I move—

I should like to say at the beginning that, personally, I view the subject matter of this Bill as a matter of very great social importance. I want to emphasise that, because I am sure that I shall not be accused of treading on any one’s toes if I say that there is a tendency in the introduction of private members’ Bills in this House to introduce Bills which deal merely with something of very secondary local importance, or to deal with Bills which deal with things which are not of very much importance at all, but in this particular instance I feel that the Municipal Savings Bank Bill is of very great social importance, it is a Bill which should be considered by this House as something of very great social importance, and as such should not receive from the House the kind of treatment which falls to the lot of very many private members’ Bills. I say that because I am prepared to admit that I have in my time been responsible probably for killing as many private members’ Bills as any other member of the House. I did so because the Bills at the time appeared to me to be trifling Bills, at other times Bills which had not been carefully thought out; they appeared to be Bills which had been introduced in the interest of very small sections of the community, and to the detriment of other and larger sections of the community. But I will say that wherever any member of this House has made a serious attempt to introduce a measure of any importance to the country, I have always given it fair consideration, and in many instances active support. In this particular instance, as I say, I trust that the House is going to give this its serious consideration. And at the beginning, without appearing to adopt a dictatorial manner, I would like to say that I would prefer, if the Bill is not in consonance with the opinion of the House, that the House would take its courage into both hands and say so. In other words, if the House feels, and in some instances they will only do so with regret to themselves—but if the House feels that this Bill should not receive the assent of the House, they should show that feeling by voting definitely against the second reading. In other words, I ask the House not to painlessly extinguish the Bill by moving that the debate be adjourned or that it be referred to the Select Committee before the second reading. I have no objection, if I am fortunate enough to get the second reading passed, to move—as I propose doing—that it be referred to a Select Committee after the second reading, but any suggestion that it be referred to a Select Committee before the second reading I cannot agree to, because I have seen so many Bills killed by that simple expedient. The Bill has been long enough in possession of the members, there has been a sufficient amount of lobbying by means of letters and telegrams from the vested interests which opposed the Bill, to have enabled members to have a very fair idea as to whether the Bill is one which should receive our sanction, or should be consigned, like so many other private members’ efforts, to the limbo of the forgotten. There are varying views on the subject of banking. There are people who hold that banking is the magic formula by which, and which only, this distressful civilisation of ours is held together. There are others who feel that banking is a sort of elaborate economic hocus pocus by means of which the few are enriched at the expense of the impoverishment of many. Tom Johnson, the recently re-appointed Secretary of State for Scotland in Great Britain, has given it as his opinion that banking is one of the world’s three great confidence tricks. I am rather inclined to agree with him, but I am saying this, that in the consideration of this Bill it is not necessary for us to enquire closely into the principle or lack of principle of banking. That is a very simple Bill. It deals with municipal savings banks—it is only a permissive Bill and it is not necessary for members on the one hand to raise a smokescreen that I am making an attempt on the holy of the holies of the capitalistic system, banking institutions, or on the other hand for members to suggest that I should make such an attempt. I can foresee that there is a possibility of objections being raised on both these points. One that the Bill will seriously affect, or is the beginning of something which will seriously affect the banking institutions of this country, and on the other hand, judging by the type of speeches which we have had from the Opposition in the last few days, there may be the feeling that the Bill does not go far enough, and that I, as a socialist, should introduce something which should take the place of the banking system.

Have you got a guilty conscience?

No, it is an attempt to try and prevent my friends from drawing these red herrings across the trail. The Bill is a simple Bill. It seeks to give powers to do two things. It seeks to give certain powers to certain municipalities to establish a municipal savings bank, and it seeks to give powers to these municipalities to attach to the municipal savings bank a housing department. That brings before us two general questions. (1) Is this House justified by an enactment of any description in giving powers to a municipality to extend their municipal activities, and (2) If the House is so justified, are municipal banks a desirable form of activity which we should give permission to local authorities to undertake? There are probably two extreme views with reference to municipal activities. There is the one view which states that municipal councils and local authorities are only justified in embarking upon activities which private enterprise cannot undertake. In other words, that private enterprise should have the complete field in human activities insofar as and as long as they find it profitable to do so, but when private enterprise has failed in any aspect of human endeavour then it is justifiable that local authorities should take it over. There is the other extreme view, which I hold myself, which says that there is no aspect of human endeavour which is not the right and proper field of the municipalities. There is no particular phase of our lives into which the municipalities should not be allowed to embark. In between these two views there are a number of people who believe that municipalities are entitled to embark upon some particular kind of activities but not on others. There are people who hold that it is right and just and eminently desirable that municipalities should be in complete control of water and light and transport, and social services such as public health, and the eradication of slums, but they are not quite so unanimous when we suggest that we might also have municipal bakeries and perhaps municipal savings banks. Well, it seems to me that the extension of municipal activity is the trend of the age. The extension of municipal activity is the trend of the age, more and more in almost every country in the world—we are gradually getting away from the rugged individualism which was the gospel of the last century, and we are adopting a more and more communal method of living. We, of course, are doing this very slowly. We are doing it very slowly, and that is one of the reasons why I feel the world is in its present troublous conditions, that we do this slowly. Where criticisms have come and are levelled against democracy, they are to the effect that democracy does so many things slowly and it does appear to me that many years ago a rapid extension of municipal activity as well as national activity or what I prefer to call communal activity, might have prevented the serious difficulties into which the world has landed. I feel that the trend of modern life is towards an extension of municipal activity, as well as national activity, and I think that can be best proved by quoting what is the opposition to this kind of thing. The opposition to the extension of Municipal as well as National effort comes mainly from vested interests and private interest. We get opposition not because they can show that it is wrong, not because they can prove that there is anything fundamentally wrong with a collection of individuals in a town or a collection of individuals in a nation, working co-operatively for their own benefit, but because they attempt to show that it is wrong because it is affecting their rights to make profits, and I think in viewing the question of the extension of municipal activities in South Africa in particular, we must for a moment bring our minds to bear on municipal or national effort on the one side as compared with private enterprise and private profit on the other. Despite a great deal of modern propaganda which tries to show that business men have at long last adopted the ideal of service, despite a great deal of very clever advertisement which sometimes deludes people to think so, it still remains a fact that private enterprise only functions and can only function in the interest of making profits for the people who have invested their money in the enterprise concerned. Despite the advertisements one may read it is still a fact that for instance large tooth paste manufacturers manufacture tooth paste not because they are concerned with the careful keeping of our teeth, but because they are concerned with making a profit on the money they have invested in the tooth paste industry; and it is quite likely that most of them who draw very large dividends from that industry have no teeth at all. Similarly, with a great deal of these patent food preparations which are placed on the market—they are not placed on the market because the directors of the companies have any kind of interest whatever in what happens to our tummies … they are not interested in our tummies at all, they are interested in making profits from the products which they produce, and I think it would be even fair to say that if more profit could be made on the same amount of money by the production of something which badly affected our stomachs they would have no compunction in withdrawing their money from the one thing and investing it in the other. So, when we come to give consideration to the question as to whether we should extend municipal activities we must bear in mind that the extension of municipal activities is to some extent a lessening of the activity of private enterprise which functions purely for profit— and opposed to such private enterprise. In South Africa we have in the last ten years or so admitted in almost every session of this House that an extension of national activity, provincial activity and municipal activity, into the realms of private enterprise, is not only justifiable, but is in many instances absolutely essential. We know that for a number of years in this particular House we have been dealing with the question of slums in South Africa. We have placed on the shoulders of the municipality through this House the burden of eradicating the slums of South Africa, and the greater burden of rehousing people, and in so doing, and when we did so, we were admitting in effect that private enterprise had failed lamentably in one of the most important aspects of social life. Private enterprise had failed to supply the houses for the poor of this country. Private enterprise must bear the responsibility in some measure for the growing up of slum quarters in the larger cities, in our towns, and the Government in the long run had to step in and place on the shoulders of the municipalities the burden of rehousing the people. It was a great social advance, and a great social advance which was only made possible by the utilisation of municipal services and the extending of powers to the municipal councils. If we do agree and there does not seem to be a very sound argument against it, nor is it necessary to amplify it too much, if we do agree it is a trend of modern life and that it is probably going to be thrust upon us—in other words, if we are serious about these new orders which we are talking about—not the new orders which the hon. member for Gezina (Mr. Pirow) has in mind, but the new order suggested in the speech eloquently made by the Prime Minister the other day, the new order which is so continuously spoken to us about by the Minister of Finance—if we are serious about these things then it is quite obvious that we must get away from the old system, and getting from the old system means a very definite going away from the system of private profit, and we can only substitute for the system of private profit a system of communal endeavour. So I want to suggest that there cannot be any doubt in the minds of any of the thoughtful members of this House—there may be a doubt which is permitted by self-interest— there may be doubt which is permitted by the thought that profits in a parti cular insitution may be seriously curtailed, but there can be no reasonable doubt from the point of view of the future of South Africa and the world, that the extension of communal effort must be the great feature of any new system of society which comes about as a result of this war. And I do not see, as I have said before, why we should wait until the end of this war. If we are going to have a new order— and it is obvious that we must have some kind of new order—

Hear, hear.

I do not mean your kind of new order, although perhaps many of those members over there are at the moment mentally grovelling in the mud, and after a little thought they will realise that the new order is something different from that which is dangled before their eyes by the hon. member for Gezina. But if a new order comes about, it must be a new order where communal effort is substituted for private enterprise, and I am justified in saying that this House must agree that the extension of municipal enterprise is something which is desirable from every aspect, and I want to suggest that that extension should come now rather than at the close of the war. There is nothing to stop us from putting in piece by piece, and as rapidly as possible, various things which, taken together, can lay the foundation of a new order. I am not going to suggest that the foundation of a new order can be laid by the institution of a municipal savings bank. I said at the beginning that this is a simple Bill. It is a simple measure which seeks to give power, a very restricted power, powers which are not very far reaching, to various municipalities—it seeks to give powers which are very necessary and powers which can be used considerably for the social benefit of the people in the municipalities concerned. I want to suggest that there are i few activities which are more suitable to municipalities than that of a municipal savings bank. After all, a municipal savings bank under the control of the people themselves, sets out to collect by the people the savings of the people, to use for the benefit of the people. It is the people themselves collecting their own savings and using them for themselves. It is democracy in its highest essence. And the only possible opposition we find are the people who want to collect the savings of all the people to use these savings for the benefit of their own pocket. These are the things which stand, the one against the other. And I suggest that the House would not only be doing the wise thing, but the just thing socially, to give to these municipalities the powers which I am asking for. They are not revolutionary powers. Communal savings banks are known all over the world, and have been known for many years. Almost every country has its post office savings bank. Many countries have municipal savings banks of some description. Australia has pioneered the way—they have had such savings banks for over 100 years, and most of these things have proved successful, but South Africa is, unfortunately, financially a conservative country. South Africa has in its midst, due no doubt to the presence of the gold mining industry, a type of financial outlook which has not kept pace with the various reforms instituted in other parts of the world, and I am this afternoon giving South Africa an opportunity during a war which is being fought for the extension of such privileges to make up a little of the leeway where they have lagged considerably. I want to suggest to the Minister of Finance before I go on to deal with the Bill clause by clause that he should at least be in favour of such a measure. If there is one thing which a Municipal Savings Bank would contribute to, it will be the efforts to extend the thrift of the people. There can be no doubt that the Municipal Savings Banks were first of all introduced about 150 years ago in England, for the purpose solely of thrift. Savings banks have been instituted in many parts of the world since, and in different ways, for the purpose of thrift. The Birmingham Municipal Bank was introduced during the last war for the purpose of thrift, and it seems to me that if this Bill is passed it will be in conformity with the Minister’s own policy, which is to encourage the people of South Africa to save money. Now I want to deal with the Bill itself for a few moments, before I go on to say a few words in its favour, because I am afraid, like most private members’ Bills, it has not received the serious consideration of many members of this House. In clause 1 it deals with definitions. There is only one definition which need worry us, that is the definition of “Local Authority,” which we have put down as “Borough, City or Municipality in which the rateable value of immovable property as fixed in accordance with the law governing the valuation of immovable property in the local authority concerned, is £4,000,000 or more.” We were in a good deal of difficulty in fixing precisely the different local authorities this Bill should apply to. And I at one time thought of placing the limitation on a population basis, but in South Africa, with its various races, it is very difficult sometimes to lay down anything on a population basis, so I felt that it was much better to lay down the limitation on the rateable value of the Borough or Municipality concerned, and that has been placed at £4,000,000 or more. This brings in under the operation of the Bill thirteen Municipalities in South Africa. When I counted up to thirteen I almost reduced it to £3,500,000 or increased it to £4,500,000, because thirteen is often an unlucky number, but I have respect for the unfortunate towns which might have been cut out of the benefits of this particular measure. The thirteen towns concerned are Johannesburg, Cape Town, Durban, Pretoria, Port Elizabeth, Germiston, Bloemfontein, Springs, Benoni, East London, Brakpan, Pietermaritzburg and Krugersdorp. Quite a representative list of towns so far as South Africa is concerned, and that list of towns will undoubtedly benefit by exercising the powers provided for in this Bill.

Why did you cut out the smaller Municipalities?

I cut out the smaller Municipalities purely in deference to the opposition which might have been forthcoming to this Bill. I realise that this Bill will immediately be attacked by the financial gentlemen of this country, and one knows that one of their chief grounds of objection to a measure of this kind is that this particular bank would not pay, so we had to restrict these powers to Municipalities where the population—where the money circulating in the district was of such a volume that the bank would start with the best possibilities, at least with the surety of being able to pay its way. We feel that the blessings of this Bill could be extended to smaller Municipalities later on by allowing a collection of Municipalities to institute a similar bank, but, in view of the criticism which might be levelled against us, we had to limit it to towns with a rateable value of £4,000,000. Clause 2 provides that a Council may establish, maintain and conduct a savings department. It provides that a Council or local authority in accordance with the definition may establish and maintain a savings bank, and for that purpose, and in addition to its existing powers, receive deposits or money and pay interest thereon. In addition, the Council is entitled to establish and conduct a housing section of this Municipal Savings Bank for the purposes of dealing with the advances upon the security of freehold land and buildings. Clause 3 merely limits the duration of particular deposits, and how they shall be repaid. Clause 4 provides that no Council shall accept such deposits subject to withdrawal by cheque, draft or order payable on demand. We have endeavoured in every possible way to resist any tendency to make a Municipal Savings Bank an imitation of any commercial joint stock bank.

Why?

This is a Municipal Savings Bank; we are not dealing with commercial banks at the moment. There is a world of difference between them. I feel myself that in starting upon a policy such as this, it is well to proceed warily and slowly. Perhaps some day in the future, with the assistance of my hon. friend, we may actually ask the House to agree to a State commercial bank, but not at the moment. Clause 5 deals with the minimum and maximum deposits receivable, and it will be noticed that the bank is not permitted to receive a total sum exceeding £1,000, nor upon fixed deposit a total sum exceeding £2,000 in any one municipal year. Here again is a provision which says that the bank is never likely to be used for ordinary commercial purposes, and, furthermore, this is a provision which prevents the banks from being used by ordinary commercial men when for a period of a few months they may have a few thousand pounds to spare.

What is the minimum?

The minimum is 1s. Clause 6 deals with the question of interest payable. Interest shall not exceed 3½ per cent. upon deposit subject to notice, nor 4½ per cent. upon fixed deposit. There are other provisions which provide for a change in the rates of interest. Although we have provided here for maximum rates of 3½ and 4½ per cent., it is very unlikely, in present circumstances, where a bank is instituted under the powers granted under this Bill, that such rates of interest will be paid. It is more likely that rates of 2½ per cent. and 3½ per cent. would be payable. These are maximum rates in this clause. Actually, I believe, the intention of the Durban Municipality, when it decided to father a Bill of this description, was to pay 2½ per cent. The next two clauses deal with percentages on deposits, and where they shall be invested. Clause 7 provides that the Council shall put 5 per cent. on deposit in a bank approved by the Administrator. Clause 8 is a clause which, if the House agrees to the second reading, may very well be altered in Committee, in order to meet objections which have been put forward by building societies, objections which I may say I happen to agree with myself. It is provided that of the balance of 95 per cent., no less than 40 per cent. shall be invested in such securities as the Council is required to invest its sinking funds in. That is a safeguard for depositors. Sub-section (b) of this clause is really the important part of the clause. It provides that no more than 25 per cent. may be invested in advances by way of first mortgage to any depositor for the purpose of erecting, improving, adding to or purchasing a dwelling house on freehold land. It will be seen that the bank is in every way a communal endeavour, and that advances on first mortgage can only be made to actual depositors in the bank. There is no intention of extending the activities of the banks to include everybody in the town. Not more than 25 per cent. of this residue of 95 per cent. can be used in this way, and the balance may be retained by the Council for municipal purposes. It is a criticism of the building societies outlined in a leading article recently published against this Bill in the “Natal Mercury,” which is the usual mouthpiece of the Natal building societies, that on this basis of only 25 per cent. on first mortgage, the bank is not likely to make any very great profit. I agree with the “Natal Mercury” and with the building societies, and actually I would like to see this percentage increased by 10 per cent. If the Bill is lucky enough to go to the Committee stage, I shall be prepared to make that suggestion to the House. Clause 9 is a very important one, from the point of view of those people who have any qualms as to the soundness of the undertaking, and it provides that any sums deposited with the Council, under the provisions of this Act shall be a charge upon the rates of the municipality concerned.

Do the ratepayers agree to that?

Oh, yes. After all, this is not a Bill which says a municipality must institute a Municipal Savings Bank, it only says that powers are given to thirteen municipalities to do so if they wish. As far as my hon. Dominion friends are concerned, I am prepared, if this Bill passes through this House, to debate that subject with them anywhere in their own towns, in Durban or anywhere else, and I am sure the overwhelming majority of the ratepayers will be with me. That has actually happened on several occasions. The hon. members of the Dominion Party have for one Friday afternoon at least forsaken the British Empire, left it in the lurch, and suddenly taken the Natal building societies under their wing. Sometimes when we listen to hon. members of the Dominion Party, we are inclined to agree with the Opposition when they talk about British imperialism, because it does seem a strange thing that the particular defenders of the Empire in this House should be the particular defenders of the Natal building societies. I know the hon. members’ views have been expressed often enough in Durban, and I know where the opposition to this Bill will come from. Clause 10 deals with the Council keeping a separate account of the activities of the bank. Clause 11 deals with the record and accounts of the savings department, and calls for very little comment. Clause 12 provides for a report by the Provincial Auditor, and clause 13 deals with the question of regulations. The business of the bank is to be conducted in accordance with the regulations, and hon. members will notice that the first set of regulations is published as a schedule to the Bill itself. This I do not think is an original departure. I believe it has happened in one or two other Bills, but it is a departure which I feel the House will appreciate when they are dealing with the Bill, because they will know, when they finally pass the Bill, what they have done. Many of the measures we have before us provide for regulations being issued, and we at times pass legislation in this House and are surprised afterwards when we read the regulations.

That is the best feature of the Bill?

Well, I am glad the hon. member likes part of the Bill. Clause 14 deals with procedure to amend the regulations.

Why don’t you give the Administrator the right to veto the regulations?

I have given consideration to the matter, and to be perfectly frank with the House, that power was not given to the Administrator because when I come to the history of municipal banks later on, the hon. member will understand. Certainly the first bank likely to be set up if this Bill is passed will be a savings bank in Durban, and we are almost satisfied that the Administrator of Natal and the Provincial Executive will use their power to again refuse the City Council, but in any case it does not seem to me to be a sensible proceeding that this House should enact measures and leave the final decision to the Administrator. We have no objection to the Administrator making comments on the Minister of Finance, but we have objection to the Administrator, who is perhaps more easily influenced by local conditions, having the final say in the matter. One has to stay in Natal to realise just what power the local building societies do have. So in order to provide against this undue influence by local companies, we have left the final say in the hands of the Minister of Finance. Clause 16 regulates the maximum advance on first mortgage, and this provision is in line with the greatest degree of safety. There may be some arguments and some objections from building societies, because the Bill provides that advances can be made up to 80%. Here the Government have by their policy realised that the higher the percentage we can advance the better, and the Government has actually gone a step further and made it possible in some instances to advance up to 90%. By Clause 17 the council is authorised to buying any immovable property. That is a provision in case it does happen that people have to hand in their houses. The municipalities are also empowered to act as insurance agents in connection with the insurance of any buildings with which they are concerned under this Bill, and they are also empowered to maintain safe deposits for the use of depositors. The regulations don’t call for any particular comment, they provide additional safeguards for the proper running of municipal savings banks. Now I want to tell the House that the efforts for the establishment of municipal banks go back for very many years in South Africa. In May, 1919, the Johannesburg City Council adopted a recommendation of the General Purposes Committee, asking the Provincial Council to empower the Town Council to establish a municipal bank. The powers were not granted by the Provincial Council. In June, 1919, the Town Council of Bloemfontein agreed by a large majority to accept the principal of a municipal bank. In October, 1919—that year must have been a very fruitful one for the discussion of municipal banks—the Transvaal Municipal Association approved of a resolution submitted by the Middelburg Town Council in favour not only of a municipal bank but in favour of a municipal insurance scheme as well. Needless to say the Provincial Council were not very interested in that. In giving evidence before the local Government Commission in December, 1919, witnesses on behalf of the Germiston Town Council stated that the council had, by resolution, adopted the principle of a municipal savings bank. Cape Town considered the matter in 1926, but the matter was deferred. Owing to the phenomenal success of the Birmingham Bank the question was again raised in 1928 and again deferred. The matter has been chiefly taken in hand by the Durban City Council. In 1924 it was decided to call for a report on the advisability of establishing a municipal savings bank in Durban, and a joint report was submitted by the then chairman of the finance committee, and Mr. E. B. Scott, at that time city treasurer, and now Durban’s town clerk. That report advocated very strongly the establishment of a municipal bank for Durban. It was adopted by the city council, but owing to opposition on the part of the building societies, the draft ordinance failed to pass the Provincial Council. In 1933 the Durban City Council revived the question in order to satisfy the demands of the local public expressed by resolution passed at various public meetings. The principle of this legislation was again agreed to by the city council, but not by the Select Committee of the Provincial Council. A further effort was made in 1936 to get the necessary permission, but was withdrawn once again owing to opposition by the Provincial council.

Not withdrawn, but was voted out.

I am coming to that story. A last effort was made in 1937, and that was likewise defeated. The second last effort of the Durban council to get this ordinance through the Provincial Council took the form of a private bill introduced by Senator Sidney Smith. That was in 1936. Senator Smith introduced this Bill as a private ordinance in the Natal Provincial Council. The chairman, however, ruled that the ordinance was a hybrid ordinance, and as such could not be proceeded with as a private bill. The ruling of the chairman was challenged, and on a vote being taken both sides had the same number of votes, and the chairman very unsportingly, as I think, gave his casting vote in favour of his own ruling, and so the Bill had to be withdrawn. On the last occasion when the Bill came before the Provincial Council in Natal, it was introduced by Mr. Douglas Mitchell, a member of the Executive Committee of the Provincial Council, on behalf of the Durban Council.

When was that?

That was in 1939. The ordinance at that time showed every sign of at long last managing to get itself passed. I was intimately concerned with it, and I am prepared to say we did actually have a majority for the ordinance, but then the Secretary of the Interior took a hand, and he decided, or at least his law advisers decided, that the giving of such powers was beyond the scope of the Provincial Council. This is the copy of a letter sent by the Executive Committee of the Provincial Council—

The Secretary for the Interior went on to say—

That signed the death knell of the ordinance, and even members who had promised to support it decided rather than precipitate a more or less constitutional argument with the Government, the best thing to do would be to defeat the ordinance.

What is the date of that letter?

The 1st May, 1939; the letter was sent from the Provincial Executive. The members, as the result of that, decided to vote against the ordinance, and so it was defeated.

Who told you that?

Oh, I get a lot of information the hon. member does not get. The point I want to emphasise is this, that there has been a demand in all the four provinces from 1919 until now for the establishment of a municipal savings bank. I am not going to suggest that in provinces other than Natal the demand has been an insistent one. It has not. Although the demand has come on several occasions from the Transvaal, and has, as far as I know, been kept continually before the public there, the demand from Natal, and particularly from Durban, has been insistent since 1919. From 1919 to 1940 is a long time, and during that period we have had a control of the Durban City Council of varying complexions. At one moment we have had a council of the right, and at another one very definitely from the left, but consistently from 1919, and particularly from 1924 onwards, there has been a demand for a municipal savings bank, and the council has been able to pass a resolution implementing that demand by a fairly large majority. Last week, by a majority of 14 votes to 4, the council agreed to accept this particular Bill, and to ask this House to do everything possible to have it passed through. This means, of course, that if the Bill passes into law, the Durban City Council is definitely pledged to proceed immediately with the institution of the savings bank. So we are not in fact wasting our time by this discussion, and we are not giving powers which are going to be utilised, but we are in fact giving powers to people who have asked for it for very many years, and in a democratic assembly it does seem to me that when the demand is insistent and consistent over a long period of years, and when the people are prepared to shoulder the burden of these powers, then it is not within the rights of this House to deny them because from other parts of the country, and from private institutions’, there is opposition. Incidentally I would like to emphasise that the Bill or rather the idea has had a rough passage from 1924, and in view of what I have already said, I make no apology for bringing a Bill of this description before the House, and I trust that in the discussion which may ensue, no mention is going to be made of the legal point as to whether it is within the powers of the Provincial Council to deal with this matter. The late Minister of Finance, Mr. Havenga, stated in reply to a speech of mine, that the legal advisers of the Government gave it as then-opinion that the provisions of this Bill were beyond the powers of the Provincial Council. As a result of that those of us who have been interested in savings banks gave up the idea of proceeding in the Provincial Council. We have brought the matter here, before the Union Parliament, and it does seem to me whether or not the legal advisers were correct at that time, the Union Parliament, by passing an Act, will make the position easier, because we shall be passing an Act which will apply to all four provinces, and avoid the necessity for four seperate ordinances in the provinces. The attack on municipal savings banks has come from one quarter. Since 1924 this Bill has been fought step by step by the building societies of the country, and especially of Natal. Natal is a peculiar province in many ways. Building societies have Natal in a financial grip that has to be experienced to be really appreciated. The building societies have exercised a tremendous influence in Natal, and that influence has been exercised to stultify the progress of this measure on every occasion. Their argument is this, that a municipal savings bank, particularly in Durban, I want to keep to Durban, is bound irrevocably to show a loss, and it is assumed that these managing directors, these 50 or 60 imposing gentlemen, are only doing this out of the goodness of their hearts on behalf of the unfortunate ratepayers of Durban. They say this municipal savings bank must show a loss, which loss will have to be borne by the ratepayers. That is No. 1 argument. Then they say that the savings bank will seriously affect the building societies. How can they have it both ways? If this bank is going to show a loss and become a charge on the ratepayers, how can it affect the building societies? They say that the bank will advance money for houses which would otherwise be advanced by the building societies. Yet side by side with that they assert that the institution will make a tremendous loss, and that loss will fall on the rates. The thing is ludicrous. The real trouble is that they think something is going to happen to their private interests. Now I want to suggest there is no possibility of the municipal savings bank instituted by any of the thirteen municipalities showing a loss. The thing is impossible. I know the argument will come from my vocal friends over there, they say who is going to trust the city council to run a savings bank? Mr. Speaker, the municipal council does not run the savings bank. Do hon. members suggest that we, as members here, run the Treasury? Do they suggest that even the Minister runs the Treasury? Of course he does not. He probably decides the policy, and the municipal council will decide the policy within the limits of the regulations, but a municipal savings bank will be run by some of the ablest financial men in South Africa, the city treasurers and their staffs, of the various centres concerned. Are my hon. friends going to suggest that the treasurers of towns like Johannesburg, Durban, Cape Town and Port Elizabeth are not fit to run a municipal savings bank? I believe the city treasurer for Durban gets more money than the Secretary for Finance gets. He handles more money in a year than the Natal Provincial Council. Similarly in Johannesburg, these are well tried men, well trained men, experts in their job, and those experts agree in the majority of cases with the case for the municipal savings bank. The principle was first advocated in South Africa by the then City Treasurer of Durban, Mr. E. B. Scott, who is to-day Durban’s Town Clerk. And he is supported by our City Treasurer, Mr. Graham Cook. Despite the fact that at the Treasurers’ Conference some years ago Mr. Anderson, the Assistant City Treasurer of Johannesburg, attempted to make a case against the municipal savings bank, the general concensus of opinion amongst city treasurers and their staffs, is that municipal savings banks are not only desirable but necessary, and can be made a great success. There is one outstanding instance of its success, and that is the Birmingham Bank, which was originally started through the efforts of the late Mr. Neville Chamberlain, Prime Minister of Great Britain. That bank was started during the war as a thrift effort. The Government felt compelled in Great Britain to pass a General Enabling Act, which made it possible for any municipal council for, I think, over 100,000 population, to institute a municipal savings bank. That particular type of bank was hedged round with so many qualifications. Depositors could not personally make any deposit except through their employers, and the bank could only invest its funds in specific Government loans, which were entirely for war purposes, and it was laid down that three months after the close of the war these banks had to go out of commission. Birmingham was the only municipality prepared to take advantage of that Act, and in 1916, due to the efforts of the late Mr. Chamberlain, the bank was started, and of course it had to go out of commission after the war. Because of the stringent restrictions laid down by the Act, the bank actually lost £7,000. However, I want to trace that story further. Mr. Chamberlain, who I am satisfied knew as much about finance as my hon. friends of the Dominion Party, and who I am satisfied was just as keen as big business to keep the capitalist system going, was trying to persuade the Birmingham Council to embark upon this scheme, at the time when the bank had to be wound up, three months after the war, Mr. Chamberlain said, “I promise you that if it is really shown to meet a need, not all the bankers in Lombard Street will prevent it becoming a permanent part of the municipal undertaking.” Those were strong words from a man who afterwards became Chancellor of the Exchequer and Prime Minister. I am tempted, Mr. Speaker, as a small echo of Mr. Chamberlain, to say that if the House does not pass this particular Bill to-day, all the building societies in South Africa are not going to stop us from getting a municipal savings bank. All the building societies in South Africa are not going to prevent us from getting a Municipal Savings Bank.

They are not trying to.

Well, if I had all the money which they have spent on telegrams the last few days, I could have had a very good day at the races to-morrow. I only want to quote a few figures to show the actual success of the Birmingham Bank. I should have liked to have dealt with its vicissitudes and with the battle which Mr. Neville Chamberlain eventually had to put up in the House of Commons, and I should have liked to have shown how determined he was on forcing through a bank for his own municipality. In 1920 the balances due to depositors were £746.000. In 1938 that had gone up to £26,680,000. From £746,000 to £26,500,000—a phenomenal success, which astonished most of the financial magnates in Great Britain, and a success which I think has put the lie once and for all to any suggestion that the Municipal Savings Bank is not the sort of activity which municipalities should be allowed to embark upon. The reserve and surplus profits fund which showed a loss, or rather a debit balance of £1,702 in 1920, had grown to a credit balance of £1,782,000 in 1938. The cash in hand was £5,000 in 1920, and in 1938 it had gone up to £1,249,000. Advances secured by mortgage on leasehold and freehold were £39,000 in 1920, and in 1938 they had gone up to £2,125,000, and similar expansions are shown in every possible direction. For instance, whereas they lent to the Corporation at call in 1920 £698,000, in 1938 they lent £23,347,000. What can be done in Birmingham can be done in other municipalities which fall within the scope of this Act. I feel that the time is long overdue in the Union for us to embark upon a scheme such as this. It is perhaps only a coincidence that at a time like this, with a Bill like this before the House, a pamphlet has been published by Professor Arndt, of the Pretoria University, in which he deals with the progress of the Volks Bank, “Ons Eerste Volksbank.” In dealing with that institution, he says that Pretoria possesses more owned houses as a result of the efforts of the Volksbank—more owned houses per head than any other town in the Union. In other words, more people in Pretoria own their own houses comparatively than in any other town in the Union.

That is not due to the savings banks, but to the building societies.

Professor Arndt says that it is due to the institution of the Volksbank—that it is due to this co-operative bank which can be compared with and is analogous in many ways with the type of savings bank which I am asking the House to agree to this afternoon. It is that type of bank which Prof. Arndt says has brought about this happy state of affairs in Pretoria, and that is a lesson which we should take. That is an Afrikaans bank, a bank whose official language is Afrikaans. It was instituted by Mr. Postmas, who is now managing director of our own Reserve Bank. There is not a great deal of difference between what is known as a Volksbank, a people’s bank, and a Municipal Savings Bank. Actually a Municipal Savings Bank is a people’s bank in many directions. It is the people’s bank in the way it conducts its business, it is a people’s bank in the fact that it is the people themselves who borrow from the people, and it uses the money for the people, and it does seem to me that we are in line with the trend of modern development. We are in line with the trend of modern social progress, and we shall be doing a very good thing for the poorer section of the people who are looking for methods by which they can acquire their own property to live in, and we are in line with the policy of the Government as laid down by the Minister of Finance, if we agree to this Bill.

I cannot support the second reading at this stage, and I am sorry that the hon. the mover of the Bill rather truculently at the start of his speech announced that he would not consider any suggestion that the Bill should be sent to a Select Committee before the second reading; that is what I propose to move, and I hope the hon. member will still see fit to change his mind and to agree to that. He knows that my reasons for objecting to the second reading at this stage are not because of opposition to the details or to the merits of the Bill. I recognise that there is a good deal to recommend the underlying purpose of this Bill, and I appreciate as much as any other member the obvious advantages which a Bill of this kind possesses in securing uniformity throughout the country as against a series of perhaps differing provincial ordinances. But I am bound to say that I do not feel that the mover has made out so strong a case, so urgent a case for the Bill, as to justify me for one, and I believe other members of this House as well, in voting for the acceptance of the principle before it is referred to a Select Committee. And the chief objection which I have is precisely that legal point which the mover seemed so anxious should not be raised, namely, the question whether this is the fitting forum, whether this is the time and place, to debate this Bill. I mean that the Provincial Council is in my submission the more fitting forum for a discussion of this measure. I feel I am expressing the opinion of a great many people, certainly in the province from which I come, that Parliament should not exercise its undoubted power of legislation where the subject matter of the Bill is equally capable of being raised in the Provincial Council, the more so if it has already been unsuccessfully raised in the Provincial Council, and if the subject matter of the Bill is peculiarly one of local interest. I feel, in spite of all my hon. friend has said, that the matter is predominantly one of Durban interest, and not one for which the hon. member has shown any strong or, to use his own words, any insistent demand outside his home town. The reason why I oppose this Bill here is that in my submission it should be dealt with in Provincial Council. The hon. member has raised a doubt as to whether the subject matter is within the powers of the Provincial Council. He has, however, cited no higher authority for the proposition than a letter from the Secretary for the Interior. The opinion of this departmental official is hardly an authority on the question whether this matter falls within the scope of the Provincial Council. Whether that letter was based on a strong legal opinion of the law advisers or not, I do not know. No authority has been cited in support of the proposition that this measure could not have been dealt with adequately in the Provincial Council. The minutes of the proceedings of the Provincial Council on the occasion when this measure has been considered there contain no hint that that point was ever taken, and there is nothing to indicate that the question of ultra vires or intra vires affected the voting on any of the occasions when the measure was voted down. So prima facie it would appear that it is within the competence of the Provincial Councils to deal with this matter—it would appear that it is competent for the Provincial Councils to deal with the establishment of an institution like a Municipal Savings Bank, and it seems to me that steps taken to encourage thrift or to make available cheap money for housing purposes may well be regarded as coming within the legitimate scope of municipal activities. But whether the question of power to deal with the measure in the Provincial Council has been considered or not, the fact remains that this measure has on several occasions been before the Provincial Council of Natal, and that it has on at least two occasions been rejected. It has not at any time yet got to the stage of having its principle approved of in the second reading in the Provincial Council. Although my friend is of the opinion that there was a majority in 1939 on the Provincial Council in favour of the Bill, there is much to encourage the opposite view. There is much to suggest that not only is this essentially a local Bill, but also a Bill which is wanted by the majority of the present Town Council of Durban, but not by any strong body of opinion outside. It may be that evidence available before the Select Committee may correct that impression so far as I am concerned, and support the hon. member’s opinion that there is a bigger body in favour of the Bill which demands action at this stage, but unless and until that evidence is forthcoming I feel that the evidence of the fact of the checkered career of the measure in the Provincial Council suggests rather that there is not a very strong or wide support for the measure even in Natal. And the mover did not endeavour to give any clear reasons why the measure was voted down in the Provincial Council. If it were possible for him or others connected with the Council to show that the reason why the measure was voted down in 1939 was not that the measure was objected to in principle, but that the Provincial Councillors preferred that it should be brought here, that would strongly affect me in my attitude on the Bill. I would then realise that the objection to the forum here would be waived, and if it was the desire of the majority of the legislative body in the province concerned that the Bill should be a national measure, that would be a strong argument in favour of what the hon. member has said. I think it is a pity that any question of the validity of the measure should have been allowed to affect the voting at the time when it was before the Provincial Council in 1939. But that was not the only occasion upon which the Provincial Council of Natal discussed this measure. The previous year, in 1938, almost identically the same provisions were before the Council as a proposed clause in the Committee stage of a draft Ordinance for extending municipal powers in Durban. And at that time there had been no letter from the Secretary for the Interior, and there is no evidence that members of the Provincial Council were affected as the result of any threat, or attitude on the part of the central Government. But on that occasion the Provincial Council rejected the proposed savings bank in that ordinance by practically the same majority as was the majority against the draft ordinance the following year. So in the light of the full facts, it does seem to me that all the evidence is in favour of the belief that the Natal Provincial Council was not in favour of passing this Bill through their own Chamber. The hon. member has not shown that he has the support of representative opinion in his own province. I think the better course would have been for the hon. member to have shown that there was a strong demand for this legislation— the better course would have been for the supporters of the measure to have tried again to carry it through in the Provincial Council. If it should be the case that there is a majority there, but that the attitude of the central Government is hostile—if, as a result of this measure being passed by the Provincial Council and referred to the Government, the Government advised the Governor-General not to assent to the measure, then either the Provincial Council in terms of section 87 of the Act of Union could recommend to the Government to introduce legislation to do here what the Government considered was ultra vires the Provincial Council, or alternatively, if the measure was assented to and it was then found ultra vires in the courts, it would then still be open to the Government or to a private member to introduce proper legislation here. I would go so far as to suggest that if that were the case, the House would be under a moral obligation to assist in giving validity to an ordinance which was desired by the majority of the Provincial Council concerned.

By that time I shall have a beard; it would take ten years.

There is no reason to suggest that. Some of the difficulties which my hon. friend has referred to as having been experienced in the Provincial Council need not be repeated. I wish to move now that the order for the second reading be discharged, and the subject matter of the Bill be referred to a Select Committee for consideration and report, the Committee to have power to take evidence and call for papers. I do earnestly commend the suggestion to my hon. friend for the reasons which I have given, primarily to enable the case which the hon. member has sought to make out to be tested out by evidence before the Select Committee; and also, may I add, that especially in a case like this where an obviously contentious and rather complicated measure is brought in by a private member, I feel it is more desirable than ever that the measure should have the advantage of being examined and improved and looked through in Select Committee. But the other reason, perhaps my main reason, for urging that the Bill should at this stage be referred to a Select Committee is that it would enable such doubts as may exist in regard to the position—those legal points to which my hon. friend referred—as to whether or not the Provincial Councils are competent to deal with this Bill—if these points are decided, then it will be possible to decide whether as a matter of policy this House should persist in putting the legislation through, or whether it should leave this matter for the Provincial Council to be dealt with, particularly as this Bill deals with matters which are essentially of local interest. I therefore move as an amendment—

I second the amendment. I feel, as has just been said by the mover of the amendment, that it is necessary for this House to have further information before we decide upon an important principle such as that which is enunciated in this Bill. But in the first instance I wish to support the view of the hon. member for Zululand (Mr. Egeland), because I take it that that is his view, that this is a matter which comes within the jurisdiction of the provincial councils. In section 85 of the South Africa Act the following class of subjects is entrusted to the provincial council, municipal institutions, and other local institutions. It seems to me that where there is an activity an important branch of work which is to be entrusted to a municipality, that that is essentially a branch of activity over which the Provincial Council has jurisdiction. I have looked up to see whether I could find any recent pronouncement of the courts, and I find that in 1934 this very sub-section of the South Africa Act was commented upon in the Appellate Division in the case of Rex v. Dickson at page 223, and the relevant portion of the judgment there, which was given by Mr. Justice Stratford, was this—

Municipalities are brought into being by the Provincial Council. They are given the area of their jurisdiction. They are given their powers and functions. They derive those from the Provincial Councils which, as I say, bring them into being. This is a matter which, according to the conditions and requirements of the times, should serve a municipal or civic purpose. That is the basis upon which the hon. member bases his case for the introduction of his Bill, and if that is so then I think it is a matter which properly should be dealt with by the Provincial Council. And if that is so I take this stand. The Provincial Councils are part of the structure of our Constitution, and if therefore a matter is properly within the jurisdiction of that body nothing should be done by Parliament in using its powers to detract from the powers of Provincial Councils. I submit then that the proper place for this matter to be debated is in the Provincial Councils themselves. And the matter which influenced me in seconding the amendment is that prima facie there is nothing before the House upon which one can decide that there is any need or necessity for legislation of this nature. I should like to have further information. I want to approach the matter with an open mind, but I cannot get away from the fact that the very institutions which are to be affected have apparently expressed no desire for legislation of this kind to be introduced. We know that there have been more or less regular congresses which have dealt with matters affecting the activities of municipal councils. If a matter of this kind is of such importance, if it is a public need, one would have expected that the bodies which are to carry the burdens of this legislation and which should carry out the purposes and functions of this legislation would be the first to come forward and express their views in favour of it, or at least be consulted, so that one could know what their views are on the matter. It seems to me that you are placing a very heavy and responsible burden both on the local authorities and on the provincial councils. A Bill such as this must have a considerable effect on municipal offices. You will have to have your receiving of money branch, you will have to keep accounts and records, records of payments and withdrawals—investments will have to be made, and all this work will become a tremendously important task of a municipality, and competent persons will have to be appointed to decide whether or not the security which is offered in connection with these schemes is sufficient, and then after an investment has been made, as is contemplated under section 17 of the Act, there is the possibility of the municipality having to buy in that property and having to administer it. These things do not do themselves. You have to have big organisations and you have to have officials to carry out the work. And all that is going to place a tremendous burden and responsibility on the local authority, which I would hesitate to place upon them, unless they come forward and ask for legislation of this kind to be introduced. And that is not all. The provincial authorities have to take the responsibility of doing the audit. What do they say about it? We are entitled to know. The only information we have is from the hon. member who introduced the Bill, and he has told us that if a motion of this kind, for the introduction of an ordinance of this kind, were passed by the Natal Provincial Council, the Administrator and his executive would be opposed to it. That does not seem encouraging. But then, sir, I asked myself what is the need for legislation of this kind. There is no hon. member who would be averse to placing every possible facility at the disposal of men who are perhaps less provident than others, and to give them security for savings. Those facilities are already there. Let us eliminate the question of private undertakings, all of which operate in the big centres affected by a Bill such as this. You have in every city and hamlet throughout the length and breadth of the land, a savings bank attached to the post office, which gives ample security to those who wish to deposit their savings. It seems to me that the opportunity for saving is at the disposal of everyone, and there is no reason why we should burden the local authorities with the responsibility of conducting an institution which is already supplied and is at the disposal of everybody. If this Bill were to provide that every person must deposit a certain percentage of his earnings, every employee of a municipality obliged to do that, or if there was some form of compulsory saving I could understand it. But there is nothing of the kind. Every man is free to decide whether he wishes to do anything in that way or not, it is simply a question of where he is going to put his money. I have to ask myself whether I should support this measure, seeing that there are already facilities at the disposal of every man and woman who wants to put something aside. A most interesting address was delivered by Mr. Anderson, the Assistant City Treasurer of Johannesburg, at the annual meeting of the Institute of Municipal Accountants in 1939. It is impossible for me to read many of the extracts, although it would be very interesting. But one thing is perfectly clear, that it is not only private institutions which would be interested in this question of municipal savings banks, but the Government itself has a very direct interest in the question as it affects national finance. According to the speech of Mr. Anderson, it is very evident that at any rate in 1926, the Treasury in England manifested an attitude which was a severe setback to the protagonists of municipal savings banks. While one is most anxious to place the fullest opportunities at the disposal of those who wish to exercise thrift, facilities are already there which are working harmoniously, and in cooperation with local authorities, and there is no necessity for any further facilities to be created. I support the amendment which has been moved by the hon. member for Zululand (Mr. Egeland). There are in private undertakings to-day a system under which the employees are given insurance benefits and in some a share in the profits of the undertaking in which they are working, and I suggest the hon. member should rather pursue his efforts by educating the working man in that direction, and getting employers to give assistance to then’ employees in this way in every fairly large business undertaking. Also, if he is interested in the question of giving people opportunities to save, I suggest that the creation of mutual building societies would be a greater help than his present proposal.

Are you a director of a building society?

No, I am not. I wish I were. One thing is evident. In England the Treasury was opposed to this proposal; a Bill of this kind, permissive though it be, is bound to be linked up with the economic position of the Government, and with the information that I have at my command, I cannot see any need for a Bill of this kind. I suggest that the hon. member accepts this amendment and allows this Bill to go to Select Committee before the second reading.

When I read this Bill I tried to find out by reading the Bill itself what was actually the reason for its introduction. I did not succeed. I listened to the hon. member for Durban Umbilo (Mr. Burnside) in order to find out whether I might get any wiser by what he said, and again I did not succeed in finding out what really was the reason for the introduction of this Bill apart from what I am going to say about it. I ask myself, why such a Bill? Is there any need for such a Bill? I listened to the speech by the hon. member for Umbilo and I was unable to get any evidence that there was the slightest need for a measure of this kind. One would have expected that if the Municipalities or the Municipal Services had felt the need of such a Bill, that they would have put a complete request to this House for legislation of the kind, but if there is such a request then apparently the hon. member for Umbilo has left it in the dark. If one looks at this Bill it appears as if it has a threefold purpose. The first purpose is for a savings bank to be instituted, but now I want to ask the hon. member for Umbilo: Is there any need for a further savings bank or institution of that kind in South Africa bearing in mind the institutions of that kind which are already in existence? First of all we have the post office savings bank which is available to everyone throughout the country. Apart from the post office savings bank there are several co-operative banks which are rapidly developing in South Africa at the moment. The hon. member mentioned Professor Arndt’s pamphlet and he is therefore familiar with the different Volks Banks—people’s banks—which there are in the country. There is the Volkskas, Spoorbondkas, Staatskas, Die Eerste Volks Bank, the Savings Bank of the Cape of Good Hope, Die Afrikaanse Verbondspaar, all small cooperative banks and savings banks which meet with any requirements there may be for institutions of the kind which the hon. member wants to bring into being by means of this Bill to-day.

And in Natal?

I say that we have these institutions for South Africa. In Natal there is a post office savings bank and Die Volkskas is also operating in Natal. Apart from that the Government has its own institutons, such as, for instance, the Union Loan Certificates, by buying which every individual who wants to save money can invest his money advantageously. Now the hon. member may say that his particular kind of savings bank provides greater benefits than the other institutions I have mentioned, but if that is so then he has hopelessly neglected to tell us in what respect his particular savings bank in the matter of benefits is better than the various institutions already in existence. As to the first part of this Bill, namely, the creation of a further savings bank, for that the hon. member has not produced evidence of there being any need for such an institution over and above the already existing institutions of the kind. If there is no extra need for the establishment of such an institution, then it can only have fatal and evil effects on the institutions already in existence. I said that the Bill had a threefold purpose. I have now dealt with the first purpose. The second purpose is the institution of a new housing scheme. Here I again want to put the question to the hon. member whether there is really any need for a further housing scheme of this kind? I am asking this because there are several kinds of Government-aided housing schemes in existence. There are the economic and the sub-economic schemes under the municipalities, and, thirdly, there are the utility companies. If the municipalities do not want to avail themselves of the ample assistance provided by the Government for housing purposes, then I should like to know from the hon. member whether they are going to use this additional assistance which he wants to give, the more so as the hon. member has not produced the slightest evidence to show that the assistance which he is going to offer people will be more economical for them than the assistance under the State schemes. A few days ago I went to look at one of the residential areas at Epping Forest, which had been laid out by the utility company in Cape Town. If hon. members have not been there yet, I would advise them to go and have a look. They will be able to see there how effectively this utility company is doing its work, and they will be able to see a scheme there which will convince every one of them that every working man living there is able to live there with a free mind and under pleasant conditions. I want to pay a tribute to that company for what they are doing, and the way in which they are carrying out their work, especially when I compare what is being done there with the schemes undertaken by the municipalities. The difference is as the difference between night and day. The utility company has laid out a garden city where people can live happily, and if we compare conditions there with the conditions in the residential area near Johannesburg bearing the Minister’s name, namely, the Jan Hofmeyr Township, which falls under the Municipality of Johannesburg, one must be struck by the work that has been done. The Johannesburg place is a soulkilling barracks, while the other place is the kind of place where people become inspired with a wish to live when they settle there. If I look at the difference between these two places, between the place built by the utility company and the other built by our largest municipality, then I say: “May Heaven preserve us from further schemes undertaken by municipalities.” Now I want to put this question: Is it possible, or is it likely, that under the Bill of the hon. member the housing scheme will be worth the paper it is written on? The money which the municipality gets in for its savings bank as a result of deposits can be dealt with as follows: 5 per cent. has to be kept in cash so as to cover drawings; 40 per cent. at least has to be invested in securities in which they will invest their redemption fund, which means Government bills; 25 per cent., and not more, can be spent on housing. Now I ask if, of all the money they are going to get, they are only to be allowed to spend 25 per cent. for housing purposes, what then can we expect from a scheme of that kind? I expect nothing at all from it, nothing whatsoever. The third object of the Bill apparently is to provide the municipalities with cheap money. Five per cent. they have to keep in cash; 40 per cent. has to be invested in Government securities, 25 per cent. may be spent on housing, and the other 30 per cent. the municipality may keep for municipal purposes, so the third object is not actually to establish a savings bank for the officials, but it is simply a means of providing cheap money for the municipality, to provide the municipality with a cheap source of money which it can use for its own purposes.

If you had listened to what I said, you would have known that I said that I was prepared to increase that 25 per cent.

It is quite likely that the hon. member is prepared to do so. At the moment I am dealing with the Bill as we have it before us; if he is prepared to amend all the shortcomings in the Bill which we want to refer to, the whole Bill will apparently be amended, so much so that the hon. member will be willing to cast the whole thing overboard. That, as a matter of fact, would be in accordance with the hon. member’s attitude if we take note of how often he has changed his attitude. If the House were to pass this Bill, then I say that as it stands now it would be of very little value. Now I put this question to myself: What is the real reason why the hon. member for Durban (Umbilo) has introduced this Bill? I can come to nd other conclusion but that he has been looking for a fig leaf in order to cover his political nakedness. He has given this Bill a socialistic colour, and in that we find a solution of the whole puzzle as to why this Bill was introduced. The hon. member at one time was a member of the Labour Party. He belongs to it again, but he was so socialistically disposed, he was a Socialist to the backbone, that on one occasion he resigned from the Labour Party, as the Labour Party was not sufficiently socialistic. Entirely on his own he formed a new party, the Socialist Party, of which he was the leader as well as the rank and file. Now he has undergone another change. Now he is no longer a Socialist, but he sits nice and snug among the capitalists and he takes joy in his new appearance. The same hon. member who formed the Socialist Party of South Africa voted in this House not only in favour of the motion to approve of the Government’s war policy, but he voted for a great deal more—he voted in favour of 100 per cent. approval being given not only to that war policy, but also to the whole of the domestic policy of the Government. In other words, he attached his full approval to the capitalistic tendencies of the Government, because nobody more than he himself has ever told us that hon. members opposite were the greatest capitalists in South Africa, and the metamorphosis which he has undergone is such that he has now given his 100 per cent. approval to that Government’s capitalistic policy, and that has been proved in a former resolution of this House which he voted for. But he can only get into this House if he leaves Umbilo under the impression that he is a Socialist, and in order to save his skin there he introduces this Bill which he describes as a socialistic measure. But he still wants a fig leaf to cover his political nakedness. I can assure the hon. member that, notwithstanding his sharp words and his heated attack on his friends opposite—and they tell us what a happy party they are on the other side of the House and how well they co-operate— notwithstanding all those stories, and notwithstanding the fact that he made a heated attack on the poor members of the Dominion Party, it seems to me that the hon. member is nervous that lest he can attire himself in socialistic garb he will not be sent back to Parliament by Durban (Umbilo). That is the only reason why he has come before this House with this Bill. There is another objection as well to this Bill. It is unnecessary, and it is ineffective on account of the fact that only a few large municipalities may perhaps make use of it, and the very large majority will be excluded from it. It is doubtful whether the large municipalities will avail themselves of it, and I even doubt whether Durban will avail itself of it. But there is another objection, and that is this: it is well known to us in South Africa that the way in which particularly the large municipalities tackle matters of public importance is not one that commends itself to everybody. We are accustomed to their making a hopeless failure of most things they tackle. Look at the way in which large cities such as Cape Town and Johannesburg control their markets. Look at the way in which Johannesburg and Pretoria run their municipal bus services. There are eternal losses which fall on the ratepayers. If we take heed of those things, and particularly if we bear in mind the fact that it is very doubtful whether everything is in order with the large municipalities, so far as their attitude and the way in which they use the money of the ratepayers is concerned, then I say that I fail to see the slightest reason why I should support this Bill. And now I want to deal with the greatest and the most serious objection I have, and that is that even if this Bill were, agreed to, it would be nothing but a lot of poor patchwork. I say so because we on this side, when the time arrives, want to take the whole of the banking system of South Africa into review—I naturally mean the big banking system, and we do not want to tackle that great question in this manner by patching up a bit here and there. What the hon. member is proposing here is nothing but patchwork and tinkering, and it is because it is our intention, when the time arrives, to take into review the whole of our banking system in South Africa, and to convert it, that we say that it is a waste of time to put this Bill on the Statute Book. There is no need for this Bill, and for that reason I move the further amendment—

I second.

I do not like the Bill at all. But I like the hon. gentleman’s introduction, and I think the homily he gave us on introducing the Bill was very pleasant to hear. He tries to municipalise us—he would municipalise everything, and that is something for us to bear in mind. He would not only bake our bread and make our tea—he would even drink it for us. The opinion I hold is that there are certain things which should be done municipally, but there are certain things which should not be entrusted to a municipality at all, and one thing which should not be trusted to them at all is a part of this Bill which I shall deal with later. There is not such a strong opinion on the question of municipal savings banks as there was in the past, but there is a feeling, none the less, that it is a matter which should be dealt with by the Provincial Council. Nothing came of it in the Transvaal, and I really do not see any reason why the hon. member should have brought the matter to this House. To say the least of it, it was improper for him to do so. Consequently there is an objection in that particular regard. Everyone knows of the success of the Birmingham Bank. We have heard of it for almost half a generation, but the fact is that it has been about the only success of its kind in the world, and there has been no other. I think the hon. member admitted that of the other banks which were opened on the same basis none survived, and it was only through the munificence of a particular gentleman in Birmingham that the Birmingham was reopened after it had Closed its doors. The point which I want to make here is that it is not an objection to a municipal bank as such, but it is a question of its desirability or success. We all know that as the world goes on, in this country there are other means for the investment of money, and I do not think many people would put their money into a municipal savings bank. There are other sources of investment which would pay them very much better. That is the whole thing about municipal banks. It is not the important subject which it is made out to be in this Bill. The other part of this Bill, that is the housing portion, is on quite a different basis, and I think the House will agree with me that with the cheap money that is provided by the Government, and with other sources available, slums are going to be eliminated altogether in time to come. We know that municipalities to-day have very large housing schemes for which the Minister of Finance has given them the money, but that is not the point. These municipal schemes are entirely different from these private schemes which the hon. member who has introduced this Bill has in view. But to-day we have the building societies providing money for private individuals who want to build their own houses. Apparently my hon. friend does not like building societies. Well, I have been associated with them for many years, and I regard them as national institutions of very great value, and I am proud of being associated with them. There is nothing that would be more open to abuse than to give this building of private homes over to municipalities. With our knowledge of municipal handling of things of that kind I would ask this House whether it would be as good for the owner, would we have the same confidence in it, as if it were done under the present system by the building societies of the country. I am quite sure it would not, and I am sure it would be bad business for the owner.

During the depression the building society could not pay out their money.

The hon. member must not say that because it is not true. There was only one building society which stopped payment for a very short time.

And they borrowed it from the Government.

Under the Act as it stood only 75 per cent. could be advanced to people who wanted to build their homes, and it is only two or three years ago that the late Minister of Finance found that there were many people who found it difficult, if not impossible, to put up the other 25 per cent. required for the building of their homes. So that 75 per cent. under the Government scheme was raised to 90 per cent. The Government then became part of the security. Now you have on the Rand to-day close on 1,000 houses—if not more— of the very finest character, built in the best way, and those houses are built under the Government scheme. They are built and supervised by experts. You know that you have value for your money there. They are controlled by the Central Housing Board, which is a very desirable thing. But now what I want to emphasise is that if you lose the soundness of the scheme you are going to get into trouble. If you are going to hand this business over to the municipalities I am satisfied that such a change would be a very bad thing for the people who are getting their own homes in the country. I am quite prepared to let your municipality have the housing schemes for which they have the power under the Act to-day, but I would not be in favour of this individual business as suggested in this Bill. I just want to say a word or two about the investments provided. The hon. member said that we must find means for the use of this cheap money. May I say that the building societies are doing a lot in that regard to-day. We have provision for that to a very large extent. We have the building societies’ perpetual scheme which is on the basis of 2½ per cent—a little while ago it was 3 per cent. Owing to circumstances this reduction to 2½ per cent. had to be made. I think one should leave these things to the institutions which are specially there to deal with these matters. Let these institutions make provision for men who want to save their money—don’t go and try and deal with it by the kind of savings bank which you now want to create. It is done in a way to-day very much better than any savings bank can do it! These 10/- and 20/- shares in the building societies are largely utilised throughout the country—it is a savings bank scheme for the man who hopes to own his own home. A man takes these shares, and when the time comes for them to be paid out the man begins his negotiations for his property. There are big developments going on there, and let me just say this: It is not 3% which a man gets, but taken it all through he gets 6%. And I say it is the duty of these building societies to deal with these things, and very excellent work is being done. They help the men to get their own homes on good terms. If you get this Bill passed all that will go by the board. There is just one thing I want to try and make clear. You cannot say under this scheme of the hon. member’s that the savings bank is going to borrow money from the one man and is going to lend it to another. If you do that sort of thing the scheme is never going to meet with any success. Now let me point out that tremendous developments have taken place in regard to the building society. You have those 5% shares. The building societies are not profitearning concerns. They have £39,000,000 deposited with them and £47,000,000 is placed on mortgage bond. There are no profits being made by the building societies and the money is paid out in bonuses. The whole position is entirely satisfactory. We remember the Government brought in a Bill some years ago and under that Bill the profits made by the building societies were considerably reduced. Instead of there being profits there are bonuses and investors get 4%, 5% and 6% paid out on their money. And there is no reason why these bonuses should not be increased. The money can only go to the people who invest their money with the building society. There is no capital account to which any profits can be put. But to suggest that by a Bill of this kind you are going to get nearer socialism is ridiculous. I do not like the Bill. It would do a lot of harm to a certain kind of worker. A Municipal Savings Bank will not benefit anyone. The rate of interest will not be as good as what our private institutions are giving to-day. Consequently I say that this Bill is not for the benefit of the country, and I hope it will not pass this House, and I shall vote against it.

I feel that I have to intervene in this debate in a twofold capacity. The Bill which has been introduced by the hon. member for Umbilo (Mr. Burnside) affects me as Minister of Finance insofar as it raises questions touching at least certain aspects of our financial structure. It also affects me as Acting Minister of the Interior because of the bearing which it has on a constitutional issue which is certainly not without importance. Now I find myself right at the outset in the position that I cannot agree entirely with the attitude which has been taken up or apparently taken up in the past by both of the departments which I now represent. The hon. member for Umbilo read a letter here which was based on a communication from the Secretary of the Interior two years ago. And that letter, although it did not say it in so many words, that such legislation as this, if passed by the Provisional Council, would be ultra vires the Provisional Council, apparently created the impression that that was the case. I must emphasise the fact that that letter did not refer to any legal opinion indicating that such legislation would be ultra vires the Provincial Council, nor indeed did the Secretary of the Interior on his own account say so, but I can quite understand that that impression could have been conveyed by the letter. In the second place, that letter definitely said that the Treasury would advise the Governor-General in Council not to consent to such legislation if passed by the Provincial Council, apparently on purely financial grounds. I am by no means satisfied that such legislation would be ultra vires the Provincial Council; indeed, I think it is legislation which would be appropriate to the Provincial Council. As far as the legal issue is concerned, I have been through the papers in the possession of the Treasury, and although there are three legal opinions in these papers which were given respectively in 1937, 1938 and 1939, there is in none of them a definite opinion that such legislation would be ultra vires the Provincial Council. Some measure of doubt was raised in the earlier legal opinion, but at no time have our law advisers said definitely that such legislation would be ultra vires the Provincial Council. My own feeling is this, that it would be quite competent for the Provincial Council to pass legislation of this nature within its powers to deal with municipal institutions. It is perfectly true that a Municipal Savings Bank would also be part of the general financial structure of the country, which is a matter of concern for Parliament and the central Government, but I do not think that that in itself should prevent legislation of this kind being regarded as falling under the heading of Municipal Institutions. Let me give an analogy. Several years ago this Parliament passed an Electricity Act. It was regarded as a matter of wider Union concern that the supply of electricity should be regulated, but that has never been regarded as preventing Provincial Councils from empowering municipalities to have their own electrical undertakings as long as they fell within the general scope of the over-riding Act, the Electricity Act, and in that same way it seems entirely appropriate for Provincial Councils to pass legislation in regard to Municipal Savings Banks so long as that legislation is not in conflict with wider legislation in regard to banking, and financial institutions generally, which may be passed by this Parliament. On that account I personally am of opinion—I do not speak as a lawyer, because I do not claim to be a lawyer—but I am of opinion that such legislation as was introduced in the Natal Provincial Council would not have been ultra vires the Provincial Council. The second point made, as far as the Government was concerned, was that the Treasury of that day would have advised the Governor-General in Council not to assent to the Ordinance if it had been passed by the Natal Provincial Council. The implication seemed to be that the Treasury was opposed to such an Ordinance, whatever form it might take. I cannot say that that is the position which I take up. I cannot say that I am opposed in principle to any form of Municipal Savings Bank. I would be perfectly prepared to view any such proposal in the light of the circumstances and of the nature and the terms of the proposal, and on that account I would not personally have been prepared to take up that attitude which was taken up on behalf of my predecessor two years ago. I know that there is a tendency to frighten people in regard to a Bill like this by describing it as socialistic. Socialistic is one of these blessed words which you use to frighten those who are children in their mental, if not their physical age. I am not afraid of that word. It is remarkable that a good many people who try to frighten others by the use of the word socialistic should come along to this House with schemes which are themselves socialistic. I have the feeling that this is not a matter of theory, it is a matter where you must regard every case on its merits, and I am not to be frightened by the suggestion that this Bill is socialistic. It seems to be a proposal which should be regarded on its merits, and while I do realise that there are certain financial objections to the institution of Municipal Savings Banks, I am not blind to the advantages attaching thereto, some of which were referred to by the hon. member for Umbilo. I appreciate what he said, that the institution of Municipal Savings Banks would tend to stimulate thrift. I am not impressed by the argument that we have to-day sufficient institutions to provide for the thrift instincts of the people. We have a good many, but we can do with more. And I do believe that Municipal Savings Banks would have the effect of further stimulating thrift. I am not quite so sure that hon. gentlemen who support the Bill because they share the ideas of the hon. member for Umbilo are always quite so anxious to stimulate thrift as they appear to be this afternoon. I have not heard the stimulation of thrift preached as a good socialistic doctrine, but I accept that argument in favour of this Bill as coming from the hon. member for Umbilo. I also realise that it is conceivable that Municipal Savings Banks might play a desirable part in tending to stimulate reductions of interest rates and that there might be value in the proposal in that regard.

That is what is worrying them.

I make that point, that I can see that there are grounds in favour of such institutions, although I have admitted that there are certain financial objections to their institution. But, summing up the position as far as that is concerned, I am not prepared to take the line taken by my predecessor apparently, that on an issue of principle any such proposal has to be rejected, and that if such a proposal were made by the Provincial Council the Governor-General’s assent would be refused. But when we come to this particular Bill, I cannot help feeling that the wise course is to accept the amendment proposed by the hon. member for Zululand (Mr. Egeland). May I say at the outset that in view of what I have already indicated as to my attitude, I regard this as a Bill which might appropriately be dealt with by the free vote of the House, and I am approaching the matter in that spirit, but I personally feel that this is a Bill which should go to a Select Committee, and I favour its being submitted to a Select Committee before the second reading rather than after. I know that the point at issue is whether we should approve of the principle at this stage before it goes to the Select Committee. My difficulty in dealing with this Bill is that it is not altogether easy to approve of the principle except in the light of certain details, and my own feeling would be that I would find it difficult to vote for this Bill as such in its present form, and then simply leave it to a Select Committee to make the necessary improvements which might not be made. That is the difficulty which I have about this matter. It is a question of separating the principle from a consideration of the details. And on that account, I feel that it would be wiser for the matter to go to a Select Committee before the second reading. The hon. member for Zululand (Mr. Egeland) in moving his amendment, has given as his main reason for that the constitutional question. I am not emphasising that point at this stage, I want to give other reasons for supporting the amendment. But I do want to say on the constitutional question that it is the policy of this Government not to interfere unduly in matters falling within the sphere of provincial competence. We have the power under the Act of Union to legislate on any subject, and any legislation which we introduce on any subject has an overriding authority over provincial legislation. That is clear, but this Government will be very loth to see legislation enacted by Parliament within what has been laid down as the sphere appropriate for provincial legislation, unless there is some very strong ground for doing so. Personally, I doubt if there is such strong ground in this particular case, and if I am correct in my view that this is a matter which would fall within the sphere of provincial legislation, then I think that consideration must be allowed full weight. But it is not on that point mainly that I support the amendment. There are three other considerations that I want to put, and the first does follow from the point that I have just been making. It is this, that even if Parliament is to legislate on this subject, I still do not feel that one should cut out the Provincial Administration in regard to the administration of such legislation, to the extent to which the hon. member proposes. May I point out, sir, that the effect of this Bill, if adopted, would really be to give municipalities unlimited borrowing powers. Now it is a necessary function of provincial administrations to-day to have control over the borrowing powers of municipalities. It is a function which is exercised with due care, but the effect of this Bill is to remove control over the extent of a municipality’s borrowing powers, and if passed, a municipality would be able to borrow for its own purposes to an extent only limited by the amount which it was able to raise through its municipal savings bank, subject to the limitations provided in this Bill. And that seems to me a matter which needs to be watched. At the same time, by giving municipalities the powers proposed in this Bill, you will be undermining in a very important respect the financial control which the provinces to-day have over local authorities. I would be loth to see that done without very much further consideration than has so far been given to it. The provincial administrator should, in each case, have the right of veto over the establishment of a municipal savings bank by a municipality, but the effect of this Bill would be to give thirteen municipalities the right to establish such banks without authority of the administrator or the executive of the Provincial Councils. I do not think that is right. I think it is quite conceivable that having regard to the financial status at the time of any particular one of these thirteen, this right should not be given to it. I feel, therefore, that I could not approve of that financial control being taken from the hands of the Administrator and his executive committee. The second point is that I do not think that this Bill should lightly be accepted, even in principle, without more consideration than has so far been given to it. In regard to its effect on building societies—I know, sir, the hon. member for Umbilo (Mr. Burnside) does not like anybody to speak on behalf of building societies, but there is a point in that connection which I think will appeal to his sense of fairness, and that is this. We, as a Parliament, have put building societies in a strait jacket, we have, in the interests of the public, enacted legislation which has imposed very considerable restrictions on the freedom of action of building societies, and seeing that we have done that, I think it is right that before we create bodies which will compete with them, and which will not be subject fully to those same restrictions, we should first carefully consider the effect of such an enactment, we should also in that connection consider carefully what restrictions should be imposed upon the municipal savings banks. I feel that that is an aspect of the matter which cannot entirely be left out of account. Don’t let us forget, sir, that these municipal savings banks will have the advantage of being able to offer customers the guarantee of the municipal rates. In that they will have a considerable advantage as competing with the building societies, and I cannot help feeling that in common fairness the effect of that will have to be properly investigated before even the principle of this Bill is approved of.

The savings bank would be confined to its own locality, whereas the building society goes all over the world.

I agree, but the only point I am making is that it does seem to me to be fair that that aspect of the matter should receive fuller consideration. I do not think one can get away from the fact that in certain aspects of its work, the municipal savings bank will be a competitor to the building societies. I am asking for consideration and investigation of that point. It may indeed be desirable to have these banks as competitors. The other point I want to make is this: I have already suggested that to my mind it is appropriate that while Parliament enacts general legislation dealing with a particular subject, electricity it may be, or banking, the provincial councils should be empowered to enact legislation in relation to their own provinces within their scope as defined by the Act of Union, provided that the legislation is not in conflict with parliamentary legislation. Now I have already announced my intention of introducing banking legislation during the present session. We have not, so far, done all that we should have done in regard to the enactment of general banking legislation. This legislation will, amongst other things, have the effect of imposing a certain measure of control in the interests of the public over various institutions which take money from the public on deposit, savings banks, people’s banks and other institutions, and I feel that it might be a mistake to enact this particular legislation until that wider legislation has at least received some measure of consideration. That wider legislation is at present being drafted by the law advisers, and I hope to submit it to Parliament during this session. I do not intend to push it through Parliament this session, because I recognise the importance of the issues involved. I hope that that legislation also will be carefully considered by the Select Committee, and I do feel that there is something to be said for this particular proposal not being pressed forward to a stage of finality until these wider legislative proposals are at least before the House. These are the reasons why I would like to see this Bill go to Select Committee before the second reading. I hope my hon. friend the member for Umbilo will have inferred from my earlier remarks that I am not hostile to the underlying principle to which he has sought to give effect. I have not taken the same attitude in regard to this measure which has been adopted in the past, and I have, I think, given good reason why this Bill should be considered further in principle and in detail, before the House is asked to express itself by voting on the secoid reading.

While listening to the Minister of Finance I could not help thinking of the man who did not like in any way obstructing his friend but who pone the less thought that his friend was wrong. The Minister patted the hon. member on the shoulder and said: “You carry on,” but at the same time he put forward reasons which would make it impossible for the House now to accept this Bill in principle. I do not think there is a single member in this House who is not prepared to do everything in his power to stimulate thrift among the people. We are all in favour of it, and if we can do anything by means of legislation to stimulate it, we on this side of the House will do everything we can. If an effort is made to provide the poor with houses, I am absolutely convinced that we on this side of the House will give our full support to it. Speaking for myself, if any bank can be established in this country which can be developed with Afrikaner capital and which can change the present-day system of banking, it will also have my support. I feel that the two large banks which we have in this country are controlled by foreign capital and by foreign interests. For that reason if any effort can be made to change that position we on this side of the House would certainly do all in our power to promote such an effort, but I do not believe that this Bill is really honestly intended. I listened very carefully to the hon. member who introduced it. He naturally knew what objections were going to be raised against it, and I take it he knew what the Government was going to do because he sits opposite, and when I listened to his speech it appeared to me that it was not honestly intended. It appeared to me that it was a bit of slim propaganda as though he was anxious to go to the working man and say to him: “Well, I tried to get you a cheap bank, and I tried to get cheap housing for you, and I tried to do this, that and the other for you, but Parliament turned it down.” He wanted to restore the confidence which his party has lost with the working classes in the country. He wanted to restore it by introducing this Bill. Now I want to put this question: Why, if the principle is such a good one, are the dorps of the platteland to be excluded. In the large towns the people have facilities like the building societies, they have trust companies, and hundreds of facilities which the platteland dorps do not know. If it is a good principle and if it is going to stimulate thrift, then I want to know why the people of the platteland towns should not be put in the position of starting their own enterprises with their 1s. per month? This Bill only applies to towns with a definite rateable value. Thirteen municipalities will fall under this Bill. I think that there are a large number of the smaller municipalities which are possibly more solvent than the larger municipalities. If it is a question of confidence it would be better to go into the position of the municipalities concerned and find out whether there really is much confidence in such municipalities. There are municipalities which are so deeply in debt that they have to levy a rate of 5d. in the £. And then I want to point this out: that if the stories which are circulated in regard to the large municipalities have any foundation of proof, we can have no confidence in them, and we cannot place a matter of this kind into their hands. We have heard of trouble in connection with contracts, we have heard of prejudice in regard to certain matters, and we can well put the question to ourselves whether the people in the large towns are more honest than the people on the platteland? Are we prepared to put this matter into their hands and not in the hands of the platteland dorps? No, if it is a good principle, and if we can stimulate thrift by a measure of this kind, and look after housing, then the platteland dorps are just as much entitled to it as the towns. I feel personally that the more facilities there are for people to save money the better, but we should not give those facilities to the towns only. We must give them to the country as a whole. There are quite a number of matters in this Bill which would have to be amended. I should like to hear what the hon. member means with the provision that they can give bonds on freehold land. Freehold land has been translated as “vrye erfpag.” The person who drafted this Bill naturally has no knowledge of ownership rights in connection with land in the Cape Province. Here in the Cape Province there is no such thing as freehold. If the Bill has to be passed as it stands now no municipality in the Cape Province will fall under it. In the Cape Province the land has been given by the State as hereditary leasehold land, and even if the leasehold fees are paid it does not become freehold. The person who drafted this Bill apparently did not know what the position was. That, however, is a matter of minor importance which can be dealt with in Committee stage. I am merely mentioning it to indicate how peculiarly this Bill has been drafted. I have read the Bill, and it appears to me to be neither flesh nor fish. We do not know what principle the hon. member has in view. The hon. member introduced this Bill and told us that he was trying to satisfy the different elements. In other words, the Bill would not compete with the building societies; it would not compete with the Governments or with the banks. I want to say straight out that if a Bill is introduced as a result of which the municipalities will become the poor man’s bank, I shall support it. But to come along with a Bill of this kind, to come along with a Bill like this, and to ask me to support it—well, that is something I cannot do. So far as housing is concerned, the hon. member admits that the assistance which will be provided for housing under this Bill will not provide for better facilities than what the municipalities can provide at the moment. If the facilities are inferior to those available at the moment, what, then, is the use of this Bill in that respect? The people in the thirteen municipalities falling under the Bill have many sources which they can turn to for assistance which the people in the dorp have not got. The large building societies are not prepared to invest money in the dorps, and now the hon. member again wants to cut out the dorps from this Bill. For that reason I feel that this Bill cannot have the support of this side of the House, and in any case that it cannot have the support of any representative of the platteland. I feel that there are quite a number of things in this Bill which could be amended in Committee, but the principle that we on the platteland have to be excluded, and that only 25 per cent. of the money can be used for housing purposes is one which I cannot vote for. I fail to see why the people in the dorps should not be allowed to start their own enterprise with their 1s. per month. I know of a building society which started with a 6d. per week, and so far it has assisted hundreds of people. If there is no building society in a dorp and a municipality is able to establish such a thing, I see no reason why it should be cut out. I further say that I fail to see why a municipality should use only 25 per cent. of the money for housing, and 40 per cent. for other purposes. I fail to see why a savings bank such as the one the hon. member now wants to establish should not be able to issue money on orders. A bank perhaps may not see its way to establish a large institution in a dorp, and in such event the municipality should be able to undertake a scheme of that kind, because it will be able to control it more cheaply. Control can be exercised, for instance it can be laid down that a municipality shall not in all receive more than a certain fixed amount. We have this position at the moment, that a municipality can borrow money, but such borrowings must not exceed a certain percentage of its valuation—that is, the valuation of the property of the municipal area. Limits may be imposed so that the dorps shal l not be allowed to exceed a certain amount, in the same way as limits are now imposed by the Provincial Administration in regard to loans that may be entered into. In all those respects useful work can be done, but I do not see my way to support the Bill as it now stands.

Mr. Speaker, I have been disappointed, though not altogether surprised, at the reception of this Bill by the House. Quite apart from any lurid suggestions of lobbying on the part of vested interests to which the hon. member referred, there is undoubtedly an attitude of mind in a big assembly like this which looks with suspicion on any new venture or on any new Bill such as this. Now to begin with, while I have listened to the arguments which have been advanced in favour of referring this Bill to a Select Committee before the second reading, and while I have listened particularly carefully to the cogent arguments put forward by the hon. Minister, I do not think they are cogent enough. The hon. Minister is as aware as I am how often the Select Committee is a burying place for Bills which do not commend themselves entirely to the House, and he is as well aware also as I am that even if a Bill does go to Select Committee after the second reading, it still has to face the many hazards that attend private Bills in this House before it can reach the Statute Book. And while I do appreciate the support of the general principle that the Minister has given to the Bill, again I cannot agree with him that it would be wiser to send it to Select Committee after the first reading, because I know the sort of reception such a Bill might meet with at the hands of a Select Committee. Also the Minister suggests that the hon. member should wait until a more comprehensive banking Bill has been dealt with, but at that rate this Bill would be indefinitely hung up, and have even less chance of finding its way through the Legislature. Therefore I, Sir, would urge the House to consider the advisability of adopting the second reading this afternoon. I do so because I welcome this Bill as a constructive contribution and a small beginning at this stage of the war to the new world which we hope for after the war. We have heard in this House a great deal about new orders of the kind foreshadowed by the hon. member for Gezina (Mr. Pirow) on the Nazi model. For myself, I do not think that if they ever do come into being such orders, like the Nazi system itself, will have much permanence, because I have too much faith and too much belief in human nature to think that it will long accept such a crushing of the individual and his right to think and do what he will, as these new orders contemplate, even with this bait of more economic security which they hold out. But I do believe that in the world that is to come the most essential thing must be, the most essential feature of it must be, that it will offer a greater measure of economic security to every man than has ever been possible before. And so I welcome this Bill, because the housing provisions do contribute to that security which is so desirable. Now I do not want to deal with the detailed criticisms that have come from hon. members, but I do want to meet a criticism made by one hon. member, the member for Hospital (Mr. Henderson). He told the House that many municipal banking schemes had been tried and had failed. Well, Sir, the hon. member was quite wrong; there have been no failures of municipal banking schemes in England. The only scheme there was the Birmingham one, and that is a long way from a failure. It arose, as I would remind the House, the Birmingham scheme I mean as the outcome of war conditions. Mr. Neville Chamberlain brought in that banking Bill firstly for the purpose of harnessing the poor man’s savings to the war machine, and secondly for better housing, and the record of the Birmingham bank has shown that it was a triumphant success for both purposes. Now, for my own part, I do not understand why there should be such opposition to this Bill on the part of the building societies, because experience has shown that wherever you set up new institutions for thrift, that you get fresh sources of thrift, e.g., in the evidence given before the Select Committee on the Birmingham bank, it was shown that a large proportion of the money deposited with that bank would not have been saved in any other way. It was new money, in fact. Therefore, I do not understand the opposition to the Bill. Apart from the general question of thrift being a good thing for the country, there is no doubt in my mind that a municipal bank would inaugurate thrift in a new class of citizens who have not before saved anything. It is true that the facilities supplied by the post office are good, but that is beside the point, because I am clear that the more facilities for thrift there are, the more thrift you will get in the country. I was impressed moreover by one thing. In reading the records of the Brimingham Bank I was surprised and delighted to discover that 33% of its deposits have been in very small sums, and when I say small deposits I mean small deposits. 33% of the deposits in the Birmingham Bank have been in sums of under £1. And that result does show that a municipal bank does meet the needs of the small investor, of the man who would not deposit with the existing institutions. And there is also this other factor, the municipality is a centre for the citizen. He goes there to pay his rates; he goes there to pay his light and water and gas. The municipality is a civic centre, and if the small man goes there to pay his light and water and has at the same time the facility of putting in a small deposit in the same building, that very convenience will be an incentive to thrift. You may say that it is a small incentive, but all these things are accumulative. The more inducement you give people the better the result. Therefore again I would urge the adoption of the second reading. As to the suggestions by the Minister that there are various safeguards necessary in this Bill, I agree with him. But there is no reason why the safeguards which he has adumbrated should not be put in during the Committee stage. These safeguards are necessary. The Bill could and must be amended in detail, but the general principle of the Bill is what I support, and therefore I hope the second reading will be passed now. For my own part I would like to remind the House of one other thing which weighs greatly with me. It is this, that in 1918 the Ministry of Reconstruction which was set up in Great Britain after the Great War was consulted on this very question of Municipal Banks. And that Ministry of Reconstruction reported in favour of Municipal Banks along the lines of the Birmingham Bank, and urged their general adoption. That weighs very heavily indeed with me. War is a wasteful business as everyone knows. It is quite obvious from the budget figures of the United Kingdom that this war has been even more wasteful than any other. No one knows what shape the world will take after this war, but I am quite convinced that whatever shape the world will take the man who owns his house, the poor man who has his own roof to cover him, will still find that an enormous asset. It is for that reason that I would again ask this House to agree to the principle of this Bill. It is because of the new facilities for housing, and it is because a municipal bank would not only tap a fresh source of saving, but would also tap a fresh source of house owner, that I support this Bill. It seems to me that the more people we help now to get their own houses the better it will be in the period of reconstruction after the war; after the war is over there will be the question of demobilisation of our soldiers. There will be the question of demobilisation of our labour from munitions, and you will get demands from an ever-increasing number of people for houses as after the last war. Therefore I would ask this House not to send this Bill to a Select Committee before the second reading. I would ask the House in the interest of better housing for the middle class, and the poorer classes, in the interest of those people who are not adequately provided for by existing institutions, however admirable, on behalf of the poorer section of the community, whose claims the members of the Opposition so loudly profess to press on every Bill b ut this —because too, I feel so deeply the necessity for adequate housing, and because I realise the equally urgent necessity of the home owners of the country being as numerous as possible—for all those reasons I support this Bill and I ask the House to adopt it now.

As a supporter of this Bill I am glad that the Minister adopted the objective tone which he did. The spirit in which he approached it was very different from that of a number of other opponents of the Bill. The majority of the arguments against it appeared to be based either on technical grounds or on dilitory grounds. The hon. member for Zululand (Mr. Egeland) apparently wanted to have the whole question to be gone into, both by the courts and the Provincial Council. I personally, like the hon. member for Umbilo (Mr. Burnside), prefer to hear the argument of those who speak in direct opposition to the Bill, because one knows where one stands with the people who use arguments in direct opposition. There is, however, a certain amount of doubt about the whole position of this Bill, and that is why some hon. members want to send it to a Select Committee before the second reading. The position can be just as well cleared up after the second reading. Other hon. members have taken up the attitude that the facilities which this Bill would provide are adequately provided, and better provided, than those that this Bill could make available. Well, if that is so, then it is difficult to see why those opponents of the Bill are afraid of passing this Bill now, because it would not disturb existing vested interests. The main argument of the Minister of Finance for sending this Bill to the Select Committee before the second reading was that it is too difficult to disentangle the principle from the details, and therefore the principle should not be accepted before the Bill has undergone an investigation in Select Committee. That is where I differ from the Minister. There are details in this Bill which I object to. In some respects I do not think the Bill goes far enough. I think, however, that the general principle is clear, and that principle is very important indeed. The principle of the Bill is this, that it is obviously and increasingly necessary in the public interest that the public control, the control of public institutions, of banking and finance, should be extended. That is the principle which I see in this Bill and that is the principle which I support. I think that the extension of public control over banking and finance is desirable on the ground that it should tend to a lowering of the general rate of interest, and should tend to the stimulation of public investment in useful public works, particularly housing, which is mainly contemplated by the Bill under discussion. The lowering of the rate of interest is, in the state in which our economic system finds itself at present, of the very first importance. One of the most eminent economists of the day, whom no one will accuse of being a socialist, Mr. Keynes, attributes to the high rate of interest one of the causes of maladjustment in our economic system. He says it is the main cause for the chronic unemployment from which the system suffers to-day. In a recent publication of his we find the following passage—

The whole of Professor Keynes’ arguments boil down to that fundamental point, that interest rates are too high, and he himself points out that it is only through public action that such rates can be lowered. My second ground, which I stated a moment ago, for supporting public control of banking and finance, was that it is calculated to lead to a higher measure of public investment in useful public works, and in this country the type of public works which it is most important to develop is housing, particularly for the working classes. Now it is precisely there that I do not think the Bill goes far enough. The Bill, the operation of the Bill, is limited to thirteen municipalities, whereas the necessity for raising public funds for the institution of housing schemes is most acute in the smaller towns. That is where the need is the greatest. Naturally the amounts which would have to be raised would be smaller in the smaller towns, and the number of depositors would be fewer, but the fact that these institutions, if established in the smaller towns, would operate on a smaller scale, is no reason against the experiment being made there as well. So if this Bill were read a second time I would certainly move in committee that that limitation be removed and that the Bill should also apply to the smaller towns. But there is another aspect where this Bill requires to be supplemented if it is to be effective. The powers for making advances to prospective house owners are limited to those who have ownership of freehold land. Now I think that is perfectly sound in itself. But unfortunately the masses of the people who are housed worst of all, the native people, are prohibited from owning freehold land in the towns. The first section of the Native Urban Areas Act lays down this limitation. It says—

In other words, where natives are allowed to build houses in urban areas they are limited to the lease of the land on which houses can be erected, and, hence no advances could be made to them under this Bill. If this Bill were to reach the Committee stage, I would move for the insertion of a new section amending this section of the Urban Areas Act if the rules of the House would permit me to do so, as I believe they do. I also cannot see why the power of these institutions to make advances should be limited to depositors. There seems no reason why they cannot be made to any individual who can offer the security which the municipal bank requires. The principle of the Bill is a reasonable one; it is a sound principle, and I hope the second reading will be passed. I do not think there is much chance of that at the present time, but I nevertheless hope that the House will give it its second reading, and then send it to a Select Committee.

With the single exception of the argument put forward by the Minister of Finance, I would say that the objections advanced to this Bill are what the legal profession calls vague and embarrassing. I am surprised at the lack of logic displayed on the part of the hon. member for Zululand (Mr. Egeland). He argues the question from the point of view whether this House is the proper forum or whether the Provincial Council is the right place to deal with this measure, although this measure is before this House to-day solely because the legislation was officially declared outside the jurisdiction of the Provincial Council. Apart from that, he takes this line, that the demand for a Municipal Bank only comes from one town, and that is Durban. I suggest that nothing follows from that at all. Even if only one town requires it, is that a reason why that town should not have it? I may have misunderstood the hon. member, but I took him to say this, that even in the town of Durban there was no big demand for the bank. But I do submit to the House that the City Councillors represent the burgesses and the interests of the burgesses, and they have a strong majority in favour of this measure, and therefore it may be assumed that this Bill is wanted by the people of Durban. The hon. member for Wynberg (Mr. Friedlander) quoted the opinion of the assistant treasurer of Johannesburg against this Bill. But surely that has no value against the opinion of the treasurer himself, or against the opinions of the treasurers of Johannesburg, Cape Town and Durban. This reminds me of the Cockney’s protest, “If you can talk with the organ-grinder, why have a conversation with the monkey on the music barrow?” I would not be so impolite as to cite this as a parallel case, but why go to the assistant treasurer when the town treasurers of the chief cities have declared themselves 100 per cent. in favour of a Municipal Savings Bank? The hon. member for Wynberg asked how we could possibly thrust this burden on other municipalities which have given no evidence of wanting it. The Bill does not do that. There is no question of thrusting these powers on anyone. It is a permissive Bill. Just as, though the sale of intoxicating liquor is licensed nobody is compelled to run a bottle store, and no one is compelled to get drunk (except perhaps members of Parliament, who are sometimes almost driven to it by the dryness of the debates here), so this Bill simply permits those municipalities who wish to start Municipal Savings Banks to do so. They are not compelled to do it. As for the building societies, they cannot have it both ways. If they are essentially altruistic societies, if they are people who are there only for the good of others, selfsacrificing corporations purely devoted to unremunerative service of the public, why do they object to the municipality coming in and helping them—sharing with them the heat and burden of the day? If they are just working for the welfare of the community, we are here to help them, and if they refuse to be assisted, what can we think? If, on the other hand, it is with them a matter of profit, why should not the building societies have competition the same as other business institutions? People cannot have it both ways. As the member for Cape (Western) (Mr. Molteno) has said, there is no good reason why the bank rate should not come down for the benefit of the poor. Here in this Bill we are creating opportunities for the very poor. This is a poor man’s bank which we want to set up, the small man’s bank, and I want to compare it with the people’s bank mentioned by the hon. member for Umbilo (Mr. Burnside). That bank, “Ons Eerste Volksbank,” was started in 1918 at Pretoria, with a capital of £250, in a little dingy back room. No doubt hundreds then said they knew that it could not succeed, but it has succeeded, and the point I want to make is this, it has not succeeded in pulling down other banks, but it has succeeded in lifting up individual citizens who were down. For their clients are the poorest of the poor. Their chief clients are the labourers of Pretoria, whose salaries vary from £8 to £12 per month. They succeeded in helping those people. In 1922 the loans to small borrowers amounted to £22,000. In 1939 they advanced £96,000. With regard to deposits, in 1922 those poor people deposited £28,000 with them. The poorest of the poor did that. In 1939 they deposited £97,000. The point I want to make is that “Ons Eerste Volksbank” is a poor man’s bank. The average savings account on its books amounts to £20. The average loan is only £15. It has been suggested that any new efforts, unless they are under the aegis of existing corporations, are bound to fail. I do not agree. This bank to which I have referred has made loans in the course of 22 years amounting to over £1,000,000. They have only lost in that time—at least they have only written off in that time—£3,100, which is 0.3% per annum—6/- per £100 of their loans. And then writing off in their case is not exactly the same as losing. They have written off doubtful debts, and not all of those are ultimately bad debts. So that the real position of the bank is better and not worse than that displayed by their balance sheets. They have made good investments and they have been tremendously useful in many ways. They have kept the poor people out of the hands of usurers. They have transformed borrowers into savers. They have given loans to thousands, and they have thereby given the poor people some sort of a home of their own. The statement has been made that Pretoria beats all other towns in the Union hollow, so far as the people with small incomes are concerned, who have their own homes. I am referring to people with incomes up to £300. The figures for Pretoria are these—I am referring to Prof. Arndt’s book, dealing with this particular bank. People with incomes of less than £200 per year—of these people 29% in Pretoria have their own homes. The best any other town in the Union can do is 12%. Of the people earning between £200 and £300 per year the percentage is 43 who own their own property or are in process of acquiring it. The best figures for the next town are 27%. These figures are reliable. They come from the official report of an Inquiry into Expenditure of European Families in certain Urban Areas, made to the Census Office of the Union in 1936. If that has been done with the dry tree—what cannot be done with the green? I suggest that at least as good work can be done for these poorly paid people elsewhere. Now I should like to read the conclusion which Prof. Arndt came to. He says this—

Well, we have the legislation here, and I ask this House to pass this Bill. The principle is perfectly straightforward. It is just a question of whether a new instrument of thrift shall be set up. In Durban and certainly in other towns too, this is asked for. It is easy enough for the hon. member for Hospital (Hon. R. H. Henderson) to talk about investments which pay 6%, the unit cost being £50. From where will the labourers get that £50? We are not thinking of the person who has £50 to invest, we are thinking of the people who have only shillings which will ultimately become enough to make a deposit for some sort of property. We want to get these little sums of money which these little people have, and save them for them and for the good of the State. That is all we want to do, and we ask the House without any hesitation to pass the Bill which cannot possibly do any harm, but almost certainly will do a lot of good. The Bill is wanted by the Municipality from which we come, whether or not it is supported by other hon. members who are here as representatives of Durban.

I do not want to take up the time of the House at this late hour, but I do want to express my appreciation of the attitude of the Government towards this matter as detailed by the hon. Minister just now. I would further like to remind hon. members of this House of the maxim of our constitutional government that the allocation of powers between the central and local authorities, operates as an implied prohibition against the one from exercising the powers allotted to the other, and I do feel that if Parliament exercises an overriding authority to interfere in a matter of this kind, it should be done very carefully, and with a full consideration of the consequences, because as the matter stands today, it can only be interpreted as a vote of no confidence in the Natal Provincial Council. This Bill is simply the result of a dispute between the Durban Council and the Provincial Council of Natal. Sir, I do think it wrong that because we stand up and oppose this measure, a series of insults should be thrown at us with statements that we are stopping people from helping the poor and defending vested interests.

So you are.

Very well, I am told so we are. Now, sir, is it correct that we have been told by the chairman of the Housing Committee, Councillor Mrs. Burnside, of Durban, that there are claims for compensation amounting to £40,000 pending against the Town Council for defective houses sold by the corporation? I mention that because I think I am entitled to do so when it is suggested that we stand here not as guardians of the people’s rights, but as the guardians of vested interests. I beg to move—

I second.

Upon which the House divided.

Ayes—54.

Abrahamson, H.

Acutt, F. H.

Badenhorst, C. C. E.

Baines, A. C. V.

Bawden, W.

Bekker, G.

Bekker, S.

Bell, R. E.

Boltman, F. H.

Bosman, P. J.

Bowie, J. A.

Bowker, T. B.

Brits, G. P.

Christopher, R. M.

Conradie, J. H.

Deane, W. A.

De Kock, A. S.

Derbyshire, J. G.

Du Plessis, P. J.

Du Toit, C. W. M.

Du Toit, R. J.

Egeland, L.

Fagan, H. A.

Fourie, J. P.

Friedlander, A.

Geldenhuys, C. H.

Gilson, L. D.

Hare, W. D.

Henderson, R. H.

Hirsch, J. G.

Hofmeyr, J. H.

Hooper, E. C.

Hugo, P. J.

Liebenberg, J. L. V.

Loubser, S. M.

Louw, E. H.

Neate, C.

Oost, H.

Pocock, P. V.

Strauss, E. R.

Strauss, J. G. N.

Strydom, J. G.

Sturrock, F. C.

Swart, C. R.

Van den Berg, C. J.

V. d. Merwe, R. A. T.

Venter, J. A. P.

Verster, J. D. H.

Vosloo, L. J.

Wallach, I.

Wares, A. P. J.

Warren, S. E.

Tellers: W. B. Humphreys and J. F. T. Naudé.

Noes—21.

Alexander, M.

Ballinger, V. M. L.

Burnside, D. C.

Conradie, J. M.

Dolley, G.

Gluckman, H.

Howarth, F. T.

Jackson, D.

Lindhorst, B. H.

Madeley, W. B.

Molteno, D. B.

Naudé, S. W.

Nel, O. R.

Olivier, P. J.

Schoeman, B. J.

Solomon, B.

Swart, A. P.

Van der Merwe, H.

Van Nierop, P. J.

Tellers: C. F. Miles-Cadman and A. F.

Trollip.

Motion accordingly agreed to.

Debate adjourned; to be resumed on 21st February.