I move—

1. (a) the substitution for item 27 of the following new item—

Agreed to.

Clause, as amended, put and agreed to.

On Clause 7,

I move—

1. (1) A rebate of excise duty—
   1. (a) of three shillings per imperial proof gallon in respect of such a quantity of brandy distilled during the calendar years 1939, 1940 and 1941, as the Minister may determine;
   2. (b) of two shillings and sixpence per imperial proof gallon in respect of such a quantity of brandy distilled during the calendar years 1940, 1941 and 1942, as the Minister may determine,

   may be allowed, notwithstanding that the wine or must from which such brandy was distilled was not approved by the Government Brandy Board:

   Provided that such brandy—

   1. (i) has been distilled in a pot still at a strength not exceeding thirty per cent. overproof;
   2. (ii) has been matured by storage in an approved warehouse in wood for a period of three years in the case of brandy referred to in paragraph (a) and for a period of not less than two years and six months in the case of brandy referred to in paragraph (b); and
   3. (iii) has been approved by the Government Brandy Board and certified by such Board to be pure wine brandy.

Agreed to.

Clause, as amended, put and agreed to.

The remaining Clause and the Title having been agreed to,

House Resumed:

The CHAIRMAN reported the Bill with amendments.

Amendments considered.

Amendments in Clauses 1 (Afrikaans), 6 and 7 put and agreed to, and the Bill, as amended, adopted.

I move—

I object.

Third reading on 12th April.

The hon. member for Roodepoort (Mr. Allen) yesterday asked me a question to which I replied, but in regard to which I said I would like to confirm later what I then said. With the authority of the Law Advisers I can now tell him definitely that the position of the man who serves outside South Africa will be no worse under this Bill than that of the man who has been serving inside Africa but outside the Union. With regard to the amendment of the hon. member for Illovo (Mr. Marwick) the position is as I stated it yesterday, but on reflection I am conscious of a difficulty in one regard. The hon. member did not mention it, but possibly it was in his mind. That is the case of the parent who receives the minimum allowance of £13. I do not think it was contemplated that where such a payment is made under the War Pensions Act, the insurance company would be entitled to withhold payment under the policy.

They have.

That may be so or may not be so. But I shall be sorry to hear that that is so. That was not contemplated, and I think it is quite right that we should make it clear that that is not intended. I think that can best be done in the War Pensions Act. As hon. members may be aware, certain amendments are being made in the War Pensions Act in regard to the payment of pensions and allowances to parents, and I propose when we come to that Bill, to introduce a sub-section which will make it quite clear that payments of allowances of the kind that I am referring to will not be regarded as falling within the scope of the section. I think that will meet the position substantially.

When the House adjourned yesterday, I was dealing with this question of the effect of Clause 38 on soldiers who serve overseas. In this clause there is discrimination against the man who goes overseas, and the man who stays behind benefits under this clause.

How does he benefit?

The man who stays in the country gets the full benefit of his insurance policy, whereas the man who goes overseas only gets a return of his premiums—that is if he is killed, his dependants would get the return of the premiums which he paid. I hope the Minister will frame an amendment to this clause to the effect that in the event of a soldier being killed overseas, the Government will accept the responsibility in place of the insurance company. I think that is only a fair thing to ask in the case of men who fight for their country overseas. I hope the Minister will agree to this suggestion, but if he cannot agree to it in regard to this particular clause, perhaps he will allow it to be brought in under the amendments to the War Pensions Act.

You can raise it then.

When the Act of 1940 was under discussion in this House, we were more or less assured that the soldier would be protected outside the Union, but the insurance companies have a certain amount of difficulty in regard to the business. I feel sure that at that time the Bill was not properly understood by the majority of the members in this House. They thought that everything in the garden was lovely and that the soldiers were being protected and that we had no need to worry. We now have an opportunity of putting this matter right. I do not mind how it is done, whether it is done under the War Pensions Bill, or whether the Minister brings it about through the amendment of the hon. member for Illovo (Mr. Marwick). I do want to stress the point that at the moment there is a very large amount of agitation in regard to this matter. There is a considerable amount of dissatisfaction. We can never please everyone—that we know—but I do think that when the implication of this Bill becomes known to the soldiers, they will have every cause for complaint against the House in that when there was this opportunity of putting right what I consider to be a grievous wrong to soldiers serving outside South Africa, we did not avail ourselves of that opportunity. I think the Government should be prepared, if necessary, to assist the insurance companies by giving them a certain amount of cover for any extra expenditure they may find themselves faced with as a result of this amendment. I want to impress upon the Minister that it is the desire of the people outside that we should see that our volunteers who are prepared to go overseas to fight for this country are properly protected. Nothing is too good for them, and if we are going to be guided by mercenary reasons, because it will cost the State a little extra, I feel that we are definitely wrong in taking up an attitude of that kind. Nothing is too good for these men who are prepared to sacrifice their lives for this country. Let us show that in a practical way. We can find millions and millions of pounds for war expenditure. A little extra will surely not make much difference. It would not be right for us to burden the insurance companies with extra expenditure which they did not foresee at the time. It would not be right to say to them now: “You must take the risk of that extra expenditure.” The Government should be prepared to stand by the insurance companies, and in doing this we would be making another gesture to these people who have gone outside the country to defend South Africa. Never mind about expense. Let us do the big thing by these men; and I consider that this difficulty should not be allowed to stand in our way. It is only right that the Minister should take this opportunity now; or if he finds it impossible to rectify the position under this Bill, he should give us the assurance that he will put the matter right in the War Pensions Bill.

The Minister has very properly referred to the fact that when the 1940 amendment Insurance Act Bill was passed, it had certain effects and it was understood that it would only come into operation in cases in which the benefit in the shape of compensation had been paid by the Government to the dependants of the soldier. He has properly referred to the fact that in many cases the parent of the soldier has been awarded £13 per annum, and he indicates that some alteration will be made so that such a miserable sum shall not be regarded as a benefit; but the fact remains that in 362 cases already under the new Act, there has been a £13 per annum “benefit” awarded to parents, and, Sir, I have said already that it is a terrible reflection on the administration of the War Pensions Act, 1942 — 362 parents of lads who laid down their lives in the war are given the minimum pension. It is not a pension at all. It is a travesty of a pension. £13 per annum where the lads themselves were contributing £13 per month to the support of their parents. There are certain members in the House now who were not here yesterday. I therefore want to repeat one or two of the points I made then. When the war began the state of the insurance law of 1923 was expressed in these terms in regard to the man who might defend his country: A person whose life is insured by any policy issued in the Union may, with the consent of the company, engage in military or naval service in defence of the Union. Any stipulation in the policy which deprives or intends to deprive the policy-holder of this right shall have no force or effect. That was a forthright statement in the law at that time. It meant that every man could go forth to the defence of his country, not fearing that his life policy would be diminished in its value in any way. Now, through the amendment of the Insurance Act in 1940, which the hon. member for Durban, Greyville (Mr. Derbyshire) has correctly described as a mistake, we have allowed stipulations to be made and we have made those stipulations rest on the fact that the dependants received a benefit; and when we look at that benefit, what do we find? It is a most contemptible subterfuge, and we can only infer that the frequency with which £13 per annum pensions are conferred on parents has had its aim. Such a benefit, Sir, is a travesty of a pension, and yet it conforms to the stipulations made under the restricted life policies issued since 1940; it enables those stipulations to be upheld, and if the dependants were to go to law, they would be told that they have received a benefit within the meaning of the War Pensions Act. It is because the insurance stipulation has proved such a deceit, that I wish to have it deleted altogether. I want that state which existed when the war started, that there should be no diminution of the man’s rights while he is at the front, and that we should get back to the spirit which immediately followed the Great War. In 1923 I was in this House when the Act was passed, and the spirit that animated everyone was to see that there should be no subterfuge on account of a man losing his insurance policy—that he should be protected in every way. The suggestion made by the hon. member for Durban, Stamford Hill (Mr. Acutt) seems to me to be a good alternative suggestion, that if it is going to be argued by the insurance companies that the amendment will cause a liability which legally belongs to them at the moment, the Government should face up to the question of meeting cover at least to the extent of £1,000 in the case of men who have been killed. It would not be an innovation as far as war compensation is concerned. In America every private who goes to the front is insured to the extent roughly of 10,000 dollars; that is to say, roughly £2,000; and if he is killed the Government bears that liability and there would be nothing new in the Union Government adopting a course of that kind. In any case, I press my amendment. I consider it is one upon which hon. members should vote in this House, because it is no use merely moving amendments which we are going to allow to be voted down on voices. I consider this an important matter to which this House must give its earnest consideration. It is one affecting an Act which is intended to become a permanent Act in this country. It is not merely for today. This is, as far as we can tell, an Insurance Bill which has been duly considered by the Minister and which he seeks to make the law of the country. I object to that. I think it is an utterly bad law, and I move the amendment which stands in my I name.

I think I should again explain the position very briefly. The Act of 1940 had no effect whatever on policies taken out before then. All the Act of 1940 did was to enable the applicant for a policy and the insurance company to come to an agreement, to stipulate certain things. The point with which we tried to deal in 1940 was this, that if the insurance companies were, in relation to service outside the Union, left with the full responsibility of the Act of 1923, they would either charge substantially higher premiums or they would refuse to accept the business, and it was therefore in the interests of the soldiers themselves that this House made it possible for such a stipulation to be inserted. We cannot go back on that now. Having allowed the insertion of that stipulation, we cannot say that that stipulation will have no force and effect. It was made the permanent law of the country in 1940. But we do say this, that when that Act was passed in 1940, I do not think provision had yet been made for these minimum allowances. It is not a pension.

It is a token payment.

Call it what you like, but it is not a pension. Provision had not been made for that, and therefore it was never contemplated that that would be adducible as falling within the scope of the stipulation of the Act of 1940, and no one can therefore object to my proposed amendment in the War Pension Act to exclude any such payment.

Similar grants were made under the previous War Pensions Act.

In any case, no one contemplated that that would be regarded as bringing this stipulation into operation, and I shall therefore have no hesitation in moving that amendment. I do not think it is necessary to accept the amendment of the hon. member for Illovo (Mr. Marwick).

The position as stated by the Minister is correct, and that was the view taken by the Select Committee when it considered this Section 38. I may tell the hon. member for Illovo (Mr. Marwick) that the Select Committee spent some considerable time in investigating all the complications and implications of Section 38. Before the Act of 1940 was passed, the soldiers found that they could not get insurance because of the limitations set upon the companies by the Act of 1923. So the position was this before 1940, that soldiers who had insured before the war broke out, of course, their policies were not affected, and if they were killed or injured the companies paid out. But it was found that soldiers who had not insured before the war broke out could not get insurance when they enlisted. That was the reason why the 1940 Act was passed to enable our soldiers to get insurance.

Did the requests for that Act emanate from the soldiers or from the companies?

I do not know.

I do; it came from the companies.

Yes, that’s quite likely, they wanted to do the business.

They wanted to be enabled to do the business.

It was found that unless the law was put right, soldiers who wanted life insurance would have to pay loaded premiums and that was why the law was passed. The Select Committee considered this question and we took the view that it was in the interests of the soldiers themselves that this should be passed. In other words, we were assisting the soldiers to get insurance, and that is why the clause was put into the Bill, being substantially the same as the amendment of 1940. I do not think I would be exaggerating when I say that if this House were to accept the amendment of the hon. member for Illovo we would be doing the soldiers a dis-service; that would be the effect because they would not be able to obtain insurance. I say that advisedly, because we considered very fully the implications of the section, and the whole Select. Committee, with the exception of the hon. member for Stamford Hill (Mr. Acutt) were perfectly satisfied that it was in the interests of the soldier himself that this section should be inserted.

There is just one other point following upon what the hon. member for Brakpan (Mr. Trollip) has said, and that is from the point of view of the soldier. You cannot force any Insurance Company to insure anyone, and therefore not only could the soldier not get insurance, but it would mean that if the Act of 1940 had not been passed he would on his return from active service have been several years older, and he would have had to pay higher premiums had he then taken out an insurance policy. Now, he will be enabled—that is under the Act of 1940—to take out a policy say at 21 years of age, he will be accepted as a first-class life, with the corresponding much smaller premium, but if we did not have this clause it would mean that he could not get insured until he came back from the war; he would be much older then and perhaps his health might by that time be impaired to a certain extent, so that the companies would no longer regard him as a first-class life. So from that point of view this proviso is of great advantage to the soldiers. It enables him to get insurance which otherwise he would not be able to get, and it enables him to get the insurance at an earlier age and at a lower rate.

I quite understand the position of the insurance companies, but in order to be fair to the men who want to go overseas to fight for South Africa they should receive some protection in regard to insurance. When this clause came before the Select Committee we had considerable discussion on it, and I frankly admit I could not understand the meaning of it. It was framed in such a complicated manner that I did not see the implications. The Law Adviser told me: “This clause is for the benefit of the soldier, I don’t know what you are worrying about.” That cut the ground from underneath my feet, but had I known then what I know now, I would have gone further in the Select Committee. Whether it is feasible to rectify the matter now in this Bill I don’t know; I must leave that to the Minister to decide, but if he will tell us that the matter is provided for in the War Pensions Bill, or that we can discuss it on the Pensions Bill, I shall do so then.

Certainly, you may raise it there.

Under this Act the man who goes overseas is penalised and the man who remains in the country is not affected; his life insurance policy holds good at the original amount of premium, whereas the man who goes overseas, if he becomes a casualty,—his policy is null and void.

I think both the hon. members for Illovo (Mr. Marwick) and for Stamford Hill (Mr. Acutt) are under a misapprehension. I honestly do not see how this amendment can really help the soldier at all. We all agree that the soldiers should be fully protected, and I felt very pleased at the statement, which the Minister made yesterday, because unquestionably there has been a great deal of confusion in the country over the Insurance Amendment Bill we passed in 1940. I have come in contact with that frequently. The public have felt that we were wrong in allowing insurance companies to insure soldiers and exclude war risks, but it has just been put clearly by the hon. member for Port Elizabeth, South (Mr. Hirsch) that you cannot compel any insurance company to accept any risk. That is a fundamental principle of insurance—the right to select your risk, and life premiums are based on a normal risk and first-class life. If there is any variation of these conditions, if the life is a sub-standard life, or if the risk is hazardous, there is an extra charge. For mining and the liquor trade an extra premium is payable. The war risk is even higher. When the Insurance Act of 1923 was passed it was evident at that time to anyone in insurance that if war broke out the war risk clause would break down completely, and that is precisely what happened in 1940. It was evident in 1923 that such a clause would never stand the test of war. A company would be forced to say: “We cannot insure you because the law will not allow us to exclude war risk, and we cannot charge you the high extra premium for the war risk.” So companies were placed in the invidious position of not being able to do this business and soldiers could not obtain insurance. All we did in 1940 was to say that where this risk is of special application, that is outside the Union, you can insure the soldier, you can accept a soldier at the normal premium and on the basis of present health, and if, he should die as the result of war injury or he should be killed outright on war service outside the Union, then you will not be compelled to pay out the sum insured, if the State agrees to pay the dependants a pension, but in this event you must repay the amount of the premiums paid. That was very much to the benefit of the soldier. I don’t see what other policy could have been followed. The alternative was that the companies would say: “If you are going on service we cannot accept your risk.” The alternative further suggested by the hon. member for Illovo is apparently this, that the companies should by legislation be forced to accept those risks. That would be a very dangerous procedure to adopt, because we would be compelling the companies to take risks at very adequate premiums and this would tend to undermine the financial stability of the companies. So I think the Minister’s method of dealing with the matter is a practical one, and when we come to the Pensions Bill we shall have the opportunity of reviewing the way in which the Minister proposes overcoming the difficulty.

I do not appreciate at all the comments of the hon. member for Orange Grove (Mr. Bell). He has said that I am under a misapprehension—perhaps I may return the compliment. All I want to say is this, that the plea made by the hon. member for Port Elizabeth (Mr. Hirsch) and also by the hon. member for Orange Grove, and also the hon. member for Brakpan (Mr. Trollip), that this was conceived in the interests of the soldiers does not hold water. It was not the soldier who was so active in getting the Insurance amendment of 1940 passed through this House. As the hon. member for Greyville (Mr. Derbyshire) has said, there was intensive canvassing to get the amendment through, and it was put through solely in the interests of the insurance companies.

That is not so.

I say that without fear of contradiction.

It still is not so.

I have not met a soldier yet who has put the theory put forward by the hon. member for Brakpan or the hon. member for Port Elizabeth. No one has ever appealed to me and said: “I am unable to get insurance and therefore you must modify the law.”

Would you expect that?

It is the claim of hon. members that the soldiers benefited; least of all have I met a soldier who would ask that we should embody in the Insurance Act of this country a disqualification of this kind, the power to diminish the policy of any man who goes out in the defence of his country. In 1923 the defence of the country was an aim which justified the Act of 1923. And it was put through with the full support of both Houses of Parliament; there was not a single word demurring to the very forthright provisions of Section 21, which said: “You dare not monkey about with the insurance policy of a man defending his country.” If he went out to defend his country he was entitled to the full policy for which he was insured. It is better to stand or fall by that than to indulge in long arguments as to what is to the benefit of the soldier. The soldier at the moment is so busy with the business of war that he is silent about that. I would go further and say that the number of casualties today of South Africans would be a very slight burden to bear by the insurance companies which have benefited so much by their insurance business in this country, and the number of people who are insured under the unchallengeable policy which is protected by the Act of 1923 is considerable. They are entitled to their insurance in full, and there has been no outcry on that account from the insurance companies. On this question of any disagreement which has occurred, I was not satisfied with the Minister’s reply to my printed question in the House yesterday. I asked the Minister whether cases have come to the Commissioner of Pensions in which insurance claims had not been met. His reply was not a reply at all. His reply was that there was no provision in the law under which such cases were notifiable to the Commissioner of Pensions, and he said in those circumstances the reply was in the negative. That is a very roundabout way of evading a very plain question. I wanted to know whether cases had come to the notice of the Commissioner of Pensions in which there had been trouble about insurance policies. I shall at a later stage bring up some cases. Whether they were brought to the notice of the Commissioner of Pensions I cannot say, but I have a shrewd suspicion. All I know is that the Minister’s reply was unsatisfactory. It did not show the frankness which I have always considered belonged to the Minister as one of his most outstanding characteristics. We are dealing with the verities of the position in regard to the soldier. Do not let us put into his mouth words which he has never thought of. Do not let us say that the amendment of the Act of 1940 was in the interests of the soldier. If I were asked such a question on a public platform I would say: “No, that Act was a mistake.” The House surrendered to the lobbying that took place, and that Act was passed in a hurry on the assumption that it was necessary. The question of an appeal from the soldiers was never mentioned. And I do not know of a single soldier who has ever come forward and said that he wanted a policy which judged in the light of subsequent events was of very little use. But as the soldier is asked to take only a challengeable life policy, a policy which the companies can evade, in the manner I have explained, I contend that it is the duty of the House to refuse to consent to the Minister’s proposal. I have pointed out that there is a loophole which means that if a soldier’s dependant is offered £13 per annum that is considered a “benefit” which has accrued to him under the War Pensions Act, and a fulfilment of the conditions which is endorsed on his policy.

That is not so.

The Minister’s admission proves it.

I think there is a good deal more in these representations than some people seem to think. I remember when the Act of 1940 was introduced, I objected to it. I fail to see that a change in the provisions of that Act would be in conflict with the duties of Parliament, but even if it were so it would be a good thing. There was a great deal of dissatisfaction with the Bill introduced in 1940.

You opposed it and you were the only one.

Of course I opposed it, because it was wrong. The hon. member for Brakpan (Mr. Trollip) says that the 1940 Act was in favour of the soldier. It is nothing of the kind. The soldier had no choice. Between the insurance companies and the Government it was a case of “you take this or you get nothing.” If the soldier did not take this he got nothing at all. The insurance companies had come to the conclusion that they would not insure people who were going on active service. But the position becomes very different when you cut the soldiers out altogether, and make arrangements under which the soldier’s dependants will get back the money the soldier has paid in—in the event of that man being killed. If the man is not killed it is all right, but if the man is killed his people are penalised. I say it is wrong now to say that if we did anything it would be in conflict with the Act of 1940. The Act of 1940 was not as represented in the House, it was not in the interest of the soldier, and the country took it very badly. There is more in the hon. member’s contention. Do not let us say that it is in the interest of the soldier when we know it is not.

What is the alternative?

I ask any insurance man what is the alternative. The alternative is that the soldier will get no insurance at all. And consequently you put him in this position—if he is killed he gets his money back, even without interest. The whole thing is wrong because it is not a fair deal. Do not let us tell the country that it was done in the interest of the soldier. We said so in the House, and the country knows it. I see the difficulties but these difficulties are the outcome of our sins of the past. If some means can be found to rectify a distinct wrong committed in 1940 I would certainly be very glad and I would support any steps in that direction.

I do want to make one thing clear at the outset and that is that I do not want any hon. member to claim a monopoly for the right to look after the interests of the soldier.

We have never done so.

I want hon. members to realise that there are others in this House who are just as keenly and deeply interested in the soldiers and in those dependent on them as hon. members who have spoken on this clause. This matter was debated in the Select Committee and every point of view was carefully considered. I want to refer to one or two points which were overlooked today. What the position was during 1914 to 1918 I don’t know. I assume that either the companies at that time loaded the premiums or refused to issue policies at all.

They issued no policies to men on active service.

Well, be that as it may. In 1923 there was no war. But the moment this war broke out this question arose and something had to be done to prevent a disability being imposed on men going on active service, to prevent these men being unable to obtain insurance, not necessarily because the insurance companies refused to insure, but because they—the companies—need not take a risk which they did not want to take, or because they would load the premium to such an extent that these men could not afford to take out policies. But there was this advantage of enabling people to take out an insurance policy at a time they enlisted when the premiums were still reasonable rather than at a time when the premiums would have gone up through those men being much older on their return and perhaps under disabilities of health. Now, a number of us when the Act of 1940 was passed had these matters in mind, and it was not until I was satisfied that I accepted the principle laid down in the Act of 1940. And to give the impression that this is sometimes new, that these matters are raised for the first time now is wrong. These matters were discussed in 1940 and this whole question was discussed in Select Committee, and when I accepted the position laid down in the Select Committee Report I had all the views laid before me, and I weighed them up and I came to the conclusion that in the interests of the soldiers themselves this was the only course we could take. I am glad the Minister took up the case of a man’s family getting £13 per annum, but it is of course applicable only to soldiers under the age of 26 years.

We are changing that under the new Act.

Well that is the only point, but as the Minister is dealing with that I have nothing to add.

I want to draw attention to Sub-Section (3) of this clause. There is no date, no limitation of time. The premiums could not be returned until a man is dead. Let me put the position this way. A man is injured or suffers bodily ill-health—and we have had cases before us on the Pensions Committee in regard to the death of an ex-soldier five, ten and even twenty-five years after he has received an injury. His death has been ascribed to his war service and to injuries received on war service. Now, what is the position of a man who insures with this stipulation in the policy? He comes back from the war, he is not dead, but he is suffering from certain disabilities. The insurance company does not refund the amount of his premium because the man is not dead, and the man continues to pay premiums until the date of his death. Now, what is the position at his death? The insurance company can refuse to pay out because the man’s dependants have a claim on the Government and the Government may pay something in way of a pension. In that case the amount for which the man is insured is not paid out, but all that is paid is the amount paid in premiums.

If the Pensions Office does not pay, the company must pay.

The insurance policy is submitted to the company. They may say: “You have a claim against the Government and until that petition has come before Parliament, the insurance company won’t pay out.”

That does not apply. It is not a question of petition to Parliament. It is a question of a pension under the War Pensions Act.

What is the position even if a man is disabled and he receives a disability pension? Does the policy then terminate or does he still continue to pay premiums.

It does not terminate; why should it terminate.

Well, then he continues to pay premiums, and some years later he dies. Does his estate get only his premiums refunded, or do his dependants get the full amount? There is no limitation on the length of the policy. If he receives a disability pension, the policy is not terminated. Nothing comes into effect until the man is dead, and the insurance company may then say to the widow: “You have a claim against the Government, and the company will not pay out until such time as that claim has been settled one way or the other.” It seems to me that there should be some limitation of the time when the company shall either pay the sum assured or refund the premium and terminate the policy. There seems to me no provision of that sort.

I am afraid I am not able to agree with the hon. Minister and his supporters when they say that the 1940 Act conferred benefits upon the soldiers. What was the position at that time? The position was previously governed by the 1923 Act.

Which contained an impossible provision.

The insurance companies found themselves faced with extra risks. It is stated that they cannot undertake this risk. Now they come along to Parliament and Parliament passes a Bill and gives them the power to undertake the insurance business without war risk. If a man was insured in 1939 in August, say, before the war started, he would be paid out the usual cover by his insurance company. A month afterwards war is declared; the man is insured and he gets a restricted amount, and the Minister says that because he gets a smaller amount that that confers a benefit upon the soldier. The soldier previously was allowed the full amount for which he was insured, war or no war. He gets everything for which he is insured. A month later a man takes out an insurance policy and the company now says to him: “We are not prepared to give you any war risk, and by that means we are conferring a benefit upon you.” Well. Sir, I fail to see how that can be a benefit. This man suffers a tremendous disability, and when the Government was faced with that position in 1940, they were not big enough to say that they had made a mistake and that they were prepared to rectify it. Do not let us say that that Bill conferred benefits on the soldier which we must not take away. Let us say that this is going to be costly to the insurance companies, that we cannot burden the insurance companies with any excessive expenditure that was not foreseen. We have no right to say now: “You have to undertake this war risk.” I do submit. Sir, that Parliament should be prepared to say to the insurance companies: “We want you to undertake this risk; let the man who was man enough to go overseas in 1940 receive these benefits; we will help you.” That is the whole crux of the situation. I maintain that it would be insulting any soldier to tell him that the 1940 Bill conferred any benefits on him. It actually took away rights which he would have enjoyed a month before, and I do hope that the Minister will give us the assurance that he will be prepared to amend the War Pensions Bill so as to cover these points. Let us candidly admit that we made a mistake; but it is not too late to remedy that mistake. Do not let us say that we have conferred benefits when in actual fact we conferred no benefits at all. What we are doing is to penalise the men who are going overseas. We ask the man to go and fight for our cause but we confer no benefits on him. We penalise him and we confer benefits on the man who stays at home. The man who slinks around here, who may be gun-shy and not prepared to fight for his country, receives all the benefits; he is not penalised, but the man who goes overseas is penalised. Let us not be afraid on account of a little further expenditure to adjust this position. Let us not deny to the soldier who is prepared to go to any part of the world in defence of South Africa the right which we give to men who stay at home.

I find it rather difficult to understand the attitude taken up by the hon. member who has just sat down. I look at the matter in this way. I consider that benefits have been conferred on soldiers—for this reason: In the first place, I take it that we are not in a position to compel the insurance companies to insure anyone against their will. Let us take a person who is proceeding on active service. Any company has the right to refuse to accept that risk. That is a risk which I maintain should be borne by Parliament, and through Parliament the whole country would be taking that risk.

That is my point.

If a man is proceeding on active service and if the company undertakes to insure him under the conditions which exist at present and which, I understand, mean that should he unfortunately lost his life, there will be a refund of the premiums. That in effect amounts to a compulsory saving on his part; but the responsibility for the support of his dependents should surely rest on the country as a whole, and we cannot expect any insurance company to make that provision. Therefore, I think we may rightly consider that the Act, as it stands at present, does confer benefits on the soldier.

I hope it will serve to bring us to the end of this debate if I point out briefly the alternative that lies before us. As the hon. member for Port Elizabeth (Central) (Col. Wares) has said, it seems to me that we are not in a position to impose any liability on the insurance company, and I disavow any intention of wishing to do so. But when an Act is brought before us and we are asked to agree to certain conditions empowering the insurance company to limit the insurance policy of a man who goes overseas in defence of South Africa, then we regard that as a hateful clause which we are not prepared to agree to. We therefore move for the delition of that clause, and it is then for the Government to say what their policy is. In similar circumstances, what is the government of the United States of America doing? When, after a long career of peace in their country they came into the Great War, their first act was to see what provision should be made for the soldiers. There was no War Pensions Act in that country. There were no provisions for allotments to relatives and that sort of thing, but they introduced an Act which covered all these matters, and in respect of this particular matter of insurance they made provision that the ordinary soldier, the enrolled soldier, the private, should be fully covered by insurance; and the cost of meeting that cover was borne by the Government itself. I am pointing out the alternative that lies before the Union Government, and I am asking the Government to accept that. It is all very well for the Minister to say to the hon. member for Durban (Stamford Hill) (Mr. Acutt) that he may bring up this matter under the War Pensions Bill. But the hon. member would then be ruled out of order in an endeavour to increase expenditure. We want some statement from the Minister in regard to the policy of the Government, and if the Government will say in respect of those who entered into policies of insurance since the passing of the 1940 amendment: We want to get back to the 1923 provision where there was a complete guarantee and there was a prohibition against anyone interfering with the policy of the man who went out of this country in defence of this country. We must have no more of these restricted policies in the future insofar as men who go to the front are concerned.

I did not serve on the Select Committee of this Bill, and the views I hold therefore on this section are the result of listening to the debate this morning, and one thing that impressed me was that there appeared apparently to be a good deal of agreement between those who support the amendment and those who are opposed to it. It seems to me that we are at cross purposes in this direction: The purpose which the hon. member for Illovo (Mr. Marwick) has in mind, will—may I say with deference—not be achieved by the amendment which the hon. member has suggested. The position, as I see it, is this, that what we did in 1940 did not help the soldier. But if we go back to the pre-1940 position we shall not thereby be helping the soldier. We removed an anomaly in 1940 which was not necessarily to the advantage of the soldier because the insurance company was empowered, as I think it has the right to do, to refuse any particular insurance risk. We removed an anomaly then, but by deleting that provision today we shall not thereby be conferring an advantage on the soldier. The matter goes very much further than can be met by an amendment to this section. I think the hon. member for Illovo is correct when he says that we are entitled to have from the Minister a declaration as to the manner in which the soldier who finds himself in this invidious position can be met. While we cannot compel the insurance company to insure this man, he is in an invidious position by virtue of the fact that he is prepared to go overseas and make the supreme sacrifice, if necessary, and he is in a worse position than the man who remains at home. We cannot compel the insurance company to treat him as well or better than the man who remains behind, but at the same time we cannot be content to say that we have no power to compel the insurance company and that therefore we are not going to do anything to assist the man who goes overseas. I feel that it is the duty of the Government to provide some machinery which will protect the man who volunteers for overseas service, so that he will not find himself in this invidious position.

I am very sorry to have to intervene so often in this debate, but I do not think that the hon. member for South Coast (Mr. Neate) has brought up a pertinent point, and I think that is a point which should be examined by the Minister before we go on to this clause. Even 25 years after the conclusion of this war, some soldiers may be badly hit by the wording of Sub-Section 3. I do think that the Minister should examine the point raised by the hon. member for South Coast. I would like to make another suggestion which might help to solve this question. If the Government were prepared to pay the load on any premium of a soldier going overseas, the matter would be solved. The insurance company would insure the man at the normal premium, and I think the problem would be solved if the Government were prepared to pay the load on the premium. We have taken a great deal of time over this clause, and I would like to make a suggestion to the Minister that this clause be allowed to stand over in the meantime so as to enable the Law Advisers to consider the points that have been raised in this debate. At a later stage they may possibly bring up an amended clause. I move, in order to enable the Minister to consider the points which have been raised here—

As fewer than ten members (viz. Messrs. Acutt, Christopher, Derbyshire, Goldberg, Marwick, Neate and Capt. G. H. F. Strydom) voted in favour of the motion, the Chairman declared it negatived.

The first amendment proposed by Mr. Marwick was then put, and a division called.

As fewer than ten members (viz., Messrs. Acutt, Christopher, Derbyshire, Marwick and Neate) voted in favour of the amendment, the Chairman declared it negatived.

Remaining amendments proposed by Mr. Marwick and the amendment proposed by Mr. Alexander put and negatived.

Clause, as printed, put and agreed to.

On Clause 39,

I have an amendment here which I want to put. I move—

I want to point out that what I am moving applies to a number of other clauses as well. The word “value” is used in three different meanings. Sometimes it is face value, sometimes cash value, sometimes realisable value. I suggest that the Minister should put the right word before “value”— whether it is cash, or realisable, or whatever the case may be. I think in this case it should be “face”. Now the other amendment is to alter £1,000 to £2,000. Under the existing law the protection is £2,000 plus bonuses. Under this clause it is reduced to £1,000 and no bonuses. It is a very difficult thing when there is an insolvency. Say a £3,000 policy has been in force for a number of years and the bonuses amount to £1,500. The trustees may say: “I want the bonuses to be taken into consideration, as an amount to go into the estate”. Supposing the insolvent remains unrehabilitated and the estate has been wound up, who is to get the bonuses? My amendment is to increase the amount from £1,000 to £2,000. That would be the face value, of course. If the face value shows £2,000 it does not mean that that is the amount which will be paid over in the case of insolvency.

I think the amendement here in respect of the term “value”—to say what kind of value it is—is not only unnecessary but undesirable. I have considered the whole matter carefully and discussed it with the Law Advisers, but it seems we are going to complicate the Bill unnecessarily by defining what value is meant. The correct view in my mind is to accept the position that the value will be decided by the content. I think if the House were to insert the word “face” value, or “cash” value, it would only cause unnecessary difficulties. I am satisfied that it is much better to leave the Bill as it stands in that regard. That was also the opinion of the Select Committee. The hon. member has raised the question of a reduction from £2,000 to £1,000. He quite fairly pointed out that the two things are not really comparable, that the £2,000 provision in the old Act was on the basis of face value and here it is something different. Actually £2,000 was not the amount available. Actually under the provision under the old Act the amount available would be more than £2,000.

Under the old Act it meant the sum insured.

Yes, that is so. If the hon. member will make the sum £1,500 I do not think there is any objection to that, and I would be prepared to accept that if the hon. member would withdraw his other amendments.

Yes, I agree to withdraw my amendment and to move that the amount of £1,000 be increased to £1,500. In view of what the Minister has said I shall not move my amendments in Clauses 45 and 46.

With leave of the Committee, the amendments proposed by Mr. Alexander were withdrawn.

I then move—

Agreed to.

Clause, as amended, put and agreed to.

On the heading to Chapter IV,

There are amendments on the Order Paper which would have the effect of extending the scope of this chapter to other associations. I myself have an amendment too. It seems therefore necessary that we should change the heading and I would therefore propose to change the heading to “Lloyds and other similar associations”. I move—

Amendment put and agreed to.

Heading, as amended, put and agreed to.

On Clause 60,

As I said a moment ago I promised on the second reading to consider this question of the establishment of similar associations. I have had the benefit of the amendments put on the Order Paper by the hon. member for Moorreesburg (Mr. Erasmus) and the hon. member for Cape Town, Castle (Mr. Alexander). I do not quite like either of those amendments. My main objection to the amendment of the hon. member for Moorreesburg is that it will bring about the necessity of several consequential amendments, and with the help of the Law Advisers I have had an amendment drafted which I think covers the point; it will make it unnecessary then for either of my friends to move their amendments. What I would do is to move a new sub-clause. Then the present clause will only deal with Lloyds. I propose that we add a new clause so that the present clause will become sub-clause (1). I move—

1. (2) The provisions of sub-section (1) shall apply mutatis mutandis to agents for members of Associations of individual underwriters formed in the Union before or after the commencement of this Act to transact insurance business in the Union in accordance with the system known as Lloyds, whereby each associate underwriter becomes liable for a proportionate part of the whole amount insured by a policy: Provided—
   1. (a) that the rules under which such association operates shall have been approved by the registrar;
   2. (b) that the deposit to be made by the committee of such association as in temms of paragraph (k) shall be in an amount to the satisfaction of the registrar, but shall at no time be less than thirty thousand pounds or less than an amount which is sufficient to cover the aggregate liability of the members of such association under unmatured policies, calculated in accordance with the Second Schedule to the Act, whichever is the greater amount;
   3. (c) that every such agent and the Committee of every such association shall submit to the registrar such periodical returns as may be prescribed by regulation.

It means this, that in effect I take over the amendment of the hon. member for Moorreesburg and lay down these provisos: one, that the rules must be approved of, and secondly, that the deposit shall be to the satisfaction of the Registrar. It is implied in the amendment of the hon. member for Moorreesburg, but it must not be less than £30,000 or less than the amount to cover the aggregate liability—and thirdly, that the necessary returns shall be submitted.

Have you got the old provision that a licence can then be issued by the Treasury?

Yes, I think that will satisfy my friend.

I just want to express my appreciation. This is the first substantial concession which the Minister has made.

I met you in regard to Union policies.

I said substantial concession. I am very grateful for it. I think the Minister has given consideration to a matter which will be of great benefit to the country, and I have no intention therefore of moving my amendment.

I want to thank the Minister for the concession that he has made. I think he is now becoming sensible with regard to this matter. At the second reading he was still a little stupid.

I said that I would consider the matter again.

In any case, I am grateful that the Minister has made this concession, and I want to withdraw my amendment in favour of the amendment of the Minister.

The hon. member has not yet moved his amendment.

Then I move my amendment as follows—

And now that I have moved it, I want immediately to withdraw it again. I just want to focus the Minister’s attention on one matter in this connection which he may perhaps discuss with the representatives of Lloyds to rectify it. In this amendment the chance is given to persons to come forward and do underwriting for this sort of business. But there is a difficulty that has arisen as a result of the war. We are now conducting a fairly large amount of trade with South America, as the Minister well knows. Lloyds is fully written up as far as that business is concerned, and it cannot provide the necessary insurance for the trade to South Africa. It has provided none of the necessary accommodation for this business. The commercial banks in the country do not want to give credit notes to the merchants, unless they can provide proof that they have the necessary insurance for sea transport. The merchants cannot provide it, because the only company that has underwritten this business for the last 20 years does not want to underwrite it any longer. I think I put the position correctly, and while the Minister has accepted this amendment of mine in so many words, I think that this is a matter that he should discuss with Lloyds with a view to meeting these people. I understand there were a number of persons who were engaged in establishing an association to see whether they could obtain insurance, but my latest information is that they abandoned the plan.

There were consultations between them and the Treasury.

Yes, but I learn that they have abandoned the plan. I hope my information is not accurate. But if they abandon this plan, it would be a good thing if the Minister could discuss the matter with Lloyds with the object of providing the necessary facilities. I see the Prime Minister predicts that there will be a scarcity of a considerable amount of essential things, and where a market has now been opened up for us in South America, I hope that the Minister will be able to persuade Lloyds to provide underwriting for this overseas trade so that credit notes can be obtained.

I shall see what I can do in connection with the matter.

I would like to move the amendment in line 67 standing in the name of the hon. member for Fordsburg (Mr. B. J. Schoeman).

The hon. member is too late. We cannot go back now.

I regret it.

With leave of the Committee, the amendments proposed by Mr. Erasmus were withdrawn.

Amendments proposed by the Minister of Finance put and agreed to.

Clause, as amended, put and agreed to.

On Clause 62,

I want to move—

I do not think it was realised what an enormous amount of notices would be involved by this clause, and in view of that fact, and the fact that such notices are not really necessary, I move the deletion of sub-section (6).

In anticipation that something of the sort might come along, I have brought along the correspondence in connection with a lapsed policy which I have unfortunately been swindled out of. This was a policy which I took out when I was quite a young man. In 1923 when I was building a house I had occasion to enquire of the Insurance Company how much they could advance me on loan on this policy. They said £300. I accepted that. When the premium fell due, and the interest, in June, 1924, I was ill in bed. I had asked the insurance company to capitalise the premium and interest and allow me to pay it later. When I applied they said that owing to a clerical error they had advanced a sum in excess of the surrender value of the policy. They wrote me a letter to that effect. At the time I received this letter I was in bed and could not attend to business, and when I tendered the amounts which were due in December, 1924, they gave me a receipt for all the amounts—making in all about £28, and I did not notice that they had put a rubber stamp on the premium receipt, “subject to the approval of the Directors.” And to my astonishment I was informed later that the policy had lapsed as from 1st June, and that they returned my premiums and the interest. I appealed to the company that as they had made the error in advancing me more than the £240 they should take that into consideration and reinstate the policy. They said they would do so if I could make a declaration that I was in the same state of health then as I was when I effected the policy—a matter of nearly 20 years. I had recently got up after 4½ months in bed, and three weeks after that I was certified to be suffering from appendicitis, and I was away from office for three weeks. They suggested that I should be medically examined and that I could choose my own Medical Officer. I submitted myself to medical examination. I did not see the certificate, but they eventually told me they were sorry but they could not reinstate the policy and that I could apply for reinstatement in two years’ time. I wrote on that letter “Go to hell”, and that was the end of the business. I submit that it is necessary that a person who is insured should be advised a month before the policy is due to lapse, that the policy is due to lapse, and of the amount payable. I must really object to the amendment of the hon. member.

I am sure that every one of us in this committee has the greatest sympathy with the hon. member for South Coast (Mr. Neate), but I feel, on the other hand, that the retention of this particular sub-clause will not meet his case. It won’t help him in any way whatsoever, or in a case similar to his. My hon. colleagues on the Select Committee will recall that we had very great difficulties in regard to the drafting of this particular sub-clause. I think we spent about two hours in this particular section and we felt that a policy holder should be given every opportunity of receiving notification before his policy lapsed. As a result of our deliberations we produced this sub-clause 6. Since this clause was printed, however, I have taken the trouble of going into the matter a little further, and I find that as it stands, it is really not worth the paper it is written on. If the insurance company, for instance, fails to give the notice required under this particular subsection, what will the position be? There is no penalty attached to the clause. It has been said that if the notice is not given the policy will not lapse, but hon. members will agree with me when I say that that would be a most unfair state of affairs as regards the other policy holders in that particular company. They would have to bear collectively the default of this particular insured and I think that is a contingency which the committee never contemplated. Then we also will have difficulty in regard to giving the notices where premiums are payable monthly. That is a difficulty which seems to me we cannot overcome. It would mean that every month insurance companies would have to send notices in anticipation of default. That is the true weakness of the clause As I say, whilst the committee felt that we would have to protect the policy holder as far as we can, on mature reflection I, as chairman of that committee, state quite openly now that I do not think this clause will meet the situation, and as far as I am concerned, I would have no objection to its deletion.

I have listened to what has been said here, and in view of the attitude of the Chairman of the Select Committee, I am not going to press for the retention of this sub-clause. As far as I am concerned, therefore, the amendment of the hon. member for Cape Town, Gardens (Mr. Long) may be accepted. But I do so somewhat regretfully. My avidity has been quickened by what I have been hearing here, because I believe if this sub-clause were retained, great sums of money would come to the Treasury. At the same time, while that aspect of the matter appeals to me, I do not think that should influence me. In fact, the very fact that this clause will bring such a windfall to the Treasury, is an argument why I should not insist on its retention. I think the hon. member for South Coast (Mr. Neate) would have been no better off if this clause had been in operation. The hon. member apparently knew that his policy had lapsed.

After it had lapsed.

Then I must have misunderstood him. I understood him to say that he knew that his policy was lapsing, and therefore he would have been no better off if this clause had been in operation. In any case. I must accept the arguments which have been put forward and which indicate that this clause will be putting too great a liability on the companies.

I am absolutely staggered to think that the hon. member for Cape Town, Gardens (Mr. Long), a man for whom I have the very highest respect, should propose to eliminate this section of this Act, which was designed to protect every policy holder throughout the Union of South Africa. That is the design of this sub-section. It is one thing that is an innovation in this Act, and is a safeguard to every policy holder in South Africa. In the Select Committee, we spent two mornings over this. Every opposition was put up to it.

By whom?

Yes, by whom? The Select Committee, by a considerable majority, passed this. Evidently someone has been at work again and has undermined the work of our Select Committee, and this is brought up now and it is accepted by the Minister. I think it is a disgrace to Parliament.

Order! The hon. member must not use such language.

I am sorry, but I feel that the work of our Select Committee has been undermined, and I am staggered to think that a man such as the hon. member for Cape Town, Gardens should move the deletion of this clause. I do not think that he realises what he is doing. There may be thousands of people whose policies have been cancelled, simply because they were not aware that the time was running out for the payment of the last premium. We do not know how many cases there are, but we have heard of one, at any rate. We go to all this trouble in the Select Committee to pass this clause, to protect every policy holder throughout the length and breadth of South Africa, and now the proposal is to delete it. I can only say I am staggered.

I want to point out that if provision must be made for the lapse of policies then it must be done in some other part of the Bill, not in this clause. The clause as it is before us, is nonsensical, with all respect to the Select Committee. I do not think that it means anything. The ratio of lapsed policies is, I understand, not very big in South Africa, but the Select Committee now proposes that the insurance companies must do something that is physically impossible, namely to give fourteen days notice before they know whether the policy will lapse. Altogether they must give one month’s notice, but it works out in such a way that something physically impossible is demanded of them where they have to give a month’s notice before they know if a person is going to allow his policy to lapse. Then they must send out thousands of notices, “We presume that your policy will lapse, and therefore we give you notice.” I am glad that the Minister has accepted the deletion of the clause. In any case it is not in place here.

I am very much surprised at the speeches made over there, and I do not think they have any relation to this clause at all. The clause itself is unworkable. The insurance companies had had no opportunity whatsoever of dealing with this clause before the Select Committee, because it was put in by the Select Committee. The hon. member for Moorreesburg (Mr. Erasmus) has correctly pointed out that there are a number of premiums that are paid monthly, and in the case of these premiums you allow 15 days’ grace, and yet before the 15 days are up, you have to give notice; you do not know whether the person is going to pay or not. The insurance industry register about 900 changes of address per day. I think it is entirely unworkable. I think the Minister was very wise in accepting the deletion of that sub-clause.

I can understand that this clause cannot be put into practical effect, but then I want to suggest that the Minister should insert somewhere in the Bill a clause to protect policies. It may happen that a policy-holder falls into arrears with his premiums through sickness and not deliberately. When the date of payment is past and the respite days have expired, then the policy falls away. It may be that the man has paid these premiums for twenty or thirty years, and then he loses everything For that reason I want to suggest that a clause be inserted somewhere to protect the policy-holders and to determine that proper notice shall be given as regards the danger of the lapse of a policy.

I shall give my attention to it.

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

I was rather in a hurry this morning because this point was sprung on me. But I now have a little additional information in regard to this point. In 1923 I got a letter enclosing a cheque for £297. £3 was deducted for interest to 30th June. That was on the 1st May, 1923. On the 16th July, 1924, I received another letter which I have already read to the House. Here I have a letter dated 7th January, 1925, which reads as follows—

But may I point out that the first intimation I had that this policy had lapsed on the 1st June, 1924, was somewhere about the 10th January, 1925. The policy, with the reversionary bonuses at that time was valued at £428 15s. 8d., and they advanced me £300, less 3 per cent. interest. But what I want to point out is this, that had I been advised, as soon as they discovered the clerical error; that the policy would lapse as from the 1st June, 1924, I could have taken steps and I could have refunded that money, but due to the fact that the company did not advise me, I had to assume that the policy was still in force. I fulfilled my obligation to pay at the end of the year, and then was advised that the policy had lapsed six months previously. This is protection that the policy holder needs, and which we thought was provided for in subsection 6 of the clause under discussion, and for that reason I want the Minister to consider the whole matter as to whether the policy holder does need or does not need the protection afforded in this subsection 6, and I trust that he will ensure that in the future policy holders really are protected in matters of this sort.

During the lunch hour we had the opportunity of giving a little more attention to the sub-clause. I want to ask the Minister if it is not possible to leave this sub-clause over so that we may insert something in connection with the lapse of policies.

We can do it in the report stage or in the Senate.

Will the Minister not go so far as to give the assurance that he himself will give some attention to the matter.

Yes.

The Minister knows what we want. We would like to see that after the days of respite have expired, that notice will still be given. As it is now, the policy lapses completely. The Minister knows that particularly in the city people often change their address, particularly poor people, and they get no such notice.

I would like to discuss that matter with hon. members.

Then I have no objection to the adoption of the clause.

The trouble in this sub-clause arises, I think, from the failure to distinguish between a policy, which is current, and a policy under which the premiums have not been paid for a time and which is being maintained in force under the non-forfeiture provision. I do not see how it would be possible for this clause to be applied to those policies, which are current and under which the usual premium notices are given, but I do see a distinct danger in not making it obligatory for insurers to give notice in the cases of those policies, which may have been running for guite a number of years under the non-forfeiture provision. I would therefore like to move a small amendment to give effect to this particular point. I move—

The clause would then read: “If, after full observance of the provisions of this section, a life policy which is being maintained in force under the provisions of sub-section (3), is due to lapse …”, and the subsequent provisions of the clause will remain as stated. I think that would meet the difficulty that the House is presented with. The clause, under these conditions, would be fully workable, and I do not think anything more is necessary, except this, that I am not very wedded to registered post. I do not know whether registered post has any special advantage over the ordinary post in this matter, and I think the committee might well consider the deletion of the word “registered”.

I find it difficult to know what the implication of this amendment will be, and I am therefore disposed to adhere to my former opinion, namely that the clause should go altogether. But I would say to the hon. member for Orange Grove (Mr. Bell) that I have promised my hon. friends over the way that I am going to give further consideration to the whole question before this Bill is dealt with in Another Place, and I shall also consider this particular point that he has raised in that connection. I would be very loth to accept this particular amendment now. May I point out that this Clause 6 was not in my original Bill, it was put in by the Select Committee. I am not wedded to it, and in view of the arguments here submitted, I think it might very well go as a whole.

I heartily welcome this provision, but I want to suggest something; we presume that there will be a respite of 30 days. As soon as the policy lapses there will be reasonable notice that the policy has lapsed, and I would suggest that another 30 days be given, provided that the company shall be entitled to make the insured pay additional interests on the arrear premium. The company must be entitled to calculate bank interest on the arrear premium. I think it is a matter of urgent importance. There are so many poor people who are insured, and in the past many of those poor people lost their money from the insurance companies through the lapse of policies. It is mostly the poor people who allowed policies to lapse, and not the rich people. I want to appeal to the Minister, if it is in any way possible, to protect the policy-holder as far as possible, and particularly in view of the fact that the company loses nothing thereby. It gets interest for the month during which the premium is in arrear. We do not want to begrudge the company a reasonable profit, but we do not want to enrich them in this way. What we want to prevent is that poor people who are compelled to make provision for their wives and children should take out a policy and then lose their money in this way. We want the law to provide the best opportunity to them to retain their policies, and that they should have a reasonable time in which to pay after the statutory demand.

I am sorry to hear the Minister say that it is immaterial to him whether this clause is retained or not. The whole aim of the Bill is to protect the public, and it seems to me if there is one clause more than another which protects the public, it this Clause 6. The whole trend of our legislation in these matters is that the creditor must be given timeous notice and the whole principle of this Bill is to protect the policy holder who may have paid premiums for many years from losing his policy through carelessness, or it may be through circumstances over which he has little control. I know of a case where a policy was ceded to a creditor, and the actual person insured had no further interest in the policy. A mistake was made by the insurance company, and the original policy holder was resorted to by the company, or rather his estate was, to pay up the premiums. I am making this point because it has been argued on behalf of the companies that in any case they always give notice. If they do this then there can be no hardship on them entailed by this clause. I wish to make no reflection on insurance companies, but we do know that they employ canvassers who may not observe all the scruples, and they induce people to take out insurance policies. Many of these people who are so induced to take out policies are not so careful or so responsibility-minded as other people, and they may lose their policies through neglect. I say that the insurance companies should not mind sending out these registered letters which are likely to be more effective in the case of people who may not be familiar with ordinary notices.

It seems to me that there is more sorrow over one person whose policy lapses than over 999 people who need no reminders. The attitude the Select Committee took up was that after all the object of this Bill is the protection of the policy holder. I feel very strongly that the ordinary person should take enough interest in his own affairs, and especially in his life insurance, to know that he is not paying his premiums and that there is great danger of his policy lapsing. I also agree that it is quite out of the question to expect insurance companies to send out notices every month, and then a final demand notice, where there is no surrender value on the policy and no question of any forfeiture clause, but I do think that where the policy has been sufficiently long in operation to have some value, and where it is apparent that this can be done very easily by the insurance companies, some step should be taken in order to give due notice to the policy holder. I do not like the wording of the clause at all, and I think it is badly drafted, but I think the Minister will realise what is at the back of the minds of the Select Committee. They wanted protection for the policy holder, who is endeavouring to carry out his obligations as well as he can, but for some reason has reached a pitch where unknown to him it may be possible for his policy to lapse. That man should have some sort of protection, and I do not think it is asking too much of the insurance companies to give him that protection. It should not be beyond our ability to devise some sort of wording in a clause which would give that protection. The policy holder should have notice 30 days before the policy will finally lapse that such lapse is going to take place, and so give him opportunity to rectify any error, and protect his own interests. I hope the Minister will try and see whether it is not possible to devise some means of bringing that about, in which case he will dispel the fears of the hon. member for Stamford Hill (Mr. Acutt) and will at the same time place no undue burden on insurance companies.

I am quite clear in my own mind that the Select Committee wanted to protect the policy holders, because after all, it is the individual policy holder who needs the protection. It is quite true, as the previous speaker has said, that people ought to be sufficiently responsible and responsibility-minded to know when their premiums are due, and when policies are in danger of lapsing. But what people ought to do, and what in fact they do do are different things. We all of us have within our knowledge numerous cases of policies which have lapsed when, in fact, they should not have done so. When insurance companies tell us that in any event they do send notice of policies about to lapse, there cannot be very much additional, burden involved in our insisting on this final notice being by way of a registered letter. The effect on the mind of the policy holder of a registered letter is much, greater than the effect of an ordinary notice. All of us are accustomed to the formal notice given by insurance companies. They come and in many instances are disregarded, but no one, in my experience, disregards a registered letter, so that it will bring the careless policy-holder up with a jerk when he finds himself presented with a registered notice that his policy is lapsing. I am not very worried about the point with which the hon. member for Cape Town, Gardens (Mr. Long) is concerned. He tells us that there are 170,000 registered letters to be despatched each month.

One hundred and seventy thousand for one company alone.

The companies are well able to look after their own interests, whereas the individual policy holder, whom this Bill seeks to protect, is not nearly so active in looking after his own interests, and therefore, sir, I am not very much concerned about the number of registered letters required or the extra clerical work involved. I am perfectly sure that the insurance companies will be well able to carry out the terms of this clause, or some modification of it, and the enormous benefit that will accrue to the policy holders must weigh much more heavily in our minds than any mere clerical difficulties of the insurance companies. Another point, it has been suggested that it may be difficult to impose sanctions or penalties for breaches of this particular clause. Well, I am quite sure that that will not be beyond the capacity of our law department. I ask the Minister not to eliminate this clause from the Bill, because I know from the amount of interest it has created outside, as well as inside the House, that the general public regard it as very important indeed. Without it they will not find the Bill nearly as useful to them as it otherwise would be.

It seems as if hon. members have the idea that companies would like policies to lapse. I want to explain immediately that no company of any prestige wants anything like that to happen.

But what about the companies that are not good companies?

We admit that there may be certain companies—I do not say there are—which at a particular stage, after a good few premiums have been paid, would say that it is advantageous to them if the policy lapsed. It is already law that no policy may lapse until the paid-up value of the policy has been used up to pay the arrear premiums.

Is that law, or is it a stipulation in the policy?

No, it is provided in the law. There is no such thing as a month’s notice. If a policy has run for three years then it has a paid-up value, and then it can run for at least a year. It is therefore not a question of a month’s notice, but of a year and a month. If the policy runs for longer than three years, the period will be still longer. I can give the House the assurance that the best companies want to protect a good policy to the limit. I would like to see the Minister delete this clause, and if it is necessary to protect the policy-holder further, then let him think of protecting the policy for a month after the policy lapses. If the clause as it now stands should be inserted it would mean that one company would have to spend £6,000 per year in order to send out 170,000 registered letters every year.

But all those policies will not lapse.

But a month before the premium lapses a registered letter will have to be sent out to every policy holder. That will have to be done under the clause as it now stands, and not only after the policy has lapsed.

Reference is made here to the lapse.

Yes, but when the premium lapses notice must be given by registered letter that the premium has lapsed. I say it is nonsensical, and it was never the intention of the Committee that such a thing should be inserted. I would say that no company would be opposed to the insertion of a provision that when a policy has lapsed, a further 14 days or 30 days should be given, and that the person should then receive notice by registered letter. It would also not help to send out registered letters regarding premiums in the case of what the hon. member for Vereeniging (Lt.-Col. Rood) mentioned here. If the policy-holder is no longer the original policy-holder then it will avail nothing. He throws the ordinary notice aside, and he will also throw the registered letter aside, because he will say that he no longer has any interest in the policy. If a person takes the step of giving credit on the strength of a policy then that person should possess sufficient business acumen to ensure that the premiums are paid. That is self-evident. If he accepts the policy as a guarantee for credit, then he himself must take precautions and not rely on the original policy-holder. I shall be glad if the Minister withdraws this clause, and if he feels that he should extend additional protection to the policy-holder then he can draft a new clause that will give the policy-holder a chance after the policy has lapsed, and in that event there can then be notice by registered letter. That would be a small matter. It would concern the exception, where a person must receive notice a month after the policy has lapsed.

And a policy can also be rehabilitated.

No sound person has ever any difficulty in that respect. I can speak only for the best companies, and not for the weaker ones. The Minister can draft something to the effect that there must be a final notice by registered letter, say within 14 days or 30 days after the policy has lapsed. I say again that no company really wants a policy to lapse. On that we are all agreed. I would like to see this clause withdrawn and the matter carefully and correctly drafted, and that we should have the necessary time for this.

I would appeal to hon. members to come to a decision on this clause now. We have had quite a long discussion on it, and I think we have exhausted the subject completely. I want to say again that this is not my clause, it is not in my Bill, it is the Select Committee’s clause, and I am therefore not bound in any way, nor am I binding hon. members in regard to it. They can do just as they please in voting on the amendment of the hon. member for Cape Town, Gardens (Mr. Long). But my own opinion, and I think it is the general opinion of the House, is that this clause, as drafted, is not a very practical instrument for giving effect to the wishes of those who drafted it. I am not talking of the entire clause but of sub-clause 6. I thnk it ought to go, that is my opinion, but I have also given the assurance that I am proposing to go fully into the whole question involved, not only in respect of this sub-clause, but in respect of the points raised by the hon. member for Waterberg (Mr. J. G. Strydom), and in the light of that to take such action as may be necessary in another place. I think now hon. members may be prepared to come to a decision and vote one way or another on the amendment.

Cannot we have it at the report stage?

I do not think so. I will move it in Another Place.

Sub-clause (3) provides that when a premium is not paid, the company will be under an obligation to grant to the insured a paid-up policy, or alternatively to maintain the policy in force against the surrender value until that surrender value becomes exhausted. Now in the original Bill drafted by the Minister and submitted to the Select Committee, of which I was a member, two years ago, there was a provision which I thought of considerable importance. That provision appears to have been dropped in the later Bill. It is a provision which restricts the rate of interest, which can be charged in connection with non-forfeiture advances. It is self-evident that the higher the rate of interest, the quicker the policy will lapse, because the procedure is simply this, that premiums, if unpaid, are advanced and charged against the surrender value, and to those premiums is added interest compounded from time to time. I am very distressed at the high rate of interest, which many insurance companies are charging. We are living in times when interest rates have fallen very considerably, but I do not know of one insurance company, which in the last ten years has reduced its interest charges. I put a question to the Minister last year in my search for information in the subject. I asked him how much were the loans granted in the Union against the security of policies, in the way of direct loans on policies and non-forfeiture advances. In 1940 the figure was just over £9,500,000. I also asked the Minister for the relative rates of interest on policy loans in 1931 and 1941. The answer was that in both years the rates on policy loans varied between 6 per cent. and 7 per cent. and on non-forfeiture advances the rates varied between 6 per cent. and 10 per cent. I also asked what the difference in interest rates were on Government loans in 1931 and 1941 and the answer was that in 1931 Government loans varied from 4 per cent. and 5 per cent. and in 1941 from 2¼ per cent. to 3 per cent., with one loan at 4 per cent. Now we all know that interest on Government loans in the last ten years has fallen appreciably. Much has been made of that fact, and yet it is extraordinary that the interest on policy loans and non-forfeiture advances has not been reduced. I submit that loans on policies are the very finest security that any company can have, because the company is merely lending the policy-holder a portion of the money which he has actually paid in. That security is quite gilt-edged for the company cannot possibly lose anything on such security. In consequence, there should be a close connection between interest rates on these loans, and the interest rate on Government loans. The insurance company might be entitled to charge a little more, say 1 per cent.

Because of the difference between a £10 loan and a £10,000.

Yes. I do feel there is this close connection between these rates of interest, but the Bill here makes no provision for interest charges, and I am wondering whether the Minister will not consider this matter.

Why don’t you yourself move an amendment at the report stage?

Well, I will devise an amendment.

You will have to do it today, because the report stage is on Monday. If the hon. member will draft it he can still put it on the Order Paper.

While we fully accept the Minister’s undertaking, it would be more effective if the hon. member for Cape Town, Gardens (Mr. Long) had simultaneously undertaken to withdraw his motion until some further stage of the Bill. We do not want to be called on to vote out this clause. Many of us regard it as the only real protection the policy holder has. We feel that this is a real obstacle to the lighthearted cancellation of policies—we want the cancellation of policies to be made more difficult and not more easy. At present it is easy for a policy to be voided in a simple manner. I myself have some experience of that. I hope the hon. member for Cape Town, Gardens, will agree to withdraw his motion so that the Minister’s promise can have some value to us, because if the motion is put, hon. members coming to this room presently will vote without knowing the exact merits of the case they are voting on.

What a reflection on the “yes” men.

Unfortunately that applies to all sides. I say that the promise of the Minister to be rendered effective should be accompanied by the withdrawal by the hon. member for Gardens of the motion standing in his name.

I am quite prepared to do that. The Minister has undertaken to deal with the matter.

With leave of the Committee, the amendments proposed by Mr. Bell and Mr. Long were withdrawn.

Clause, as printed, put and agreed to.

On Clause 64,

I move the amendment standing in my name; it is self-explanatory.

Amendment put and agreed to.

Clause, as amended, put and agreed to On Clause 71,

I want to move the amendment standing in my name on this clause. I move—

I may just say what the object is. Under section 14 every Union insurer has to furnish a statement of his assets. He can state his assets in group form or detailed form but it will cause a good deal of difficulty if all small details have to be supplied and if any member of the public for ulterior motives can find out all the details, for instance in regard to mortgages held over certain farms in certain districts. Why should a member of the public be able to go and get a list of mortgages over the property of certain individuals. There is no question of the stability of the company. It may just be done for the purpose of political influence, and this sort of thing is going to throw a tremendous burden on the company. You want to protect the policy holder and you do not want busybodies using information which has nothing to do with the stability of the company, or of the bona fides of the company, for other purposes than it is intended for. One gathers from the evidence before the Select Committee that the information may be given in group form, in which case the point does not arise. But it may also be given individually, and my amendment aims at detailed statements in respect of individual assets not being disclosed. The information in respect of the stability of the company will still have to be given. I should just like to refer to one or two paragraphs in the evidence. On page 67 Mr. Monkhouse says that the South African Mutual, if they had to give details of all their mortgages, would occupy four hundred pages of foolscap. Surely that is not intended. You do not want every member of the public to be able to walk in and see all these details. It does seem to me to encourage the public to have some sort of a star chamber and to obtain information which does not concern the average individual. It is very much better that these details should not have to be furnished to the Registrar. The Registrar should get the list of mortgages without going into every detail. Then on page 77 of the evidence—that is Mr. Rumball’s evidence—there is this: “Whilst we welcome the widest publicity being given to any statements furnished in broad groups, we feel most strongly that wide publicity regarding each individual investment is unnecessary and even undesirable.” That I think is perfectly sound. It simply means that information may be used for ulterior motives.

I am afraid I shall have to fall from grace again as far as the hon. member for Cape Town, Castle (Mr. Alexander) is concerned. I cannot maintain my high standard in the acceptance of his amendments, I cannot accept this one. May I point out that what we are concerned with here is not the question of what information is to be supplied by the Society to the Registrar. That has already been disposed of. All we say here is that whatever information is supplied by the Society to the Registrar shall be available to the public. The hon. member seems unduly apprehensive as to the extent to which the public will be able to play the part of nosey-parker. He seems to assume that more detail will be supplied than is in fact the case. We dealt with that point in Section 14, and we laid it down that every insurer shall supply a statement to the Registrar. But in the following clause certain provisions were made applying to the statement in Section 14. And Section 15 (a) says this: “Every statement shall be prepared in accordance with regulations; provided that, if a regulation or any form prescribed by a regulation provides for a specification of different classes of assets and a compliance with the requirements of that regulation or form by a particular insurer would result in unduly voluminous returns, the insurer concerned may group various classes of assets together, or otherwise abridge the statement in such a manner as the Registrar may approve.” That substantially meets the point which my hon. friend raises on the basis of the evidence before the Select Committee. We have already laid down what statements shall be supplied, how the statements shall be prepared, but once the statements are supplied, I think we must take up the attitude that the Registrar’s office is a public office and these statements shall be available for inspection by the public.

Amendment put and negatived.

Clause, as printed, put and agreed to.

On Clause 76,

I was going to draw attention to this clause but in view of what the Minister said at an earlier stage that he was going to consult those concerned, and give them the opportunity of going into the regulations before they were promulgated, there is no need for me to say any more. That would meet the case. I want to refer to what was said on page 69 of the evidence. A question was put to Mr. Monkhouse. This is the question: “I think we have had enough evidence on that, except that I see it has been suggested that if the Treasury undertakes that the companies will be consulted before the regulations are promulgated, that will meet you to some extent.” To which Mr. Monkhouse replied: “Yes, in the future.” I take it the Minister is giving that assurance.

Yes.

I think that meets my objection to Section 76.

Clause put and agreed to.

On Clause 78,

I beg to move the amendment as printed. It is purely a drafting amendment to remove a possible misunderstanding. I move—

Amendment put and agreed to.

Clause, as amended, put and agreed to.

On the Second Schedule,

I have some amendments on this second schedule. They may look portentious but they are very simple. It is just a question of whether the principle is agreed to or not. It is this, that in the Second Schedule non-Union insurers are treated on a different basis from other companies. I think you should make a distinction between non-Union insurers which have been in existence before the coming into operation of this Act, and those which come into existence afterwards. My contention is that the foreigner should be given the same beneficial provisions in the Schedule as Union insurers. If you deal only thus with non-Union insurers which come into existence after the coming into force of the Act then I agree that they should be dealt with as new companies. But the old companies have been carrying on in this country under the laws in force here. Why make the provision retrospective to non-Union insurers.

They are non-Union insurers nevertheless.

Yes, that may be so, but they have been invited to come here.

Who invited them?

They have been allowed to grow up here, they have done their work well, they have done well by South Africa.

And they have done very well for themselves.

Yes, they have prospered themselves, that is true, but I think when you bring in new legislation you should treat concerns which are in business on the same favourable basis as others. That is to say you should treat non-Union insurers which have been in business here on the same basis as Union insurers. In making a distinction against non-Union insurers, I do not think it is reasonable to go retrospectively and treat such companies which have been doing business here for a long time differentially from Union companies. I therefore move the following amendment. I move—

Here, again, I am afraid I cannot accept the amendment and I doubt whether anyone expected that I would accept this amendment. The proposals seem perfectly reasonable. It is true there is a certain amount of discrimination in favour of Union companies as against non-Union companies, but on the other hand, as far as non-Union companies are concerned, the basis proposed is lenient, and non-Union companies should have no difficulty in complying with that basis. I am therefore not prepared to abandon the proposal contained in the schedule.

I had intended moving an amendment here but in view of what the Minister has said I withdraw the amendment.

I find myself in considerable difficulty in connection with this schedule, that is in connection with the “Minimum basis for the liabilities under Life Policies: Union Insurers.” The schedule lays down a basis which, as the Minister has said, is an easy basis, it is a very reasonable basis, and with that I quite agree. But there is this provision, which alters that aspect rather considerably. In paragraph 4 of the second schedule on page 78, sub-paragraph (1) (c) (i) there is a passage which reads: “In the case of life policies other than immediate annuity policies—(i) if the date of calculation is less than ten years after the commencement of this Act, the calculation shall be based on an assumed rate of interest not exceeding 4 per cent. per annum, or (ii) if the date of calculation is ten years or longer after the said commencement the calculation shall be based on an assumed rate of interest not exceeding 3½ per cent. per annum.” This, read in conjunction with the provisions on the next page forming the basis for Union insurers, which allows the “Zillmer” difference of one year, is quite an easy basis except for this, that the ten year period is calculated from the inception of this Act and not from the inception of the company affected. It will have this effect, that after the lapse of the period of ten years, a new company will be faced with starting on the basis of an assumed rate of interest of 3½ per cent. and not 4 per cent. That is a point which I think is of considerable importance, because while it is quite possible for a new company to start on the basis of 4 per cent., which is a reasonable basis and one on which most new companies have started, it is practically impossible for a company to start on 3½ per cent. The effect of the clause will be to negative the chance of a company starting, after this Act has been in force for that number of years. If a company had that same number of years in which to find its feet then there would be no objection whatever, and I would suggest to the Minister that he amends this schedule to provide that the ten year period shall date not from the commencement of this Act but from the commencement of the company’s existence. If that were done it would go a long way towards meeting the case of a new company, which under this schedule will find it impossible to start. I have a note here from an actuary who confirms this. This schedule should be read in conjunction with section 15 (i) which provides for the establishment expenses account. This section read in conjunction with the establishment expenses account makes it utterly impossible for a new company to start. I do not see how any one will be able to start a new company. The period of ten years as provided makes it impossible—but to make it ten years from the inception of the company would be a fair basis.

The point which the hon. member has raised is a very technical one on which we should naturally take technical advice. This point has been very carefully considered by the Government actuary who has advised us on the matter and whose opinion is different to that of the hon. member for Orange Grove. I am quite prepared to put the point made by the hon. member again to the Government actuary and consider the matter further in the light of his reply.

Amendment put and negatived.

Second Schedule, as printed, put and agreed to.

On the Third Schedule,

There is one point I want to draw the Minister’s attention to. It is an omission, I think. Under Life Policies and Sinking Fund Policies, paragraph 3, there is a provision for the calculation of paid-up policies, which appears to exclude the addition to the value of the paid-up policy of any bonuses, which have been declared and exist at the time the policy is made fully paid-up, I think this should receive some attention, and to the computation there should be added the full value of the bonuses, which the clause omits to make clear. I have had some legal advice on the subject and that advice bears out my contention, I would ask the Minister to look into it.

Third Schedule put and agreed to.

House Resumed:

The CHAIRMAN reported the Bill with amendments.

Amendments to be considered on 12th April.

I would like to move the following amendment standing in my name—

The Minister told us that his intention with this legislation is to keep away people from the railways who travel unnecessarily. In the case of passengers who travel second class, these are not the people who travel for pleasure. They are people who have no motors at their disposal, and who have to go from one place to another. They must make use of the train, and it is extremely unfair of the Minister to impose this tax on those people. I would therefore ask him to accept this amendment. The Minister excludes the passengers who travel third class. On what ground does he exclude them? If the Minister argues here that the third class is used by non-Europeans who are poor and that they are not in the position to pay this tax, and that they nevertheless have to use the trains, then I want to put the counter argument that the persons who have to use the second class are the poor Afrikaners who are compelled to make use of the train because they have no other means of transport. They are poor and they have to travel second class. They can scarcely do even that, and now the Minister comes and imposes this tax on those people. It is very unfair, and I want to ask him to take my amendment into serious consideration. What can the result of this tax be? If the Minister insists on this tax and on including the second class, then we shall get the position where people who are not in a position to bear the additional burden will be obliged to make use of the third class. In our country the third class is used almost exclusively by non-Europeans. I want to ask the Minister whether it is actually his idea to do this, and whether he is actually busy here now compelling our less-privileged European Afrikaners through the medium of this tax to make use of the third class. The Minister cannot say that this tax is fair. If he adopts the standpoint that the object is to keep people away from the railways by this tax, then let him tax these people who travel first class, but do not apply it to the Europeans who travel in the second class. These are not people who travel for pleasure, but people who travel because they are obliged to travel.

I regret it, but I cannot accept this amendment. I want to be as fair as possible in connection with this Bill, but I cannot accept this amendment. We have already voted on this amendment in Committee of Ways and Means, and we have decided to include second-class passengers. The object of this Bill is not to keep away people from the Railways, but to collect taxes.

But you said that too many people travel on the railways, and that the Railways cannot keep the people away.

Yes, that is so, but I also put it very clearly that the primary object of this tax is to obtain money, and since that is the position, and where there is a big congestion in a certain sphere, this is a desirable direction where to look for money. The fact that the Railways draw so many people, more people than can be provided for, is an indication that it is a suitable source for taxation.

Then why do you exclude the third-class?

That matter has already been discussed. We have already said that the object of the tax is to obtain money. If we were to accept this amendment it would mean that we would perhaps have to lose half of the money on which we relied. Then my hon. friend said further that we want to compel people to travel third-class. I do not know if this will be a result of the Bill.

The people will not be able to afford to travel second-class.

The increase is now 15 per cent. There was a time when tickets were considerably higher than now. I think it was considerably higher than 15 per cent. at the time, and in that time the people were not compelled to travel third-class. I am sorry, but I cannot accept this amendment.

I do not know what the position is going to be in connection with the narrow-gauge railway. Take the railway from Port Elizabeth up to Langkloof; there is only first-class and third-class. What must the people there do?

They cannot buy second-class tickets.

They will now have to buy the first-class ticket and in addition have to pay 15 per cent. on it. They cannot afford it. The same applies to the narrow-gauge from Upington to Kakamas.

Quite probably.

I shall be very glad if the Minister finds out what the position is, and if he ascertains that it will be difficult for the poor class of people to take out first-class tickets and to pay the 15 per cent. in addition, then he must try to arrange with the Minister of Railways for the provision of second-class coaches on those lines.

I shall draw his attention to the matter, but I cannot undertake to do anything in that direction.

I am surprised that the Minister of Finance now says that the primary object of this tax is to obtain money, that it is a war tax. I was under the impression that he said very clearly that the Minister of Railways tried to keep passengers from the railways. He could not succeed, and for that reason the Minister of Finance intervened with this tax to try to reduce the traffic in this manner. That was my impression, and I thought that was right. Assuming that the object of the Minister is to obtain money for the war, as he now says. Then what right has he to discriminate between passengers; why does he impose this tax only on certain classes of the population? He excludes the suburban passengers; he excludes the third-class passengers; he excludes the natives who go to and from the mines, and where the mines pay a portion of the travelling expenses. They are exempted. In the third place the Minister comes and excludes the military who travel by train, and he also goes so far as to exclude people for whom other Governments must pay when they travel by rail. Is it not unfair and unjust to discriminate in this manner against certain persons who use our railways? There is no justification for it. If the Minister wants to impose a war tax then he must impose that tax on the whole of the population, and he should not single out one section for that unfair tax. I want to say to the Minister that if he refuses to accept this amendment he will force poor people, who have to travel in exceptional circumstances, to travel third class. Can the Minister ever find it in his heart to witness a needy old man or old woman going to the funeral of a child, or to a sick-bed, who are not in a position to pay the increased ticket, for they already find it difficult to buy second-class tickets, but on behalf of white civilisation they yet do so to remain away from the non-Europeans—will he ever find it in his heart to force this taxation of 15 per cent. on those people and thereby compel them to travel third class among the non-Europeans? There are comparatively few third-class compartments, and those persons who will be compelled to travel third class will have to travel with the non-Europeans. In view of all these liberalistic ideas of the Minister, I want to ask him now if he really wants to force the Europeans to make use of the third class in such circumstances. One would still be able to understand such a tax if the Minister imposed it on the well-to-do people who travel first class. But when the Minister imposes the tax on second-class passengers, then what justification can there be for excluding the third class? It has appeared from replies to questions that the non-European population already receive more than £10,000,000 from the war in the form of pay and allowances, and despite this they are exempted from this contribution to the war effort. The wealthy mining companies are also excluded, but the Minister comes here in a very unfair manner and he wants to force the poor European Afrikaner to pay this big contribution. I want to appeal to the Minister to have a heart for those less-privileged Afrikaners. I pointed out to him on a previous occasion that Ministers still regularly use private coaches. But here we have a case of people who cannot do otherwise than to use the railways, and we must help them. I make a last appeal to the Minister to accept my amendment, in spite of what he said.

Question put: That the words “or second,” proposed to be omitted, stand part of the Clause:

Upon which the Committee divided:

Ayes—46:

Abbott, C. B. M.

Abrahamson, H.

Acutt, F. H.

Allen, F. B.

Ballinger, V. M. L.

Bawden, W.

Bell, R. E.

Botha, H. N. W.

Bowker, T. B.

Christopher, R. M.

Clark, C. W.

Conradie, J. M.

Davis, A.

Derbyshire, J. G.

Du Toit, R. J.

Friedlander, A.

Gluckman, H.

Goldberg, A.

Hirsch, J. G.

Hofmeyr, J. H.

Hooper, E. C.

Johnson, H. A.

Kentridge, M.

Lawrence, H. G.

Long, B. K.

Moll, A. M.

Molteno, D. B.

Mushet, J. W.

Neate, C.

Payn, A. O. B.

Pocock, P. V.

Raubenheimer, L. J.

Robertson, R. B.

Rood, K.

Shearer, V. L.

Solomon, B.

Solomon, V. G. F.

Stallard, C. F.

Steytler, L. J.

Van der Byl, P. V. G.

Wallach, I.

Wares, A. P. J.

Warren, C. M.

Waterson, S. F.

Tellers: J. W. Higgerty and A. E. Trollip.

Noes—18:

Bekker, G.

Boltman, F. H.

Booysen, W. A.

Conradie, J. H.

De Wet, J. C.

Dönges, T. E.

Erasmus, F. C.

Labuschagne, J. S.

Le Roux, P. M. K.

Loubser, S. M.

Pieterse, P. W. A.

Steyn, G. P.

Strauss, E. R.

Strauss, J. G. N.

Swart, C. R.

Werth, A. J.

Tellers: J. J. Haywood and J. F. T. Naudé.

Question accordingly affirmed and the amendment dropped.

Clause, as printed, put and the Committee divided:

Ayes—44:

Abbott, C. B. M.

Allen, F. B.

Ballinger, V. M. L.

Bawden, W.

Bell, R. E.

Botha, H. N. W.

Bowker, T. B.

Christopher, R. M.

Clark, C. W.

Conradie, J. M.

Davis, A.

Derbyshire, J. G.

Du Toit, R. J.

Friedlander, A.

Gluckman, H.

Goldberg, A.

Henderson, R. H.

Hirsch, J. G.

Hofmeyr, J. H.

Hooper, E. C.

Johnson, H. A.

Kentridge, M.

Lawrence, H. G.

Long, B. K.

Molteno, D. B.

Mushet, J. W.

Neate, C.

Payn, A. O. B.

Pocock, P. V.

Raubenheimer, L. J.

Robertson, R. B.

Rood, K.

Shearer, V. L.

Solomon, B.

Solomon V. G. F.

Stallard, C. F.

Steytler, L. J.

Van der Byl, P. V. G.

Wallach, I.

Wares, A. P. J.

Warren, C. M.

Waterson, S. F.

Tellers: J. W. Higgerty and A. E. Trollip.

Noes—18:

Bekker, G.

Boltman, F. H.

Booysen, W. A.

Conradie, J. H.

De Wet, J. C.

Dönges, T. E.

Erasmus, F. C.

Labuschagne, J. S.

Le Roux, P. M. K.

Loubser, S. M.

Pieterse, P. W. A.

Steyn, G. P.

Strauss, E. R.

Strydom, J. G.

Swart, C. R.

Werth, A. J.

Tellers: J. J. Haywood and J. F. T. Naudé.

Clause, as printed, accordingly agreed to.

On Clause 3,

I handed in an amendment this morning. I do not know if the Minister has already seen it, but it is on the Table of the House.

The amendment is not printed.

No, it is on the Table. I move—

The amendment comes to this, that the tax on the first class will be 15 per cent., and on the second class 10 per cent. If we could have done it under the rules of the House, we would have moved that the tax on the third class should be 5 per cent. I consider that after all the representations that have been directed to the Minister, he ought to agree to grant amelioration in connection with the second class. He should meet the second-class passengers by a reduction in the tax. The people who travel first class are the more well-to-do people. They are more well-to-do than those who travel second class, and a reduction of 5 per cent. will mean quite a lot to those who must use the second class. The Minister has now said that he needs the revenue which this tax will yield. But as a result of all the restrictions that have been laid on transport, particularly as regards petrol, there will be an incerase of passengers in future. The second-class passengers must make use of the railways, and I want to ask the Minister to meet the second-class passengers by reducing the tax to 10 per cent. in their case. If I had the right to do it, I would have moved that the discrimination which the Minister is permitting to take place here should be prohibited, and that there should be a tax of 5 per cent. on the third class. Under the rules of the House we may not do this. My other amendment is that the word “plekbewys” be substituted by the word “reiskaartjie”. The word “plekbewys” appears in the Act of 1912. It was called “plaatsbewys” at the time. It is an entirely different expression than what is intended by “reiskaartjie.” I do not think that the translators of the Department had anything to do with it. To us it is more a proof of the methods which the Government employs in drafting Bills in English, and then to follow old precedents slavishly. They do not keep account of the development of Afrikaans. I hope the Minister will remove this term from the Bill, and that he will use the word “reiskaartjie” instead of “plekbewys”.

In support of the hon. member for Gordonia (Mr. J. H. Conradie) I also want to make an appeal to the Minister. I do not know if it will help. We have directed representation upon representation to him and have pointed out the injustice that is committed in this Bill towards the poor man, but all in vain. Yet I want to plead once again with the Minister to be a little merciful: We plead, as the amendment shows, for a little mercy for the less well-to-do man. I hope that the Minister will in heaven’s name give heed to the pleas.

I fear that I cannot accept the hon. member for Gordonia’s first amendment to differentiate between the tax as regards the first-class and the second-class passengers. This will again mean a reduction of the revenue on which we relied. I want to add that when we originally considered the introduction of this tax I wanted to discriminate between the first class and the second class on such basis that it would yet yield the amount envisaged, but that the first class should perhaps be taxed by 17½ per cent. and passengers in the second class by 12½ per cent. The Railway Administration, however, strongly objected. They considered that it would lead to difficulties in administration, and they pointed out further that their transport difficulties consisted mainly of the provision of accommodation in the second class, and they were opposed to more people being encouraged to travel second class. But just to show that I do not reject all amendments. I shall be prepared to accept the other amendment of the hon. member regarding the substitution of the word “reiskaartjie” for the word “plekbewys”. May I point out, he will perhaps be interested in the matter, that the word “plaatsbewys” is used in the original Act of 1916 and the word “plaatsbewys” is the prescribed word in the Definition Clause. If I accept the amendment, therefore, it will apparently involve a further amendment, in the original Act, which, if necessary, I shall move in the Other Place. But I am prepared to do even that in order to meet him.

The Minister admitted just now that he originally intended to impose a bigger tax on persons who travel first-class than on persons who travel second-class, but he said that Railway Administration told him that it would lead to confusion. How can it lead to confusion? Let the Minister explain this. In the second-class as many as eight persons are crammed into one compartment, while no more than four persons are taken into the first-class. If one travels by train one sees what goes on and what inconvenience second-class passengers have to suffer. The compartments today are in a state of disrepair and little heed is being taken of the convenience of the second-class passenger. The Minister says that he is letting the tax remain, because he needs the revenue. He says he must get his £500,000, and if he accepts the amendment he will get less. For that reason he does not want to differentiate between the person with a large income and the person with a small income. The well-to-do man travels in the first-class, and in the second-class the man who is less well-off, the less privileged man. Why should they be taxed equally heavily, both by 15 per cent.? It is highly unfair, and the Minister himself admitted it when he stated that he wanted to make a difference originally. At first he wanted to make the tax on the second-class less. But, he says, it will cause confusion. I stand by my attitude that the Minister is ignoring the interests of the European Afrikaners. He showed sympathy for the non-Europeans in the third-class, but not for the Europeans in the second-class. He does not care if they suffer inconvenience and are heavily taxed. He wants to press the last drop of blood from these persons. I challenge the Minister to go and address meetings on the platteland and to justify this tax. He will see the reaction among the farming community who have to travel second-class. The Minister pushes them aside. I say that the Minister has a moral obligation towards this class of person, and that he has no right to squeeze them out like this.

I told the Minister of Finance yesterday that it is unfair that an out-and-out railway measure such as this should be sponsored in the House by the Minister of Finance. Here he comes and tells us this afternoon something that precisely confirms what I have already said. He tells us that the Minister of Railways alleges that it will cause confusion if the tax on the second class is reduced by 5 per cent. What confusion? The Minister cannot tell us. He heard it from the Minister of Railways, but the officials of the Railway Department and the Minister of Railways are not here to put through the measure as should be properly done. The Minister has heard something from the Department of Railways, but he cannot explain it. And yet the Minister comes and tells us that the tax is imposed on passengers, and does not affect the Railways as a whole. And then he tells us immediately thereafter that the Railway Department said that it would cause confusion. This is a tragic way in which to force such a measure through the House. Take a place such as Humansdorp. The little line at Humansdorp provides only for third-class passengers and for first-class passengers. Does the Minister realise what the result is going to be. There is no second class on the line, and these people will now be compelled to travel third class. They can no longer afford to pay for the increased first-class tickets. I challenge the Minister to defend this tax in Humansdorp.

I challenge you to show me a white man who will board a train among natives.

The position is that in Humansdorp you get the forest workers and other poor people who cannot afford to travel first class. They have already applied to the Department of Railways for separate third-class provision for Europeans. Will the hon. member deny this? Now the tax on the first class is being still further increased, and still more of these people will have to seek refuge in the third class. The Minister of Finance smiles. I told him the other day that there are 4,000 or 5,000 persons in the Government departments who draw a wage of from 4s. to 6s. per day. If they want to travel with their families once a year, or if they must travel as a result of sickness, they have to pay 15 per cent. more on their tickets. If ever there was proof that the Minister has no heart for the poor Europeans, but that he is a friend of the non-Europeans, then that proof is surely provided in this Bill.

We would very much like to know from the Minister what the confusion is that is going to be caused. It avails nothing to tell us that there is going to be confusion, without the Minister explaining how it is going to be caused. It becomes clearer to me every day that the Ministers of this Government do not think for themselves, but that the officials of the Departments think for them. If the officials tell them that it is going to mean a little more work for them, then the Minister simply accepts it. The time is near, it will certainly come, when the people will square accounts, and we shall see that the officials who give the Ministers wrong advise shall not remain there.

The Minister told us yesterday that he is introducing this tax with the object of alleviating the congestion on the railways. But the Minister is now beating about the bush. He says now that if he accepts the amendment to exempt second-class passengers then he loses revenue. Now when did the Minister mean what he said? Yesterday morning? Yesterday he said that he did not impose the tax in order to tax the farmers on the platteland as against the people who live in the cities, but merely to alleviate the railways a little. Today he comes and says that he cannot accept the amendment for then he will lose revenue. The people outside will investigate the truth, and they will come to the conclusion that the Minister tries to tax the farmers on the platteland, but exempts the non-Europeans and the urban dwellers. This is an indication to the platteland of what we must expect of the Minister if he should obtain greater authority in the country. We must protest. I want to ask hon. members on the other side, particularly the hon. member who says so easily that the white man will not travel together with the coloured person, what about the forest worker and what about the other poor people who must inevitably travel on account of sickness or other matters, and who cannot pay more? It is hard enough for them as things are today. Here the Minister must display some humanity. The Minister said yesterday that the people in his constituency are not suburban people, that they are not privileged. But I want to point out that those people are within reach of the best specialists in South Africa. They can call in the doctor for 10s. 6d., and can call on a specialist right at their homes. The people for whom we plead are the people who live miles and miles from a town, who have to go to the towns for their business, who have to get the doctor from the towns at high cost. We plead for them. But the Minister’s constituents are in the heart of Johannesburg and can obtain all these things right at their front door. They do not therefore bear this special tax. We can only warn the people. Here we have a little foretaste of what awaits us in the future from this Minister. This is only the beginning. The Minister’s reasons are extremely unconvincing, and are unworthy of him. Yesterday he spoke about alleviating the congestion on the railways. Then I told him that at every station more non-Europeans boarded the trains than there are Europeans who travel second class. But he does not want to tax the natives. He does not want to touch them and he particularly does not want to touch the gold magnates who pay for the tickets of the natives who come to the mines, for they are the small privileged group under the Minister’s regime. He therefore taxes the people who do not agree with his war policy, the Afrikaners in the country, the people who have developed the country and made it habitable. They are being singled out to bear the tax. We protest.

I would like to make a request to the Minister. He has apparently set his heart on forcing the measure through. Now I want to appeal to him to make representations to the Minister of Railways to provide that effect may be given to this measure by providing for the poor people whom he now compels to travel third class. Let him now provide so that the poor Europeans are not compelled to travel in Kaffir-trucks in which there were Kaffirs only a short while before. On most railway lines there is no special third class for Europeans. It happens that natives alight and the Europeans have to go in those same compartments. We must avoid that. The Minister cannot escape the results of the tax even if he wants to. If this tax goes through then the coloured workers in the employ of the Mint at Pretoria, who earn £25 per month, will not pay a penny more when they travel, and also the native workers at the Durban harbour who receive £15 per month will pay nothing additional in railway fares, but the poor forest workers and plantation workers who earn £5 per month will have to pay 15 per cent. more on their second class tickets. Governments have already fallen as a result of weaker measures than this. I do not know how the Minister can look the population in general in the face in connection with this discrimination. I therefore appeal to the Minister, since he wants to go through with this unfair and unasked measure, that he should ask the Minister of Railways to provide third-class coaches for Europeans so that the people who cannot pay for a second class ticket, the people who earn 4s. per day and who are compelled by necessity to travel, need not climb into Kaffir-trucks. I appeal to members on the other side who are Afrikaners and who know the difference between white and coloured. I appeal to the hon. member for Kimberley, District to ask the Minister to make such provisions. Will the hon. member be prepared to defend this tax in a single platteland town? Will he be prepared to defend it that the poor European should pay 15 per cent. more for his ticket while the coloured person does not pay the tax? Will he defend it that the less privileged Europeans should be compelled to travel third class? I appeal to the hon. member at least to urge upon the Minister that the Europeans should not be compelled to travel in third-class compartments in which coloureds and natives have travelled. The Minister now says that it will cause too much difficulty to increase the first class tax to 17½ per cent., because it will cause confusion. Surely we are not a debating society here and we are not children. He cannot satisfy us with such arguments. He cannot send us to bed with a lollipop in this manner. What is the reason that the people who travel first class to Muizenberg to bathe in the sea should not have to pay this tax? In any case I appeal to the Minister to provide third-class coaches for Europeans.

This measure leaves an extremely bad taste. No other measure forced through this session has caused such a bad taste as this measure. I want to warn the Minister. He is unyielding and he prides himself on the fact that he will accept no amendment that the Opposition can move. I just want to say that I have with me another person who comes from the platteland and who is, or was, one of the Minister’s supporters. He feels embittered towards the Minister of Finance. If the Government collapses the Minister will be the cause of it.

But surely you will be overjoyed.

Naturally I will be, but I just want to say that the Minister of Finance renders the Government no service by going on in this irresponsible way. Does the Minister realise that there are 500,000 poor whites in the country? Does he realise that one-quarter of the European population of the country are poor whites who live under the bread line? They are affected by this measure. The white population who live under the bread line and who are not in favour of the war, but who struggle to make a living—does he want to give them a chance to live as Europeans? Where must they get the money? It is a cruel measure against the portion of the population who are not well-to-do. Does the Minister want to tell me that he does not know this? He makes concessions to the coloureds and the town dwellers and punishes the poor European. The second point to which I want to refer is that the passenger train between Cape Town and Klaver and Bitterfontein has no third-class coach for Europeans. There is only third class for coloureds and natives. Is the Minister going to take steps to ensure that there will be a coach regularly for Europeans? The Minister by his taxation is making it impossible for the poor section of the population to travel second class. They will suffer as the result of this, particularly the people in the North-West. Will he take steps for a regular third-class service for the impoverished section of our population who must travel now and again? The Minister does not only affect the section of the poorer European population who stand by the Opposition, but also his own supporters on the platteland. By this measure he will drive a nail into the coffin of the Government. If the United Party falls nobody but he will be the cause of it. He will pluck the fruits of this unjust measure very shortly.

It really surprises me that the Minister is proceeding with what one can only term a very bad Bill. The Minister knows well enough what the attitude of his own side is in respect of this Bill; he knows that they are seething with dissatisfaction and if they were free to vote as they like they would vote down this measure every time. The Minister knows this as well as I do. We hear what they say in the lobbies. If the Minister really wants to impose a good tax I shall tell him how to do it. Let the Minister of Finance personally pay £1 to every member of Parliament for every Saturday afternoon that we have to work here unnecessarily. I want to ask the Minister if he has really pondered over the effect that this measure is going to have on the far-distant parts of our country. Does he realise the discrimination that is being made? Take the officials. An official is transferred from Pretoria or Cape Town to Upington, Keimoes or Kakamas. Does the Minister realise how he affects them, how he affects the teachers. The teachers who teach in far-distant areas surely want to go to their parental homes for their holidays. They are punished by this measure. Does the Minister not understand that he will find it difficult in future, to persuade officials to go to far-distant places? I do not know where it must be proposed, but I think that we shall find the place before we are finished with this Bill. The Minister’s object with the Bill is to preclude people from travelling too much on the railways and to prevent the railways from being overtaxed in that manner. Cannot the Minister exempt one ticket per person per year from the tax and tax only those people who make use of the trains too frequently? I hope that the sense of justice of the Minister is not so blunted that he will not realise that certain classes of the population, certain teachers and officials are being penalised as against other sections. Exempt one ticket per year, and let those people who want to use the railways thereafter pay the tax. And then I want to ask the Minister to exclude certain railway lines. In Sub-Clause (2) we find that by railways is meant any railway line that is controlled and exploited by our Railway Administration except the line from Upington to the boundary of South-West Africa, and the line from Mafeking to the boundary of Bechuanaland. And here I would like to insert: Except a railway line on which the Railway Administration has no second-class coaches. We have heard that the line from Humansdorp to Avontuur has no second-class coaches. Those people will be compelled either to be herded with the natives in the third class, or to travel first class. The poor section of the population are not only compelled by the Administration to buy a first-class ticket, but the Minister is now going to tax them by a further 15 per cent. I direct these few requests to the Minister. The Minister has now caused the principle of this Bill to be accepted, and we want to help him make the thing a little less unfair. If the Minister ponders the matter he will realise that what we ask here is fair.

I would like to appeal to the Minister to reply to the representations which the hon. member for George (Mr. Werth) has directed to him.

It was my intention to rise. The hon. member for George (Mr. Werth) has put the question to me whether we can exclude certain lines. That will be impossible in practice. The best way out would be to get second-class coaches on those lines. Where we have a general measure of this nature within the boundaries of the Union, I cannot see how we can exclude certain lines.

The Minister of Railways must be compelled to provide those coaches.

Yes, but this Bill cannot be used as a means thereto. The other hint that the hon. member has given does not fall within the scope of this clause. We have to do here with the scale of the tax. My hon. friend will see that it will be impossible in practice to draft the law in such a way that every person shall be exempted once a year from the tax. It will mean that the Railway Administration will have to keep a record of all persons who have bought tickets. That is impossible.

That shows how bad the Bill is.

That suggestion of the hon. member is impracticable.

The hon. Minister knows that it is a custom in our country for the less privileged people to use the second-class, while the non-Europeans make use of the third class. We do not find on the railways that third-class coaches are reserved for Europeans, because the Europeans travel second-class. The Minister must admit that there are about 500,000 people who are poor and who are looked upon as poor whites in our country. When those people make use of the railways then they avail themselves of second-class tickets. They do not make use of the railways through affluence; they do not use the railways for pleasure trips, but simply because they must travel, while the more well-to-do classes often use the railways for pleasure. We have to deal here with 500,000 European Afrikaners who in the most cases do not possess motors. They have no other means of transport at their disposal except the railways. They must use the railways of necessity when they feel obliged to travel. They do not go for holidays, but they perhaps have to go to their children, or have to travel in the event of sickness. Now what is the result of this tax going to be? The wealthy people can use their motors. They seem to succeed in getting petrol, which the poor people do not get. The poor people have no option, and it boils down to this, that this tax is being forced upon them. They are obliged to use the railways. How can the Minister find it in his heart to compel an old man who draws a pension and who, with his wife, has to make ends meet on £6 per month—if he gets more, the Minister takes the pension away—how can the Minister find it in his heart to compel such a person to pay this tax? He is obliged to do one of two things. When he has to travel, then he must take out a third-class ticket and travel among the non-Europeans, or he must simply remain away from the railways, or he must pay this tax to assist the Minister’s war effort. On the other hand we have the position that coloured women receive an allowance of £9 10s. per month. They travel third class, and they do not pay a single penny tax on their tickets. But the man who gets £6 per month to support himself and his wife is compelled to squeeze something from this £6 per month so as to pay this tax. It is an unjust and cruel tax. It is cold-blooded action on the part of the Minister to exact this tax from the poor people, and we simply cannot agree with it. If the Minister had come here and said that he wants to prohibit those people from using the railways then something might have been said for it; then he would still have had some argument. But he now admits roundly that his sole object is to obtain funds to continue the war. He has the taxation to cover war expenditure, so why is he so unjust and so unfair as to apply this scale of taxation? I have already told the Minister that the non-European population have drawn £10,000,000 in war allowances. That is money that has come from the pockets of the Europeans, and yet the non-Europeans are exempted from the tax. The Europeans have to pay it. There is an unfair and unjust discrimination against this class of person, and the Minister ought to have a little grain of justice in his soul to meet these people.

I just want to emphasise what the hon. member for Bloemfontein, District (Mr. Haywood) has just said, and what I have myself said previously. It seems as if the Minister does not grasp the matter. On the platteland the people do not travel for pleasure. Nor do they travel often, but when they do travel then they travel because they have to. They do not live near the cities, and they sometimes have to go there to do their business. I raised another point which the Minister, it appears to me, has not taken into consideration, and that is that to my mind the non-Europeans actually travel more than the Europeans. I think the Minister should tell us that he is prepared to investigate this, and if it is so then he must either give the Europeans this concession for which we plead, or he must apply the tax also to the non-Europeans. I think that will be no more than fair. The Minister is really headstrong. I think that the Minister is sustaining a stubbornness that is not a human characteristic. I want to tell the Minister that in the lobbies his own people tell us to shake him up about this tax, because they do not like it.

Do you always do what they tell you to?

No, but now they say that we must shake the Minister up because they are as much opposed to this thing as we are. But unfortunately they are not allowed to express their opinion. We have to do here with a class tax which is at the same time an unreasonable tax. Why does the Minister not impose his tax of 15 per cent. on journeys from Cape Town to the Beit Bridge. Then the tax will press evenly. And let the Minister be honest and say that he imposes this tax to obtain money for the war. But now we find that within ten miles of Cape Town there is no increase.

No, the minimum is 10s.

Yes, I am putting it wrongly. But it means nevertheless that the people in the big cities, on the suburban lines, do not pay the tax, and I am told for a fact that the increase in the suburban traffic is greater than the increase on the platteland.

That is correct.

If that is so, how can we say that the Minister’s proposal is fair? No, the Minister will simply put us on the platteland in a position where we are treated with double injustice.

I want to ask hon. members not to repeat the argument in connection with the platteland over and over again.

I thank you for your guidance, Mr. Chairman, but I want to raise a brand new point. I see that members on the other side are coming in now. Outside in the lobby they told us that we must shake up the Minister because they do not like the tax, because it is an unjust tax, and perhaps they will now help us. I want to point out that people on the platteland receive perhaps 13 or 11 gallons of petrol per month, and they have to travel a distance of 30 miles to get to a town. They cannot get more petrol, and they must use the train, and now the Minister tells them that they must pay 15 per cent. more. How must these people manage?

They will just have to inspan the ox-wagon again.

That shows how far the hon. member’s brain has developed, if he still thinks that the farmers must inspan the ox-wagons. We must plough with the oxen, and we cannot inspan the oxen when we have to go to the town. That argument is ridiculous. The fact is that the platteland will feel this tax doubly. It will make it ever-increasingly difficult for the people on the platteland to continue their business. But look at the kind of reply we get from the Minister. The hon. member for George asked the Minister to give a person a ticket at the ordinary tariff once a year to enable him to take a holiday once a year or to travel at the old tariff once a year. The Minister then said that this could not be done because it would mean that the railways would have to keep a record of all the people who took out tickets. Do hon. members on the other side agree with the Minister? Will it entail involved bookkeeping? They give no answer, because they themselves do not believe what the Minister says here. If the Minister employs such an argument against this improvement that is being suggested, then it really looks as if he is not very well-informed about this tax. I would suggest that the Minister ought to do this. He can put the onus of proof on the person who buys the ticket.

The hon. member cannot raise that point on this clause.

The Minister said that he cannot consider this suggestion because there would have to be extensive bookkeeping if he agrees. I would just like to suggest something that the Minister can do.

The hon. member can do that later.

Then there is another little point in connection with the ticket that costs less than 10s. and that is exempted from the tax.

That falls under a later clause.

I would like further to suggest an amendment, because there are railway lines which have no second-class coaches. It is unfair for the Minister to impose this tax on railway tickets, and at the same time to compel people to take out first-class tickets. The Minister has admitted that what the hon. member for George (Mr. Werth) said here is true. I want to ask the Minister to accept such an amendment and to compel the railways in such cases to provide second-class coaches.

There is one little point about which I feel very dissatisfied. The Minister has admitted that he will approve in principle that there should be discrimination between the first-class and the second-class, but he says that practical difficulties were raised on behalf of the Railway Administration that such a thing would not be practicable. But what is actually the difficulty? The railway clerk can have before him a list of the travelling money payable, and then the 15 per cent. and 10 per cent. can be added. There is no difficulty. As it is the clerk has to see what the price is and what he must add, and I cannot see what difficulty there can be in making a difference between the two classes. If the Minister were opposed to it in principle then the matter would have been different. But he admits the fairness of the demand we have made, but he tells us that he cannot agree to it because the Railway Administration says that it cannot be done. If the Minister can carry out the Bill as it is now before us, then he can very easily carry out that discrimination. Unfortunately we cannot move an increase in taxation under the rules of the House, and for that reason we cannot move our amendment. But we hope the Minister will go into this matter and himself insert an amendment to make that difference between the first class and the second class. The Minister of Railways is not here to tell us why this cannot be done. I want to ask the Minister of Finance again to make a concession in this respect and to make the difference. Let us be helpful at least in this respect to the people who have to pay the tax.

Amendment put and the Committee divided:

Ayes—17:

Boltman, F. H.

Booysen, W. A.

Conradie, J. H.

De Wet, J. C.

Dönges, T. E.

Erasmus, F. C.

Labuschagne, J. S.

Le Roux, P. M. K.

Loubser, S. M.

Pieterse, P. W. A.

Strauss, E. R.

Strydom, J. G.

Swart, A. P.

Swart, C. R.

Werth, A. J.

Tellers: J. J. Haywood and J. F. T. Naudé.

Noes—44:

Abbott, C. B. M.

Abrahamson, H.

Acutt, F. H.

Allen, F. B.

Ballinger, V. M. L.

Bawden, W.

Bell, R. E.

Botha, H. N. W.

Bowker, T. B.

Christopher, R. M.

Clark, C. W.

Conradie, J. M.

Davis, A.

Derbyshire, J. G.

Du Toit, R. J.

Friedlander. A.

Gluckman, H.

Goldberg, A.

Hofmeyr, J. H.

Hooper, E. C.

Johnson, H. A.

Kentridge, M.

Lawrence, H. G.

Long, B. K.

Mushet, J. W.

Neate, C.

Payn, A. O. B.

Pocock, P. V.

Raubenheimer, L. J.

Robertson, R. B.

Rood, K.

Shearer, V. L.

Solomon, B.

Solomon, V. G. F.

Stallard, C. F.

Steytler, L. J.

Van Coller, C. M.

Van der Byl, P. V. G.

Wallach, I.

Wares, A. P. J.

Warren, C. M.

Waterson, S. F.

Tellers: J. W. Higgerty and A. E. Trollip.

Amendment accordingly negatived.

Remaining amendments put and agreed to.

Clause, as amended, put and agreed to.

On Clause 4,

On the motion of Mr. J. H. Conradie, certain amendments were made in the Afrikaans version which did not occur in the English version.

Clause, as amended, put and agreed to.

On Clause 5,

I cannot conceive how the Minister can be so unfair as to extend exemption in respect of passengers whose railway tickets are less than 10s. The effect will be, to put the matter practically, that the person who has to travel far and who has to pay a big amount for his railway ticket will have to pay 15 per cent. in addition, but the person who lives near a coastal resort and near the big businesses and hospitals need not pay the tax. The thousands of persons who travel to Muizenberg to swim for pleasure, and the thousands who travel by train to the races every Saturday afternoon, and the thousands in Johannesburg who go to the dog races to waste money and for pleasure do not pay the tax, but the man who has to travel over a long distance in consequence of sickness or death, or because he has to go to a hospital, must pay. And what sense is there that a man who travels from Paarl to Cape Town to do business should not have to pay, but that the man who travels from Beaufort West to Cape Town for the same purpose must pay? What is the sense of it? I can well understand the Minister making an exception of the people who have to use the train every day to travel to their work, the people who take out concession tickets—very well, exempt them. But why exempt all the people who travel for pleasure over short distances? I cannot understand it. I am opposed to the Bill, to the whole taxation, but if there must be a tax why should it be imposed only on the people who have to travel long distances to get to the shops or to a doctor? If a farmer who has to come in for business happens to have the good fortune of residing within a certain radius within which the ticket costs less than 10s. he does not pay the tax, but if he lives a little farther afield he must pay the 15 per cent.

Move your amendments at the report stage. Then we can discuss them there.

Will you then adjourn the House now?

No, I want to proceed to the following order.

No, then we cannot accept the suggestion. I ask again why a man must be taxed who has to travel on behalf of his health or to a doctor, or in respect of urgent business, while those people who travel short distances for their own pleasure, are exempted. I do not want to move that this clause be deleted, for then it will simply mean more taxation, but I want the Minister to reduce the tax on tickets above 10s. As it stands here it is extremely unfair.

I want to move the following amendment—

We wanted to move the amendment before, but then the Minister said that it did not fit in there. For that reason I now move it here under “exemptions”. Allow me to sketch the position in areas where only first-class and third-class coaches are used. Needy Europeans are forced to travel third-class, and this will now be the case more than ever before. The hon. member for Rustenburg (Mr. J. M. Conradie) said by way of an interjection just now that Europeans will not travel third-class. If he means that they will not travel with the coloureds then he is right.

That is what I meant.

Where there are only first-class and third-class coaches available, and poor people cannot afford to travel first-class, there they will have to travel third-class. That is the position on the line at Humansdorp, and for that reason they have applied there for third-class coaches to be made available to Europeans, but that it should be coaches in which non-Europeans will not travel. Do not use coaches in which non-Europeans have travelled, and that have perhaps not even been properly washed. For that reason I am proposing this reasonable amendment. If the Minister does not accept the amendment it will simply mean that he wants to force people who cannot afford to travel first-class to travel with the natives and the coloureds in the third-class. Here at any rate he can meet the situation. The Minister of Railways was to have told us why they did not use second-class coaches, but unfortunately he is not here and the Minister of Finance is not au fait with the position. I would like to direct an appeal to the Minister of Railways, but in view of the fact that he is not here I want to suggest to the Minister of Finance to leave this clause over until he has got into touch with the Minister of Railways and the Department of Railways, and has consulted them.

I would like to move the following amendment—

1. (d) for conveyance of any passenger who satisfies the person duly authorised to issue tickets by the production of a certificate signed by a duly qualified medical practitioner or dentist that the proposed journey has to be undertaken for reasons of health; or.”

The implications of the motion are that when a man from the platteland or elsewhere is obliged to travel by train for health reasons, perhaps to undergo an operation at the instructions of his doctor, and the man can show a medical certificate to this effect, then he will be exempt from the tax and the 15 per cent. surcharge will not be levied. I put the motion with the greatest confidence, and I hope that the Minister will accept it. In those areas far removed from the best medical facilities it is sometimes essential for people to undertake long journeys in order to consult a medical practitioner or to undergo an operation, and I think that the Minister can easily meet the people of those areas and exempt them from the tax in periods of emergency. Surely we cannot make those people pay in such cases. They do not travel for luxury, but they travel only because they are compelled thereto, and if they can show a doctor’s certificate they ought to be exempted from the tax. I really hone that the Minister will accept this, and that he will be a little merciful towards the small man who has to travel for health reasons.

I want to propose the amendment standing in my name—

Why do I propose it? The Minister proposes to exempt from taxation tickets that cost less than 10s. The hon. member for Winburg (Mr. C. R. Swart) has pointed out that the intention obviously is to exempt people who travel to the races and to dog races, and who go from the cities to the coast. They may travel without contributing anything to the war funds of the Government. For that reason I propose that Oudstryders should also be exempted. They have now arranged to hold a congress at Vereeniging, and I went to the Minister of Railways and asked him if they could have concessions, reduced tariffs to attend the congress. The Minister of Railways said that it cannot be done, that they must pay the full price. If teachers hold a congress they get concession tickets, but these Oudstryders cannot get it. Now I want to move in any case that they be exempted from the extra taxation. Why should the people who go to the races to gamble be exempted, while these old people who sacrificed everything for their country and who are having a difficult time and suffering need, and who get only a small pension, pay 15 per cent. extra? For that reason I move my amendment. The object of my second amendement is to waive the exemption concerning officials of other governments. Why should they be exempted from the 15 per cent.? The needy section of our own people simply have to pay, but officials of Allied governments may make use of our trains and are exempted from the tax. Is the Minister so unpatriotic that he should make such an unfair discrimination between the citizens of another State and the needy citizens of his own country? Let those who come from other countries pay the extra tax; but meet your own people.

The hon. member for Winburg (Mr. C. R. Swart) has asked why we exempt tickets costing less than 10s. In respect of any tax there is generally a point below which it does not pay to collect the tax. 15 per cent. on 1s. is a very small amount, and therefore we have to take a point at which to commence the tax and we considered that 10s. was the appropriate notch. I expected that the hon. member for Delarey (Mr. Labuschagne) would support me there. He spoke of persons who have to travel to the district town, but this exemption of 10s. means in respect of the second class that one can travel 76 miles without paying the tax.

The return?

No, single journey, but it yet means that the return ticket for between 40 and 50 miles is exempted.

And what will the man say who has to travel 60 miles?

There must be a point at which to commence, one cannot go too low. Then the hon. member for Gordonia (Mr. J. H. Conradie) put a motion that I cannot accept, because I think it is too wide, but perhaps I shall be able to meet him partially on the following clause. He wants to exempt from the tax passengers who can show a certificate from a doctor or a dentist that they must travel for medical treatment or in respect of their health. I think it is put a little too wide, dangerously wide. But I am prepared to yield the position of which we have spoken, namely in respect of persons who must go to hospitals for treatment to consider an amendment on the following clause which deals with refunds, that the Commissioner of Inland Revenue, where he is convinced that a passenger has undertaken a journey for hospital treatment, can permit a refund of the whole tax on the ticket, or a portion thereof. In that event an investigation will have to be instituted and the exemption will have to be in the form of a refund of the tax.

That is far too tedious.

I am prepared to move something to this effect when we come to the relevant clause. It is very difficult to apply such a thing when the tickets are taken out. The hon. member will understand that according to the clause we have already adopted the additional taxation price is printed on the ticket. Consequently the whole amount must be paid when the ticket is taken out, but we can make provision for repayment when application is made for it. I hope my hon. friend will accept this concession as a proof that I am not altogether headstrong. I cannot express myself favourably in respect of the amendment of the hon. member for Bloemfontein, District (Mr. Haywood). His one amendment is that we would not exempt the governments of other states. This tax is a tax on persons and not on governments, and I am not prepared to waive that proposal. The same applies to his motion in connection with Allied troops. I am not prepared to omit that. His motion in connection with the Oudstryders, in the form in which he proposed it, has little value. It comes down to this, that the exemption shall be extended in the event of the transport price being calculated at a concession tariff. Oudstryders do not receive concessions.

But I am moving a new paragraph.

Yes, but it still comes to this, that even if the hon. member’s amendment is adopted, that Oudstryders will be exempted from the tax only if they get concessions. He does not achieve much with his amendment, because the Oudstryders do not get concessions. But apart from that, I am not prepared to accept the amendment. I do not know if hon. members on the other side have any more amendments?

Yes, we have a few.

Very well, as soon as all the amendments have been moved I shall move that the Chairman report progress and ask for leave to sit again.

I have a serious objection to the concluding words in paragraph F of this clause, namely the words: “Which has been approved by the Minister of Finance for the purposes of this section.” According to Clause 126 of the South Africa Act control of the railways is exercised by the Minister of Railways, or rather by the Railway Board of which the Minister of Railways is the Chairman. Under this clause the Minister of Finance now gets the right to disapprove of something which has been decided upon by the Minister of Railways, the Railway Board and the General Manager of Railways.

No, you are reading the clause wrongly.

The clause provides that from this tax is exempted any person in respect of whom a transport price is calculated at a concession tariff or a reduced tariff, or certain categories of persons in respect of whom the transport price is calculated at a reduced tariff or at a concession tariff, and then comes the words, “which has been approved by the Minister of Finance for the purpose of this section”. This means that he must approve the categories to whom the reduced price is extended.

No, only for the purposes of this clause.

Whether those categories in this tax must be exempted or not?

Yes.

Now what does it mean? It means that the Minister of Finance says that he cannot trust the Minister of Railways, the Railway Board and the General Manager to grant concessions in future. They may perhaps assist categories of persons to evade this law, and therefore he reserves the right to say that he does not approve of it.

No, it is not so.

He does not want to allow the Minister of Railways, the Railway Board and the General Manager to say what categories of persons shall receive concessions. They may perhaps allow certain classes of persons to evade this law and the tax. Is that not a stigma, is it not a motion of no confidence as regards the Minister of Railways? I am surprised that the Minister of Railways can approve of such a thing. I said yesterday that I am disappointed in the Railway Board for approving this tax. But I am not prepared to go with the Minister and say openly to the world that I cannot trust the General Manager of Railways and the Railway Board in connection with a matter such as this. I therefore move the following amendment—

The control of our Railways is entrusted to certain persons and bodies under the South Africa Act, and I am not prepared to appoint the Minister of Finance, under a supplementary law such as this, as a sort of Court of Appeal above the General Manager and the Minister of Railways.

I want to move the following amendment—

I think the Minister should accept this amendment. We know for what purpose this holiday is given, and if we expect the men and women teachers who get this holiday to remain in the town and the vicinity in which they give tuition then the holiday will certainly not answer its purpose. Generally speaking our teachers certainly do not get a big salary. They do not get a princely salary, and I want to appeal to the Minister to accept at least this amendment.

I regret that I cannot accept the last amendment. I have said why on a previous occasion. I cannot see why the teachers should be exempted from the tax and not the bank clerks or the ordinary shop clerks.

Exempt them also.

Then we must exempt everybody. As regards the amendment of the hon. member for George (Mr. Werth) I cannot agree that this clause, as drafted, causes any infringement of the power of the Railway Board. The railway administration remains completely free to give any concession.

But you can reject it.

No, I do not reject concessions. We levy a tax in this Bill, and we say in the Bill that as regards the existing concessions, we shall exempt from tax the persons to whom certain concessions are extended—not all. Now where in future further concessions are granted by the Railway Administration, it rests with the Railway Administration to do so. It is the Administration’s responsibility, but it is our responsibility to say in what cases those persons shall be exempted from the tax. How then can it infringe the powers of the Railway Board?

You do not trust them.

It is not a question of trusting. It is for them to say to whom they are going to give concessions, and it is for us to say on whom the tax shall be imposed. It is not at all fitting to accept that amendment. I now move—

Agreed to.

House Resumed:

The DEPUTY-CHAIRMAN reported progress and asked leave to sit again. House to resume in Committee on 12th April.