announced that the Committee on Standing Rules and Orders had appointed the following members to serve on the Select Committee on the South African Association Incorporation Act, 1906 (Cape), Amendment (Private) Bill, viz.: Messrs. Close. Robinson, Van Hees, Hay and Roux; Mr. Close to be Chairman.

I move, as an unopposed motion—

seconded.

Agreed to.

When this debate was adjourned on Monday I was trying to show the fallacy of the Minister’s argument that outside diamonds do not compete with the products of De Beers, the Premier, Jaggersfontein and South-West Africa. Let me say positively that all diamonds, no matter what their colour, size or shape, produced outside the Union do compete. The factor of competition is the money value of the diamonds that are produced outside our sphere of operations. The Minister, I think, said that the Government could not control the alluvial diamonds. I quite agree that the Government could not control the individual digger, but they could control the whole of the alluvial output. One of the Minister’s arguments was that they could not control the alluvial output because there were so many diggers who lived from hand to mouth. That is quite true, but there are also a large number of men who become poor whites through working on the river. Now, the Government could control this alluvial output by not continually proclaiming so many of these alluvial farms. The Minister also said that for obvious reasons they did not control the output of the river diggings. I asked myself what these obvious reasons were, because it is a very wide term to use, and it struck me that one of the obvious reasons was that the river diggings stretch over an immense tract of country from Barkly West for many hundreds of miles into the Transvaal, and that these alluvial diggings are included in and almost form part and parcel of constituencies, every one of which sends a Nationalist member to this House. Now the Government will not control the output that they can control, but they seek to further control diamonds which are already controlled. The Minister delivered a most violent attack on the directors of these diamond mining companies, and especially on the London Diamond Syndicate. He implied that they exercised undue influence over their colleagues for the purpose of obtaining favoured conditions. That was the implication. It is not alone a grave charge against the directors of the company, who are connected with the diamond industry, but it is a graver charge against those directors who are not concerned in the diamond trade. To my mind it is almost accusing those gentlemen of commercial blackmail, and I say that these accusations are unjustified and unwarranted, and I defy the Minister of Mines and Industries to prove any one of the accusations which he has made against those gentlemen, who are entrusted with at least thirty million sterling of public money. Now in the early days of Kimberley there was an open diamond market. There were very many diamond buyers who bought the product of the different mines and who shipped that product over to England and obtained financial facilities through the banks. When the demands slackened these people were forced to sell their diamonds in the London market to meet their impending obligations, and we had frequent fluctuations in the diamond market, so much so that very big falls in price took place and the industry suffered very considerably. It was then that Mr. Rhodes approached the directors of the De Beers Company, who were diamond merchants. It was through his influence and persuasion that this original syndicate was formed. This syndicate was formed seventeen or eighteen years before Union. I remember Rhodes saying to me—

Now the Minister said the syndicate made huge profits at the expense of the producer. You might just as well say that the wool buyers make huge profits at the expense of the farmer. I can see no difference myself. For a period of a little over 30 years the London Syndicate purchased from this country at least £150,000,000 worth of diamonds. They had bad times and good times, but I say positively that for the whole period the London Syndicate only made in the aggregate a normal profit on the large amount of business. I may say that if they had devoted their capital, experience and business ability to any other industry, the chances are they would have made a much larger profit. After many years the Premier Company and the South-West Company made terms with the syndicate. They did it in their own interests; they were free agents; no one forced them. Now the Minister implies that the directors who were interested in this syndicate made concessions in their own interests. This is incorrect. It is a grave charge to make, and it is based purely on imagination. During the American crisis of 1907-8 there was a split in the original syndicate. I may say for the information of the House that the original syndicate was composed of four firms largely interested in the mines and four London firms who had no interest in the mines whatever. During the American crisis of 1907-8 the demand for diamonds entirely ceased and the four members of that syndicate who were not interested in the mines retired from the syndicate, and a new syndicate was formed consisting of Wernher Beit and Company, Barnato Brothers, Messrs. Mosenthal and Dunkels and Company. All those merchants were largely interested in the mines. What did the merchants say who were not interested in the mines to the other merchants? They said: it is all very well for you to continue buying from the mining companies. It does not make much difference to you if you buy diamonds and lose a little for the time being, because you are helping the mines in which you have enormous interests. This conversation took place at the time when the De Beers Company were pressing the syndicate to buy a considerable quantity of diamonds to keep the mines going. They said we are not owners of the mines; we are merchants. Those four firms retired from the syndicate and the remaining firms took over their shares and divided them amongst themselves. That was the time that I, having some interest in the mines, took a small share in the syndicate which, it is only fair to the House to say, I hold to-day. It is absurd to say that the directors of these companies sell the diamonds themselves; it is untrue. After all, this Bill only applies to three companies, the Premier, De Beers and the Jagersfontein. Now all these companies have their own diamond committee, which is composed of directors, who are neither directly or indirectly concerned in the diamond buying or in dealing in diamonds. They keep separate minute books and separate codes, and the directors interested in the syndicate have no voice or influence in fixing the prices or the terms. There are twelve directors of De Beers Consolidated Mines. There are four who are diamond dealers and there are eight directors who have no interest whatever in the diamond business, and those eight directors—I say this from my own personal knowledge, and I have been a director of De Beers for over 30 years—drive the hardest bargain with the syndicate, and I am quite certain that if any other company offered the same prices and terms that they would be accepted by the diamond committee of De Beers and the other mines. I may say, for the information of the House, that during the five years ended 31st December, 1924, the London syndicate purchased from De Beers, South-West, Premier and Jagersfontein about £27,000,000 worth of diamonds. During that time there was a big reaction after the war in which all industries suffered. I say this, because I know to my own sorrow, that they did not make certainly more than interest on their money. Now the Minister made a great boast about the agreement that he had made with the Anglo-American Company. What did it amount to? An advance of 2½ per cent. Has the Minister never heard of a difference of 2½ per cent. in a big deal before to-day, in a transaction amounting to at least £1,750,000? Has he never heard of that? I think he has. Some of the directors of the Consolidated Company are members of the syndicate that purchased from the Administrator of South-West. As the Minister admitted, they purchased these diamonds for five years. Well, it is just the same custom as has prevailed with the De Beers Company for the last 30 years. Have these directors ever exercised undue influence over the Administrator or the Minister in regard to that big transaction? Now, the Minister said this Bill was holding a sword of Damocles over the head of the syndicate. Ridiculous ! The syndicate has its head office in London and has a branch office in Kimberley. It employs a staff of highly-qualified men— sorters and valuators—and the salaries and expenses amount to practically £25,000 per annum. All the syndicate need do is to close the Kimberley office. Where would the sword of Damocles be then? It would be only another nail in Kimberley’s coffin, because £25,000 a year would be withdrawn from circulation. It is not holding a sword of Damocles over the head of the syndicate; it is holding a sword of Damocles over the head of the producers, who under this Bill, cannot even control the disposal of their own property. Where would the Minister be if this syndicate ceased its operations in this country? They are very clever business men with large financial resources, and this is not the only country where they can do business. Their activities would probably be transferred to other countries. When I read this Bill I could not believe my own eyes. I asked myself whether I was in Russia or South Africa. It is the most revolutionary measure ever introduced in any civilized assembly that I know of. You are depriving people of the inherent right of dealing in their own property. Mining investors have become nervous and there has been a distinct weakening in the diamond market. Now that can be done under this Bill if it becomes law? The Government can go into the diamond business, establish offices in any part of the world, and buy diamonds produced outside of the Union. The Government may advance money to the alluvial digger. It is sure to have an enormous number of applications for advances from these diggers, and I do not envy the Government their job of dealing with diggers who will probably be dissatisfied with the prices offered by dealers. These will come to the Government and considerable pressure will be brought to bear on them to carry out the principle of “jobs for pals.” Furthermore, the Government may fix the value of the diamonds that De Beers may sell and fix the minimum prices. How are they going to do it, considering that a parcel of diamonds worth £100,000 will be sorted into 350 or 400 grades, worth, from 7s. 6d. to £100 a carat? The market is in London for different qualities, sizes and shapes, and these are continually fluctuating. I say the Government can neither fix the price—it may fix a price—within the Union, certainly it cannot fix the prices of the necessaries of life. How can they fix the price of such a delicate article of commerce like the diamond, subject to the world’s conditions, politically, financially and industrially. You cannot fix the prices for wool, wheat, skins or mealies. No, supply and demand govern prices, and the prices of diamonds are governed by the amount the world is prepared to spend only and the control value placed on the market. The arrangement for this control has been in operation the last thirty years, backed by four big producers, and it has been a great success. Why not leave well alone? The minimum price that may be fixed by the Government may be higher than the maximum price ruling in the European markets for stones from Brazil, Angola, the Belgian Congo, and West Africa— our competitors—would be selling freely, whereas we should be unable to sell. You can fix railway rates because there you have a monopoly, though even there mistakes have sometimes been made. But you cannot fix ocean freights. Under this Bill the Government can prohibit any company exporting diamonds without first obtaining the consent of the Control Board. A company can only sell to persons selected by this Control Board. Under these circumstances the producers would be denied the advantage of the world’s competition. We cannot bargain for the sale of our own products, and we are denied the right conceded to the workers of collective bargaining. Let me refer to Clause 6, which lays down that the Board—

According to that this Board can do what it likes with other people’s property. I am very thankful to see that some provision is made for paying the producers, but this Bill does not say how long the producers will have to wait before they receive the proceeds of the sale of their diamonds. Members realize how easy it is to get money from the Government. Let me compare the Government conditions with the syndicate contract for this year’s production from De Beers, the Premier, and Jagersfontein. For the first six months ended June 30, the syndicate, including the ten per cent. export tax, have bought diamonds to the value of £3,500,000 —cash against delivery. In some instances smaller companies like the Jagersfontein, they pay out in five monthly instalments of £80,000, which helps the company immensely. During the following six months the syndicate will probably take about £3,000,000 worth. In this transaction the syndicate takes all risks of marketing and bad debts, and the producer is responsible for nothing. The syndicate gets an allowance and, while it would not be fair to disclose the conditions between buyer and seller, I may say that this allowance more than covers these risks, and any excess of profit over this allowance is divided between the syndicate and the producer, the syndicate getting forty per cent. and the producer sixty per cent. You could have no better protection than this system of dividing the profits between seller and buyer. The farmers in this country have not this advantage. They sell right out to the skin, grain and other buyers, and whatever profit there is they keep to themselves, but the diamond producers have a much greater advantage over these other South African producers. To my mind, that is an ideal arrangement. The producers are perfectly satisfied. I will ask any business man in the House whose terms would he rather accept for the disposal of his produce: the Government’s under this Bill or the arrangement made with the syndicate. Hon. members will remember that there was a world commercial slump in 1920, due to the reaction after the war. When the slump was at its height the syndicate held £7,000,000 worth of diamonds. Amsterdam and Antwerp became nervous, and the bankers who had given these people large credit became alarmed. A deputation from these large dealers come to London and interviewed the syndicate, with the result that the syndicate agreed that they would not put one diamond on the market until there was a demand for diamonds—until business improved. The dealers were satisfied, it created a lot of confidence, and the bankers were perfectly satisfied. And the syndicate kept their word, and held these diamonds between twenty and twenty-two months, and prevented one of the greatest panics that could have happened in this diamond industry. If the syndicate had put the diamonds on the market the industry would not have recovered for at least ten years. The interest alone on the £7,000,000 for the period these diamonds were kept under lock and key amounted to half a million of money. Is the Government prepared to do this? Is the country prepared to entrust amateurs with this business, as against others who have been years in the business. I have been in this industry over 50 years, and I am told we are to run the risk of three amateurs, probably unsuccessful men, taking the business out of not only my hands but the hands of the gentlemen associated with me all these years. As the Government under this Bill will become diamond merchants, they may hold in addition to Union diamonds other diamonds produced in any part of the world. They may establish offices in any part of the world, and it would not astonish me if the first office they were to establish would be in Russia. There is a large amount of diamonds still in Russia, and it would assist that Government if someone would come and buy a few million pounds worth of their diamonds, and it would not surprise me if the extreme Labour wing should press the Government to do this. If they do this they will get themselves into a terrible pickle. I was reading a book entitled “Letters from a self-made merchant to his son.” In one letter he says—“My dear son—One fool can buy more in a day than twenty sensible business men can sell in a year.” I will just quote the position of De Beers and that of the other companies would probably be the same. The fixed annual charge of the De Beers, that is to say, their liability for interest, redemption of debentures, interest on preference shares, is £1,200,000, approximately. At the commencement of the year it amounted to £3,000,000 sterling, including mining expenditure but exclusive of taxation. How can we possibly carry on if we don’t sell outright? To-day we actually sell in advance, and, as I said before, the Jagersfontein Company have received monthly payments for their diamonds. If this Bill unfortunately becomes law, the whole of these companies will have to reorganize and conduct their companies’ affairs from an expenditure point of view on the irreducible minimum because they do not know where they are going to sell, when they are going to sell, to whom and how they are going to sell, or when they are going to get the money. No man could conduct his affairs under these conditions. Our expenditure will have to be conducted on the irreducible minimum, and that will cause a lot of unemployment, reduction of staff, salaries and work-people. I have been chairman of the Jagersfontein company for thirty years without a break, so I ought to know something about them—much more than about politics. At times we have been compelled to raise large sums on the security of our diamonds. If this Bill is passed, we could not do it, because no banker will lend money if he cannot receive the diamonds at any time. Our financial resources will be crippled. Diamonds are a luxury. The working classes do not buy them, but this Bill will only injure the working classes. I should like to ask the Minister of Finance how he could finance the business of this country, having to provide all the expenditure and some other body, like this Board of Control, were brought into being, over which he had not the slightest control; if they were empowered to collect the taxes, employ as many men as they liked, go where they liked, do what they liked, pay others what they liked, pay their assistants what they liked, and hand him over the money when it suited them, how could he possibly conduct the affairs of this country? Knowing the Minister of Finance as I do, I know that he would not accept office under these conditions. If the directors of the diamond companies were rogues or fools there would be some excuse for this Government interference; but until the Minister of Mines cast his aspersions upon these gentlemen, I say this, without fear of contradiction, that no hon. member has ever heard a whisper against the character, probity and integrity of the directors of the De Beers, either past or present. Despite all the new discoveries in the last twenty-two years, outside the Union, and the increased production to-day, amounting to £7,000,000 per annum—these discoveries have taken place since Rhodes’ death—and, in addition, we have had three very serious crises in the diamond market. To-day diamonds are in fair demand and fetching fair prices. Confidence has been established and maintained. This can only be achieved by business men with long experience and big financial resources. Could the Government do as well as that? Certainly not. There is no necessity for this Bill. The Government, when they have been parties to the disposal of diamonds, have always been well represented at the conferences. They have always been consulted and been parties to the negotiations and they have always agreed to the terms. It is quite right that the Government should have some voice in the disposal of the product of South-West Africa and the Premier Company, because they are very largely interested. This they have had, and this Bill won’t increase the powers that they have hitherto enjoyed in this regard. There have never been any serious differences amongst the producers. The Minister of Mines and Industries has generally taken the chair at these conferences. Why change all this? You cannot improve it. Now during the life of a Government there are many changes in portfolios. Supposing the Minister of Defence, that, may I say, democratic martinet, became Minister of Mines and Industries, we would not have a soul to call our own; worse still, supposing the Minister of Posts and Telegraphs were appointed to the portfolio of Mines and Industries—well, it would not be a case of handing over your diamonds, it would be a case much more probably of “deliver the goods.” And, to make the thing a complete farce, they might appoint the hon. member for Vredefort (Mr. Munnik), with his knightly chivalry and his judicial impartiality, as chairman or a member of this board. In that case all I have to say is, heaven protect the diamond industry from the autocracy of the democracy.

I am sorry to interrupt the hon. member, but his time has expired.

This is a very important matter, and I hope that in view of the importance of the subject and of the special knowledge that the hon. member has, with the indulgence of the House, he may be allowed to speak a little longer.

No objection having been raised to indulgence being granted, the hon. member for Beaconsfield may proceed.

I won’t be long, Mr. Speaker. On December 31st last the De Beers Company declared a dividend of 10s, on its deferred shares. They had passed dividend for 3½ years in consequence of the depression in the diamond market. Just as we were getting our heads above water, just as we required some sympathetic treatment from the Government they bring down a heavy hand to crush the industry. There is a great desire in this country—and I have heard expressions from hon. members in this House—that Rhodesia should join the Union. It was a sorry day when Griqualand West allowed itself to be annexed to the Cape Colony. They bled us dry; they took many millions out of Griqualand West, which they spent all over South Africa. Were it not for that, Griqualand West would to-day be a land flowing with milk and honey. The other day I heard some Ministers congratulating the House on having come to a customs convention with Rhodesia, and I think there was a feeling that this may result ultimately in Rhodesia joining the Union. But what will she think of this Bill which has been laid on the Table? She will fear, if this Bill is placed on the Statute Book, that for her mining interests she will receive the same treatment that the diamond industry has received. Let me tell this House, seriously, that this Bill sounds the death-knell to Rhodesia coming into the Union. In this country there are too many politicians and too few statesmen. South Africa is a big field for mediocrity. I make bold to say that if the Nationalists had had a majority over the whole House a Bill of this character would never have been introduced, for it is so opposed to the nature and instincts of the Dutch of this country. I know the Dutch very well; I lived with them for many years when I was prospecting, and I know there is no people in the world who love freedom and liberty more than the Dutch and hate Government or official meddling in their affairs. Why is this Bill introduced? In my opinion, it has emanated from the socialistic and communistic supporters of the Labour party, whom the Nationalists must, naturally, appease. The Socialists in turn must satisfy their communistic friends, and they have to keep the Bolshevists quiet. We had evidence in Kimberley at the Labour Conference, when the Minister of Posts and Telegraphs and the Minister of Mines and Industries were present. They did not very much attempt to make speeches; most of their time was taken up in keeping their friends quiet, but they were not quick enough to stop the hon. member for Pretoria (West) (Mr. Hay) from saying that the Prime Minister of this country was too “ladylike.” It was not a Labour conference; it was a conference in labour. This Bill is the first fruit of the Pact, and I say God help South Africa if we have more of this Bolshevic legislation, which has commenced with diamonds, and which will, if this continues much longer, end with wool, skins, wheat, mealies and cotton. In all seriousness let me warn my Dutch friends—and I have a good many Dutch friends—that if they pass this Bill they will sow the wind and reap the whirlwind.

After listening to the Janus from Beaconsfield, one wonders why the late Prime Minister (Gen. Smuts) issued that pitiful call to him during the last election time at Kimberley. You will remember that on that occasion he put out the cry “Dear old Davy, don’t go away, we require you in the House,” and here he sits.

Yes, and I beat you, too, didn’t I?

The hon. member says he beat me, too. He is quite right, but he also forgets that a great deal of the arguments that he accuses the Minister of Mines and Industries of using against him were arguments that he heard in Kimberley every day during that time. It is principally in that connection that I would like to deal with the hon. member for Beaconsfield, who has given us so much information on behalf of the Diamond Syndicate. We have been told that the shareholders of De Beers reflect the opinion on this Bill when we see that shares have dropped, and the hon. member (Col. Sir David Harris) warns the House that shares are dropping still further. May I put it to him that the reason why the shares will drop is because they are afraid they are going to lose the influence of the hon. member for Beaconsfield inside the Diamond Syndicate if this Bill becomes law? The hon. member stated that one of the reasons why this Government could not deal with the whole diamond question was because the production of Angola was a very serious competitor, so far as the diamond market was concerned. I mention the case of Angola only, as it was the only one mentioned as of serious importance. The hon. member put it to the House that Angola also produced large diamonds, but he forgets to tell the House what their percentage of production is and what is the size of the diamonds they produce. The percentage of production by Angola is so small and the largest diamonds they can produce are such a negligible quantity that the hon. member was merely putting out a little bit of straw to blind us as to the position in that regard. Then the hon. member for Beaconsfield twitted the Minister with having used the expression that “for obvious reasons” the alluvial digger was not controlled, and he was gracious enough, with that chivalry which he boasts so much about, to tell us that the Government were only imbued with the idea of securing the votes of the diamond diggers. The hon. member knows what the “obvious reasons” are. If he has forgotten them, let me tell him. He knows that during 1924 the mines produced 2,152,000 carats of diamonds valued at £5,883,000, an average value of 54s. 10d., and he also knows that the alluvial diggers produced 287,000 carats of diamonds valued at £2,150,000, or an average value of 149s. per carat. Now the hon. member knows as well as anybody interested in the diamond industry that the alluvial diamond is absolutely necessary to maintain that high grade and that high quality of diamond which we are exporting from South Africa at the present time. The Minister has no intention in this Bill of controlling the alluvial digger. For the purposes of this Act, the alluvial digger is not a producer at all. The hon. member (Col. Sir David Harris) went on further to say that this Diamond Syndicate had in the past been responsible for handling £150,000,000 and that the syndicate had made a normal profit. I wonder what his “normal profit” is. He forgot to tell us. I venture to say that if he had told us that since the beginning of our diamond production we have produced something like £234,000,000 worth of diamonds and that during the past thirty years the Diamond Syndicate has been acting as the salesmen for these diamonds, and if we take it that they would not receive less than 10 per cent. commission on the sales, they must have made at least fifteen millions out of this country by the handling of diamonds. The hon. member does not suggest how the syndicate functions. The syndicate after purchasing the diamonds accumulates the stones in London; they are viewed by what is called “a letter of sight,” these letters being numbered from one onwards. To show how wide are the ramifications of the syndicate, it not only speculates in the diamonds, but also in the “letters of sight,” for it is most valuable for buyers to obtain a first view of the diamonds when they are offered for sale. The hon. member wants to tell us that if the Government does not issue “letters of sight,” the diamond syndicate would be in a worse position than it is at present. No, the syndicate will get its “letter of sight” and will buy from the board if the board ever functions. The hon. member forgot to say that it is highly probable that the board will never function; so long as the hon. member for Beaconsfield (Col. Sir. David Harris and the hon. member for Kimberley (Sir E. Oppenheimer) carry on their lovely little game, so long will the board not function, but the day they compose their differences and cut up the stakes, then it will be necessary for the Government to step in and protect the producers from being fleeced by the buyers, as they have been in the past. When that position is arrived at, and when at the end of a six months’ period the unfortunate producer has to get rid of his product, the syndicate waits until he puts in his price; the syndicate says, “We are not prepared to take your price,” and puts in a very much lower one. This Bill aims at encouraging competition, and the hon. member will have an opportunity of competing for the stones and may use his Hatton Garden ramifications to that end. The hon. member said this was a Socialistic measure, and that the Government was going in for Bolshevism, evidently forgetting that in this Bill the Government is once more following the policy of the late Government. In 1923 an Electricity Supply Act was passed by this House. That measure set up a Government monopoly for the sale of electricity.

A public service.

If there was less of a chorus opposite I might catch some of the sense. The Electricity Act has been copied almost to the very paragraph as far as this Bill is concerned. The hon. member for Standerton (Gen. Smuts) nationalized the means of electrical supply. The Electricity Supply Board has to draw on the Treasury for its money in exactly the same way as this measure proposes shall be done. The hon. member fears that this Socialistic measure will take funds from the Treasury. Under the Electricity Supply Act the Government has to supply funds to allow the Electricity Board to function, and it had to pay 1¼ millions to enable the Victoria Falls Power Company to build a new power station. But that money is not lost to the Treasury, any more than the money which may be advanced for the purchase of diamonds will be lost. The hon. member told us what would happen if the diamonds were sold without the syndicate functioning. But what happened when an attempt was made by an outside party to purchase the De Beers production? Does the hon. member remember that when the second competitor made an offer for the whole of the De Beers’ output the syndicate then paid a higher price and secured the stones? This Janus from Beaconsfield, in his double-headed capacity as a member of the Diamond Syndicate and a director of De Beers, beats the shareholders of De Beers and then he tells us that the shareholders have implicit confidence in the directors. I have not the slightest doubt that they have had in the past, but it is high time their eyes were open. The hon. member tells us that the syndicate will cease to function in London. I hope it will, and that it will start functioning in Kimberley, where its headquarters should be and where its salaries should be paid. The hon. member also threatened us that this was not the only country which produced diamonds, and that if the syndicate were driven away, it would go elsewhere. That is a very idle threat. There is no necessity for the syndicate to go anywhere else for its diamonds, for there is nowhere else for it to go. The market at Angola has been secured by the hon. member and his syndicate, and as to British Guiana this Government will be in a better position to control that output, and that is one of the reasons why the board should function. If there is going to be any outside competition for the world’s production, then the Government of the Union will have an opportunity to interfere and see that prices are stabilized. The hon. member went on to say how the Diamond Syndicate functioned, and he gave an instance of the financial methods during the last six months and the six months previously. He said the syndicate paid £3,500,000 in cash against stones. The hon. member has forgotten to tell the House that these diamond sales are fixed up in this way; very often the diamonds are already sold by the London buyers before the syndicate pays out a 6d. for them here. Dealing with the measure itself, I think if the hon. member had been more interested in the measure itself and made it clear to the House what the measure aims at, he would have enlightened us a great deal more than he did by his tirade. The House will have noticed that the first three clauses of the Bill, that relating to the limitation of quantity of diamonds to be disposed of by producers, that fixing minimum prices, and that in regard to returns to be furnished to the Minister, are clauses which will come into effect whether the board functions or not. The next clauses up to Clause 16 deal with the board itself. Clause 17 will also come into force when the board is not functioning. In analyzing this Bill it is obviously clear that the intention of the Government is to carry out this portion of the Bill which is highly necessary. I hope the hon. member has not passed over those clauses on purpose, because he will bear me out that the diamond trade has been highly precarious in the past as far as the people of South Africa were concerned. The hon. member will remember that period of eight years when you fell from maximum prices to the minimum and had a sudden slump. In 1920 De Beers, after declaring a dividend of 3½ millions, within six years, closed down their mines and threw their workmen on to the State for maintenance.

That is not true.

Such conditions as that no Government except that of which the hon. member for Standerton (Gen. Smuts) was head would have allowed. This Government is not going to allow such a traffic in human souls as that, and we are entitled to this measure The portion of the measure dealing with the board can only be called into function as I have already stated if the worst should happen and the hon. member for Beaconsfield (Col. Sir David Harris) and the hon. member for Kimberley (Sir Ernest Oppenheimer) compose their differences and do not compete with each other. Then the treasury will be called upon to finance the board in the first instance, and the maximum amount the treasury will be required to provide was that stated by the hon. member for Beaconsfield (Col. Sir David Harris), namely, three to six million pounds. The hon. member forgot to say that within eighteen months of that board commencing operations, we should have returned to a state of increased prosperity and the board would have earned its profits, which profits would go towards redeeming the amount paid out by the treasury and, after that, the further profits accumulating would enable the board to carry on without coming back to the treasury. Those further profits will come to the board instead of going to the syndicate, of which the hon. member is a shareholder. I can foresee the time when the Minister of Mines will be able to lend the Minister of Finance a little bit of money if he wants it, particularly if the Minister of Mines follows the methods employed by the hon. member for Beaconsfield (Col. Sir. David Harris) in the past. I put it to this House that in every branch of industry the State has been called upon to function in, the State has done very well indeed. The hon. member is, perhaps, acquainted with the old Cape Act of 1882. If so, he will remember that that Act has already provided for the setting up of a board. That Act says that one-fourth of the profits accruing from the diamond production shall be ad ministered by a board constituted for the protection of mining interests. I contend that the hon. Minister has actually had this board created since 1882, and not only so, but he has had money, controlled by the Minister of Finance, which he can draw on for this board if he wishes it to come into power.

That was simply for the suppression of illicit diamond buying.

This board was to be constituted for the protection of mining interests, and the Bill set out how the board is to be constituted, and what its function would be. I will leave the interpretation to the legal men.

You had better.

Hear, hear.

The hon. member for Standerton (Gen. Smuts) says “Hear, hear,” but I will not leave it to him to interpret, because I know how he would interpret it. Then the hon. member gave the House to understand that the Diamond Syndicate of to-day was no more the old syndicate. He wished us to understand that they had found out the iniquity of their old practises, of the directors also being directors of Re Beers, and had sold their share to Breitmeyer, the Barnatos, Joel and Mosenthal. Well, we like to see secession, even if it is in the diamond trade, and this was no more than secession, because these remaining directors were some of the old directors. I want to point out that it is still the same old board, only it is in a new skin. The old syndicate has not ceased to exist, as the hon. member for Beaconsfield (Col. Sir David Harris) said it had.

I said nothing of the kind.

It is the same thing in a new skin, that is all. The hon. member for Beaconsfield (Col. Sir David Harris) knows what the position is. The position is that this is a fight between the syndicate versus the Premier, De Beers and the South-West producers. Let me tell my hon. friend this. That any attempt by the Minister of Mines to stabilize the price of diamonds will meet with the general approval of the whole of the diamond world. If there is one thing the people who own the diamonds from South Africa to the extent of £234,000,000 fear, it is that a lot of diamonds will be thrown on to the market, possibly by the hon. member for Beaconsfield (Col. Sir David Harris), and that prices will not be maintained. It is natural that these people view with suspicion any large production in South Africa of diamonds at the present time. Let me tell the Minister that any measure to stabilize the diamond trade will meet with general approval in the diamond world. The hon. member put up to this House that there were large outside producers. As far as my information goes there is no fear of the menace of the outside world, as far as South Africa is concerned. The production in Brazil is alluvial and is consumed entirely in South America and the Argentine. Then there remain the Congo and South-West, and I want to put it to the hon. member that South-West diamonds are controlled by the Union Government. With regard to Angola, the hon. member for Kimberley (Sir Ernest Oppenheimer) was able to drive a very good bargain with the Portuguese Government. If there was any fear of that bargain breaking down at anytime, this Government would be the proper authority to negotiate with the Portuguese Government in order to see that that supply was controlled. When the hon. member said South Africa was entrenched as far as its diamond market was concerned, he was overlooking the fact that 99 per cent. of the world’s diamond supply comes front South Africa. It is for the protection of that trade and South Africa’s interest in that trade that this measure has been introduced. The Bill carries my hearty support. I regret that when the hon. member for Standerton (Gen. Smuts) passed the Electricity Supply Bill and took as his argument that electrical supply was a national asset, he did not at the same time deal with our diamond industry on the same ground.

I rise to speak with a sense of responsibility because my name has frequently been mentioned in this debate. The sequence of speakers, viz., the hon. member for Beaconsfield, followed by the hon. member for Vredefort, reminds me of the Kimberley electoral campaign and the result achieved, and, personally, I now feel quite hopeful that we shall succeed and that the Minister will not carry the second reading of this Bill. I have listened to the hon. member for Vredefort (Mr. Munnik), and I think it is necessary to explain to the House the working of the diamond trade. From what the hon. member has said, he appears to have obtained his information from a fairy book. In the course of his speech the hon. member quoted from the Act of 1882, but he left out the middle portion of the clause. It is quite true that a control board, or, rather, a protection board, was set up under that Act, but the hon. member did not mention that this was not a Government body, but consisted of two members each from Kimberley and De Beers, Dutoitspan and Bultfontein mines, and that the function of the board was to protect the diamond mining industry in Griqualand West against illicit diamond dealing. Coming to the Bill, the title discloses that it has two principal objects. The first is to provide for the sale and export of diamonds, that is to say the Government may —all the provisions of the Bill are permissive— fix the quantity in value of diamonds that can be put on the market by all South African producers, and apportion the quantity among the various producers. The second object of the Bill is to enable the Government, if deemed advisable, to establish a Diamond Control Board, or, in plain words, to enable the Government to set up as diamond merchants. I would like to point out at this stage that for some time past there has been a great deal of ill-informed talk about the diamond trade, the result of which has been a feeling of uncertainty as to the soundness of the industry. On my arrival at Cape Town the Mayor of Kimberley saw me, and my first inquiry was naturally as to how Kimberley was progressing. He told me that the diamond industry was still in a very bad way, and he added, we all know that Kimberley and De Beers will never be prosperous again because there are too many diamonds in the world. This kind of talk is not only confined to Kimberley, but one hears it on all sides, in Cape Town and elsewhere. The feeling that has been created throughout the country is that the diamond trade is on the verge of collapse, and that the industry, which was once the mainstay of the Cape Province, is nowadays a most precarious one. Evidently the Government has also been convinced that this is the real position of the trade, and this is no doubt the reason why the first part of the Bill exists—the right to control the sale of diamonds. This right of control is clearly meant as a means of protecting the industry. Consequently, in the interests of Kimberley, in the interests of the country at large, and in the interests of the diamond trade generally, it is of the utmost importance to frankly examine for once the question as to whether this over-production of diamonds really exists, and whether there is really an absence of control of output, because on the correctness of these premises the necessity or otherwise of the Bill depends. One has heard so much about competition with the South African diamond mines from other sources of production that people are frightened. It is only right that I should give you some idea of the various sources of diamond production. Everybody knows that there are four big diamond producers within the Union, including South-West, namely, De Beers, South-West, Premier and Jagersfontein. These producers have, after very protracted and difficult negotiations, come to an arrangement among themselves limiting the quantity of diamonds to be put on the market and apportioning their respective share of the diamond trade. All of them subscribe to the policy of limitation of output, without which no prosperity for the diamond trade is possible. Apart from the four big producers—De Beers, Jagersfontein, Premier and South-West Africa—there are sundry small mines in the Union, which produce between £400,000 and £500,000 per annum. Then, again, we have the alluvial production, which is uncontrolled, and has been steadily increasing, and is now at the rate of £2,000,000 per annum. This alluvial production considerably affects the quantity of diamonds that can be supplied by the four big producers. We have therefore in the Union only one source of production which is uncontrolled. I shall revert to this alluvial production later on. An argument has been put forward by the hon. member for Vredefort (Mr. Munnik) that alluvial stones are necessary to sweeten the mine diamonds, but that is incorrect. There can be no such mixing of stones by the purchasers. On the contrary, every producer in making a diamond contract stipulates that his diamonds must not be mixed with the diamonds of other producers, otherwise no adjustment of prices or control would be possible. As a matter of fact, the only control upon the alluvial production is exercised by the Minister of Labour, who has started relief works, which means that the production is limited because some five or six hundred men find that it is better to get 7s. 6d. per day on relief works than to work in the diggings.

I wish it was so.

Outside the Union there are four sources of production. Of these Angola, the Congo and British Guiana are of special importance. The other production is from the Gold Coast, but so far the production from this source has not been large. The Anglo-American Corporation, which is a South African company controlled and managed in South Africa has been able to establish friendly relations with three out of four of these producers outside the Union. I can tell you that they have no more desire to spoil the diamond market by over-production than the Union producers have; and they know as well as we do that the control of the output is the only method of preserving the prosperity of the diamond trade. I must emphasize that these productions outside the Union are important, but one must not lose one’s head over them. The discovery of the Premier Mine—the world’s biggest mine—in 1902, and the opening of South-West Africa, five years later, did not ruin the diamond trade and I am satisfied that the discovery of these new fields will in themselves not be a danger to the trade. I shall now proceed to give the House some information about these producers. The Angola Company, although it possesses very rich and extensive diamond deposits, will produce between £300,000 and £400,000 of diamonds during the present year. Thereafter they propose to produce £600,000 per annum. That surely is not over-production. The company Forestiere et Miners and allied concerns hold the diamond rights of the Congo. These companies produce at the rate of about £850,000 per annum, or perhaps £1,000,000, and there is no intention on the part of these companies at present to increase this rate of output. Moreover friendly arrangements as to prices at which diamonds are sold exist between London and Antwerp. I believe that Antwerp with its great diamond cutting industry realizes even better than we do the necessity of limiting the output to the demand. The Anglo-American has also come to an arrangement with South-West Airman producers to limit the output to £200,000. This year it will be less.

What is the capacity?

A diamond reserve of two and a half million carats has been proved on the same lines as an ore reserve is proved in Johannesburg, but they are limited to £200,000. There now remains British Guiana. This is an alluvial field worked by individual diggers like our river alluvial. And, like our alluvial, it is uncontrolled. The annual output is between £750,000 and £850,000 per annum. I would like the House to remember that at the present moment there are only two important producers of diamonds the world over that do not voluntarily subscribe to the policy of limiting the output to the demand; and these are “our river alluvial fields” and the alluvial fields of British Guiana. For the information of members, I shall now shortly summarize the diamond production of the whole world. Within the Union, including South-West, we have the four big producers, who will sell £8,000,000 of diamonds during 1925, unless they are foolish enough to fix a lower quota than £4,000,000 for the second six months of this year. Our small mines produce, say, £500,000, and the alluvial output amounts to £2,000,000. That makes a total production of £10,500,000 for the Union including South-West. Outside the Union there is a production of £2,000,000. We arrive, therefore, at a total world production of £12,500,000. In other words the Union, including South-West, supply 84 per cent. of the world’s consumption of diamonds, whilst fields outside the Union supply 16 per cent. These figures should once and for all dispose of the loose talk that the control of the diamond market has passed out of the Union hands. The control may have passed out of the hands of a particular individual, but it has not passed out of the hands of the Union. I have attempted to give the House a picture of diamond production, and I will now try to give a brief description of the selling side of the business. For this purpose I must go back to the year 1920-21. The general post-war depression had set in and there was a total collapse in the diamond trade. The mines had to close down, and this resulted in great hardship in the diamond producing centres. Huge stocks of diamonds had accumulated in the hands of the syndicate, who then bought the South African output. The merchants in New York, Antwerp and Amsterdam were overstocked, and the producers themselves had large accumulations of diamonds. The various accumulations probably amounted to something between £18,000,000 and £20,000,000. Incidentally the losses made by purchasers of diamonds during this time were stupendous. About 1922 there were signs of a revival in the trade, but it was found that a new source of supply had been created which was willing to sell diamonds at such a price that the regular trade could not compete, or, if they had competed, bankruptcy all round would have resulted, and the recovery of the diamond trade would have been indefinitely delayed. It was easy for the new suppliers to sell at low rates, because they were selling diamonds which did not cost them anything. I refer to the Bolshevik party of Russia, who had simply confiscated the diamonds owned by the Russian people, and were selling them at any price so as to get funds, which funds they used to quite a considerable extent in Bolshevik propaganda.

What was the total value of them?

Between £25,000,000 and £30,000,000. It is difficult to say, but these have been absorbed. The stocks accumulated by the trade during this severe crisis have now been used up, and the producing companies have reduced their stocks to normal. We have now arrived at the point when the whole of the needs of the world for diamonds must be supplied from fresh production, so that we are on the threshold of better times. This new era of prosperity will be not alone for Kimberley, but for every diamond producer in South Africa. The sales of diamonds by the syndicate, which had the disposal of the stones of the four big producers, steadily increased from 1922 onwards, and the volume of trade for 1925 (for the four producers) should not be less than £8,000,000. This is a volume of trade, which, divided among the four producers, will put each one of them into a comfortable position. For great prosperity a further expansion of trade is required, and I do not see why even this should not come about in due course. Central Europe and Russia, instead of being purchasers of diamonds, have during recent years been sellers, but with the more settled condition of Europe, which should result from the Dawes plan and kindred schemes, I predict new prosperity for Central Europe, and ere long I hope they will again figure as diamond consumers. There is therefore no reason for despondence; on the contrary, one is justified in being an optimist. I should like to say that the Diamond Syndicate, in spite of my “secession,” as an hon. member called it, was able to raise the price of diamonds by 3 per cent. to 5 per cent. I do not want to be misunderstood. I do not say that the diamond business will always be good. It will suffer as it has done periodically in the past, together with all other trades, from more or less severe trade depressions, but I say no special depression in the diamond trade need be feared from over-production now that all producers of diamonds, with the exception of the river alluvial here and British Guiana, voluntarily restrict their output in order to conform to the demand. That being the real position of the diamond trade, I feel that no Control Bill meets the case, if the one source of production which is now uncontrolled is to be specially exempted. I fully admit that one cannot interfere with the alluvial digger, who finds to the value of about £50 a month, more or less, and who earns a very precarious living. I maintain, however, that this in itself does not establish the claim that all alluvial diamonds as such should be excluded from the operation of this Bill. This is particularly inadvisable when we remember that all recent discoveries of importance, whether they were South-West Africa, Angola, Congo or British Guiana, have all been big alluvial deposits. The correct aim of the Government can only be to prevent interference with the small man; the exemption from the operation of the Act should not apply because the diamond is alluvial. The case the Government wishes to meet by exempting alluvial, as they do under clause 19. would really be met not by exempting alluvial, but by laying it down that a person producing, say, less than a given amount a year, or who, better still, works by himself or with his family, should not be interfered with. But we are not justified in exempting alluvial just because they are alluvial diamonds. It may be necessary at some future time to negotiate with people in foreign countries who produce alluvial diamonds for limitation of output, and what argument can we have if we specially exempt our alluvial in this Bill? As I have already said, I do not think that there is any immediate necessity for the control part of the Bill, now that the producers have arranged quotas among themselves. But I know how wearisome the recent negotiations were, how the diamond trade was actually endangered through internal dissension among the producers, and how the uncompromising attitude of the syndicate, secure in the belief that no one could successfully compete with them, lost two months’ trade to the producing companies, and thereby considerable revenue to the country. I can understand that the Minister of Mines now says: “I will never again run this risk. I want to have the power, if the producers cannot agree among themselves, to step in and settle the matter. If I have the power then these dissensions will not take place and prompt settlements will be arrived at between the producers.” If I correctly interpret the Minister’s intentions, then he ought to make it clear in the wording of the various clauses dealing with possible control that he will only interfere if the producers cannot agree among themselves. If that were done, a great deal of the objection to Government interference would be removed. It is of course evident that once the Government has to step in and fix quotas it producers cannot agree among themselves, then they must have the right to Veto contracts, because the style of contract entered into could easily nullify the quota given; but, again, the vetoing of contracts should only take place if the Government has been forced to fix the quota. Surely we have managed to control this trade very well, and bring it to prosperity again, and we should be able to manage without this Bill. I now propose to deal with the second part of the Bill, the part which authorizes the Government to become diamond merchants by establishing a diamond board. If the Government is not alarmed by the experience of the post-war depression, which I have described, and thinks the diamond business so lucrative that they foresee clearly that they could make profits out of it and so relieve general taxation, there is of course no reason why they should not deal in diamonds just as they might decide later on to deal in wool or cotton or any other merchandise. What the country would think of the idea I don’t know, for the money that will be required for this business is very considerable. In normal times two and a half to three million pounds will be sufficient, but in times of depression and crisis up to seven millions may be required in order to carry the stocks which such a control board will have to accumulate. But the producers could have no objection if a new firm were established which would compete with the other diamond merchants. The more competition the better prices the producers would obtain. Producers should welcome this new competition in order to meet the position when I settle my supposed differences with the hon. member for Beaconsfield. But that is not the sort of diamond business the Government proposes. When our Government enters the field it eliminates first of all competition. Clause 6, section 2 (a) looks all right at first blush because it provides for ordinary purchase and sale, and says the board can enter into agreements with producers for the purchase of part or of the whole production of any producer. One might argue that this clause 6, section 2 (a) simply aimed at protecting the producers against any combination of diamond merchants, whether the old syndicate or a new combination. As a producer, one would almost welcome that. But look at the preamble to 6, 2. The Government will lay down the “method and terms of obtaining all or any diamonds from all producers or any producer.” And what if the ill-advised producer refuses to sell his diamonds on the terms approved of by the board, because he believes, no, he actually knows, he can do better by selling to someone else? Provision is made for the obstreperous producer, since the Governor-General, being thwarted in his endeavour to buy the diamonds on his terms, will get even with the misguided producer by acting under section 16, and declare by proclamation that “It shall be unlawful for any producer indicated to sell or dispose of or export diamonds save to the board or through the agency of the board.” That finishes the argument, and the producer must come to heel and accept the terms of the Governor-General. After all, he gets some money for his diamonds by accepting the offer to purchase. The person who drafted this portion of the Bill must know something about workmen and strikes, because it suddenly struck him that this foolish producer might go on strike and say, “It is true, I cannot sell to anyone else, but I am not going to sell to you, either. I will rather keep my diamonds and accumulate them.” Section 6, 2 (b) deals with him. The board will, under those circumstances, take the diamonds without paying for them. It will “demand and receive the diamonds” under threat of forfeiture. That section must have been inspired by the hon. member for Troyeville. I suppose one of his Moscow friends must have described to him how they in Russia deal with diamonds. Does the hon. Minister really think that anyone would produce diamonds if they could be taken away from him without payment, or does be rely on the law, which enables him under these circumstances to take over a diamond mine or lease it to someone else if it is not worked to his satisfaction or closed down? The provisions establishing the control board are made pure confiscation through clauses 16 and 6, 2 B. The Minister explains the intention of this clause (6, 2 B) by saying it might be required to deal with the producer who might not be willing to accept an offer from a particular purchaser, however good that offer may be, and that this power to demand the diamonds might be required under these circumstances. But he does not require the power, because he has the power of vetoing a contract of which he does not approve.

You approve of the veto?

The hon. Minister has referred to what was done in South-West Africa, and that the control he exercised was really the control exercised by the German regie. It is true that the hon. Minister has done nothing except what the German law laid down. He has taken over the functions of the regie, and that body had the power to limit the output of producers and sell the diamonds. But that body consisted formerly of the producers themselves, and a German Government official attended their meetings just as such officials attended the meetings of German colonial companies.

The Government had the final say.

No, I think if the Minister inquires he will find that it was not so, but our Government issued a proclamation taking over the functions of the regie under martial law.

Martial law has been withdrawn.

But the Government has retained the power. I have tried to show that one section of the Bill is understandable, but unnecessary. I have tried to show that the portion of the Bill which makes the Government diamond merchants is risky and, even if passed in its permissive form, it will be a deterrent to capital coming to this country. If it is put into practice we shall see a flight of capital from the Union.

This is an old story.

It may be an old story, but it will be a true story if the Government seizes private property. The hon. Minister will admit that I have not indulged in purely destructive criticism. On the contrary I have tried to explain the diamond trade to hon. members. But I must repeat that this Act containing clauses, particularly Clause 16 and 6, 2 (b), is nothing but confiscation.

We agree that this is an enabling Bill. There can be no doubt whatever that the time has come when we should look upon such questions as the control of gold and diamonds from a national point of view. The Bill is founded on the word “may,” and, because Government may do certain things, some hon. members argue that Government necessarily will do them. When you arm a policeman with a revolver it is not that he should use it without reason, but that he may do so in case of necessity. It is all a question of what you do with the powers given. Take, for instance, the use of aeroplanes; in one man’s hands they are used to drop bombs on innocent women and children, but in another man’s hands they are used for social service for the benefit of the whole countryside. It is well to have the strength of a giant, but is tyrannous to use that strength like a giant.” That is why we wish to give a full permissive power of attorney to the Government, to prevent things going on from year to year, as they have, without any power of redress. I know it annoys our friends opposite when we say “our gold, and our diamonds,” and it is only an act of grace on their part that allows us to say “our country.” In evidence before a Government commission, those who favoured restrictions of output included Solly Joel, the diamond king, the hon. member for Beaconsfield (Col. Sir David Harris), Mr. Brink, Mr. Imroth, the hon. member for Cape Town (Central) (Mr. Jagger) and Mr. Oats, but I do not say that they were in favour of Government control. All members appear to favour limitations of production and control, but differ on what the latter should be. The member for Beaconsfield claims that directors of De Beers have always worked for shareholders’ interests and members who were also in the buying syndicate left the bargaining to directors who were not so interested. Mr. Oats, however, speaking in 1908 at the annual meeting of De Beers (of which he was chairman) said: “It was one of the most odious parts of his duty to deal in diamonds with gentlemen, themselves large shareholders of the company.” It has indeed been a sad thing to see our great national asset bandied about, as it has been in the Past. The hon. member for Beaconsfield (Col. Sir David Harris) asks the Government for State control, but it is the alluvial areas he wants controlled. The principle, however, is the same. What right have mining company men to say: “Leave us alone, but control the alluvial production.” The hon. member for Beaconsfield, giving evidence before the Diamond Cutting Commission some years ago said he did not see why alluvial diggers should not have “the crumbs which fell from the rich man’s table.” But the position is changed now; Lazarus is no longer looking for the crumbs that fall from the rich man’s Lazarus is now in Abraham’s bosom. We are all in favour of control, but we want the control here, not in London. We do not want the protection that centres in because, the moment the syndicate gets the diamonds in its hands, and there is a fall in value, at once they cable out to have the mine shut down, and our people are thrown out of work, until these international philanthropists have parted with their diamonds at a profit, and added to the millions they have already made, and when everything is perfectly clear for them, then we can have our mines re-opened. We do not want any more “friends in London”; we have no time for “South Africans in London, we want them here. Therefore, we claim South Africa first and centre control here. In whose hands would that control best be placed? Supposing British Guiana, the Congo and Angola, were serious competitors, who are best fitted to secure arrangements to limit the outside competitive output than the Union Government? It would be far easier for our Government to arrange with the Portuguese Government when discussing the Mozambique Convention, than for the syndicate to do so. Although there may be some breaking down of the links of empire by abolition of titles of distinction there are links still strong enough for us to go to the British Government and say: “For your own interests it would pay you to come into the arrangement and limit the output in British Guiana.” Mr. Ross Frames, chairman of De Beers and of the Premier, has pointed out the difficulties of relying on the syndicate’s arrangements for the allocation and sale of diamonds. It would be sad, indeed, if we had to leave it to the existing agencies, for that would only mean that always there would be the menace hanging over us of a disturbed industry and a had market. The hon. member for Beaconsfield (Col. Sir David Harris) said— what is perfectly true—that he is not a speculator. Market manipulators don’t speculate —they play on certainties. So does the racecourse man with his under and over 7 game; he invests in the board and leaves the others to speculate. Your Abe Baileys and Solly Joels and, perhaps, members of this House, do not speculate, they act on absolute certainties; it is the outside public which speculates. How have financiers made their millions? By getting hold of the assets of the people and collaring their credit. They do nothing for this country, and wish to be regarded as the benefactors of South Africa. The other day one of the big bankers in New York (Mr. Otto Kahn) referring to one of the worst financial scandals in America said: “It is almost as bad as a South African market manipulator.” Our “kaffir market” stinks the world over, and when people say: “You are frightening capital away,” who is doing that but the men who made raids and wars, and who tried to reduce labour to servile conditions by a policy of violence?

What about the Roberts Victor?

I lost plenty of money on the Roberts Victor, but I got what has been a very valuable lesson. As long as I was connected with it, diamond-cutters here could buy rough stones. The hon. member for Beaconsfield (Col. Sir David Harris) believes that after his death all knowledge of diamonds will fade from the face of the earth, that he alone is the possessor of this wonderful knowledge. Well, I hope he will live long, because he is, at least, amusing. These men who profess to have such an intimate knowledge of diamonds tell you that they and their friends provide from five to ten millions of money to keep this industry going. Absolutely untrue. Diamonds are dealt with as every other product is dealt with. You ship the product, you draw against it, but they do not put up the money. If the product is unsold it is carried just like cotton or wool or any other product against advances from banks or financial institutions. As for their sustaining the market, just let me mention this. I have always been of opinion that it would have been better if they had been truthful, but there is something in regard to diamonds which seems to destroy the moral qualities. These men whom we have now elevated into being our “old nobility,” and added to their titles a value of about 300 per cent., because it was understood that a title was worth £1,000 a year on a board of directors. Now it will be worth £3,000 a year. We have at least the right to ask that these gentlemen recognize the obligations of their order. It seems to me, however, that as regards the interpretation of the motto of one of these honourable orders, amounts to this: “Ek verneuk nie, maar ek ’n plan maak.” Their statements cannot be relied on. I will give you an instance as late as December 2 last. One of their papers that they own and control, just as they control their race horses— and whose editors are just like their jockeys, riding or writing to order—came out with huge scare headlines: “Diamond glut. Control efforts fail. Price declines. Result of alluvial digging.” Then we are told that, unless this alluvial output is shut out, dreadful things are going to happen. Yet “South Africa,” a paper in London which I should say is one of the most amenable in every possible way to our financiers, on November 28th said: “It is stated, as showing how strong the trade is, that the Diamond Syndicate has not a single rough stone to sell to the many would-be buyers here.” The market was absolutely bare of stones. This is published in the special report of their own paper. And yet they had the audacity, because they wanted to influence the public here, to come and tell this sad story about the “diamond glut.” I hope we are going to stand by the alluvial men. I noticed all the time that we had this question before us, the smiles on the face of the hon. member for Beaconsfield (Col. Sir David Harris) and the hon. member for Kimberley (Sir Ernest Oppenheimer). They were smiling through their tears all the time. It reminded me of that hymn, “Behind a frowning Providence there hides a smiling face.” They were hoping there would be a reversion of the Government and that they would control the board. How delighted they would be if that power were placed in their hands, and they found themselves in the position of reaping the great advantage of complete and absolute control. The whole thing really turns on white labour. All the diamond mines to-day employ less than white workers. De Beers once employed in the long, long ago, but under 3,000 white men are now employed in our diamond mines. In the alluvial diggings, which these gentlemen want to close up in their own interests, 14,000 Europeans are interested—7,000 who have licences and 7,000 who are dependent upon them as partners or employees. I quote the official figures of the Secretary for Mines in his report for 1924. He says he has to consider the question of 14,000 Europeans. I put it to this House, which is the best investment and which is the investment we ought to think most of in this House—the investment of a few paltry millions, or the investment of human lives? If you are going to say that capital should first be protected, I say we should take a much broader view and stand by the 14,000 white men, instead of the few capitalists who reap the greatest advantages from these mines. Then we have the matter of interlocking directorates. We have as chairman of the Premier Mine a gentleman whose name I mention with the greatest respect, Mr. Ross Frames, who is also the chairman of De Beers. Now we only get 10 per cent. taxation out of De Beers and we have a 60 per cent. partnership right in the Premier Mine. Now I ask, if you are going to allow this syndicate business and this control outside the Government, are you going on with that position— that the man who is in charge of your Premier Mine, in which you have a 60 per cent. partnership, is interested, also as chairman of De Beers. Which is he going to stand by? These gentlemen who understand interlocking directorates are quite satisfied. We had a warning from Sir Percy Fitzpatrick in regard to this State ownership, and Sir Percy Fitzpatrick is one of the archangels of the South African party. I am perfectly certain that they will receive his statement with the greatest approval. He points out that it was due to him we had 60 per cent. interest in the Premier Mine, and as I was in the Transvaal Parliament at the time, I can say that it was. He points out that the company was only entitled to 12½ per cent., but he got them 40 per cent. He points out that the Government ought to have used its money from the gold fields and particularly from the diamond mines, in reduction of debt and the obligations of this country, and he blames the Botha-Smuts Government most severely for, he says, the new gold mines were being worked out like the old and not one penny of the production was being devoted to reduction of debt or the creation of public works. I know this Bill has no reference to diamond cutting, but we trace, in the powers being taken by the Government, also the protection of that interest which has found so many enemies and so few friends in the diamond trade. I hold in my hand a complete exposure of the almost inhuman action of the syndicate in regard to these local industries, where the cutters have tried to buy diamonds for cutting and could not get them, every possible obstacle being put in their way. At least the syndicate might have profited by Mr. Rhodes’ warning that, if they did not pay tribute, ultimately the people would come in and exact still more. Well the people have come in and are exacting more. I have been sneered at in connection with the Roberts Victor Mine, but I can say this, that the Roberts Victor Company was the one company which enabled this cutting industry to go on, and you would have had a very strong diamond cutting industry in this country today if the Roberts Victor had so continued. The hon. member for Beaconsfield (Col. Sir David Harris) in an interesting speech made at Kimberley, on the future of Kimberley, gave a warning of what might be expected by the present Government. He says: “We may have to put our foot down decidedly and firmly, because self-preservation is the first law of Nature.” I will say this for the hon. member, it was at a convivial gathering welcoming in the New Year, and I am sure when prohibition comes into force, one of its results will be the occasional loss of truthful utterances such as this. The hon. gentleman in that convivial speech, after declaring that he and his friends had reached the limits of their forbearance and were going to insist on these alluvial diggings being closed down—

I never said anything of the kind.

Well, this paper, the “Diamond Fields Advertiser,” is, of course, as we all know, a Socialistic Bolshevist Labour organ—

There is no report of that kind in the “Diamond Fields Advertiser.”

I appear to be a perfect bogey to the hon. gentleman. I hope the hon. gentleman will get someone to tell him something about the order to which he belongs and about the chivalry he should therefore display. This is his own statement in the “Diamond Fields Advertiser.” Then he goes on to speak about guarding his own interests. Well, I said it was a convivial gathering and, really, I quite understand my hon. friend. He gives an instance here of a very great man—such a great man—Lord Burnham, I mention his name with the greatest solemnity, “Lord Burnham.” He says Lord Burnham and his friends put in £6,000 for three farms and Lord Burnham’s family have drawn £75,000 a year ever since, and they are to take their share in £1,600,000 five years hence. That is a very good illustration of what our friends overseas, in London, who introduce all this capital to us, do. Another warning we got from the hon. gentleman was that America might take it into its head to retaliate. I hope the Hon. member for Cape Town (Central) (Mr. Jagger) will listen to this terrible danger held up to us—that America might retaliate. America, I should like to remind the hon. gentleman, is a business-like country which goes in for protection and efficiently protects its own people, and I commend its action to the hon. member. This bugbear that America mighty retaliate is held up to us. Let us see what America has done with our diamonds, if I might be excused by the hon. member for Beaconsfield (Col. Sir David Harris) for saying “our” diamonds. America put on 20 per cent. on cut diamonds and 10 per cent. on rough diamonds. Did our hon. friends retaliate? Not a bit of it. We heard nothing of it. Why? Because their friends are all in the same show. Taking a very low estimate, America imports from us £5,000,000 worth of diamonds a year on which America makes £750,000 at least a year out of its protective duties. I commend this to the attention of the Minister of Finance. So far as this competition from outside is concerned, it has been subject to 66 per cent. of taxation. The Government of West Africa have that income from this source. The Government of Belgian Congo take about 53 per cent. So that, as far as competition is concerned, these Governments are equally interested with our own in keeping production at a high value. It has been pointed out that alluvial diamonds are the most valuable and should, therefore, have the most consideration in production. I want to point out that there is nothing to fear after the speech from the hon. member for Kimberley (Sir Ernest Oppenheimer) in regard to the future of our diamonds, and they stand firm at a high figure. In fact, the average for last year was 66s. a carat; which has only been exceeded in three years, and that only to a small extent. Whatever the increase in price, it has been paid by the consumer. It was pointed out by the Minister who introduced the Bill with what a small amount of shareholding present controllers managed to get complete control of this industry in their own interest. When the purchase of the Premier interest was brought about, those who held thirteen per cent. of the mine controlled the whole one hundred per cent., because all the vote is in the deferred shares, and not in the preferred shares or the debentures. This Bill has been termed a Socialist measure. I think it is so to a great extent, but hon. members must accustom themselves to Socialist measures in the interest of the people. We are sweeping into the younger day. As regards the argument that a Government cannot enter into business successfully, I would point out that the Government of Chile derives enormous revenues from the control of nitrates, and that in Germany the Government controls the phosphate industry. In fact, I have a long list of articles exported from various countries which are managed by the Governments concerned. I am perfectly certain that this measure, after it has had a run for some years, will show the great advantage of what is being described as Socialism. There is no need for members to be afraid of that term any longer. It is already worn out. [Time limit called.]

When the Government introduced this Bill, which reverses the established order of things in a particular trade, and seeks to obtain authority for a procedure for which there is no parallel in our Statute Book, it would naturally have been expected that speakers on the Government side would have contributed some valid and valuable information, showing the justification for this legislation. With the exception of the Minister, however, no one on the Government side appears to me to have done so. The hon. member for Vredefort (Mr. Munnik) launched out into generalities and ancient history, and his history appears to have been inaccurate. The hon. member for Pretoria (East) (Mr. Hay) has told us of his experiences in the share market, which seem quite irrelevant to the present subject. I suppose the majority of members, like myself, have had nothing to do with diamond production or marketing, and that for their knowledge of the intricacies of the trade they must rely upon people who have gained expert knowledge by long experience. I think the hon. members associated with the diamond industry who have spoken have put before us some very valid arguments to show that this Bill is unnecessary, and, secondly, to show that if it becomes law it is likely to have very disastrous consequences. The first question is, what measure of control is necessary. The Minister has argued that it is necessary to bring in competition to relieve the industry from the shackles which the syndicate have thrown upon it, and that he is actuated by a desire to uphold the interests of the shareholders in the different diamond-producing companies. It seems to me that the hon. member for Beaconsfield (Col. Sir David Harris) has made out a very fair case for the results which have attended the efforts of the syndicate to market diamonds. Whether he did or not, it was made quite clear that without the intervention of the Government an agreement has been come to among the producers in the Union as regards the quota they should sell, and there appears now no reason to anticipate undue competition from the fields which produce diamonds outside the Union. That being so, one is bound to ask what is the need for this Bill? I am prepared to admit there must be some control, but it is surely better that it should be exercised by the producers than that it should be imposed upon them by outside authority, which, on the face of things, cannot be so well acquainted with the intricacies of the diamond market as those who produce the stones must be. If the Minister’s proposals were adopted as regards the measure of control, I suppose he would have to constitute a board as is proposed in section 4, because in section 2, for example, the Government proposed to take power to determine at any time by written notice to any producer the minimum prices at which diamonds of any particular class determinable by reference to quality or weight or by the area of production or by any other circumstance shall be sold or disposed of by such producer. I have been told, and nothing has been said to contradict it, in the course of the debate, that there are vast numbers of classes of diamonds, that it requires the most expert knowledge to distinguish one class from another, and, still more, to determine any price which could affect those different classes of diamonds. I do not see that the Government has, or is likely to have, the knowledge to exercise that determination. I will come to the composition of the board presently. But in addition to that there are other powers given to them as regards control, which seemed to me to be unreasonable. Government proposes to take power to determine the quota or percentage in relation to the quantity referred to in paragraph (a) of section 1, which may be disposed of by any such producer. But the Government, so far as I can see, do not show that it would be their intention to make any equitable division among the different producers. There is nothing, so far as I can see in the Bill, to prevent the Government giving what would be an undue share to any one particular producer. I do not suggest that the Minister would set out with the intention of doing anything unfair, but one knows how easy it is for mistakes to be made.

We had a practical test in South-West.

Certainly, South-West is one example. Let us give the Minister credit for this, that he thinks the South-West position is satisfactory, but it may not be equally satisfactory in dealing with other producers. Other people besides the present Minister may have to determine it. The point is that if the people concerned can settle it among themselves, there is no possibility of a complaint afterwards, whereas if the Minister is going to take the responsibility of determining, there is always the possibility—giving the Minister credit for the fairest possible intentions—that a mistake may be made and that one producer may be given an unfair advantage. These are obvious objections to the measure of control which it is proposed to take, and I cannot see that any case has been made out for taking the control away from the present producers and transferring it to the Government. The Minister has argued that competition is essential. It is generally recognized that producers in their own interests must limit their output where necessary, and therefore I cannot see the necessity for disturbing that arrangement. Then I come to the more drastic part of the Bill, the part which empowers the Government to step as it were into the shoes of the syndicate and become a dealer in diamonds. That, it seems to me, is a very risky business. The Minister, of course, must rely upon the board. I look at the section which deals with the board which is to be composed of three members, one of which shall be designated by the Governor-General as chairman and business manager. The chairman and members are to be selected for their knowledge and practical experience of buying, selling, and dealing in diamonds, or of finance or public business. I should like to know whether the Minister can assure this House that if necessary he could fill those places on the board satisfactorily, if he had to do it to-morrow. It is clear from the debate that the trade is a most intricate one. It involves knowledge of merchants and conditions in many parts of Europe and America, and I make bold to say that there are not three people in the Union to-day who are possessed of that knowledge, and would be available for the purposes of the board. It is obvious that people like my hon. friend (Sir Ernest Oppenheimer) cannot go on the board. They cannot afford to sacrifice their time for any salary the Government would pay. I do not know whether there are any officials in the service at present with a knowledge of the trade, but I do not think there are three people in the Union with the necessary knowledge and experience and sufficiently acquainted with the intricate methods of the diamond trade to justify their appointment now or in the near future.

Would the hon. member for Kimberley (Sir Ernest Oppenheimer) be so unkind as to withhold his advice?

That is not a serious question; it is no argument. That being so, when one comes to look at the powers of the board and the powers of the Government in the exercise of which the Government must rely upon the board, then one begins to see that the whole matter is fraught with endless possibilities of danger. First of all, there is the point which has been made by both hon. members who have spoken on this side: That it might be grossly unfair to the diamond producers. They can have their diamonds taken from them; they are prevented from making their own arrangements. They have in fact their whole scale of operations determined by the Government, and are not allowed to use the knowledge which they possess in getting rid of the diamonds which they produce. They must go on their knees to the Ministers and say: Please take our diamonds and sell them on our account, and if the Minister is not prepared to give them a price that is satisfactory and they decline to enter into an agreement, the Minister comes along and says: “I demand your diamonds,” and you have to hand them over. And the Minister is empowered I suppose to do what he likes with them; to sell or keep them. There is nothing to show that he has to account for them within a reasonable time or pay interest on any money he received and, generally, there is nothing to show that he will make a good buyer. The Minister, as I understood, laid great stress on the fact that in times of depression, when the trade was weak, the syndicate went to the producers and said they could not carry out their contract, and would the producers vary the terms. It is not disputed that something of that kind happened. The hon. member there, of course, is of the opinion that that was a fraudulent act; that the members of the syndicate through the exercise of their influence over the buyers and the companies obtained an undue advantage. Supposing the Government had been in the position of the syndicate? First the Government might have found itself with an immense amount of money locked up in unsaleable stones, but if the Government had been dealing with the producers instead of the syndicate, and had gone to the producers and said: “We must alter the agreement,” the producers would have said: “We don’t care whether you lose money or not—you have to pay us.” That is where the public would come in. We are exposed, if the powers contemplated by the Bill are put into force, to the risk of Government having large sums of public money tied up and to Government making a mistake and losing a vast amount of money. There is the further point of what effect this would have on the industry, if this happened when the world’s demand for diamonds had fallen off. I take it the world’s demand represents a certain sum of money which is available for the purchase of diamonds. On occasions that sum becomes less, and it is then that the difficulties to which the hon. member for Kimberley (Sir Ernest Oppenheimer) referred will arise. The competition from outside sources will become a serious danger to the welfare of the diamond producers of this country. That would react on South Africa, because the money which the Government gets from its existing sources of taxation on diamonds would fall off, the rate of production would be curtailed, the number of men employed would be reduced, and there would be a corresponding decrease of revenue all round. I cannot agree that these are contingencies which it is unnecessary to consider. I am not satisfied that the Minister and his friends have sufficient knowledge of the diamond trade to enable them to calculate against these risks if this were a mere business matter the House would want more information than it has today, for the only practical information we have so far obtained is from two hon. members who know much more about the subject than we do. The Government can, if it chooses, carry the second reading of the Bill, but I do not think it should do that. The matter should be much further investigated before we are asked to commit ourselves to the second reading. Evidence should be taken by a select committee from people conversant with all the details of this intricate business. The proceedings in the select committee will enable us to see whether the Minister really knows what he is talking about, and whether there is sufficient evidence to show that the measure is really necessary, whether Government Knows what risks it will run, and whether it is sufficiently equipped with technical knowledge to administer this law properly. It does not convey much comfort to me to be told that this Bill is only to be regarded as a sword of Damocles hanging over the industry. One knows that these swords have a way of falling and, possibly, with an election pending, and Labour members clamouring for their quid pro quo from the Government, I would not give very much for the strength of the rope suspending that sword. I hope the Government will agree that further investigation is essential before we are called upon to commit ourselves to a new departure which may have disastrous consequences to the industry and to the country at large. I will, therefore, move as an amendment—

I only wish to say a few words in seconding the amendment moved by the hon. member for South Peninsula (Sir Drummond Chaplin). My first point is, what is the necessity for this radical Bill. Has the country, has the Treasury been damaged in the past by the administration of the private companies that have the control over this industry? Or has the State suffered damage by the sales of the syndicate in London? In this Bill it is now proposed that the functions of the producers and of the syndicate shall be taken over by the State. I stand here as a Conservative. I belong to a race that has always respected the property and the real estate of a man and I must say that I am astonished that my countrymen on the other side who represent farmers in South Africa, respectable first class land owners and business men, that the hon. members who represent them and sit on the Government benches support this Bill. I ask myself what are we South African people coming to, to what depths are we sinking? I ask it in all seriousness. I do not speak of diamonds in particular, I regard the matter on principle and it is bad principle. What is to-day applied to diamonds can to-morrow be applied to other industries. I ask this—I come back to my first point again—can the hon. Minister produce any proof that the administration or the Treasury has in the past been caused any damage because of the sale of the diamonds by the producers and the syndicate? That is what I want to say in starting because this proposal encroaches on the rights, the vested rights, of business people who in the past have done good to the State in paying taxes that resulted from this industry. Without any proper reason these rights are attacked, rights of an established industry, and I go so far as to say—I have read the draft Bill carefully—that We are putting upon our Statute Book a principle of confiscation. No one can get away from that, for what does the Bill say in main? In the first place it gives power to the Government to restrict the number of diamonds for sale. It can fix the quantity of diamonds the producers may sell. And the proposal goes so far that if I have a diamond mine in which I have put money the Government can come and say that if I, e.g., take out £1,000 in value I may only sell diamonds to the value of £500. I say that vested rights are being taken away in a radical manner and the owners of the mines will no longer have the right of disposing of the produce of their property. Then the State goes further and says that if anyone has a certain quantity of diamonds of his annual production for sale it can lay down that they shall not dare to ask more than a certain price for them. The State comes in and says that it also wishes to settle the price at which you shall sell your own goods produced by the investment of your own capital.

What section is that?

If the hon. member will only look at section 1 (a) (b) (c) he will see. An owner of a mine is further asked to make a return to the State of his production. The State is entitled according to the Bill to act as diamond dealers to fix prices and to go to the market and deal with assets the property of the producer. As the Bill stands I am not surprised that the hon. member for Pretoria (West) (Mr. Hay) openly states here that it is a Socialistic measure. He knows what this means and does not mince matters. He acknowledges it openly. He is a man of considerable weight on the cross benches and he declares nothing less than that this is a Socialistic measure. The fact will reverberate along the country side of South Africa. Yes, the hon. member for Bloemfontein North (Mr. Barlow) can laugh.

I know the farmers.

He can laugh, but it seems to me that what I said is a palpable hit and that it hurts. It is not alone the truth but it hurts. I say that we have to-day actually had a new principle laid down in this Bill. The State fixes the price.

What?

The minimum price. I said that the Government has the right to fix the price, the law says the minimum price. The Bill contains other subordinate points but I have not sufficient time to deal with them now, but with your permission, Mr. Speaker, I only want to go into this point. The law makes provision for the appointment of a board of control. Have you read the draft, Mr. Speaker, and have you noticed in what way the board will be composed? The board is appointed by the Minister and is subject to immediate dismissal by the Minister. It can be appointed to-day and if to-morrow it does not carry out the order or policy of the Minister—whoever the Minister may be—then it can be dissolved the day after to-morrow. What does the Bill say? It says that the members of the board must be persons who have knowledge of the diamond industry and diamond trade. But the Government knows well that there would be nobody in the diamond trade with any self respect who will accept such a position for selling himself body and soul to the Minister. That is why the Bill says that he must have knowledge either of the diamond trade or of public affairs or of finance. Thus we can appoint a man although he knows nothing of the most delicate industry known to us—the diamond trade. We must remember that the board has the right of fixing prices. The board created here has the full control. The board should surely in the first place inspire confidence not alone to the diamond trade but also the public, and not alone the public of South Africa but of the whole world, because this is one of the most delicate businesses known in the whole world. The Government goes even further to give an absolute control over the industry. The Bill at the end says that a reserve fund shall be created. The producer, the possessor of the diamonds, has a price fixed for which he can be compelled to sell his diamonds to the Government. He must at his own expense bring his diamonds to the Government for a fixed price, so says the Bill, and if subsequently there is any profit after the costs are paid and after the advances have been repaid where does the profit go? Does it go back to the owners of the diamonds or the mines? No, then Parliament decides where the profits shall go to, in other words, the profits go to the Treasury. There again a confiscation is again clearly introduced. It is absolute confiscation from beginning to end, and confiscation which is based on the principles of the Bolshevists, Lenin and Trotsky. I do not intend to discuss the Bill any further. I think that the principle underlying the Bill is of so grave a nature that I entirely agree with my hon. friend the hon. member for South Peninsula (Sir Drummond Chaplin) that the order for the second reading should be discharged and the Bill referred to a Select Committee so that at least an industry in which the public have invested millions of pounds—and these people are entitled to come to Parliament who is their protector—can come to give evidence and suggest something in order that the Bill may have some possibility of acceptance by Parliament and the population of the Union. I have great honour in seconding the amendment.

It is exceedingly interesting to watch the psychology of certain speakers in this House, and it is remarkably interesting to note how their thought change from time to time and the attitude they adopt in regard to the same measure at different times. It has been said that by introducing this Bill this side of the House intends to embark upon the confiscation of property and the socialisation of property. How that can be done in calm and serious moments I fail to see. How those principles can be read into the Bill is a problem, I suppose, as much for the speakers as for myself. It seems to be necessary to refer certain gentlemen on the opposite side to a report which was issued last year by the Select Committee on Precious Stones, the membership of which was composed as follows: The Minister of Mines and Industries, Sir Harry Graumann, Mr. Munnik, Capt. P. A. Celliers, Gen. Kemp, Mr. Sampson, Mr. Schultz and Mr. Rockey. It is interesting to note that the Government party had a majority on this committee. Consequently we would like to know what the attitude of the members of the party opposite would be on the question involved. I have only got a Dutch copy of the report, but I have tried to make a translation of this report, which bears very intimately on the question at issue. The report, which was only issued on March 28th last, reads, inter alia, as follows:—

by the producers.

Then the third says: “The committee has also considered the increased production of precious stones outside the Union and South-West and the possible effect upon the market, and the committee is of opinion that it may become necessary for the Government to enter into an agreement with outside producers or to apply any other measure”— Socialistic or not, hon. members may note— “to stabilize or keep in existence the market for precious stones.” It seems to me pretty obvious what the attitude of members on the opposite side was at that time. In any case, if they have forgotten, they can refresh their minds by turning back to this report, which was only issued last year. It is interesting to note, further, what the Government of the day actually embodied in legislation. I refer hon. members opposite to one of their own Acts, No. 38 of 1919, the third section of which provides for the compulsory sale of diamonds, and not only that, but for the fixation of prices by the Government.

What Act is that?

Act 38 of 1919. That Act seems to have escaped their memory. The Act was for establishing a diamond-cutting industry which we have been looking forward to for a long time.

And you will continue to look for a long time.

We are not looking at side issues, but the principle, and the broad principles are established definitely in that Act which provides for compulsory sales and fixation of prices by the Government. It would be well for the hon. members opposite to look at these things again. When the hon. member for Caledon (Mr. Krige) says that we are intending to innovate a new principle in this present Act, I must refer him to a letter signed by the Secretary of Finance just this day twelve months back, 11th March, 1924, of which I have made a translation. It arose on the question as to the existing law providing for the sale and disposal of precious stones at the time. The Secretary of Mines and Industries was instructed to write to the Secretary of Finance to find out what the law was. This is the reply—

This provision was incorporated from the Transvaal law, which had reference to both mining and dealing in precious stones. As for dealing in or trading in precious stones, the present law is Ordinance 63, of 1903. It is clear what the significance is of the Precious Stones Ordinance. It laid down that the right to mine and dispose of precious stones is vested in the Crown. What new principle is involved in this new Bill now before the House? It seems to me, before we start and raise a dust about this Bill, we should inquire into the past. Members opposite are making a party question of a purely economic one. There can be no doubt, and all of us are agreed upon it, both the producers and other responsible men of this country, we are all agreed that the time has arrived when the diamond market should be controlled. It has been realized by the committee appointed by this House last year, and why at this present juncture, when we are proceeding in a measure to materialize that, why now turn and assume a different attitude? We all realize it is necessary for the State to control the market. It is not only because of the State’s interest in direct taxation, and in a share in the mines, but it is most because the State has a direct interest in those who are employed in mining. We know by experience what resulted in past years when certain mines closed down suddenly and the men were thrown out of employment. We realize there are a number of men employed in the industry, and the Government representing the State must watch the interests of these men, and we know it is within the power of individual companies and individual men to swamp the market, and the people who will suffer will not be the capitalists, but those who slave from day to day to make an honest living. It has been adduced by hon. members on the opposite side that the alluvial diggers must be involved in this control. I wish to put before this House the consideration that before any thought can be given to controlling the whole production we must first make provision for those who earn an honest existence on the alluvial diggings. It has been stated by the hon. member for Pretoria (West) (Mr. Hay) that about 14,000 men, women and children subsist to-day on earnings from alluvial diggings. I believe the figure is even higher. These people come from all parts of the country, and 99 per cent. of them go there to earn an honest living. Only recently I had an opportunity of discussing this question and speaking candidly about it to one of the diggers’ committee. I have learned from a very well-informed and responsible man that many of these diggers make more of a success at digging than they could do elsewhere. When we consider that it is in consequence of natural conditions that many of them are there, I think we should hesitate before we take a step to control their production, and before we do so we must open up other avenues of employment and provide them with education and the ordinary amenities of life. For that reason I am very grateful that the Minister has wisely inserted that particular article excluding alluvial diggings. If that were not done I fear that we should simply drive men from the diggings into the towns, there to lead a hand-to-mouth existence. Very few of them have any capital; they mostly labour with their hands, and they cannot compete with organized capital. Another section of the Bill of which I approve on behalf of the alluvial diggers is paragraph 6, whereby alluvial diggers will have better security for the sale of their product. Hitherto they have been in the hands of the buyers, and, while I do not wish to enter into judgment on the buyers, I am informed that the diggers do not get for their stones what they deserve. It has been denied from the Opposition side that the mine-owners are in the habit of using alluvial stones to “sweeten” their parcels, but while I do not wish to contradict the hon. member for Beaconsfield (Col. Sir David Harris) or to say to what extent it is done, I was speaking this afternoon to a gentleman who knew what he was speaking about, and he confirmed the assertion that this was actually done.

The hon. Minister who introduced this Bill gave us to understand, after his investigation of the operations of the syndicate, that it required no very special experience of the diamond trade to deal with this very difficult question; but I think, after what has fallen from the hon. members for Beaconsfield (Col. Sir David Harris) and Kimberley (Sir Ernest Oppenheimer), we must realize that to this trade there must be brought an immense amount of experience and knowledge, and one must come to the conclusion that the hon. Minister, however painstaking he may have been in the preparation of this Bill, hardly realized the intricacies and ramifications of this trade. So far as the ordinary member is concerned, it can hardly be said that we have the opportunities that may be necessary to understand and appreciate the details of the diamond trade, but, it being our duty to settle the problem presented by the hon. Minister, sitting as business men to decide a business question without party considerations, the question arises whether we should not, before we pass the second reading of this Bill, require the fullest information obtainable and whether it does not call for further detailed enquiry. The Minister advanced two reasons for the measure. The first was to protect the shareholders of the De Beers and Premier Mines from the methods of the syndicate and the second was to stimulate production, or in other words to enable the producers to get better prices. In suggesting that it was necessary to protect the producers from the syndicate the hon. Minister has taken a very heavy onus upon himself in making a grave charge against the directorate of one or two of the chief companies in this country, for he has accused them of having abused their position for private profit. I think I have stated the Minister’s view correctly: and he must realize that a charge of this kind, made so categorically and deliberately in this high court of Parliament, is one which in common fairness he should be prepared to prove. In the course of his speech he made the statement that “millions had been obtained improperly” by the syndicate at the expense of the shareholders, while the hon. member for Vredefort (Mr. Munnik) said that the syndicate had consistently “fleeced the shareholders.” I should have thought a charge of that character would have been followed by some detailed proof; but the Minister has not supplied the House with any such details. If he cannot do so he stands guilty of making charges against individuals in this House which he would find difficulty in repeating outside.

You as a lawyer ought to appreciate my point, but you have entirely missed it.

Well, I carefully stated the Minister’s accusation, and he did not correct me. I believe all hon. members who are present will agree that the charge which he made implied bad faith and that impression is, I believe, one that a great number of people will share. I think in the interest of those who are vitally interested—the shareholders whose dividends are supposed to have been depleted— the House is entitled to ask on what grounds the Minister made such a statement. It is at least remarkable that these shareholders of the two companies concerned have never raised any protest against such alleged interference with their dividends. So far as the market is concerned the entry of the Minister in the guise of a protector of producers should not have had the effect of depreciating but rather of appreciating the value of the shares.

The shares have actually appreciated.

The hon. member for Beaconsfield (Col. Sir David Harris) is my authority for the statement. I understand the price of diamond shares has depreciated to the extent of three-quarters of a million. Putting that point aside I ask him again to supply the House with the information on which he based his first ground for this Bill. I do not think that was the real object of the Bill. What was the second ground? He suggested this measure was necessary to stimulate production; in other words, that it was necessary in order that a better price might be secured for the producer. It is rather remarkable to look back and see what was done by the present Government when in opposition, in regard to De Beers and other mining companies. The Minister said that so far as South-West was concerned the Government had an interest of 66 per cent. in the diamond fields, which, in part, he qualified, and the impression he left on my mind was that so far as the South-West production was concerned it stood on exactly the same footing as the production of the Premier Mine. That is not so. The Government is not interested as an owner in the diamonds produced in South-West. The interest it has and which is exercised through the Administrator is founded on the ordinances of the German Government, which in order to secure its taxation and to prevent the illicit trade in diamonds which it was thought was springing up in the South-West Protectorate, promulgated in 1909, the law under which the diamond Regie is constituted. But to speak of the interest of the Government in South-West diamonds as something equivalent to that of the Premier Mine under the ordinance of 1903, is incorrect.

I never used the word equivalent. I mentioned the two separately.

I venture to say the Minister repeatedly spoke as if the Government was really a partner in the South-West diamond fields.

That is hair splitting.

I want to ask the Minister, if the Government finds it necessary in the case of these two mines to stimulate production by increasing the price of diamonds, why does he not go into the market himself. In the case of South-West Africa he was concerned merely with the question of getting a better price. Why, if he cannot do the same in the case of the Premier Mine, because the Government has no voice in its control, does he not ask for an amendment of the Transvaal Ordinance of 1903? One could understand that the Government, if it had this interest, would be able to step into the field as a seller, and make its price with buyers in the ordinary way. But, passing away from this point, if for a moment you grant that the Minister had put forward some reasons to justify the House considering whether it would grant him the powers he seeks under this Bill, one would imagine that the Minister would have been able to place before the House some information on the prospects of selling the diamonds which he proposes to place under the control of his board. Assuming that he becomes through this board, a vendor of diamonds to the extent of, say, £10,000,000 a year, he has not given us any details about the market in which he intends to sell. One would have thought he would have been able to assure the House, which he is asking to provide the necessary finance, that he was satisfied that he would do better than under the existing arrangements, and that he had satisfied himself on this score, and could satisfy the House that he would not find any difficulty in that respect. I know nothing about the operations of the syndicate. The hon. member for Pretoria (West) (Mr. Hay) has no doubt a considerable knowledge of the subject. It seems to me very likely that a syndicate, if it knew its business, would, under the circumstances under which it has built up its organization, have taken steps to secure an adequate and complete system of distribution of the stones. They might buy and secure control of the diamonds right down to the cutting stage, and even beyond it. The hon. Minister appears to assume that if he eliminates the syndicate from direct bargaining with the producers he will immediately find at his disposal a market in which he will sell at the price he is dictating now, and perhaps a better price, but I think he overlooks that those people who wish to buy naturally make the best bargain they can, and when they are faced with the Government as a seller, will certainly attempt to get the stones at a price which suits their purpose. If the Minister is looking to fresh foreign competition, particularly from America, let him consider this, that no body of men will be prepared to risk the large sums of money required for any considerable deal in this trade, but would naturally be very cautious and regulate their price accordingly, realizing, as they would, the prospect of making a big loss: The Minister has failed to give us sufficient information on the vital point, whether, if this power be conferred by this Bill, he will not be worse off than under the present system.

When the House adjourned, I had been dealing with some remarks made by the Minister when he first introduced the second reading of this Bill. The impression I had derived from his statement was that he averred that the directorate of the companies he referred to had been guilty of commercial immorality. I would like the Minister to know the source from which I took ray authority for that statement. That source is his own remarks as reported. I would like to read to the Minister the report of his remarks on this point: “It was impossible for them to do justice to De Beers (he was speaking of the directorate) and at the same time derive the large profits which they derived from the syndicate. Nothing would have been said if they had been content with reasonable profits, but the syndicate had for years systematically pocketed not a matter of tens of thousands or hundreds of thousands, but a matter of millions of profits, and that at the expense of the producers.” Now, I would ask the Minister to say if my remarks are not a fair deduction from his statement. If they are fair, I think we are entitled to ask him for fuller information and for proof of the very serious charge he has made. When the House adjourned I was following up an argument designed to support the contention that the view we take on this side of the House that the principle of this Bill should not be accepted is the proper and correct one. If for the moment the House will follow my argument and if hon. members will go the length of agreeing with me that the reasons put forward by the Minister are very slender, what then can we think is the real object that lies behind this Bill? If one may conjecture as to the reason for introducing this Bill, and one takes ones mind back to what occurred a few weeks before June 17th last, it looks very much like the fruit of a political pact, the redemption of those promises made so liberally to the electorate that on the return of the Allied Party (as it now is styled) an attempt would be made directly or indirectly to establish a diamond-cutting industry in the Union. It does not seem to be a significant fact that there is this exemption in favour of cut stones in this Bill. But apart from this point, this is really a practical nationalization of the diamond mining industry of this country. I listened to the hon. member for Hope Town (Dr. Stals) this afternoon, when he said that there was no attempt to nationalize the industry by this Bill. He made that point rather strongly. What would the hon. member say if his property, whether derived from diamond mining, sheep farming, or whatever it might be, was taken control of by a Government board, who controlled the sales and pocketed the profits? If it is not appropriation, I would like to know what it is? This Bill not only gives the Government power to appropriate any profit which may result on the sales of diamonds, but it leaves the board free to demand whatever price it likes for its services. Is the board to be content with a 7½ per cent. profit for the realization of its diamonds, or would perhaps 10 per cent. be enough? No limit is stipulated in the Bill. A further point I would ask the Minister to consider is this: What is there in this Bill to prevent the board first, as a compulsory statutory agent, taking possession of these diamonds and then selling them to itself, and afterwards realizing them at a profit on an upward turn of the market?

Like the syndicate.

There is nothing in the Bill to prevent it taking over these diamonds and then announcing itself as the buyer, and passing on the profits derived on re-sale to the Treasury. I think this is a practical nationalization of this industry; it is a compulsory appropriation of the proceeds of private property, a principle which has never been heard of before in the legislation of this country. Turning now to the actual provisions of this Bill, I think the House waited with some interest to hear what machinery the Minister proposed to set up to give effect to his scheme. In ten minutes he sketched out this machinery and left the House to digest it as best it might. He did not indeed seem to like this first view of the infant he had brought into the world. There is the first provision, that is, the determination of the quotas to be assigned to the producers. It might well be necessary where the producers fail to determine what the quota should be, for the State itself to determine that quota. It has been an essential feature of the past policy of this country to restrict production according to the world’s demand. But what seemed illogical in the Minister’s argument is that he failed entirely to make any reference to the fact that if production must be limited, alluvial diamonds must similarly have a definite quota assigned to them. If the Minister were engaged in negotiations with producers abroad, it would be of help to him to be able to say that there was a definite limit beyond which the Union’s total production could not go. In effect, by his omission to deal entirely with the production of alluvial diamonds, the Minister fails entirely to deal adequately with the question of a limitation of the total output. When we come to the other clauses of the Bill, I must say it does seem to me that the very meagre and slender provisions made in this Bill for regulating and controlling the operation of the board, do in fact show that the Minister has not thought out all the details of the Bill. There is one principle wholly absent from this Bill, and that is, in the disposal of the diamonds, the producers are not in any way to be consulted. If the Minister thought so much, as he says he does, of the legislation of South-West, he would have known that the German Government recognized that their interest was solely confined to that of tax collectors, and they left the control of prices and disposal of the diamonds to the producers of the diamonds.

Not legally.

The Minister, as I understood it, thought that that legislation was sound, but why should he when he comes to deal with Union producers, give them no say in the matter whatever? Have they acquired no experience in the industry in all these years? Is it likely that three men, who must necessarily because of the qualification clauses of the Bill have had no experience in the diamond industry, would be able to deal with the sale of so large a quantity of diamonds without the assistance of those people who have had long experience in the industry? Then I should have thought if the Minister was creating a board which is to be a dealer, a voluntary agent and a compulsory statutory agent, he would have made provision that the board should be able to finance the producers. Where is the right on the part of any producer to demand and advance against the ultimate realized price of the diamonds taken from him? Surely the Minister does not think diamond producers exist on thin air. Yet there is nothing to give the producer the right to demand an advance on his diamonds. Then he takes another power, that of demanding the unconditional delivery of diamonds, which may be produced by a producer. What would be the position if the producer had pledged them to a bank or raised money on them? How is he to satisfy the demands both of the bank and of the board? Surely that is a position in which the rights of third parties must be considered when you come to consider in detail how this Bill affects the rights of the producers you realize the extraordinary inroads made upon them. Not only are the producers not consulted in regard to fixing the sale price of their diamonds, but they have not the right to follow up those diamonds and see what happens to them. I do not know the method underlying the operations of the Diamond Syndicate, but I imagine that under the existing system the producers have a running audit by which they are enabled to follow up the fate of their diamonds, step by step. It is another instance of the principle of the non-recognition of the rights of the producers that no such provision is made in the Bill. And will the board have the exclusive right to decide when and where it will sell these diamonds? And how long has the producer to wait for the proceeds. There is another point which may interest the Minister of Finance, whose department is bound in law to demand the payment of an export tax before diamonds leave the country. Who will pay this tax? The board, when it takes over and exports the diamonds, or the producers? If the board pays the tax before realization it is probable that it will charge the producer interest at 7 per cent. on the advance made for export duty until it recoups itself. And if the board proposes to wait for the proceeds before the tax is paid, the Minister of Finance will have to make some alteration to the existing law, which makes the tax payable when the diamonds leave the country. But that is probably one of the trifling points, not touched upon by the Minister, which has not yet been gone into. The Minister seems to be in doubt, for instance, as to whether he will need five, six or seven millions to carry on these operations, and a trifling matter such as tens of thousands to be paid on export duty is not to be considered. There is a wider appeal that I wish to make to hon. members. The present Bill deals with the diamond mining industry, no doubt due to the influence of the hon. members on my left. It may not be long before Parliament is asked for powers to control other primary products such as sugar, fruit or wool. If we follow what is being done in regard to the control of exports from other countries, we find in the case of New Zealand, that although the export of dairy produce is controlled, this was only done after the views of the producers had first been ascertained by means of a plebiscite. Even then the Government were given a very limited degree of control, and there was no deprival of the legitimate exercise by producers of the right to decide how their products would be disposed of. I feel that the speeches so far delivered on this side of the House indicate that we do not regard this as a party matter, but as a business proposition, realizing that it concerns not only the Union but a large body of people abroad who will watch with great care the proceedings in this House. I say there is something more behind this Bill in that respect. We have heard the hon. member for Pretoria (West) (Mr. Hay) approve of this as a Socialistic measure. I suppose this is the first step and that afterwards the claim will be made that profits must be controlled, and then wages, and finally the right to carry on or to stop work will be dealt with, as the hon. member for Hopetown (Dr. Stals) actually indicated. I make this appeal to members opposite, because we are not dealing with this matter as if it were a party matter. We feel that a big principle is involved, and we ask them to give it their earnest consideration solely on its merits.

I make no claim to special knowledge of the diamond trade and I do not speak as having any personal interest in it, but I do not care to give a silent vote, and that for two reasons. The first is that I represent a constituency, Port Elizabeth, which is the port of that big diamond-producing centre, Kimberley, and there has always been a strong sympathy between the two places. And I am old enough to remember what the finding of diamonds meant to the Cape Colony, alike in the contribution of the industry to the public revenue, the employment it gave, and the market it provided for the products of the country, although in that respect it has been overshadowed by the gold-mining industry. As an hon. member said this afternoon the sense of ownership has always been strong in the people of this country, both as regards movable and immovable property, and it has even gone so far as to include a man’s right to wallop his own nigger. And if this Bill were to be applied to anything else but diamonds it would be laughed out of this House. It becomes necessary for the Minister to prove very clearly that there is something very special about the diamond trade which would warrant the introduction of a Bill of this sort. That there is something special about the trade in diamonds we have recognized before. In the late Cape House there was special legislation dealing with the diamond trade but this is different from anything that has ever been brought forward before and I say that for the Minister to justify a Bill of this sort which sets up or gives the power to set up a considerable Government trading concern, which usurps rights in property, gives rights to fix prices and even to discriminate between producers, because a right is given to apply conditions to one lot and not to others, the Minister must give the clearest possible proof of the necessity for such a Bill. The hon. member for Hopetown (Dr. Stals) seemed rather to think he had disposed of all that by reading out the report of a Committee of this House which was never agreed to, but on which there was a majority of S.A. party. That does not influence me one iota in favour of this Bill. There was nothing in that report to justify this Bill. The only thing I think that could justify the Minister in the matter would be if he were able to show that this was to the benefit of the producers and the State as partners in the diamond industry and he would have to prove that in the clearest manner. He has told us that the producers are De Beers, the Premier, Jagersfontein, South-West; and the alluvial diggings are excluded from the Bill and need not be taken into account. He did not tell us and no one has told us that there has been any demand on the part of any of these producers for legislation of this sort. Neither the Minister nor any of his supporters have told us so far. I followed the Minister very attentively and I do not think he was as clear as he might be. I do not mean in that way to reflect on what he said but I think he assumed a considerable knowledge on the part of members of this House of the workings and a knowledge of the Diamond Syndicate which we do not—which I certainly no not—possess, I gathered from the Minister that the definite points upon which he objected to the working of the syndicate were two. They had been connected in a double capacity—the same people were directors of producer companies and also members of the syndicate but in this Bill his board will be acting in the same capacity. He gives the power of discrimination to the board to buy diamonds and also to call on producers to hand over their diamonds for sale on commission, so the board may have diamonds on hand which they have bought and which they will be anxious to make a profit on and diamonds which it has called upon producers to hand over to them and when a dull time comes in the market the board will be in a difficulty. They will have to decide whether they will sell the diamonds which belong to them or those which they hold in a fiduciary capacity and without any reflection on the board they will be put in the difficult position of acting in the double role that he objects to on the part of the present syndicate. Then the instance the Minister gave was, I think, that in dealing with the syndicate there was a difference of £224,000 between the first offer they made and the final offer that was accepted, on a deal of something like £5,000,000; something like 5 per cent. If the Minister is going to set up his board, who are to deal directly with the diamond people, the people who buy diamonds by the retail, and he finds no more than 5 per cent, difference between the price he starts out to get and what he gets eventually, he will be uncommonly lucky, and there is nothing whatever unreasonable in a 5 per cent, difference between what is asked for at first in a transaction and what is actually obtained. His object seems to be very largely the elimination of the middleman; the man who does the distributing work, and that is rather a popular thing at the present time. The distributor is a person who serves a very useful purpose in the economic and business life of the country, and if any producer can get someone who will take the whole of his product and give him a share of the profits, he is much more likely to come out on the right side, than if he starts amateurs to handle it on his account. Who is it that it is proposed should carry on the business better than they can do it themselves? A board of three who are to be subject to instant dismissal. That seems to me a very weak point in the Bill indeed. What kind of man are you going to get to take a position of that sort? And that is the condition that is laid down in this Bill. In the case of other boards established, such as the Railway Board and the Public Service Commission, there is statutory provision for the safety of these people, but the idea of taking this business out of the hands of those people who have proved that they can handle it well for all these years and putting it in the hands of three men who will be subject to instant dismissal. The Government are likely to come out a good deal worse than they are at present. A business man is apt to think he can run a farm better than any farmer, until he tries and, in the same way, most farmers feel convinced in their minds that they could carry on a business much better than any storekeeper until they try, and a Socialist thinks he can run a business or a farm better than anybody else—also until he tries. In the same way it is said that in a naval battle the man on a ship, who is more sure of what ought to be done and what will happen is the latest joined midship-mite, and for the same reason, because he is not sensible of the danger and difficulty. The same reason applies in all these cases, and the same thing, it seems to me, applies to the Minister in so lightly going in and handling this highly-intricate business. As to the reason for failure in these instances I have spoken of, it is not merely a case of common sense and knowing how to do a thing—experience. Sometimes it would be difficult to explain why one takes a certain step. It is done by a sort of intuition. It is a habit of mind. It would be difficult to put in black and white why certain things are done in business, and in all businesses a special knowledge is required. We have eminent business men in this House. The hon. member for Cape Town (Central) (Mr. Jagger) is, I suppose, one of the most sensible and capable business men in the Union. At the same time, if he were to set up in the diamond or timber business, I should be sorry to take any shares in that business. The diamond trade is admittedly a highly technical one requiring very special knowledge of the markets, and its machinery is so delicate as to be easily disturbed, and once dislocated, it is exceedingly difficult to re-adjust it. The Minister has not convinced me that it would be to the public interest to have a board to control the sale of diamonds, and I shall certainly vote against the Bill.

I do not wish to say much about this Bill, but only to refer to a few points. The first matter that attracted my attention was as to what actually was the intention of the Bill. I conclude it is that the state shall get its just share, and the small producers their just share of the diamond trade. Against this there is opposition by hon. members on the other side, but they forget that in the past similar laws have also been made with reference to the farmer. The hon. member for Caledon (Mr. Krige) has said that this Bill will come into operation immediately. As far as I know and gather in reading this Bill, it is intended to give the Government control over the trade just as is the case with the Co-operative Wine Farmers’ Association. I remember speaking to somebody about the Wine Co-operative Society, he said: “As long as it is a good thing, I am with it; but when it no longer is a good thing, I am no longer with it.” As regards this Bill, I think that the control is not going to be applied so long as the syndicate does its duty and takes care that the best prices are obtained by the producer. To this it is replied that where in the past the De Beers Company employed 4,000 men, there were now only 1,800 working. We know that this is due to better machinery and that the company also leave their business to lay out large farms of which they know nothing, and they contribute large amounts to party funds and therefore things no longer go so well as in Rhodes’ time. The hon. member for Caledon (Mr. Krige) has stated that he is a Conservative, and that we should not encroach upon the rights of private property. I ask him what he thinks of the wine farmers’ co-operation.

No, that does not encroach on private property.

Absolutely! That puts everybody on the same footing, and have there not already been large inroads made upon the private incomes of people? There is the income tax, the super-tax and, during the war, there was yet another known as extra-profit tax (or war tax), so that I had to pay 10s. out of every £1 I made to the State. That is what almost ruined us. Isn’t that encroachment on private property and rights? What objection has there been that the State takes 10 per cent, of the profits of De Beers, 60 per cent, in the Transvaal, and 66 per cent, of the profit in South-West Africa of the profits made on diamonds? The State must see that it gets this lawful share. That has not happened, and the Minister now wants to see that the State should get it. This is the reason why he introduces this Bill. This is what is behind the Bill, but all sorts of other things are searched after, because hon. members on the other side like to look for things in others that are usually to be found in themselves. Alluvial diamonds are excluded. Alluvial diamonds are also found in South-West, but I suppose that it is the alluvial diamonds of the Union that are excluded. The people in the diggings and in the country are now frightened by everything that they are told. We hear also that the prices of shares are falling. As regards this, I can say that the shares are simply manipulated to frighten the country and to kill the Bill, then they will rise again. I speak here as an interested shareholder in the company, but I am convinced that our interests will not be prejudiced. The same thing happens with alluvial diamonds. The buyers say that the prices will drop simply in order to buy the diamonds cheaper. I have a letter from the diggings and my correspondent writes that the people there are dissatisfied with the Bill although they have not seen it yet. It is just the buyers who have been telling them this to frighten them. It has happened often in the past when the buyers have told them that Russia has put large quantities of diamonds on the market, or that trouble was brewing between Germany and France, or that something had gone wrong in England with the money market, all simply to be able to buy the diamonds cheap and to make a big profit.

There appears to be a conspiracy of silence on the Government side of the House on this Bill. One would have thought that if the party to which the Minister of Mines belongs were really behind him on this matter, we would have heard a great deal more from the members of that party. We are accustomed to hear very long speeches on very unimportant subjects from the Government benches, but here we are dealing with a matter of supreme importance and yet very little has been said on the question from the Government side of the House. I cannot help thinking that the Minister is too wise to have brought the Bill in by himself, but that he has been jockeyed into this position, and that he is already feeling the spur of the Government’s connection with the Labour party. My objection to this Bill is that it is the thin end of the wedge. I cannot help thinking that it is a Socialistic production. It really began probably with the hon. member for Vredefort (Mr. Munnik), who has very big ideas and who would have been a very successful mining man, if he had not been a very indifferent politician. We know that the nationalization of the means of production and distribution is one of the parrot cries of the Labour party. What this Bill is aiming at is to do away with the private ownership of shareholders in those great concerns which are carried on in this country. The Minister says, “You needn’t worry; it is only a permissive Bill.” It is only permissive as long as the Minister’s followers on that side allow it to be permissive, but when jobs are holding out at probably £10,000 apiece, there are a good many people looking for those jobs. The Minister will be coerced into doing something, whether he likes it or he doesn’t. I want to deal with the question of Government action in private enterprises. We know that when Governments go into private enterprises they generally make a hopeless mess of the whole thing. We had an experience of that a few years ago when, with tears in his eyes, the leader of the Opposition at that time talked about this country going hungry and starving because we had not enough wheat in the country, and he so influenced the Government of the day that we imported a large amount of wheat which we have not yet paid for and which I do not know whether we ever shall be able to pay for. We then had all the advantage of the leading commercial and financial men on our side. What is going to become of entering into this private enterprise of diamond producing? I am not sure that any of the members on the opposite side have sufficient knowledge to run an ordinary goedkoop winkel. I want to speak to members opposite as a commercial man. Most of the members on that side are not, I think, commercial men and very few of them are farmers. When you are dealing with the commercial side of a product of this kind you are dealing with a luxury. Diamonds are a luxury; they are inedible and indestructible. Every diamond produced in the world is another diamond added to the world’s stock of diamonds. They are here, and they have got a commercial value of sorts. Their commercial value is only such as can be maintained by certain acute restrictions over the business. We have had men running the diamond industry and the Diamond Syndicate for thirty years. The Minister can know little about the commercial side of the subject, and after all, that is the side that matters, and matters very much. He knows as well as I do that if he takes the powers under this Bill he will be forced to take control. That is bound to come. The Minister knows as well as I do that he is not equipped, that no member on that side can possibly be equipped, to take the place of these men in the business world so far as diamonds are concerned. I would like to say a word to the kindergarten young men on that side of the House, who have not had the commercial experience of many of us who are older men. You are here an untried group of men. I hope you will do well. But you are not going to do well by mixing yourselves up with matters you don’t understand. The mines of this country are over-legislated, they have always been over-legislated, but because we have paid up to now, it is not fair to assume that we are always going to sit down quietly. I am a shareholder in De Beers to a very modest extent, but I cannot conceive of the directors of De Beers being men who would do anything which was not honourable. I would say to the Minister, “Go slowly, send the subject matter of this Bill to a Select Committee, where, at any rate, it will be removed from the floor of this House, and we can have men to go into the matter quietly and calmly from the commercial point of view and from the point of view of the benefit accruing to the Union, the point of view of those working on the mines, and the point of view of diamond cutting.”

I rise to join in this very one-sided debate because I would not like to give a silent vote on this important Bill. Very able speeches have been made from this side of the House, practically tearing this miserable measure to pieces. I have heard very little in reply on the other side. That I understand. I understand that, as far as the Labour party are concerned, they have won. They need not speak any more; they have passed the speaking stage as the hon. member for Pretoria (West) (Mr. Hay) has said, this is Socialism and it is only the first step. Never in the history of this Parliament has so clear and undisputed a measure of State Socialism been put on our Statute Book as this Bill. But why the hon. members opposite, members of the Nationalist party, do not join in this debate, I do not understand. Either they must be afraid or they must be ashamed. This Bill is important. It is important because of its subject and even more important because of the principle which it embodies. Any Bill which deals with the diamond industry in this country is an important measure. Millions of money have been invested in that industry; it has played a great part in the history of South Africa, and it gives employment to tens of thousands of people. Therefore I hope that, even at this late hour hon. members on the other side will wake up and join in this debate and answer the arguments put from this side of the House. Before I come to deal with the Bill, I should like to refer to the speech with which the hon. Minister introduced the Bill two weeks ago. A more deplorable speech I have seldom heard in this House. The hon. Minister is entrusted with the control and supervision of the mining industry in this country. We expect from him in that exalted position, a spirit of fairness and sympathy and understanding. But in that speech he showed no fairness, sympathy or understanding. He spoke in a spirit of bitter animosity which, to me, was inexplicable. I say if that is the spirit in which the Minister approached the subject, then I understand this Bill. Then I see it is a penal Bill meant to settle old scores. It does not deal with the diamond industry on its merits but because there is a spirit of vengeance —if I may use the word—behind it. I am afraid of what is going to happen to the other branches of our mining industries in this country if that is the spirit in which they are going to be dealt with by this Government. The hon. Minister spoke of the sword of Damocles. He said he was hanging a sword of Damocles over this syndicate, but he is doing much more than that. He is hanging a sword of Damocles over the whole diamond industry in this country. Make no mistake about it. If this Bill becomes law, the effect will be not proper control and regulation, but it will be confusion and paralysis and unemployment and it will lead to one of those diamond crises through which we have periodically passed in this country. What struck me about this Bill on first reading it, was what struck the hon. member tor Cape Town (Gardens) (Mr. Coulter), whom I wish to congratulate on the brilliant speech in which he dissected this Bill to-night. Here is an industry in which millions of pounds have been invested. It has been run by the owners of that industry, the people who put their money into it, for a lifetime. Here their industry is being dealt with in a very drastic manner and not a word in this whole Bill of consultation with them in making these drastic provisions. I cannot understand it. I should have said, in common fairness, if the State wants to regulate an industry it should consult with the owners, with the people who have ventured their all in it. Not a word of consultation. You may read this Bill from beginning to end, but you will nowhere find that the board is called upon to consult anybody in the industry. The board can simply take the most arbitrary measures without the least regard to the people who control and own the industry. Let us differentiate two things. I can understand that in an industry like this it may be necessary for the Government of the country to have a certain amount of say. Let us assume that as common ground. I do not resist any attempt by the State to exercise a proper control in regard to an industry in which it is interested. It is quite true the State has a 60 per cent. interest in the Premier Mine and, as the Minister pointed out, the old Transvaal law did not reserve to the State any measure of control in the working of that mine. I can understand that occasion may arise where the State should have a legitimate say. I would not object to that. I am not so strongly wedded to the principle of private enterprise that I would entirely eliminate the State.

That will infect it with Socialism.

No; I admit that within certain limits—

That Socialism is a good thing?

—it may be, necessary for the State to have a say in it. That is why I would vote for the amendment moved by the hon. member for South Peninsula (Sir Drummond Chaplin). There are some provisions in the Bill which may be reshaped so as to be workable. We admit diamonds can only be produced and sold in limited quantities, and in the interest of the industry itself it may be necessary to limit production and to arrange quotas for the various big producers in the country, and if the producers themselves cannot come to an agreement on these important matters, let the State step in and have a certain measure of say in regard to that. That, I do not think any hon. member on this side of the House would resist, and if this Bill were sent to a Select Committee it would probably be that it would come back in a form which recognized this principle and gave the State a “say” which it has not now.

How much “say ”?

And that would enable us to exercise a certain measure of control where necessary. Let me say this. The hon. member for Hopetown (Dr. Stals) quoted a report of a Select Committee and he seemed to think that the whole principle that underlies this Bill was given away there. He was wrong. All the committee reported, and meant to report, was this: I agree that circumstances may arise which may make it necessary for the Government to come to Parliament in order to obtain powers to control the disposal of precious stones by the producers. But this Bill says something quite different. I can understand that the Government of the country should have a say in the control of the disposal of the diamonds by the producers. That is a matter in which the State might exercise a certain measure of control, but what is proposed in the second part of this Bill is that the entire control shall be taken out of the hands of the owners of this industry and vested in the Government by legislation; that is something entirely different. If this Bill becomes law the only right which the diamond industry will have is to produce diamonds, and once they are produced the whole matter passes out of their hands. This is a private industry, in which millions of pounds have been invested. Let us be quite clear that the result of this Bill will be that the stones from these mines will be taken over and pass out of the control of the producers.

That is the position now.

That is not the position. The hon. Minister does not know what the position is. I think that is a very far-reaching action to take, and it is useless to try to seek for precedents for such action; there are no precedents in our Statute Book in South Africa, I am quite sure, where the State has gone to a private industry and said to them: “We are going to take you over. We are going to run you.”

What about railways?

I do not think that interruption needs any answer. I remember some time ago prominent members on the opposite benches went about the country preaching the doctrine of the nationalization of mines. I remember how on one occasion when that mad Parliament sat in Pretoria and the hon. member for Brakpan (Mr. Waterston) brought in his petition for a republic, the hon. Minister of Justice soothed their feelings by assuring them that their policy was the nationalization of the mines. Here we have it; not in an honest, open way, but in the worst form possible. I agree with the hon. member for Cape Town (Gardens) that here we have practically nationalization of the mines in its most immoral form, nationalization without compensation, and that people who have put millions into the industry are deprived of control by the State appointing a board to run the industry.

Almost as immoral as the Pact?

It is no use looking for precedents; this is a new point of departure. Here for the first time in the political history of South Africa we have the State stepping in and pushing aside people and saying, “I take your property. I shall run it, and you will have nothing further to say.” Members will see that once this board is set in motion the mining industry may produce diamonds if it wishes, but it is very unlikely that they will continue to produce diamonds. The logical result of this Bill is that the State will have to go further and will have to step in not only to be the diamond merchant of the Union, but also the producer of diamonds in the Union. I say it is useless to look for a precedent. Two years ago, when we started the Electricity Commission, we took away no man’s property, nor the management of his property. We set up a great public concern, and just as municipalities deal with water or other public utilities, so this body deals with electricity supply. But not a single penny has been taken away from a man, nor any share of management. The only consolation the Minister of Mines gives us is that this Bill may not be put into force. The hon. member for Vredefort (Mr. Munnik) said this afternoon that it was most improbable that the provisions of the Bill would be carried out. Then why waste the time of the House with this discussion? Surely our time could be better occupied; we have lots of other work. If the legislature of this country puts this power into the hands of the Government, the Government may go on, and the Minister says, “We shall use the powers given us in this Bill when and as we choose.”

Quite right, too.

The House must look at this Bill in that light—that we are going to take away from a most important industry the right of management of the owners and to give it to others. I do not understand this. We are making a departure in this case such as we have never made in this country or this legislature, and I ask us to pause very carefully before we do it. A good deal of argument has been addressed to us as to the technical qualifications of men in this country to run this industry. I am not going to argue this case. I take it that this is probably the most highly technical industry in the world and calls for the most highly specialized men, both from the technical and the financial point of view; and yet it is proposed that it should be run by the State. The State has not even been able to run the agricultural affairs of this country, and although we have been trying to find markets for our beef and other agricultural products, we are as far from solving the problem as ever. Our difficulties are going to be very great if we take over an industry and trade such as the diamond trade. It requires knowledge and expert skill, such as you will find nowhere in this country. You will find if this board comes into operation that it will come to loggerheads with the producers, that contracts will be cancelled, and that you will have a diamond crisis in this country such as we have never had before. I think one provision in this Bill is very important and will certainly come into force when this Bill comes into force, and that is the financial provision that will have to be made by Parliament. The board can come to Parliament for money, and I think that if any provision in the Bill is going to prove true, that will prove true. We shall have to finance this board, and on a very large scale. We have been told that in normal times a capital of about three million pounds will be required to run the diamond trade, so far as this country is concerned, but it is not going to be a normal state of affairs at all. We know that the history of this country has been punctuated by diamond crises, and we know that these crises from time to time synchronize with depression in this country, and I can imagine a diamond crisis taking place and this board sitting chock-full of diamonds, not knowing what to do with them, unable to sell them, and coming to Parliament for money. The syndicate, we have been told here, only two years ago were sitting with no less than £7,000,000 worth of diamonds. They had to carry the baby, but it would be very difficult when this board comes into action, and the board comes to Parliament and says, we must have £7,000,000 at a time when there will be depression and when it will be difficult for us to get money. We would have set public opinion in the lending countries against us, and when we want money for railways and other things, the board will be sitting on our doorstep and asking for £7,000,000 or whatever they want to carry on their business. That provision will come into action if we want to see the Government of this country become diamond dealers, with all the difficulties and pitfalls which lie along that path. Do not let us, as the Minister has suggested, say, “Well, these powers may not be exercised.” We must act with open eyes in this matter, and assume that these powers are going to be exercised; that these dangers are real and will come along our path, and let us deal with the matter in that light. This Bill supplies in itself a very severe test of the sincerity of the Government. If this Bill is a good Bill from the point of view of the producers, as the Minister says, if this Bill is meant to insure and improve the position of the producers, why are the alluvial diggers excluded from the benefits? I have not heard the hon. member for Hopetown (Dr. Stals) ask for his constituents to have the benefit of this Bill that is meant to improve the position of the producers. I have not heard the hon. member for Barkly (Mr. W. B. de Villiers) or others say they are grateful for this exclusion, and I do not believe there can be a better test of the sincerity of this Bill than just this point. If it is good for the producers, why is it good for one class of producers and not the other? If this Bill is going to improve prices, why should the alluvial diggers be excluded from the benefit of these higher prices? No, it is very different. The hon. Minister knows this is an insincere position. He knows his constituents and the constituents of those members who sit behind him will not stand this Bill which has introduced this penal legislation for those who have not voted for them. I am not going to continue the debate. The various points that arise on the Bill itself has been dissected by member after member on this side of the House. What concerns me is that this is an entirely new departure. We are singling out the diamond industry to-day. There was a time when it was impossible to do so, and to-day you have this change that De Beers and the other producers are singled out for penal legislation in this country. What has happened to De Beers may happen to others to-morrow, and I ask hon. members who sit on those benches not to forge a weapon which in time to come will be turned and must be turned against them. We cannot do an injustice; or do what we are doing here, without suffering for it in the end. I feel certain that if we say to-day, it does not concern us, it is only De Beers, the Premier Mine and others, and do this unjust thing, the time will come when we shall all bitterly regret it. Do not let us pass the measure for the diamond industry which we are not prepared to pass on equal terms for other industries in this country. Let us be fair. This is the high court of justice in this land, and whatever industry it is, and whatever the feeling of prejudice in the country, let us do justice here. Let us take high ground here, let us adopt a standard here which tomorrow can be applied to us as well as to others. I have heard the hon. member for Hopetown (Dr. Stals) say there is the provision in the law that the right of mining belongs to the State. Naturally, that is a clause which is in not only the diamond law, but the gold law of the Transvaal. The right of mining belongs to the State, but what has the State done? It has passed a law saying what private capital can do, and private people can do. They have established a large industry involving the outlay of millions of pounds under that law. It is a legally established industry, and I say for us after this has happened to appeal to that general provision of the law, and say the State has a superior right to override the law, is a false position to take up. In the end, it will rebound on us and we shall all suffer. I think it is a pernicious law, it is really only possible under the abnormal circumstances of the country to-day. I can understand that legislation of this kind will be attempted, but it is in truth impossible and pernicious legislation, and if it passes this House and passes Parliament the day will come when most of us who sit here will rue it. The Labour party may rejoice at it for no doubt it is State Socialism. It realizes a great ideal which millions hold, but it is not held by the people in this country, and the great majority in this country will bitterly rue the day when they pass this Bill into the law of the land.

I really had no intention of speaking in this debate, and I can give the hon. member for Standerton (Gen. Smuts) the assurance that I did not have the intention simply because the matter of the control contemplated by the proposed legislation appeared to be a matter which spoke for itself, and with which I cordially agree. I must say that I was a little surprised that so much opposition comes from the other side, while so little of it is of any actual consequence. Now I must say that I listened with attention to the plea—pro De Beers—of the hon. member for Standerton. I do not take it amiss. The hon. member spoke of the all mighty, “all powerful” De Beers. This indeed it was, “all powerful,” but as happens with more than one thing, the great De Beers must share in the fate of the former Government and must fall with it. When the hon. member sat here he could protect De Beers, but now he sits on the other side he must allow another point of view to prevail. Then the hon. member for Standerton says: “Now I must be punished.” If there is one thing that makes a strong appeal to me, it is the high ethical standpoint assumed from time to time by the hon. member for Standerton (Gen. Smuts). I will only say to the hon. member that while he was speaking I could see that he had to struggle between what he should say in favour of De Beers and how he should suppress his own feelings thereanent. I could not help feeling several times how, under a serious exterior, he was still laughing secretly to himself. One could feel that it was a special plea. I wish to assure the hon. member that if this is a Socialistic Bill then I agree entirely with Socialistic legislation, and then I think I shall not be in any worse company than my hon. friend himself, because the electricity board has been given powers, which inhere in private people, in the interest of the State and this measure of the previous Government was to secure control. Then the hon. member for Standerton then tries to establish a nice distinction of principle between that measure and the Bill. He says that measure was not Socialistic, but this measure is. Well, this may appeal to some illiterate people, but I can give the hon. member the assurance that the public of South Africa will not fail to see the intention up his sleeve. The hon. member for Standerton is never so highly ethical as when he can fight a matter in no other way. He now comes and says that we have here to do with a highly complicated industry. Now I can tell him I believe that 999 out of a thousand shareholders in the diamond mines are very ignorant of the diamond trade and mines. They are only concerned that they should get the one thousandth portion. I am convinced that if the diamond mines can find the necessary people to buy or to sell diamonds, then there is no reason why the Government should not get them. I willingly acknowledge my ignorance about the attention to what they said. The latter used a lot of weak arguments, but he gave no reason why the Government should not proceed with this matter. The experience we have had in the past and to which the hon. member for Kimberley has referred was of such a kind that we felt convinced that it was now high time that the Government should seek the powers which it had already been felt last year the Government should possess. Nor do I know how far the compromise that was later made, and in consequence whereof many diamonds were sold, was hastened or influenced by the consciousness in the persons concerned that the Government intended to tolerate the matter no longer but intended to ask for the necessary powers to come between the two as a Government, when its interests are concerned as was the case in September of last year. The hon. member for Kimberley actually said here this afternoon that it may happen that these people should again trifle with this great question to the detriment of the State and where it may happen that negotiations are held up, that it would then not be unreasonable that the State should come between the two to exercise control. What is then this control? That is another matter, and the hon. member for Standerton on this point said that the Government simply took over everything and then acted as a diamond buyer. He knows just as well as I that that is not the case.

It is in the Bill.

No, he knows that the Minister of Mines and Industries has said that that is something we do not intend to carry out.

Why in the Bill then?

Precisely for the same reason that the old Free State Government said to De Beers: look and accept a law and if you close the mine then I will come in. The result of that law was that no mines would close. Never did that Government find it necessary to open up mines. It looks as if the hon. member for Standerton has less confidence in De Beers and other producers than in us. We have so much confidence in them and assume that they have so much common sense that they will appreciate that in their own interests they must not do again such things as they did last year because if they continue this country may suffer a great calamity. We, however, say to them if you do it again then we shall make use of the powers given to us. When people are so unreasonable then it is time for the State to see that they deal with the 40 per cent. of the diamonds coming to the State in the interest of the State. Is it then expecting too much that the Government should ask to be empowered to come between the two and say if you cannot do the business then I am going to do it. It has been said that the Government has not the business people to carry on these matters. I admit that I do not know about it, nor the hon. Minister of Mines and Industries, but then of course we shall consult people in order to see that the interests of the State are looked after. Now I should like to know where this is wrong or unreasonable. It seems to me as if hon. members think that what happened last year, when the persons concerned were so unreasonable, may happen again and that then we shall not be in a position to, or will not, act. If this is the fear I ask why then not give to the Government the power that they ask in the interests of the people and of the producer. I do not wish to detain the House longer except for one thing. The hon. member for Standerton has said that we can test the good faith of the Government or rather can see the good faith from the fact that the alluvial diamonds are excluded. I can give no other answer to this than that of the hon. member for Hopetown (Dr. Stals). I do not see why those diamonds should be under control. They were always without control, and they are so still to-day.

There is no control.

Just imagine now. I said that there was no control while other diamonds were controlled. The hon. member for Standerton caused great joy to the member for Kimberley by supporting him that alluvial diamonds should also be controlled. That is the way in which they now want to get out of the difficulty. Alluvial diamonds are not controlled, and if my hon. friend has not seen the necessity therefor during all these years, then he supports our view that it is not necessary. It has been asked why the Nationalist party does not take part in the discussion. We do not talk for the simple reason that we do not wish to waste the time of the House and that we are convinced that we are acting rightly and that the arguments we have heard have not in the least convinced us. I am now still as fully convinced, no a little bit more, that the Bill is a good one, because a lack of argument on the other side is sufficient proof that the position that the Government has taken up is right.

We have listened to a remarkable speech. The hon. gentleman ended by trying to explain to the House why we have heard so little in defence of this Bill from his side of the House. He gave two reasons. The first was that they were so absolutely convinced of the rightness of this Bill that no defence was necessary. The second was that the arguments he had heard against the Bill were so feeble and, indeed, altogether non-existent, that there was nothing to answer. I do not know whether the hon. Prime Minister has been in the House during this debate, but I have had a good deal of experience in Parliament now, and I have never heard a first-class Government Bill so torn to pieces by criticism as this has been.

Oh, dear.

I take only one of the speeches, that by the hon. member for Cape Town (Gardens) (Mr. Coulter). Has it been answered?

Hair-splitting from A to Z.

I have really felt myself doubting whether the Prime Minister understood what this Bill is intended to do. He talked about control. We are all agreed that a measure of control is necessary with regard to the production and disposal of precious stones. But this Bill is not a Bill for the control of the disposal of precious stones; it goes very much further; and that is a point the hon. Prime Minister failed to touch upon altogether. It is not a Bill to enable the Government to control the disposal of the output of the producers, but to take the ownership of their produce out of their hands without any security or conditions, and to dispose of them.

For whose benefit? What is the difference?

If the hon. member, who is a lawyer, does not see the difference I despair of him.

In the most general terms what are the implications of control?

One implication is that the disposal takes place by someone else than the person who controls it. That is the whole point. The Select Committee contemplated the disposal by the producers of their stones under the control of the Government. The implication is that there are two parties—the one which does and the one which controls —and that is contrary to the principles of this Bill. This is not control by the Government but direct action and that is where the hon. Prime Minister entirely failed to answer the criticisms which have been passed upon the Bill. I heard an interruption asking for whose benefit the stones are to be sold. The State sets up a compulsory agency on behalf of the producers, but without their having any responsibility to account.

Do you seriously say that?

Yes.

Then your argument is not worth listening to.

I think perhaps the hon. Minister might sleep more peacefully if he did not listen to it. I have read this Bill and there is nothing that I can see in it on this point except the words “on their behalf.” But although the stones are to be sold on their behalf the producers are never to be consulted and there is no stipulation as to payments or accounts—none of the conditions ordinarily laid down in a contract between principal and agent. The producer takes the risks and waits for his money. That is the point I object to. I am not going to attack this Bill because it is a Socialistic measure—I think it is—but on its merits. I say for this country to trust its Government with unlimited power of going into the diamond market, of taking away from the producers the stones they have produced, and of disposing of these stones, will involve us in far too great risks. And what does the argument of the Prime Minister ultimately come down to? He says: “We do not mean to put the Bill in force,” and the Minister of Mines said this was a sword of Damocles— “We shall only use it if necessary; not otherwise.” He took as a parallel the right of the State under the Transvaal law to step in in the event of a mine not being worked, and to take over the mine if necessary; but this is an entirely different provision. This does not propose to come in when work has been suspended. It is a sword of Damocles continually suspended over the head of the diamond industry, and I have yet to learn that a sword of Damocles is a health measure. It is not conducive to prosperous, comfortable or active life. But even if the State had to interfere, owing to the hopeless failure of the principal producers, to find a proper method of disposing of their stones, I say this is the wrong way to do it. The Bill is wrong whether regarded as a threat or an actual practice and the principle of the State coming in without any consultation on the part of the producers or giving them the right to object. The owner is absolutely ousted from the ordinary rights of property, and that is what I object to. The principle has been cited which is laid down in the diamond law of the Transvaal—that the State reserves the right of mining for and disposing of precious stones. But that is a very different thing from the State stepping in where private parties have already come in on certain terms and have been allowed to start production. This law does not authorize the State to step in after they have produced their diamonds and take them away. Surely no interpretation of the principle of the Transvaal law would go so far as to justify a step of that sort. None of the previous laws that have been cited as precedents hold good at all. I need not argue the question of electricity. As the right hon. member for Standerton (Gen. Smuts) has pointed out, no man’s property was taken away or interfered with. One hon. member cited the Wine Control Bill, but that measure was asked for by the wine industry which carries on the control itself.

The Beef Bounties Bill handed the farmers over to the meat trust.

That Bill made no attempt to control the trade, and it provided that no matter who exported, he would obtain the bounty. I do not believe that any precedent can be cited that goes so far as this Bill.

Why not start a new one?

Because it is a bad one.

All new things are bad?

I do not go so far as that. The hon. Minister put forward two reasons for this Bill—one was that the shareholders were not getting a fair deal. The hon. Minister took exception to the remarks of an hon. member who interpreted the Minister’s speech as implying censure on the directors of diamond companies; but, as I understood him, he alleged that the shareholders were not getting a fair deal. They profess to act in the interests of the shareholders. Well, I say frankly, that the position of a disposing syndicate being also in control of the producing companies is not a sound one, and may lead to undesirable consequences. But is it the business of the State to step in and see the shareholders protected against the directors? These things must be left for the company itself to deal with, or the courts of the land, if any wrong is being done. Is the State going to step in every time it thinks a person, or a group of persons, have obtained too large a control in a particular company? It is a matter for the shareholders, but for the Government to take over the whole business as is proposed in the Bill, I prophesy it is going to do the shareholders far more harm than good. The other reason was that the Government was so largely interested in the output of diamonds. That is quite a legitimate argument for the State having a certain amount of control. The Government, as hon. members know, possess the right to 60 per cent, of the produce of the Premier Diamond Mine in the Transvaal. That is one instance. That was given to them—60 per cent, was vested in the State by the ordinance of 1903. I was amused at the hon. member for Pretoria (West) (Mr. Hay) giving his recollections as a member of the Transvaal Parliament, and confirming something said by Sir Percy Fitzpatrick. But he was quite wrong. The law was passed before the Transvaal Parliament came into existence. It was made before there was any diamond mine in existence, before any rights had come into existence in the Transvaal, and it gave the Government 60 per cent, of the produce of any diamond mines that might be discovered. I quite agree that the Government having that interest ought to have more control than it has. That was not necessary in those days because we had not concentrated control in a few hands as we have now. That is different from stepping in and saying to the Premier you have produced a certain amount of diamonds. Hand them over to us. We are going to market them. Don’t ask what you are going to get for them. Shut your eyes and take what you get. That I think is indefensible. Coming to the financial point of view I think I can see the possibilities of a very serious situation arising when a time of crisis comes. Everybody admits that then whoever is going to dispose of our diamonds will have to hold a very large stock, even amounting to as much as £7,000,000 as some have stated. If the Government is left with such a stock of diamonds and diamonds begin to revive, is the Government going to sell that stock and prevent the mines from producing new diamonds. Imagine what pressure is going to be put upon them by members of this House and outside this House, that they must not bring this stock on to the market and prevent the mines re-opening and putting fresh diamonds on the market, and the Government would be left sitting with the stock and unable to sell them except at the expense of having very great pressure put upon them not to damp down the reviving market by throwing this stock on to it. That is a very real danger and one we are exposing ourselves to quite unnecessarily by this Bill. Another criticism I have about the Bill is that it puts powers into the hands of the Minister which no Minister ought to have. Not only can he say to the diamond producers, you shall only produce so much, but it gives him power to single out one producer and say you shall stop while others may go on, and others may sell privately but you must not. That is a power no Minister ought to have, no matter what party he belongs to. He should not be able to discriminate between one producer and another, if he does not want to exercise the power in full of limiting produce, let him apply it on a pro rata basis, but let him not have the power to single out one producer as in the Bill. This Bill is bringing in a new principle; it is not a question of control, it is a question of the Government stepping directly into the place of the owners of diamonds in this country and operating. It is going to lead the Government into business of the most delicate and difficult description and lead them into very serious complications, and apart from all questions of Socialism or anything else, before giving the Government the powers given under this Bill, the House ought to ask for a more detailed examination of the actual facts from a business point of view than we have now. We have practically no facts to justify this Bill. Articles of this description are not disposed of in open market like wheat. It is a market where monopolies will always exist. Even if the Government takes the whole produce of the Union and sells it on the Continent it will still have to face monopolies. Sometimes there will be competition; sometimes there will be a close market, but before we enter into this market this House ought to know more about what it is doing. I think that the matter ought to be referred to a Select Committee before passing the second reading. In regard to the attitude of the hon. members who represent alluvial digging constituencies, the hon. member for Hopetown (Dr. Stals) was almost pathetic in his gratitude to the Government for leaving the alluvial digger out. It is going to be a magnificent thing for the diamond industry of this country, he said in effect, but thank the Lord we are not going to be in it. That shows the real opinion of members in regard to the effect of this Bill.

To my mind the most remarkable feature of to-day’s debate is the attitude of the. Nationalist party. Here we have a Nationalist Minister introducing a Bill containing a very far-reaching principle and involving the expenditure of millions of the taxpayers’ money, and yet the Prime Minister does not trouble to attend most of the debate, and when he was goaded into making a speech he admitted that lie had not intended to say anything. The two members on the Government side who have spoken have made a special plea for the treatment of the alluvial diggings; they made a halting apology for the Bill and thanked God that they were not included in it. Apart from them no other Nationalist member has spoken; in fact, the attitude of the Nationalist members has been one of sullen resentment and gloomy silence. I have never known so important a measure being received with such blank silence. The real reason for this attitude is that the Nationalist members do not like the Bill, but they cannot help themselves. Not a single farming member or landowner on the Government side of the House has said a word about the measure. I can well understand the Labour members chuckling. The Nationalist party is in the position of a big dog being held down by the ear by a little dog. The Nationalists are squirming, but they cannot help themselves. This Bill is a case of cause and effect. On Labour Day the leader of the Labour party— the Minister of Labour— issued a fighting manifesto for his party, and speaking at Kimberley he said “What of the attitude of the Labour Party in the next parliament? We know we cannot secure a clear majority, but with double our former members we shall hold the balance of power. If the Nationalists try to rule this country for big business we shall have no hesitation in turning them out.” That was the cause of the Bill, and to-night we see the effect. I have heard that the British take their pleasures sadly, but I have never known the Nationalists take their pleasures so sadly as they have to-day. I have never seen such a disgruntled party. The leader of the Labour Party, in the speech from which I have quoted, went further and said, “We are going to see that the Labour principles are gradually adopted by the Nationalists.” Now, however, the Labour party is very strangely silent about the constitution of its party. That constitution aims at the socialization of the means of production, and the control and administration thereof by the State.

What is the date of that constitution?

This is the present constitution—it was not drawn up in Moscow. The next item in the Labour constitution is the abolition of private property and the introduction of State ownership.

Where are you quoting from?

The Minister of Labour tried to alter this constitution, but he was steam-rollered. I am quoting from the South African Labour party constitution.

No, you’re not.

I have not the actual constitution here, but I challenge the Minister of Labour to tell us what the constitution is.

You can buy it for sixpence.

The actual wording may be slightly different now, but the principles are the same. The Minister of Labour tried to get both these clauses altered at Durban, but he was stopped. It is curious how they are keeping the constitution in the background at present. I repeat that the constitution declares for the socialization of the means of production—

And the abolition of private property?

Yes. And the proof is that here we have a Bill doing away with private property—rank confiscation. The Minister of Mines was merely a receiving station for the views of the Labour party. The Minister is presently going to read the Labour constitution I hone.

No, I’m not.

He is frightened. On the last page of the constitution there is a pledge binding members of the Labour party to the constitution, and to vote on all occasions as a properly constituted caucus shall direct. On April 30 the Minister made a speech in which he said the Labour party still holds to that programme and convictions.

What are you quoting from?

“ Die Burger.” The Minister said that the Labour party still holds to its programme and its convictions, and he gave an explanation of what those pro-programme and convictions were. “The socialization of the means of production, distribution and exchange, and the common ownership of the means of life.” If I have maligned the Minister I shall be very pleased to be corrected. If I have maligned any of the Labour members all they need do is to correct me.

You do not suggest that we mind being maligned by you, do you?

I should think the hon. Minister might not mind being maligned, but he should mind being put in a corner like this, he should mind being shown up like this, being a member of a party which, as far as I can see, is ashamed to own up to its constitution. Neither the Minister nor any of the Labour members has got the moral courage to come into the open, yet all the time these men are pushing their aims behind the scenes. The Labour party have never wavered in their allegiance to their ultimate goal. They are, for political purposes, suppressing it for the time being, just as the Nationalist party are for the time being suppressing some of their objects, but all the time the Labour party are insidiously pushing their views.

Tell us what you said at Bethal.

There I differ from the Minister of Labour, because I always say the same thing. What I said at Bethal I say here. I notice the Minister of Posts and Telegraphs was giving a lecture in this city only last night, teaching the young idea how to shoot, telling the youth of the country how to make two different speeches to different types of audiences. He is an adept at speaking with two voices, as is also the Minister of Labour. I would like to know from the Minister when he gets up just now, as I think he is in honour bound to do, what sort of a speech he is going to make, whether he is going to talk as a Nationalist or a Labour man.

What did you say at Bethal?

I think I can honestly and conscientiously say this, that I have always been consistent. I think I have proved conclusively what the genesis of this Bill is. The Minister of Labour told the country quite frankly at the time “When we get into power, we are going to Hold the balance, we are going to see that the country is not run for ‘big business’.” I believe that speech was actually delivered in Kimberley and was meant as a threat to De Beers. On no other assumption can we on this side of the House explain this Bill. Never in my Parliamentary experience have I heard a Bill so completely turned inside out as this Bill has been. Member after member has got up and spoken with devastating effect against the Bill, and not a single one of the points made against it has been answered. The Prime Minister, as usual, was the reverse of lucid, he made a very involved statement, but he carefully refrained from explaining to this country on what principle he is going to confiscate the diamond industry of this country. Why has this Bill been produced? Normally a Bill is brought to this House because some section of the public calls for it. No one has called for this Bill. The shareholders do not want it; the producers do not want it; the public do not want it. Will the Minister tell me of one single shareholder in this country who has asked for it? He told us this Bill was to protect the poor shareholder and producer. Well, they show a curious lack of gratitude to it if that is so, because they deprecate and execrate the Bill. Not” one of the people interested in the industry has asked for it; it is really a whim of the Minister of Labour who has foisted it on to the Minister of Mines and Industries. At the mere whim of the Ministers we have this extraordinary Bill brought forward. Then look at the extra ordinary powers it confers. I do not think Mussolini himself has such wide powers as this Bill gives. Without consulting the industry, without any Conciliation Board, and in every other industry in the country there is a Conciliation Board—the Labour Party is always loud in calling out for that—the Minister possesses power of life or death over what is really the second or third largest industry in this country, and why does he have it? Because, he says he wants to hold the sword of Damocles over the industry. It is legislation by the big stick—a new principle in this country. It is government By blackmail. I can conceive of no other purpose for this Bill than that the Government intend to hold up the diamond mines to ransom so that at any moment they wish the Government can go to the industry, and hold a pistol to its head and go through its pockets. This is the beginning of Government by threat. If this goes on, as long as there is a Nationalist party in power, every citizen in the Union will have a sword of Damocles hanging over his head. I see a more sinister aspect in this Bill. I say this Bill is only one of a series of measures proposed by the present Government which are aimed at the liberties of the public. Let me put the position that will arise by the time the present Government has carried out all the policies which the Ministers have proclaimed: the diamond industry will be bludgeoned out of existence. Not by the consent of Parliament, but at the whim of the hon. Minister. The sword of Damocles is only one of a series of coercive measures in which the Government, if they have their way, will be harrying and harassing the people. One hon. Minister is to have the right of declaring martial law without any responsibility to Parliament. Apparently the hon. member for Pretoria (West) (Mr. Hay) is very pleased at that prospect. The Minister, I say, will have the right to shoot, hang and burn, and he can even act without declaring martial law.

I am sorry, but the hon. member cannot anticipate.

I agree, sir. The considered statements of various Ministers on various occasions make it clear that they contemplate a long series of infringements of the liberties of the people. We have one in this Bill. Another proposes to give a single Minister the power of life and death. The Minister of Justice is going to have the power of prosecuting his enemies and releasing his friends, and he has already arrogated to himself these rights. Another Minister seeks the power to intervene in any trade dispute, bullying and checking employers and employees. These are the principles which emerge from the statements of Ministers during the last six months.

What about an Indemnity Bill?

After this you don’t need an Indemnity Bill. Ministers will be in clover.

They have profited by experience.

No. I do not think so. If the late Government proposed to take upon itself the powers which Ministers are now proposing, we should have heard the welkin ring. I wish to warn the Labour and Nationalist members, however, in regard to this dictatorial legislation, that, while they are in a very happy position just now, they are not going to remain in power for very long. Already there are signs that decay and disintegration are setting in. It would be contrary to all political experience if a loosely-knit Pact of this sort should last very long. Therefore, they should remember that whatever legislation they are passing now is not going to be for their time only, but for a very long time. I stress this because it seems to me that across the way hon. members have forgotten—they are so busy dishing out the spoils—that this anomaly of Labour and Nationalism being in power and working together is only a passing phase of South African politics.

Why don’t you discuss the Bill?

It is part of the Bill to discuss motives and ultimate implications. I am sure hon. members opposite will admit that we have tried to put them on the right way and they have refused. I am sorry that hon. members have seen their way to start this sjambok Government. Another hon. Minister is shortly proposing to take powers to design for us a new flag. I suggest to the Minister of the Interior that when he is looking for a design for a South African flag—

The hon. member must refrain from discussing pending legislation.

I notice from the Press that the Minister of the Interior shortly intends designing—

The hon. member must confine himself to the Bill before the House.

My object in referring to these co-relative matters was that these dictatorial powers—

You are wasting the time of the House.

No. I think I have been teaching the Nationalist members a salutary lesson. I have been trying to impress on hon. members that this Bill is merely one of a series of dictatorial powers which Government intends to assume. In regard to the flag I would suggest that the “Jolly Roger” bearing the skull and crossbones would be the fittest emblem for the party across the way. I have not heard one valid argument in favour of the Bill from the Government benches all day. My hon. friend the member for Bloemfontein (North) (Mr. Barlow) has come in and I am reminded that at Kimberley he said during the election as a direct threat to the mines, that what the Labour party hoped and intended was to get the balance of power so that they could pass Labour legislation in this country. This Bill is the first instalment of socialistic-labour legislation, which Nationalist members will be the first to deplore in time to come.

I think from certain points of view this has been the most amazing debate we have ever had in this House—amazing for the strength of arguments against the Bill and amazing for the extraordinary conspiracy of silence on the part of the supporters of the Government. The members of the Labour Party have been kept deliberately quiet and muzzled for fear lest they should let out some of the interesting Socialistic doctrines they entertain. The Nationalistic members have also been muzzled for fear of the consequence of what they might let out. The hon. member for Pretoria (West) (Mr. Hay) let a very large sized cat out of the bag, because he said he approved of the Bill on the ground that it was part of the necessary policy of controlling both the diamond and the gold industries. The arguments against the Bill on this side of the House have been fairly properly and exhaustively put with a wealth of precision that the Prime Minister has found it very difficult to answer. His reply was that no argument had been advanced against the Bill. I can only believe that he was not in the House when these speeches were made. Then the Prime Minister proceeded to point out the differences between the hon. member for Beaconsfield (Col. David Harris) and the hon. member for Kimberley (Sir Ernest Oppenheimer), quite ignoring the fact that both these members were united solidly against the principles of the Bill.

Business interrupted by Mr. Speaker at 10.55 p.m.; House to resume to-morrow.