House of Assembly: Vol45 - THURSDAY 25 FEBRUARY 1943
Before proceeding to the Order Paper, I have to draw attention to the fact that notice of motion was given yesterday by the Minister of Finance to go into Committee of Ways and Means on taxation proposals which include excess profits duty. As these proposals have greater legislative effect than Order of the Day No. I for Friday, 26th February, viz., adjourned debate on motion by Mr. Oost on excess profits duty, they will block discussion on the motion. The Order of the Day must consequently be discharged.
First Order read: Adjourned debate on motion for House to go into Committee of Supply, to be resumed.
[Debate on motion, adjourned on 24th February, resumed.]
The financial year now drawing to a close has been an outstanding one for the Railways Administration. It has been outstanding in that whilst in the fourth year of the world war and handicapped in the matter of obtaining new engines, rolling-stock, and material, and maintaining trained personnel, the Administration has fulfilled satisfactorily the constantly expanding transport needs of the country.
Rising costs and increased traffic have increased expenditure beyond the amounts authorised by Parliament last year, but the increased revenue which has accrued has more than offset this.
In common with many other undertakings in the country, the Administration has experienced considerable difficulty in the matter of supplies. Many of the normal sources from which our needs are drawn have been closed to the Union altogether, whilst the output from the remaining sources is limited. Further limitations are imposed by shipping difficulties. Last year a position was reached where our imports of commercial and industrial commodities had dropped to only 12 per cent. of normal imports, so that something had to be done to see whether an improvement was possible. This was one of the reasons for my recent visit to England, and I am glad to say the discussions I had with the British Government resulted in a considerable improvement in the position, which I hope may be reasonably maintained. In addition to this, much has been done in this country to meet our needs from our own resources.
A few months ago senior officers of the Administration visited the Belgian Congo and West Africa with a view to investigating the prospects of obtaining supplies of wooden sleepers and timber from those areas. Whilst the prospects of obtaining such supplies at the present time are not good, a new field has been explored which holds possibilities.
Passenger traffic continues to be heavy, and notwithstanding that everything is done to discourage it, we have established all-time records in the number of passengers carried and in the revenue accruing from that source.
Defence traffic again made heavy calls upon our resources, and necessitated the running of 1,466 special trains as against 1,098 for the previous year. Although I pointed out during my last budget speech that this traffic is not the cause of railway surpluses, it still appears to be believed in some quarters that the Railways are making a profit out of the needs of this Department of State. This is a complete fallacy. Defence traffic is carried at a much lower rate than applies to other traffic, and I can assure hon. members that if all our traffic were carried at the rates applied to the Defence Department the Administration would be faced with a deficit running into millions. To illustrate the facts, let me quote the position for the first nine months of the financial year. The total revenue derived from all classes of Defence traffic was £3,959,881, and the rebate allowed on this totalled £1,410,405. It takes approximately 70 per cent. of the revenue to earn it, and thus it cost the Administration £2,771,917 to earn the revenue of £3,959,881. As the amount paid by the Defence Department after deducting the rebate was £2,549,476, it will be seen that the amount falls short by £222,441 of the Administration’s expenditure.
With regard to goods traffic, the demand for truckage throughout the year was generally in excess of available supplies. It was only by the strict control of our rollingstock that our customers generally suffered the minimum inconvenience.
Coal traffic provided the main feature of the year’s working, due to the very heavy bunkering requirements at the ports. Throughout the year all the Union collieries worked at practically full pressure, and the output advanced by nearly 1½ million tons in the Transvaal and well over 300,000 tons in Natal.
Another feature was the heavy volume of livestock traffic. The severe drought experienced in certain Cape Northern and Cape Western districts necessitated the transfer of tens of thousands of sheep and other animals to fresh pasturage in other areas and their return after the drought had broken.
The tonnage of base minerals conveyed in the aggregate was below the figure for the previous year, the reductions being in respect of manganese and iron ores, due mainly to the absence of shipping. Chrome ore exports, however, were well above those of 1941.
Traffic generally during 1943 may be affected by the progress of the present campaign in North Africa and by the extent shipping will be available to South Africa.
The expansion of local industries continues, and we can reasonably anticipate that the volume of internal traffic will at least be maintained on the same level as during 1942. In addition, from preliminary advices I gather that record crops are anticipated in citrus, wheat, and possibly maize.
To sum up, the position is that traffic offering during 1943 will be more or less on a par with that handled during last year. If that turns out to be so, we should with careful control and a little inconvenience be able to meet all requirements from a rolling-stock point of view, with our position improving to the extent by which we are successful in obtaining some of the stock on order overseas.
Records continue to be established. At the end of last year we reached the highest level in our history for passenger earnings, the weekly figure being £282,654—an advance of nearly 8 per cent. on the highest figure reached previously. Gross ton miles in July, 1942, reached the phenomenal figure of 2,884 millions. Tonnage of goods handled surpassed the previous year’s record on three occasions. Monthly passenger journeys eclipsed on four occasions anything previously achieved, the figure for October 1942 being 15,639,995 journeys. The peak figure of £847,838 in respect of weekly earnings, reached in October 1941, was exceeded by nearly £30,000, the new record being £877,779. We steadily approach the million a week mark. What this means in relation to the expansion of our country’s services will be understood when I tell you that the weekly average in the last year of the late Sir William Hoy’s regime was £461,914.
Two of the Administration’s three cargo vessels were fully employed throughout the year. The third vessel was laid up for repairs for a considerable period. These, with requisitioned and other vessels, made up a total of twelve ships operated by the Department.
Whilst it is expected that the same number of vessels will be operated during 1943—’44 as are in service today, an increase of over 50 per cent. has been allowed in the estimates to cover the cost of operation. This increase is due to the anticipation that an additional number of voyages will be undertaken. So far as can be seen at present, three of the fleet will be fully employed in the coming year on work for the Defence Department, the others sailing to various coastwise and oversea destinations, returning to Union ports with sleepers, timber, wheat, and other cargoes.
Ship repair work at our ports has expanded to such a degree that over 300 of the Administration’s staff are employed on a full-time and over 100 on a part-time basis, in addition to some 3,000 employed by numerous contracting firms.
In conformity with the policy of conserving supplies vital to road motor transport, it has been necessary to curtail our services throughout the Union. In doing this, we have had due regard to the clearance of perishable traffic. All pleasure trios and charabanc tours have been cancelled entirely. These restrictions, it is estimated, will represent a total saving of three quarters of a million in operating mileage.
During the year under review few new services were introduced, whereas it was necessary for a number to be withdrawn, and this has resulted in a net decrease in the route mileage of 221.
Revenue from road motor transport for the calendar year 1942 showed an increase of £120,651 compared with the previous year, whilst expenditure was £137,217 higher, the net result of the year’s working being a loss of £22,993.
Due to difficulty in obtaining repair materials and spare parts and to the inability to release vehicles from service, general overhauls are considerably in arrear. The estimated costs of these arrear overhauls is over £125,000, which should really be added to the loss already mentioned to obtain a true picture.
During the year 1942, 38,182 tourists visited the Union from beyond our borders. Bearing in mind the more difficult conditions which prevailed, this figure compares well with the record of 41,000 established during the preceding year.
I mentioned in my last Budget speech that I proposed, in conjunction with the Board of Control of the Tourist Development Corporation, to appoint a small Committee to inquire into the question of South African hotels in relation to the development of tourist traffic. This Committee was appointed in July last and is now conducting a comprehensive survey of the existing hotel industry and its ability or otherwise to meet the needs of the public and tourists under post-war conditions, with due regard to all factors which militate against its expansion or development.
Revenue from commercial advertising is expected to reach or even exceed the record figure of £53,000 established last year.
Whilst fully recognising the value of and in many cases the necessity for advertising, and appreciating the suitability of certain sites on railway property for this purpose, I am satisfied that in recent times over-zealousness on the part of officials and advertisers has resulted in the good appearance of buildings and bridges and the natural beauty of many parts of the country being adversely affected by the display of unsightly hoardings.
There are certain positions on railway premises where advertisements can be placed without detracting from the appearance of such premises or affecting the scenic attractions of the neighbourhood. In a few cases suitable hoardings or show-cases may actually improve matters. What is essential, however, is that a measure of control should be exercised, and with this end in view I have appointed a special Departmental Committee who will report on the question from time to time and who will in future ensure that the policy of the Administration in regard to advertisements is adhered to.
The resources of the Administration have continued to be available for the war effort of the Government. From personal observation I feel I must say once more how splendidly railwaymen are assisting and how magnificently they have worked in a spirit of loyal co-operation to meet and overcome the many almost insuperable difficulties inseparable from war conditions. The contribution from our workshops is a remarkable tribute of efficiency and calls for special commendation. The many women workers engaged are doing excellent work, and have adapted themselves to the requirements and to the demand for high precision work, probably considered impossible before the war. The staff engaged on actual transportation and other duties are equally to be commended for their share in keeping the wheels turning in face, of ever-increasing traffic demands and ever-diminishing resources and man-power.
Special tribute, too, is due to the 10,000 members of the staff on active service. From the accounts I have received, they have excelled in all spheres and enhanced the already high reputation of the South African soldiers. Whether in the fighting forces, the dock operating companies, the engineers, the base workshops, the traffic operating sections, or other units, the reports of their achievements are outstanding in each and every direction in the very highest degree.
The comprehensive training of the Railways and Harbours Brigade, of which I made mention last year, has proceeded on the lines indicated, and a very highly trained and efficient force is being brought into existence. At the same time the Railways and Harbours branches of the Civilian Protective Services have been organised in the larger centres and at the ports to operate within the boundaries of the Administration’s property, and the training to meet any emergency is proceeding satisfactorily.
In support of the Government’s Anti-Waste Campaign the General Manager has been appointed a member of the Central Committee of the National Anti-Waste Organisation, and the closest degree of co-operation exists between that organisation and the Administration in all matters affecting the elimination of waste.
The Administration’s anti-waste efforts continue to be vigorously prosecuted, and during the financial year now drawing to a close material worth many thousands of pounds has been salvaged.
This campaign has not been confined merely to the collection of surplus material, however. Its scope has been constantly expanded, and now embraces all types of reclamation work, the development of substitutes, improved operating methods, and other special measures to prevent waste and promote efficiency.
As a result of the growing need for protecting essential services by the Corps formed for that purpose at the outbreak of hostilities, the Administration has decided to increase the annual contribution which it has hitherto made in this connection to the Defence Department from £250,000 to £350,000.
The conditions of our staff continue to receive my unremitting attention, and there have been improvements in the pay and other conditions of service throughout the year. They include improvements in the wages of railworkers and the lower paid sections of the graded staff, including learners and juniors. Apart from these wage increases, numerous improvements in the grading of individual posts and in the salary and wage scales of individual grades were deemed to be merited, the principal of such improvements being an increase of 6d. per day in the wage scales of the footplate grades and an increase in the maximum wage for shunters.
I would now like to say a word on the subject of non-European conditions and pay.
During my period of office many improvements in the conditions of service of the non-European staff have been sanctioned, involving total additional expenditure estimated at £831,253 per annum, of which sum no less than £700,061 per annum represents direct wage improvements. Over half of this additional expenditure arises out of benefits conferred upon the non-European staff during the current financial year—£431,800 per annum in wages and £41,400 per annum in other concessions, such as increased scales of remuneration for Sunday duty and weekday overtime.
In addition, the award of benefits under the provisions of the Railway Pensions Amendment Act of 1941 involves additional expenditure eventually of approximately £160,000 per annum, a large proportion of which will benefit the non-European staff.
The wage scales now applied are substantially higher than they were before the depression reductions operated between 1930 and 1933. It is true that at some centres the Administration’s wage scales are not as high as those of certain other large employers, but I think it would be quite impossible for us, with our very heavy commitments in respect of wages and the need for us to strive towards uniformity throughout the country, to continually outbid every muncipality and other employer. Besides, I am not so concerned to scale up the higher paid non-Europeans where private employers are generous, as to scale up our lower paid non-Europeans where conditions are not so good. In this connection I find that many corporations who find the greatest difficulty in contributing to level crossings and other works because they have no money don’t hesitate to compete against us for nonEuropean labour by paying out sums which, if applied to us, would upset our whole economic fabric. Let me say, however, that I have strived and will continue to strive for the betterment of our non-European labour. It is not for me to make a declaration on behalf of the Government in regard to the foundations of future non-European economic policy, although it has been suggested that I should do so. That should rightly come from the Prime Minister at the appropriate time and place. I think more will be achieved so far as I am concerned if I, in my own Department, do what I can and as I can to improve non-European conditions and wages rather than await the complete enunciation of Government policy before doing anything at all.
On the question of the representation of non-Europeans on our Staff Organisations, I am at work now on this subject. The nonEuropean staff at present have several Associations which conduct correspondence with the Administration in regard to the conditions of service of their members. Certain of these associations have also been accorded interviews with me from time to time, while three European servants have been appointed under the designation “Inspector (Non-European Labour)” specifically to look after the interests of the non-European personnel.
I recognised, however, that the present system of representation leaves much to be desired, and following upon the adoption of the identity of interests system of representation for the European section of the staff, I appointed Lt.-Col. Fyfe-King to investigate and report immediately upon the question of staff representation for the non-European staff. I have no doubt a satisfactory system of staff representation on the lines adopted for our European servants will result.
The employment of non-Europeans upon responsible Railway work now undertaken by European graded staff has been considered on several occasions during recent years.
It is realised that there is much to be said for the reasons advanced in favour of the adoption of a form of working whereunder the needs of the non-European travelling public may be catered for by people of their own race.
The difficulty is, however, that under existing conditions, if non-Europeans were appointed it would be impracticable to allocate work in a manner which would obviate Europeans and non-Europeans undertaking similar duties in one and the same office.
Considerable structural alterations to station buildings would be necessary before it would be practicable to give effect to a policy of employing non-Europeans in such appointments as booking-clerk, while an adequate non-European relief staff would require to be set up to meet such contingencies as sickness, leave, injury on duty, etc., amongst the non-European graded staff.
A standing committee of railway servants under the chairmanship of a senior departmental officer has been appointed to watch the position in regard to the cost of living. This Committee and one appointed by the Public Service Commission collaborate from time to time and have jointly evolved a scheme regulating the application of uniform scales of cost-of-living allowances to all Government servants. All staff receive the cost-of-living allowance to counter increases in living expenses which have occurred since the outbreak of war. Based on the allowances in force at the end of December last, the annual cost to the Administration is over two million pounds.
The total number of staff employed at the 31st December was 133,949, an increase of 7,187 over the number in the Service at the end of 1941. This increase was necessary to cope with the extraordinarily heavy traffic and to replace servants released for active service.
I would like to give the House my views on the question of promotions in the Railway Service. This is a difficult and delicate subject and one which is a constant source of trouble in the Service itself and of discussion outside it. It will be appreciated that with a great State undertaking like the Railways, the revenue of which is rising £50,000,000, upon which 10 per cent. of our European population relies directly for its livelihood, which is one of the largest landowners in the country, handles commercial arid industrial activities of vast magnitude, controls all forms of transport by land, sea and air, and has health, public works, finance, and other self-contained departments within its ambit, the problem of securing the best and most capable officers to control it is a question of paramount importance.
I cannot say that this problem has been faced as it should have been in the past, and I would like to see changes instituted. There are those I know who look at promotion questions purely from the racial point of view, but, of course, the right way to look at them is from a South African point of view. Our aim must be to secure for this service the best brains our country can produce. If these brains are not available within the Railway Service, they might conceivably have to be obtained from outside of it, but this is a contingency I hope it will never be necessary to face.
The system in vogue today results in elderly servants reaching senior office with a period of service in front of them that can be measured in months only and with nothing but a pension to look forward to. It is the system of the barber’s shop when the hairdresser calls out “next please” to the waiting circle. Occasionally it has happened that the next has not been chosen, and then all the seniors have been upset, appeals have been lodged, and Ministers have even had deputations from Members of Parliament protesting.
There is no more reason for automatically appointing the senior officer of our Railways with his long experience behind him as General Manager of Railways than there would be for automatically appointing the senior member of this House with the longest experience of it as Prime Minister.
We have on the Railways three main divisions of activity. These are firstly Commercial, secondly Engineering, and thirdly Operating. Only engineers can rise on the engineering side, and the tendency is for other officers to specialise in one or other of the remaining two groups. Because of their technical attainments, servants may rise to the top of their special group and be both able and efficient in their job, but that does not prevent them, if they happen to be senior, from demanding to be promoted through another group altogether to the highest posts irrespective of their abilities in branches other than the one they have specialised or even distinguished themselves in.
It is possible to have an outstanding engineer at the head of the engineering activities of our Administration, and in the ordinary way to have reached so high a position should be enough for any man, but under our scheme of things such an engineer, if he is senior, has the right to feel that the reversion of the General Manager’s position, for which he may have no special qualifications whatever, is his because of seniority. The same applies to the other groups, and so, instead of getting competent specialists, we get many officers who, having jumped about through all branches of the Service, reach high offices with a little knowledge of many things and no special knowledge of anything.
A good operating man does not necessarily make a good commercial man, nor a good engineer a good system manager from the accident that they are next in seniority for the job or even because they have long experience on the Railways. There are officials who may be quite competent to run a small system but do not have it in them, either by reason of lack of knowledge, absence of personality, or a dozen other things, to run a larger system or to assume any other higher office. But let us pass over such officials and see what a commotion occurs!
Now, there are some serious results ensuing from this system of promotion. To begin with, there is a tendency to have a lot of rather elderly officials whose best years are really past—although, of course, none of them will admit it—sitting at the top complacently awaiting the passing of the few months that will bring them their pension. Because of their years, and because they may have been promoted on the “next please” principle, they are quite unsuited to take the General Manager’s place and, even if one will pass that exacting test, it means he can be General Manager for a relatively short period only. Experience and seniority are important in the education of any railway officer, but in themselves they are not a sufficient qualification for the senior posts in the Service.
What is required is that more attention must be paid to what qualities a servant has gained for himself from his seniority and experience. Officers in the respective departments should be made to recognise that their direct line of advancement is to the higher posts within their particular sphere of activity and that they cannot aspire to a System Managership or the General Managership unless they measure up to the full requirements of these important posts.
I have no doubt that we have amongst our officers men who possess the natural ability to reach the highest office if they are given the opportunity, but we have to evolve a means of seeking them out well in advance of anticipated vacancies.
When it comes to assessing the real ability and personal efficiency of an officer we are, I admit, faced with no easy problem. If an individual possesses qualities of personality, leadership, administrative ability, tact, driving force, zeal, sound and balanced judgment, co-operativeness, it probably matters little whether he be an engineer, a commercial man, or an operating expert; he obviously is well fitted for advancement if he has reasonable experience to back up his claims.
I have always had in mind a man with quite a few years ahead of him as a likely holder of our highest office. He was a man whose promotion had been rapid, but at every step he had justified himself; he had outstanding gifts of the kind we need in our service. By the untimely death of Mr. Troskie we lost a great officer.
In this matter we must endeavour to select the younger type of officer so that we can be assured of reasonable continuity of his services, since continually chopping and changing our chief administrative officers leads to inefficiency and indifference. What officer will act as a new broom if he feels he will only occupy his new post for a few months? The continual “general post” of officers in the higher positions must be done away with.
I visualise that, apart from the work of administering our service, we will have in the post-war period developments that will bring in their train a multitude of problems, and now as perhaps never before there is a call for the officers we choose to be possessed of the highest qualities and adequate ability to meet them.
For these reasons, Mr. Speaker, I have impressed upon my colleagues on the Railway Board and upon the Management the necessity for a change of outlook on this question of appointments, and I am glad to say that they agree with me as to the necessity for it. I will, however, welcome the views of this House on this important question. I judge that our friends opposite will support my view because since the days of the late C. W. Malan that has in fact been their policy. On this side I know that if members are satisfied the change will make for greater efficiency, they will readily endorse it.
The health and social welfare work, particularly amongst the families of the lower paid groups of the Administration’s servants, continues satisfactorily. The closest contact is maintained with individual famflies through visits by trained Lady Welfare Officers. The nutrition and vegetable clubs that have been formed are proving most valuable.
The free hot midday meal for dock labourers foreshadowed in my budget speech last year is now being served at the East London, Port Elizabeth, and Cape Town harbours. The scheme will be expanded as required. Our Native servants have in certain ports shown some reluctance to take advantage of this very genuine effort to help them, believing apparently that if our Administration, presided over by a Scots Minister, gives something for nothing there must be a catch somewhere. They will, however, learn greater wisdom in time.
Due to prevailing conditions in regard to the supply of material and the difficulties in connection with labour, the departmental housing programme has been retarded somewhat, and as there is little prospect of improvement in these conditions during the ensuing financial year I am not making further provision in the estimates of Capital and Betterment expenditure for such housing. The amounts already voted and available are considered sufficient for the work to proceed as circumstances permit.
The question of the provision of better housing for its non-European staff is one which has been under consideration by my Administration for some time. Many improvements in existing premises occupied by the non-European staff have been effected during recent years while suitable new quarters have also been erected.
The non-European Housing Committee is engaged upon a survey which aims at determining the best means by which a long-range housing scheme can be planned and executed. The Committee has made considerable progress, and while it has not yet submitted its final proposals, the proposals which have been made are sufficiently comprehensive to cover work which could not be undertaken in any one financial year but would require to be spread over several years. £100,000 has been made available during the current year for expenditure on housing for the non-European staff, and negotiations with various municipal and town councils are now in progress in connection with the housing schemes planned.
During the year ended 31st December last 722 loans were sanctioned, bringing the total number granted since the inception of the scheme to 2,328 and the total expenditure to £2,309,542.
Whilst the restriction in regard to building is common to both the house ownership and departmental housing schemes, properties bought under the first of these are often obtained by purchase, and funds are therefore required to be available to meet loans granted. In the circumstances I am providing in the 1943—’44 estimates an amount of £250,000 as the fifth instalment towards the Administration’s house ownership scheme.
I announced last year my intentions regarding the establishment of a staff training institute at Kaalfontein and my desire to have some part of the building available at the cessation of hostilities so that’ men could undergo a re-fresher course before returning to their civilian occupations. The preliminary work of fencing,’ sinking boreholes, and tree planting being completed, a start has been made on the buildings.
It will be remembered that previously I made reference to the bad working conditions in some of the Administration’s workshops and of my intention to improve these. Provision was made in the estimates to the extent of a quarter of a million pounds, and although circumstances inseparable from these times have made it difficult to effect improvements as speedily as I would wish, much has been done.
The number of St. John Ambulance Association awards gained by candidates in examinations conducted under the auspices of the S.A.R. & H. Centre in 1942 reached a new record figure of 4,650, which represents an increase of 80 per cent. compared with the number of awards gained in the pre-war year of 1938. There has also been a corresponding increase in Brigade membership, which at 31st December last stood at 3,720, representing an increase of 87 per cent. compared with 1938.
Members of the staff continue to render valuable service in treating cases of injury and sudden illness on railway premises, and many trained first aid workers unable to enlist for whole-time military service are assisting in the C.P.S. and Military Auxiliary hospitals. Specially trained men and women have enlisted for part-time duty on ambulance trains operating in the Union, whilst at the Union’s principal ports railway ambulance men continue to deal with many of the cases arriving in hospital ships.
There is a growing interest in the St. John Ambulance Movement throughout the Union, and one factor which has contributed to this is the translation into Afrikaans of the First Aid and Home Nursing textbooks. It is also proposed to issue, in both languages, under the auspices of the St. John organisation, a manual on hygiene suitable for South African conditions.
Hitherto the concessions granted in connection with ambulance instruction and training have been confined to European members of the staff and to the wives and adult daughters of railway servants, but schemes have now been formulated for the extension of training to juveniles and to male nonEuropean members of the staff. During 1942 six non-European divisions were formed, resulting in 202 certificates being issued.
The House will recall that last year I set aside a sum of £25,000 to be expended in assisting Provinces in the maintenance of roads used by our Road Motor Services, conditional on payments being made in respect of services rendered in the matter of improving specific roads desired by the Administration. At the start this proposal was not too well received, but it has now been put upon an agreed and, I think, satisfactory basis, and the whole amount has been allocated amongst the Provinces in respect of works in hand or to be undertaken. In view of this satisfactory result I have decided to set aside a further amount of £25,000 for the ensuing financial year.
Whilst a number of new works have been held up on account of the lack of material and staff, others have been deferred due to their not being regarded as essential under present conditions. All this, representing many millions of pounds of expenditure, forms a reservoir of activity and employment which will greatly assist in post-war development. Numerous major undertakings, however, require to be proceeded with to meet the demands arising out of the war, and in this connection we have various large works at our harbours. In addition to the programme outlined last year, the Administration is now constructing a graving dock at East London. This installation has been rendered possible only through the British Admiralty’s co-operation in supplying the necessary machinery, which in these ’times would otherwise be quite unobtainable. As war-time measures, floating docks are being installed at Durban and Port Elizabeth.
Other major works, such as the harbour extension and additional deep-water berths at Table Bay, additional deep-water berths with attendant facilities at Durban, the extension of the Island View wharf, and the development scheme at Salisbury Island at Durban, are progressing satisfactorily notwithstanding difficult conditions. With the works of lesser magnitude in progress at the other ports, we are advancing towards a stage when our capacity to handle shipping will be able to meet efficiently all possible demands. I firmly believe that although our harbours and ports will now have been developed beyond what we have hitherto thought necessary, we shall not have anticipated post-war developments by more than a very few years.
Port and shipping problems have altered considerably during the past year, due to the war s strategic changes and operational planning. A year ago one of the main difficulties confronting our ports was the berthing of ships and the rapid clearance of cargoes to achieve the quickest despatch of ships.
Today the problem is to obtain commercial goods as, owing to increased service requirements, Allied Governments have turned over to war production and placed strict embargoes on exports. Against this, the loss of the Mediterranean and the early successes of the Japanese in the Far East have resulted in large numbers of ships having to use the Cape route. The Directors of Port and Shipping, about whose appointment I have previously advised the House, continue to perform most valuable service in the securing of co-ordination of work and effort between the fighting and civilian services, the shipping and commercial interests, and the various Government Departments operating at our ports.
In this connection I notice Lord Leathers, the British Minister of War Transport, has had some flattering things to say about the working of our harbours. May I in turn say that what we have accomplished has been possible only through the very efficient, prompt, and understanding way Lord Leathers and his Ministry have co-operated with us in all our work and in helping to solve all our difficulties.
One of the most important matters to receive attention on my recent visit to England was the question of diverting shipping from one port to another to ensure its safety and the most efficient service and despatch. As a result of consultations with Lord Leathers and the Commander-in-Chief, South Atlantic, arrangements were concluded on my return to appoint a Ports Allocation Executive to work on the principles operating in Great Britain. The results of this innovation have been most satisfactory.
With the improvements carried out during the past three and a half years and the works still in progress, I am confident we shall not only improve on last year’s achievements in respect of shipping, but be able to handle greatly increased tonnages, and in this manner enhance South Africa’s already remarkable war effort.
I now come to the financial position and I propose to deal with this aspect more exhaustively than in past years.
There has been a good deal of very loose talk in this House and outside, by people who have little understanding of the real position, regarding the alleged profits made by the Administration. The impression is abroad that in some way the Administration is taking advantage of a difficult period to line its own nest and to make the railway servant a privileged class, entrenched in a manner not enjoyed by other employees. That such is not the case need hardly be stressed, but I think time is opportune for making a clear statement regarding the financial policy of the Administration, in the hope at least that knowledgeable people may appreciate the principles upon which it is based.
I gave a brief reply in the debate on the Part Appropriation Bill regarding the position of wages stabilisation in relation to the Rates Equalisation Fund. I think I made it clear then that the Rates Equalisation Fund in effect was a reserve which would come to the aid of the Administration when revenue was insufficient to meet expenditure and that there could be no question of making up any shortfall in revenue by cuts in wages as long as there was a balance in the Rates Equalisation Fund available to make ends meet. This does not place the railway servant in a particularly entrenched position, but it does permit the Administration to carry on during a period when revenue may have receded, without requiring the Administration’s staff to shoulder the cost of making good a deficit, a cost which should rightly be borne by railway users. In such a case railway users would not be involved because a balance in the Rates Equalisation Fund will ensure to them that rates and fares will not be increased to make good a temporary shortage of revenue.
I assume that Members are satisfied that a Rates Equalisation Fund should exist, and that views differ only regarding the limit to which this Fund should be allowed to go. I shall now deal with this aspect. For many years after Union no amounts were placed to the credit of this fund and only since 1935 have regular contributions been made. The suggestion has been made that as the Administration could carry on for so long without contributions it should be able to continue doing so. My reply to this is that had the Railway Administration been able to accumulate a matter of, say, £7,000,000 before the last depression struck the Union in 1929 and 1930 it would have been an excellent thing for the country in general and the Railway Administration in particular. This at any rate will be fully endorsed by the staff of the Administration who had much cause for regretting the absence of any reserve which would have obviated the very drastic cuts made in their emoluments.
In 1934 the Granet Commission investigated the matter of the Rates Equalisation Fund and came to the conclusion that this fund should have regular contributions made until it reached the sum of £2,000,000. In those days revenue was approximately half what it is today, and automatically, therefore, this £2,000,000 limit becomes £4,000,000 on the basis of increased revenue alone.
At the time of investigation by this Commission the Administration had effected curtailments of wages, allowances, and other payments to the staff to the extent of over £1,000,000 per annum and consequently the Granet Commission in suggesting a Rates Equalisation Fund of £2,000,000 only, had not taken into account that the inroads made by the Administration into the emoluments of the staff would at a later date be refunded and that further commitments would be undertaken.
In 1938 my predecessor, the hon. member for Gezina, made a rough estimate of the position and informed the House that it was his intention to increase the Rates Equalisation Fund to £7,000,000, as this sum represented approximately the amount by which rates and fares had been increased and the emoluments of the staff decreased during the period of depression.
I am satisfied that his assessment of the position then was approximately correct, but in those days revenue was much less than it is today, and the £7,000,000 in proportion to today’s revenue should be £9,000,000.
It is now my intention to limit this fund to £10,000,000 and I will give my reasons for fixing it at this limit.
First of all, let me make it clear that the revenue of today has reached artificially high figures. By “artificial” I mean that the income of the Administration is a wartime income which is not backed by normal industrial and economic development in the country. Let us consider the revenue from passenger traffic. There is more money in the pockets of the people today than has hitherto been normal. There is more money available, thus the spending-power for a time has been greatly increased. This increased spending-power is undoubtedly contributing largely to the increased revenue of the Administration. In addition, money which would normally be spent overseas by our people is now kept within our borders. Notwithstanding injunctions to the public to refrain from travel where this can be avoided, it is probably too much to expect that, with more money available than hitherto, the injunction will be very seriously observed. In addition to this, residents of territories beyond our borders are contributing substantially to this revenue. These people would normally also spend their surplus in trips to Europe but are now finding that trips to the Union make a suitable and, I hope, a pleasant substitute.
All this extra traffic is being carried without a proportionate increase in the number of trains run under pre-war conditions. Trains are crowded today and the public are putting up with inconvenience which I am certain they would not accept in normal times. The result, however, is a considerable accretion to the revenue of the Administration, an accretion which it would be foolish to assume is of a permanent nature.
As far as goods revenue is concerned, this is actually below the estimated revenue for this year and is less than last year’s revenue. This is to be expected in view of the curtailment of imports which normally contribute substantially to our high-grade goods revenue. Coal traffic shows an increase, as I have already mentioned, but this also must be looked upon as temporary war-time inflation with at present no guarantee of permanence.
The House, therefore, will realise that there is a fortuitous increase on the revenue side, and I would ask them to remember this when I deal with the expenditure side.
When considering the expenditure side I must remind members that it is not my policy to authorise increases in expenditure represented by improved wage or other conditions of the staff merely as temporary expedients. What improvements there have been, apart from cost-of-living allowances, are of a permanent nature, and it becomes necessary to consider what these permanent increases are.
Since the commencement of the war, railworkers’ pay has been increased to a maximum of 9/6 per day. The large scale employment of European railworkers was started by the the late Chari Malan on the basis of 5/- per day. This increase will bring additional expenditure, involving this class of worker, during the war period to the sum of £455,000 per annum, and later on to a higher figure.
The Member for Cape Eastern may consider that little has been done for the non-European staff of the Administration but, as I have already stated, the increases granted to this section since the commencement of the war aggregate expenditure of close on a million pounds per annum.
The increased provision of articles of uniform and clothing to certain lower grades of staff involves approximately £41,500 per annum.
Permanent increased expenditure, totalling £345,000 per annum, is involved in improvements in pay conditions to Workshop, Traffic, and Running staff.
There are many other items of permanent expenditure which it is unnecessary to mention in detail, but a correct assessment of the improvements brought about in the emoluments and conditions of railway servants during my term of office as Minister amounts to the substantial sum of £1,962,000 per annum, and this is permanent expenditure.
I mentioned to the House recently that I had appointed an Hours of Duty Committee to investigate the hours of the staff. I think it can be taken as a foregone conclusion that the staff as a whole, while welcoming reduced hours, would not welcome a corresponding reduction in wages. It is clear, therefore, that any reduction in hours of duty will involve increased staff and the Administration will again be faced with a permanent increase in expenditure.
There is other expenditure which may or may not recede, such as, for instance, the cost-of-living allowance. After the War the amount now being paid out of Railway revenue in respect of the difference between military and civil pay will fall away, as also will the contribution being paid by the Railway Administration to the Defence Department for protection by the Essential Services Protection Corps, but much of the expenditure, as I have stated, will be of a permanent nature.
I am not an alarmist and do not suggest for one moment that a depression is bound to follow after the cessation of hostilities, whenever that may be, but it is essential to look ahead and weigh the permanent increased expenditure against temporary and fortuitous increases in revenue to visualise conditions as they may exist when the war comes to an end.
In looking forward to the development in this country after the war, one must visualise the effect of the industrial development which has taken place during the war and consider the permanent effect of such development. It is more than likely that import traffic, on which the Administration admittedly makes profits, will be slow in recovery. Consider the effect, too, of the development of our own resources and the carrying of local materials on the basis of the present rates. The Planning Council of the Government and the Industrial Development Corporation will endeavour to develop the industries of our own country on the basis of freight rates some of which are at present uneconomic in so far as the transport costs of the Administration are concerned. I am far from objecting to this, but in time this policy will undoubtedly involve a revision of the Administration’s tariffs as a substantial loss of high-rated import traffic would affect the entire structure on which our rating policy has been built up. Some such revision had to be made in 1920 under somewhat similar circumstances, but I think the country as a whole would prefer that such a revision were not brought into effect too suddenly and would rather see South African industrial development carried out on the country’s present low tariff policy for as long as possible. To enable this to be done would require that the Administration had a sufficient reserve to permit it to pay its way for a few years whilst stabilisation was striven for between industry and transportation.
Harbour and other development which is now in hand involves considerable outlays of fresh capital. The Administration is required to meet not only the increased costs which may be involved without receiving an adequate return but also the interest on the capital invested.
In passing, let me remark that it is perhaps not generally realised, in connection with this matter of “interest,” what a large part the Administration plays in promoting the general good of the people of this country. At the moment the Administration pays in interest over £6,000,000 per annum to the Treasury in respect of capital borrowings. This money does not remain with the Treasury. The capital comes mainly from the investments of the people of the country in Government loans, but the people obtain the interest on their investments through the operations of the Railway Administration.
It would perhaps be more readily realised by the public if some of our Government loans were termed railway loans. They would then look to the Railways for the return on the investment and would perhaps more gladly see a sufficient reserve to ensure that the interest on their investments in a postwar period had every likelihood of coming forward. No-one should welcome such a policy more than my colleague, the Minister of Finance.
After the war I think we can look forward to a healthy development of the Road Motor Services. On the present tariffs Road Motor Services do not pay and the loss is shouldered by the Administration. It is not my present intention to endeavour to make the Road Motor Services pay by increasing tariffs, but the House will appreciate that a development in Road Motor Services will mean an increased loss to be borne by railway users.
In the last complete year in which our Airways operated the Administration had to face a loss of over £325,000. This loss has fallen away because of the suspension of our Airways Services. It is not my wish that the whole of any future loss on Airways Services should be carried by the Railway users, but whatever sum may be involved, I can assure Members that Airways in this country will be unable to operate without a substantial subsidy, and there will therefore be some considerable deficit to be carried when these services are resumed.
Shipping is another matter which may be developed after the war, and to what extent this can be a payable proposition remains to be seen. Up to the present we have run three ships sucessfully because we have been able to provide cargoes for them. It is uncertain whether we will develop our shipping, but if we do, it is as well to remember that with world-wide competition to face, the Administration would not be on completely sure ground in so far as profits from this service are connected.
More and more I am endeavouring to make the Railways an ideal employer of labour. I want to improve workshop conditions and housing for the staff, both European and non-European. More and better accommodation will not produce an economic return, and improvements in this direction increase the expenditure to be carried from our revenue.
In my meetings with the combined Staff Associations, which have been of a cordial and helpful nature, I have come to the conclusion that there is no cry for a general all-round increase in wages. Certain sections of the staff may yet require their wages adjusted in relation to other sections of the staff, but there is today no outcry for a general uplift in substantive rates of pay. There is no doubt that this is due to the action taken in the past two or three years whereby investigations have been carried out niece by piece to see what improvements are justified. The staff as a whole, therefore, are not looking for a general increase in emoluments. They would far rather maintain satisfactory conditions and be assured that there is a substantial reserve fund in the background which will obviate any chance of the whittling away of their emoluments at the first breath of a recession in the Administration’s revenue, as happened during the last depression.
I have endeavoured to give a clear picture not only of the present financial obligations of the Administration but also of the further commitments which will have to be faced in a post-war South Africa.
In expecting a considerable decline in passenger revenue when the war is over, I have given my reasons which in no wise suggest depression years. I place the Railways in the forefront as a stabilising influence in post-war settlement and development. To be a steadying influence in the country as a whole we must have a Railway Administration which will not be required to upset the economic balance of industry and agriculture by lack of stability in tariffs nor be the cause of disruption by having a discontented staff suffering from specialised taxation to meet financial deficits.
This is when the country will appreciate the wisdom of the policy I am following in setting aside the fortuitous surpluses of these days to meet the economic vicissitudes of the days to come, a policy by which I firmly stand and for which I ask the unqualified support of this House.
I think it should now be clear that whatever reference may have been made in earlier years and in my predecessors’ time to a Wages Stabilisation Fund, there was no necessity to establish such a fund, and in fact no such funds has been established. The references to it in the past, whilst no doubt excellent windowdressing, were quite unnecessary.
It is my intention to allocate a considerable portion of the anticipated surplus for the year coming to a close to the Rates Equalisation Fund, which should advance the balance in that fund to approximately £9,000,000. To what extent I may be able to go beyond this figure next year I am unable to say, but in any case the limit I have fixed is £10,000,000 and I hope it may serve the useful purposes I have outlined.
I come now to a few details covering the
The new procedure whereby surpluses are disposed of through the Finance Act leaves no unappropriated balances but, as I have already intimated, the Administration has had another successful year, though not to the extent of the preceding one.
Revenue.
At the time of framing the estimates it was impossible to envisage the possibilities of the future in so far as they might affect our Railways. Instead of basing revenue on actual figures for the previous year a conservative basis was adopted and Railways revenue assessed on earnings of £730,000 per week and Harbours £45,000 per week. The revised estimates for these figures, based on the position disclosed at the end of December, are £787,000 and £46,000 respectively.
Expenditure.
The advance in expenditure has not been so great as was anticipated. It has increased by 3.70 per cent. in relation to the improvements in revenue of 8.22 per cent.
Estimates of expenditure of Railways, Harbours, Steamships and Airways approved by Parliament for this year will be exceeded by £1,633,258, the original and revised expenditure figures being £44,112,742 and £45,746,000 respectively.
Estimates of additional expenditure have already been presented to the House.
The anticipated results for the year are therefore as follows:
REVENUE: |
|
Railways |
£46,201,000 |
Harbours |
2,497,000 |
Steamships |
1,214,000 |
Airways |
2,000 |
£49,914,000 |
|
EXPENDITURE: |
|
Railways |
£42,114,000 |
Harbours |
2,281,000 |
Steamships |
1,298,000 |
Airways |
53,000 |
£45,746,000 |
|
SURPLUS: |
|
Railways |
£4,087,000 |
Harbours |
216,000 |
Steamships |
84,000* |
Airways |
51,000* |
£4,168,000 |
|
*Loss. |
|
Less: Appropriations already authorised by Parliament |
£1,1987,000 |
Leaving an estimated surplus of for appropriation |
£2,181,000 |
I propose to allocate £500,000 to the Betterment Fund to permit this fund to meet the commitments involved in the many works of improvement which are in hand and contemplated in our large programme of new works to be taken in hand as soon as conditions permit.
The balance, estimated at £1,681,000, I propose to place in the Rates Equalisation Fund in pursuance of the policy already outlined.
I will now deal with the estimates for the ensuing year.
I have already outlined my views on developments in the country, and it is therefore unnecessary to make further comment in regard to the probable business expected by the Administration in the coming financial year except to say that I have based revenue on little less than the average of the current year.
Weekly earnings for Railways have been assessed at £781,000 per week and for Harbours at £46,000 per week.
On this basis the revenue for the year 1943—’44 will be:
Railways |
£45,703,000 |
Harbours |
2,504,000 |
Steamships |
1,712,000 |
Airways |
1,000 |
totalling |
£49,920,000 |
The estimated expenditure for the year 1943—’44 totals £48,227,000, made up as follows:
Railways |
£44,056,000 |
Harbours |
2,416,000 |
Steamships |
1,699,000 |
Airways |
56,000 |
Total |
£48,227,000 |
These figures represent an increase of £2,481,000 over the revised estimate for 1942-43, viz.:
Railways |
£1,942,000 |
Harbours |
135,000 |
Steamships |
401,000 |
Airways |
3,000 |
Total |
£2,481,000 |
The increase in expenditure when compared with the revised estimates of expenditure for the current year is due mainly to increased provision for cost-of-living allowances, increased shipping activities, and improvements in the emoluments of certain sections of the staff to which I have referred.
Summarised, the working of the combined services of the Administration for the financial year 1943—’44 is expected to yield a gross surplus of £1,693,000, as follows:
Revenue |
£49,920,000 |
Expenditure |
48,227,000 |
Gross Surplus |
£1,693,000 |
This gross surplus will be reduced in respect of the following customary appropriations:
Betterment fund |
£1,200,000 |
Annual contributions to make good the deficiency in Pension and Superannuation Funds |
487,000 |
£1,687,000 |
In the past years it has become customary to supplement my budget speech with a white paper. Last year I deleted much of this white paper as it merely represented extracts from various other reports and official publications. What was left was mainly a resetting of figures which appear in the estimates which are laid on the Table and supplied to hon. members. In view of the paper shortage and the fact that hon. members are not being deprived of information, I have deemed it expedient to dispense with a white paper this year.
Before concluding I wish to pay a special tribute to the General Manager, Mr. Hoffe, in view of the unjustifiable and grossly unfair attacks which have been made on him in this House during the past few days. I have been closely associated with all General Managers of these Railways since Union, and know that Mr. Hoffe’s record of fairness in his dealings with and interest in the welfare of all sections of the staff is unsurpassed. He has shown himself indefatigable in his efforts to improve the lot of railwaymen from the lowest ranks to the highest. As Chairman of such bodies as the Railway Conciliation Board, the Railworkers’ Commission, which recommended considerable improvements in the service conditions of railworkers, the Housing Commission, which evolved the rent rebate and house ownership schemes, and the Staff Training Committee, which recommended the establishment of the Kaalfontein training institute, he was largely responsible for the permanent betterment of staff conditions as important as any ever conceded to railwaymen. In all the different spheres of staff welfare work, such as physical training, nutrition clubs, first aid, care of railway orphans, the welfare of men at the front and in prisoner-of-war camps and of their dependants, he has by his keen interest, energetic leadership, and driving force, done a vast amount of good, which has deservedly made him popular with all ranks of the Service. He enjoys the Administration’s and the Goverment’s fullest confidence in his work as General Manager.
In conclusion I desire to thank all members of the staff for the continued loyal and ungrudging service rendered to the Administration and the public during the year under review when at times conditions have been arduous and difficult, and to express my appreciation of the support rendered me by the Railway Commissioners, the Management and the Port Directors.
I now lay on the Table—
On the motion of Mr. Werth, the debate was adjourned; to be resumed on 3rd March.
Second Order read: House to go into Committee on the Oliphants River Irrigation Works Bill.
House in Committee:
On Clause 2.
I want to say at the outset that we on the Oliphants River are extremely grateful to the Minister for the writing off of this £252,000 which rested on this scheme. I just want to add that, although we express our appreciation, what has happened here is not an exception. As the Minister of course knows, various writings off have been made throughout the country in the past. Enormously large sums have been written off already, and this is therefore not a special concession to the Oliphants River. It is a general rule where debts have rested upon such irrigation schemes, to write those debts off because the irrigation schemes have been regarded as national undertakings. Nevertheless, we thank the Minister for what has been done. But I wish to say a few words about the disbanding of the Oliphants River irrigation board. It affects a big principle. It definitely lays down a precedent when the Minister disqualifies a special board of a scheme.
The hon. member is now discussing the principle of clause, and we are now on Clause 2.
The discharging of the Oliphants River irrigation board falls under Clause 2.
It is the discharging of the debt.
Yes, I see, I must raise the matter under the other clause.
Clause put and agreed to.
On Clause 3,
What I have already said comes down to this, that a difference is being made between the irrigation board of Oliphants River and the other boards. It is quite a new precedent which the Minister creates here and applies to the Oliphants River irrigation board. We have to do here with a scheme which is certainly one of the best in the country. It cannot be questioned that the Oliphants River irrigation scheme is definitely one of the best in the country. The progress being made there, the favourable weather conditions and the great measure of success which we are achieving are proof enough that the Minister cannot say in the least here that the undertaking is in a certain measure impossible or not self-supporting. He cannot say it to justify this standpoint in abolishing this board. It is not clear to me on what grounds the Minister wishes to justify his attitude in abolishing this board. What harm has the board done; where has it failed in its duty? It is a young scheme, but it is a young scheme which is blooming. If the Minister says now that it is a general policy, that this precedent will be applied to all the other schemes, then we can understand it. But he makes a special distinction here in applying this disqualification only to the Oliphants River irrigation board. We cannot understand what the object of rhe Minister is, and I have therefore received instructions to protest against it. I feel that it is the Minister’s duty to act impartially and not to select a single scheme. He must come to us with a general policy, and here we have not a general policy.
I must remind the hon. member that he cannot discuss the general policy in connection with this clause. He must confine himself only to the terms of the clause itself.
Then I wish to move that this clause be deleted.
The hon. member does not need to move it, he can vote against it.
I do wish to appeal to the fairness of the Minister. A distinction is made here in regard to the Oliphants River irrigation scheme. It will definitely hamper the scheme and do harm. We do not see what the object of the Minister is, why he wishes to impose this qualification on the Oliphants River irrigation board. We very much want the assistance af the Minister to help us with that fine development. He takes just as much interest in it as we, but now he comes here with legislation which abolishes that irrigation board. It is a far-going principle, which creates a precedent, and we do not therefore understand why the Minister must act in this way against this irrigation board.
I wish to remind the hon. member that the principle has already been accepted at the second reading of the bill, and he cannot therefore discuss the principle again now.
On a point of order, Mr. Chairman, is the hon. member not entitled to discuss the principle of this special clause?
The hon. member may only discuss the provisions of clause 3, but not the principle of abolition which has already been adopted at the second reading.
But I assume that the hon. member may make remarks about the principle of this clause.
Yes, but not about the principle of the bill.
If the principle of this clause is being discussed, then the hon. member is surely entitled to ask whether it is going to be the general policy of the Government in regard to other irrigation boards too.
The hon. member has already put that question.
When the Minister yesterday explained this Bill, he told us the history of the irrigation scheme on the Oliphants River. But he omitted to tell us why he is taking the step which is proposed in this clause. The history he told us was very fine but we knew it already. But why he should now proceed to abolish the Oliphants River Irrigation Board he did not tell us, and I want to ask the Minister whether it is necessary to take such a drastic step. Did anything happen in that district in regard to this scheme which compels him to interfere in this manner? If so, then it would have been his duty to inform this House of the reasons which prompted him to take that step. We feel that a dangerous principle is embodied in this clause, viz. that the local board is replaced by the Minister and the Department. This means that ultimately we are going to have central supervision of every scheme and central administration on the part of the department and we are afraid of too much bureaucratic management in South Africa. I just want to say this. I do hot want to say that I have no confidence in the Minister that he will not manage the scheme properly. I have more confidence in him than in his colleagues because he has practical experience of this matter. But to entrust the management of such schemes to the Minister with his department in future, is going to be very dangerous.
May I remind the hon. member of section 168 of the Standing Rules and Orders, which reads as follows—
But that is exactly what I am doing, discussing the details. In this clause the Minister proposes to abolish that Irrigation Board and that is the detail I am discussing. I asked the Minister why he wanted to abolish that Irrigation Board.
That the hon. member may do.
Before we can accept this clause, the Minister should give us a sound reason why he should take such a step. We shall not be able to make a success of irrigation in South Africa if we take away the management from the local people and centralise it in the hands of the Minister and his department. If that is going to happen in the case of this board, it will also be done in future with other boards. We on this side of the House are jealous of the principle of local management, and for that reason we maintain that the Minister should give us a sound reason for taking this step, or otherwise he should withdraw this clause and refer this Bill back to the Select Committee on Irrigation Matters. I sincerely hope that the Minister will reply on this point.
That is precisely what I wished to say a few more words about. It is a new principle and precedent that is being created here. It can become a very dangerous precedent. Tomorrow the present Prime Minister may no longer be Minister. There may perhaps come another Minister, and we have to do with the whole future of irrigation.
I want to remind the hon. member that he cannot discuss the principle of the bill now, but only the particular provisions of this clause.
For that reason I want to make an appeal to the Minister to explain to us what the reason is for the abolition of the Oliphants River irrigation board. We will be glad if the Minister will be so kind as to explain to us why the distinction is made between this particular board and the other boards in the country. We very much want the information.
I should like to explain to the hon. members again what I explained yesterday already. This Irrigation Board was founded in 1911. When the board was called into being for the first time, when they made application for the irrigation scheme, the debt amounted to £155,000. Thereupon the dam was built and the amount of debt was increased until it ultimately reached the figure of £605,000. That board never functioned. This measure means the abolishing of a board which does not function. The hon. member for Namaqualand (Lt.-Col. Booysen) asked where and when the board failed in its duties. It never carried out its duties, never since it came into being.
Do you mean its duty to levy rates?
It could have carried out its duties, but not a penny was ever paid.
But then you have the general power to take over the board.
Because they failed to carry out their duties, we are abolishing the board.
Which duties?
The duties of an irrigation board.
Did they not distribute the water?
That is not only the duty of an irrigation board. I now want to ask that hon. members should take into consideration the difference between a private board and the board of a Government scheme. This board is to be transformed from a private board into a board of a Government scheme.
Does it not remain a private scheme?
It is to become a Government scheme. The hon. member for Oudtshoorn (Mr. S. P. le Roux) is afraid of a precedent being created of the central administration going to manage undertakings of this nature and taking away the management from the irrigators. In this case the board is transformed into a different board, viz. a board of a Government scheme. In the case of private boards the irrigators maintain the right to have members on such a board. This board was created in 1911 and it never functioned. This department has administered that irrigation scheme from 1927 until now.
What about the private irrigators?
The Irrigation Board is to be transformed now and the scheme becomes a Government scheme.
Is this to be a new board?
A new board will be set up.
Is provision being made for the representation of the irrigators.
No such provision is being made. The appointment of the members of the board rests with the Minister. This is exclusively a Government scheme. I just want to explain to the hon. member for Namaqualand that the irrigation board which was in existence, never functioned and carried out none of its duties. From 1927 onwards the scheme has been administered in the manner in which it is being administered at present. It was nominated by the Minister and it will function again. But the abolishment of the Board is taking place because it never functioned since 1911.
The Minister now states that he wants to abolish the 1911 board because it never functioned. If he wants to abolish this board for the reason mentioned, are there not many other boards which should also have been abolished?
They were private schemes.
Such a board has several duties. It has to levy the water taxes; it has to distribute the water and arrange the irrigation. Surely the Minister does not want to tell us that that board never distributed the water amongst the irrigators? It has already happened with many other schemes that the boards did not at the beginning collect the levies, and the reason for it was that originally interest was demanded from the full capital sum and no irrigator was in was in a position to pay it. Since 1927 another policy has been followed, namely of subsidising schemes. The Irrigation Commission investigates the matter and recommends a write-off in order to make the scheme economically sound and thereafter the board is required to levy the water rate, to properly distribute the water, etc. I can assure the Minister that if he now gives those irrigators the opportunity to appoint their own board, they will be able to meet their obligations. He should not say that these boards did not carry out their duties at the beginning for we all know they could not do so and that was the reason for a change in policy. By virtue of the Minister’s proposal in Clause 2 they will be able to do so in future. We want to know from the Minister why he abolished this particular board and why he is now starting with this policy.
Because it is now a Government scheme.
But the Minister will also have to admit that there are people there who are not settlers.
But what is a Government scheme?
I take it that a Government scheme is a scheme Where irrigators are settlers. I assume that is the case. But here we have also people who are not settlers and why should the right of electing representatives on the irrigation board be taken away from them? But even if those people were all settlers under that scheme, why should they not be entitled to appoint their own board. The Minister knows just as well as I do that it is better under such a scheme to leave the management in the hands of the persons concerned. If he wants to direct everything from his office in Pretoria, he will not obtain the best results. But what is more, if the Minister applies that principle here, he will want to, apply it tomorrow or the day after to other schemes too. There are also other Government schemes—I do not exactly know when a scheme becomes a Government scheme—but there will be other schemes where we find settlers and private irrigators and where the State will have a large say in the general management of the scheme. What has been done here with the Oliphants River scheme will in time to come also be done with other schemes. It will not remain there, and we want to ask the Minister to give those people an opportunity to appoint their own management. The department could appoint some of the members, but allow the irrigators to appoint some also. I think the Minister Should meet us in this respect. If he accepts this clause, the result will be more far-reaching than the Minister himself now realises, and for that reason we cannot allow it to pass without any more. I shall be obliged to vote against this clause and I want to ask the Minister not to force me to vote against it. We are speaking here in the interests of irrigation in general, and we expect the Minister not to take steps which will detrimentally affect irrigation in future.
I should like the Minister to tell me how many Government settlers and how many private irrigators there are under this scheme. As far as I know the Irrigation Act of 1912, no provision is made therein for a Government scheme. When an irrigation area is proclaimed, it is to be controlled by an irrigation board and that board is elected by the ratepayers who are supplied with water. Here the Minister comes along and takes away the vote of the private irrigators. Possibly one third or half of the irrigators are settlers, and because there are so many settlers, the private people’s say in the matter is taken away. I believe the Act of 1912 provides that a settler is also a ratepayer under a scheme and that he is therefore entitled to a vote. Why should that vote be taken away from him. The Minister introduces a special Bill to do that, and we should like to know why the Irrigation Board cannot fall under the Act of 1912. That is the principal Act in regard to irrigation schemes and here the Minister creates an exception.
And makes Government employees of the irrigators.
There are independent farmers under this scheme. If the Minister is rather concerned about the settlers meeting their obligations, we can understand it. But what about the people who are independent farmers? And how can the Minister say now that this is a Government irrigation scheme? Which Act makes provision for a Government irrigation scheme? We know nothing about such a thing. I should like to know from the Minister how many private people fall under the scheme and how many settlers. When he gives us that information he should at the same time state why he is making an exception so that these people cannot fall under the Act of 1912.
Business suspended at 12.45 p.m. and resumed at 2.20 p.m.
Afternoon Sitting.
With reference to the interpretation of the Minister, I think that the Minister is not exact in his statement. I am well acquainted with the fact. A small clash arose at that time. That was the position. In accordance with the agreement between the farmers and the Department, there was a stipulation that a certain quantity of water had to be provided. We had at that time only a catchment dam, and consequently the Department could not give the farmers enough water according to the agreement, and through that a clash arose. The board at that time took the view that we could not burden the settlers with that tax before the Department gave the quantity of water to the irrigators, and when the board did not collect the taxes, the then Minister decided to act himself and collect the taxes, and so it went on year after year; not that the board was unwilling to function—it was willing to function, but the Minister then acted himself in place of the board and collected the taxes.
From 1927.
I just want to explain that the board was not unwilling, but they only clashed on that point that there was not enough water, but when the second dam was built and there was enough water, then the board was willing to function, but the Minister kept on collecting the taxes. Now I say: Is it fair now that the Minister is going to make a distinction with regard to this scheme and other similar schemes. We know the Minister is not an enemy of that scheme, but it will really be an unsound policy if the Minister is going to make the distinction between the Oliphants River scheme and the other schemes. It will be an unsound policy to make a departure here. We have the Irrigation Act of 1912, which is a stable act. I want to request the Minister urgently to consider the feelings in this matter. The Minister knows what the feeling in the Oliphants River irrigation scheme is. He knows that we are all riparian owners. The Minister is here taking the initiative away from the farmers. The Government settlement is on the Oliphants River, but there are several farmers who are riparian owners. We feel that it is not fair—not that we do not take fully into consideration the right of the settlement and the claim which the Minister has in connection with it, the help which he gives there. We get the impression, because the Minister gives us that £252,000, that he is now demanding the compensation by taking our rights from us altogether and thereby disqualifying us. I wish to point out to the Minister that this is not a new thing; he knows that there are dozens of schemes which cannot fulfil the requirements of the law in paying that capital, and that it has been written off. This therefore is no exception. If he does not bind the other schemes in this way, why does he do it in the case of the Oliphants River.
I want to make a last appeal to the Minister to tell us if he is not willing to do something in connection with this matter, if he is not willing to accept an amendment that the Board shall be constituted differently to what he proposes here. If he has not such an amendment to hand, and he promises us to bring in such an amendment in the other Place, then we can let the Bill through, but if he does not want to do that then I fear that we shall have to vote against this Clause. We do not want to create the impression that we are against the Bill. The Minister knows what the feeling is. I think even members of his own side are of opinion that this composition, as proposed by him, is not sound. I hope the Minister will undertake to bring about the necessary change in the other Place.
It will have to be done under Clause 5 if I agree, and I shall be willing that two representatives of the Board be chosen by the irrigators.
I have such an amendment.
Clause 3, as printed, put and agreed to.
On Clause 5,
I move the amendment appearing under my name on the Order Paper, viz. that the word „not less than” be deleted. That will mean that the board will consist of five members, three of which will be appointed by the Minister and two by the ratepayers. Seeing that the hon. Minister does not want to meet our wishes in regard to Clause 3, I think that he ought to meet us in respect of Clause 5.
What is your proposal?
The motion is that the words “not less than” be deleted. The board will then consist of five persons, viz. the chairman and four other persons, and of those four persons two will have to be nominated by the ratepayers. The Minister will then appoint the other two.
I am prepared to accept an amendment that an additional two persons be appointed. I am prepared to enlarge the board and to appoint two representatives of the ratepayers.
That would mean that the board will consist of at least seven or eight persons.
As I said, I am willing to enlarge the board. Two additional members can be appointed.
In that case I move—
I should like to appeal to the hon. Minister to accept the proposal of the hon. member for Gordonia (Mr. J. H. Conradie). The position is that it says here “not less than four” but he proposes that it will not be more than four. If the Minister wants six members, he should mention the number. Otherwise, if the Minister is dead and another Minister has taken his place, the greatest confusion may arise and any number of members may be appointed. I believe there should be certainty about the number.
I am prepared to say: of which two snail be elected by the irrigators.
I think the Minister moreover did not properly understand my objection in regard to Clause 5 (2). There is no limitation of the period of service.
I am prepared to insert here “three years”.
I want to ask the hon. Minister if he will not accept, instead of what he is moving now, the following amendment—
Then in future the Minister can make the number larger, but it remains then that the half shall be elected by die Minister and the other half by the irrigators. The Minister will always have a majority through the Chairman, who represents the Department. He will always have the majority.
I am sorry, but I cannot accept it. I am prepared to say six persons, of whom two shall be elected by the irrigators. I would like the hon. member to bear in mind that it is a Government scheme out and out, and the Government must maintain control. Until to-day, since the inception of the scheme, the Government has paid everything. Already £1,750,000 has been written off and the administration costs amount to about £7,000 a year.
But according to my amendment for five members the Minister will still have the majority through the Chairman. Only two members will be elected by the ratepayers.
I now want to make a proposal in accordance with what I said just now. I move as amendment—
If my proposal is adopted, then it also meets the objection of the Minister that one cannot say beforehand of how many members the Board must consist. If it is then found necessary to enlarge the Board then this can perhaps be done without disturbing the ratio of the Board, but the Minister will always retain the majority through the Chairman. My amendment only provides that, apart from the Chairman, the irrigators shall elect half the members. In think it is a fair proposal.
I am prepared to move that at least four of the six be elected by me, and the other two by the settlers. I would like to have a new clause to this effect drafted.
“Of whom two shall be ratepayers.”
I shall have a clause drafted and shall propose it at the report stage, if the House is satisfied with the principle I propose.
I am not satisfied with the proposal of six. Why cannot the Minister accept my proposal? What the Minister has said strengthens me in my request. He says that the two persons who will be able to be elected will be settlers.
Irrigators.
I want to point out that apart from settlers there are also private irrigators. Under my proposal it will be possible to elect one private irrigator and two settlers. If you make it one irrigator and one settler, then the settlers will feel their representation is inadequate.
I am sorry, but I cannot accept it. I have said “settlers,” but under this Bill they are not viewed as two sections.
Then use the word “taxpayers.”
Yes.
I just want to say to the Minister that he is going to have a lot of difficulty. If you look at clause 4, you will see that the Board is going to experience big difficulties, because it states in Clause 4 that the division of water must occur in accordance with the provisions of the principal Act. It is not said according to what provisions of the Act. There are two difficulties. The one is that you have the right to obtain water from the normal stream and the other is where the Board is obliged to divide the water equitably. Which of the two is it? The Department should see to this, because it may create difficulty. The division according to equity generally means according to what you pay. The ratepayers will elect the best in their interests, and it is therefore necessary that they are well represented on the Board. If they can put half the number of people there, they will be satisfied. If they do not have satisfactory representation then they will look upon the whole thing as a Government affair and, as you know, it is ever permitted to steal from the Government as much as you can. The consequence of not giving these people authority is going to be that they will not take an interest, and the Government will only have trouble. When a big furrow breaks, and the ground washes away, or something else goes wrong, then they will not take as much interest as when they are properly represented on the Board. In the interests of good co-operation the Minister should rather accept our proposal.
Clause 4 (2) has reference to the Clanwilliam Irrigation Board.
If that is so, then there is no provision whatever here as to how the water should be divided. The Minister has much experience of irrigation and he knows how many difficulties there can arise. If the Board does not enjoy the confidence of the people who use the water, then many difficulties will arise. The Minister can prevent this. I accept that he has reasons why there should be a majority, but I want to draw his attention to the fact that he is protected in Clause 8 which reads as follows—
- (8) (1) The Minister may—
- (a) If he is satisfied that the portion of the canal or the structures referred to in sub-section (2) of Section 4 have not been properly controlled or maintained; or
- (b) if the Board has failed to collect any Government rates which it is its duty to collect, within a period of sixty days after such rates became due, or has failed to pay to the director, in accordance with sub-section (4) of section six, any such rates received by it,
- (i) cause any such action to be taken at the expense of the Board; or
- (ii) by notice in the Gazette and to the Board determine the period of office of the members of the Board and assume the functions of the Board such a period as he may deem fit, or upon such determination or at any time thereafter take all such steps as may be necessary for the election of the new Board.
If the Board does not do its duty, the Minister can send them away. The Minister is completely protected. I have had 30 years experience of irrigation and I want to be helpful to the Minister. I have nothing to gain by it, but if you have a board that does not enjoy the confidence of the ratepayers you seek trouble. I think our proposal is fair, fifty-fifty, and then the Minister still has the right to nominate the Chairman so that he is completely protected.
I am glad that the Minister has promised the concession to give the irrigators the opportunity of electing two out of the six members, and I think that the Opposition should be satisfied with that. There should be differentiation between a Government scheme and a private scheme.
With leave of the Committee, the amendments proposed by Mr. J. H. Conradie in line 47 were withdrawn.
I want to focus the attention of the Minister on the fact that if his amendment is adopted, which I hope will not happen, and we use the word “ratepayers”, then any person who pays rates may vote.
I think the word “irrigators” is the best.
It proves how careful we must be.
We may say “ratepayers under the board.”
Yes, something of the kind, but I am just pointing out how careful we must be. My proposal is the best, and remains the best, and it will assure the irrigators in general that the thin end of the wedge is not being driven into the Bill for the future. I appeal even yet to the Minister to accept my amendment.
I think it is dangerous where we have to do with the expenditure of public money, through Parliament or another body, if we do not insure proper control over the expenditure. Then this House may perhaps say that in future it is not going to bother itself about the schemes, because there is not adequate state control. We must be careful.
I want to suggest that the Minister makes such a proposal in the other House, because it is also not stipulated here how the election must take place. If one says that the ratepayers under the scheme, or the irrigators, must elect, then there must be regulations in accordance with which they must elect.
If we insert the word “settlers” instead of “ratepayers”, then the difficulty disappears.
What about the private owners?
They are also settlers under the Act.
I want to object to it strongly. Riparian owners under the scheme are not settlers, and all the settlers are not riparian owners. There are owners who own big land in the vicinity. There are several hundreds of them. It is not only that they are riparian to the river and make use of the water, but they are stock farmers and have some thousands of morgen outside. The Minister can insert in his amendment “ratepayers under the scheme”, but he must not use the word “settlers”.
I want to ask the House that we leave this clause over. I notice that we do not determine here how the members must be elected.
But we can put the matter right now. I would like to bring my amendment to the vote.
Then I move my amendment as follows—
I want to put a point of procedure to you, Mr. Chairman. If you now put the amendment of the Minister first, then hon. members on this side are in this position: if my amendment is put and I am voted down, then we would rather have the proposal of the Minister. But if we vote for the Minister’s proposal, then my proposal falls away. I therefore want to ask here that my amendment be put first.
No, I must put the amendment of the Minister first. His amendment comes before that of the hon. member.
Question put: That the word “four,” proposed to be omitted, stand part of the Clause.
Upon which the Committee divided:
Ayes—30:
Badenhorst, C. C. E.
Boltman, F. H.
Booysen, W. A.
Bosman, P. J.
Conradie, J. H.
De Wet, J. C.
Dönges, T. E.
Geldenhuys, C. H.
Haywood, J. J.
Hugo, P. J.
Labuschagne, J. S.
Le Roux, S. P.
Loubser, S. M.
Louw, E. H.
Malan, D. F
Olivier, P. J.
Schoeman, B. J.
Serfontein, J. J.
Steyn, G. P.
Swart, C. R.
Van der Merwe, R. A. T.
Van Zyl, J. J. M.
Viljoen, D. T. du P.
Viljoen, J. H.
Vosloo, L. J.
Warren, S. E.
Wentzel, J. J.
Wolfaard, G. v. Z.
Tellers: J. F. T. Naudé and P. O. Sauer.
Noes—64:
Abbott, C. B. M.
Abrahamson, H.
Acutt, F. H.
Alexander, M.
Allen, F. B.
Ballinger, V. M. L.
Bell, R. E.
Botha, H. N. W.
Bowen, R. W.
Burnside, D. C.
Christopher, R. M.
Clark, C. W.
Conradie, J. M.
Davis, A.
Deane, W. A
De Wet, H. C.
Dolley, G.
Du Toit, R. J.
Egeland, L.
Fourie, J. P.
Friedlander, A.
Gilson, L. D.
Hare, W. D.
Hayward, G. N.
Hemming, G. K.
Hirsch, J. G.
Hofmeyr, J. H.
Hooper, E. C.
Humphreys, W. B.
Jackson, D.
Johnson, H. A.
Kentridge, M.
Lawrence, H. G.
Lindhorst, B. H.
Long, B. K.
Marwick, J. S.
Miles-Cadman, C. F.
Molteno, D. B.
Mushet, J. W.
Neate, C.
Payn, A. O. B.
Pocock, P. V.
Raubenheimer, L. J.
Reitz, L. A. B.
Robertson, R. B.
Rood, K.
Shearer, V. L.
Smuts, J. C.
Solomon, B.
Solomon, V. G. F.
Sonnenberg, M.
Steyn, C. F.
Strauss, J. G. N.
Sturrock, F. C.
Sutter, G. J.
Tothill, H. A.
Trollip, A. E.
Van den berg, M. J.
Van der Merwe, H.
Wallach, I.
Wares, A. P. J.
Warren, C. M.
Tellers: G. A. Friend and J. W. Higgerty.
Question accordingly negatived and the word omitted.
May I say something on the amendment of the Minister that you are now going to put. I hope the Minister realises that he has made a tremendous mistake. He neglected to delete the words “at least” and it therefore means that the Board must consist of at least six members. The Board may thus consist of eight or ten members and then the irrigators elect only two.
About what did we vote then?
We voted about bringing my proposal to the vote. Then “at least four” would have remained, but in addition it would have meant that the irrigators would have elected half the members. Apart from the promises made by the Minister, I make an appeal to him. The amendment now adopted means that the Board shall consist of at least six members—it may consist of eight or ten, and then the irrigators will elect only two. They thus get an insignificant representation. I therefore want to ask the Minister to keep his word and to put the matter right at the report stage.
I am surprised that the hon. member can say that. When I proposed that “four” be deleted, I definitely said that the words “at least” be maintained. I said it absolutely purposely, and now the hon. member cannot say that I made a promise.
But the hon. Minister had replied when he had not yet proposed to make it six. Then we said he could retain the words “at least,” but then he must accept an amendment that at least half of the members shall be irrigators. It was only after that matter had been dealt with that he said that the Board will consist of six members, of whom two will be irrigators.
You can see later what I said.
The Minister definitely brought this House under the impression that the Irrigation Board would consist of six members and that two of them would be irrigators.
I have said that the words “at least” must remain.
I am speaking about later. The Minister came to incorporate six. He then told the House that if the Board consists of six members then he is willing that two be chosen by the irrigators. Does the Minister want to deny that?
My amendment proves what I said.
I say again that the Minister brought this House under the impression that he was willing to allow the Irrigation Board to consist of six members of whom two would be chosen by the irrigators. The Minister now wants to say that this is not so. If he does not improve this position at the report stage, then the law is not as he promised it to the House. I want to appeal to the Minister to remain at his word. If he thinks he said something else, let him then remain at the impression which he gave the House.
I just want to say this to the Minister, that if this clause goes through as it is now amended then he does not give the settlers the right to elect a representative. They are not registered owners; they have no title. Therefore I say that the word “ratepayers” must be used. Act No. 8 of 1912 provides that a settler shall be looked upon as an owner, but not as a registered owner, and under this amendment the settlers will be totally excluded. The best plan would be to leave this matter to the Minister and his Department to go into properly. One cannot do it here hurriedly, and it is unreasonable to expect it of the Minister. Then I still say that provision must be made for the manner in which these persons are elected. Must they come together to elect representatives, or must they vote by ballot, or what is the position? I want to ask the Minister to deal with the other clauses, and then we can revert to this one later.
Remaining amendments proposed by the Minister of Lands put and agreed to and the amendment proposed by Mr. S. P. Le Roux dropped.
Remaining amendments proposed by Mr. J. H. Conradie put and agreed to.
Clause, as amended, put and agreed to.
On Clause 6,
I want to appeal to the Minister in connection with Clause 6, Line 16, in connection with tax money. The settlers pay a tax of 20s. a year and the riparian owners 25s.
No, you are wrong. May I explain. The tax of 20s. refers to the Clanwilliam scheme. They pay 20s. because they provide for the maintenance of the scheme at their own cost but everyone under the Oliphants River scheme pays 25s.
I am very thankful for the explanation. But still I feel that, with my knowledge of the Oliphants River scheme, that I must make an appeal to the Minister in connection with the tax. Many of the private owners under the scheme have heavy mortgage bonds on their farms. They are not rich people who live there. There are rich people among them, but the majority are poor. The Minister perhaps does not know this, but there are people who have heavy mortgage bonds on their land. Even the settlers must bear heavy burdens. They are people who are assisted by the Department. They must pay interest and redemption, and then they still have to pay the water tax. I want to ask the Minister to fix it at £1 a morgen. I want to point out to the Minister that the canals are too small. We have sufficient water but the canals are too small, and the result is that the owners sometimes suffer tremendous losses as a result of a shortage of water. Prices are reasonable today, but the potato harvest has been a complete failure because there was no market. In view of all the other considerations I think that 25s. a morgen is too high a water tax for these poor people. I think it should be fixed at £1 a morgen. Then I come to the Clanwilliam scheme. There are people with five morgen and ten morgen, and in view of all the burdens they bear, I want to ask the Minister whether he will fix a tax of 17s. 6d. for the private scheme at Clanwilliam. I do not expect that this side must support me. I make this appeal on my own because I know the conditions there, and I should be very pleased if the Minister can meet us in this way. He would be meeting his own people, as he knows himself. It is absolutely out of the question to compel those poor people, who have had to be assisted by the Government and who must pay interest, to pay more than £1 a morgen per year for water tax.
I regret that I cannot agree to the request of the hon. member for Namaqualand (Lt.-Col. Booysen). He says these people are poor. I doubt it, particularly as regards the private persons. There are people among them who are affluently wealthy. Let me say this, that the current expenditure in connection with the maintenance and administration of the scheme amount to £7,000 per year, and that will increase. If I tell the hon. member that the income at 25s. per morgen does not cover the expense, then he will realise that I cannot concede further.
Is that subsistence expenditure?
The expenditure is £7,000 per year. About 10,000 morgen are scheduled. Now the expenditure is £7,500 and it will become more. The hon. member has already pointed out that the canals are too small. Not only must the canals be made larger, but the water must be increased. We have already undertaken to raise the dam at Buffelshoek as soon as we can get the iron. The canalising must be carried out. It will cost a lot of money. The irrigators will not be asked to contribute to this. It is now a Government scheme, and the Government will bear everything. Let me say to the hon. member that in 1940 the production under this scheme was £175,000; in 1941 it was £195,000, and in 1942 it was £240,000. We expect that there will be a considerable rise this year, so that the figure of £240,000 will be surpassed. Then I want to point out that in 1939 a farm of 22 morgen, of which 17 morgen were scheduled, was sold for £352. It is the farm Genoa. It is now sold for £2,250.
For 17 morgen?
Yes. Then there is another farm of 505 morgen, of which 56½ morgen is scheduled. It was bought in 1935 for £535 and the owner now refuses £10,000 for it. I am convinced of it that the sum of 25s. has been fairly fixed. The Government still has to bring about all those improvements; these must come shortly. And then I want to focus the attention of the hon. member on something else, and that is the brack which is a big problem there. I said yesterday that a large part of the settlement is unfortunately at sea level, with the result that a mass of ground becomes brack, and a lot of draining work must be done. All those expenses must be made. I must really say that I am of opinion that it was a mistake to make a settlement on those lower portions. After providing the House with this informa tion, I trust that the hon. member will waive his objection. I move—
Agreed to.
I am sorry that the Minister got up so quickly. He wants this taxation to be paid on land directly or indirectly irrigated; The Clause reads as follows—
I have never heard that a person taxes land that is indirectly irrigated. I do not know if the Minister has heard of this. I have never heard of the expression “directly or indirectly irrigated”.
I am prepared to give an explanation on that point.
If the land is indirectly irrigated, what benefit can you get from it? The water flows away and you cannot levy a tax on it.
What is meant by indirect irrigation is that the irrigator pumps water above the canal.
But surely that is also direct. The Minister now explains that this means water that is pumped, but one also irrigates directly. It does not say here “direct or indirect out of the furrow”. In any case, it is not my law. But to me it looks wrong. I have never heard of such a thing.
Clause, as amended, put and agreed to.
On Clause 10,
I want to move the amendment which appears on page 263 of the Agenda. It reads as follows—
I think it is very necessary that we should have these words inserted. We know that the canals are used on irrigation schemes for drinking water, and I think it is essential that the Minister should reserve the right.
Agreed to.
Clause, as amended, put and agreed to.
On Clause 13,
I have no objection to this clause, but only that the clause is in the wrong place. When a lawyer looks for something, then he looks for it in the law in which that provision ought to be. In my opinion the Financial Relations Act is the place in which such a clause should be incorporated. Unless you go through all the laws, you will never find this provision. I consider that it should not be in a law such as this.
Where are the attorneys and advocates going to find it?
This stipulation is being brought in here in a law that deals with the Oliphants River Irrigation Scheme, and I think it is wrong.
We shall never look for it there.
Beyond that I have no objection to this clause, but I do not think it is right to incorporate this provision in the law.
Clause put and agreed to.
Remaining clauses, the Schedules and Title of the Bill put and agreed to.
House Resumed:
The CHAIRMAN reported the Bill with amendments.
Amendments to be considered on 26th February.
Third Order read: Second reading, Insolvency Law Amendment Bill.
I move—
This Bill aims at amending the Act of 1936 and to make it applicable to South-West Africa and the town and settlement of Walvis Bay. This legislation has been introduced at the request of South-West Africa. The position is as follows. A trustee appointed in terms of the Union act is recognised in the mandated territory of South-West Africa but the reverse is not the case, and it is mainly in order to achieve uniformity in this respect that this Bill has been introduced. There are also other difficulties. A trustee which is appointed here has to report here and also in South-West Africa. In order to clarify the position in regard to those points this legislation has now been introduced. Furthermore there is the complication of Walvis Bay which does not form part of the mandated territory of South-West Africa, and in order to eliminate all those difficulties this Bill has been introduced here. There are furthermore a few alterations of a more technical nature which have been found necessary after the six years which have elapsed since the passing of the last Act.
The Minister was very brief in his explanation. There are a good few minor points in connection with this Bill, and I want to say this: I hope that we shall introduce the custom in the House, as has happened in some cases, that where a Bill is introduced to amend an existing law the legal advisors should draft a short memorandum to explain what the nature of the Bill is. This Bill contains a lot of technical points, and it requires a tremendous lot of trouble to compare the Bill with the original law, and then to see what the results of the amended law will be. I therefore want to suggest that a brief review of the Bill must be given by the Department or the legal advisors when an amended Bill is introduced. So far as I could go through the law, there is nothing against which objection can be raised. It is an improvement on the existing law, and it is intended to remove a few anomalies. It is a pity that the hon. member in his speech did not mention a single one of the other amendments, but in any case there is nothing in the Bill against which objection can be raised and we shall therefore support the Bill.
Motion put and agreed to.
Bill read a second time; House to go into Committee on the Bill on 26th February.
Fourth Order read: Adjourned debate on motion for second reading: Offices of Profit Amendment Bill.
[Debate on motion, adjourned on 24th February, resumed.]
In this case I again want to appeal to the Minister of the Interior. I am very sorry he is not present at the moment.
He is on his way.
I want to point out that this Bill is of great importance not only to members of this House but also to the general public outside. The Minister yesterday gave us an unsatisfactory explanation in regard to this Bill, and I therefore think that the Minister will agree with me that something should be done to achieve more clarity in this Bill, not only in regard to hon. members in this House but also on account of the public outside. Seeing that this matter is now before the House, we ought to arrive at a solution of the whole problem. The hon. Minister should not come here and only ask that certain cases be excluded from the definition of “offices of profit under the Crown.” I just want to say that the Minister came here with an ill-considered Bill. He himself was entirely ignorant not only in regard to this Bill but also in respect of the information to which this House is entitled. I just want to point out that when certain questions were put to him he could not answer them. Not only that he could not answer them, but he has no idea of what the expression “offices of profit under the Crown” means. When I listened to him I got the impression that he has not studied the Bill at all and that he simply read out the memorandum which his department supplied. It is a most unsatisfactory state of affairs that a Minister should supply this House with information in that manner. If he had only gone to the trouble of going through the Bill he would have been able to give the required information to hon. members of this House. It was his duty to give that information to the House. But he did nothing of the sort. I maintain that his explanation in regard to this matter was so unsatisfactory that he himself will have to admit that the House cannot accept it. There was a full Bench decision on this case in the Supreme Court. A case was heard of van der Merwe vs. Havenga, our previous Minister of Finance. Here in the Cape Supreme Court we had a case of a member of the Executive Committee holding a licence under the Liquor Act, and a special provision existed that nobody shall hold a license if he occupies an office of profit under the Crown. The Court decided that although he was a member of the Executive Committee he could still hold a licence too, and there they went directly against the decision given in the case of van der Merwe vs. Havenga. That shows that different decisions were given in different courts. The Free State court gave one decision and here in the Cape Province a decision was given which is in direct conflict with the Free State judgment. If even the courts cannot agree on the defintion of offices of profit under the Crown, then the Minister will agree with me that the matter is of great importance not only for members of this House but also for the public outside, and for that reason the Minister ought to introduce a Bill which has been well considered and which will meet with general approval. For that reason I want to appeal to the Minister under these circumstances to withdraw the Bill and not only to withdraw it but to refer it to a Committee of this House before the Second Reading so that the parties concerned may have the opportunity of giving evidence before such a Committee and to make any representations which they may consider desirable. As the Bill is at the moment it does not include certain cases. The Bill is so confusing that it would only be fair and right to give us an improved Bill which is clear in regard to this doubtful matter. The Minister did not study this matter. He did not go into the matter. If he had done so he would not have drafted this Bill as it reads now. In the case of van der Merwe vs. Havenga it was definitely laid down that one could not occupy an office of profit under the Crown unless certain principles had been adhered to and those principles are, first of all, that the money is to come from the Government, that it has to be voted by the Government; and, secondly, that the appointment should be made by a Minister of the Crown.
But the first condition is not essential. The money may come from another source and it may nevertheless be an office of profit under the Crown.
I agree with what the Minister says. Let me give you an instance. There is the case of the deputy sheriff of a court. That is not an office of profit under the Crown, but the Messenger of the Court does occupy an office of profit under the Crown. There is very little difference between the two, but the difference is that the Messenger of the Court is appointed by the Minister whereas the deputy sheriff is appointed by the sheriff. All the same the deputy sheriff also receives money from the Government for he serves criminal summonses for which the Government is responsible. The whole matter has been fairly well thrashed out in the case of Wentzel vs. Krige. It seems to me that there are many commissions being appointed by the Government and they have created new positions from time to time. In certain cases it is laid down that the officials concerned receive a refund of their expenses only. In spite of that one finds that those officials can also be considered to be persons occupying offices of profit under the Crown. Seeing that this matter is so difficult and so involved, not only for the ordinary member of Parliament but also for the person outside, it is essential that we should have clarity in the matter. Even the Liquor Licensing legislation is affected in certain cases. It affects members of the public and it is not right that the public should not know where they stand. There should be no doubt among the public in regard to the tenor of this Bill. The Minister will agree with me that there should be a clear definition of the expression “office of profit under the Crown.” I have here before me the definition of that term in the Official secrets Act in England. If one takes that definition one finds it very unsatisfactory too. The definition in the Official Secrets Act of 1899 is also very indefinite and confusing, so much so that our courts in the case of Van der Merwe vs. Havenga also had difficulty in regard to this definition. For that reason it is essential that we should have a proper definition of our own and I therefore want to suggest that as our courts are also experiencing difficulties and as there are different judgments from courts in the Free State and in the Cape Province, that the Minister should take the matter into revision. I therefore wish to move that the Bill be referred to a Select Committee. I therefore move as an amendment—
I propose that it be referred before the Second Reading as otherwise your ruling, Mr. Speaker, may be that only the principle embodied in the Bill may be dealt with by the Select Committee. I therefore should like to see that the Bill be referred to the Committee before the Second Reading, and I hope that the Minister will accept it, not only for the benefit of members of Parliament, but for the benefit of the people as a whole.
I second.
Mr. Speaker, I am very much obliged to those hon. members who have taken part in the discussion yesterday and today on this interesting matter. It is quite clear, I think, that there is still a great deal of confusion and misunderstanding in the minds of hon. members. The purpose of this Bill is not to open the door unduly widely, but to deal with one of two cases which have arisen without at the same time departing from that Satutary rule enshrined in the constitution, that members of Parliament should not be permitted to accept offices of profit under the Crown. The purpose of that rule is to prevent the Government of the day from extending its patronage to members of Parliament, and to secure their allegiance by male fide means. Some hon. members raised either in their speeches or by interjection, a number of cases and enquired whether they would be offices of profits under the Crown—membership of Divisional Councils, School Boards and a variety of other Boards or Bodies were mentioned. Now, the principal test to be applied is who makes the appointment? If it is the Government who appoints through a Minister, or through an official, then the source of income is irrelevant. The case quoted by the hon. member for Prieska (Mr. Geldenhuys) is one in point. Messengers of the court are appointed by the Government, they are appointed by the Minister of Justice, and they receive their income not from any Government source, but from fees which they obtain in the course of their work from clients. Yet the messenger holds an office of profit under the Crown. In the case of the deputy-sheriff, the source of his income is the same, but the appointment is made by the sheriff himself, and although the work of the deputy-sheriff is analagous to that of the messenger of the court, whether the latter works under the jurisdiction of the Supreme Court or the magistrate’s court, his is not an office of profit under the Crown, while that of the messenger is. The same test would apply in regard to other bodies. Let me give a contemporary example. My colleague, the Minister of Finance, announced yesterday that it is the intention of the Government, if Parliamentary sanction is obtained, to subsidise the Governor General’s Fund on a fifty-fifty basis. There may be an appointment made in the future of a secretary or other official of the Fund. Would that be an office of profit under the Crown? I think it would not be if the Government had nothing to do with the appointment, that is to say, if the appointment is made by the executive of the Fund, even though part of the salary flows from the Government’s subsidy. I say that because the appointment is not made by the Government, and therefore the office held by the official is not an office of profit under the Crown. It would be competent for a member of Parliament to hold that office. If one follows that out, then I think there is little doubt that apart from these four cases mentioned in the Bill in which the position is made clear, that while membership of these Boards or Bodies contsitutes an office of profit, the Bill excludes them from the ban imposed by the Act of Union. Apart from that, the tests to be applied are the ones I have mentioned. I do not still feel that there should not be a great deal of difficulty if hon. members examine each particular case from that standpoint. But this Bill does deal with a matter which is peculiarly of interest to members of Parliament on all sides of the House, and the Government wishes to treat this matter on that basis, I mean on a Parliamentary basis. I am anxious to meet the wishes of members of Parliament, I am anxious that members of Parliament should fully understand the implications of this Bill, and realise that the Government is legislating merely to remove possible anomalies and to prevent members of Parliament finding themselves in a position of jeopardy through no fault of their own. I have had certain discussions in the course of today, and as a result I think it is advisable for the House not to take any decision, either on the motion as moved by me, or on the amendment of the hon. member for Prieska, at this stage. I therefore propose to move that the debate be adjourned, and before it is resumed, I hope to be in a position to announce what decision the Government has come to. I hope to have the assistance of representatives of all the parties, at any rate, at what may be termed an informal conference, where we can have a round table discussion, and where it may be mutually agreed as to what further course of action should be pursued. In this matter I am in the hands of the House, and I ask for time in order to consult the wishes of the House. I move—
I second.
Agreed to.
Debate adjourned; to be resumed on 1st March.
Fifth Order read: House to go into Committee on the Farm Mortgage Interest Amendment Bill.
House in Committee:
I would like to propose an amendment—
You will remember that the Act of 1933 made provision that the subsidy must be voted every year by a decision of both Houses of Parliament. Now certain things are withdrawn as regards the Act, but the decisions are not withdrawn. I have consulted the legal draughtsman in connection therewith, and he agrees that the position is not quite clear. Further, I move—
“(2) Notwithstanding anything contained in the principal Act or in Sub-Section (1) or in any resolution adopted under that Act, Sections 6, 7 and 8 of the said Act shall remain in force until such time as it shall be repealed.”
As regards the first portion of this amendment, I think the Minister will be prepared to give the farmers a chance longer than six months. I now propose twelve months, but I at first thought of making it still longer. Even in the Bill which the Government proposed the day before yesterday in connection with prescription, the shortest period is a year. Here I ask that the farmers will have the right to demand the subsidy within twelve months after the Act expires. The Minister gives him only six months, but that period is too short. As regards the other portion of my amendment, this touches a big principle. The Act of 1933 will now be repealed, and in 1951 the protection of the law will disappear. One of the privileges which the farmer enjoyed under the Act of 1933 was that no interest rate higher than 5 per cent. could be demanded from him, and if the law lapses the farmer will not only lose his subsidy, but will also again have to pay a higher rate of interest as the bond holder may desire. If the bond says that the rate of interest shall be 6 per cent. or 7 per cent., then that interest can again be demanded from him. This was a great privilege enjoyed by the farmer, and I think I have the right to ask the Minister to maintain that protection. We can now get money at 3½ per cent., but while the Act determines that it shall be 5 per cent. as a maximum, I consider that we should in any case restrict it to that amount. The Minister knows what the position is. Today the position is just as bad as then, and if the farmer again has to pay the impossibly high interest, where will he land? At the time the Government made provision respecting farmers who had to pay higher than 5 per cent., and the bonds could also be taken over by the Land Bank. I feel that the protection for the farmers should remain. The principle is now accepted by this House to waive the interest subsidy, and all I ask now is that the farmers shall retain the other privileges they enjoyed, particularly the privilege of a fixed rate of interest. I shall be glad if the Minister can do this. It is a reasonable request. My very first amendment is simply to put the position clearly. But the whole second amendment is of importance, particularly the portion that will limit the rate of interest to 5 per cent.
I am sorry, but so far as the second portion of the amendment of the hon. member is concerned, I cannot accept that without the approval of the Governor General. It prolongs the period of the taxation, if Clause 6 of the original Act No. 34 of 1933 is deleted. It is necessary to obtain the approval of the Governor General before such an amendment can he put, as the proposed new Sub-Section (2) would involve increased taxation.
I want to appeal to the Minister again. He now extends the Act to 1951, and it is of course better than nothing, but I want to ask him if it is right and fair towards the young farmers in the country who now begin farming that they can get no help where they have to take up bonds of necessity? We now differentiate between one farmer and another in the country, and I think the Minister will agree that this is not right and fair. We have repeatedly pointed out how the original idea for which the subsidy was given has now passed over a period of ten years, and thus the object for which it was originally given no longer exists, and it is therefore no more than right that one should deal with ail bonds in the same way and treat all farmers alike. In view of the fact that we spend so much money for various purposes—there is now again a big sum that is being asked to help along the Governor General’s Fund—seeing that there is all this money for such things, the Minister will surely admit that if the period is extended to 1951 then all bonds should be dealt with in the same way. I make a special appeal to the Minister to include under the scheme farmers who are having a very difficult and trying time at the moment. It is precisely the time the farmer who is just beginning, or who has been farming on his own for only the past five or six years, who is finding it difficult to get to his feet, and therefore we ought to help that kind of farmer. But my great argument is that the Government has not the right to differentiate between one farmer and another, and I hope the Minister will realise that it is essential that all the farmers be assisted properly, and that no difference is made between the one and the other.
I would like to support the hon. member for Swellendam (Mr. S. E. Warren) in connection with his amendment, viz. to substitute “twelve” for “six.”
I shall accept that.
I am very glad, for otherwise it would have produced big difficulties. As regards the definition that when the law now lapses the mortgagee falls back into the same difficulty as in the past, and can again be compelled to pay the high interest, there I also feel that the Minister should make a concession. You know what our experience was and what interest the farmer had to pay. The position is ever that the weaker your position is as a farmer, the higher your interest. The banks or other money-lenders become afraid of you and increase the interest. It is like that in life, that the safer your position is, the lower the interest you have to pay. If provision is not made for that in this Bill, then there is not the least doubt that on the day on which the money-lender gets the chance he will again exact from the farmer what he exacted from them in the past. We know that in many cases the farmers had to pay 8 per cent., 10 per cent., and even 12 per cent. interest. What provision does the Minister make that the money-lenders will not again act as in the past? The Minister knows that we proposed an amendment to bring down the interest to 3½ per cent. Then it was argued by the other side that if the interest is brought down the price of land rises. But the fact remains that you can get money today at 34 per cent., while you do not give the farmers the chance of availing themselves of this, but on the contrary, expose them to this that in future they will again have to pay 12 per cent. I hope that the Minister will in any case cling to the maximum interest of 5 per cent. I personally would be in favour of 4 per cent. at the highest, but let us in any case make provision, otherwise we shall only get trouble again in the future.
I really hope that the hon. Minister will accept the proposaL I think one can say that the biggest advantage of the Act of 1933 was the limitation of the interest the farmers had to pay. The interest at the time was limited to 5 per cent., but if the Minister is going to waive that provision, then the danger exists that the interest will again soar to 7 per cent., 8 per cent. or 10 per cent., and even, as the hon. member for Victoria West (Mr. D. T. du P. Viljoen) said, to 12 per cent., because there were cases in the past where the interest went up to 12 per cent. Immediately after the repeal of this law, the moneylenders can again demand the higher interest. What will be the good of the Minister’s assistance with his so-called redemption scheme over eight years, if the interest of these people will immediately rise by 2 per cent. or 4 per cent.? Then it will again mean that the Minister will be giving the bondholders much more assistance than the little assistance he gives the farmers. We dealt with the matter at the second reading, and I really hope that the Minister will ensure that the rate of interest shall remain limited to 5 per cent. I hope the Minister will be prepared to meet us so that this stipulation shall not be lost.
The hon. member for Swellendam (Mr. S. E. Warren) proposed three amendments. The third of these, Mr. Chairman, you ruled out of order. I would in any case, not have been prepared to ask the Governor General’s recommendation for it. The amendment, as proposed on the Orper Paper, would in any case not have worked. It would not have been enough to retain Clause 6, or even Clauses 6, 7 and 8 of the existing law. Other clauses would also have had to be retained, as, for instance, the verbal description, the issue of certificates, and also other privileges. Thus from the technical point of view, it would have been an impossible amendment. But I do not think we are now called upon to stipulate what the rate of interest after eight years will be. Five per cent. may then be too high. Let us leave the matter until then, and the Government of the day can take the necessary steps. I am now prepared to propose legislation what the rate of interest over the eight years shall be. The second amendment of the hon. member is to alter the figure 6 to the figure 12 in line 15. I had thought that six months would be long enough to make an application. But, in any case, there can be cases of delay for which good reason exists, and to cover that possibility I shall be prepared to accept that amendment. Then my hon. friend proposed the insertion of certain words in line 9. I think there is perhaps danger, if we do not say something about the decision taken from year to year, that the provisions of this Bill may perhaps be declared unsuitable. I do not see much chance of this, but, to put the matter quite clearly, I would be prepared to put this whole clause, viz., Clause 2, in a new form. My hon. friend has seen the draft, and he is satisfied with it. I think it will put the matter clearly.
With leave of the Committee, the remaining amendments proposed by Mr. S. E. Warren, were withdrawn.
I would like to take the opportunity to submit another proposal. It relates to the second part of my amendment which you have ruled out of order. I propose the following amendment—
(2) Notwithstanding anything contained in the principal Act or in Sub-Section (1), no mortgagee shall demand a rate of interest on any farm-mortgage bond exceeding 5 per cent. per annum.
In the first place, I should like to draw the attention of the Minister to the fact, since he says that we cannot fix the rate of interest which will be payable in eight years’ time and that it is not necessary to insert such provisions, that on the 1st April, 1951, we may come to the end of this period, and then after three months the rate of interest on bonds may revert to what it was originally, and it may even be higher than it was originally, and there may not be a Parliamentary Session just at that time.
Before the hon. member proceeds, I just want to explain to the hon. member for Swellendam (Mr. S. E. Warren) that his amendment is applicable to all farm mortgages. It goes beyond the scope of the Bill which only deals with mortgages falling under the Act which is being amended, and I am accordingly unable to put it to the Committee in that form.
May I then alter my amendment to refer only to subsidised bonds? Then it will not be out of order. I therefore move my amendment as follows—
Then it means nothing.
Why not?
Will my hon. friend allow me to explain? If he alters his amendment to apply to bonds which fall under the subsidy, his amendment will mean nothing. My hon. friend’s amendment will result in the rate of interest being limited to 5 per cent. in respect of the period for which the bond is subsidised, and that is already contained in the Act.
If I take the present value of the subsidy and the Government contributes a similar sum, then as soon as I pay off my contribution on the bond, I no longer fall under the Act. I am then excluded from the provisions of the Act, and I now ask that in such cases the interest on every subsidised bond under the Act will remain in force, so that I will still get the benefit of 5 per cent.
What the hon. member for Swellendam (Mr. S. E. Warren) has just said is absolutely clear. More than 50 per cent. of the farmers who are in a position at all to do it, will avail themselves of the provision that if they can contribute the amount which the Government is willing to pay as the present value of the subsidy for the eight years, then that joint sum can be paid off on the bond. In other words, such farmers will fall outside the Act within a few months, and then the mortgagor may come along and simply increase the rate of interest to what it was formerly under that bond or to an even higher rate. No, I think this is a very important point. If the Minister can prove to us that the case is not as we are putting it here, we can allow the matter to pass. But I do not see how he can allege that. Apart from that, the position may be this, that if the person gets the interest subsidy for eight years, he falls under the provisions of the Act for eight years, and his rate of interest cannot be increased beyond 5 per cent. But as soon as he reaches the end of the period, the interest may immediately be increased again.
My point was that as long as these people get the subsidy, the interest cannot be increased.
But the position is that these people get the present value of the interest subsidy under the alternative proposal in the Bill within the next few months, and then they, no longer fall under the Act. Then they no longer have the protection of 5 per cent. We say, therefore, in the first instance, that the Minister should provide that these people, even though they are excluded from the provisions of the Act in that manner, will still have the 5 per cent. protection for the period this Act is in force. That is the least. Then there is this second question. Those people who do not avail themselves of this alternative, will receive the interest subsidy for eight years, and they will therefore have the protection of 5 per cent. interest until the 1st April, 1951, when the Act falls away. The interest on the mortgage is payable every six months, and it will then immediately be increased to what it was originally, 6 per cent. or 8 per cent. It may even be increased beyond that. It may go on in this way until the following year when Parliament re-assembles, if the Government then in power is prepared to tackle the matter. If it does not do so, those farmers will be in difficulties, and in any event they will lose if the Government does not apply the Act with retrospective effect. As the hon. member for Christiana (Mr. Wentzel) has already said, if there is one good thing which this Act did, it was to introduce the provision in connection with the limitation of interest to 5 per cent. We should like to retain that benefit for these mortgagees, if we cannot extend it to everyone. I want to point out that the current rate of interest is 3½ per cent. We can borrow money at that rate. The Government can borrow money at 3 per cent., and nevertheless the farmers are compelled to pay 5 per cent. It seems to me that the Minister is going to expose the farmers to the risk of again having to pay higher rates of interest on their bonds. The Minister is apparently afraid to reduce the rate of interest because the price of land will rise. He need have no fear on that score, and I sincerely hope that he will again go into this matter, and that he will be prepared to accept our amendment, so that in respect of the following eight years, at any rate, farmers will have the protection which enjoyed in the past, in connection with these bonds, and I hope that he will see his way clear to introduce measures which will thereafter also protect the farmers against exploiters such as those we had in the past, and who demanded up to 12 per cent. interest. There are members on the other side as well as on this side, who are attorneys and who can give the Minister the assurance that in some cases farmers have had to pay 12 per cent. interest.
I am not a lawyer, but it seems to me that even if the farmer takes his subsidy for the eight years in advance, in order to pay off his bond, his bond will still be under the same legal position as it would have been if he had taken the subsidy every year for the eight years.
No, that is not so.
I think it is only necessary for the Minister to make sure of this position, and then it will not be necessary to insert all the other amendments. The hon. member for Victoria West (Mr. D. T. du P. Viljoen) said that the farmers can borrow money on mortgages at 3½ per cent. He will be rendering the farming community a greatservice if he will tell them where they can borrow money at 3½ per cent. I know of no case where money can be borrowed at less than 4½ per cent. on bonds. It is not right to mislead the House and the farming community in this way.
I shall mention a case to the Minister with which I had to deal myself. But I first want to point out this. If a person with a bond of £1,000 takes that £97 to be the present value of the subsidy and if he also pays an amount, and that is paid off from the bond, then that person will no longer fall under the interest subsidy provisions. I now want to quote the case I came across in connection with an estate. A farmer made his will in such a way that his farm was to go to his children, but the survivor, the widow, was to retain full usufruct of the farm. The Office asked which of the children were farmers and which not. Half of the children were not farmers but the other half were. The interest subsidy is now being paid on half the bond only, and the result is that the mortgagee is demanding as much as 6½ per cent. on the other half of the bond, in spite of the fact that the work on the farm goes on exactly as in the past. This is a case to which the Minister should give his attention. This is something that should be changed. The children do not posses the land. The widow still remains on the farm and the work on the farm is being continued for her benefit, but the mortgagee demands 6½ per cent. interest on half the mortgage because interest subsidy is being paid on only half the mortgage. We do not only have cases where this alternative is being made use of, but we also have the case of people who die with the result that the subsidy is stopped. What we demand is that in such cases where the mortgage still stands, where the estate is still giving usufruct to the widow or to the widower, the Minister should take care that the rate of interest cannot be increased.
It seems to me that this discussion is somewhat premature. We are not dealing here with the position of a farmer who avails himself of the third alternative and who contributes a portion to the redemption of his mortgage debt, which is implemented by the present value of the subsidy, and where this sum is then paid off on the mortgage. This falls under Section 3, and the hon. member for Swellendam (Mr. S. E. Warren) wants to move an amendment there. But we have not yet reached that point.
I want to move an amendment in both places.
When we reach that point, this matter can be discussed. We have a section here which reads that the Act, as it now stands, will not be in force for one year only, but for eight years.
We want it for good.
At the moment we are not dealing with it yet. At the moment we are dealing with this position that after the 31st March there will be no restriction on interest, which is payable on farm mortgages, if this Bill is not passed. That is the position at the present moment. In recent years we have extended that provision. Now we say that we do not extend it for one year, but we extend it for eight years, in so far as farm mortgages falling under this Act are concerned, in other words, in the case of the subsidised bonds to which my hon. friend referred. What he really has in mind is that the restriction on interest to five per cent., in the case of those subsidised bonds, will be applicable even after 1951. We are not dealing now with cases where the bond has been paid off partially. We are now dealing with the general case that after 1951 the interest will not be restricted to 5 per cent. According to my hon. friend, a restriction must apparently be imposed on mortgage bonds at present receiving the subsidy, limiting the rate of interest to 5 per cent.
We want that to apply generally.
If he wants to apply this to all farm mortgages, then he has in view an extension of the provisions of the Act. We are not dealing with that now.
If we cannot get this in general, then we do not want the assurance in the narrower sense that the bonds which were entered into before 1933, will not carry a higher rate of interest than 5 per cent.
I say therefore that what my hon. friend on the other side apparently desires is that with regard to a certain number of bonds, the rate of interest after 1951 too, will be restricted to 5 per cent. In other words the interest on a certain group of bonds must be restricted to 5 per cent. for ever.
We want this to apply to all bonds, but since we cannot get it in respect of all bonds, we do want to make sure of some.
We can deal with that general question when the time for that arrives. It seems to me to be ridiculous to stipulate at this stage what the interest in 1951 shall be in respect of a certain group of farm mortgages.
It is your proposal to make it applicable to certain persons only.
We are not discussing the general question now. When we come to that I shall be prepared to consider the points raised in that connection and the proposals which have been made. But I certainly cannot accept this motion.
Will the Minister reply to the question I raised?
I wanted to reply to the point which my hon. friend raised, but I have forgotten it. This would also, of course, entail an extension of the Bill. We are dealing here with certain farm mortgages only, and it is only with reference to those bonds that we are introducing this Bill. During the course of the second reading debate, I definitely indicated that we were not prepared to extend the provisions of the Bill to that type of bond. We are confining the Bill to the type of bond which was dealt with under the original Act of 1933. It is impossible during the Committee stage to go any further in that direction.
In the first instance, we moved that the interest on bonds shall not exceed 5 per cent. The Chairman ruled that out of order, and then we introduced our second motion, asking that people should still get the protection of the restriction to 5 per cent. in cases where they take the present value of the subsidy and contribute an equal sum to pay off on the bond, with the result that they no longer fall under the Act. The Minister’s reply was that this was contained in the Bill, and that within eight years the interest could not be raised higher than 5 per cent. But we adopt the attitude that even after the eight years have expired, these people should not have to pay more than 5 per cent., until such time as the government of the day decides that this limitation must be removed. For that reason, in order to put the position clearly, I want to move the following amendment—
(2) Notwithstanding anything contained in the principal Act or in Sub-Section (1), no mortgagee in respect of a subsidized mortgage under the principal Act shall demand a rate of interest exceeding five per cent. per anuum. This provision shall remain in force until specially repealed.
I do not think the Minister can object to this. His point is that the interest remains at 5 per cent. for eight years. Now we want to provide that in respect of subsidised farm mortgages the interest may not exceed 5 per cent, after the expiration of eight years. We do not know what the position will be after eight years, but even then it will be time enough to bring about an alteration in the Act. I do not think the Minister will object to this amendment.
I just want to explain that I cannot accept this amendment without an instruction, because it goes beyond the provisions of the Bill, as accepted at the Second Reading. It is a new and an important principle which is moved by the hon. member, and I cannot put it to the Committee without an instruction.
I should like to draw the attention of the Minister of Finance to the fact that we do not want to give the advantage of the limitation of interest, on a permanent basis, only to those bonds which receive a subsidy. We are not only fighting for that small number of farmers. We should like to apply the same principle to all bonds. That is the principle for which we are fighting, but unfortunately we cannot at this stage move such an amendment without the assistance of the Minister. We cannot get away from the fact that when the interest on mortgage bonds was fixed at 5 per cent. in 1933, that practically became the basis of all interest on bonds. Why not create the principle in this way that the rate of interest on mortgage bonds will, at any rate, not exceed 5 per cent.? We advocate that the rate of interest on bonds should be even less. But we are now dealing with this Bill. If we accept such a provision, then in 1951 when this interest subsidy expires, the interest cannot be fixed at a higher rate than 5 per cent. in respect of this group of bonds, and then we shall again establish the principle that the rate of interest on mortgage bonds shall not exceed 5 per cent. There will not be so much exploitation then. If this principle is not accepted now, the mortgagors and money-lenders will keenly look forward to 1952. I can give him that assurance, but if it is laid down here that the rate of interest may not exceed 5 per cent., even in 1952, it will have an immense influence on the bonds which are entered into after 1951. Surely it makes no difference to the Minister. What difference does it make? If money becomes so scarce that the rate of interest rises to 10 per cent., the Minister can intervene, but as the position is today I cannot see that it is going to make any difference to the Minister.
The hon. Minister said just now that we could not fix the rate of interest in respect of 1951 at this stage. But it seems to me that there are certain aspects of the case which the Minister did not take into consideration. The danger is real. The knife is at the throat. When we come to paying off, and one of these people wants to reduce the subsidy by £100 and he gets £1,000 bond, the mortgagor will simply tell him that if he wants to pay off £100 at present, he will have to pay off the whole bond, and the man concerned will then be involved in high costs. There is no guarantee that the interest will remain at 5 per cent. At the moment a large number of people will find themselves in difficulties. The mortgagor will say that he is going to call up the bond. If the man puts the matter to him nicely, the bondholders will agree to take the £200 and leave the balance of £800, but he will then require the man to pay 6 per cent. or 7 per cent. interest, and then the mortgagee will be at his wit’s end. I think the Minister should protect these people against a higher rate of interest. As has already been said by previous speakers, the biggest advantage which these people derived from this Act was that the rate of interest was fixed at 5 per cent. and not higher, and we are running the risk of having to pay a higher rate of interest as from next month.
I just want to refer the hon. Minister to this. There are two points under discussion at the present time. One is the question of people who decide to pay off on the capital sum.
That comes later.
This is also included in the amendment. What we want is a guarantee or an assurance …
The amendment has been ruled out of order; I just want to draw the attention of the hon. member to that fact.
Let us then leave this point until we reach the next clause. If the Minister will only give some indication of his plans in connection with the following clause, he will eliminate the whole discussion on that clause. I just want to refer the Minister to this. Before 1933 the general clamour on the part of the people was for a reduction in the rate of interest. If the Minister studies the resolutions of that time, the resolutions of deputations, the resolutions of agricultural associations, and the resolutions of farmers’ associations, he will see that there was a general clamour for the reduction in the rate of interest. It was necessary to reduce the rate of interest. Now the Minister introduces a measure under which there is a possibility of an increase in the rate of interest immediately after the war. There is a definite possibility that the rate of interest will simply shoot up. We want to have stability in the country. A guarantee must be given to the people in the country that they will not again become the prey of money-lenders who will squeeze everything they can get out of them, when bad times come again. We want to ask the Minister to give an assurance that after 1951 the rate of interest will not again be permitted to rise sky-high without control. Immediately after this war, we will again experience a depression and a shortage of money. The Minister knows that as well as we do. It is when that depression arrives and there is a shortage of money, that the moneylenders will again demand a high rate of interest. I think the Minister ought to give the assurance to the country that nothing will happen which will result in the rate of interest again shooting up and the farmer again becoming the prey of those money-lenders.
The danger that the farmer may again become the prey of moneylenders is undeniably great. It may happen at any time that money will again become scarce, that money will again become dear, and then these people will again become the prey of money-lenders, and the farming community will again find itself in the position in which it was placed before the introduction of this Act. We had hoped that we could incorporate this guarantee in the Act in order to prevent such an increase in the rate of interest from taking place. You, Mr. Chairman, have ruled this amendment out of order, and we feel that we cannot be satisfied with that, and we want to make every effort so to enlarge the scope of this Bill that we will be able to prevent this rise in the rate of interest. We shall have to have special leave from the House to extend the scope of the Act, and because we cannot do it at this stage, I want to move that the debate be now adjourned so that we shall have the opportunity to obtain the leave of the House for the extension of the scope of this Bill. I move—
I am not prepared to accept it.
Upon which the Committee divided:
Ayes—35:
Bekker, S.
Bezuidenhout, J. T.
Boltman, F. H.
Booysen, W. A.
Brits, G. P.
Conradie, J. H.
Dönges, T. E.
Du Plessis, P. J.
Erasmus, F. C.
Geldenhuys, C. H.
Haywood, J. J.
Hugo, P. J.
Labuschagne, J. S.
Le Roux, S. P.
Loubser, S. M.
Louw, E. H.
Malan, D. F.
Naudé, S. W.
Olivier, P. J.
Oost, H.
Schoeman, B. J.
Serfontein, J. J.
Steyn, G. P.
Strydom, G. H. F.
Swart, C. R.
Van der Merwe, R. A. T.
Van Zyl, J. J. M.
Viljoen, D. T. du P.
Viljoen, J. H.
Vosloo, L. J.
Warren, S. E.
Wentzel, J. J.
Wolfaard, G. v. Z.
Tellers: J. F. T. Naudé and P. O. Sauer.
Noes—62:
Abbott, C. B. M.
Abrahamson, H.
Acutt, F. H.
Alexander, M.
Allen, F. B
Ballinger, V. M. L.
Bell, R. E.
Blackwell, L.
Botha, H. N. W.
Bowen, R. W.
Carinus, J. G.
Christopher, R. M.
Clark, C. W.
Conradie, J. M.
Davis, A.
Deane, W. A.
De Wet, H. C.
Dolley, G.
Du Toit, R. J.
Egeland, L.
Fourie, J. P.
Friedlander, A
Goldberg, A.
Hare, W. D.
Hayward, G. N.
Hemming, G. K.
Hirsch, J. G.
Hofmeyr, J. H.
Hooper, E. C.
Jackson, D.
Johnson, H. A.
Kentridge, M.
Lawrence, H. G.
Lindhorst. B. H.
Long, B. K.
Miles-Cadman, C. F.
Moll, A. M.
Molteno, D. B.
Mushet, J. W.
Payn, A. O. B.
Pocock, P. V.
Raubenheimer, L. J.
Reitz, L. A. B.
Robertson, R. B.
Rood, K.
Shearer, V. L.
Smuts, J. C.
Solomon, V. G. F.
Sonnenberg, M.
Strauss, J. G. N.
Sturrock, F. C.
Sutter, G. J.
Tothill, H. A.
Trollip, A. E.
Van den Berg, M. J.
Van der Merwe, H.
Wallach, I.
Wares, A. P. J.
Warren, C. M.
Waterson, S. F.
Tellers: G. A. Friend and J. W. Higgerty.
Motion accordingly negatived.
I want to associate myself with what the previous speaker on this side has said. I think that the request by this side is no more than reasonable. There was either justification or there was no justification for the provision that no more than 5 per cent. interest shall be paid by the farmers on their mortgage bonds. The hon. Minister now practically refuses to give us the assurance that this justifiable principle which was adopted, during all the years when he himself was a member of the Cabinet, will be extended to all cases.
The hon. member may not discuss bonds which do not fall under this Act.
I am referring to bonds which were entered into before 1933. The rate of interest on those bonds entered into before 1933, was reduced to 5 per cent. The whole House regarded it as justifiable to reduce the rate of interest. It was either justifiable or it was not justifiable, and I take it that the fact that the Minister was prepared to keep the interest at 5 per cent. during the past ten years, proves that it was justifiable. Surely, the circumstances have not altered. Those farmers are still struggling under the mortgage debts which they contracted during those bad times. If at that time this rate of interest was justifiable, then it is surely justifiable today. Why then is the Minister not willing to accede to the reasonable request on the part of this side of the House that he should give the assurance that this 5 per cent. interest will be maintained in the case of those bonds, even though it be for ever. This is something which was either justifiable at that time or it was not. If the Minister refuses to maintain this rate of interest, it shows that he is of opinion that it is no longer justifiable today to leave the rate of interest on these bonds at 5 per cent.
I want to remind the hon. member that I have already ruled that that amendment cannot be accepted without an instruction, and that point cannot therefore be discussed until such time as such an instruction is given to the Committee.
I appreciate that. The Minister does not want to give any assurance that he will keep these bonds at 5 per cent. for the next eight years.
The hon. member will get an opportunity to discuss that point under another clause.
I want to make an appeal to the Minister. I understand that he is now refusing to give further assistance, when this Act expires after 1951, to mortgagees who received protection under this Act. His argument is this: Who knows that 5 per cent. will be a fair rate of interest after 1951? This Act will be terminated after 1951; who knows whether there will still be justification for the payment of the subsidy? No one knows what the position will be, and now the Minister proceeds to terminate the Act on that date. I would not like to drag this matter into politics, but the Minister is doing so now. He cannot therefore hold it against me if I tell the farmers that he, knowing that he does not know what the position will be in 1951, nevertheless says that he wants to get rid of them and that on that date he is going to terminate the Act, and that they will then no longer enjoy his protection. The Minister knows the reasons for the introduction of this Act. He knows that in many cases the Act has served its purpose. If that is the case, why does he now treat the farmers so unsympathetically? Does he not care what rate of interest they are required to pay? He has not been in direct touch with the farmers as I have been for thirty years. I know what rate of interest the farmers have to pay, and I know what their position is; I know how dependent they are on this subsidy. I know that they are not always in a position to pay their interest on the due date. I know what this interest has meant to the farmer. I admit that there are cases where the people concerned should not have received the subsidy. For that reason I asked at the beginning why the Act was not amended in such a way that this would not happen. I can assure the Minister that there are many poor people who were saved by this Act. I sat and listened to the Minister in his cleverness—and I admit that he is cleverer than I am—when he spoke about the price of land. Take this case. The farmer’s son enters into matrimony. His father must now buy a farm for him, and naturally he wants to buy it as cheaply as possible. He is placed in the position that he must have a farm for his son. The individual who bought land under those circumstances was protected under this Act, and the Minister is now taking away the protection which these people enjoyed, and he simply does not care what happens to them. He must not hold it against me if I inform the farmers that the Minister of Finance does not care what happens to the farming community.
I said on a previous occasion that this Bill is closely related to the Act of 1935, the Farmers’ Assistance Act. There are a large number of farmers who from the beginning in 1933 benefited from the Farm Mortgage Act. But the assistance they received was not sufficient. The Government, still had to adopt the 1935 Act. That position has not yet altered. Many farmers have been assisted under the Farmers’ Assistance Act to the extent of 100 per cent., and a portion of their debts is still covered by the benefits they derived from the 1933 Act. If that assurance is not given to farmers after these eight years, the Minister will find soon after 1951 that he will again have to introduce an Assistance Act. Their obligation does not rest on the subsidy of the 1933 Act; their obligation under the 1935 Act is just as great. The one supplements the other. And therefore it is essential that the Minister should give serious consideration to what the hon. member for Swellendam (Mr. S. E. Warren) has said. It will pay the Minister to give this protection to the farmers. The farmers accepted this Act on an honourable basis, and the figures which the Minister quoted the other day in connection with repayments, should be a guarantee to him that the farmers will eventually meet their obligations. The greatest percentage of the farmers will hardly be able to meet their obligations if they do not have the benefit of a 5 per cent. rate of interest.
We certainly cannot allow the Minister to push through this clause as it appears here. As the hon. member for Hoopstad (Mr. J. H. Viljoen) said, it is not only this one class of man that the Minister will affect when he alters the law in this way, and whom he helps with £3 out of £100, but this assistance which he proposes here we regard as a sugared pill. The Minister thinks that we will pick up that sugared pill and not realise that from that moment we will find ourselves in the position in which we were in 1933. The Minister must act today like a Joseph. He must Josephy. He must try to get cheap money for us. He must not still take away from us that little which we have obtained for the farmers under the previous Minister of Finance. No, we dare not support him in doing this harm to the farming community of the country. We may not speak broadly, but we want the Minister to think broadly.
Nationally.
He cannot think nationally. We differ now already on the question whether the majority of the people on the other side can think, but I think that the Minister of Finance can at least claim that he knows how to touch our pockets. It is possible that the same state of affairs will arise after this war, as after the previous war. It is possible that the farming community will again be the prey of moneylenders, and by taking away what we have here, the Minister is taking away the one safety valve that we still have, and which has served as a standard on which farm mortgage bonds were based.
The hon. member cannot now discuss the policy; he must confine himself to the clause.
This article reads in such a way that it takes away the existing rights, and the Minister comes along and gives us something which to us is a sugared pill. That is how we regard it, and that is why we unfortunately cannot allow it to happen this afternoon. If the Minister will get up and say to us: I will at the next opportunity make provision for the whole question of the level of interest rates on mortgage bonds, then I am prepared to leave the matter there. Then we can even give the Minister the necessary support in the passing of the Bill, however inadequate the assistance is which he offers. But I fear we are going backwards here; we are throwing up the reins, and we are leaving the people, the farmers, to the mercy of the money wolves, so that they will again land in the wretched conditions from which we have tried to save them. If the Minister says that he intends, while money is cheap today, to give the farmers the opportunity of making use of it, then we shall be thankful. The Minister comes along and tells us about the external loans he has paid off because he can get cheap money overseas, and also in South Africa. Then the Minister can also get some of that cheap money for the farmers, and make it available to them, so that the farmers will be able to stand the kicks that will perhaps come after the war. But unfortunately the viewpoint of the Minister is just the opposite, and I think that it is time that hon. members on the other side who represent the farmers, should help us to prevent an injustice being done to the farmers. It is proposed that if the farmers make use of the opportunity of paying off on a 10 per cent. basis, they will still be protected until 1951 in respect of an increase in the rates of interest. I am not so sure.
It is not so.
Here again is a legal man who says that it is not so, but the hon. members on the other side are sitting with the idea that the farmers will enjoy the benefit. I want to ask hon. members to ascertain what the exact implications of the clause are.
When the Minister introduced the Bill, I told him that he was displaying no goodwill and was not acting generously to the farmers in connection with his proposals, and the Minister has this afternoon proved my accusation. He wishes to take away for good, certain assistance that is given to the farmers under the Act. He wants to abolish the whole legislation, but he has not the courage to say so; he keeps it going temporarily, but after that he wants again to throw the farmers to the wolves. We ask him that the protection which the farmers have had should remain. Our charge against the Minister is that while this Act is being abolished with the protection for farmers, the Minister does not propose other steps to protect the farmers against the dangers against which the Act has protected them. If he had come with a general mortgage redemption scheme, then we would have said to him: “You need not wait until 1951, take the Act away immediately.” But he does not come with a mortgage redemption scheme; he does not enable the farmers to get rid of their great debts. He does not do that. We made a further proposal: Give the Land Bank a chance to extend its funds, so that if the farmers are pressed by the mortgage holders for higher rates of interest, they can take refuge in the Land Bank. That he also does not do. I suggested that the Land Bank should issue Land Bank credit notes. The Land Bank is dependent on the Government for funds, and we know that the Government often refuses to make sufficient funds available.
The hon. member must return to the clause.
I ask that this assistance in connection with farm mortgage interest should not be taken away.
I propose to extend it for 8 years.
But then it disappears.
Otherwise it disappears at the end of March 1943.
Quite right, but the Minister knows that the promise of his predecessor to the farmers was that the Act would never be abolished as long as there existed a need for it, and the present Minister is normally bound to carry out that promise to the farmers. Is he prepared to promise the farmers that if there is an increase in interest rates on the part of the mortgage holders, that he will protect the farmers? The Minister is silent. He is not prepared to make a promise, and therefore we are compelled to move an amendment which the Minister has turned down.
The Chairman would not allow it.
The Minister was not prepared to allow us to get the instruction from the Governor General. He must not now stand and hedge here. The Minister has not the courage to admit outright that he is taking away the protection of the farmers in future. He is undoubtedly thereby doing a lot of harm to the farmers. Any time a shortage of money can arise, and interest rates can again be pushed up to 7 per cent. and 9 per cent. and still higher. The existing Act protected the farmer against this, but the Minister now takes it away. Therefore we say that the Minister should have taken steps. He should have given the farmer further protection in respect of interest rates, or given sufficient funds to the Land Bank, cheap money to assist the farmers. But the difficulty is that the Minister himself is busy snatching up the cheap money to carry on his war effort. That is the reason why the Minister does not want to give the Land Bank the opportunity to get hold of cheap money, because it will possibly hinder his war effort. The Minister is in a position today to get the money at 2¼ per cent., and he lets this beautiful opportunity pass of getting hold of cheap money to enable the farmer to convert his mortgage bonds into something in terms of cheap money. Then there will be no need for a subsidy. We dot not want any assistance under existing circumstances, except that we want to get cheap money. The State has the machinery to supply it. The farmers have not got it. The State can assist the farmers in this manner through the Land Bank, if the Government is prepared to do it. Therefore we protest strongly against the removal of this protection of the farmers. I am surprised that more hon. members on the other side do not get up and help us. I want to appeal to them, for the sake of the farmers and their own electors to assist us in retaining this protection for the farmers.
I am sorry that the hon. members on the other side carry on in this way. I do not want to accuse them of acting in this way because an election is at hand, but it almost appears to be the case. The hon. member for Delarey (Mr. Labuschagne) stood up and said that this Bill was a step backwards, that it is a hindrance to the farmers, and that it will drag them into an abyss.
I no longer have a constituency. You cannot accuse me.
In so far as the existing Act is concerned, we know that it had to be renewed from year to year. The interest subsidy continued only to the end of March each year, and thereafter it had again to be approved. The Government has now come along and extended the Bill, for 8 years according to the clause, and then hon. members come to say that it plunges the farmers into an abyss, and does not assist them. That is too bad. The hon. members on the other side talk all day about money that is plentiful at 2½ per cent. and 2¾ per cent., but at the same time they say that if a man makes use of the third scheme of the Minister to redeem his mortgage bond, or to reduce it, then he is again given over to the money wolves, and will again have to pay 8 per cent. or 12 per cent. If a man can get money at 3 per cent. why will he go and pay 12 per cent.?
What happens after 8 years?
Another point they make it that the Land Bank should get money to advance loans. The position is that the Land Bank could not dispose of the money it had. I therefore cannot understand the hon. members. The Land Bank will still always be there to assist.
That is the assurance we have not been able to get from the Minister.
The Minister told us that the Land Bank could not put out on loan the money it had. The hon. members argue all around the point. My viewpoint is that we now get certainty for 8 years, and after 8 years I do not regard it as reasonable to pamper further, people who contracted mortgage bonds before 1933, at the expense of those who contracted mortgage bonds after 1933.
It is a pity that hon. members on the other side immediately something is suggested on this side of the House for the welfare for the farming community, or a section of the farming community, shout “election”. They are so full of the election that they forget everything else. Then the hon. member who has just sat down said that we could not argue that money was obtainable at 3½ per cent. and then at the same time say that they would have to pay 12 per cent. We are talking here of what will happen after 8 years. Then there will possibly be a great shortage of money. The Minister himself expects a great depression. We do not know what will happen after 8 years. But there is another point to which I want to draw the attention of the Minister. And that is that at the moment we are going about the country trying to establish a wool scheme for after the war. Why? Not so much for the wool scheme, but to place the farmers on a firm basis. I can tell the Minister that certainty for the farmers is 25 per cent. of their success and that lack of certainty means 25 per cent. failure. We do not know what the conditions will be in 1951, it may be that for three years interest rates will remain as they are today, and then they come and press the farmers. The uncertainty will also impede transactions, because it will be said: “We do not know what the position will be in five year’s time, the interest rate may be 8 per cent. or 10 per cent.” It will be harmfull to farmers. We only ask that we should be protected against interest rates of 10 per cent. or 12 per cent. The Minister says that he does not know what will happen in 1951, but he comes here and says that he will still pay the subsidy until 1951. Exactly. He does not know what the position will be in 1951. Perhaps we will buy sweets with a subsidy. Yet he comes and says that in 1951 he will still pay it. But because he does not know what will happen after 1951, he cannot promise that interest rates will not be higher. I cannot understand the logic. The Minister can do the farmer a favour. Give them certainty so that they will know whether they are on or off in respect of interest rates. I do not know whether the Minister knows that farming is one of the most difficult things in the world, especially in South Africa. The Minister is not a farmer, and I am afraid he cannot realise what difficulties the farmers have to cope with, but we on this side who have to do with farmers day and night and who know what the position is, come here not for election purposes, as the hon. member for Rustenburg (Mr. J. M. Conradie) wants to make out, but because we really mean it. The Minister can come to my constituency and I will give him the platforms and he can ask the farmers, irrespective of parties, and they will agree 100 per cent. with this side of the House, unless politics are drawn in and his supporters must vote as the Minister wants them to. If the farmers give their honest opinion, then they will say that they regard it of the greatest value that interest rates cannot be higher than 5 per cent. The Minister loses nothing if he does this. Just say “Yes” and the whole discussion is over.
I wish to follow up what the hon. member for Victoria West (Mr. D. T. du P. Viljoen) said: We do not want to distrust one another and hurl accusations at one another. I want once again to give the assurance, which we have repeatedly given from this side, that we are just as concerned about farmers’ interests as they can ever think to be. But we do not want them to put farming matters in a wrong light. Do not make it seem as if we have certainty now under the present system, but are going to have uncertainty in the future. There is no certainty today, and hon. members know it. As the law is at present, the interest subsidy exists only from year to year, the certainty lasts only from year to year. We therefore have the choice of letting the uncertainty continue, or of accepting a different arrangement which gives a certain measure of certainty.
We are not talking about that now.
But that is the main point in the argument. We want hon. members there to agree that the position at the moment is uncertain, but that the Government has ended the uncertainty by substituting something better. If we agree on this point, then we can go further. We are just as desirous, as we said at the Second Reading, of supplying money to the farmers at 2 per cent., if possible, but the money which was lent to the Land Bank comes out of bonds which were issued by this Government and former Governments, under which money was lent from the public at 3 per cent. and 4 per cent., and perhaps still higher. This Government cannot say to the investors: You have lent us money for another 10 or 20 years, but we prefer to pay the money back, because we can borrow more cheaply.
They are doing it now with foreign debts.
There are certain funds that can be redeemed, but not all. There are certain loans that can be redeemed at a certain time. The Minister can put me right if I am wrong, but in my simplicity I assume that it is so. Only after the passage of a period of years can the loans be redeemed, and then it is perhaps possible to borrow more cheaply. Assuming that the proposal of the hon. member for Oudtshoorn (Mr. S. P. le Roux) is adopted, and the Land Bank is allowed to issue its own bonds and to borrow money to an amount of, say, £20,000,000, and that the Land Bank then comes and says to the Government: Here is your £20,000,000 back; will the Government not then be entitled to answer: But you pay an average of 3½ per cent. interest. When we borrowed the money it was not cheaper, whereas you have in the past had the benefit of it for all those years, you cannot come now and evade your obligations. That is the position. The money has been borrowed. A contract has been concluded, and the contract must be fulfilled.
And the farmers must suffer under it.
It is not a case of suffering. If money is available so cheaply and there is so much money with which people are saddled, let the farmers take up the mortgages. The Land Bank has always followed a fixed policy, and we created the Assistance Board to be able to assist further in certain cases where the Land Bank advances only up to 60 per cent. of the valuation. There is just one point which I want the Minister to explain, if not under this clause, then under Clause 3, and it is the following: Assuming that a man pays off cash and gets the full equivalent amount from the Treasury, and he pays that sum to his mortgage-holders. Does that mean that the protection which he receives today in respect of the maximum interest then falls away immediately, and is it not possible to make provision in Clause 3 to give the protection in any case to the man up to 1951? Otherwise, I fear that the inducement for the man to pay cash and to make use of the subsidy in this manner falls away. If he has to be encouraged to pay off a cash amount, then the protection must be maintained for the full eight years, as he had in the past. Otherwise, he will just go on using that subsidy from year to year to enjoy the protection, and I fear that then not so much cash will be redeemed as the Minister expects. On this point I very much want an explanation from the Minister.
It is not clear to me what we are now really discussing at this moment. We have accepted the principle of this Bill at the second reading, and have discussed it there, and we have also rejected a motion in connection with a general redemption scheme. But now we are perpetually reverting to the matter of a general bond redemption scheme that we have already discussed, and that does not fall within the scope of this clause. Then we also come perpetually to the matter that was also raised by the last speaker, and that will come under discussion under the next clause. We can deal with the case of protection for a man who redeems in cash under the following clause. If hon. members want to propose an amendment to Clause 3 I would like to see what it is and what their arguments in favour of it are, but I cannot discuss it now. Moreover, we are not discussing the matter of general bond redemption now.
Yes.
No, the hon. member must not take it amiss, but we are not busy with that, and I cannot reply to it. But now hon. members come and ask perpetually what will happen after 1951, and apparently what they want is that we shall now give the assurance that the interest on a certain group of bonds after 1951 shall remain limited to 5 per cent.
We would like to have it for all.
Bonds may perhaps be called up thereafter. But in any case I do not know what will happen then. It will mean that after 1951 there will be a number of bonds that existed before 1933, and that will enjoy the protection. That is evidently the whole point. I can well understand that the circumstances may be such that you, when 1951 approaches, may come and say that a restriction must be imposed on the interest of farm bonds, but then everyone will have to be included, and not only a group.
Then give the assurance.
It is not now the time to determine what shall be applicable after 1951. The time will come later to consider this.
If you take away the existing protection, you must give a new one.
There is no existing protection after 31st March, 1943.
The word of your predecessor.
There is no existing protection after 31st March, 1943.
Do you not keep yourself to his word?
I do not know what promise the hon. member refers to. I have never heard or seen it.
He said that it would be maintained as long as the need existed.
I make the promise that this will be in force till 1951. That principle has been accepted by the House, and if the House is not satisfied with it, then the matter must fall away. But that hon. members do not want. We accept the principle that the interest subsidy shall continue until 1951, and if it is then necessary to place a restriction on the interest regarding farm bonds, then I shall consider it.
If the Minister is prepared to provide the protection until 1951, then why is he not prepared to extend it thereafter? If it is not necessary thereafter, then it can be suspended. The Minister is a great optimist. He mentioned that if he would still be Minister then he would do so-and-so. But if he comes here and says that he is prepared to provide the protection until 1951, and that it can then be considered to extend the protection still further, then we say: “Give the protection also after 1951, and if it is no longer necessary in 1951, then suspend it.” It comes to the same, except that you look at it from the other side. Does the Minister admit that he takes away existing privileges in this Bill? Neither this Minister, nor any other Minister of Finance, would have dared to do away with the interest subsidy in this period in which we are living. The Minister does not dare to risk it under existing circumstances, and the circumstances are described by him as favourable. This Bill definitely takes away after 1951 the privileges that the farmers had, but the Minister wants to give the bitter medicine to farmers drop by drop, and a lot of water with it, so that the people shall not resist it. Our argument is brief: In the Act as it was there were certain guarantees and one of them is that the rate of interest shall not go above 5 per cent. It is true that it had to be re-enacted year after year, but neither this Minister nor anyone else would have dared to suspend it in this time. No Government would have dared it. And the Minister does not know what is going to happen in the course of the following year. It may happen that after the war money will again become scarce, and that the interest subsidy will then be more necessary than ever, particularly the stipulation of a maximum of 5 per cent. Hon. members on the other side hold the view that the war will last another 4 years. If it lasts another 4 or 5 years then we can expect that precisely about 1951 or thereafter, money scarcity will prevail, and therefore the protection for the farmers must be maintained. It is to obtain the guarantee that this evil shall be prevented that we come here to plead with the Minister to stand up and to say that he is prepared to give that protection after 1951. If it appears that matters then are different, then we can say that we are prepared to take it away.
It was not my intention to speak on this clause, because at the Second Reading I said what I had to say about the Bill. There are, however, a few aspects which have emerged as a result of the discussion we had here, and I cannot abstain from drawing the attention of the House to these. First of all we heard in the past the argument here in the House that this was a legislative measure in connection with which we had no certainty. It had to be renewed from year to year and that caused the uncertainty; and if it was the intention on the part of the Treasury to have this Act continue its existence permanently, also in the future, I cannot see any circumstances for the Act having been renewed from year to year. We could then simply have passed an Act which would have been a permanent one and which need not have been renewed from year to year. The original aim was that the Act should continue as long as the circumstances demanded it. It was never intended as a permanent legislation. If that had not been the case I cannot see why it should have been renewed from year to year. Instead of that uncertainty of the past, we now have here a Bill which will give us certainty for eight years at least, apart from the advantages embodied in these proposals, which were not contained in the old Act. We moreover have the advantage that this Act will be valid for the next eight years. This is something permanent on which we can build. If we want to argue that we should continue as at present and that after eight years the subsidy should remain as it is today or was in the past, then the Minister should rather withdraw this Bill. Let us continue then with the old Act as in the past and it will no longer be necessary to discuss this Bill any further today. This Bill takes the place of the old Act which we had to renew every year; what is, however, peculiar is this, that never in the past when we discussed this legislation and when it had to be renewed from year to year, did anybody advocate the transformation of this Act into a permanent Act, but a redemption scheme was always advocated. Seeing that we now have obtained security for eight years, hon. members on the other side get up and demand that the Act be made permanent. That is something we never discussed in the past, and if it has to be granted the Minister should rather withdraw this Bill, for that will then be unnecessary, and we can continue with the Act as we had it in the past. The circumstances can, of course, change considerably in eight years. It is obvious that, when circumstances should make it necessary, the House will have the power at the end of eight years to declare that the Act is going to terminate then, but in that case provision should be made so that we may go into the merits of the case. We should then have to propose something better or to extend the period of eight years; but to say that, when the new Act terminates after eight years, we should replace it by this or that measure is impossible to do now, for we do not know what the circumstances of the future are going to be. It is obvious that no Government is a permanent one; it does not sit there always and eternally. My friends of the Opposition are convinced that they will be the Government in the near future, and if that is so, why should they worry so much about the Minister making this Act a permanent one? Surely they will then be able to take steps to their own liking and replace this legislation by one which is more effective and more permanent. No, I have the impression that our friends of the Opposition have very little confidence in their own statement that they will shortly govern the country. If they believe in that statement, why should they then ask the Minister to extend this Act still further, so that it will not terminate at the end of the eight years? I do not stand back for any person in this House in my desire to improve the position of the farming population, and if there are persons in this House who know something about farming interests, then I claim that I know something about it also; and if anybody here is a practical farmer, then I say that I am also a practical farmer’ myself. I know the position of the farmer, and I should like to do the very best for the farmer, and because I want the best for the farmer, I feel that this Bill is such an improvement on the old existing system, that I cannot but congratulate the Minister for taking the bold step of introducing this Bill. I cherish the hope that if circumstances should demand so at the end of eight years, we shall have a Government which will be sympathetical enough—I have not the slightest doubt that the same Minister of Finance will still be there, and that he will show still the same consideration which he is showing now—and if the circumstances require it that something more permanent should take the place of this Act, I hope that it will be done. I hope that this Act will answer its purpose as well and will advance the interests of the farmers as well during the next eight years, as did the old Act in the past.
I am amazed at the speech of the hon. member for Caledon (Mr. H. C. de Wet).
I am not surprised that you are amazed at it.
It reminds me of a man who went to a doctor, and when the doctor did not know how to assist him, he simply said to him: “Look, I cannot do anything further for you; you must ask God to help you.” He said that this Act has had to be renewed every year. Yes, that is so, but it was done by the decision of both Houses.
Why did you not ask it to be made permanent?
For the last five years, year after year, we on this side have asked that it should be made permanent, but we did not have the assistance of the hon. member on the other side. But now he is so worried about the farmer and he wants to do his best for the farmer. I put this question to him. I never could think that any government that says it loves the farmer—and the Minister admits that this Act has benefited the farmer—could come before the House here and replace the Act in this way. The hon. member for Caledon says that this is such a good Bill, but now the farmers surely know what the position is going to be. He says that if the Act is necessary in 1951, then we can adopt another Bill. But neither he nor I can say what the position will be in 1951. They admit that the farmers who received assistance under this Act needed the assistance. They even admit themselves that they do not know what the position will be in 1951, but nevertheless they say that this Act must expire in 1951. If the farmers then still require assistance, then a new Bill must be introduced. Why do they then now propose that the Act must terminate in 1951. The position in short is that we must say what we are going to do in ten or twenty year’s time, in this sense, that we must say what our principle is. We must not say what we are going to do in a temporary sense, because we do not know what temporary assistance is necessary. We must say what our permanent plan is. I did not intend to get up but it really looked as if the hon. member for Caledon thought that he was right. The difficulty with the hon. member is that he regards the matter through the wrong glasses, through glasses that have been put on for him by his side of the House. Does he want to come along and tell us that what he has said is the real reason why this Act must be withdrawn and why this change should be made? Are those the reasons that he has mentioned? If he was not in earnest, then he simply spoke in order to talk, and then we cannot take him amiss, because he is sitting on the other side in a difficult position. I just want to say this, that there is no justification for the Bill as it is proposed here. We do not know what the position will be in 1951. The farmers do not want a subsidy if a subsidy is not necessary. If it is not necessary in 1951, then they do not want it. But we say that the Minister cannot predict what is going to happen in the next eight years. I now put a pertinent question to the hon. member for Caledon. Is he or any farmer on the other side prepared to get up in a farming community and say that he is prepared that the provision fixing interest rates at 5 per cent. should fall away in 1951? No, he is not prepared to do it. He will not dare to do it, but in this House he tries to talk such things right. I say that the Minister of Finance should make provision for fixing the interest at 5 per cent. If it is possible, it can be reduced to 3½ per cent. Then we can further amend the Act. We want to know now what the position is. My own opinion is that the Government should take over all the mortgage bonds. It can get money at 2½ per cent. and can give it to the farmers at 3½ per cent. The Government can take over the good mortgage bonds in connection with which the interest is fixed at 5 per cent., that class of bonds. Take over the mortgage bonds and make provision for a redemption scheme. The hon. member for Caledon must not get up here and pretend to speak in the interest of the farmers.
Order! I must draw the attention of members to the rule that a member must not repeat arguments that have already been used by another member.
I am sorry that the hon. member for Caledon (Mr. H. C. de Wet) said that whereas the old Act had had to be renewed from year to year, and whereas we now have certainty for the next 8 years, we on this side have never advocated that the Act should be made permanent.
I never said that.
The hon. member said further that this was a beautiful Bill and that it was better than the old Act. In the first place, the farmers lose 1½ per cent. immediately. They must pay it, and then later it is refunded to them. The farmers for years have paid 3½ per cent. Now they will have to pay 5 per cent., of which 1½ goes to the Government. The Government keeps it for them. There can be no doubt that the benefits which the farmers have received in the past, namely, that the farmer pays only 3½ per cent., will fall away immediately after 1st April. The farmer will have to pay 5 per cent. One and a half per cent. goes to the Government. It is only in the first year that the 1½ per cent. goes to the Government. Thereafter it is gradually reduced, and later it is again refunded to the farmer. If hon. members on the other side who really represent the farmers consider this Bill carefully, then they must realise that the benefits that the farmer has had in the past are taken away from him. What he gets, he must first pay to the Government. No, this Bill amounts to this: that the Government immediately takes away that great benefit which the farmer has had in the past. It simply amounts to this that the farmer will have to pay the additional 1½ per cent. and the Government will keep it for him. That is all and nothing more. The assistance which he has received in the past falls away. No one dares deny that. Then we say further, that if that privilege is taken away, then we ask for at least this assurance, that after 1951 interest rates will be fixed at 5 per cent., so that we can know that it will not be higher. I want to ask the Minister if he will not rather at this stage report progress and ask leave to sit again. It will give us an opportunity to investigate this matter further, because the Minister must realise that it is an important clause in the Bill.
Under the Rules of the House I cannot do that now. I will do so when we get to the next clause.
But then the opportunity for us to plead for the fixing of interest at 5 per cent. disappears. If the Minister can give us the assurance that we can discuss this matter on a later clause, then we will agree to end this discussion now. If the Minister will give us the slightest hint that he will consider the matter, then we will let it pass now. But then we must have the assurance of the Minister that he will consider the matter, because, failing this, we must have another opportunity to plead for it.
Clause 2, as printed, put and negatived.
I move—
(2) All the provisions of the principal Act, except the first proviso to Section 16 of the said Act (which is hereby repealed) shall, subject to the provisions of this Act, continue in operation after the thirty-first day of March, 1943, and shall, subject to the second proviso to the said section, cease to be in operation on the first day of April, 1951, and no application for the payment of subsidy under the said Act which is lodged more than twelve months after the latter date shall be granted.
Agreed to.
On Clause 3,
In connection with this clause, I want formally to move an amendment standing in my name. The amendment is as follows—
We can discuss this amendment later, and I now want to propose—
Agreed to.
House Resumed:
The CHAIRMAN reported progress, and asked leave to sit again; House to resume in Committee on 26th February.
I move—
In moving this motion, I may very shortly state the main reasons for the additional expenditure which I am asking this House now to grant an appropriation for. It will be appreciated that with the greatly increased turnover on the Railways, we have had to meet very considerable expenditure in excess of what we originally estimated, and the bulk of this expenditure is due to that. Heads Nos. 4, 5, 7, 9 and 13 are all directly due to increased turnover, in respect of running expenses, traffic expenses, cartage services, catering, tourists, superannuation and other funds, is due to increased balances standing to the credit of various funds an additional vote being required for that reason. With regard to Head No. 17, “Miscellaneous expenses” the principal item there is the special cost of living allowance which has gone up considerably since our previous Estimates were framed, and £378,000 of that total is accounted for in that way. An amount of £38,000 is the difference between civil and military emoluments owing to the staff on active service being today rather larger than when our Estimates were prepared. In regard to operating expenses, steamships and the miscellaneous expenditure in connection with steamships, that also is due to increased activities which I dealt with today in my Budget speech. In regard to the additional expenditure on capital and betterment works, here again certain works have been gone ahead with, which were not originally provided for in our Estimates, mainly in connection with our special harbour development. There is a very small amount of £3,700 due to airways, and unforeseen works, which item totals £112,728.
I second.
Agreed to.
House in Committee:
The Committee has to consider the Estimates of Additional Expenditure to be defrayed from Railways and Harbours Revenue Funds during the year ending 31st March, 1943, and the Estimates of Additional Expenditure to be defrayed from Loan Funds during the year ending 31st March, 1943.
The Committee proceeded to consider the Estimates of Additional Expenditure to be defrayed from Railways and Harbours Revenue Funds.
Head No. 4.—“Running Expenses—Railways”, £402,603, put and agreed to.
Head No. 5.—“Traffic Expenses—Railways”, £309,186, put and agreed to.
Head No. 7.—“Cartage Services—Railways”, £33,196, put and agreed to.
Head No. 9.—“Catering and Bedding Services—Railways”, £199,568, put and agreed to.
On Head No. 13.—“Tourist Service—Railways”, £33,070.
Will the hon. Minister give us information in regard to this item “Hotel accommodation £22,500”.
This is due to increased Hotel booking by the Railways. As you know, we book hotel accommodation on behalf of tourists who are travelling under the aegis of the Railways, and this amount has been required for that purpose. We have to get an appropriation for that.
It is payable by the public.
Yes, but under our way of accounting, we have to report it to the House and get authority for the amount expended.
Head put and agreed to.
Head No. 15.—“Interest on Superannuation and Other Funds—Railways”, £39,708, put and agreed to.
On Head No. 17.—“Miscellaneous Expenditure—Railways”, £446,117.
Under this head there appears an amount of £7,614, being a contribution to the Liberty Cavalcade in Johannesburg and an amount of £653 for the same purpose in the case of Bloemfontein and East London. I should like to know from the Minister why these contributions were made.
It is customary on the part of the Railways, to take advantage of any great gatherings, fetes or other shows, in order to push their own publicity, and at this cavalcade it was decided that it would be unwise for the Railways not to take the opportunity of having a large exhibit of their own. I am not quite sure about the details of the Bloemfontein one, but in regard to the Johannesburg Liberty Cavalcade, we had a display of Railway working, and also a big restaurant, and it is only the expenditure on these things that is put in here. This is very much on the same principle as the Railways not very long ago expended £50,000 in connection with the Voortrekker celebrations.
But under this head it is specifically called a contribution. It is not stated that it is for an exhibit. It says here specifically that it is a contribution.
A good deal of the expenditure in connection with the Liberty Cavalcade was of a voluntary kind, a lot of work was done voluntarily by Railway workers in their own time, but the Railways undertook certain responsibilities, and we made a grant towards the total; but it was part and parcel of the Railway exhibit. As a matter of fact, the Railway exhibit cost a great deal more than this, but it was agreed that the Administration would meet a certain proportion of the total cost.
There is another item in connection with which I should like to know something, namely: “The difference between Civilian and Miltary Pay of Staff on Active Service.” I want to ask the Minister why the expenditure in connection with this item has become so large. Is it because more recruits have been obtained, or what is the cause.
It is entirely due to the fact that a great many more men have volunteered for active service. I think the numbers went up from 6,000 to 10,000 and consequently the amount has risen very considerably.
Head put and agreed to.
On Head No. 19—“Operation Expenses—Harbours”, £85,905.
Here there is an increase of £85,905, and there is an amount of £10,000 for which special approval of the Governor General has been obtained. It is in connection with Harbours. Where have the Harbours been built and what was the urgent necessity for building them. Here there are various items of a war character, and which have been built under the War Administration. In this manner there appears here all kinds of items, and we do not get the full amount from war expenses. It is placed here under Harbours. The result of this will be that whereas before the war already, we have always suffered a loss on our harbours, we, by these capital expenditures will increase the interest still higher, with the result that the losses that the Railways must bear will be still greater. If something of this nature is required in view of the war situation, then the Department of Defence must pay for it, and not the Railway Department. The present Government is always talking about the business principles on which the Railways must be conducted, but here it is not done. If the Government must do something for the defence of the country, like the building of a harbour, then the Government must pay and not the Railways.
I should like to explain in connection with that matter that in view of the fact that our Harbours are very congested, and in view of the danger of leaving ships in open roadsteads with the enemy surrounding us, it has been found necessary to develop one or two other harbours for safety and for other reasons, but it is not advisable or permissible for me to disclose where they are, but I want to reassure the hon. member that no expenditure is incurred by the Railways unless the Railways are satisfied that they will serve a Railway purpose, and that they will be able to use such works afterwards. Only then do we pay for such works. This is only a fraction of the work involved; the rest is borne by the Defence account and all the work that the Railways undertake is work which will subsequently be useful to the Railways in connection with the development of our traffic and our general railway work.
I just want to ask the Minister something. I do not want to know where the harbour is he talks about. I should like to know if it is for military purposes; and, if so, if it should not be paid for by the Department of Defence?
Primarily it is almost entirely for mercantile activities in respect of our own ships. But I can assure the hon. member that no money is spent by the Railways which I am not perfectly satisfied is not for the use of the South African Railways.
In view of the assurance of the Minister in connection with the previous vote, I should like to know whether the same assurance is valid in connection with Item 754 “Repairs”, £63,125. Can he also give the assurance in connection with this item that the Railways are not paying for something which is required solely for military purposes?
That is repairs to our own ships. One of our ships went through very extensive repairs during the last twelve months, not due to the war at all, but due to its general condition.
Head put and agreed to.
Head No. 26.—“Working and Maintenance—Steamships”, £217,941, put and agreed to.
Head No. 27.—“Miscellaneous Expenditure—Steamships”, £427, put and agreed to.
The Committee proceeded to consider the Estimates of Additional Expenditure on Capital and Betterment Works [U.G. 4—’43.]
Head No. 1.—“Construction of Railways”, £23,124, put and agreed to.
Head No. 2.—“New Works on Open Lines”, £25,000, put and agreed to.
On Head No. 5.—“Harbours”, £165,000,
Here a considerable additional amount of £165,000 is asked for. What are the urgent harbour works that fall under this amount, for which no provision was made in the original Budget. It appears to be a large amount.
I think if the hon. member listened to the Budget speech I indicated there what these new works were—they are in connection with all harbours, but mainly in connection with Cape Town, Durban, and East London—they are in connection with extension of floating docks, extension of Salisbury Island, quays, etc.
Head put and agreed to.
At 6.40 p.m. the Chairman stated that, in accordance with the Sessional Order adopted on the 28th January, 1943, and Standing Order No. 26 (1), he would report progress and ask leave to sit again.
House Resumed:
The CHAIRMAN reported progress, and asked leave to sit again; House to resume in Committee on 26th February.
Mr. SPEAKER adjourned the House at