I move as an unopposed motion and pursuant to notice—

I move—

The immediate occasion of this motion is, as stated, these happenings in Johannesburg, on the Reef and in Pretoria, those thirty-odd strikes about which a good deal of political capital has already been made by the Opposition side of the House—episodes which have caused a good deal of uneasiness among people who are very anxious that the native situation should not be made a matter of political capital. I want to say what I believe is true, that these happenings are the reflection of serious maladjustments in our economic situation, and that the warning which has been given is a timely one, that there is still time to put these maladjustments right. It is less than eight years since this House, since Parliament put on the Statute Book a series of Acts designed to establish for all time the lines of native policy in South Africa. Those Acts were the Native Land and Trust Act, the Native Laws Amendment Act, and the Representation of Natives Act. The Native Land Act and Trust Act applied to the Cape Province the principles of the 1913 Land Act. It took away from the natives of the Cape Province the right to buy or lease land in any but specified areas. Those areas had been roughly specified by the 1913 Act, but they had never been finally declared. The 1936 Act complemented the 1913 Act by finally laying down approximately, certainly in total, the amount of land which should be released for ultimate native occupation. It released, in fact, some 7,250,000 morgen of land, making the total available land for the native population some 18,000,000 morgen. Outside that area the native population would not be allowed to acquire any interest in land. The Native Laws Amendment Act, coming behind that Act, applied the same principle of segregated property rights to the urban areas. The Native Laws Amendment Act abolished the right, which the African people had had up to that time, to buy land in urban areas, even where they might not occupy it. Urban areas were for ever closed to Africans as property owners. The Representation of Natives Act put a political frontage to the economic organisation which was incorporated in these two Acts. As I have said, these Acts were designed to lay down finally the lines of native policy in South Africa, to define permanently the relationship between the European population and the native population in South Africa. That definition was to be based on separate territorial rights, separate property rights. The African people were to be limited in their property rights to the areas released under the Land Act. Outside these areas they were to have no claim, no continuing claim, on the rest of the country. The assumption behind the Act was that, within the area released, the native population should be at home, outside the area released they should be merely visitors. I want to make clear at this point that the application of the term “segregation” to that policy is essentially a misnomer. The intention was not really to separate the African people and the European people except in the matter of property rights. Not even the most extreme segregationists, and I may say that they have not been Afrikaners, but Englishmen—not even the most extreme segregationists have assumed that the Native population should be entirely separated from the European population. All they have said is that the property rights of the Native population shall be separated from the European population, and that, as I have said before, the African population shall have no continuing rights in European areas, but into those European areas Africans should and, indeed, must go, but at the wish of the European population and for as long as the European population wants them. That is they shall be in, but not of the European area. Now, behind that policy as laid down was a further assumption, and I believe a further intention, that the African people should not be welded into the industrial system of South Africa, that they should be a movable element, a dispensable factor in our industrial system, that they should not remain permanently in the towns, that their homes should be in the country, but that they should merely come into the towns for limited periods, they should be sojourners there. Last year the Prime Minister made a public statement that this policy had failed, that a policy designed to keep the Native population in the rural areas had had the opposite effect, that it had speeded up enormously the progress to the towns, that the Native population was far from being a completely rural population, that a large part of it had established itself as a permanent urban population which could not return to the country, and by implication he supported the idea that a larger part would still become permanently urbanised. I believe the Prime Minister’s statement was a mere recognition of fact, but it is an important recognition of fact, it is a recognition that the policy which was laid down some eight years ago has not only failed, but that its failure was inevitable. Since 1921, between 1921 and 1936, the European population of our larger towns have increased by 60 per cent. In the same period, the Native population of our larger towns has increased by 100 per cent. The process of urbanisation is going on very rapidly, and the process is attacking the African population on a much larger scale than the European population. I would remind the House in passing that while only one-third of the European population is still on the land, over 83 per cent. of the Native population is still on the land; that that simply means that the process of urbanisation will be more rapid for our Native population than for the European population, and I want to suggest that the process of urbanisation was a natural process. It was a natural process which doomed to failure the policy of segregation as visualised for this country. The policy was definitely unsound in its foundation; it cut across the whole economic trend of this country, and therefore it could not succeed. That, sir, will be my main contention, and my desire is to try to get the House to realise its validity and to shape its policy accordingly, because all that has happened, I shall submit, is that while we have assumed that we were committed to one policy, our whole economic development has been pulling us in the other direction, and the continuance of the assumption that we should follow one line has made it more difficult for us to make essential adjustments; it has made it increasingly difficult for our economic system to adapt itself to the increasing demands on it; it has resulted in adjustments in our economic system from which we ourselves are the major sufferers. I shall also attempt to show the House that this so-called policy of segregation has not only been economically unsound, but that it is in its effects on the native population morally indefensible, and that it is today creating an antagonism between African people and Europeans which bodes ill for the future peace of this country. I propose, sir, to concentrate first of all on the purely economic aspect of the case, the aspect that will appeal most to the European section of the population. The chief characteristic of South Africa’s economic life in this last generation or two has been a process of industrialisation. Since the beginning of this century, South Africa has practically undergone an industrial revolution. Sir, that process of industrialisation has been rapid, but it was unnecessarily rapid. From the moment that the gold mining industry began to develop in this country, it was absolutely necessary that South Africa should embark on a progressive policy of industrialisation, for the gold mining industry has established a standard of living for the majority of people in South Africa which is out of all relation to the value of our other natural resources. Farming in this country can do nothing to support the standard that has been pitched in this country by the gold mining industry. It can only hope to benefit by that standard progressively as we develop our system to increase the demand for agricultural produce. We have also been alive to the fact, but not sufficiently alive to the fact, that the gold mining industry is a wasting industry, so that we have had to realise and have realised from time to time, that there is a definite time limit to the standard we all enjoy here, unless we can build it on some other foundation. We have, therefore, made purposeful attempts to peg our standard on another and more lasting foundation. That is why we have done our best to encourage secondary industries, even where it has not been an easy or a natural process. We have encouraged secondary industry by high protective tariffs, and by every means in our power, and as a result we have had quite a spectacular rise in secondary industry. I contend, sir, that that secondary industry has itself cut at the roots of the so-called segregation policy. The development of secondary industry has only been possible on the foundation of the gold mining industry, which in itself has drawn thousands and thousands of native people into the urban areas, and that secondary industry has used the road that the gold mines have built between the reserves and the towns; secondary industry, even with the attempt made by the Opposition to build up our secondary industry on a white basis, has had to draw numbers of natives into its ambit for it to lay any foundation at all. So here, sir, is the economic development which has cut across our whole intention to keep our native population in the country, as I have had occasion to point out in this House many times before; industry has purposely, certainly definitely exercised a pull upon the cheapest labour from the rural areas. Not tied down by living wages, it has consistently used the cheapest labour that was suitable to its purpose at the present time, and has therefore broken the connection between town and country. That was a natural line of development, but that natural line of development was assisted by the very policy that was adopted by this country in 1936. The policy which defined the limits of landowning for the whole native population enormously increased the stream from country to town, and that stream is continuously being reinforced by the assumption which we still support, that reserves are the final home of the native population. Since we adopted the policy of segregation, those who have had the business of administering the land side of their policy, the Native Affairs Department and the Native Affairs Commission, have done their best to find homes in the rural areas, in the reserves, as they now exist for the people who are there, and for anyone else who has a claim on those reserves, and the result of their effort has been inevitably to whittle down the size of the holding which any man can have, in order to accommodate more and more people within that limited circumference, until we have eventually reached a point where it is practically impossible for the people in the reserves to make a living without the continual exodus of then-menfolk to industrial areas, the periodic exodus of those who have land, and the permanent exodus of a great many of those, who have never had land are never likely to have land. At the present time every single native reserve in this country is not only hopelessly overcrowded with the people who have a direct claim on the land, but there is a long waiting list of people who are one day hoping to get land, people who have really no hope of land on the, present basis, unless holdings are increased in size, unless and until the size of the holdings make it more possible for those areas to provide a living and a home for the people who are on them. What is going to happen if we go on with our present policy so far as the reserves are concerned is that the men who have land will have to go out for longer and longer periods to work, and all the younger sons will have to go out permanently. As long ago as 1931, when the Native Economic Commission took its evidence, the Commission was told by representatives of the Native Recruiting Corporation in the Transkei, that every able-bodied man in that reserve was out of the reserve for eleven months in every two years throughout the whole of his able-bodied life. That was before we applied the Native Land Act to the Cape Province and increased enormously the pressure which already existed on the Transkei and Ciskei areas. Here is the first explanation and the first cause of the drift to the towns. Here, I contend, sir, is the initial cause of the failure of the whole principle of segregation. But I feel that unless the country will face this fact, we cannot have that rapid adjustment of our economic life which has now become increasingly necessary and increasingly urgent. This process of industrialisation we have had has not only been rapid, but it has been spectacular in range. Even so, it has not been enough to maintain on an efficent basis even the European population whose interests it was primarily designed to subserve. Even this enormous industrial development we have had, has not been enough to absorb the whole of the European population on a level that any of us here would regard as adequate to maintain a civilised standard of living. That was becoming increasingly evident to us even before the war; and there was a rapidly growing underground uneasiness that years of very valuable addition to the resources of the gold mining industry and of the revenue to this country from the gold mining industry, had not been used to build up a more secure position in this regard. In the last few years we have had the advantage of bounding revenues, we have had the advantage of bounding surpluses, but behind these bounding surpluses have been the growing awareness that the mining industry is still a wasting asset, and is probably a more wasting asset than ever before. Now the war has thrown the whole situation up in relief, on the expanding field of employment created by war conditions, we have established a degree of economic security hitherto unknown by many Europeans in this country. Today between the army and industries subsidiary to our war effort, a great many Europeans have achieved employment and a new standard of security in that employment. We have not only given them employment but we have raised their standard of living. But have also given a promise, as a result of the principle of this war and of our dependence on the people who are willing to fight it, that these people shall never fall back onto the edge of the abyss upon which they existed precariously before, and we have made the promise that those who come back after the war will not suffer as they did in the past but that they will find security in on social system. I cannot see on what foundation these promises are made. There is a happy assumption going round that we are automatically going to have enormous industrial expansion in South Africa. I do not know on what that assumption is based. I cannot see anything that would justify the assumption that we are automically going to have an enormous industrial expansion here in South Africa. My own feeling is that there are far more definite signs of a possible contraction rather than an expansion.

Hear, hear.

I hope my hon. friends of the Opposition are going to agree as sincerely with my last thesis as they do with my first. But my own feeling is that the international situation being what it is, and the national situation being what it is, unless we have some very definite plans—if we are just trusting to good fortune, which has been very kind of us in South Africa—if we are just trusting to good fortune, we are faced with a contracting market of employment, not an expanding field of industrialisation but a narrowing field of industrialisation. That seems to me to be the natural corollary to the fact that the world is going to swing into its stride as soon as the war is over, and we in South Africa are going to find it extremely difficult to compete with other countries in the world. With the admitted high cost structure of our secondary industry, I do not see how we are going to stand up against the competition of the large and efficiently organised mass production countries or the low labour cost countries of the East who will assuredly be an increasing factor in the situation. That is the position that I think we have to face; and in my opinion, we need and must have some sort of plan, if we are to have any hope of implementing our promises to the men who are fighting for us, that we will maintain or even try to maintain for them the level that they have today achieved through military or war industrial service; and if we are to do what the hon. the Minister of Native Affairs was talking hopefully about to the farmers the other day, namely, maintain the internal market for the farming community—an internal market that they could not achieve in peace time. I noticed with interest that the hon. Minister was very hopeful that we would be able to maintain that market. I must say, sir, that I feel just as dubious about that market as I do about the employment market, about the possibility of employing our returned soldiers, unless we have some plan that has not so far been traversed before this House. It is easy to talk about these things on the buoyant market of war-time employment, but the question is, what are you going to do when that particular buoyancy disappears? Now we have got a lead on this thing. It has been given to us by the Industrial and Agricultural Requirements Commission whose business it was to consider this whole situation. At the beginning of the war, the Government appointed this Commission with the express intention that it should review our whole economic situation and show us how to plan for the future. In some directions, sir, the report of this Commission was extraordinarily hopeful, extraordinarily encouraging, much more so than any of us would have anticipated. It declares that we have great possibilities for the development of secondary industries, on which again they peg their hopes. They know that we cannot peg the future on the gold mining industry. Not only is it physically a wasting industry today, but it is all too apparent that a lot of people are losing confidence in gold, and at any moment that foundation may disappear. It is realised that agriculture cannot again absorb our population. The Commission’s line in this regard is what we need today in agriculture, is to pull more and more people off the land, and hope to build up for those who remain on the basis that the hon. the Minister of Native Affairs rightly suggested, the basis of increased consuming capacity in the rest of the country. Their hope lies in industrialisation of this country, and in that connection they give us this very encouraging statement—

But they add: Provided proper training is made available. These are our advantages the Commission gives us, and I trust and believe that the Industrial and Agricultural Requirements Commission does not make that statement without having investigated the position and having full knowledge behind it. We must make the assumption that their statements are founded on full scientific knowlegde. Well, sir, let us make that assumption, then here we have the credit side of our ledger. But what about the debit side? That we also have to face. And the Commission has faced this for us also. They say that all other things apart, the development of secondary industry in South Africa depends on our home market. Like all new countries, we are at a disadvantage in competition with older industrialised countries. We are at a particular disadvantage in this country, because we have a high cost of structure. Our only hope therefore is to build the expansion of secondary industries on our home market, and here they begin to touch our difficulties. They say—

They come back on that note; it is repeated. Here is another section dealing with the same question of industrial development, and the note is repeated:

And it has been pointed out that the absence of mechanisation is largely due to the unskilled character of our labour forces—

Now, sir, in other words, our only possibility of dealing with the problem before us, which is first of all to provide a living fit for those who fight for us, to sustain them when they come back, is to face initially these two problems of the low purchasing power of our home market, and the low productivity of our labour forces. I contend, sir, and I have got very good support for my contention, that the low purchasing power of our Native population and the low productivity of our labour force, are both the natural result of the policy that we have pursued with regard to our Native population, that while we have been progressively industrialising the country, we have been progressively impoverishing the people on whom, in the last resort, the foundation of our industrial development depends. Actually, knowing a good deal about the Native population in this country, I do not know how we could have thought it would be otherwise on the policy we have pursued. I do not know how we could have imagined it would be otherwise. Today the outstanding feature common to all sections of our Native population is poverty. Last year the Right Hon. the Prime Minister appointed a Committee to investigate the conditions of urban Africans, because these conditions were beginning to create a very considerable amount of anxiety in themselves. That Committee functioned under the chairmanship of Mr. Smit, the Secretary for Native Affairs, and included a number of heads of our Civil Service. It begins its report in this way. (Incidentally, the intention of the enquiry was to find out what assistance could be given to the urban Native population to improve their standard of living other than increasing their wages)—

The Committee goes on from that preliminary to consider every aspect of Native life in the towns. They deal with health; they deal with housing; they deal with transport; they deal with nutrition and with labour conditions. When they have dealt with all these, they turn to the social side of things, and here they say—

I may just say there that in every single section of the report, the Commissioners come back to the same problem. They say “our problem is to find how you can help a native population who are not in a position to help themselves, because they cannot buy the most elementary of social services. They cannot buy the cheapest houses we can put up; they cannot buy hygienic conditions of life; they cannot buy the food they require. So the Commission says—

And then, sir, having shown that that is the condition of the urban Native population, do they hold out any hope that that position will be rehabilitated by assistance from the rural population? No, sir. They turn to the rural side, which was not in their terms of reference, but which they are forced to deal with in one respect. We laid down a few years ago as a regulation that where destitute native children are discovered in towns, instead of a grant being made to them under the ordinary mother’s grant provision, in the first instance an effort should be made to send the children, so destitute, back to some native kraal, wherever a guardian or a person with legal responsibility under native law can be made to bear the burden. The Committee comes to this question, and it says—

Now, sir, here is the foundation on which we have to plan, if we are in fact going to plan the next stage in our industrial development, the stage on which the whole future of the European population depends. But, I return to my contention that these conditions of poverty, of low purchasing power and of low productive capacity, are the natural results of the policy that we have pursued, and that if we continue to pursue that policy, we are only going to aggravate the position until it will be impossible to retrace our steps and to build up our secondary industry on our home market. That is my contention, sir. I began by saying that the imposition on the whole country of the 1913 Land Act principle, the final imposition of the Land Segregation by the 1936 Act, was to make it impossible for the Reserves to support on any sort of basis of efficiency, even at the lowest, their present Native population. But the farms do not provide an alternative means of livelihood. Under the present economic system, they cannot do much more than they are’ doing for the rural Native population. We are prepared to accept that, sir, that, if the farmers are to retain their present numbers of employees, they cannot do much more for them than they are doing. In the circumstances, towns have naturally drawn the Native labour forces; but not in such a way as to provide them with a satisfactory basis of living. The towns have not themselves created the purchasing power that would have helped the rural areas to rehabilitate themselves. They have been helping to exploit their labour force as a labour force instead of seeing it as a consuming market, and they have been enabled and encouraged to do this by the continuance of these laws and regulations which try to prevent the Natives from going into town, and when they do get into town, deprive them of any sort of bargaining power. The streams of people from the Reserves and from the farms going into the towns to eke out their livelihood definitely tend to depress the standard of the people in the towns, and the people who are divorced from the Reserves and the farms have been given no protection by the Government. The Native worker who must seek his livelihood in the towns can only do so if he gets a permit. When he gets a permit he has to go looking for work; when he gets work he is in competition with people who have other sources of livelihood, and he is not allowed to combine to use his power, he is not allowed to use the weapon which labour has everywhere forged for itself, the weapon of collective bargaining. He is handicapped first of all under the provisions of the Master and Servants Act, and then he is deprived of his right to bargain for his wage conditions. He is left outside the ordinary channels of constitutional negotiation. And it is only in recent times that Wage Board Regulation has begun to give him a little bit of an advantage, but the advantage that he has been given here is not nearly enough to help to turn back the stream of untrained labour from the country and stabilise the town labour force. At present wages as regulated by the Wage Board are still at a level where it is quite unnecessary for the employer to select his labour. Any employer who can employ a man at 18s. per week as the Railways do in Johannesburg, or even at 25s. per week as the Johannesburg Municipality does, does not need to do much selection of his labour force on the basis of efficiency. The man who comes from outside is just as good a worker on that level as the man who lives in the town, and therefore the assistance against competition which might be given to the urban Native labour force by the establishment of a reasonable wage has been denied to him. Now, up to this point, industry has been able to build itself up on a native population which in its eyes has been purely a labour force and not a consuming force. It has been able to do that and reach the present level without considering its labour force as other than a labour force. But the possibilities of that situation have now come to an end, and if industry is to meet the new demands now being made on it, it must change its approach to the native population and begin to view it as a consuming market. We shall all have to recognise that the native population which has gone into the towns has gone into the towns for its benefit and for ours, that the two are inextricably linked. We shall have to cease viewing it merely as a labour force in competition with the European in the labour market and see it as the consuming force on which the expansion of the European labour market depends; we shall have to begin to remove the obstacles we have put in the way of the development of the Native labour population. We must remove all these obstacles which make the improvement of the position of the Native labour force impossible; which make it impossible for Native workers to get a decent wage. As this House knows, the Native population in the towns is refused every one of the alternative channels open to the Europeans through which they may build up their economic standards. They have been refused trading rights. The Native has been refused the right to build his own house in the location, he is refused all those property rights on which he might build up security for himself, he is refused all those rights on which a stable population is based. Now, we can turn back that tide of destruction which has blocked the advance of the Native, and we must turn it back if we are going to have the expansion which we need, but we must turn it back very soon if at all. I say that advisedly, and I say it not only on the strength of my personal experience which has been most depressing in the last few years, but I say on the strength of all these recent reports which we have before us. We have always held in South Africa that our Native labour force is a permanent thing, that we would always have it to manipulate as we need it. I also believed that that was the case. I have often written and spoken on those lines. I have held that the experience of other countries in which European settlement has been established alongside aboriginal races could not be repeated in South Africa because our Native population is too large and too virile—too large and too virile for the experience of America with the Red Indians, to be repeated here. Well, these last few years have taught us that many other things that have happened elsewhere and we thought could not happen here are, in fact, likely to happen here, and this is one of them. I have come to the conclusion that our earlier assumption in this matter, as so many others were, were founded on insufficennt knowledge. I am not trying to scare the House, but my conclusions are based on scientific evidence, and those conclusions are that if we do not build up our Native population soon we shall have no Native population to build up, and that the sort of thing which has happened elsewhere where primitive and industrialised peoples have come into contact, may happen here. Today the ravages of malnutrition and disease are so widespread that they threaten the whole foundation of South African society. Now, I do not expect the House to take my opinion on this matter. Whenever the House finds it impossible to answer any of my arguments, they just say they don’t believe them. I want to make this statement with the support of scientific investigations which we have just had. The Industrial and Agricultural Requirements Commission, after pointing out the weakness of our consuming market, states—

But the Committee which went into the condition of urban Natives goes much further, and talking about the incidence of venereal diseases says—

The Committee further points out that at the present time, in Durban alone, three Natives die every day from tuberculosis. Now we are all too familiar in South Africa with the idea that we have enormous death rates among the Native population. We tend to take it for granted. Of course, we cannot compute these rates accurately because the Government has consistently refused to meet the problems of establishing a complete registration of Native births and deaths in spite of every request from those who are concerned about the future health conditions of the country. That perhaps makes us take the facts less seriously than we should. But we also tend to make the general assumption that a high death rate simply means that you kill off all the weak and that you are left with the strong. Well, that may be true in tribal society, but the very opposite is true in industrial society. If you have a high death rate in industrial society you have a high morbidity rate also. A high death rate in such a society merely means that you are going to have a general deterioration of your whole population. And that is what is happening here; and unless we stem the tide it will be no use our talking about improving conditions later on. On the economic side, I think the issue before the country is perfectly plain. It has been set out in no hesitant terms by both these Commissions and now the Social and Economic Planning Council has come along and emphasised the findings of these other bodies. It says that this matter is urgent. I have now dealt with the one side of the question, but what about the Native side of the situation? What about the human side of the situation? What about the position from the Native point of view? On the human side, I can assure the House that the Native population is all too alive to the position. It is all too alive to the disabilities of its own position. The Native population feel desperately the weakness, the economic weakness, of their own situation. They are deeply concerned with their struggle to live, and they find it a more and more discouraging struggle. The strikes in Johannesburg and on the Reef are in my opinion evidence of the fact that there is still life in the people. I think it is quite a hopeful sign in that sense. Of course, these occurrences do distress one, but whatever the Opposition may say, whatever political capital they make out of it, these strikes are essentially the reflection of the growth of economic maladjustment. That is their foundation. Anything else is merely subsidiary and contingent. If you create grievances by serious social maladjustments you must not be surprised if anyone who has a down on you starts fishing in troubled waters. That is a lesson which South Africa has to learn. But from the point of view of the Native population these strikes show that the people are still prepared to put up a struggle for their own existence. But it is not wise to strain that situation too far. In the long run we shall have a serious deterioration of the Native population if we do not do something to build up their physical and economic situation. We shall have a great deal of trouble which we do not want, and cannot afford. I know that hon. members on this side of the House—the Opposition benches—will say that we here are responsible for this sort of thing.

You know you are.

They have said it time and again. They say these people would never have thought of their disabilities had we not told them about them. Of all the ostrich like attitudes, that is about the most complete I have ever come across. I can remember the days when I was not in a position to talk about these things as I can do now—I can think of the early days of my connection with Native affairs, when I heard Native leaders tell the story long before any of us here were in the fight for social justice. I learnt the case from them, not they from me. If you do not give people the right sort of education, they will get the wrong sort. Learning is in the air, experience is in the air, people get it from the circumstances in which they live, and if they get it with an attitude of hostility to society, society has only itself to blame. Now, sir, I consider this House should be forced to go and listen to the debates of the Natives Representative Council. I have always thought that it was a pity the Government would not let the Natives Representative Council sit in Cape Town, somewhere in the vicinity of this House while the Parliamentary Session was in progress, because I think it would be a first class education to members of Parliament if they were to go and listen to the speeches made there. Then they would know the sort of dangers which they have to face. Just to show what is happening I am going to read to the House part of a speech which was made by Dr. John Dube in reply to an address by the Minister of Native Affairs when he opened the proceedings of the last Council. The subject is the Atlantic Charter. Now, I have not addressed any meeting of Natives on the Atlantic Charter—none the less the Natives have heard all about it. Incidentally this matter was raised in the Minister’s address and the member given the job of replying to the address said this—

Now, that is the challenge by the Native population to us at this particular point in their and our history. One last remark at this point. The Native population is becoming increasingly distressed by its inability to maintain its families on the basis of its life. The people are not refusing to work, they want to be employed; they are not refusing to work, they only ask to be able to earn enough to keep their families together. If we refuse them these things we are going to have to pay the price, and the price which we shall have to pay will be aggravated seriously by one of the worst features of the Native situation today, which is the disintegration of family discipline. I have listened on various occasions during the last two or three years to the hon. member for Beaufort West (Mr. Louw) trying to make our blood curdle with the wickedness of the Communist regime which does not believe in family life. The more I have listened to him the more amazed I have become that the hon. member for Beaufort West dare to put up that argument in this House because I defy the hon. member or anyone else in this House to prove that any civilised country in our time has done more to destroy family ties and to destroy family life than we have done in South Africa. Today family life is being destroyed everywhere among our Native population by the operation of the laws by which we govern them. I have already quoted the fact that the Native men go out to the mining industry for long stretches, and that they are spearated from their wives and families, except for short intervals in their lives. Men are also taken to the coal mines, the sugar estates and to every part of the industrial field. They are drawn there without their families, on the assumption that they should have no permanent existence in the towns; and the result is that the foundations of family life are continually and insidiously destroyed, and with those foundations the discipline on which we should bank to keep our Native population stable. Now if you destroy family discipline, you destroy all discipline. On this whole subject of the disintegration of the family and its effects let me again quote from the Inter-departmental Committee on Urban Conditions. In the section on Health from which I have already quoted, they write—

But right at the beginning of their Report they say—

Now, I want to come to my next point. I have shown the position as I see it. I have tried to show the House that the character of the Native population is in our hands. I have tried to show the House that our future as Europeans depends on our ability to change the present character of that population, to build up the population instead of destroying it as we are doing at present. I now want to turn to some practical propositions. I am not coming forward this morning with any revolutionary scheme of change. I am not proposing that we should have an immediate elaborate change of the social structure of South Africa. That would be a foolish proposition, unhistorical and unsocial. But what I want to ask the House to do is to change its conception of the direction in which it is pressing the Native people, to bring its conception into line with the direction dictated by our economic needs and our common interests. What I am asking them to face is simply the implication of one of the recommendations made by the Social and Economic Planning Council, which goes to the whole root of the matter. The Council in its recent report says—

That is the crux of the matter, that we shall integrate the life of our Native population into the life of our whole community. It has been disintegrated piecemeal. And the very effect of the disabilities which have been created has been to destroy the whole foundation. Now, I want to ask the House to abandon the conception that the Native population is something entirely different. I want to ask hon. members to realise that economically it is part of the whole community, the well-being of which means the well-being of every section. It will mean, of course, the changing of certain of our laws. It will mean the abandonment of the principle of territorial segregation in its widest sense. It will mean the abandonment of the idea that the Native areas are the home, the only home, of the Native population of this country. It will mean that we shall set ourselves to build up decent homes for as many of the people in these Reserves as the Reserves can carry and that we must face the fact that the rest of the population must find its livelihood elsewhere in dependance on the general economic resources of the country. That is what we shall have to do if we accept this proposition. Now it will also mean the abandonment of the idea that the Native has no claim to be in the town, that he does not belong to the town. That, as I have tried to show, is in any case a purely fictitious idea. The Native in the town does belong to the town; he has no other home; he must live there; and we must face that fact and enable him to live a decent life in the town, and to become a stable part of the town, with the means of building up security for his family, which will bring in its train stability and respect for the organisation of the town. Industry can no longer do with migratory untrained labour. Dr. Van der Bijl has reminded us again of that recently in his addresses to the Industrial Development Corporation. He has insisted that the labour force of industry must be a stable force with growing demands and he is himself engaged in a considerable experiment in Vereeniging in the building up of such a force. Let us also be realistic; let us see that the Native has a claim in the town, and let us begin there now by a proposition which has already achieved widespread support throughout the country, that the Native location shall not be the only home of the Native, but that those who have established themselves in the towns, shall be able to buy homes in the towns.

Amongst Europeans?

In separate areas, if you like. The trouble is, sir, that every attempt we make to have the place of our Native population in our society reviewed objectively is always confused by emotional issues. The moment we try to see the needs of the people we are told on the one hand that they will cost too much or that we are out for social equality and are going to create all sorts of social problems. I wish we could get free of these arguments from emotion and prejudice which are simply destroying our ability to see and deal with the problems of building a sound economic system in South Africa. Money, of course, we must have, but as for equality, that is a question that doesn’t arise, so we do not talk about equality but about opportunity. Now if you give the Native people the opportunity to hold up and maintain their self-respect, they do not want mixture. All that they do ask is that instead of everlastingly having to live in Native locations, there shall at least be Native villages where they can build up their life as an essential and stable part of the town, and that seems to me to be a most reasonable proposition, against which our friends on this side of the House cannot put forward any valid arguments. These, sir, are the things which I think have to be faced. But there is one matter that should be faced at once, that is the abandonment here and now of the priniciple of financial segregation. That, to my mind, is a most iniquitous and hopeless principle and must go. It was, of course, intended as a concession to the Native population; it was supposed to be a quid pro quo for segregation. It was intended as a benefit. The Natives were told that if they were shut away in areas by themselves, any money derived from Native sources would be spent on themselves; but we know, sir, that the country has assumed that only what is derived from the Native population themselves, shall be spent on them. In the urban areas that has led to the self-balancing Native revenue account. Now the Interdepartmental Committee on Urban Conditions has seen for itself that wherever the municipal self-balancing account exists, you cannot have those services that society has itself laid down as essential wherever people are gathered together if there is to be health and decency. In their report they come back to this time and again. Even in the large municipalities, the self-balancing Native revenue account will not maintain the standard of living in one part of the town that is regarded as essential in other parts of the town. Now if that is the case in the large municipalities, sir, the position in the small municipalities is quite hopeless. This justifies my contention that the principle of a separate Native Revenue Account should be abolished and the Native people in the towns regarded as the working class of the town whose well-being is both the concern and the responsibility of the town as a whole. The same thing applies to the Native Trust Account. The Native Trust Account has to cover both education and general development. This Account gets £340,000 from the Government specifically for education; for the rest it gets rents from land and fees derived from rural areas. We shall be told that the Government has given £5,000,000 most of which has been spent on the purchase of land for Natives, and will give the additional money necessary to complete the purchase planned under the Land Act, but the interest which comes from that expenditure is nothing like what it should be in view of the prices that have been paid for the land purchased. That is incidental, but the fact is that out of those revenues, the Native Affairs Department has got to finance Native education and Native development. Is it surprising, in the circumstances, sir, that the Native reserves, in spite of what is being done for them, are steadily sinking down into desert conditions, and that still approximately only one-third of Native children of school age are in school. That is why I say we must abandon now the priniciple of financial segregation, and accept the responsibility of building up our Native population as an essential factor in the well-being of this country. We must prepare to spend the money necessary to do this. It must not be possible for the sort of thing that is reported by the Inter-Departmental Committee in its section on educational and vocational training ever to happen again. Here we are faced with industrialisation demanding higher productivity, which can only be built up on better education as well as better nutrition, and a small and simple scheme, a small beginning, planned by the Native Affairs Department and presented to the Treasury, is turned down for lack of funds. Thus we cannot even get the beginnings of improvement, because that is going to involve demands on the Treasury. The same thing is happening with Native old age pensions; the same thing is happening with Native disability pensions; the Natives cannot pay them themselves and the Treasury is not willing to do so. That is an impossible situation and that is why I say we must see this whole question of the well-being of the Native population as a national responsibility and abandon the principle of financial segregation. I think I have said most of what I wanted to say, sir. I have covered a large field and taken a long time, I am afraid, but it happens to be urgently important for the future of South Africa. Now I want to make a final appeal—I am not much prone to making appeals because I do not think they are much good—but it is rumoured about the House and about the country generally, that if we have a General Election this year, we are going to have another Black Manifesto election. I do sincerely trust that that will not happen. If it does, I think we are entitled to say that it will be a national crime; I repeat it will be a national crime. Our Native population is one of our greatest assets. We have used it as badly as we have used our land, and a great many of our other national assets, but the Native population is a human asset and it has feelings; unlike the land, it does react actively to its treatment. It will be a great mistake to make that particular asset feel that it not only has no status in the country, but that it is regarded as an enemy by the very people whose interests are bound up with its well-being. I think it would be a tragic thing if at this time, when the whole of our future depends on what we are going to do with one of our national assets, that we should turn our backs on the Natives and make enemies of them instead of friends. I trust that this course will not be chosen, and that the Election will be fought on an issue that will have constructive purposes and not destructive ones in view.

I second. Since members who sit on these benches have been in this House, we have at various times asked for certain types of concessions on behalf of the people we represent. We have asked for higher wages, lower taxation, improved administration, and so forth. In this motion, as I think is clear from the speech of the hon. member for Cape, Eastern (Mrs. Ballinger), we are not asking for anything specific; we are putting forward the request to both sides of the House that this matter should engage the attention of the House. We are asking the Government in addition to review the direction in which Native policy has been proceeding. At the time when the foundation stones of the present Native policy were being laid, in the 1936 Land Act, the Native Laws Amendment Act, etc., some of us who are sitting in this House now and also in Another Place, drew attention to the fact that these Acts must act to the detriment of all sections of the people. It is our concontention, sir, that everything that has happened since has borne out those warnings. We are asking now for a reconsideration of the policy which was embodied in those Acts. There have been in recent years a number of encouraging signs in this country to those of us who hold this point of view. Speeches from those in high places, a different tendency in the Press, a more hopeful reaction from the man in the street, and also a tendency on the part of those who are traditionally supposed to be opposed to the Native people—all these reflect a change in thought. We want to point out that it is no use realising the extent to which the European population depends on the African population; it is no use recognising the necessity to increase Native purchasing power and to increase Native social services and Native education; it is no good thinking along those lines unless the implications of those thoughts for the future of this country are realised. What has to be realised is that these humanitarian feelings can never take concrete shape in a concrete policy until it is also realised that it is necessary to review the policy of segregation. That is our chief object in bringing this forward at the present time. The segregation policy, as has already been pointed out, is to a large extent a misnomer; it does not mean and never has meant a separation between black and white in this country. Therefore when we talk of a segregation policy, we are not attacking the fact that black and white live together in this country—and it will never be otherwise. What we are attacking is the terms upon which they live together. There are the following main features of the policy of segregation as I see it. There is urban segregation, rural segregation, industrial or occupational segregation, financial segregation. These are the main manifestations of the policy, and I want to review very briefly the actual effects their application is having in each of these fields I have mentioned. Let me first deal with the rural policy: its sheet anchor is the Land Act of 1913, as amended by the Land Act of 1936. I am going to assume for the purpose of the remarks that I am going to make in connection with the Land Act, that the 7,250,000 morgen of land, the purchase of which is provided for, have in fact been purchased. We know as a matter of fact that it has not, but I will assume that it is so.

When the House adjourned I was concerned in making the point that there has undoubtedly been a movement in this country in favour of securing greater purchasing power for the Native population and making them a more efficient labour force, but without realisation of the inconsistency of these primary objectives with the existing policy of segregation as we have experienced it in the past. Now, I said that I would examine the effects of that policy, and show, if I could, that these effects are quite inevitable, in relation to these four matters—rural segregation, urban segregation, occupational or industrial and finally, financial segregation, and I commence with rural segregation. The land Acts have guaranteed occupation to the Native population of approximately—assuming all the land were obtained under the 1936 Act—54,000 square miles—approximately 54,000 square miles has been allotted to the Native population and the balance of over 400,000 square miles to other sections of the population. Now, I am aware that the discrepancy of these figures as between the land which has been allotted to the Native population and the rest of the community is not as large as it might appear because the quality of the land, the rainfall and other factors, have to be taken into consideration. But one fact, I think, must be universally admitted, and that is that provision has only been made for half the Native population and another fact is this, that on the basis of present methods of agriculture, the 3,500,000 of the Native population who have some anchorage in the Reserves, cannot hope to make a living on the land, but that the vast bulk, probably the total male population, is dependent on wage earning in areas outside the Reserves. Perhaps I may elaborate on certain features. Of that 3,500,000 who have some kind of anchorage in the Native Reserves, it is probably not exaggerating to say that anything from one-half to one-third must be completely landless. A high officer in the Native Affairs Department who has now retired once told me that from his experience he thought the majority of the Native population of the Reserves are landless. Generally speaking, they are badly overcrowded. That is admitted in every report of the Native Affairs Departement. I admit that overcrowding is relative, it must be judged in relation to agricultural methods, but the methods of agriculture cannot change under existing conditions—without proper training, without development, without the provision of storage facilities and without the provision of scientific research and marketing facilities, but up to now this country has shewn no evidence of being prepared to provide those facilities. I shall return to that at a later stage. What I want to emphasise is that under existing conditions the vast bulk of the Native population in the Native areas are incapable of making a living there. They have to go out for at least—on an average—one-half of their total time, and that aggravates the difficulties, the economic difficulties, in those areas, by imposing a steady strain on their labour power. No community in rural areas anywhere in the world, even with much more highly developed people, I contend, could stand the degree of strain on their labour force which the objective conditions in the Native areas impose on the people there. Now, another aspect of rural segregation concerns the farm workers, and with regard to them they can never, generally speaking, hope to find anchorage in the Native areas. They can only be admitted to the towns on the same conditions as the Reserve population, that is temporarily, in the vast majority of cases, for the purpose of casual employment. The conditions of poverty or lack of poverty vary tremendously. But we have to face the position as it presents itself today. The Farm Labour Commission went into this whole question of farm labour and they found the same as we find that their purchasing power is very low indeed. Finally, I come to the one million of the African population who are permanently in the towns and who form the nucleus of an ordinary industrial working class. The hon. member for Cape, Eastern, said something about the disabilities under which they labour. They cannot own land, they may only lease land from the local authorities. Their movement is restricted by the Urban Areas Act from one area to another. On the whole I don’t think it unfair to say that their housing facilities are very primitive indeed, and that local authorities, tending as they do, to look on the African in the town as a temporary phenomenon, as a person whose real home is outside, has been inclined to neglect this section of the community. Their trading facilities are very limited indeed—absent altogether outside the urban locations, and open to a very small extent inside those locations. They are outside the provisions of the ordinary industrial legislation. Their educational and training facilities are inadequate. They are a section of the population who are discriminated against to the extent of quite paralysing their bargaining power. But perhaps the worst disability under which they suffer is not directly imposed in this way, their not being able to trade, not being able to invest their savings except through certain Government schemes, etc. The worst disability seems to me the constant dilution of the market in which they have to sell their labour, by the casual workers from the Reserves being forced to go into the urban areas due to the conditions which I have outlined under rural segregation. The Wage Board admittedly has of recent years made some sort of an attempt to establish minimum standards for the urban African industrial worker. It is not enforced on a racial basis. Rightly the industrial legislation in this country is supposed to lay down wages not on the basis of race but of work done. However, the fact remains that the vast bulk of the unskilled industrial workers are Natives and the Board in trying to lay down these standards has found itself able to lay down only a minimum far below the admittedly minimum cost of living for a Native family. Why is that so? It is so, I contend, because industry in the towns has tended to base itself not on the labour of workers with families to support in the towns, but on this casual and inefficient labour which has been drawn from the rural areas and whose families in the rural areas have some sort of, though inadequate, subsistence basis, and it is that factor which makes the urban population—which has recently been investigated by the Inter-Departmental Committee—such a difficult problem to deal with. I have largely covered the next aspect of segregation — the industrial one — in my remarks dealing with the conditions of the Native urban workers. I have dealt with their exclusion from the industrial laws, except the Wage Act, the educational discriminations, etc. Finally, and this perhaps is the most serious aspect of segregation, there is the financial position. There seems to be a theory both in national finance and also in local finance, that generally the public money which is required for social services and pension schemes for African people, must be limited to the amount which that community contributes in direct taxation. I must admit that there are exceptions to that principle. There is the lump sum—some £380,000—for Native education, the provisions for Native sub-economic housing schemes, and also for their participation in poor relief, which comes under the Social Welfare Department—these are the exceptions to that principle. Apart from these comparatively minor exceptions the general principle is that expenditure on social services and also education must be met from the proceeds of the direct taxation imposed on the Natives. And that also tends to perpetuate the low standard of living and the low standard of the purchasing power of the African, because it imposes on workers whose wages are very low the necessity of carrying the burden of the unemployed, the aged and other categories of the community which ordinary civilised States provide for. Now, these are the general aspects of the segregation policy which, so long as it is pursued, must lead to those conditions of chronic poverty, low purchasing power and inefficient labour which together make this whole subject so very difficult. I want to consider now briefly the effects of this policy on the various categories of the European community, more particularly from the point of view of their prospects for the future. There is no doubt that from a short range point of view the basing of industry on inefficient, low paid casual labour has to some extent benefited the gold mining industry. The mining industry has built itself up on that basis, and it has not had to worry too much about the social implications of such a policy because the mining industry is not dependent on the local market to dispose of its products, but it sends everything, it sends its total output, out of the country to overseas markets, and therefore from the “get rich quick” point of view the mining industry can make out a case. But that is purely from an economic point of view, it does not take into account the social effects on the worker concerned. But I am considering this now from the point of view of the European community. The mining industry is exceptional. And I say it is an exception with due regard to the position of the agricultural industry, of the farmers. There is no doubt that farming has based itself upon a standard of wages which was set half a century ago, and farm rates of wages, and farming labour conditions, as the Native Economic Commission has told us, are very much set by custom and not by ordinary economic factors. But my contention in this connection is that that policy cannot go on indefinitely. My contention is that it is breaking down as evidenced by the chronic shortage of labour on farms to which the attention of this House is always being drawn. And it is further evidenced by the necessity of subsidising the farming community due to the lack or the poverty of the internal market, which fact goes to show that cheap labour is no compensation for the absence of markets. The farming community requires markets more than anything else. I pass now to consider the bearing of this policy on secondary industries—I mean apart from the gold mining industry. They perhaps have less to gain than any other interests. Industrial interests have less than any other to gain in the long run from this policy, due to the fact that they consist to a large extent of protected industries. Pressure is brought to bear on secondary industry in this country to employ a much higher proportion of European workers than is done in the farming industry or in mining. The secondary industrialist is thus to some extent, though not entirely, deprived of what are conceived to be the short term benefits of cheap labour. On the other hand, what they need most to develop is a strong internal market. Industry, apart from the gold mining industry, will never be able to compete in the world market, it depends for its development on the growth of the internal market and also on the efficiency of its labour force. It is in this particular respect that the casual labour basis is so pernicious. The man who is half the time a peasant and half the time an industrial worker cannot develop into an efficient worker. Great industrial countries overseas have been built up on generations of industrial workers. The successful agricultural countries have been built up on generations of agricultural experience. And to turn—as this policy must turn—almost the entire Native population, on whose labour the whole of the economic policy depends, into casual temporary labour cannot lead to the development of a tradition of industrial efficiency and discipline such as is required by the economic life of this country. Finally, in my analysis of the effect of the policy on the white communitv. I want to turn to the European working classes. On the one hand, as pointed out by the Economic and Wages Commission 17 years ago, it must be admitted that the extraordinary high standard of skilled wages in this country is dependent on the abundance of low paid black labour. On the other hand, in order that that standard of skilled wages can be maintained, it is necessary to employ a very high proportion of black workers, low paid, unskilled Native workers, to European workers. And there have been increasing signs in recent years that that proportion cannot be indefinitely maintained. For one thing, the European population has two sources of increase—on the one hand ordinary reproduction, and on the other hand, immigration. The Native population can rely on reproduction only. And I want to point in this respect what the hon. member for Cape, Eastern, said this morning about the effect of the low standard of wages and the primitive living conditions which this policy has imposed on the African workers; actually we are convinced, and this is a matter of fact, that this constitutes a serious threat to the existence of the Native population. In some of these few areas where accurate statistics of births and deaths are kept—such as in East London—we know that half the number of Native babies who are born in any one year die before they reach the age of one year. And I can give examples of other towns where the same thing happens. There is no reason to think that the position is any better in the countryside, at all events in the Native Reserves, and so long as that process continues, the possibility of maintaining a sufficient proportion of Native workers to Europeans to secure a high skilled wage gets less and less. In any event, the phenomenon of the poor white in this country indicates that the pursuance of this policy narrows the maket for skilled labour in this country. The Van Eck Commission made the startling statement that of the European workers coming on to the labour market each year, only one quarter have received any industrial training. If the market for skilled labour was being maintained I have no doubt that adequate numbers would be forthcoming, but it is not being maintained. Now, what is the alternative policy? We are not suggesting a sudden reversal of policy; we are not suggesting any immediate drastic steps. The present position has grown up under the influence of certain conditions which have been imposed by legislation and by policy. What we are suggesting is that that tendency, that trend of policy, should be altered, that the direction should be altered altogether, and I wish here to make certain suggestions as to the direction in which the alterations should take place. I shall begin, as I began when examining the conditions of the Native population, with the Native Reserves. The objective in the Native Reserves should be to create such stable agricultural conditions as will produce sufficient food for the requirements of the population, and sufficient surplus in order to provide them with the cash which they require to meet their needs and obligations. Now what would that involve? The first thing would be the abandonment of the principle of financial segregation. There is ample evidence of the deterioration of agricultural conditions in the Reserves, soil erosion, over-stocking and other things, and a great amount of capital expenditure is necessary on a scale sufficient to check soil erosion, to create irrigation works and to establish storage facilities wherever possible. In fact, to create conditions under which a peasant population can live. The difficulty of agriculture all over the world has been starvation of capital facilities. That has been met in this country to some extent in the case of the European by the establishment of the Land Bank. In the case of the Native population, it would have to be met by other methods, but the necessary financial facilities of a capital nature must be forthcoming. Now the total revenues of the Native Trust available, after provision for education, which is the main charge upon them for a general development, I think I am right in saying, is about £500,000. There are, so far as I know, no loan facilities for development except the money that has been set aside for the purchase of land, none of which goes into the development of the land itself, but is all applied in the form of the purchasing price, and a very high price too, paid to the owners of the land. The point I am concerned to make here is that what money has been voted from loan funds has been for the purpose of land purchase, and was not intended to provide essential capital facilities which any agricultural community must require. The chief agricultural officer in the Transkei once told me that it would take £3,500,000 to finance the fencing of the Transkei alone, and how is that going to be accumulated out of a revenue such as is at present at the disposal of the Native Trust? That obviously must be capital expenditure. I am aware of the efforts that the Native Affairs Department has been making with the facilities at its disposal, and I am not impugning for one moment the attempt that they have made to develop the Native Reserves. What I am saying is that they have been set a task which no man with the best will in the world, could fulfil, if the object is to develop in the Native Reserves an independent Native peasantry. I remember an occasion on which I was present at discussions in the Native Representative Council constituted under the 1936 Representation of Natives Act, and one of the members there, I cannot for the moment remember which one, during the discussion of the agricultural estimates, put forward the contention that it was the policy of the Trust in the Transvaal to allot to each man who could get land with ten acres, and grazing for about five head of cattle, and he said that that was insufficient to enable him to make a living. The agricultural officer present made the only reply to that that he could make, seeing that he was an executive officer parrying out a policy laid down for him. He said it was not the object of this land settlement to enable a man to make a living, but the object of it was that he should have somewhere where his family could live, and where they could grow some food, whilst he was away at work. I say that was the only answer this officer could have given, and that, in a nutshell, is the policy which obtains throughout the Reserves, with the result that there is this constant migration of casual labour between the urban areas and the Reserves, which seems to me to indicate a fundamental fault in our administration of Native policy. What is wanted is a comprehensive survey of all these areas, and the necessary research into fertilisers, seed requirements, etc. On the basis of that survey capital equipment should be provided, together with credit facilities for the purchase of seed, fertiliser, etc., and proper provision should be made for marketing and storage. That is a long term policy. The old financial idea that you can only get money from one to spend on another is something that I have criticised before. If as much money as has been spent for the purchase of these trust farms had been spent on the proper development of the Reserves I think very much more progress would have been made. I trust the Minister or anybody else in this House will not say in reply to our attack on segregation: “Do you want these people away from the Native Reserves?” That is not the point at all. We contend that the policy of developing the Native Reserves has not necessarily anything to do with the policy of segregation as we define it. The development of Native Reserves should be only one aspect of the land settlement policy of this country. Special measures are necessary, and will always be necessary to protect the weaker sections of the community economically, whatever race they belong to. [Time limit extended], I have dealt, then, with what is necessary in the Reserves. In the urban field the counterpart to the policy that I have suggested for the rural areas would be to attempt to build up a regular Native working class, not to discourage the settlement of the Native with his family in the towns, as is done at present. It will obviously be necessary to encourage to quite a large extent the migration of a large number of Native population from the reserves to the towns, and to give them the opportunity of securing suitable employment, to give them the right to purchase their homes, to do what work they are fitted for, and make what contribution they are able to the life of the community; and most important of all, in my opinion, they must be provided with that degree of education which historical experience has shown is necessary to allow them to take their place in industrial life. Then with regard to the Native population on European farms, the Van Eck Commission has told us already that there must be much greater economy in the use of labour than at the present time. And that, too, should be regarded as a question worthy of Government assistance. Sometimes members on these benches have been accused of being opposed to the subsidisation of the farming community. As a matter of fact, we have never opposed it. The condition of agriculture in every country in the world has been such in the last ten or twenty years as to make it necessary to subsidise agriculture, but what we have contended for is that subsidies should depend on the reorganisation of farming methods. These are the chief directions in which changes are required. These changes are inconsistent with the present Land Act, and they are certainly inconsistent with the Urban Areas Act. They are most inconsistent of all with the policy of financial segregation. They do not involve the mixing up of racial groups, and that is something which we have never given support to in any shape of form. I have said in this House before that provided a man is guaranteed employment at a living wage and has opportunity to do such work as he is fitted for, that is what we ask for, both for Europeans and Africans in this country. But if there is to be separation, that involves a certain price, and we have contended that it is fundamentally unjust to expect the Native population to bear the whole of that price. That is what the policy of segregation has meant up to the present time. Now, Mr. Speaker, I hope that the arguments that have been put forward in all sincerity from these benches today, will receive the serious consideration of this House, such as I contend they deserve. In any case, what we ask is that the principles that we have contended for should be examined on their merits. If there are any aspects of the policy which we have put forward which seem in any way to prejudice the European community of this country, we would be glad to have them pointed out. We ask that this motion, and the changes which it implies, should receive treatment on their merits, because our conviction, which we believe has been proved and is being proved more and more, is that the present policy of this country is inconsistent with the sound development of the life of the community of this country as a whole.

The hon. member for Cape Eastern (Mrs. Ballinger) is to be congratulated on her statement of the case which she has put forward today. The compliment which the House paid her of listening with rapt attention to every word of that statement was a unanimous tribute to the fine character of the hon. member’s appeal. At the same time, I cannot subscribe to the proposals that have been made in the course of this debate, because in certain respects to accept these proposals would invite dangers which would involve us in worse evils than those under which we are labouring today. A little while ago there was a discussion with regard to the action of the Government in registering trades unions, and I was one of those who found it necessary to utter a word of warning to indicate the grave dangers inseparable from a policy of entrusting to undisciplined Natives the responsibility of membership of a trades union whilst they are devoid of a sense of responsibility and almost barbarian in their outlook. The demand for a change of Native policy today is made by the hon. member for Cape Eastern, and she says that any revision of Native policy must be brought into line with industrial development, and to meet the aspirations of the Native population. This demand is made at a time when the country is concentrating on the war effort, and that being so, this matter must be treated with grave deliberation, there must be overwhelming justification for the revision which the hon. member desires if we are to embark upon it at this momentous time. The whole question of our Native policy is in itself a matter of considerable moment to the people of this country. It was this question that divided the Europeans in South Africa 100 years ago, and drove to the North the section that took part in the Great Trek. We have to remember, sir, that this is a thorny question which cannot be disposed of with any want of consideration or disregard for the interests of different sections in the Union. I think the hon. member has put forward a very strong case for the improvement of Native conditions, and her arguments have been well founded upon the reports and findings of various Commissions, which have investigated the economic and industrial side of Native development in this country. The demand that a new policy should be brought into line with industrial development would seem to rely for its basis upon recent happenings on the Reef and in Pretoria, and in this connection thirty strikes were mentioned. I want to say that if the Native population in the Union is to be changed with the idea largely of fostering urban industries without reference or consideration to other sections of the community, a great deal more consideration must be given to the matter. A large number of Natives become victims to the temptations of the urban areas, and have adopted a criminal career which makes them very bad citizens. I make no general charge against the Natives of not being a law-abiding people. I know from experience that in their tribal condition they have a good law-abiding sense, but I don’t blind myself to the fact that we possibly are to blame for the considerable portion of the criminal classes who are ready to take advantage of disturbances and exploit them for their own benefit. At the end of last Session I sounded a warning in this House against the increase of crime in Johannesburg and in Durban. A little while afterwards, a very able Native doctor in Johannesburg, Dr. Xuma, in the course of a lecture on Native crime, took me to task as though I had accused Natives of being a lawless community. I said nothing of the kind, and I wrote to the “Star” to correct that impression, pointing out that nobody could seriously deny that the warning given by me had been fully justified by events both in Johannesburg and Durban, where public outcry had led to the Department of Justice having to take special measures to protect the public from the nightly terror of assault, robbery, burglary, etc. Out of my long experience of Native administrative work in which I have had to restrain and guide excited and riotous Natives, I expressed the opinion that in times of stress masses of Natives are prone to indulge in rioting and disorder, and that often the worst characters among the Natives take control on such occasions. I concluded my letter with the following remark—

I observe from the report of the Inter-Departmental Committee on the social health and economic conditions of urban Natives that the Committee recommends that as an immediate step which can be taken without amendment of the law, Native trade unions should be registered, and afforded administrative recognition in accordance with rules agreed upon between the Department of Native Affairs and the Department of Labour. I venture to say, sir, that the frequency of strikes on the Witwatersrand has been due to that action. The recognition of Trade Unions today irrespective of their fitness to discharge the responsibility, has been largely to blame for the unfortunate incidents on the Rand.

They have not been recognised.

The hon. member says they have not been recognised, but I wish to refer him to the report of the Inter-Departmental Committee in which it is stated that no less than 33 of such Trade Unions exist in Johannesburg, and others in Cape Town, Durban, Port Elizabeth and East London are already functioning. I say, sir, that the time has arrived for a frank discussion of this matter. The Departmental Committee in question admits that it was pressed by various Trade Unions to recommend recognition of Native Trade Unions. I wish to point out, sir, that this is a far wider question than one upon which the advice of European Trade Unions ought to be accepted without reference to other sections of the community. Apparently, the Inter-Departmental Committee was prepared to act under that pressure, and to make the recommendation that they embodied in their report, and I consider, sir, that that Committee neglected its duty in not consulting other important interests in regard to the advisability or otherwise of recommending such a step. The terms of reference to that Committee were very misleading, so misleading that the ordinary simple farmer would never have dreamed that the question of Native Trade Unions was to have been considered by that Committee. The terms of reference are worded in such a way as merely to indicate that the duty of the Committee was to explore possible ways, other than merely increasing wages, of improving the economic, social, and health conditions of Natives in urban areas. In other words, it must investigate what could be done to improve the general condition of Natives in urban areas. There was not a syllable in those terms of reference to indicate that the question of Trade Unions amongst Natives was a matter to be decided upon or to be the subject of a recommendation by that Committee. The Committee acted improperly in making such recommendations without having ascertained opinions from sections of the community vitally interested in this matter. It is true that the Committee consulted the Chamber of Mines, and that body did not hesitate to oppose the recommendation, in consequence of which it was recommended by the Committee that the mining industry should be excluded from this recommendation. The Committee made the comment that the Natives employed in the mining industry were well housed, well fed and physically well cared for. That, I think, is quite right. I think they are better treated on the whole as regards their food and their supervision, and the provision of a certain amount of welfare work than those employed by a private employer. I think if one were to quote the figures, which however I do not propose to do, relating to the deferred pay, shewing the large amount of money that is remitted to their homes by the mining Natives, everybody would be agreeably surprised at the large proportion of their earnings which are sent to their own families. That is a form of welfare work which is done by the mining industry merely as a means of encouraging thrift among the Natives, and encouraging them to provide properly for their own relatives. Now we come to the question of Native strikes. I was surprised the other day to see a document that had been issued in Natal through the Native Press under the name of one of the members of the Other Place—the Senate—declaring that he was in favour of Natives being given the right to strike. That hon. member has not had the wide experience that some of us have had in regard to Native strikes, or he would not so light-heartedly speak in favour of encouraging such strikes, because they may have results which he would be the very first to regret. I will read the hon. member’s letter, but in the meantime I want to read a letter which I received from a prominent Trade Unionist in Johannesburg on this very question, showing that the Trade Unions themselves are by no means unanimous in recommending the recognition of Trade Unions unless they are convinced that that course is going to achieve the purpose which is sought to be served. I am at one with these Trade Unions in feeling that a great real can be done and ought to be done to improve the lot of the Natives championed by the hon. member for Cape Eastern. My case rests upon a considerable experience of what a Native strike means. When I wrote to the Johannesburg newspaper, my letter was read by a prominent Trade Unionist, who wrote to me in these terms—

I wrote very fully to my correspondent.

Give us his name.

I prefer not to mention his name in the House, but I will give it to the hon. member for Cape Eastern if she wishes to verify the genuiness of the letter. In dealing with the matter I expressed the opinion that the advancement of the Native workers in the larger towns since the first establishment of the gold mining industry, had been quite considerable, but their capacity to be entrusted with the responsibility of membership of a trades union has not grown in proportion to the numbers who have been employed in the several industries. I said it was a melancholy fact that criminal classes among the Natives had increased out of all proportion since the entry of the Native into industry. I have never known of a strike or mass organisation on behalf of Natives that has not been captured by the criminal element. I have never argued that the Natives as a people are criminally disposed, or lacking in a law-abiding sense. On the contrary, their own tribal government affords ample proof of their law-abiding traditions, but I should say that the influence of the criminal class among the urban Natives constantly prompts any mass meeting to resort to violence. In the course of my fairly long experience, I have been present at Native strikes when the least indiscretion on the part of the police or of those interested in ending the strike, would have led to bloodshed and serious loss of life. In the urban areas and the towns the persons like to suffer most would be the Natives themselves, but if we were to contemplate the extension of Native Trade Unions to areas sparsely inhabited by Europeans, namely, the farming areas of the Union, the Natives would be in the majority, and isolated farmers and their families would be so completely at the mercy of mobs and violent Natives that in course of time the farming industry would be brought to a standstill. These are views that I hold with regard to the establishment of Trade Unions in the towns of this country. On the other hand, I am not opposed at all to whatever action can be taken to improve the lot of the Natives in urban areas. I believe, sir, that welfare work such as is done on quite a big scale in many of the cotton mills in India, where the employees are not more advanced than are our Natives—I think less than 8 per cent. read or write—I think, sir, that that kind of work, that kind of welfare work for the time being would be a tremendous advantage. The letter which I received from the trades unionist of whom I have spoken, referred to the type of Native workers on the Rand, and he said—

Now, sir, we come to the question of the abolition of the Native pass regulations. If you will refer to reports of Committees that have reported on this matter, you will find that in most cases the Committees recommended that means of identification by registration should still be maintained even though the registration of contracts of service were no longer needed. Quite ten years ago in this House I imagined that the then Prime Minister, the late Gen. Hertzog, had agreed to a suggestion which I made that most of the irritating pass documents the Natives were obliged to carry, should be done away with. I suggested that as we were dealing with the Native Taxation Act which required the Native to produce proof that he had paid his taxes, the time had arrived that he should be allowed to use that document as his passport, that the production of that document to which his photograph could be attached was what we should aim at. At that time I imagined I had made an impression on the Prime Minister and that he was distinctly in favour of adopting that course. I find that the Departmental Committeee has made a recommendation that seems to me to be neither fish nor red herring. They made a recommendation with regard to the Pass Laws that would be impossible for anybody to carry out. The Committee stated this—

Can you imagine a Native imparting to the police or to an official, or indicating to him, that he is about to commit a crime? I say it is laughable. But let me read the terms of a circular in which this decision was communicated to the public on the 5th May, 1942. If this were to apply to a mass of Natives, it would be a different thing. If, in certain circumstances, when a crime had been committed, the police were free to call upon Natives to produce their passes in a certain area, there might be some object in an instruction of that kind. But what do they say in imparting this instruction to the local authorities? They make it applicable to individuals. No Native shall be called upon to produce his pass unless he has committed or is about to commit a crime; that is how the circular reads. The Minister of Justice issued a circular letter on the 5th May, 1942, directing that as far as Johannesburg, the Witwatersrand area, Durban, Pretoria, Pietermaritzburg, Kimberley and Bloemfontein are concerned, no pass or document required by various regulations to be carried, should be demanded from any Native, or his arrest effected, or his prosecution instituted, except in circumstances where there are reasonable grounds for believing that the Native concerned has committed or is about to commit some other offence of sufficient gravity to justify such action. Well, sir, that reduces the Pass Regulations to absurdity, and it argues a simplicity on the part of the Native which he does not possess. You can scarcely expect the Native to let you know that he is about to commit a crime or has committed one. But these are the only cases in which the police can still call upon the Native to produce his pass. Short of that combination of circumstances, he is not allowed to call upon the Native to produce his pass.

Was that issued by the new Minister?

No. This House will have reason to welcome his appointment. Now let me quote a letter written to a newspaper by a certain Senator at a time when there was a “Crime” Commission sitting in Durban, at a time when there were blackout Regulations in operation, at a time when there were Natives from all parts of the world passing through the city and when there was so much intermingling of Native races and members of unsophisticated tribes of Africa, that it seems unfortunate that a statement of this sort should be made at such a time by a Senator. The Senator in question writes in these terms—

He then goes on to deal with other matters which are not germane to this matter. That appeared on the 2nd January. A Government Gazette of the 19th December contained an Order making it an offence for any Native to take part in strikes. I think we must refrain from expressing views contrary to the law and contrary to an emergency measure intended to preserve the peace in war-time. I do not think it is right that any responsible member in this House or in the other place should take it upon himself to say that in his view the Natives should have the right to strike when all measures of negotiation have been tried and failed. I am afraid I spoke rather at length. But in my opinion the Department of Native Affairs must not accept the recommendation of one section of the commuity on such a far-reaching matter and I hope that in future Committees that are appointed will be very chary to accept recommendations of one section—however important they may be—to the exclusion of a large class of people in South Africa who are touched by this question at one point or another.

Although I want to congratulate the hon. member for Cape Eastern (Mrs. Ballinger) on her carefully thought out speech I must still tell the House that the proposal which she has put before the House is of a very drastic nature. It is a motion in which she asks that the Government be urgently requested immediately to take the country’s Native policy into review, in order to bring it into conformity with the industrial development, the needs and the aims and objects of the Native population, and so on. She asks for an immediate revision of the Native policy. The seconder of the motion, after a long plea, practically apologised to the House and said that although they proposed this motion they did not ask that it should be done immediately.

I did not say that.

That I how I understood it. He said that it must be done, but that we need not take immediate drastic steps. If that is so he does not associate himself with the views of the mover, because she says that the Native policy must be changed immediately. It has taken us practically forty years before Parliament eventually decided to accept the Native policy which is today in force in this country. Hon. members will recollect that the late Gen. Hertzog for almost a lifetime tried to get the people of this country to agree to this Native policy, and after long experience and years and years of consideration he put this policy through in 1936 in a joint Session of both Houses of Parliament which almost unanimously accepted the segregation policy. In 1936 the policy was accepted and now the Native representatives come here and within a few years of the policy having been laid down, and Parliament in its wisdom having accepted it, rightly or wrongly, they now want us to depart from that policy. The Native policy embraces the purchase of 7,250,000 morgen of land. It is a well-known fact that the existing Reserves are too small and are over populated, and that with the best will in the world the natives are unable to make a living there. The segregation policy provided for the purchase of 7,250,000 morgen of land to provide additional space for the Natives. Seeing that hon. members over there are asking for a change in our Native policy I want to ask them whether they realise that this will mean putting an immediate stop to the purchase of further land?

No.

Well, they cannot have their cake and eat it. They ask for the policy to be changed, and an important principle in that policy is the purchase of 7,250,000 morgen of land.

That is necessary in any case.

Gen. Hertzog as Prime Minister at the time estimated that it would cost £10,000,000, but he said it would have to be done, even if it cost £20,000,000. We know that since the outbreak of the war the present Government has put a stop to the further purchase of land. The Native representatives should rather attack the present Prime Minister and the Minister of Native Affairs and try to induce them to make more money available for the purchase of the necessary land. That would be better than to come here and plead for a revision of the Native policy. It has taken many years to formulate that policy, and I fail to understand how they can come here now, after the policy has been enforced for only a few years and has not been properly tested yet, and propose its revision. I don’t blame the hon. members for doing so because I remember the Prime Minister a few weeks ago, just before Parliament met, making a speech in which he said that the segregation policy had failed. The Minister of Finance started with it. I don’t blame him, because I well remember that when the Native Bills were under discussion in this House and when they had to be voted on, the present Minister of Finance spoke against them and voted against them. But the present Prime Minister who was a member of the Cabinet supported the legislation. So if it can be proved that the policy has been a failure then I hold the Prime Minister responsible because he should have seen to it that the policy which was laid down was carried out Unfortunately this disastrous war started in 1939 and in their war drunkenness hon. members opposite were unable to think normally. I do not admit that the segregation policy is a failure but if it is a failure then it is due to the present Prime Minister and his Government who put a stop to the further purchase of land. As a member of the Native Affairs Commission I know the extent of the land hunger among the natives, and I can testify here to the fact that the present Reserves are overcrowded. When hon. members say here that more must be done for the prevention of soil erosion, I only want to tell them, and I do so for the information of the House, that the Department of Native Affairs has already done a great deal to prevent soil erosion, and they are still doing a great deal. One thing is certain—the hon. member was correct when he said that the Native population was deteriorating—they were going back—this must be attributed to many factors, such as for instance the lack of hospitalisation. The provision of hospital facilities comes under the Provincial Councils and the Provincial Councils shrug their shoulders and say they cannot afford the hospitalisation of Natives. The sooner the Government makes an investigation and takes steps—and it should not stop at an investigation—in regard to the hospitalisation of Natives, the better. It will be in the interest of the whole country and of the Natives. Take the development of the Natives. We know that the natives are anxious to develop but unfortunately we have to deal there with the Provincial Councils which are not doing their duty. I think the Government will be well advised to take hospitals for Natives away from the Provincial Council as soon as possible, and place hospitalisation under the Department of Native Affairs. I am convinced that that is a problem which should not be delayed. If we want to build up a sound and healthy Native population for the future it is urgently necessary that drastic action be taken. We who live on the platteland can notice the change that takes place in the Native after he has been on the farm a year or eighteen months. If he gets better food and better treatment one can see a great change, particularly in the children, within eighteen months. If one of the Native labourers is ill we see to it that a doctor is sent out to attend to him, and the family is properly looked after. I feel that the Statistics of the Native Reserves are not complete, but even from those Statistics it must be clear that the Natives are deteriorating tremendously in health matters. At the same time I want to say that the policy of segregation has not yet been tested, and for us as a House today to vote for a motion asking the Government immediately to change the Native policy is impossible. We would commit an act of great folly if we agreed to that. I therefore move as an amendment—

I want to second this amendment and to make a few brief remarks. As my Parliamentary Leader has already told the House, responsible Ministers, even the Prime Minister himself, and responsible officials, have stated that segregation is impracticable and that it is dead. If that is so, then I as a layman, as a man standing outside, must ask myself what the difference is between the present, when people say that segregation is dead, and the days when it was not dead, but alive. The proof of the pudding is in the eating thereof, and as I look around I ask myself what is going on. Every Sunday one notices motor lorries leaving Johannesburg in all directions, full of Natives, going out to make propaganda in the various town locations, and elsewhere, in order to sow the seed of the evil which has been spreading so luxuriously of late. We have seen the results of this sort of thing. That is what is happening in these days when segregation is supposed to be dead. There are 555 sects among the Natives, all so-called religious sects. They may have a bit of religious colour attached to them, but inside those sects, pure propaganda is carried on and it is the type of propaganda which is directed against the Europeans. Those 555 sects, without any restriction, as far as I know, work day and night making propaganda all the time. And that is what is going on because there is no segregation. But I go further still: some time ago, while walking about in Johannesburg, I noticed a number of Natives walking through the streets, all armed with heavy sticks, all thoroughly excited, and I heard subsequently that they had indulged in offences and assaults of all sorts, and that a strike was in progress. I discussed the matter with big industrialists, who shook their heads and said: “What is going to be the end of it all? Look what the Natives are doing; how are we going to get our labour?” Now all this sort of thing is happening at a time when segregation, as the Minister of Finance states, is dead. What happened in Pretoria? We have had disorders and other troubles there, and not only there. And the result is that valuable European and non-European lives are lost. We cannot welcome the end of segregation. In days gone by, when this country was governed by the father of segregation, the late Gen. Hertzog, the man who since 1911 had been fighting for his segregation policy, we never heard of such happenings. There were no strikes, and even less did we hear of murder and manslaughter. Never! I therefore hope, fully realising the value of the segregation policy, that it will be put into practice, and I appeal to the Government to give effect to it. We all know that in the fifteen years when Gen. Hertzog was in power, and when segregation was alive, we never experienced this kind of thing that has been going on since the present Government has been in power. In the days when the segregation policy was carried out we had peace and prosperity, among the Natives too. Today things are different. That is why, as I have already said, people are anxious and ill at ease about the future, and we have to think of the families of the people, both white and black, who are left behind after some of the members are killed in these disorders. Let hon. members ask the farmers on the platteland what the position is in regard to their labour in these days of non-segregation. Let hon. members ask the sensible Native himself, and he will tell them, “No, baas, we don’t want that sort of thing, because the nation which in the end is going to be hardest hit is the black nation.” And they are quite correct. That is why I support this amendment and I ask myself who really is the cause of all this trouble? Who started breaking down the segregation policy? Who was opposed to segregation being put into actual effect? It was not the Government side, it was “His Majesty’s Opposition”, as it is called. During the last elections we had to fight tooth and nail to keep the country informed of the position so far as segregation was concerned. The people had been stirred up and excited by the argument that the Natives were living in luxury while the white people were starving, that the cattle of the Natives were running about sleek and fat while the European’s cattle were dying from starvation. They would not grant an extra 1d. for the application of the segregation policy and naturally the present Prime Minister is a man who more than anybody else understands the art of making capital out of the mistakes of his opponents. And he availed himself of their mistakes here and said: “Very well, then I am not going to give another penny to give effect to the laws we have on this matter.” That is the position we have reached. Hon. members opposite now want to spend all they can on the continuance of the war, but meanwhile we have a new Minister of Native Affairs. Well, he still has to prove his worth. We are waiting and the country is watching intently because this is a serious matter. When the segregation Bills were passed he was on our side. We now have to see whether the Minister still has the courage he had in those days, whether he still stands by that policy. The hon. member for Cape, Western (Mr. Molteno), voiced certain complaints. I must say that he and his colleague behind him (Mrs. Ballinger) handled their case very well, but the hon. member for Cape, Western, was pretty inconsistent. A few days ago he quoted an authority here to prove that one could make a living on a quarter of an acre. Today he and his friends complain that the Natives cannot possibly exist on the allocated land. Of course, those hon. members over there have been elected to represent the interests of the Natives as they see them, and we want to give them credit for what they are doing. They should, however, be consistent and not talk about quarter of an acre one day and the next day talk about the Natives needing more land. I want to second the amendment and I want to appeal to the Minister of Native Affairs and ask him, being a new Minister, to show that he has the backbone to carry on the policy which we initiated after twenty-five years of hard fighting.

I would at the outset like to deal briefly with the amendment of the hon. member for Vredefort. The House will recollect that the late Prime Minister, on assuming office, without any delay, brought certain Bills before the House, dealing with the Native problem as a whole. A Select Committee was set up on which many prominent members of the House, including the late Prime Minister. The present Prime Minister, Mr. Havenga and you yourself sat. I had the honour of being a member and for several years the various aspects of the Native question were discussed and eventually the 1936 Acts were passed. We know the very careful consideration that was given to those measures, and I challenge my friend the hon. member for Vredefort (Mr. Conroy) to say that this particular aspect of the question, this drift of the Natives to the towns, was ever satisfactorily settled. The hon. member will remember that one of the provisions that was made was that the towns should be required to take a census and place a limitation upon the Natives that could be employed in the respective areas, and that where a sufficient quota existed, no further immigration of Natives should be allowed. In view of conditions prevailing today owing to the war, I do not know any town that has placed any limitation upon the Natives entering; in fact, they are demanding more and more labour every day. When conditions have become more normal, there will be then an opportunity of trying out the particular solution to the problem, but the present time is inopportune. Now, sir, the hon. member for Cape, Eastern (Mrs. Ballinger) seems to suggest that it is poverty that is driving the Natives into the towns. There I join issue with her. That there is undoubtedly a drift amongst the Natives in the rural areas into the towns cannot be denied, but it is not poverty alone that is driving them, by any means. It is the natural drift that we see amongst our own people, amongst the so-called poor whites in this country. In our villages and wherever you go, our sons, often sons of the wealthy men, are going into the towns where they come into contact with the excitement and change of life, and that is the real urge for this drift. And it is not the men only, you have a large number of young girls and women flocking to the towns, not because they are driven by poverty. I know of Natives getting their £3, £4 and £5 a month in the country drifting up to Johannesburg and the other towns. If they once get to the town and come into contact with the life there, it is most difficult to get them back into the rural areas. That is unquestionably a position that we must face. The hon. member and her seconder, in dealing with this matter, from the Native aspect, said better provision must be made for the development of the Reserves. Well, there I think that the Native Trust is doing a tremendous lot of work. But we already have large areas of land where we cannot get Natives to settle, and that is a definite fact. The position is that so many of them live in towns, and they are not anxious to get on to the land. That is a position that is arising today. One of the difficulties of land settlement is due to the fact that in the Native Affairs Department the staff, owing to war conditions, has been almost decimated and we have not got the men to control settlement. These are facts that I think the House must take into consideration in dealing with what is unquestionably an extremely important matter. In saying that I want also to say that the time is not propitious for this motion. I think it could have been introduced with more benefit after the war, but as it has been introduced, we must face up to it. I should like to say here that I appreciate the very fair manner in which the mover introduced her motion. Mr. Speaker, in dealing with this matter, we have to consider exactly what effect this is going to have upon the Natives. Our Natives are drifting into the towns, and they are becoming urbanised. We have been pressed by certain municipalities to establish settlements for these Natives, where they can acquire land in their own right, but I think that it is in the interests of the Natives at this stage that they should be encouraged to occupy land in locations in their own areas. I also think that better and increased provision for housing in urban locations under proper control and under a proper system of health control is the first step that we should take in developing these urban locations before we change our policy and grant title to Natives in urban areas. We should make provision for decent housing, and a decent settlement of family life. We are doing this more especially in the Transvaal and in larger municipalities of the Union. In Port Elizabeth you will see conditions there that I think are a credit to the European population in this country, and that development is going on all over the country, almost every municipality today is becoming alive to the fact that these Natives are part and parcel of the population of this country and must be treated decently and well, and they are doing it.

Kimberley.

I know the position there and in some other areas is disgraceful, but the hon. member must know that the Native Affairs Department is now provided with machinery which can compel municipal bodies to take the necessary steps for improvement, and the hon. member must know also that provision is being made in almost every municipality for the decent housing of Natives, so that they can bring up their families under decent conditions. In view of the fact that we have adopted this policy of urban Native settlement here after long years of consideration, is it not wise that we should rather wait to see whether that policy cannot be extended and further and better provision made, before we ask the House to change this policy and provide for Natives to acquire land under title in urban areas.

Mr. Speaker, when the House adjourned last evening I was just about to devote some time to the hon. member for George (Mr. Werth), his position as a member of the Cost-Plus Contract Committee, and the speech he made in this House. The hon. member is always something of an enigma to me, somehow I have failed to understand his mentality. The Commission of which he was a member did a very valuable work indeed, and knowing the hon. member as I do, I have no doubt whatever that his contribution to the work of that Committee was very valuable. He has always shown a very keen desire for knowledge, a great desire for information on all points, and I have no doubt whatever that the work that he put in on that Committee was found to be of very great assistance. But to a large extent he has stultified the good work that he did by the very peculiar attitude that he adopted both in his minority report and secondly, in the speech that he made in the House. Because, Mr. Speaker, in the whole of his condemnation of the basis of Cost-Plus contracts and the manner in which the military contracts were carried out, he took no cognisance whatever of the circumstances which existed. He will not take into consideration the fact that time was the deciding factor, and the urgency of the situation was of such a nature that it was absolutely essential that the work should be pressed on with. Although I will not go so far as to say that the work should be done regardless of cost, I do say that provided reasonable control was exercised, the circumstances were such that the work had to be expedited and brought to fruition as soon as possible. I sometimes wonder, Mr. Speaker, if the hon. member for George would have taken up the attitude he has done if circumstances which were quite possible had come about. I remember, sir, the hon. gentleman said on one occasion that in the event of this country being invaded, he was prepared to defend this country, as I have no doubt he would have done. But I sometimes wonder whether if, in the event of that having come about, when the hon. member for George very reasonably had taken advantage of the fortifications and defences that were prepared, whether he would have stopped to consider whether these things had been built on a Cost-Plus basis or not, or whether he would not rather have commended the efficiency and acumen of those responsible for bringing these defences to a proper state. The hon. member for George, when he started on his indictment, followed a line of argument which is sometimes taken by people dealing with the whole of our military machine. It is inevitable that in the huge military machine we have built up, there must be shortcomings and mistakes. There are some people, unfortunately I must say people who ought to know better, who always take the small percentage of things that have gone wrong and hold them up as a standard of the whole, which is very far indeed from the actual truth. I will go so far as to say that 80 per cent. of the work which was undertaken by the Defence Department was done very well indeed. It is entirely wrong and it gives a wrong impression to endeavour to base an attack on the small percentage where mistakes have occurred. Let us just see what the hon. member really has done. In his minority report he said in Clause 3—

That, Mr. Speaker, is a purely ex parte statement by the hon. member, and when you come to anaylse the facts that he brings in order to bolster up his case, he finds it very difficult indeed to substantiate those statements and the very grave charges that he has made. One instance of what I mean I will give. He selects out of the report some very strong comments made by one witness giving evidence regarding the over-charging in ship repairing something which has nothing whatever to do with the cost-plus contracts which this Committee was going to investigate, nothing whatever. But it is on that he bases the great bulk of his charges. He says, in effect, that because it has been proved that A was found to be making excess profits, there is no need for him to trust B. In other words I will not trust B because A is a rogue. What an amazing point from which to launch an attack upon the Government and upon the Defence Department. It seems to me, Mr. Speaker, that that is the most extraordinary mentality, but it is typical of the attitude taken up by the hon. member. I don’t believe myself that the hon. member for George really takes this jaundiced view of life, because he is really rather a merry fellow, and I am quite certain that he does not really think that the whole universe is in the condition that his arguments would lead you to believe. Then he goes on at great length to deal with this alleged unfair discrimination on the part of the Director of Fortifications in the giving out of contracts for work. There again he overlooks the condition of things. Surely if you are dealing with work of a very peculiar character, and a very urgent character, surely you must entrust that work to people who are competent to do it, you must entrust that work to contractors who can give you the necessary plant and equipment, and the necessary financial backing in order to carry on the work, and not discriminate and try to give this thing to everybody merely for the sake of so doing. It seems to me that that is a point of view which is absolutely indefensible. Not very long ago I attended a meeting in Port Elizabeth where with Col. Craig and the Master Builders we had exactly the same point to discuss, and in connection with which there were people who felt that they had a grievance because they were not getting the work. As soon as we dived into the question we found exactly how many of them were competent to carry out the contracts and these were some very big contracts. We found that they were not capable of doing the job. Their suggestion was that the work should have been let out in small sub-sections, and allocated to various people. Surely from the point of view of economy and efficiency, that suggestion could not possibly be adopted. When it was suggested that the best thing they could do was to endeavour to pool their resources, form themselves into a combine and thus be able to tackle this work, they agreed that that was the only way in which it could be done. But up to date they have not been able to so settle their differences as to bring about that particular state of affairs. The hon. member for George had a good deal to say about East London, where the contractors had to import labour in order to carry on the job. But he did not give the House to understand that all the labour available had already been exhausted. Exactly the same thing happened in George itself, where the Public Works Department started to undertake the building of the Air School and then handed the work over to Murray and Stewart one of the big four. I am not able to tell you whether local labour was employed there,—I hope it was—but I do suggest that if no local labour was available it would have been essential for the contractors to import labour on that occasion as well, in order that the job could be carried out as expeditiously as possible. Let us now look at another line of attack. The hon. member had a great deal to say about the exorbitant price paid for cigarettes, and the exorbitant profits that were made. Let us see what the actual position was. I have no knowledge of the firm concerned, but I do know something of the magnitude of the business in cigarettes that had to be done. When the hon. member for Pretoria, Central (Mr. Pocock) and I were working together for the D.G.W.S. we bought for the troops something like 395,000,000,000 cigarettes. You will agree, sir, that that was a big amount, and nearly every one of the orders we placed was a rush job, and the order had to be completed by a certain time, and that certain time was very short indeed. We could not tell for obvious reasons when we would be able to send them away, and everything had to be done in a rush. The hon. member for George will not allow any consideration of the urgency of the matter. Now how was the thing carried out? We said: “All right, we will make a price and we will make it less than the ordinary wholesale price, and those prices will be subject to adjustment when it is possible to arrive at a fair figure.” You must have a price on which to work, and we gave a price subject to adjustment. Now what happened? When eventually the matter comes to be investigated, if you turn to the third report of the Committee, you will find some of the matters which are disallowed in arriving at the cost in this matter. To begin with, nothing was allowed for advertising. I would like to ask the hon. member for George whether he has any idea at all as to what the advertising appropriation of one of these big tobacco businesses is. I think he would be surprised at the almost astronomical figures revealed. Now that has to come off to start with. Then salaries, travellers’ expenses, legal expenses, bad debts, management expenses, and all taxation; these all have to be paid for, but are disallowed from the contract price and I am sure you will find, Mr. Speaker, that when these deductions are made, and when you have eventually arrived at the nett figures at which these things are paid, and when my hon. friend the Minister of Finance has finished with his side of the business, you will find that these so-called exorbitant profits have largely disappeared. Then the values of the service must be taken into account to a certain extent. As an example of what I mean I will refer to the biscuit business. We got the figures of the total amount of biscuits of all sorts made in this country, and the total weight was 12,000,000 lbs. When we started in on a biscuit army contract, we asked the manufacturers to give us 27,000,000 lbs. weight of army biscuits alone in one year, and what did that mean? It meant that the whole of their labour, staff, plant and everything else had entirely to be reorganised. They worked 24 hours a day for four months without a break; then they had a fortnight’s rest and worked for another three months without a break, another fortnights rest and another three months. I maintain that the value of work of this kind cannot adequately be expressed in terms of money. None the less, let me tell the House that whereas we were paying 10d. a lb. at first we reduced the price to something less than 6d.—a saving of some £450,000. That, the hon. member will not take any cognisance of at all, and moreover, he does not believe that services of this sort should be paid for. Another point that I want to mention is the magnitude of the task the costs accountants had to carry out. It was months before they could get onto the job, because they had so much to do. Their investigations took weeks and months, and we could not wait until the accountants came along and did their job. Take the case of canned snoek. The snoek would not remain quietly in the sea until the cost accountant had made up his mind what should be paid. It stands to reason it must be sometime before the final prices can be determined. The hon. member for George comes along and holds up his hands in horror and says: “Look at the exorbitant profits,” ignoring altogether that the prices are always subject to review, and at the final reckoning you will find that the profit is very little indeed. Actually the hon. member’s indictment boils down to his attack upon the Director of Fortifications, and he bases his attack on the allegation that Cost-Plus contracts were far too costly, far too expensive. Let me again emphasise what the hon. member for Troyeville (Mr. Kentridge) said about the letter which Col. Craig wrote to the hon. member for George setting out in detail actually what had taken place. He made it perfectly clear that when he arrived back from England on the 15th October, 1939, he was immediately pushed into this work, and was told it must be completed by the 31st March the following year. He at once called together all the big contractors that were available, and said: “Help me out of this.” One and all they said: “We will have nothing to do with if, we don’t understand this work, we don’t know whether we can do it, we can’t possibly take on work on Robben Island, because we don’t know what the conditions are there and what is required.” Further than that you must remember that all these works were of a secret nature. These contractors could not tell everybody what was required. Eventually Col. Craig made the suggestions to these firms as to how they should do it. He suggested that they should make a pool, and they did do that. They came together and made a pool, and after having arranged the matter with them, he went up to Pretoria himself and interviewed the Tender Board there. There he was not only congratulated, but at the next meeting of the Tender Board the terms and conditions of the contract were confirmed. The hon. member for George is one of the greatest sticklers for things being done properly, and it is rather unfortunate for his attack on Cost-Plus contracts that he should have selected contracts that were definitely passed and ratified by the Tender Board. That is a most important thing. The Director-General of Fortifications is a very able offcier, he is a man for whom we have the highest regard. Not only has he supervised Cape Town harbour, but he also was largely responsible for the harbour at Algoa Bay. By his advice, schemes which were costing £8,000,000 eventually came out nearer £3,000,000. Anybody who saw Col. Craig giving his evidence last year, before the Select Committee on Public Accounts, would realise that in his anxiety to be fair, and to give all possible information he very often placed himself in a false and unfair position, because he endeavoured to answer questions with the utmost fairness and frankness on matters when it was impossible for him to have all and complete knowledge. He was so anxious that nothing should be hidden that, as I say, he often placed himself in a false position. I think the hon. member for George will have to make out a very much better case than he has done in this House, before he can ask the country to believe that the situation is as black as he has endeavoured to paint it.

It must be one of the most difficult jobs in life to try and make a bad case look good. I listened to the Prime Minister when he replied to the hon. member for George (Mr. Werth). The Prime Minister had to walk very warily because the points made by the hon. member for George were such that it was very difficult to controvert them. I have been listening to every speech since the Prime Minister spoke, and I have also listened to the speech of the hon. member who has just sat down, Mr. Hirsch. We have the evidence before us to prove that the country’s money has been squandered in a terrible manner, and the country should be very grateful to the hon. member for George for having drawn the country’s attention to these matters, and to the consequences which may result. And now hon. members opposite have to jump about and do all they can to defend the position and make things appear to be in order. I am sorry that they are trying to do so. I don’t want to speak about that. We have other members on this side who can deal with that question, but there is one matter which I want to bring to the notice of the Minister of Agriculture—it is a matter to which reference has already been made—namely, the difficulty in which people have been placed through no longer being able to obtain mealies for their cattle and their poultry. There has also been talk here about the fixing of prices and I want to ask the Minister very politely here this afternoon to reconsider the question of fixing the price of mealies at 12s. 6d.

There is a motion on the Order Paper by the hon. member for Wolmaransstad (Gen. Kemp), and this question can be dealt with on that motion.

The position is that there is a danger of the present crop being very much below the estimate. In view of today’s weather conditions the Minister may be very much out in his estimate, and I think the Minister should very carefully consider the whole situation. I realise that he is in a difficult position; he must be very much concerned, and cudgelling his brain on account of these circumstances, over which we have no control, having arisen. We are all very worried about the position and I therefore want to ask the Minister carefully to consider the matter before making a decision. The farmers have to produce today under most difficult conditions. The Minister realises that costs of production have gone up tremendously and continue to go up every day. Farming implements are expensive, and so is everything else. Take power paraffin for instance. The farmer has to pay practically as much for it as for petrol. At the same time exorbitant profits are being made on commodities which the farmer requires in order to produce. If the farmers do not produce, what is the position going to be? We urgently need grain but the Government only thinks of war today. Everything is set aside for the sake of the war, and the farmers are in the greatest difficulty, but they do their best to produce food. If, however, nothing is done by the Government to restrict the profits on the farmer’s requirements, it will become impossible for the farmer to carry on. I ask the Minister in all earnestness to go into this question. Some of the Government Departments refuse to see anything but the war, and they don’t care in the least how the people on the platteland have to struggle. I have a telegram here from one of the Railway contractors. This man posted a cheque to the Transportation Board on the 21st October, together with an application for a transportation certificate. That cheque was drawn on the 28th October. On the 24th November he had not yet received a reply from the Transportation Board, in spite of the fact that he had sent them a number of telegrams, and in spite of the fact that he had sent further information to this so-called Transportation Board. He is without petrol today; he has to deliver goods to town and is in danger of losing his contract because he is unable to meet the demands that are made on him. I do not know which Department it comes under, but I want to ask the Minister to give his attention to matters of this kind. This man cannot get any petrol because the local magistrate says that he cannot help him as he has no licence.

I should like to ask the Minister whether it is not possible to place the farmers on the same basis as ordinary business men. A business man is allowed first of all to deduct all his expenses, and then to make 8 per cent. profit before he is taxed. Cannot the farmer be placed on the same basis? Let him also be allowed to deduct his expenses and then make 8 per cent. on his capital, before he is assessed for income tax. I do not believe that there are any farmers who make a clear 8 per cent. on their investment in farming, and I shall therefore be glad if the Minister will place the farmers in that position. There is also a matter which I want to bring to the notice of the Minister of Agriculture, it is a matter in regard to the wool scheme which he has agreed upon with the British Government. I said on a previous occasion that I was glad our wool was being sold in that manner, but I have never yet been satisfied with the price which the Government has arranged. We have always been told that we would be treated on the same basis as the Australian farmers. I therefore hope that the Minister will see to it that we also get this 15 per cent. increase. I know the Minister is having a very difficult time. The farmers generally are having a difficult time, and surely he, as Minister of Agriculture, should have a more difficult time than the farmers. But there is one thing for which I blame the Government very much and that is that they allow, after the wool has been sold to the British Government, the brokers to still get nearly £1,000,000 by way of commission amounting to 2½ per cent. on wool which has already been sold. That is a matter which the Agricultural Unions and the hon. member for Cradock (Mr. Bekker) have never yet complained about—they have never yet complained about the fact that the Government, after having sold the wool, has to pay nearly £1,000,000 in commission on the sale of wool which has already been sold. Surely we should put an end to that. Why should the brokers get that commission? I fail to understand why the Minister allows a thing like that. The brokers get 5s. or 6s. per bale to press the wool and that is quite enough.

I want to say a few words about the Cost-Plus contracts and the reports which have been published in connection with the enquiry. In that connection I only want to say that the hon. member for Port Elizabeth, South (Mr. Hirsch) has been unjust to the hon. member for George (Mr. Werth). We have a democratic system of government in this country, and it is taken for granted that we, the Opposition, have a duty to watch the country’s expenditure. We also share in the democratic system and that is why I am glad personally that the Minister of Finance saw fit to appoint this important Committee to go into a matter involving an amount of more than £50,000,000 in connection with Government contracts, and to go into the question whether any exploitation was taking place, or whether certain people were making excess profits, and also whether there were people making money illegitimately out of the whole system. I feel we owe a debt of gratitude to the hon. member for George because of the way he raised this matter in this House, and I want to try and show that everything the hon. member for George said in this House was well founded and was confirmed by the evidence. It is noteworthy that if one goes to other countries, such as America, England and Australia, if such an important question involving millions of the people’s money has to be enquired into, one does not find the same protection being granted to officials which our Government tries to extend to officials involved in a matter of this kind. If one studies the whole matter one comes to the conclusion that matters of this kind are not considered from a Party point of view. The Commissions which were apponited in those other countries came to the conclusion that the Cost-Plus system which we are now saddled with, or at least which was in force here until a short time ago, is a system which is not to the benefit of the country. One finds for instance that from 1914 to 1918 that system was in operation in various countries at a time when those countries did not yet realise the implications of the system, but during those years they learned wisdom and at the start of this war all those countries, except in certain urgent emergency cases, entirely rejected the Cost-Plus system. There is ample evidence in these reports to show that it is a pernicious system which should never have been adopted, but we in this country immediately adopt a system which has been rejected by other countries, and then hon. members, together with the Prime Minister, come here and say that everything is in order. I want to try and show what went on under the system and what the implications of the system are which we have these reports about, reports which are of such importance that the Minister of Finance has given instructions not to continue with the Cost-Plus percentage system, and not to continue with any Cost-Plus contracts except in very urgent cases. In the first report, in paragraph 19, we find the following, which explains what a Cost-Plus contract is. It says this—

It appears that that was generally the system which was in force here except in the Department of Public Works, and then the report continues and in paragraph 42 it describes the four types of Cost-Plus contracts which are in existence, namely:—

1. (i) Cost-Plus-a-percentage;
2. (ii) Cost-Plus-a-fixed profit or fee;
3. (iii) maximum price, and
4. (iv) target cost (with limit of payment of cost over the target).

Then, in paragraph 43, there is a description of the four types of contract. According to the report it is perfectly clear that if this system is to work effectively, the Cost-Plus fixed profit basis should be applied. In this country the feeling has arisen that the Government, as a result of the adoption of the Cost-Plus percentage system, has unnecessarily paid out large amounts to contractors, and we on this side have from the very beginning insisted on a proper investigation into the benefits or disadvantages of the system. The Minister has listened to us and we are grateful for what he has done. It is now clear from the Commitee’s findings that the system lent itself to a great deal of unjust profiteering. It is clear from the report that now we unfortunately have the phenomenon that members of the Committee are trying to gloss over the abuses and that the Prime Minister tries to defend the system as it has been in operation here. I have already indicated what has been done in other countries and that the system has been rejected there. An investigation was made into the system and afterwards it was found that many abuses might occur and did occur under the system, and it was thereupon relinquished. The hon. member for George in his report and in his speech confined himself to only two aspects of the matter, namely that the system was impracticable and expensive, and further, that there had been abuses in connection with the system. An investigation was made in connection with three matters, namely building contracts, war requirements and ship repairs. The hon. member for George came to certain conclusions, each of which he confirmed by means of evidence. Let me refer to the first part, paragraph 10 on page 11, where the hon. member sets out to prove his findings—

And then the hon. member for Kensington (Mr. Blackwell) comes and says: “Yes, the hon. member for George raises the matter of building contracts although ship repair contracts were involved.” It is clearly stated here that it was not restricted to ship repair work. And then I refer to paragraph 12—

There is definite evidence that the contractor, the master, was appointing himself as his own foreman, and that he was drawing a salary. And then we have paragraph 13—

And then the following exchange of words took place between the acting chairman and Maj. Jordaan—

I have quoted three instances which are confirmed by the evidence, and yet the hon. member for Port Elizabeth, South (Mr. Hirsch), and possibly also the Prime Minister, come here and tell us that the statements of the hon. member for George are not confirmed by the evidence. In paragraph 14 there is reference to the purchase of galvanised iron. The contractor sold the iron to himself at 16d. per foot, while the actual price was 8-¾d. per foot. And so I can go on and quote other irregularities, the one after the other, to prove that the contentions of the hon. member for George are well founded. If one studies the majority report, however, one finds that it is full of platitudes. Let us look for instance at paragraph 116 of their report, where they say—

This concerns the employment of tradesmen and a debit had to be entered, and they had to be paid, and the contractors got 10 per cent. on what he paid them. Now, the excuse is made that the Cost-Plus system had to be adopted because there were emergency cases. But why was the worst form of the Cost-Plus system adopted? Another excuse which was made was that they could not ask for tenders because there were no surveyors. Two objections were always raised whenever they decided that contracts had to be issued. The first was that things had to be done in a hurry, and the second that no surveyors were available. Now, we get an interesting case of an emergency contract. In this memorandum of the Cost-Plus Contract Committee, in what we can call the fourth report of the Minority Report, we find an instance on page 6, which refers to this argument of emergency contracts. Ie refers to the building of the military hospital at Baragwanath. This was a hospital for 1,400 beds which had to be constructed for the Imperial Government. Here the system of Cost-Plus-percentage was also applied, in spite of the fact that the English Government asked that it should not be applied. It was applied, however, because it was regarded as an emergency case. But what do we find in paragraph 6 on page 6—

1. (i) In May, 1941, it was decided that the hospital was necessary and should be built.
2. (ii) It took eight to nine months to decide on the site.
3. (iii) Then three and a half months were spent in drawing up plans and specifications for putting it out to tender.
4. (iv) After that two and a half months were wasted in coming to a decision whether the hospital should be built on Cost-Plus or by tender; and
5. (v) eventually it took four and a half months to build.

And if we read further we find that the English authorities did not want them to do the work under this system. Paragraph 7 of the Report says further—

Now, compare this with the evidence of Dr. J. E. Hollaway, Secretary for Finance, and Brigadier Blaine, Secretary for Defence, before the Select Committee on Public Accounts in 1942 (page 20 of the Third Report)—

But in spite of that our Government proceeds to do so; the English Government has already had experience of that system, and it has seen the enormous amounts this Cost-Plus contract system has cost the people of England. Our Government, however takes no notice of that, and carries on with the building of these so-called emergency matters, although it took them a month and a quarter to select the place where the building was to be erected, and after that the building was completed in four and a half months. It was stated, and particularly by the Prime Minister, that all these Fortifications were so important and so urgent that they had to be completed so as to prepare them for the fixing of the guns. We have evidence that as late as August, 1942, the Fortifications were there, but no guns had been mounted. Then I want to mention another case. They say that this system was necessary because no surveyors were available to help the Department. We have evidence that the Society of Architects and Surveyors approached the Government and said that they were prepared to do the work, but the Government took no notice whatsoever. I have a telegram here from somebody who has read the discussion which has been going on in this House, and I want to read that telegram.

The hon. member cannot read a telegram relating to a discussion during this Session.

Very well, Mr. Speaker, then I shall only say that this surveyor is prepared to do this work as he is unemployed at the moment. Now, how are these building contracts given out in a country like England? There, so far as the army is concerned, tenders are asked for In special cases contracts are issued on the basis of Cost-Plus a certain amount. In the Air Administration there is a list of prices and in the case of the Admiralty there are costs plus a fixed amount for profit. Now we find that our Government has taken no notice of what other countries have done in regard to this matter. In England the Cost-Plus system is only resorted to in exceptional cases of the greatest urgency. In America they have a fixed basis, and the most interesting point of all is that in another Dominion which is faced with the same difficulties as we have, namely Australia, they have not carried on in the way we have done, and they have not allowed a profit of 10 per cent. They have fixed the maximum at 3 per cent. And now we come to the second report which deals with war requirements. What do we find in that report? The hon. member for Kensington (Mr. Blackwell) wants to make out that the hon. member for George is a prosecutor and that he tries to make things look worse, and takes them out of their true context. If hon. members read this report they will find that the hon. member for George did not adopt the role of a prosecutor, because after having made a thorough investigation he found that a proper system of control had been enforced by the Department under Dr. Van der Bijl. Where we find that to be the case, if we study this report and sum it up, we must really come to the conclusion that it amounts to condemnation of everything appearing in the first report. Let me quote paragraph 65 to the House—

Here we have the unanimous findings of the Committee about a Department which is properly managed. We do not find there that the hon. member for George has adopted the role of a prosecutor. He found that they had immediately taken steps to bring about proper price control. He found that a fixed profit basis had been laid down, and consequently he felt at liberty to sign this report. And then members opposite come here and say that the hon. member for George is a prosecutor, and that he only tries to make propaganda out of the report. I am convinced that when the Prime Minister spoke in this debate he had not yet read that report; that he had only read the first and third reports, but not the second report. I do not propose reading those paragraphs, but we notice for instance in paragraphs 52, 56 and 58 that the hon. member for George agreed with the other members of the Committee and that he had not assumed the role of prosecutor in respect of the activities of the Department. Now I ask hon. members opposite, and particularly the hon. member for Port Elizabeth, City (Mr. Hirsch), how he can call the hon. member for George a proscecutor? And now I come to the third report. This report gives evidence of the fact that after the Minority Report had been published—the Minority Report on the First Report—the members who had signed the Majority Report had again started thinking over the whole matter, but I understand that the Prime Minister, after having read the Report of the hon. member for George, was so upset about the terrible condition of affairs that he referred the Majority Report back and asked the Committee to again go into the matter. In this Report there are paragraphs dealing with the Controller of Fortifications and the admission of staff for contractors without authority, which I want to quote. First of all I want to quote paragraph 37—

And then there is an important question dealt with in paragraphs 47 to 51 which I shall also read—

1. (47) The Committee is satisfied, after a very minute enquiry into the matter, that the machinery under which Col. Craig and his organisation was compelled to obtain his staff was altogether too involved and cumbrous and that he was faced with the alternative either of having little or no supervision over the contractors on jobs in the aggregate running to millions of pounds, or engaging staff and placing them upon the contractors’ books as he did. The Committee is satisfied that the course adopted by Col. Craig was justified in the circumstances, and sees no reason for censuring his conduct.
2. (48) One extremely unsatisfactory feature of this practice is that, in certain cases, the contractors concerned have actually charged the customary profit on the salaries of these temporary Government servants whom they carried on their books. This aspect of the matter was raised by the Authorities Committee when the subject first came to their notice in November, 1941, and despite their views that it was entirely unwarranted, had continued right up to the present time. In his Minute of January 19th, 1942, Maj. Jordaan gave an express assurance to the Quartermaster-General that contractors were not drawing a profit where they carried the salaries of supervisory staff on their books, but in spite of this, the Committee has received evidence to the contrary. One large firm, both in Cape Town and in Durban, has continued right up to the present time to add contractor’s profit to the payment so made, and there has been no refund.
3. (49) In the case of the Grahamstown contract by another firm, to whom apparently express instructions on this point were given by the Garrison Engineer on the direction of Maj. Jordaan of the Head Office, the Controller and Auditor-General unearthed the fact that this profit had been charged, paid and not refunded. The same appears to have happened with a third large contracting firm from Cape Town. It would seem, therefore, that all of the three big Cape Town firms concerned, whether or not they received instructions to the contrary, consistently debited a profit on the salaries of members of Fortificacations staff carried on their books, and no readjustment of this matter has yet been made.
4. (50) Col. Craig, the Director of Fortifications, candidly confessed at his last appearance before the Committee that he had no knowledge that this profit was still being charged, or that profit wrongfully charged in the past had even yet not been refunded—all of which shows the pitfalls to which irregular practices of this nature inevitably must lead.
5. (51) The Committee feels that prompt and energetic action should be taken to ensure that full enquiry is made without further delay into these cases of unauthorised profit taking on the part of contractors, and that the Controller and Auditor-General should give special attention to this matter.

And so we can go on to prove what the Majority found afterwards in the Third Report, all in confirmation of the conclusion which the hon. member for George had come to in the first instance. Now, there is another case, too, which should be brought to the notice of the House. It is indicated in the reply of the hon. member for George. Just to prove what the position was in regard to the Fortifications personnel, I want to quote from paragraph 11 on page 7—

What is meant by “it has to be done orally”?

Now that I have quoted all these matters I think we must all agree that an Augean Stable has been discovered and it should be clear to us that it is in the interest of the country to accept this amendment of the hon. member for George. I can go further still by saying that in the first part of the Majority Report all these matters in regard to the staff dealt with by the hon. member for George have not been thoroughly gone into, but in their Third Report they came back to it, as I have already told the House. After the final answer by the hon. member for George an opportunity was still given to the Government. If the hon. member for George has misled the country he now comes along with this fair proposal of his and says: “Let us have all the evidence in connection with this matter printed. Do not let us merely submit to the House the Committee’s findings, but let us have all the evidence printed; then the House can judge for itself. It now turns out that there are members on that Committee who differ from me, and who even go so far as to accuse me of suppressio veri.” The hon. member for George said that there was favouritism of a certain group of contractors, the so-called “big four”. The hon. member for Kensington says that there is no evidence to prove it, and now it is found that a certain Mr. Bakker in Cape Town was willing to take on contracts. The hon. member for Kensington does not say one word to show where there was suppressio veri on the part of the hon. member for George, and that is why the hon. member for George says that all the evidence in connection with this matter should be printed so that the public can judge for themselves. There is only this to be said now: we find that the hon. member for Kensington says that after all this difference of opinion the hon. member for George practically comes to the conclusion that he agrees with everything that is contained in the Majority Report. No, if we study the matter carefully we find that the hon. member for George has clearly stated that the Cost-Plus percentage system should be done away with in the Defence Department, and that they should revert back to the contract system based on tenders and fixed profits. The hon. member for Kensington says that there should be a gradual reversion. Consequently there is a great difference of opinion between the hon. member for George and the hon. member for Kensington. We are dealing here with a matter involving millions of pounds. This side of the House in its amendment asks for a Commission of Enquiry to be composed of members of both sides of the House to go into this whole matter. As I said at the beginning of my speech—is there any reason why we should not do the same as other countries have done? Why should we not do what America, England, Australia and, I believe, Rhodesia too, have done? After this system had been in operation in Rhodesia for twelve months they found it to be a breeding ground for corruption, and they reverted back to the ordinary basis. All we ask is that we should go back to the ordinary basis and that we should see how much can be saved by way of expense. One man who gave evidence said that three-quarters of a million pounds in expense were saved by a control system. I am convinced that the country will be grateful to the hon. member for George one day because his thorough investigation of this whole matter and his conclusion, have drawn the attention of the country to the fact that there are serious abuses under this system, and I am convinced that he will yet save the country millions of money, and that in fact he has already saved the country very large amounts.

Mr. Speaker, we have heard a great deal about Cost-Plus, and it sems to me that this House in very many respects, has not got a true conception of the term. The hon. member for George said that Cost-Plus should be done away with, root and branch.

Cost-Plus percentage. That is a tremendous difference.

I will deal with that point. Theoretically the Cost-Plus system with the percentage is perhaps the best form of buying goods you can possibly get, but trouble arises when any theory is put into practice, and it is found capable of very great abuse. Now, Sir, in our purchases of war supplies and in building fortifications, or whatever the matter may be, our constant attention has been drawn to the fact that abuses creep in and we must, as far as possible, get rid of those abuses. My hon. friend the member for Gordonia (Mr. J. H. Conradie) says the system is so bad that it has been done away with in England. Now, Sir, I would call the attention of the House to this fact apropos of the amendment moved by the hon. member. In the examination of total war expenditure, in the Public Accounts Committee, we have had our attention drawn to this one system of spending public money, that is Cost-Plus and the percentage. The Committee asked the Government to allow a Commission to sit on this system as a system, and I think the Commission has done very valuable work indeed. But when we get members like the hon. member for Gordonia getting up and saying that the system in England has been abandoned long ago, perhaps he knows, Sir, that an investigation that has been made in England revealed abuses in that system that we have never dreamed of in this country. The report of our own Commission has shown that certainly no abuses in this country have taken place so far as the system is concerned, comparable with those in England and in America. I can well understand if abuses have been revealed, such as have been revealed in America and England, we would all have said: “Do away with this system for ever and ever.” No such evidence has been brought before this House, there have been weaknesses, there have been abuses, but nobody will say there has been corruption of the kind that has been revealed in England. Dishonesty of that kind has not been reaveled by this Commission, and that is a very important point. My friends here have said this afternoon that Australia long ago abandoned this scheme, and I think it was the hon. member for Gordonia who accused the Prime Minister of not having read these reports. I am afraid, Mr. Speaker, he is in the same boat himself. The Committee sent a communication to the Prime Minister of Australia, where my hon. friend said they had abandoned the system.

I did not say that. I said up to 3 per cent. was allowed.

You said they turned it out, root and branch.

No, no. You do not understand Afrikaans.

That is what my hon. friend always says when he makes a statement, he says we don’t understand Afrikaans. That is an ordinary reply from him, but that cock does not fight any more as far as I am concerned. Now what did the Prime Minister of Australia say in reply to this Commission—

That is my point, Mr. Speaker. The fee covers the contractor’s overhead, use of plant and profit margin, and is based on departmental estimates for the work; it does not exceed 3 per cent. on costs.

That is what I said, 3 per cent on costs.

But it is the Cost-Plus system.

A fixed fee, not percentage.

My hon. friend knows more about rhetoric than arithmetic—

The same system as we have here. But I do not want the House to be under any misapprehension. Our plan has been progressive. Where we have found abuses, we have cut them out and this is borne out by the report of this Commission with regard to Cost-Plus contracts so far as the Director of War Supplies is concerned. With regard to the Director of War Supplies the Commission says—

I signed that.

He signed that and yet he brings in an amendment asking for an investigation to be made …

It has been made.

… and yet the hon. member says he always wants to save the taxpayers’ money. That would be wasting the taxpayers’ money. Now I want to repeat again that the Cost-Plus system, plus fee, had to be adopted in the early stages just as we find it still retained in Australia. As to the percentage laid down, that is a different point altogether. I may have my own views about that, but the great difficulty in the early days was to get big contractors to realise that even giving them eight per cent. was sufficient remuneration for work they were to undertake, which, so to say, they knew nothing at all about. They knew how to build post offices, how to put up industrial buildings or insurance buildings, but these great works of fortifications they knew nothing at all about. They were, as we see from the evidence, persuaded to take the work. They did not want it, and they were given that remuneration as a consideration for doing so. Here, also, I should like to add my mead of praise to an officer of the standing of Col. Craig. I think it is a most unfortunate thing in this House that we are getting into the habit of attacking officers who are in the Civil Service, or in the Military Forces of this country, attacking officers by name in this House, while we know that these officers have no chance of replying. Hon. members opposite can attack us as much as they like, we shall give them a Roland for their Oliver every time, but here they attack officers who cannot reply. Here is an officer second to no man in this country. I have had experience of this man for twenty years We have brought out from abroad engineers on many occasions to advise us on our harbours, and we have found repeatedly that here was one of our own men, born in South Africa and educated here, who could give us better advice than any of these experts from abroad. This man has saved this country millions of money. Can anyone say that the Minister of Defence in going to such an officer was doing a disservice to this country? He went to this officer, he went to the best man he could find, and he said to this man: “You must do this fortification job in five months” — it was an almost impossible task in the circumstances, but he got his job done in five months, and I think it is most regrettable that we should have attacks made in this House on members of the Public Service, on men like Col. Craig.

I talked about the fortifications, I have nothing to do with Col. Craig.

As far as the hon. member for George is concerned, he would damn that man for ever without any qualms of conscience.

You have no right to say that.

It is a regrettable thing to creep into this House, and I hope it will not be allowed to continue. Now, in conclusion, let me say that the Cost-Plus system was adopted in the early days as the only basis. Less and less is it being used. The Public Works Department are talking about going back to tenders, and might I say here about tenders that my experience of tenders in the early days of the war was that they were unworkable. You get people making an article at say 3s., and another factory making the same article at 6s. Why? Because the quantities were so large that the Department of Defence at first had to take all the articles that could be produced at 3s. Then they found that they wanted more. They went to the next tenderer who was making those articles at 4s. 6d. They had to take the lot he made, and finally they had to take the lot which the other man made at 6s. I need only say these things to show how at a time of war and stress it is quite impossible to have the ordinary tender system, and I submit that no department which has the interests of the taxpayers of the country at heart can not possibly in a time of short markets adhere to the ordinary system of tenders. And that being so, I think the Government well advised to recommend as far as possible doing away with the Cost-Plus system on the old basis, but to keep going on with it where necessary on the new basis, asking the spending departments to do all they can to see to it that where abuses creep in they will, so to speak, nip these abuses in the bud. If they do that they will be serving this country as they have been serving it ever since the war broke out. I think the Minister of Defence is much too modest in this House and before the country when almost in an apologetic way he talks about the organisation he has set up. The Defence Minister has set up an organisation of war supplies second to none in any country in the world. I have had experience of people from Australia, from America, from England, coming in and investigating our methods, and they have told me this—and these are their own words—“You are streets ahead of us in England, you are streets ahead of us in America, you are streets ahead of us in Australia.”

Well, that is what we say.

That should be good enough for this House and for this country, and the Minister of Defence should be shown by this House that we believe completely in his administration of the war on the supply side.

We don’t.

A most effective Minister of Defence he has been, so effective as we have never had before.

The hon. member who has just sat down tried to make us scared to do our duty. He said he hoped the practice would be stopped of us mentioning here in this House the names of officials and attacking them. I want to tell the hon. member at once that I shall not be restrained from doing my duty as a representative in this House by anything the hon. member may have said. We did not in the least criticise Col. Craig’s ability as an engineer. He may be the ablest engineer in the whole world, but we said that it has been shown that he is a feeble administrator, that he is not competent to handle matters in the way we expect from an administrator and that we consider it our duty towards the people to protest against those abuses. We admit that nobody can be all things at the same time. The fact that Col. Craig is probably a good engineer does not mean that he is a good administrator, and if he is such a good administrator as he is supposed to be, why then—perhaps the hon. member for Maitland (Mr. Mushet) can tell me that—has a change been made in the entire procedure of the Fortifications section today? Is that not the best reply to our criticism?

The reply is that fortifications are being built.

The hon. member says that the fortifications are being built; that is the only reply. The point is, who pays for them? The hon. the Prime Minister has been lauded to the skies by the hon. member over there; we know that the hon. the Prime Minister said on a previous occasion: “Do not worry me with accounts; it may cost what it will.” Because we possess a sense of responsibility …

When Japan is on the point of attacking us, that is justifiable.

If I had to take the mind of the hon. member for Maitland as my teacher, I would soon have to disappear from this House. The public’s money is at stake here and I as one of the trustees of that money have to take care that that money is properly spent. We on this side of the House want to assure you that we shall under no circumstances neglect that duty which our conscience imposes upon us. When one comes to look at the merits of the speech of the hon. member, one finds the same chronic incompetence to grasp this fundamental principle, this fundamental difference between a Cost-Plus and percentage contract and a Cost-Plus a tendered fee or fixed amount contract. If there is anything which proved the limitations of the hon. member’s intelligence, his understanding in regard to this matter, it was his reply that the two were the same thing. I have never been a teacher but I shall try to explain this difference to the hon. member.

Don’t forget you are not a seller and distributor of shirts.

Yes, and I don’t distribute nonsense either, like some of the hon. members on the other side do. I just want to explain this matter. To me it appears to be so simple that it nearly amounts to an insult to the intelligence of hon. members to explain it. When one executes work on a Cost-Plus a percentage basis, the inducement exists to let one’s costs run up because one’s profits will then run up too. But if one has to calculate one’s works on Cost-Plus a tendered fee or fixed amount, one’s profits are not dependent on the work charges, not on the length of time worked, but they are based on a fixed price which one will receive in any case. The hon. member for Maitland maintains that this amounts to the same. He is exposed by this very Report itself. If it were the same, why then should this Commission feel obliged to recommend that we should abolish this Cost-Plus a percentage contract and replace it by the Cost-Plus a tendered fee? Does this recommendation mean that they after all recommend the same old thing? If we have to measure the remainder of the hon. member’s remarks according to this standard which he himself laid down, we cannot attach much value to them.

Did you read the Report?

I am under the impression the hon. member is looking for company. He said that the hon. member for Gordonia was in the same boat as the Rt. Hon. the Prime Minister. But he ought to know: most probably he is also in the same boat. I now want to come to another matter. The Prime Minister came here and with a triumphant gesture held out this First Report and referred to one paragraph therein and exclaimed: This justifies it, for here the Commission declares after having-investigated it—here it states emphatically that good work has been done—

This is the anchor to which the Prime Minister clings. When you read these reports, the Prime Minister’s behaviour reminds you of that of a certain farmer; when they asked how things were, he replied: “I have just come back; my house has been burnt down; my cattle have died; my wife is ill; my three children have died in the concentration camp; I am an invalid for the rest of my life owing to a nasty wound I received; but for the rest everything goes well!” Like a drowning man the Prime Minister clings to this one small paragraph. No, let us discuss this matter rather on its merits and in a calm spirit. Here we had a Committee which was appointed, and I wish to express my thanks to the Government for having-appointed that Committee. The Committee was appointed especially at the instance of hon. members on this side of the House who served on the Select Committee on Public Accounts. I want to thank the Government for appointing that Committee. But when you look at the membership of the Committee, the first thing that strikes you is the composition of it. I find no fault with the lay members of that Committee. I presume that this had to be a Committee on which the Government had to have a majority. I do not object to that. But then two experts were added to it, and this was a most unfortunate choice, unfortunate for those people, unfortunate for the Committee and unfortunate for the country. I think it was unfair towards those two unfortunate members. One of the two experts was Mr. Prentice of the Department of Public Works. As is clear from the evidence, he consistly defended the cost plus a percentage system. He gave evidence himself and if one looks at these reports one finds that he, although a member of the Committee, from time to time was put in the witness box himself. One moment he acted as a judge and the next moment as a witness. He is not a witness who can judge things objectively, but he is a witness who has been put there in order to defend a system introduced by his own department. The other expert member of the Committee was Mr. Osborne. He is connected to the firm of Dorman, Long & Co., one of the largest suppliers of war material. They are the people supplying the armoured cars and “Belman hangars” and steel construction work and Mr. Osborne is connected with that firm. Now with the best intentions in the world—and I do not in the least want to doubt the integrity of these members—but I maintain that it is unfair to appoint people who are in such positions to such a Committee. It is not fair towards them or on certain occasions they have to withdraw from the discussions of the Committee and in that way the Committee loses the benefit of their opinions, or they have to take part in discussions which perhaps result in their duties coming into conflict with their own interests. I reiterate that it was very unfortunate to have made these appointments. In the place of Mr. Prentice, for instance, a man like the Chairman of the Institute of Architects in South Africa should have been appointed. He would have been a man able to judge objectively and he would have been a great asset on the Committee, and the public outside would then have been convinced that impartial advice would have been tendered to the Committee. Under the circumstances it is difficult to expect, even with the best intentions in the world, that those people would be able to judge as objectively as is essential in a case like this. This undoubtedly influenced the deliberations of that Committee. I notice that the majority memorandum of that Committee accuses the hon. member for George (Mr. Werth) of being the prosecutor here; but after reading these reports and especially after reading their memorandum on the minority report, I received a very strong impression that here we have to do with advocates for the “Defence.” They were people who had one object in view and that was—I give them credit for it—that their duty forced them to recommend a change being made in the system; but on the other side they had to plaster up and whitewash as much as possible, and that is what this report unfortunately does. This report creates the impression that the people there were too afraid to mention the name of some person or other, as that might perhaps be used against the Government. I say again that is great pity that one should receive that impression in regard to the reports submitted here. But coming to the reports themselves—I do not now want to go into the details—but coming to the reports one finds that the majority report, whatever may be the reason for it, is not always reliable as far as the facts therein contained are concerned. They come here and attack the hon. member for George. He is supposed to be the person who came here with a preconceived idea and tries to bolster it up artificially by means of arguments—to prop it up by arguments. If one looks at the facts which can be proved, the majority report cuts a very poor figure indeed. Allow me to give you one instance of the majority report not always being correct as to its facts. This is a question of facts which can easily be ascertained. I take this as a touchstone, for if they cannot be relied upon in a simple matter such as this, one finds great difficulty in accepting their findings in regard to other facts. In the memorandum, paragraph 38, it is stated—

Look at the impression that must create.

The impression is created here that on other systems 40 per cent. has been carried out, and under the Cost-Plus system 60 per cent. only. There is an appendix to the reply given by the hon. member for George, where the actual figures are given. You will see that according to the figures quoted by him it is not a question of 40 per cent. under those systems, but a question of 93.4 per cent. through the Public Works Department between October, 1940, until May, 1942, and from the beginning of the war until October, 1940, 50 per cent. But during the first year there was only approximately £900,000 done on the tender system, and £900,000 on the other system. Well, the error occurs because in the total of 40 per cent. which they arrive at under the other system, they have simply included work done not on tender, but done by the Department of Public Works itself and by municipalities. In paragraph 34 this has been very astutely put, for it does not say there that 60 per cent. was on the tender system and 40 on the others, but it says there that it is apparent that approximately 40 per cent. of the total has been carried out on systems other than Cost-Plus. They express themselves very carefully. This is not a question of other systems. Here on the tender system there is a small amount out of the total amount carried out on other systems, not by municipalities and not by the Department of Public Works itself; but on the tender system the figures are those given by the hon. member for George, and it is not true that 40 per cent. has been carried out on systems other than Cost-Plus. This may be a subterfuge; they may say: We never said it was the tender system. After all, it is also a system when the work is done by the municipalities or the Department itself. If this is actually so—there has been talk of suppresio veri—but I say that when this is actually the case, then we have here an example of suggestio falsi. Why not state explicitly: So much has been given out under the tender system and so much under other systems. I think that we as an Assembly can be very grateful for the work the hon. member for George did on this committee. It is my opinion that he performed a splendid bit of work there. I want to congratulate him, but at the same time I do not want to embarrass him by my humble congratulations, for there have been better congratulations than mine. The Government itself has paid him the best compliment, namely, in connection with the cardinal point of difference between his minority report and their majority report. On that cardinal point the Government accepted the recommendation of the hon. member for George. “Praise from Olympus is praise indeed”. No better compliment could have been paid the hon. member than this. I just want to refer to my documentary evidence in regard to this point. If we look at the memorandum we shall see that the majority itself indicates what that cardinal point is. They indicate it at the end of paragraph 53 of their memorandum. They state that in general the hon. member for George agreed with them, but then they go on to say in paragraph 53 of their memorandum—

This is not exactly what the hon. member for George said in his report. He said that he does not want to leave it to the discretion of the Defence Force. He said that he had no confidence in them carrying it into effect, as he knew their partiality for this wrong type of contract. He said that there should be some other authority to compel the Defence Force to effect this switch-over; it could be the Authorities Committee, or the Cabinet, but there should be some authority to give directions to the Department of Defence. It should not be left to the discretion of the Defence Force. In contrast with that view, the majority report wishes to leave it to the discretion of the Defence Force when and how the switch-over should take place. If we go into the merits of the report, we find that the basis of the whole majority report suffers from one fundamental weakness, viz., that it has been based on false premises, due to the fact that they did not strictly and accurately adhere to their terms of reference. If we look at these terms of reference, we see that they read—

There is no question here of Cost-Plus something else, not of Cost-Plus a fixed fee, but only of “Cost-Plus a Percentage.” If one, however, reads through the report itself, one will find that this difference has never been taken cognisance of; it has been carefully evaded, and the attitude has simply been adopted that if any form of Cost-Plus can be justified, then the Cost-Plus a Percentage system used by the Defence Department is also justified. These are entirely false premises, and they form the basis of the report—the incompetence to see the difference between the two systems. If we look at paragraphs 31 to 35, we shall see that they bear the heading: “Introduction of the Cost-Plus system.” Everything is based on the “Cost-Plus” idea, and there is no mention of Cost-Plus a Percentage. In paragraphs 58 and 59 the “disadvantages of the Cost-Plus” system are gone into, while paragraph 60 deals with the “advantages of the Cost-Plus” system.” Instead of the Cost-Plus a Percentage system, they simply take the much wider form of Cost-Plus, and then in paragraph 61 draw the conclusion—

Which Cost-Plus system was justified? The Cost-Plus a Percentage system? You will see that it makes a tremendous difference which form of Cost-Plus contract is made use of, the Cost-Plus a Percentage one which is the most pernicious one, and lends itself best to abuse, or one of the other forms of Cost-Plus contracts. We shall assume that the circumstances obliged the authorities to a certain extent to have recourse to the Cost-Plus contract, but we want to know why the Department of Defence resorted to the worst form of Cost-Plus contract. The reply to this question in the Majority Report is an attempt to justify generally the use of Cost-Plus and not in this particular form. The only excuse offered is that the work was urgent and speed was essential, but this one can obtain under any form of Cost-Plus contract. The majority makes no attempt to answer the simple question: Was the Department of Defence justified in making use of the “Cost-Plus a Percentage” contract? When the hon. member for George drew attention on the wrong premise on which the report had been based, the Majority came and said: “Yes, but, the Defence Force did not at the time have the advantage of the collective wisdom of today; today they know much more, but then they did not possess that knowledge. We have now seen what has been done in other countries and what their experiences were, but at that time we did not know all that. On this point I just want to refer to the Majority Report itself which states that in England the system has been condemned years ago and that recourse has been taken there to another system. Australia also made use of the Cost-Plus for a time, but they did not make use of the Cost-Plus a Percentage but of the Cost-Plus a fixed fee. This is also the position as regards the United States of America, and if all those Countries were able to use the right form in their Defence departments, does it not entitle us to point a finger of reproach at our Defence Department which chose the wrong system and moreover obstinately and stubbornly still clings to it? We have the evidence here that the Authorities Committee gave instructions to experiment with the other form, but Defence simply declared that it could not be done, that it was impossible for them to do so. The Authorities Committee then came along and said: You can in any case try it so that we can observe the results. And what do we find? That they again did not do it. That was in 1942. You see therefore that in the circumstances we are entitled to reproach the Department of Defence and the Government for having followed the wrong system and that, if a form of Cost-Plus had to be made use of, they should not have chosen the worst form of it, and that they did so in spite of the experience in other countries of which they must have had knowledge. When last year we brought up this matter in the Select Committee, the attitude simply was that it could not be done. Now the Government comes along and says that it has to be done and that the Cost-Plus a Percentage system must be abolished and that another form must be introduced in certain circumstances whilst generally we should go back to the tender system. One can quote one instance after another, and any person reading the report in an unbiassed manner and judging the matter objectively, will agree with me that as far as the reports, their logical conclusions and reliability are concerned, the Majority Report does not come anywhere near the Minority Report of the hon. member for George. What is to be done now? This Committee was appointed particularly at the instigation of the Opposition, and in spite of the inherent weakness of its composition, important aspects of the problem came to light as a result of the enquiry. We are grateful that the Government itself immediately took steps to give effect to certain recommendations, especially also to those in the Minority Report. But now the Government should go a step further. There remain still other points which need investigation. The matters enquired into by this Committee covered only a limited part of the whole problem, a fraction of the enormous war expenditure. There are other aspects of the problem in regard to which the public are worried and demand an enquiry. The majority report itself states in paragraph 16—

They out on record the disappointment that they could not make investigations on a broader basis. In their Third Report, paragraph 51, they again bring up this point. As I said, there is a further field which has to be covered and we find that this is such an important aspect in regard to war expenditure, that England as far back as December, 1939, and Australia in July, 1941, took steps to appoint special commissions to go into this matter. I have here before me the reports which have been published in England up to the end of 1941. 40 reports have already been issued up to the end of 1941 and that work saved the British Government hundreds of thousands of pounds. But if one wants to have the work done properly, one must have a commission with the necessary powers and with proper terms of reference and one which can devote the necessary time to do it. I may just tell you that that committee in England together with sub-committees held 418 meetings, visited 50 establishments which were either under Government control or under private control, and that they interrogated 744 witnesses. There is great need for such a commission in our country. The Authorities Committee we have, cannot do this work as it is only an extension of the Treasury, or as the Secretary for Finance described it, it is only the Treasury-in-Committee; they only carry out the functions which are carried out by the Treasury in peace time. They cannot investigate these matters and they neither have the machinery for it. All they do is to grant authority for certain works, but they cannot investigate whether a work for which £200,000 is demanded, might not have been executed for £100,000. The Authorities Committee cannot do it and the Auditor-General who is largely an accounting officer, also has not the machinery and cannot call for witnesses and papers and make recommendations. The committee in England had very wide powers. It could compel witnesses to appear before it. Even the owners of large factories which supplied the Government, could be summoned to attend and give evidence. The committee was empowered to investigate the books of firms. Only in that way could it do good work. The Auditor-General is not authorised to do so, and the Select Committee on Public Accounts is also powerless; it also has not the time nor the necessary powers. Then there was something said here about the other forms of control of expenditure, viz. control by the Treasury, the Auditor-General and the Select Committee on Public Accounts. These are, however, all forms of control which they also have in England, and most probably also in Australia, but there they nevertheless deemed it essential to appoint such a special committee to make a thorough investigation. In Australia they appointed a joint committee of both Houses of Parliament; in England they appointed a committee composed of 32 members of the House of Commons with the right to sit also during the recess, seven forming a quorum and they have full powers and had already submitted 40 reports up to the end of 1941. We want to achieve something of this nature by our amendment, viz. that a committee shall be appointed consisting of members of this House. If the Government is really in earnest to show the people that no money is being spent in a wasteful manner on the war effort, let the Government accept the amendment. This will only have a healthy effect. We can afterwards discuss the powers and authority of such a committee, but it is absolutely essential that the principle be agreed to. Only in that case will the Government prove that it is in earnest in regard to keeping the expenditure on the war within reasonable bounds and to seeing that the country’s money is not wasted. It is very easy to say that works have to be executed, but the question is whether they could not be executed as efficiently against lower prices. If that should be the case then it is a crime against posterity to follow more expensive methods. We on this side of the House are opposed to any war expenditure, but we possess sufficient sense of responsibility to realise that as the Government will spend money on the war in any case, there should be proper supervision so that we shall receive value for our money, and that it should not be used further to enrich people who already possess heaps of money. We want to prevent “profiteering” taking place; we want to prevent posterity reproaching us that we have wasted money in an irresponsible way.

That is a phenomenon which we expected, that in such an important discussion as this, only one member on the other side of the House would dare to take part in the discussion, apart from the Prime Minister.

Another three members on this side also took part.

Well, I hope that the Minister of Finance will still take part. We are dealing here with enormous sums, and we on this side of the House are concerned about the expenditure. We find that England, which is participating in the war, took special measures from time tp time with a view to controlling her expenditure. England naturally feels that it is the country’s money which is being spent for her own purposes, and they want to exercise careful supervision. But when we come to South Africa, we find that there is reckless extravagance such as we have never before had in our history, but the Prime Minister says that it does not matter what he spends—perhaps he does not care either how it is spent, as long as he spends money on the Empire’s war. Hence the lack of control. The money which is spent and which comes from the State coffers of our nation, is spent on a war overseas with which we have nothing to do, but at the moment I want to confine myself particularly to the reply of the Prime Minister on the amendment which was moved by the hon. member for George (Mr. Werth). The hon. member for George made out a very strong case, a case which the other side has not yet dared to deal with—no one has yet made an attempt or succeeded in rebutting the case. What was the argument which the right hon. the Prime Minister advanced? He stood here and frankly admitted that the committee which conducted an investigation into Cost-Plus contracts did valuable work. He went so far as to say that the hon. member for George had given him a certificate. The work of the committee was of such a nature that thousands and thousands of pounds were being saved, because the recommendations of the hon. member for George, who had submitted a Minority Report, were acted upon. His recommendations immediately influenced the Government in deciding to abandon the Cost-Plus-and-Percentage system, and to switch over to the tender system. What is the reason why the Prime Minister has now refused to appoint a further committee or commission? I just want to refer to this briefly. He says he is grateful for the work the Committee did, but he does not want to appoint a further committee to cover the whole field of Defence expenditure because, he said, such a committee would have to be given undefined and unlimited powers, and for that reason the Prime Minister could not appoint the committee. There is no reason, however, why the terms of reference of the committee should be unlimited in scope. It can be confined and limited to war expenditure. That is no argument. If any reason must be found to justify the appointment of a commission or committee that reason is to be found in the success with which the previous committee carried out its functions. Its success is admitted by all sides of the House, and the Prime Minister cannot say that he cannot appoint a second committee, because its terms of reference would have to be unlimited. A second reason which the Prime Minister advanced in support of his refusal was that machinery existed which could do the work, and which exercised supervision and control. But that reason holds even less water. That machinery also existed in connection with those matters which the Cost-Plus Committee investigated with so much success. Year after year we get the Auditor-General’s report, after he has examined the accounts of the State. It is not a new thing. It has always existed. But it appeared that that was not sufficient to bring to light the evils connected with the contract system, not in time, at any rate. The second piece of machinery to which the Prime Minister referred was the Select Committee on Public Accounts. The Prime Minister says: “But these accounts are examined by the Select Committee on Public Accounts.” But that Select Committee is nothing new either. It has existed all these years. But in spite of the existence of that machinery these irregularities and wastage of money took place in connection with the Cost-Plus system. The Select Committee discussed this system thoroughly. I think it would be interesting to ascertain how much of the Select Committee’s time was occupied, year after year, in examining the system, but the matter was never satisfactorily solved, until it was referred to the committee which had the time to investigate it properly and which made recommendations on which the Government acted immediately, because it could not withstand the criticism from the public. But when you come to examine what reasons remain as to why the Prime Minister is not prepared to appoint a committee, the reason is, in the first place, that they fear the results of such an investigation. They are afraid that these things which will be brought to light will influence the opinion of the public in the country, and that it will shock the Government supporters, and they are particularly afraid of such an investigation in view of the fact that there is possibly an election pending. Now I want to deal briefly with the fact that the existing machinery did not bring to light what was happening until the committee was appointed and issued its report, especially the minority report, where these evils were brought to light. In connection with the Cost-Plus system, evidence was repeatedly led, also before the Select Committee on Public Accounts, which indicated that in other countries where this system was also in force, it had failed utterly and completely. I need only refer to the report of the Auditor-General on the war expenditure account, 1940—’41. As early as 1940—’41 this matter was fully discussed by the Select Committee, and before the Select Committee the Auditor-General referred to Great Britain’s experience. What was the outcome of an investigation in England in connection with the system? I just want to quote this from the report of the Auditor-General to which I have referred—

In Great Britain they came to the conclusion even before 1941, that the Cost-Plus system was unsuitable, and they proceeded to introduce another system. They found that it was impossible to continue with the system, because it simply left every channel open to abuse, and they then endeavoured to prevent the leakages. Thereafter the system of contracts was placed on the basis of Cost-Plus, in the first place because speed was demanded in doing the work. This system was also followed in Great Britain, but a change was brought about, and the Auditor General writes as follows regarding the position in Great Britain—

Then the Auditor-General goes on to write that although the committee found in Great Britain—

They go on to say about this type of contract—

It goes on to say—

That is their finding. There is no incentive to efficiency whatsoever under this system. There is no incentive to economy; there cannot be any economy at all under such a system, because the higher the costs are driven up, the higher becomes the profit which is made out of the contract. If a contract might be carried out for £50,000, and it can be driven up to £100,000, it means that the profits are increased by 100%. That was the finding in England, and for that reason the British Committee reported that this system in itself contained no incentive to efficiency. There is no question at all of economy under this system. But the other argument which we heard in this House was that there were cases where speed was demanded, and that we could not introduce another system, because this system had to be followed in those cases where speed was required. That was not the findingin Great Britain. It was not found that these contracts expedited matters. We have had evidence of that in our own country too, namely, that these contracts did not assist in the least in expediting matters. I have gone into those cases. In certain circumstances it would have taken 4½ to 6 months to complete the work. Speed was required, and a contract was entered into on this basis. The work did not take 6½ months but 184 months. The evidence which we have from England and which I need not quote here, goes to show, beyond doubt, that the work is not expedited by these contracts. That argument falls away completely. It is further said that these contracts in themselves contain no incentive to efficiency. Reference is also made to the expensive nature of the contracts, as I have quoted, and we can therefore have no confidence at all that these contracts will afford any protection in so far as the Treasury is concerned. They afford no protection to the Treasury; they do not promote efficiency, and economy is impossible. All sorts of methods have been tried in South Africa in connection with these contracts, until this committee was eventually appointed with a view to seeing whether it could not put a stop to the leakages under the system. All those efforts were made, and they all failed. They failed because it was simply impossible to prevent inefficiency and waste under this system of contracts. The reports of the Auditor-General indicate that that waste just continued unhindered. As a result of that waste, the Government of England appointed a committee as early as 1941, and they proceeded to block those channels of wastage. Why did South Africa wait? Even after England had done it, our Government still waited until the Cost-Plus Committee was eventually appointed in 1942. This appointment in 1942 proved to be the only means of preventing that enormous waste of State money. Arising out of the revelations which we have had here, I want to go further and ask whether there is any reason to assume that conditions at the present time are what they ought to be in connection with our war expenditure. In this connection I want to show immediately, and I want to prove, that there is every reason to assume that the position in connection with our war expenditure is not at all what it should be, and that it is necessary to create proper machinery to adjust these matters. After everything which took place, and in view of the enormous waste of money which is going on, the Auditor-General is not in a position to exercise proper control over the expenditure and to audit the books properly. If that could happen, the true state of affairs could become known, but the books relating to war expenditure are in such a state that no proper audit could be carried out. In this connection I should like to quote from the report of the Auditor-General, which was published under the heading “War Expenditure Account, 1940-41, statement and report of the Controller and Auditor-General”. That is his report relating to war expenditure. I want to point out that it is no secret that from the very beginning, year after year, a plea was made in this House that a stop should be put to this terrific expenditure, that the valves should not be left open so that the money could simply stream through. This had no effect on the Government, and the enormous waste of money simply continued. I just want to quote from the report of the Auditor-General, which refers in particular to the war account for the year 1941-42, and I want to point out that notwithstanding the malconditions which were discussed in this House, and also before the Select Committee on Public Accounts year after year, the conditions in the Department of Defence continued on a basis which excluded proper control. The argument was advanced that the war had suddenly come about, that there was no staff, and that they could not get proper control. It was said that they first had to appoint people, and in the meantime this enormous waste took place. The position is that our war expenditure—and it is admitted by members on the other side—simply ran amuck, and no control could be exercised. Notwithstanding the fact that this state of affairs was discussed in the House year after year, we find that the Auditor-General states this on page 3 of his report—

That is the same story which we had the previous year, when the Auditor-General found it necessary to tell us that he was not in a position to complete his audit, because the books of the Department of Defence were in such a state of confusion. He says here clearly that in submitting his report on the accounts, he must state that it was not possible for him to complete the audit up to the 31st March, 1942, and then he goes on to say—

We have had precisely the same thing every year. When we look at the report of the Auditor-General relating to the previous year, we notice precisely the same thing, viz., that he could not complete the audit, and that the extract from the financial statement had to be submitted to this House in an unaudited form. This report went to the Select Committee, and the Auditor-General had to appear before the committee with an unaudited report, which the Select Committee had to go into. In connection with the staff, too, it was said year after year that there was not sufficient staff to exercise proper control. We said: “If there are not sufficient people, appoint a greater number, but do exercise proper control over our war expenditure, so that this waste can be eliminated.” In connection with the personnel, I also want to quote what the Auditor-General said in his report.