In accordance with paragraph (1) of the resolution of the House adopted on the 11th March, the Supplementary Estimates of Expenditure to be defrayed from Revenue Funds during the year ending 31st March, 1944 stand referred to the Committee.

When the Minister of Mines replied on Saturday last to the speech I had made, he called me an agitator. Evidently because I pleaded the cause of a certain class of our people who have sacrificed everything they hold dear for the interest of the mine owners—evidently because of that the Minister felt very indignant and he called me an agitator.

Did you lose any sleep over that?

In reply I can only say this, that evidently the Minister of Mines has as little knowledge of the conditions of these mineworkers as he has of the constitutional advancement of South Africa. Just as the hon. Minister is living constitutionally in the Victorian era, so he is living in a world created by his dreams in regard to the conditions of the mineworkers for whom he is supposed to be responsible. The Minister took exception to what I said in regard to these miners’ phthisis sufferers—that many of them were starving between the different stages of Phthisis. I said that the man after receiving his cash compensation when he reached the ante-primary stage—and I said that it often happened that he starved between that time and the time he reached the primary stage. To starve it is not necessary to go completely without food. You can eat and yet be starving. I have seen many of these phthisis sufferers who have no other income, who have received no ex gratia grant and who are literally in such a way that they cannot subsist. And then the hon. Minister said that my criticisms were not serious criticisms. In spite of the fact that they were not serious criticisms it took the Minister precisely thirty-five minutes to reply to them, so if he had considered them serious criticisms, it would probably have taken him the rest of the Session to reply. The Minister also became very indignant because of the fact that I accused him of having done nothing for the miners’ phthisis sufferers since he took office. The best way to prove that is to analyse the Minister’s reply. The Minister admitted that the only benefit he conferred on the miners’ phthisis beneficiaries was by increasing the amount available for ex gratia grants and making the provision more elastic, and making a slight improvement in regard to these grants. Secondly the Hon. the Minister said: “Look at the Commission I have appointed.” The Minister also said it would be most improper to introduce legislation until that Commission had submitted its report. By implication the Minister meant to convey that if the Commission took ten years to submit its report it would be improper even to introduce emergency legislation to meet the men in the meantime; that they would have to endeavour to come out on the small compensation they received; they would have to endeavour to exist on the small amount they received, as compensation, until such time as the Commission had reported. But the Minister also said that we on this side never asked for the Commission. I frankly admit that not one member on this side of the House ever asked for a Commission to be appointed. But we did ask for direct benefits to be conferred on these men, which would have been much more valuable and of much greater benefit than the appointment of a Commission. And then the Minister waited two years before he appointed the Commission. He took office in September, 1939,—he appointed the Commission in October, 1941. As an excuse the Minister said that he first of all wanted to acquaint himself with the position. I want to know from the Minister whether he did not acquaint himself with the position before he took office. In those days when he sat as a private member and he pleaded the cause of the miners’ phthisis sufferers he must have acquainted himself with the condition of those sufferers. Surely it was not necessary for him to take two years to acquaint himself further with their position or to ascertain whether they received sufficient compensation or not. Two years were not necessary to come to a decision with regard to the appointment of this Commission. It was not necessary to take two years to decide whether this Commission was necessary or not. The fact remains that the hon. the Minister for two years sat still and did nothing in regard to the miners’ phthisis sufferers. The first thing he did was to introduce the amending Bill in 1941 which was a very slight improvement as was maintained by one of his own supporters, the hon. member for Krugersdorp (Mr. M. J. van den Berg). Two years after his appointment he decided on this Commission. Since then the hon. Minister of Mines has done absolutely nothing. I want to ask the Minister of Mines this: Surely it was within his power to confer some additional benefit upon these miners’ phthisis sufferers without necessarily introducing legislation? If the Government could proclaim an emergency regulation to provide that the native dock workers in Durban should be paid 5s. a day, the hon. Minister surely cannot tell the House that it was not within his power to issue a proclamation which would at least confer a cost of living allowance on the miners’ phthisis sufferers. There is a cost of living allowance being paid, but it is being paid only to miners’ phthisis sufferers who are in the secondary stage, and I have already shown in my speech that it is a completely inadequate cost of living allowance that is being paid at the moment. The hon. Minister, also with great indignation denied that learners were being employed to do the work of qualified miners. I, however, repeat that charge. I have sworn affidavits here to prove it. Learners are being employed after six months training to do the work of qualified miners. After they receive the temporary certificate, they are employed to do the work of qualified miners, and they are not being paid for that work. If the hon. Minister will take the trouble to investigate the position, he will find that these charges will be completely substantiated. The hon. Minister also stated—and with considerable satisfaction—that the mineworkers were completely satisfied with the removal of this additional hose from the drills. I have a letter here, written by the Secretary for Mines in January, 1943, where he stated in reply to a complaint that was made by a group of mineworkers, that the mines have again been instructed to comply with Regulation No. 101 in regard to the additional hose. That was in January. I received those letters at the beginning of the week, where complaint is again made in regard to certain mines where they have not replaced this additional hose. Then the other matter in regard to which I warned the hon. Minister, was the infiltration of native labour in the mines. That is a very serious complaint. I showed him that by the infiltration of native labour, by the abolition of certain shifts, more responsibility was being placed on the workers of a later shift, and they in turn placed that responsibility on the shoulders of the natives. I have received serious complaints that there is a steady infiltration of native labour, and that dilution of labour is taking place on a large scale. If the hon. Minister does not take steps to stop that, I want to warn him that it will again lead to the position which we had in 1922. We can sum up what the position is after three and a half years. After waiting two years the hon. Minister appointed a commission which has not yet reported. The only other thing he did was to make a very slight improvement in the ex gratia payments. Further he has done nothing at all. [Time limit.]

I also want to ask the hon. Minister whether it is not possible to do something more to assist the miners who are in receipt of an ex gratia payment, and I would like to know whether it is not possible to stretch the means test in regard to the cases of these poor unfortunate people. When the present means test, which was applied by the Act, was brought into existence—it was many years ago—and since then conditions have altered greatly, and I know of some cases, but I am glad to say that I do not know of many cases, which have been badly hit by the application of the present means test. But I do know of some cases, and in the cases which have been brought to my notice, the earnings of the children were, as a matter of fact, taken into consideration. It is all very well to apply a means test in connection with these men, which is done in almost the same way as it is applied to the old age pensions, and I think everyone in this House knows the hardships caused by the means test under the old age pensions, and that the earnings of the children are taken into consideration. Their parents are entirely dependent on the generosity of the children, and if the children do not seem disposed to help their parents, which they are expected to do on account of the money they are earning, these parents have to live on something like £7 10s. per month. That is really a case of hardship. I want to pay a tribute to the officials in charge of the administration of this fund. I do believe that they would go as far as they possibly can, but after all they are controlled by the Act. They would do more if they could. I am glad that the hon. Minister of Finance is in his seat at the moment. I mentioned a matter in this House some time ago, and the appeal I made on that occasion was that when phthisis applicants make application for the old age pension, the award made by the Phthisis Board should not be taken into consideration. That would make a huge difference to the people who get this ex gratia grant. When they make application under the present conditions, that grant is taken into consideration in the allocation of the old age pension grant. The point that I want to make in that connection is this, that when an ex gratia payment is granted by the Phthisis Board, that man has rendered exceptional services to the country, before getting that grant, and as he has rendered these special services, and as he is in a very unhealthy condition on account of working on the mines as long as he has, he should be exempted from the inclusion of the award under the old age pension. I would again put forward the plea that these ex gratia payments should be exempted when these people apply for an old age pension. I repeat that that would make a tremendous difference. These old people are only getting about £7 10s. at the moment, and they cannot live on that. It would make a considerable difference, not only to the man but also to the wife. The wife generally lives longer than the husband, and she would reap the benefit. There is no doubt about that. The wife lives longer because the husband is afflicted with disease, and in 99 cases out of 100 the wife does outlive the husband, and I put forward a plea for the husband as well as the wife on this occasion. It is a well-known fact, I think, that I live amongst these people. I see how they suffer, and I know only too well how short their expectation of life is when they are stricken with this disease, and as long as I am a member of this House I shall be failing in my duty if I did not come forward and make a plea on behalf of those stricken people. There is another matter that I want to bring to the notice of the Minister, and it is this. I think we should congratulate ourselves on the amicable relations between the Mineworkers Union and the Mine Management, and I want to point out that during the last two or three years the relationship has been much more amicable than in the past. I was rather amused by the hon. member for Fordsburg (Mr. B. J. Schoeman) when he was telling us just now about being two years late. According to the hon. member, two years ago we should not have had the Phthisis Act, because Hitler would have been in possession of the gold mines today. Then I want to refer to another matter, and that is the tremendous effort which the mineworker has been putting forward on the Witwatersrand in connection with the war effort. The mineworkers are doing a tremendous amount of work. The men are working overtime, and they are even contributing largely to the war funds. The mineworkers in the Crown Mine contribute something like £300 a month to war funds. They are very proud of that effort. The other mines are doing exactly the same, and considering the relations between the Mineworkers Union and the management, I say that we should be proud of the way the Mineworkers Union and the management have carried on and conducted the mining industry for the benefit of the country and the Empire generally, during the last two or three years of the war.

I am also rather disappointed in the hon. Minister. When he introduced the Base Minerals Act he told the farmers what rights he was going to take away from them. We felt cold shivers down our backs, because we heard that we were going to have footpaths through our veld, and that we were going to have our rights taken away. The Minister was going to do all sorts of things. Well, sir, two years have elapsed and nothing has been done yet. It took two years to appoint a Commission; another two years may elapse before that Commission completes its deliberations, and by that time perhaps the hon. Minister will not be here; he may be in the grave by that time. I must say that I am disappointed in the hon. Minister. When I saw him I thought to myself that here was a good old Anglo-Saxon. I even went so far as to compare him with a man like Wellington. Well, I have been disappointed. I feel that there is one point that I should bring to the notice of the hon. Minister, and that is the monopoly that the cement companies have. In the Cradock district there is a company producing lime. Originally they got that lime subject to the conditions that they should not use the lime for cement. These people are terribly handicapped. There are huge deposits of lime in some of these districts. These people are very keen on forming a company. They have got all the capital they need, and they find that these companies under the contract, have refused them the right to mine or to manufacture cement. I hope that in cases like that the hon. the Minister will go into it and see that these people dot not hold back the country as far as the development of base minerals is concerned. The hon. member for Swellendam (Mr. S. E. Warren) has told me he knows of a similar case where there are huge deposits of lime, but where the cement companies have imposed certain restrictions on that lime, and have refused to grant any new facilities, so that the lime can be manufactured into cement. Today we are experiencing a huge shortage of cement. In our area they are going to construct new dams. They are going to put up the Lake Arthur Dam, but cement is very scarce, and if they can manufacture cement in these areas it would be of great assistance in putting up the dam. I hope that if these people approach the hon. Minister he will give them the necessary support against these companies. That is one point I should like to bring to the Minister’s notice, and then there is another point which I want to touch on. For a number of years a certain amount of oil has been found in the water in the Middelburg district. According to geologists it is quite possible that there may be deposits of oil in that area. As the Minister knows, the Stormberg Mountains have huge deposits of coal, and there is no doubt that light strikes of oil have been found, but of course, you would have to drill about 3,500 feet in order to get that oil. I think if the Minister causes investigations to be made, he may find that there is oil. When Prof. Illing was in this country, he took some of these samples and he told us that he would have the manalysed in England and give us a report. Unfortunately the war broke out and we heard nothing further about it. If you take the water and boil it down to nothing, a certain amount of oil is left in the pot. I think if the Minister were to go into the matter and give facilities, or drilling facilities, which will enable them to go down 3,500 feet, he may find that he has some success in these areas as far as oil is concerned.

As representative of a mining constituency—it is entirely a mining constituency—I want to tell the hon. Minister that we suffer under a deep sense of disappointment at the delay which has taken place in regard to the commission which has been appointed to deal with the miners’ phthisis question. As has been stated, the commission was appointed in October, 1941, and up to now we have received no report. I would like the Minister to tell us when he thinks the commission will be in a position to report, because we are anxiously awaiting the findings of that commission. In reply to the hon. member for Fordsburg (Mr. B. J. Schoeman) the Minister stated that he had no power to expedite the report of the commission. The Minister stated that the commission was appointed by the Governor-General-in-Council, and that he, as Minister, had no control over the commission. I would like to tell the Minister that some of us do not agree with that contention. It may be that nominally the Governor-General-in-Council appointed the commission, but, nevertheless, we know that it is the Cabinet that appointed the commission, and we go a step further because we know that it is really the Minister within that Cabinet who asked for the commission to be appointed. I would suggest to the Minister that it is obvious that he, as the responsible Minister, has some power in asking the commission to expedite its findings, and to let us have its report at the earliest possible opportunity. Arising out of the question of the commission, the Minister stated that, in the meantime, the ex gratia fund had been doubled. It was increased from £75,000 to £150,000, and the awards which were being made to beneficiaries had increased very substantially. I want to suggest to the Minister that in administering that fund, certain difficulties have arisen, and in actual practice we find that the miner who has lived a thrifty life, who has been provident, who has taken care of his wages, who has looked after his family and who today comes to that fund for help, is penalised. I have many cases where miners who are in the secondary stage have made application to the fund, and their application has been refused, and the ground of refusal is this: Inspectors are sent out by the Miners’ Phthisis Board to investigate all these cases, and if they find, for instance, that a miner has collected a house of furniture, or when he received his compensation, and he put it into a small property and raised a bond for the balance of the purchase price—in other words, if the property is registered in his name, although there may be a substantial bond — the report is that the applicant is in possession of assets, and consequently the fund should not help him. I must say that the hon. Minister himself has been sympathetic when individual cases have been brought to his notice. But I would suggest to him that some instruction should be given to the Phthisis Board that the so-called means test should be relaxed. In other words, that the miner who has not spent his money in an irresponsible way, should not be penalised. The actual working of grants under the fund is really this: A miner who has dissipated his estate, who has spent his compensation recklessly when he got it, and who is left with nothing, as a result of irresponsible living, is assisted by the special fund, and, as I have indicated, the other man who has been thrifty and provident and who has tried to make ends meet, finds that his application is turned down because he has a few sticks of furniture, or perhaps a property registered in his name. I think the Minister will agree with me that this state of affairs is unsatisfactory, and I express the hope that some instruction will be given to the Phthisis Board that the means test should in certain cases be relaxed, and that each case should be considered on its merits. That the reports of the inspectors should not be swallowed holus bolus. Some further investigation should be made into certain cases, and I commend that to the Minister. I know that with his sympathetic outlook towards the miner, he will give it every consideration.

The first thing that I should like to deal with is on page 207, D (5) “Diverse Committees”. I shall be glad to know what the £100 is intended for. In the past we had the Diggers Committees and they received £500, but it seems to me that these committees have now been abolished. Why are the subsidies to the Diggers Committees which have always been granted, not given any longer? Then on page 209 we see an amount as expenditure for miners’ phthisis. There is an increase of £1,060. It seems to me that the increase is due to a greater number of miners suffering from phthisis, but there does not appear to be an increase in the cost of living allowances. I shall be glad to know if the Minister has made provision for increased cost of living allowances for those suffering from miners’ phthisis, and if not, why not.

The accounts here are those that are charged as a departmental entry, but the cost of living allowance does not come out of the Treasury at all; it does not come out of public funds. It comes from a fund which is voted voluntarily without any legal compulsion on the Chamber of Mines.

Then I have to understand that it is an allowance made by the Chamber of Mines. In terms of the reply to the question of the hon. member for Fordsburg (Mr. B. J. Schoeman) single people are only given an allowance of 15s. per month and married people get 26s. 3d. Those are the only allowances they get. Now I shall be glad to know what allowances are given by the Government to phthisis sufferers. They cannot work any more and have sacrificed everything for the country. Civil servants get increased cost of living allowances; I pay my servants an increased wage as a result of the rise in the cost of living, but these people who are ill do not get what they deserve. I hope that the Minister will make provision for an increased allowance for these people.

I did intend to support the hon. member for Kimberley, City (Mr. Humphreys) yesterday in his plea for better control of diamond cutting and for an extension and better care and greater thought to that industry. I thought it well, however, to wait for the Minister’s reply, because upon the Minister’s reply depends a very great deal as to what conclusions one can come to with regard to the future of this industry. While the Minister’s reply was, as it usually is, curteous and therefore satisfactory from that point of view, it contained so little that there is no assurance in it at all that we are going to have that extension of the diamond cutting industry or the establishing of a diamond cutting industry on the same dimensions of which we heard in this country only a few years ago. I just want to deal with that for a moment because its history has a bearing on the issue. We find that we have 6,000 cutters in Amsterdam and 1,000 cutters somewhere else. It was the intention that Kimberley should be the home of diamonds and that our diamonds should be sent to the world ready to wear. That was part of the policy that was laid down. I do think that that is something to bear in mind. Later on this diamond cutting industry was practically removed from Amsterdam to America. We had a little agitation to get the Government to adopt a different attitude, but nothing was actually done. Then we had a motion in this House for the establishing of a diamond cutting industry in Kimberley and for certain contracts to be entered into which would lay the foundation for what has been established in America and elsewhere. That venture, if I may call it a venture, was unsuccessful and the reason for our closing down was not because it was not suitable to cut diamonds and sell them just as in other parts of the world; it was not because our diamonds do not sell just as well when they are cut as in their rough state—and that is a postion which has been impressed on the people of this country—that experiment did away with that fallacy. Now it is true that the reason for that contract falling away was more or less the fault of the contractor—the reason was not what has been generally accepted. It was only in existence for two or three years. You had 300 cutters with their wives and families there, some of whom have come from Holland, and you had a great many South African apprentices, so things were well on the way of having the diamond cutting industry as part and parcel of the mining industry. The most recent information one has is that the Minister is not establishing the cutting industry on the same scale as we had it here previously. His policy apparently is to supply certain people with diamonds, and he has an agreement to that effect. That is very satisfactory but that does not meet the Bill. Now, what is our latest information—it is that the diamond industry is going to Palestine. Why?

Because of cheaper wages.

There is no country in the world producing the percentage of the world’s diamonds which we produce which would allow the cutting to go to other parts of the world. That industry belongs as much to South Africa as any other industry you could mention. I therefore say to the Minister that the policy must be altered. There must be a policy that the diamond cutting industry shall be in South Africa. The Minister may reply: “Well, the Government will not undertake it, we don’t want anything to do with it.” Well, I don’t want the Government to do it, but I ask this—who is behind the establishment of a diamond cutting industry in Palestine? The information I have is that a large number of men are going there, and that it is not just private enterprise.

I shall be very glad if you will give me all the information you have on that.

I have really no proof of that, but if it is so, it is a very serious position indeed. It is very serious to think that we in this country should be looking on while an industry which should belong to this country is being filched away from us, and I hope the Minister will take the necessary steps, whatever they may be, to restore the position.

I think it is as well that I should reply at once to the points made by the hon. member for Hospital (Mr. Henderson) and by other hon. members as well. It is a little difficult for me to understand really what the hon. member for Hospital desires me to do. Does he desire that the State should start a cutting industry, that we should employ a large number of people in cutting, and that we should start up as diamond merchants and go into the trade. If that is so I can only say that I do not see my way to put a proposition of that kind before Parliament, nor do I think that we have at our disposal the knowledge, the technique and the people who are engaged in the diamond trade and the diamond business—we do not want to enter into a fight with our own fellow citizens whose business it is to carry on that trade. If the Government were to enter into that business it would mean that we would be competing with our own people. It would be very undesirable to do so and I don’t think it would have the effect which the hon. member thinks it would have. The policy I have pursued in regard to this is to encourage the extension of diamond cutting in South Africa to the utmost extent, and for that purpose I have issued a large number of licences for master diamond cutters, and it is my intention still to pursue that policy. I think they with their capital, their knowledge and their experience are in the best position to run that industry. In regard to Palestine does the hon. member say that the Union of South Africa should refuse to export rough stones and should refuse to sell them for cutting outside South Africa? Does the hon. member say that we should say: “We shall cut all the stones here and we are going to keep them here.”

No, I did not urge that.

Then what did the hon. member mean by saying that we should stop the export of diamonds?

On a point of order, I made no statement of the kind at all. What I did say was this, that the policy which was preached to this country was that you could not sell uncut diamonds the same as cut diamonds, and I said that that was a fallacy.

If the hon. member means that you can sell uncut stones as well as cut diamonds, I have nothing to quarrel with. We are cutting and selling cut diamonds to the tune of more than £2,000,000 per year, and I hope it will increase. I am taking steps to foster this very thing. I am taking steps which are calculated to lead to our not only having two or three hundred journeyman and apprentices in this trade but in a short space of time we shall have 500, and I hope it will not stop at 500. For the moment the agreement is pegged at 500, but if the trade allows it we shall be in a position to increase the number further. If we are to refuse to sell or to export—we should lose the export trade. Let me remind hon. members that we have not got a monopoly of diamonds. In Angola large quantities of gem stones are produced and the same applies to the Congo. If we were to refuse to do that it would bring our trade to an end. The hon. member complained that there was no assurance of a diamond cutting industry being established. I don’t know what assurance I can give. I have given an assurance that the master cutters will always have stones at their disposal to cut. I am taking steps to increase the number of cutters and also to see that those who are engaged as apprentices will run no risk of being thrown on the streets before they have finished their articles. Beyond that I do not see what we can do. And with regard to the competition in Palestine and America, I can only say that if South Africa is prepared to reduce the standard of living and the wages paid to its workers to the level prevailing in Palestine, I shall be very much surprised indeed. I am not prepared to advocate such a course. I do not think it is in our interest, but I do think we can get a large and permanent trade here. I think we can get it and I think we can get an increased share of the trade and still maintain a proper standard of living and remuneration to which the South African workers are accustomed. The hon. member for Ventersdorp (Col. Jacob Wilkens) asked why the Government did not pay a cost of living allowance to miners. At least that is what I understood. The Government does not pay wages.

He was referring to phthisis sufferers.

The whole policy of the Government hitherto has been that the cost of recompensing phthisis sufferers should fall on the industry itself.

The Government lays down the scale of pay.

That is so. We took steps to see that what at the time was deemed by Parliament a fair basis of remuneration was given, but the payment comes out of the owners of the industry, out of the shareholders.

Well, why don’t you lay it down?

There is no idea at all in our legislation that the Government shall make a contribution of this kind. The whole basis is that the recompense shall be given by the owners of the mines, that is the shareholders, and therefore it will be quite out of the question to suggest that the Government should make any demand of this kind. It could only be done by fresh legislation.

Well, why not?

The hon. member also asked me what a figure of £200 represented under 5 (d), “Grants to Diggers’ Committees”. The figure is merely a nominal figure to cover expenses which are from time to time incurred by members of Diggers’ Committees, who are indemnified when they are put to expense in going to a meeting. It is from year to year, a nominal figure is put on, and it is adjusted as the expenditure is incurred. I now want to say something in regard to the hon. member for Brakpan (Mr. Trollip). He told me that I had delayed in appointing this Committee, and the hon. member for Forsdburg (Mr. B. J. Schoeman) has stressed the same thing. It is perfectly true that I could have appointed this Commission within a few months of taking office, and that I did not appoint it until 1941—and therefore they are entitled to say that I might have appointed it earlier. I am not concerned with saying that I am not to blame for not having done it earlier. I might have done it earlier and if I am to blame for that, well, then I am to blame. It would have been very much easier for me instead of appointing a Commission and undertaking impliedly to enact a new Phthisis Act, which will be intelligible to everyone—it would have been easier to have introduced amending legislation straight away. But before doing that I wanted to be assured that the basis of our Act is suited to modern conditions, and I think it was right that we should investigate this de novo. It took me some time to come to that conclusion. Perhaps I might have come to that conclusion earlier but after all, there is no other Minister who has taken the steps to improve the position which now exists. It was open to my predecessors to have done so. They did not do it. At any rate if I have sinned by being some months in delay, my predecessors sinned by being years in delay.

Two wrongs do not make a right.

No, I agree they don’t but perhaps I should say that it does not lie with some hon. members opposite to cast that in my teeth.

At least they made some improvements.

So have I made considerable improvements. The hon. member for Brakpan urged that I should make a relaxation in the means test in regard to the application of ex gratia payments. Well, I have done so. I shall tell the House the new instruction which I have given in respect of that. I have the instruction here and it reads as follows—

Hon. members may say that that is not a very great advance, but it shows that I have given attention to this matter, and I have determined that there shall be relaxation and the hon. member and the Committee generally will accept that as a guarantee that this matter has not been lost sight of and that some advance has been made. The hon. member for Brakpan further said that the existing legislation and the administration both put a premium on being improvident and penalised the provident person, because the provident person who has provided himself with means of subsistence did not get a slice out of the ex gratia fund. That is perfectly true. But the ex gratia fund was introduced in order to assist people who fell by the way, and if you have not fallen by the way I do not see how you are going to make out a claim for an ex gratia payment. You may say that as a right everyone should have higher pay. The logic of that I can follow, but to say that the ex gratia payment, which is only intended to assist those who are really in distress, should be made to everyone—I don’t see how that can be applied without reservation. I do not see how that can be applied without taking into account the economic position of the person concerned. Now I want to say a few words to the hon. member for Cradock (Mr. G. Bekker). He told me about the oil in the water in the Middelburg district. Perhaps I should state what I am preparing to do this coming year. There is £30,000 on the Estimates for the purpose of developing and searching for oil. The position is this. All the information at our disposal, both geologically and geophysically, made from observation on the surface and in every other way, has been correlated by the geological survey section, and they have plotted out a programme of search in a particular district. For the purpose of testing the condition, the consistency, the substance of certain rocks at deep level, all this preliminary information has to be obtained before we can go any further.

Which district is that?

I am not going to tell the hon. member. If I were to do that I should invite a good deal of speculation which is very undesirable, but I can tell the Committee this, that we are proposing to put down, I think, some ten boreholes this year, which will vary in depth from 500 to 9,000 feet, and when these boreholes have been completed we shall be in a position to form a better opinion than we are in at present as to the possibility of getting oil. I have not said anywhere that the chances are in favour of our doing so, what I have said is that the information at my disposal leaves the possibility of getting oil at such a definite standard that it is right that the country should test the matter out. The possible award is so great that we should leave no reasonable effort untried in order to test whether we have or have not got these oil resources, and that is why this money is on the Estimates. That money, of course, will be quite insufficient to carry out the programme which I have indicated, and it is quite clear that more money will be needed, but whether it will be needed this year or next year will have to be decided. The hon. member also referred to certain difficulties of people who wanted to work lime. I shall be pleased to receive particulars. Let me assure the hon. member as a matter of principle that where any base mineral is required to be worked in the public interest I shall not now permit any private individual to hold up that for his own purposes.

What about companies?

No company or individual. I class companies with individuals. No private owner, company, corporation or individual, will be permitted to hold up for his own purposes any base mineral when the exploitation can be carried on on a commercial basis. I give that positive assurance. In saying that, my technical advisers come along sometimes and say: “Well, this may be a possibility, but the marketing arrangements are such, or the possibilities are such, or the state of the market is such, that it makes it very doubtful whether it can be done.” That is a factor which I have to take into consideration. If I were to rule it completely out, it would be an invitation to incautious people to waste their substance and that would be no good to anyone, it would only lead to disappointment. We have to be very careful about this. I have to take all factors into consideration and I give the assurance that taking all these factors into consideration no one, no company, or individual, will be able to hold up against the public interest any base minerals to which he may have the title, to exploit. The hon. member for Langlaagte (Mr. Bawden) also drew my attention to these ex gratia payments. I have replied to that, and I give him the same reply as I gave to the hon. member for Brakpan. Now I come to the hon. member for Fordsburg (Mr. B. J. Schoeman). I hope I have not hurt his feelings by any language I used—it was unintentional — but I do really deprecate the use of exaggerated language and I deprecate the use of language about starving between these various stages …

I have seen them starve.

I say that that language is not justified. You may say that the payments are not sufficient in certain cases. Well, if the hon. member had said that I would have taken no exception, but I do say that in my opinion it is grievously exaggerated language to talk about starvation. I do not want to preen myself too much on what is being done, but I do think the hon. member in his speech did not show appreciation of the very considerable advance that has been made in the remuneration which is being given now to beneficiaries under the ex gratia scheme. It has largely now become possible to put that on such a regular basis that the recipients have every reason to suppose that as long as their means remained the same and their financial position is not radically altered they will continue to get the assistance. It is not spasmodic in the same way that it might have been found to be before. It has been regularised and systematised, and that will be one of the bases on which we shall be able to frame the new Act when the time comes to do so. The hon. member went back again to the question of the hose pipe, and he said that there had been a breach of the regulations by some companies, and that he had proof of it in a letter which he read. That is strictly and literally the fact. The circumstances are these. The Miners’ Phthisis Prevention Committee was dealing with this matter, and they were commending an alteration of the regulation which they eventually did recommend, and the regulation was altered, but some of these mining companies with an intelligent anticipation that this alteration of the regulation was going to take place acted accordingly, and cut off one of these hoses. That, of course, we did not like and the moment that was brought to the notice of the department a letter was written and he insisted on the regulation being strictly observed until it was altered.

The miners are still complaining.

Well, if they are still complaining they are complaining against their own representatives. The Mineworkers’ Union is represented on the Miners’ Phthisis Prevention Committee, and the recommendation on which I acted came from the Miners’ Phthisis Prevention Committee, and it was a unanimous recommendation. The hon. member will find, if he goes into it, that the objections which are still being raised in some quarters are based on want of information, they are based on a misconception of the true position, and the new regulation has been made by me not just to amuse myself or to please someone, but it has been done in pursuance of the considered policy of the Miners’ Phthisis Prevention Committee. I have acted on the best advice I could get on the matter.

I want to take the Minister back to the general policy of the Department or rather to the lack of policy. I think after the reply he has given to my remarks of yesterday my worst fears have been confirmed. His reply has been an evasive one. He has failed to come to grips with the main point I put before him. I want to know what steps the Minister is taking to bridge that gap which will inevitably come in our national income when the expected decline in the production of the gold mines takes place? I have had no reply to that. We know, and that has been the burden of our song, that you have to postpone the decline for as long a period as possible. Now, what steps is the Minister taking to bring that about? I read those extracts from the Van Eck Report which mentioned three factors. The first was an investigation into the possibility of ultra-deep mining; the second was the establishment of new resources, and the third was—I had better quote from the report itself: “It cannot be in the national interest to exhaust this important asset too rapidly.” That was the third factor. What is the Government doing? We are faced with this position that within the next ten years we will have a drop of more than one-half in the production. There will be a tremendous gap in our national income. What will take the place of that decline in production?

Is that the job of the Mines Department?

The job of the Mines Department is to see that the mines are developed in a national perspective.

So they are.

I am told today that those gentlemen who control the mines are so altruistic that they do not consider their own interest but that they regard the matter in a national perspective: I cannot believe that.

Our interests are identical in that respect.

I think the hon. Minister is probably talking for himself and for his Government, but not for the country. After all, it is a simple issue this. When certain people have an investment, they naturally want to get the best out of the capital they have invested. They want to get the highest return and the quickest return in the shortest possible time. Is that in the national interest or is it more in the national interest to see that this important asset is developed in a way which has in view a long-range policy, and not the immediate enrichment of the people who have invested their capital in it?

Do you want to retard exploitation?

I am coming to that point. I do not know what the Minister is doing. I want to know what he is doing in regard to his own Commission’s report, in which it is definitely said—

The hon. Minister has said that what I want must necessarily mean a retardation in production. Assuming for a moment that that is what I meant —I did not say that—the Minister said it was a preposterous proposal to retard the exploitation of these mines. He said the best policy is to go full steam ahead and to clear the underground reserves of this country, and he said it was a preposterous thing to suggest anything else. May I remind the hon. Minister that in 1937 already a prominent authority like Sir Robert Brand suggested inter alia the following solution to the problem of the increasing production of gold—

Do you favour that?

Is this such a preposterous thing? I am not saying that I favour this. The Minister says that this is an unheard of thing. I am drawing his attention to the fact that it is not such an unheard of thing. And may I come to something much more recent. I want to give him the opinion of Mr. H. O. Webber, who is not entirely unknown in mining circles. He says this …

Will you give me the page?

I am going to quote from page 15. He discusses the possibility of a restriction being made on production by international action. And then he says this—

Then I want to commend the following paragraph to the Minister’s attention—

And then he concludes—

These are some of the factors which the hon. Minister should take into consideration These are weighty arguments. If the Minister rejects them, let him say so. Let him say: “I do not mind how quickly the supplies are exhausted; as long as I can get a little taxation out of the mines, that is all I want, and as far as the resources are concerned, I do not care if they go their own sweet way.” We want this national asset to be regarded in a national perspective. We want it to be regarded in the light of something that belongs to the people as a whole, and if there are people who can develop it, they are entitled to be paid for the risk and capital they put into it, but they must remember that the country comes before the industry, that the country stands above any industry. That brings me to the control board. [Time limit.]

The hon. member for Fauresmith (Dr. Dönges) has made two very notable and valuable contributions to the discussion of this vote—valuable because he has shown very clearly that our friends on the other side of the House are now beginning to realise what important part the gold mining industry has played and must continue to play in the national economy of South Africa.

We have always realised it.

But you have not always said so. I think the policy of the past has been to tax the gold mining industry out of existence as soon as possible. But the point the hon. member has made about controlling production—I think although he may not have said it specifically that is his intention—can only be applied if we nationalise gold mining or hand it over to some public utility corporation, neither of which is really reasonable because I personally, being a believer in placing as many activities of national importance either under national control or under public utility corporations, believe that the gold mining industry is the last industry that can be dealt with in that way, because it is so speculative in its nature and because it takes so much money before you can prove that any particular area is a gold producing area. The public will not allow the state to speculate millions and millions of pounds in trying to test whether or not an area is gold producing. Then there is another thing which my hon. friend overlooks, and it is this. The exhaustibility of the gold is a matter over which we have not got entire control. It is really more a question of international arrangement. As the price of gold goes up, so the life of the mines increases very considerably, and therefore the speculation as to the life of the mine under one set of conditions cannot possibly apply under another set of conditions, and we have to realise that South Africa is not the dominating factor in the question as to whether gold will be used or whether it will not be used, and as to what is to be the price of gold. It is an international problem and it seems to me clear both from the statement issued by Prof. White in America and by Prof. Keynes in Great Britain that gold will continue to be utilised; but because it is a matter for international control, it is obvious that our best interests in South Africa is to encourage the extraction of every possible ounce of gold as long as we can sell it, and not to leave it until possible international arrangements restrict the use of gold and makes it unpayable for us to extract the ore to the fullest extent. Our policy must therefore be today to extract gold to the fullest extent, but I will say this—and I am sure the Minister will agree with me, and I hope the Minister of Finance will agree with me on that subject—we have to use some of the profit that we make—and today the state makes a great deal—for the development of secondary industries. We are exhausting that industry to a growing extent. I think it is desirable to consider the possibility of setting aside annually a portion of the revenue that we get from the gold mining industry, and apply that to the development of secondary industries in South Africa, so that when that industry has been exhausted we shall have established large secondary industries in this country to take the place in our national economy which gold today occupies. Then I want to touch on another point. The mining industry has, I want to admit frankly, done a great deal towards improving the position of the European miners. Largely through the sound policy pursued by the Mineworkers’ Union in the days of the late Charles Harris, and now under the leadership of Mr. Brodrick, of co-operating to the fullest extent in getting benefits, the mining industry has given very substantial benefits to the miners in recent years.

One day you are a Labourite and the next day you are a Capitalist.

No, I am a Socialist.

You are always jumping from one side to the other and from one party to the other.

No, it is the hon. member who is jumping from one constituency to another and has “jumping” on the brain. I want to put this point. The mining industry has recently—I think very rightly—made provision for a cost of living allowance for European miners and it seems to me rather preposterous that no steps are being taken simultaneously to make provision for the natives in the mines, and in that regard I agree with the hon. member who spoke yesterday. After all, the native has to live the same as the European, and if there is an increase in the cost of living it applies equally to the native; and under Regulation 43 cost of living allowances have been granted to European workers and to native workers in secondary industries without any reference to the employers whatever. I say it is right and proper that the Minister should take into consideration the application of Regulation 43, as far as the cost of living allowance is concerned, to natives employed on the mines. We have been told by the Minister of Labour to whom the matter was referred, that it is a matter for the Minister of Finance. Yesterday the Minister of Mines, although he did not say so, seemed to imply that it was not a matter that he could deal with but that it must await the report of the commission. This cost of living allowance has nothing to do with the commission which has been appointed. The necessity for the payment of a cost of living allowance is something which is recognised by the Prime Minister as important, owing to the increased cost of living, and therefore I hope the Minister of Labour and the Minister of Mines will not bandy the natives about from one department to the other, but that they will seriously consider the question of applying Regulation No. 43 as far as the natives on the mines are concerned.

May I just say to the hon. member who has just sat down that we have always appreciated the value of the gold mining industry. But the difference has been this: We on this side of the House have been advocating and are still advocating that that industry should be developed in the interests of the country as a whole. Their viewpoint has been—and I think we have the admission from the Minister of Mines now—that they are quite satisfied with the way the industry has been developed by the capitalists. It is their capital they have invested and they develop it in their own interests.

I said that the interests were identical.

The Minister says that the interests of the gold mining industry and the interests of this Government are identical. That is the charge we have been laying against the Government.

That is a perversion of what I said.

That is the point I am making, that there is this difference in outlook. We say that you must develop the gold mining industry in the interests of the country. The Minister is satisfied that the industry should be developed in the interests of the capitalists, and he says that the interests of the Government and the interests of the capitalists are identical.

I did not say that.

The hon. Minister will get an opportunity of explaining what he meant. However, I did not get up to introduce this particular aspect of the debate. I just want to ask the hon. Minister a simple question, and that is in regard to base metals. I was very pleased to receive the Minister’s assurance that the Government will not allow the base metal industry in this country to be held up by people who are in a position to do so today. That is the position today in the Northern Transvaal. There is a growing feeling that certain interests are holding up development.

If you will let me have the details I will go into it at once.

I shall furnish the Minister with particulars. The whole of the asbestos fields in the Transvaal are controlled by one or two individuals or concerns. They have all the claims registered in their names. One feels that the monopoly may be very good in certain interests. It may be in the interests of the country to develop certain industries, but as far as this is concerned, these people should not be allowed to use the power which they have against the interests of the country. What I really got up to ask the hon. Minister is this: whether it is not possible for his department to furnish more information to the miners who develop asbestos and corundum, as to what is a reasonable price for these articles. Here you find simple folk, mostly farmers who do not know the value of these things. They bring in their article and they are told: “This is what you can get.” Nobody knows what the price of that article should be, and I think that the Government would be of great assistance to the farmers if it would let them know what can be regarded as a reasonable price for these articles. In the war both these articles are very necessary. Corundum as an abrasive is very necessary. In spite of the fact, however, that these articles are very necessary, the price has not gone up. I do not want to say that these people are making undue profits, but the Department could be of more assistance if they would publish figures to show what is a reasonable price for these products. If the farmers are in possession of those figures they can look after themselves. Today there is tremendous dissatisfaction. We were very pleased when the Minister came up to the Northern Transvaal and paid a visit to these fields, but the miners feel that they would like to visit the Minister personally and put their case to him, and, as I have said, it will allay the feelings very considerably if they can have this information as regards the price of the commodities.

There are one or two factors which I would like to bring to the notice of the Minister. First of all, I have mentioned this fact to representatives of the mining industry, and that is in connection with the existing Provident Fund. The Minister will remember that some years ago this fund was brought into being and that there were two schemes, the A scheme and the B scheme. The A scheme is the scheme proposed by the Chamber, where the miner can contribute equally with the Chamber. At that particular time a ballot was taken. About 80 per cent. to 90 per cent. of the miners voted against the A scheme and accepted the B scheme, which meant that the Chamber by itself would call this fund into being and contribute to this fund. I take it that the miners at that particular time were misinformed. As a result of that, they voted against the A scheme. Today, if you go to the mining community, they will tell you that if this scheme is put to the miners today, the same percentage who at that time voted against the A scheme will now vote in favour of it. Their experience has taught them that people who are leaving the mines today and who are now getting £400, could have had their contributions doubled if they had accepted the B scheme. I have mentioned this fact to representatives of the Chamber of Mines, and it would seem from remarks made that it would be accepted by the Gold Producers’ Committee, if the miners were asked today to contribute and were prepared to contribute in order to double this amount that is paid out to miners who leave the mines. I think it is only fair that I should ask the Minister to act as an intermediary between the two bodies concerned in order to bring about a movement whereby the miners were asked to contribute so as to make doubly secure their future when they leave the mines. I think the Minister will realise that this is a very sound scheme, and it is acceptable to all parties concerned. At the time the miners were incorrectly informed, but today it is entirely a different matter. Then we come to a point that his been raised by various speakers this morning, and that is the ex gratia payment which to my mind was called into being as a sort of relief to these miners who were not entitled to a pension. This fund, although it is appreciated today, is not an acceptable fund. It is looked upon as charity, and the miners feel that they do not want charity.

It comes out of the same fund.

It comes out of the same fund. That fund is not governed by legislation insofar as a specific amount is paid to each miners’ phthisis sufferer. Each individual case is dealt with on its merits, and the means test again enters into the picture. In 1936 the Pension Bill was drafted by the then Minister of Mines, and that Bill was to have been submitted to the House, but was thrown out as a result of objections raised by the secretary of the Mine Workers’ Union. At that time the Bill was rejected. I have a wire in my possession which was sent on the very day this Bill was submitted to the House, asking that the objection to the Bill should be withdrawn. I must take it that the Bill was acceptable to the Minister at the time, and to the Chamber of Mines, but that Bill was held back simply because these gentlemen representing the two sections of the miners objected to it. I think the Committee will agree with me that if that Bill was reconsidered it would be accepted. I know for a fact that it is acceptable to the miners today, and that would do away with all the anomalies of the ex gratia fund, whereby instead of a miner receiving a pension from the secondary stage, he would receive a pension from the primary stage. The miner would then know exactly how he stood when he leaves the mines or when he reaches that stage of miners’ phthisis. Then there is another point and that is the question of rheumatism. That point has been raised often in this House, and it has been rejected on the ground that it is not an occupational disease. May I suggest to the Minister that as little as rheumatism can be looked upon as an occupational disease, so much less can you look upon tuberculosis as an occupational disease, and still your miners’ phthisis pension is based very largely on having tuberculosis. You come across scores of cases nowadays where miners leave the mines and have to be satisfied with compensation from the Provident Fund, because rheumatism has made it impossible for them to follow their occupation underground, and it is not regarded as an occupational disease. As I have said before, neither rheumatism nor tuberculosis can be looked upon as an occupational disease and yet in the matter of compensation and legislation tuberculosis has been accepted as an occupational disease, and I fail to see why rheumatism cannot be regarded as an occupational disease. I want to ask the hon. Minister whether he will not reconsider this case. I can bring forward scores and scores of cases where it has been made impossible for men to follow their occupation underground as a result of having developed rheumatism, and these men have not even a call on the ex gratia funds. They have no right to any claim at all, because rheumatism is not looked upon as an occupational disease. I would like the hon. Minister to consider this matter or to obtain information with regard to it. Then I come to my last point, and that is the miners’ phthisis commission. I would submit to the Minister that very important evidence has been led before that commission, and the miners are anxiously awaiting the report of that commission. This matter has been stressed by various other speakers. I think sufficient evidence has been obtained by that commission. We fail to see why that commission should still withhold its report.

Yesterday I spoke in Afrikaans and I don’t know whether the Minister was able to follow me, and I therefore propose to address him now in his mother tongue. Yesterday I drew attention to the appalling conditions prevailing on the diamond diggings at Brakfontein—better known as Hickso to the Department. I drew attention to the sanitary arrangements prevailing there at present which to say the least of it are scandalous. But it was not only the sanitary arrangements which I described as scandalous, but also the medical treatment which is meted out to people in that area or on those diggings. The medical treatment as well as the hospital treatment is such that I can honestly say that if the Minister were to visit these places and see conditions for himself he would agree with me that it is a state of affairs which cannot be allowed to continue any longer, and therefore I extended an invitation to him yesterday to go out there and inspect these conditions for himself. I understand that he has been to other diggings in the Transvaal and I would impress upon him in his own interests and for his own sake to go to that place and inspect the position as it exists today. It is not too far for him. He can get off at any station, somewhere between Hopetown and Belmont, and it will only take him about an hour by motor. It will only take up about three hours of his time in all and let me tell him it will not be a waste of time, but it will show him, and give him an insight into the sufferings of these people on the diggings.

What kind of reception will he get?

Oh, you know nothing about diggings so I don’t want to discuss the matter with you.

In Afrikaans yesterday you promised that you yourself would take the Minister round.

So I will. I hope the Minister will consider this and will view the position as it is. It is an appalling state of affairs, and it is only right and fair and just that these people should also receive consideration from the Government, more especially when one thinks that the revenue to the State from these areas amounts to between £80,000 and £90,000, and that the people producing that revenue are given nothing in return.

What is this £80,000 or £90,000?

That is the revenue from the export. I cannot give the exact amount but I can say what the total value is. It is £943,016. On that, of course, the export duty is 10% — you have to deduct certain items in respect of stones cut in South Africa.

What proportion is sold?

There are 195,118 carats produced and that was sold for £943,016. Taking off the export duty of 10% that means a revenue to the Government of £90,000 less the diamonds which were cut in this country. I do not think the Minister’s own department could tell the exact figure for the diamonds cut in this country.

But what is your point?

My point is that these poor people have to pay in taxation such large amounts and they do not get anything in return. They pay more in taxation proportionately than any other section of the community.

But they don’t pay a penny of that.

They pay more than any section of the community and therefore they are entitled to a certain amount of consideration. They are entitled to receive some recompense for what they pay to the State and it is the duty of the Government to see that their position is improved. I am sure if the Minister goes and sees for himself he will agree with me that it is an appalling state which is prevailing on these diggings especially, and therefore I have every confidence in asking the Minister to try and improve the position of these people. As far as education is concerned and scholarships, nothing is done by the Department of Mines to assist them in any way. They are dependent on bursaries and so on and donations which they receive from surrounding members of the public. It is not right, nor is it fair it is not even just. These people are also entitled to see that their children are properly educated, and that they receive the education which others receive. Then I want to ask the Minister why he has refused to issue a licence to the son of one of the diggers there. I can give him the name if he wants to know it.

Yes, let us have the name.

His name is Liebenberg. Now let me tell the Minister this. He is one of the prominent diggers there and he has been on the diggings for many years. Unfortunately, through illness or bad health, it is impossible for him to keep proper supervision over his men on the diggings and the law unfortunately is preventing his son from doing so. A licence was applied for and I understand that the magistrate has no objection to such a licence being granted. In the first instance the magistrate for reasons of his own did not recommend the granting of a licence, but since then he has recommended its issue. This is the case where a licence should be given to the son. It is only for the purpose of assisting his father to continue his business as a digger. I can quite understand that it might be against the policy of the Government to grant licences on a large scale. If that were the policy I could agree with the Minister to a certain extent. But that is not the position here. This is a case of a licence being asked for under exceptional circumstances. The son has to help the father who has been there for years, the father is ill, he is in bad health, he cannot carry on, he cannot keep proper supervision, so his son should be allowed to step into his shoes and keep the business going. I ask the Minister under these special circumstances to reconsider the whole matter and to agree to the licence being granted. Surely the son should be allowed to help the father. He has been working there for some considerable time. It is not as if he had some other calling—that is the only work he has been accustomed to, and if this licence is not granted to him, not only will it be impossible for the father to carry on but the son will also be affected—the son will have to give up as well, and neither the father nor the son will be able to make a living in future. And what will be the result? A digger like that will be cast on the State and become a liability to the State. The State will have to see to it that he is enabled to make a proper living. And here the Government has the opportunity of preventing these people from becoming a liability on the State. [Time limit.]

When my time expired I was asking the Minister to consider the question of bringing the diamond cutting industry under control. I was pointing out that fantastic wages were being paid to journeymen—they were getting over £1 an hour. Wages have skyrocketed and I suggested to the Minister that the condition that was prevailing was a serious one. I suggested that the Minister should try to exercise control over the wage position if possible, and I suggested that for the time being the issuing of licences should be restricted. In regard to the first point—the question of high wages—I can appreciate the Minister’s difficulties. The Minister probably argues that with times and conditions as they are today, big profits are being made out of the cutting of diamonds, why then should not some of these profits go into the pockets of the journeymen just as much as into the pockets of the master cutters.

Exactly.

There is much to be said for that point of view but at the same time one cannot disregard the high wages. It is an unsound state of affairs. I have been wondering whether it would not be possible to find a way out of the difficulty. It may interest the Committee to know that these men have been making their £200 a month and that they are demanding more. Yes, they are demanding as much as £250 per month. That is even more than a Minister’s salary.

Perhaps the Minister would prefer to be a diamond cutter.

The Minister said that he could not see how the wages of journeymen could be reduced. And he told us that the actual cause of the high wages was the demand for stones. Now, the question is whether the Minister was quite correct in making that statement. Is it not the demand for big stones which is responsible for these high wages? I believe that the cutters cannot make these high wages unless they cut big stones. A man cannot make £200 a month out of the cutting of small stones. I may tell the Committee that our production of big stones constitutes only a small proportion of our total production, and if we are going to pick the eyes out of our production by cutting only the big stones, we shall be heading for an acute crisis and a collapse.

What do you call a big stone?

I would call a big stone anything over two carats. The position is unsound. I have been told that the cutters actually refuse to cut small stones. Master cutters buy in series, and my suggestion is that they should be compelled to cut in series—they should cut the big as well as the small stones. That, I think, would automatically bring down high wages. The other point I was going to make is this. That the issuing of licences should be restricted. In England, it may interest the Committee to know, there are only twelve diamond cutting factories. That is minimising competition among journeymen. I should like the Minister to explore that position. The journeymen themselves say that they are making hay while the sun shines.

And why shouldn’t they?

Well, because it simply does not do the country any good. I contend that we have a heaven-sent opportunity today for establishing a cutting industry on a sound basis. We have not had such an opportunity in a lifetime—and let me tell hon. members that it will not come again in a hurry. I submit that this country is entitled to a flourishing cutting industry, just as much as, in fact more so, than any other country. The cutter has advantages in this country. He has the advantage of the 10 per cent. export duty which was imposed, as hon. members may remember, to encourage diamond cutting. And yet after all these years we have done little or nothing with that duty to establish a cutting industry on a sound and competitive basis. I contend also that a cutting industry will help us in our post-war problems. There are boys in this country who can cut diamonds as well as the boys in any other country. We are told that it must be bred in the bone. We are told that diamond cutters are to be found only in the low countries. That is a fallacy. In our post-war programme this industry should play an important part. What is to prevent the young soldier who has lost a limb from becoming a good diamond cutter? He can earn his £60 or £70 per month. I want the Minister to take this into serious consideration.

We are making arrangements to train such people.

The Minister says that he is making arrangements. Well, it is not very long ago, not more than two years ago, when that problem was completely ignored. Then I gathered that it was not to be for returned soldiers, that it was not an industry for men to enter over the age of 21.

I never said that.

I gathered that the apprentices had to enter the trade when they were 16 or 17 years of age. I am glad the Minister has told us that he is considering the returned soldier.

They will get preferential treatment. I have bargained for that.

I am glad to hear that. What I feel is required even now at this stage is that the Minister should go back and have a thorough investigation made. The master cutters are quite prepared to have the whole matter investigated. I want the Minister to see if he cannot find a way out of this impasse in regard to this abnormally high wage. The industry certainly will not stand the strain, neither can it be placed on a competitive basis. Although we have the advantage of the 10 per cent. export duty it will not be able to compete after the war. It will simply disappear, and that is why I am emphatic in urging that steps be taken to place it on a competitive basis. The whole position is unsound, and unscientific, and if we really want the industry to survive and to expand—as I am sure we do—then I suggest that the Minister should go fully into the whole position and have a thorough investigation. It should be made as soon as possible.

I think I should say a few words about what the Minister has been pleased to call “Control Board.” I am afraid that my remarks in that regard may have given rise to a misunderstanding. I perhaps incautiously, thought that the Minister was acquainted with what had been said about this matter by the hon. member for Fordsburg (Mr. B. J. Schoeman) in the course of the debate on the economic policy of this side of the House earlier on in the Session. What I said here in effect was this, that as far as the particular mines were concerned on their Directorates—that is what I had in mind, although I expressed it rather crudely perhaps—that on the Directorates there would be representatives of the Government to see whatever policy was laid down by the State was carried out. Those representatives would be in a position to see that that policy was carried out, and I also added that representatives of the workers should be on such a body. But it is quite true that if you want to regard this matter not only in the light of the industry itself, but in the light of the interest of the country, you want some controlling body consisting not merely of people in the industry itself; and in the proposals made earlier in the Session we envisaged an economic and planning council with these powers of co-ordination. Insofar as that is a “Control Board” that is correct—that is our policy. There must be some body co-ordinating the various activities of the country, fitting them together, seeing that there is no overlapping and seeing that there is no giving of advantages to one at the expense of the other. Now, if one considers the position one finds this. I know a lot has been said about the matter, about the relative importance which the secondary industries and mining respectively have in regard to the general policy of the Government. It has frequently been said by secondary industries that they are the step-children; that the pace is set by the Mines, that the Government does what the Mines say, and they have to follow suit. That is why we see in a control body not just a control body for the mining industry, but a control body which can work out or see that there is worked out a long range policy not only for the gold mining industry, but for the base metals and the other economic activities of the country as well. I want the Minister to understand what I meant and I don’t want there to be any misconception on his part. There must be this general control body; it is to be in the form of an Economic and Panning Council, and as far as the policy laid down, representatives of the State are to.be on mining directorates to see that the policy laid down is carried out. Then in regard to base metals we are very glad to know that the Minister is acting under the powers which were granted last year.

Where?

Well, he says so, and I am accepting it for the moment. He is acting under those powers to see that the production is not held up by private owners or companies. But what has he done on the other side of the picture, what power has he to see that there is proper conservation of these base metals? And what has he done in wielding these powers, to see to it that the policy laid down is carried out? You do not want to have a company starting, a base metal company starting, and going a certain way then be stopped by the ukase of the Government, “You cannot do this or you cannot do that.” We want to know what is the general policy of the Government, in what line can they go in the development of base metals? What is required of them? I mentioned the example of the Nickel industry in Canada and I pointed out that the Government there had taken timeous steps to see that the smelting was done in Canada itself. They forced the American company which had its main smelting works in the United States to have these works in Canada. Now, what is the policy of the Government in that regard? Are they taking powers, are they taking steps to see that where our base metals are taken out, some form of work is given to the people of this country, or are they allowing the ore simply to be shipped in its crudest form? Do they require some form of refining to be done in this country, before the ore can be exported? These are matters on which we want some more information than the Government has as yet given us. We want to know what are the powers of conservation, how is the Minister wielding these powers; we want some guidance for the people who are interested in the mining of our base metals. We want something for them to go on. This is an important matter. I now want to come back to this general question of prolonging the life of the gold mines. I can only say that as a layman the argument put forward by Mr. Webber appeals to me, and I should like to know what the Government are going to do about these matters? Does the Government reject the statements of the Van Eck Report and on what grounds? I want to know whether they are prepared to consider this matter any further. We have seen what the Van Eck Report says. We don’t want the Government simply to say: “We are going to prolong the life of the mine.” We want to know how they are going to do it. Now we have those three factors mentioned in the Van Eck Report. The first factor is further investigation into ultra-deep mining, and the second factor is the search for new areas. The Van Eck Report has told us that these two factors can only hold up the decline of the mines, it can only prolong the life of the mines, for a period of five years.

I don’t accept that.

Here we have a Minister who is very fond of Commissions. A Commission has brought in its report, it is supposed to consist of experts, and the Minister simply says: “I don’t accept that.”

We have to explore what ultra-deep mining will do. I do not accept the five years’ limit.

Here we find the Minister airily dismissing the finding of a Commission.

They have given no report about ultra-deep mining.

They have said that even if that is done it can only stop the decline for five years. Let the Minister look at paragraph 151. He will notice what it says there. And what is to happen after five years? “After us, the flood.” That apparently is the attitude of the Government. “It does not matter what happens after we are out.” But we are concerned with that period after the war. We are concerned with the future of this country and we want to see that these declining assets do not decline in such a way that they have a permanent effect on the future of this country.

I have listened to the three speeches by the hon. member for Fauresmith (Dr. Dönges) and it is quite evident that he has devoted some considerable time to this subject, but he was quite right, and it is quite evident when he said that he spoke as a layman. I would like to deal with one aspect. He said that the present mine owners are making the maximum profits in the minimum time. That, however, is quite contrary to the policy that has been followed for a long time. In the question of making the maximum profits in the minimum time many technical features arise, and one has to take account of what is South Africa’s real national value, and that is its vast resources of low grade ore, and I do say this, that the policy of the mining houses has been to pay considerable attention to this enormous asset, which we have in the shape of low grade ore. If they had followed the policy, which my hon. friend has stated on two occasions in this debate, then the correct thing to do would have been to mine the high grade ore, take out the rich ore, make big profits and shut down. But no, the mines have followed a very sound and sane policy, and in the hands of the present technical advisers to the mines that policy has been fully manifested in the continued reduction of the grade of ore. In every mine there is high grade and low grade ore, and the balance between the high grade and the low grade has been well kept in the past. Hon. members opposite talk of prolonging the mines but do nothing but scream for increased taxation. They think that the mines’ special contribution is not sufficiently high. Hon. members must remember that it is a flat tax on the mines, and any flat tax is one of the big handicaps a mine suffers from in working its low grade ore resources. Such a handicap was very largely overcome after the departmental committee sat and in 1936 evolved the formula tax that enabled a mine to mine considerable tonnages of low grade ore on which the taxation is automatically reduced.

Because the life is so short, we must not tax them?

Yes. I would commend hon. members opposite to say less of taxation and to consider more the question of the prolongation of the life of the mines. The policy has been to tax the mines as much as possible directly and indirectly, and it has been estimated that although the direct taxation is now 15s. in the £, the indirect taxation on every ton of ore hoisted and milled is between 6s. and 7s. in the £, so that if we consider this matter from the point of view of reducing the costs of working, and in consequence making payable that colossal tonnage of low grade ore, we will go further towards prolonging the life of the mines than in any other manner.

The tax is so high and yet they pay out such wonderful dividends.

The question is how much has been invested. I think I am correct in saying that since we went off gold at the end of 1932, the capital expended in the development of the mines has run into between £80,000,000 and £90,000,000. That is over and above the normal capital expenditure that had already been invested in these mines in the past. No, the policy of taxation both direct and indirect is the key and a very real key to the whole issue of the future preservation of our mining industry. I would like to ask the Minister now if he would give us some more information in regard to manganese and chrome. As I understand it, shipping is the problem, but I am informed that Rhodesian chrome is being shipped to America. Ships are apparently calling at Beira, but not at Delagoa Bay and Union ports, and consequently the producers of this country find themselves in an extremely difficult position. I am informed that the United States asked our chrome producers to produce as much chrome as possible, and let me say here that South Africa is the biggest producer of chrome in the world. One company has put up a fine plant in the Transvaal where it can by concentration improve the quality of our chrome considerably, and it seems to me rather disturbing that we are not able to export our own chrome, when so much has been done towards improving the quality of the chrome produced in the Union. I would be grateful if the Minister would give us some tangible information on this subject.

I do not want to repeat what has been said here yesterday about the diamond cutting industry, but I am glad that the Minister said something about the control of the diamond market. A few years ago I mentioned the matter and suggested to the Minister to use the wealth of Namaqualand for certain purposes. Consequent upon that the “Diamond News” of Kimberley attacked me and stressed the point that it would be mad for the Government to take the huge control upon itself. I do not know what the Diamond Association will have to say about it, but I am glad that the Minister said that the control now Tests in his hands. However, I want to confine myself to the diamond cutting industry. I feel convinced, as stated by the hon. member for Kimberley, City (Mr. Humphreys), that we, in view of the fact that the low countries of Europe have been occupied by the Axis powers, have an opportunity as we will never have again to develop our diamond cutting industry. We are already engaged on it for years but have not made any progress whatsoever. There were various difficulties amongst which the competition of established cutting industries in Europe, but in consequence of the conquest of these countries the opportunity offered itself. Various other countries availed themselves of the opportunity to start new businesses, more especially America and Palestine. Especially in Palestine the development is very great, but we in South Africa, who are the greatest producers of diamonds, do not develop our industries. Only a few years ago they started with it in Palestine and last year 2,600 people were already employed in the cutting industry whilst the prospects were that next year another 1,500 people would be engaged there. Our latest Year Book is already a little out of date, i.e. the one of 1940, but it shows we have made no progress. The quantity of diamonds cut during 1933 was even more than that of 1940. The number of people working in diamond cutting industries during 1933 were 180 qualified people and 164 apprentices, but although the number of qualified cutters in 1940 was 255 there were only 5 apprentices. Apparently nothing is being done for future development. I do not know where the fault lies, but we do not make use of our opportunities. We allow other countries to make use of the opportunities whilst golden opportunities are passing us. I think that it is an offence against South Africa.

I cannot but express my regret that the hon. Minister saw fit to try and avoid the issue yesterday by shouldering the responsibility on to some other department. May I say with due submission that though there may be two departments involved, this House gave the Minister of Mines the necessary authority to conduct mining operations without prior consent having been obtained. Before you can convert coal into oil it is necessary first to mine that substance, and I feel therefore that though there may be joint responsibility, the responsibility resting on the Minister concerned with this vote is the major one. I should like the Minister to go into the merits of the question which I raised. Apparently coal is not such a hot favourite with the Minister. Diamonds appear to be his weakness. But I would like to ask the Minister not to allow the brilliance of these precious stones to overshadow the claims of the black diamond. He must not allow himself to be misled by the glitter of these brilliants. May I point out that the black diamonds about which I spoke yesterday and the exploitation of which I so strongly urged, are the brothers of the other brilliants and we would not like the Minister to allow the brilliance of the precious stone to overshadow the claims of the humble black diamond. Under the Base Metals Act the Minister has the power to seek authority to mine. That is what we want, to mine coal with a view to its conversion into oil. Up to now that has not been a strictly commercial proposition, and therefore it is not one that we could take to the Industrial Development Corporation. They are guided by economic considerations and economic considerations only. As I stressed yesterday, and I repeat today, we do not expect to make money out of this project for a start; but it has a very much wider implication; it appeals to the national sense. I would therefore urge upon the Minister not to lose sight of that aspect. We are not concerned with the money so much as we are concerned with national security and other national considerations. I leave the matter at that, and with the Minister of Commerce and Industries, we can then deal with the commercialisation of the products produced.

I only want to refer to one aspect of the administration of the existing phthisis legislation, and it is that section which gets a payment under the 1941 Act.

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

I move—

Agreed to.

House Resumed:

The CHAIRMAN reported progress and asked leave to sit again; House to resume in Committee on 9th April.

I move—

The primary object of this Bill is to give effect to the resolution which was passed by this House in Committee of Ways and Means in connection with the increase of certain customs duties. At the same time we are taking advantage of the opportunity to make one or two amendments in the Customs Law and in the Customs Tariff. I think I should take the clauses one by one. The first clause contains two amendments, one of which is purely consequential on the Excise Act of last year, while the second will serve to remove any doubt as to the position of a club in the matter of open stocks. The second amendment is intended to bring the Customs Law into harmony with the Excise Act in regard to the maximum weight of cigarettes that may be imported. The third amendment makes certain amendments to the first and second schedules to the Customs Tariff Act No. 36 of 1925. The chief amendments to the tariff items will give effect to the increased duties to which we have agreed. There are several other items in the first schedule which are also being amended. I can assure the House, however, that none of these is of any special importance, and I do not think any of them is likely to cause any difficulty. As, however, hon. members may wish to go more closely into some of these details, I am not going to ask for the committee stage to be taken forthwith if the second reading is adopted. All the amendments contained in the second schedule are consequential on the amendments contained in the first schedule. Then we have Clause 4 of the Bill which will serve to fill the gap in the law in regard to the confiscation of goods, the export of which is attempted in contravention of the law prohibiting exportation.

Motion put and agreed to.

Bill read a second time; House to go into Committee on the Bill on 10th April.

I move—

This Bill, the enactment, of which is the result of the present economic circumstances, is one which in my opinion it is essential that we should pass this session. Indeed, I believe that the House will be accepting a very grave responsibility if it fails to pass this Bill this session. I shall enlarge on that a little bit later. At this stage I merely want to sum up my reasons for that statement in this way: At present there is an abnormal amount of easy money in the country. There are abnormally easy money conditions. It is almost inevitable that as a result of that building societies should be placed in the position when they can hardly fail to follow certain lines of action in respect of the disposal of the funds which come to them so easily and abundantly, which they would not follow in normal circumstances. But the war will come to an end, and the post-war period will be a difficult one. Readjustments will have to be made to get back to normal conditions. It is essential, I think, that we should institute safeguards to avert the danger of societies being found to be unprepared for these necessary adjustments. Before I go further in amplifying that statement, I think I should say a few words about the procedure which has been followed in the preparation of this Bill. This is an amending Bill, not a consolidating Bill. The amendments are extensive, but they are also urgent. It seemed to me to be desirable to dispose of the amendments contained in this Bill first, before the work of consolidation was proceeded with. As it is an amending Bill, I thought it best to proceed by way of consultation and discussion with the building societies. It is my intention to introduce a consolidating Bill later and refer it to a Select Committee. I cannot promise that Bill for the next session, but I hope to introduce it as soon as reasonably possible. But in the meantime, pending the preparation of such a consolidating Bill, it is important to give legislative effect to these amendments in our Building Society Law which are urgently required. I said that we have adopted the procedure of consultation and discussion in the preparation of this Bill. That consultation has now been going on for just about four months. This Bill has been under discussion and subject to consultation since the 10th December of last year. The consultation has taken place primarily through the association of building societies, which has had perhaps a dozen meetings to consider the proposals contained in this Bill. Unfortunately that Association is not fully representative of all the building societies in the Union. But I am hopeful that one result of the discussions which have been taking place during the last four months will be an amendment to the constitution of the Association, which will have the effect of it becoming more fully representative. Although the Association does not at the moment represent all societies, I took steps to arrange that all societies should be consulted in regard to this Bill. All societies received a copy of the first draft of the Bill, that was sent out more than two months ago. The first substantive draft of the Bill was sent out on February 3rd, 1943; all societies received a copy of that, and of the explanatory memorandum. They were all invited to attend a meeting of building societies held on February 18th, which was also attended by the Registrar of Building Societies, and they were advised that if they could not attend that meeting they would be free to submit their views in writing, and those views would be fully considered. All the societies, Mr. Speaker, members and non-members, received copies of the draft Bill as it was approved, on the basis of the approval given to the proposal before that meeting. Further, the draft Bill which was sent to them did not differ substantially from the one now before the House. One or two additional concessions have been made to meet points that have been raised, but in substance the Bill is the same as that of which the societies were advised after the discussions on the 18th February. As a matter of fact, most of the non-members of the association have attended one or more meetings held for the discussion of matters in connection with this Bill; everything possible has been done to keep all the societies fully advised of what was contemplated, and to obtain an expression of their views, and I think I can say that we have done a very great deal to meet the views put before us. Where the views have not been submitted personally, but by written representation, they have been given the most careful consideration, and the great majority of the points submitted have been met. Any suggestion, therefore, that this Bill has either been rushed or has been imposed upon the societies without consultation, would be a grossly misleading statement. Let me explain more fully the necessity for this Bill. The function of a building society, as normally conceived is to accept deposits from depositors, and then to invest the money so received remuneratively mainly along the lines of assisting in the provision of homes for the people. The profits on such investment go to the shareholders, and to reserves. The first consideration, therefore, is the security of the investment. Now in normal times, Mr. Speaker, the depositors are many, and the average amounts held in societies by the various depositors is small. Deposits consist in the main of the savings of the people, and mostly these are savings to meet various contingencies, such as the danger of illness, or with a view to the purchase of a house when circumstances permit, for school expenses for children, or for those possibilities which may occur in the course of any man’s life, the object being to have money available which can be drawn upon at short notice. The tendency, Mr. Speaker, has been for a period of years for these savings deposits, as they have come in, to exceed the amount withdrawn during the same period by depositors, and societies have therefore found themselves in the position where they could easily meet withdrawals out of the amount coming by way of new deposits, and it has been natural for them to commit themselves in the investment of their funds to loans for relatively long periods, the ordinary type being a 15-year loan. They have naturally assumed that that state of affairs in which they have more money coming in than money going out, would continue. There was always the possibility of a run, but I think the societies have assumed that while they were merely dealing with savings deposits, any run on them that there might be, would be of such a nature that it could be met without difficulty, out of repayments of loans and out of new deposits which would continue to come in. Now what means that we have had a tendency growing up quite naturally in building society finance to borrow short and lend long, to borrow money which might be called for on very short notice, and lend that money on loans of say fifteen year currency. That, after all, is an essential feature of building society finance, borrowing short and lending long, and in normal circumstances while you have the savings deposits coming in, as they have been coming in, and while you have only normal withdrawals, that has been perfectly sound. But in the last couple of years a change has come about in this respect, and I am not sure the significance of this change has always been appreciated. In fact, sir, alongside all these savings deposits of which I have spoken, a new type of deposit is coming to the building societies, and that I shall call the repository deposits. I am thinking now of deposits which are placed with building societies to earn interest, while the owner of the money is in difficulty in finding suitable and more remunerative investment elsewhere. Now who are such repository depositors? Well, let me give one or two instances. There are people, for instance men on active service, who are depositing money with the building societies, either themselves or through their dependants, against the time when they will come back. There are merchants who are unable to maintain their stocks, and they are placing that money with the building societies. Of course, they cannot do it to any great extent, but in any case that is happening. Above all, there is the normal private investor, who would normally be putting out his money on mortgage, but today cannot find outlets for that money, which is going into the building societies. Now all that money is short term money. In due course the soldier will come back and withdraw that deposit, the merchant will have a chance of buying stocks again, and he will withdraw his money, and the investor will again be in a position to find outlets for his money, and he will withdraw it from the building societies.

What is the increase?

I cannot say. I do not carry those figures with me, but the increase will be quite considerable. This money will be required for other purposes, and the building societies will be called upon to meet these commitments. Now what have the building societies been doing with this additional money, which has been coming to them in this way? Well, I suppose quite naturally they have simply gone further along the lines of pre-war policy, namely the policy of lending long the money which they have borrowed short, and, sir, the tendency has been to make the terms of their loans more attractive, to extend the period of investment, to decrease the amount of repayment, and the tendency has also been to increase the valuation of the properties on which advances are made so as to increase the amounts that can be advanced on those properties. Now, of course, all that has meant that the building societies have tended to get into the place of the private investor, who would normally put out his money on mortgage. That has happened again and again in the experience of pretty well every one of us, that the private investor has found himself supplanted by the building society which has provided money for the repayment of his mortgage. It has meant, of course, therefore, that the building societies have increased the amounts which they themselves are lending long, but it is the private investors who are in this way being edged out of the market. They have almost inevitably been compelled to deposit their money again which has become idle, with the building society, and so the amount of repository deposits has been increased. In other words, there has been an increasing amount of money which the societies have been borrowing short, and the whole result of the present economic position is to increase the amount of lending long and to increase the amount of borrowing short. What about the future? At the present moment the indications are that the amount of repository money with the building societies will increase until it reaches a very large figure. Then when the war ends, as life and business become more normal, much of this money will be withdrawn, and the full effect of borrowing short and lending long will then be felt. There is a definite danger, Mr. Speaker, that some of the societies may then find it difficult to meet their commitments. There is also the almost certain effect that at the very moment when, with a view to rebuilding and reconstruction the building societies should have money available to help people in building new homes, all the money they have will have to be paid out to meet those commitments to which I am referring. Of course, at that time the private investor will again come into his own, but he will lend the money on less favourable terms than the building societies are charging today, but in order to lend that money he will again have to withdraw his money from the building societies. Briefly stated, the purpose of this Bill is to provide some check on the development of this state of affairs to which I have been referring. I have circulated a very complete memorandum on the clauses of the Bill, and I do not therefore need to deal with those clauses in detail. I propose merely to refer to the main provisions. The chief clauses which give effect to the object of the Bill as I have described it, are four in number. The first is Clause 6. Clause 6 amends Section 22 of the principal Act, which deals with the powers of societies. Now the main provisions of Clause 6 are these. In the first place, we propose to fix a maximum in respect of the investments of funds of the societies in premises. Investments of that kind, desirable of course up to a point, are not liquid investments and may be subject to fluctuation. We therefore propose that 20 per cent. of the sum of the societies paid up share capital, and unencumbered reserve funds shall be the maximum amount which may be invested in this way. We recognise that there will be exceptional cases which will have to be met, and we make provision for such exceptional cases. In the second place, in this clause we propose to repeal the present provision in the law which requires every society to have mortgages to an amount not less than the amount which it owes on deposits and loans. Thirdly, in this clause, in order to check the tendency to borrow short in order that they may lend long, and having regard to the abnormal withdrawals of short term borrowings which will inevitably come after the war, we propose to fix a maximum for deposits. We propose a maximum both for savings account and amounts held on fixed deposit. We suggest that these should vary according to the size of the assets of the society, as that after all will largely determine their ability to pay, in Section 6 (1) paragraph (3) these maxima are set forth, I do not intend to read them, but will simply draw the attention of the House to these maxima. It must be obvious to anybody that it will be suicidal to allow a society with total assets of say £100,000 of which say £20,000 are liquid assets, to accept individual deposits which may be withdrawn at very short notice of £5,000 or £10,000 and this clause will therefore tend to impose maxima on amounts which may be so accepted. The next important clause is Clause 8. That amends Section 24 of the principal Act, which deals with the investment of funds. Now here we face the other side of the problem of borrowing short and lending long. The object of our proposals in this clause is to secure a wide diversification of risks for the societies, and a regular inflow of money by way of repayment of advances. Obviously, sir, it is necessary to safeguard against the danger of an undue concentration of investments in large risks. There are four main provisions in this Clause 8. The one is limitation in respect of advances over £5,000, and I take that as the natural limit for the usual business of a society which is to provide homes for the people. What we contemplate is that normal advances in excess of £5,000 should not exceed 20 per cent. of the total assets. Some societies have in the past gone in fairly extensively for the policy of large advances, and we propose, therefore, to raise the proportion 20 per cent. to 25 per cent. where the total fixed term advances are less than 5 per cent. of the total assets. Then in the second place we propose a limitation of the amount of individual advances in any one case, and that again will be found set forth in the table in paragraph 8 (1) (b). That amount, the maximum amount, should vary with the size of the society. We provide further that any one advance may not exceed 10 per cent. of the unencumbered reserve and the paid up undefined share capital. Finally, sir, in this clause we propose to limit the amount of fixed term advances. That means, sir, that in effect you will be increasing the advances where repayment has to take place regularly, and in that way we shall achieve our object of having a regular flow of repayment money coming to the society, which will assist it in meeting calls upon it. The next important clause is Clause 9. Quite obviously a most important feature in building society finance is the valuation of the property on which advances may be made, and this clause deals with the method of valuation. At present the society may make advances on mortgages up to 75 per cent. of the vaue of any particular property. Now the crux of the matter is, how is that value determined? This, Mr. Speaker, is a time of rising property values, but prices of property may fall again later. It is also a time when there is keen competition for investments. There is a temptation, too, and a danger of valuations being put up higher than they should be, and it is therefore of fundamental importance that valuations should be properly carried out. I cannot close my eyes to the fact that we have had indications that sometimes these valuations —I am not making any general charge—but sometimes these valuations are made on a rather more casual basis than they should be. The provision of this clause that we wish to insert deals with the basis of valuations, and they have been discussed most exhaustively with the Association of Building Societies. Some might like us to go further than we are going here in regard to the determination of the basis of valuation, but as far as I can judge this clause will meet the position. At the same time, in the next clause the Registrar is given the power of inspection, and since the safety of the society depends so largely on the soundness of its valuations and the advances made on those valuations, that seems to be essential. The fourth important clause is Clause 10, which amends Section 25 of the principal Act, which deals with the share capital and assets. I think I should refer to three of the provisions in that clause. In the first place, in view of the tendency to borrow short and lend long, it is proposed that every society shall in future at all times possess funds which cannot be withdrawn under any circumstances equal to 25 per cent. of the total of the withdrawable or payable funds. That is a very desirable provision. For the same reason it is proposed to require the maintenance of a higher proportion of long term funds in the form of share capital. The ratio has been put up according to our proposal, from 33⅓ per cent. to 40 per cent. Thirdly, it is proposed that of this proportion of share capital three-quarters shall consist of shares of which the repayment can never be demanded by the holder. These are the main clauses which give effect to the chief purposes of this Bill, and I think now all that will be necessary is to refer to four other clauses. The first is Clause 3. That is a new section which empowers the Registrar to require a revision of the rules of the societies in certain circumstances. I think there has been a good deal of misunderstanding in regard to this clause. It has been suggested that this means that the Registrar is going to impose uniform rules on all societies, but it has been entirely overlooked that in any case the Registrar’s decisions are subject to appeal to the Minister, and the Minister himself is responsible to Parliament. The whole object is to iron out certain obvious inequities at present existing, inequities which in some cases are definitely unfair to certain societies, and all we have in mind is the removal of undesirable divergencies. But in view of the difficulties which have been raised, I propose to move an amendment to this clause which will have the effect that all the Registrar will be able to require will be that the proposal to amend the rules shall be laid before the annual meeting of the society. It will then be for the members themselves to decide whether that amendment will take place. But we shall, if this clause in its amended form is given effect to, be permitted to bring to the notice of societies points in respect of which it is considered their rules require amendment, and then the members will have to deal with it. We shall not impose these amendments on them. In Clause 5 a certain amount of difficulty has also been raised in respect of the form which will have to be submitted for approval. I propose to move an amendment in that regard limiting the forms to forms of a contractual nature. I think it most desirable that such forms should be submitted for approval in view of the difficulties which occasionally arise. Next I would draw attention to Clause. 16, which amends Clause 30 of the principal Act. Clause 30 of the principal Act deals with the statements which have to be submitted by societies. In this clause we are proposing to substitute advances for persons. In other words, the societies will have to submit their statements on the basis of advances they have made, and not on the basis of persons to whom they have made such advances. The number of persons owing a society say more than £5,000 is different to the number of advances of over £5,000. Two advances of say £3,000 each to the same person for different purposes are obviously very much less dangerous, if there is an element of danger, than one advance of £6,000, and so, sir, by making that change, we shall be meeting the societies. We are making the change primarily to provide a better statistical basis, but at the same time it will have an important bearing on the provisions of the Bill in relation to maximum advances to which I have referred. I quote the case of one society on the basis of its 1942 figures. That society had 21.5 per cent. of its total advances in respect of persons owing more than £5,000, but only 18.5 per cent. in respect of individual advances of over £5,000. There is therefore a very important difference in that respect. Finally, sir, I want to refer to Section Ī8, which amends Section 31 of the principal Act, which deals with the work of the auditors of these societies. Here we have taken over or proposed to take over, certain important provisions from the Banking Bill, with two objects, the one to strengthen the position of the auditors, and the other to assist in the enforcement of the Act in the absence of regular inspections by the registrar. Such provisions are necessary for the protection of the depositors, and since the House has approved of them in the case of the Banking Act, I have no doubt the House will approve of them here. I commend this Bill to the House; it is an attempt to meet a situation which is present today, and may well become quite serious in the period after the war. It represents the result of a great deal of work and consultation; it seeks to strike a fair balance between the interests of the societies and the safety of the deposits which they have committed to their charge. I think I should also say that the acceptance of this Bill should provide us with a basis on which we can go forward in connection with the work which I have foreshadowed, of consolidating the present law in relation to building societies.

The Hon. the Minister of Finance gave the House the impression that if this Bill was not passed by Parliament this Session there was a great possibility of the whole financial structure collapsing. The Minister said that we had to keep our eyes on the post-war period and he said that in view of the conditions which were likely to prevail after the war and especially in view of the inflation of values and the possibility of building societies granting loans on those increased values, the position was so serious that the Bill must be passed this Session. I imagine the Minister must have known as far back as two and a half years ago that there was going to be a difficult post-war period, and, particularly so far as the rise in the value of property is concerned the position which we are faced with now is not one which has begun to make itself felt only in the past few weeks. This state of affairs has been developing for the last two years, and that being so I am not convinced of the absolute necessity of this Bill having to pass this Session. If we accept what the Minister says, and if it is so highly essential for this Bill to pass this Session, then, surely it was the Minister’s duty to have introduced the Bill at the beginning of the Session so as to give hon. members the opportunity of making a proper study of the provisions of this very complicated measure, so that they would have been able to form sound conclusions about the whole Bill. What, however, is the procedure which the Minister has followed? Only a few weeks ago this Bill was laid on the Table of the House, and in that short space of time hon. members have had to study these proposals, and not only that, but they have had to try and gather information with a view to ascertaining whether the Bill is necessary and whether it is justified. Let me say this to the Minister, that it is quite impossible for members to do all this within the brief space of a week. Now, what is the position today? In 1934 the Principal Act was introduced and passed by Parliament. Since that time four amending Bills have been brought before Parliament. First of all, an amending Bill was introduced in 1937. The next one was brought in in 1941, another one in 1942, and now this Session the Minister comes along with this fourth amending Bill of his. If we add the clauses of the four amending Bills it means that we have a Building Society Act containing 127 clauses. The Minister in his introductory remarks admitted the need of a consolidating measure. While admitting that, he added that he could not hold out the slightest hope of such a measure being introduced next Session. It is probable, therefore, with conditions changing as fast as they are doing today, that we shall have another amending Bill brought before us next Session. I feel that the House is not being treated fairly. The Minister says that he has consulted representatives of building societies at great length, but it is not the building societies alone which are interested in this matter; the public are just as interested as the building societies because it is for the sake of the public that these facilities are being created, and it is the members of the public who constitute the depositors with the building society. The public have not been consulted. The Minister found himself faced with the same difficulty as he was faced with in connection with the Insurance Bill, but that Bill had been before this House for three years, and in spite of the fact that he had had ample consultation with the insurance companies the Minister still saw fit to refer the Bill to a Select Committee. That Select Committee took evidence from all sides, it considered objections, and then it brought forth a measure which will in all probability be accepted by Parliament during this Session. I am glad to admit that there are important provisions in this Bill which are acceptable to all members of the House. I accept the Minister’s statements that building societies must not merely provide facilities to enable members of the public to secure their own houses, but provision must also be made for the protection of the deposits made by the public, and in that respect the Minister will have the full support of all sides of the House in taking protective steps of that kind. The Bill, however, does not only contain provisions for the protection of the public, it also contains other provisions, and members of this House have not had the opportunity of hearing evidence from various sides. Building societies, so far as our community is concerned, are most important institutions, and the Minister quite rightly stated that it is the function of building societies to provide housing for the population, or rather to make it possible for members of the public to obtain their own houses. This function is an extremely important one. Housing is an extremely important part of our whole social policy, and consequently everything possible must be done in order to encourage building societies to extend facilities and to enable members of the public to secure their own homes. There are certain provisions in this Bill, however, which will curtail these facilities to a certain extent. Hon. members do not know to what extent, and in what way, such curtailment will take place. They have not had the opportunity of securing any information. Complaints have been received for instance that this Bill is going to force smaller building societies to close down. This is of the utmost importance, if it is true, because our policy should be to encourage institutions of that kind. It it is true that certain building societies will perhaps be forced to close their doors as a result of the provisions of this Bill, then it is clear that those provisions need further consideration. Money is plentiful today, and the danger indeed is that building societies may perhaps not be sufficiently careful in regard to the issuing of loans, but if facilities are curtailed at a time when money is plentiful people who want to borrow money may perhaps be compelled to go to other institutions to take up money, and as a result of the restrictions contained in this Bill they may perhaps be able to secure money elsewhere on favourable terms. On the other hand, bonds which they may take up, will perhaps in that case contain provisions which may constitute serious dangers. The Minister should therefore keep open the doors of those institutions which are on a sound basis. I want to ask whether it is not possible to refer this Bill to a Select Committee? The Select Committee will then be able to consider the whole matter, obtain evidence from the public, and from interested building societies, and after that it will be in a position to bring forward a consolidating bill which will have been thoroughly considered, and hon. members of this House will have the opportunity of going fully into the provisions of the Bill and of obtaining all the information they require. I don’t think it will make much difference if this Bill is held up for another six or nine months. We are approaching the end of the Session; if drastic action has to be taken in the meantime, the Government has ample power to impose certain restrictions. The Government can do anything today by way of proclamation. I feel that it is no more than fair for the Minister to agree to this Bill being referred to a Select Committee. Consolidating legislation can then be introduced on the whole subject of building societies. Evidence can be taken in the proper way, and the measure can be carefully considered. I therefore move—

I second. I think the hon. member for Fordsburg (Mr. B. J. Schoeman) has made out a good case for referring the Bill to a Select Committee. I should however in the first instance like to express my appreciation towards the Department for the White Paper which has been compiled in connection with the amendments. We should get a White Paper in connection with every Bill which comes before the House. It is very useful to members. But now I should like to say immediately that the Bill at present before us is very complicated. One wonders which Bill is the more complicated one, the Insurance Bill or this Bill. It is an amendment Bill of 25 pages and one really wonders why it is necessary that so many amendments should be effected in such a short period. There must be exceptional and special circumstances which the Minister did not explain in his speech, which justifies a measure of this nature, at the end of the Session. In 1934 Act No. 62 was passed, the following year we passed Act No. 19 of 1935 and that very same year Act No. 40 of 1935— this was not exactly; an amending Bill, but contained temporary regulations — then in 1937 we got Act No. 65, whilst in 1941 we had Act No. 39 which was also amended the Act on building societies. In 1942 we had Act No. 24 and this year the Minister comes along with an entirely embracing amendment of the legislation on building societies of 1934. During three consecutive years we had to do with far-reaching amendments, and this measure now before us is certainly not going to be final. It is not a consolidating one. One would have thought that the Minister would have made an attempt to place some consolidating measure before us. In connection with Union legislation one feels that one might later find oneself in a labyrinth. It is impossible for a layman to keep himself informed of the legislation in connection with the various matters and it is certainly not in the interest of the administration of the country that each year amending legislation should be introduced. The Bill before us contains interesting, and I will go so far as to say, necessary amendments which should have been brought along earlier. Legislation of this nature is certainly not in the interest of the country’s administration. One should keep in step with the public. We cannot blame the public if they were to say that with this type of legislation they are unable to say where they are. It is for that reason that I want to support the plea to have this Bill referred to a Select Committee. I accept that the Minister and the Registrar of Building Societies have gone into the matter and have heard the evidence of the Building Societies but after all it is this House with its 153 members that has to decide, and we as members cannot perform our duties properly where legislation of this nature is placed at our disposal only a few days before it is to be dealt with. It is unfair. Legislation of this kind should be proposed early during the Session. One would like to see a complicated measure of this nature to appear in the Government Gazette of the previous year in order to afford the population an opportunity to study it properly. The Minister should meet this objection properly. At the moment we have a Registrar of Building Societies of whom the country can be proud, an official to whom we should like to leave all these matters, and therefore if I contend that this Bill gives too much power to this official, I do not want to throw any reflection upon this official. But he will not always be there, and I object that a Registrar of Deeds should be given the powers which this Bill conveys. I think that we are all afraid of too much bureaucracy. It can be abused. The Minister will agree that it is dangerous to overdo bureaucracy, and it is being done in this Bill. Why does the Minister not adjourn the second reading? Refer the matter to a Select Committee, so that we have an opportunity to go into it further. This House is the jury which sits on matters and should be afforded an opportunity to consult people and to gain information. I support the proposal to refer the Bill to a Select Committee.

I am very appreciative of the Minister’s introduction of the Bill, and I am very appreciative of the White Paper with which we are supplied. It tones down and makes more pleasant some of the restrictions which appear in the Bill. I am going to support the Bill with, I hope, certain amendments which I shall move later. It is not often that an amending Bill is welcome, especially if it aims at the regulation and curtailment of powers, and going generally for safety in working; but in this case I welcome it because I believe that the amending Bill is desirable at the present time, desirable because of the times ahead, desirable because of the possibilities—speaking even now of after war effects, and though we have the promise from the Minister that he will introduce a consolidating Bill, that in all probability will come at a very much later date. It is the opinion of people for whom I have very great respect that measures of this character, financial measures one may term them, should be handled in the way that we have handled other measures of the same kind. It is as desirable to have these amendments to this Bill now and prepare for the future as it was to have the amendments to the other measures which we have recently passed. I am not speaking like this because I am expecting anything like a slough of despond after the war. I am not expecting that, but I say it is wise to make your legislation in such a way that there is protection granted for the sections of the community concerned. While I support the Bill there are quite a few sections which I hope will be amended. I am glad that the Minister has already expressed his willingness to grant some of these amendments. The original Bill came before this House in 1934. I was on the Select Committee, and consequently that Bill was converted into a Good Act. That is how I look upon it. Half the people who served on that Select Committee are already in Heaven.

Don’t you go there too.

Perhaps that is why we have to amend it.

So I am looking with a good deal of respect at this little Act which I assisted in drafting. If we look at the position and compare it with what it was we see tremendous changes. The assets of these companies have multiplied by four—£80,000,000 as against £20,000,000. The development has been tremendous, probably bigger than anything of its kind in the world before. And there is a certain amount of truth in the Minister’s statement in regard to the plentiful of money, and the possibility of extreme finance. I don’t regard it as serious but that in itself is sufficient reason for this amending Bill being introduced now and our not waiting until after the war. It is perfectly true to say that there has been a strong feeling among the Building Society people that this Bill should have been referred to a Select Committee, Well, the negotiations have been lengthy and so much has been agreed upon that I see no reason why this measure should not be passed. The Minister and his registrar have been comparatively reasonable in the matter—yes, as reasonable as usual.

Of course.

And undoubtedly a great change has taken place in the Bill. In fact it is hardly like the Bill which I saw at the end of last year, and the Bill now before us is much more acceptable than the one we originally had. It has been suggested that this Bill is helpful to the large societies, and gives favours to the large societies. An examination will show the very reverse. All the large investments of your big undertakings are dealt with a bit drastically, but it is only the larger societies which are affected. So while the smaller societies will come into their own in time it is an unfair suggestion to make that this Bill is in the interest of the large societies only. It is just the reverse, and I should like any hon. member to show me any section which is oppressive to the smaller societies as against the larger ones. There are just a few clauses I want to refer to. There is this right of appeal to the Minister, which is given in the various regulations. That has always been a source of contention. There should be a general section. Every organised body appreciates the right of appeal. I should like to say this, that during all these years the registrar has been not only helpful, but a guide and a counsellor, and no difficulties at all have arisen, but a new king may arise who does not know Joseph, and then Joseph may get gip from the new king. So I suggest that the Minister should provide for the right of appeal in the same way as it is provided for in other Bills. I suggest there should be a general appeal to the Minister. Now on this question of maximums. Why should these institutions be restricted? Surely things are regulated by the circumstances of time. And to give a maximum which you must abide by for all time must have the effect of restricting business. The Directors must be the best judges of that. It should be remembered that right up to 1934 there were old societies with directors of great experience, men in responsible positions, and although there was no Act to guide them everything went well. These societies have stood the test of time right through the Great War, as a matter of fact right from the time of the Boer War—they have stood the test of the gold standard and other things and nothing has gone wrong. I suggest it is quite wrong to tie them up in this way, but I am sure the Minister will meet us there. Then Clause 8. It is a remarkably restrictive clause, and a dangerous clause, and one which should have a good deal of attention from this House before we adopt it. This clause deals with advances over £5,000. Up to now advances have been made up to £5,000 and the only provision was that they should appear in the annual balance sheet. That position is brought under review because very much larger loans have become usual during the past few years, and it is evidently thought that these larger loans are not of the safe kind. One will agree, perhaps, that when you come to large loans on business property, hotels, etc., that the limit is correct, that 20 per cent. is correct. Personally I would not admit that it is wise to do so because it is common cause, and the Minister will probably know that in business of this kind the larger loans have proved the safer ones to the building societies, One point I want to make is this, that as it stands it will cover the building of residential properties, flats and so on.

That is why we raised it to 25 per cent.

The last thing in the world that should be done is to place restrictions on the provision of houses. It is common cause that you cannot stop the building of flats. People are prohibited from building small houses in the suburbs of our cities, Pretoria, Cape Town, Johannesburg and elsewhere, largely because of high land values. You cannot build these three and four roomed houses today economically, and people are therefore forced into flats. Flats are not coming things, they are already here. Last week Mr. Bevin in England spoke of the great change that was taking place in communal living and even communal eating, which would take place after the war. He might have said it has already taken place as far as South Africa was concerned. I remember when I was in a big South American city I found that people could not build very small houses because of the price of the land, and those who go to certain suburbs to build such houses find there are restrictions of all sorts. More and more people will live in flats in the future, and you cannot keep back the tide. If you stop building flats and residential houses, you are putting the country in a terrible position. If the hon. Minister introduced this about 1950, when we may have got the housing position up to date, I would probably agree with this restriction that he is proposing. However, I feel that this Bill should pass. I believe that this amending Bill is most desirable and I hope it will pass.

I regard this Bill with the utmost gloom. I look upon it as a typical emanation from a Continental mind obsessed by bureaucratic despotism. The Continental mind has never known freedom, and this Continental bureaucratic attitude is the very antithesis of our ideas. We aim to develop individual private enterprise, we aim to encourage individual initiative, and we always like to allow our citizens freedom to manage their own affairs in their own way. I would like to support the amendment to have this Bill referred to a Select Committee, and I want, in the first instance, to refer to what the hon. Minister described as the consultations that have taken place. Now what were those consultations? They were consultations between Treasury officials and the building societies represented by their association. Who are the Treasury officials? They are servants of the people. And what are the building societies? They are also servants of the people. Now, sir, have the people been consulted? I submit they have not. There is an old saying that the man who pays the piper is entitled to call the tune. It is the people who pay the piper in this instance. It does not matter to the building societies if they are enclosed in a straightjacket, as long as all their competitors are enclosed in a similar jacket. But it is the people who have to pay. I would like to refer to the fact that prior to the initiation of this restrictive legislation, the people were able to get a much better return on their call money; the poor man who wanted to place money on deposit on call, money that he had saved for a rainy day, he was able to get a much higher rate of interest in the past than he can today, and the man who wished to borrow money from the building society was able to borrow it at a lower rate. The building societies were able to work on a margin of 1 per cent. I refer to an institution here at the Cape, which was not only able to work on that small margin, but accumulated a very large reserve fund totalling £400,000. Today building societies are compelled to work on a margin of 4 per cent., that is the margin between interest allowed on call deposits and the rate of interest charged on loans. The whole Bill is based on the assumption that the bureaucrats know more about the management of the people’s affairs than the people know themselves. I disagree with that. We are told that the great object of the Bill is to safeguard deposits, and the method adopted for doing that is to force building societies to invest their money in so-called gilt-edged securities. Now these gilt-edged securities return 3 per cent., we are told, but the building societies cannot use that 3 per cent. They must set aside 1½ per cent. for depreciation of their capital, and in the last great depression one building society, I understand, had to sell liquid securities at a loss of £200,000—which is a poor way of safeguarding the people’s money. Anybody who has studied the proper functions of money knows that money, to fill its proper functions, must be kept in circulation, it must not be used as a store of wealth. To keep money in circulation is a primary function of a building society. The small man who keeps his savings in his stocking is violating that principle, his money in that case being used as a store of wealth. The building society says to him: “Lend us your money, we will put it into circulation to your benefit and our own. We will allow you interest on it.” The building society puts that money into circulation, but here we have the State coming along and saying: “No, we are not going to allow you to put that money into circulation, you must use it as a store of wealth, you must invest your money in gilt-edged securities, of which we can control the selling price.” Because that is what it means. It is the people who stand at the back of all this, and who control money power who can reduce the selling price of these gilt-edged securities at will. I had hoped during this Session to have applied for permission to introduce a Bill on this very subject, and I submit that the provisions of my Bill would have safeguarded the people’s deposits absolutely, and would have gone a long way towards the solving of the housing problem which is such a very serious one in this country, but circumstances over which I have no control compelled me to abandon the project. I hope after the election to introduce such a Bill. I hope that the people of our country, when they see that all their power to control their own money and their own affairs is being transferred to a Registrar sitting in Pretoria, will rise and say: “No, we are not satisfied; we can manage our affairs a great deal better than any individual sitting in Pretoria.” Now, Sir, we have been told by the hon. member for Hospital Hill (Mr. Henderson) that this is an agreed measure, but it is obvious that the building societies with head offices in Natal do not agree, for they have submitted quite a number of amendments. I also have a letter from a Preotria building society submitting sixteen major amendments, which means that there are sixteen major objections to the Bill. So I think when we have building societies who talk about sixteen major amendments to a Bill, it cannot be correctly described as an agreed measure. There is another point. What is the effect of this type of legislation? It has the effect of destroying the small societies which are being absorbed by the larger ones. The financial boa constrictors of the Rand are swallowing up their small competitors, and I have a list here of five platteland building societies which have recently been swallowed up by amalgamation with these large societies. They are the Adelaide Building Society, the Aliwal North, the Bethlehem, the Harrismith (No. 2) Building Society, and the Queenstown Building Society. I am given to understand that a number of others will follow, or that negotiations are now in progress. To conclude, Sir, I would like to support the proposal that this Bill be referred to a Select Committee. I think it is high time that this bureaucratic invasion of the liberty of the subject is put a stop to. I think that here we have a very flagrant instance of it and I think if time were given for consideration, the hon. Minister might find that the people of this country are perfectly competent to work out their own salvation without the assistance of Treasury officials.

I must say that the speech of the hon. Minister impressed one with the necessity for certain legislation, out at the same time one could not help feeling that in spite of what has been said about consultation, this measure has been rushed very much indeed. I will explain why. First of all, it is quite correct that in December this measure was first brought to the notice of the building societies, and very many consultations took place. But even now many of the societies have not seen the final draft of the Bill now before the House.

This is a result of the consultations.

Even though these consultations have taken place, they have only taken place with certain officials of the association, and not with the very large number of representatives of the smaller societies.

They represent the association.

That is just where the difference of opinion occurred. It is held by the smaller societies of the country that this measure is definitely favourable to the four big societies, and is not in the interests of the small societies. That is their contention. I am not prepared to argue that particular point, but that is the contention put forward by the smaller societies, and certainly they have not had an opportunity of seeing the final draft of the Bill. Even today, Sir, although the Bill has been under consideration and has receive the closest scrutiny of the association, the Treasury officials, the Registrar and the Minister, the Minister proposes to move in Committee two vital amendments.

I cannot come with a Bill like this without being able to amend it in Committee. If I do not accept amendments then you criticise me.

The point is this, what you are proposing now is what some of the smaller societies have been urging on you. It only shows that right up to now these representations are coming in, and when they have seen the Bill in its final form requisitions for amendment will still be coming in.

I am prepared to consider them.

The hon. member for Hospital Hill (Mr. Henderson) did not support the proposal to send the Bill to a Select Committee. He mentioned that while he was in favour of the Bill there were several clauses which he thought should be amended and his whole speech supported the need to send the Bill to a Select Committee. There are many things which the hon. member disagreed with, and he is one of what I might call the expert members of the House on the building society question. He represents the big societies, and he has no right at all to speak on behalf of the smaller societies. I cannot claim to speak on behalf of all the smaller societies of which I am not a member. But if you represent a particular group then you have to have very sound authority before you can claim to speak on behalf of others. The smaller societies are not coo happy about this Bill, because while they are prepared to agree to certain proposals put forward by the Minister on the question of valuations of property, and one or two other necessary things, they do feel there are certain other proposals in the Bill which definitely are going to stop the development of the smaller societies. As one put it to me, if this Bill had been introduced 30 years ago, there would have been very few big societies in South Africa today. How far that is so I am not prepared to say.

[Inaudible].

I am not for a moment going to say that your big societies are not of very great value to the country, I am not saying that at all. What we have to see is that building societies are developed on sound lines and are placed in a sound position. The hon. member for Hospital Hill has called attention to what building societies had passed through in the last twenty or thirty years. We had the last Great War and the depression which followed it; we had the biggest financial depression we have ever experienced before we went off the gold standard, and yet we came through and met all these crises very well. The societies survived these experiences, and if that is so what is the urgent need to pass this Bill today? If their financial strength was such as to stand up to that, if there is such urgent need as the Minister has described, if the financial position is going to be such as he anticipates, then those who suggest that the Bill should go to the Select Committee are taking a great responsibility on their shoulders.

I am not prepared to take the responsibility of delaying this Bill. I am quite prepared to consider suggestions for amendment, but I am not prepared to accept the responsibility for delay.

Is the position today, from a financial point of view, any worse than it has been in the last two years? I venture to say that the amount of money available today is no less than it was last year. There was every indication last year that there would be a large amount of surplus money for investment, and I quite appreciate the Minister’s anxiety to meet a position that may be serious, but I am not sure whether that could not be met by a short Bill to cover that particular point which worries him so much. But the Minister has gone further than that, and has introduced provisions here which many people think will interfere with their own effective control of businesses which they have built up for many years. I think the difficulty the Minister has in mind could be met by the passing of a shorter Bill. With regard to many of the sections of this Bill, I ask the Minister what opportunity has been given to these people who have not had the chance to see the final draft. I certainly think they should have time to consider it.

How long do you want?

At least another week.

It will not be on the Order Paper until Tuesday, in any case.

I want to remind the Minister that there has not been a single measure of importance of this nature that has not been sent to the Select Committee to be thoroughly investigated. I do submit that the position was known to a certain extent last year, and the Minister would have been very well advised if he could have given us this Bill at the beginning of the Session, and have it sent to a Select Committee. If the Minister is not prepared to send it to the Select Committee, at all events there must be sufficient time given for representations to be made by any bodies who have amendments to propose.

Mr. Speaker, I hope the Minister will not take up the attitude that this Bill is a party measure. It is by no means a party measure, it, is one that the whole House it interested in, and in regard to which I think the vast bulk of opinion in the House will be in favour of sending it to a Select Committee. If the Minister leaves it to the House there is no question that the proposal of the hon. member for Fordsburg (Mr. B. J. Schoeman) will be carried. I cannot see the urgency for this Bill. The hon. member for Hospital Hill (Mr. Henderson), who supported this Bill, has pointed out that during more than a generation building societies have been able under existing conditions to weather every storm without much difficulty, and surely now, when so drastic a measure is contemplated, the opportunity should not be lost of sending the matter to a Select Committee so that a Bill can be evolved which will be acceptable to all sections, and at the same time will be fair to the societies concerned. I have a letter here which I would like to read to the Minister from a Pretoria society, which is one of the smaller societies, referring to the circumstances under which a number of drafts of this Bill have been submitted to it—

And then it goes on to say that none of the main objections have been withdrawn, and the Minister has not granted any amelioration worth talking about, and has now prepared a draft Bill that will tie them hand and foot. That is a very serious allegation to make, but it is an allegation which can be disposed of if the matter is referred to a Select Committee. As far as I am concerned, I must say that it was impossible for me to be able to digest a technical Bill of this nature in the few days that we have had it before us. It was placed on the Order Paper last week, and since we received the Draft Bill I at once sent it to the Pretoria Society. I have not yet received any comments because the time is too short for them to consider it. This is a measure which affects the savings of vast numbers of people, it affects the people’s capital to the extent of something like £80,000,000, and it should therefore not be embarked upon without a very careful investigation. The Minister pointed out last year that after eight years’ experience he had for the first time taken an opportunity of giving building society legislation a complete overhaul, and the Bill was then also rushed through at undue speed, and it is not necessary now to come along and introduce this highly technical matter which involves fundamental changes in the working of building societies in this country, without adequate consideration. This Bill, I believe, has been submitted to the Natal building societies. The Natal building societies as a unit are opposed to the measure, and I have before me a memorandum which is based on this Bill. After making a number of comments it says this—

That is on the second of this month—

They ask—

It seems to me that that is a perfectly reasonable request. After all, the directors of building societies are on the whole capable and honourable business men. They are people who have built up the societies and there is no reason why the Minister should assume that during the next twelve months the country is going to be faced with disaster as far as these societies are concerned. Let the matter first be carefully gone into. The Minister has, of course, told us that he is prepared to agree to some very important modifications and I am sure that those modifications are of such a nature that they will diminish to a large extent the objections to the Bill, because one of the main objections was that we are creating a financial dictatorship in South Africa in the person of the Registrar of Banks and Building Societies. But there are a large number of provisions which can still be modified. It seems to me that the criticism of the hon. member for Hospital Hill (Mr. Henderson) that it is rather absurd to limit the right of building societies to advance loans for building purposes, is well founded. Under these circumstances I would appeal to the hon. Minister to allow this Bill to go to a Select Committee.

I would like to associate myself with the plea that has gone up to the Minister to refer this Bill to a Select Committee. It is quite clear that as far as the small building societies are concerned, they have received no consideration as regards certain provisions. We know that the Association of Building Societies does not represent the whole of the building society movement in South Africa. As a matter of fact, it is an open secret that as a result of this Bill having come before the executive of the Association of Building Societies, it has led, one might almost say, to the disintegration of the Association of Building Societies, because the treatment accorded to the smaller societies, and particularly the smaller societies in Natal, led to the spectacle of the representatives of these small societies walking out of a meeting held by the Association. I suggest to the Minister that the Bill must be of paramount interest, it must be of very great importance, if it leads to a situation such as that. The building society movement is, of course, a very old movement in South Africa, and up to 1934 there was no legislation regulating building societies. As the result of public uneasiness caused by the failure of a large Johannesburg building society, a Bill was introduced in 1934. A major Select Committee sat on that Bill and as a result we had the legislation of that year. All the factors which have been mentioned by the Minister today were taken into consideration when that 1934 Bill was passed.

There was not a war on then, was there?

No, but the fundamentals, that is the protection of depositors, the ratio of shareholdings to deposits, were all fully considered. However, after a few years experience, after the Act had been in operation for a few years, as the result of valuable experience gained, amending legislation was introduced and certain provisions were tightened up. That happened in two or three succeeding years, and the last piece of legislation we had was last year. When the Minister introduced that legislation he stated that as a result of eight years experience, he was now able to have a complete overhaul of building society legislation. In other words, the indication was given and the impression created that in the meantime that was to be the last word in building society legislation.

Oh, no.

I suggest to the Minister that there has been no change since last year in regard to the position of building societies. The position is the same today as it was last year. I think if the Minister will study the returns of building societies, he will find that, generally speaking, there has been no abnormal increase in building society deposits since last year. And these very questions which the Minister is considering today, must surely have been in his mind in 1942 when he passed that Act. What abnormal change has taken place. The principle of borrowing short and lending long has been applied to building societies almost since their very inception. It is part and parcel of the history of building societies. That is their practice. That was their practice in 1942 when the financial conditions were the same as they are today. I would suggest to the Minister that this legislation is just as important as the legislation dealing with banks and with insurance companies, or any of these other trusts, and for the life of me I cannot see why at this late stage of the Session legislation of such primary importance should be rushed through. I would also point out to the Minister that if a consolidating act is introduced next year, it will merely be a consolidating act of existing legislation, which means that if we pass this Bill as it is, these principles will be incorporated in the consolidating act. There can be no amendment if a consolidating act is passed, and I submit if the House is going to pass this legislation now, then we shall next year have to accept the same principles as these five Acts; This Bill in its entirety will be in the incorporating Act, and no hon. member will be given an opportunity to challenge any of these provisions.

Why do you assume there will be no change?

I assume that the consolidating Act will simply be a consolidation of these principles. If these principles are accepted now and adopted by this House, it would be very difficult for the House next year to say that we do not now agree with these principles and we are going to alter them.

The Minister said we may not get it next year.

I think the House will agree with me on this point. I say in all seriousness that if these fundamental principles which affect all building societies very acutely are now adopted and passed into Law, it will be practically impossible for us to amend them or to delete them entirely at a later date. I agree with the hon. member for Durban, Berea (Mr. Hooper). When I rose to speak I did so with a feeling of gloom. As a matter of fact, I think I did so with a feeling of distress, and it is no exaggeration to say that the majority of the members in the House feel that this legislation is of such importance, particularly to the small building societies in the country, that the Minister should consider sending it to a Select Committee. Let us go into all these questions and consider them fully. I cannot see how there is going to be such a revolutionary change in our financial affairs in the next twelve months, and I would add my plea to those that have gone before that the Bill should go to a Select Committee.

I would like to associate myself with hon. members who have appealed to the hon. Minister to send this Bill to a Select Committee. I feel that this Bill has not only made some of the members gloomy, but it has cast an atmosphere of gloom over the whole House. I feel that it is wrong to introduce amending legislation when it is opposed unanimously by all the smaller building societies.

That is not the position.

Those are the representations that have been made to me, that, eleven building societies in Natal are opposed to this amending legislation, and two building societies in Grahamstown are both definitely opposed to this amending legislation. They feel that there is some insinuation that building Societies are unsound in their finance, and I feel that the building societies represent one of the most democratic institutions we have in this country. They are run by those directly interested in the benefits that these societies confer. The first Building Society Bill of 1934 has already been amended four times, and last year we had a Bill and we were practically promised that that was the final consolidation of building society legislation, and it has come as a shock that within the first year of its operation we have to have an amending Bill.

And one of such wide dimensions.

I feel that if we rush into this amending legislation there is no doubt that we shall have amending legislation next year again, and I feel that all this amending legislation is definitely not in the interests of the building societies. These institutions confer great benefits on the people. I wonder whether the Government’s sub-economic housing legislation is not perhaps at variance with the interests of building societies, and in a way there is an insidious movement being instituted against, building societies. I do know that our Government control measures are inclined to militate against the interests of all small institutions. We have small businesses in towns which are closing down today, and I feel that this control is in the interests of the larger institutions, which I do not think is in the best interests of democracy as a whole. I feel that legislation of this nature, if rushed, may lead to the closing down of small building societies. It may be argued that that is in the interests of the people as a whole; still, I am very much averse to putting the control of any benefit into the hands of large interests even if those interests are under direct Government supervision, and I do appreciate that the Minister feels that these institutions, because they control so much money, should have the closest Government supervision. I do feel that, but I feel that the Minister’s fears, which he expressed this afternoon, cannot be fully justified. I feel that the Minister is a little hasty in this legislation, and I do appeal to him that he should appreciate the opposition that has been put up to this Bill. He should appreciate the harm which is done to building societies by this continual amending legislation, and I do hope he will take the opinion of this House as a whole, which, I think, in the strongest terms possible, has impressed on him the necessity of referring this Bill to a Select Committee. I do want to make these representations as strong as I possibly can. I say that I speak right from the heart of the people that some of these smaller building societies serve people who have a direct interest, people who say that these societies have never given them any reason for lack of confidence in the building societies. I myself do not know of individuals, even in the times of the greatest depression, during the last war, who have lost a penny through inappropriate handling of the business of building societies, and I want to close now with this appeal to the Minister, to refer this Bill to a Select Committee.

I wish to associate myself with those who plead with the Minister not to proceed with this Bill in its present form. A very large class who are as much concerned as the Minister himself with the well-being of the financial position of the country, have grave doubts as to the wisdom of the policy enshrined in this Bill. There can be no doubt that the anxiety of those associated with the smaller building societies, shows that there is a fear that the structure of their finances will be so affected by this Act, that they will no longer be able to carry on. It is not too much to say that this Bill is regarded by its critics as a Bill for the amendment of the Building Societies Act to bring about the absorption of the smaller societies by the larger societies. That is perhaps a longwinded way of saying that this Bill represents big finance, and it is because that is so that the modest efforts of small finance will oppose the passing of this Bill during the present Session and in its present form. I cannot for the life of me see why we should be warned by the Minister that if this Bill is not passed this Session, grave happenings may follow. I think the hon. Minister goes too far. On the Rand there is a great deal of criticism in regard to this Bill, and only today I had a conversation with a prominent man who indicates that this is an exceedingly unpopular measure and that it gives ground for criticism that the big society bear is due to consume and swallow many of the smaller societies. It cannot be denied that one society has approached some of the smaller societies with a view to their amalgamation, and I believe I am correct in saying that as far as can be ascertained some of the smaller societies have already succumbed to this pressure. I believe that the Aliwal North Building Society, the Bethlehem Building Society, the Harrismith No. 2 Building Society and the Queestown Building Society are in the course of being swallowed or have already been swallowed by one of the large societies on the Witwatersrand. It is said that a prominent member of the Public Debt Commissioners Board has a good deal of influence with the Minister of Finance in connection with this matter, and that the Bill, although it does not go with the popular consent, goes very strongly with his backing. He is looked upon in some quarters as the villain of the piece, and his name is on everybody’s lips just now as the man who is going to have a rake-off through his mammoth society in connection with this Bill. These are unhealthy rumours at a time when this Bill is announced as one which must be put through with all speed. I am not a supporter of hasty legislation, and least of all am I a supporter of hasty legislation which is surrounded at this stage by reports of that kind, and if it is true that some of the smaller societies have already had to succumb, I think we should be failing in our duty as members of the House if we did not oppose this Bill. There are few of us who like to put all our eggs into one basket, and if the building policy of this country is in the hands of the few, it will certainly tend to a state of monopoly that will not be healthy in a young country such as this where cheap building and home building is one of the essentials, and we must do nothing to injure public confidence. I do not know whether the Minister’s notice has been drawn to a meeting held by the Association of Building Societies of South Africa. Their annual general meeting was held in Johannesburg on March the 22nd, and the amendment of the Building Societies Act was referred to at that meeting, but that meeting emphasised that the need of the moment was a consolidating Act, not so much the amendments that are propounded in this Bill, but a consolidating Act that would place building societies in this country on a satisfactory footing. If the changes proposed by this Bill in the structure of building societies forms part of a new policy of the Government, I hope the Government will allow that policy to be carefully examined by a Select Committee, and I want to associate myself with those members who have appealed to the Minister not to proceed with the Bill at this stage. There would be no time for a Select Committee to complete an investigation that is necessary for the far-reaching questions that are bound up in this Bill, and therefore I think that rather than press our request for a Select Committee, we should urge upon the Minister to abandon this Bill. We have already had one Bill that has been abandoned for this Session. A Select Committee was actually appointed to report upon a Bill dealing with the administration of estates; but the time left before the end of the Session was considered far too short for the investigation that was needed in that case, and the Committee reported accordingly and had its report adopted by this House. I hope the Minister will recognise that this is no time for pressing on with the passing of a Bill of such a contentious nature and containing such far-reaching provisions.

I feel that the words that have been uttered this afternoon by various successive members in the House do reflect the very wide feeling that exists in this House with regard to the measure now before it, and I hope that the hon. Minister will give due consideration to the representations that have been made by the various members. The several financial measures that have been introduced in this House in recent years I feel are measures which no doubt are essential, but which certainly are measures which should not be rushed through this House. I do not think there are any grounds for this rush. Take the other Bill of the Minister’s, the Insurance Bill, now before us. It was first introduced the year before last, it was re-introduced last year, and this year it has gone to a Select Committee. Some of us know that there has been an urgent need for certain sections of such a Bill, but the Bill has been given ample time to be considered fully. The concerns interested in the measure have had the opportunity of considering it, and we find the Bill now before this House, after having been thoroughly investigated by a Select Committee. The position is still much as it was before, and we have survived the fact that the Insurance Bill has not yet been put into law earlier. Now, in connection with the building societies, I do not know that there is any pressing need for this measure, and I can see no reason why it should be pushed through at this late stage in the Session when there are so many other pressing matters before us. It would, I submit, be far better for this important measure to be deferred and brought up again next year and for the Bill to be considered during the recess by all bodies concerned, the large societies as well as the small. The feeling I have gathered is that the large societies are not at all pleased with the introduction of this Bill. They have accepted it with a certain amount of what I might call duress. The small societies are unquestionably opposed to the Bill in its present form. No one wants the Bill. The Bill is seeking to bring about wide changes, it is going far in its amendments, and I feel that we should step carefully lest we do more harm than good. When one looks back over the history during the last fifty years of the building society movement—and I have rather peculiar interests because it was my grandfather who, more than fifty years ago, founded the United Building Society, although I have no direct interest in that society myself—and when one thinks of the financial vicissitudes through which this country has passed and one views the success which has attended the building society movement, then it is amazing, if this Bill is so urgently necessary, that the whole structure has not collapsed before. As far as I remember there was one bad case in the building society world, and it was not a case in which this Bill would have helped, for if anyone is out to perpetrate a swindle Acts of Parliament will not help. If we take the management of our building societies throughout this long period we find that it has been exemplary all the way through, and the whole movement has been conducted very soundly over this period of years. I feel, moreover, that in passing some of this financial legislation we are perhaps unwittingly going to place a complete ban on any new enterprise being started, and in a new country—and here I share the view of the hon. member for Illovo (Mr. Marwick)—that in a young country we have the right to develop and we should not place any handicap on establishing new institutions. We cannot expect any new institution to produce the same sound reserves that old institutions possess, but we must leave the door open so that enterprising persons, who have initiative and ability, should be given every opportunity to establish whatever further concerns may be considered necessary. This is a point which I feel is of paramount importance. I see it in our banking legislation and I see the same thing creeping into this Bill—we are having the same trouble in this building society legislation, and I feel that whatever we do we must not close the door and place a ban on the possibility of new institutions being brought into existence. We do not want to entrench existing organisations and place them in a position of having complete monopolies, so that they can continue to grow and grow. It is a note of warning which I wish to sound. The last point I want to mention is that in all these measures we are creating a controller. I don’t wish the House to think that I am personal in what I am going to say, but I do feel distressed, and I think this distress is gradually growing stronger, that we are placing into the hands of some persons powers of control, which are so unlimited, so wide, that they are becoming highly dangerous. I do not think it is good for the individual charged with that responsibility, and here, again, we have to watch our step. I feel strongly that that is a point, which is very important. We have had some interesting books written on the matter, and I have a very interesting booklet here dealing with the growth and evils of bureaucratic control. Take for example the question of appeal. I cannot see what is the good of providing that there is to be an appeal from the departmental head to the Minister and eliminating appeal to the courts. Often the Minister is quite incompetent to judge the situation. He may not have the expert knowledge to judge on technical points. The Minister may also be placed in a very invidious position, if he is called upon to decide and rule against the decision of a departmental head. We are in this Bill introducing again the principle that there is no right of appeal to the courts of law. We have established these courts of law, and it is fundamental in our constitution that there shall be a right of appeal to our courts of law, bodies specially selected for their competency to deal with and decide upon any dispute. We are denying people this very right in the measure, which we are being asked to pass. I do want to conclude with an earnest appeal to the Minister either to send this Bill to a Select Committee, or better still to scrap it altogether, and in due course to introduce a complete consolidating measure, which will bring the whole position up to date and clarify the position.

It seems to me that the concensus of opinion of members who have spoken on this second reading is that this measure is unnecessary and unduly rushed through the House at the end of the Session, and I should like to add my appeal to the Minister to delay the passage of this Bill and, if necessary, submit the matter to a special committee during the recess. I do not want to go over the same ground that other members have gone over but I want to quote from a memorandum sent to me from Pietermaritzburg. The memodrandum reads as follows—

That is signed by S. H. Porritt. There is the expressed opinion of the eleven societies whose head offices are in Natal, and in view of all the representation that has been made in this House this afternoon, I sincerely trust the Minister will consider postponing this legislation to some future date.

I do not want to discuss the merits of this Bill. I listened very carefully to the speech of the Minister of Finance and also to the speeches of the members on the other side of the House. I have felt for a long time that legislation is being introduced here, sometimes very important legislation, but that legislation is not introduced early enough to afford hon. members sufficient time to investigate matters properly and not only just to read through a Bill but at the same time to ascertain the repercussions thereof. I tried to follow the various laws which are being amended by this Bill but I must honestly admit that I did not have sufficient time to study the matter properly, and I doubt very much whether there is any other hon. member in this House who was able to do so, if he also had to do his other duties. The same objection came from the other side of the House. It is very strange to us that the hon. member for Pretoria, Central (Mr. Pocock) came along here with a suggestion that this Bill affords the big building societies an opportunity to kill the smaller ones. He forms part of a Government labelled by Government supporters as the most capitalistic Government, and if that is the position, we can understand that the big societies will endeavour to obtain the assistance of the Government to devour and digest the smaller ones. Later we will get another flood in the country as we have seen when the executor chambers were in existence. They did a lot of harm and there is a lot of trouble in connection with it. We should see that the greater building societies do not do away with the smaller ones. The small societies will not be such a danger because they have to remain within the limits of their money. Where it is necessary to protect the depositor, the Government should do it. Against this we can have no objection. It is reasonable. But we do not want legislation to go through which assist one section of the people and not the other. I was pleased to see that members of the other side stood up one by one and asked that this Bill should be referred to a Select Committee. I feel convinced that the Minister of Finance would have done so but he feels that there is not sufficient time now. I think that he himself feels that it would be wrong on his part to place one section against another. But he cannot expect if we did not have the opportunity to go into this matter properly, that we should accept this Bill all of a sudden. I take it that he is quite honest with his intentions. But we have been misled so often; we have so often had trouble with legislation which has been passed hastily that we feel that the Minister, as a reasonable person and as one of the Ministers who up till now has given us the most time to study a Bill properly, must also meet us today. I am sorry that it is like this, but it really seems as if members of the Government intentionally propose legislation in such a manner so that they can pass it as quick as possible, so that members are not afforded the opportunity to think about the consequence of such legislation. Where this is done the Minister will agree with me that it is not fair towards this House, and it has the result that within a few years a law like this has to be amended four times. If the Minister wants to be reasonable and fair he is bound to accept our request, and refer this Bill back to a Select Committee, even if it means that this Bill will not be passed during this Session. Hon. members on the other side feel with us in this matter. I want to see if they are going to have the moral courage to vote with us. I want to see what they are going to do, because the Whips are busy with them.

The hon. member must confine himself to the Bill.

I am speaking about the Bill. The amendment is that the Bill should be referred to a Select Committee, and I ask hon. members on the other side to vote for the amendment in view of the fact that they spoke in its favour.

But it has nothing to do with the movements of the Whips.

I make this appeal to the equity of the Minister that he should accede to our request. The Minister may proceed like this but a day will come when trouble will start on the other side. Members on the other side all feel that there should be proper protection for the depositor but I think that the Minister of Finance makes a mistake to be in such great hurry now. If we had gone on for so many years we may just as well get this legislation through next year. The world will not be lost in one year, and in one year the societies will not find themselves in such difficulties that everything will be lost. I feel that the amendment of the hon. member for Fordsburg (Mr. B. J. Schoeman) is a reasonable amendment, and I appeal to the Minister to accept it in view of the fact that his own side addressed the same request to him. We sit here from 10 a.m. until 6 p.m. in the evening, and it cannot be expected that we should be able to take part in the proceedings of this House whilst at the same time studying all the Bills placed before us. We have to do it if we are expected to speak authoritatively on these Bills. Apart from this we should like to consult people who are interested in the matter and we cannot find the time to do so. I think the Minister makes a mistake if he were to stand firm that this Bill should be passed now and if he were not to accept the amendment. He says that amendments may be moved. We are not in the position to move amendments. We are already three months here and even if the Minister adjourns the Committee proceedings for a week we have so much work that we are still unable to compile the necessary amendments. The Minister should remember that we have been very busy for the last three months and we are no longer quite as capable to concentrate as we were in the beginning of the Session, and it is incorrect to push Bills through here when members are in that condition. I rely on it that the Minister will be so fair as to accept the amendment.

There has been quite a lot of general criticism of this Bill during the discussion this afternoon. We have, for instance, had complaints about the very drastic provisions of the Bill, but we have had very little indication of what the specific points of objection are. We have been told of the general objections of the building societies, especially the smaller ones, but I have not been told which are the points which will hurt the smaller building societies.

Give them time to tell you.

They have had many months to tell me. We have been discussing and consulting since December. After the meeting on the 18th February the Bill drafted was circulated to every society and this Bill is substantially the same as the Bill then drafted, only with one or two further concessions made in response to points submitted to us.

They say you have tightened it up.

They cannot say that. Let them tell me in which respects. We have just general statements but nothing specific, no specific indication as to what is wrong with the Bill. We have general statements but no specific statements; obviously some societies don’t want the Bill. They don’t like it, but they are not prepared to tell us why.

There is a general dislike.

Yes, but they don’t tell us why. I have been perfectly prepared all along to consider any points which may be raised in connection with this Bill, to deal fully with them, and to meet the difficulties, but I must know what the difficulties are.

Appoint a Select Committee and find out.

Why cannot they come to me with their difficulties? I have been offering for several weeks to meet representatives of the building societies, but they have not come.

Only certain sections.

No, we have heard a lot about the attitude of the Natal building societies. I offered them a month ago, through a leading senator who speaks for the societies, indicating my willingness to meet them, but they have not come.

Evidently the Bill has not been circulated among the building societies.

Oh, no, the Bill has been circulated to all the building societies, and I have at all times been prepared to receive their deputations, but they have not come. That is my difficulty. We have these general statements, designed apparently to kill the Bill, but the grounds on which they want to kill the Bill are not before me. Now, this is a Bill the enactment of which the Government this year regards as essential from the point of view of financial stability in the country. I do not see how we can say anything further than that in the light of the position as I explained it when I introduced the Bill. I explained the difficulties. I cannot accept the position that we are where we were in 1934 when the original Act was introduced. I cannot accept the position that we are in exactly the same position as we were in at the beginning of the war. These difficulties of the war situation were not envisaged in 1934, and these difficulties of the war-time situation have increased very greatly and are increasing steadily now. They have increased during the last year and they are increasing now.

Cannot you have a clause just to deal with that?

Most of the principal clauses of the Bill deal with these points, and if there are clauses which are not essential, let my hon. friends come to me and let us discuss them.

Why don’t you go to a Select Committee?

Why not come to me? I am in charge of the Bill. We have had pleas put forward that this Bill should be referred to a Select Committee. These pleas have been put forward temperately and eloquently. But I cannot agree to that, because it would mean killing the Bill. If it is to go to a Select Committee now the Bill would be dead, and in view of the urgency of the situation I would be failing in my duty if I agreed. We have had precedents quoted. We have had the case quoted of the Banking Bill. Naturally, that was new legislation, and that is why it went to a Select Committee. We have the Insurance Bill—not an entirely new Bill—we had the Act of twenty years ago, but the new Bill is based on a different principle, and where you have new principles it was natural that you should refer these principles to a Select Committee. But here we have not got a new Bill. It is not a consolidating measure even, it does not introduce new principles, it applies more rigidly the principles already in the existing Bill which have been accepted by Parliament and are accepted as necessary. I cannot see why in principle a Bill like that should go to a Select Committee. We have taken the alternative course of discussing it fully with those interests best able to advise us from one point of view, namely, those who represent the Building Societies. And now we have submitted it to Parliament. Someone remarked that it had been said that this Bill was an agreed measure. I did not say that. Nor do I believe that the hon. member for Hospital Hill (Mr. Henderson) said that.

No, I did not say that.

We have done our best to meet criticisms, so far as we possibly could, and we have gone a long way to meet them, but not all the societies have agreed to this Bill, but they have been very fully consulted and great efforts have been made to meet the points raised. It is also not true to say that this Bill is opposed by all the smaller building societies. It may be opposed by a number of them but there are a number which are satisfied and I would like to show the House the extent to which these smaller building societies have taken part in the discussions of the Bill. After all, what should be our primary concern in dealing with this matter; with whose welfare are we concerned—with the financial interest of the building societies or the safety of the money of the people who have invested in the building societies?

They are the same.

No, they are two aspects but they are not the same. We have been told that the people who run the building societies should be left to look after themselves. What are these bureaucrats who know more about people’s affairs than people themselves? But we are responsible for the depositors. The people who run the building societies are responsible to the shareholders and to the members.

And to the depositors.

We cannot take the line that these people must be left entirely free to run their own affairs.

But surely they must be responsible to their depositors; I don’t follow your argument.

They are responsible as trustees to the depositors but not in the sense in which they are responsible to the shareholders, who elect them.

No, they are responsible to the depositors.

They have not got the same responsibility to the depositors.

Of course they have the same responsibility—the depositors are the very people they are responsible to.

The position in that regard is the same as it is in regard to the banks.

Your argument …

I am afraid I cannot reply to two interjections at the same time.

Are they not responsible to the depositors?

There we took the line that we had to protect the savings of the people. If we had not taken that line we would not have passed the Banking Act, and it is because we took that line that having regard to the change in the economic trend in the country that we considered it essential to pass this Bill.

[Interruption inaudible],

I am sorry, I am genuinely sorry that I cannot meet the plea which hon. members have put to me—I cannot refer this Bill to a Select Committee, but I am prepared still to consider as far as possible any reasonable request put before me. I have no desire to rush this Bill through. I asked the hon. member for Pretoria, Central (Mr. Pocock) how much time he thought was necessary for the Committee stage. He said not before Monday or Tuesday. Well, I am quite prepared to meet any representations. If hon. members will give me their specific points I shall see to what extent I can meet them.

Question put: That all the words after “That”, proposed to be omitted, stand part of the motion.

Upon which the House divided:

Ayes—57:

Abbott, C. B. M.

Abrahamson, H.

Acutt, F. H.

Alexander, M.

Ballinger, V. M. L.

Bawden, W.

Bell, R. E.

Botha, H. N. W.

Bowker, T. B.

Carinus, J. G.

Christopher, R. M.

Clark, C. W.

Conradie, J. M.

Deane, W. A.

De Wet, H. C.

Dolley, G.

Du Toit, R. J.

Fourie, J. P.

Friedlander, A.

Gilson, L. D.

Gluckman, H.

Goldberg, A.

Hayward, G. N.

Hemming, G. K.

Henderson, R. H.

Heyns, G. C. S.

Hofmeyr, J. H.

Howarth, F. T.

Humphreys, W. B.

Jackson, D.

Johnson, H. A.

Kentridge, M.

Lawrence, H. G.

Lindhorst. B. H.

Mushet, J. W.

Neate, C.

Quinlan, S. C.

Raubenheimer, L. J.

Reitz, L. A. B.

Shearer, V. L.

Smuts, J. C.

Solomon, B.

Sonnenberg, M.

Steenkamp, W. P.

Steyn, C. F.

Steytler, L. J.

Sturrock, F. C.

Sutter, G. J.

Trollip, A. E.

Van Coller, C. M.

Van der Byl, P. V. G.

Van der Merwe, H.

Wallach, I.

Warren, C. M.

Waterson, S. F.

Tellers: G. A. Friend and J. W. Higgerty.

Noes—40:

Bekker, G.

Bekker, S.

Boltman, F. H.

Booysen, W. A.

Bosman, P. J.

Brits, G. P.

Conradie, J. H.

Erasmus, F. C.

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 der Merwe, R. A. T.

Van Zyl, J. J. M.

Venter, J. A. P.

Verster, J. D. H.

Viljoen, D. T. du P.

Vosloo, L. J.

Warren, S. E.

Wentzel, J. J.

Wilkens, Jacob.

Wilkens, Jan.

Wolfaard, G. v. Z.

Tellers: J. J. Haywood and P. O. Sauer.

Question accordingly affirmed and the amendment dropped.

Original motion put and agreed to.

Bill read a second time; House to go into Committee on the Bill on 13th April.

I should like to move the amendment standing in my name on the Order Paper on page 418—

1. (5) For the purposes of Sub-Section (1), a banker who receives payment of any such cheque for a customer shall, subject to the provisions of Sub-Section (3), not be deemed to have given a consideration therefor, merely because he has in his own books credited his customer’s account with the amount of the cheque before receiving payment thereof, or because any such payment is applied towards the reduction or settlement of any debt owed by the customer to the banker;

The first of the amendments will have the effect of re-drafting Sub-Section (5). In the main, the purpose of the re-draft is to secure greater clarity, and at the same time, by the addition of the words at the end, we are proposing to meet the position of the collecting banker where he has credited the amount of the cheque in reduction of an overdraft. It was of course intended that that should be met, but the phrasing of the law was not entirely clear. Then there is the further amendment—

I am afraid I cannot accept the amendment of the hon. member for Swellendam (Mr. S. E. Warren) which, after all, goes to the very root of the proposal in this Bill. The proposal of this Bill is that we take steps to give the drawer of a cheque, and also the payee, the protection which they think they have today. We give them protection, but only on the condition that they take special precautions, and the special precaution they must take is to cross the cheque and mark it “non-negotiable.”

What about the negligence of the maker of the cheque?

Well, of course, drawers of cheques are protected against negligence as well, but they will have to take that special precaution before they can get any protection. But it is only if he has taken that precaution that he will be protected. Now the hon. members put forward a proposal which breaks that down completely, because the onus is shifted in such a way that it will never be possible to prove that the person who has the cheque in hand, has not obtained it in such circumstances as his amendment indicates. I shall have to ask the House not to accept that amendment and to allow the Bill to stand as it is at present.

I am very sorry that the Minister did no accept the amendment which I moved. I think that it was a very fair proposal. I do not know whether he realises what the result of this alteration is going to be. If a man in South Africa steals an animal and it passes through the hands of four or five people then you cannot summon any of those people if they were not dishonest. You can only demand the animal back but under English law it is quite different. If an animal is stolen and it passes through the hands of four or five people, you can summon each of those four or five people in terms of the common law. Now the Minister is engaged to protect careless people. The man who lost a cheque now has a right which no other person possesses, simply because there are Government employees who are negligent. The cheque will after all not be lost or stolen if they were to look after it properly. There is no doubt whatsoever that in connection with these bank drafts we are now going over to the English Doctrine of Conversion. It is nothing else. You delegate the right to a person to institute proceedings against each one handling the cheque. I do not believe that the Minister or his Department appreciates the effects of their proposals, and the Minister has not yet given me a reply to my question. I asked the meaning of true owner.

They are the words used in the existing law.

No, it is not an interpretation in the law itself. It is not the Cape Law. The judges used the word where they discussed Section 80 during the course of one of the cases which came before them. There the judge used the word. But the Minister now has in mind a radical right which he intends to take away from persons who in the past have been protected by this law. Today they are no longer protected. He is now going to make those people responsible for the negligence of his officials. His officials can be negligent, but where a man takes a cheque without knowledge, there is a possibility that that person may be called upon to repay the money which he has already paid. In other words he has to pay twice. He has to suffer the loss. I want to ask the Minister this question. Will he propose that we accept the same principle in connection with other movables which exist in England? If he is unwilling to do so why does he accept that principle in connection with bank cheques? If money is stolen is he prepared to do the same thing? Oh, no; he is not willing to do so. It is for that reason that I think it unfair and I think that my amendment which is clear and which only protects the honest man should be accepted. My amendment has in view that, if a man has taken the cheque openly without any knowledge of fraud, without any negligence on his part, without having made the necessary enquiries, should not be held liable. Take a person who is stationed in the native territories where there are no banks. The Administration sends a cheque to him. There is no bank where he can draw same. In the past that person simply took the cheque and handed it over to a shopkeeper. Now the shopkeeper will not accept it. If the cheque is crossed and made non-negotiable, how is that person going to get the money? He has no banking account. The cheque does not mean anything to him. I could still have appreciated it if they had made it non-negotiable but as soon as they cross it it can only be paid to a person who has a banking account. The person stationed in native territories is absolutely lost. Very few of these people have banking accounts. How are you going to pay these people? Does the Minister realise what he is busy doing? Where the Minister interferes here with the Common Law which had existed for years he is busy playing with fire. The Minister does not know what the repercussions are going to be. But no, it must be put through. The only thing that I ask is that the honest person must be protected. Put the dishonest man in gaol, but why should the honest person not be protected? Does the Minister do it with the banks? He goes out of his way to protect them under this law. If they accept it and pay they are protected. They do not come under the Common Law under which the private person comes. It seems to me so unfair and unreasonable that you should protect those dishonest people. You are going out of your way to do it in the case of a cheque, but you do not do it in the case of other movables. It seems to me most unreasonable, and the only thing that I ask for is this: If a man is dishonest and he deals with a lost cheque or a stolen cheque, make provision that he can be prosecuted. A cheque is a document which is practically as good as money. It is for that reason that one can exchange it so easily. No I ask this: If the Minister wants to do it, let him proceed with it but I want to see where he is going to stop with it. Any business man will tell you in future that he is not going to exchange a cheque for you. He will refer you to the bank. Now I should like to know from the Minister why the cheque should specifically be crossed if already marked non-negotiable? Is this also intended to protect the bank? A crossed cheque is only paid in certain circumstances, and if the bank pays in any other way than that provided for by the crossing then they are responsible. I want to appeal to the Minister to accept this amendment of mine.

The hon. member for Swellendam (Mr. S. E. Warren) asked what is meant by the words “true owner”. The Law Advisers told me that it is the wording used in the existing legislation. I must accept that they know the law and that the words are used in legislation

But not in the same context.

I think it is used in this way: “True owner” will in the first instance mean the person who signed the cheque and thereafter it will mean the person who has the legal right to that cheque. Then the hon. member also asked why it was confined to Bills of Exchange. We apply it in the case of Bills of Exchange because it was generally understood that that was the position as far as Bills of Exchange are concerned. It was very clear when I proposed this Act that the public realised that the position was very much different to what they understood it to be. It was a surprise to them. The general conception of the matter was that the owner of the cheque actually had protection. We do not propose to give him that entire protection which he evidently thought he had, but we place him in such a position that he can protect his rights if he wants to take the trouble to do so, and in order to do so he must cross the cheque and mark it “non-negotiable”. Most people were under the impression that this was the legal position, and we only go a certain length of the way to place them in the position in which they thought they were. It is not an importation of the English Law of Conversion, not even as regards Bills of Exchange, because before those rights are protected in the case of the owner of the cheque, he must take that trouble, in other words he must himself create those rights, not as a result of logical conception, but as a result of the action which he himself takes by writing those words on the cheque and by crossing it.

Amendment proposed by Mr. S. E. Warren put and the Committee divided:

Ayes—30:

Bekker, G.

Boltman, F. H.

Conradie, J. H.

Erasmus, F. C.

Fouché, J. J.

Geldenhuys, C. H.

Haywood. J. J.

Labuschagne, J. S.

Le Roux, P. M. K.

Loubser, S. M.

Louw, E. H.

Malan, D. F.

Olivier, P. J.

Pieterse, P. W. A.

Schoeman, B. J.

Serfontein. J. J.

Strauss, E. R.

Strydom, J. G.

Swart, C. R.

Van der Merwe, R. A. T.

Van Zyl, J. J. M.

Viljoen, D. T. du P.

Vosloo, L. J.

Warren, S. E.

Wentzel, J. J.

Werth, A. J.

Wilkens, Jacob.

Wolfaard, G. v. Z.

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

Noes—61:

Abbott, C. B. M.

Abrahamson, H.

Acutt, F. H.

Alexander, M.

Ballinger, V. M. L.

Bawden, W.

Bell, R. E.

Botha, H. N. W.

Bowker, T. B.

Carinus, J. G.

Christopher, R. M.

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.

Higgerty, J. W.

Hirsch, J. G.

Hofmeyr, J. H.

Jackson, D.

Johnson, H. A.

Kentridge, M.

Lawrence, H. G.

Lindhorst, B. H.

Long, B. K.

Molteno, D. B.

Mushet, J. W.

Neate, C.

Payn, A. O. B.

Pocock, P. V.

Quinlan, S. C.

Raubenheimer, L. J.

Reitz, L. A. B.

Robertson, R. B.

Shearer, V. L.

Solomon, B.

Solomon, V. G. F.

Sonnenberg, M.

Steenkamp, W. P.

Steyn, C. F.

Steytler, L. J.

Sturrock, F. C.

Sutter, G. J.

Tothill, H. A.

Trollip, A. E.

Van der Byl, P. V. G.

Van der Merwe, H.

Wallach, I.

Warren, C. M.

Waterson, S. F.

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

Amendment accordingly negatived.

The amendments proposed by the Minister of Finance were put and agreed to.

Clause, as amended, put and agreed to.

On Clause 2,

I move—

Agreed to.

Clause, as amended put and agreed to.

On New Clause 3,

I move—

1. 3. Section 81 of the Bills of Exchange Act, 1893, of the Cape of Good Hope, of the Bills of Exchange Proclamation, 1902, of the Transvaal, and of the Bills of Exchange Ordinance, 1902, of the Orange Free State is hereby amended by the insertion after the words “such banker” of the words “or issued by the State and intended to enable any person to obtain payment on demand from any banker,”.

Agreed to.

The remaining Clause and the Title having been agreed to.

House Resumed:

The CHAIRMAN reported the Bill with amendments.

Amendments considered.

Amendments in Clauses 1 and 2 and the new Clause 3 put and agreed to and the Bill, as amended, adopted.

Bill read a Third Time.

I move—

This Bill like the Bill which was dealt with earlier on today is designed to give effect to a resolution which the House passed in Committee of Ways and Means. That was the resolution imposing a tax on Railway passengers. The Bill to give effect to that resolution is a simple one and I think it will be effective. There is very little for me to say in introducing this Bill. I have on several occasions dealt with the questions of principle and of policy involved in this tax. The House in Committee approved of the rate of 15 per cent. It approved of the tax being imposed on first and second class passengers. These matters have been determined. I have also indicated the amount which we expect to derive from this tax, namely £500,000. Then I advised the House when moving that we should go into Committee of Ways and Means what exemptions were contemplated. Hon. members will find these set forth in Section 5 of the Bill. I need not repeat what I said on a previous occasion in that regard. There is very little new in the Bill except these parts which I have mentioned. There is first of all the question of when the Bill will come into operation. When I introduced the Budget I said it would not come into operation before the 15th April. We now propose that the date should be as from the 19th April. So we start at the commencement of a week. Then it is proposed to make the tax payable on the cost of the fare, by which one means the cost of conveyance, and it will therefore include as indicated in Section. 3, excess charges and supplementary fares. In Section 4 it is laid down that the payment of the tax shall be made with the payment for the ticket. That is, of course, the convenient way of doing it. In effect, as far as the taxpayer is concerned, he will be paying more for his ticket than he would otherwise do. Section 6 deals with the question of refunds. If anyone is entitled to a refund in respect of his ticket he will also be entitled to a refund of the relevant tax. Then we deal with the relationship between the Treasury and the Railway Administration which will collect the tax, and it is proposed that the Treasury will pay the Railway Administration 1 per cent. of the amount collected to cover its cost. Then there is a clause regarding regulations which will cover further necessary points of detail.

I should like to ask the Minister if he does not think that he is making a farce of the proceedings of this Parliament. Yesterday afternoon we decided in vague general terms to accept a principle and this morning for the first time the Bill appears before the House. Now the Minister proposes the second reading. We tried to go into it as much as possible during the time at our disposal but I must honestly admit that I cannot say with a clean conscience that I can vote on this measure.

We can adjourn the debate until tomorrow.

Then I move—

seconded.

Agreed to.

Debate adjourned; to be resumed on 9th April.

I move—

This Bill is also a Bill which arises out of the resolution passed in Committee of Ways and Means. The House may feel, as it did in the case of the previous measure, that it has not had these proposals before it long enough. In any case we are near the time for adjournment and I think I should move the second reading now, and briefly make such explanations as may be necessary. The principal aim of the Bill is to bring into operation the increased duties which were approved of in Committee of, Ways and Means. There are also two subsidiary aims to effect certain minor amendments to the Excise Act which we passed last year, which have been shown by experience to be necessary, and to make corrections in the law as it stands now as the result of the change in the basis of the tax on cigarettes which I referred to on a previous occasion. The main object of the Bill is to give effect to the new excess rates, and that is done in Clause 5, which merely repeats in effect the Ways and Means resolution. Connected with Clause 5 at least in part, is Clause 6, which is a rebate clause, and in regard to that I would refer to the fact that provision has now been made for a rebate on the cheaper grades of pipe tobacco. I foreshadowed it on an earlier occasion, and I have now made provision for it in this clause of the Bill. The other rebates provided for in Section 6 are in the light of the experience gained in the working of the Excise Act. I think at this stage I should draw attention to a further clause of the Bill which deals with rebates. That is Clause 7. The Excise Act, as hon. members know, allows a rebate of 3s. per gallon on brandy in respect of the tax on brandy measured for three years.

Why not for five years?

I am simply telling my hon. friend what the law says today. The law says that rebate is allowed provided the wine distilled has been approved by the Brandy Board. Now owing to the shortage of stocks of rebate brandy it has been necessary to relax the provisions of the existing law, and that relaxation is proposed in this particular clause. In the first place it is intended, if this is adopted, to allow certain other brandy for rebate purposes, which, while fulfilling all the other requirements, was not distilled from approved wine. It has been necessary to accept brandy matured for 2½ years. Strictly speaking, that is not entitled to rebate and therefore we propose that in such cases there should be a rebate of 2s. 6d., which is comparable to the 3s. I have said that a subsidiary aim of the Bill was to rectify the position in the law as the result of the change we are making in the basis of the tax on cigarettes. I have already explained that on a previous occasion, but perhaps I should say again that at the present moment the difficulties have arisen because of the different systems of packing by different manufacturers of cigarettes. The difficulties have been discussed and a basis has been arrived at by agreement which was set forth in the resolution that was passed in Committee of Ways and Means. In terms of that the tax will be varied according to the weight of the various classes of cigarettes. That will get over the difficulty which has been experienced. That necessitates certain amendments in the existing excise law as we passed it last year, and these amendments will be found in Clauses 1, 2, 3 and 4 of the Bill. I think that is all I need say by way of further explanation.

I should like to ask the Minister if we cannot adjourn this debate now. We have not had an opportunity to go into this Bill, and if we are to proceed with the discussions now we would only make a farce of the proceedings of this House.

I will accept the proposal for adjournment if you move it.

Very well. I now move—

seconded.

Agreed to.

Debate adjourned; to be resumed on 9th April.