I brought it to the attention of the Minister of Finance yesterday that no fewer than 70 per cent. of the wine farmers produce 100 leaguers of wine or less. This means that those farmers have a gross income £500 or less. On the 100 leaguers of wine for which the farmer gets £500, the taxation is £3,175. This shows us what an enormous milch cow the wine farmers have become for the Government. We feel that the wine farmers must now build up a reserve, because after the war there will be a tremendous curtailment in the consumption of the wine farmers’ product. We have to deal today with abnormal circumstances, and we must enable the farmers to make use of these circumstances to build up a reserve. We have an abnormal condition that should enable the farmers to get rid of their surplus. After the war there will possibly be a surplus of from 60 per cent. to 70 per cent. If that happens then the time may possibly come again when the farmers will have to open their wine barrels to let the wine flow away. The Minister is busy caring only for today and nothing for the future, and all his taxes are arranged in such a way that the Government thinks only of today and not about the future so as to enable the people to build up a reserve for the future. We can visualise what the position of the farmers will be if they have no reserves to fall back upon, and I want to appeal to the Minister to waive this tax and to reduce the taxes that already exist.

I think the stones will almost call out if I do not speak about this matter this morning. I think that the hon. Minister of Finance himself also expected that I would speak about this increase of taxation. It is my duty. And when we speak about the liquor trade and also about the wine industry, then we must adopt some standpoint or other. We must consider that the wine industry either has the right to exist, or that it has no right to exist. If we consider that it has the right to exist, then we must follow a road that will make it possible for the wine industry to survive, but I fear that the road which the Minister of Finance is following in respect of this new additional taxation is the road along which the industry will be killed gradually. I must also urge upon the Minister, as did the hon. member for Swellendam (Mr. S. E. Warren) yesterday afternoon, that he should stand up here and tell us whether he wants this taxation to continue, yes or no. I can remember the time when there were from 300 to 500 wine farmers on the steps of the Houses of Parliament to lodge a protest against additional taxation on brandy. Today it is not necessary to come. We have the K.W.V., and the directors of the K.W.V. come here as patrons of the wine industry, and as such they are acting in an able manner. Permit me to say this, that were it not for the existence of the K.W.V. the wine industry would not have existed at all today. Do we realise sufficiently and do we appreciate sufficiently that there is such a co-operative which can act in the interests of this industry, and which can keep alive an industry of which the consumption is only 50 per cent. of the production? It is due to the directors of the K.W.V. and to the existence of the K.W.V. that the industry still exists today. I would almost ask the Government to erect a statue to the directors of the K.W.V. so that their work may be commemorated when they are here no longer; also to my colleague, the hon. member for Swellendam (Mr. S. E. Warren). We have to thank these people for the fact that the Government is not saddled today with a number of people who are dependent on the Government. It is due to them that those people can still make an independent living and are still an asset to the State. I have taken the trouble to get out the figures, and I find that in 1938 the position was that for every £ sterling that the wine farmer obtained, the State obtained £3 10s. That was also the position in 1939, and thus it remained until 1940, but in 1941 the Minister came with increased taxation and enabled the State to get still more. For every £ the farmer received, the State in 1941 got £4 10s.; in 1942 that State again got £4 10s. for every £ which the farmer got. But what is the position going to be in 1943, after the new taxation is imposed? If the consumption of brandy remains the same as last year then for every £ that the farmer will receive, the State will receive £7. But the Minister expects the consumption to increase, and he estimates therefore that he will get £1,400,000 additional as a result of the new taxation and the increased consumption. In other words, the amount that the State will receive as against the farmer, will be more than seven times as much. Yesterday afternoon the Minister of Finance gave three reasons why he considered the taxation justified. The first reason is that the consumer pays the tax. If we accept that it is the consumer who pays the tax—and we want to admit that this is so—then in any case it falls back upon the industry. Those people who will have to pay more in taxation will ultimately drink less of the commodity, or will not drink it at all. If the Minister wants to pursue his argument consistently, that it is after all the consumer who pays, then he will be able to tax still more and the surplus will become still greater and ultimately the wine farmer will be destroyed. As a result of the increase in price, the commodity will no longer be consumed, and the surplus will become so big that it cannot be controlled. It will become 60 per cent., 70 per cent., and 80 per cent., and the position will get out of hand. In spite of the fact that the consumers will pay, it will ultimately be the industry which will go under in consequence of the taxation, and which will have to suffer the loss. The second reason which the Minister gave to justify the taxation, was that there was decreased competition. That is a temporary circumstance. Importation has become almost impossible, but if the circumstances change again, and the presently decreased competition increases again, and the taxation remains, then the whole argument will fall away. In the third place the Minister said that there is increase in consumption at present. What proof have we today that after the new taxation is imposed the consumption will increase. That is what the Minister anticipates, as appears from the amount which he expects to receive. We are only at the beginning of the year, and it is possible that the increase in consumption will not occur. Then his argument will fall away. I really think that this taxation on spirits is becoming a little too bad, or does the Minister want the industry to be eradicated? Is it the policy of the Minister to make the people who today make a living in the wine industry a burden on the State? Were it not for the directors of the K.W.V. there would have been not 300 or 400 wine farmers on the doorstep of Parliament today but 3,000 or 4,000, and then the Minister would have found himself in the same difficulty in which Mr. John X. Merriman was at that time.

I would be neglecting my duty towards those who have sent me here if I did not associate myself with the protest that has been lodged against the increase of the tax. If there is one section of the community who had to find their way themselves and who have had little assistance from the Government, then it is the wine farmers, and now the wine farmers are being singled out to form an ever-greater taxation source for the Government. Is it sound to tax a commodity by seven times the value that the producer receives? You can kill any industry in that way. Now the Minister says that it is the consumer who pays. This tax is unfair towards the wine farmer and the consumer. It is unfair towards the wine farmer and to the man who wants to take his drink. They are being singled out for heavy taxation. If the Minister wants prohibition let him say it straight out. We know his feeling. We know that he can easily do without liquor. But because he feels like that, other people must now be compelled to feel the same. There are many other things in respect of which the Minister is not like ordinary people. Let him be human. Why should he force his peculiar customs on other people? If we go back very far, who was it who acted strongly against the excise tax on our liquor? Who fought for our wine farmers? I am sorry to say that the Minister is a descendant of Onze Jan, who at that time fought for the wine farmers, while the present Minister is today doing the opposite. An apple sometimes falls far from the tree. But apart from that the Minister cannot sustain his argument that one can simply go on making the consumer pay more without this reacting on the producer. It is nonsense. I also want to lodge a protest against the tax on tobacco. There again you have a Minister who never smokes a cigarette, and who does not know a pipe. But why does he begrudge it to other people? It is not the rich man whom the Minister is taxing. It is the poor man who smokes his cigarette and his pipe, for the rich man smokes cigars. These two taxes affect the people who can afford them least. In his enthusiasm to assist the British Empire, the Minister imposes those heavy taxes on the poorer section of the population. I can well understand that the Minister should have described these taxation proposals as drastic. The wine farmers and the tobacco farmers will never be able to think favourably of the Minister of Finance.

Something that has struck me in this debate is the calm and cool manner in which members on the other side of the House are allowing the threats of a portion of their electors to be cut, without uttering a single word of protest. I am thinking, for instance, of the hon. member for Carolina (Mr. Fourie) who peeped in now and again and then disappeared again. Apparently he thinks that by sounding the retreat he will perhaps be able to live in order to collect the corpses of the farmers at a later date. There is the hon. member for Potchefstroom (Mr. H. van der Merwe) who also represents tobacco farmers. Why has he remained so quiet?

The Speaker has ruled recently that hon. members can speak for themselves.

I know, but that is precisely what they are not doing. Why does the hon. member not speak for himself? Then there is the hon. member for Rustenburg (Mr. J. M. Conradie). He need not necessarily speak for himself, but he ought to get up and plead for his electors. We see how with a cynical smile they watch their own electors being decapitated. I do not know that it will help to make a last appeal to the Minister to make a last concession, because if half of what we hear is true this will be the Minister’s last chance to make any concession as Minister of Finance. Cannot he be a deathbed repenter? If he repents now, the wine farmers and the tobacco farmers will pay for a mass for his soul. But I want to revert to the arguments which the Minister has used. He has employed two arguments to defend his taxation, and the first is that one must tax an industry which is able to pay. The Minister said that we on this side employed the argument that one should make the mining industry pay rather than the tobacco industry and the wine industry, but, added the Minister, one cannot proceed to place a higher tax on the mine industry because it is a wasting asset. It is disappearing gradually; but that is not the position in respect of tobacco and wine. For that reason the Minister prefers to impose a higher tax on tobacco and wine. That, now, is the argument of the Minister.

That is your interpretation of what I said.

The Minister said that the mining industry is a waning industry. That is his reason for not taxing it higher. What sort of argument is that? That is precisely a reason why the mining industry should be taxed more, for what is the difference between the gold-mining industry and the farming industry in South Africa? In 500 or 1,000 years we shall still have wine farmers and tobacco farmers, but not the gold mines.

How do you know that?

It is true that if we should have this Government much longer, we may perhaps not have any wine farmers or tobacco farmers, but the mining industry is a wasting asset. What sort of an asset is that? The gold that is being taken out of the ground will not make South Africa richer but poorer, while every pound of tobacco that is produced and every leaguer of wine that is produced, makes our country richer. That is the difference. The gold-mining industry is busy living on the capital of the land because it is also using the capital that is under the surface. For that reason fresh taxation should be imposed on the industry which uses up its capital, and not on other industries. It is precisely the opposite of what the Minister said, for the exact reason that the gold mines are a wasting asset, and because they batten on their capital they should be taxed, and not the other industries. If the gold mines cease to exist, South Africa will be in a very difficult financial position, and it will take a good deal of time before we can adapt ourselves to the dislocations that will be caused thereby. For that reason we say that you can tax the waning asset which is busy using up your capital, but other industries of a permanent nature must be made financially strong, so that when the gold mines are exhausted the other industries can take their places to prevent the economic dislocation that you will otherwise get from becoming too great. But what does the Minister do? He protects the people who live on our capital, and he crushes permanent industries to death, industries that will still be there when the gold mines have ceased to exist. That is an illogical standpoint. The Minister should do precisely the reverse. Now the Minister says that it is not the wine farmers and the tobacco farmers who pay the tax, but that the tax is borne by the consumers. The hon. members for Paarl (Mr. Hugo) and Malmesbury (Mr. Loubser) have nullified that argument to a large extent. There is just one aspect on which I want to say something. The Minister says that it is the consumer who pays. Very well, he pays the tax, but it has a reaction on the farmers. You give the wine farmer a bump in front, and the bump is transmitted to the manufacturer, and then rebounds to the farmer, who has to act as the buffer of the impact. I said here yesterday that for wine for which the farmer gets 5s., the State gets 25s. in taxation. I calculated this hurriedly and wanted to remain on the conservative side, but the actual figures have now been given by the hon. member for Gordonia (Mr. J. H. Conradie). I have gone into his figures and it appears that for every 5s. that the wine farmer receives, the State takes 31s. 9d. in taxation. In other words, you have the position that if a farmer sells enough wine to make 20 leaguers of brandy, then the buyer has to pay £3,675. How much of that £3,675 does the farmer receive? The farmer receives £500, and the Minister gets £3,175. The Minister says that it is the consumer who pays. Very well, but there you have the position that the buyer who makes brandy must pay £3,675, but the farmer receives only £500 and the rest has to be paid in excise. For that reason the buyer cannot pay the farmer a higher price. If the taxation was less, the farmer could demand a higher price for his product. The buyer says today: Yes, I can only pay you £500, because I have to pay £3,175 in excise for that wine. In this way the farmer suffers, even though the consumer pays. Surely it is time for the State to stop using the wine farmer and the tobacco farmer as milch cows. There sits the hon. member for Rustenburg. Is he satisfied with the tobacco tax? Are his farmers satisfied? Thousands of his farmers are tobacco farmers.

It is not they who pay, but the consumers.

Ask the tobacco farmers if they are satisfied with the tax.

They are. They do not pay, but the consumers pay the tax.

It must be peculiar people who are satisfied with that tax. Let the hon. member for Rustenburg say if his tobacco co-operative, which is the biggest and finest in the country, is satisfied with the extra £1,300,000 that is now imposed on tobacco. I see the hon. member is already sitting with his hands before his face in shame.

I do not rise because I have been challenged by the hon. member for Humansdorp (Mr. Sauer). In connection with his remark about me, I think that if the hon. member would hold his hands before his face he would look much better. So far as the tobacco farmers of Rustenburg are concerned, they have received everything for which they asked. They got the price they proposed to the extent of 100 per cent. The hon. member for Humansdorp says that I shall be afraid to vote for this tax and to express approval of it. Let me tell the hon. member that this money is being voted to win the war. The tobacco farmers are anxious not so much about the tobacco as about the land which they want to retain, and for which they have paid such high prices, and which they would have lost if there had been a German victory, for which the hon. member pleaded only two years ago. The tobacco farmers have received 100 per cent. of what they asked, and they will be satisfied. The hon. member refers to our co-operative as the finest in the country. This proves that the Government has cared for the tobacco farmers and that this has enabled them to build up this fine co-operative. The Government will continue to bear them in mind in the future.

A great deal has been said about the excise on brandy, but I must also protest to the Minister of Finance in respect of the unprecedented increase of the excise duty. The hon. member for Humansdorp (Mr. Sauer) has told us what the farmer receives for his wine and what the tax on brandy is. I want to put it thus: If you distill five leaguers of wine the farmer today gets £25, but the Minister, under the increased excise, gets £185 10s., more than six times as much; and if the poor farmer deducts the production costs then he does not get £5 per leaguer, but only £2 10s. or £2, because the production costs today are exceptionally high. Now the Minister comes and says that this is a fair tax, because the consumer pays it. The consumer pays in the first instance, but it reacts on the farmer. The Minister forgets that the wine farmers are doing all in their power to put an end to over-production. They have permitted the adoption of a law to restrict the farmers. They may not plant more vineyards, and they may not produce more than they have produced hitherto, in order to prevent their downfall. The wine farmer is doing his best to keep his head above water and to save himself. We had a big export market for table grapes. Export is at a standstill, and the internal market cannot absorb all the grapes. Now the Government gives a subsidy in respect of the grapes, but instead of taking them off the market in another way, the Government also diverts the grapes to the distillery pool for the manufacture of spirits. And then the Minister comes and places a further 10s. per gallon on the farmers in excise. As the hon. member for Humansdorp said, the mining industry is a wasting industry, and it will have disappeared when the wine farmers will still be there. Instead of strengthening and stabilising the wine industry, so that the wine farmers can help to withstand the shock when the gold mining industry disappears, the Minister is busy destroying also the wine industry with his taxes. This is something that is impossible in a country in which such a product must be produced. Apparently the Minister of Finance has become so hardened that he simply takes no notice of representations that are made to him by members on this side of the House who represent wine farmers. I can recall that in the years 1916 or 1917, there was a demonstration of wine farmers here. Mr. Merriman was Minister of Finance at the time. The street in front was packed with wine farmers, and they threatened to storm the Houses of Parliament. The police were collected to assist in stopping them. It would be a very good thing if the wine farmers again made such a demonstration. But this time I do not think that they will permit themselves to be stopped by the police. I think that they will come and fetch the Minister of Finance here and carry him out to put him on the pillars. It will be a good thing if they do this, because this is an impossible thing that is happening now. I see that the hon. member for Rustenburg (Mr. J. M. Conradie) is here. He at least did say something.

I said nothing about wine.

He spoke, and he immediately put his foot in it. He told us what an ultra-loyalist he is, and that in order to win the war he is willing to support any tax on tobacco.

That is not what I said.

He wants to see the war through and he said that he supported the tax. He added that the hon. member for Humansdorp (Mr. Sauer) wants Germany to come here, but that he himself preferred to retain his land. A frightened person is a queer creature; he sees ghosts in broad daylight.

When did you resign as a commandant of the Ossewa-Brandwag?

That has nothing to do with the matter. That is quite apart from this question, and what the hon. member for Rustenburg says here will not detract the attention of the electors from the tax on tobacco. I say that scared people see spooks in broad daylight. These are the people who say that Germany will win the war, and will then come here to take our land.

I think the hon. member should revert to the vote.

I want to say that it is a very foolish person who fears anything like that. This additional tobacco taxation is being imposed on hundreds of tobacco farmers who have to live from hand to mouth, and this increased tax which the consumer must pay will rebound on the tobacco farmers. We deprive the poor people of the little they have to enjoy a little drink now and again, or to smoke a pipe or a cigarette. We know that the Minister of Finance does not do this. He does not know what this means to a person. These people feel that the additional tax presses on them. Now the Minister says that the people can leave it if they do not want to pay the taxation. That will mean that they do not smoke or drink. That will have a reaction on the Government and on the Minister, and I hope the reaction will be so strong that they will actually feel it. I hope it will be so serious that there will be an earnest promise that this increased excise duty will be immediately removed when the war is over, and not only this duty but also other excise taxation. I want to appeal to the Minister that he should remove not only this increase of 10s., but also a great deal more than that 10s.

Question put: That item No. (1), proposed to be omitted, stand part of the motion.

Upon which the Committee divided:

Ayes—62:

Abbott, C. B. M.

Abrahamson, H.

Acutt, F. H.

Alexander, M.

Allen, F. B.

Ballinger, V. M. L.

Bawden, W.

Bell, R. E.

Blackwell, L.

Botha, H. N. W.

Bowker, T. B.

Christopher, R. M.

Clark, C. W.

Collins, W. R.

Conradie, J. M.

Davis, A.

Deane, W. A.

De Wet, H. C.

Dolley, G.

Du Toit, R. J.

Fourie, J. P.

Friedlander, A.

Gluckman, H.

Hayward, G. N.

Hemming, G. K.

Henderson, R. H.

Heyns, G. C. S.

Hirsch, J. G.

Hofmeyr, J. H.

Hooper, E. C.

Howarth, F. T.

Jackson, D.

Johnson, H. A.

Kentridge, M.

Lawrence, H. G.

Lindhorst, B. H.

Madeley, W. B.

Miles-Cadman, C. F.

Molteno, D. B.

Mushet, J. W.

Neate, C.

Payn, A. O. B.

Pocock, P. V.

Quinlan, S. C.

Raubenheimer, L. J.

Robertson, R. B.

Rood, K.

Shearer, V. L.

Solomon, B.

Solomon, V. G. F.

Sonnenberg, M.

Steyn, C. F.

Sturrock, F. C.

Sutter, G. J.

Tothill, H. A.

Trollip, A. E.

Van der Byl, P. V. G.

Van der Merwe, H.

Wallach, I.

Wares, A. P. J.

Warren, C. M.

Tellers: G. A. Friend and W. B. Humphreys.

Noes—34:

Badenhorst, C. C. E.

Bekker, G.

Boltman, F. H.

Booysen, W. A.

Bremer, K.

Conradie, J. H.

Dönges, T. E.

Erasmus, F. C.

Haywood, J. J.

Hugo, P. J.

Le Roux, P. M. K.

Liebenberg, J. L. V.

Loubser, S. M.

Louw, E. H.

Malan, D. F.

Olivier, P. J.

Pieterse, P. W. A.

Schoeman, B. J.

Serfontein, J. J.

Steyn, G. P.

Strauss, E. R.

Strydom, G. H. F.

Strydom, J. G.

Swart, C. R.

Van der Merwe, R. A. T.

Viljoen, D. T. du P.

Viljoen, J. H.

Vosloo, L. J.

Warren, S. E.

Werth, A. J.

Wilkens, Jan.

Wolfaard, G. v. Z.

Ayes—61:

Abbott, C. B. M.

Abrahamson, H.

Acutt, F. H.

Alexander, M.

Allen, F. B.

Ballinger, V. M. L.

Bawden, W.

Bell, R. E.

Blackwell, L.

Botha, H. N. W.

Bowker, T. B.

Christopher, R. M.

Clark, C. W.

Conradie, J. M.

Davis, A.

Deane, W. A.

De Wet, H. C.

Dolley, G.

Du Toit, R. J.

Fourie, J. P.

Friedlander, A.

Hayward, G. N.

Hemming, G. K.

Henderson, R. H.

Heyns, G. C. S.

Hirsch, J. G.

Hofmeyr, J. H.

Hooper, E. C.

Howarth, F. T.

Jackson, D.

Johnson, H. A.

Kentridge, M.

Lawrence, H. G.

Lindhorst, B. H.

Madeley, W. B.

Miles-Cadman, C. F.

Molteno, D. B.

Mushet, J. W.

Neate, C.

Payn, A. O. B.

Pocock, P. V.

Quinlan, S. C.

Raubenheimer, L. J.

Robertson, R. B.

Rood, K.

Shearer, V. L.

Solomon, B.

Solomon, V. G. F.

Sonnenberg, M.

Steyn, C. F.

Sturrock, F. C.

Sutter, G. J.

Tothill, H. A.

Trollip, A. E.

Van der Byl, P. V. G.

Van der Merwe, H.

Wallach, I.

Wares, A, P. J.

Warren, C. M.

Tellers: G. A. Friend and W. B. Humphreys.

Noes—35:

Badenhorst, C. C. E.

Bekker, G.

Boltman, F. H.

Booysen, W. A.

Bremer, K.

Conradie, J. H.

Dönges, T. E.

Erasmus, F. C.

Fullard, G. J.

Haywood, J. J.

Hugo, P. J.

Le Roux, P. M. K.

Liebenberg, J. L. V.

Loubser, S. M.

Louw, E. H.

Malan, D. F.

Olivier, P. J.

Pieterse, P. W. A.

Schoeman, B. J.

Serfontein, J. J.

Steyn, G. P.

Strauss, E. R.

Strydom, G. H. F.

Strydom, J. G.

Swart, C. R.

Van der Merwe, R. A. T.

Viljoen, D. T. du P.

Viljoen, J. H.

Vosloo, L. J.

Warren, S. E.

Werth, A. J.

Wilkens, Jan.

Wolfaard, G. v. Z.

Tellers: J. F. T. Naudé and P. O. Sauer.

Question accordingly affirmed and the second amendment proposed by Mr. Sauer negatived.

Question put: That item No. (4), proposed to be omitted, stand part of the motion.

Tellers: J. F. T. Naudé and P. O. Sauer.

Question accordingly affirmed and the first amendment proposed by Mr. Sauer negatived.

Question put: That item No. (3), proposed to be omitted, stand part of the motion.

Upon which the Committee divided:

Upon which the Committee divided:

Ayes—58:

Abbott, C. B. M.

Abrahamson, H.

Acutt, F. H.

Alexander, M,

Allen, F. B.

Bawden, W.

Bell, R. E.

Blackwell, L.

Botha, H. N. W.

Bowker, T. B.

Christopher, R. M.

Clark, C. W.

Conradie, J. M.

Davis, A.

Deane, W. A.

Derbyshire, J. G.

De Wet, H. C.

Dolley, G.

Du Toit, R. J.

Fourie, J. P.

Friedlander, A.

Gluckman, H.

Hayward, G. N.

Hemming, G. K.

Henderson, R. H.

Heyns, G. C. S.

Hirsch, J. G.

Hofmeyr, J. H.

Hooper, E. C.

Howarth, F. T.

Jackson, D.

Johnson, H. A.

Lawrence, H. G.

Lindhorst, B. H.

Miles-Cadman, C. F.

Molteno, D. B.

Mushet, J. W.

Neate, C.

Payn, A. O. B.

Pocock, P. V.

Quinlan, S. C.

Raubenheimer, L. J.

Robertson, R. B.

Shearer, V. L.

Solomon, B.

Solomon, V. G. F.

Sonnenberg, M.

Sturrock, F. C.

Sutter, G. J.

Tothill, H. A.

Trollip, A. E.

Van der Byl, P. V. G.

Van der Merwe, H.

Wallach, I.

Wares, A. P. J.

Warren, C. M.

Tellers: G. A. Friend and W. B. Humphreys.

Noes—34:

Bekker, G.

Boltman, F. H.

Booysen, W. A.

Bremer, K.

Conradie, J. H.

Dönges, T. E.

Erasmus, F. C.

Fullard, G. J.

Haywood, J. J.

Hugo, P. J.

Le Roux, P. M. K.

Liebenberg, J. L. V.

Loubser, S. M.

Louw, E. H.

Malan, D. F.

Olivier, P. J.

Pieterse, P. W. A.

Schoeman, B. J.

Serfontein, J. J.

Steyn, G. P.

Strauss, E. R.

Strydom, G. H. F.

Strydom, J. G.

Swart, C. R.

Van der Merwe, R. A. T.

Viljoen, D. T. du P.

Viljoen, J. H.

Vosloo, L. J.

Warren, S. E.

Werth, A. J.

Wilkens, Jan

Wolfaard, G. v. Z.

Tellers: J. F. T. Naudé and P. O. Sauer.

Question accordingly affirmed and the remaining amendment proposed by Mr. Sauer negatived.

Question put: That item No. (6), proposed to be omitted, stand part of the motion.

Upon which the Committee divided:

Ayes—58:

Abbott, C. B. M.

Abrahamson, H.

Alexander, M.

Allen, F. B.

Bawden, W.

Bell, R. E.

Blackwell, L.

Botha, H. N. W.

Bowen, R. W.

Bowker, T. B.

Christopher, R. M.

Clark, C. W.

Collins, W. R.

Conradie, J. M.

Davis, A.

Deane, W. A.

Derbyshire, J. G.

De Wet, H. C.

Dolley, G.

Du Toit, R. J.

Fourie, J. P.

Friedlander, A.

Gluckman, H.

Hayward, G. N.

Hemming, G. K.

Henderson, R. H.

Heyns, G. C. S.

Hirsch, J. G.

Hofmeyr, J. H.

Hooper, E. C.

Howarth, F. T.

Jackson, D.

Johnson, H. A.

Kentridge, M.

Lawrence, H. G.

Lindhorst, B. H.

Miles-Cadman, C. F.

Mushet, J. W.

Neate, C.

Payn, A. O. B.

Pocock, P. V.

Quinlan, S. C.

Raubenheimer, L. J.

Robertson, R. B.

Shearer, V. L.

Solomon, B.

Solomon. V. G. F.

Sonnenberg, M.

Sturrock, F. C.

Sutter, G. J.

Tothill, H. A.

Trollip, A. E.

Van der Merwe, H.

Wallach, I.

Wares, A. P. J.

Warren, C. M.

Tellers: G. A. Friend and W. B. Humphreys.

Noes—43:

Badenhorst, C. C. E.

Bekker, G.

Boltman, F. H.

Booysen, W. A.

Bosman, P. J.

Conradie, J. H.

Dönges, T. E.

Du Plessis, P. J.

Erasmus; F. C.

Fullard, G. J.

Haywood, J. J.

Hugo, P. J.

Labuschagne, J. S.

Le Roux, P. M. K.

Liebenberg, J. L. V.

Loubser, S. M.

Louw, E. H.

Malan, D. F.

Naudé, S. W.

Olivier, P. J.

Pieterse, P. W. A.

Schoeman, B. J.

Schoeman, N. J.

Serfontein, J. J.

Steyn, G. P.

Strauss, E. R.

Strydom, G. H. F.

Strydom, J. G.

Swart, A. P.

Swart, C. R.

Van den Berg, C. J.

Van der Merwe,

R. A. T.

Verster, J. D. H.

Viljoen, D. T. du P.

Viljoen, J. H.

Vosloo, L. J.

Warren, S. E.

Wentzel, J. J.

Werth, A. J.

Wilkens, Jan.

Wolfaard, G. v. Z.

Tellers: J. F. T. Naudé and P. O. Sauer.

Question accordingly affirmed and the amendment proposed by Mr. S. E. Warren negatived.

Original motion put and the Committee divided:

Ayes—60:

Abbott, C. B. M.

Abrahamson, H.

Acutt, F. H.

Alexander, M.

Allen, F. B.

Bawden, W.

Bell, R. E.

Blackwell, L.

Botha, H. N. W.

Bowen, R. W.

Bowker, T. B.

Christopher, R. M.

Clark, C. W.

Collins, W. R.

Conradie, J. M.

Davis, A.

Deane, W. A.

Derbyshire, J. G.

De Wet, H. C.

Dolley, G.

Du Toit, R. J.

Fourie, J. P.

Friedlander, A.

Gluckman, H.

Hayward, G. N.

Hemming, G. K.

Henderson, R. H.

Heyns, G. C. S.

Hirsch, J. G.

Hofmeyr, J. H.

Hooper, E. C.

Howarth, F. T.

Jackson, D.

Johnson, H. A.

Kentridge, M.

Lawrence, H. G.

Lindhorst, B. H.

Miles-Cadman, C. F.

Mushet, J. W.

Neate, C.

Payn, A. O. B.

Pocock, P. V.

Quinlan, S. C.

Raubenheimer, L. J.

Robertson, R. B.

Shearer, V. L.

Solomon, B.

Solomon, V. G. F.

Sonnenberg, M.

Stallard, C. F.

Sturrock, F. C.

Sutter G. J.

Tothill, H. A.

Trollip, A. E.

Van der Merwe, H.

Wallach, I.

Wares, A. P. J.

Warren, C. M.

Tellers: G. A. Friend and W. B. Humphreys.

Noes—44:

Badenhorst, C. C. E.

Bekker, G.

Boltman, F. H.

Booysen, W. A.

Bosman, P. J.

Conradie, J. H.

Dönges, T. E.

Du Plessis, P. J.

Erasmus, F. C.

Fullard, G. J.

Haywood, J. J.

Hugo, P. J.

Labuschagne, J. S.

Le Roux, P. M. K.

Liebenberg, J. L. V.

Loubser, S. M.

Louw, E. H.

Malan, D. F.

Naudé, S. W.

Olivier, P. J.

Pieterse, P. W. A.

Schoeman, B. J.

Schoeman, N. J.

Serfontein, J. J.

Steyn, G. P.

Strauss, E. R.

Strydom, G. H. F.

Strydom, J. G.

Swart, A. P.

Swart, C. R.

Van den Berg, C. J.

Van der Merwe, R. A. T.

Venter, J. A. P.

Verster, J. D. H.

Viljoen, D. T. du P.

Viljoen, J. H.

Vosloo, L. J.

Warren, S. E.

Wentzel, J. J.

Werth, A. J.

Wilkens, Jan.

Wolfaard, G. v. Z.

Tellers: J. F. T. Naudé and P. O. Sauer.

Motion accordingly agreed to.

Customs Duties.

I move—

1. (2) That the customs duties on the articles as set forth hereunder be increased to the extent shown.

Agreed to.

I move—

Agreed to.

House Resumed:

The CHAIRMAN reported the resolutions on income tax, non-resident shareholders’ tax, gold mines special contribution, diamond mines special contribution, excess profits duty, personal and savings fund levy, railway passengers tax and excise and customs duties and the amendment of the Law Resolution.

Report considered and the resolutions adopted.

Mr. SPEAKER appointed the Minister of Finance and the Chairman of Committees a Committee to bring up the necessary Bill or Bills to give effect to the resolutions now adopted.

The MINISTER OF FINANCE brought up the Report of the Committee, submitting five Bills.

I move—

It has almost become customary to amend the Land Bank Act annually. I hope that it will be necessary next year to introduce a consolidating Bill. In the meantime, however, there are a few provisions in the existing Act that must receive attention, and we propose in this Bill to bring about amendments in connection with four matters. The four matters are not mutually dependent. Each stands on its own feet. The first deals with the maximum advance which the Land Bank may grant. At present the maximum is 60 per cent. of the value of the fixed property on which the advance is made. We propose to increase the 60 per cent. to two-thirds. The position in other countries is that the tendency has always been to let the percentage of the maximum advance rise in accordance with the development of the country, and after I had gone into the position in other countries, I felt that the time had come that we must also allow our percentage to rise from 60 to 66⅔ per cent. The experience of the Land Bank in 1912 in respect of advances on the 60 per cent. basis has been exceptionally favourable, and I think that we can safely increase the maximum percentage to 66⅔ per cent. This will enable the Land Bank Board to issue loans that are at present forbidden in terms of the legal provision in respect of the valuation of land. The second clause deals with the method of land valuation. Its object is to enable other persons to be employed as valuators in certain circumstances. The fact that we must today always use valuators sometimes causes considerable procrastination, and in order to save time and expense it is proposed that the Land Bank should also be given the opportunity of using other persons, particularly the advisors who are appointed. The third clause seeks to empower the Land Bank to invest a part of its reserve funds in a more liquid way than is the case today. The Land Bank at present has available a reserve fund amounting to £1,500,000, and the only purpose for which they can use the funds is for the purpose for which the bank has been created. This means in practice that the money can be used only for ordinary Land Bank loans. I think it is desirable that a portion of the funds may be invested on a more liquid basis, and that is also the desire of the Land Bank Board. This amendment will place them in a position to do so.

How can they invest then?

As it is set out here—“In Government or Municipal stock or securities or in any other stock or securities approved by the Board.” This will enable the Board to keep a portion of the reserve fund more liquid than is the case today. The last clause deals with the money that the Board may receive on deposit. At the moment there is a limitation in connection with money that is received on deposit to one month. This has a handicapping effect on the bank, particularly as regards short term loans issued by the bank. It suits co-operative societies, for instance, to invest their money with the bank. But the restriction to one month has a handicapping effect. The adoption of this proposal will have as a result that the bank will be able to take such money on call and it is then not restricted to one month. I think that all the proposals are reasonable and desirable in the interests of the bank and of the clients of the bank, and I hope the House will adopt the amendments as such.

The provisions of this Bill seem quite fair on the surface, and where the Minister comes and increases the percentage of the bonds that may be issued on the valuation of the property to 66⅔ per cent. we naturally welcome the proposal. We would like to have a greater percentage.

Perhaps that will come later.

I hope that the “later” will not remain away too long. While this matter is under discussion, I want to draw the attention of the Minister to what happens when farms are valued and advances have to be given. It has been brought to my notice by a responsible person in the Land Bank that when the valuator goes out to a certain district then the valuation is not higher than a certain limit. On the strength of that the advance is given. Let me give an example. In my constituency there is, for instance, the district Venterstad. There the valuations are no higher than £2 10s.—I do not know precisely what the figure is, but I mention it as an instance. Now I have had experience that where valuators go out they do not in any sense take into consideration the improvements that, have been brought about. Thus I have calculated in my own simplicity that the advance that they ultimately make is just as much as the improvements that have been brought about, or even less. In other words, the value of the land does not come into consideration. The Minister will understand that the production potentialities of a farm depend a good deal on the improvements that have been made. If a man has improved a farm he is better able to produce. Now I would like the Land Bank to set to work on a strictly economic basis. If a man’s farm is unimproved then he is surely not in the same position as the farmer who has developed his farm by means of fencing and dams, by cultivating lands to produce lucerne, etc. The farm is in a better position than the unimproved one. I hope that where the percentage is now being increased the improvements will also be taken into consideration. So far as the increase of the percentage is concerned, I hope that there is nothing lurking behind it.

No.

I shall explain why I am expressing this hope. I have before me a statement from the State Advances Recoveries Office, and in that there appears a sum of £2,392 that was taken over by the Land Bank from State Advances. Now I am told that the Section 20 Land Bank loans, which automatically go over to state advances, are transferred as soon as the advance is more than 60 per cent. But now I see that a large amount of the money is again repaid, again transferred to the Land Bank as soon as the bond is reduced below 60 per cent. Is that so? Now the advances are increased to 66⅔ per cent., and it is self-evident that it can be expected that more will now be transferred from state advances to the Land Bank. As soon as the bond is transferred to the Land Bank from State Advances, a serious factor enters, and that is that no suspension of a portion of the bond on the farm can take place. In other words, the farmer is no longer in the favourable position in which he was when his bond was with State Advances. There is no longer any suspension. With state advances there can be a suspension of two years to give the farmer an opportunity to gain his breath a bit, but as soon as the bond is back with the Land Bank this cannot happen. During the past eighteen months there has been a disquieting procedure, that bonds are transferred to the Land Bank and then the farmers must pay, they must meet their commitments. For that reason I hope that it is not the intention of this increase of the percentage to 66⅔ per cent. to transfer more bonds to the Land Bank, and then to force farmers who are in a difficult position to meet their commitments immediately. At a later stage I shall speak about state advances. But I hope that this proposal has nothing to do with that phenomenon which I have mentioned, because it is not in the interests of our farmers. Then the Minister spoke about the reserve fund that can now be invested in another way. I want to reserve my criticism on that to some extent. I hope the Land Bank will not become an ordinary commercial bank, but that the Land Bank will remain a Land Bank representing only the interests of farmers. I would like to know if this is also a temporary measure or a permanent measure. I hope it has nothing to do with seeing the war through, that it is not a measure to enable the Land Bank temporarily to advance money for war purposes that should have been used for agricultural purposes. I hope the Minister will give a reassuring statement on those points.

Section 1 of this Bill increasing the percentage from 60 per cent. to two-thirds is not only welcome but I feel very much overdue. Personally I would urge upon the Minister to make that percentage at least three-fourths, that is 75 per cent. The reason for that is that the Land Bank only makes advances against the fair agricultural and pastoral value of the land. They do not make advances against the actual value of the property with all the improvements, and as a result considerable hardships have been suffered in the past, particularly where bonds are called up, and it is in this connection that I would like to ask the Minister to make it the policy of the bank that even this two-thirds or three-fourths as I have urged will not be adhered to too rigidly where bonds are called up. For instance, a farmer’s property may be valued at say £4,000 by the ordinary appraiser, not the Land Bank valuator. He can go to any commercial firm and he can get 60 per cent. of that value, namely £2,400.

He can get more.

Yes, he may even get more. Now for some reason or other that bond is called up. He approaches the Land Bank, but the Land Bank valuation is confined only to the fair agricultural and pastoral value with the result that the value is only placed at £3,000. So the Land Bank only offers the farmer £1,800 wherewith to pay back a bond of £2,400. The offer, of course, is useless. The farmer is stuck, he cannot raise the balance between £1,800 and £2,400 with the result that he stands in jeopardy of losing his property. I submit that in cases like that where a bond is called up the Minister should be prepared to give the Land Bank definite instructions telling them that they will be entitled to advance up to 80 per cent. or even 100 per cent. of the fair agricultural and pastoral value of that property in order to enable that farmer to retain his property.

Why not the market value?

Well, the Land Bank is bound by the fair agricultural and pastoral value, and I submit very strongly that the position as it is today is not fair.

The Land Bank after all has been established with the object of giving assistance to the farming community and I say that with the exception of people who want to raise only smaller bonds, the Land Bank is not assisting the man very often who deserves that assistance most and is really entitled to it. I think if the Minister would accept my suggestion and in the special circumstances which I have mentioned authorise the Land Bank to go further than it is allowed to go even under this Bill he would render a service to the country as a whole. I sincerely trust he will do that. I have a instance in mind where a bond was called up recently. The Land Bank valuator’s valuation amounted to slightly over £3,000 and the Land Bank offered that farmer £1,000. On what grounds? It was absolutely wrong and bad judgment, I submit. I should like to know for what reason a man whose fair agricultural and pastoral value of his farm was over £3,000 should be offered only £1,000 by the Land Bank. It is in cases like that where bonds are called up and when the farmer stands the risk of losing his property that the Land Bank should not be hidebound by any law, but should have the right to go to the full agricultural and pastoral value of the property. In conclusion I would like to stress that the Minister should be guided by and accept the advice of Members who know what they are talking about.

I welcome this Bill, but I would like to know from the Minister whether farmers who already have bonds from the Land Bank will be able to get increased bonds, whether they will be able to move up their bonds to 66⅔ per cent.

Certainly.

Then I would like to ask if the farmers’ assistance bonds cannot be taken over by the Land Bank before the £1,500,000 is lent out to someone else. Under the Farmers’ Assistance Act they only got loans for five years, but under the Land Bank they may perhaps receive loans for twenty years. Cannot the Land Bank take over the farmers’ assistance loans to the extent of two-thirds? That will help the farmers considerably. The five year restriction now hangs like a sword above the heads of the farmers who have farmers’ assistance loans, while the Land Bank grants loans repayable over twenty or thirty years. I want to ask, furthermore if the Minister cannot establish a branch office of the Land Bank at Kroonstad. The whole North-Western Free State has to go to Bloemfontein, very often for minor matters. Sometimes the matter is worth less than the expenses to Bloemfontein. The Minister can easily find offices in Kroonstad if he does not want to have a big building erected. Then still one more point, and that is in respect of undivided land. There are perhaps one or two children of age, but it is undivided land. Cannot they also get a bond even though it is not as big as in other cases?

I also welcome these amendments incorporated in the Bill, and we can understand that the Land Bank should be very desirous of lending money to the farmers. It is after all the bank for the farmers. But my objection is that even the increase from 60 to 66⅔ per cent. will not avail much if the Land Bank’s valuations remain as conservative as heretofore. I know of a case where a person bought a farm at a stipulated price, and it was explained to the Land Bank that the Divisional Council’s valuation was made in 1919. Since that time there was no other valuation, and the Land Bank put the valuation virtually at the same price that was originally paid for the farm. There were no improvements. It was practically the value of the virgin land. The Land Bank fixes its own valuation. It has valuators, and its valuations are revised in the Land Bank office. The result is that the people cannot come out on the money that they receive from the Land Bank and have to go to private institutions. I readily agree that if land is worth £3,000 a person cannot expect to get £3,000 or £3,500 on it. The Land Bank is a business institution and it cannot do anything like that. But I think that the Land Bank should not simply put the valuation at the valuation of the local body. The valuations must be reasonable. We also know that the valuations are sometimes much lower than those of the local bodies. I hope the Minister will see his way clear to meet us in this respect. He said that he would think about whether he will not be able next year to increase the advance to 75 per cent. Why cannot he now determine that the Land Bank can go to 75 per cent. on a reasonable valuation? If he does not do this then we cannot blame our farmers if they go to private institutions. This Bill is a step in the right direction, but I hope the Minister will see his way clear to increase the percentage, and that the Land Bank will be more reasonable in its valuations.

I would like to avail myself of this opportunity to thank the Minister of Finance for this improvement of the Land Bank Act in the first place. I feel the same, however, as other hon. members who raised objections to the effect that this concession is not adequate. We know that under Section 20 the Land Bank is exempted in cases where they advance more than 60 per cent. of the valuation. They can go to 100 per cent., but then the difference must be covered by the State Advances Recoveries Office. This affects only bonds that were registered before 1 June, 1935. But bonds contracted after that date do not enjoy that protection. During the past ten years there has been an enormous increase in the value of land. We do not say that the Land Bank should depart completely from its conservative policy in making valuations, or that the valuation must be made in conformity with the high price of land which prevails today. But we do think that the Land Bank can increase its valuations in safety. They are very conservative, and the experience of the hon. member for Fort Beaufort (Mr. V. G. F. Solomon) is also the experience of other legal practitioners. We know that in many cases the Land Bank valuations are altogether too low when the ruling prices are taken into consideration. We know that the manner in which the Land Bank runs its business is praiseworthy. The administrative costs are fairly low, and the outstanding instalments are low in comparison with the capital investment. We also know that the reserve funds of the Land Bank run to a considerable amount, and we are also thankful that the Land Bank has never had any reason to suffer any considerable loss. We therefore feel that in view of the experience of the Land Bank in the past 31 years that we have the right to ask that when a farmer’s bond is called up, and he cannot perhaps come through with the 66⅔ per cent. valuation, that the Land Bank should intervene to assist him, in view of the experience of the Land Bank in the past. Of late years it was practically only the Land Bank which gave farm bonds. The commercial banks do not apply themselves to that business. Nor can we blame the farmers for seeking refuge in the Land Bank, for the Land Bank was created for that purpose. The commercial banks, however, are now beginning to pay attention to farm bonds because money is plentiful. Therein lies the danger today. Money will not always remain plentiful, and when the aftermath comes, and when the commercial banks restrict facilities and take steps, then we must be in a position to help those farmers, because the commercial banks do not restrict their loans only to 66⅔ per cent. of the Land Bank valuation of the land. Their valuations are higher than the Land Bank valuations. We therefore hope that the Minister will be able to meet us in this respect, and that he will enable the Land Bank not only to make advances of 66⅔ per cent. but that the bank will also be able to go further in exceptional cases, and that he will meet us further so that where the valuations are conservative the Land Bank will definitely keep account of the rise in land values. If he does this, then we feel that he will be doing the farming industry a great favour.

I want to support this Bill somewhat half-heartedly. I want to say why I do not support it whole-heartedly. I do not think that 66⅔ per cent. is nearly enough. It is an increase of 6½ per cent., and this is not nearly enough to assist the farmer effectively. We also find that the valuations of the Land Bank are today approximately 10 per cent. lower than the valuations of its valuators. This consequently means only 50 per cent. in many cases and we find that after representations’ are made the farmer perhaps gets a little more. I want to point out furthermore that these valuations are not made uniformly, and if we go into the valuations then an advance of 60 per cent. on those valuations is very low. We find that land with precisely the same carrying capacity is valued at £3 per morgen by one valuator, while by another valuator it is valued at £4, and we would like to have greater uniformity in the valuation. There is plenty of money at present and the Land Bank has a lot of money because private moneylenders give money on such conditions that farmers are paying off their Land Bank debts with the money they borrow from private money-lenders. I have explained this previously to the Minister, when he said here that the farmers are paying off their debts. It often happens that the farmer who cannot get an advance of more than 60 per cent., obtains money from a private money-lender at a cheaper rate than he could get it from the Land Bank, and then he repays his loan to the Land Bank. Where that is the case, I think that the Land Bank should extend its loans to 75 per cent. of the valuation. Then I also think that the rate of interest can be brought down. The Land Bank advances money at 4½ per cent., and there are private moneylenders who give it even at 4 per cent. As regards the valuators, I want to say that it will be a very good thing if the Minister takes steps to ensure uniformity. There is no uniformity at present, and that is a great shortcoming. Then there is another little point that bothers me a little in this Bill, and that is the reserve fund of £1,500,000 that is now affected. I do not know why this should be done. I think the reserve fund should remain there. Perhaps we might later want to expand to what is called chattel mortgages, and then we shall need the money, and I cannot see why that £1,500,000 should now be touched. It causes me a little anxiety. We are going to have difficult times. Ere long the Land Bank may not have money to advance, and then it will have to use its reserve fund. If difficult times come, that would be precisely the time when the farmers will require bonds from the Land Bank, and then we shall again have the old argument that the Land Bank has not sufficient money. I feel that that reserve fund should not be touched, for difficult times will come when we shall need that fund. I feel further, in view of the fact that private capital is plentiful, and that bonds are being taken over by private moneylenders, that the Minister should enable the Land Bank to compete with them. The Minister has now a very big chance to take the farming community under his protection. If difficulties arise in the future the private bond-holders will call up the bonds, and the farmers will be made insolvent. We would like to have long-term credit for the farmers, and the Land Bank can give it. We know how private money-lenders have ruined the farmers, and I feel that the Minister should compel those people to lend the money over terms of five years or ten years. That would give considerably more protection to the farmers.

In general I welcome the change proposed in this Bill. I think however that the Bill does not go far enough. I would like to support hon. members who have said here that the Land Bank Board ought to have the right to advance loans up to 75 per cent. of the valuation, especially in view of the fact that the improvements on such a farm are sometimes not taken into account by the appraisers, and in view of the fact that we know that the Land Bank is very conservative in its valuations. The Bank does not take a great risk, and if the act can be changed in such a way that loans can be granted up to 75 per cent. of the valuations, it will be a very good thing. There are occasions where the Land Bank buys back farms. But we also know that those farms are placed on the market by the Land Bank and in most cases the farms are sold at a profit. In general I think that the Bank has no reason to complain about the amount which it must advance by way of loans. It has suffered practically no losses. I want to go further and submit that where the Bank makes a profit on a farm in the way I have explained, the profit ought to be repaid to the previous owner. The farm is perhaps taken over for debt to the bank and the farm is then sold at a profit by the bank. I should think that interest should be calculated up to the date when the farm is resold and the profit should be paid to the former mortgagee. The Land Bank has no intention of making a profit out of a farmer in this way and I think that it is a matter which the Minister should seriously consider, whether in the future, when such a farm is bought and the farm is later resold, interest shall be calculated up to the date when the farm is resold. And if there is a profit it can be given back to the former mortgagee. Then I come to the question of interest. Money is cheap and in the present circumstances the Land Bank in my opinion can reduce the interest. The hon. member for Cradock (Mr. G. Bekker) has spoken of 4 per cent. Even that is too high. We can get money today from private people at the same rate of interest, and as the Land Bank is there to assist the farmer, I think the Land Bank ought to reduce the interest rate to 3½ per cent. As a result of the interest subsidy, some people still get 1½ per cent. subsidy. The Land Bank rate of interest is 4½ per cent. and I would like to know from the Minister whether it is not possible to reduce the rate of interest to 3½ per cent. In connection with the proposal that application forms must be sent direct to a representative of the Bank in the area where the applicant resides, I want to ask whether it is not possible to expedite the matter further by instead of sending applications to the magistrate, to find out what the character of the applicant is, they should be sent direct to a responsible person like a Justice of Peace in the neighbourhood of the applicant. If anyone applies in the district of Pretoria, then that application first goes to the magistrate. The magistrate sends it to the Commandant of the Police in the district and the Commandant of the Police then sends it to the Police post in the neighbourhood of the applicant. They usually take time to return the particulars and then it again goes to the Commandant of the Police, and from him to the magistrate and from the magistrate to the Land Bank. After a month or six weeks and sometimes it takes still longer, it arrives at the Land Bank. I would like to see the Minister meet the farmer by eliminating that delay.

I am very grateful for the good work which the Land Bank has done. There cannot be the slightest doubt, when times were bad, the Land Bank met the farmers and assisted them. My obection is that the Land Bank has too many rules and that it works too digressively. When the Bank comes into competition with other institutions, with Boards of Executors, etc., which advance money, then it must lose every time becaue it has so many rules. There are hon. members here who have spoken about the valuations. They ask that the Land Bank should lay down certain rules in connection with the valuation and that they should keep to them. As regards the valuation of land, this is quite impossible. Our experience is that land is perhaps equally good, but it has a different market value. The one piece is perhaps remote or there is some other difficulty connected with it. Their valuation is the opinion of a person and we cannot lay down rules for this. If a person has experience and he has an idea of what the land will yield, then he is in a position to give a valuation. As far as I personally am concerned, I must admit that I have never yet had difficulty with the Land Bank Board. We have differed already about valuations, but further I have not yet had difficulty, But if we restrict the Land Bank too much with all kinds of rules, then this will be the reason why it cannot compete. There have been times when money has been scarce, and when the Land Bank has been a great assistance. I personally welcome the change that the Land Bank can now advance money up to a higher percentage of the valuation. I only hope that the opinion of local people about valuation will be taken into consideration. The Land Bank has appointed people in the districts and I think that the opinion of those people should be taken into account. They have selected people with common sense and experience, and the valuations of those people should be accepted. I understand that the plan now is that officials of the Bank must do this. Much depends on valuations. If a valuation is too low, then it is of no use increasing the percentage. I also want to tell the Minister that people are today repaying mortgage bonds because they can get money from the Boards and other persons at better terms as regards interest and repayment. The Land Bank cannot compete. The Land Bank is a business undertaking and I do not expect it to advance 100 per cent. of the value of land. That is not business. There is always a danger that the value of land can decrease. On the other hand we know that the Land Bank so far has lost very little, and there are cases where they have made a profit after they had bought back a farm. Matters have been arranged very conservatively in the past and in a sense it was a good thing. But a person must not be too conservative. You must look at the circumstances and where they have local people, who are trusted by them, they should accept the opinion of those people. I have not yet had difficulty, but other people have complained. I welcome the fact that the Minister has said that next year he will introduce a new measure to consolidate the various Acts. When we look at this statute then we see that there is hardly a page on which there is not a amendment. It is time that they should introduce a consolidating measure, a measure which is practicable and which will assist the farmers where they require assistance, and which will alo give extended powers to the Land Bank. My ideal of the Land Bank is that it should become a farmer’s bank, not merely an institution to lend money on first mortgage, but it should be able to advance money to a farmer on his crops. Today we have many co-operatives and control boards. Prices are fixed under the control board system. Before we have had the position that the shopkeeper financed the poor farmer, because at the end of the year he handled the farmer’s crop. He was therefore certain that he would get his money and he also still had the opportunity to make a profit on the crop. This practice is disappearing day by day, because we have the co-operatives who insist that the produce should be delivered to them, and under the control board system certain persons are appointed to receive the produce. Consequently the shop-keeper says that he can no longer finance the farmer, and we cannot take him amiss. I think that it is a step in the right direction to deal through control boards and through co-operative associations. But I also feel that we cannot expect the business people to carry the poor farmer through the whole of the year. Consequently there must be a body which will be able to assist the poor farmer to bring his harvest through. Provision must be made for this. If the Land Bank can do so, then it would be best. If the Land Bank cannot do it, then the farmer should be given the opportunity to substitute his crop. When we deal with this legislation next year, then we must give serious attention to the idea of “chattel mortgages”. There are facilities today for co-operative associations. They have the right to do something in this direction. We have it in European countries, also in Canada, the United States and Australia, and I think it is something which we should also introduce here. Under our legal system, a crop cannot be pledged, because we cannot place the crop in the possession of the money-lenders. We can however consider a system of registration and advertising so that the world can know that a certain crop has been pledged. Serious consideration should be given to this matter. Our farming is being expanded more and more in cooperative societies. When we break economic laws and when rich people stand together to do so, then it is necessary for us to have control boards. The law of supply and demand has in my opinion collapsed. It no longer exists. All kinds of trusts and companies have been formed to kill those things. Take the fruit market and the vegetable market here in Cape Town. If there were 500 hawkers who bought there, then they would compete with one another and the farmer would get his right. But this is not done. One man buys for the 500. He buys for all and as long as we have this state of affairs it is necessary to have control boards. If the control boards must remain then it is necessary for us to find another way in which the small farmer who lives from hand to mouth can be assisted through the year. I say this because I was glad to learn from the Minister that he is going to introduce legislation next year to deal with this matter. I have said that the 60 per cent. is now being raised to 66⅔ per cent., but this is still not sufficient. It should be 75 per cent. There has not been the fall in the value of farm properties as there has been in urban properties. Consequently a greater portion of the valuation is advanced. In the cities there are building societies which assist people to get houses and they deal in small sums. As regards the platteland, we have to do with big sums. I hesitate to take these valuations out of the hands of the persons who have been appointed, but on the other hand I feel that the Land Bank should be able to do so if they find that it is necessary. It may also be that where the Land Bank has offices there will be people who are able to judge. At the moment the position is that the magistrate reports on a person, but he has also to make inquiries in the area. He does not know all the people and he must receive advice from other people. Then we come to the item in connection with the investment of securities. The last part of the clause is that the Land Bank will be allowed to take money, but not for less than a month. That change is necessary. The Land Bank is prepared to take money from co-operative societies where they have money on reserve and in this way they can possibly reduce the obligations of the Government. But what I cannot altogether agree with, is that the reserves instead of being invested in mortgage bonds, must now be invested in bonds. Here is a reserve of £1½ million and instead of making it available for investment in farm mortgage bonds, which was the idea when the Act was passed, because the object was to assist the farmer with money, we find that that idea is now being changed and the reserve fund can be invested in Government bonds, in municipal bonds or obligations or any bonds or obligations of which they approve. This means anything. If gives the right to invest money against any security and I think that this is going far. I think that the Minister should seriously consider the question of whether it is essential that this money be invested in Government bonds or municipal loans. I do not think it agrees with the original intention of the Act. The intention was to give loans to farmers. I see that they are piling up money, but can it not be arranged with the Government or the Reserve Bank that if they have reserve funds it can be invested somewhere where it is always liquid, so that they can get it when they need it? We do not know what is going to happen after the war, whether the value of money is perhaps going to fall, or what conditions are going to arise. Perhaps they can lose by investing the money in Government bonds or municipal loans. Can no other plan be made? Everyone expects that there will be a change in the sphere of money matters in the world, and is this not now a good time to invest money in another way? If it must be done, we cannot wait until after the war to see first what the monetary position is going to be. In a few years’ time we will perhaps be better able to judge what the position is going to be and then if necessary introduce such a Bill. While the Minister is promising to introduce consolidating legislation next year, it appears to me that in any case the matter can stand over until next year.

I also want to welcome the Bill partly. There is a part of it with which I cannot agree, and in respect of which in the committee stage we will move amendments, which I hope the Minister will seriously consider. We have been urging for a number of years already from this side that the Minister should depart from the conservative limit of making advances up to 60 per cent. Even 66⅔ per cent. which the Minister is now proposing is conservative and the hon. member for Fort Beaufort (Mr. V. G. F. Solomon) has also advocated that it should be increased. I hope that it will be increased to 75 per cent.

It can be done as a matter of policy.

If the Act fixes it at 66⅔ per cent. then policy cannot change it. At the moment the position it that many farmers go to private places to get money. Money is now being offered at 4 per cent. but the danger is that if rates of interest rise the money-lenders will demand repayment. Therefore I feel strongly that the Minister should not encourage the farmers to go to private companies or people, but they should remain with the Land Bank. I hope that the Minister will accept an amendment that loans can be given up to at least 75 per cent. of the valuation. Another factor in connection with getting loans from private companies, is that the rate of interest of 4½ per cent. today is too high. I hope that the Minister will consider reducing the rate of interest to 3½ per cent. Under Art. 4 the Minister wants to give the Land Bank the right to invest money with municipalities or in Government bonds. What rate of interest will they get there? At the most 3 per cent. not even 3½ per cent. The rate of interest for Government bonds today is about 2½ per cent. but let us take it at 3 per cent. Is it right that the Minister should have £1½ million of the Land Bank invested with municipalities where they will get only 2½ or 3 per cent. while the farmer will have to pay 4½ per cent.? Land Bank loans are made on a safe basis. The Government has lost very little money in the past and it appears to be unfair to take this step. To me it also appears to be dangerous to call in other appraisers than the Land Bank appraisers, or to get other persons for valuations. What is the haste? There are two or three appraisers in every district and if a farmer makes an application even if notice is given by post, the appraiser can be instructed within eight days to go and value a place. A day or two afterwards the valuation can be in the hands of the Land Bank. At the outside it will take 14 days. That is surely sufficient. Let me tell the Minister that in practically every district, you have good land and bad land and what is so surprising is that if you have an first-rate farm and it lies in a weak area, then the official—and the danger will become even greater if other appraisers are called in—will value the first-rate farm according to the whole district. You may perhaps get a magistrate who is not acquainted with the district, and who is not aware with the real value of the land. Take for example the North-Western Cape. I have often struggled to get Land Bank mortgage bonds for people. Then they say that the area Brandvlei or Williston is a bad area. But you get some first class farms there with Bushmangrass which is the best in the country, while alongside there is land without grass, and the value of which is not 50 per cent. but perhaps 90 per cent. less. On this farm there is perhaps poisonous plants or “vermeerbos” and in this way a greater injustice can be done, and the first-rate farm is valued according to the surrounding farms. I think therefore that it is dangerous to call in other people to give valuations. The Minister will perhaps say that the farmers are in a hurry, but they can wait fourteen days without being any the worse for it. It is in their interest. Then I also want to ask for a branch of the Land Bank for the Northwestern area which comprises almost a quarter of the Cape Province. In these areas many Land Bank mortgage bonds have been issued and also loans for Jackal proof fencing, etc. Can a branch of the Land Bank not be established there? Then the Land Bank will be of even greater value in that area. I want to make an urgent appeal to the Minister to make provision for this. To sum up, I hope that the Minister will favourably consider amendments in the direction indicated.

I would also like to add a few words, because I attach great importance to the continued existence of the Land Bank, because it is the only bank in South Africa that has been built up on our own capital. It is the bank of the farmer.

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

Afternoon Session.

When business was suspended I was just busy giving expression to my interest in our only farmers’ Land Bank. I do not want to repeat what I have said, but I merely want to deal with it in the light as I see it. It is a healthy principle,—this everyone admits—that investments must be safe and that loans as such must be made. Therefore we have been so very conservative in the past and only gave 50 per cent. Therefore we welcome this increase as proposed. I would like, however, to draw the Minister’s attention to a thought which he has expressed on various occasions, i.e., that the farming industry is so flourishing that they are able to pay off their mortgage debts. I want to ask the Minister whether he has ever thought where that money comes from. How many of those farmers who are paying off their mortgage debts have obtained the money elsewhere and could only get it if their Land Bank loans had been paid off. I know of many persons in my area who have applied for assistance to other sources. If the Minister makes inquiries he will find out how many of those same mortgage bonds that have been paid off at the Land Bank have again been registered elsewhere. This is something about which I feel very worried. I have here before me a list which shows the various forms of assistance which had to be given to farmers in the past. I want to appeal to the Minister to allow the farmers to get a loan from the Land Bank up to 75 per cent. We know that in all healthy businesses the principle is that a man should not be burdened over his ears. He must have a credit balance on which he can operate. I repeat that the Minister would be surprised if he examined the registration, to find out how many of those mortgage bonds that have been paid off at the Land Bank, have been registered elsewhere. We know that in the past the farmers have been exploited terribly. The farmer’s mortgage debts later became so high that he lost his land. It is in the interest of the commerce and industry of South Africa that a farmer should have a strong purchasing power. We welcome it that our agricultural unions in the past have used all their powers to assist the farmers. The farmer is the backbone of the country and it is essential that he should be kept on his own legs. Without the purchasing power of the farmer commerce and industry cannot continue to exist. There is today over-capitalisation in banking. The facilities must be restricted. Those facilities ought to be used for the proper purposes, but not to exploit the farmer. The farming industry has to contend with the vicissitudes of nature. The farmer has to contend with marketing difficulties and day after day we hear that that industry is being handicapped even by over-production. He must even find a market for his own over-production. This problem must be dealt with on a healthy basis. I make bold to say—it has been mentioned here by previous speakers—that in the same district you find two farms which adjoin each other and which have not the same productivity. Some farms are over-capitalised in dwelling houses and furniture, but there are none that are over-capitalised in barns, dams etc. But there is not a single one which is over-capitalised in barns and similar things. There are not sufficient dams and things of this kind. There can be no over-capitalisation in this. These things are reproductive. Articles of luxury like houses of £10,000 must not be taken into account even if it is convenient for the owner of the farm to have such a house. The really reproductive improvements must be taken into consideration when the valuation is made. The reproductive investments must be taken into account. The land owners also have not the same productive capacity; they have not the same spirit of enterprise. This is the person who stabilises all the capital that has been invested. He gives value to capital. This person has value. Then we find the provision in the bill that application forms can go straight to the officials of the bank where the bank has got a branch. The bank can send someone there who has knowledge of the bank to value the ground. Well, this does not always mean that he is a land appraiser. He knows that he must invest the money safely and now we have this position that where 60 per cent. of the valuation is advanced, it is interpreted that the bank in order to be safe, deducts 10 per cent. and this means therefore that an advance of only 50 per cent. is made. I say that the best appraiser is a competent man. I am talking of my own constituency. From the beginning, wherever I could give advice, I saw to it that the best practical farmers were appointed as appraisers, irrespective of there political views. They were farmers and I did not have them dismissed from the committees. They are still serving now. Such farmers know farm after farm and they know the persons on those farms. This serves both purposes and we must not depart from it. The value of land has risen greatly, not because of the productive capacity, but because of big capital which is interfering, and which today is driving the poor farmers to pay a higher price for the land they have than it is really worth. Land must be purchased on Land Bank loans, but they can get the money cheaper elsewhere and in this way they are practically driven to buy the land at a higher price than that on which they can get a loan from the Land Bank. These are all matters which deserve the Minister’s attention in connection with this Bill, and he is making certain changes in the the Act in order to make the position as healthy as possible for the farming industry. As I have already said, I become alarmed when I think of the time that lies ahead and which our farming community will again have to endure. We have already had those fatal conditions in our country and we know today that where there was over-capitalisation our people had a difficult time and they are still struggling today under the burden. We know that the position was that people paid prices for land which they could not recover from the production of that land. When they were in that position they did not receive any relief from big capital which interfered and which pushed up the price of land. This is the state of affairs against which we must be on our guard. Then I come to rates of interest. The Minister ought to reduce the rate of interest. At this stage where money is cheap, he ought to do so. The time is not far when interest rates will again soar. After all this waste it is the law of nature, and it is God’s law—if there has been waste then there must be shortage. It makes no difference what plans may be made by the wise men of the world. They will not escape this law. No one will escape it. Instead of accepting the last world depression just after the war we tried to stabilise matters and to continue on the same basis. It was the ruination of South Africa that she did not accept the depression just after the war. In a short time we will again be faced with the same thing. We must reduce the rate of interest of the Land Bank so that people will not be attracted by the low rates of interest offered by money-lenders and to borrow that money to pay off Land Bank mortgage bonds. I hope that the Minister will consider these few remarks. Then I come to the investments of the reserve funds of the Land Bank. The Minister must not consolidate these reserve funds in his own loans, or it must be done in such a way that the money can be obtained on demand. He must not invest it in municipal loans and bonds. This reserve fund must be used for the purpose for which it has been built up, i.e., to give the farmer cheaper rates of interest and to have money available to advance money to the farmer in times when money is scarce. Further I want to say that we must increase our advance to 75 per cent. Keep the farmer with the Land Bank and do not tempt him to go and accept a cheaper rate of interest elsewhere. The increase to 75 per cent. would make it possible to bring loans, which are made under the Assistance Act, under the Land Bank. I hope that these few remarks will have so much value to the Minister that he will consider them, because we will do our best to improve the Act in this respect and I hope that the Minister will make us further concessions.

I would very much like to draw the attention of the Minister to a few points in this Bill. In the first place I want to point out that when the Land Bank was originally established by the late Gen. Botha in the Transvaal, its great object was to assist the farmers and not to yield great surpluses. The idea was, and I think the Minister will agree, that when the bank yields great surpluses, then the farmers ought to enjoy the fruits of it. In other words, those surpluses must be used to reduce interest rates and to reduce the debts of the farmers. This was the object of the Land Bank as it was established in the Transvaal. That was the great idea of the mover of the Bill. What do we find in this case? I just want to point out to the Minister to support what I have said here, that the object of the Land Bank was what appears in the latest report of the Land Bank Board. May I just tell the Minister that I would like to see the report of the Land Bank laid on the Table as soon as possible so that members of this House can become acquainted with the activities of the Land Bank in the past year. I want to quote to the Minister what the Board of the Land Bank has to say on this particular point. In Paragraph 34 of the latest report, i.e., for the year ended December, 1940, the Land Bank Board says—

The idea was to make the interest rates of loans from the Land Bank as low as possible. That was the original idea and this has also been done by the Land Bank. If we now analyse the position, then we get the privilege of the reduction of interest rates in our country, but not only in our country, but also throughout the whole world. I think that in the first instance the Minister ought to see that rates of interest are reduced as much as possible, because it is absolutely in the interest of the farmer. Because the Minister and the Government do not bring the rates of interest into line with the prevailing rates of interest, we find that commercial banks are now competing with the Land Bank. They compete in so far as that they reduce the rate of interest. In support of what I am saying here, I again want to refer to what appears in this report of the Land Bank. In Paragraph 31 we see—

The commercial banks take the course of putting out their money on mortgage at a reduced rate of interest. We cannot take the farmer amiss if he makes use of it. But it is not a healthy state of affairs because we can expect the same thing to happen in the future as what happened after the last war. There will be a depression. Then we found that the commercial banks recalled their capital with the result that many people were ruined. This can happen again. Therefore it is not in the interest of the Government to allow the commercial banks, by reducing interest rates, to practically take over the mortgage bonds from the Land Bank, because they are investing their surplus money in mortgage bonds. No, I think that it is only right and fair for the government of the day to reduce the interest rates and thereby stem the tide which is at present attracting people with a reduced rate of interest. The result is at the moment, that instead of the Land Bank getting mortgage bonds, they go to the commercial banks and this is wrong. Therefore I hope that the Minister will see that there is a reduction in the interest rates as soon as possible. But there is another case. The Minister has said here, and I am grateful for it, that loans will no longer be limited to 60 per cent., but that it will be increased to 66⅔ per cent. of the valuation. This is an increase, but it is not sufficient. Let me tell the Minister that it is these very people who suffer most, who have bought a farm and who require more than 66 per cent. They can perhaps pay off only 20 per cent. and then they must take a second mortgage to come through with that amount which they received from the Land Bank. These people will still continue to have a bad time even though they now get the additional amount up to 66⅔ per cent. Therefore I want to ask the Minister to increase this 66⅔ per cent. Other hon. members have pleaded for it, and I want to give the Minister the assurance that I myself as an appraiser know that people sometimes really do not get the proper valuation of the farm. I also want to warn the Minister to be careful with the appointment of appraisers. I want to mention one case to him where a magistrate in order to become popular, appointed a whole lot of appraisers in an area, with the result that there was no uniformity in connection with valuation. This is where great difficulties sometimes come in. I want to tell the Minister that it would be much better if he had only certain valuators in a certain district, and if he then calls these people together so that they can discuss the matter, then he will get a good and sound valuation. In certain districts there has been great difficulty about the fact that appraisers have been appointed on a large scale. I hope that the Minister will endeavour to make a change and that he will see to it that the limit is increased. It is precisely there that the difficulty arises, because the people are obliged to take a second mortgage. If we look at what the Land Bank has lost in general, then the Minister will agree with me that it is a practically insignificant amount in respect of mortgage bonds in comparison with the large amounts that have from time to time been advanced by the Land Bank. Then the Minister wants to make provision for a surplus. I am against a surplus, but I agree with the principle. I do not think however that it is right and fair to have a surplus. That surplus should have been taken not only to assist other farmers, but to reduce the rate of interest. I hope that the Minister will see to it, and I think I have repeatedly advocated it in this House, that the Land Bank system will be so amended that it will not be necessary to have that surplus. There was never an idea that there should be a great surplus, and as the report indicates, it was the idea that it should be used in the interest of the farming community of the country. I cannot advocate too strongly that the interest rates for the farmers should be reduced. Then we also find that loans for jackalproof fencing have been stopped. The Land Bank has stopped it altogether. I assume that it is largely due to the war conditions. I have heard from the Prime Minister, however, that he is going to give instructions that the Controller of Supplies should help the farmers with wire as much as possible, and he has also promised that Iscor would continue to make wire, and I think therefore that the Minister should reconsider this decision. Now I just want to tell the Minister this, that there are many cases where farmers have fenced in half of their farm and they can no longer enjoy the privilege of enclosing their whole farm. This means that the money which they have already spent on wire to enclose part of the farm, is practically valueless to them. I want to make a strong appeal to the Minister today to go into the matter and see whether he cannot revise the decision to stop it altogether. He ought to make provision in certain serious cases where it is absolutely necessary, where the Minister and his Department are satisfied that it is necessary in the interest of the farmer himself. He must assist in such cases and see that the farmer’s farm is enclosed so that he can reap the benefit of the part of the fence which already exists and which at the moment is valueless. Then I also want to tell the Minister this in connection with valuations in the North-Western areas. The people there are experiencing many difficulties. We find that great delay is caused and it appears that the desired attention is not given to persons who live in remote parts and who make their applications and representations by letter. Where they do so by letter, there is great delay, while in other cases where the farmers are closer to the local branch of the Land Bank they are assisted quickly it they go there personally. Because they make personal representations, they are assisted more quickly. But in many other cases in the North-Western areas where the farmer must apply by letter, it takes a very long time before they know where they stand; delay takes place from time to time, with the result that the farmers have so much difficulty, that they are practically forced to go to other institutions. I know of one case where a farmer had so much difficulty, and where there was so much delay in dealing with his application that he afterwards dealt with the local commercial bank, and when the Land Bank eventually granted his application, his application had already been accepted by the local commercial bank, with the result that it was not in the interest of that farmer himself, because the time may come when the commercial bank might do the same thing which it did before the war, recall the money immediately there is a depression and the price of land depreciates, with the result that this man will suffer and perhaps go under. We have had experience of many such cases where people have gone under. There ought to be better facilities for farmers in remote parts. It is absolutely essential. A plea has been made here that there should be branches of the Land Bank in the more central places in that part of the country. I do not see why this cannot be done. If there are such branch offices, then the farmer will be in a better position to get the facilities that are provided for them than is the case today. Then I also want to urge the Minister strongly that the time has come when there should be facilities for short term loans that can be provided by the Land Bank. It is here where the farmers have so much difficulty. In certain times during the year, when the farmer is on the point of selling his produce, he perhaps requires a little money, a small amount of £50 or £100, and then you find that the farmer must go to the commercial bank. There is perhaps only one bank in the place which has a monopoly, and consequently the farmer must go there and apply and the commercial bank often says: “You have your first mortgage with the Land Bank and it is difficult for me to assist you.” In other words, the commercial bank uses a sort of threat to get hold of the business of the man. Therefore it is absolutely essential to enable the Land Bank to make short term advances. If the Minister will do these two things, i.e., to reduce interest rates and to make provision for short term loans to farmers, then the Land Bank will fulfil its purpose and be a great assistance to the farmer. I hope that the Minister will seriously consider it.

I notice that a slight change is proposed in regard to the valuation of properties on which a bond is sought to be raised. I take it that the procedure now laid down is not going to be followed invariably. For the future it will be optional for the Board either to have the valuation made under the existing law—that is through the magistrate, and a valuator appointed from the district, or to follow the procedure now proposed in the Bill. I should like to say that if the existing procedure is to be done away with, that is to say the valuation through the magistrate and through a well known valuator, it would be very much regretted. I think the preference of the borrower would be for the continuance of the existing procedure. He understands it very well and he can have much more confidence in the valuation made by a recognised valuator of the district than by any made by the officers mentioned in the Bill. Under the new procedure the Board can have the valuation made by an adviser or officer of the bank. We have been singularly fortunate in Natal in the successive managers of the bank appointed over a long period of years. They have been very highly valued and esteemed friends of the farmers, advising them at times of difficulty and helping them in every possible way, but at the same time the introduction of a system in which an adviser or officer of the bank might be considered a competent person to value a farm might not be welcomed by the farmers of our province. They consider that the question of land values is a sort of science only known to old residents, men who have lived there for years and know the value of almost every farm. So I hope that although this procedure is laid down as the alternative it will not be popularly followed by the Board. I hope the Board will not oust the present procedure for the new procedure adumbrated by the Bill.

As an Afrikaans-speaking Afrikaner I deplore in the first place that this Bill is drafted in Netherlands. I am not a Netherlander or a German or a Frenchman. I want the Bill in my own language. Why is it not in Afrikaans?

Because the original Act is still in Netherlands.

If we made mistakes in the past, then that is no reason why we should continue them. We have only two languages, English and Afrikaans. Why do you want to press Netherlands down my throat? Nor do I want English. I shall not tolerate it. This Bill amends certain provisions of Act No. 18 of 1912. I have that original Act in my hands. I am not a legal man. This Act is marked red from one end to the other with amendments. How must I as a practical farmer understand the thing? Do you think it is fair to expect of me to understand such a Bill? I represent farmers and I want to speak to them in my language and explain to them what the law means. But if I see that thing, how can I do so? I feel that they are hitting me below the belt here. When I speak about the Land Bank laws as they now are then I feel that there is a certain measure of hypocrisy. Let the Minister tell me if there was not a compromise between the Department of Agriculture, the Land Bank, and the Farmers’ Assistance Board, namely to fix one valuation? I know it is done, and this measure is merely an illusion. I speak from practical experience. I do not want any sky-high prices, but at the moment the price is fairly high. But what does the Land Bank do? There are many of our farmers who feel today that the Land Bank is not giving them a fair chance, because they feel that they can get more from the commercial banks than from the Land Bank. Take the matter of valuation. To me hypocrisy is the greatest evil in this respect. Here we appoint valuators to value the land. I am not speaking of my own experience, but of the experience of my family. The land is valued at market value. But what do the people get as an advance? Instead of 60 per cent. of the valuation, they do not even get 40 per cent. Why do you use valuators if they ignore the values? Land that is valued at £5,000 and on which the man should rightly receive £3,000, what does he get?—£2,000 or less. Why do you appoint valuators? For make-believe to the public. Is it the officials, the Government who must have authority in these things? Then make the valuation yourselves and remove the valuators. Do not sustain the illusion that the valuators fix the value. It does not matter whether it is van Aswegen or Visser or whoever else. Now the law is being amended. It appears that the farmers will now receive an increase so far as bonds are concerned, that they will receive bigger loans, but that is only an illusion for political purposes. That is my view. Let them give us only 60 per cent. according to the law. Then we shall be satisfied. But now they come allegedly with an increase. It is nothing but hypocrisy. I ask the Minister to lay upon the Table any valuation in any district where 60 per cent. was granted. He cannot do so. Who draws the line? The Department? The valuator is being appointed as an illusion, but the Department draws the line as it likes. The Minister is afraid of inflation. So am I. But act according to the law. Take my own case. I considered that I got my son a piece of land very cheaply and he paid something more than £4,000. Do you know what they granted?—£2,000. Not 50 per cent., and then I made a bargain. According to my information the valuator valued the land higher than my son paid for it, but he does not even get the 50 per cent. advance. Surely that is hypocrisy and nothing else. Another person bought for more than £5,000. He was granted £2,200. The valuation of the inspector was more than £5,000. The man did not even get 45 per cent. Who draws the line? What is the good of all the valuation if the Department does as it likes? That is why the Land Bank it today encumbered with money. The people do not want to do business with such a class of of institution. They prefer to go to the commercial banks. We as the highest Council in the country must act in terms of the law. The law has been made and now corruption takes place—excuse me if I use the wrong word. The Minister of Finance, I understand, stands in the pulpit every Sunday.

Order!

I always thought that one could include Sundays.

The hon. member may not become personal.

What the farmers want is 60 per cent. under the existing Act. But a ring has been formed consisting of the Department of Lands, The Farmers’ Assistance Board and the Land Bank. We must bend under them, but we are not going to do it. This Bill appears to be to the benefit of the farmers, but I believe that it is only make-believe so as to hit us further under the belt. I cannot vote for it.

I want to make my contribution in connection with this Land Bank Amendment Bill. My reason is that this concerns the farmers so greatly. Every hon. member in this House realises how it concerns the farmers. Although the other side of the House disputes it and says that the mines are the backbone of the country, it remains a fact that the farmers are the backbone. We cannot wage war with gold, but with food and supplies. Therefore the Minister should have a soft spot for the farmers on the platteland who are today slaves in the service of the State, and he should not raise the slightest difficulty when this side of the House, and partly also the other side of the House, pleads for an increase in connection with Land Bank loans. Unfortunately I am under the impression that we cannot move the Minister on a single point. We have been struggling for a few days, but inexorably, despotically, he stands on his point, and involuntarily he makes an impression that is not in his favour, and that will affect him in the future. He creates the impression that he is the financial dictator of the State, and our country is not ripe for a dictator, and will not become so. I want to ask the Minister, therefore, to make a concession to the farmers on this most tender point. The Land Bank was established to help and to save the farmers. Those old statesmen who have gone considered it necessary to introduce this measure in view of the critical situation that then existed. That was just a beginning and there is today still much room for development, for expansion and for improvement. We cannot stand stationary at the old things. At the time it was a help, but as circumstances change and the farmers’ interests on the platteland develop we must expand the help to the farmers in their difficult task. To throw a spoke in the wheel now and to decline under any circumstances to offer help—for what reason, then, do we sit here? For what are we here as an Opposition. We are here engaged in constructive criticism. Must we waste our time and the time of the State and tire ourselves out talking, while the Minister sits there and merely shrugs his shoulders? The Land Bank has in the past been the refuge of the farmers and will remain their refuge in the future. It is a fact that when the farmer is helped by the Land Bank he sleeps peacefully. He is not afraid that the money-lender will call up the money tomorrow or the day after, when he is in the position of having at his disposal no other help or way out. Some of the older members of this House will recall what happened during the Second South African War here in the Cape Province, and how many bonds were called up by money-lenders and how many farmers were thereby impoverished and made bankrupt. Similar circumstances may arise again and for this reason the farmers only feel safe when they have their bonds with the Land Bank. In that they have confidence. Therefore this side pleads that the Minister should promote this great cause and that he should make a concession. We must move with the times. We cannot cling to the old things. There is constant development and we must keep pace with circumstances. We therefore ask that the Minister should show some spirit of conciliation when we ask for more facilities. I want to point out to the Minister that the Land Bank must surely not count on profits. It must not expect to make a profit. Surpluses must not be achieved by the Land Bank. What does he want to do with surpluses that have come from the sweat and blood of the farmers? Profit in the Land Bank must be eliminated and the farmers must be helped as much as possible so that they must make a success of farming. The Minister knows that he has never yet suffered losses through the Land Bank. Here and there small losses occurred, but on the other hand profits were made here and there. If he were to draw up a balance-sheet he would find that there has been no loss. There should also be no profit. The rate of interest is too high and the Minister must take that seriously into consideration. If the Minister goes to a bank today and says: What rate of interest will you give me on my State money? Then the bank will not give him 2 per cent. Why then does he burden the farmers with 5 per cent.? We do not ask for 2 per cent., but this side pleads only for a rate of interest of 3½ per cent., and then we ask that up to 75 per cent. of the value of a farm be given in advances. Is that not safe? Must the Minister stand firm on the restricted business basis? Is he so afraid that he will lose a few pounds? Is 75 per cent. not sufficient cover? If a farm is valued at £100 and he gives a bond of £75 he still has £25 out of the £100 to play with. It is not on movable property but on fixed property. The security is there. In other respects the Minister is inclined to be a bit careless but immediately it comes to the farmers he wants 100 per cent. safety and certainty. It is not necessary. The security is there and the State has not yet lost money in this connection. This side of the House feels that the Prime Minister should please not take up the attitude that he has adopted recently. We demand that the Minister meet us. We are on the platteland and we know how the farmer struggles. We know how the farmer must economise and that he must live thriftily, and we know how attached the farmer is to his farm; he does not want to live there in luxury and comfort; he wants to work and toil there, and to serve the State in this manner. These are facts which the Minister must take into consideration and help the farmers. Not all the farmers of the country require farming loans and make application for farming loans. It is the section of the farming population that needs help and it does not after all comprise a very great percentage of the farming population: And when it is only a part of the farming population, the Minister must not come here with a law of the Medes and Persians. Even though the Minister may have rejected all the other requests, I consider that he would be doing the greatest injustice if he rejects the request of the Opposition. When the House goes into Committee we shall propose amendments. I want to assure the Minister that if he does not meet us on these points we will keep this House busy with divisions from morning till night.

You must not threaten.

I understand that the Minister is in great haste; the Minister is so very anxious to say “ yes ” because he is convinced that this side of the House does not put forward an unreasonable request. He must be convinced that the country and the Treasury will not suffer a loss but that it will in fact be a benefit to the State to make a concession to that section of the farmers in connection with a lower rate of interest and a higher valuation in the granting of those loans. With these few words I shall resume my seat because I know that the Minister is in a great hurry.

Mr. Speaker, this debate has ranged very widely over Land Bank policy and procedure. Hon. members will forgive me if I do not reply in detail to all the points that have been raised, but merely confine myself to points which have been mentioned falling within the scope of the Bill. The hon. member for Beaufort West (Mr. Louw) and others, asked why stop at 66⅔ per cent., why not go up to 75 per cent? I suppose there are others who would say, why not go up to 80 per cent., others 90 per cent. and others 100 per cent.

It depends on the man to whom you lend the money.

We have a Land Bank in South Africa of which we have reason to be proud, because it is in a strong position, and that is due to the cautious policy which has been pursued. I am not going to be a party to breaking down that confidence, and that is why I am going slowly in this matter. I am not prepared at this stage to go beyond 66⅔ per cent. In coming to this decision we took account of what is the procedure in other countries. There has been a tendency to raise the percentage, but that tendency must take its effect by degrees. For instance, in Canada the percentage is 66⅔; in most of the states of Australia it is 66⅔; in one, Tasmania, it is 70 per cent., and in one, Queensland, it goes up to 80 per cent. The Federal Land Bank in the United States of America has a maximum of 50 per cent. on the value of the land, and 20 per cent. on the permanent insured improvements. Therefore in the light of these facts we are taking a reasonable line in putting the figure at this stage at 66⅔ per cent. I say at this stage, because I do not exclude the possibility of going further later, but the time is not yet ripe for any higher percentage than that.

*The hon. member for Willowmore (Mr. Steyn) and various other members raised the question of the conservatism of the Land Bank in connection with valuations. Well, the policy of the Board of the Land Bank is not to stimulate inflation in the country, as far as possible not to go with the stream that carries with it an uneconomic increase in land values. That increase in land values is also not in the real interests of the farmer himself. The Board of the Land Bank believes that it would be unfaithful to the interests of the farmer if it were to encourage that tendency, and therefore it is the policy of that Board to act conservatively as regards valuations, and I am of the opinion that it is the right policy. That policy has my full support. The hon. member for Albert-Colesberg (Mr. Boltman) seemed to be of the opinion that there are in connection with this proposal. I can assure my hon. friend that there are no ulterior motives. This proposal, like another proposal in the Bill, is made on the recommendation of the Central Board of the Land Bank. I think there is perhaps a misunderstanding. There is no question of the taking over of the advances. Only when the debtor does not meet his obligations to the Land Bank is his mortgage taken over by the Advances Office, and thereafter it is not again taken over by the Land Bank. My hon. friend seems to think of the cases where the administration is taken over, but that is an entirely different matter. Then the question was raised in connection with Article 2—what is actually the object of this? The object of this is to save time and expense. The hon. member for Prieska (Mr. Geldenhuys) spoke of the lack of uniformity with reference to valuators. This proposal will work in the direction of combating that lack of uniformity since the object of this is to make more use of the advisers who are now appointed in place of the local boards. It will work in the direction of combating the lack of uniformity, and it will also save time and expense. But naturally, as I said on an earlier occasion, it is not our intention to apply only the one system. The Land Bank Board wants to have both systems as its disposal. Then a good deal has been said in connection with the proposal regarding the reserve fund. There again, there is no ulterior motive in the background. It is not the Government that wants to secure the money of the Land Bank. It is the Land Bank itself which has made this proposal. They feel that since they have this reserve fund they should really keep a part of that reserve fund so that it may be available for that purpose. It is quite true that when the law was originally made, it was laid down that the reserve fund might only be used for the ordinary purposes of the Bank, but at that time there was no thought of a big reserve fund such as there is today. Today the Bank has a reserve fund of £1,500,000, and it is entirely reasonable and fair that we should comply with the request of the Board of the Land Bank, viz., that they may invest a part of it in liquid form. There remain two other matters to which I must refer. The hon. member for Ventersdorp (Col. Jacob Wilkens) is worried about the language. I simply want to explain to him what the position is. We are busy here amending an Act which was orginally drafted in Dutch. He himself would not want Afrikaans words to be added to an English text. That would of course be a monstrosity. As long as that original Act exists in Dutch you can only amend it in Dutch, but I want to repeat what I said earlier: I hope—I want to make no promises—but I hope that next year we shall be able to introduce a consolidating Bill, and then of course it will be in English and Afrikaans. Then naturally we shall omit Dutch altogether, and I hope that will satisfy my hon. friend. The last point that was raised was in connection with the rate of interest. The rate of interest is fixed by the Board of the Land Bank, and the Board of the Land Bank must take account of two things. In the first place they must take into account what they must pay on the money that they owe to the Government. In the second place, out of what must they cover their administration costs? They calculate that they need 1 per cent. for administration costs.

Is it not 4 per cent.

No, they calculate that they need 1 per cent. for administration costs. That, in any case, is what they tell me. Thus they add that 1 per cent. to the 3½ per cent. which they have to pay to the Government. At the moment they are not receiving new monies from the Government. The money that they are spending today is money which they borrowed from the Government in the past, and it is money for which the Government had to pay 34 per cent., 3¾ per cent., 4 per cent. and even more. The average rate of interest which the Government pays today on its loan is 34 per cent.

Do you do that with foreign loans?

We pay off foreign loans whenever we can. But we cannot convert loans before it is time to repay those loans. We cannot pay off loans until we have the right to pay them off. In the last few months we have converted various loans, but the loans were for comparatively small amounts. But we cannot convert the loans that are not yet repayable, and at the moment the Treasury pays an average of 34 per cent. on its money, and it cannot be expected that the Land Bank should pay less than 34 per cent. to us.

Motion put and agreed to.

Bill read a second time;

House to go into Committee on the Bill on 8th April.

The hon. Minister of Mines, when he became a Minister four years ago, began to show every sympathy for the diggers. He took an interest in their welfare. He went so far as to visit the diggings and I do believe that he really took an interest in the welfare of those people. He went to see them in the difficult conditions in which they live. He went to see whether there are many of them who are still able to make a living, etc., etc. The diggers cherished great hopes concerning the Minister. The only kind of expectation that a digger invariably has is to get more ground, ground which he can work in order to make a living. The Minister gave the diggers clearly to understand that he wanted the superfluous people removed from the diggings, and that was done. The number of diggers has greatly decreased. The superfluous people have been removed. Many of them have enlisted in the army but a great number has remained and those people feel deeply disappointed today because no provision is made for them in one way or another. The Minister introduced a small measure here with which he has not altogether achieved his object. The actual clause that he wanted to put through, and which would have given him the power to close diggings, we did not accept. But he went as far as to say that if there were farms which we could point out as possessing diamond-bearing ground he would do his best to put the farms at the disposal of the diggers. But unfortunately we no longer have those lands belonging to private owners but in fact to companies. Last year the Minister made a statement in the House. When the Minister put through his Base Metals Act he accepted the principle that where an owner declines to allow prospecting of ground possessing base metals the State shall have the power to do this, and the Minister also said that he would ask the owners of diamond-bearing ground to place such ground, at the disposal of diggers, and he then said that if they were unwilling he would later be obliged to introduce legislation in that direction too. I then asked the Minister whether he had approached such owners and if so what the results of the negotiations had been. His answer was: Yes, he did approach the owners but nothing came of the negotiations. In other words, they refused to make the lands available. Now I should like to know from the Minister who were the owners whom he approached. I am sure that it was the companies that he approached, and those companies are people with whom he clashes and with whom he will clash in the future. I said that I believe that the Minister really had sympathy for the diggers, and I believe it still today. But the Minister came to a halt against Capitalism. Those people who have all the power in their hands, those people bought farms by paying big amounts for them exclusively and mainly with the object of retaining the control of diamonds in their hands. Today we have the position that diamonds have a good price, especially industrial diamonds. There is a good demand for industrial diamonds. But De Beers Company are the people who have the monopoly and alone control the market, and those people refuse to give the diggers, people who for sixty or seventy years have made their living out of the land, a chance to extract diamonds. Now I want to ask the hon. Minister what he intends to do with those people. He knows what a critical position they are in. He knows that there is no private ground, available, except diamond-bearing ground that is in the hands of Capitalists who simply want to control the market. Since the Minister’s negotiations with them failed I want to ask him when he will introduce legislation to force them, just as the Act regarding base metals compelled the owners to allow their ground to be prospected. It is definitely not a matter of principle. It is in fact a matter of principle in the sphere of diamond digging, but in two other respects it is already law; and I want to ask the Minister when he will give the people an opportunity too to make a living. It is not necessary for me to repeat what I have said here every year, viz. that the type of digger who is today on the diggings is suited for nothing but digging. They have grown old in that occupation and it will not help to give them some other occupation. Care must be taken of those people who are there at the moment.

Mr. Chairman, I am aware that the Minister has no direct responsibility for matters relating to wages and cost of living allowance. These are matters which normally would fall in the province of the Minister of Labour, but in view of the fact that the Minister of Labour has disclaimed responsibility for the exclusion of native labourers on the mines from the benefits of the cost of living allowance, I feel there must have been some measure of consultation between the Minister of Mines and the Minister of Labour in that connection, and it is for that reason I would like to ask the Minister if he is prepared this afternoon, or when he replies to this debate, to give us the reasons why, in the circumstances, the cost of living allowance has been taken away from a large number of the very poorest labourers in the country, and why the richest industry in the Union has been given the benefit of that exclusion. Mr. Chairman, I notice from a recent issue of the “Cape Times” that the profits from the gold-mining industry are put down at £3,500,000 for one month, and that the increase of profits in March over February amounted to £330,000. On the one hand we would appear to have a very rich industry, well able to pay the cost of living allowance, which is being paid in all other industries in the country, and on the other hand we have the situation that the bulk of the people who work on the mines are extremely poor, and that the cost of living has probably hit them as hard, if not harder, than any other section in the Union. I would remind the Minister that it is only in relation to certain classes of labour that travelling expenses are paid. A distinction is made between the ordinary recruited native labourer and the man who comes forward under the assisted voluntary scheme, and I want to make this point. There is only a technical difference between the man who comes forward under the A.V.S. scheme and the man who comes forward as a contracted labourer; it is said that the A.V.S. man can choose his own mine and start working in his own time, but the facts are and we know perfectly well that where he works depends on the state of labour in certain mines, and he is not able to pick and choose where he is to work. In the same way the labour and urban regulations are such that he has to find work within a certain period, or he is liable to prosecution for being in an area where he should not be. So there is little difference between the A.V.S. man who comes from the Transkei and the indentured labourer and no justification for refusing to pay the travelling expenses of the former. I would also remind the Minister that the mines do not pay a capitation fee for the man who comes forward under the A.V.S. scheme. These are facts which the Minister should take into account in any discussion which he may have with the Labour Department in connection with this matter of the cost of living allowance. It is a very vital thing to labourers on these mines, who are the backbone of this industry. They are enabling huge profits to be made, they are enabling us in this country to meet our war expenditure, as no other country is able to do, and it does seem to be an extraordinary thing that these poor people should be excluded from the benefits of the cost of living allowance. I know it is the primary duty of a Minister to look after the industry, but we do feel that he should help us to hold the balance of justice as between the employer and employee, and that where it comes to a question of consultation with the Labour Department, we are entitled to ask him to come down on our side, as it were, and see that these people are helped in time of very great need indeed. Then there is another point, and that is this question of the increased use of extra-Union labour. I have looked up the figures, and I find that from 1932 to 1941, a period of nine years, the quantity of extra-Union labour on the mines has gone up by 100 per cent.; that is to say, from 91,000 in 1932 to 185,000 in 1941, and I find, sir, that this last year ending December 31st, 1942, out of a labour force of 300,000 no less than 160,000 came from outside the Union. I would like the Minister to explain the need for this big increase. It seems to me that one line of thought is that we are trying to protect the farmer in this country by lessening the competition between the mines and the farms, and I say that that is an unfair thing to do until such time as farming wages are put on a basis which has some relation to those paid on the mines. I can understand the farmer wanting it, but I do not think it is fair, for that reason, to penalise our own natives. The second possible line of thought is this, that as the result of the hazardous calling of mining, the Union native today is not able, from the point of view of health, to stand up to the work. If that is the case, Mr. Chairman, it is indeed a very serious state of affairs. The third possibility is that the competition of secondary industries is becoming so acute that the mines find themselves quite unable with the labour force now in the Union, to compete on equal terms with those secondary industries, and therefore they are importing labour from Portugese territory to avoid the effect of that competition. There is another feature of the matter which is worth consideration. Of these 160,000 extra territorial natives, no less than 100,000 come from Mozambique, and one of the conditions of the Convention is that part if not all of the wages of these labourers has to be paid in Mozambique territory. If you work out the figures you will find that the wages in relation to these 100,000 labourers over a period of twelve months, amount to a very large sum of money, and that £3,000,000 or £4,000,000 is being spent in Mozambique territory in relation to work done in the Union. And I am asking whether that is a healthy feature, and I submit that any examination from a public point of view will clearly indicate that it is not a healthy feature of the mining industry as it exists today. I want to touch very briefly on the effect of the Silicosis situation. Without laying any charge against the mining industry I want to mention the allegation, which has repeatedly come to my knowledge, that the practice on the mines is to weigh the natives from time to time, and when it is noticed that a labourer is losing weight he is told: “You are not very well, it is time you go home and have a little rest.” That man goes home to the Transkei without any reference to the fact that he may be a possible sufferer from Silicosis. He goes back to his home and eventually he does develop Silicosis, and then he is unable to establish his claim against the mining companies for compensation. This is an allegation of fact which I should like to have investigated because I feel that if there is a possibility of it happening it is time that independent medical inspectors should be brought in to look after the interests of the worker in contradistinction to the medical man who may be there to look after the interests of the mines. These are matters which are of great interest and importance to the people I represent, and they are of considerable importance also to the European people of this country, because it is not disputed that the very backbone of industry is our native labour force. If that is being destroyed, and the evidence seems to indicate that it is being destroyed, then it is a serious matter. I do not dispute that conditions on the mines are excellent. The food is good, the natives are well looked after, but these facts do not go far enough, so far as the families of these men are concerned, and when it comes to a question of pay we should not be influenced by the fact that the men on the mines are given good food and are given football fields to play on—the men’s families cannot live on the fact that the men are well treated on the mines, and that they get good conditions while they are there. The cost of living has increased so far as the families of these people are concerned, and in view of these facts, and in view of the fact that there has been no increase in the pay of these native mine labourers for twenty-five years, I think I am justified in asking for a change in the direction of improved wages and a recognition of the justice of the claim for a cost of living allowance.

I think I had better reply to this point at once. The hon. member for Lichtenburg (Mr. A. P. Swart) repeated something that had been said last week when this Vote was on, in regard to promises which I was alleged to have made to alluvial diggers in the Western Transvaal. Let me say again what I have said before that I had the greatest sympathy with these alluvial diggers, and that I found that they were living in the most deplorable circumstances. I proposed in the legislation which I introduced to take power to take away from the diamond fields those who had no fair chance of earning a livelihood there. Parliament in its wisdom did not pass that legislation and so it remained within the discretion of anyone on these fields to remain there, and I cannot take anyone away from there. So it is idle to say that I had made suggestions that they would be assisted—had that legislation been adopted, I might have been able to do a great deal more. It is idle to say now that they would be better off with the legislation which I suggested at the time. The legislation which was adopted by Parliament was quite different in that respect from what I had proposed. I put forward this policy that those who remained on the fields should be so limited in number that having regard to the land at their disposal, and the dimensions of the diamond market, and the other factors, there might be a fair opportunity for them all to earn a decent livelihood and that those for whom no fair and decent living could be expected should either be removed or should be encouraged themselves to move from the diggings and take up some other form of life. Let me say that that process is going on. The hon. member is correct in saying that some have left. The number is being reduced but I regret to say that it is being reduced far too slowly. I took out the numbers last year and I reckon that there were twice as many holders of certificates as could be expected to earn a fair living on these diamond fields. And therefore it is beyond my capacity to provide a good and fair living to those people with the stones and the land available on these fields. The hon. member asks why I did not introduce legislation for the purpose of compelling those owners who possess land which is either diamondiferous or suspected of being diamondiferous. I do not know that I am at liberty to discuss new or projected legislation here, but as the matter has been raised perhaps you will permit me to reply to this extent; there is no parallel at all between the position of diamonds and the position of base minerals or gold in this respect, because in the case of base minerals and gold there is a public demand for the working of what is under the ground. It is desirable that all the resources in base minerals should be made available to anyone who wishes to exploit them, and the same applies to gold. But that is not so in regard to diamonds. We have in the safes of one corporation and another more diamonds already than are required by the markets of the world, and those diamonds have to be handled with the greatest care in order to prevent a break in the markets. That is the radical difference in the position so far as base minerals and gold are concerned. I hope the hon. member will not expect me to press this point again. It is not within my power to alter that fact. That is my reply to the hon. member for Lichtenburg. Now, with regard to the hon. member for Transkei (Mr. Hemming). Well, he said that no cost of living allowance was given to native miners on big mines in the Witwatersrand whereas a cost of living allowance has been given to the white workers there. That is perfectly true. But I want to remind the hon. member that it is not within my province and not within my power to control wages. I have not the machinery to do it, and it does not fall within the ambit of my office; but it is quite true that I take considerable interest in the welfare of all workers on the mines, and I do interest myself in all these matters, and without it falling within the ambit of my office I do make from time to time representations where I think representations are justified, and I do what I can do. With regard to the position of the native workers on the mines of the Rand, the hon. member did not comment on the fact that the Government has appointed a Commission to go into the question of the wages, the wages of the native miners on the Rand. A Commission has been appointed and is considering that problem at present. Until they have reported I am not going to make any comment at all, but I think the hon. member might have mentioned that fact.

What has that Commission to do with the cost of living allowance?

Nothing.

Oh, yes, a great deal. If wages are placed on a proper basis there should be no necessity for any cost of living allowance. If they are not, and it is considered that the conditions are temporary, you may, if you wish, have resort to a cost of living allowance, though it is a very double edged weapon and has repercussions which are often not realised by those who adopt that weapon. I think a good deal more can be said about that than has been said. The cost of living allowance has to be considered now, as the method has been adopted on a fairly considerable scale. A cost of living allowance for natives on the Rand stands in a peculiar position because the native miners on the Rand are compounded and never mind how the cost of living goes up there is no extra charge to them for food, clothing or housing. Clothing, yes, there is to some extent, but not extra food or housing or medicine, or any other ordinary amenities of life.

That would not apply to their families at home.

Yes, their families are at home, but the cost of living is not up for them. The cost of living may be up for the families in the Transkei to a certain extent, although I take it that they do not pay any more rent for their huts and I take it that the main cause of the rise of their cost of living is if the yield of their mealies is not sufficient and if they have to buy mealies from the store, and the other ordinary things they buy from the storekeeper. That is a very limited opportunity for a rise in the cost of living and I therefore think that although the attention of those who are controlling the mines of the Witwatersrand has been directed to this point, the answer is well taken that their position is quite different from that of the white workers of the Rand who are affected by any cost of living increases from time to time, whether those increases are in rent, clothing or anything else. There is a radical difference. But as I say, the Government has appointed a Commission which is going into the question of remuneration of natives generally. Then the hon. member indulged in some very sketchy remarks as to the vast profits made by the mines. I do not know whether the hon. member realises that there is a gigantic capital which has to be not only provided for in the way of interest, but has to be redeemed over, in many cases, a short life and the profits to which he referred are gross profits which had to replace the vast capital invested and also provide for these investments. There was no indication that the hon. member realised this elementary but very important fact. There was no indication that the hon. member appreciated that of the profits which were made about 60 cent. went to the Government and further, there was no indication when he compared the rise for March over the figures for February, that February was a shorter month with fewer days and that in every year the earnings for February are less than those for March. No, those references to the vast profits of the gold mines were uncalled for and are out of all connection with the true facts of the case. And then the hon. member referred to the increase in labour from outside the Union. Yes, it is true it has increased. I do not know what the hon. member’s idea is. Does he wish all labour coming from outside to be stopped? If he does not what is his complaint? And if he does come forward with the argument that all labour from outside the Union should be stopped, I do not think there is anyone in this House or outside this House who would not shout him down and say what nonsense it is to deprive the industry of these great labour resources. What does the hon. member want? I hope I shall not be thought to be too aggressive if I venture to say that I think the hon. member did not consider what he wanted at all. It is a fact that we are getting more labour from outside and I am not sorry for it—it is an indication of the great progress of the Union and the great necessity which exists for further labour. I am not going to follow the hon. member into speculations as to the particular reason for it. Now the hon. member referred to the method of weighing natives on the Witwatersrand Gold Mines. The hon. member appeared to object to these natives being dealt with in that way. Well, it is quite true that the medical officers who are charged with the health of the natives do have them weighed periodically and constantly, because you cannot rely on a native to come forward and describe his symptoms with the same accuracy and promptness as the white man, so we have to adopt some other method which will put the medical officers on the track of these who are sick and they tell me—and I have no reason to doubt it—in fact I believe everything they say—that the constant weighing of a man is a very good automatic way of being put on the track as to whether he is sickening for anything—it is a very good way of being put on the track of those who are sickening although they do not realise it themselves, and the methods which are being adopted are progressively better and better. Anyone who does show a falling off in weight is immediately subjected to an exhaustive test, and the same methods of estimating his illness are adopted in the case of one man and another, no matter what his colour is. I should like to say that during the last year or two there has been detected a larger number of cases of Silicosis without tuberculosis in the case of natives. 768 Natives were certified to have Silicosis without tuberculosis, giving a prevalence rate of 2.11 per 1,000. The rates for the previous 11 years were 2.02 and round about that figure, falling to 1.29. Well, now, this marks an increase. I am informed that the increase is not really to be attributed to an actual increase in prevalence, but to the superior methods for detection and it is accounted for by the use of miniature radiography at the Witwatersrand Native Labour Association Hospital, where all native recruits are now examined. So that the hon. member whose anxiety for the health and care of the natives of the Transkei I admire and appreciate and share, may rest assured that considerable attention is being paid to the health of these natives and that improved methods are being adopted with the result which I have mentioned.

May I have the privilege of speaking for half an hour. I think it requires no apology on my part when I draw the attention of the country to the mining-industry and the unqiue position it occupies in our national economy. I think the unique position the industry occupies is sufficient justification for my raising the whole matter. If any other justification were needed, it is to be found in the deplorable lack of constructive policy and initiative on the part of the Government in regard to that industry. Its importance can be gauged from the position which it occupies in relation to our national income. According to the latest figure with which I have been supplied by the courtesy of the Minister of Labour I find in the estimated national income for 1941-’42 that out of a national income of £493.3 millions the contribution of the mines is £100,000,000. In other words, the mining industries of the Union supply more than 20 per cent. of the national income. And that is very important—important in the first respect for our external payments and secondly, also, for the maintenance of the income level of the people of this country. But now that picture has another side, rather a dismal side, and that is what according to the figures with which we have been supplied by the Government Mining Engineer, and also by private engineers, that industry is expected to be showing a sharp decline in the comparatively near future. According to the Van Eck Report that decline on the figures supplied by the Government Mining Engineer is—I am quoting from paragraph 151—and I am quoting the exact wording of the paragraph —“The Government Mining Engineer has pointed out that within the next ten years there may not be the decrease shown as labour may conceivably be transferred from mines which close down to others; but with a fixed total mineable tonnage this procedure would result merely in accentuating the rate of the subsequent decline.” The figures quoted show that within the next ten years, that is up to 1955 there will be a decline in the industry by more than half. And those figures are confirmed by the figures published by Mr. Hill. They are not quite the same, but both of them, although they base their calculations on a different basis, concur on this major point which is set out in this report to which I have referred, namely that although “the results of the two estimates are not strictly comparable, but both gentlemen are agreed that a rapid decline in the tonnage to be milled by existing mines must commence within the next ten years. Even if new areas and ultra deep mining in known areas make further tonnage available, the commencement of the decline can only be postponed for about five years.” That is the other side of the picture, and as I see the matter, the two main problems confronting the mining industry, confronting the country a the moment, are firstly the prolongation of the life of the mines in such a way as to make the decline in production as gradual as possible. That would require a certain measure of conservation and not the reckless exploitation of whatever mining resources there are in this country; and the other part of the problem is the combating of speculation in and the manipulation of shares in the mining industry generally. In the Van Eck Report three factors are suggested, to deal with the first problem I have raised; the first is that since production below the present maximum mining depth cannot begin until several years after investigations and prospecting had been started, it is clear that, if such production is to assist in retarding the sharp decline shown by the estimates the problems associated with ultra deep mining should be investigated without delay. In other words, certain investigations must now be made, because it will take some time before the effect of such investigations can be put into operation. And the second is as an investigation into potential new producing areas is bound to be a lengthy matter and to involve large capital expenditure, this should be stimulated. Early consideration, the report says, should also be given to the question as to whether the State should participate in such investigation and, if so, to what extent. And the third factor suggested by the Van Eck Report is that “it cannot be in the national interest to exhaust this important asset too rapidly.” One has to keep it going and try as far as possible to let the decline have the least possible effect on the national income. If the decline is made more and more gradual, the effect thereof on the national income can at any rate be minimised. Now, the first point one feels is how can you expect the farsighted policy envisaged by the Van Eck Report recommendations if it is to be left to concerns, to private enterprises whose main consideration is getting the maximum of profit in the minimum of time—how can one expect to get such policy from people who, from the consideration of self interest, are only living for the day and perhaps for the morrow, but who take no regard of what may happen in ten years time? They cannot be expected to take into consideration what will be to the interest of the nation—they cannot be expected to take into consideration in their private interest what is in the national interest. Human nature being what it is, you can hardly expect that from private enterprise. Now, what is the Government’s policy in regard to this problem? We would like to know what is the Government doing faced as it is with this position of a rapid decline in production? How do they intend to retard or to minimise the decline in the next ten years? How do they intend to fill up the gap in our national income which will be caused by that expected decline? In other words, we want to know from the Government how they intend tackling this problem and steeping down the fall in production gradually and tempering the decline to the shorn national income? We know what the policy of the Government has been up to now—or rather, we know their lack of policy. We know that they have done nothing to discourage the rapid exhaustion of this important asset by any measures. We know they have been pampering these profit seeking interests — they have been playing up to these people who are engaged in this industry. Those people have been given a free hand so long as they, the Government, get a certain amount of taxation out of it. The Government have been prepared to give them a free hand, and they have allowed them to take as much gold as they want out of the bowels of the earth, provided the enterprise gives a certain amount of taxation to the State. Well, that is not a solution of the problem. It is not the “hole in the ground policy” that we want here. We know what has happened in other countries like Chile. Other countries have regretted that policy very deeply and sincerely. There is no virtue in taking your resources of the earth and selling them. You want more than that. When you deal with an industry which plays such an important part in our national economy we should have had a definite policy on the part of the Government in regard to retarding the decline in that gold-mining industry which is now being predicted. Now this can be done. There are various alternatives that have been suggested, but so far as I see the Government’s policy has been marked by the absence of any. Various ways have been suggested, and one is to retain the existing system with relatively high taxation accompanied by more stringent control of exchange activities. That is to say, stick to the old method and tax them perhaps a little bit more highly. That I suggest, Mr. Chairman, is not a correct policy. I suggest that that would simply be hastening the decline, and would not be retarding it. Another suggestion that has been made by certain of my friends on the other side is that the gold-mining industry should be nationalised. If we were starting today with a clean slate, that might be a possible solution. In another branch of mining it might still be a correct solution, but I am afraid that for practical reasons it would be very difficult to apply that solution to the gold-mining industry. Therefore, by reason of these practical difficulties, I think that policy should also be rejected. The third alternative is the retention of private ownership, but under control of a body on which the State and the workers are adequately represented. In other words, the main object of such control would be not high dividends and quick returns, but a systematic and long-range development of our existing gold reserves, and the search for new sources of supply. What I am envisaging here for the Minister is a sort of national gold trust developing our greatest national natural resources for the benefit of the people and of the country.

Who finds the capital?

I say that private industry is there to provide the capital, but private industry must not be allowed to exist untrammelled. They can still get their returns, but they must do it under the eye of and the control of the State, because the State has the greatest interest in that. We do not want them to have quick returns: they can have steady and safe returns, and they must have the right to continue to draw their interest on the capital which they have put into the industry; that must be theirs too. But we do not want them to go and play ducks and drakes with what is a national asset today, and which ought to be developed in the national interest. This third alternative, I submit, is a constructive proposition which is scientifically attractive as a great technical, economic and social experiment. In another sense we have already made experiments of that kind in South Africa. As a matter of fact we stand, I should imagine, very near the forefront of the world as far as experiments of this nature are concerned. We have in our Iscor Corporation an example of what can be done when you have a national asset, not exploited for private interest but developed in the national interest, and that is what we feel ought to be done here. It is not a question of nationalisation. I realise there are practical difficulties, but the practical difficulties in the way of this third alternative are not insurmountable. I think they can be surmounted, but they require something more than this lack of constructive policy which we have had from the Government, simply muddling along, simply letting the controllers of the industry do what they please. There has been no constructive policy, no energy going out from the Government to control the production and the way in which this national asset is being, I might almost say, wasted in this country. We know that in countries like Chile the huge nitrate deposits have been a positive menace to them, because they have discouraged the creation of secondary industry. Chile was prepared to be satisfied to get 25 per cent. royalties on the nett profits of the Nitrate Corporation, which is run by foreign capital. We know that that policy has obtained in this country. I have no doubt the fact that we have had all this money available overseas by the sale of our gold has retarded the creation of necessary secondary industries in this country. We feel that as we have this money, we might as well import goods which might be manufactured in this country. The third alternative I have mentioned broadly, is the policy of the Nationalist Party, and I think we are justified on the eve of a General Election, in asking the Minister for a clear and unequivocal exposition of what the Government’s policy is. Is the Government prepared to go on simply on the old lines, or is it prepared to adopt the plan which will conserve this great asset? We would like to know that. How are they going to tackle this major problem, which is facing the gold mining industry today, not facing the gold mining industry as a profit-making machine, but facing that industry as the largest single contributor to the national income, and therefore a most important part of the national economy of the country? I think we are entitled to know what the policy of the Government is, and I think the country is entitled to know when one of these days, in the near future, the people will be asked to cast their votes for the policy which is put forward. Another matter which I think is of great concern, and which we are in a better position to tackle today, is this question of base minerals. We had an Act last year, and I then regretted that the Minister had not grasped time by the forelock, that he did not make a much more detailed explanation of the Government’s policy in regard to base minerals. I contended that he had tackled only one aspect of the matter, and that was the productive side. The Act simply tried to take away all the obstacles to production that there were, but it never tackled the other and most important side, namely, the question of conservation. Conservation has been considered so important in other countries, that they have legislation on the subject. We have an Act here, but except for some regulation there is practically nothing about conservation in it. I want to read what has been said in a book which has recently appeared in America: “Elements of a National Mineral Policy.” There they talk about conservation measures—

Other countries are tackling this problem, what are we doing? Here we have got the same problem again facing us as in the gold industry, namely, development versus exploitation on private account. With this distinction, Mr. Chairman, that so far as base minerals are concerned we have practically a clean slate today, vested interests have not yet grown to such an extent as to make the tackling of this problem impossible. Let me just refer when I talk about conservation measures, to a few examples. There is the question of coking coal. Our coking coal deposits are very limited in this country, and they are very necessary for our secondary industries, they are very necessary for the iron and steel industry; and yet we find the Government report stating in regard to coking coal, that supplies are being exported and used internally for steam raising purposes, for which more plentiful deposits of coal are available. The report states that the supplies of coking coal so necessary for large-scale industries such as iron and steel, are limited in relation to our potential requirements, and therefore no coking coal ought to be exported from this country. Certainly it is wasteful to use it for steamraising purposes. That is the Government report, and what is the Government doing about it? And let me say this, that this is not the first time this has been reported on. Before this report was issued, there were other representations, and the Government has simply allowed the wasting of this very essential base mineral, which is required for our other industries in this country. The same with manganese and fluorspar. Again attention is drawn in this report to lack of conservation of these. Even when some of these base metals cannot be used for other industries in this country, it should be the policy of the Government not to allow these ores to be shipped from this country in an unrefined condition. They should at any rate see that some refining takes place in this country, and through that some employment given to the people of this country. There is the nickel industry in Canada, which is an example to us. There they have smelting works run by American capital. The Canadian Government woke up to the fact that this was not the correct position, to allow their nickel to go only half refined out of the country. They caused major smelting works to be set up in Canada. That is a long-range policy which aims at using base metals as a national industry, and not merely for private enterprise. Commissions are not enough. We have had a spate of commissions on all these matters. We found the Minister the other day also sheltering behind a new commission that he has appointed for miners’ phthisis. Reports are issued from time to time, reports which are born to blush unread and waste their wisdom on the desert air of Ministerial inertia and timidity. We get no forrader in that way. What we want is not so much this philosophical contemplation of the hon. Minister, we want some more action, not the legal deliberation which takes the Minister two years to decide whether he will even appoint a commission, another two years before the report is out, and another two years for the Minister to digest it. Mr. Chairman, we feel that in this matter we want some activity, we do , not want continually to think that these assets are running to waste. At present we are in a position to do something about it, because here the main problem is one of control. One cannot expect, with the best will in the world, one cannot expect private enterprise to be able to take a long-range view of a problem of this nature. I want to refer to the conference which took place in America and quote this part of the deliberations of the representatives at that conference on base minerals—

Here again the problem is the same, are we going to leave it to private enterprise and competition? Are we going to adopt this negative attitude of a “holes in the ground” policy? If so, after 20, 30 or 40 years all South Africa will have of these hidden riches will be a number of “holes in the ground”. So we also in this case ask for some planned development by a national base metals corporation. That, Mr. Chairman, is much easier of attainment than in the case of the gold-mining industry, because we are still at the very threshold of our development as a base mineral country. We can still do that if we only have the courage to seize the opportunity. Every day that the Government postpones making this fateful decision makes it more difficult for the Government, or its successor, to come to any decision. Vested interests are created and we never know where we shall be in a year or ten to fifteen years’ time. We want the Government to take steps now; they have still the chance. But I am afraid that as long as we have a Government which is concerned with other matters, which has shown not in this regard only but in the whole question of the mining industry, such a deplorable lack of initiative and want of constructive policy, that one really cannot expect very much from them. I want to read what a little paper “Common Sense”, which is not a Nationalist publication, says in regard to the Government. It says—

It goes on, and I want to commend this to the particular attention of the Minister; The Minister seems very fond of these commissions, and the writer of the article says—

Does that not apply to the last Government?

No, to the present Government. Mr. Chairman, they have the opportunity now and I am afraid I am almost tempted to say what Disraeli said when he looked at the Treasury benches. He said: “Mr. Speaker, when I look at the Treasury benches the Ministers remind me of one of those marine landscapes which one not unusually finds on the coast of South America. You behold a range of exhausted volcanoes!”

Mr. Chairman, I was obliged to withdraw the motion standing in my name in regard to the indigenous oil industry, but I would like to take this opportunity to discuss with the Minister this afternoon the policy that he and his department have in regard to making use of the powers granted him in the Base Metal and Minerals Act passed by this House last year. We see according to the Estimates, that the Minister has asked us to vote an amount of £30,000 to enable him to investigate the possibility of finding natural oil. Well, I admire the Minister’s optimism, and while I am afraid he is wrong, I hope that he is right. We wish him all luck in his enterprise, and nobody will be more grateful than I shall be if the Minister’s hopes are justified, and if he does strike crude petroleum. But I feel that the matter should not be left there, and that the Minister should not confine his activities to the possibility of discovering natural oil, the existence of which at the present moment is highly problematical. If there is no natural oil, we are forced back to our present position, and I feel we should ask the Minister to take steps to investigate the possibility of recovering oil from our coal reserves. While the existence of crude petroleum is problematical, we know that we have vast coal reserves. I understand the coal reserves in South Africa are estimated at 250,000,000,000 tons. That in itself, Mr. Chairman, is by far the greatest natural asset which this country possesses, and is the surest bulwark which we have in this country for the protection of white civilisation, or for that matter of any civilisation at all. Without the existence of these vast coal reserves, civilisation as we know it will come to a standstill in this country. I feel it is incumbent upon us to exploit these reserves, to husband them, and work them as carefully and economically as possible. We have to bear in mind that once we exhaust our mineral wealth, civilisation as we know it will come to an end, and we have to remind ourselves of this further fact, that mineral wealth can be exploited once, and once only. As soon as it has been mined it is no longer an asset, and we can never replace it. It is a capital asset which cannot be replaced from revenue account. I feel, therefore, that we must use our minerals wisely and economically, and we must put them to the use for which they are most suited. In the past we admit that our coal reserves have been somewhat wastefully used. If we look at the coal dumps all over the country we see that millions and millions of tons have been allowed to go to waste on the dumps outside the mines where spontaneous combustion takes place, and a once valuable asset is dissipated. Some advance has been made, principally through the activities of the Fuel Research Institute. We are now able to use finer coal and coal of a lower calorific value, but I feel that the limits of economy have not been reached, and it is because of that I suggest that to make the fullest use of coal we should turn it into oil. In the past we have always been met by this answer that it is not economical to make oil out of coal while you can import natural oil from elsewhere. If we want to be honest with ourselves, we must admit that we have not dealt with other national problems on the same basis. If we allow ourselves to be guided by economic reasons only, we must say that we should never produce one bag of maize, one bag of wheat or one pound of sugar in this country, because in normal times we are able to import those products very much more cheaply from elsewhere. But because we can import them cheaper we do not on that account discourage our people from growing them. We have to look at the national interest, and national interests cannot always be expressed in terms of pounds, shillings and pence. I feel that in our approach to one of our major problems, namely the exploitation of our mineral resources, we must also be guided by considerations other than those of economy. We don’t want to consider it in terms of money only. If an enemy plane were to appear on the horizon today we would not refrain from sending up one of our fighters simply because petrol costs 5s. a gallon or more. No, Mr. Chairman, we have to consider national interests and national security. We are still able to import petrol into this country owing to the strength and might of the British Navy, which has kept our ports open. But, Mr. Chairman, we must in addition to that look after ourselves. We know that Japan, before the war, embarked upon a seven-year plan under which they contemplated spending £44,000,000 to establish an indigenous oil industry. They hoped that in less than seven years they would make Japan self-supporting as far as oil is concerned. We know that Germany and Italy had large coal reducing plants, but for which I am sure Germany and Italy could never have waged war and could never have lasted as long as they have done. They foresaw the possibility of being excluded from outside oil supplies, and they took it upon themselves to instal these plants. With regard to costs, it is estimated that a plant costing about £2,000,000 would produce 8,000,000 gallons of petrol a year, in addition to which you would have valuable by-products, the chief of which is bitumen. At present we have a company working in South Africa, the Torbanite Company, and I wish here again to pay a tribute to that company, which in spite of difficulties has been producing … .

You told us that last year.

Yes, but you have forgotten it already. Mr. Chairman, I wish to pay a tribute to the pioneering effort inaugurated by this company. They have done much to show us the way, and we may regard their plant as a pilot plant. The supply of torbanite is limited, whereas the deposits of coal are almost unlimited. I feel, therefore, that we must not allow the matter to rest where it is. I understand negotiations are still proceeding between the Torbanite Company and the Government, and I do not wish to say very much more until those negotiations have been concluded one way or the other. I would remind the House of this, that when the Torbanite people commenced producing, and when the fiscal policy of the Government was different from that obtaining today, the price of petrol was reduced by something like 5d. a gallon owing to the reduction of import duty, the reduction of railway charges, and those reductions were introduced immediately after the Torbanite started working. That was a reduction which they could not contemplate when they started working, and that fact has been responsible for a great deal of their difficulties. However, the Government has helped them in every way possible, and I hope the negotiations which are now proceeding will be successfully concluded, and the industry placed on a sound and permanent basis. But Torbanite can supply very little of our needs, and if we go in for a process of producing oil from coal, we shall take the matter a stage further and establish a truly national industry. There are two known processes, the hydrogenation process for which a special coal is required, and the coal required for that process is a coking coal, of which we have only a limited quantity, and which is urgently required for other industries. It may not be prudent for us to exhaust our coking coal in that way. [Time limit.]

I am afraid the hon. the Minister did not quite follow what I said on Saturday. I don’t know whether I did not speak distinctly, or what may have been the reason, but one thing is perfectly clear and that is that the hon. the Minister did not understand my arguments at all. I emphasised the fact that so far as diamonds were concerned the Minister had specially taken the trouble to visit the diggings. I did not emphasise that the Minister had not made any promises. That was not my point at all. The great point I wanted to emphasise was that the Minister had seen the conditions under which those people were living there. Never has such a black picture been painted in this House of the conditions prevailing among the diggers as that which was painted by the Minister himself. I admit that the legislation which the Minister wanted to pass through this House was turned down, but quite a large proportion of his demands were granted. The principal portion of his demands were granted. If we look back at the position which the Minister referred to a moment ago—if the House gives the Minister an opportunity of reverting to that position and of assuming that responsibility, he will not be prepared to accept it. I think the Minister realises that the weapon which he has today without that great responsibility is just as powerful a weapon for the removal of the diggers as he would otherwise have had. The Minister has the power today to wipe out the diggers within a very short space of time. He has the power of completely shutting up the diamond diggings, and if I look at the policy which the Minister is following now, it is not quite clear to me that the Minister is very consistent in all he is doing. He said to us: Give us that legislation and if you do the opportunities for the professional digger will be very much improved. Well, one can close down the diggings in two ways. The first way of doing so has been entrusted to the Minister—the Minister has been given the power to do so. The door can be closed to all new influx. The Minister has that power. Then the next opportunity the Minister has is this: He need not proclaim any fresh ground; he need not give them the chance of going to any new ground. We can at least expect the Minister even if he has not made that promise, to put himself out specially to do something to meet the needs of the professional digger. Without arguing at length with the Minister I want to put this question to him. He knows what the position of the professional digger is today. What does he intend doing, what steps is he going to take henceforth so as to relieve the position of the professional digger? It is perfectly clear that if the Minister does not take steps in the very near future the appalling condition which the Minister painted to the House will ere long prevail among those people, judging by the reports from the Department of Social Welfare. Now I put this question to the Minister. What does he intend doing for the professional digger? Last year the Minister told us that certain land owners were holding back the development of the country by closing up land so far as base minerals were concerned. We then asked him what about the people who deliberately shut up diamondiferous land. To that the Minister said this: Let this be a warning, and I take it as a warning to those people in the future. The hon. member for Lichtenburg (Mr. A. P. Swart) put this question to the Minister:

The Minister’s reply was—

That was the Minister’s reply. So nothing has come of that threat. The opportunities of tackling this whole matter are better than they have ever been before. Our stocks are almost exhausted. 60 per cent. of the world’s diamonds are being used in industries today. I admit that the quantities we have are not large. On many of our diamond diggings we only find diamonds which can be used for industrial purposes, and this applies particularly to the Lichtenburg diamonds. Our opportunities are passing, and the Minister should not imagine that the world agrees with him so far as the question of control of the diamond market is concerned. Let me say beforehand that I am a supporter of control, but to give one company the power to have the whole country in its grip, and then to allow the major portion of the land to be bought up by that one company, is a crime against South Africa. I have a book here written by a certain Monnickendam entitled “Secrets of the Diamond”. One of the biggest Amsterdam diamond merchants definitely denies here that diamonds will become valueless if control is relaxed. He writes this—

I repeat that the world at large does not agree with the Minister that the value of diamonds is dependent on control. My time is very short and I do not want to go into that matter any further. I only want to say this: To place this control, so far as South Africa is concerned, in the hands of one big company, at a time when the Government has the power and can hold the balance in regard to the tremendous wealth of Namaqualand is an absolute crime.

I hope the Minister will forgive me for referring to a matter which I consider to be of the greatest importance to this country, a matter which I have referred to in this House on previous occasions. The Minister made a statement recently in Another Place but he unfortunately did not make it quite clear what the intentions of the Government are as regards the future progress of our base metals and minerals. I sincerely hope that the Minister will do so today, and will place before the country a clear statement as to the position in regard to the development of our base metals and minerals. This matter is regarded as being of the utmost importance by large sections of the community who see in the development of our base metal industry a great future for this country. A meeting was held recently by the South African Scientific Workers with regard to our raw materials and they did not seem to be too well pleased with the progress that is being made in that respect, nor did they seem too well pleased with the position in regard to the marketing and selling of our base minerals and metals. I have drawn the Minister’s attention particularly to our base minerals because I think that part is of the greatest importance. I just want to draw the Minister’s attention to a meeting held some days ago at Pietersburg. I should like to quote a brief report which appeared in the Press about it—So the Minister can see that this base mineral and metal position is causing grave concern throughout the whole Union. I also have here another cutting from Washington where Mr. Charles E. Wilson is reported as having said this—

It shows the importance which the whole world is attaching to this question of the development and exploitation of base metals, and I would again urge on the Minister to make a clear statement of the Government’s intention on the subject. If the Minister fails to make a statement he will only keep the country in a very anxious mood. I have had a great deal of correspondence on this matter—and so has the Department—and I feel that the Minister agrees with me as to the necessity for a vigorous policy to be pursued in the matter of developing our base metals and minerals and finding markets for them.

I think I had better reply to the various speeches which have now been made and to the various points that have been raised. The hon. member for Fauresmith’s (Dr. Dönges) speech I listened to with the greatest interest because it foreshadowed the mining policy of his party. Well, I have tried to think over rapidly the synthesis of the whole of his speech. It boils down to this; he said the Government should control the development of the mining industry and shape its policy and should not leave it to the exploitation of private individuals. It seemed to me he was going on something like totalitarian principles—he wished the Government to appoint a controller of the mining industry—or perhaps he wished to have an addition to the Mealie Control Board to deal with the mining problems of the Union of South Africa. One thing that has been standing out with regard to control and controllers is that you have to have first class brains in order to do it and make a success of it. Now let me tell the hon. member that the best brains in the country in regard to mining are already enlisted in the mining industry. If you were to rake the four corners, not only of this Continent but of the whole of Europe and America, I doubt very much if you would get an improvement on the brains of those who are directing the mining industry of the Witwatersrand. It is a model, and let me say that the officials of the Government Department have nothing but the greatest admiration for the way in which mining problems are tackled by the technicians of the mining industry. Now what is this control board to do? And where are you to get the personnel to do it? I should like very much if the hon. member for Fauresmith, speaking on behalf of his party, had enligtened us on this, and if he is going on the public platforms and if he is going to speak on this matter I hope he will tell us where he is going to get these super men to supervise the mining industry, where he is going to get these men to replace the best technicians in the world? What is his idea? Is it to develop the mining industry to increase its volume, or to restrict it? I listened very carefully to him. He said we had to check the production of gold in order to break the suddenness of the falling off. He knows as well as anyone that you cannot produce gold unless it is there. So if there is a brake to be put on, is it the policy of his Party that we should deliberately restrict enterprise, that we should restrict the scope and the development of the gold mining industry? It is a very startling policy, and it would lead to very interesting results. May I ask the hon. member if he knows that a mine prospecting lease has been given in respect of certain very promising areas in the Free State? They have not been touched yet beyond borehole examinations, but they are an interesting speculation. Is it part of the policy of the hon. member and of his Party—would they back the Government up if we were to say: “No, we are not going to allow you to develop that—this will be kept for a future date—we are going to keep the Free State and its gold resources locked up for a future date, so when gold mining peters out on the Witwatersrand we can go into the Free State and take our chance there.” Is that the policy? If it is not, then I do not understand the speech of the hon. member. How does he propose to brake the falling off if it is not by a restriction of that kind? If the policy put forward by the hon. member for Fauresmith were to be put to any audience on the Witwatersrand, in the Transvaal or in the Free State, I believe it would be turned down unanimously so long as they understood it. Had that policy been followed in the past it would have meant that so far from the Witwatersrand having been developed from Springs to Randfontein, we should today have had perhaps one quarter of the number of Municipalities which we have today, and we should perhaps have enough gold to develop 100 or 50 years hence instead of the gold having been developed now. If that is what the hon. member looks forward to, then a control board for the mining industry is something which the Government will have nothing to do with. No, the policy of the Government with regard to the development of precious minerals is this, we shall make the greatest use of all the ore that is there. We do not wish there to be any wasteful mining. I appreciate what the hon. member said about that especially in regard to coal, and I shall deal with that later. In regard to precious minerals, we shall use all the ore than can be mined, taking advantage of the present price of gold, and if we are to keep the gold mining industry working on the scale that it has been worked in past years we have to face Vising costs, and I am afraid these rising costs are not likely to fall to a substantial degree; we can only face these rising costs and hope to maintain the dimensions of our industry if there is a complete overhauling of the taxation policy of the Government, a reduction of the taxation—unless, of course, there is going to be an increased price paid for our gold. Either one or the other. We hope that what has been suggested as a possibility in the Press in the last few days will be realised. It has been suggested that gold may reach a higher price than it is standing at today. But unless there is one or other of these conditions in regard to the gold mining industry, the position of that industry may become a disastrous one. Our policy has not been one of laissez-faire. The policy of this Government as of the last Government, in fact of all Governments since Union, has been to encourage the utmost production on lines which do not allow of waste to secure that all that can be produced shall be profitably exploited. Let me tell the hon. member this, there is a need which I fully recognise for laying down a long term policy. I am not prepared to accept or to ask for any powers of control of the technicians now directing the industry. In my opinion they are doing their work as well as it can be done, but I do recognise that there is a necessity for considering a long term policy embracing the possibility of ultra deep mining. I was present at a scientific society at which the learned gentleman who read a paper suggested the possibility of mining down to 13,000 feet. It is a possibility which will have to be examined. And in the report of the Agricultural and Industrial Requirements Commission that is suggested too. The hon. member for Fauresmith has struck the same note. May I tell him that the matter has not been neglected. It has been under consideration by the Government and it has been closely considered by me, and we are about to appoint a commission to go into this very fact.

What, another commission!

Yes, another commission. The hon. member was pleased to make merry on the subject of commissions. What does he expect me to do? Does he expect me, a mere lawyer, to dive in and give orders as to what is to be the long term policy? Does he expect the Government Mining Engineer without consultation, and without evidence, to issue a ukase on a totalitarian precedent to say what is to be done and what not?

A control board can do it.

Yes, exactly. That is where a control board would come in and public interest go out. If you had your control board over the mining industry, that is the very sort of thing it might do—that is the very sort of trap it might fall into. Well, I am going to see that this commission is appointed, and that the most competent men available are appointed on it. It is difficult to get men who are competent to advise on the possibilities of profitable mining at 13,000 feet. Such a thing has never been done in the world’s history, and if it is done it will need a reconsideration of all our taxation problems. If it can be done at a profit, it will be something in the nature of a mining miracle. However, we shall examine it. With regard to the conservation of coal, it is quite true there has been wasteful mining in coal. In saying that I wish to guard myself very carefully against making an accusation against those who have been responsible for mining. There are different factors which enter into this. It is closely connected with the qualities of coal which can be used on board ship, whether for bunkering or export, and it is closely connected with the calorific value of coal which is fixed for general use. It is a very complicated question, and when the hon. member says that coking coal is so precious that it should never be used for export I am very much with it in principle, but I have gone into this question and let me tell him that it is a very complicated question. It is not a fact that all coking coal comes from one colliery, nor is it a fact that all the coal from one colliery is coking coal. It often happens that one seam is fit for coking and another is not. And I must tell the hon. member that from the point of view of economic mining it is not feasible to work out one seam and leave the others untouched For economic mining it is often necessary to work both seams or more than two seams. It is a very complicated question indeed and it is one which I can assure hon. members is engaging my close consideration, and I hope we shall be able to take some action on the matter, which will lead to much greater conservation of coking coal for use in our secondary industries. That is what I aim at. I would be very glad if it were feasible to prevent any coking coal from being used in any other way. But I am not able to make such a statement at present. The hon. member said in round terms that all these questions are questions of national interest as against private gain. May I remind the hon. member that under a system where private enterprise is the basis of all our production, and the aims and objects of every youth is to make a profit during his life so that he may be able to maintain himself and his family—in such a system the making of profit, the making of gain, is a matter of national interest. It is not a question of national interest against private gain, but the making of gain by private individuals is a matter of national interest. That is the difference between the Communistic system which apparently in some parts of his speech the hon. member was aiming at, and which in other parts he does not want.

Then what about Iscor? They work for gain. Is that against the national interest?

Oh, no. They work for gain, don’t they?

But then your argument falls away.

No, it does not. The point is that the hon. member’s speech was entirely inconsistent; at times he seemed to suggest that there was an innate opposition between public interest and private gain, and at other times he played up to it. I am just pointing that out. I claim consistency in this, that where you have an economic system based on private enterprise, you are bound to allow profits and you are bound to allow for individuals earning profits, and it is because they do not earn enough profits that you are compelled to have old age pensions and security schemes. We want them to earn profits in which case they will be contributors to the public revenue. Then the hon. member wished to stop all export of raw mineral products. Well, I think that would be a disastrous action. I am willing to make every possible effort to process our minerals wherever we can. We are doing something of that kind now. The subsidiaries at Iscor at the Van der Byl Works which are being established at Vereeniging are going in for the manufacture of ferro alloys, and I was very glad to hear from Dr. van der Byl the other day when he told me that their first attempt to make ferro-tungsten out of our own tungsten had been 100 per cent. successful. I hope that we shall be able to do that with chrome and manganese and other substances, and that our export of alloys will largely take the place of simple concentrates. The hon. member for Ermelo (Mr. Jackson) spoke about oil, and he seems to think that we should go in for the hydrogenation process and extract oil from our coal. That I do not think really falls in my Department at all. That, I think, should be raised on the vote on Commerce and Industries. I have not got the machinery for that. What is committed to the technicians of my Department is the production of minerals, and not the creation of a product from them. The hon. member for Christiana (Mr. Wentzel) asked me if it is my policy to close the alluvial diggings entirely. The answer is emphatically no. What my policy was, and as I have explained still is, is to keep the numbers of those who are on the alluvial diggings confined to the old professional digger. On the diggings at the present time there are many who hold diggers’ certificates and who are not professional diggers at all. They are the people I want to weed out; I wanted to take away their certificates, but I could not do so, I was not allowed. Attorneys, engineers, all sorts of professional men who just go in for digging for diamonds as a side show, are there, and if I were to throw open, if I had the power to throw open those rich fields which before were open in Lichtenburg, I venture to say it is highly probable that most of the wealth would go to people who are not professional diggers at all. I frankly want to squeeze out all those people who go in for digging just as a side show.

You are squeezing out the professional digger.

No, I am not squeezing him out, but I cannot put him in the favourable position that I would like to do. Let me tell the hon. member what I am doing. I am working in two ways. In so far as I am reducing the number of those who only go in for it as a side show, I am leaving the larger share of diamond production to the professional digger. You may say that is is a small thing, but it is something. It is a token of my ability and my wishes in the matter. I am doing that, I am also taking steps to protect the price that the professional digger gets. In former times the Diamond Corporation used to send in their buyers to the alluvial fields, intermittently, and give what prices to them seemed good and right, but by bargaining with them I have got a definite undertaking and understanding that they send their buyers regularly on to the field, and that they buy with the deliberate purpose of keeping up the price and seeing that the diggers get a fair price for their stones. The standard price is the selling price, the South African selling price of the trading company less 10 per cent. to cover their expenses. And I see that they pay up to that price. I think the hon. member will agree with me that I have done something to show that I am not cool towards the interests of the professional digger, or indeed any of these diggers. I have not done as much as I would like to do, but I have done that, and if I have an opportunity of doing more, I will do it.

[Inaudible.]

Well, I cannot make diamonds grow where there are none.

Why not proclaim ground?

I am not prepared to ask Parliament to give me powers to throw open this ground for the reason I have already given. No Minister has come forward and suggested that, my predecessor never attempted to do it, and for very good reasons, and my successor will not do it either, I venture to prophesy.

He will be a wiser man.

I am quite confident that he will not be so foolish as to adopt that policy, at any rate. The hon. member said that 60 per cent. of the stones were now used in industry. I do not know where he gets his figures from. If you take one sale in one particular month, you may find that those sales were industrial, but I do not think his figure is correct. Let me tell the hon. member that of the stones that are produced on the alluvial field, a very small proportion are industrial, nearly all are gem stones, and he would be very sorry, and those for whom he speaks would be uncommonly sorry if they had to take the industrial price for the stones that they produce, because they get a very much higher price than that. It is not true to say that we are leaving the control of the diamand position to one company. I suppose he is thinking of De Beers. It is not true and is a complete travesty of the facts. The control of the diamond interests of South Africa is more completely in the hands of the Government now than ever before. And that control is a very effective one, and is exercised by agreement between reasonable men who have common interests. The Diamond Producers Association has a board which is exercising control and the powers of the Minister of Mines in connection with that are very wide, so that it is quite a travesty of the true position to say that the control of the diamond interests of South Africa are left to a single company. They are not, they are very largely in my hands, and to the best of my ability I am using those powers. The hon. member for Pretoria, West (Mr. Wallach) spoke about base minerals, and asked me to make a comprehensive statement as to the Government’s policy in this respect. I have to express my acknowledgment to the hon. member, because he is always to the fore in pressing the development of base minerals upon my mind. Well, I am grateful for that, but I do not think at any time they are absent from my mind, I will tell the hon. member and the Committee what our policy is in that regard. The most important base minerals are being properly developed at the present time. Iron is being properly developed, I think, and we have an adequate supply of it. Coal is also being developed, though it is not entirely being managed to my satisfaction. Let me say there are a good many features of the coal mining industry which I am insisting shall be altered, but we are producing at any rate the quantity of coal that the country requires; the coal required for war purposes has made demands on the collieries far exceeding anything that we could possibly have thought of, and the collieries have responded to those demands very well indeed. The workers, the miners, the labourers, the artificers and the mine owners have responded to this, and I express my acknowledgment and those of the Government to them for what they have done. Their efforts have been of the very greatest value, and are recognised with very great appreciation. There are many points I need not go into, points in regard to which alteration will have to be introduced. As I have already hinted, we shall have to see if not only coking coal can be preserved, but that we conduct the mining of coal on such lines that all coal which is available shall be extracted. I understand a good deal of coal which might have been profitably mined, and would have been of value if it had been mined, has been left in certain mines.

What about by-products.

I will come to that presently. Our coal reserves are very large indeed, but they are not large enough that we can afford to see anything wasted. By-products are being produced on one property, and at a profit, at the present time. How far that profit will last into the peace period none of us can tell. By-products are being undertaken by one company, and with regard to the rest, our policy is to encourage private enterprise to the utmost. The small mines assistance scheme was set up years ago under the authority of Parliament for the purpose not merely of encouraging enterprise, but for giving financial assistance to the small people engaged in mining what seemed to be likely propositions which they had not enough money themselves to finance. That is still going on. I, as a matter of policy, have dropped encouraging and assisting any small gold mining propositions at the present, because I want to concentrate attention on base metal propositions. These are being assisted, and will be assisted wherever they show signs of being worked on sound commercial lines. At the present time we are smelting our own copper, and that is a step forward. Zaaiplaats has lately increased the capacity of its plant in this respect, and we are able now to smelt the whole of the copper which is produced, and we have capacity there, I am told, to smelt a good deal more if the copper is developed. Tin we have been hunting for, and have found in certain quantities, and I am hoping that we shall find a good deal more. I will encourage that in every way possible. Asbestos has had a pretty good market, and I am quite pleased to hear that there has been a public meeting of asbestos producers at Pietersburg, which I hope will result in some sort of arrangement for co-operation. I have been trying to get co-operation amongst them, and I shall be very glad indeed if they achieve that, and I shall be pleased to assist that movement in any way I can. Chrome and manganese are rather under a cloud at the present time. Shipping facilities have dropped in respect of these two minerals, and I am afraid the outlook for chrome and manganese for the next year is not a very bright one. Then with regard to tungsten, the search for tungsten has been intensive, and I have two field parties now out in Namaqualand some 500 strong, counting the native labourers. We are examining the tungsten resources of Namaqualand and on both sides of the Orange River. At the same time, I am not cutting out private enterprise. I shall be pleased indeed if likely propositions are found, and when these propositions have been found, to call for public tenders under the Base Metals Act and allow private enterprise to develop them. There is plenty of room for us all. I do not know that I can say anything further on the matter of general policy. Marketing is not really a matter for my department, but it is true that we have a representative of the department on the staff of the High Commissioner in London, and it is part of his duty to keep in touch with the markets of the world, and to inform us of the prospects in different places. The information which is collected by me is placed at the disposal of all enquiries whenever they come forward, and I can assure the House that people are not shy of making use of our information. I think now I have covered all the points that have been raised.

I have really never heard anything more lame and miserable than the Minister’s reply. All he has been doing has been to play with words. If the hon. member for Fauresmith (Dr. Dönges) had spoken Afrikaans, so that the Minister had been unable to understand him, one might have realised the position, but the hon. member spoke in English, in spite of which the Minister came along with a distortion of facts as though he did not even understand English. First of all I want to tell the Minister that it is the policy of this side of the House to regard as unreasonable and unfair to the country a procedure whereby great wealth is taken out of the soil in the way it is being done today. We find that yearly an amount of between £118,000,000 and £120,000,000, has been taken out of the bowels of the earth, and that the country has been impoverished to that extent while the population at the same time has only made £20,000,000 out of it. Such a division of the country’s wealth is a scandal. No other country in the world would tolerate such a position but it seems to me that the Minister is under the influence of the mining capitalists, and that we shall not be able to get rid of that influence unless we get a different Government. The Minister smiles, but even if one analyses what he has said one does not yet know what the Government’s policy is. Naturally the Minister is completely out of sympathy with the general population of the country and from a Minister like that we cannot expect anything else. I got up, however, to bring the scandalous conditions prevailing at the diggings at Brakfontein to the Minister’s notice. Conditions there are really a disgrace so far as any Government is concerned. Sanitary services and medical services are of such a nature that if the Minister were to visit the place he would have to admit that the conditions prevailing there are thoroughly undesirable and cannot be tolerated to continue. I want to invite him to visit the place. We hear such a lot about the Minister’s experience, but all he knows is what is happening in Johannesburg. His experience is very restricted and it is all wrong that people should be treated in this way. The Minister can get off the train at one of the stations along the line and I shall drive him to these diggings in my own motor car. The subject is not one to laugh at. If he sees the conditions prevailing there he will no longer take it so lightly. If there is one section of the population which should be assisted it is the diggers. In 1941 the alluvial diggings produced 159,118 carats to a value of £943,016. The Government on those diamonds received 10 per cent. by way of export tax. I am taking account of the fact that the value of cut diamonds in this country has to be deducted of that amount; so the Government got about £90,000. That is more or less the amount which the Government got out of the work of those poor people who are labouring there in the sweat of their brow, but the Government does nothing for them. Such is the poverty there that every right thinking person must feel ashamed about it. I therefore say that the Minister has no right to laugh about it, he should go into this whole question with his Department and see what can be done. The Minister can get off the train at Hopetown and I am prepared to meet him there in my own motor car, without any expense to the State, and I shall take him there so that he can see the conditions for himself. If he himself is unable to come let him send the head of his Department. Conditions are such that they can no longer be allowed to continue. If a doctor has to be called to attend to anybody there it often happens that the patient is dead before the doctor arrives. The medical services are very restricted and I notice from the amount on the Estimate that practically nothing is being done for the education of the children of the diggers. There is an amount of £163 for study bursaries for children of diggers. Are not those children entitled to receive proper education? Is it not in the interest of the State to see to it that those children are educated, in the same way as the children of any other section of the population? Especially in view of the fact that such large profits are being made out of this industry, anyone will admit that it is no more than fair and just that those children should be given a chance in life.

At 5.55 p.m. the Chairman stated that, in accordance with the Sessional Orders adopted on the 28th January and 26th March, 1943, and Standing Order No. 26 (1), he would report progress and ask leave to sit again.

House Resumed:

The CHAIRMAN reported progress and asked leave to sit again; House to resume in Committee on 8th April.

Agreed to.