000 to that. He can levy that income tax without special legislation., and it is consequently unnecessary for him to mention it.

We do not require any special legislation.

Exactly, you do not re quire special legislation for that £1,400,000. But if that is so, why do you mention it? You need only mention the £6,000,000. I have taken the position that if, in the next few years, the position should remain as it is today, viz., that gold remains at 120s. per fine ounce, if it should happen, as it probably will, that the price of gold should go up, what then? The Minister will in the next few years onlytake half of the excess profits during everyfinancial year. Consequently, he ties the hands of the Government for a few years. Assuming now that the price of gold should go up to-morrow or the day after. A short while ago the price of gold was 108s. per ounce, to-day it is 120s. per ounce; to-morrow it may be 130s. per ounce, because it is definitely to the interest of the mine bosses to make the price of gold go up.

It has always been in their interest.

Well, that being so, it is to their interest to make the sterling value of the £ go down in order to make the price of gold go up.

That has always been so.

Yes, but it is more particularly so now, so that their premium may go up, and if the price of gold next year should go up to 130s. per ounce, we shall still have our maximum of £7,400,000. Our hands will be tied.

In that case we shall get a larger amount in income tax and we shall also get a larger amount from the leased mines.

I am not talking about income tax and leases. That money is due to us in any case. I am referring to excess profits. This does not affect the excess profits. I cannot understand why the Government should tie our hands seeing that we so faithfully support the Government. I must say that the Government here places me in a position of great temptation, though I am going to vote with the Government, I am going to support it. I cannot understand, however, why the Government, in view of the fact that it is so highly probable that the price of gold will rise, should tie its hands to the extent of £7,400,000 for the ensuing financial year and after that to half of the excess profits. Has the Minister worked out what the position will be if next year the price of gold should go up to 130s. per ounce? The premium then will be about £24,475,000. The Minister must also bear in mind that next year he will not be entitled to take more than £7,400,000, with the result that the mine bosses will have £14,950,000. That is the amount with which they will get away, and where is the fifty-fifty basis then? Has the Minister worked out what the position will be if the price of gold next year should go to 140s. per ounce? I repeat what I said that it is in the interest of the mine bosses that the sterling value of the £ should go down and that the price of gold should go up. If next year we are still tied down to £7,400,000, then the premium will be about £30,250,000 on the basis of 140s. per ounce. Of that the State will get £10,300,000 while the mine bosses will get away with about £19,950,000. Where is the fifty-fifty basis then?

And if the price of gold drops to 90s., what then?

Well, then the mines do not lose anything, we are the people who will lose. The Minister did not tell the mine bosses that if the price should drop to 90s. they would still have to give away £7,400,000. If he had told us that they would have to give that amount, even if the price of gold should drop, the mines would never have agreed, but I do feel that it would have given us a little more satisfaction. I just want to ask the Minister whether it is just that he should allow the mine bosses to force us to give these concessions. The Minister deliberately kept the taxation proposals in regard to the mining in dustry secret in order to prevent an agitation He came forward with a well-thought-out plan and although we did not approve of that plan in its entirety we still said that it was a well thought-out plan. That, at any rate, was how J understood it. The reason why the Govern ment so carefully kept the secret of its taxation proposals was with a view to preventing an agitation. After the estimates had become known, the Government, as a first concession, gave £750,000 and further placed the mines or a five-year plan. The taxation for this year is fixed at a maximum, and for subsequent years the assurance is given that it will not be more than 50 per cent. of the premium. Then, however, we ask the Government: “Give the farmers some seed wheat,” we are at once told that there is no money. When we ask for a decent amount for child welfare, we are told there is no money. If we ask that the Government shall do something for the tenant-farmers—40 per cent. of the farmers in my constituency are tenants—we are told there is no money. The Government has put in its estimates and now it is giving these concessions to the mines. I consider that the mines at last have cause to be satisfied.

I rather feel that the hon. member who has just sat down has fallen into the same error as the Government made originally, when they considered that the premium on gold was going to be the net profit which the mines would make. The whole basis of his argument was the assumption that the premium would be about 34 millions for the year. The assumption was that the premium for the past financial year would be between £19,000,000 and £20,000,000, the whole of which would be profit to the mines. Very few people really understood the position of mining, and nearly everybody assumed that, with the premium on gold, the whole of that premium immediately became profits. One cannot help feeling that, in the taxation proposals which were placed before the House, in spite of the explanation by the Minister last night, the Ministers themselves felt that the whole of the premium was profit, and that they based their taxation accordingly. I must say that I have listened with surprise, and with pleasure, to the speech by the hon. member for Turffontein (Mr. Sturrock). He is looked upon as a gentleman with wide experience and a great knowledge of mines. But where I welcome his speech, perhaps it would have been better, and more in the interests of the country, if he had made remarks of that nature when he spoke on the budget originally. One feels that members, who are perhaps not so well acquainted with mining, may have been misled, when members like the hon. member for Turffontein said frankly that they disapproved of the taxation proposals of the Government. One feels that one is justified in asking those members, who can speak with authority on mining matters, that they should put their views before the House and the country and enable them to judge what the true position is. Let me say that I welcome the help that is now being given to the industry, in the proposal made by the Minister last evening. I think it is unprecedented in the history of any country for any Government to make a declaration of its financial policy for such a long period as four years ahead. In making that declaration I think the Government has acted very wisely indeed, and I heartily congratulate it. One can only hope that the latest proposals for the taxation of the gold mines will help to remove a good deal of the alarm, which has caused so much damage to the mining industry in the last week or twO. One feels that the complicated method of assessment has partly been the cause of the very adverse criticism that has been advanced of the. Government’s gold-mining taxation proposals. A layman, naturally, is not competent to say whether the Government’s proposals are the soundest that could have been arrived at. One can only accept the position that the Government experts went into the matter and decided accordingly. I listened last night with very great interest to the important speech of the hon. member for Springs (Sir Robert Kotzé), and could not help being impressed very much indeed by his remarks, which showed that he is frankly disturbed at the Government’s method of taxing the gold mines. Tn spite of everything, I feel that the Government should have consulted the mining industry as to the best methods of imposing the additional taxation. Last night the Minister of the Interior said that Mr. John Martin, the mouthpiece of the mining industry, had declined to consult the Government on the question, but what I should like to know is, did the Government definitely decline to consult the industry and was Mr. John Martin the only representative of the industry who was approached? I can quite understand one individual declining to shoulder the responsibility of speaking for the whole of the industry on such a momentous issue. One remark made by the Minister of the Interior last night I very much regret; that was his allusion to the fact that the hon. member for Springs had supported the Minister in the estimate the latter made last February of the probable amount that the Government would expect to get from the mines as the result of the Union going off the gold standard. The Minister of the Interior told us that in his calculations he arrived at practically the same result as the Minister of Finance. It was rather interesting to reflect that although the Minister of the Interior arrived at the same figure of additional gold-mining taxation as was disclosed in the budget, he had no knowledge at all when he framed his estimates of the additional burden to be placed on the country for the relief of farmers.

[inaudible].

The point was that at that particular time the Minister stated that the member for Springs (Sir Robert Kotzé) had agreed with his computation. I am bound to say that the Minister and the member for Springs disagree on that point. The hon. member for Springs totally denies the interpretation placed on the conversation that has been referred to. However, in a matter like this, something has to he done to endeavour to restore the confidence of the people. I don’t think there is a member in this House who has not received communications, and who has not been harassed by his constituents, particularly by those constituents who have lost money. But the assurances that have now been given should reassure the industry, and if it is found during the coming year that the proposals bear with undue harshness on the industry, the Minister will be prepared to reconsider them. I do submit that the income tax assessment on the mines at the present rate of 20 per cent. is a very heavy burden, and they are entitled to ask, at any rate, during the period of the taxation of excess profits, that that tax should not be increased. There is only one other point I wish to refer to, and that is the proportion of taxation that is going to be taken this year, as it affects those mines which have not been making profits for the past few years. I am informed that mines like the E.R.P.M., Langlaagte and Durban Deep, mines which have paid little or no dividends, many of them making losses, will be taxed to the extent of 53 per cent. of their profits. It does seem wrong that the mines which have been experiencing the greatest difficulty, and have been struggling to keep their heads above water for years past, should be faced now with the position of meeting taxation and raising money, as was pointed out yesterday, to pay for such taxes. I can only say again that the proposals which have been made now will go a long way to satisfy public opinion; and although originally I felt very strongly inclined to join in and vote against the taxation proposals which the Government put forward, I do feel that the Minister’s statement yesterday, carrying as it does the Government’s pledge, has materially altered the position and so altered it as to a material improvement of it that I do not feel justified at this stage in voting against these proposals.

The strength of the Rand representation in this House, oratorically as well as numerically, probably accounts for the fact that the criticism on the Minister’s proposal to go into Committee of Ways and Means has been almost entirely confined to the mining taxation.

So they ought to be.

There are in the proposals to which the Minister asks the House to assent some revolutionary and confiscatory measures, and except by way of passing comment these have not been touched upon. I feel that it is incumbent on me to voice disapproval of some of these proposals. Tn regard to the mining taxation there does not seem to be much divergence of opinion on the point that the State is entitled to share in the extra profits—the difference seems to hover round the question of how much or how little, and the matter has developed into one of bargaining. I wish, however, to draw the attention of the House once again to the remarkable proposals in regard to interest on farm bonds, and would repeat what I said in the budget debate, that I have every fear they will have most devastating effects on the future of farm finance. The farmer, it is said, is in need of relief. With regard to that point, I do not pretend to have a sufficiently intimate knowledge of the farming community, and I therefore accept it as a fact that the farmer is in need of relief. But I do suggest, that to provide that relief entirely at the expense of one particular class, and that class one which we may presume has heretofore been of assistance to the farmer, is an indefensible proposition. If it is essential, as a matter of national policy, that the farmer should receive relief, it should be done at the expense of the community as a whole. The business of money lending is not confined to farm mortgages and until these proposals were mooted two or three weeks ago, I do not think the average investor was very much concerned whether his money was sunk in farms, urban properties, or in other securities, so long as there was a sufficient margin of safety on the capital invested. Today, however, he will realize that his investment was something in the nature of a lottery, and if he drew a farm mortgage he is a loser. The assumption behind these proposals must surely be that the general position in relation to farm mortgages is that they are not sufficiently good security as they stand to-day. I submit that such is far from being the case. While there may be a percentage of such investments not so secure as was the case some time ago. I submit, with a certain amount of knowledge; of these matters, that the majority of farm mortgages still show a sufficiently good margin on the capital invested by way of loan. The incidence of these proposals will, I fear, produce some extraordinary anomalies. I would not labour the point if I did not feel that this is going to be the case on a wholesale scale. So far as the farm mortgagee is concerned he is to be forced to disgorge anything which he may receive above 5 per cent.—not for the benefit of the State—but to be returned to the debtor from whom it was obtained. It is not hypothetical to put before you the case of many people, comparatively poor, who will be compelled to disgorge money under this provision and hand it back to the relatively rich. An hon. member enquires whether I shall vote against the proposal. I know very well it will be my duty to support the Government if they wish to adhere to these proposals. That is my duty, I am sent here with a mandate, and I have to respect it, it is not part of my duty to imperil the coalition spirit that has come about. But all the same I can tell the Ministers where I differ and I hope that at some time, if not immediately, they may see that my remarks are not entirely without substance and sense. There are other instances which one can quote from experience. As a matter of fact, any person with experience of investments can tell you that in many cases they represent to a comparatively large section a considerable portion of their income, and it is not only quite conceivable, but it is more than probable, that they will often be compelled to lose a portion of their income for the sole benefit of people who may be quite well able to pay the interest. It will be said that a good deal of the business is done by trusts, but surely trusts are combinations of persons, and not necessarily all well-to-do persons. Is it wrong to take more than 5 per cent.? No. If it is wrong the Minister of Commerce might be able to do something towards getting insurance companies to reduce the rate of interest on loans to policyholders of their own money. Another example of the far-reaching implications of these proposals is afforded by the type of finance company which lends money to farmers for working purposes. It must be known to the Minister that in this direction the matter is going to operate very harshly, and it is a fact that at least one big company has been compelled to take into consideration the desirability of withdrawing from this class of business. I am convinced that the result of legislation on these lines will be in many instances that at the first opportunity which may arise bonds will be called in; that will be very much to the detriment of the farmer and I think he will then rise up and abuse us rather than bless us for the assistance which we are now presumed to be giving him. I cannot understand why, if the Government regard it as imperative that something on such lines was necessary, they have surrendered any part of the surtax. If the idea is to bring interest rates down as a whole, that appeals to me as a more commendable method. The burden should be fairly distributed. Let us apply the principle fairly all round over the whole community and if the surtax does not meet the case, it might be increased rather than that we should simply tax one section, a section which has been beneficial to the farmer.

Business suspended at 12.45 p.m. and resumed at 2.20 p.m.

Afternoon Sitting.

Just prior to the lunch adjournment I was endeavouring to make a point which it seemed to me had not received sufficient attention during this debate. I referred to the proposals in regard to the alleged taxation of interest on farm mortgages. I quoted one or two cases of hardship that would arise under the Government’s scheme. I recognize that all measures of taxation involve hard cases, but they should be the exception rather than the rule. In this instance hard cases are going to be the normal rather than the abnormal. There will as I have already suggested be many cases in which the Government will take from a relatively poor person and give to a relatively wealthy one. I know of an instance in which a man has a bond over his urban property on which the rate of interest is 7 per cent. The Government will not interfere in that case; but this man has ceded as collateral security certain mortgages in his favour over farm properties carrying a like rate of interest. The Government will compel him to limit the interest from his farm mortgages to 5 per cent. and the law will force him to pay 7 per cent. for the money he himself has borrowed. Thus the Government’s proposals will produce the ironical position of compelling a man to continue payment of 7 per cent. on his own mortgage liability, and sacrifice 2 per cent. to which he was entitled for money be has lent on farm properties. I will give you another example. There is a class of institution flourishing in Natal which takes money from depositors and invests it in mortgages on farms. The depositors receive a specified rate of interest. It would seem as though these investment companies may still be called upon to pay that specified interest to their depositors, but to take a lower rate of interest from the farmers to whom they have lent the depositors’ money. These institutions work virtually on co-operative principles, and on such a small margin that a difference of one or two per cent. may place them in insolvency. I am not up against the farmer. I assume that as a matter of national policy we must afford some relief to the farming community, but we need not do so at the expense of one unfortunate class of investor. The Government should have turned its attention to the holders of all interestbearing securities. I know of first class municipal stocks which still carry 6 per cent. If it is wrong for a farm mortgagee to take 6 per cent. interest, it must be equally wicked for a man who has the resources of a first-class municipality as security to take 6 per cent. interest. The Government should have tackled the matter on less rough and ready lines. Although of course there are people who decry the acceptance of interest on loans, it is not wrong or unlawful to put money out at interest. These farm mortgagees have not been doing anything that is wrong. What they have done is quite legitimate. This action of the Government may be a precursor to the extension of the principle. The professional man, the artizan, and others may find themselves told by a beneficent Government that they are not entitled to bargain—that they must take a limited profit. I honestly and genuinely believe that a very grave error of principle is being committed. I fear that even an older member of this House than myself or a more eloquent member, would probably achieve little more than I can hope to do in putting forward the view I have submitted, but I do commend this point of view to the Minister. It is not submitted merely for the sake of being critical. I put it forward to give the Minister some indication of a certain type of thought, a responsible type, and one that should not be entirely ignored. I trust that at some time in the near future my remarks may bear fruit, and that the anomalies to which I have called attention will not be permitted to continue to exist.

I am satisfied that the hon. member for Roodepoort (Col. Stallard) must have been convinced that he was right in his opposition to the taxation proposals of the Government before he moved an amendment such as that which he has submitted to this House. I also am in a difficult position. I have not departed from the attitude I took up during the debate on the budget, when I indicated that, taking all things into consideration, I felt that the Government’s taxation proposals were not unreasonable. In spite of the very strong agitation that exists on the Rand, taking everything into consideration, I am still satisfied that the taxation proposals of the Government are not unreasonable, and are worthy of the support of this House. We have had a series of proposals, or formulae, and we cannot analyze all the complicated figures. The Minister, with the assistance of the technical advisers to the Government, has submitted a certain formula, which will have the effect of securing the amount of revenue required by the Government, and which it is claimed will also have the effect of encouraging the working of the low-grade ore, and the expansion of the industry. As against that the hon. member for Springs (Sir Robert Kotzé) tells us that the formula will not have the effect, but that his formula, a flat rate, will have the effect of encouraging the working of the low-grade ore. The hon. member for Springs may be just as mistaken, as possibly the advisers of the Minister are. I do not say that the advisers of the Minister are mistaken, but, at any rate, until the method of taxation that has been proposed has been tried out I think it is impossible for anybody to get up in this House and say with certainty that the one or the other is completely wrong or right. The best test of the position is to take figures which we understand, and when we consider those figures I suggest that we shall feel justified in supporting the proposals of the Minister. Last night the Minister of the Interior gave an analysis of certain figures, from which he adduced the fact that before the proposals of the Government were submitted to this House, months before, he stated that something like £7,400,000 would have to be taken from the mines. I propose to submit another set of figures. For the last few years I have recognized the importance of the industry to South Africa, and I want to refer to the attitude of the Chamber of Mines at a time when there was no question of taxation. I refer to the sittings of the Gold Standard Select Committee, before which the Chamber of Mines was represented by Mr. Martin and Mr. Anderson, who gave evidence, and put forward certain figures, which commended themselves to me, although they did not commend themselves to the majority of the committee. I supported the abandonment of the gold standard, on the ground that the advantage derived from so doing would benefit every section of the community, and I must say that the Chamber of Mines took exactly the same attitude. I take the evidence of Mr. Martin and Mr. Anderson, which will be found on pages 460 and 467 of the record of evidence. Certain figures were given as to what would ensue if South Africa went off the gold standard, and devalued to the extent of 25 per cent., 25 per cent. resulting in raising the price of gold from 85s. to 113s. 4d. per ounce. They told us, as a preliminary, that if it were possible to reduce working costs on the mines by 2s. per ton, we would extend the life of the mines by something like 33 per cent., and if it were possible to reduce the working costs of the mines by 4s. per ton, we would extend the life of the mines by something like 70 per cent. They stated unhesitatingly that if South Africa went off gold, and devalued our sovereign by 25 per cent., that that would be tantamount to reducing the working costs of the mines by 4s. per ton, and would have all the results which the Low-Grade Ore Commission had been asking for. Taking that figure, they showed the select committee that, on the basis of the 1931 figures, when the dividend was £8,026,912—and the working costs 19s. 4d. per ton, the advantage, by devaluing to the extent of 25 per cent. only, would be that the amount received by the mining industry, for a similar output of gold, would be increased by £15,400,000. How did the Chamber of Mines suggest that that £15,400,000 would be utilized? That is given on page 461. They stated, and I think very sincerely, that, in their opinion, there was no case at the time for any increase in wages. They stated that, in their opinion, there was no likelihood of any appreciable increase in the price of commodities. They thought that at the very most, the extra working costs might come to an extra million pounds. For the sake of there being no mistake about it, the Chamber of Mines submitted a calculation on the basis of the working costs going up £3,200,000, which was equal to an increase of 10 per cent. in the working costs, and an extra £4,200,000 accruing to the Government. They indicated to the committee that after disposing of the £7,400.000 which is the amount we are haggling about to-day, a balance of £8,000,000 would be left to the mines. After all, the issue is not so much what is being taken, but what is left to the industry from the premium. They left themselves with £8,000,000, and in connection with that amount they stated specifically in their evidence, and they meant it I am sure, that the idea was that £2,000,000 of that would go to the shareholders by way of increased dividends and £6,000,000 would be expended in the expansion of the industry. That was based on the price of gold being 113s. 4d. per ounce. The position now before the House is that the taxation is based, I believe, on the price of gold being 120s. per ounce: therefore, one has to take into consideration the additional profit that will accrue as between the 113s. 4d. and 120s. per ounce, and that works out, you will find, at £3,850,000, increasing the premium on the price of gold at 120s. to £19,250,000. If you take away from this the £3,850,000, the difference between £7,400,000 and £9,300,000 which is the total amount the Government is to receive from the premium, by way of increased normal tax £1,400,000, excess profits tax £6,000,000, and an increase of £1,900,000 from the leases, accruing under the ordinary contracts, in respect of which there can be no oom plaint, it will be evident that the mines are still in a better position by £1,950,000 than they were under the figures which they submitted to the select committee, remaining with £9,950,000 of the premium instead of the £8,000,000 with which they appeared to be content. One is also entitled to take into account the further increase in the price of gold. The price of gold yesterday was 122s. 2d., and everything points to its going up still further. Then again, while the Chamber of Mines calculated on an increase in their working costs of 10 per cent., in fact, something like 2s. per ton, their working costs have gone down from 19s. 4d. in 1931 to 19s. in 1932, and in the present year they are slightly above that but still less than in 1931. Taking, therefore, their own figures submitted to the Gold Standard Select Committee, I submit there is nothing whatever in the proposals before the House to justify the mining industry or the general public complaining about these proposals. Now my friends, the hon. member for Roodepoort (Col. Stallard) and the hon. member for Kensington (Mr. Blackwell), in their attacks on these proposals, indulged in what. I must say appears to be a great deal of exaggeration. They were “bolshevistic,” the hon. member for Kensington said. That is a very popular term, but after all, what is the position? As I understand the bolshevistic idea, it is to take everything away, to take all the assets away, and run everything by the community. I take even the statement of the Minister of Finance about the State’s right to take the whole premium, and I see nothing bolshevistic in that, because the case of the Minister of Finance was, not that he appropriated the property of anybody, but that he was taxing profits, and in this particular instance, taxing profits which did not arise out of any energy, any expenditure or any expansion on the part of the industry concerner, but which arose out of an act of State policy. Surely, it is not unreasonable to say, when an industry secures an unearned income as a result of State policy, the State has the right thereto. The State, however, in its desire to encourage the mining industry and its expansion, does not appropriate the whole premium, but only a portion of it, and the mines are left, as I have already shown, with a large profit in excess of their profits before South Africa went off gold. Then the hon. member for Roodepoort, in his endeavour— possibly successful endeavour—to make the flesh of our agricultural friends creep, painted a doleful picture and said the Government was appropriating 40 per cent. from the mining industry, and what was going to happen? The next step would be, he said, that, pressed by the landless portion of the population, they would appropriate 40 per cent. from the land. But here again, surely, one has only to mention it to show how contradictory it is. In the one case, the Government is taking part of the increased profit of an industry which is developing an asset which the State has, namely, the right to mine, but which right it handed over, on certain conditions, to the mining industry; and that being the case, surely it is not comparable to state that because the State appropriates a certain percentage of that unearned income, it is going to appropriate a percentage of actual capital or of property. I submit a suggestion of that kind is an exaggeration which is unworthy of my hon. friend. Then we were told that, as a consequence of these proposals, there would be a check on the expansion of the industry, and on the working of low-grade ore. There again, as a matter of fact, the Chamber of Alines, in its evidence before the select committee, on a basis which was very much worse for them than the present one, showed that they would utilize £6,000,000 out of £8,000,000 for the development of low-grade ore, and the expansion of the industry. Under their proposal they would have been left with £8,000,000; now, they are being left with something like £9,500,000. That being the case, surely it is unreasonable to say that the expansion they were prepared to undertake under their own proposal is not likely to take place under the present proposal. I have more faith in Mr. John Martin, Mr. Anderson, and other heads of the mining industry, than to imagine that once having gone off gold, because they cannot gel their own way in the details of taxation, they would refrain from developing the industry which, in the long run, is to their own advantage, as well as that of the State. The hon. member for Kensington (Mr. Blackwell) spoke of these proposals shattering the confidence of investors, and he read a letter. Surely these letters are not evidence the House can accept as to the actual position. One must look at psychology. What might shake the confidence of A may not necessarily shake the confidence of B. In deciding what would shake confidence, there are other considerations which have to be taken into account. There is, in the first place, the fact that the normal dividend, the profit, has not been touched, that in 1931 the dividends paid out came to £8,000,000 odd, and in 1932 they came to slightly more than £8,000,000. That normal profit, assuming we had not gone off gold, is not touched in any way. What is touched is the excess profit which has been brought about by South Africa going off gold. That being the case, the ordinary investor looking for the dividend-producing investment is faced with the position under these proposals that not only is the dividend which he was in the habit of getting entirely unshaken and untouched, but in addition there is an additional sum available for distribution in dividends. Surely the ordinary investor who, before we went off gold, was already looking upon Kaffirs as first-class security, with the additional profit which or their own figures accrues to the industry as the result of going off gold, cannot possibly have his confidence shaken now that we are oft gold. There is another consideration. The individual as well as the corporation which has capital to invest, in looking for a market for the investment of that capital, is concerned more with several considerations, firstly, the question as to what profit will be earned—and the profit is likely to be greater to-day than if we had not gone off gold, and, in addition, he is likely to look to the life of the industry, likely to enquire whether he will get that profit for a longer or a shorter period. If it can be shown, as it is shown by the figures of the Chamber of Mines itself, that as a result of the policy now being pursued, the life of the mines is materially extended, then surely that is an enhanced advantage to the investor, and must encourage investment. There are other aspects which he would look at. One is, what security generally does he get? If we take the London market, the ordinary investor overseas is in the position of getting from a gilt-edged security anything from 2 to 2½ per cent. If he does not want to invest in London, but on the Continent, he may get a higher rate of interest, but he has no security whatever from day to day as to what will be the constitution of the Government of the country concerned, or whether there will be moratoria or a general wiping-off of debts. There can be no better return than from investment in our gold-mining industry. If the investor looks for security he has greater security in South Africa for a continuance of present arrangements, than in any part of Europe. He may even examine the position on the basis of the soaring prices of the share market before the present slump. I have been told by an accountant that an analysis of the position on the soaring prices of shares before the present slump took place, showed that the dividends paid out by the industry represented something like 3½ per cent., so that even on that basis the investor is in a better position than by investing his money overseas, even in Great Britain, we will say, at 2½ per cent. or 3 per cent. So from every angle it must be clear to anyone looking at the matter impartially that, as far as the possibility of expansion is concerned, as far as the confidence of the investing public is concerned, nothing whatever has been done to either check expansion or shatter the confidence of investors. We are, therefore, faced with this position. On the one hand, the hon. member for Roodepoort (Col. Stallard) says we are taking too much; on the other hand the hon. member for Benoni (Mr. Madeley) says we are not taking enough, but that we must take 100 per cent. of the premium. Then comes along the hon. member for Moorreesburg (Mr. Erasmus) and agrees with the hon. member for Benoni, and I suppose if they had their way, they would take the full premium. The hon. member for Benoni would use it in one direction, and the hon. member for Moorreesburg in another. With one set of critics saying, “You are taking too much,” and another set saying, “You are taking too little,” it seems to me that the Government has acted in an impartial manner. I submit that in the light of these facts and in the light of the figures which have been quoted to the House, the amount of taxation taken by the Government is not unreasonable, and does not call for any undue criticism. Over and above that, the hon. member for Roodepoort and the hon. member for Kensington overlook the assurances which has been given by the Minister. I must say that the hon. member for Springs (Sir Robert Kotzé), who appreciates the value of these assurances to a much greater extent than my other hon. friends, did express his appreciation of it, and I think it may be said that the hon. member did admit that some advantages have been gained by the alteration that has taken place. What is the effect? In addition to the amount taken being reasonable, the Minister has now definitely undertaken—what I understood the Minister of Finance was originally prepared to undertake— that not more than £6,000,000 will be taken from the excess profit. From that point of view the mining industry has nothing to complain of. Now, I want to make a suggestion to the Minister as he desires to see the low-grade ore worked. I would rebate that surplus but I would rebate it by way of bounty on low-grade ore worked, so as to secure the benefits for the low-grade mines and at the same time get security that more low-grade ore would be worked. I would urge the Minister to take that into consideration. The Minister has given assurances which must be of the utmost value to investors, and which must have the greatest possible effect on the expansion of the industry. He has told the mining industry that he would not only limit the amount of taxation on surplus profits for the next year, but that he would also do so for the next three years. My hon. friend the member for Moorreesburg (Mr. Erasmus) rather resented the assurance that there would be a limitation in the taxation of excess profits for the next four years. But this assurance will have the effect of creating a sense of stability for the industry. Over and above that we have the assurance that in respect of new mines, the amount expended in the sinking of shafts and the amount expended on underground expenses, will be first allowed before any taxation is imposed upon them. There is the further point that in any ease, as far as the low-grade mines are concerned, they are safeguarded by a minimum of taxation. Any profits of 2s. 6d. or less per ton milled will not be taxed at all. So there is no doubt that the Government is endeavouring, and, I think, is successfully endeavouring, to encourage the working of the low-grade ore, it is not only doing that, but it is also in the process creating greater spending power and more employment, which is most essential. And that being so, I would appeal to my hon. friends who have no doubt proposed their amendments with a full sense of responsibility and earnestness, not to overlook the other considerations that have been put forward and, having expressed their criticism, to allow the proposals to be adopted by the House.

I have listened with great interest to the speeches that have been made here and I was very much surprised at the speeches made hy the hon. member for Springs (Sir Robert Kotzé) and for Roodepoort (Col. Stallard). I must say, however, that I also listened with great surprise to the hon. member for Moorreesburg (Mr. Erasmus). On the one hand hon. members representing the Rand accuse the Government of taking too much of the gold premium in order to help the farmers, and, on the other hand, we have the hon. member for Moorreesburg who accuses the Government that it leaves too much to the mines and that it does not help the farmers sufficiently. I am getting sorry for the Government seeing that, on the one hand, it is being criticized by the hon. member for Moorreesburg, who tells us that he is 100 per cent. coalitionist, and, on the other hand, by the mines. The representatives of the mines have in any case made a proposition, but the hon. member for Moorreesburg is only trying to make matters difficult for the Government. He merely complains that the Government is not taking enough from the mines to give to the farmers. I want to ask the hon. member for Moorreesburg why, if he is a man, he does not make a proposal? I do believe that the hon. members for Springs and Roodepoort are not so very much in earnest when they speak here, because if they are in earnest they are not thoroughly acquainted with the attitude adopted by the Chamber of Mines when it started an agitation to force the Government off the gold standard. I wish to remind them of what Mr. Martin, the chairman of the Gold Producers’ Committee, said in the evidence which he gave before the Select Committee on the Gold Standard. He was asked what the position of the farmer would be if the Government should decide to leave the gold standard. His reply was that even if South Africa came off gold the farmer would still have to be helped. He stated that departure from the gold standard by itself would not be enough to save the farmers, and that the Government would have to take further steps. He was then asked where the Government would have to get the money to do so, and he definitely replied that the mines would then make big profits and that the Governmnet would be able to tax those profits. And that is what the Government is doing to-day, so I cannot see why the mines should complain now. The Government came here on the first day of the session and told us that it was its policy to take 50 per cent. of the profit of the gold and to use a substantial amount of that money for the purpose of assisting another section of the community which was in distress. What is wrong with that? According to the statement of the president of the Chamber of Mines before the select committee, that was also the policy of the Chamber of Mines. I cannot see what injustice is being done to them now. The hon. member for Springs stated that it is not merely the mines who have benefitted by our leaving the gold standard. He states that the farmer has also benefitted by it and that the wool farmer is now getting 40 per cent. more for his wool. I admit that the wool farmers are very grateful for that 40 per cent., and they are also grateful for the subsidy which they are getting, but in spite of that 40 per cent., and in spite of that subsidy the hon. member knows that the wool farmers still have to sell their wool below the cost of production. The hon. member may not know but it is the case. The price of wool does not cover production costs. What is the position in regard to the gold mines?. Throughout the depression the gold mines made profits, while thousands of farmers were sold up and while thousands of farmers to-day are face to face with ruin. The gold mines flourish, and theirs is the only industry that flourished, so I cannot see that there is any injustice to take a portion of the profits of the gold mines in order to give them to another section of the population.

Will that principle also be applied to the farmers when they flourish?

As soon as the depression is over and the wool farmers are again able to produce at a profit, when the price of the wool is again 1s. per lb. and more, I shall be the last man to plead for a tax to be made on the mines in order that money may be given to the farmer.

No, that is not the point. Will the farmers then render assistance to the unemployed in the towns?

If the farmers flourish and another section of the population is in distress, as the farmers are in distress to-day, then I, as a representative of the farmers, say that the farmers will do their duty by giving up something to help those people. It is for that sort of thing we sit in Parliament here. We do not sit here in Parliament for everyone of us to see what he can get from the Government, but to see what we can do to the population as a whole, and that is the reason why I advocated and pleaded for a national Government. We have a strong Government to-day, we have before us measures to help the farmers such as no party Government would ever have introduced. It is only a national Government that can do this, and it is for that reason that I am grateful that this national Government has introduced these drastic measures to help our people. It is argued on the one side that the Government has taken too much from the mines; on the other hand it is argued that the Government has taken too little; if we look at the press it would appear as if the contention is that the Government is always busy giving in to the Chamber of Mines. The hon. member for Moorreesburg also said so, and he intimated that the Government is dominated by the Chamber of Mines. What is the statement of the hon. member for Calvinia (Dr. D. F. Malan), however? When he took part in the budget debate I understood him to say that even if a pure nationalist party Government had been at the head of affairs they would have taken the same portion of the mining profits. It does not look to me, therefore, as if the Chamber of Mines is dominating the present Government. The Minister of the Interior stated as long ago as February that the Government would have to take about £7,400,000 of the additional mining profits. It does not appear to me, therefore, as if that accusation made by the representative of the wheat farmers of Moorreesburg against the Government has any justification. I think that the wheat farmers of Moorreesburg will be very grateful for the reduction of the interest on their bonds and for the interest subsidy of 1½ per cent. which the Government is paying them. We regard this as a very big concession, and I go further and I say this—and I say this especially to the hon. member for Moorreesburg, who sits here as a representative of farmers—that I think that hon. members know that the condition of the farmers is becoming more and more precarious every day. We are suffering from a drought which I fear threatens to become a national calamity. If there is one thing for which we are grateful it is that the party war is over and that we can meet here to devote our attention to the economic position and the difficulties of our people. If we sit here and see the perils that are threatening our people, and if the Government does its duty to try and help the farming population, is it right then for a representative of farmers to state that the Government is always giving in to the mines so that it has not got sufficient money to give seed wheat to the farmers? I ask the hon. member for Moorreesburg whether he is of opinion that this is fair and right. He speaks here with a certain degree of responsibility. He is no longer merely the secretary of the Nationalist party, he is also the representative of a section of our farmers, and is it right that he should come here to say things like that and to cause divisions merely with the object of inciting the people against the Government? Let me analyze his accusations: he says that the Government gives in to the Chamber of Mines but refuses to supply seed wheat to the wheat farmers. The Minister of Agriculture passed a special Bill through Parliament in order to make provision to enable farmers to secure seed wheat through their co-operative societies to whom the Land Bank advances money. I say that we must be grateful to-day for what we have received, and I know that if matters do not improve, if the rain does not come, further attention will be given to the farmers. I am speaking here as a farmer and not as a politician making his living out of politics. I am a farmer making my living out of farming, and I represent one of the largest farming constituencies in the Cape Province. I say that we are grateful and I say that it is our duty to support the Government as far as possible. If it should so happen, and I hope it will not happen, that the rain should not come, the state of affairs next year will be still worse and we shall have to look to the Government again to help us more and more. For that reason it is not right that we should make speeches here to say that we are coalitionists while we are stabbing the Government in the back. I like a man to come out into the open if he wants to fight.

You were first of all a Roosite and then you were something else.

He accuses me of being a Roosite but he crept in in Stellenbosch under the cloak of coalition in order to get into the House.

Never.

I came here as a coalitionist because I was honestly a coalitionist for years. I want to say a few words more in regard to the charge made against the Government that it was always giving in to the Chamber of Mines. If one looks at the paper one sees the headlines: “Big concessions to the mines; the Government ties itself down for five years.” If one reads that paper it would appear that the Government is always giving in to the mines. As I understand matters, the Government is taking 50 per cent. of the profits, which I believe amounts to £7,400,000. Next year it will not take more than that. That is how I understand the position according to the statement of the Minister of Mines. What is wrong with that? The Government will not take more than that during the next three years. I understand the position to be that we shall not take more than that for the next three years. I imagine that we have tue old game here of playing the farmers off against the mines. Let me warn young members, like the hon. member for Moorrecsburg, that that game has been played out, and that the farmers are not going to allow themselves to be divided by that kind of thing to embarrass the Government, as was done in the past.

I have no doubt that it is quite impossible to overestimate the difficulties which hon. members experience over a matter of this kind. I have no doubt that members from the Witwatersrand particularly, find difficulties of a peculiar and strange character in dealing with this particular vote, because the position is not quite as represented by the hon. member for Benoni (Mr. Madeley) in his speech to-day, when he wanted to convey the impression that Rand members are all, more or less, creatures of the Chamber of Mines. As far as I know, the agitation on the Rand, against this taxation, is not sectional, and is not engineered by any particular section of the people. I have received numerous communications , principally by telegraph, from practically every section of the Johannesburg community, and I must admit that there is a considerable unanimity of opinion on this subject. They may be all wrong. That is quite probable, because members of this House, every day that passes, get more and more technical and expert knowledge placed before them until they feel that they know less and less about the matter. I must confess that that is my position. However, when we come down to hard facts we are justified in accepting the statement made by the Minister yesterday which, I believe, impressed the House as, I believe, it will impress the country. The desire has been expressed for more simple taxation. The hon. member for Springs (Sir Robert Kotzé) put that point to the House and we have often heard that all taxation should be simple, so that everyone may understand it. I assure the House that this taxation is so simple that few of us understand it. Then there are other difficulties with which hon. members have to contend, and one of those difficulties is the expert evidence which we get. For instance, the hon. member for Springs told the House yesterday that the low grade position will not be improved under the proposals of the Government, and also that the scope of the gold-mining industry will not be widened under this taxation. If we, who come from the inland centres, were impressed with that view, it would take a very great deal to prevent us from voting against the Government’s proposals, but there are so many difficulties and so many technicalities that we are inclined, on the whole, to back the Government. May I say, with regard to this 50 per cent. that is becoming more or less a legend, this 50-50 which was advocated all over the country by the leaders of the people—first of all, it was 50 per cent. of the profits, and eventually it was 50 per cent. of the gold premium, but it has been so turned and twisted by those who give us advice that one hardly knows what it is 50-50 of, or if it is 50-50 of anything at all. I say that the general opinion of the House is in favour of accepting the Government’s proposals. Those proposals are designed to accomplish three things, to balance the budget, to help the farmers out of an extraordinary and terrible position, and to widen the scope of the gold-mining industry. It is also the object of the Government to hold the scales evenly. It is a big thing to attain those three objects, a big thing for any Government to do, and if the Government do secure them, they will do good service to the country. There is no difference of opinion in this House with regard to the heavy burden of taxation that the country has been carrying, and I would have suggested that instead of balancing the budget, the Government might very well have left £2,000,000, and relieved the general taxpayer. That would have given us a national budget. It would have helped at least those who are oppressed, and it would have helped them at a, time when this large amount of money is available. We know that this country cannot carry much longer the burden it has carried for some years, and that the opportunity of giving relief will pass. While the Government may be forgiven in this regard for this particular year, gold premium or no gold premium, when we come to our next budget, it will be the duty of the Government to reduce the burden of taxation whatever else happens. But that is not the worst of this business. Directly this vote is through, the hon. the Minister of Finance will introduce more taxation. He will introduce taxation by means of protection as well as taxation for revenue. He will ask this House to permit him to make perpetual an onerous tax which I hope the House will never approve of, which has been on under the gold standard for a year. In addition to that, he will introduce further taxation. I say that the time has come when this country will say that they will have no more increases in customs duties, or any increase in taxation. I am hopeful that when we come into committee that particular taxation will disappear. I want to say in conclusion, that whatever doubts we may have had with regard to supporting the Government on this measure, those doubts have been dispelled. They were dispelled for me yesterday by the Minister’s statement. I could not help feeling how earnest he was, and how convincing, and I believe that in convincing this House he will convince the country. I am not going to take a sectionalist view. Members from the Rand are not going to press the Government at this stage, or to take the earliest opportunity of overthrowing them by a vote of no confidence. The Minister believes that the proposals he has submitted will prove suitable and satisfactory, and he has promised to modify them if they do not prove satisfactory. Members in the position in which we stand can ask for no more. I can see no reason for the amendment, and I beg to say that I support the proposals that the Minister has laid before the House.

As a new member of this honourable House, I very naturally have been observant of all that takes place in the Chamber and what has interested me most of all is the rôle played by the Minister of the Interior. It seems to me that his rôle is to be the spearhead of the repulse of any attack which is being waged on the Government, and that when the tide is flowing against the Government, this Minister is rushed in to maintain its position. I must say that that Minister does so very brilliantly. Last night he was in a particularly brilliant mood, and the effect of his brilliancy has been to dispel the last lingering doubts of the hon. members for Hospital (Mr. Henderson), Troyeville (Mr. Kentridge) and Turffontein (Mr. Sturrock). The Minister last night was in a very expansive mood, and shared one or two very interesting secrets with the House. The most important secret was that the Minister wrote an article, published in the “Cape Argus” and the “Star” last February, and claimed in that article to express the ideas of the South African party about future mining taxation. This secret, I think, was especially good because it was effectively kept, not only from Parliament but also from members of the South African party. What are the implicalions of that secret? What the Minister wants this House to believe is that this article could be considered by the country and by investors as a warning of the impending taxation of the mines. I do not think the Minister can substantiate that attitude. At the time this article was written, the Minister was a humble private member. I think he described himself as being a musket-bearer; and at the time he was wandering in the political wilderness, clutching at straws, if I may mix my metaphor, to get into office. I cannot see how the Minister can say he was speaking for his party.

He did not say that.

That was the impression the Minister gave me, and I think he gave the House. Another secret the Minister shared with the House was that presumably, on this article, those members of the South African party who are at the present time members of the coalition Government, found themselves in complete agreement with their Nationalist colleagues on this matter of mining taxation, which mining taxation was apparently not the policy of the South African party, nor of the Nationalist party, but was the policy of the coalition Government. This last secret apparently was communicated to the House to corroborate an even bigger secret, and this final secret was to the effect that members of this House and the country at large should not think the six South African party members of the Government could be considered to be flies attracted by the Nationalist spider. I would like to let the Minister into a secret. He shared a few with the House, and with myself, and I would like to share a secret with him. The secret I would like to share with him is that in this House there is only one party—a party of 12. The 129 members who are pledged to support the Government are not party men at all, but are independents. They bark as much as they like; but when the whip cracks they cannot bite. The cleverest thing that has ever been done in this country, politically, is the formation of a Government party by the Prime Minister, and it was a stroke of genius at the same time to smash to smithereens the two big parties, and to extract an unconditional pledge from its members to support this Government party of 12 through thick and thin. It is no wonder that members of the Government are pleased with themselves. When I first came to this House as a new member, and a novice in politics, which I still am, I was surprised at the care-free air of Ministers. I did not understand, in my youthful innocence, this phenomenon of a party of 12 which could rule a House of 150, and a country of 2,000,000. I did not understand that such a state of affairs could exist. There is a still more arresting phenomenon, which I will communicate. There is the rhyme—

And so it is with this party of 12. Within this party there is a party of two, and what this party of two lacks in numbers, it more than makes up for in influence.

This is all very interesting: but will the hon. member come to the motion?

With your indulgence, Mr. Speaker, I am coming to the motion. It may appear to you to be drawn out, but I think the result will justify the delay. I want to say that this party of two is a believer in the Nationalist faith, and this Nationalist faith to-day is behind the taxation proposals which the House is asked to consider. I think there is a great deal in the situation to make one laugh. The spectacle of this House of 150 members being dominated by a Government party of 12 is funny enough, in all conscience. But it is specially humorous to think what might have been had this coalition not taken place. It would have been very interesting to have been in this House. If a Nationalist Government had levied or proposed to levy this taxation on the mines, it would have been interesting to hear the Minister of Justice declaiming to the House and the country at large, that the proposals of the Government were a grave attack on this great industry which had carried the country on its back for the past 30 or 40 years. I think the right hon. gentleman would have told this House that he could see in this action of the Government something which would cause civilization to strike its tents. I can almost hear the Minister of Mines telling the House that he regards this taxation as an act of political pillage. These members of the South African party are now in the Government and are now supporting taxation which in all probability they would have opposed most bitterly. I say and I say with all seriousness, that the taxation proposals placed before this House are actuated by a lack of understanding and a lack of appreciation of the mining industry. I feel there is little question of that. I feel that the Nationalist junta which has always failed to appreciate at its full worth the mining industry, or any other industry in this country is doing its utmost —I will not say deliberately, in fact I am sure it is not deliberately—to retard industrial progress in this country. Our future in this country is industrial, our wealth is in our minerals, and any mistaken policy of agricultural development in the belief that our future lies in agriculture is doomed to failure. I say that the mining industry is the one to which the country must look to for its salvation and there is no possibility of agriculture being rehabilitated to an extent that would provide the wealth that this country has a right to expect. I think this coalition Government, this Government which was formed by both parties, should reconsider their whole attitude towards the mining industry. They should appreciate that the mining industry means everything to this country and they should realize that their taxation proposals are too onerous on the industry. The Rand, in voicing its protest, has at last indicated the feelings of a section of the community which for many years now has been penalized far more than any other section. It is common cause that if it were not for the Rand, this country would be in very dire straits. Instead of our national finances being on a better footing than those of probably any other country in the world, we would be bankrupt. The Rand, in voicing its protest, has not done so with any idea of pushing forward any sectional interest. The main industry of the country should be protected. I appeal to hon. members for the Rand to remember their duty to this great section. I have heard one or two of them state that while they feel that the Rand has not had its due, at the same time, out of loyalty, they must vote for the Government. I ask them to seriously re-consider that decision. They are representing constituencies which definitely make a living out of mining and the: proposals of the Government will, in many cases, bring hardships on the people who live in those constituencies. I think many of them have the idea that when they go back to Johannesburg, they will be welcomed by a brass band. Quite possibly they may be, but I think the band will play them to the place of execution. Many hon. members have received telegrams, and not to be outdone, I would like to read one I have received—

This telegram is merely one instance of the attitude of the Rand and I would appeal to hon. members from the Rand to vote for the amendment of the hon. member for Roodepoort (Col. Stallard).

I have listened very carefully to this debate and to the budget debate. There is one aspect which I sincerely regret and that is, that certain members refuse to take a broad national view. One does regret that certain members are doing everything possible in order to create a feeling of distrust against the mines. I also regret that there are certain members who are doing their level best to create a feeling of antagonism in the townspeople against the farmers. This is most regrettable. I, as a farmer representing farmers, realize that the mines are a national asset and if it had not been for the mines I wonder where South Africa would have been. Certainly I do feel I cannot in any way support the contention that the mines should be taxed to the fullest limit. On the other hand, one does feel that the mines being a national asset, they must contribute their share towards the general good of the country. I think hon. members are also inclined to forget the unfortunate conditions through which the agricultural community has passed during the last few years. Some hon. members do not quite understand what has actually happened. Agriculture has passed through a most trying time during the last three years. The hon. member for Roodepoort (Col. Stallard), tried to explain that after the country went off gold, both the primary producers and the mines received the benefit of the 40 per cent. increase in prices, but he forgot to point out that the position was entirely different. I can speak only from the point of view of the wool farmer. During the depression, the price of gold increased, whereas for the primary producers, the commodity prices went down enormously in value. Take for instance the price of wool. And the hon. member for Albert (Mr. Steytler) was perfectly correct when he said that even with the 40 per cent. rise to which the hon. member for Roodepoort (Col. Stallard) referred, the price at which wool was sold was still below the cost of production, whereas, so far as the mines were concerned their products had increased in price before we went off the gold standard, and when we went off the gold standard they got a 40 per cent. rise on top of a higher price. I think the hon. member was not quite fair when he threw out a challenge and said that everyone was receiving that profit of 40 per cent.

The principle was the same in both.

No. There is a vast difference in calculating the figures, but now there is another aspect which hon. members are trying to overlook. After all, hon. members have been complaining in the same note that unemployment has, to a large extent, increased in the towns. To what is that largely due? It is largely due to an influx of people from the country to the towns, and that is due to the unfortunate position through which agriculture has been passing during the last four years. I look upon these proposals of the Government as being an emergency measure; I look upon them in the light of prevention being better than cure, because if something is not done and the position is allowed to drift, what shall we find? You will find that probably a very large percentage of the people, who are on the land to-day, will simply drift into your big towns, and what is going to be your position then? Even to-day they are crying out. I remember that a distinguished member of this House (the late Mr. J. W. Jagger), at the beginning of his political career, was among the most unsympathetic men in his outlook on the farmer, until he started farming himself, when he became one of our best friends. I remember Mr. Jagger saying that farming was the worst paid profession in South Africa. And I want to ask the hon. member for Roodepoort what his experience is of farming.

It does not pay.

I am very glad to have that admission, and consequently, because it does not pay, the hon. member’s policy is: Let them get off the land, let them flood into the towns.

Quite untrue.

I think it will be a most unfortunate thing if ever a political division should come about between town and country. Let us analyse the position. You can be pretty certain that perhaps Johannesburg is the only exception where you are not; dependent on your farming, and your platteland proximity. The other big cities, even Cape Town, are all dependent on their hinterland, and what is the position in the small up-country towns? I represent a fairly large up-country town (Queenstown). Those people are entirely dependent on their farming development, and the depression which the farmer has gone through has had its repercussions in the towns.

And still you take a dole from them?

That is what I resent—this talking about a dole. It is not the farmer who is going to get it. I was very pleased to hear the Minister say that it was the bondholder who would get the benefit, and the bondholder is in the town.

He has not asked for it.

There are many cases where bondholders have not been getting their interest, and under those conditions they stand some chance of getting it.

1.25 per cent.

A big case has been put up that the investor should not lose anything. Why? When we have passed through a world-wide depression, why is only one section of the community called upon to lose, and why not the other section? Why should the investor not also be prepared to sacrifice something for the general good of everyone else? I feel that hon. members are taking a very narrow view. The fundamental principles of the Government’s proposals depend on co-operation. A strong appeal was made by the Minister of Finance for co-operation, in order that all sections should work together, and I think these speeches made by certain members have gone a long way to create bad feeling between country and town in South Africa, and I resent it very much. Not only has the farmer’s income been reduced by an enormous percentage, but his capital value has shrunk in the same proportion. I have never heard of a man who has made a fortune out of farming, even in the best of times, and to talk disparagingly about farmers is not to the credit of any hon. member. There are many people who do not know what is going on. Farmers have gone through very difficult times. Farmers have even sold their stock to meet their interest payments, and I have known many leading men, leading farmers, who have had to go with their hat in their hands, absolutely humiliated. And let me point this out. This position does not only affect the man who does not work. It affects the man who works on his property, and he is in queer street to-day. This position does not prevail in South Africa only; it prevails all over the world. The hon. member for Cape Town (Gardens) (Mr. Coulter) knows quite well that even in America steps have been taken to save the farming community. I should like to know what would have happened if you had had a big agricultural collapse? Owing to the currency’ policy of the State, farmers who have exported have suffered tremendous losses. One cannot deny that. In this House there used to be academic debates on that subject. Even the hon. member for Cape Town (Gardens) was one of those who at first thought that the country’ should remain on gold. I do not like the idea of a dole, and I certainly would have welcomed a better basis of relief than that which is given here. I would have preferred something on the basis of the Van der Horst scheme, where you do not get something for nothing, but where the State receives something for whatever is given, and I sincerely hope that the Government will look into this matter. What I feel is this, that if the proposals of the Government, in regard to the development of the mines, are going to be what the Government claims for them, they are going to constitute one of the first steps towards the rehabilitation of the farming community of South Africa. If it assists the unemployed of Johannesburg, it will create a much-needed inland market for the farmers; Johannesburg is the market for our livestock, and as soon as prices rise there, we feel the difference right through South Africa. I resent to some extent, farmers coming in here continually begging the Government to do something for them. I feel that something big should be done to save our agricultural community. The present proposal is a temporary one, but we farmers hope that commodity prices all over the world will rise, and I can assure the House that when that happens, it will no longer find the farmers asking for doles. Even the hon. member for Roodepoort (Col. Stallard) who is so up against the farmer—

Nothing of the sort. I am the farmers’ best friend.

Does the hon. member think that the farmer is living on the dole? I ask him to try farming. The late Mr. Jagger tried it, and found that farming was one of the worst paying propositions. It used to afford a comfortable living, but now that he can sell nothing it has become absolute serfdom. I have no sympathy with the farmer who has done nothing for himself, but I do feel for the farmer who has worked hard and improved his property. Hon. members ask why in good times farmers do not put something away for a rainy day. Well, when times are good the general desire of the farmer is to improve his property. We were always told by investors that land was one of the safest investments, and we were advised to improve our farms. Today, however, we find that when a farm is put up for sale, it does not, as a general rule, realize the value of the improvements. Cannot the hon. member for Roodepoort have a sympathetic feeling for the farmer?

I am most sympathetic.

Cannot the hon. member take a broader view?

I am the one who does take the broad view.

So broad that the hon. member is not anxious to see the Government do something to keep the farmer on the land.

If the Government’s is the wrong way.

Then why do you not suggest what should be done?

I did, the other day.

You should have said in your speech what you wished to suggest.

But we were dealing with taxation then, and I cannot cover every point in one speech.

We feel that this is an emergency measure, and it is the earnest desire of every farmer that success will attend the deliberations of the World Economic Conference now sitting in London. The crux of our position is the low price of commodities, and if that problem is solved, the farmer will never again ask for a dole. A certain amount of stigma has been attached to the farmers by speeches which have been made in this House, but I can assure you that the farmer is as honourable a gentleman as the man who dwells in the towns. The Government has practically decided to reduce the interest on farm bonds to 5 per cent., but I feel that that proposal has its dangers. When you single out an investor who puts his money into farm mortgages, and compulsorily lowers his interest to 5 per cent. you may thereby create a position in which investors will, in future, be fearful of advancing money on farm mortgages. Seeing that there is so much money in the country awaiting investment, the Government should have taken the bold step of bringing interest down generally to 5 per cent. Unfortunately, the policy of the Government is drawing a distinct line between town and country. I regret that very much. I will not go so far as the hon. member for Kensington (Mr. Blackwell) who suggests that the Government should subsidize everything, and he amused me when in closing his speech he declared that the money from the mines is being doled out to the farmers. I hope that if we take a broad view and work together for the general good of South Africa, as is the purpose of coalition, we shall soon see better days.

I interrupted the hon. gentleman who has just sat down (Mr. van Heerden; by interpolating a reference the “dole”. I did it in order to find out what his answer would be to a view that is gaining currency outside, for the more the public follow our debate the more they notice that it is one long drawn-out demand that one section of the community should be benefited at the expense of the other section. The hon. member (Mr. van Heerden) is, I must admit, one of the most progressive farmers in the Eastern Province. I ask the hon. member whether he can really feel aggrieved at what he calls a “stigma considering that every day these requests are made to the Government to step in to remedy the difficulties which affect a particular section of the community? In 1920, when our pound was worth ten shillings, and when consumers were burdened with the very heavy cost of living, and wool was being sold at 3s. to 4s. a lb., was any compensation then paid to the rentier class? Did the farmers in this House, feeling sore in their consciences, offer to remedy the situation of the unfortunate investor? The hon. member was perfectly right in drawing attention to the fact that this continuous demand for assistance by the farmers is destroying confidence to an extent that will eventually react on the farmers themselves? By this talk of universal bankruptcy, which proceeds from every quarter of this House, the farmer is day by day, through his representatives in this House, doing far more than he knows to damage his own reputation for credit-worthiness. It is perfectly true that the rates of interest on mortgages in Australia have been reduced by 22½ per cent. It is true also that they have in Australia a plethora of money, cheap money on every side, and a demand by the farmer and others for new capital, to continue development of their enterprises. I would like to refer hon. members to an article in the March number of the “Round Table”, by a writer well acquainted with conditions in Australia. He refers to the consequences of arbitrary interference with interest rates, and states that some of the economic results are already apparent, in that farmers’ credit has been destroyed. That is the consequence of interfering by State action with contracts which were regarded as final and binding. He points out that this policy of interference with interest rates has led to a reaction, and in this country it will have similar results. It will affect the value of the land, which farmers are so anxious to increase, while it will damage farmers’ interests generally. I would like to say with regard to the reference I have made to a dole, that it will not come from the townsmen solely, but from the unbonded farmer, who will be called upon to contribute towards the needs of the bonded farmer.

Won’t they all contribute?

Yes, indirectly; it will come also from the unbonded farmer and the bonded farmer if you like, but the unbonded farmer will ask why he should not receive some contribution, why he should be left out. His neighbour, who has passed a bond on his property, may have an income very much larger than his, though he is unbonded, and his neighbour will be directly assisted by the State, while he will be left out. A system of legislation where there is that differentiation cannot be sound. Hardships will be created. There are people who have money invested on farm mortgages, in Government stock, and on fixed deposit in the banks. I would like to give an instance of how they are affected. After the budget was introduced into this House, a lady whom I do not know wrote to me from up-country explaining that with the fall in the rate of interest on fixed deposit, and with the reduction in the rate of interest on her bonds, the small income she had of £25 a month had been reduced to something like £11 a month. She asked whether it was a sound system of legislation that produced in part such a result. That was a letter written by someone who obviously, I should say, was the wife of a retired farmer who, having been left by her husband with some slender provision, is now reduced to straits of that kind. The whole basis of this resolution is that there is a fall in prices that cannot be cured. It is based upon the assumption that there will be no further rise in prices. I believe that, whatever the information of the Government was at the time this measure was framed, there can be no question that there has been already a permanent increase in prices. I have here the latest issue of the “Economist” and looking at the prices for primary products reckoned in British sterling, it is most significant to notice that from February 8th of this year to the 17th of May, they have risen by 7 per cent., and what is more significant, in America in the same period, they have risen considerably. Everyone feels that prices are on an upward trend, and if before the end of the financial year wool is at 1s. per lb. my friend over there who has been making interjections will be very happy. He will smile, but I wonder if the rest of the community paying these subsidies will smile with equal gusto. I said in speaking on the budget that the supposition that all the bonded farmers in this country required assistance was not founded on fact, and I referred to some figures which have been collected on this very subject by an organization which can claim perhaps to have possession of perhaps the best available facilities for knowing what the position of the farming community is in South Africa. I would like to repeat to the House the result of this close investigation. According to this statement, the percentage of farmers whose financial position is bad and beyond recovery, is 10 per cent.; those who are financially embarrassed, but likely to pay, 30 per cent.; and those who are good for their liabilities. 60 per cent. These figures have not been challenged, and I have not yet heard any reply to them, although they were stated here and published elsewhere. I repeat, those are figures which are almost incontestable, if any estimates can be incontestable, and they have been collected from sources which are worthy of full credence. I would like to mention to the House that when we come to look at the figures regarding the numbers of insolvencies of farmers for the last three years, it is most significant that they are going down. In 1930, for the four provinces of the Union, the figure was 574; 1931, 525; and 1932, 452.

In spite of the depression?

In spite of the depression. These include everything advertised in the “Government Gazette,” and both classes— insolvencies and assignments—are so advertised. If you take the returns for other persons for the same period, you will find that for 1930 the figure was 1,673; and for 1932, 1,415. We must not overlook the fact that with this rise in prices farmers are now the best situated to reap the benefit to the full extent, even of a small rise in prices. The efforts which have been made to improve the farmers’ conditions, mean that a small margin is all that is required to place him in a position to make a profit. The provisions made by the State which have the effect of keeping down his costs, have not been sufficiently acknowledged by those who claim to speak for farming interests. In addition to the subsidies and low taxation, you have the low cost of railage for the farmer for the carriage of his livestock; he gets also the benefits of the advances which have been made under the Farmers’ Relief Act, and from the Land Bank; there are almost his low cost of living and the low customs duties on agricultural machinery and fertilizers; and therefore I feel justified in saying that the state of affairs reflected by this resolution is, I believe, rapidly passing away. There is hardly justification for the whole of the scheme of relief which underlies this budget. It will create a feeling of resentment in the country on the part of those who have to contribute towards the maintenance of the farming industry. Sometimes a suggestion has been made in the course of this debate that the bondholder has not suffered throughout this depression. You would imagine sometimes, from what is said, that the fall in price levels, so far as the consumer is concerned, has been very considerable. We know from the white paper that the fall in wholesale prices has been 25 per cent., and actually it has been less in retail prices during the period quoted. But after all, it is not a 25 per cent. addition, so far as the investor is concerned, to his income. He has special taxes imposed upon him, and he has had to sustain losses. He has, in addition to fixed interest-bearing securities, invested in equities; and many investors have had to sell at low prices in the period 1930-’32, who bought shares at the high prices which prevailed in 1928 ’29. I do not think anybody would say that they should come to this House and ask for assistance at the hands of the Government. Let me say to those hon. members who did not appreciate my argument just now, that when a converse position prevailed, and we had the cost of living such that the pound was worth just over 10s., and all those who were real producers benefitted considerably, this House gave no compensation to those who were suffering from that high cost of living, so far, at any rate, as he was an investor, though in so far as he was a wage-earner there were increases in wages. In spite of what the hon. member for Albert (Mr. Steytler) said to-day, if the present position was reversed and farmers were to rejoice in unbounded prosperity, is it likely that they would be prepared to contribute towards the losses of other sections of the community? I do not think they would be prepared in these circumstances to submit to special taxation of their profits. I would like to reiterate what the hon. gentleman himself said just now, who spoke for the farming industry, that in this country there is a desire to see a restoration of confidence, which is the chief thing farmers require if they wish to borrow money and carry on their farming operations, and that this should be the remedy to be sought rather than the repeated cry that this industry is practically bankrupt and that this House should vote milions of pounds towards it. They should take warning from other countries, and understand that this cry is detrimental to the farming industry as a whole. It is hardly consistent with the independence and the spirit of enterprise, which we know our farmers to possess, that they should be pictured as they have been, expecting, almost as a right, that every loss they sustain should be passed on to other sections of the community. That is damaging to them, to their self-respect and to their morale. I hope, that in pointing this out quite plainly and saying this if you like almost in blunt language, it will have served its purpose, because I believe hon. gentlemen will be glad to feel that, in consequence of the debates in this House, an impression has not gone forth that our farming industry is an invertebrate one, not able any longer to assert that inherent independence and courage which we know our country people do really possess.

In regard to the interest subsidy to farmers and agriculturists, I want to point to the fact that the interest subsidy will have the effect of giving fresh hope to a large section of the farming population, but by no means to all. We can make a definite distinction between three sections of the farming population. In the first place, we have our best farmers, and I want to associate myself there with the hon. member for Roodepoort (Col. Stallard) where he says that a small number of our best farmers, or rather of those farmers who financially are in the best position, do not require that per cent. I know that that is so, and I know of a few such cases. I know of the case of a farmer who received his subsidy on his wool, and did not know what to do with the £800 or £1,000 which he received. In the end he invested it in a municipal loan. It may also happen that a man who has a large farm has a bond on that farm of about £5,000, in respect of which he is now going to receive an interest subsidy of 1½ per cent. in spite of the fact that he does not require it. We next come to the large middle-class farmers who will really be helped by the Government, seeing that they will only have to pay 3½ per cent. It will save them and it will be a great asset to the country. So far as those people are concerned, we cannot praise the scheme sufficiently. That large class of farmers will be greatly helped by the subsidy. We then come to another class of farmers who, as a result of temporary circumstances, possibly as a result of the drought, or of low prices—I am thinking of mohair farmers—cannot pay that 3½ per cent. at once. If they cannot pay their 3½ per cent., the bond holder does not get his 1½ per cent. either. Those people are first-class farmers, they are people who have not made a failure of their enterprize and they are people of great enterprize and they are a great asset to the country and they do not want doles, but they are going to find the position very difficult. By means of measures which we cannot discuss at this stage the Government will help them to a certain extent. Those who will be assisted are very grateful for this assistance. But surely the scheme was intended to rehabilitate those farmers, many of whom can be looked upon as being among our most progressive people. Unfortunately, we shall not by this scheme get many of those people to the stage that they will be rehabilitated. I am afraid that a great many of them will be driven off their farms. The Land Bank is most sympathetic and the object of the Government is a good one, but I am afraid that a great many of those people will not be saved. I realize that it is very difficult to help those people who perhaps only for a time, possibly for a few years, are not in a position to pay their 3½ per cent. interest, and who, as a consequence, will be driven off them farms. Where such cases fall under the scheme they will be helped, but failing that they will be driven off their farms. Yet I consider that it should be possible to rehabilitate them by every case being separately looked into, and if it should be found that a man is a bad farmer, that he neglects his farm, and does not meet his obligations, then he cannot be helped; in such a case he should not be a farmer, and he should not remain on the farm; but the farmer who does his best, who tries, as far as possible, to meet his obligations, that man we should help. If he makes a full statement of his position, and if it appears that his interest amounts to £200, while his total revenue from his farm only amounts to £120, what of that man? He has to pay the minor expenses in connection with his home, and the education of his children. Let us leave those points out of account because we know that in the circumstances in which he finds himself today he cannot do so. I maintain that in such cases an investigation should be made. In my own mind I have a plan, viz., that of a local commission on which the magistrate and a farmer of a district would serve as members— not an irresponsible commission such as we have had in the past, but a responsible commission. This commission will have the right to investigate a person’s position. The law must give the right to such a commission to keep the farmer, as a farmer, on his feet. The slogan of the commission must be: “The farm shall pay what it can produce, but not more.” The man must remain on his farm and he must remain the owner of the farm as long as he does his best and farms in the best way possible. So long as he can do this he shall not be driven off if the farm cannot produce any more. We must institute a temporary, individual moratorium, by no means a general moratorium; a general moratorium would damage the farmer’s credit. If the bondholder knows that the farmer is under the control of the commission and that he will do his best, and that he will get what the farm produces, then he (the bondholder) will get confidence because he knows that the farm will pay all it can, but no more. There is a large class of people who are not helped, as I have shown here, and they can be assisted under a plan of this nature. The Van der Horst plan would have been of greater assistance in the future, but it would not have looked after the man whom I have mentioned here. The farmer would have liked the Van der Horst plan, as it would have provided for the redemption of debt in days to come. Furthermore, the tenant is not assisted by these present proposals. I am not allowed to discuss that matter, although I have received many letters dealing with the position of the tenant-farmer. I wish to refer to the matter, however, as the hon. member for Moorreesburg (Mr. Erasmus) has referred to it. As the hon. member for Moorreesburg mentioned this matter, and pleaded for the tenant and for other farmers, who are not assisted by the Government’s proposals, the hon. member for Albert (Mr. Steytler) has taken him to task in an effort to drive in a wedge between members supporting the present Government. I did not hear him say a great deal against those members who definitely have taken their stand against the Government by proposing a vote of no-confidence. I do not know whether he has a different opinion regarding the Witwatersrand Saps who have attacked the Government here and who have introduced a vote of no-confidence. We find here that the 100 per cent. supporters of coalition from the Witwatersrand come forward within three weeks and turn against the Government with a vote of no-confidence.

Not all members of the Rand.

No, not all of them. I do not wish to create difficulties for my hon. friend. The rest of the country demanded of its members that they should be 100 per cent. coalition. I said that I was not going to make such a promise. In the first place it is bad language. “100 per cent. coalition,” what does it mean? Any meaning can be attached to it. I undertook to support coalition and my leaders know that if I undertake a thing, and say I will do a thing, I shall carry out my promise. The Rand South African party members were not asked to make that promise of 100 per cent. and now they are the first people to come here and propose a vote of no confidence in the Government, a proposal with which I do not agree. Yet the hon. member for Albert pursues his attack on the hon. member for Moorreesburg and he declares that that hon. member has stated that the Government stands under the control of the Chamber of Mines and is governed by it. He never said so. He should say that the mine bosses ought to be content with the concession which they have received from the Government. When the hon. member for Albert made his attack the Minister of Agriculture said, “Hear, hear.” I wish to remind the Minister of Agriculture that the hon. member for Albert was rejected from the caucus because he had stabbed the Government in the back. He is one of those who helped to break the Nationalist party, and he is a member who will again stab the Government in the back; he is a Roos man, he will remain a Roos man, and he will join that movement again.

If a person stands behind the door himself he will always be looking for someone else there.

The coalition Government knows where it is with people who have stated that they are not going to make a promise of 100 per cent. support, but that they would support the coalition Government to the end. I was pleased with the estimates put forward by the Minister of Finance. The Budget constitutes an enormous concession to farmers, and it was more than I could have expected. Yet I say that it is humiliating that the Acting Minister of Finance had to make further concessions to the Chamber of Mines. I do not blame him, but the fact remains. He was driven by circumstances, and possibly it was advisable for him to do so, but he did not deserve that the 50 per cent. Rand coalitionist supporters should come here to propose a vote of no-confidence in the Government. The hon. member for Cape Town (Gardens) (Mr. Coulter) has been talking here a great deal about doles. Let me tell the hon. member that if he could ride on the edge of every penny which the Government is giving to the farmers to help them, he would see that this would lead him to the money-boxes of the trust boards and professional men in the towns. That money does not remain in the farmers’ hands, but every penny of it goes to the towns and it eventually gets to the inhabitants in the towns, and it is to their benefit. I have never in all my life seen anybody take up such an extraordinary attitude as that which is taken up by the townspeople now. It is in conflict with their own interests. Every pound that the Government spends to save the farming community, and to rehabilitate the farming community means that the inhabitants of the towns are enriched and that their position is improved. It is unintelligible that the representatives of the towns understand so little of the interests of their own voters that they cannot see that all the help that the Government gives to the farmers is help for their own towns. If I had sat in the town to practice my profession, it would have helped me too. Every penny comes back to the banks in the towns to the credit of the people who are in the towns, and that is right. We all agree to it. Every penny that is given to the farmers for help is help to the towns. A great deal of criticism has been levelled here against the assistance which the Government is extending to the farmers. I am convinced that a time will come when the various interests in the country will appreciate better the fact that different interests go hand in hand and will realize that the interests of one section of the community go hand in hand with the interests of another section of the community. I think I can say with justice that we had expected in January, after we had been driven off gold, that the Government, which was forced off gold, as a result of the power of the Chamber of Mines, would have been prepared to take 100 per cent. of the gold premium. That is what I felt. I do not blame the Government for reducing the amount which it is going to take, but I am very sorry that he should have laid it down for five years because the Chamber of Mines which with its influence has forced us off the gold standard, possibly helped thereby somewhat by the power of the farmers, will use its influence further to make the value of our money depreciate so that it will be able to get another thirty or forty millions through that depreciation.

I desire to make a few explanations to the best of my ability. In the first place I want to say at once it appears to me that when those people, who from the very start have been in favour of coalition, criticize the Government, they are looked upon as giving constructive criticism, but as soon as anybody who is against coalition criticizes the Government, his criticism is regarded as destructive. I am not going to waste my breath this afternoon on the hon. member for Albert (Mr. Steytler) because I imagine that the hon. member for Graaff-Reinet (Dr. Bremer) has answered him quite well enough. He made a remark, however, which affected me personally, and to that I wish to reply. He tells us that I got into Parliament unopposed for Stellenbosch under the cloak of coalition. His statement does not trouble me very much. I am accustomed to fight, and when it becomes necessary I shall fight again. I did what I regarded as my duty, but my highest parliamentary body is my caucus, and it was on the instructions which I received from my caucus that I decided to support coalition. I am not one of those kind of supporters who, on instructions from Advocate Roos in Johannesburg, stabs the Government in the back. If I rightly followed the hon. member for Turffontein (Mr. Sturrock) then I must say that his contention was a right one. And if I properly followed the Minister of the Interior, then his contention was also correct. The hon. member for Piquetberg (Mr. de Waal) was also right in the figures which he quoted. One can juggle with figures, and in one way or another they are always correct. The hon. member for Turffontein said that the Government was getting £13,500,000 out of the £19,500,000. If the Government’s old money amounts to £4,100,000 and the new money amounts to £3,700,000, and the Government takes a further £6,000,000, these various amounts together make a total of £13,800,000. The Minister of the Interior was correct when he stated that the amount of extra premium on gold makes a sum of £19,500,000. Of that total he states that we get £3,700,000 in old money and £6,000,000 in addition. This makes £9,700,000. That is about half of the £19,500,000. The hon. member for Piquetberg was correct once more when he said that we would in any case have got the £3,700,000, so that there is about £15,550,000 over of the £19,250,000. Of that we take £6,000,000 and £9,250,000 is left for the mining magnates. He considers that we do not get sufficient by a long way and in that I agree with him. To my mind the hon. member for Piquetberg gave the most correct statement of the position. I am very sorry, however, that the Minister of Mines gave way to the cries of the mining magnates. He has to admit that the mining magnates have scored over him, even though they had to put the mayors of the Witwatersrand on the train to give them a nice little trip here in order to achieve their object. I am sorry that he has given way on this £750,000 after we had secured that amount from those extra profits. It is a serious question whether we may not be returning to the gold standard next year when there will be an end to those extra profits. I fully agree with the Minister that the investment of one’s money in gold shares is something of a speculative nature, and in order to stabilize this matter he has taken certain precautions. He takes up the attitude that we shall remain off gold and consequently those receipts will be repeated and for that reason one can fix these matters so that the people who invest their money in mines will know where they stand. We require a great deal more assistance, however, as a farming community and the Afrikaner of the country, because very few of those people who make their money in Johannesburg remain in this country. Most of them go overseas and I am very sorry that the Government should have left an amount of £9,500,000 while we only get £6,000,000. For that reason I am sorry that we did not take more from them, I am sorry that we did not leave them the £6,000,000 and we did not take the £9,500,000. There is another matter on which I wish to touch upon and it is in connection with farming interests. We rejoice at the help that is extended to the farmers, but judging from speeches that have been made in this House it would appear that all the farmers are bankrupt. I was surprised to hear the other day, however, that in the Free State where the farmers are suffering very severely as a result of their own doings through over-speculation, so very few farms are bonded. I have ascertained that there are some districts there in which only 23 per cent. of the farmers are bonded, while in other districts only 21 per cent. and in others again only nine per cent. are bonded. To me that is a magnificent sign, and these people deserve credit for the fact that in these difficult times more farms have not been bonded. But I know what they paid for their land, and I know how they had to struggle in the days when they got practically nothing for their wool and their sheep. Somebody made a remark the other day that 70 per cent. of the farms belonging to our people were bonded. It appears to me that there are not as many mortgages as those people would like the public to believe. I am very sorry to see that the situation is being so greatly exaggerated. Our farmers are now being assisted out of the extra premium and it helps them very considerably, although I agree that it is not sufficient. There are, however, certain farmers who do not require that assistance, but there is another section whom it will greatly benefit, and then there is a third section, to wit, those who live on settlements and who owe something like £600 on their farms, and those people have to raise £21 so as to get the 1½ per cent. subsidy from the Government. As conditions are, however, at present that man is unable to do so. He is only getting 4s. 6d. for his fattest wethers, and 2½d. to 4½d. for his wool. Consequently it is impossible for him to raise this £21 on his farm. These people are never able to raise that money. That £21 is too much for them. Consequently the man who is in that position will not get the 1½ per cent. and unless those people are helped they will not be able to remain on the land. For that reason I rejoice at the fact that the Government made provision to render special assistance in the drought-stricken areas. Those people particularly required that assistance because if they did not get that they would have to go and look for work on the roads. Only a quarter of an hour ago a young man hailing from an old constituency of mine—and I was surprised to see that he was so well dressed— came to me and told me that he had been looking for work for four months. He is unable to find work in his own area. I am pleased to see that measures are taken in the drought-stricken areas to keep that class of person on the land. I shall conclude my remarks now because we are anxious to get this Bill passed, and I shall bring other matters of importance personally to the notice of the Ministers.

I want to draw the attention of hon. members to the fact that we are not discussing the question of farmers’ needs. We are dealing here with taxation proposals. The position of the farmers can better be discussed on the motion for the second reading of the finance Bill.

I cannot help feeling a great deal of sympathy with the Acting Minister of Finance. It is very hard that, in the unavoidable absence of his colleague, he should have to bear the brunt of the attacks that have been made on this very difficult question of the taxation of mines. As the hon. member for Boksburg (Mr. Bouwer) gave us a little quotation, I will also give one, which may appeal to the Acting Minister, when he hears what his friends have to say about the proposals of the Government for which he, as a member of the Cabinet, is responsible, although the chief responsibility rests on the absent Minister of Finance. The Minister must sometimes think that—

I believe the third day has not arrived. With the assurances that have been given by the Minister and also after his explanation, I think the contrary, as a whole, will accept the Budget proposals as the fairest that could be devised under the circumstances, having regard to the present economic condition of the country, and to the fact that those who are best able to bear* taxation should be required to balance the Budget. The remarks you made just now with regard to the farmers renders it unnecessary for me to deal with that subject. But I would like to say a word or two to my friends who represent farming constituencies. It is quite wrong for them to think that those who represent urban constituencies regard farmers’ interests as contrary to their own. The farmers’ interests and the interests of the towns are the same, and the hinterland of Cape Town certainly represents a very large farming area. Some of those hon. members ought also to realize that the interests of the farmers and the interests of the mining industry are not in conflict either. Several speeches have been made of a character hostile to the mining industry, just as if the Chamber of Mines and the mining industry were some foreign concern. For that reason I want to quote a few figures from the latest report of the Government mining engineer to indicate what a stupendous part in South African affairs the mining industry occupies. I do not see how South Africa could have carried on without wholesale bankruptcy without the mining industry, and particularly the gold producing portion of it. Out of the mineral production of 1932, £49,766,321 was gold production. The earnings of persons employed on mines and quarries totalled for 1932 the sum of £19,040,968, including white, Asiatics, natives and other coloured persons, but the wages for whites alone amounted to £10,546,927, being paid to 32,220 persons. The wages paid on the Witwatersrand Gold Mines, during the year 1932, amounted to £15,936,957, in fact, a total of nearly £16,000,000. The total number of persons other than whites employed on mines and quarries amounted to 277,838 natives and coloureds, and 904 Asiatics. The South African produce used on the Witwatersrand gold mines (large mines) was of the value of £10,675,214, out of a total of £17,177,352 for stores £16,142,000 was used by the gold mining industry. Add the two amounts together, the amount paid in wages and the amount paid for machinery and stores, and it will be seen that the gold mines were responsible for the circulation of money to the extent of £31,306,290. Visualize South Africa without this marvellous industry. When I speak of the mining industry, I am including all the men who are engaged in it, and who are entitled to credit for the pitch of perfection to which the industry has been brought. An amount of £11,778,172 was expended on South African products, including articles whereof the chief cost of production was incurred in South Africa. Under these circumstances it is only a question whether in taxing them you are observing the ordinary rules of taxation, that you need the money for public purposes, and that you are placing the burden on those best able to bear it. With the collapse of agriculture, and the fact that the gold-mining industry is the only industry able to weather the storm, the Government in carrying out those principles was bound to select the industry best able to bear taxation. I am sorry that the hon. member for Stellenbosch (Mr. W. B. de Villiers) and others should talk about concessions having been made to the mining industry. The Minister of Finance in his first speech said it was a question of fifty-fifty, and all that has happened now is that the Government have amended their proposals so as to put them on a fifty-fifty basis. They have also given a measure of stability to the industry by telling them that they are not going to alter the taxation for a few years, and the one thing the mining industry should know is the worst as far as taxation is concerned. The industry now know exactly the limit of the amount required from them, and know that they can go ahead with development schemes. They know that there will be no nasty surprises. The Government has dealt justly with them, and I may say that I am surprised, after the explanation given by the acting Minister of Finance, and after the adjusting of these proposals, that there should be such strong action taken in this House, action that amounts to a motion of no confidence. If a motion is submitted to throw out the Bridget, it is not only a vote of no confidence, but it is a direct vote against the Government which would compel them to resign. Personally, although as an urban representative I would have liked to have seen something more done for the people in the towns, and something more for the unemployed, and although I can see many ways by which the position of the people in the towns could be improved, yet by and large, I think the country as a whole accepts this Budget. At any rate, we cannot visualize the day when the Government will allow the farming industry to perish by not giving them a helping hand. If the farmers go down, the people in the towns will inevitably go down with them. I do not begrudge the help that is given to the farmers, but I hope that when the next opportunity comes the Government will also remember the great distress that exists in the urban areas. There has been a tendency since the session started of the coalition boat being driven about by currents and crosscurrents. Now there are a number of hon. members who are rocking the boat, a very dangerous procedure indeed. Some of them hardly speak in this House without showing hostility towards the coalition Government, although they were elected as supporters of coalition. Now I would only like to say that, as far as the mining industry is concerned, they should visualize what would have been the position if there had been no coalition Government. Would they have fared as they have fared under this Budget? The hon. member for Boksburg (Mr. Bouwer) thinks this is a very drastic way of dealing with the mining industry. If you have heard what the hon. member for Graaff-Reinet (Dr. Bremer) and others had to say, however much the incidence of this Budget might be felt, the little finger of a Nationalist Government, pure and simple, would have been heavier on them than the whole hand of the coalition Government. We know from the chief Nationalist organ in the Cape, that still girds at the coalition Government every day, that they are out for a policy of the absolute confiscation of the premium; in other words, they want to kill the goose that lays the golden eggs, or rather, they want to starve the goose, give it nothing, and still expect it to lay the golden eggs.

We want him to lay in our nest.

It should be a South African nest in which we all share. The hon. member’s nest is a very narrow one, and suitable for the few people who are his friends. If you are going to let the industry know, that while you expect a substantial amount in the way of premium, you leave them sufficient to develop the industry, you are not killing the goose that lays the golden egg. Allow it to go on laying the golden eggs, because if there is no encouragement to do so there will be no encouragement to overseas investors to see that mining development takes place. What the hon. member does not realize is that 70 per cent. of the number of shareholders are South Africans, although 70 per cent. of the dividends go overseas, because the head offices are there. Do not let us refer to the mines as if there are only a few rich people who are shareholders, and that it is only for the few. You have the dividends circulating through South Africa, and you have the men who are employed. Do let the industry know that if you do tax it, you do so, not in a confiscatory spirit, but in a spirit of fairplay and justice. Give them the encouragement necessary to go on developing one of the greatest industries in our country, without which South Africa could not go on. I deprecate this constant firing at the mining industry, as if it were hostile, just as I deprecate the hostility between town and country. The hon. member referred to a rather offensive telegram, in which hon. members from the Cape and Free State were considered as parasites, and that the only men who were entitled to take part in this were members from the Transvaal. Natal was not mentioned. I do not mind what that unknown correspondent calls me, but what I do say is, that the interests of the townsman and the farmer are interdependent, just as the interests of the mining industry and those of the country are; and if you injure the one you injure the other. The Government, as is its duty, is bringing back equilibrium and stability in this country, to give an opportunity to every civilized citizens to lead a decent life here. Let us get rid of these cross-currents and the idea that as soon as something is brought forward which we do not like, we should begin to rock the coalition beat. The people of South Africa expect us to see that the Government is given a straight course to carry on its work. Substantial objections to various sections of the Budget have been made, but we should not reject the Budget; we should give the Government support, in the hope that next year there will be a better tale to tell. We start with a clean sheet next year, and with a Budget that is balanced; and I hope that next year there will be something more like the spirit there was when coalition started.

The introduction of the speech of the hon. member for Kensington (Mr. Blackwell) contained the kind of criticism with which I thoroughly agree. It is most regrettable, however, that the conclusion of his speech was not in the same spirit as its introduction. I am thoroughly in agreement with him that if legislation has to be introduced to assist the farming population such legislation will result in the death of agricultural credit, as money-lenders always have the right to invest their money at a higher rate of interest than that which they can get on farm mortgages. To my mind the effect of this legislation will, therefore, sooner or later be that money will be withdrawn from the farms to be invested in other directions where a higher rate of interest can be obtained. As regards this point, I am thoroughly in accordance with the hon. member. He may know the saying in his own language, of which he showed such a great knowledge, when he pleaded for the interests of the people he represents. I wish that I could command my language in the same way he did when I plead for the interests of the people who have suffered so greatly. The saying to which I refer is: “Adversity makes strange bedfellows.” But the great difference between the hon. member and myself is that he pleaded in the brilliant language which he has at his command and which enables him to draw on his imagination on behalf of people who, he nearly made us believe, are really in distress while the people whom I plead for are apparently not in want, although in reality they are very deeply in distress. The fate that has overtaken them is only imaginary, while the farming population since three years ago until this day have been on the verge of ruin. I want to assure hon. members that practically every farmer on his land is to-day being turned into a slave driver. He is being turned into a slave driver in having to struggle day and night for fear that he may land on the roads eventually. I was shocked the other day by the statement of the Minister of Commerce and Industries when he said that it is not humiliating and demoralizing for a white man to work on the roads. I say that it is demoralizing.

The hon. member must confine himself to the motion.

Yes, I shall do so. I want to point out that people violently oppose this because they always feel that they have not had sufficient allowance made for them. Now the hon. member comes here and tells us that we must not take too great a bite out of the profits of the mines as we shall kill credit. That is a terrible spectre. It is a spectre of which we have heard a great deal in the past when it was urged that interest must be reduced from eight to five per cent. It is the same spectre with which we were scared a few years ago and with which we have been scared again to-day. While we are pleading for a general reduction of interest, not even to 3½ per cent., which is still one per cent. higher than the world rate, but to five per cent., we are told that we shall shock the confidence of the world and that we shall kill credit. If there ever was a good example of the old saying: “Bogey frighten baby,” this is one. This saying is as old as the hills, as old as the fairy tales which I listened to 30 years ago when I as a child sat in these galleries and heard it said that scab was a thing which came on its own and which could not be cured. We believed that fable, until we had a soldier Minister—and I say this with all due respect—who in the end cut the knot and he declared it was all nonsense and that the scourge could be fought. I think we should get another Minister like that to-day, I will not say a Milner, but in any case a “damn the consequences” Minister, a man who will cut the knot and who will make the light shine on our economic edifice so that that cobweb may be excluded. I express the hope that this will happen sooner or later that those cobwebs of misconceptions which are shutting out daylight from our economic edifice will be removed. I want to confine myself particularly to the speech of the hon. member for Roodepoort (Col. Stallard). That hon. member only thinks in terms of gold, as if gold were the only thing of value. Gold has no value because it has no intrinsic value. It only has an extrinsic value, and if we start out from the misconception that it has real value, we neglect those things which in reality do have value. The hon. member stated that the price of gold had gone up from 80s. to 120s. That would be the value of gold. I do not know whether his measure is a good one or not, because one measures the value of gold only in terms of another material. In any case he came to the conclusion that an increase of 40 per cent. in the value of gold had also caused a natural increase of 40 per cent. in the value of South Africa’s export products, and that the Government must come and attach a portion of that increase. I desire to draw the attention of hon. members to the fact that that is not so in practice. The farmers possibly incurred debt at a time when wool was four times as high in price as it is to-day, which means that to-day they have to pay 400 per cent. more in terms of their product. When we left the gold standard the profits on gold went up by about 40 per cent., but wool fetched the extreme perice of 8d. a lb., and that is what it is to-day. In other words, where we originally received the value of 12 lbs. of wool we have to-day to refund the value of 30 lbs. of wool. That is more than 200 per cent. of what we have received. I should like hon. members to tell us how one can bail anything out of a bucket that is empty, and that is what his arguments amount to. If the Governments of the world were honest and paper money could be issued on the basis of the value of products, which constitute the real wealth of the world, the agricultural population would not be in such a state of misery to-day. One hon. member asked why assistance should be given to the farmers, and in reply to that I want to ask him whether he had ever heard of the mines suffering from a drought, or from too much rain. I also want to ask what the real assets of the country are. Hon. members have fought tooth and nail here against our taking a share of the profits. Those assets are the trees which we plant, the dams which we build, and everything which we create for the future, but so far as the mines are concerned, the hole is only getting bigger and it is worth nothing to the country. The hon. member for Cape Town (Gardens) (Mr. Coulter) asks how it is that the farmers cannot get money when money is so cheap. The answer is that money is cheap, in terms of the rate of interest, but it is very expensive in terms of the products which the farmers sell, and it is for that reason that that money cannot be invested in farms. One would see, too, that bonds on farms would be worth nothing if the value of farming produce were to drop very much. To my mind we must secure a general reduction in the rate of interest in order to assist all farmers. So far as a portion of the farming population will be helped by this Budget I heartily welcome it and all farmers will welcome it. I hope this will be the first step and that in future more drastic action will be taken to keep the farmers on the land.

I shall not detain the House for more than a few minutes. I wish briefly to set out the situation as it presents itself to me, a newly-fledged member representing a Rand constituency, a very angry and sad constituency at that. When the taxation proposals were first placed on the Table, I experienced a sensation of consternation. It appeared to me that the axe was applied too vigorously to the mining industry. Since yesterday, however, the whole position has changed. The new proposals of the Acting Minister of Finance seem to me to present the matter in an entirely different light. I have had conversations and have received letters from various leaders of the mining industry, whose contention has always been that they would not very much mind the £6,000,000. They thought it was high, and very severe, but that was not what gave them any trouble; what troubled them was the insecurity as regards the future. That is what most of these leaders said to me. One of them said openly, “I am very worried about the future of our industry; I am afraid that the Government may take more next year and still more the following year.” Well, the Minister’s statement should set at rest all fears on that point. He has shown that during the next year the Government will not appropriate a larger sum than was appropriated this year, and that in the following three years, not more than 50 per cent. of the additional profits will be taken. That is the assurance which the leaders of the mining industry have asked for; they have expressed their willingness to accept a 50 per cent. taxation of profits. On those grounds, I am quite certain that it is my duty to vote with the Government. I realize that I have a primary duty to my leaders, but at the same time I also owe a duty to my constituents. There are further concessions made by the Minister in regard to improvement and development schemes and amortization, and so on, and in the circumstances I feel I can freely and whole-heartedly vote for the taxation proposals. I hope that the hon. members for Roodepoort (Col. Stallard) and Von Brandis (Mr. Higgerty) will see matters in the same light and withdraw their amendment.

It is a great pleasure to me to be able to refer to the remarks of the hon. member for Rosettenville (Dr. Baumann) who has just sat down. We received the impression that the hon. members for Kensington (Mr. Blackwell), and for Roodepoort (Col. Stallard), had prepared their speeches before they had heard the last speech of the Acting Minister of Finance on this matter or before they had carefully gone into the exact meaning of that speech. Allow me briefly to mention a few points which we have to bear in mind when considering the question whether these taxes on the gold mines are equitable or not. In the first place, we have a point that the profits which the gold mines make out of the premium are made out of the people of South Africa and not as a result of extra production. Nor is it the result of the rise in the value of the product abroad. England last year bought our gold at about 120s. per fine ounce in England and is still paying the same price to-day. They paid the same price to South Africa, but the mines make the additional profit because they are practically producing the gold more cheaply in South Africa.

How do you arrive at that conclusion?

When new wealth is exploited, if a new person produces a new product, and he sends it abroad, or if he sends more of a particular class, and if he makes additional profits, then he brings greater wealth into the country.

Does that additional wealth belong to the country?

No, it does not belong to the country, but that is not the case with the mines, because their additional profit is made out of the population of South Africa. That is the point. It is not because they send more abroad, as countries abroad pay more for the gold that they make additional profits, but England still pays the same as it did last year. Costs of production in South Africa went down, however, because we have a depreciated currency and to that is attributable the fact that the mines make additional profits. That is one of the first points we have to bear in mind when we consider the question whether the proposed taxation on the mines can be justified.

How will you apply that principle to the farmers? Has not the value of wool appreciated in the same way?

Whether the prices of wool go up overseas, more money comes to our country because the value of the product has appreciated abroad. This consideration is only applicable to wool insofar as the wool farmer is also getting more, as our money in South Africa has depreciated in comparison with the money of the country where the wool is sold. Another point which we have to bear in mind is that our money has depreciated not because of the fact that South Africa was unable to maintain its gold payments, but in consequence of the political agitation in South Africa. The whole of the mining industry and of those concerned in the mines threw in their weight on the side of those who desired South Africa to leave the gold standard. They declared that they were not doing this in their own interest but in the interest of the country; well, if they did all this with altruistic motives they should be prepared now to say that they do not want those profits, or at least that they are willing to hand over a reasonable portion of those profits to the community as a whole. If they tried to make the country leave the gold standard for selfish motives, in order to make profits out of the disturbed economic conditions of the world, it is not unfair for the State to prevent them from getting away with the loot. A further point is that the Government requires all the money which it is taking, in the first place to make the Budget balance, and in the second place the Government needs the money to support the farmers and to reduce unemployment and also for other purposes for which the Government has taken it. It is absolutely essential the Government should get that money and hon. members who oppose the taxation proposals must indicate other sources from which the Government can get the money which is required if it is not allowed to take it from these sources.

Is it necessary to take so much?

The Minister of Finance has merely stated that it is necessary and the debate in the House has proved it. The three points which I have mentioned here are strong considerations why it is necessary to take a very large portion of the mining profits. The Minister of Finance stated here that it was the attitude of the Government that it required a certain amount. He stated that that amount was definitely required and that the Government had imposed a tax which was calculated to produce that tax. The second consideration which the Government had in mind was the development of mines with a low grade of ore, and which the Government desired to encourage, and provided those two principles are maintained, the Government will be prepared to discuss an amendment of the method of taxation with the interest concerned. And it is in consequence of that discussion that amendments have been indicated by the Acting Minister of Finance. The Government says that if the tax should produce more than the amount it requires and for which it has estimated, it will put matters right. This clearly shows that the Government is anxious to give effect to the policy which it has announced. We know that the Government desires to balance the scale as between the mines and the rest of the country and that the Government does not wish to prejudice the mining industry. The mining industry is an industry for which capital is needed and a great deal of capital is required for the development of new mining grounds, capital which largely emanates from abroad. The Government consequently realizes that it must hold the scales so that it will encourage the investment of capital on the one hand, and that, on the other hand, it will give the population of South Africa a just and fair share in the additional profits of the mines. We must bear in mind that the advantage which the mines are getting is not merely casual, but that it is a casual advantage which they make out of the pockets of the rest of the population. Those people who have pleaded here for the interest of the mines cannot complain that the Government has not carried out the basis announced by the Minister of Finance. It is a fair basis. During the world war we know that fifty per cent. was also adopted as the basis of taxation of excess profits. I contend that the mines, of all people, have the least cause for complaint of the amount of money that is taken from them. I cannot see how they can complain of the manner in which the tax is imposed. The Minister has given them an assurance about the amount to be raised, they have an assurance for the future as regards the development of low-grade ore. They know what their position is and the tax is so arranged that the interests of the country will be looked after.

I do not intend delaying the House, but we have heard such a lot here about telegrams that have been received by members and which have been quoted by members representing Rand constituencies that I feel that I should also quote a telegram which I have received from my constituency from a certain section of the community which has not yet received any assistance. I do hope that assistance will be rendered to them as well, and I wish to read a telegram from the Farmers’ Union of Ugie—

I would be able by the production of other letters and telegrams to indicate that it is not merely the Farmers’ Association of Ugie which is in favour of this view, but that this applies to other farmers’ associations as well. The hon. member for Queenstown (Mr. van Heerden) rightly remarked here that although different sections of the farmers have been helped from time to time, there is one section which has not been assisted at all. The hon. member for Graaff-Reinet (Dr. Bremer) has also made it clear that that section, viz., the tenants, has not yet been assisted.

I think it would be better if the hon. member were to discuss that matter on the second reading of the Finance Bill.

We have had a very long debate, and I think most hon. members will agree that we have had a very interesting debate. I do not intend to answer each hon. member’s speech individually for I think that would take too long, and would make too great demands on the patience of the House, so I will deal as brifly as possible, with the various points which have been raised. I say briefly, because we shall have an opportunity to deal with each of the several resolutions separately, and so I shall now deal summarily with the main points that have been raised. First, I would like to refer to the criticism made by various hon. members on the proposal regarding the interest on farm bonds in excess of 5 per cent. This proposal enables the State to appropriate and return to the debtor interest in excess of that amount. That proposal has been attacked as a very serious interference with private contract. Undoubtedly, any interference with private contract is open to criticism, but there comes a time in the social life of the community when the Government which is responsible for the well-being of the whole of the community, cannot avoid interference to a greater or lesser extent. Such a time, in the opinion of the Government, has come in regard to the relations between the farming population and the bondholders to whom they are under obligation, bonds that were entered into at a time when the prices of farming products were different from what they are now. The position, in the opinion of the Government, is that that state of things is a burden out of all proportion to the contract entered into, and they consider that unless relief is afforded to that section of the community a serious social evil will result. That is the justification for interfering with private contracts. Two methods have been suggested. One method suggested was that the Government should subsidize the bondholder in respect of interest which he would get over 5 per cent.—that the State should, out of its funds, relieve the farmer to the extent of interest over 5 per cent. Another suggestion was to limit all interest to 5 per cent., and that we should not treat one section differently from another. The Government did not feel able to go as far as that in its interference with private contracts. They did not even feel disposed to legislate, compelling a holder of farm bonds to take no more than 5 per cent., but what they said was: “If you do take more than 5 per cent. the State will appropriate the amount over that gure.” It is an interference with private contract, certainly, but unless the economic dislocation of the world that exists now improves, certainly if it gets worse than it is now, we may see more serious interference with private contracts, even than this. Some members say that people with farm bonds will call them up. Probably some people will. The estimate made of the extent to which the Land Bank may have to come to the relief of farmers may be a low one. Bonds may be called up. But it is no longer easy to get a good investment at 5 per cent., with good security, and bondholders will have to consider where they are going to invest their money if they call up their bonds. They are now assured of 5 per cent. If that is not good enough for them, they may find some difficulty in getting a good 5 per cent. investment, elsewhere. Then one hon. member touched on the question of investment companies, trust companies and so on, whose finances will be seriously affected by the reduction of interest on farm bonds, but that is a matter that will be dealt with by a Bill, and the hon. member will be able to deal with it when it comes before the House. The hon. member for Cape Town (Gardens) (Mr. Coulter) raised the point of the wording as to whether it was intended that this surtax, or whatever you may call it, applied to interest accrued or to interest received after the 1st April. The intention was that the tax will apply to interest accrued and received on and after the 1st April. Now these are most of the points raised outside the mining taxation As one would have expected, most of the hon. members who spoke devoted themselves to the mining taxation, and I would like, first, to deal with the criticism of the hon. member for Springs (Sir Robert Kotzé), whose criticism I value very much, and I regret the words which were addressed to him by the hon. member for Benoni (Mr. Madeley) who made an attack on the hon. member and who said that not only in this House, but in his official career, before he came into this House, he had been always a friend to the Chamber of Mines.

He gave the men that impression.

If he gave the men that impression, then they were wrongly impressed. From my experience of the hon. member’s work, and it is borne out by anyone who has worked with him, he carried out his duties as a most conscientious and most fair-minded man as between the mining companies and the men, fairly and equally. As regards this discussion, I would like to say that the hon. member (Sir Robert Kotzé) admitted when he spoke that he had been allowed every access in the working out of his calculations to the figures of the officials of the Treasury and of the Mining Department, and he had been treated with complete confidence; but in return, he has also treated us with complete confidence and has given us the advantage of his ability and experience in helping us to remove difficulties in this matter. I cannot accept all the criticisms which he raised as criticisms telling against the utility of this particular scheme. I admit that this scheme is difficult to understand, and anomalies will arise, and they are practically bound to arise; but the hon. member himself admitted that, in certain important respects, this scheme is an improvement on the previous one. One objection he made was that it was going to take from the low grade mines a higher percentage than from the rich mines. Well, that is inevitable. In the case of a low-grade mine, it might possibly make no profit at all, or a very small one, before this premium came about, so that practically the whole of its profit now is derived from the premium. If you levy a special tax on the premium, it would naturally fall heavily on such a mine, but the answer is that the premium has put that mine into a position which it could not have hoped to occupy before. We cannot allow mines to carry forward lasses which they have been sustaining for years, and apply them to this particular year. I would like to take the case of the City Deep, which the hon. member mentioned. On the average value of gold, this mine was running at a loss. Now it is making a profit. In assessing that mine, for excess profits duty, an exemption limit of 2s. 6d. per ton milled is allowed before the tax comes on. The result, therefore, is this, that it was running at a loss of 2s. per ton; it is now taxed because it is making a profit over and above 2s. 6d. per ton milled. The conversion of this loss of 2s. per ton to a profit of 2s. 6d. per ton escapes taxation altogether. It is not taxed at all. The difficulty about the scale I admit is great. I accept the criticism, and if we could possibly have devised a flat rate which could have been equitably applied, it would have been much more easily understood and probably would have obviated many of the criticisms and difficulties that have arisen. The hon. member for Springs (Sir Robert Kotzé) put it in this way. He said that this tax which was being laid on the industry, on what I might call premium profits, is equal to a percentage tax of 33 and one-third per cent. on the whole of the profits of the industry, which, added to the 20 per cent. already existing under the income tax law, makes a 53 and one-third per cent. tax on the whole profit. I submit that is not a fair way of criticizing the tax. As I said in moving this resolution, this is an appropriation of a share of the premium profits. It is not in the nature of a tax. It is not a tax upon the industry, it is the appropriation by the State of a share in an accession of profits, which has come to the industry without its own efforts, without any expansion of work, or increase in efficiency, but due merely to the changed currency system of the country.

An HON. MEMBER [inaudible].

If the hon. member means that shareholders get less by the Government taking this share, than they would have got had it not been taken, I agree with him.

It is more than they were getting, in any case.

Yes, and if the mining companies when we were on gold had been made this offer, that the State should take £6,000,000 excess profits, if we went off gold, they would have jumped at it. I contend it is not fair, it is not a reasonable picture of the burden put on the industry to lump together this appropriation of a share of the premium profits, with the ordinary taxation paid over the whole profits of the mine, and to say, “Look what you are taking from the shareholders.”

It is true, in point of fact.

Well, I should say, in point of arithmetic, rather than in point of fact. Arithmetic may be put in such a way as to be not always what one might call fact. Then the hon. member for Kensington (Mr. Blackwell), became very indignant when he thought of what was being done with all this money that was taken from the mines. He said, “"You are giving no increase of wages to the men.” What did he mean? Was he suggesting that because of this premium, or out of this premium, a general increase of wages should have been ordered all over the country?

I was trying to picture the men’s mentality when the farmers got £2,000,000 and the men got nothing.

Did the hon. member accept that mentality, did he consider that that was a right mentality?

No.

If the hon. member did not accept that mentality, why did he bring it to this House? If it is an unreasonable mentality, why then did he introduce it into this House? I can see that the hon. member was suggesting that we should pay or cause to be paid a general increase in wages all round or an increase in wages to all those who took part in the production of gold.

I admit that that mentality is not right.

The hon. member for Roodepoort (Col. Stallard) has made a proposal which I shall deal with later. The hon. member for Von Brandis (Mr. Higgerty) said that the Government should have consulted the industry. I am sorry about the way in which this matter has been raised in the House but as it has been raised, I have to say something about it. The name of Mr. John Martin was mentioned and I do not want any injustice to be done to that gentleman. I want to tell hon. members what he told me as being the position about this consultation. He told me that the Minister of Finance some time before he left for England, some time before the Budget was drawn up, suggested to him that there should be consultation between the Minister of Finance and two or three prominent leaders of the mining industry. Mr. Martin said that he thought over that, and the more he thought over it, the more awkward he felt it would be if he and two other members of the mining industry, should be taken into the secret of new taxation and should try to improve or otherwise on taxation which might affect their particular interests differently from the way in which it would affect the interests of other mines. Later on he met the Minister of Finance again and the Minister then said to him that on thinking it over, he had come to the conclusion that it was better not to ask the mining industry for consultation, and Mr. Martin agreed with that. Now the question is whether the denial came from the mining industry or from the Government. I think it came from both sides, fifty-fifty.

The Minister of the Interior would not admit that last night.

Business suspended at 6 p.m. and resumed at 8 p.m.

When the House rose I was dealing with various points raised by hon. members in the course of the debate in regard to the taxation of mining profits. The hon. member for Benoni (Mr. Madeley) and others have attacked the Government’s proposals on the ground that they do not go far enough. They say, in effect, that the premium profits belong to the State, that they came into existence as a result of the action of the State, and that the State should have taken the whole amount, and used it for various national purposes. They do not altogether agree, however, as to what those purposes should be. The hon. member for Benoni, and the hon. member for Magaliesberg (Mr. Alberts) are not quite at one as to what they would do if they had the whole of these profits.

We might come together.

I have no doubt that certain classes of birds always do come together.

Well done

Whatever theory we may hold as to how these profits came into existence, and as to what is the effect of this state of things on the community at large, the Government holds that it would have been unwise in the interests of the country to take the whole of these profits These profits, however they may have come into being, offer us at this moment an unexampled opportunity for the obtaining of the capital required for the expansion of our gold mining industry, and it would have been foolish in the national interests for us to have done anything which would prevent the possibility of obtaining capital for the expansion of the industry, and the giving of additional employment.

Mr. Havenga did not say that.

What did Mr. Havenga say?

He said he would use it in the interests of the people.

Yes, sir, I am suggesting the best way to use it in the interests of the people. What the Government considers they have done is to take a fair and reasonable share of these premium profits to meet the financial exigencies of the time, and they left a sufficient share in the hands of the industry to ensure its expansion, additional development and the inflow of additional capital. That is the principle on which we stand, and on those proposals we must be judged. I appreciate very much the speeches made in support of that view by certain hon. members from the Rand. The hon. member for Turffontein (Mr. Sturrock) and others who have spoken, have put before the House their considered judgment that the Government have not gone too far, and that the proposals of the Government are not such as to justify the outcry that has been raised against them. I appreciate their attitude all the more because I know what pressure has been put upon them. I know what telegrams have been received, what exciting, urgent and, at any rate, in my case, insulting telegrams have been received with regard to this taxation of the mining industry, and I appreciate all the more the considered judgment expressed by hon. members that the Government’s proposals are not such as to frighten capital and to cripple the industry. I hope that the House will share that view. But after listening to the speeches to which I have referred, I am all the more disappointed by what I must call the amazing statement of the Chamber of Mines, reported in to-night’s “Argus.” I can only call it an amazing statement.

Let the old arrangement stand.

If I were playing a schoolboy game with the Chamber, I might take that view. I am not looking at the Chamber, but at the interests of the industry. The opening paragraph in the newspaper, which is the newspaper heading, reads—

What they are criticizing, of course, is the new resolution moved yesterday, and the effect of it on the mines. The actual words of the Chamber of Mines (what I formerly read was the comment of the paper)) are as follow—

Now I have stated to the House on the authority of the Government that we intend to take £6,000,000 by this tax, that we do not intend to take more, and that if the tax produces more during the current financial year we shall rebate it to the companies. Yet here the Chamber tell us that this new scheme is going to give us more. They know, as well as I do, that this new scheme is not going to produce more than £6,000,000, and that if it does we shall rebate the amount in excess. They also say—

That is a criticism which they are entitled to make. They go on—

That also is a matter of opinion—

I dealt with that matter in my speech to-day. If you regard these premium profits simply as ordinary profits of the industry, well, that is so, but this tax proceeds on the basis that these premium profits are not ordinary profits of the industry, and are profits of which the State is entitled to take a share. How they can make the statement they have made, and say that an enormous burden is being imposed on the gold mining industry, how they can say what they do about the amount to which we have limited ourselves during the current year and the next financial year, I do not know. I come now to the most serious part of it—

This is the agreed 50-50 basis of profits we have been urged to accept, and now we are told that it constitutes an exceedingly onerous taxation.

It does.

But we were told that if they were given 50-50 they would be satisfied.

After this year.

These assurances were given, as the hon. member knows, to reassure the investors with regard to the future—

What do they tell their shareholders? They do not try to explain to them the value of these concessions. They do not try to explain to them that it means anyhow stability for a period of years. They tell them that it is a fraud, and that the Government are throwing dust in their eyes. I regard that as a very serious thing. As a member of the Government I have always regarded the Chamber of Mines as responsible leaders and representatives of the gold mining industry. I have always dealt with them on the basis of confidence, I have always accepted their assurances as being given with the fullest intention to carry them out and I have always accepted it that they accepted the assurances of the Government on the same basis. These statements were not made in a spirit of light-heartedness, but in the most serious and solemn manner, and what do the Chamber tell their shareholders? They tell them that it is a fraud, intended to throw dust in their eyes. It has come to me as a shock. It makes me wonder what has been behind all this agitation.

Hear, hear. Now you have accepted their assurances about employment.

Mr. BLACKWELL [inaudible].

What do they mean by the statement they make regarding the recent assurance of Gen. Smuts, that they remember the fate of that assurance, if they do not mean that the Government intended to deceive. I am afraid that if the hon. member for Kensington (Mr. Blackwell) tries to defend the chamber’s statement, he has got à hard task. Whether the statement with its exaggerations was for the purpose of sowing suspicion I am unable to fathom. If the object of it was to prevent the revival of any public confidence, to keep the public as long as possible with the view that the original estimate of the chamber as to the effect of this taxation was correct, notwithstanding any facts to the contrary, I do not know. Well, it may succeed; but if that is its object, and if it succeeds in that object, it will be at the expense of the country, and at the expense of the reputation of the Chamber of Mines. The chamber in these last years has built up a reputation of being a responsible body speaking for a great industry, speaking not only to people here, but to people all over the world who are interested in the gold mining industry; and to issue such a statement to the effect that people must be very careful about putting their money into these gold mining companies, is risking that reputation with this country and with the world. But I do not look to the opinion of the chamber for the moment. They have been engaged in a controversy, and like every controversialist, they appear to argue for victory and overlook the real objects. It is to the welfare of that industry that we look, and I am sorry that such statements have been issued as have been by the chamber. I believe shareholders and investors will be sorry. The gold mining industry of the Transvaal offers to investors here and elsewhere at the moment, a great and tempting opportunity for investment. We are fully aware of it, and we have no intention of destroying that confidence of people here and elsewhere in the stability of that industry and the prospects that it offers for the investment of capital. We should be foolish if we did so. That is the opinion of the Government—that these proposals we have put before the House will not have that effect. If we put up that opinion, the chamber is entitled to criticize and put forward facts in doing so; but they do not believe it; and I do say they are doing a great wrong in telling the investor here and overseas that faith cannot be put in the assurance of the Government. I do not want to keep the House longer, but I want to deal with the amendments. Two amendments have been moved, rejecting, not this particular scheme, but rejecting the whole taxation scheme of the Government for the year. One amendment was moved by the hon. member for Benoni (Mr. Madeley), which is in terms to which we are accustomed—to reject the whole taxation scheme of the Government on the grounds that we should take the whole 100 per cent.; and I have dealt with that already. The hon. member for Roodepoort (Col. Stallard) has also moved an amendment which asks the House to reject the whole taxation scheme. It has been described by some hon. members as a motion of no-confidence in the Government; and so in form it is. The hon. member is an oldish Parliamentary hand, although not a very old one, and he knows that a motion which rejects the whole financial policy of the Government for the current financial year is one of the ways in which Parliament can be asked to say that it has no confidence in the Government. My hon. friends who may think of supporting that motion may know this significance. I know many hon. members may not like it, and when they come into committee they may find it difficult to vote for this particular resolution in spite of what we have tried to put forward in justification of it; but the hon. member (Col. Stallard) goes further than that and asks the House to reject the whole of the taxation policy of the Government; and I ask the hon. member not to press his proposals so far as to reject the whole. If he feels that his indignation against this particular tax, and the manner in which it is proposed to impose it, is so strong, I hope hon. members will not feel justified in following him. I leave it to the sense of the House to say whether the proposals put, with the modifications made by the Government, are such as to justify the rejection of the Government’s whole taxation policy. I do not intend to deal with these matters any further. The points which have been raised in regard to the relief of farmers had better be dealt with, as I said before, by the Bill which will have to come before the House, giving effect to these resolutions and to the proposals for the reduction of interest and the other matters.

Question put: That the words “the House”, proposed to be omitted, stand part of the motion and a division was called.

As fewer than ten members (viz., Messrs. Blackwell, Bain-Marais, Bawden, Bouwer, Derbyshire, Higgerty and Stallard) voted against the question, Mr. Speaker declared the question affirmed; amendment proposed by Col. Stallard dropped.

Question put: That all the words after “House”, proposed to be omitted, stand part of the motion and a division was called.

As fewer than ten members (viz., Messrs. Derbyshire, Madeley and Col. McArthur) voted against the question, Mr. Speaker declared the question affirmed; amendment proposed by Mr. Madeley dropped.

Original motion put and agreed to.

On the motion that the House go into Committee now,

I object.

If the hon. member will withdraw his objection I am prepared to undertake that we shall not take the gold taxation proposals to-night.

Objection withdrawn.

Motion put and agreed to.

House in Committee:

The DEPUTY-CHAIRMAN stated that the committee had to consider the taxation proposals on customs duties, income tax, gold mines excess profits duty and farm mortgages interest tax, and that the committee had leave to bring up its report or reports forthwith instead of on a future day.

Customs Duties.

I move—

I want to say something on Item 45. The proposal under “B” is to raise the duty on tea and I should like the Minister to give an explanation of that.

This matter was explained by the Minister of Finance in his Budget statement. Certain additional duties were put on in 1932, on tea among other commodities, in order to counteract the advantage which importers were getting through our being on the gold standard and countries from which they were importing, off the gold standard. Those duties could be repealed by proclamation by the Governor-General. This year the question was whether these duties should be allowed to lapse, or whether they should be amalgamated with the existing customs duties. The Minister decided that in view of the revenue which they brought and in view of the fact that the imposition of these duties had not raised the price to the consumer, and that their abolition would in all probability not affect the price to the consumer, he would not take these duties off. So he decided to amalgamate these additional duties with the existing duties.

Here we have the duty on tea increased because of the reasons given by the Minister. Now this duty is to be crystalised at the higher figure of 7½d.—it is a duty of 7½d. per lb. on tea—a matter of everyday necessity. I would not be doing my duty if I did not protest against an increase on an article like that. From the explanation of the Minister it seems to me that we get it either way—it is a case of heads I win, tails you lose. People use tea in large quantities, it is a poor man’s luxury and a duty of that kind cannot possibly be defended.

I hope the Minister will look carefully into these duties. I particularly want to draw attention to rice and the duty on that commodity. We should not forget that these duties were put on at a specific time when the country was really in distress, and that they were not put on for a particular time. To ask at this time that they should be continued is unfair and unjust. You take rice, which is the first item here. It looks as if rice is one of the few things which the Government should leave alone. I was reading a report issued in Pretoria the other day, in which it said this, about rice—

Rice is more or less a staple food of the people. Its price is higher here than we can find it anywhere, and there is nothing to protect it. We do not produce rice in this country so there is no reason for protecting this commodity. If these are to be revenue duties, let the country know it. No doubt there are good reasons for protecting fish, for we catch our own. The increase on the duty on rice is 100 per cent.

But it is only 1s. per 100 lbs.

I am sure that the Government has no intention whatever that this should be a permanent duty, and it cannot be the policy of the Government to tax these particular articles which are wanted by the poor.

I am bound to express my disappointment at the re-imposition of these duties. Last year when they were imposed we were under the impression that they would remain only for a year, as there was then every likelihood of the financial position improving. There is a great deal of dissatisfaction over their re-imposition. In 1931, the duty on tea was 4d. a lb., and was then increased to 6d. per lb, and last year the duty was increased to 7½d., making a total increase in two years of 90 per cent. These are items which are almost in daily use in the poorer households, the people of which have been looking for some relief owing to the changed financial position of the country. It has been said that the re-imposition of the duty did not increase the price of tea, but that may possibly be due to the fact that the import price was lowered. The Minister is asking us to believe that an increased duty does not affect the consumer. If the Minister is under the impression that the remission of duty would not have brought abou a reduction in the price of tea, he is mistaken. If the price of an article like tea goes down, competition ensures the consumer obtaining the benefit. I am satisfied that if the Minister could have seen his way clear to reduce the duty, the consumers would have reaped the benefit in every instance. The taking off of these duties may be only a small matter to the national exchequer, but it would have been appreciated by the people directly concerned. I am very much disappointed that these duties on the daily necessaries of life are to be retained.

When these duties were imposed last year, we were told that it was only a temporary matter. I appeal to the Acting Minister of Finance to withdraw this 1s. per 100 lbs. duty on rice. It will not mean very much to the State, but the remission of the duty would be appreciated very much by poor people who eat rice daily. The same with regard to tea which is becoming more generally used in the Union. I wish to protest against the continuance of these duties.

I also take strong exception to these duties. We are doing very little for the unemployed in the Budget. Thousands of people are looking to the Government for assistance, but practically nothing has been done in that way from the gold premium. Increasing the taxes—

They are not being increased.

I understand there is a possibility of the duty on rice being increased by 100 per cent.

No.

When these duties were imposed, we were on the gold standard and that made a tremendous difference to the cost of imported articles, especially articles coming from the countries which were off the gold standard. We have about 165,000 people in South Africa—Indians—who are practically fully dependent on rice as a means of subsistence. I think we ought to take that into consideration during these terrible times of unemployment. Had we been in the middle of a boom, there was some possibility of the unemployed situation being eased, we might have agreed to these duties. It is proposed to place an extra duty of 3½d. a lb. on tea. I do not see why coffee is left out of this.

Now; the watchdogs must keep awake.

This is not the time to perpetuate high duties, and I appeal to the Minister to reduce these duties, bearing in mind that poor people cannot afford to buy these articles when they rise in price.

I hope that the Government will not reduce the duty on rice; on the contrary, I should like to see an embargo placed on its importation. Let people use crushed mealies. Rice is a foreign product which we have to import, and if people were to use more crushed mealies they would not require any rice.

Hon. members ask: why these duties? These duties are not being imposed now. They are in existence already, and were in existence up to the time this motion was tabled. This resolution simply amalgamates them with the duties under the existing tariff. The reason the Minister gave for not dropping these duties was that he could not afford to give up the revenue which they bring in, and that he had no reason to think that the dropping of these duties would reduce the prices of these articles to the consumer,

I think I heard the Minister of Finance make such a statement as that which has been repeated by the acting Minister, but there never was a bigger fallacy. The Minister was not sure that if duties were taken off the benefit would go to the people. Let me assure the Minister that in a general way all duties that are put on eventually get to the public, and all duties that are taken off eventually go to the benefit of the public. That is only prevented in a case of small currency.

I explained that the duty was put on as a temporary duty, the power being given to the Government to repeal it at any time.

The Government had power to repeal it, but did not exercise that power, and now desires the duty to go on. At this particular time there should be no such thing as adding to the duties. If the Minister could show the House that there is anything to protect it would be different. This is an article of food which is required, and already the price to us is the highest price in the world. In the circumstances of the country I think the House should not appeal to the Minister in vain. The total amount of the duty is not large, and in all the circumstances it ought to disappear.

I do not agree with the Minister when he says that these customs duties should be regarded merely from the point of view of revenue. The custom duty on tea and rice must also be looked upon from the point of view of protection for our own products. In Natal a first-class tea is produced, and then we ought to have our bush tea. Our English-speaking friends do not yet like to drink bush tea, but if they would only develop a taste for it, they would soon learn to drink it. As regards the question of rice, during the past few years rice was never as cheap in the retail trade as it is to-day. The poorest man can buy rice, and if he cannot do so, he can buy mealies. Many of us, therefore, do not look at these customs duties merely from a point of revenue; we look upon them from a point of view of protection of the products of our own country.

When the question was discussed last year the Minister of Finance admitted it was put on for revenue purposes. Surely, seeing what the present financial conditions of the country are, we have a right to expect that this duty would not have been put on this year. There was no intention of making it permanent, and it might have been taken off now.

Item put and agreed to.

On Item 15,

Up till now this Government has not done much for the poorer people in the towns, and I do not know what I am to tell the people of Jeppes when I come back. It is not much, but to bring the matter to a head, I move, as an amendment—

If this amendment is carried, it would mean that rice will come into this country on cheaper terms than other imported cereals, and I do not see why it should. There seems no reason why rice should not be taxed on a similar scale to other imported cereals.

Take the duty off.

The hon. member would like to see us take it all off.

This will hit all the people who are living on or below the poverty line. I support the proposal that has been made to reduce the duty.

The amendment which has been moved will put rice in its original position. I do not know whether it is realized that this 1s. means you are taxing the people an extra £30,000 for last year’s importations.

An ⅛d. per lb.

If the Minister accepts the amendment it will really help the poorer class of people.

Help the shopkeepers.

The DEPUTY-CHAIRMAN put the question: That item 15 (d), proposed to be omitted, stand part of the motion, and the Committee divided:

Ayes—57.

Abrahamson, H.

Alberts, S. F.

Alexander, M.

Basson, P. N.

Baumann, E. P.

Bawden, W.

Bowen, R. W.

Bremer, K.

Brits, G. P.

Cilliers, A. A.

De Villiers, W. B.

De Wet, S. D.

Duncan, P.

Du Toit, M. S. W.

Du Toit, P. P.

Du Toit, R. J.

Eaton, A. H. J.

Erasmus, F. C.

Fagan, H. A.

Faure, P. A. B.

Gerdener, H.

Grobler, J. H.

Grobler, P. G. W.

Hertzog, J. B. M.

Hofmeyr, J. H.

Humphreys, W. B.

Joubert, F. A.

Kotzé, R. N.

Le Roux, S. P.

Luttig, P. J. H.

MacCallum, A. J.

Naudé, S. W.

Pienaar, J. J.

Reitz, D.

Reitz, L. A. B.

Reynolds, L. F.

Rood, W. H.

Rooth, E. A.

Roux, J. W. J. W.

Sauer, P. O.

Scholtz, J. J.

Shaw, F.

Steenkamp, W. P.

Steytler, L. J.

Stuttaford, R.

Swanepoel, A. J.

Swart, C. R.

Terrebianche, P. J.

Tothill, H. A.

Van Coller, C. M.

Van Heerden, G. C.

Verster, J. D. H.

Viljoen, J. H.

Visser, W. J. M.

Wessels, J. B.

Tellers: Malan, M. L.; O’Brien, W. J.

Noes—14.

Bouwer, G. S.

Chalmers, J.

Derbyshire, J. G.

Henderson, R. H.

Hockly, R. A.

Madeley, W. B.

Lawrence, H. G.

McArthur, R. T.

Sephton, C. A. A.

Strauss, J. G. N.

Wadley, T. M.

Wares, A. P. J.

Tellers: Kayser, C. F.; Reitz, H.

Question accordingly affirmed and the amendment proposed by Dr. H. Reitz dropped.

Original motion put and agreed to.

Excise.

I move—

1. (a) an excise duty on cigarette tobacco manufactured in the Union as set forth in the accompanying Schedule be levied; and
2. (b) a surtax or corresponding customs duty be levied on cigarette tobacco entered for consumption in the Union, either on first importation or when cleared from a bonded warehouse as set forth in the accompanying Schedule.

Schedule.

Excise and Corresponding Surtax Duties.

I am in favour of this, but I would like the acting Minister to make arrangements whereby the manufacturers and dealers will have a reasonable time to get rid of their stocks before the Act comes into operation.

That is being done.

Does that include manufacturers as well?

No, only the stocks of distributors.

Are you prepared to extend the same facilities to the stocks of manufacturers?

There may be technical difficulties about that, but I will go into the matter and see if it can be done.

Motion put and agreed to.

Income Tax.

I move—

1. (a) In the case of companies the sole or principal business of which is mining for gold, for each pound of taxable amount, four shillings;
2. (b) in the case of companies the sole or principal business of which is mining for diamonds, for each pound of taxable amount, three shillings;
3. (c) in the case of all other companies, for each pound of taxable amount, two shillings and sixpence;
4. (d) in the case of persons other than companies, for each pound of taxable amount, one shilling and as many two-thousandths of a penny as there are pounds in that amount, subject to a maximum rate of two shillings in any such pound.

Agreed to.

Super Tax.

I move—

For each pound of the amount subject to super tax, one shilling and as many five-hundredths of one penny as there are pounds in that amount, subject to a maximum rate of five shillings in any such pound.

Agreed to.

Interest Surtax.

I move—

Rate of Surtax.—When the nominal rate of interest derivable from any security exceeds 5 per cent. per annum, 5 per cent. Provided that the amount payable as surtax in respect of the interest derivable from any security shall not exceed the amount whereby the interest receivable in respect of that security exceeds an amount equivalent to a yield of 5 per cent. upon such security.

Perhaps the Minister will now be able to tell us what is the position in regard to the point he was not quite certain about when I was speaking, that is to say, whether this tax is to be levied on the whole amount, or whether it is to be levied on the surplus over and above 5 per cent.

The whole amount.

That is to say, the interest is charged on 6 per cent., and the tax is to be levied on the whole 6 per cent., and not 1 per cent.?

Yes.

Does this tax represent a reduction on last year’s tax?

Yes, the amount is less by about £200,000.

I take it any rate of interest over 5 per cent. is subject to surtax at the rate of 5 per cent?

Yes, that is right.

I think the Minister will see that 5 per cent. has not been a normal rate in this country. Although by a stroke of the pen you may make interest on farm bonds 5 per cent., you cannot make it a normal rate in urban areas. I suggest that instead of this being a tax on anything over 5 per cent., it ought to be on interest over 6 per cent., because that has been the normal rate of interest and is the normal rate to-day, except where it has been reduced by the action of the Government in regard to the farmers. I do submit this would be particularly unfair, and if the Minister will accept it, I suggest that the figure five be replaced by the figure six, which would be more just.

I do not know whether the hon. member understands. This is a reduction of taxation. Last year there was a tax on all interest whatever the rate might be. We have replaced that by a flat rate of 5 per cent., excepting anything below 5 per cent. It is a very considerable reduction of the taxation that was imposed last year. To raise the exemption limit to 6 per cent. would not be desirable. It would mean a much larger sacrifice of revenue, and secondly it is the idea of the Government that a rate of 5 per cent. on mortgage securities is under present circumstances a very fair rate, and that everything should be done to encourage the reduction of rates of interest down to 5 per cent. The hon. member must realise that the rates of interest now being exacted on mortgage securities—6, 7, and 8 per cent.—are very high under existing circumstances, and I do not think this is unreasonable.

The reason I put these questions to the Minister is because I have a wire from a constituent of mine as follows—

My payments last year doubled. Please protest.

It cannot be more than last year; it must be less to the extent to which this gentleman’s investments are 5 per cent. investments, and if they are 6, 7 or 8 per cent. investments, then it remains the same as last year.

No, a lower rate.

Then even if you have a 6 or 7 per cent. mortgage, the rate is lower on this than last year?

Last year it was a graduated rate rising from 5 to 10 per cent. At any rate it was never less than 5 per cent.

If you have a bond of £1,000, what would be the position there? You are not taking off the 1 per cent.

However desirable it may be that bonds should be reduced to 5 per cent., 5 per cent. is not a normal rate, and consequently to place a surtax on any interest over 5 per cent. is clearly wrong. There is a reduction of interest, but in reality this might have been wiped out altogether. Do not let the farmers run away with the idea that 5 per cent. is the ordinary rate of interest. I want to move an amendment which I hope the Minister will accept. I move, as an amendment—

That would mean that you would not be charging the surtax on something below a normal rate of interest. If you insist on this as it is, you will be charging the surtax on what is below the normal rate. This is only brought about because farmers’ interest has been reduced but there is really no relation between the one and the other.

If I remember rightly the interest rate from which the existing surtax is graded is 5 per cent. It seems extraordinary to suggest that it be raised to 6. Earlier in the day I suggested that if anything it would be more equitable to raise the rate of surtax. I believe the amount derived from the surtax last year was £350,000, and the adjustment proposed involves the surrender of £200,000. I have always regarded the hon. member for Hospital (Mr. Henderson) as a sound business man and I cannot understand him proposing such an amendment. The surtax does not apply only to bonds, but to all fixed interest-bearing securities, and there are many such which carry interest at 5 per cent. and under 6 per cent., and it would be absurd for us to throw money away in this way.

Amendment put and negatived.

The original motion put and agreed to.

I move—

Agreed to.

Resolutions on customs and excise duties and income tax to be reported.

House Resumed:

The DEPUTY CHAIRMAN stated that the committee had agreed to resolutions on customs and excise duties and income tax.

Resolutions considered and adopted and a Bill brought up.

I should like to learn from the Minister whether, in connection with the dam scheme of the Government, boreholes and cement dams are also included. I should further like to ask the Minister whether he would be prepared to give the House an explanation in connection with the finding of the commission anent the Schwartz scheme. I understand it was a fairly representative conference and that a scheme was strongly recommended and the opinion was expressed that that scheme would make the rainfall in South Africa more regular. I should like to know whether the Government will do anything further in that direction.

I hope that the Minister will not pay too much attention to the Schwartz scheme, because unless he is prepared to have a high mountain built somewhere in the country to divert the winds which will come over the Schwartz dam, it will not help a great deal. I am of opinion that winds in mountainous areas have a great deal more to do with rain than the sea has. We know that one comes across the biggest deserts in the proximity of the sea. What I want to refer to is the point which was mentioned by the hon. member for Heilbron (Mr. M. L. Malan), namely the Government’s scheme to assist in the building of dams. I should like to learn from the Minister whether the Government is prepared to help in the construction of small dams which are needed for irrigation purposes. It appears to me that it was the original intention merely to help the farmers in the building of small dams to prevent soil erosion. I want to assure the Minister that a great many farmers can be beneficially assisted if they can secure loans for the building of small dams for irrigation on their farms. In my constituency, particularly, we are very dependent on dams. So far farmers have always experienced that they cannot borrow money for the building of dams. I trust that the Minister will take into consideration the construction of such dams. I have always pleaded in favour of the Government, if it desires to foster irrigation, helping the individual farmer to secure money, not only for small dams but also for large dams. I trust, therefore, that the Government will enable farmers to borrow money more easily, so that they may build dams. I now wish to touch on another matter, which deals with the question of our irrigation policy in general. We have two kinds of dams in this country for irrigation purposes. The first class of dam is that which nature has given us, viz., our mountain ranges. They constitute a natural catchment area, and although nature has given us those, we are busy ruining them by mountain fires. I should like to know from the Minister whether it is the intention of the Government to do something to protect our natural water supplies. In the past the mountains with their forests and plants served as a sponge which caught the rainwater and then gradually returned it by evaporation and natural outflow to the rivers at the foot of the mountains. Now however, as a consequence of the unfortunate habit which a number of people have of setting fire to our mountain sides, we are busy ruining those dams. I ask the Minister to take steps to prevent that kind of thing. We build large catchment dams which cannot serve a whole generation. Many of them will probably not be in use for longer than thirty years, because at the end of that time they will be silted up. Here, however, the country has natural catchment dams which we are ruining. We have invested more than £8,000,000 in other dams that have been built, but we have not yet spent one penny on the protection of our natural water supplies. I can give the Minister the assurance that in the western districts of the Langeberg and in the Swartberg the destruction caused by mountain fires every year is incalculable. If we can only irrigate the land at the foot of the mountains it will be worth a great deal more than the land which we can irrigate below the dams that are built. I wish to suggest the legislation should be introduced for the establishment of mountain clubs in the same way as jackal clubs are formed.

The hon. member cannot discuss legislation at this stage.

In any case I wish to ask the Minister to consider the question of something being done to prevent those fires.

I should also like to speak a few words in favour of irrigation. Although I do not agree with the previous speaker that the Schwartz scheme should be left out of account, I agree with him where he urges the building of dams and greater facilities being provided for irrigation. We know that where there is water there is evaporation, which brings with it a change of climate. For that reason I am of opinion that the old methods which we have inherited from our forefathers have cost us millions of pounds, as a result of the policy of irrigation works being constructed in areas where heavy floods are experienced only once in every five years; to place farmers under such schemes without even settling them there properly means that all the capital and all the energy expended on those schemes will be wasted. I want every farmer to be placed in a position to build a dam on his farm, so that when good rains fall the water may be caught up in the dams out of which it will then be gradually distributed. If this can be done, one of the effects will be that our climatic conditions will be improved. As regards mountain fires, we know that they cause tremendous destruction. I consider that if we devote more attention to the subject of the conservation of water, it will be of great benefit to the country. Look at our interior, where we have large drought-stricken areas. If we can have a large catchment dam there, where the water can evaporate during droughts, to what extent will that help us? Have a condition of evaporation which will have a great influence on our climate. We know that on the large dry river schemes water is led off, instead of the water being kept for years when it is required most. The consequence is that the dams are dry during those years, and all the money and all the work is wasted. Irrigation can only be allowed there where there is permanent water. I hope that the Government will, by their irrigation policy, enable the farmers to build dams everywhere on their farms, and even if the water cannot be used for irrigation purposes, it will still be there for evaporation. There are instances to-day where there is grass for the cattle, but the cattle cannot be kept on the land because there is no water. I hope that the Government will carry out its plans in future in that direction.

I would like to know what the Government’s policy is in regard to irrigation? For many years irrigation has been looked upon in this country as a failure, because irrigators have come to the Government from time to time for remission of a portion of their indebtedness, and in this way a large proportion of the capital invested has been lost—in many cases as much as two-thirds (⅔) of the capital. The reasons are not far to seek. In some cases barrages were thrown over dry river beds, and we have these tremendous barrages holding no water. Works were undertaken in the Oudtshoorn district also, but when the ostrich feather industry went to the wall the irrigation schemes proved a failure. Then there are cases of dams silting up, and there is the Hartebeestpoort Dam, where the land cost about £200 a morgen on completion. No farmer can farm on ground which costs so much. Generally speaking, I would say that this country is not suited to irrigation, but we have to make the best of a bad job. The biggest rivers in this country are the Vaal River and the Orange River, and, although we have spent upwards of £10,000,000 on irrigation, we have never thought seriously of schemes on the Orange River or on the Vaal. By a process of elimination we therefore come back to the Vaal River. The Vaal River is the best river in this country for irrigation purposes, and it is an extraordinary fact that a big scheme on the Vaal River has never been tackled. I want to draw the Minister’s attention particularly to the desirability of irrigation schemes on the Vaal River, and when he is working out his policy I hope he will consider that very seriously. A big scheme on the Vaal would certainly be better than embarking on projects such as road making, which leads us nowhere. What we are doing to-day is making a nation of roadmakers, a nation of poor whites; whereas, if we go in for sound irrigation schemes on our large rivers, we shall assist the nation materially. Our prospects for the next ten years seem rosy. Millions of money are coming from the mines. It comes from the land by way of gold premium. Let us put a portion of that back into the land.

I should like to bring a few points to the notice of the Minister, and it is especially the first point which I wish to raise which is very urgent, and in respect of which the Government must help quickly. It is a matter in connection with water boring. So far as I know, there are no complaints of the manner in which the department does the work. It is being done very well, but the complaint which I wish to bring to the notice of the Government is that the existing regulalations are causing difficulty. According to those regulations people have to pay £7/10/- in advance if they want to get a bore. We know that there are too few bores in the country, but in our district, at Jonkerspruit, e.g., the farmers are not able to pay the money in advance, although they need the water very badly. They are quite willing to pay the money, although there are objections against their guaranteeing each other’s liabilities. An amendment of the regulations is urgently required, so that that £7/10/- may be added to the amount which they have to pay off in five years. The condition of affairs in those areas is such that farmers have to bore, but they have not got the £7/10/-, and they are consequently afraid to make application. Another matter which is possibly not so urgent, but which will become urgent, is a better control of water through irrigation. In my constituency, there are six or seven public rivers on which irrigation works are situated. Now that the water is becoming scarce, there is not enough for all those irrigation schemes. If there should be a person who is careless he may demand all the water that he is entitled to by law. The other irrigators will not be able to go to the Water Court, as it is too expensive for them. A cheaper system should be introduced to provide for cases of disputes about water, because to-day the River Board has to come and make surveys, so that the expenses connected with such a case may sometimes amount to £5,000 or £6000, more than what the land along such a river will produce over a period of years. Consequently it is not possible for those people to go to the Water Court. A much simpler system must be devised to protect the lower riparian owners against unreasonable owners higher up. When there are difficulties, and there is a scarcity of water, and people want to get their rights laid down, a water court is expensive, and people become bankrupt; and when the Water Court is over they are faced with the same thing again, which they might have got in a cheaper way.

The hon. member is not entitled to plead for the introduction of legislation.

I merely wish to bring this matter to the notice of ’the Minister. I feel strongly in favour of what my hon. friend i on the other side has said. I know that the Government cannot do this now, but as soon as there is money available, it should be placed at the disposal of people for the making of dams. It would be in the interests of the country to do so, and a great many white people would be able to make a living on such dams. At the moment it is a very slow process when application is made for the building of a dam. In my area the Water Board and the commission have passed the scheme, but we do not know yet where we stand with the department. People are blaming me for sitting still. I have approached the department, and I know that they have to act in accordance with their rules and regulations. But it is a very slow process, and I should like the Minister to give his attention to the matter, so that he may see whether assistance can be devised to expedite those matters.

I want to say a few words in connection with what the hon. member for Oudtshoorn (Mr. le Roux) said. I am surprised that an hon. member who knows something about farming, should casually reject a great scheme like the Schwartz plan.

Tell us something about it.

The hon. member for Ceres (Mr. Roux) is able to study the details of the plan himself, and he has possibly more leisure than I have at my disposal. I hope that the Minister will go into the matter, and not only the Minister himself, but that he will get a commission of experts to make an investigation into this plan. The hon. member opposite spoke about building mountains to divert the wind in a particular direction. There is no question about that, and I am afraid that my hon. friend has never studied the plan;

The hon. member cannot discuss the Schwartz plan now.

I want to discuss irrigation.

Under which item does the subject occur which the hon. member wishes to refer to?

I mentioned that plan casually, as another hon. member had referred to it.

The Minister’s salary does not come under this Vote, and the Committee can only discuss votes that are referred to under those items.

I wish to discuss irrigation in general.

The hon. member cannot do so now. He must confine himself to the points that are mentioned in this Vote.

: Then I want to make an appeal to the Minister and draw his attention to the fact that if we cannot proceed to build small dams on farms, we shall never be able to cope with drought conditions in this country. A great plan like the Schwartz plan is the only thing that can save us in the future.

When the Minister of Justice made the announcement that the Government intended subsidizing irrigation schemes on a large scale, a glow of enthusiasm passed through my constituency. I should be very grateful if the Minister of Irrigation will make it clear to us what the conditions are on which the money can be borrowed. I see on the loan estimates that £30,000 is made available for irrigation works throughout the Union. That is a small amount, and I doubt whether it will be enough. In that part of the Free State which I represent we are more interested in water-boring than in small schemes. My constituents would welcome it if a dozen bores could be sent there by the Government. Ours are dry parts which, at the present moment, are having a good deal of attention, because nearly half the stock of the Free State has been sent there, as there is still a little grass there. There is grass on the farms, but very often there is no water. I should appreciate it if the Minister would explain to us his policy in regard to water-boring. We expect the Government to pursue a progressive policy and to provide more water bores.

I notice on page 143 that provision is made for £50,000, losses on bores, that were placed at the disposal of farmers and tenants. I represent one of those constituencies where there are a great many people who want to bore. The value of those farms is unfortunately so small that they are unable to pay the cost of boring on the present scale. For that reason I should like the Minister to reduce the cost of boring. This amount shows that the Government does not charge all the expenses that are incurred by it. While many farmers are assisted now out of the Treasury, I should like the Government to consider the question of reducing costs of boring for those people, because in a number of parts which I represent people cannot pay those costs on the present scale.

I should like to give my support to what was said here by the hon. member for Ceres (Mr. Roux) when he asked the Government to reduce the cost of boring. Farmers are experiencing, at the moment, that it is quite impossible for them to pay boring costs on the present scale. Those costs are too high, although they used to be higher still, and were reduced later on. At the moment farmers are in such a position that they cannot pay the boring costs on the present basis. In view of the fact that the Government desires to help the farmers, I consider it is not more than right that farmers should be met in this way. There is another matter. There is a departmental regulation that before a bore is sent to a certain part at least seven farmers must sign an agreement that they will use that bore. There must be at least seven farmers. I can tell you that in the less privileged parts, where people live long distances from each other, it is often a difficult matter to get an agreement signed by seven people who want to take the bore. The consequence is that by the time all of them have signed so much time has passed that many of them have got into the position that they have to trek or leave as a result of circumstances over which they have no control. The administration will help farmers a lot if this regulation can be abolished. I agree that it may be that there should be a certain number of farmers who will take the bore, but they should not insist on having seven farmers sign before a bore can be sent.

I wish to associate myself with members who have pleaded for irrigation works. I wish to draw the Minister’s attention to the fact that my constituency is particularly suited for dry land farming. The rainfall, however, is so irregular that it does not pay, because if we do not get rain for three, four or five years the money that has been invested becomes useless. I wish to point out to the Minister that there are suitable places for catchment dams on private property, and even on village property. I should like the Minister, when the time comes, to have the condition of the country thoroughly inquired into for the purpose of suitable spots being found where catchment dams may be built in the north-west. If we can get catchment dams there, it will help farmers a great deal in times of drought, and they will not have to trek so far with their stock.

How much has been written off from the Victoria West dam?

That has nothing to do with the matter.

Many hon. members have discussed the question of bores. I do not know whether it is the object of the Government to give bores to the farmers for nothing. The original regulation was that every man who applied for a bore had to deposit £25. That deposit has now been reduced to £7/10/-. If we do not ask for a deposit everybody will ask for a bore on any spot of land, but if a person has to pay a deposit he will be a little more careful. If we do not do that we shall require thousands of bores. The position to-day is that the Government is already subsidizing bores to the extent of 50 per cent. The Government, even to-day, is bearing half the costs of bores.

Cannot one sign a promissory note for it?

I do not want to say too much about promissory notes, but I think it would be unwise to depart from the old policy of demanding a deposit of £7/10/-. That deposit has actually been reduced from £25 to £7/10/-, and the Government is to-day subsidizing bores to the extent of 50 per cent. I want to draw the attention of the House to the fact that people do not ask for bores during the rainy season, but to-day, in view of the drought, they all want to bore at the same time. If we want to do that the department will have to buy thousands of bores, and if the rain comes the bores would stand idle. At the moment there are 85 bores in the veld. Several members have mentioned the Kalahari scheme. I want to say at once that I have not the least faith in that scheme. I have never yet heard of mankind being able to change the climate.

Big rivers change the climate.

I shall be pleased if the hon. member will read an article which a certain professor wrote in this morning’s Die Burger, and in which he states the scheme cannot be a success.

Has he been there?

It is not necessary for experts to go there. They sit in their office and work out what can happen. If he could fill the whole of that dam, it would still only be a drop in the ocean, and it would not have any effect.

How is it that Lake Ngami is dry now?

That lake is dry because the rainfall has to come from the sea. To imagine that we must go and spend millions of pounds in a part of the country, in an uncertain scheme, in a country which does not even belong to us, seems to me to be somewhat unwise. It is human that the mere idea of large streams of water is always attractive, but do not let us by means of congresses and things of that nature, go in for a thing that will not pay. It will cost us millions of pounds, and I have already said that I have no faith in it. I am sorry that I cannot hold out any hope that I shall go on with that scheme. The hon. member for Heilbron (Mr. M. L. Malan) asked whether it is the intention of the Government also to bring small dams, which are not intended for the prevention of soil erosion, under this scheme of dams. I do not think that such dams can be built under that scheme, but the ordinary arrangement still exists, viz., that a man who wants to build a dam can come to us to borrow the money. That, however, will not happen under this scheme. The hon. member for Oudtshoorn (Mr. le Roux) has touched on a point which I regard as being of the greatest interest. I do not only feel very strongly on the question of mountain fires, but also on the question of veld fires generally. A deputation met me yesterday with the request that we should take steps to put a stop to mountain fires and veld fires. I am very strongly in favour of that, but I wish to point out to hon. members that there are many of our farmers who will not be in favour of the passing of legislation to prevent veld fires and mountain fires. The hon. member for Riversdale (Mr. Badenhorst) will not vote for a measure aiming at the prevention of veld fires. I have always held the opinion that veld fires were very bad for the grass and for the veld, but I am asking myself how we are going to induce farmers to adopt a measure of this nature. I myself and my department will see to it that veld fires are reduced as much as possible on our own lands and on our mountains. The deputation asked us that we should not let out any more land on mountains, as a great many of those fires originate on Crown lands. Look at the Transvaal, and see how people burn the veld and shrivel up the trees and char them. I consequently agree with hon. members, although I must honestly say that I do not see how we can put a stop to such fires. The hon. member for Beaconsfield (Mr. Humphreys) spoke about the irrigation scheme along the Vaal River. I have already said that I have more faith in an irrigation scheme along the Vaal River and along the Orange River. As regards that scheme we have all the data, and it is a good scheme. It is only for the Government to say so and we shall go on with it. I hope that the hon. member will be satisfied with that. We have the data, but we have not got the money. I am pleased that the hon. member for Fort Beaufort (Mr. Hockly) made a very reasonable suggestion in regard to the Schwartz scheme. We know that our climate is not greatly influenced by the Kalahari but by the sea currents from the South Pole. In the Argentine they have a magnificent weather service, which is connected with people in the southern areas, so that they are able to tell the farmers about a month in advance, fairly accurately, what the weather is going to be. We must not start playing about with fantastic schemes in the Kalahari. Our climate is dependent on the hot and cold currents and the conditions in the southern archipelago. It is there that we must make our investigations and not in the Kalahari. I believe I have now replied to all questions.

I would like to discuss a very serious question of irrigation policy which affects certain schemes where land companies have acquired ground under irrigation schemes which are already completed, and I would like to take advantage of the rule which allows me 30 minutes to discuss a question of policy. I would like to call the attention of the Minister to the fact that there are schemes which have been completed, and where there is already a considerable extent of land under irrigation, which are still in the hands of land companies and are not being made beneficial use of as far as the general population is concerned. I regard this as a matter of extreme importance and also extreme urgency, and I would like to bring one example to the attention of the Minister. There is an irrigation scheme on the Sundays River under what is called the Van Ryneveld Pass Dam, which has been completed for a matter of five or six years.

Do you call it the Sundays River?

It is above Lake Mentz. Now the history of this particular scheme goes back for about 14 years. In about the year 1920 the Government that was then in power voted money to build this dam. After the money had been voted a certain gentleman, by the name of I. W. Schlesinger, acquired certain options on land under this scheme. Immediately the Government which was then in power knew about these options they very rightly said that this dam would not be built if the ground was going to be acquired by a speculative land company for the purpose of speculating in land, and the scheme was dropped. After the scheme had been dropped the farmers who had given options to Mr. Schlesinger, one or two or more of them, went into consultation, and tire options were given back to the farmers. These farmers then came to the Government, I am told, almost on their knees. The farmers went to the Government almost on their knees and asked the Government to proceed with the carrying out of the scheme. The Government—again very rightly— said that if the options had been withdrawn it would proceed with the scheme, which it did. The dam, however, had not been finished when Mr. I. W. Schlesinger again acquired the options, and in a very short time had control of the whole of the irrigation board, and the land was in his hands. The scheme was completed and the land was sold at £90 per morgen, mainly in England and India, to officers wire had received gratuities and to various people of that kind. These people settled there and were greatly disappointed with what they had bought, and very few of them indeed are left there now. The whole of this ground is still in the hands of the African Irrigated Lands Company; a small quantity of the land was in the hands of the Graaff-Reinet and Adendorff municipalities. No rates have been paid on the ground except maintenance rates. Last year the select committee made a report suggesting that a write-off should be made, and that the water rates be reduced from £3/12/6 to 12/6 a morgen—practically a write-off of half-a-million. There are 3,000 morgen under lucerne for the profit of the African Irrigated Lands Company. This ground is capable of holding about 300 families. I regard this as a very, very grave matter, that a land company should have acquired from 3,000 to 4,000 morgen under an irrigation scheme, and that the select committee should suggest a write-off of half-a-million to enable a company of this nature to retain this ground permanently. The company states definitely that it is not its intention to sell any more ground, but farm the ground itself. It is a very, very grave matter that a company should be allowed to hold this ground, when hundreds and hundreds of families are looking for ground on which they can exist. There is no difficulty about taxation. The taxes they should pay to-day are £3/12/6 a morgen. It is because I realize the grave danger of this report being accepted by the House that I raise the matter. If we utilize ground such as this we can put people back on to the land. It will be said, “How can the Government differentiate against a company like this?” There are 30 or 40 small holders, and we are very glad that the select committee should suggest a reduction in the water rate to 12/6 a morgen. It is a very strange thing that this very select committee has solved the problem itself, for it has suggested that the municipality of Graaff-Reinet should he discriminated against, and that it should pay £3/12/6 a morgen for its ground under this scheme, while the African Irrigated Lands Company, which acquired the land against the express wish of the Government—I might almost say that the land was acquired practically under false pretences—should have a write-off from £3/12/6 to 12/6 a morgen. This is a very serious matter to raise, and a very serious statement to make. I do not blame the members of the select committee; I blame the machinery of the select committee. No opportunity was given or sought for submission of evidence from the municipality, and no evidence was sought from the small holders. All the evidence asked for was from the company, and they came down with the engineer of the board in order to give that evidence. If this is allowed to stand as it is, there will be a grave miscarriage of national policy. I feel sure that I have the sympathy of this Government when I ask that this matter be dealt with in this particular way, and that We differentiate as far as the water tax is concerned; that we say as soon as this land company sells ground to an individual as a small holding, at that moment the write-off shall occur from £3/12/6 per morgen to 12/6 per morgen. In that way we shall get the people on to the land very quickly. I do not know whether an offer was made to the company for the purchase of the ground, but I know that the company has expended, including the purchase price, about £600,000. I may be wrong to the extent of £100,000 or so. Whose fault is it that the whole proposition to-day is only worth about £150,000? It is the fault of the company, who, against the expressed wish of the Government, obtained options before the dam was built, notwithstanding the fact that they were told that the dam would not be built if a speculative land company had options on the land below the dam. I think the position is perfectly clear that, in the first place, the company did not have a moral right to buy that ground; and, in the second place, that they have no moral right to consideration in the matter of the write-off. There are other points that I had better raise, lest it be said that I am not putting both sides of the question. It is quite true that this company has 8,000 morgen scheduled there, and that only 4,000 morgen can be benefited by water. Whose fault is that? The company maintain that it is the fault of the Government engineer. I say it is perfectly plain that it does not matter whose fault it is, because the company acted directly against the expressed wish of the Government, and if they lose £5,000,000 there, it is only right and just that they should lose it, seeing that they did a thing which the Government declared should not be done. The serious point is that the matter is urgent, because there are hundreds of people waiting to be settled on this land. A large part of the unemployment problem of that particular area can be dealt with if this matter is properly handled. There are many schemes before the Department of Irrigation to-day which cannot be considered because they are not sound schemes but here we have a scheme which is complete, and the ground is irrigated. I bring the matter to the attention of the Minister, believing that he and the Government will be in sympathy with the representations I am making. There are many other considerations with regard to a company like this, together with the many other companies with which it hangs together; but I ask, with confidence, that the Minister will see that this ground is made available to those people who are hungering for it.

I am pleased to notice that the Minister shares my view in regard to mountain fires. He states, however, that he sees no chance of taking steps against such fires owing to the fact that there is a difference of opinion on the matter among farmers themselves. I am of opinion that the Minister should not be scared simply because farmers differ on the subject. If he wants to take steps, and if he is afraid that some people may be dissatisfied with those steps, he can leave the enforcing of such steps to the discretion of the divisional councils. If a divisional council then desires to take the steps for which the Minister has made provision, such a council will have the right to act. If a divisional council like that of Riversdale in accordance with the pleadings of the hon. member for Riversdale (Mr. Badenhorst) does not desire to take such steps, it need not take them. I am also gratified that the Minister shares my view in regard to letting out mountain sides to farmers. Some of our mountain ranges have been let out to farmers, and I can assure the Minister that if he acts with circumspection in regard to these matters, he need have no fear that those mountain sides will be fired by those people. Many people live at the foot of the Swartberg and it is often necessary to rent the mountains to them. I suggested to the former Minister that those mountain ranges should be let to farmers with the express condition that if the farmer fires the mountain he will not be allowed to rent it again. If that is done, I have generally found that mountain fires do not take place. For that reason I want to ask that such facilities shall be granted on those conditions, not for the grazing of sheep but for the grazing of cattle, because the grazing of cattle will not damage the veld. The Minister further said that the ordinary facilities existed for the building of dams by individuals. That is my objection, that the facilities are there, but that the interest which the people have to pay is too high.

The rate of interest is four per cent.

If that is the case that the Government will in future put up the money at four per cent., then I am very pleased that the Government has at last consented to do what I have always been pleading for in this House.

The hon. member for Oudtshoorn (Mr. le Roux) has made a very important suggestion in regard with mountain and veld fires which I shall certainly bear in mind. I do not know yet whether it would be best to summon a conference at the end of the year, but in any case I shall consider the suggestion.

†The hon. member for Graaff-Reinet (Dr. Bremer) has raised a very important and contentious matter—on the Van Ryneveld’s Pass Dam. It is true the Irrigation Commission recommended a write-off and the select committee recommended it, but the House has not yet passed it. I am fully acquainted with the position, and have seen deputations pro and con. It is a very vexed matter. I hope, however, that the hon. member will leave the matter over until I have visited the ground, and in the meantime I would suggest to him not to allow this to become a sort of King Charles’ head.

I promise the Minister that I shall not take up a great deal of his time, but as I have not yet had the opportunity of saying a few words on this Vote, I want to ask the Minister what the policy is in the future in regard to irrigation schemes. The hon. member for Graaff-Reinet (Dr. Bremer) spoke about a dam that had been built in the constituency of Graaff-Reinet and where the land is practically all used for speculative purposes by the owners with a view to selling it at high prices. In my own constituency there is also land available for the dam. In that case the people who live under the scheme are prepared to make a suggestion to the Government and to say that when the scheme is completed the Government may decide how much of that land they can use themselves, and the balance of the land they are prepared to sell to the Government at prairie value. Those people say, therefore, that they do not want to speculate with the dam. They are prepared to give the Government the land which they cannot use themselves, so that the Government can, in turn, sell that land at prices at which the poor people who want to come and farm there can make a living. I should be very pleased if the Minister will give his attention to the scheme. Those people are very honest. They do not know what is going to happen, they do not know whether the scheme is going to be started in one or two years’ time, and now they have to dig furrows in order to carry on with the cultivation of their lands.

I may say that we are still considering that scheme, and we are still enquiring into it. As the hon. members knows, we have to make arrangements in the Sundays River Valley area in which those great floods have taken place. As soon as those matters have been dealt with we shall give further consideration to this scheme.

Vote, as printed, put and agreed to.

Vote 33, “Interior,” £267,728, put and agreed to.

On Vote 34, “Public Service Commission”, £21,359.

On the motion of Mr. Giovanetti it was agreed to report progress and ask leave to sit again.

House Resumed:

Progress reported; House to resume in Committee to-morrow.